INVESTMENT

Evolution of the Indian PE/VC Industry Timeline 1988 - 1996 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],1996 - 2000 2004 - 2008 2001 - 2003 Early Days India Discovered Period of Risk Aversion India Shining Bubble ,[object Object],[object Object],Return to Rationality 2009 - Today

Investments peaked in 2007, dropped significantly in 2009 Period of Risk Aversion “ India Shining” Bubble Return to Rationality India Discovered 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Today: Realignment of Capital with Opportunities No deals 1 deal 2 deals 2+ deals ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],While 215 firms invested in 2008, only 149 were active in 2009 Figures in ( ) denote no. of deals in 2008 Deals in 2009

Key Macro Trends in India ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Key Growth Sectors Healthcare A Energy B Education C Waste Management D Financial Services E

Healthcare: Demand Continues To Increase … Rising Household Income ,[object Object],Increasing Proportion of Middle Class ,[object Object],Increase in real household income Increase in proportion of middle class Rising Prevalence of Lifestyle Diseases ,[object Object],Percentage of population with lifestyle diseases A

… While Supply Continues to Lag Beds per ‘000 Shortage of Medical Professionals in India Global Average 1.5 Global Average 3.0 Doctors per ‘000 Nurses per ‘000 Bed demand – supply in Mumbai Bed demand – supply in Delhi A

Energy: Another Demand-Supply Mismatch Energy consumption in will increase 5X over next 20 years Macro Trend Growth Opportunity Expanded energy generation, both traditional and renewable Upgrading of existing transmission lines to reduce wastage (currently at 30%). Significant new transmission will also be required. EPC and manufacturing or energy equipment will continue to receive high margins and expanded growth Incentives from government for increased oil and natural gas exploration/production Biodiesel, if produced economically will increase in production Alternate, renewable sources of energy (small-hydro, biomass, wind & solar) will continue to be tapped Efficient lighting & metering will see rapid adoption Analytics & Remote Monitoring of energy consumption in order to drive efficiencies Fuel deficiency will only increase over time Environmental norms will get stricter Indian DNA of energy efficiency will continue B

Education: “Informal Sector” Driving Growth ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],C

The “Informal” Education Sector Key players ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Network of 1m schools (219m students) and 18,000 higher education institutes (11m students) 80% of this spend is on teacher’s salary; only 0.82% as capex Highly fragmented due to scalability challenges Only 7% schools are private, but cater to 40% of enrolled students 50:50 split between K12 and higher education Indian Education System $80 billion Private spend $50 billion Government spend $30 billion Formal education market $40 billion Informal education sector $10 billion Vocational training $1.5 billion Supplementary education* $6.4 billion Books $1.75 billion Multimedia and ICT $0.16 billion Preschool $0.3 billion C

Waste Management ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],D

Financial Services: Banks Looking to Expand Their Reach Banks are aggressively driving adoption of credit/debit cards Which is driving POS transactions While the UID project will create many applications that will drive adoption of Smart Cards E

Financial Services: ATM expansion will further enable growth ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],E

Financial Services: While Financial Inclusion will continue to be a central theme of the current government ,[object Object],[object Object],[object Object],1,300 14.01 ~750 March 08 2,500 22.5 ~800 March 09 440 7.4 NA March 06 770 Size of loan portfolio ($m) 10.5 Outreach (million) NA Number of MFIs March 07 E Categories of Financial Inclusion Market Size (in millions) Penetration Target in 5 Years Social Security Pensions 40 20% NREGS 100 20% SHGs (Government and Bank-Linked) 35 20% SHGs (MFIs) 25 10% Kisan Credit Cards 55 10% Farmer Co-operatives 20 20% Domestic Money Transfer / Foreign Inward Remittances 60 15% Scholarships to Students 5 15% Third Party Collections (MFI, Insurance, FMCG, Other Retail) 90 15% General Purpose No Frills Accounts (Savings/Withdrawals) 90 15% General Purpose Loan/Credit Accounts 75 10%

Investing In India: Risks & Challenges ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

INVESTMENT

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