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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. Foreign Institutional Investment (FII) for investments in listed companies Foreign Direct Investment (FDI) for investment in unlisted companies.

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

Regulations for Private Equity Investors and Venture Capital 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).

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.  PE firms also provide the domestic entities the necessary mentoring and advice without having to go to public markets.

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.

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

Some Recent Examples

Schools turn smart to woo PEs

Rp.100 crore deal that Reliance Equity Advisors Reliance Capitals PE arm struck with Pathway World School This was the first PE investment in any school in the country

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.

Temasek to invest Rs 880 cr in GMR

10 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 whollyowned subsidiary Claymore Investments (Mauritius).

Blackstone to Invest INR 2250 Million in Jagran Media Network 07 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 Indias leading media and communications group, with the groups 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

Major India Private Equity / Venture Capital Funds

               ICICI Ventures UTI Ventures Kotak Private Equity Group CVC International JM Financial Evolvence New Bridge Financial Advisors Carlyle Apax Blackstone Warburg Pincus Temasek Holdings General Atlantic 3i Chrys Capital

Major India Private Equity / Venture Capital Funds

                     Oaktree New Vernon Capital Ascendas India Property IREO Och Ziff Capital Trikona Motilal Oswal TPG 2i Capital (India) Private Ltd SCFPL - Siemens Venture Capital Acer Technology Ventures APIDC-Venture Capital Limited Creditcapital Venture Fund (India) Ltd. GE Capital Services India Ltd TDA Capital Partners Inc Infinity Technology Investments Pvt Ltd Karnataka Information Tech Venture Walden International India Jina Ventures Samara Capital TVS Capital Funds Limited

Major India Private Equity / Venture Capital Funds

             Actis Baring GW Capital Oak Hill Capital ILFS IDFC West Bridge Capital JumpstartUP IFC Intel Capital SIDBI GVFL Pequot Capital

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

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.

Venture Intelligence (Press Release from www.india EMPEA, March 2009 Global Private Equity Report, 2008 PWC

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