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Private Equity.. The latest in Indian financial resource.

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Presentation on theme: "Private Equity.. The latest in Indian financial resource."— Presentation transcript:

1 Private Equity.. The latest in Indian financial resource

2 Private Equity Players These are established investment bankers - invest into proven/established businesses. PE investors can be domestic (established as trusts, or a company) or foreign private equity firms. Foreign Institutional Investment (FII) for investments in listed companies Foreign Direct Investment (FDI) for investment in unlisted companies.

3 Private Equity Investors are individuals or firms which provide private equity funds to different ventures. They generally receive a return on their investment through one of three ways: an IPO, a sale or merger of the company they control, or a recapitalization Private Equity Capital It is the form of capital that buys majority stakes in companies and/or entire business units to restructure its capital, management and organization. Usually the targets are held private for three to five years Private Equity firms are firms which provide private equity funds to different ventures. They generally receive a return on their investment through one of three ways: an IPO, a sale or merger of the company they control, or a recapitalization Various Concepts

4 Regulations for Private Equity Investors and Venture Capital Investors Companies Act, 1956 (the "Act"), Foreign Exchange Management Act, 2000 Securities and Exchange Board of India Act, 1992 along with the rules and regulation therein. SEBI Venture Capital Regulations, 1996 SEBI Foreign Venture Capital Investors Regulations,(2000), FDI and RBI FEMA provisions. Guidelines issued by the Central Board of Direct Taxes (CBDT).

5 Why PE Investments in India? Indian growth story PE firms have its spillover effect on various fronts such as Corporate governance standards, Knitting global connectivity, Building executive teams, Improving/raising organizational capability, enhancing evaluations and creating liquidity. Further, PE firms also provide the domestic entities the necessary mentoring and advice without having to go to public markets.

6 Opportunity for SMEs Whether big or small everybody has a desire to grow Governance Activities Accountability Transparency Corporate Governance Global Standard Practices human Resources Management, Financial Planning, Reporting and Investor Relations.

7 Exit strategies of PEs Direct sale to investors seeking a shareholding in a firm acquired by the fund. The initial public offering (IPO) is a preferred exit option in developed PE markets. Post-purchase listing of the company permitting sale of equity through the stock market. Sale to another private equity firm, referred to as a secondary buyout. Mergers and acquisitions : As the Indian economy's growth has kept a steady pace, industry-wide consolidations are an attractive route for a PE investor to make an exit

8 Some Recent Examples

9 Rp.100 crore deal that Reliance Equity Advisors — Reliance Capital’s PE arm — struck with Pathway World School. This was the first PE investment in any school in the country Schools turn smart to woo PEs

10 Private limited entity under Section 25 of the Companies Act, 1956, and not as a trust. The reason: The company sees this as an alternative way of having a scalable model (which the trust structure does not allow as its bars payment of dividends). Schools that cannot go for the Section 25 option have begun turning to “smart equity” from private equity (PE) players to expand access to new technologies, build new set of services and add resources.

11 Temasek to invest Rs 880 cr in GMR 10 Apr 2010 Singapore-based Temasek Holdings has signed an agreement with GMR Energy Ltd (GEL) to raise capital for energy expansion plans. Temasek Holdings would invest $200 million (about Rs 880 crore) through its wholly-owned subsidiary Claymore Investments (Mauritius).

12 Blackstone to Invest INR 2250 Million in Jagran Media Network 07 Apr 2010 The Blackstone Group (NYSE: BX), will be investing INR 2250 million (approximately USD 50 million) in Jagran Media Network Private Limited, which will hold majority share of Jagran Prakashan Limited (“JPL”). JPL is India’s leading media and communications group, with the group’s flagship brand, Dainik Jagran, being the most widely read newspaper in the world with a total readership of 54.6 million. Jagran Media Network Private Limited -approvals for the investment from the Foreign Investment Promotion Board

13 Major India Private Equity / Venture Capital Funds ICICI Ventureswww.iciciventure.comwww.iciciventure.com UTI Ventureswww.utiventures.comwww.utiventures.com Kotak Private Equity Groupwww.kotak.comwww.kotak.com CVC Internationalwww.citigroupai.comwww.citigroupai.com JM Financial Evolvence www.evolvenceindia.comwww.evolvenceindia.com New Bridge Financial Advisorswww.newbridgecapital.comwww.newbridgecapital.com Carlylewww.carlyle.comwww.carlyle.com Apaxwww.apax.comwww.apax.com Blackstonewww.blackstone.comwww.blackstone.com Warburg Pincuswww.warburgpincus.comwww.warburgpincus.com Temasek Holdingswww.temasekholdings.com.sgwww.temasekholdings.com.sg General Atlanticwww.generalatlantic.comwww.generalatlantic.com 3iwww.3i.comwww.3i.com Chrys Capitalwww.chryscapital.comwww.chryscapital.com

14 Oaktreewww.oaktreecapital.comwww.oaktreecapital.com New Vernon Capital- Ascendas India Property www.ascendas.comwww.ascendas.com IREO - Och Ziff Capital - Trikonawww.trikonacapital.comwww.trikonacapital.com Motilal Oswalwww.motilaloswal.comwww.motilaloswal.com TPGwww.texaxpacificgroup.comwww.texaxpacificgroup.com 2i Capital (India) Private Ltd www.2icapital.comwww.2icapital.com SCFPL - Siemens Venture Capitalwww.siemensventurecapital.com Acer Technology Ventureswww.acervc.comwww.acervc.com APIDC-Venture Capital Limitedwww.apidcvc.comwww.apidcvc.com Creditcapital Venture Fund (India) Ltd.- GE Capital Services India Ltd- TDA Capital Partners Inc www.tdacapital.comwww.tdacapital.com Infinity Technology Investments Pvt Ltdwww.infinityventure.comwww.infinityventure.com Karnataka Information Tech Venturewww.kitven.comwww.kitven.com Walden International India www.waldenint.comwww.waldenint.com Jina Ventures www.jinaventures.comwww.jinaventures.com Samara Capital www.samaracapital.comwww.samaracapital.com TVS Capital Funds Limited Major India Private Equity / Venture Capital Funds

15 Actiswww.act.iswww.act.is Baringwww.bpep.comwww.bpep.com GW Capitalwww.gwcaps.comwww.gwcaps.com Oak Hill Capitalwww.oakhillcapital.comwww.oakhillcapital.com ILFSwww.ilfsinvestmentmanagers.comwww.ilfsinvestmentmanagers.com IDFCwww.idfcpe.comwww.idfcpe.com West Bridge Capitalwww.wbcp.comwww.wbcp.com JumpstartUPwww.jumpstartup.netwww.jumpstartup.net IFCwww.ifc.orgwww.ifc.org Intel Capitalwww.intelportfolio.comwww.intelportfolio.com SIDBIwww.sidbi.comwww.sidbi.com GVFLwww.gvfl.comwww.gvfl.com Pequot Capital www.pequotcap.comwww.pequotcap.com

16 Portfolio Investments by PE.. Classification ICICI Ventures By Fund By Sectors By Strategy IAF Series 1 IAF Series 2 Real estate Fund ICICI Emerging Sectors Fund/Others Mezzanine Fund By Fund Shoppers' Stop TV Today (Aaj Tak) Crossword Pantaloon Retail Trinethra Infowavz Rel Q ICICI Emerging Sectors Fund/Others Bill junction/Techprocess Mars Restaurants Miditech Naukri.Com Avesthagen Biocon Medicorp

17 The main barriers to entry for PE in India are: Complex regulatory issues Increasing number of PE players looking at the same investment opportunities Despite taking minority stakes in deals, managers requested a seat on the Board, Infrastructure, retail, consumer durable, financial services, medical and health care. Few Concluding Remarks

18 Sources Venture Intelligence (Press Release from www.india infoline.com) www.india EMPEA, March 2009 Global Private Equity Report, 2008 PWC EMPLOYMENT IN PRIVATE EQUITY FIRM????? GOOD OPTION

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20 One Billion = One Hundred Crores 100 crores 1 billion = 1000 million, 1million= 10 lacs 10 million=1 crore or 100 lacs


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