Four s weekly pe track 28th may-3rd june2012


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Four s weekly pe track 28th may-3rd june2012

  1. 1. Four-S Private Equity Track…Issue: 28th May – 3rd June, 2012 …… Your Eye to Indian Private Equity PE activity for the week 100.0 16 During the week ended 3rd June, 2012, there were 8 PE/VC deals 14 worth $32.1mn compared to 9 deals worth $39mn in the previous 75.0 12 week. 9 8 10 50.0 39.0 8 Out of the total, 5 were PIPE deals, 1 growth stage deal and 2 early 32.1 6 stage deals. 25.0 4 2 In the largest deal during the week, Carlyle Ventures invested Rs 0.0 0 600mn ($10.7mn) in Kerala based South Indian Bank Limited for 27th May12 3rd June12 around 2% stake. PE Investments No. of Deals Private Equity: Investment Summary during the week Stake Value Investor (s) Target (%) ($mn) Sector Industry Segment Stage Carlyle South Indian Bank 2 10.7 Services BFSI Banking PIPE Tiger Global , SAIF NA 10.0 Services Retail Internet Retail Growth Partners Construction HSBC Global IRB Infra NA 3.7 Construction & Allied Roads, highways PIPE Investment Fund Activities Yarn, fabrics, Goldman Sachs Alok Industries 1.26 3.6 Manufacturing Textiles PIPE home textiles Goldman Sachs Core Education NA 3.1 Services Education Education services PIPE Misc. SIDBI Timbor Home NA 1.1 Manufacturing Furniture PIPE Manufacturing Helion Venture Partners, Lightspeed Fashionara NA NA Services Retail Internet Retail Early Venture Partners Mumbai Angels and Media & Gaming app Rolocule Games NA NA Services Early Blume Ventures Entertainment developer Source: Four-S PE Database profit of Rs 4.01bn in the year ended March 2012, against First Carlyle Ventures invests in South Indian Bank Rs 2.92bn in the previous year. First Carlyle Ventures has invested Rs 600mn in Kerala based South Indian Bank Limited for around 2% stake Zovi raises $10mn funding from Tiger Global & SAIF through bulk deal on BSE. The fund purchased 22.62mn Partners shares at a price of Rs 26.5 per share. Incorporated in 1929,, a private label e-tailer dealing in apparel and South Indian Bank is one of the first private sector banks in accessories for men and women, has disclosed that it has Kerala to become a scheduled commercial bank in 1946. As raised $10mn in series B round of funding from Tiger Global on September 2011, South Indian Bank had a network of besides existing investor SAIF Partners. Last July it said it has 664 branches with a sizeable footprint in southern India and raised $5.5mn in series A round led by SAIF Partners. The has 683 ATMs. The bank has recorded the highest-ever net funds has been utilised primarily for expanding warehouse Indian Private Equity Weekly Update 28th May-3rd June, 2012
  2. 2. operations and creating a full logistics team. Zovi has its units of international, infrastructure, garment and domesticown logistics operations in as many as 15 cities including and retail businesses. It manufactures home textiles,Bangalore, Chennai and Delhi. The firm has an average apparel fabrics and polyester yarns.The company has 15order ticket size of around Rs 800-1000 and it is clocking manufacturing plants located at Silvasa, Vapi and Navi1,200-1,500 transactions on a day on an average. Mumbai. The company is planning to exit its non core business like reality and to focus on textile business and toFour-S Comment: Venture capitalists continue to show a lot reduce the debt.of interest in e-commerce stores. There is also start ofconsolidation in the Indian e-commerce arena. At the Four-S Comment: Alok Industries is a heavily indebtedbeginning of the year, India’s largest and most-funded e- company, with a D/E ratio of around 3x. The company runscommerce company Flipkart acquired, the a perpetual negative free cash flow business, resulting incountry’s second-largest online electronics retailer, for an steadily increasing D/E. Its valuations are too low to allow itundisclosed amount, thought to be worth $20-30mn. This to raise equity in any meaningful way. In the last 1-2 years,was followed by Snapdeal’s acquisition of online sports the company has talked of selling non-core assets to free upretailer Esportsbuy for around $10-14mn. The consolidation some cash. In May, Alok announced sale of office space forwave has been triggered by Amazon’s likely entry into the Rs4.25 bn. The company has debt of around Rs 110bn, so itIndian e-commerce space. Amazon has launched Junglee, a needs to do a lot more to bring down debt.beta site that is seen by many as a precursor to theimminent introduction of a full-on Amazon India store. Goldman Sachs invests in Core Education Goldman Sachs Investment has acquired stake in CoreHSBC Global invests Rs 200mn in IRB Infra Education & Technologies Limited through a bulk deal onHSBC Global Investment Fund has invested Rs 206mn in IRB exchange. Goldman Sachs bought 5.78 lacs shares at a priceInfrastructure Developers Limited. It has bought 1,831,956 of Rs 292 a piece, aggregating to Rs 168.7mn on BSE.shares at Rs 112.83 through bulk deal on NSE. IRB Founded in 2003, Mumbai based CORE Education andInfrastructure Developers undertakes construction and Technologies was formerly known as Core Projects andoperation of major road and highway projects in India. IRB Technologies. It offers technology-based educationInfra has a portfolio of 17 road projects, of which 10 have solutions to government organizations and schools in the USbeen commissioned while six are under implementation. and the UK. The company has acquired nine companies in the UK and the US in the past five years in an effort toFour-S Comment: IRB Infra’s share price has fallen expand its global reach. The company is planning to tapdramatically in the last one month, ever since its CMD Asia-Pacific, Africa and West Asia and may look atVirendra Mhaiskar was named a suspect in a murder acquisitions in these regions. It is also planning to startenquiry. From levels of around Rs 200 in April’12, the stock operations in Singapore and China.price has now come down to around Rs 110 levels. Theinvestment could turn out to be a masterstroke for HSBC if SIDBI invests in Timbor HomeIRB’s promoter comes out clean from the investigation. SIDBI has invested Rs 60mn in Ahmedabad based Timbor Home Limited, an integrated furniture manufacturer. TheGoldman Sachs invests in Alok Industries funds raised will be used to set up 30 high-end IKI kitchenGoldman Sachs has acquired 1.26% stake in Alok Industries stores across India. Through IKI Kitchens, the company isLimited for Rs 199.5mn through bulk deal on BSE. It bringing the Intelligent Kitchens concept to the Indianpurchased 10.43mn shares for Rs 19.12 per share. Founded kitchens, making them highly durable, functionally practicalin 1986, Alok Industries operates in four special business and user friendly, by ensuring good ergonomics and Indian Private Equity Weekly Update 28th May – 3rd June, 2012
  3. 3. efficient space utilisation, besides making them look Fund Raising & Liquidity Eventsaesthetically great. Last year, Timbor Home raised Rs233.5mn through IPO by issuing 3.69mn shares at a priceband of Rs 54-63 per share, by diluting 25% stake. Tech entrepreneurs & VC investor join hands to float early-stage fundFour-S Comment: The modular kitchen market in India is A group of entrepreneurs have floated an early-stagestill at a nascent stage but has tremendous growth investment fund called India Quotient, which may backpotential. It has been growing at 50% per annum and is even pre-revenue startups or firms which have not startedexpected to maintain this growth rate for some more years. generating revenues but require funds to build on theirModular kitchen accounts for 40% of the furniture and ideas or live products/services which are yet to startfittings industry. The increasing number of nuclear families, pumping income. The group includes former Seedfundrising disposable incomes, affordability, and easy budget, partner Anand Lunia, as well as Vishal Mehta of Infibeam,will drive awareness levels and demand for modular Kashyap Dalal of Inkfruit, Mohit Dubey, the founder ofkitchen. Carwale, and several other entrepreneurs. There are five companies which have already received funding, includingHelion, Lightspeed Ventures Invests In Fashionara IIMJobs, a job portal for business graduates; personalisedHelion Venture Partners and Lightspeed Venture Partners gifting startup Engrave; shopping network RedQuanta andhas invested in Bangalore-based Fashionara, an online at-home beauty and personal care services firm Belita,portal that offers premium fashion and lifestyle among others.merchandise. The funds raised will be used to build thebusiness and the company is also planning for second and Apollo, ICICI to launch $350mn Distress Fundthird round of funding. Founded by Arun Sirdeshmukh, Apollo Global Management LLC and ICICI Venture are raisingformer chief executive of Reliance Trends, and Darpan $350mn for India distress fund. The fund will invest inMunjal, former CTO of Times Internet , is an companies that are in distressed situation or going foronline retailer that offers merchandise in the space of restructuring or spinning off assets and also in non-fashion and lifestyle. Its current focus is on apparel, performing loans. The fund will be headed by Kalpeshfootwear and accessories. Kikani, senior general manager of ICICI Bank. ICICI Venture and Apollo aims to raise about $750 Mn for the fund.Mumbai Angels, Blume Ventures invests inRolocule Games Private Equity and M&A NewsPune based - Rolocule Games Private Limited, a gamingstartup has raised angel investment from Mumbai Angels IFC to invest $20mn in Ramkrishna Forgingsand Blume Ventures. Rolocule Games is a game IFC is planning to invest $20mn in Kolkata based Ramkrishnadevelopment studio creating realistic, casual and social Forgings Limited for expansion activities. The company isvideo games for tablets and smartphones. It has earlier planning to install new Front Axle Beam manufacturing linereceived seed fund from CIIE (Centre of Innovation in Jamshedpur requiring a capital expenditure ofIncubation and Entrepreneurship, IIM Ahmedabad). approximately $97mn. Founded in 1981 by Mahabir Prasad Jalan, Ramkrishna Forgings manufactures forged and machined Transmission and axle components for medium and heavy commercial vehicles. It caters to the automobile, railway, defence and mining sectors. Indian Private Equity Weekly Update 28th May – 3rd June, 2012
  4. 4. Kurlon to raise PE investment IPO, Other OfferingsBangalore based Kurlon Limited, mattresses and furnishing PE-backed Shriram EPC to raise up to $26.4mnmanufacturer is planning to raise Rs 2bn for minority stake Engineering procurement & construction firm Shriram EPC,in the company to fund its expansion plans and double its backed by Bessemer Venture Partners and others, ismanufacturing capacity in India. The company is in talks planning to raise funding up to $26.4mn (Rs 1.50bn). Thewith Apax Private Equity, Darby Private Equity - an arm of funding could be done through rights issue of equity sharesFranklin Templeton among others for fund raising. The or QIPs, ADRs, GDRs, FCCBs or any other securitiescompany has plans to increase the manufacturing capacity convertible into equity shares. According to a BSE filing, theand workforce capacity of Kur-lon’s mattress business. It company has also appointed Vishal Vijay Gupta of Bessemerhas also applied for bank loans to fund the capex Venture Partners as its nominee director after RS Chandrarequirement. (also from Bessemer) resigned from Shriram EPC’s board.BookmyShow to raise funds for expansion Speciality Restaurants IPO gives a breather to PEBigtree Entertainment Private Limited is planning to raise investors$10-12mn funds through VC and PE investors for expansion. Fine dining operator Speciality Restaurants recentlyEstablished in 1999, Bigtree offers ticketing for movies, concluded its IPO at Rs 150 per share, raising over Rsplays, concerts and live events through its website - 1.75bn. The IPO was oversubscribed 2.54 times on the It also provides doorstep delivery, day of its issue on 18 May. Two PE investors have madecash collection, warehousing and software for ticketing attractive gains on their investments in the company.transactions. The portal has partnered with 850 screens Though SAIF Partners and Glix Securities Pvt. Ltd are notacross 87cities. BookMyShow has ticketed for over 1,500 selling their shares in the restaurant chain, the former couldplays online and have the exclusive and permanent rights potentially earn an internal rate of return, or IRR, of 18.16%for ticketing for theatre venues like Prithvi Theater, on its investment while Glix could earn 31.17%, going by theMumbai, NCPA Mumbai, Indian Habitat Centre Delhi and issue price of the restaurant chain. SAIF had invested RsRangshankara Bangalore. They have international presence 355mn in the company in December 2007, followed by anin Malaysia and New Zealand. investment of Rs 150mn by Glix Securities in May 2010. The cost per share, after the conversion of preference shares, isVoicetap to raise VC funds for expansion Rs 71 for SAIF and Rs 81 for Glix.Mobile education startup - Voicetap is planning to raise$7mn from VC funds in the US, Singapore and India. It has Goodwill Hospital re-files DRHPalready raised $1mn from CCube Angels, Frontline Strategy Goodwill Hospital and Research Centre, which withdrew itsand angel investor Umesh Kumar Baveja. Founded in 2009 IPO in January this year due to poor investor response, hasby Mrigank Tripathi, Voicetap is focused on mobile- again filed draft papers with market regulator SEBI for theeducation and work closely with leading telecom operators public issue. Goodwill Hospital, engaged in running a multiin India & Africa. Voicetaps technology allows students to speciality hospital in Noida under the name "Ojjusassess themselves and also access actual educational Medicare", is planning to mop-up Rs 980mn from the capitalcontent and counselling services over the mobile. The market through an initial public offering (IPO). Thetechnology allows students to search topics and relevant healthcare firm said it is considering a pre-IPO placementexperts and then listen to content either live, from for a cash consideration of Rs 300mn. Goodwill Hospitalrecordings or through a user-generated call. withdrew its IPO in January after the issue failed to get subscription of even 1% of its shares on sale. Goodwill was the first company to withdraw its IPO in 2012. Indian Private Equity Weekly Update 28th May – 3rd June, 2012
  5. 5. M&A Activities During the week ended 3rd June, 2012, there were 5 M&A deals worth $117.6mn. In the largest deal during the week, CRISIL acquired 100% stake in UK based analytics firm - Coalition Development Limited along with its subsidiaries, for $44.5mn.M&A Activity: Summary during the week Stake Deal value ($ Acquirer Target Target business (%) mn) CRISIL Coalition Development Ltd BFSI - Analytics firm 100 44.5 Antwerp Port Authority Essar Ports Infrastructure and Construction NA 31.0 Jindal Steel & Power Gujarat NRE Coking Coal Cola mines 9 25.0 Centre For Sight New Vision Laser Centre Healthcare NA 10.0 Bharti Softbank Holdings Y2CF Digital Media Media & Entertainment 49 7.1 Source: Four-S Database, Acquisition price is in $mnMarket UpdateKey Domestic Indices Indian Market Movements 52 Week Index 25-May-12 1-Jun-12 Change (%) High Low BSE Sensex 16,217.82 15,965.16 -1.58% 19,619.65 15,135.86 S&P CNX Nifty 4,920.40 4,841.60 -1.63% 5,740.40 4,770.35 CNX Nifty Junior 9,519.15 9,440.35 -0.83% 11,550.00 9,268.50 Nifty Mid Cap 50 1,989.50 1,945.85 -2.24% 2,515.70 1,907.15 CNX IT 5,879.85 5,902.75 0.39% 6,835.25 5,802.85 Bank Nifty 9,456.30 9,267.60 -2.04% 11,451.25 9,110.45 CNX Infrastructure 2,174.15 2,141.20 -1.54% 3,191.60 2,099.70 CNX Realty 208.15 204.65 -1.71% 302.20 196.65Source: BSE, NSEKey Global Indices Global Market Movements 52 Week Index 25-May-12 1-Jun-12 Change (%) High Low NASDAQ 2,837.53 2,747.48 -3.28% 3,134.17 2,298.89 Dow Jones Industrial Average 12,454.83 12,118.57 -2.77% 13,338.66 10,404.49 S&P 500 1,317.82 1,278.04 -3.11% 1,422.38 1,074.77 NIKKEI 225 8,580.39 8,440.25 -1.66% 10,255.20 8,135.79 Hang Seng 18,713.41 18,558.34 -0.84% 23,317.79 16,250.27 Straits Times Index 2,772.75 2,745.71 -0.98% 3,227.28 2,521.95 FTSE 100 5,351.53 5,260.19 -1.74% 6,084.08 4,791.01Source: Yahoo Finance Indian Private Equity Weekly Update 28th May – 3rd June, 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 28th May – 3rd June, 2012