Security firm SIS in cash services venture with Spanish co

Security firm SIS Group and Spanish firm Prosegur have entered into a 51:49 per cent joint venture to form a cash management services company.

SIS Prosegur, the joint venture company will invest Rs 150 crore to develop the cash management service business in the domestic market.

Among the services, the company will offer a comprehensive range of secured transportation, vaulting, processing and maintenance solutions for ATMs, bank cash, bullion and other valuables catering primarily to banks/financial institutions and organised retail industry. It would also set up cash vaulting and processing facilities across India.

Mr R.K. Sinha, CMD, SIS Group said, “The cash services segment in India needs consolidation. The industry is far too fragmented and with this joint venture agreement with Prosegur, SIS shall invest resources to create cash management infrastructure.”

Growing market

The security industry of late has been witnessing hectic activity. Last year, Schneider Electrics acquired Zicom Electronic Security Systems Ltd's assets in India.

The Rs 3,000-crore security solutions market has been growing 50 per cent annually. It is being primarily driven by the office segment, commercial real estate and also small and medium enterprises.

Started in 1974, the Sinha family owns nearly 85 per cent. In 2008, DE Shaw had invested in the company SIS Group posted sales of Rs 1,850 crore during the fiscal year ended March 31, 2011. The group offers a range of security services, including man guarding, electronic security, cash management services, security training and consulting and mechanised cleaning.

Its customers include Tata Group, Aditya Birla, State Bank of India, BHP Biliton, Rio Tinto and Qantas Airlines.

Mr Christian Gut, Chairman and CEO, Prosegur, said, “while the security services business in India has largely remained fragmented in India, the cash management services segment has been growing at over 25 per cent per annum owing to the rapid expansion of bank branch network, ATM network, bullion movement and growth of organised retail business”.

bindu.menon@thehindu.co.in