Team Winds of Change

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Analysis of PE Investments

Team Winds of ChangeArun Raghavendran R

Jasleen KaurVignesh Chandrasekaran

Salil Pawar

KPMG International CaseCompetition 2011

Preliminary Round, NMIMS


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Quotable Quote

To understand KKR, I always liketo say, don't congratulate uswhen we buy a company. Any foolcan buy a company. Congratulateus when we sell it and whenwe've done something with it andcreated real value

- Henry Kravis


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PE Investment: A SuccessStoryGenerating Higher Revenues Year-on-Year

Without PE, Genpact is forecasted toregister a growth of77% in 2004-10

However, with PE, Genpact is predictedto grow at 230% in the same period

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Genpact Revenues based on(in million US$)

AssumptionGrowth with PE, 22% CAGR

Growth without PE, 10% CAGR

Genpact is a global leader inbusiness research process

management and technologymanagement.Investors: General Atlantic, Oak Hill Since 2004

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Benefits of PEInvestment

Providing better opportunities

Private Equity Investment serves as astimulus to provide a bigger platformto grow and open newer avenues

The broad benefits of Private EquityInvestment are summarised as shown


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Spectramind eServices is

an active player in the BPOand ITES industry.Investors: ChrysCapital, HDFC since 2000

Chronologyof Events

Exited after acquisition ofWipro in 2002 when

Spectramind was worth$100 million dollars

Increase in proceeds = 90%growth in 2 years

The Spectramind StoryGrowing confidence in PE as a viable option


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The monetary stimulus

provided by the PE/VC firmscan be used by the investeefirms to increase R&Dinvestments and capitalexpenditure

Increased R&D expenditurestimulates innovationproviding a distinctive

competitive advantagewhich increases revenue

Boost in RevenuesPE acting as a tool to promote revenuegrowth

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nue Growth in Mphasis (in million

(in million $)

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

With PE 7.98 26 84.8 276.47 901.31 2938WithoutPE 7.98 9.778 9.7 10.7 11.8 13

PE A B h


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PE: A Boost to theEconomy

Providing a Fillip to Growth

A small influx in the Private Equity Investment

creates a multiplier effect in the economyleadin to hi her income and ex enditure


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Operational EfficiencyCreating an impact

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Effect of Private Equity on Indian companies

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ong-term rowtOrientation

and Strategic Direction

Company Before PEFunding

Independent reporting

No Process

No structure in

decision-making

Im ro er rofit sharin

Company After PEFunding

Increase in Media VisibilityIncrease in StakeholderConfidenceIncreased wagesEnhancement of reputationBetter client and vendor

relationshipsBetter corporate governance

Long termGrowthOrientation

Strategic Direction

Usage of PE / VC Fundin


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Entrepreneurial DriveSupporting Entrepreneurs

Naukri.com is Indias No.1job-search portal

Database of about 17million users

Over 70,000 live job listings

Helped thousand in finding

Naukri.comLaunched In 1996-97Launched By SanjeevBikhchandhaniPE Investor ICICI Venture


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PE Investment CasesSuccess Sagas

RapidExpansion

Investment of $290 millionbetween 1999 and 2001

At a period there was a high riskbecause of regulatory uncertainty

in telecom sector

This investment helped Bhartiscaling up significantly through

organic and inorganic growth

WarburgPincusattitudetowards Bharti

Quick Decision-

Exited the Bharti stake between2004 and 2005 when theproceeds were$1.83 billion

Increase in proceeds = 531%

Bharti Airtel


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Factors favouring andopposing PE

InFavour

InOpposition


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Thank

You!

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