The Hindu Business Line : GVFL divests stake in Colortek

Ahmedabad April 13 GVFL Ltd said it will divest its holding in Gujarat's Valsad-based Colortek (India) Ltd, a company producing liquid colorants for colouring plastics.

In 1993, GVFL had invested Rs 15.5 crore in two phases from its venture capital fund GVCF 1990.

The divestment marks the successful exit from the 50th of its 59 investments, the company said in a release here. GVFL had invested in Colortek at seed stage and has over the past 13 years helped the company through constant support and strategic intervention.

It had invested in Colortek based on the experience of the original promoters, German support and technology but the company made consistent losses in the initial stages.

Instead of closing down the company, GVFL bought out the founder, an experienced professional CEO, Mr Ramesh Chary, to bring about a turnaround in the company. Mr Vishnu Varshney, CEO of GVFL, acted as the non-executive Chairman and also appointed two senior members from GVFL on board of Colortek to help in streamlining the internal systems and procedures and provide management support in the areas of finance, accounts, marketing and corporate governance.

"GVFL invested in Colortek as we saw an opportunity in a niche but innovative technology segment. But there were challenging moments when GVFL had to handhold and nurture Colortek. Today, Colortek divestment has become an IIM-Ahmedabad case study and one of the most impressive turnaround stories in Indian venture capital history," said Mr Bharat Kanani, Chief Operating Officer of GVFL Ltd.

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