Your Eye to Indian Private Equity

Transcription

1 Four-S Private Equity Track Issue: 7th March, th March, 2011 Your Eye to Indian Private Equity PE activity for the week During the week ended 13th March, 2011 there were 11 PE/VC deals worth $201.4mn compared to 3 PE/VC deals worth $54.5mn in the previous week. Out of the total, 5 were growth stage deals, 4 were late stage and 2 were early stage deals. In the largest transaction during the week Mount Kellett, along with TVS Capital and Ajay Piramal Group's healthcare fund invested $90 mn in MedPlus Health Services. Private Equity: Investment Summary during the week Investor (s) Target Sector Business Stake (%) Amount Stage Mount Kellet, TVS Capital and Ajay Piramal Group's healthcare fund MedPlus Health Services Healthcare Pharma retail Late IFC Shalivahana Green Energy Infrastructure Cleantech NA 30.0 Growth Macquarie Asia Pacific & Squadron Capital StanChart PE AMR Construction Infrastructure Mining NA 20.0 Late Privi Organics Manufacturing Chemicals NA 18.9 Growth Motilal Oswal PE GR Infraprojects Ltd Infrastructure Roads NA 17.8 Growth Tiger Global, IDG Ventures and Indo-US Venture Partners Motilal Oswal PE, IDFC Investment Advisors Myntra.com IT/ITES Online Retail NA 14.0 Early Electromech Material Handling Infrastructure EPC NA 10.0 Growth BCCL Eco Recycling Infrastructure Cleantech Early Bain Capital, GIC Hero Investments Manufacturing Auto NA NA Late Inventus Capital Partners Sokrati Opulent Venture Capital Srei Infrastructure Finance Trust Ltd Source: Four-S Database, Deal size in $mn PE major leads stake buy in MedPlus US private equity group Mount Kellett Capital Management is leading Rs 4.10bn ($90 mn) investment in one of India's top pharma retailer MedPlus Health Services. The $3.5-bn Mount Kellett, along with TVS Capital and Ajay Piramal Others Marketing and Analytics Infrastructure Infra finance th March PE Investments th March No. of Deals NA NA Early 11.5 NA Growth Group's healthcare fund, will acquire a little over 35% stake in the Hyderabad-based firm. Mount Kellett is making the first Indian investment and others will buyout existing financial investors, including Peepul Capital, NEA IndoUS Ventures and Arcapita th January 23 rd January, 2011

2 IFC to invest $30 mn in Shalivahana Green Energy IFC will invest $15 Mn in Shalivahana Green Energy Limited (SGEL), to fund its power projects. SGEL, a part of the Shalivahana Group, is a biomass power company with installed capacity of 47 MW spread across 5 plants - 2 in Andhra Pradesh, 2 in Maharashtra and 1 in Karnataka. IFC will also provide $15 mn debt to Rake Power Limited (RPL), a 100% subsidiary of SGEL, for its 2x23 MW biomass projects. The loan will be up to 12 years with a grace period of 3 years. Macquaire Asia Pacific and Squadron Capital invests $20 mn in AMR Construction Australia-based Macquaire Asia Pacific and Hong Kongbased Squadron Capital together will invest $20 mn in Hyderabad-based mining and infrastructure company AMR Construction. Promoted by A. Mahesh Reddy in 1992, the infrastructure services company filed for an IPO in 2008 but has not been listed yet. AMR has an impressive client-list, which includes Singareni Collieries Co Ltd, India Cements, Madras Cements, Gujarat Industries Power Co Ltd and Grasim Cements, among others. Privi Organics raises $18.9 mn from Standard Chartered Private Equity Standard Chartered Private Equity (SCPE), the private equity arm of Asia-focussed lender Standard Chartered, has invested ~$18.9 mn in Mumbai-based Privi Organics, a manufacturer, exporter and supplier of chemicals used in the aroma industry. The funds raised will be used to part-finance the company s plans to expand its manufacturing units situated at Mahad in Maharashtra as well in the backward integration of its various projects. Privi is reported to be exporting its products to some of the world s largest fragrance companies spread across about 25 countries. GR Infraprojects Ltd raises funds from Motilal Oswal PE Advisors GR Infraprojects Ltd, based out of Udaipur, Rajasthan, has raised $17.8 mn from Motilal Oswal Private Equity Advisors and Hybrid Infrastructure Portfolio, which is managed by IDFC Investment Advisors Ltd. The investment is reported to have been made for a minority stake in GR Infraprojects. The company is mainly engaged in EPC for roads, toll projects and emulsion plants. Company has executed projects in Rajasthan, Gujarat, Madhya Pradesh, Haryana, UP, Bihar, Himanchal Pradesh and Jharkhand. The funds raised will be used for Shillong bypass project, other EPC projects and to meet working capital requirements. Tiger Global invests $14 mn in Myntra.com Global private equity firm Tiger Global along with existing investors IDG Ventures and Indo-US Venture Partners has invested $14 mn in the second round of funding of online retail company myntra.com. The online retailer is currently cashing in on the rising demand for cricketing merchandise. Myntra.com, which was founded by three IIT-ians sells a range of jerseys, T-shirts, mugs and other merchandise in Indian cricket colours from a range of global brands, such as Nike, Adidas, Reebok and Puma. Motilal Oswal PE Advisors invests in Electromech Material Handling Systems Motilal Oswal Private Equity Advisors, the private equity arm of brokerage firm Motilal Oswal Securities Ltd (MOSL), has invested $10 mn in Pune-based ElectroMech Material Handling Systems (India) Pvt Ltd. Electromech is engaged in the business of designing, engineering, manufacturing and installing electric overhead travelling (EOT) cranes, electric wire rope hoists, gantry cranes, jib cranes and various kinds of customized material handling solutions.

3 BCCL invests in E-Waste Recycling firm Eco Recycling Bennett Coleman & Co Ltd (BCCL) has invested Rs 35mn in e-waste recycling company Eco Recycling Ltd, by subscribing to 0.8mn equity convertible warrants. Eco Recycling was established in 2007 by Infrotrek Syscom Ltd and Mr B K Soni. Last December, Infotrek Syscom amalgamated the subsidiary Eco Recycling and changed the name from Infotrek Syscom to Eco Recycling Ltd. The firm focuses on safe disposal of e-waste recycling and secured data destruction. Bain, GIC invests in Hero Investments Private equity firms Bain Capital and the Government of Singapore Investment Corp have agreed to invest in Hero Investments to help it fund its acquisition of Honda Motors' 26% in its Indian joint venture. Hero Investments has agreed to buy Honda Motors Ltd's stake in Hero Honda Motors for around $851 mn in a deal that will see the Japanese automaker exit its joint venture in India after more than 26 years. The funds will be used to retire a significant portion of debt raised for the deal. Inventus Capital invests in Sokrati Sokrati, a digital marketing and analytics company, has received the first round of funding in the form of Series A funding from Inventus Capital Partners. However, details of the quantum of investments made have not been disclosed. As a practice, Inventus generally invests between $1-$10 mn per investment. Founded in January 2009 by ex-amazon.com veterans Ashish Mehta, Santosh Gannavarapu and Anubhav Sonthalia, Sokrati has an office in the US, too. Sokrati offers automated platform for search and social media marketing and targets the advertisers in the travel, e-commerce and classified advertisements segment. Opulent Venture Capital Trust invests in Srei Infrastrcture Finance Ltd Opulent Venture Capital Trust has bought 11.52% stake in Srei Infrastructure Finance Ltd pursuant to amalgamation of Quippo Infrastructure Equipment Ltd with Srei Infra Finance. Opulent Venture holds 20.10% stake in Quippo Infrastructure Equipment, the Kanoria family holds 58% and Srei holds 16.85%. Post amalgamation, the promoters' ownership in Srei will go up from 30% to 46%, and will create treasury stocks of about 9.5% of Srei. Fund raising and liquidity events TPG Capital plans exit from Shriram Transport Finance TPG Capital is planning to exit from Shriram Transport Finance Co (STFC). TPG Capital s Newbridge Fund had invested $100 mn in for 49% stake in Shriram Holding (Madras) Pvt Ltd in which Shriram Group holds the remaining 51% stake. This holding entity has 41.29% in the listed Shriram Transport Finance, which has a market cap of around $4 bn. Hence, TPG's indirect holding in Shriram Transport Finance comes to 20%, with an estimated value of around around $800 Mn. If the deal materlises, TPG will make 8 times return on its investment. Greenko founders pick Aloe PE's part stake in firm Founders of AIM-listed Indian clean energy owner and operator Greenko, first generation entrepreneur Anil Chalamalasetty and Mahesh Kolli, have acquired 3.75% additional stake in the TPG-backed company from its largest shareholder Aloe Private Equity for mn. Aloe Environment Fund and Aloe Environment Fund II (which are both managed by Aloe Private Equity) held 17.85% of Greenko as of December 15, 2010 (14.35% after factoring in equity dilution from outstanding options conversion in the future). The private equity fund s stake has come down to 14.11% as of now.

4 Godrej Properties acquires entire paid-up capital of Udhay GK-Realty Mumbai based real estate developer Godrej Properties Ltd. (GPL), has acquired entire paid up capital of Udhay GK- Realty Pvt. Ltd from HDFC Ventures Trustee Company Ltd. two investors will contribute up to 22.5% of the fund ($67.5 mn). Private Equity and M&A News Standard Chartered PE to part-exit from Powerica Standard Chartered Private Equity, the Private Equity arm of the lender Standard Chartered, is planning to partially exit from its investment in Powerica Ltd, a genset manufacturer based in Mumbai. The exit is being planned through the upcoming initial public offering (IPO). Standard Chartered Private Equity had invested Rs 1.5 bn in Powerica in October Currently, the PE firm holds 11.57% in the company, which is expected to fall to below 10% post-issue. NEA- IndoUS, Peepul Capital script mega exit from MedPlus Two India-focused venture capital funds - NEA-IndoUS and Peepul Capital are understood to have scripted a mega exit from Hyderabad-based pharmacy and pathology lab chain - MedPlus Health Services. According to investment bankers close to the deal, these two funds have managed a return of close to 4 times on their investment in this chain, which is growing at a rapid pace. A stake of 35% held by these two funds along with another investor is understood to have changed hands with a transaction size worth $90 mn. Kotak Mahindra raising $300 mn India Infra Funds Kotak Mahindra Group is raising two private equity funds, one domestic and one offshore, with a total corpus of $300 mn to invest in infrastructure projects in India. Kotak has roped in Sumitomo Mitsui Banking Corporation (SMBC), one of the largest banks in Japan, and Brookfield Asset Management (a real estate, renewable power and infrastructure asset owner, operator and manager with assets under management of over $100 bn), as cornerstone investors (or significant anchor investors). Kotak and the Techno Electric plans to raise Rs 7.5bn for wind power project Techno Electric and Engineering Company Ltd plans to raise Rs 7.5bn from IFC, Standard Chartered Bank and DBS Bank. The Kolkata-based company will utilize the funds to partfund its 200 MW wind power project based in Tamil Nadu. Besides the debt, Techno Electric will also pump in Rs 4bn as equity into the project. The project will be done in two phases. The first involving 125 MW will be completed by June 2011 while the second phase will operationalise the rest 75 MW by March Reliance Venture plans to invest $150 mn in FY2012 Reliance Venture Asset Management (RVAM), the venture capital arm of the Anil Ambani group, plans to invest up to $150 mn in about a dozen companies in financial year The fund is reportedly eyeing investments in the education, healthcare, infrastructure ancilliaries, aerospace and defence sectors. RVAm is currently invested in about 18 start-up ventures. IPO and Other Offerings Bio Ethanol Agro files DHRP for IPO Bio Ethanol Agro Industries Ltd has filed the draft red herring prospectus (DHRP) with the Securities and Exchange Board of India (Sebi) to raise Rs 620mn through an Initial Public Offering (IPO). The funds raised will be utilised to manufacture 60 kilo litre per day (KPLD) of extra neutral alchohol (ENA), 44 TPD of distillers dried grains with solubles (DDGS), 4 KPLD of Technical Alcohol (rectified spirit), 30 MPTD of CO2 and two captive power generation units.

5 Executive Tracking Tamasek India MD Padmanabh Sinha moves to Tata Capital In a major lateral move, Padmanabh (Paddy) Sinha, Managing Director of Temasek Holdings India, one of the two sovereign wealth funds managing investments of Singapore government, will join Tata Opportunities Fund as Senior Partner and Chief Investment Officer. Padmanabh had joined Temasek in the middle of He was a part of the founding India team. Earlier, he was Vice President-Investments at ICICI Venture. Before that, he was associated with egurucool.com, the e-learning company funding by Star Group and ChrysCapital, as well as with Rabobank. M&A Activities M&A Activity: Summary during the week Acquiror Target Sector Stake (%) Deal value ($ mn) Hero Investments Hero Honda - Honda's stake Manufacturing Dodsal Group AE&A IDEA (India) Pvt Ltd Infrastructure 100 NA Hanung Toys Cody Direct Corp Marketing & Distribution 98 NA Kabra Extrusiontechnik Ltd Gloucester Engineering Co. Inc Engineering Karbonn Mobiles Unidentified Korean company Telecom (Mobile Handset) NA 40.0 Insecticides (India) Ltd Monocil brand of Nocil Ltd Agro-chemicals 100 NA United Phosphorus Ltd Sipcam Isagro Brazil (SIB) Agro-chemicals 50 NA Sapa Profiles India Pvt Ltd Alufit (India) Pvt Ltd Manufacturing 100 NA Godrej Propoerties Ltd Udhay GK Realty Real estate NA NA Dhunseri Petrochem & Tea Ltd Sona Assam Tea factory Food - Beverages 100 NA Dazzel Confindive Ltd Horizon Leisure Hotels Pvt Ltd Leisure - Travel 40 NA Source: Four-S Database, Acquisition price is in $mn Stock Market Updates During the week ended 13 March, 2011, there were 11 M&A deals worth 895.5mn (size of 8 deals were not disclosed). In the largest deal during the week, Hero Investments has agreed to buy Honda Motors Ltd's 26% stake in Hero Honda Motors for around $851 mn in a deal that will see the Japanese automaker exit its joint venture in India after more than 26 years. Hero Investments is buying the stake at Rs a share Key Domestic Indices Indian Market Movements 52 Week 12-Mar Mar-11 Change (%) Low High BSE Sensex 18, , , , S&P CNX Nifty 5, , , , CNX Nifty Junior 10, , , , Nifty Mid Cap 50 2, , , , CNX IT 6, , , , Bank Nifty 10, , , , CNX Infrastructure 2, , , , CNX Realty Source: BSE, NSE statistics Key Global Indices Global Market Movements 52 Week 13-Mar Mar-11 Change Low High Nasdaq 2, , , , DJIA 12, , , , S&P 500 1, , , , Nikkei 10, , , , Hang Sang 23, , , , Straits Times 3, , , , FTSE 100 5, , , , Source: Google finance

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