HFCL's Maloo may invest in Zicom

MUMBAI: There seems to be an alliance brewing between Vinay Maloo of Himachal Futuristic Communications (HFCL) and Pramoud Rao of Zicom Electronic Security Systems (Zicom), which could result in Maloo investing in the electronic security business.

When contacted by TOI, Rao, MD of Zicom said nothing is on the cards. He added that Maloo and he knew each other and meet on social occasions, but that is about where the whole thing ends.

Sources said Maloo is very keen on partnering with Zicom. To facilitate the interest, Zicom is in the process of floating a new company, Zicom Global. Maloo is expected to buy a 26% stake in this entity. The idea being that Zicom Global will take up large electronic security projects on a built-operate-and-transfer (BOT) basis; but only in the overseas market.

It could not be ascertained as how the structure of the arrangement would eventually shape up as plans are yet to be firmed up. A London-based investment banker is believed to be working on the deal.

Even as this nuances of this relationship are being worked out, Zicom, as part of its expansion plans is close to acquiring a 51% stake in a Dubai-based fire fighting and safety equipment firm. ‘‘We have just got a board approval for raising upto $35 million by way of Foreign Currency Convertible Bonds and/or other foreign securities. Many investors including funds have approached us to invest in these financial instruments,’’ Rao said.

Rao started Zicom in 1994 in partnership with Manohar Bidaye, the chairman of company and is now the largest electronic security systems provider in the country with a turnover of nearly Rs 80 crore (FY2006). The promoters hold 31.2% stake in the company which is valued at Rs 176 crore, based on Monday’s closing price of Rs 174 on the BSE.

Zicom’s products include access control systems, CCTV surveillance, fire alarm systems and remote video surveillance catering to residential and institutions. Recently, the company forayed into retailing and has launched stores under the Zicom brand.

Vinay Maloo hit headlines when he joined hands with media moghul Kerry Packer in IT, communications and entertainment (ICE) space. The association led to the Packer picking up a stake in HFCL. Lot of hype surrounded HFCL which saw its stock zooming past the Rs 1,000 mark in early 2000. The scrip now trades in the range of Rs 20-Rs 23 on BSE. The beleagured Rs 756 crore group has not been doing well for some time now.