3 0 J U L Y      -      5 A U G ’ 1 2                                    Private Equity TrackResearch4India               ...
Private Equity TrackBain Capital buying 30% stake in Genpact             L Capital to      invest   $19.6mn     in   PVR,f...
Private Equity Trackexplosive consumption and is growing at a           raised $7.2mn (Rs 400mn) in Series B fundingCAGR o...
Private Equity TrackWealth India Financial raises Rs 200mn for          560mn for the recent quarter after fiveexpansion p...
Private Equity TrackBanyanTree’s second fund hits first close,                                                      Privat...
Private Equity Trackwholly owned subsidiary of the company) froman institutional investor.                                ...
Private Equity TrackMarket UpdateKey Domestic Indices                           Indian Market Movements                   ...
Private Equity TrackFour-S Services Pvt LtdFounded in 2002, Four-S has a strong & successful track record of genuine, accu...
Private Equity TrackAbout Research4IndiaResearch4India is the research services arm of Four-S Services Pvt Ltd. Here wepro...
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Four s weekly pe track 30th july - 5th august 2012


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Four s weekly pe track 30th july - 5th august 2012

  1. 1. 3 0 J U L Y - 5 A U G ’ 1 2 Private Equity TrackResearch4India Weekly update on the Indian PE Sector 1200.0 1100.9 16 PE Activity for the week 14 1000.0  During the week ended 05th Aug, 2012, there 12 were 12 PE/VC deals worth $1.1bn compared to 800.0 10 7 deals worth $34.2mn in the previous week. 7 12 600.0 8  Out of the total, 5 were early stage deals, 4 were growth stage deals and 4 were PIPE deals. 6 400.0 4  In the largest deal during the week, Bain 200.0 Capital Partners has agreed to buy around 30% 34.2 2 stake in the business process management and 0.0 0 technology services company Genpact Ltd for 29th July12 5th Aug12 $1bn. PE Investments No. of Deals PE Deals During The week Stake Value Investor (s) Target (%) ($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 Ammis Biryani NA 7.2 Growth Services Retail Restaurant Lok Capital, Omidyar Vistaar Financial Network, Elevar Equity NA 7.2 Growth Services BFSI NBFC Services Pvt Ltd Advisors, SVB India Merchandis Accel Partners Universal Collectabillia NA 5.0 Early Services Misc. Services e firm Sequoia Capital Practo Technologies NA 4.6 Early Services IT/ITeS Software Foundation Capital, Wealth India Financial Fin services NA 3.6 Early Services BFSI Inventus Capital 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 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.
  2. 2. Private Equity TrackBain Capital buying 30% stake in Genpact L Capital to invest $19.6mn in PVR,for $1bn subsidiaryPE firm Bain Capital Partners has agreed to L Capital Asia has picked a 10% stake in Ajaybuy around 30% stake in the business Bijli-promoted PVR Ltd for Rs 577mn through aprocess management and technology services preferential issue. The fund will also invest Rs.company Genpact Ltd for $1bn. The stake 500mn to set up a joint venture with PVR, PVRheld by the existing investors of the company Leisure Ltd, which will focus on in-mall– General Atlantic and Oak Hill Capital – will entertainment, gaming, food and leisure. Lbe bought at $14.76 per share with an Capital’s holding in the venture will be 44%,additional $2.24 per share of special with PVR taking 51% and the remaining goingdividend. The two investors still hold a 10%, towards management stock options. PVR’swhich will be worth another $382mn. Bain existing investment in the bowling-alleyCapital has agreed not to sell any Genpact business PVR BluO Entertainment Ltd, a jointshare for a period of two-and-a-half years. venture established in 2009 with Thailand- based Major Cineplex, will now be held throughFour-S Comment: General Atlantic and Oak this new company.Hill bought 60% in Genpact in 2004 for$500mn. They subsequently reduced their stake Four-S Comment: PVR, which expanded fromto little over 40% after 2 rounds of sale. In this single screen theatre in New Delhi, has earlierround of exit, they are estimated to have seen interest from private equity investor. ICICIpocketed around $1.62bn (Bain deal of $1bn Venture had invested in the company in 2003and special dividend) for 30% stake sale, and 2005 totalling Rs 470mn. The PE firm madethereby making around 6.5x return on multiple partial exits from PVR starting with ainvestment. BPO and IT Services sector seems pre IPO deal and subsequent open market dealsto be completing its first cycle of exits. Last thereby exiting completely in 2007 for Rsyear also saw some high profile PE exits in the 1.95bn, making nearly 4x its investment. ICICIsector - Blackstone exiting Intelenet by selling Venture again bought into the company in 2008its majority stake to UK’s Serco in a $634mn and currently holds a 7.79% stake.deal and General Atlantic selling PatniComputers stake for $254mn. Oman India Joint Investment Fund invests in Solar IndustriesBrick Eagle Capital invests in Xrbia Industrial explosives maker Solar IndustriesDevelopers India has struck a deal to raise Rs 720mnBrick Eagle Capital Group is investing Rs 2bn in ($13mn) from Oman India Joint Investmentfive projects of Xrbia Developers Limited, Fund through a preferential allotment for 4.28%affordable housing venture promoted by the stake. Founded in 1995, Nagpur-based SolarEiffel group. The fund has invested Rs 400mn in Industries (formerly Solar Explosives Ltd) has athe first development and the rest of the money capacity of over 2.8 lakh MT of explosives (withwill go into the remaining ventures. The five over 2.1 lakh MT of bulk explosives and the restprojects will come up in the area of Karjat, near being cartridge explosives), 190 millionMumbai, on 150 acres acquired by Brick Eagle detonators and 75 million metres of detonatingand will be developed in partnership with Xrbia. fuse. It claims to have increased market shareThe Groups realty footprints span across Pune, in India from 24% to 27% in FY12.Mumbai, Nagpur, Delhi & Bangalore, with over Four-S Comment: The annual market of civil25 mn sft. of existing development and 119 mn explosives in India is approximately Rs 22.50sft of planned projects. bn which is around 5% of the global civil Research4India 2
  3. 3. Private Equity Trackexplosive consumption and is growing at a raised $7.2mn (Rs 400mn) in Series B fundingCAGR of 20%. In India, the mining sector from Lok Capital and Omidyar Network besidesaccounts for 80% demand for civil explosive existing investors Elevar Equity Advisors andwhich in turn is dominated by coal mining and SVB India Capital Partners. Vistaar caters to thethe balance 20% is for infrastructure projects underserved market of small and microlike roads, hydro engineering, irrigation etc. enterprises (MSMEs), estimated to compriseIndia is the world’s eighth-largest explosive over 26 million companies. The funds raised willmanufacturer. As the industry is tightly be utilised to expand Vistaar’s current networkregulated most of the industry is in the to 180 branches across the country over theorganized sector with ICI India, Gulf Oil, Indian next four years, with a projected portfolio ofOil Corporation and Solar Industries are the over Rs 16bn.leading players. Accel Partners invests in UniversalSAIF Partners investing $7.2mn Ammis CollectabilliaBiryani Accel Partners has committed about $5mn inSAIF Partners is investing Rs 400mn or $7.2mn Universal Collectabillia, a celebrity merchandisein TMA Hospitality Services Pvt Ltd, which owns and brand extension firm jointly owned byQSR chain Ammis Biryani. The investment Anjana Reddy, who is part of the Deccancomes after SAIF Partners set up a Rs 1bn Chronicle family, and cricket legend Sachin($18mn) investment vehicle, Zooropa Foods Pvt Tendulkar. Collectabillias business model nowLtd, to invest and manage a chain of quick includes helping celebrities extend their brandservice and casual dining restaurants. Ammis beyond careers and has recently struck a dealBiryani currently operates in Bangalore and was with southern movie star Rajnikanth. It hasfounded in 2008 by Navaj Sharief. It operates similar deals with Sachin Tendulkar and tennisprimarily as a take-away and delivery chain player Sania Mirza, besides owning rights forwith 13 locations in Bangalore. any sporting memorabilia related to Tendulkar.Four-S Comment: Quick-service restaurants(QSRs) that operate in the value-for-money Sequoia Capital invests in online clinicsegment, are catching the fancy of PE/VC management platform Practoplayers. QSRs continue to report annualizedgrowth figures of 25% to 30% and operate on Bangalore-based Practo Technologies Pvt Ltd, aminimum gross margins of 20%, despite the web-based clinic management softwaresullen economic mood. The sector is being developer, has raised Rs 250mn (arounddriven by the younger generation, who continue $4.6mn) from Sequoia Capital in a Series Ato spend. Recent investments include Pune- round of funding. Practo’s flagship product isbased QSR chain focused on selling seafood and Practo Ray, a web-based software tool whichfish products, Fishtro, raising $5mn from Correa provides automated appointment schedulingHospitality. Steammo also raised seed funding and storage of healthcare records including X-from IncuCapital earlier this year. Last year saw rays, files, prescriptions and billing. The moneyfirms like Faasos (Sequoia Capital) and Goli raised will be used to launch its variousVada Pav (Ventureast) raising money. products globally and expand Practo’s 80- member team to around 350 over the next two years.Vistaar raises $7.2mn from Lok Capital,Omidyar, Elevar & SVBBangalore-based Vistaar Financial Services PvtLtd, a small enterprise financing firm, hasResearch4India 3
  4. 4. Private Equity TrackWealth India Financial raises Rs 200mn for 560mn for the recent quarter after fiveexpansion plans consecutive quarterly losses. SpiceJet, part of the Sun Group is a low-cost airlineWealth India Financial Services, promoters of headquartered in Chennai. It began service inonline investment services platformFundsIndia.com, has raised Rs 200mn from May 2005 and by 2008, it was Indias second- largest low-cost airline in terms of marketexisting as well as new investors. The fundraising was led by venture capital firm share. Last year, Kalanithi Maran invested Rs 1bn into SpiceJet Ltd and increased his stake inFoundation Capital with follow on investmentsfrom current investors Inventus Capital. The the budget carrier to 48.6%.investment will be used by FundsIndia toexpand customer base and enhance the Edubridge Learning secures Rs 15mn fromcompany’s online platform with new products Acumen Fundand services. FundsIndia.com is a transactionalplatform that allows users to link their bank Acumen Fund, a non-profit global venture fundaccounts with investment options like mutual which focuses on poverty alleviation acrossfunds, equities, and fixed deposits, with options Africa and South Asia, has put in Rs 15mnfor managing multiple accounts, and ($300,000) in Mumbai-based education servicesautomatically triggering investment related provider Edubridge Learning Pvt Ltd. Edubridgeactivities. provides vocational training for low-income youth across Maharashtra, Tamil Nadu, Karnataka and Chhattisgarh. Edubridge targetsE-learning firm Liqvid raises $3mn from the youth aged between 18 and 25, who areJapans SBI Holdings typically the first formally employed members of their respective families. Till date, theLiqvid eLearning Services Pvt Ltd, an integratede-learning content solutions company, has company has trained over 1,500 students and with this investment, Edubridge plans to scaleraised $3mn in funding from a subsidiary of SBIHoldings, Japan. Headquartered in Noida, with its services from 12 to 30 centres over the next two years.offices in Bangalore, Singapore and the US,Liqvid provides technology-aided EnglishLearning and Training (ELT) solutions toindividuals and organisations under the brand Fund Raising & Liquidity EventsEnglishEdge. The content can be accessed viaPC, tablet and mobile, and the company claims Morpheus Capital to close debut fundthat EnglishEdge has more than 2,50,000 Morpheus Capital Advisors is raising Rs 4.75bnlearners across schools, colleges, vocational for its final closure of its consumer goodsinstitutes and more. Its key institutional focused fund. The fund is targeting affluentcustomers include IIT Delhi, Jamia Millia, investors, non-banking finance companies,Pinegrove School, Kimberley International banks and foreign investors for its fund. LastSchool, Shemford Schools, British Council and year, the fund made its first closure by raisingEducomp, among others. Rs 4.25bn, which aimed to invest in the development of consumer brands. Headed byRakesh Jhunjhunwala invests in SpiceJet former IMG India Chief - Babul Nayar, Morpheus will invest in companies operating inRakesh Jhunjhunwala has invested around food and beverages, apparel & retail, beauty &R76.9mn in SpiceJet through its arm Rare wellness, travel & tourism and educationEnterprises. The company acquired around sectors. It plans to invest in consumer-related0.52% stake in the company. The investment companies that have put in place innovativecame after SpiceJet posted a net profit of Rs business strategies and technology.Research4India 4
  5. 5. Private Equity TrackBanyanTree’s second fund hits first close, Private Equity Newsreaches close to $100mnBanyan Tree Finance Pvt Ltd, advisors to Star Health looking for PE fundingBanyanTree Growth Capital, a structuredprivate equity fund that provides capital to Star Health and Allied Insurance Company ismiddle market companies, has raised close to planning to raise Rs 1.5bn PE funds for a 6-8%$100mn at first close for its second fund – stake in the company. Its holding company StarBanyanTree Growth Capital II LLC. The fund is Health Investments Pvt. Ltd (a SPV fortargeting a corpus of $175mn to be raised by promoting the insurance company) hadthe end of this year. The capital has been raised received a similar funding from Sequoia Capitalfrom global institutional investors across Asia, (to bypass the 26% FDI rule) earlier inthe US and Europe. The fund will stick to its November 2010 and ICICI Venture (Rs 1.2bn)earlier investment philosophy and focus on in the same year. The company was trying togrowth capital in the manufacturing and SME tap the retail insurance segment as announcedspace for investments. in 2009 during when it had 80% of premium income from the Government Health schemes and rest from the retail segment.IndoUS Venture Partners raises $149mnfor new fund India Value Fund to invest up to $180mnIndoUS Venture Partners, a venture capital firm in Manipal Hospitalsbased in Bangalore, has raised $149mn forIndoUS Venture Partners II, LLC. While the In what will be the largest private equityventure capital firm has put $150mn as the investment in an Indian healthcare firm, Indiatotal offering amount, this may not be the final Value Fund Advisors (IVFA) is committing up toclose and the fund could be looking to raise up Rs 10bn ($180mn) to Manipal Hospitals to roll-to $175mn. The fund made its first sale in out an aggressive inorganic expansion strategyOctober 2011, raising $97.5mn, and reached over the next 4-5 years. In the first leg of the$132.5mn in April this year. Some of the recent transaction, Manipal Hospitals is set to get Rsinvestments made by the VC firm include baby 3bn over the coming weeks from IVFA andproducts e-commerce venture Hushbabies.com investment will increase as we start acquiringand digital magazine store Magzter Inc. In assets in secondary & tertiary healthcare2011, IndoUS Venture also exited pharma retail service providers besides day care surgerychain MedPlus Health Services in a secondary centres.deal in which it reportedly made 4x return. Cox & Kings’ UK arm to raise $100mn fromKotak Realty Exits Lalith Gangadhar CVCIKotak Realty Fund is exiting its investment in Mumbai-based travel services provider Cox &Lalith Gangadhar Constructions Private Limited, Kings Ltd is close to signing a deal to raisewith around 10 times return on its investment $100mn from Citigroup’s private equity armin 2007. Kotak is selling its 49% stake for Rs Citigroup Venture Capital International (CVCI)530mn to the promoters. The fund invested for its UK-based arm. The company, whichinvested Rs 50mn for 49% stake in the real acquired UK-based Holidaybreak Plc last year,estate firm in 2007. Later in 2008, it invested rs will use the money to part-retire its debt of Rs450mn in Lalith Gangadhar’s high-end villa 12.5bn. In May this year, the company saidproject in Bangalore called LGCL Ashler. that its board had approved investment of up to $140mn in Prometheon Holdings (UK) Ltd (aResearch4India 5
  6. 6. Private Equity Trackwholly owned subsidiary of the company) froman institutional investor. Jupiter Infomedia IPO opens for IPO, Other Offerings subscription The Rs 40.8mn IPO of Jupiter Infomedia , a webMuthoot Capital Services shares sale offer infomedia company with online publications onoversubscribed business, encyclopedia and yellowpages,The offer to sell shares of Muthoot Capital opened for subscription on July 31. It has fixedServices by six of its promoters was the issue price at Rs 20 a share and planned tooversubscribed. The offer for sales of 3,09,165 offer 20.4 lakh equity shares through the issue,shares, received bids for 3,09,187 shares, the which closed on August 1. Jupiter Infomediadata showed. The floor price for the sale is Rs intends to use issue proceeds for purchasing90 apiece. Based on the minimum bidding and setting up of offices in Mumbai andprice, sale of 3,09,187 lakh shares would fetch Kolkata; renting offices in Ahmedabad, Chennaiover Rs 27.8mn to the company. 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 $570mn. Stake Deal valueAcquiror Target Sector (%) ($ mn)Sahara Group Plaza Hotel Hotel NA 570.0PhillipCapital Group MF Global Sify Securities India Pvt BFSI 29.85 25.0 Ltd - Sifys stake Global Tea & Commodities - 2 teaDhunseri Petrochem & Tea F&B NA 22.0 estatesHero MotoCorp Erik Buell Racing Racing company NA 20.0Birla Shloka Edutech Ltd Ojus Healthcare Pvt Ltd IT/ITeS 51.1 NA InMobi Metaflow Solutions M-Vas NA NASource: Four-S PE DatabaseResearch4India 6
  7. 7. Private Equity TrackMarket UpdateKey Domestic Indices Indian Market Movements 52 WeekIndex 27-Jul-12 3-Aug-12 Change (%) High LowBSE Sensex 16,839.19 17,197.93 2.09% 18,944.60 15,135.86S&P CNX Nifty 5,099.85 5,215.70 2.22% 5,629.95 5,129.35CNX Nifty Junior 9,783.80 10,093.90 3.07% 11,145.70 9,988.80Nifty Mid Cap 50 2,002.20 2,085.50 3.99% 2,481.60 2,088.35CNX IT 5,562.00 5,697.15 2.37% 6,811.30 5,602.70Bank Nifty 10,140.55 10,315.60 1.70% 11,226.75 10,295.10CNX Infrastructure 2,289.00 2,366.50 3.27% 3,077.10 2,348.00CNX Realty 208.25 217.95 4.45% 299.65 219.15Key Global Indices Global Market Movements 52 WeekIndex 27-Jul-12 3-Aug-12 Change (%) High LowNASDAQ 2,958.09 2,967.90 0.33% 3,134.17 2,298.89Dow Jones Industrial Average 13,075.66 13,096.17 0.16% 13,338.66 10,404.49S&P 500 1,385.97 1,390.99 0.36% 1,422.38 1,074.77NIKKEI 225 8,566.64 8,555.11 -0.13% 10,255.20 8,135.79Hang Seng 19,274.96 19,666.18 1.99% 22,808.33 16,250.27Straits Times Index 2,998.49 3,051.33 1.73% 3,227.28 2,521.95FTSE 100 5,627.21 5,787.28 2.77% 5,989.07 4,791.01Source: Google Finance, Yahoo financeResearch4India 7
  8. 8. Private Equity TrackFour-S Services Pvt LtdFounded in 2002, Four-S has a strong & successful track record of genuine, accurate andobjective advice to top Indian & global companies & PE Firms. Four-S has already provensuccess in corporate finance, strategy consulting, fund-raising, investment banking andinvestor relations mandates with 100+ corporates and large PE funds.Four-S, trusted advisor to top Indian & Global CosOffering comprehensive bouquet of services to SMEs, Corporates and PE FundsResearch4India 8
  9. 9. Private Equity TrackAbout Research4IndiaResearch4India is the research services arm of Four-S Services Pvt Ltd. Here weprovide regular research reports on key sectors of the Indian economy, and largeunlisted companies in these sectors. These reports will be available on our upcomingsite www.research4india.com, as well as from leading international research sellers likeThomson Reuters, Bloomberg, Research and Markets, CapitalIQ etc.DisclaimerThe information contained herein has been obtained from sources believed to be reliable but isnot necessarily complete and its accuracy cannot be guaranteed. No representation, warranty,guarantee or undertaking, express or implied, is made as to the fairness, accuracy orcompleteness of any information, projections or opinions contained in this document or uponwhich any such projections or opinions have been based. Four-S Services Pvt. Ltd. will not acceptany liability whatsoever, with respect to the use of this document or its contents. This documenthas been distributed for information purposes only and does not constitute or form part of anyoffer or solicitation of any offer to buy or sell any securities. This document shall not form thebasis of and should not be relied upon in connection with any contract or commitmentwhatsoever. This document is not to be reported or copied or made available to others.The company may from time to time solicit from, or perform consulting or other services for, anycompany mentioned in this document.For further details/clarifications please contact:Seema Shukla Ajay JindalSeema@four-s.com Ajay.jindal@four-s.comGurgaon Office: Mumbai Office:214, Udyog Vihar, Phase I, 101,Nirman Kendra, Opposite Star TV,Gurgaon – 122016 Off Dr E Moses Road, Mahalaxmi,Tel: +91-124-4251442 Mumbai – 400001 Tel: +91-22-42153659Research4India 9