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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$7.5Bn
Source: TSJ Venture Intelligence India
23.5%
12%
7.1%
6.8%12.1%
0.8%
0.5%
7.9%
2.1%
27.2%
IT & ITES
Manufacturing
Real Estate
Healthcare & Lifesciences
BFSI*
Shipping & Logistics
Travel & Leisure
Eng. & Construction
Food & Beverage
Others
*Banking, financial services & insurance
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PE Investments by Stage : 2006
Source: TSJ Venture Intelligence India
Late stage and PIPE deals accounted for ~70% of overallvalue of PE transactions (PIPE: banking, pharma, autocomponents)
Stage of Company No. of Deals Amount (US$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$-M)
InvestorsCompany
Source: TSJ Venture Intelligence India
Others: Animation services: Rich Crest, remote IT infrastructure management Microland; chip design firm InSilica
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Selected IT/ ITES Exits 2006
IPO
SAIF
RR Donnelly
IPO
Infosys Tech
EDS
Acquirer
IT Services21SAIFCSS Group
IT Services25Intel Capital, GE CapitalR Systems
BPO380 (for 52%)Baring PEMphasiS
Logistics32New Vernon, VolaradoAllcargo
BPO250RR DonnellyOfficeTiger
BPO115CitigroupProgeon
SectorAmount(US$-M)
InvestorsCompany
Source: TSJ Venture Intelligence India
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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
Source: TSJ Venture Intelligence India
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PE Investments by Stage : 2007
(First H alf)
Source: TSJ Venture Intelligence India
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
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