MoneyTree™ India - Q2 2016

www.pwc.com/globalmoneytree www.pwc.in

PricewaterhouseCoopers India Pvt Ltd

MoneyTreeTM India Report Q2 2016

Technology Institute

This special report provides summary results of Q2 ’15, Q1 ’16, and Q2 ’16.

Data provided by Venture Intelligence

PwC MoneyTreeTM India Report – Q2 ’16 2

Table of contents

1. Overview 3

2. Analysis of PE investments 4

Investments by industry 5 Investments by stage of development 7 Investments by region 9 Top 20 PE deals 10

3. Analysis of PE exits 11

Exits by industry 12 Exits by type 13 Top five PE exits Q2 ’16 14

4. Active PE firms 15

5. Sector focus: IT & ITeS 16

Total PE investments 17 Investments by stage of development 19 Investments by region 20 Investments by subsector 21 PE exits in the sector 22

Definitions 23


1. Overview

Indian private equity did reasonably well in the second quarter of 2016, with overall investments worth 4.3 billion USD across 147 deals. Despite e-commerce/consumer Internet investments slowing down considerably owing to valuation and profitability concerns, the IT & ITeS sector continued its dominance over other sectors with investments of 1.6 billion USD, primarily driven by the 1.1-billion-USD buyout of Mphasis by Blackstone. This decent showing is despite the absence of a number of hedge funds that had joined the e-commerce bandwagon last year.

Financial services continues to be a favoured sector among growth/late-stage growth investors, and this mirrors the expected growth in the economy. Non-banking financial companies, microfinance and fintech are subsectors which continue to see significant interest. Logistics and consumer are two other sectors which could contribute to investment growth in the next half of the year with a combination of primary and secondary investments—in particular, the Goods and Services Tax Bill (GST) has the potential to spur logistics deals.

At 1.2 billion USD across 40 deals, exits for the quarter saw a 54% drop as compared to the previous quarter. But, interestingly, this quarter saw four PE-backed IPOs, and, as the markets continue to climb, more of these can be expected.

Buoyant stock markets are a challenge as well, as many promoters look at IPOs as opposed to raising private money in such situations. The outlook for the rest of the year remains positive as India remains firm on its growth agenda. We see a number of pension and sovereign wealth funds setting up Indian offices and starting to invest directly in the country—some of these are focussing on extracting good businesses from the stressed balance sheets of Indian corporates for investment. Traditional private equity funds remain committed to investing in India across varying capital pools, and this complements the needs of Indian businesses at a time when banks have become cautious about corporate lending.

A number of new sectors have been opened up for foreign investments, and are expected to draw corporate buyer interest as well, which is essential from an exit standpoint for private equity investors. In addition, there is the potential additional spend that could be caused by the 7th Pay Commission implementation and a good monsoon season, both of which are expected to bolster the economy further. While some of these factors may be short-term stimulants, they play an important role, and with the reforms process looking reasonably irreversible and India firmly on the path of fiscal consolidation, private equity investors are expected to continue to remain busy in the coming quarters.

Sanjeev Krishan Leader, Private Equity and Transaction Services PwC India


2. Analysis of PE investments

Total equity investments in PE-backed companies The second quarter of 2016 has again given a strong push to Indian private equity (PE). Q2 ’16 has seen investments worth 4.3 billion USD in 147 deals, a 2% increase in value terms as compared to the previous quarter, despite deal volume decreasing by 21%. In Q1 ’16, investments worth 4.2 billion USD were made in 186 deals. As compared to Q2 ’15, the value of deals in this quarter has dropped by 29% and volume has declined by 21%. In Q2 ’15, PE investments stood at 6.0 billion USD in 186 deals. The average deal size for this quarter was 29.1 million USD. The information technology & IT-enabled services (IT & ITeS) sector continued its dominance in this quarter, despite a weak show by e-commerce investments. While the investment flow of 1.6 billion USD in 92 deals was 17% higher than Q1 of the year in value terms, there was an 11% drop in terms of volume. However, the value reflects a 14% drop as compared to the year-ago period. The banking, financial services & insurance sector (BFSI) again secured the second position, attracting 769 million USD—a 25% decline as compared to the previous quarter and a 14% surge as compared with the year-ago period. With just two deals, the energy sector attracted 730 million USD. This quarter has seen six buyouts worth 1.6 billion USD, and the PE appetite continued to be strong, with late-stage investments worth 1.2 billion USD in 25 deals. The drought in early-stage investments

continued in this quarter, with just 183 million USD in 74 deals. Regionally, Bengaluru attracted a little more than 1.5 billion USD, while Mumbai saw investments of just 1.5 billion USD. Contributions from other regions were insignificant in this quarter.

Total private equity investments

No.

of

deal

s

101 89

10

8 99

118 96

14

0 17

9 16

7 10

9 13

5 86

81

50

72

103

100 93

12

8 10

6 13

5 13

8 15

2 13

5 14

7 13

3 14

3 12

2 12

0 12

7 12

5 11

1 15

6 13

5 13

6 14

6 21

1 18

6 20

3 18

4 18

6 14

7


1,384

2,164

1,790

2,006

2,578

2,128

4,577

5,403

3,825

2,729 2,581

1,196

755

814865

1,749

2,1142,198

2,397

1,948

4,273

2,565

3,952

1,853

2,314

2,165

4,026

1,384 1,299

4,848

1,571

2,348

2,456

3,172

2,882

4,465

3,158

5,993

6,601

3,781

4,188

4,277

0

1000

2000

3000

4000

5000

6000

7000

Q1

2006

Q2

2006

Q3

2006

Q4

2006

Q1

2007

Q2

2007

Q3

2007

Q4

2007

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Q2

2011

Q3

2011

Q4

2011

Q1

2012

Q2

2012

Q3

2012

Q4

2012

Q1

2013

Q2

2013

Q3

2013

Q4

2013

Q1

2014

Q2

2014

Q3

2014

Q4

2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

Q2

2016

Value of deals (in US$ Mn)

Analysis of private equity investments


Investments by industry Q2 ’15, Q1 ’16 and Q2 ’16

The dominance of the IT & ITeS sector continued in the second quarter of the year, despite a weakness in e-commerce related deals. The sector attracted 1.6 billion USD in 92 deals, which is 17% higher than the 1.4 billion USD in 103 deals it attracted in the previous quarter, but 14% lower than the 1.9 billion USD in 106 deals it received in Q2 ’15.

“The IT&ITeS sector continued to receive the highest level of funding among all sector this quarter. Deal making displayed an expected dip after the frenzy of deals in late 2015 and, measured against the second quarter of last year, both values and volumes dropped. Investments in the e-commerce segment have also declined and there is a slowdown in the investment scenario across the start-up ecosystem. Going forward, while some investors may have a reduced appetite, newer investors will continue to invest in this segment for brighter ideas and teams. With consolidation starting to happen in the e-commerce segment and ongoing corrections around valuations, the focus on profitability will intensify in the coming quarters.”

Sandeep Ladda Leader, Technology PwC India

“As compared to the same period of last year, the investment in BFSI has grown in the second quarter of 2016, but given the activity in the market, we were expecting more deals to close. So, it would seem that macroeconomic and political factors, including Brexit, the US elections and slow growth in major economies, are impacting the overall deals market. Since the financial sector is one of the first sectors to be impacted by the external environment, slower deal closing is reflective of market sentiments.”

Bharti Gupta Ramola Leader, Financial Services PwC India

“Power generation platforms—both conventional and renewable—are attracting considerable interest from long-term investors and funds. A common theme is to deploy these platforms for takeover of partly developed and distressed assets, with a strong technical partner in tow to improve the commercial viability of these projects.”

Kameswara Rao Leader, Energy PwC India



The manufacturing sector also witnessed a good deal flow in this quarter, with nine deals worth 544 million USD compared to the 178 million USD in the previous quarter and 355 million USD in five deals in Q2’15.

Investments by industry


1,899

1,565

83

677

355

816

32

81

2

65

418

1,396

230

10

1,029

178

454

25

25

119

21

701

1,631

730

769

544

233

137

22

19

1

1930 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

Information technology(IT) & IT-enabled services (ITeS)

Energy

Telecom

BFSI

Manufacturing

Healthcare & life sciences

Food & beverages

Agri-business

Engineering & construction

Fast-moving consumergoods (FMCG)

Media & entertainment

Others

Q2 2015

Q1 2016

Q2 2016

Note: Others include other services, hotels & resorts, sports & fitness, agribusiness and retail.



Investments by stage of development Q2 ’15, Q1 ’16 and Q2 ’16

Buyouts led the PE investment inflow in the second quarter of the year with 1.6 billion USD in six deals, followed by late-stage investors with 1.2 billion USD in 25 deals. The growth stage attracted 793 million USD in 31 deals, whereas PIPE deals saw 527 million investment in 11 deals. Early-stage investments sank further to 183 million USD in 74 deals.

Investments by stage development


356

1,125

1,251

963

2,248

50

230

1,089

1,544

338

946

40

183

793

1172

527

1603

0 500 1,000 1,500 2,000 2,500

Early

Growth

Late

Pre-IPO

PIPE

Buyout

Other

Q2 2015

Q1 2016

Q2 2016

Note: Definitions for the stage of development categories can be found in the ‘definitions’ section of this report.

Growth stage in the above graph includes both growth and growth-PE stages.



Investments by region Q2 ’15, Q1 ’16 and Q2 ’16

Interestingly, in this quarter, except Bengaluru and Mumbai, none of the other regions in the country attracted many PE investors. Bengaluru led with 1.538 million USD in 44 deals, followed by Mumbai with 1,500 million USD investments in 34 deals. Hyderabad received investments worth 370 million USD, followed by Chennai (367 million USD) and BCR (287 million USD).


222

2,279

1,016

83

519

1,873

1,205

1,085

869

320

55

654

1,538

1,500

287

370

367

215

0 500 1,000 1,500 2,000 2,500

Bangalore

Mumbai

NCR

Hyderabad

Chennai

Others

Q2 2015

Q1 2016

Q2 2016

Investments by region

Note: NCR includes Delhi, Gurgaon and Noida.



Top 20 PE deals Q2 ’16

The top 20 deals comprised 82% of the total deal value in Q2 ’16. The top five deals together accounted for 58% of the total deal value. The average deal value for this quarter was 29.1 million USD.

Top 20 PE deals in Q2 2016

Company

Industry

Investors

Amount (US$ Mn)

Mphasis IT & ITeS Blackstone 1,100 Resurgent Power Energy CDPQ, SGRF, KIA 500 ICICI Home Finance BFSI TPG Capital 331 Sanmar Group Manufacturing Fairbridge Capital 300 Greenko Group Energy GIC, ADIA 230 Shriram Transport Finance BFSI IFC 150 Fractal Analytics IT & ITeS Khazanah 100 DFJ India Portfolio BFSI Newquest 100 Eicher Motors Manufacturing Cartica Capital 90 Future Supply Chain Shipping & logistics SSG Capital 88 Glenmark Pharmaceuticals Healthcare & life sciences IFC 75 Apollo Health & Lifestyle Healthcare & life sciences IFC 68 Classic Stripes - Promoter Holding Co Manufacturing KKR 55 DFM Foods Food & beverages WestBridge 52 Janalakshmi Financial Services BFSI IFC 50 Bangalore International Airport Travel & transport Fairbridge Capital 49 Vectra Networks IT & ITeS Wipro Ventures 44 Repco Home Finance BFSI IFC 40 Sanghi Industries Manufacturing Piramal Enterprises 39 KLT Automotive and Tubular Products

Manufacturing KKR 35



3. Analysis of PE exits

Total PE exits PE exits in the second quarter of 2016 were among the lowest in recent history, with 1.2 billion USD in 40 deals. This is a 54% drop as compared to the previous quarter (2.6 billion USD in 39 deals) and a 70% drop from Q2 ’15 (4.0 billion USD in 71 deals).

With five exit deals worth 465 million USD, the BFSI sector has emerged at the top, followed by telecom with 206 million in one deal. IT saw exits worth 173 million USD in 14 deals.

The public market has become the most preferred route for exits this quarter, with a total exit value of 713 million USD in 17 deals. Strategic sales followed, with a total exit value of 216 million USD in 16 deals and secondaries worth 214 million USD in five deals.

There were four PE-backed IPOs with a total IPO value of 641 million USD.

Total PE exits

No.

of

deal

s 21

18

23

32

35

39

38

33

34

15

21

11

17

42

32

31

48

37

44

61

34

33

31

31

46

35

34

37

37

41

22

34

27

61

49

54

68

71

51

59

39

40


554

574

607

948801

669

1,514

789

948

308210 268

277

706604

370

973

1,005

1,227

3,079

780

1,080

795

431

1,324

403

1,4761,597

1,122

1,913

448

1,216

470

1,2381,289

1,331

1,937

3,976

1,7461,666

2,560

1,184

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Q1

2006

Q2

2006

Q3

2006

Q4

2006

Q1

2007

Q2

2007

Q3

2007

Q4

2007

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Q2

2011

Q3

2011

Q4

2011

Q1

2012

Q2

2012

Q3

2012

Q4

2012

Q1

2013

Q2

2013

Q3

2013

Q4

2013

Q1

2014

Q2

2014

Q3

2014

Q4

2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

Q2

2016


Analysis of PE exits


Exits by industry Q2 ’15, Q1 ’16 and Q2 ’16

BFSI tops the exit chart this quarter with three of the top five. This includes the exit of a group of PEs from Equitas Holding, AU Financiers and Ujjivan. The total exit value of the BFSI sector was 465 million USD in five deals, which is four times higher than that of the previous quarter (110 million USD in three deals) and just a 7% drop from Q2 ’15 (297 million USD in nine deals). The telecom sector saw a single exit by Providence from Idea Cellular (worth 206 million USD), which made it the second largest sector for exits. In the previous quarter, the sector saw a single exit worth 60 million USD. In Q2 ’15, the sector saw two exits worth 271 million USD. The IT sector saw exits worth 173 million USD in 14 deals, which is a 58% drop as compared to the previous quarter (412 million USD in 12 deals) and a 91% drop as compared to the year-ago period (1.9 billion in 15 deals).


271

497

1,944

381

12

338

532

60

110

412

1,273

224

345

136

206

465

173

30

5

84

221

0 500 1,000 1,500 2,000 2,500

Telecom

BFSI

IT & ITeS

Manufacturing

Energy

Healthcare & life sciences

Others

Q2 2015

Q1 2016

Q2 2016

Exits by industry

Note: Others include shipping & logistics, other services, retail, food & beverages and hotels & resorts.



Exits by type Q2 ’15, Q1 ’16 and Q2 ’16

With four IPOs, the public market has become the best exit route for PE investors in this quarter, with a total exit value of 713 million USD in 17 deals. In Q1’15, public market deals were worth 480 million USD in 12 deals, while in Q2’15, the figures were 1.4 billion USD in 47 deals.

Strategic sales saw exits worth 216 million USD in 16 deals, while secondary sales saw five deals worth 214 million USD. Two investors made exits worth 40 million USD via the buy-back route.


417

1,375

580

1,604

188

480

639

1,253

40

713

214

216

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800

Buyback

Public market sale

Secondary sale

Strategic sale

Q2 2015

Q1 2016

Q2 2016

Exits by type



Top five PE exits Q2 ’16 The top five exits comprised 58% of the total exit value in Q2 ’16.

Top 5 PE exits in Q2 2016

Company Industry Investors Deal amount (US$ Mn)

Equitas Holdings BFSI IFC, Sequoia Capital India, CLSA Capital, FMO, Helion Ventures, Aquarius, Aavishkaar Goodwelll, Lok Capital, India Finacial Inclusion Fund, MicroVentures, Creation Investments

217

Idea Cellular Telecom Providence 206 AU Financiers BFSI Warburg Pincus, IFC, ChrysCapital,

Motilal 112

Ujjivan Financial Services

BFSI IFC, FMO, Units, Wolfensohn & Co., Lok

79

Carat Lane.com IT & ITeS Tiger Global 75



4. Active PE firms

World Bank’s PE arm, IFC, and the home-grown Blume Ventures have entered into 11 deals each in this quarter.

The most active PE investors in Q1 2016 are listed below.

Q2 2016 Investors No. of deals* Blume Ventures 11 IFC 11 Sequoia Capital India 7 Accel India 6 Kalaari Capital 6 Beenos Partners 4 Omidyar Network 4 Ratan Tata 4 SAIF 4 IDG Ventures India 3 Katabole Technology Ventures 3 KKR 3 Matrix Partners India 3 Data provided by Venture Intelligence

* Number of deals includes both single and co-investments by PE firms. Cases where two or more firms have invested in a single deal are accounted for as one deal for each firm.


5. Sector focus: IT & ITeS

Mergers and acquisitions (M&As) in the technology sector have boomed over the course of the last few months. From megamergers to mid-market and small-scale transactions, the resurgence has been considerable.

Deal activity in the global technology space has accelerated with recent announcements of Softbank acquiring ARM Holdings for US$32 billion, Uber China’s merger with Didi Chuxing, Verizon’s acquisition of Yahoo! for 4.83 billion USD, and Walmart’s acquisition of the e-commerce company Jet for 3.3 billion USD. These deals are expected to change the landscape of their specific industries—Uber exited from China with a hefty payout, and the competition is now left in an uncertain position; and Verizon, with both Yahoo! and AOL, could be a major player in digital advertising.

Close to home, the technology industry, particularly e-commerce, has seen several M&As in the past quarter—Myntra’s acquisition of Jabong, Quikr’s acquisition of Hiree to expand QuikrJobs, 1mg’s acquisition of diagnostics marketplace Medd, and the merger of TinyOwl and Roadrunnr were some of the marquee deals. The e-commerce industry is poised for consolidation and a series of M&As this year are likely as companies as well as investors focus on sustainable growth and profitability. Already, larger players in several e-commerce segments have started snapping up competitors to strengthen their position (e.g., OYO Rooms’ acquisition of Zo Rooms).

Recurring trends of transformation, consolidation and investments in emerging technologies continue to demonstrate the rapid evolution within the technology industry, which is also seeing increasing interest in digital assets from non-digital buyers, as seen in the cases of Future Group’s acquisition of Fabfurnish and Titan buying a majority stake in CaratLane.

Going forward, we expect a gradual increase in deal activity as the year progresses. With increasing downward pressure on valuations, more assets will come to market, enticing recently inactive serial technology acquirers to start shopping again. Non-digital buyers are likely to add to deal volumes, although perhaps not proportionately to values, and are likely to focus on innovative technologies with the aim of making their business models more robust.

Sandeep Ladda Leader, Technology PwC India

Sector focus: IT & ITeS


Total PE investments With Blackstone’s 1.1-billion USD Mphasis deal, technology continued its dominance as the most attractive sector, with a total investment of 1.6 billion USD in 92 deals. This is 17% higher than the previous quarter, but a drop of 14% as compared to the year-ago period. In Q1 ’16, there were 103 deals worth 1.4 billion USD, while Q2 ’15 saw 106 deals worth 1.9 billion USD. There were no big e-commerce deals in this quarter.

This time, buyouts clearly earned the top spot in terms of stage of investing, with the single Mphasis deal worth 1.1 billion USD. Growth stage attracted 180 million USD in 17 deals.

Interestingly, early-stage investing has seen a further drop in this quarter, with 164 million USD from 65 deals.

The average deal size has surged to 17.7 million USD from 13.6 million USD in the last quarter. Also, average early-stage investment surged to 2.5 million USD.

No.

of

deal

s 28

18

35

21

34

35

35

32

33

27

47

26

24

16

21

21

28

16

36

24

40

47

43

43

47

49

60

40

44

43

48

48

70

61

78

79

114

106

119

109

103 92


217

850

366

151

625 647

307

233

555

353

422165

99 65

397

106273

111148

311

791

347

515

443303

312

2,423

181150

481 648

988 985

772

1,568

2,635

1,072

1,899

3,769

1,094

1,396

1,631

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Q1

2006

Q2

2006

Q3

2006

Q4

2006

Q1

2007

Q2

2007

Q3

2007

Q4

2007

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Q2

2011

Q3

2011

Q4

2011

Q1

2012

Q2

2012

Q3

2012

Q4

2012

Q1

2013

Q2

2013

Q3

2013

Q4

2013

Q1

2014

Q2

2014

Q3

2014

Q4

2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

Q2

2016

Value of PE investments in IT & ITeS sector (in US$ Mn)



A comparison between the quarter-on-quarter growth rates of the IT & ITeS PE investments against the total PE investments during the last decade shows that funding for this sector was higher than the total PE funding in most quarters. The second quarter of 2016 was no different, with total PE investments seeing a 2% growth and tech investment surging 17%.

-200%

-100%

0%

100%

200%

300%

400%

500%

600%

700%

800%

Q1

2006

Q2

2006

Q3

2006

Q4

2006

Q1

2007

Q2

2007

Q3

2007

Q4

2007

Q1

2008

Q2

2008

Q3

2008

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2008

Q1

2009

Q2

2009

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2010

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2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

Q2

2016

IT & ITeS investment growth Total investment growth

Value of PE investments in IT & ITeS sector



Investments by stage of development Q2 ’15, Q1 ’16 and Q2 ’16 On the back of the 1.1-billion USD buyout of the BPO firm Mphasis by Blackstone, buyout deals have topped the stage of investments in this quarter. There were no buyout deals in the previous quarter, while a single deal of 440 million USD was recorded in the year-ago period.

The growth stage has seen 17 deals worth 180 million USD, a 72% drop as compared to Q1 ’16 (651 million USD in 19 deals) and a 73% drop from Q2 ’15 (664 million USD from 20 deals). Similarly, late-stage deals saw a huge decline. This quarter has seen seven deals worth 158 million USD, while the previous quarter saw a similar number of deals that brought in investments worth 555 million USD. In the year-ago period, it was 529 million USD from 12 deals.

Early-stage investments dropped by 5%, from 173 million USD in Q1 ’16 to 164 million USD in Q2 ’16. Further, PIPE deals saw 29 million USD in two deals.


440

261

664

529

6

173

651

555

18

1,100

164

180

158

29

0 200 400 600 800 1,000 1,200

Buyout

Early

Growth

Late

PIPE

Q2 2015Q1 2016Q2 2016

IT & ITeS investments by stage of development



Investments by region Q2 ’15, Q1 ’16 and Q2 ’16 Regionally, Bengaluru has made a comeback in Q2 ’16. It became the favourite destination for technology investments, attracting 75% of the total invested money—that is, 1.2 billion USD across 31 deals. Mumbai lagged behind in the second slot with 179 million USD in 19 deals.


146

1,061

474

128

90

434

409

376

8

169

1,220

179

105

15

112

0 200 400 600 800 1,000 1,200 1,400

Bangalore

Mumbai

NCR

Chennai

Others

Q2 2015

Q1 2016

Q2 2016

IT & ITeS investments by region



Investments by subsector Q2 ’15, Q1 ’16 and Q2 ’16 IT services has become the top subsector with the Mphasis deal worth 1.1 billion USD. Online services, a distant second, attracted just 173 million USD in 37 deals.


750

10

522

137

445

35

910

87

45

173

31

151

173

100

104

50

1,100

103

0 200 400 600 800 1,000 1,200

Online services

BPO

Mobile VAS

Enterprise software

IT services

Others

Q2 2015

Q1 2016

Q2 2016

IT & ITeS investments by subsector



PE exits in the sector Q2 ’15, Q1 ’16 and Q2 ’16 As compared to the previous quarter, there was a 58% drop in exits in the IT & ITeS sector in Q2 ’16. The sector saw exits worth 173 million USD in 14 deals, as compared to 412 million USD in 12 deals in Q1 ’16. Strategic sales saw the highest number of exits—worth 161 million USD in 11 deals.

Total IT & ITeS exits

No.

of

deal

s 8 4 3 12 5 6 8 8 7 6 11

12 9 16 7 8 9 5 4 3 5 4 8 8 14

11 4 13 9 8 4 9 11 9 8 9 5 10 9 7 9 14 6 15

18

15 9 14

12


93176

22772629

679

58

316379

81105

78

261287

56196712 12

32 25

162

48

393

225

156

1,719

340

612

154 96129106

1,056

258225

519

194

498

181

185

10

448

685

1,944

98

615

412

0

500

1,000

1,500

2,000

2,500

Q1

2004

Q2

2004

Q3

2004

Q4

2004

Q1

2005

Q2

2005

Q3

2005

Q4

2005

Q1

2006

Q2

2006

Q3

2006

Q4

2006

Q1

2007

Q2

2007

Q3

2007

Q4

2007

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Q2

2011

Q3

2011

Q4

2011

Q1

2012

Q2

2012

Q3

2012

Q4

2012

Q1

2013

Q2

2013

Q3

2013

Q4

2013

Q1

2014

Q2

2014

Q3

2014

Q4

2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016



Definitions

Stages of development

Early stage – This refers to the first or second round of institutional investments in companies that adhere to the following: Less than five years old Not part of a larger business group Investment is less than 20 million USD

Growth stage – This refers to investments of less than 20 million USD. Also, investments meeting the following criteria are considered to be in the growth stage: Third or fourth round funding of

institutional investments First or second round of institutional

investments in companies that are more than 5 years old and less than 10 years old or spin-outs from larger businesses

Growth-stage PE – This includes the following: First or second round of investments worth 20

million USD or more

Third or fourth round funding in companies that are more than 5 years old and less than 10 years old, or subsidiaries or spin-outs from larger businesses

Fifth or sixth round of institutional investments

Late stage – This comprises the following: Investment in companies that are a decade old Seventh or later round of institutional

investments

PIPEs – The following constitute PIPEs: PE investments in publicly listed companies via

preferential allotments or private placements Acquisition of shares by PE firms via the

secondary market

Buyout – This is an acquisition of controlling stake via purchase of stakes of existing shareholders.

Buyout (large) – This includes buyout deals of 100 million USD or more in value.

Other – This includes PE investments in special purpose vehicle (SPV) or project-level investments.

Types of PE exits

Buy-back – This includes the purchase of PE or VC investors’ equity stakes by either the investee company or its founders or promoters.

Strategic sale – This includes the sale of PE or VC investors’ equity stakes (or the entire investee company itself) to a third-party company (which is typically a larger company in the same sector).

Secondary sale – Any purchase of PE or VC investors’ equity stakes by another PE or VC investors constitutes secondary sale.

Public market sale – This includes the sale of PE or VC investors’ equity stakes in a listed company through the public market.

Initial public offering (IPO) – This includes the sale of PE or VC investors’ equity stake in an unlisted company through its first public offering of stock.

PricewaterhouseCoopers and Venture Intelligence have taken responsible steps to ensure that the information contained in the MoneyTreeTM report has been obtained from reliable sources. However, neither of the parties can warrant the ultimate validity of the data obtained. Results are updated periodically. Therefore, all data is subject to change at any time. Before making any decision or taking any action, you should consult a competent professional adviser.

©2016 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

www.pwc.com/globalmoneytree www.pwc.in

Contacts Sandeep Ladda Leader, Technology PwC India [email protected]

Sanjeev Krishan Leader, Private Equity PwC India [email protected] This report was researched and written by the following:

Pradyumna Sahu Director, Technology PwC India [email protected]

Sibi Sathyan Knowledge Manager, Private Equity PwC India [email protected]

About PwC’s Technology Institute The Technology Institute is PwC’s global research network that studies the business of technology and the technology of business with the purpose of creating thought leadership that offers both fact-based analysis and experience-based perspectives. Technology Institute insights and viewpoints originate from active collaboration between our professionals across the globe and their first-hand experiences working in and with the technology industry. For more information, please contact Raman Chitkara, Global Technology Industry Leader, at

About PwC At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

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MoneyTree™ India - Q2 2016