Serve & Volley served up for private equity funding

30th June 2008, Bangalore: Last week it was Laqshya. This week it is Serve & Volley. Private equity is definitely making its presence felt in the out-of-home advertising industry. Barely before the news that Warburg Pincus is investing Rs. 276 crore into Laqshya has sunk in, sources revealed that Lehman, Goldman Sachs and ICICI Ventures are lining up to invest 15-20% in Bangalore based Serve & Volley with key assets including Bangalore Municipal Corporation, Kolkata Metro and the Delhi Metro. That’s to the tune of Rs 200-250 crore.

Sources also say that talks were on with at least 3 funds to raise Rs.300 crore.

The 11 year old company is not the only one in the industry looking to PE funding. The topic was the focus of discussion in the Panel Discussion held at the Outdoor Advertising Convention in Mumbai last week. Media owners and investment bankers discussed the options of bringing in more PE funds. The Rs.1800 crore industry has recently seen strong growth of about 10-15% and this is what has been attracting several PE and venture capital funds to outdoor media firms. But the segment still remains highly fragmented with over 2000 players and only 10 of those have a national presence.

When contacted, Raj B Bhattacharjee, AVP of Business Development, Serve & Volley, said “We expect a reorganisation and a shakedown in the industry. We want buying power to increase our assets. We already have the Delhi Metro and the Kolkata Metro (in the bag), but we still need to make huge investments. This is why we went in for PE funding”.

Serve & Volley, promoted by entrepreneur Nitesh Shetty, has been increasing its pan-India presence with several infrastructure-related outdoor assets. The company is managed independently and has only ties with its assets in construction, real estate and infrastructure. Shetty has also been talking to Citigroup and Och-Ziff for PE funding for his business.