1. Four-S Private Equity Track…
Issue: 16th January – 22nd January, 2 012 …… Your Eye to Indian Private Equity
PE activity for the week
281.2 16
280.0
14
nd
During the week ended 22 January, 2012, there were 10 PE/VC 240.0 12
deals worth $281.2mn compared to 5 deals worth $135.2mn in the 200.0 10
previous week. 160.0 135.2 8
10
120.0 6
Out of the total, there were 3 deals at growth stage, 3 deals at early 80.0 4
5
stage and one deal each at late, project and PIPE stage. 40.0 2
0.0 0
15th January'12 22nd January'12
The largest transaction during the week was by Temasek Holdings
picking up 4.9% in Godrej Consumer Products Ltd. for $135mn.
PE Investments No. of Deals
Private Equity: Investment Summary during the week
Stake Value
Investor (s) Target (%) ($mn) Sector Industry Segment Stage
Godrej Consumer
Temasek Holdings 4.9 135.0 Manufacturing Personal Product FMCG Late
Products
Olympus Capital DM Healthcare NA 100.0 Services Health Services Health Services Growth
IL&FS PE Indiabulls Infraestate 9.4 38.5 Construction Real Estates Real Estates Project
Knowlarity Telecommunication
Sequoia Capital NA 6.6 Services Telecom Early
Communications Services
Acumen Fund GUARDIAN NA 1.1 Services BFSI Microfinance Early
Songs Investments SV Agro Processing NA NA Services Misc. Services Agri SCM Growth
New Silk Route Varsity Education NA NA Services Education Education services Growth
Songs Investments Be Well Hospitals NA NA Services Health Services Health Services Growth
Nalanda Capital Ratnamani Metals NA NA Manufacturing Metals Ferrous Metal PIPE
Seedfund Handspick.com NA NA Services Retail Online Retail Early
Source: Four-S PE Database
capital infusion would help Godrej Consumer finance its
Temasek Holdings buys 4.9% into Godrej aggressive inorganic strategy, wherein it has acquired 7
companies across the world since 2010 and consolidated its
Consumers
holding in 2 JVs.
Singapore’s sovereign wealth fund Temasek Holding is
buying 4.9% stake in consumer products firm Godrej
Four-S Comment: For Temasek, the transaction is significant
Consumer Products Ltd for Rs 6.85bn ($135mn). The fresh
considering it is first after the leadership change at
Indian Private Equity Weekly Update
16th January – 22nd January, 2 012

2. Temasek. Manish Kejriwal, who was heading India office Four-S Comment: With the capital infusion, the company
since 2004, left in late 2011 to start his own PE firm, making will be able to kick start its development on land parcels it
way to Rohit Sipahimalani, who joined from Morgan bought from National Textile Corp. Ltd, a government-
Stanley. Also, the deal is Temasek’s first big investment controlled firm owning large tracts of land across India
since 2010, when it invested $200mn in GMR Energy Ltd. comprising defunct textile mills. The company also acquired
The PE fund spent 2011 in picking up small equity stakes in another tract of land close to Bharat Textile Mills, which
public listed companies e.g. Max India and Jain Irrigation belonged to Poddar Mills. The firm is now planning to
through open market transactions. Temasek’s other develop the 2 pieces of land as a gated residential project
portfolio companies in India include ICICI Bank, Tata Sky, including IT office space.
Bharti Airtel and its tower arm Bharti Infratel.
Sequoia Capital invests $6.6mn in Knowlarity
Olympus Asia invest $100mn in DM Healthcare Communications Ltd.
Olympus Capital Asia Investments Ltd has invested $100mn Gurgaon-based Cloud telephony start-up Knowlarity
in Kochi based healthcare chain DM Healthcare Ltd for a Communications Ltd. has received Rs 340mn ($6.6mn) from
significant minority stake. The transaction is a combination Sequoia Capital. Knowlarity plans to use the funding to
of Olympus Capital’s primary investment into DM strengthen its R&D activities and expand marketing
Healthcare for the growth and expansion of the company in operations. After establishing its presence in India and
India and secondary purchase of a portion of India Value Indonesia, Knowlarity is now planning to extend its
Fund’s shareholding in the company. India Value Fund had solutions and services to other international markets.
originally invested around $50mn in DM Healthcare four
years ago for a 22% stake. With the fund raised, DM Four-S Comment: Cloud telephony-based services in India
Hospital will set up greenfield projects and partner with are at an early stage and poised for healthy growth given
smaller hospitals across other tier 2 and tier 3 cities in India. the demand amidst telecom players looking for pan-India
It targets to have close to 3,000 beds by 2015 from 900 at presence. At present, cloud telephony services market is
present. growing 25% CAGR and is expected to grow at the same
pace over the next 3-4 years. Besides, the company is
Four-S Comment: The transaction happens to be a single growing fast to keep pace with the growing demand. Today,
largest independent deal in Indian healthcare sector it’s catering to larger enterprises, through its hosted IVR
(in rupees terms). Although Apax Partners had invested solutions integrated with its existing IT systems. Knowlarity
around a similar amount in Apollo Hospitals 5 years ago, but has also serviced social projects such as m-Governance for
then the Indian currency was much stronger against the US the Mid-Day Meal scheme.
dollar. The Apax-Apollo deal was for $104mn or around Rs
4.25bn back then. The latest deal value is around Rs 5.1bn.
Acumen Fund invests $1mn in GUARDIAN
Social VC investor Acumen Fund has invested $1mn (Rs
IL&FS takes 9.4% in Indiabulls real estate project 52mn) in GUARDIAN (Gramalaya Urban and Rural
The real estate fund of IL&FS Private Equity has invested Rs Development Initiatives and Network), a Tamil Nadu-based
2bn (~$38.5mn) to buy 9.36% stake in Indiabulls Infraestate microfinance institution focusing on lending to communities
Ltd, a 100% SPV floated by Indiabulls Real Estate Ltd to who lack access to water and sanitation facilities. The fund
develop a realty project on a 8.39 acre parcel of land in raised would be used by GUARDIAN to build its portfolio
Lower Parel Mumbai, earlier occupied by Bharat Textile and transition from a partially grant-funded NGO to a fully
Mills. Further details of the projects were not known. self-sustaining microfinance institution (MFI). In addition,
the capital raised would be utilized to scale up potentially
Indian Private Equity Weekly Update
16th January – 22nd January, 2 012

3. path-breaking models for expanding water and sanitation Varsity Education offers varied education services including
facilities across poor communities. curriculum development, teacher recruitment & training
and facilities management, and has a 10,000 employee
Four-S Comment: Acumen Fund is a VC firm specializing in base. The company claims to have served over 300,000
growth investments in water, healthcare, energy, agro, students across Karnataka, Andhra Pradesh, Maharashtra
cleantech and housing segments, and prefers to invest in and Tamil Nadu.
India, Pakistan, South Africa, East Africa (focus on Kenya)
and West Africa. The firm typically invests between $0.3- Four-S Comment: In recent times, education has been one
2mn with exit period ranging from 5-7 years. Its India its of the top priority sectors for New Silk Route. Prior to this
portfolio include Kochi-based ayurvedic chain Ayur Vaid deal, New Silk Route invested in Beaconhouse School
Hospitals, Hyderabad-based LifeSpring Hospitals, Mumbai- System, one of the world’s largest K-12 chains catering to
based ambulance start-up service ‘Dial 1298 For over 200,000 students. In January 2011, it had also invested
Ambulance’ and Drishtee, a rural communications company. up to $25mn in Hyderabad-based Sri Chaitanya Educational
Group.
Song Investments backs 2 portfolio firms
PE firm Song Investment Advisors Ltd. has invested in 2 new Nalanda Capital raises stake in Ratnamani Metals
companies: secondary care hospital chain Be Well Hospitals Nalanda Capital, a Singapore-based PE firm focused on
and potato supply chain management company SV Agro secondary market transactions has increased its holding in
Processing. Both companies would utilize the capital Ratnamani Metals and Tubes Ltd to 10.47%. The firm
infusion for growth purposes. Be Well Hospitals is a chain of manufactures high frequency welded & submerged arc
secondary care medical facilities targeted at tier II and tier welded (SAW) carbon steel pipes, seamless tubes & pipes,
III cities, as well as metro suburbs. SV Agro Processing is an welded tubes & pipes and electric fusion welded stainless
end-to-end potato supply chain management company steel pipes. The company has manufacturing plants at
handling everything from input selling, contract farming to Mehsana (Gandhinagar) and Kutch district of Gujarat.
infrastructure facilitation and logistics to ensure product
delivery to processors and retail clients. Four-S Comment: Nalanda Capital, which has $875mn
under management across 2 funds, appears to be looking to
Four-S Comment: Songs Investment Advisors Ltd. is an early bring down the average cost of share acquisition in its
and growth stage investment firm based out of Hyderabad portfolio firms as stock market valuations have tanked to
managing $17mn of capital. The fund is backed by search near 2 year low. The company originally picked up stake in
giant Google Inc., Soros Economic Development Fund and Ratnamani Metals in early 2010 and has been slowly
Omidyar Network. It typically invests between Rs 5-200mn increasing its exposure in the firm ever since.
in a firm over the life of the investment. So far, it has Last week it picked up additional stake in another portfolio
invested in K12 Techno Services Ltd, which manages over 60 company, Great Eastern Shipping Company.
schools run by 15 different trusts under the Gowtham
Model School. Seedfund invests in online e-commerce portal
HandsPick.com
New Silk Route invests in Varsity Education Seedfund, an early-stage VC fund has invested an
New Silk Route Partners, an Asia-focused private equity and undisclosed sum to acquire a significant minority stake in
growth capital firm, has acquired a significant minority stake HandsPick.com, a fashion apparel and accessories e-
in Hyderabad-based education support services provider commerce brand owned by Delhi-based start-up Intuitent
Varsity Education Management Ltd for an undisclosed sum. Online Venture Ltd. The capital raised would be used for
Indian Private Equity Weekly Update
16th January – 22nd January, 2 012

4. design, manufacturing, sourcing, brand creation, logistics India Equity Partners raising $500mn for second
and customer satisfaction assurance. HandsPick, at present, fund
has over 60 brands online, including Lee, Puma, Spykar and Mid-market focused PE firm, India Equity Partners (IEP) is
Wrangler, among others. Members can also place orders planning to raise its second private equity fund targeted at
over the phone and opt for trials before the actual $500mn and has already received commitments for around
purchase. HandsPick has a 30-day return policy and backs a $130mn from a group of more than 50 investors. At
mandatory cash-on-delivery payment mode. present, IEP is investing out of its first fund worth $350mn.
It has been chasing investments in sectors like consumer
Fund Raising & Liquidity Events products, food services, healthcare, education and
consumer finance, as well as logistics and utility services.
For the second fund, IEP is expected to focus on its existing
strategy.
Magnetar to raise $100mn Cleantech Fund
SEBI registered Magnetar Venture Ltd plans to launch a
Red Fort raises $500mn for its second realty fund $100mn fund focused on clean technologies by March 2012
Delhi based real estate focused PE firm Red Fort Capital has to funnel growth capital into budding enterprises. To start
raised $500mn from overseas investors for its second real the proceedings, it will raise $20mn in its first phase. As an
estate fund focused on residential properties. With the fund investment strategy, Magnetar will look to invest in state-
closure, Red Fort Capital has around $900mn under run firms working in the field or their units.
management, making it one of the largest independent
private equity real estate investment specialists in India. Of
Private Equity and M&A News
the $500mn corpus, around $400mn had been raised by the
fund and another $100mn has been raised via co-
New Silk Route to invest $300mn in India
investment pools. What may have also attracted investors
Asia-focused PE firm New Silk Route (NSR), is looking to
to Red Fort is its track record. In March 2011, Red Fort said
invest as much as $300mn (~Rs 15.51bn) this year, primarily
that it had returned over $100mn to investors since 2009 as
in medical devices firms and restaurant chains. Besides, NSR
its fund I portfolio reached the harvesting stage.
is looking to raise capital for Ascend Telecom Infrastructure
Ltd, a telecom infrastructure company controlled by it.
StanChart IL&FS Infra fund partially exit IL&FS
Ascend recently merged its telecom tower business with
Transportation that of India Telecom Infra Ltd. The merged entity has
Standard Chartered IL&FS Asia Infrastructure Growth Fund nearly 3,700 towers and needs funds to scale up operations.
has made a partial exit from IL&FS Transportation Networks
Ltd by selling 1.25% stake for a little over Rs 400mn. The
Prestige Construction may raise Rs 18bn through a
stake sale has been done at a profit of 25% or 1.25x. The
fund still holds over 3% stake in IL&FS Transportation. stake sale in Bangalore SEZ
A slew of global PE players have envinced interest in buying
Standard Chartered IL&FS Asia Infrastructure Growth Fund out “Cessna Business Park”, a 4.5mn sq ft SEZ being
acquired the stake in March 2008 at Rs 133 per share while developed by Bangalore based Prestige Construction Ltd.
the stake sale has been done at Rs 166 a unit. for a Rs 18bn. The project is one of Prestige’s landmark
commercial space developments in the city, strategically
Indian Private Equity Weekly Update
16th January – 22nd January, 2 012

5. located on Sarjapur-Marathalli outer ring road and already NMCE in talks with PE players to raise Rs 300-
house marquee technology majors like Cisco as its clients. 350mn
If Prestige decides to go ahead with the sale, it will be the National Multi-Commodity Exchange of India (NMCE), 4th
second major such deal after global private major largest exchange domestically, is in talks with 5 private
Blackstone picked up a significant stake in another tech park equity investors and banks to raise Rs. 300-350mn to
developed by the Embassy Group for $200mn in 2011. comply with minimum capital rule. Forward Markets
Commission, the commodity futures regulator, has asked
Clearwater makes open offer for 20% stake in commodity exchanges with 5 years of operations to have a
Kamat Hotels minimum equity capital of Rs. 1bn by 31 March this year.
PE firm Clearwater Capital Partners is all set to make an
open offer to acquire another 20% in hospitality chain Australia firm forms JV with PE firm
Kamat Hotels Ltd, after it exercised a right to convert 5,966 Australia-based Water Resources Group Ltd (WRG) has
foreign currency convertible bonds into equity. It was entered into a JV with Mandala Water Ltd, a 100%
allocated 1.95mn shares in Kamat Hotels (India) Ltd at Rs. subsidiary of global PE fund Mandala Capital AG Fund Ltd.
135 apiece. Post allotment, Clearwater and its associates The JV will use Water Resources Group’s products and
hold 32.23% of the total shareholding of Kamat Hotels. technologies in India, Pakistan, Sri Lanka and Bangladesh.
Kamat Hotels issued FCCBs worth $18mn to Clearwater last Water Resources Group will own 49% in the JV, which will
year. The PE firm exercised some of those bonds the same allow it to tap the growing South Asia desalination market
year at Rs. 135 apiece to hold a 24.5% share in Kamat for both industrial and municipal applications. The JV will
Hotels. also look to develop new markets in seed & food
preservation and food logistics.
TVS Logistics in talks for PE funds
Chennai-based TVS Logistics Services Ltd is in talks with PE BCCL eyes majority stake in Neo Sports, Neo Cricket
firms including global PE giants KKR and Temasek for a Bennett, Coleman and Co Ltd (BCCL), part of the Times
second round of funding roughly estimated at $50mn. The Group, has joined the race to pick up a majority stake in the
firm plans to use the funds to achieve scale which would 2 sports channels of Nimbus Communications namely, Neo
enable the firm raise capital from the primary markets. Cricket and Neo Sports. Both the channels are housed under
Besides, the company is looking to expand its footprint in Neo Sports Broadcast Ltd, a subsidiary of Nimbus. Times
the domestic market and globally which might inlclude Group has also shown preliminary interest in buying out the
expansion in Southeast Asia, Turkey and South Africa. Hyderabad-based Associated Broadcasting Company.
M&A Activities
During the week ended 22nd January, 2012, there were 8 M&A deals worth $336mn
(size of 6 deals were not known). In the largest transaction during the week, Japan based life insurance
major, Nippon Life Insurance announced picking up 26.0% in Reliance Capital Assets Management for
$290mn.
Indian Private Equity Weekly Update
16th January – 22nd January, 2 012

6. M&A Activity: Summary during the week
Stake Deal value
Acquirer Target Target business (%) ($ mn)
Nippon Life Insurance Reliance Capital Asset Management Assets Management 26.0 290.0
Dalmia Cement (Bharat) Ltd. Calcom Cement India Cement Manufacturing NA 46.0
Nomura Research Anshin Software Software Development NA NA
Automatic Data Processing Randstad Holding NV HR BPO Services NA NA
eYantra Industries Ltd Privilege Corner Corporate Rewards 100.0 NA
Dishman Pharma Creapharm Parenterals Bulk Drug Maker NA NA
Sundar Garments George Street London Apparel Brand NA NA
Malabar Trading Co Protect Nature Agriculture & Food Products 50.0+ NA
Source: Four-S Database, Acquisition price is in $mn
Market Update
Key Domestic Indices
Indian Market Movements 52 Week
Index 13-Jan-12 20-Jan-12 Change (%) High Low
BSE Sensex 16,154.62 16,739.01 3.49% 19,811.10 15,135.90
S&P CNX Nifty 4,866.00 5,048.60 3.62% 5,944.45 4,531.15
CNX Nifty Junior 9,101.50 9,414.35 3.32% 11,758.15 8,224.15
Nifty Mid Cap 50 1,965.50 2,022.30 2.81% 2,657.10 1,722.45
CNX IT 5,872.60 5,897.95 0.43% 7,344.90 5,011.10
Bank Nifty 8,975.05 9,516.85 5.69% 11,978.05 7,766.35
CNX Infrastructure 2,343.15 2,466.90 5.02% 3,217.50 2,045.70
CNX Realty 213.75 231.70 7.75% 344.05 179.85
Source: BSE, NSE
Key Global Indices
Global Market Movements 52 Week
Index 13-Jan-12 20-Jan-12 Change (%) High Low
NASDAQ 2,710.67 2,786.70 2.73% 2,887.75 2,298.89
DJIA 12,422.06 12,720.48 2.35% 12,876.00 10,404.50
S&P 500 1,289.09 1,315.38 2.00% 1,370.58 1,074.77
NIKKEI 225 8,500.02 8,766.36 3.04% 10,891.60 8,227.63
Hang Seng 19,204.42 20,110.37 4.50% 24,468.60 16,170.30
Straits Times Index 2,791.54 2,849.38 2.03% 3,236.93 2,521.95
FTSE 100 5,636.60 5,728.50 1.60% 6,105.80 4,791.00
Source: Yahoo Finance
Indian Private Equity Weekly Update
16th January – 22nd January, 2 012

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Indian Private Equity Weekly Update
16th January – 22nd January, 2 012