Tuesday, November 16, 2010

Murthy's Catamaran eyes Manipal stake: Set to be Premji's co-investor in edu group

Three decades after N.R. Narayana Murthy and Azim Premji failed to find common ground to work together, co-founder of Infosys may soon be a co-investor with his information technology peer and Wipro chairman in an education venture. Catamaran, a proprietary venture capital fund of Murthy, is prospecting a potential investment in Manipal Universal Learning, in which PremjiInvest infused US$ 42 million almost two years ago. Catamaran is evaluating a deal even as Manipal, an Indian cross-border education story, is mulling a big-ticket initial public offering (IPO), possibly within the next 18 months.

The discussions pertaining to a possible investment are still in early stages and the details remain sketchy even though sources familiar with the situation said Catamaran could invest up to US$ 10 million. While PremjiInvest has a committed corpus of nearly US$ 1 billion, Catamaran is a smaller US$ 129 million fund, tracking venture investments. The possibility of having Murthy and Premji as investors could well be a coup for Manipal, which is looking at the capital market.

Before Murthy founded Infosys, he had a meeting with Premji for heading Wipro's then nascent IT business. The meeting,obviously, went nowhere, with Premji later dubbing the encounter as just a drink at Welllington Club, and finding Murthy too high-powered for us and Murthy very happily admitting, "He rejected me. But I am very grateful to him for that."

Global success and billions later, the two might come together at Manipal Universal Education. However, Catamaran's investment head Arjun Narayan said the fund will not comment on speculation as a matter of policy, while Manipal Education MD Ranjan Pai said, "There is nothing as of now." Manipal Universal Learning is part of the Rs. 2000-crore (Rs. 20 billion) Manipal Education and Medical Group (MEMG), which is a strategic player in education and healthcare services. There is an intent on the part of Catamaran and Manipal to strike a deal, but it depends on how the IPO story develops, another source added.

Pai declined to comment any further stating that his company's board will have to meet and discuss on IPO and then go in for formal discussions with bankers. However, informed sources said Manipal Education could be looking at US$ 1-1.25 billion valuation for its public offering, which could be launched in the second-half of FY12. Informal discussions have been under way with bankers, they added.

Manipal's education revenues could touch US$ 250 million by FY12. Its revenue is equally split between India and overseas operations, which include a large acquired campus in the Caribbean island of Antigua. The other international campuses are spread across Dubai, Malaysia and Nepal. In January this year, Murthy's Catamaran made its maiden investment in a pre-IPO deal with SKS Microfinance, where it invested Rs. 28 crore (Rs. 280 million) for a 1.3% stake. Catamaran picked up the stake at a steep discount to the issue price as SKS looked at roping in marquee investors ahead of the IPO. Last year, Murthy sold shares worth Rs. 174.3 crore, or US$ 37 million.

Source: The Times of India, November 16, 2010
Murthy's Catamaran eyes Manipal stake: Set to be Premji's co-investor in edu groupSocialTwist Tell-a-Friend

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