Aditya Birla Private Equity
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Aditya Birla Private Equity Aditya Birla Private Equity Document Transcript

  • India knows India best Partner with the experts at Aditya Birla Group
  • Aditya Birla Group’s Global Footprint Australia | Brazil | Canada | China | Egypt | France | Germany | Hungary | India | Indonesia | Italy | Korea | Laos | Luxembourg | Malaysia | Philippines | Switzerland | Thailand | UK | USA | Dubai | Singapore | Myanmar | Bangladesh | Vietnam
  • Aditya Birla Group: An Overview The 11th largest cement producer globally n A US$ 28 billion corporation, the Aditya Birla and the second largest in India Group is in the League of Fortune 500. It is Among the world’s top 15 BPO companies n anchored by an extraordinary force of 125,000 and among India’s top four employees, belonging to 25 different nationalities. Among the best energy efficient fertiliser n In India, the group has been adjudged ‘The Best plants Employer in India and among the Top 20 in Asia’ by the Hewitt-Economic Times and Wall Street In India: Journal Study 2007. Over 50 percent of its A premier branded garments player n revenues flow from its overseas operations. The Aditya Birla Group is headed by The second largest player in viscose filament n Mr. Kumar Mangalam Birla, as Group Chairman. yarn The second largest in the chlor-alkali sector n Globally the Aditya Birla Group is: Among the top five mobile telephony n A metals powerhouse, among the world’s n companies most cost-efficient aluminium and copper producers. Hindalco-Novelis is the largest A leading player in financial services n aluminium rolling company. It is one of the Among the top three super-market chains in n three biggest producers of primary aluminium the retail business in Asia, with the largest single location copper smelter Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where success does not n in viscose staple fibre No. 1 come in the way of the need to keep learning The fourth largest producer of insulators n afresh or to keep experimenting. The fourth largest producer of carbon black n
  • Sponsor: Aditya Birla Group n value proposition makes the Fund a The preferred partner for entrepreneurs / The Aditya Birla Private Equity Fund (The promoters raising private equity capital, Fund) is sponsored by the Aditya Birla investors and the business eco-system Group, one of the oldest, largest and most at large respected business houses in India. The Group has a track record of building n gover nance standards, with High highly successful businesses across Mr. Kumar Mangalam Birla on the Board industries and geographic boundaries, of Directors of Aditya Birla Capital both organically and via acquisition. Advisors n Aditya Birla Group’s commitment of The The breadth and depth of the Aditya Birla 20% of the corpus of the Fund Group’s experience endows the Aditya Birla Private Equity Fund with distinct advantages: Access to business expertise across n a spectrum of manufacturing and service industries, which can be leveraged to evaluate investment opportunities and guide portfolio companies for value creation Relationships at the highest level n across industries, and thorough on- ground understanding of regulations, in India and around the world, to be immensely valuable for the Fund’s portfolio companies
  • Investment Team: expansion, capital markets activities and Aditya Birla Capital Advisors strategic planning. The principal investing team includes Mr. Rahul Shah, one of the most Aditya Birla Capital Advisors is the investment experienced and longest-tenured professionals in manager / advisor to the Aditya Birla Private India’s private equity industry, and comprises Equity Fund. investment professionals drawn from established The investment team consists of seasoned private equity, investment banking and consulting investment professionals with a formidable firms. The team also has exceptionally strong track record across industries, countries and CXO level operational expertise and extensive investment stages. With over 90 years of network of relationships, enabling it to provide combined experience, the team has a track- long-term IRR-enhancing operational insights to record of: portfolio companies. In order to align interests with investors, a significant portion of the Unearthing unique investment opportunities n investment managers’ carried interest will be within India and abroad shared with members of the investment team. Negotiating, n structuring and closing over 40 transactions, at early and late stages Select Investment of growth Deals of the Enhancing n the value of portfolio companies Investment Team Exit Multiple Gross IRR through strategic and operational insights in Prior Roles on Cost (annual) Generating n superior returns by divesting India Games 14x 72% Active Hotels 9x 73% investments through multiple exit Indian August 4x 49% strategies Shopper’s Stop 4x 23% The investment team is headed by Mr. Bharat DQ Entertainment 3x 33% Future Software 3x 91% Banka. In his previous role he was the principal Redington 3x 62% architect of the Aditya Birla Group’s M&A based Investment value as of June 30, 2008.
  • India: Today, growth in India is broad-based and A Compelling Investment Destination spread across consumer industries, infrastructure, engineering and manufacturing, Aditya Birla Private Equity Fund is an India - and niche emerging sectors - resulting in centric fund. numerous investment opportunities. A structural change is occurring in the global economy, with growth shifting to Asia. India will GDP CAGR (%) Estimates for 2008-2013 be a key beneficiary of this trend, and despite the global economic slowdown, India is 9.8% expected to continue being the second-fastest 7.7% G7 Countries growing major economy in the world. India’s 5.7% GDP is estimated to grow four times as fast as 4.0% 2.0% 2.0% 2.4% 1.7% that of developed (G-7) markets. 1.1% 0.6% 0.1% In the near future, while India’s absolute Japan Brazil France India China Russia Canada Germany Italy USA UK insulation from global financial issues is unlikely, it is still expected to remain relatively cushioned: GDP growth is projected to sustain in the 7% - Source: International Monetary Fund (October, 2008). 8% range. More importantly, India has side- stepped the worst of the financial crisis: there have been no financial institution bankruptcies; adequate liquidity exists; business and consumer debt levels are low; and interest rates and inflation are declining consistently. Similarly, India dodged the worst of the Asian financial crisis of the late 1990s. Cumulatively, this depicts the strength and resilience of the Indian economy.
  • Private Equity Funds: An Attractive Asset C2007 levels, through September (latest data Class for Investment available as of date)1 Genuine Private Equity Funds focus on exercising Limited Competition: Investment by Private n reasonable influence on the outcomes of their Equity Funds has less competition from investments by being active value creators. Private alternative sources of financing, given that the Equity Funds help build portfolio companies by IPO market is subdued and issuers prefer providing not only capital, but also expertise, equity over debt to avoid aggressively strategic advice, operational inputs, financial leveraging balance sheets expertise and networks. This combination of capital and knowledge-based value addition helps such Private Equity Funds generate potentially higher returns over longer durations, compared to passive investors in public markets. Now is a great time for Private Equity Funds to be making investments, and accordingly for investors to invest in Private Equity Funds: n Valuations: Public market valuations in Low India are at a five-year low, and valuations negotiated by Private Equity Funds are typically even lower, improving the potential for higher returns Increasing Opportunities: The number of n investment opportunities relevant for Private Equity Funds is growing: despite the global slow-down, the value of investments by Private Equity Funds in India in C2008 has exceeded 1: Source - Venture Intelligence
  • On Offer: Focus on investing in fast growing companies Aditya Birla Private Equity Fund n are or could be potential leaders in their That Aditya Birla Private Equity Fund is differentiated space as it seeks to generate attractive returns by Experienced and dynamic management teams n making investments in high-growth, mid-sized, with a proven track record of success India-focussed businesses through active Potential to grow sales at over 30% CAGR for n involvement in portfolio companies. The Fund four to five years after our investment plans to take significant minority stakes in portfolio companies. The Fund will invest across Reasonable pricing power through n sectors, with specific emphasis on consumer- differentiated offerings or price inelasticity of oriented, infrastructure-enabling, niche emerging their offerings and engineering / manufacturing oriented Scalable and profitable business models and n businesses. clear business plans The Fund, structured as a trust, is registered as a Venture Capital Fund with SEBI1. Consumption Led Growth Infrastructure Enablers Drivers: Rising per capita income and credit The beneficiaries of large-scale investment in expansion infrastructure; critical to sustaining infrastructure growth Niche Emerging Sectors Skilled Ancillary Businesses Education Healthcare Technology Services Niche Engineering Logistics Digital Media and Entertainment Business Services Manufacturing Eco-System 1: The SEBI Registration number is: IN/VCF/08-09/138 dated 24/12/08
  • Principal Terms: A Snapshot The Fund targets to raise commitments for US$ of targeting a pre-tax IRR of 25%. The sponsor 250 million (INR 1,250 crores), with an objective will commit 20% of the corpus of the Fund. All Investors1 Fund Aditya Birla Private Equity Fund Target Fund Corpus US$ 250 mn2 (INR 1,250 crores3) with upsizing at option of Trust/Investment Manager Sponsor Aditya Birla Group Target Return / IRR 25% annual pre tax IRR Term 7 years, drawdown in 3 years (with 1+1 extension at discretion of Investment Manager) Sponsor Commitment 20% of the Fund corpus Hurdle Rate 10% IRR per annum 20% immediately upon closing and balance in various tranches within 3 years Drawdown Schedule (drawdown notice of 21 days) Management Fee 2% pa of the committed capital during the commitment period, and 2% pa of effective corpus (amount drawn down less capital returned) thereafter; plus applicable taxes Fund set-up cost (one-time) On actuals; not exceeding 3% of the aggregate committed capital Distribution of Return Distribution will be net of all taxes as applicable Performance Linked Fee 20% of the pre-tax return with catch-up Investors Resident In India Investment Manager Aditya Birla Capital Advisors Private Limited Minimum Commitment Size ? INR 50 lakhs Individuals: ? and institutional investors: INR 2 crores Corporate Investors Other Than Those Resident In India Investment Manager Indigold Asset Management Company Limited, Mauritius; part of Aditya Birla Group Country Advisor Aditya Birla Capital Advisors Private Limited, India ? US$ 250,000 Individuals: Minimum Commitment Size ? and institutional investors: US$ 2 million Corporate 1: While most of the principal terms are common to all investors, a few terms differ depending on whether investors are resident in India or outside India, as indicated above 2: Fund corpus to be raised from India and overseas 3: US$ 1 = INR 50
  • Cautionary Statement and Securities Laws Considerations This document is for informational purposes only and does not constitute an offer to sell, or a solicitation to purchase, shares of Aditya Birla Capital Advisors Private Limited or interests in Aditya Birla Private Equity Fund (the ‘Fund’), nor does it otherwise constitute an offer or solicitation to invest in any other funds proposed to be managed by Aditya Birla Capital Advisors Private Limited. The interests (the ‘Interests’) in the Fund have not been approved or disapproved by the US Securities and Exchange Commission or by any securities regulatory authority of any state or other jurisdiction, nor has any such authority or commission passed on the accuracy or adequacy of this document or any other materials delivered herewith (collectively, the ‘Presentation Materials’). Any representation to the contrary is a criminal offence. The Interests have not been and will not be registered under the US Securities Act of 1933, as amended (the ‘Securities Act’), or any state securities laws or the laws of any foreign jurisdiction. The Interests will be offered and sold under the exemption provided by Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder and other exemptions of similar import under the laws of the United States and other jurisdictions where the offering will be made. The Fund will not be registered as an investment company under the US Investment Company Act of 1940, as amended, and consequently, investors in the Fund will not be afforded the protections of such Act. This document has been provided to its recipient upon the express understanding that the information contained herein, or made available in connection with any further investigation, is strictly confidential and is intended for the exclusive use of its recipient. It shall not be photocopied, reproduced or distributed to others at any time. This document is neither a prospectus nor an invitation to subscribe for the Interests. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinions regarding the appropriateness of any investment, or a solicitation for any product or service. The information herein is subject to change without notice. Statements in this document describing the Fund’s objectives, projections, estimates, expectations or predictions may be ‘forward looking statements’ within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied in this document. Important factors that could make a difference to the Fund’s operations include global and Indian demand-supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the Fund’s principal markets, changes in government regulations, tax regimes, economic developments within India and the countries within which the Fund conducts business and other factors such as litigation and labour negotiations. The information including facts and figures have been derived from public sources and should be relied upon by the reader at his or her own risk and the Fund and Aditya Birla Capital Advisors Private Limited and their respective directors and officers assume no responsibility, expressed or implied, for the completeness or accuracy of the information contained or views expressed herein or for any direct or consequential loss arising from any use of this document or its contents. The India map published is indicative and for illustration purposes only. All efforts have been made to make the map accurate. However, Aditya Birla Capital Advisors Private Limited and their respective directors, officers and employees do not own any responsibility for the correctness, accuracy or authenticity of the same. Map not to scale.
  • Aditya Birla Capital Advisors Private Limited Aditya Birla Centre, S.K. Ahire Marg, Worli, Mumbai - 400 030, India. Website: www.adityabirla-pe.com Email: abg.pe@adityabirla.com