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3 0 J U L Y - 5 A U G ’ 1 2
Private Equity Track Research4I nd ia Week ly updat e o n t he Ind ian PE Sec tor
Research4India is the research services arm of Four-S Services Pvt Ltd. Here we provide regular research
reports on key sectors of the Indian economy, and large unlisted companies in these sectors. For subscription / custom queries, please contact Seema Shukla at seema@four-s.com.
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29th July'12 5th Aug'12
PE Investments No. of Deals
Investor (s) Target
Stake
(%)
Value
($mn) Stage Sector Industry Segment
Bain Capital Genpact 30 1000.0 PIPE Services IT/ITeS BPO
Brick Eagle Capital Xrbia Developers NA 36.0 Growth Construction Real estate Housing
L Capital PVR, subsidiary NA 19.6 PIPE Services M&E Recreation
Oman India Joint Fund Solar Industries India 4.28 13.0 PIPE Manufacturing Misc Explosives
Saif Partners Ammi's Biryani NA 7.2 Growth Services Retail Restaurant
Lok Capital, Omidyar
Network, Elevar Equity
Advisors, SVB India
Vistaar Financial
Services Pvt Ltd NA 7.2 Growth Services BFSI NBFC
Accel Partners Universal Collectabillia NA 5.0 Early Services Misc. Services Merchandis
e firm
Sequoia Capital Practo Technologies NA 4.6 Early Services IT/ITeS Software
Foundation Capital,
Inventus Capital
Wealth India Financial
Services NA 3.6 Early Services BFSI
Fin services
portal
SBI Holdings (Japan) Liqvid eLearning NA 3.0 Early Services Education e-learning
Rare Enterprises SpiceJet 0.5 1.4 PIPE Services Travel & Tourism Airlines
Acumen Fund Edubridge Learning NA 0.3 Early Services Education Services
Source: Four-S PE Database
PE Activity for the week
During the week ended 05th Aug, 2012, there
were 12 PE/VC deals worth $1.1bn compared to
7 deals worth $34.2mn in the previous week.
Out of the total, 5 were early stage deals, 4
were growth stage deals and 4 were PIPE deals.
In the largest deal during the week, Bain
Capital Partners has agreed to buy around 30%
stake in the business process management and
technology services company Genpact Ltd for $1bn.
PE Deals During The week
Private Equity Track
Research4India 2
Bain Capital buying 30% stake in Genpact
for $1bn
PE firm Bain Capital Partners has agreed to
buy around 30% stake in the business
process management and technology services
company Genpact Ltd for $1bn. The stake
held by the existing investors of the company
– General Atlantic and Oak Hill Capital – will
be bought at $14.76 per share with an
additional $2.24 per share of special
dividend. The two investors still hold a 10%,
which will be worth another $382mn. Bain
Capital has agreed not to sell any Genpact
share for a period of two-and-a-half years.
Four-S Comment: General Atlantic and Oak
Hill bought 60% in Genpact in 2004 for
$500mn. They subsequently reduced their stake
to little over 40% after 2 rounds of sale. In this
round of exit, they are estimated to have
pocketed around $1.62bn (Bain deal of $1bn
and special dividend) for 30% stake sale,
thereby making around 6.5x return on
investment. BPO and IT Services sector seems
to be completing its first cycle of exits. Last
year also saw some high profile PE exits in the
sector - Blackstone exiting Intelenet by selling
its majority stake to UK’s Serco in a $634mn
deal and General Atlantic selling Patni
Computers stake for $254mn.
Brick Eagle Capital invests in Xrbia
Developers
Brick Eagle Capital Group is investing Rs 2bn in
five projects of Xrbia Developers Limited,
affordable housing venture promoted by the
Eiffel group. The fund has invested Rs 400mn in
the first development and the rest of the money
will go into the remaining ventures. The five
projects will come up in the area of Karjat, near
Mumbai, on 150 acres acquired by Brick Eagle
and will be developed in partnership with Xrbia.
The Group's realty footprints span across Pune,
Mumbai, Nagpur, Delhi & Bangalore, with over
25 mn sft. of existing development and 119 mn
sft of planned projects.
L Capital to invest $19.6mn in PVR,
subsidiary
L Capital Asia has picked a 10% stake in Ajay
Bijli-promoted PVR Ltd for Rs 577mn through a
preferential issue. The fund will also invest Rs.
500mn to set up a joint venture with PVR, PVR
Leisure Ltd, which will focus on in-mall
entertainment, gaming, food and leisure. L
Capital’s holding in the venture will be 44%,
with PVR taking 51% and the remaining going
towards management stock options. PVR’s
existing investment in the bowling-alley
business PVR BluO Entertainment Ltd, a joint
venture established in 2009 with Thailand-
based Major Cineplex, will now be held through
this new company.
Four-S Comment: PVR, which expanded from
single screen theatre in New Delhi, has earlier
seen interest from private equity investor. ICICI
Venture had invested in the company in 2003
and 2005 totalling Rs 470mn. The PE firm made
multiple partial exits from PVR starting with a
pre IPO deal and subsequent open market deals
thereby exiting completely in 2007 for Rs
1.95bn, making nearly 4x its investment. ICICI
Venture again bought into the company in 2008
and currently holds a 7.79% stake.
Oman India Joint Investment Fund invests
in Solar Industries
Industrial explosives maker Solar Industries
India has struck a deal to raise Rs 720mn
($13mn) from Oman India Joint Investment
Fund through a preferential allotment for 4.28%
stake. Founded in 1995, Nagpur-based Solar
Industries (formerly Solar Explosives Ltd) has a
capacity of over 2.8 lakh MT of explosives (with
over 2.1 lakh MT of bulk explosives and the rest
being cartridge explosives), 190 million
detonators and 75 million metres of detonating
fuse. It claims to have increased market share
in India from 24% to 27% in FY12.
Four-S Comment: The annual market of civil
explosives in India is approximately Rs 22.50
bn which is around 5% of the global civil
Private Equity Track
Research4India 3
explosive consumption and is growing at a
CAGR of 20%. In India, the mining sector
accounts for 80% demand for civil explosive
which in turn is dominated by coal mining and
the balance 20% is for infrastructure projects
like roads, hydro engineering, irrigation etc.
India is the world’s eighth-largest explosive
manufacturer. As the industry is tightly
regulated most of the industry is in the
organized sector with ICI India, Gulf Oil, Indian
Oil Corporation and Solar Industries are the
leading players.
SAIF Partners investing $7.2mn Ammi's
Biryani
SAIF Partners is investing Rs 400mn or $7.2mn
in TMA Hospitality Services Pvt Ltd, which owns
QSR chain Ammi's Biryani. The investment
comes after SAIF Partners set up a Rs 1bn
($18mn) investment vehicle, Zooropa Foods Pvt
Ltd, to invest and manage a chain of quick
service and casual dining restaurants. Ammi's
Biryani currently operates in Bangalore and was
founded in 2008 by Navaj Sharief. It operates
primarily as a take-away and delivery chain
with 13 locations in Bangalore.
Four-S Comment: Quick-service restaurants
(QSRs) that operate in the value-for-money
segment, are catching the fancy of PE/VC
players. QSRs continue to report annualized
growth figures of 25% to 30% and operate on
minimum gross margins of 20%, despite the
sullen economic mood. The sector is being
driven by the younger generation, who continue
to spend. Recent investments include Pune-
based QSR chain focused on selling seafood and
fish products, Fishtro, raising $5mn from Correa
Hospitality. Steammo also raised seed funding
from IncuCapital earlier this year. Last year saw
firms like Faaso's (Sequoia Capital) and Goli
Vada Pav (Ventureast) raising money.
Vistaar raises $7.2mn from Lok Capital,
Omidyar, Elevar & SVB
Bangalore-based Vistaar Financial Services Pvt
Ltd, a small enterprise financing firm, has
raised $7.2mn (Rs 400mn) in Series B funding
from Lok Capital and Omidyar Network besides
existing investors Elevar Equity Advisors and
SVB India Capital Partners. Vistaar caters to the
underserved market of small and micro
enterprises (MSMEs), estimated to comprise
over 26 million companies. The funds raised will
be utilised to expand Vistaar’s current network
to 180 branches across the country over the
next four years, with a projected portfolio of
over Rs 16bn.
Accel Partners invests in Universal
Collectabillia
Accel Partners has committed about $5mn in
Universal Collectabillia, a celebrity merchandise
and brand extension firm jointly owned by
Anjana Reddy, who is part of the Deccan
Chronicle family, and cricket legend Sachin
Tendulkar. Collectabillia's business model now
includes helping celebrities extend their brand
beyond careers and has recently struck a deal
with southern movie star Rajnikanth. It has
similar deals with Sachin Tendulkar and tennis
player Sania Mirza, besides owning rights for
any sporting memorabilia related to Tendulkar.
Sequoia Capital invests in online clinic
management platform Practo
Bangalore-based Practo Technologies Pvt Ltd, a
web-based clinic management software
developer, has raised Rs 250mn (around
$4.6mn) from Sequoia Capital in a Series A
round of funding. Practo’s flagship product is
Practo Ray, a web-based software tool which
provides automated appointment scheduling
and storage of healthcare records including X-
rays, files, prescriptions and billing. The money
raised will be used to launch its various
products globally and expand Practo’s 80-
member team to around 350 over the next two
years.
Private Equity Track
Research4India 4
Wealth India Financial raises Rs 200mn for
expansion plans
Wealth India Financial Services, promoters of
online investment services platform
FundsIndia.com, has raised Rs 200mn from
existing as well as new investors. The fund
raising was led by venture capital firm
Foundation Capital with follow on investments
from current investors Inventus Capital. The
investment will be used by FundsIndia to
expand customer base and enhance the
company’s online platform with new products
and services. FundsIndia.com is a transactional
platform that allows users to link their bank
accounts with investment options like mutual
funds, equities, and fixed deposits, with options
for managing multiple accounts, and
automatically triggering investment related
activities.
E-learning firm Liqvid raises $3mn from
Japan's SBI Holdings
Liqvid eLearning Services Pvt Ltd, an integrated
e-learning content solutions company, has
raised $3mn in funding from a subsidiary of SBI
Holdings, Japan. Headquartered in Noida, with
offices in Bangalore, Singapore and the US,
Liqvid provides technology-aided English
Learning and Training (ELT) solutions to
individuals and organisations under the brand
EnglishEdge. The content can be accessed via
PC, tablet and mobile, and the company claims
that EnglishEdge has more than 2,50,000
learners across schools, colleges, vocational
institutes and more. Its key institutional
customers include IIT Delhi, Jamia Millia,
Pinegrove School, Kimberley International
School, Shemford Schools, British Council and
Educomp, among others.
Rakesh Jhunjhunwala invests in SpiceJet
Rakesh Jhunjhunwala has invested around
R76.9mn in SpiceJet through its arm Rare
Enterprises. The company acquired around
0.52% stake in the company. The investment
came after SpiceJet posted a net profit of Rs
560mn for the recent quarter after five
consecutive quarterly losses. SpiceJet, part of
the Sun Group is a low-cost airline
headquartered in Chennai. It began service in
May 2005 and by 2008, it was India's second-
largest low-cost airline in terms of market
share. Last year, Kalanithi Maran invested Rs
1bn into SpiceJet Ltd and increased his stake in
the budget carrier to 48.6%.
Edubridge Learning secures Rs 15mn from
Acumen Fund
Acumen Fund, a non-profit global venture fund
which focuses on poverty alleviation across
Africa and South Asia, has put in Rs 15mn
($300,000) in Mumbai-based education services
provider Edubridge Learning Pvt Ltd. Edubridge
provides vocational training for low-income
youth across Maharashtra, Tamil Nadu,
Karnataka and Chhattisgarh. Edubridge targets
the youth aged between 18 and 25, who are
typically the first formally employed members
of their respective families. Till date, the
company has trained over 1,500 students and
with this investment, Edubridge plans to scale
its services from 12 to 30 centres over the next
two years.
Morpheus Capital to close debut fund
Morpheus Capital Advisors is raising Rs 4.75bn
for its final closure of its consumer goods
focused fund. The fund is targeting affluent
investors, non-banking finance companies,
banks and foreign investors for its fund. Last
year, the fund made its first closure by raising
Rs 4.25bn, which aimed to invest in the
development of consumer brands. Headed by
former IMG India Chief - Babul Nayar,
Morpheus will invest in companies operating in
food and beverages, apparel & retail, beauty &
wellness, travel & tourism and education
sectors. It plans to invest in consumer-related
companies that have put in place innovative
business strategies and technology.
Fund Raising & Liquidity Events
Private Equity Track
Research4India 5
BanyanTree’s second fund hits first close,
reaches close to $100mn
Banyan Tree Finance Pvt Ltd, advisors to
BanyanTree Growth Capital, a structured
private equity fund that provides capital to
middle market companies, has raised close to
$100mn at first close for its second fund –
BanyanTree Growth Capital II LLC. The fund is
targeting a corpus of $175mn to be raised by
the end of this year. The capital has been raised
from global institutional investors across Asia,
the US and Europe. The fund will stick to its
earlier investment philosophy and focus on
growth capital in the manufacturing and SME
space for investments.
IndoUS Venture Partners raises $149mn
for new fund
IndoUS Venture Partners, a venture capital firm
based in Bangalore, has raised $149mn for
IndoUS Venture Partners II, LLC. While the
venture capital firm has put $150mn as the
total offering amount, this may not be the final
close and the fund could be looking to raise up
to $175mn. The fund made its first sale in
October 2011, raising $97.5mn, and reached
$132.5mn in April this year. Some of the recent
investments made by the VC firm include baby
products e-commerce venture Hushbabies.com
and digital magazine store Magzter Inc. In
2011, IndoUS Venture also exited pharma retail
chain MedPlus Health Services in a secondary
deal in which it reportedly made 4x return.
Kotak Realty Exits Lalith Gangadhar
Kotak Realty Fund is exiting its investment in
Lalith Gangadhar Constructions Private Limited,
with around 10 times return on its investment
in 2007. Kotak is selling its 49% stake for Rs
530mn to the promoters. The fund invested
invested Rs 50mn for 49% stake in the real
estate firm in 2007. Later in 2008, it invested rs
450mn in Lalith Gangadhar’s high-end villa
project in Bangalore called LGCL Ashler.
Star Health looking for PE funding
Star Health and Allied Insurance Company is
planning to raise Rs 1.5bn PE funds for a 6-8%
stake in the company. Its holding company Star
Health Investments Pvt. Ltd (a SPV for
promoting the insurance company) had
received a similar funding from Sequoia Capital
(to bypass the 26% FDI rule) earlier in
November 2010 and ICICI Venture (Rs 1.2bn)
in the same year. The company was trying to
tap the retail insurance segment as announced
in 2009 during when it had 80% of premium
income from the Government Health schemes
and rest from the retail segment.
India Value Fund to invest up to $180mn
in Manipal Hospitals
In what will be the largest private equity
investment in an Indian healthcare firm, India
Value Fund Advisors (IVFA) is committing up to
Rs 10bn ($180mn) to Manipal Hospitals to roll-
out an aggressive inorganic expansion strategy
over the next 4-5 years. In the first leg of the
transaction, Manipal Hospitals is set to get Rs
3bn over the coming weeks from IVFA and
investment will increase as we start acquiring
assets in secondary & tertiary healthcare
service providers besides day care surgery
centres.
Cox & Kings’ UK arm to raise $100mn from
CVCI
Mumbai-based travel services provider Cox &
Kings Ltd is close to signing a deal to raise
$100mn from Citigroup’s private equity arm
Citigroup Venture Capital International (CVCI)
for its UK-based arm. The company, which
acquired UK-based Holidaybreak Plc last year,
will use the money to part-retire its debt of Rs
12.5bn. In May this year, the company said
that its board had approved investment of up to
$140mn in Prometheon Holdings (UK) Ltd (a
Private Equity News
Private Equity Track
Research4India 6
wholly owned subsidiary of the company) from
an institutional investor.
Muthoot Capital Services shares sale offer
oversubscribed
The offer to sell shares of Muthoot Capital
Services by six of its promoters was
oversubscribed. The offer for sales of 3,09,165
shares, received bids for 3,09,187 shares, the
data showed. The floor price for the sale is Rs
90 apiece. Based on the minimum bidding
price, sale of 3,09,187 lakh shares would fetch
over Rs 27.8mn to the company.
Jupiter Infomedia IPO opens for
subscription
The Rs 40.8mn IPO of Jupiter Infomedia , a web
infomedia company with online publications on
business, encyclopedia and yellowpages,
opened for subscription on July 31. It has fixed
the issue price at Rs 20 a share and planned to
offer 20.4 lakh equity shares through the issue,
which closed on August 1. Jupiter Infomedia
intends to use issue proceeds for purchasing
and setting up of offices in Mumbai and
Kolkata; renting offices in Ahmedabad, Chennai
and Delhi; and initial operating expenses for the
marketing/branch office (first three months).
M&A Activity for the Week
During the week ended 5th August, 2012, there were 6 M&A deals worth $637mn
(size of 2 deals were not known). In the largest deal during the week, Sahara Group bought New York’s Plaza Hotel for $570mn.
Source: Four-S PE Database
Acquiror Target Sector
Stake
(%)
Deal value
($ mn)
Sahara Group Plaza Hotel Hotel NA 570.0
PhillipCapital Group MF Global Sify Securities India Pvt
Ltd - Sify's stakeBFSI 29.85 25.0
Dhunseri Petrochem & TeaGlobal Tea & Commodities - 2 tea
estatesF&B NA 22.0
Hero MotoCorp Erik Buell Racing Racing company NA 20.0
Birla Shloka Edutech Ltd Ojus Healthcare Pvt Ltd IT/ITeS 51.1 NA
InMobi Metaflow Solutions M-Vas NA NA
IPO, Other Offerings
Private Equity Track
Research4India 7
Market Update
Key Domestic Indices
Key Global Indices
Source: Google Finance, Yahoo finance
Index 27-Jul-12 3-Aug-12 Change (%) High Low
BSE Sensex 16,839.19 17,197.93 2.09% 18,944.60 15,135.86
S&P CNX Nifty 5,099.85 5,215.70 2.22% 5,629.95 5,129.35
CNX Nifty Junior 9,783.80 10,093.90 3.07% 11,145.70 9,988.80
Nifty Mid Cap 50 2,002.20 2,085.50 3.99% 2,481.60 2,088.35
CNX IT 5,562.00 5,697.15 2.37% 6,811.30 5,602.70
Bank Nifty 10,140.55 10,315.60 1.70% 11,226.75 10,295.10
CNX Infrastructure 2,289.00 2,366.50 3.27% 3,077.10 2,348.00
CNX Realty 208.25 217.95 4.45% 299.65 219.15
Indian Market Movements 52 Week
Index 27-Jul-12 3-Aug-12 Change (%) High Low
NASDAQ 2,958.09 2,967.90 0.33% 3,134.17 2,298.89
Dow Jones Industrial Average 13,075.66 13,096.17 0.16% 13,338.66 10,404.49
S&P 500 1,385.97 1,390.99 0.36% 1,422.38 1,074.77
NIKKEI 225 8,566.64 8,555.11 -0.13% 10,255.20 8,135.79
Hang Seng 19,274.96 19,666.18 1.99% 22,808.33 16,250.27
Straits Times Index 2,998.49 3,051.33 1.73% 3,227.28 2,521.95
FTSE 100 5,627.21 5,787.28 2.77% 5,989.07 4,791.01
Global Market Movements 52 Week
Private Equity Track
Research4India 8
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Private Equity Track
Research4India 9
About Research4India
Research4India is the research services arm of Four-S Services Pvt Ltd. Here we
provide regular research reports on key sectors of the Indian economy, and large
unlisted companies in these sectors. These reports will be available on our upcoming
site www.research4india.com, as well as from leading international research sellers like
Thomson Reuters, Bloomberg, Research and Markets, CapitalIQ etc.
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