ADAG VC arm doubles investment target to $125-mn

Encouraged by a positive economic climate and quality business plans from Indian entrepreneurs, Anil Dhirubhai Ambani Group's venture capital arm has more-than-doubled its investment target to $125-million for the year.

Reliance Venture Asset Management (RVAM) has upped the earlier allocation of $50-million for investments to up to $125-million for FY 11 and correspondingly, there will also be a spike in the number of deals it closes to ten or above, a top company official said.

"We had planned for 3-6 deals in the first-half (of FY 11). We have already concluded four, are close to a fifth and will do three-to-six more in the next six-months. It is an exciting year which will see us investing up to $125-million," RVAM's Chief Executive Officer, Harshal Shah, told PTI here.

Shah said it is an "excellent time for investing" because of the positive macro-economic factors, better quality business plans it is receiving and reasonable expectations on valuations, prompting RVAM to redraw its yearly targets.

"This is a good time and we have to move in now with additional money to leverage on the current climate," he said.

RVAM will draw the additional corpus to be employed in investments from the ADA Group and is very positive on the defence, aerospace, travel, media and entertainment sectors.

RVAM is also looking at an exit from one of its 11 investee companies soon and is mulling offers received from bankers, Shah said.

It already has a portfolio of four defence-related companies and is looking for investments in the areas of dual- use technology firms--those offering solutions for both military and civilian use--and ancillaries which benefit through defence offset clauses, he said.

In the travel, media and entertainment spaces, introduction of 3G and BWA (broadband wireless access) will catapult sector firms to a new league which has heightened RVAM's interest, he said.

"We are in the works for some deals in these streams," Shah said, declining to reveal further details. Its fifth investment which is nearing a close is a follow-on investment in an investee company, he said.