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Mumbai: Private equity firm Morpheus Capital Advisors has paid Rs42 crore for an 8% stake in home shopping company TVC Skyshop Ltd.

The transaction values TVC Skyshop, founded in 2000, at about Rs500 crore.

TVC has the ability to deliver products in over 3,500 towns. TVC Skyshop will use the funds to expand its business and increase awareness about its brand.

In 2008, the Mumbai-based TVC Skyshop had raised an undisclosed amount from Samara Capital.

“Given the large market opportunity, the industry reaching an inflexion point and TVC’s strengths, there is room for immense shareholder value creation here," said Balu Nayar, managing director at Morpheus.

TVC’s positive financials despite an old-fashioned business model make it a unique investment for Morpheus, Nayar said. “We were impressed with their (TVC) old-fashioned business model—this is the only company of any significant size in this entire sector, including e-commerce that is profit after tax-positive," he said.

TVC uses television commercials, publications, the Internet and catalogues to sell its own brands and products, including consumer electronics and health and lifestyle products.

Skyshop’s revenue rose 80% to 69 crore in the quarter ended 31 March from a year earlier.

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