Process of equity funding for a technocrat businessman

APOHANTM
Day 2: Process
Equity Funding for
Business Growth & Financial Turnaround: Process
APOHANTM CORPORATE CONSULTANTS PVT. LTD.
Where Businesses Realize Their Dreams!!!
A genuine business motivation delivers profitability, returns, stability, growth and sustainability!
Presented by: Arun Joshi
E-mail: arun.joshi@apohanconsultants.com
Ph. +91 9810481325
Website www.apohanconsultants.com
7/11/2020
APOHAN CORPORATE CONSULTANTS PRIVATE LIMITED
1
8th, 9th & 10th July ,2020| 11.00 a.m. to 12.45 p.m.
Organizer: Maratha Chamber of Commerce, Industry & Agriculture, Pune

APOHANTM
Section 1:
Readying For Private Funding:
Business Strategy,
Corporate Management,
Financing Plan.

APOHANTM
Step 1: Business Strategy: Choose a Corporate Path
◦ Formulation of business philosophy, vision, missions, etc
◦ Formulation of the short-term, mid-term & long-term objectives of the company
◦ Formulation of central strategic management department, its constitution & mandate
◦ Preparation of strategic business plan with surveys, DPR, costing
◦ Certifications, registrations, memberships, associations
◦ Business alliances & JVs
◦ Preparation of contract structure between stakeholders
◦ Preparation of flexible, custom financial model with sensitivities & scenarios
◦ Preparation of top level strategy for each department boundaries of roles of departments
◦ KRAs and performance incentive sharing mechanism between departments
◦ Preparation of corporate policies
◦ Preparation of organization chart, departmental SOPs
All of this needn’t be done at cost of operations, but someone somewhere must be
spending time on these matters to avoid long-run repentance!

APOHANTM
 Financial strategy
 Working capital
 Financial plan
 Capital structure
 Financing strategy
 Financial performance
improvement
 Financial risk analysis
 Investment strategy
 Working capital
 Organization chart
 Directorial remuneration
 Mergers & acquisitions
 External commercial borrowings
 Financial restructuring
 Financial turnaround
 Project finance
 Export finance
 Lease strategy
 Licensee contract
 Royalty contract
 Local joint venture
 Joint ventures with FDI
 Dividend policy
APOHAN CORPORATE CONSULTANTS PVT LTD WWW.APOHANCONSULTANTS.COM
 Product pricing strategy
 Product basket rationalization
 F&V cost management
 Allocation of overheads
 Investor relations
 Financial contracts
 Insurance strategy
 Training
 Financial policies
 Financial data, SW, HW
Step 2: Financial Strategy: Get/Use Money Systematically

APOHANTMStep 3: Corporate Management - Provide Robust Structure
◦ Constitutional
◦ Group structure, timely change of legal form
◦ Objectives, MOA, AOA
◦ Promoters, shareholders, investors, lenders
◦ Shareholding agreements
◦ Entry, exit, dilution philosophy
◦ Proper allocation of rights, assignments
◦ Organization structure
◦ Watch on control & ownership
◦ Board of directors
◦ Performance oriented selection
◦ Rights, duties, incentives, penalties
◦ Mechanism for performance evaluation
◦ Training for performance management
Existence & quality of stakeholder contracts leads to harmony & effectiveness of
the leadership
◦ Corporate governance
◦ Regular consultation with experienced CS
◦ Professional conduct of directors
◦ Induction of independent directors
◦ MOC, SEBI, compliances
◦ Investor relations & communications
◦ Corporate policies
◦ Disclosures, filings, reporting, mechanisms
◦ Assessment of M&A need
◦ Watch on capital structure
◦ CSR
◦ Registrations, Memberships
◦ Company/product/process certifications
◦ Compliance of industry standards
◦ Memberships of industry associations

APOHANTM
Section 2:
Investibility Enhancement

APOHANTM
 Profile: Business Leader successful at implementing strategic
approaches to drive profitability and sales. Leading teams for
businesses and revenues; driving sales, marketing and growth
strategies. Lead a team of up-to 200 members. International
experience of leading projects delivered in Australia, Africa & UAE.
 Companies: Worked with Onicra Credit Rating Agency, AVTEG Pvt
Ltd, Hope Technologies Ltd, Supertech Solutions Ltd, Fifth Quadrant
Designs etc.
 Sectors: MSME, information technology, Social Impact & Livelihood,
Banking, Infrastructure and Facility Management, Education and
Training
 Domains & functions: Expert in Sales & Marketing, corporate
management, business strategy, Network advisory, business alliance
management, Cross Cultural engagements, Rating Models, Project
Management, Go To Market, Opportunity Identification, Start up,
etc.
 Graduation: BSc (Electronics) and PGD (Industrial Instrumentation
and Information Technology) from Center for Electronics Design and
Technology of India, Gorakhpur (CEDTI), 1996 Batch
 PG: MBA (Marketing and Financial Management) from Nagpur
University, Nagpur, 1998 Batch
 LinkedIn Profile: https://www.linkedin.com/in/shaileshkw
Shailesh Waghmare
Business leader with 19 years of
experience of impacting
organizations through strategic
decisions across Rating Industry,
Consulting Services, MSME
advisory, IT & ITes, Education
Management and Marketing &
Management Consulting
Profile: Director, Strategy & BD
Represented Organisations in various forums as a speaker, member of panel discussion, faculty at
workshops organised by CII, IIA, FICCI, NSIC, ACMA, NSDC, AIMA, UNDP, etc.

APOHANTMInvestibility enhancement for tomorrow
MSME & Its Importance
The MSME sector has an important place in the Indian economy. It employed 111 million people, which is
approximately 21% (KPMG 2016) of the overall employment in the country. (According to the Ministry of MSME’s 2017–18 report)
A unique feature of MSMEs in India is that almost 93% do not access any outside funding while a little more
than 5% use institutional finance and 2% use non-institutional finance. Even among registered MSMEs, only
11% access institutional finance (Ministry of MSMEs 2009).
MSMEs are dependent on very few partners and contracts, especially as suppliers to larger companies. For
instance, when there was a crisis at Maruti Suzuki India Ltd., the company itself did not default but several
MSMEs that were dependent on its business defaulted on their bank payments due to liquidity problems.
MSMEs in India face primary constraints – lack of timely and adequate finance
Major reason - paucity of information

Demand – Finance for MSME
Estimated overall demand for finance by MSMEs to be around Rs 32.5 trillion, comprising a debt demand of Rs
26 trillion and an equity demand of Rs 6.5 trillion. (A 2012 study on MSMEs in India by the International Finance Corporation (IFC))
Other Estimate shows overall financing demand of MSMEs in terms of debt to be at approximately Rs 6,931
thousand crore while the equity demand is around Rs 1,842 thousand crore.
A huge gap in the equity needs of mainly in mature stage enterprises compared to early stage or growth stage
MSMEs. (The IFCs report released in November 2018 mentions)
Equity and Venture Capital Funding for MSMEs
MSMEs in India largely rely on informal sources for equity,
- Own saved funds and funding from family & friends
- Debt has been preferred mode such as Loan Against Property (LAP) and Jewel Loans
- while equity as source of finance is being utilised by very few enterprises.

Hurdles and Solution
A major hurdle for MSME financing is the information opacity prevalent in the sector as many of the units lack
- financial records, operational records, process records, credit histories, and collateral, etc. the bases on
which investors make credit assessments.
In their absence, investors are unable to progress with their investment proposals.
Credit rating is one way to address these information asymmetries prevalent in the sector.
By reviewing the credit ratings, the investors improve its assessment of the target’s net worth and pays the
correct price.
The credit rating has other intangible benefits too. One is that enterprises are able to obtain feedback through
the rating process on their strengths and weaknesses. They are also able to benchmark themselves with other
MSMEs when they obtain their ratings.

APOHANTMCredit Ratings and the Premiums Paid in M&A
Investors’ ability to select between good and bad targets is not always perfect.
Thus, the premiums paid in mergers and acquisitions (M&As) may be suboptimal when the investor
miscalculates the true potential of a target firm.
The information gleaned from credit rating agencies (CRAs) would assist investors to distinguish better
between targets.
By using ratings as an independent, unbiased “second opinion,” an investor can more accurately match the
premium it pays to the true worth of the target. The overall result should be a more efficient allocation of
capital.
While availability and cost of investing of MSME is very important, financial literacy of MSME owners is
important to enable them to make informed financial decisions.

APOHANTMRating Criterion for MSME
some misconception – rating is only on financial reports… truth NO
 Financial Strength and Integrity – Accounting quality, disclosures, transparency in financial management, Sales
and net worth, profitability, efficiency of capital (IRR), working capital management, interest coverage, debt
service coverage, cash accrual to debt ratio, standard financial ratios, etc…
 Financial flexibility based on net-worth / credibility of promoters
 Management Strength and Integrity
 Management Risk – assessing promoter competence, group companies, track record, ability to manage business
cycle, organization structure, systems n processes, succession, etc.
 Uniqueness of product and Services and market perspective
 Operations Stability, marketing infrastructure
 Competitive Strength and standing
 Industry/ sector study, comparative growth
 Business Risk and mitigation
 Business Plan and growth plan
 Business Sustainability
 Long term viability
 Stakeholder management – suppliers, customers ….

APOHANTM
Day 3:
M&A Process – Core steps
Concepts, Process, Schedule, Costs, Roles, etc

APOHANTM
Counselling from M&A Consultants
Type of Service What it means? Why it is required?
M&A counselling Advise on objectives, key decisions, process,
preparedness
On job learning in M&A may cost heavily
to business.
Strategic Finance
Counselling
To explore several options of financing a
business
To avoid NPA, dissolution & loss of
reputation due to default
Corporate Management
Counselling
To evolve a path for control, ownership &
governance matters
To avoid complicated stakeholder
disputes & absence of harmony.
Business Strategy
Consulting
To plan business growth, to realize a
businessperson’s dream
To organize company, to tread a
calculated path
Investor Counselling We counsel investors & HNIs for investment in
private limited business.
To get better returns & control in
management
Typically, without systematic counselling, an SME would take around 3-4 months
to understand what they want & it may come out to be impractical. etc!

APOHANTM
Reaching a Deal Structure
1. Asset Transactions
 Asset sale
 Slump Sale
2. Equity/security Transactions
 By the company
o Issue of new shares, Buyback of shares
o Bonus shares, Rights Issue
 Between the shareholder
 Sale purchase
3. Corporate Transactions
 Combinations
o Mergers – Statutory, Subsidiary,
Consolidation,
o Mergers – Horizontal, vertical,
conglomerate,
o Mergers - Co-generic, Forward, Reverse
o Acquisition – Friendly, Hostile
 Divisions
o Demergers, hive-offs, divestiture
4. Combinations of the above
M&A advisors need to select appropriate transaction
as the same has huge implications towards meeting
strategic objective, process, time, compliances, cost &
certainty.
Apart from internal experts, Apohan consults
investment bankers, company secretaries, CAs &
lawyers in arriving at the best transaction structure.
The Variants of M&A Space:
Schemes, Arrangements, Compromises, Restructuring, Corporate
restructuring, Financial Restructuring, Business Restructuring,
Group Restructuring, Asset restructuring, Issue, Allotment,
Placement, Block Deals, IPO, ADR, GDR, FPO,FDI, ODI, DVRs,
Convertibles, ESOPs, Options, Joint Venture, Inorganic Growth,
Turnaround, Amalgamations, Acquisitions, Takeovers, Spin-offs,
Revivals, Combinations, Mergers, Combinations, Dormancy,
Closures, Deregistration, Dissolutions, Liquidations, Winding-up,
Corporate Control : M&A Fibonacci Numbers-
0%, 5%, 10%, 24-25-26%, 49-50-51%, 74-75-76%, 90%, 100% ,

APOHANTM
Types of M&A transactions
https://www.apohanconsultants.com/mergers-
acquisitions/#classificationofmanda
Types of investors
https://www.apohanconsultants.com/mergers-
acquisitions/#classificationofmanda
Strategic Options

APOHANTM
The 5-phase M&A Process Flow
•Pre-mandate
discussion
•NDA- (B to C)
•Proposal
submission
•Acceptance to
proposal
•Consulting contract
execution
Appointment
Phase
•Statement of
business objectives
•Schedule of
assignment
•Strategic options for
M&A
•Formats for external
communication
•M&A cost
Inception
Phase
• Profile of seller
• Detailed document
analysis
• Required profile of
buyer
• Communication to
investor
• Study of investor
communication
• NDA (B to S)
• Data room preparation
• Buyer due-diligence
information
• Expression of interest
by investor
• Shortlisting of serious
investorIdentification
phase
•Financial model
•Selection of
CS/CA/Lawyer/Tec
hnical/Expert
•Term sheet
•Valuation
•Corporate/account
/tax
•Seller due-diligence
Detailing
Phase
•BTA model
•Negotiations
•Signing
•Fund transfer
•Success fee
•Handholding
Closure
Phase
The process looks daunting, lengthy & risky. However, depending upon comfort between the parties
& quality of consultants, it may happen quicker & correct.

APOHANTM
Study of Company’s Existing Documentation
CORPORATE FUNCTIONS
 Group/ Corporate structure
 Shareholder relations
 BOD performance
 Investor/bank relations
 Strategic management
 Mergers & acquisitions
 Business alliances, JVs
 Corporate management
 Corporate governance
 Risk management
TECHNICAL FUNCTIONS
 Project plan
 Project management
 Certifications
 Supplier development
 Inbound logistics
 Production, manufacturing
 Operations & Maintenance
 Quality management
 Marketing
 Business development & sales
 Distribution channel
 Research & development
SUPPORT FUNCTIONS
 Administration
 Human resources
 IT – HW, NW, SW, SM
 Financing
 Financial management
 (Business) Investment
 Legal
 Knowledge management
 Compliances
 Public relations
 CSR
 Industry memberships

APOHANTM
Preparation of new M&A Transaction Documents
(Key to Deal Success)
1. Consulting proposal, agreement
2. Inception report
3. Client presentation
4. Profile of client
5. Profile of target company/investor
6. Teaser, Pitch book
7. Information memorandum
8. Data sheet
9. Business plan
10. Schedule of investment requirement
11. Financial model
12. Amendments in MOA/AOA
13. Board resolutions
14. Advertisements for online media
15. Advertisements for physical media
16. Mutual NDA
17. Investor presentation
18. Investor proposal analysis report
19. Investor’s due diligence report
20. Valuation reports – 4 types at the
minimum
21. Document list of data room
22. New documents & reports for specific
needs
23. Term-sheet
24. Business Transfer agreement
25. Corporate documents
26. Legal documents
27. Disclosure schedule
28. Due diligence agency appointments
29. Due-diligence report
30. Handholding report
In addition, the study & analysis of hundreds of company documents is involved.
This is why an M&A advisory can’t be purely success based, brokering can!!!

APOHANTM
Scheduling M&A Timeframe
SN Milestones Work description Month
s
1 Consulting
contract
NDA, M&A advisory contract. T0
2 Inception
report
Objectives, Options,
Company profile, Target
profile
T1 = T0+
0.5
3 Shortlist of
investors
Prospecting & marketing,
teaser, presentation,
screening
T2 = T0+
1
4 Plant visit Mutual NDA, plant visit T3 = T0+
1.5
5 Study of key
document
Business plan, Financial
model, valuation.
T4 = T0+
2
6 Approvals Internal approvals on both
the sides, statutory approvals
T5 = T0+
2.5
SN Milestones Work description Months
7 Term sheet Preliminary offer, LOI, Term
sheet
T6 = T0+ 3
8 Due diligence Due diligence of seller, buyer T7 = T0+ 3.5
9 Draft
contract
Disclosure schedule, draft
M&A contract
T8 = T0+ 4
10 Final Contract Review, legal vetting,
negotiations & signing of
M&A contract
T9 = T8+ 2 to
5
11 Funds Disbursement of funds,
consideration
T10 = T9+ 0.5
12 Merger
Integration
Corporate process,
accounting/ taxation,
compliances, filing,
reporting, closure, etc.
T11 = T8+ 1
M&A process takes around 6-9months on an average & hence must be planned well
in advance.

APOHANTM
Roping in Professional Experts
 Role of Company secretaries
 Schedule of meetings
 Board + General + Special resolutions
 ROC fees
 ROC, SEBI etc permissions
 Secretarial compliance of M&A
 Secretarial due-diligence of both
parties
 Role of Chartered accountants
 Accounting of M&A
 Taxation of M&A
 Financial due-diligence
 Role of Business Lawyers
 Court approvals
 Distress litigations
 Regulatory permits & licences for
M&A
 Legal due-diligence of business
contracts & M&A contract
 Role of Valuation experts (for tax)
 Enterprise valuation
 Land and building valuation
 Plant and machinery valuation
 Inventory valuation
 Valuation of investment
 Brand, IP, etc valuation
Apohan is linked with most of the reputed M&A experts in Pune & has established a
network of experts to complete all the statutory tasks in the speedy manner.

APOHANTM
Provide for All M&A Costs
 Major Costs:
 Brokers - Save 100% of it or pay nominal finder fee.
 M&A consultants – Major fees is success based
 Due diligence professionals – Internal staff and buyer can take care of this
 ROC fees – Depends upon face value of additional capital
 Stamp duty – Varies from state to state
 Nominal costs:
 Company secretary – Corporate process charges
 Chartered accountants, Accounting – Consolidation of statements
 Chartered accountants, Taxation – Consolidation of statements
 Business lawyers – Court, NCLT, Approval, contracts
 Valuation expert – Value for tax & compliance purposes
 Technical expert – May not be needed.
 Miscellaneous Costs:
 Approvals, Taxes, Contingency
Taxes, ROC fees, stamp duty, M&A Consultant’s success fees are major costs!
Transparency in information sharing & clarity of documentation decide these costs!!

APOHANTM
The offer & negotiations
Valuation
https://www.apohanconsultants.com/financial-strategy/the-framework-of-sme-
business-valuation-for-ma/
M&A financial model
https://www.apohanconsultants.com/financial-strategy/importance-of-financial-
models-in-business-decisions/
M&A contract
https://www.apohanconsultants.com/financial-strategy/importance-of-business-
contracts-financial-contracts-for-indian-smes/
7/11/2020
23

APOHANTM
Section 4:
Precautions

APOHANTM
Managing Confidentiality
1. Types
1. Consultant to Consultant
2. Consultant to principal
3. Principal to Principal - Mutual
2. Impacts
1. Information & competition
2. Information & valuation
3. Employees & M&A
4. Non-circumvention
5. Pseudo-Broker risk
6. Documents
1. NDA
2. Mutual NDA
3. NCND
7/11/2020
25

APOHANTM
Avoid Brokers!
 The brokers shouldn’t be taken as M&A consultants!!!
 They don’t know M&A process details and may reveal your M&A intent to wrong entities. A company
rumoured to be sold risks business relations
 They don’t know many investors & even if they know, no professional investor invests crores of rupees on
their personal recommendation.
 They make difficult getting an investor as the investor requires direct mandate from the business/seller to
the M&A consultants.
 Investor gets put-off by higher brokerage charges as they are ultimately paid by the company.
 Brokers increase cost of acquisition of finance without much contribution in deal making, documentation,
trust building,
 They delay M&A closure as it takes them a lot of time to make an agreement, decide payment sharing, etc
as they don’t do this full time.
 They accept any terms & conditions & that is why they are wrongly perceived as very lucrative M&A.
A decent broker would charge a nominal referral fee.
A full-fledged M&A services company has immense investor
network (as well)!!!

APOHANTM
 Advantages of M&A advisor
1. Capability to originate deals
2. Easily accessible
3. Able to understand the SME
conditions
4. Located in the town
5. Reasonable fee structure
Availability
Comparison of M&A Advisor & IB
7/11/2020 APOHAN CORPORATE CONSULTANTS 27
 Disadvantages of M&A advisor
1. Typically narrow bandwidth
expertise
2. Typically poor investor network
3. Tendency to take the deal to the
IB
 Advantages of IB
1. Network of professional
2. Network of funds and investors
3. Ability of complex strategic
transactions
 Disadvantages for SMEs:
1. Difficulty of access
2. Complex client screening process
3. High fee structure
4. Difficulty in understanding SME
limitations
5. Deal reaches through many brokers
6. More interest in large deals

APOHANTM
Be Patient
Industrial goods
A shop
A Listed company
Piece of art
Real estate
A nuptial knot aspirant
Private Limited business
Order of liquidity
Cash
Gold
Bank balance
Listed shares, bonds, units
FMCG goods
White goods
Commodities

APOHANTM
1. Market, marketing infrastructure, client network and marketing vision – Go/NoGo
2. Technical, technological and operational merit of a business – 80% weight
3. Clarity of M&A objectives, management maturity
4. Past financial performance ( Except for stressed funding) – Don’t worry
5. Financial integrity, passion of the promoters/directors, USPs – Extremely Crucial
6. Financial viability of business & identification/communication of all future risks
7. Existence of all internal documentation, merits claim documents
8. Readiness of quality transaction documentation through professionals
9. Readiness to (& knowledge about) undergo the rigorous M&A process (& not compliances)
10. Practical expectation of the M&A time-frame (…)
11. Provision for the total M&A transaction cost
12. Focus on value addition (growth & turnaround) in future over present
13. Rationality and reasonability of the valuation/offer to the investor
14. Experienced, capable & networked M&A consulting infrastructure/ecosystem
15. Business vision to assess the benefit in retrospect
Key Deal Success Factors
SME’s first question is the last question!

APOHANTM
1. No corporate management, financing mgmt. & strategic mgmt. infrastructure
2. Brokers appointed by SMEs as M&A consultants
3. No knowledge of equity funding market & process
4. Misconceptions about equity
5. No financial model, no investment schedule
6. No deal structure
7. No financial contract
8. No clear offer
9. No 360 degree expertise – MBA strategy, MBA finance, MBA marketing, Sector expert, Accounting expert,
Taxation Expert, Secretarial expert, Business lawyer, Valuation expert
10. No access to Big 4 M&A consultants
11. No communication infrastructure
12. No network of investors
13. No internal documents
14. No transaction documents
Reasons for Deal Failure for Deserving SMEs
Merchant bankers or Investment bankers who are basically consultants underwrite IPOs!
Now understand the importance of “merit of business” from investment perspective!!

APOHANTM
Perspective of an equity Investor in financing a private
business
RISK OF BUSINESS
MANAGEMENT QUALITY ASPECT
LIQUIDITY ASPECT
TERM ASPECT
CONTROL ASPECT
ENTRY PROCESS
SECTOR & LOCATION ASPECT
TICKET SIZE ASPECT
POTENTIAL/VALUATION & OFFER ASPECTS
CONTRACTUAL ASPECTS
Perspective Of An Equity Investor In Financing A
Private Business

APOHANTM
Section 5:
Economics of Equity
Why you should not worry about equity funding!

APOHANTM
Savers Financial
Intermediaries
Borrowers
Economics of Equity (1/5)
Equity
Equity means no guaranteed
return and no security of
the investment as well
Debt
Debt means guaranteed,
fixed return with all possible
security
Savers save money in two formats
• Through
financial
intermediaries
• NBFC’s
• Banks
• Lends money
to business
• Lends the
money to
customers of
business
Savers save
money
Debt
•Debt acts as the low cost resource of capital for
business
•Debt is redeemed in a timely fashion providing
financial leverage to the businesses

APOHANTM
Customers money converted into profit
reserves or equity of the businesses
Interest paid to
secured lenders
is very low
Lends money in the form of
debt with high rate of interest
Debt creates
equity (profit)
for banks
Note:
• Directly Investing in the business will give high returns
• Lending is intrinsically in unattractive
• If your business is having high potential, don't worry about availability of equity capital
• Interest to saver < lending rate of banks to businesses < return on capital employed in business

APOHANTM
 Risk perception of business
1. The tendency to use money bank
deposit is more because of risk
perception of business
2. Much of the risk perception is out of
absence of laws, regulatory
framework, absence of
documentation, absence of network,
lack of knowledge of business, etc
rather than the actual risk of the
business
3. It is only the higher risk perception
that keeps the debt market live.

1. When the risk of the savers is taken care
of, the tendency to lend gradually gets
converted into tendency to invest in
equity
2. Equity capital can be very easily mobilize
3. Loans can be easily liquidated
4. Relative it is very difficult to liquidate
equity
5. The intrinsic tendency of investor if to
invest in a high return opportunity
provided that his concerns regarding risk
are taken care
6. It is not the investment that is in
demand, but it is the quality investment
opportunity that is in demand.
 How to lower the risk perception?
1. Compliances
2. Observance of laws of the land
3. Transparent accounting
4. Business documentation & records
5. Corporate policies
6. Substantiation of the claims
regarding the strengths of the
company
7. Financial integrity
8. Credit rating
9. Professional business management
10. Track record of financial
performance
11. Risk management

APOHANTM

1. FDI is equity investment in India by foreign companies
2. They bring in only 30% off capital requirement from
abroad
3. 70% capital cost and working capital is mobilized from
banks in India
4. They remit the profits that they make in India
5. In comparison with the actual money they brought in,
the remittance is very high and it affect the current
account balance of the country
6. As the value of FDI business increases over time as the
business becomes bigger, technically there is a
possibility that there is much higher capital outflow
from India
7. So why do we need FDI to mobilise our own saver's
money into business?
8. The answer is: They have the capability to make a
company equity investment worthy for rapid inorganic
expansion

9. Their companies are investment worthy in their
own countries
10. They make their subsidiaries or joint ventures in
India investment worthy
11. Those Indian companies who are already a very
good professional setup attract FDI and grow with
them
12. The company's left out cannot stand their
competition in future
13. There are respectable local exceptions which are
run as professionally as the companies in the
developed countries, but these examples are very
few
14. Maximum SMEs always remain small, never
become even listed small caps, forget being a giant
MNC diversified conglomerate, as they never work
on improving their investibility

APOHANTM
1. Business is all about capability to make profit from operations taking care of all technical,
technological, operational, marketing abilities coupled with investibility infrastructure and it has
nothing to do with how much money you have in your own pocket to do what you want to do.
2. Of course, you need to have money to prepare a workable project plan, to do the initial preparatory
work & and the cost of investibility infrastructure

APOHANTM
Section: 6
About Apohan
7/11/2020
38

APOHANTM
Apohan’s Services
1. Merger & Acquisitions Advisory
◦ All kinds of business transfers, Sell side advisory for businesses, Buy side advisory for investors, Business
turnaround, financial growth advisory, Succession planning & management outsourcing
2. Financing Strategy, Financing Plan Advisory
◦ Long-term bank loan advisory, NBFC & other institutional debt advisory, Working capital advisory, Project
finance, SME finance, Government schemes & subsidies advisory, Finance training for non-finance staff
3. Corporate Management Advisory
◦ Formative, constitutional & promoter related advisory, Shareholding, ownership & control related
matters, Identification, training & performance of Board of Directors, Business Alliance, JV strategy &
plan
4. Business Strategy Advisory
◦ General business strategy & plan, Greenfield & brownfield project strategy & plan, Bid / tender advisory
EPC/PMC/AMC, Risk management advisory, Contracts, strategic financial models, India entry strategy
1. Counselling for businesses on strategy/options to avail equity finance
2. Counselling for investors on how to make safe & remunerative investment
7/11/2020
39

APOHANTM
Apohan: Unique Consulting Approach
For businesses seeking growth or financial turnaround, we provide customized,
end-to-end service from problem identification to implementation of a solution.
SN Feature Typical Industry Practice Our Practice
1 Custom Solutions Buy what we have to offer We offer what the business exactly needs rather
than what we have
2 Implementation Report is the end Recommendations that are implemented
3 Flexible scope of work Fixed, rigid scope of work Dynamic, objective oriented scope
4 End-to-end solution Multiple conflicting agencies All agencies are taken care of centrally
5 Handholding No relationship after last milestone Handholding for understanding new system
6 Long-term
engagement
Assignment specific engagement Multiple engagements to realize all potential
7 Counselling No personal touch Special care of individual needs, company culture
8 Risk sharing No relation with results Risk sharing by substantial revenues linked to
results
7/11/2020
40

APOHANTMScreening & Filtering Criteria – Prospective Clients
Desired Average Business Size
1. Revenue*: Rs.50 cr.
2. Equity investment requirement: Rs. 25 cr.
Bottom threshold size
1. Revenue of Rs.25 cr.
2. Equity investment requirement: Rs. 10 cr.
The M&A process is rigorous, hectic & lengthy. It involves role of many types consultants.
It is very documentation heavy. Small organizations, typically, as per observations, don’t
have appetite for these transactions.
*Acceptable Parameters
1. Current revenue
2. Recent Peak revenue
3. Target revenue in next 2-3 years
4. Capital block
5. Net worth
We don’t do end-to-end debt finance advisory, though we provide strategic advisory on debt contracts.

APOHANTM
No Pure Statutory Services
We don’t (directly or indirectly) provide the following services if not
needed in M&A course:
◦ Company secretarial work: Incorporations, filing, reporting, statutory payments, etc.
◦ Chartered accounting work: Accounting, taxation, reporting, filings, compliances, etc.
◦ Legal work: Filing cases, representation to NCLT/courts, etc.
◦ Cost accounting: Compliance
◦ Marketing advisory: Surveys, strategy, market growth, profit sharing, etc
◦ Technical work: Feasibility, technical DPR, technical appraisal
◦ Approvals: Getting approvals, permits, licenses, etc from government bodies
◦ Certifications: Private or public certifications such as IEC, GSTN, ISO, CMM
◦ Non-strategic HR, administration, IT, etc advisory
◦ Business services not related to M&A, strategic financing, business strategy, corporate
The business can procure these services directly. Apohan shall define the scope of work & review
outcome of all these for M&A activities in the context of the assignment.
Apohan has a wide network of above professionals for completion of above works.

APOHANTM
Sectors: Whom We Serve
Infrastructure
Construction
Real estate
Roads & highways
Ports
Airports
Inland waterways
Water
Waste
Mining
Energy
Power
Telecom
Environment
Social Infrastructure
Education
Hospitality
Tourism
Health
Commodities
Steel
 Metals & alloys
Chemicals
Cement
Coal
Petroleum
Natural gas
Engineering
Civil
Mechanical
Electrical
Electronics
Instruments
Chemicals
Manufacturing
Automotive
Ship building
Air craft
Media & Entertainment
Publication
Film
Music
Event Management
Art industry
Information Technology
HW & networking
Software design
Web & app design
ERP
Call centres
BPO
Digital media
Social Media
Internet
Trade
Home Trade
Import
Export
Entrepot
Business Services
Communication
Banking
Insurance
Transport
Logistics
Distribution channel
R&D
Equity research
Surveys
Data analysis
Agricultural
Agriculture
Fishing
Dairy
Poultry
Horticulture
Wood
Tobacco
Paper
Other
Pharmaceuticals
Defence
Municipal services
Diversified
EPC
PPP
Other
Our services are not intended for a specific sector or industry, a specific product or service!
New Age Technologies
Blockchain
Artificial intelligence
Robotics
Automation
Drones
Big Data
Cloud
3D Printing
Immersive reality
Holography
Nanotechnology
Advanced materials
Electric vehicles
Hydrogen cells
Internet of Things
Renewables
Waste to power
Biomass to power
Genetics
FinTech EduTech
Collaborative Tech
Quantum computing
Smart cities
New age screens
LBS
Connectivity

APOHANTM
Apohan: Unique Consulting Approach
Engagement with Apohan means a businessperson has got
Additional legs, hands, hearts, minds, brains & souls!
SN Feature Typical Industry Practice Our Practice
1 Custom Solutions Buy what we have to offer We offer what the business exactly needs rather
than what we have
2 Implementation Report is the end Recommendations that are implemented
3 Flexible scope of work Fixed, rigid scope of work Dynamic, objective oriented scope
4 End-to-end solution Multiple conflicting agencies All agencies are taken care of centrally
5 Handholding No relationship after last milestone Handholding for understanding new system
6 Long-term
engagement
Assignment specific engagement Multiple engagements to realize all potential
7 Counselling No personal touch Special care of individual needs, company culture
8 Risk sharing No relation with results Risk sharing by substantial revenues linked to
results

APOHANTM
About Payments & Consulting Contract
Price Proposals – short-term engagement
1. Mobilization fees: These will a fixed fees. They shall
be without an advance payment BG.
2. Milestone based fees: These fees shall be based on
delivery key milestones in the course of the
assignment in place of fixed monthly payments.
They can be monthly as well.
3. Success fees: M&A advisory in basically loss-making
looking at the heavy cost structure. Upon closure of
the deal contract, a major fraction of the total fees is
paid in the form success fees.
4. Time incentive: The client pays an agreed sum for
closing the deal before the agreed latest time.
5. Value incentive: The client pays for more than
expected realization of value for having found a
partner who sees more synergies, etc.
Apohan is not a mere consulting company but also it believes in its recommendations & action plans.
Hence success fees & profit sharing would be the key elements in the long-term engagements.
Key Contractual Terms
1. Exclusivity: The mandates becomes
exclusive after the client signs NDA with an
investor of his/her choice.
2. No guarantee of success: Despite several
merits of the business or the promoters,
despite M&A advisory abilities of Apohan,
a deal may not go through in negotiations.
Both the buy side & sell side expectations
of value & terms are beyond control of an
M&A consultant.
3. No statutory role: Apohan does not carry
out statutory roles of CS, CA, lawyers,
valuers, etc
4. Documentation & decision support

APOHANTM
Apohan Experience / Assignments
SN Current assignments Rev. Amt
1 Strategic sale/dilution of a
Pune based solar & industrial
inverter company
20 12
2 Financial turnaround of a
state if the art food
processing company
220 70
3 Financial turnaround of
metal forging company.
40 16
4 Advisory for corporate
management for a leading
cutting tool company
8 NA
SN Apohan upcoming assignments
1 100% sales of a Dam-to-tap water infrastructure
company in Pune & Ahmednagar
2 Growth advisory for a infrastructure services company in
highway sector based in Mumbai.
3 Holistic business strategy including corporate
management for a reputed real estate company in Pune
4 Sell side advisory for a Industry 4.0 sector IT company
based in Pune
5 Succession planning for a Pune based Power project
company
6 Buy side advisory for Pune’s largest metal company to
acquire a casting company.
7 Buy side advisory for Mumbai based investor to acquire
a biodiesel company.

APOHANTM
Apohan: General Information
Description Details
Name ApohanTM Corporate Consultants Pvt. Ltd.
Legal form Private limited company (ROC Pune)
Nature of business M&A, Strategic Financing, Corporate Management, Business Strategy advisory
Incorporation year 2018
Corporate office
Office no. 11, 1st floor, Shriram Complex, Model Colony Rd., Shivajinagar, Pune, Maharashtra,
India – 411016 ; Landmark: Fergusson College
Registered Office C-302, Omega Heritage, DSK Vishwa Road, Dhayari, Pune, Maharashtra, India -411041
Website https://www.apohanconsultants.com
Link of HQ location: https://goo.gl/maps/v6r82ax14Uy
Membership Maratha Chamber of Commerce, Pune
Bank details
Apohan Corporate Consultants Private Limited |IDFC First Bank, Kalyani Nagar Branch, Pune|
|Account Number: 10032009434| IFSC Code: IDFB0041358| MICR: 411751009
CIN U74999PN2018PTC180122
PAN/TAB/GSTN AARCA5583G / PNEA29043A / 27AARCA5583G1Z7
Start-up Certificate No.: DIPP46253
Udyog Aadhar MH26D0228386
Ongoing /planned… ISO, SEBI Registration for Investment Advisor

APOHANTMExercise – M&A Process
 What is M&A timeframe?
 What are key components in M&A total cost of transaction?
 What type of valuation is relevant to your business?
 What is valuation of synergy of merger?
 What essential aspects you will look into to engage an M&A consultant?
 Who deserves the real credit for getting investment in your company
 What types of deal is suitable for your requirement?
 What type of investor is suitable to your requirement?
 What is basis of your confidence of getting equity investment?
Evaluation method…
 Rating on 1 to 10 basis
 No reference to financial
statements
 No advice of any officers, etc
Send answers to:
Arun.joshi@apohanconsultants.com,
Shailesh.waghmare@apohanconsultants.com
Pavan.kale@apohanconsultants.com

APOHANTM
Contacts
Thank you!
Contact Person Arun Joshi Shailesh Waghmare
E-mail arun.joshi@apohanconsultants.com Shailesh.waghmare@apohanconsultants.com
Phone +91 20 25650005 +91 20 25650005
Mobile +91 9810481325 +91 96500 13256
Website www.apohanconsultants.com
Address Office no. 11, 1st floor, Shriram Complex, Model Colony Rd.,
Shivajinagar, Pune, Maharashtra, India – 411016
APOHAN CORPORATE CONSULTANTS PVT LTD WWW.APOHANCONSULTANTS.COM

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