Four s weekly pe track 19th march - 25th march 2012


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Four s weekly pe track 19th march - 25th march 2012

  1. 1. Four-S Private Equity Track…Issue: 19th - 25th March, 2012 …… Your Eye to Indian Private Equity PE activity for the week 350.0 302.5 16 During the week ended 25th March, 2012, there were 7 PE/VC 300.0 14 deals worth $35mn compared to 10 deals worth $302.5mn in the 12 250.0 previous week. 10 200.0 7 8 150.0 10 6 Out of the total, there were 4 early stage deals and 1 deal each at 100.0 4 Growth, PIPE and SPV level. 35.0 50.0 2 0.0 0 In the largest deal during the week, Parsvnath Developers raised Rs 18th March12 25th March12 1.2bn ($23.6mn) from Kotak Realty Fund for a township project in Gurgaon. PE Investments No. of Deals Private Equity: Investment Summary during the week Stake Value Investor (s) Target (%) ($mn) Sector Industry Segment Stage Parsvnath Developers Kotak Realty Fund 20.0 23.6 Construction Real estate Real Estate SPV SPV Railway and auto Frontline Strategy DTL Ancillaries Limited NA 9 Manufacturing Automotive Growth component Prajay Engineers CLSA 7.6 1.0 Construction Real estate Real Estate PIPE Syndicate Pre school and K- Omidyar Network Akshara Foundation NA 1.0 Services Education Early 12 Hyderabad Angels Edutor Technologies NA 0.4 Services Education Content Early Omidyar Network EnglishHelper NA NA Services Education Vocational Early Online retail - Angel Investors NA NA Services Retail education Early Consortium products Source: Four-S PE Database Kotak Realty to invest Rs 1.2bn in Parsvnath 1.2-acre plot in the heart of Delhi, on Kasturba Gandhi Developers Marg, on the block and is expecting to raise around 7bn Parsvnath Developers is raising Rs 1.2bn (~$23.6mn) from through the sale. Kotak Realty Fund for a new 100-acre integrated township Debt servicing continues to remain the bete noire of the project on Sohna Road in Gurgaon. Kotak Realty fund will real estate sector. The net debt of Indias top 11 listed real get a 20% stake in the special purpose vehicle. The project estate companies at the end of December 2011 rose 14% will be largely residential in nature with some commercial from a year ago to Rs 417bn. The real estate players have and retail developments, and will be launched in the next been striving to reduce their debt by monetizing non-core two months. assets. During the last quarter of 2011, DLF raised Rs 12bn during the quarter from the sale of non-core assets like the Four-S Comment: Parsvnath Developers, which has a focus IT Park in Noida and IT SEZ in Pune. Sobha Developers on the national capital region, is currently trying to reduce reduced its debt in the quarter by selling its land parcel in its debt, which stands at around Rs 13bn. It recently put a Gurgaon. Indian Private Equity Weekly Update 19th – 25th March, 2012
  2. 2. Railways component maker DTL Ancillaries raises $200mn in five years. It has so far deployed $85mn across a$9mn portfolio of 24 companies in India, 70% of which are for-India Industrial Growth Fund (IIGF), a private equity fund profit investments and the rest grants to non-profitmanaged by Frontline Strategy Limited has invested $9mn organizations. In its bid to enhance employmentin DTL Ancillaries, a customized roll forming company. The opportunities in India through impact investing, OmidyarCompany is a leading supplier of roll formed parts and Network also plans to support rural business processfabrications to the Indian Railways – recently, it became a outsourcing, agriculture and vocational training projects.Part-I supplier to the Railways. It is also a leading supplier, inits space, to the Indian automotive sector. Hyderabad Angels invests Rs 20mn in Edutor TechnologiesCLSA acquires 7.63% stake in Prajay Engineers Edutor Technologies has raised Rs 20mn from group ofCLSA Mauritius Ltd has acquired 7.63% stake in Hyderabad angel investors, Hyderabad Angels. The Hyderabad-basedbased real estate company – Prajay Engineers Syndicate start-up develops and markets interactive learningLimited for $1mn through open market transaction. CLSA platforms for touch devices like Tablets PCs or iPads. TheirMauritius bought 5,336,134 shares at a price of Rs 9.5 per solutions, for K12 students, are designed to help improveshare Legatum Capital. Prajay Engineers Syndicate Limited their learning outcomes while aiding Educational Institutesdevelops real estate in India through two segments- in improving productivity and efficiency.Construction and Development of Property and HospitalityHotels and Resorts. Four-S Comment: PE investors continue to remain bullish on the Indian education sector. India is the largestOmidyar Network backs two firms - Akshara education market in the world with approximately 540mn in the 0-24 years age bracket. Education sector is the largestFoundation and EnglishHelper services market in India with a market size of $57bn perOmidyar Network, the philanthropic investment firm annum (as of 2009). The government currently spendscontrolled by eBay Inc. founder Pierre Omidyar, has about 4% of GDP on education, which is planned to beinvested an undisclosed amount in English language increased to 6% in the 11th Five Year plan. Factors drivinglearnings solutions company EnglishHelper Inc. and growth of this sector include demand-supply gap, higherextended a three-year grant of $950,000 to Bangalore- spending by consumers, increasing preference for privatebased public charitable trust Akshara Foundation, which sector offerings and government reforms. Hence, there isfocuses on elementary education. huge potential for private investment in the sector.Akshara has developed a technology platform, KarnatakaLearning Partnership, as a tool for non-profit bodies,corporations, academic institutions and citizens to get AllSchoolStuff raises funding from Angels Investorsinvolved in improving government schools in Karnataka. ConsortiumEnglishHelper offers a combination of English language Gurgaon based, online retail store for allreading and writing technologies and has helped over school, learning and educational needs has raised angel10,000 learners across the country. funding from Angel Investors Consortium. The funds raised will be used for setting up infrastructure, expanding theFour-S Comment: Omidyar’s education portfolio in India has team, customer acquisition and streamlining the supplynow expanded to five investments – the other 3 include chain. AllSchoolStuff provides online stores for students,Tree House, Anudip Foundation and Aspiring Minds parents, teachers and schools to choose from a wide varietyAssessment. Omidyar Network started funding projects in of branded, high quality products to meet all theirIndia about two years ago with plans to invest up to educational supplies needs. Indian Private Equity Weekly Update 19th – 25th March, 2012
  3. 3. company has been working on restructuring its businesses, Fund Raising & Liquidity Events which is close to completion and sources in both firms said they have reopened negotiations for an investment, which could be as high as $100mn. The investment in Gitanjali is expected to help its brands, which have done well in India, to go global and improve their image.Helion raises $255mn for third India VC fund Blackstone Group, Bain Capital may buy outHelion Venture Partners, an early-to-mid-stage venture Euronets India ATM businesscapital firm, has raised over $255mn for its third fund, Private equity funds Blackstone and Bain Capital aretaking its assets under management to $605mn. The new negotiating to buyout the Automated Teller Machinesfund would probably make Helion the largest venture business of Euronet Worldwide in India to benefit fromcapital firm in India in terms of assets under management. rising use of electronic transactions. The business, whichThe Bangalore and Delhi-based VC has investments in nearly Euronet classifies under the so-called Electronic Financialthree dozen startups, which includes NASDAQ-listed Transaction segment, is facing profitability pressures due toMakeMyTrip and legal process outsourcing firm UnitedLex steady climb in costs. It is the biggest third-party operator ofBPO. It had raised $140mn for its first fund in 2006, shares ATMs across the nation. Euronet had in the past soldfollowed by another $210mn in 2008. The new fund will a similar business in the UK to Bridgepoint Capital forcontinue with early-to-mid-stage focus on technology $30mn. The India business, where it operates more thaninnovation and consumer demand-driven businesses. Helion 1,300 ATMs, could be valued as high as $250mn.Venture Partners III will look at deal sizes between $2-10mnand with an investment horizon of 5-7 years. Super Religare Laboratories in talks with private equity firms for stake sale Private Equity and M&A News Two private equity PE firms, including International Finance Corporation, are close to buying over 15-20% stake inMorgan Stanley Unit may invest $200mn in Indias largest diagnostic chain Super Religare LaboratoriesContinuum Energy (SRL) ahead of its planned public issue. IFC has a tentativeA proprietary investment arm of Morgan Stanley is in agreement to invest around Rs 1.25bn, while either Jacobadvanced talks to invest about $200mn, roughly 10bn, for Ballas Capital or Qatar-based QInvest will invest Rs 1.5bn.51% stake in Continuum Energy Pte Ltd (CEPL), a Singapore- The deal is expected close in the next few weeks. The fundbased holding company developing wind power assets in infusion will help the privately-held company reduce itsIndia. Continuum Energy, co-founded by former investment debt of about Rs 3bn that came with the acquisition ofbanker Arvind Bansal and others, is a two year-old start-up Piramal Diagnostics in 2010.which is building a portfolio of wind farms throughacquisitions and green field development. IFC to invest up to $24mn in IDFC PE-backed DoshionGitanjali Gems, L Capital reopen investment talks IFC, the private sector investment arm of World Bank, mayListed jewellery firm Gitanjali Gems has revived talks with L invest up to $24mn in IDFC Private Equity-backed waterCapital, the private equity arm of the worlds largest luxury management company Doshion Ltd through angroup LVMH, for a strategic investment. The two were in equity/quasi-equity investment to finance expansion-negotiations a year ago but talks had not progressed over related capital expenditure, long-term working capital andthe structure of the business. In the last one year, the upcoming Build-Own-Operate-Transfer (BOOT)-based water Indian Private Equity Weekly Update 19th – 25th March, 2012
  4. 4. projects, cross-country pipelines and other EPC projects. Executive trackingIFC’s investment will be at the corporate level and will beused to fund several upcoming projects spread across India. Accel’s Prateek Dhawan to join Everstone Capital Prateek Dhawan, Principal in Accel Partners’ growth equityIFC to invest up to $20mn in Nereus Capital’s team in India, is joining Everstone Capital as a seniorCleantech Fund member of the investment team. Dhawan will be based inIFC may invest up to $20mn in Nereus India Alternative Everstone’s Mumbai office. Dhawan joined Accel’s growthEnergy Fund LLC, a newly formed fund which will target investment team from Goldman Sachs Investment Partners,companies engaged in the development, construction & where he was leading the fund’s private equity investmentsoperation of renewable and clean energy generation assets in India. At Goldman Sachs Investment Partners, Dhawanor those focused on the deployment of clean energy was responsible for investments in Tikona Digital Networks,technologies in India. The total target size of this fund is Bharti Infratel and Asian Genco. Preceding Goldman,$250 million and it will be domiciled in Mauritius. The Dhawan worked at Cisco Systems’ corporate developmentanticipated portfolio of Nereus will include 7-10 of $15-35mn each, in equity and equity-linkedsecurities of companies primarily focusing on the Donald DSouza to Head HDFC Bank ECMdevelopment, construction and operation of power HDFC Bank has appointed Mr Donald DSouza as the Headgeneration assets in India. of Equity Capital Markets in the Investment Banking division. Mr DSouza will be reporting to Mr Rakesh Singh, IPO, Other Offerings Head of Investment Banking at HDFC Bank. Mr DSouza will be responsible for building the equity capital marketsHarisons Steel files for Rs 600mn IPO business that includes origination and execution of capital-Harisons Steel Limited has filed DRHP with SEBI to raise Rs raising mandates, said a release from the company. Mr600mn through an IPO. The funds raised will be used to set DSouza was the President of Investment Banking at IIFLup rolling mill with a proposed capacity of 30,000 Mts p.a. prior to joining HDFC Bank. He has also served in Kotak,(Rs 415.9mn); to part finance incremental working capital CLSA and J M Financial, the release added.requirement (Rs 80mn) and for other corporate purposes.Incorporated in 1999, Harisons Steel is engaged in themanufacturing of stainless steel ingots and billets of variousgrades and sizes.Alok Industries planning to raise $150mnAlok Industries Limited is planning to raise $150mn throughADR/GDR, QIP etc warrants for expansion. Recently inFebruary, Caledonia Investments Plc, UK-based investmenttrust company sold 2.08% stake in Alok Industries throughopen market transactions for Rs 300-350mn. Alok Industries- founded in 1986 - operates in four special business units ofinternational, infrastructure, garment and domestic andretail businesses. It manufactures home textiles, apparelfabrics and polyester yarns. Indian Private Equity Weekly Update 19th – 25th March, 2012
  5. 5. M&A Activities During the week ended 26th March, 2012, there were 9 M&A deals worth $40.4mn (size of 6 deals were not known). In the biggest deal during the week, Australia-based PET packaging supplier Amcor Ltd. has acquired Uniglobe Packaging Private Ltd. for $20.7mn. Uniglobe produces flexible packaging for the food, personal care, and health sectors.M&A Activity: Summary during the week Stake Deal value ($ Acquirer Target Target business (%) mn) Amcor Uniglobe Packaging Private Limited Packaging NA 20.7 B Braun Ahlcon Parenterals (India) Ltd Pharmaceutical 26 17 Virgo Valves and Controls Ltd - Thermax Ltd steam division and Rifox Hans Manufacturing NA 2.5 Richter GmbH KEPCO Pioneer Gas Power Power 22.7 NA Oscar Investments Ltd Voyages Ltd Aviation 48.8 NA Gruner + Jahr Networkplay Media & Entertainment 50+ NA Naturex Valentine Agro Agro NA NA General Electric Advanced Systek Private Limited Engineering services NA NA Nitco Limited New Vardhman Vitrified Manufacturing-tiles 51 NA Source: Four-S Database, Acquisition price is in $mn Market Update Key Domestic Indices Indian Market Movements 52 Week Index 16-Mar-12 23-Mar-12 Change (%) High Low BSE Sensex 17,466.20 17,361.74 -0.60% 19,811.10 15,135.90 S&P CNX Nifty 5,317.90 5,278.20 -0.75% 5,944.45 5,187.85 CNX Nifty Junior 10,324.50 10,297.85 -0.26% 11,758.15 10,176.30 Nifty Mid Cap 50 2,300.60 2,309.90 0.40% 2,657.10 2,274.75 CNX IT 6,501.25 6,532.15 0.47% 7,344.90 6,426.50 Bank Nifty 10,391.35 10,294.55 -0.94% 11,978.05 10,038.90 CNX Infrastructure 2,556.25 2,520.80 -1.41% 3,217.50 2,470.65 CNX Realty 242.00 240.75 -0.52% 344.05 234.55 Source: BSE, NSE Key Global Indices Global Market Movements 52 Week Index 16-Mar-12 23-Mar-12 Change (%) High Low NASDAQ 3,055.26 3,067.92 0.41% 3,090.08 2,298.89 Dow Jones Industrial Average 13,232.62 13,080.73 -1.16% 13,289.08 10,404.49 S&P 500 1,404.17 1,397.11 -0.51% 1,414.00 1,074.77 NIKKEI 225 10,129.83 10,011.47 -1.18% 10,207.90 8,135.79 Hang Seng 21,317.85 20,668.80 -3.14% 24,468.64 16,250.27 Straits Times Index 3,010.68 2,990.08 -0.69% 3,227.28 2,521.95 FTSE 100 5,965.58 5,854.89 -1.89% 6,103.73 4,791.01 Source: Yahoo Finance Indian Private Equity Weekly Update 19th – 25th March, 2012
  6. 6. About Four-S ServicesFour-s is a boutique firm focusing on cutting-edge Financial Research, Business Advisory and Investment Banking services forclients. Through our deep research into Indias high growth industries and accurate and objective advice we have helped manymarquee institutional investors take informed investment decisions in private equity and public markets. Four-S has provensuccess in business advisory, investment banking and investor relations mandates with 100+ corporate clients and large PEfunds. For further information on the company please visit www.four-s.comDisclaimerThe information contained herein has been obtained from sources believed to be reliable but is not necessarily complete and itsaccuracy cannot be guaranteed. No representation, warranty, guarantee or undertaking, express or implied, is made as to thefairness, accuracy or completeness of any information, projections or opinion contained in this document or upon which anysuch projections or opinions have been based. Four-S Services Pvt. Ltd. will not accept any liability, whatsoever with respect tothe use of this document or its content. This document has been distributed for information purposes only and does notconstitute or form part of any offer or solicitation of any offer to buy or sell any securities. This document shall not form the basisof and should not be relied upon in connection with any contract or commitment whatsoever. This document is not to bereported or copied or made available to others. The Company may from time to time solicit from, or perform consulting, or otherservices for, any company mentioned in this document.For Further details/clarifications please contact:SeemaShuklaEmail- seema@four-s.comAddress:Gurgaon MumbaiFour-S Services Pvt. Ltd. Four-S Services Pvt. Ltd.214, UdyogVihar 101,Nirman Kendra,Phase-I, Gurgaon -122016 Near Famous Studios, Off Dr. EHaryana, INDIA Moses Road,Tel: +91 124 4251443 Mahalaxmi, Mumbai+91 9810408474 Tel: 022 - 42153659 Indian Private Equity Weekly Update 19th – 25th March, 2012