NEW DELHI: SIS Security, one of India's largest security services companies, has formed a new joint venture with Spanish security services giant Prosegur, to offer alarm monitoring and response solutions for homes and small businesses.
This is the second JV between the two entities, and comes aboutfour years after the two companies got together to form SIS Prosegur, which provides cash logistics services to financial institutions and commercial establishments.
As per the terms of the new joint venture, the yet-unnamed new entity will receive an initial capitalisation of Rs 100 crore from SIS and Prosegur, and will initially launch in Gurgaon, before rolling out services across Mumbai, Bengaluru, Hyderabad and Chennai.
"This is the first time that a primarily B2B sector like private security is exploring the vast opportunities in the B2C segment in India, specifically in residential security," said Rituraj Sinha, promoter of SIS Group.
Both entities will each own a 50% stake in the company, which will have its national operations centre in Gurgaon. The new joint venture will offer home, fire and burglar monitoring systems to consumers, and will also be the first responders to any situation that may arise. It will also inform emergency services, such as police, fire and ambulance services, if required.
"There are no companies in India at this point that offer a complete home alarm monitoring apparatus. With this, we hope to offer consumers the complete suite of security services, using the best technology available," said Sinha.
According to Sinha, this will be the first time that such a service is being offered in India. Globally, US-based ADT Worldwide and Sweden's Securitas Direct Verisure Group are amongst the biggest players in this segment.
The development comes at a time when the country's security services sector has been seeing increasing consolidation, with a number of global security companies such as G4S and Securitas also establishing a strong presence in Asia's third-largest economy.
According to industry estimates, India's security services sector is estimated to hit $10 billion (about Rs 68,130 crore) by 2018, but continues to be a highly fragmented sector, with only a handful of large players operating in the segment, which continues to be dominated by smaller unregulated firms.
SIS, which expects to report revenue of Rs 4,000 crore in financial year ending March 2016, and is backed by home-grown private equity firm, CX Partners, has emerged as one of the few major domestic security services that competes with some of the biggest private equity firms and global conglomerates that are also actively pursuing buyout opportunities in the country.
In 2014, SIS Prosegur, the cash logistics JV of SIS and Prosegur, acquired the cash management business of Danish major ISS for about Rs 150 crore.
Additionally, last year, the Delhi-based company raised debt financing of about Rs 600 crore from National Australia Bank, a significant portion of which is expected to be used towards making acquisitions.