Four-S IVCA Report Teaser

8/7/2019 Four-S IVCA Report Teaser

http://slidepdf.com/reader/full/four-s-ivca-report-teaser 1/8

INDIAN PRIVATE EQUITY REPORT 2007INDIAN PRIVATE EQUITY REPORT 2007

BROC HURE

Strategies and Services for Stakeholder Success



I

Indian Private Equity Report 2007

About the Report

Four-S in association with IVCA have used their extensive experience of working closelywith leading Private Equity (PE) firms to put together a report that presents all thecurrent issues and trends in Indian PE. The report classifies PE Investments during theyear by Sector, Industry and Development stage and also includes a listing of the topPE/VC players in 2007. Fund raising activity, Exits & Liquidity events as well as a studyon the performance of PE-backed companies have also been covered in the report.

Who should read the report?

The report is relevant for all key players associated with Indian Private Equity –Corporates looking to raise funds, PE Funds investing/planning to invest in the Indianmarkets, Investment Banks, Consulting Firms and Law Firms.

PE Funds operating/planning to invest in the Indian markets will be able to analyse thetrends in the market from a single authentic source.

Top executives of corporates looking for PE funding will get to know about the fundsand the kind of companies they invest in. They will also be able to benchmark thevaluation against the comparable companies and will also be able to understand thevalue addition from a PE investor on the operational front through our special section“Impact of PE Funding on Investee Companies”.

Investment Banks, Consulting Firms and Law Firms will be able to know about the keyfunds and the kind of deals they are doing in the Indian market.

Study Methodology

Four-S has a strong understanding of the PE space in India having worked with leadingPE firms in India for over six years in a research support role. We have also ensuredthat we have captured the views that matter through in-depth meetings with leading PEstalwarts. The firm has been actively tracking the fund raising space and has a dealsdatabase of PE activity in the country since year 2000 and also comes out with theFortnightly Four-S Private Equity Newsletter. As a result, the deals data used in thereport is the most authentic source available on the Indian Private Equity Market.

2

Ind

ianP

rivat e

EquityR e

port

20 0

7

Indian

P

rivat e

Equi ty

R e

port20 0

7



I


1. Executive Summary

2.

PE/VC Investments in India1.1. Investment Analysis - Top 10 deals

1.2. Trend Analysis

2.2.1 Sector & Industry Wise Trend

2.2.2 One-of-a-kind Investments

2.2.3 Development Stages Wise Trend

1.3. Most Active PE/VC Firms (Top 10 Value Wise)

2.4 Indian & Middle East PE firms

3. Fund Raising, Exits & Liquidity Events

1.4. Fund Raising Activity

3.1.1 Indian Economy on a Roll3.1.2 Top New Funds Raised

3.1.3 New Instruments / Fund Types

- Hedge & Mezzanine Funds

- Proprietary Funds

- Structured Products

1.5. IPO & Non-IPO Exits

3.2.1 Returns Analysis

3.2.2 Major PE Backed IPOs

3.2.3 Major Exits Through Other Modes

4. Impact of PE Funding on Investee Companies1.6. PE Funding: A Performance Booster?

1.7. Case Studies

4.2.1 Shriram Transport Finance

4.2.2 Jyothy Laboratories

4.2.3 GMR Infrastructure

5. China PE Market and Comparison with India

6. Policies Affecting PE/VC Investments

7. Major Deals That Were Called Off

Annexures:

A. List of PE/VC Deals in 2007 (Sector Wise)

B. Source of PE/VC Funds (Country/Region Wise)

3

Tab le

ofC

ont

ent s

Table

ofC

ont

ents



Source: Four-S Research

I


Year 2007 saw Private Equity (PE) and Venture Capital (VC) investments ‘Riding aWave of Euphoria’ in India. If 2006 was about PE/VC activity ‘Bursting into Bloom’, by2007, as the comfort level of investors increased, the sentiment had escalated toecstatic levels as can be witnessed in the phenomenal growth in PE/VC investmentsin India which hit an unprecedented $xxbn in 2007, x times the $xxbn figure of 2006.

With GDP growth in 2007 maintaining momentum at xx%, projections of over xx%growth for the next 5 years, a stock market that showed x% growth in the year andstrong business indicators, it was an investment party where everyone wanted to beseen. In fact, 2007 saw India stride ahead of China in terms of investment – incomparison, the neighboring BRIC country received only $xxbn PE investment.

By the end of the year, it had become evident that the growth was not sustainable. Asvolatility set in and the severity of the US sub-prime crisis began to sink in, pursestrings tightened. However, on the brighter side, the finger on the pause button isexpected to be only a temporary phenomenon. The recent market correction isresulting in more attractive valuations and investment sentiment is expected to be

positive by the second half of 2008 which will see the return to healthy growth asopposed to the unprecedented growth of 2007.

Record-level growth in PE/VC

Investments

4

2006 2007 YoY Growth %

Investment Value $xxbn $xxbn* xx%

No. of deals xx xx* xx%

Funds Raised $xxbn $xxbn xx%Average Deal Size $xxmn $xxmn xx%

Active PE Funds xx xx xx%

Biggest Deal $xxmn $xxbn xx%

1.ExecutiveSu

mmary

Growth Pattern of PE/VC Deals in India

xx

xx

xx

xxxx

y

y

y

yy0

50

100

150

200

250

300

350

400

450

2003 2004 2005 2006 2007

03

6

9

12

15

18

21

24

No. of Deals (LHS) Investment $bn (RHS)




* Deals include QIPs and those done by Hedge Funds and Proprietary Funds.

I


Total PE/VC investments announced in Indian companies was $xxbn across xx deals in 2007, ascompared to $xxbn across xx deals in 2006. The average deal size nearly doubled as compared to2006 ($xxmn v/s $xxmn), as even smaller investors that earlier used to look for $xxmn deals beganlooking for $xxmn deals.

5

Execu

tiv

eSumm

ary



PE Investments (in $bn): Development Stage Wise



I


Investing in the CoreInfrastructure (Engineering & Construction) sector accounted for a lion’s share in the 2007 deals listwith nearly $xxbn worth of investments (xx% of total PE/VC investments announced during theyear). As core development continues to be a high priority, the Infra sector is expected to be one of

the fastest growing sectors in India, requiring huge investments worth $xxbn over the next x years.The major growth driver within the Infrastructure sector was the Construction industry, accounting for xx% of the investments.

Telecom was astrong second andmajor gainer due tothe 2 mega dealsinvolving the BhartiGroup. The sector saw a totalinvestment of

$xxbn (a xx% jumpover the $xxbninvestment in 2006)based on thephenomenal growthrates predicted inthe subscriber basewhich could doubleto xxmn by 2010.

BFSI came in third with an investment of $xxbn (xx% of the total). Maximum activity in this sector was among NBFCs and Brokerage Firms driven by the strong performance of Indian Capital

Markets. Brokerages posted healthy returns based on diversification strategies, strong expansion interms of services portfolio, network, etc. and thus attracted $xxmn worth of PE investment. The topfour sectors of Infrastructure, Telecom, BFSI and Real Estate (in that order) received nearly xx% of all PE investments during 2007.

IT/ITES sector was the biggest loser with investments dropping by xx% on YoY basis due to theslower profitability growth forecast. The slowdown in the sector was based on the adverse impact of the over x% appreciation in the rupee and the depressed US economy, which is a major revenuesource for Indian IT companies, coupled with the fact that most of the big IT firms were not lookingto raise funds. However, the sector still managed a record xx small sized deals mainly in the webbased Information Services Industry and in the BPO/KPO Industry.

Traditional favourites like IT/ITES, Manufacturing and Healthcare together comprised of only xx% of all investments by value in 2007 as compared to xx% in 2006 mainly due to better and bigger sizeopportunities in other areas of the economy and comparatively slower growth rates in these 3sectors.

Focus shifting to Growthstage fundingGrowth stage funding received

the largest share of the

investment pie (xx%), with

$xxbn invested in xx deals as

compared to xx PIPE deals at$xxbn.

6

0

50

100

150

200

250

Early Growth Late PIPE Buyout Spin-off

0

2

4

6

8

10

No. of deals (LHS) Investment $bn (RHS)

PE Investments (in $mn): Sector-wise

Executiv e

Summ

ary

IT/ITES Manufacturing Engg. &

Construction

Healthcare &

Lifesciences

BFSI Real Estate Telecom Others

2006 2007



I


7

About Four-S

Four-S Services is India's leading provider of Research, Financial Consulting and

Business Content services. We have a proven track record of consistently delivering highquality solutions, enabling our clients to improve the effectiveness of decision making andacting as a catalyst in achieving business success.

We provide full spectrum business and financial research & consulting services to PrivateEquity players. Working as an extended arm with leading private equity players, weidentify and track target sectors and companies, prepare investment recommendationreports and monitor emerging investment trends.

We have offices in Delhi, Gurgaon and Mumbai with state of the art infrastructure toensure safety and confidentiality of information. Our team comprises of experienced

analysts with advanced qualifications covering a wide range of sectors includingInfrastructure, BFSI, Textiles, Auto, Pharmaceuticals, Information Technology andConsumer Durables amongst others.

Our services include:• Financial Consulting— Valuation— Investor Relations— IPO Consulting— Capital Structuring— Strategy & Planning

• India Specific Research— Information Services— Business & Financial Analysis— Industry Analysis & Updates

• Business Content Services— Annual Reports— Website Content Development Services

— Investor Presentations— Corporate Profile Four-S is a trusted Business and Financial Research Partner for Global PrivateEquity Funds. If you would like to know more about our service offerings or want todiscuss your research requirements, please write to us at [email protected]

Four-S Services Pvt. Ltd. Locations

New Delhi: 409, Meghdoot, 94, Nehru Place, New Delhi -110019, INDIA Tel. No. +91-11-41808168Mumbai: 202, Vinayak Chambers, 4th Road, Khar (West), Mumbai – 400052, INDIATel. No. +91-22-26482878

www.four-s.com

http://www.four-s.com/

http://www.four-s.com/



I


8

Executiv

eS

ummary

Order Details

Rs 10,000 (Domestic Market Non-IVCA Members)

Rs 5,000 (Domestic Market – IVCA Members)US $215 (International Market – Non-IVCA Members)US $110 (International Market –IVCA Members)($25 delivery charges for International buyers)

Details Required

Title: _____ First Name:_________________ Surname_________________________

Company Name ________________________ Job Title_________________________

Physical Address _______________________ Telephone________________________

______________________________________ Facsimile_______________________

______________________________________ E-Mail___________________________

Town/City______________________________ Quantity of Reports________________

County/State___________________________ Amount__________________________

Postal/Zip code_________________________ Date of Cheque/PO/Draft___________

Country_______________________________ Cheque/PO/Draft No._______________

Signature______________________________ Issuing Bank_____________________

Branch__________________________

Please send the above details along with payment to:

IVCA.Ms Nishi Narang

[email protected] Seema [email protected] of Payment: Cheque/PO/Draft/Cash

Please allow 15 days for delivery

Special Discount

for IVCAmembers

Documents

Four-S IVCA Report Teaser