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SIDBI venture fund takes up stake in KMG
Tuesday, April 4, 2006
Source: The Times of India, Bangalore
SIDBI Venture capital fund has picked up a 10% stake in Bangalore-based KMG Infotech. The deal size is estimated to be $2.3 million (around Rs. 10.5 crore). SIDBI is the second institutional investor for KMG, which last year divested 8% stake in favour of Fairfax Financial Holdings, a US-based investment company.
Confirming the deal, KMG Infotech managing director Rahul Gupta said the deal would enable KMG to set up a 600 seater centre in Chandigarh besides acquisitions in verticals such as testing and ERP (enterprise resource planning) space.
KMG, which has an employee base of 250 professionals across its four centres in India, has set an ambitions target of having a base of 1,500 employees by 2008.
According to KMG's founder, Subhash C Bhatia, the market potential has been growing at a faster pace in the last 12-18 months which has pushed his company to set up its second marketing office in the US.
The $10-million KMG has been focusing on providing IT services to the insurance sector. This strong focus on insurance prompted the $6 billion Fairfax to pick up a stake in the company.
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