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Private Equity.. The latest in Indian financial resource

Private Equity.. The latest in Indian financial resource. Private Equity Players. These are established investment bankers - invest into proven/established businesses. PE investors can be domestic (established as trusts, or a company) or foreign private equity firms.

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Private Equity.. The latest in Indian financial resource

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  1. Private Equity.. The latest in Indian financial resource

  2. Private Equity Players • These are established investment bankers - invest into proven/established businesses. • PE investors can be domestic (established as trusts, or a company) or foreign private equity firms. Foreign Institutional Investment (FII) for investments in listed companies Foreign Direct Investment (FDI) for investment in unlisted companies.

  3. Various Concepts Private Equity Investors are individuals or firms which provide private equity funds to different ventures. They generally receive a return on their investment through one of three ways: an IPO, a sale or merger of the company they control, or a recapitalization Private Equity Capital It is the form of capital that buys majority stakes in companies and/or entire business units to restructure its capital, management and organization. Usually the targets are held private for three to five years Private Equity firms are firms which provide private equity funds to different ventures. They generally receive a return on their investment through one of three ways: an IPO, a sale or merger of the company they control, or a recapitalization

  4. Regulations for Private Equity Investors and VentureCapital Investors • Companies Act, 1956 (the "Act"), • Foreign Exchange Management Act, 2000 • Securities and Exchange Board of India Act, 1992 along with the rules and regulation therein. SEBI Venture Capital Regulations, 1996 SEBI Foreign Venture Capital Investors Regulations,(2000), • FDI and RBI FEMA provisions. • Guidelines issued by the Central Board of Direct Taxes (CBDT).

  5. Why PE Investments in India? • Indian growth story • PE firms have its spillover effect on various fronts such as Corporate governance standards, Knitting global connectivity, Building executive teams, Improving/raising organizational capability, enhancing evaluations and creating liquidity. • Further, PE firms also provide the domestic entities the necessary mentoring and advice without having to go to public markets.

  6. Opportunity for SMEs • Whether big or small everybody has a desire to grow Governance Activities Accountability Transparency Corporate Governance Global Standard Practices human Resources Management, Financial Planning, Reporting and Investor Relations.

  7. Exit strategies of PEs • Direct sale to investors seeking a shareholding in a firm acquired by the fund. The initial public offering (IPO) is a preferred exit option in developed PE markets. • Post-purchase listing of the company permitting sale of equity through the stock market. • Sale to another private equity firm, referred to as a secondary buyout. • Mergers and acquisitions : As the Indian economy's growth has kept a steady pace, industry-wide consolidations are an attractive route for a PE investor to make an exit

  8. Some Recent Examples

  9. Schools turn smart to woo PEs Rp.100 crore deal that Reliance Equity Advisors — Reliance Capital’s PE arm — struck with Pathway World School. This was the first PE investment in any school in the country

  10. Schools turn smart to woo PEs • Private limited entity under Section 25 of the Companies Act, 1956, and not as a trust. The reason: The company sees this as an alternative way of having a scalable model (which the trust structure does not allow as its bars payment of dividends). • Schools that cannot go for the Section 25 option have begun turning to “smart equity” from private equity (PE) players to expand access to new technologies, build new set of services and add resources.

  11. Temasek to invest Rs 880 cr in GMR10 Apr 2010 Singapore-based Temasek Holdings has signed an agreement with GMR Energy Ltd (GEL) to raise capital for energy expansion plans. Temasek Holdings would invest $200 million (about Rs 880 crore) through its wholly-owned subsidiary Claymore Investments (Mauritius).

  12. Blackstone to Invest INR 2250 Million in Jagran Media Network07 Apr 2010 The Blackstone Group (NYSE: BX), will be investing INR 2250 million (approximately USD 50 million) in Jagran Media Network Private Limited, which will hold majority share of Jagran Prakashan Limited (“JPL”). JPL  is India’s leading media and communications group, with the group’s flagship brand, Dainik Jagran, being the most widely read newspaper in the world with a total readership of 54.6 million. Jagran Media Network Private Limited -approvals for the investment from the Foreign Investment Promotion Board

  13. Major India Private Equity / Venture Capital Funds • ICICI Ventures www.iciciventure.com • UTI Ventures www.utiventures.com • Kotak Private Equity Group www.kotak.com • CVC International www.citigroupai.com • JM Financial • Evolvence www.evolvenceindia.com • New Bridge Financial Advisors www.newbridgecapital.com • Carlyle www.carlyle.com • Apax www.apax.com • Blackstone www.blackstone.com • Warburg Pincus www.warburgpincus.com • Temasek Holdings www.temasekholdings.com.sg • General Atlantic www.generalatlantic.com • 3i www.3i.com • Chrys Capital www.chryscapital.com

  14. Major India Private Equity / Venture Capital Funds • Oaktree www.oaktreecapital.com • New Vernon Capital - • Ascendas India Property www.ascendas.com • IREO - • Och Ziff Capital - • Trikona www.trikonacapital.com • Motilal Oswal www.motilaloswal.com • TPG www.texaxpacificgroup.com • 2i Capital (India) Private Ltd www.2icapital.com • SCFPL - Siemens Venture Capital www.siemensventurecapital.com • Acer Technology Ventures www.acervc.com • APIDC-Venture Capital Limited www.apidcvc.com • Creditcapital Venture Fund (India) Ltd. - • GE Capital Services India Ltd - • TDA Capital Partners Inc www.tdacapital.com • Infinity Technology Investments Pvt Ltd www.infinityventure.com • Karnataka Information Tech Venture www.kitven.com • Walden International India www.waldenint.com • Jina Ventures                                            www.jinaventures.com • Samara Capital                                          www.samaracapital.com • TVS Capital Funds Limited                       

  15. Major India Private Equity / Venture Capital Funds • Actis www.act.is • Baring www.bpep.com • GW Capital www.gwcaps.com • Oak Hill Capital www.oakhillcapital.com • ILFS www.ilfsinvestmentmanagers.com • IDFC www.idfcpe.com • West Bridge Capital www.wbcp.com • JumpstartUP www.jumpstartup.net • IFC www.ifc.org • Intel Capital www.intelportfolio.com • SIDBI www.sidbi.com • GVFL www.gvfl.com • Pequot Capital www.pequotcap.com

  16. Portfolio Investments by PE.. Classification ICICI Ventures By Fund By Sectors By Strategy • IAF Series 1 IAF Series 2 • Real estate Fund • ICICI Emerging Sectors Fund/Others • Mezzanine Fund By Fund ICICI Emerging Sectors Fund/Others Bill junction/Techprocess Mars Restaurants Miditech Naukri.Com Avesthagen Biocon Medicorp • Shoppers' Stop • TV Today (Aaj Tak) • Crossword • Pantaloon Retail • Trinethra • Infowavz • Rel Q

  17. Few Concluding Remarks • The main barriers to entry for PE in India are: Complex regulatory issues Increasing number of PE players looking at the same investment opportunities • Despite taking minority stakes in deals, managers requested a seat on the Board, • Infrastructure, retail, consumer durable, financial services, medical and health care.

  18. Sources • Venture Intelligence (Press Release from www.india infoline.com) • EMPEA, March 2009 • Global Private Equity Report, 2008 PWC EMPLOYMENT IN PRIVATE EQUITY FIRM????? GOOD OPTION

  19. Thanks

  20. One Billion = One Hundred Crores 100 crores • 1 billion = 1000 million, • 1million= 10 lacs • 10 million=1 crore or 100 lacs

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