Private Equity Track

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1 1 7 T H R D S E P T 1 2 R e s e a r c h 4 I n d i a W e e k l y u p d a t e o n t h e I n d i a n P E S e c t o r PE Activity for the week The year 2012 has so far aggregated $6.18bn (330 deals) of PE investments compared to $9.24bn (306 deals) during the same period last year. During the week ended 23rd Sept, 2012, there were 8 PE/VC deals worth $75.5mn compared to 5 deals worth $42.7mn in the previous week In the largest deal during the week, IDFC Private Equity Fund III invested Rs 1.55bn ($29mn) in Pune-based Parag Milk Foods Pvt Ltd. 0 Till date 2011 Till date 2012 PE Investments No. of Deals 0 PE Deals During The week Investor (s) Target Stake (%) Value ($mn) Stage Sector Industry Segment IDFC Private Equity Parag Milk Foods NA 29.0 Growth Manufacturing Food & Beverage Dairy ASK Property Investment Advisors Shriram Properties Bangalore project NA 18.2 Project Construction Real estate Real estate Leapfrog Mahindra Insurance Broker Growth Services BFSI NBFC Blackstone Financial Technologies (India) Ltd PIPE Services IT/ITeS Software & services Norwest Venture Partners Appnomic System NA 5.0 Growth Services IT/ITeS Software & services Info Edge India Limited Zomato Media Private Limited NA 2.4 Early Services Misc. Services Online reviews Blume Ventures, India Venture Partners Indian Angel Network Covacsis NA 0.5 Early Services IT/ITeS Poncho NA NA Early Services Retail Software & services Restaurant - QSR 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 IDFC Alternatives invests $29mn in Parag Dairy IDFC Private Equity Fund III has invested Rs 1.55bn ($29mn) in Pune-based Parag Milk Foods Pvt Ltd. The deal has been struck by the private equity group at IDFC Alternatives. Part of the investment has also been used to provide a partial exit to Motilal Oswal Private Equity, which has made 3x returns on its four-year-old investment. Of the Rs 1.55bn invested, Rs 750mn is primary issue to IDFC Alternatives. Of the remaining Rs 800mn secondary component, Rs 650mn would go to Motilal Oswal and the rest Rs 150mn to other investors. Four-S Comment: This is the largest ever deal in Indian dairy space. Earlier, in 2010, Carlyle invested Rs 1.1bn ($22mn) in Tirumala Milk Products for a minority stake and in 2008 IFC invested $8.5mn in Modern Dairies. As per news reports, IFC and Cargill Ventures are in talks to invest in Dodla Dairy. There are other players like Kwality Dairy, Creamline Dairy and Prabhat Dairy, all looking for private equity funding. ASK invests close to $18.2mn in Shriram Properties Bangalore project ASK Property Investment Advisors (ASK PIA), the real estate private equity arm of the ASK Group, made the fourth investment from its second real estate fund as it put in close to Rs 1bn (around $18.2mn) into Shriram Properties residential project in Bangalore. The funding has gone to the special purpose vehicle undertaking the project for building villas and low-rise apartments. Insurance to design low-cost health insurance products, and will add value to the company with its expertise in micro-insurance. LeapFrog is the world's largest investor in inclusive insurance and related financial services. Launched by former US president Bill Clinton, the fund focuses on the vast untapped market of emerging consumers in Africa and Asia. It invests up to $15mn in its portfolio companies. Blackstone invests in Financial Tech Blackstone has raised its holding in public listed transactions-related technology provider Financial Technologies (India) Ltd to 6.1% by acquiring an additional 1.14% stake for $8.6mn last week through open market transactions. Founded in 1998, Financial Technologies offers transaction automation, technology and networking solutions. The latest transaction makes Blackstone the single largest institutional investor in Financial Technologies. IT firm Appnomic Systems raises $5mn from Norwest Venture Partners Bangalore-headquartered Appnomic Systems Pvt Ltd, a global provider of software and SaaS solutions for predictive, application-centric and autonomic management of IT infrastructure, has raised $5mn in Series C round of funding from Norwest Venture Partners. The funds will be primarily used for expanding the company s market operations in the US and enhancing its products and services. The company had earlier raised $2.5mn in Series B, led by Norwest Venture Partners. The latest investment takes the total funding to $12.5mn. M&M Financial sells subsidiary's stake to Leapfrog Mahindra & Mahindra Financial Services Limited has sold 12.27% stake in its subsidiary Mahindra Insurance Broker Limited to Microinsurance fund LeapFrog Financial s subsidiary - Inclusion Resources Private Limited for around Rs 643.3mn. LeapFrog will help Mahindra Info Edge invests in Zomato Info Edge India Limited has invested additional Rs 128.6mn in Zomato Media Private Limited, which is engaged in the business of providing advertising, ratings and reviews for restaurants. Info Edge has invested through optionally convertible cumulative redeemable preference shares. The aggregate investment by Info Edge Research4India 2

3 including the above is Rs 310.6mn in Zomato, which translates to about 48.5% stake in the company. Zomato is operational in 12 cities in India and has recently forayed into international markets with the launch of its services in Dubai. It has launched the Dubai section of its website with more than 3,500 restaurants listed along with menus, ratings, reviews, maps and photos. Blume Ventures, India Venture Partners invest in Covacsis Covacsis has secured VC funds of around Rs 25mn from Blume Ventures, Indian Venture Partners and a European Fund. These funds will be used to expand the company's business in India and also internationally. Incorporated in 2009 by Tarun Mishra and incubated under IIT- Bombay s Society for Innovation and Entrepreneurship (SINE), Covacsis helps manufacturing companies to measure floor economics in real time. Covacsis' technology helps companies convert operational data into real time financial numbers. restaurants due to lower costs involved. The Rs 30bn QSR space in India is growing at about 30% every year. Fund Raising & Liquidity Events Indiareit closes Mumbai Redevelopment Fund for nearly $80mn Piramal Enterprises promoted real estate private equity firm Indiareit Advisors, which shelved its plans to raise $500mn offshore fund, has closed its new domestic fund focused on the Mumbai redevelopment market and is looking to strike its first deal soon. The international realty fund was supposed to be launched in July this year and the fund was planning to tap Asian, European and American investors. This fund was supposed to invest in real estate developments in Mumbai, Delhi, Pune, Chennai and National Capital Region (NCR). Indiareit Advisors recently successfully closed its Mumbai Redevelopment Fund raising Rs 4-4.5bn (~$80mn). IAN invests in Mexican food QSR - Poncho Indian Angel Network has invested an undisclosed amount in a Quick Service Restaurant for Mexican food Poncho in Mumbai. Started by two IIT alumni, Anshul Gupta and Amit Raj, Poncho offers Mexican food in an open kitchen style. Poncho has a 35 member team and plans to scale up to 15 outlets by the end of the year. It opened its first outlet in last September in Mumbai. Four-S Comment: The food services and restaurant is largely unorganised in India with very few branded players. Out of the total estimated restaurant market of Rs 450bn, organised branded vendors account for 20% of the market. Among the restaurant formats, quick service restaurant (QSR) have great potential due to the convenience offered in terms of access, sharp pricing and diverse menu. Moreover they cater to growing young population under the age of 25 years and have potential to scale better compared to fine-dining Warburg Pincus sells 4.2% more of Moser Baer at a huge loss Warburg Pincus has sold almost half of its remaining stake in Delhi-based Moser Baer India Ltd through open market transactions with a huge haircut. The PE firm, which had pumped in over $200mn in the publicly listed optical media products maker during , has part-exited, having lost over 95% of its investment value, as per news reports. As per stock market disclosures, one of its investment entities, ELM International Ltd., sold its entire stake of 3.35 per cent in a series of open market transactions, while another entity, Randall Investments Ltd., also cut its holding in the last one month. The two entities sold around 4.2 per cent stake for an estimated sum of a little less than $1mn. Research4India 3

4 Private Equity News IndoUS backed CarZ to raise funds for expansion Automobile service company Carz is planning to raise Rs 1.20bn in second round of PE investment by February The company plans to add another 34 outlets with an investment of Rs 450mn over the next two years across the southern and western Indian markets including Gujarat, Maharashtra and Tamil Nadu. It plans to use part of the funding for setting up of these outlets which requires an investment of around Rs 12mn for each 1,000- sq yard Carz outlet. IFC to invest in Ecolibrium Energy IFC is planning to invest in Ecolibrium Energy Private Limited, a startup providing services and products in Smart Grid domain. Ecolibrium is looking to raise upto $1.5mn, with IFC contributing to a large part of the capital raise. The company is looking to raise equity capital to expand its presence in the energy efficiency space by strengthening its product capabilities and reaching out to a larger customer base. Ecolibrium Energy has been incubated at the Centre of Incubation, Innovation, and Entrepreneurship (CIIE), at IIM-Ahmedabad. It works with power distribution companies and large industrial customers in India. Dr Lal PathLabs to raise funds for expansion Dr. Lal PathLabs Private Limited is looking to expand in South and West of India, and aggressively looking at Africa, South-East Asia and West Asia. The company plans to invest up to Rs 5.5bn for its expansion plans, which will be raised from internal accruals, debt and two global private equity firms. Dr Lal PathLabs offers a range of more than 1,700 diagnostic tests to consumers, from routine biochemistry tests to more complex molecular tests. Dr Lal PathLabs runs over 125 laboratories across the country and over 2,000 centres with over 1,500 employees. L Capital to invest in the Great Indian Nautanki Company Luxury firm LVMH's PE arm L Capital has chosen yet another investee company in India with The Great Indian Nautanki Company which operates the entertainment entity Kingdom of Dreams (KOD) in Gurgaon. The PE firm will invest around Rs 2bn in GINC and the company has plans to divest 20% in the first phase of divestment. Funds are to be utilized for expansion in India and international destinations. It includes setting up of new project (KOD) in Mumbai along with spreading into foreign markets like China, Singapore and Las Vegas. Maiyas Beverages & Food to raise PE investment Launched after the completion of five-year noncompete clause between Sadananda Maiya and MTR Foods, Maiyas Beverages And Food is all set to raise PE funds of around $20mn for expansion. The clause expired in April Maiya Food. which sells ready-to-eat food under brand name Maiyas. is aggressively focusing on the market across South India. Sadananda started business expansion with an aggressive Rs 600mn investment in a fully automated factory on 20 acres in Bangalore. Research4India 4

5 M&A Activity for the Week During the week ended 23rd, 2012, there were 5 M&A deals worth $127.9mn (size of 1 deal was not known). In the largest deal during the week, Japanese diversified trading company - Mitsui has acquired 25% stake in API maker Arch Pharmalabs for Rs 3.72bn ($68mn) increasing its stake to 30% Acquiror Target Sector Source: Four-S PE Database Stake (%) Deal value ($ mn) Mitsui Arch Pharmalabs Pharmaceutical Tech Mahindra Comviva Technologies IT/ITeS Future Ventures Express Retail Retail Superhouse Limited Linea De Seguridad. S. L Manufacturing NA 1.1 Innoventive Industries Innovative Technomics Manufacturing 51 NA Market Update Key Domestic Indices Indian Market Movements 52 Week Index 14-Sep Sep-12 Change (%) High Low BSE Sensex 18, , % 18, , S&P CNX Nifty 5, , % 5, , CNX Nifty Junior 10, , % 10, , Nifty Mid Cap 50 2, , % 2, , CNX IT 6, , % 6, , Bank Nifty 10, , % 11, , CNX Infrastructure 2, , % 2, , CNX Realty % Key Global Indices Global Market Movements 52 Week Index 14-Sep Sep-12 Change (%) High Low NASDAQ 3, , % 3, , Dow Jones Industrial Average 13, , % 13, , S&P 500 1, , % 1, , NIKKEI 225 8, , % 10, , Hang Seng 20, , % 21, , Straits Times Index 3, , % 3, , FTSE 100 5, , % 5, , Source: Google Finance, Yahoo finance Research4India 5

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6 Four-S Services Pvt Ltd Founded in 2002, Four-S has a strong & successful track record of genuine, accurate and objective advice to top Indian & global companies & PE Firms. Four-S has already proven success in corporate finance, strategy consulting, fund-raising, investment banking and investor relations mandates with 100+ corporates and large PE funds. Four-S, trusted advisor to top Indian & Global Cos Offering comprehensive bouquet of services to SMEs, Corporates and PE Funds Research4India 6

7 About Research4India 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. These reports will be available on our upcoming site as well as from leading international research sellers like Thomson Reuters, Bloomberg, Research and Markets, CapitalIQ etc. Disclaimer The information contained herein has been obtained from sources believed to be reliable but is not necessarily complete and its accuracy cannot be guaranteed. No representation, warranty, guarantee or undertaking, express or implied, is made as to the fairness, accuracy or completeness of any information, projections or opinions contained in this document or upon which any such projections or opinions have been based. Four-S Services Pvt. Ltd. will not accept any liability whatsoever, with respect to the use of this document or its contents. This document has been distributed for information purposes only and does not constitute or form part of any offer or solicitation of any offer to buy or sell any securities. This document shall not form the basis of and should not be relied upon in connection with any contract or commitment whatsoever. 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, any company mentioned in this document. For further details/clarifications please contact: Seema Shukla Gurgaon Office: 214, Udyog Vihar, Phase I, Gurgaon Tel: Ajay Jindal Mumbai Office: 101,Nirman Kendra, Opposite Star TV, Off Dr E Moses Road, Mahalaxmi, Mumbai Tel: Research4India 7

Private Equity Track

Private Equity Track 1 S T - 7 T H O C T 1 2 R e s e a r c h 4 I n d i a W e e k l y u p d a t e o n t h e I n d i a n P E S e c t o r PE Activity for the week The year 2012 has so far aggregated $6.40bn (340 deals) of PE