Tano Capital invests in Promac

Tano India Private Equity Fund, seeded by Charles Johnson, former co-president of Franklin Templeton Investments, has made a strategic investment of close to Rs 33 crore in Bangalore-based Promac Industries.

Promac is a privately-owned Rs 120-crore company, which manufactures cement plants, and process and material handling plants on a turnkey basis. Founded in 1972, it has executed more than 150 projects in the cement and material handling sector.

Its clientele includes Lafarge (South Africa), Redler (UK), Purechem Industries (Nigeria), Hiedelberg (Germany), L&T, KPCL, BHEL, Grasim, Balco, JK Cement and Sterlite Industries.

According to information available, Promac will utilise this growth capital for organic expansion and working capital requirements. Promac's margins are understood to be in the range of 11-12 per cent. Promac is trying to capitalise on the infrastructure spending boom, which is under way in India.

According to independent estimates, the infrastructure outlay for FY08-12 is estimated at Rs 12.7 trillion and companies such as Promac, which provide products and services linked to infrastructure stand to gain. Mape Advisory Group was the sole financial adviser to Promac.

The profile of Promac fits in ideally with Tano's investment focus. Tano Capital manages investments in China and India. Its China fund is around $50 million and focuses on venture capital investments. Its India fund - about $110 million - is a growth fund which invests across sectors.

Backed by the expertise of Johnson, The Tano India PE Fund focuses on providing expansion capital to mid market companies domiciled in India.

In India, this fund is led by Hetal Gandhi (former CEO of IL&FS Financial Services and former head of IL&FS Private Equity) and Carlton Pereira (former head of Corporate Finance at KPMG, for India and the Middle East).

The fund's advisory board consists of J Mark Mobius, acknowledged emerging markets 'guru' and Sir Nicholas Brady, former US treasury secretary.

The fund is sector agnostic (except real estate and pure commodity plays) and typical investment size is $5-15 million. Tano has so far invested $30 million across five companies in retail, power cables, pharmaceuticals, industrial manufacturing and heavy engineering.

It is keen to look at opportunities in auto ancillaries, logistics, environment management and pharmaceuticals.