Your Eye to Indian Private Equity

Transcription

1 Four-S Private Equity Track Issue: Your Eye to Indian Private Equity PE activity for the week During the week ended 17th June, 2012, there were 9 PE/VC deals worth $124.6mn compared to 9 deals worth $232.4mn in the previous week. Out of the total, 7 were growth stage deals and 1 each was late stage and Project deals. In the largest deal during the week, Super Religare Labs raised $66mn from NYLIM Jacob Ballas India Fund and IFC th June' th June' Private Equity: Investment Summary during the week Investor (s) NYLIM Jacob Ballas, IFC Norwest Venture Partners, Nexus, Helion Draper Fisher Jurvetson and Western Technology Investment Target Super Religare Laboratories PE Investments No. of Deals Stake Value (%) ($mn) Sector Industry Segment Stage NA 66.0 Services Health Services Diagnostic Late Komli Media India NA 30.0 Services Credit Suisse United Spirits NA 11.1 Manufacturing Media & Entertainment Food & Digital Media Growth ru-net Freecultr NA 9.0 Services Retail Internet Retail Growth ru-net BeStylish NA 8.0 Services Retail Internet Retail Growth ACCION International &Pragati India Fund Saija Finance NA 4.5 Services BFSI Microfinance Growth Kaizen Your Kids 'R' Our Kids NA 3.6 Services Education India Alternatives Investment Advisors IL&FS PE Gokaldas Intimatewear Pvt Ltd ETT Limited - IT Park Project Reliance Capital Grover Zampa 18.0 NA Manufacturing Kids education/day care PIPE Growth NA 3.5 Manufacturing Textiles RMG Growth NA NA Construction Real estate Real estate Project Food & Growth Source: Four-S PE Database Super Religare Labs raises $66mn Super Religare Laboratories (SRL), a unit of Fortis Healthcare, has raised $66mn funding from NYLIM Jacob Ballas India Fund and IFC, the investment arm of the World Bank. The amount raised from the deal will be utilised by SRL for repaying its debt, which the company had raised for acquiring Piramal Diagnostic Services in The funds will also be used for consolidation and for expanding the operational network of SRL. This will be the third round of

2 private equity investment in the company, after Avigo Capital Partners and Sabre Partners invested Rs 1.5bn in Four-S Comment: Super Religare is one of the leading diagnostics services companies in India. The company had acquired Piramal Diagnostic Services Private Limited (PDSPL) in August 2010 for $107.4mn; with this acquisition - it has the largest market share (48%) in the organized sector in India, (according to ICRA Management Consulting Services Limited, Indian Diagnostics Services Market Report, January 2011). Overall, it accounts for about 10% of the country's $2bn diagnostic and radiology market. The rest comprise 50,000 standalone centres and small regional players. Komli Media raises $39mn from Norwest Venture Partners, Nexus, Helion & others Online ad network and audience measurement provider Komli Media India Pvt Ltd has raised $39 million, led by Norwest Venture Partners, with participation from Nexus Venture Partners, Helion Venture Partners, Draper Fisher Jurvetson and Western Technology Investment. The fund will be used to enhance the company s core media technology platforms and products, hiring more talents and expand its presence across the Asia-Pacific market. Four-S Comment: This is the fourth round of funding for the company. In January 2011, it raised $15mn, led by Norwest Venture Partners. Existing investors Helion Venture Partners and Nexus Venture Partners also participated in that round. The company had also raised $6mn in July 2010 and $2mn in January 2008 from same set of investors - Nexus Venture Partners, Helion Venture Partners, and Draper Fisher Jurvetson. Russian firm invests in two Indian e-commerce sites Russian internet and technology investment company ru- Net seems to have become the first foreign company to invest in an Indian online retail company. The Moscowbased company invested $17mn in Freecultr ($9mn) and BeStylish ($8mn), two e-commerce websites backed by the Smile group. While Freecultr is an apparel designing and retailing company, BeStylish is a shoe e-retailing company. Four-S Comment: E-commerce companies operating in India are governed by the same FDI (foreign direct investment) rules as other brick-and-mortar retail chains. The policy allows 100% FDI in business to business e- commerce ventures, but not in retail trading ventures. But in India, the bulk of the e-tailing business is centered around selling to the consumer, and not B2B and many of them are known to be running on foreign funds, mostly of international venture capital and equity funds. They structure the investment in such a way that the investment comes in at wholesale logistics or warehousing arm where 100% FDI could be used. ACCION, Pragati India invests in Saija Finance ACCION International and Pragati India Fund has invested $4.5mn in Bihar based Saija Finance in its second round of funding. Saija Finance is a NBFC with a focus on providing microfinance services for the urban and rural poor, as well as micro and small businessmen in the underserved geographies of Northern India - Bihar, Jharkhand, Delhi, Rajasthan, Chhattisgarh and parts of Uttar Pradesh and Madhya Pradesh. Saija Finance plans to use the funds to strengthen its presence in the region, through expansion of its branch network and extension of client outreach. Kaizen invests in Your Kids 'R' Our Kids Kaizen Management Advisors Private Limited has invested Rs 200mn in Bangalore based Your Kids 'R' Our Kids Education Pvt Ltd, a day care and education firm. The company plans a pan-india network of 65 centres serving more than 10,000 children in the next five years. YKROK provides services like corporate day care, pre-school and after school services and has a capacity of serving more than 2,000 children in the country across 15 centres. It currently has centres in Delhi, Pune and Bangalore. YKROK provides services like corporate day care, pre-school and after school services and has a capacity of serving more than 2,000 children in the country across 15 centres. It currently has centres in Delhi, Pune and Bangalore.

3 Gokaldas unit Enamor gets funding from India Alternatives Hinduja family-owned lingerie firm Gokaldas Intimatewear Pvt Ltd, which sells the Enamor brand in India, has raised Rs 200mn ($3.5mn) from a PE fund managed by India Alternatives Investment Advisors, sponsored by the promoter of Centrum Group Chandir Gidwani. IL&FS PE acquires Express Trade Tower from Noidabased ETT Group IL&FS Investment Managers Ltd, the country s largest home-grown private equity firm in terms of assets under management (AUM), has struck a deal with Noida-based ETT Limited to acquire its IT Park project called Express Trade Towers. The iconic plan is located in Sector-132 Noida Expressway, a new business trademark on Noida-Greater Noida Expressway. Reliance Capital buys 18% stake in Grover Zampa Reliance Capital is acquiring 18% stake in Grover Zampa, a merged company of Valle De Vin Private Limited and Grover Vineyards Limited. The fund raised will help Grover Vineyards and Valle de Vin merge and come up with new winery operations in grape producing regions of Maharashtra and Karnataka states in India. This is Reliance Capital s second investment in vineyards after Indage Vintners. Reliance capital held around 1.90% in Indage vintners. company IPO in As on Dec 2011, it held 11.94% stake in the company and it was one of the largest non-promoter shareholder. SBI, FMO launch $80mn financial services fund Japan's SBI Holdings and Netherlands Development Finance Company (FMO) have jointly rolled out a new fund that will invest in financial services across emerging Asia. The SBI- FMO Emerging Asian Financial Services Fund is targeting up to $80mn in capital and is seeking to make a first close on $60mn. The new fund will be managed by Singapore-based SBI Ven Capital, a mid-market regional VC player affiliated with the eponymous financial conglomerate. Also based in Singapore, the vehicle will invest mainly in growth-stage companies. Global Environment Fund raises $124mn for clean energy investments Global Environment Fund has raised $124mn SME focussed South Asia Fund. Global Environment Fund (GEF) invests in businesses around the world that provide cost-effective solutions to environmental and energy challenges. GEF has invested around $100mn through eight deals in India. Recently, GEF South Asia Fund along with International Finance Corp (IFC) invested $11.5mn to Bangalore-based energy efficiency firm Kalki Communication Technologies. It also invested Rs 1.15bn in Saisudhir Infrastructures. Its active investments include Kalki, Greenko Group Plc and Saisudhir Infrastructures Ltd. GEF exited from REVA Electric Car Company. Fund Raising & Liquidity Events Private Equity and M&A News New York Life sells 2.19% in Commercial Engineers New York Life Investment has sold 2.19% stake in Commercial Engineers & Body Builders Co Limted through bulk deal on NSE. New York Life Investment Fund sold over over 1.2 mn shares at a price of Rs 71 per share, aggregating to Rs 85.2mn. With this stake sale, NYLIM stake stands at 0.71% in Commercial Engineers. NYLIM has sold significant stakes in March, April and May. It part exited during the Foreign PE fund may buy stake in SpiceJet A couple of foreign PE funds have evinced interest in acquiring a stake in SpiceJet Limited, as per news sources. The airline is close to signing a term sheet with one of the two PE firms. Last year TPG Capital was planning to acquire a minority stake in the airline. The funds were to be used to expand the fleet size but there has been no development on the deal. Last week the airline announced expansion of its

4 international services to the Gulf market by connecting Delhi and Mumbai with Dubai daily from June 25. Tyroo, SeventyNine to raise $10mn Tyroo and SeventyNine, SVG group companies are planning to raise $10Mn through VC and institutional investment for expansion. The company is also planning to make acquisitions in the digital media space and will back entrepreneurs to launch new digital businesses. SVG is the digital media group in country with companies such as Tyroo, SeventyNine (the mobile network), Zoomtra and Quasar. Cloudnine to raise Rs 1bn for expansion Cloudnine Hospitals is planning to raise Rs 1bn for expansion. The hospital is looking to expand into Mumbai, Chennai and Hyderabad through acquisitions. It is also planning to expand its footprints in tier-ii cities. The company will take Brownfield project approach in metros and Greenfield projects in small towns. The hospital is engaged in providing infant and maternity care by offering complete pregnancy care, fertility care, gynecological care, well women care, neonatal and pediatric care. IPO, Other Offerings Kindle Experiential to raise $4-5mn for expansion Hyderabad based Kindle Experiential Learning Private Limited, an education startup is planning to raise around $4.5-5mn from two undisclosed Indian individual investors. Kindle Experiential develops innovative learning solutions for schools under the brand Creya Learning. Its plans to set up 20 Creya experiential learning centers across India. Currently, the company plans to sign on four more schools and is also currently in discussions with a Mumbai-based education group that runs 25 schools across the country. Stanley Lifestyles to raise $20mn through PE Bangalore based Stanley Lifestyle Limited is planning to raise $20mn through PE route. The fund raised will be used in two tranches; the first tranche of $10mn will be used for forward integration expansion by opening new showrooms in New York, Paris, London, Middle East, India and Dubai by The second tranche will go to fund backward integration by setting up a tannery in Tamil Nadu to reduce cost. Bangalore based-stanley Lifestyles Limited (SLL) is engaged in the manufacture of pure leather, customized upholstery and furniture through its two manufacturing facilities in Bangalore. Ashok Leyland to raise Rs 7.5bn through QIP Ashok Leyland is planning to raise Rs 7.5bn through private placement in order to meet it's capital expenditure requirements. The company plans to have a target cap-ex of Rs 8bn this fiscal which includes investment in joint venture, plant and equipments and research & development and is in line with the planned investment of approx Rs 41.5bn in Tamil Nadu keeping with the macro plan of LCV project with company's Japanese partner Nissan announced last month. RCom unit wins Singapore IPO approval Telecoms carrier Reliance Communications has said that the Singapore stock exchange has approved its undersea cable unit for an IPO that could raise more than $1bn. The company is looking to list the undersea cable unit as a business trust in Singapore and will use the proceeds from the proposed share sale to cut its debt burden - $7bn as of March. The undersea cable unit IPO is crucial for Reliance Communications, which has been trying to raise about $3bn by selling its telecoms tower assets but has so far been unsuccessful. M&A Activities

5 Orissa for $330mn. M&A Activity: Summary during the week Acquirer Target Target business Stake (%) Deal value ($ mn) Vedanta Aluminium Raykal Aluminium Company Mining NA 300 Sony Pictures Televisions Multi Screen Media Private Media & Entertainment Zicom Electronic Security Systems Phoenix International WLL Security services Omnesys Technologies Harsa IT Solutions IT/ITeS NA NA WPP Plc Hungama Digital Services Media & Entertainment 50+ NA AurionPro Solutions Limited Enline PLC IT/ITeS NA NA Suntory & Food Narang Connect Private Food & beverage 51 NA Times Internet Delhivery Logistics NA NA Source: Four-S Database, Acquisition price is in $mn During the week ended 17th June, 2012, there were 8 M&A deals worth $616mn (size of 5 deals were not known). In the largest deal during the week, Vedanta Aluminium acquired L&T s bauxite mines in Market Update Key Domestic Indices Indian Market Movements 52 Week Index 8-Jun Jun-12 Change (%) High Low BSE Sensex 16, , % 19, , S&P CNX Nifty 5, , % 5, , CNX Nifty Junior 9, , % 11, , Nifty Mid Cap 50 2, , % 2, , CNX IT 5, , % 6, , Bank Nifty 9, , % 11, , CNX Infrastructure 2, , % 3, , CNX Realty % Source: BSE, NSE Key Global Indices Global Market Movements 52 Week Index 8-Jun Jun-12 Change (%) High Low NASDAQ 2, , % 3, , Dow Jones Industrial Average 12, , % 13, , S&P 500 1, , % 1, , NIKKEI 225 8, , % 10, , Hang Seng 18, , % 23, , Straits Times Index 2, , % 3, , FTSE 100 5, , % 6, , Source: Yahoo Finance

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