News Round-up

• The government has reduced the cap on foreign direct investment limit in internet services to 74 percent from 100 percent and introduced a 6 percent revenue share clause. The impact of this would be passed on to consumers which will result in costlier internet services.

The government has also introduced a higher entry fee of INR 2 mn for category A (national-level) licence and INR 1 mn for Category B (state-level) licence, against a flat fee of INR 1 earlier. It has done away with the Category C (local-level) license altogether. Abolition of Category C will lead to either mergers of existing category C players with other category companies or to close down business.

ISPs with networth of INR 1000 mn and above can only offer IPTV services. ISPs will now have to follow stringent security norms. The chief officer in charge of technical network operations and the chief security officer can only be resident Indian citizens while all foreign top-level executives would require clearance from the home ministry. Other security norms with regard to monitoring facilities, remote access and providing information to all security agencies will also be applicable to ISPs. Source: Economic Times

• MAUJ, the leading Mobile Value Added Services Company has tied up with Mobile ESPN to manage the integration of the short code ‘3776’ and the WAP destination for ‘Mobile ESPN’ services in India. Mauj will enable mobile ESPN services and will be responsible for distribution of rich multimedia content through the WAP sites and on-device portals for all sports services. Mauj will also Mobile ESPN develop unique sports based applications and provision sports services on the operator platform.

Mauj was founded in 2003 by Anupam Mittal. Today Mauj is the flagship brand of People Infocomm which won the Red Herring Asia 2006 Top 100 Awards recently. Source: IndiaPRwire

• World Bank, in its report, has rated India as low as 134; 41 places behind China in terms of ease of doing business on various parameters. A Committee of Secretaries (CoS), which was formed in November last year, has considered the report and directed follow-up action. A concerned commerce and industry ministry has sought details from various departments on the progress made on easing of several cumbersome procedural issues affecting business startups in India.

The rankings track indicators of the time and cost to meet government requirements in business start-up, operation, trade, taxation, and closure. They do not track variables such as market size, macroeconomic policy, and quality of infrastructure, currency volatility, investor perceptions or crime rates.

The government has developed a model where 11 procedures including approval of name, memorandum and articles of association, registration for value-added tax etc. will now be completed in 16 days as against 35 days as per the report. The National Institute of Urban Affairs (NIUA) is developing a model to reduce time and procedures for registration of property. Source: Hindustan Times

• Macmillan India Limited, the leading publishing giant is considering the acquisition of a company in the education publishing sector. Source: Financial Express

• Silicon Valley’s leading Venture Capital fund ‘Draper Fish Jurvetson’ (DFJ) is setting up its India office in Bangalore. Mohanjit Jolly, one of the Fund’s Directors, will be managing India operations. Jolly was earlier with Garage Technology Ventures. DFJ has been targeting early stage investments. DFJ’s earlier Indian investments include Seventymm – the online DVD rental company, Komli – online ad network firm and Reva – the electric car manufacturing company. Source: VCcircle.com

• MakeMytrip.com, the online travel portal, has received in-principal approval for a tie-up with Indian Railway Catering and Tourism Corporation Limited to enable online reservation of rail tickets on its site. MakeMyTrip.com was launched in the year 2000 for servicing travel market for US based NRIs. It was founded by Deep Kalra, Keyur Joshi and Sachin Bhatia. Source: Business Standard

• According to a New York Stock Exchange survey of top business leaders representing companies from 24 countries, India has been voted as a country of significant importance for identifying new markets after Japan, Eastern Europe, Russia, Western Europe and the US. India ranked amongst the top destination for investments and was voted fifth in terms of overall strategic importance. India was named as the single-most crucial region by one out of 100 companies from across the world, while the ratio was much higher at one out of 48 among the non-US companies. 60 percent voted for focusing on India primarily for identifying new markets to sell their products and services, while Japan topped the list with 77 percent. Six percent considered that the primary reason behind their focus on India was exploring a source of products and materials, after China at 9 percent while 7 percent believed that it was for establishing a regional area of strength as against 9 per cent for China. Source: Asian Age

• The Delhi based Indian Angel Network (IAN), earlier known as Band of Angels, will be making two more early stage investments shortly. The IAN is also exploring possibilities of starting a fund. So far investments through IAN have been made in individual capacity. IAN has already made seven investments. IAN’s network has grown to 60 members including institutions such as Google, IBM, Punjab Venture Capital, SIDBI Venture Capital, Naukri.com and Greylock Partners. IAN has operations in Delhi, Mumbai and Bangalore.

Mumbai Angels network was founded by Sasha Mirchandani, Praveen Chakraborty, Prashant Choksey and Shantanu Surpure. Today its network has grown to 25 including members like Ranjan Kapur, country head, WPP, Rafique Malik of Metro Shoes, Javed Tapia, director of Red Hat India and Gulu Mirchandani, chairman, Onida. Mumbai Angels propose to close 10 deals by the year-end and will be shortly investing in early stage companies in the internet, travel, manufacturing and software space. MKhoj and NetElixir are few of its investments. Source: Business Standard

• Google Inc. has started information online search in Indian local languages such as Hindi, Tamil. It is targeting to widen its reach and tap into more advertising business in the country. Raftar.com and Guruji.com are the only two serious local search engines in India. Both Indian companies feel catering to local audience requires an understanding of the local requirements, and hence they do not consider Google’s entry as a threat to their growth in market share. Source: Livemint

• Mumbai based online travel portal company, ‘Travelport’, is looking at acquiring two niche travel companies in Yoga tours and ayurvedic tourism. Travelport was founded five years back by Doctor Heena JA. Shubhkam Securities and Investrics have made private equity investments in the company. Source: Economic Times

• Bangalore based, Saastra Software, is scouting for VC funds to the tune of USD 10 mn. Saastra provides customized software solutions to the travel and hospitality sector. Vishnu Murli Konduru is the founder CEO of Saastra and has several years of experience in the hospitality and travel businesses - having worked for Oberoi Hotels, Cendant and Damania Airways. Source: Business Standard

• Google held a roadshow in Ahmedabad for creating awareness of its business solutions for small and medium businesses. Google’s focus is to market its advertising products like AdSense, AdWords and Web Analytics. The company is also targeting educational institutes and real estate developers who are keen to advertise their programmes through AdWords. Source: Business Standard

• The RBI in its Report on Macroeconomic and Monetary Developments, has raised concern over investments by hedge funds in the stock markets and higher leveraging by PEs in international merger and acquisition (M&A) deals and raised questions over the longer term sustainability of such investments worldwide. According to RBI, in view of the opaque nature of PE activity and size of business accruing to them, they carry risks to overall macroeconomic stability and, in particular, to Emerging Market Economies.

• Another professional networking website “Brijj” has been launched; this time by Infoedge India Ltd. Infoedge was promoted by Sanjeev Bhikchnadani, Ambarish Raghuvanshi and Hitesh Oberoi in 1995. Infoedge has promoted various vertical portals - www.naukri.com (online recruitments), www.jeevansathi.com (online matrimonials), www.99acres.com (online real estate deals) and offline executive search division - Quadrangle

• AskLaila, a ‘local information service’ has been launched by Bangalore based ‘Four Interactive’ company. It is currently in beta stage and provides information about local services, food joints, shopping, events including reviews and articles in Bangalore. Four Interactive, funded by Matrix Partners India, is founded by Kiran Konduri and Shriram Adukoorie. Kiran has earlier co-founded Zephyr software and Cogniti. Shriram has been with Microsoft and was instrumental in launching MSN in India and managing ISP and telecom business. Source: VCcircle.com

• SEBI has issued guidelines for overseas investments by SEBI registered VC funds. The VC funds can invest up to 10 percent of their investible funds with prior permission of SEBI in those offshore companies which also have back office operations in India.