IVCA Presentation October 2007

8/14/2019 IVCA Presentation October 2007

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Venture Capital & Private Equity

in India

Last Update: October 2007Email: [email protected]


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Phase I - Formation of TDICI in the 80s and regional

funds as GVFL & APIDC in the early 90s.

Phase II - Entry of Foreign Venture Capital funds

(VCF) between 1995-1999 Phase III - (2000 onwards). Emergence of successful

India-centric VC firms

Phase IV (current) Global VCs and PE firms actively

investing in India 150 Funds active in the last 3 years (Government,

Overseas, Corporate, Domestic)

Setting the stage - Venture Capital in India


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The Opportunity

High Growth in Technology and Knowledge basedIndustries (KBI)

KBI growing fast and mostly global, less affected bydomestic issues.

Several emerging centers of innovation biotech,wireless, IT, semiconductor, pharmaceutical.

Ability to build market leading companies in India thatserve both global and domestic markets.

India moving beyond supplier of low-cost services tohigher-value products.

Quality of entrepreneurship on ascending curve.


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Growth of PE/ VC in India

2000 1H 2007 (US$ millions)

1160 937591 470

1650 2200

7500

5648(280)

(110)(78)

(56) (71)

(146)

(299)

(161)

0

1000

2000

3000

4000

5000

6000

7000

8000

2000 2001 2002 2003 2004 2005 2006 First Half2007

0

50

100

150

200

250

300

350

Value of Deals (Number of Deals)


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Investments by SectorNumber of Deals

Source: TSJ Venture Intelligence

0 20 40 60 80 100 120

IT & ITES

Manufacturing

Healthcare & Lifesciences

BFSI*

Others

2004 2005 2006

2006: Others

Textiles, garments, Media & Entertainment, Retail

Eng/Construction, Food & Beverage, Real Estate *Banking, financial services & insurance


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Investment by StageNumber of Deals

Source: TSJ Venture Intelligence

0 20 40 60 80 100 120

Early stage

Growth stage

Late stage

PIPE

Buyout

Other

2004 2005 2006

PIPE Private investment in public equity


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2006 PE/ VC Trends

US$7.5bn invested in 2006 across 299 deals.

IT & ITES retained its status as the favorite industryamong PE investors, followed by manufacturing and

real estate. Largest PE deal was $900M LBO of Flextronics by

Kohlberg Kravis Roberts (KKR).

M&A and IPO activity continued to remain strong.


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2006 PE/ VC Investments by industry

Total US$7.5Bn

Source: TSJ Venture Intelligence India

23.5%

12%

7.1%

6.8%12.1%

0.8%

0.5%

7.9%

2.1%

27.2%

IT & ITES

Manufacturing

Real Estate

Healthcare & Lifesciences

BFSI*

Shipping & Logistics

Travel & Leisure

Eng. & Construction

Food & Beverage

Others

*Banking, financial services & insurance


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PE Investments by Stage : 2006


Late stage and PIPE deals accounted for ~70% of overallvalue of PE transactions (PIPE: banking, pharma, autocomponents)

Stage of Company No. of Deals Amount (US$M)

Early Stage 59 236

Growth Stage 42 393

Late Stage 104 3663

PIPE 61 1314

Buyout 11 1125

Others 22 769


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Selected ES IT/ ITES Investments 2006

Matrix Partners 7 Online movie rentalsSeventymm

Sequoia Capital 10 Mobile VASBubble Motion

Sequoia Capital10 Software TestingAppLabs

Baring PE 11 Marketing AnalyticsPharmARC

Online Services8Clearstone, SIDBI, SBIBillDesk

Mobile Content10WestBridge, Sequoia,Intel

People Infocom (Mauj)

Online education services10KITVEN, Individuals24x7 Learning

Iris Capital 1 Software TestingIndium Software

HR BPO8Barings PESecova

Online travel services10WestBridge (Sequoia)Travelguru

SectorAmount(US$-M)

InvestorsCompany


Others: Animation services: Rich Crest, remote IT infrastructure management Microland; chip design firm InSilica


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Selected IT/ ITES Exits 2006

IPO

SAIF

RR Donnelly

IPO

Infosys Tech

EDS

Acquirer

IT Services21SAIFCSS Group

IT Services25Intel Capital, GE CapitalR Systems

BPO380 (for 52%)Baring PEMphasiS

Logistics32New Vernon, VolaradoAllcargo

BPO250RR DonnellyOfficeTiger

BPO115CitigroupProgeon

SectorAmount(US$-M)

InvestorsCompany



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Top Cities attracting PE Investments

(2006)

Source: TSJ Venture Intelligence India* National Capital Region

City No. of Deals Value(US$M)

Mumbai 69 1,780

Delhi/NCR* 41 395

Bangalore 40 1,525

Chennai 22 354

Hyderabad 17 492

Pune 10 1,114


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PE/ VC Investments by Industry

Total US$5.6B (First H alf of 2007)16%

7%

2%

37%

2%

7%

14%

5%2%

1% 4%

3%

IT & ITES

Manufacturing

Healthcare & Life Sciences

Textiles & Garments

BFSI*

Hotels & Resorts

Media & Entertainment

Engg. & Construction

Shipping & Logistics

EnergyTelecom

Others

* Banking, financial services & insurance



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PE Investments by Stage : 2007

(First H alf)


Total number of deals: 162 with total amount invested at~ US$5.6B

Stage of Company No. of Deals Amount (US$M)

Early Stage 24 154

Growth Stage 25 1082

Late Stage 67 2162

PIPE 34 1714

Buyout 6 440

Others 6 47


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PE Investments by Stage : 2007Source: TSJ Venture Intelligence India

5,648162

4.28%24216Others

0.89%502Telecom

1.74%983Energy

4.55%2579Shipping & Logistics

14.38%81213Engg. & Construction

7.31%4139Media & Entertainment

1.84%1043Hotels & Resorts

37.55%212126BFSI*

2.83%1606Textiles & Garments

2.23%12613Healthcare & Life Sciences

6.89%38914Manufacturing

15.51%87648IT & ITES

% ShareValue US $MNo. of Deals

* Banking, financial services & insurance


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Please contact IVCA for further

information:

[email protected]

IVCA Presentation October 2007

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