TVS Finance buys out auctionindia.com

By Our Special Correspondent

CHENNAI, FEB. 21. Making a decisive move towards e-commerce area, city-based TVS Finance, piloted by Mr. Gopal Srinivasan, has inked an as yet undisclosed cash-cum-share deal to acquire www.auctionindia.com, a premier B2B (business-to-business).

The portal, launched in August 1999, was originally owned by Cyber Commerce Pvt. Ltd., a subsidiary of San Jose-based Cybernet Software Systems Inc. The property was subsequently transferred to the new company called Auction India Private Ltd.

The TVS group company will now acquire Auction India Private Ltd. The Cyber group has decided to sell auctionindia.com based on study made by Icra Advisory Services.

Auctionindia has currently 32 personnel and about 23 franchisees outside Chennai. The entire technical team will move into the TVS Finance fold.

According to Mr. R. Shiv Kumar, Director of Cyber Commerce, close to a quarter million dollar has been invested in the portal. So far, the auction site has facilitated conclusion of over 50 auction deals worth close to Rs. 12 crores.

Mr. Shiv Kumar insists that his group will provide technical support to auctionindia.com even under the new dispensation. www.autionindia.com, he claims, has in place a working price model, fetching a revenue stream.

A combination of constraints ranging from liquidity to size and brand equity has proved a hurdle for auctionindia.com to drive up business volume.

Mr. Shiv Kumar feels that the `scalability' constraint has been overcome now that the TVS group is acquiring the company. The TVS name, its business ethics and professionalism will all go a long way in activising the growth of auctioninida.com, he feels.

Mr. Gopal Srinivasan, Director, TVS Finance, sees ``a close synergy in the way TVS has mapped its future plans in the electronic marketplace and the current positioning of auctionindia.com.''

The acquisition is expected to make TVS a major player in the burgeoning B2B segment by integrating the strengths of auctionindia.com with those of the group.

On the consideration paid, Mr. Srinivasan will only say, ``it is a tiny number anyway'' without elaborating. A due diligence exercise is currently under way on valuation. The exercise, being done internally by the company's chartered accountancy firm, is expected to be completed by March.

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