Four-S Services -Research

1. Four-S Private Equity Track…
Issue: 19th - 25th March, 2012 …… Your Eye to Indian Private Equity
PE activity for the week
350.0 302.5 16
During the week ended 25th March, 2012, there were 7 PE/VC 300.0 14
deals worth $35mn compared to 10 deals worth $302.5mn in the 12
250.0
previous week. 10
200.0 7
8
150.0 10
6
Out of the total, there were 4 early stage deals and 1 deal each at 100.0 4
Growth, PIPE and SPV level. 35.0
50.0 2
0.0 0
In the largest deal during the week, Parsvnath Developers raised Rs 18th March'12 25th March'12
1.2bn ($23.6mn) from Kotak Realty Fund for a township project in
Gurgaon. PE Investments No. of Deals
Private Equity: Investment Summary during the week
Stake Value
Investor (s) Target (%) ($mn) Sector Industry Segment Stage
Parsvnath Developers'
Kotak Realty Fund 20.0 23.6 Construction Real estate Real Estate SPV
SPV
Railway and auto
Frontline Strategy DTL Ancillaries Limited NA 9 Manufacturing Automotive Growth
component
Prajay Engineers
CLSA 7.6 1.0 Construction Real estate Real Estate PIPE
Syndicate
Pre school and K-
Omidyar Network Akshara Foundation NA 1.0 Services Education Early
12
Hyderabad Angels Edutor Technologies NA 0.4 Services Education Content Early
Omidyar Network EnglishHelper NA NA Services Education Vocational Early
Online retail -
Angel Investors
AllSchoolStuff.com NA NA Services Retail education Early
Consortium
products
Source: Four-S PE Database
Kotak Realty to invest Rs 1.2bn in Parsvnath 1.2-acre plot in the heart of Delhi, on Kasturba Gandhi
Developers Marg, on the block and is expecting to raise around 7bn
Parsvnath Developers is raising Rs 1.2bn (~$23.6mn) from through the sale.
Kotak Realty Fund for a new 100-acre integrated township Debt servicing continues to remain the bete noire of the
project on Sohna Road in Gurgaon. Kotak Realty fund will real estate sector. The net debt of India's top 11 listed real
get a 20% stake in the special purpose vehicle. The project estate companies at the end of December 2011 rose 14%
will be largely residential in nature with some commercial from a year ago to Rs 417bn. The real estate players have
and retail developments, and will be launched in the next been striving to reduce their debt by monetizing non-core
two months. assets. During the last quarter of 2011, DLF raised Rs 12bn
during the quarter from the sale of non-core assets like the
Four-S Comment: Parsvnath Developers, which has a focus IT Park in Noida and IT SEZ in Pune. Sobha Developers
on the national capital region, is currently trying to reduce reduced its debt in the quarter by selling its land parcel in
its debt, which stands at around Rs 13bn. It recently put a Gurgaon.
Indian Private Equity Weekly Update
19th – 25th March, 2012

2. Railways component maker DTL Ancillaries raises $200mn in five years. It has so far deployed $85mn across a
$9mn portfolio of 24 companies in India, 70% of which are for-
India Industrial Growth Fund (IIGF), a private equity fund profit investments and the rest grants to non-profit
managed by Frontline Strategy Limited has invested $9mn organizations. In its bid to enhance employment
in DTL Ancillaries, a customized roll forming company. The opportunities in India through impact investing, Omidyar
Company is a leading supplier of roll formed parts and Network also plans to support rural business process
fabrications to the Indian Railways – recently, it became a outsourcing, agriculture and vocational training projects.
Part-I supplier to the Railways. It is also a leading supplier, in
its space, to the Indian automotive sector. Hyderabad Angels invests Rs 20mn in Edutor
Technologies
CLSA acquires 7.63% stake in Prajay Engineers Edutor Technologies has raised Rs 20mn from group of
CLSA Mauritius Ltd has acquired 7.63% stake in Hyderabad angel investors, Hyderabad Angels. The Hyderabad-based
based real estate company – Prajay Engineers Syndicate start-up develops and markets interactive learning
Limited for $1mn through open market transaction. CLSA platforms for touch devices like Tablets PCs or iPads. Their
Mauritius bought 5,336,134 shares at a price of Rs 9.5 per solutions, for K12 students, are designed to help improve
share Legatum Capital. Prajay Engineers Syndicate Limited their learning outcomes while aiding Educational Institutes
develops real estate in India through two segments- in improving productivity and efficiency.
Construction and Development of Property and Hospitality
Hotels and Resorts. Four-S Comment: PE investors continue to remain bullish
on the Indian education sector. India is the largest
Omidyar Network backs two firms - Akshara education market in the world with approximately 540mn in
the 0-24 years age bracket. Education sector is the largest
Foundation and EnglishHelper
services market in India with a market size of $57bn per
Omidyar Network, the philanthropic investment firm
annum (as of 2009). The government currently spends
controlled by eBay Inc. founder Pierre Omidyar, has
about 4% of GDP on education, which is planned to be
invested an undisclosed amount in English language
increased to 6% in the 11th Five Year plan. Factors driving
learnings solutions company EnglishHelper Inc. and
growth of this sector include demand-supply gap, higher
extended a three-year grant of $950,000 to Bangalore-
spending by consumers, increasing preference for private
based public charitable trust Akshara Foundation, which
sector offerings and government reforms. Hence, there is
focuses on elementary education.
huge potential for private investment in the sector.
Akshara has developed a technology platform, Karnataka
Learning Partnership, as a tool for non-profit bodies,
corporations, academic institutions and citizens to get AllSchoolStuff raises funding from Angels Investors
involved in improving government schools in Karnataka. Consortium
EnglishHelper offers a combination of English language Gurgaon based AllSchoolStuff.com, online retail store for all
reading and writing technologies and has helped over school, learning and educational needs has raised angel
10,000 learners across the country. funding from Angel Investors Consortium. The funds raised
will be used for setting up infrastructure, expanding the
Four-S Comment: Omidyar’s education portfolio in India has team, customer acquisition and streamlining the supply
now expanded to five investments – the other 3 include chain. AllSchoolStuff provides online stores for students,
Tree House, Anudip Foundation and Aspiring Minds parents, teachers and schools to choose from a wide variety
Assessment. Omidyar Network started funding projects in of branded, high quality products to meet all their
India about two years ago with plans to invest up to educational supplies needs.
Indian Private Equity Weekly Update
19th – 25th March, 2012

3. company has been working on restructuring its businesses,
Fund Raising & Liquidity Events
which is close to completion and sources in both firms said
they have reopened negotiations for an investment, which
could be as high as $100mn. The investment in Gitanjali is
expected to help its brands, which have done well in India,
to go global and improve their image.
Helion raises $255mn for third India VC fund Blackstone Group, Bain Capital may buy out
Helion Venture Partners, an early-to-mid-stage venture Euronet's India ATM business
capital firm, has raised over $255mn for its third fund, Private equity funds Blackstone and Bain Capital are
taking its assets under management to $605mn. The new negotiating to buyout the Automated Teller Machines
fund would probably make Helion the largest venture business of Euronet Worldwide in India to benefit from
capital firm in India in terms of assets under management. rising use of electronic transactions. The business, which
The Bangalore and Delhi-based VC has investments in nearly Euronet classifies under the so-called Electronic Financial
three dozen startups, which includes NASDAQ-listed Transaction segment, is facing profitability pressures due to
MakeMyTrip and legal process outsourcing firm UnitedLex steady climb in costs. It is the biggest third-party operator of
BPO. It had raised $140mn for its first fund in 2006, shares ATMs across the nation. Euronet had in the past sold
followed by another $210mn in 2008. The new fund will a similar business in the UK to Bridgepoint Capital for
continue with early-to-mid-stage focus on technology $30mn. The India business, where it operates more than
innovation and consumer demand-driven businesses. Helion 1,300 ATMs, could be valued as high as $250mn.
Venture Partners III will look at deal sizes between $2-10mn
and with an investment horizon of 5-7 years. Super Religare Laboratories in talks with private
equity firms for stake sale
Private Equity and M&A News Two private equity PE firms, including International Finance
Corporation, are close to buying over 15-20% stake in
Morgan Stanley Unit may invest $200mn in India's largest diagnostic chain Super Religare Laboratories
Continuum Energy (SRL) ahead of its planned public issue. IFC has a tentative
A proprietary investment arm of Morgan Stanley is in agreement to invest around Rs 1.25bn, while either Jacob
advanced talks to invest about $200mn, roughly 10bn, for Ballas Capital or Qatar-based QInvest will invest Rs 1.5bn.
51% stake in Continuum Energy Pte Ltd (CEPL), a Singapore- The deal is expected close in the next few weeks. The fund
based holding company developing wind power assets in infusion will help the privately-held company reduce its
India. Continuum Energy, co-founded by former investment debt of about Rs 3bn that came with the acquisition of
banker Arvind Bansal and others, is a two year-old start-up Piramal Diagnostics in 2010.
which is building a portfolio of wind farms through
acquisitions and green field development. IFC to invest up to $24mn in IDFC PE-backed
Doshion
Gitanjali Gems, L Capital reopen investment talks IFC, the private sector investment arm of World Bank, may
Listed jewellery firm Gitanjali Gems has revived talks with L invest up to $24mn in IDFC Private Equity-backed water
Capital, the private equity arm of the world's largest luxury management company Doshion Ltd through an
group LVMH, for a strategic investment. The two were in equity/quasi-equity investment to finance expansion-
negotiations a year ago but talks had not progressed over related capital expenditure, long-term working capital and
the structure of the business. In the last one year, the upcoming Build-Own-Operate-Transfer (BOOT)-based water
Indian Private Equity Weekly Update
19th – 25th March, 2012

4. projects, cross-country pipelines and other EPC projects.
Executive tracking
IFC’s investment will be at the corporate level and will be
used to fund several upcoming projects spread across India. Accel’s Prateek Dhawan to join Everstone Capital
Prateek Dhawan, Principal in Accel Partners’ growth equity
IFC to invest up to $20mn in Nereus Capital’s team in India, is joining Everstone Capital as a senior
Cleantech Fund member of the investment team. Dhawan will be based in
IFC may invest up to $20mn in Nereus India Alternative Everstone’s Mumbai office. Dhawan joined Accel’s growth
Energy Fund LLC, a newly formed fund which will target investment team from Goldman Sachs Investment Partners,
companies engaged in the development, construction & where he was leading the fund’s private equity investments
operation of renewable and clean energy generation assets in India. At Goldman Sachs Investment Partners, Dhawan
or those focused on the deployment of clean energy was responsible for investments in Tikona Digital Networks,
technologies in India. The total target size of this fund is Bharti Infratel and Asian Genco. Preceding Goldman,
$250 million and it will be domiciled in Mauritius. The Dhawan worked at Cisco Systems’ corporate development
anticipated portfolio of Nereus will include 7-10 group.
investments of $15-35mn each, in equity and equity-linked
securities of companies primarily focusing on the Donald D'Souza to Head HDFC Bank ECM
development, construction and operation of power HDFC Bank has appointed Mr Donald D'Souza as the Head
generation assets in India. of Equity Capital Markets in the Investment Banking
division. Mr D'Souza will be reporting to Mr Rakesh Singh,
IPO, Other Offerings Head of Investment Banking at HDFC Bank. Mr D'Souza will
be responsible for building the equity capital markets
Harisons Steel files for Rs 600mn IPO business that includes origination and execution of capital-
Harisons Steel Limited has filed DRHP with SEBI to raise Rs raising mandates, said a release from the company. Mr
600mn through an IPO. The funds raised will be used to set D'Souza was the President of Investment Banking at IIFL
up rolling mill with a proposed capacity of 30,000 Mts p.a. prior to joining HDFC Bank. He has also served in Kotak,
(Rs 415.9mn); to part finance incremental working capital CLSA and J M Financial, the release added.
requirement (Rs 80mn) and for other corporate purposes.
Incorporated in 1999, Harisons Steel is engaged in the
manufacturing of stainless steel ingots and billets of various
grades and sizes.
Alok Industries planning to raise $150mn
Alok Industries Limited is planning to raise $150mn through
ADR/GDR, QIP etc warrants for expansion. Recently in
February, Caledonia Investments Plc, UK-based investment
trust company sold 2.08% stake in Alok Industries through
open market transactions for Rs 300-350mn. Alok Industries
- founded in 1986 - operates in four special business units of
international, infrastructure, garment and domestic and
retail businesses. It manufactures home textiles, apparel
fabrics and polyester yarns.
Indian Private Equity Weekly Update
19th – 25th March, 2012

5. M&A Activities
During the week ended 26th March, 2012, there were 9 M&A deals worth $40.4mn
(size of 6 deals were not known). In the biggest deal during the week, Australia-based PET packaging
supplier Amcor Ltd. has acquired Uniglobe Packaging Private Ltd. for $20.7mn. Uniglobe produces
flexible packaging for the food, personal care, and health sectors.
M&A Activity: Summary during the week
Stake Deal value ($
Acquirer Target Target business (%) mn)
Amcor Uniglobe Packaging Private Limited Packaging NA 20.7
B Braun Ahlcon Parenterals (India) Ltd Pharmaceutical 26 17
Virgo Valves and Controls Ltd -
Thermax Ltd steam division and Rifox Hans Manufacturing NA 2.5
Richter GmbH
KEPCO Pioneer Gas Power Power 22.7 NA
Oscar Investments Ltd Voyages Ltd Aviation 48.8 NA
Gruner + Jahr Networkplay Media & Entertainment 50+ NA
Naturex Valentine Agro Agro NA NA
General Electric Advanced Systek Private Limited Engineering services NA NA
Nitco Limited New Vardhman Vitrified Manufacturing-tiles 51 NA
Source: Four-S Database, Acquisition price is in $mn
Market Update
Key Domestic Indices
Indian Market Movements 52 Week
Index 16-Mar-12 23-Mar-12 Change (%) High Low
BSE Sensex 17,466.20 17,361.74 -0.60% 19,811.10 15,135.90
S&P CNX Nifty 5,317.90 5,278.20 -0.75% 5,944.45 5,187.85
CNX Nifty Junior 10,324.50 10,297.85 -0.26% 11,758.15 10,176.30
Nifty Mid Cap 50 2,300.60 2,309.90 0.40% 2,657.10 2,274.75
CNX IT 6,501.25 6,532.15 0.47% 7,344.90 6,426.50
Bank Nifty 10,391.35 10,294.55 -0.94% 11,978.05 10,038.90
CNX Infrastructure 2,556.25 2,520.80 -1.41% 3,217.50 2,470.65
CNX Realty 242.00 240.75 -0.52% 344.05 234.55
Source: BSE, NSE
Key Global Indices
Global Market Movements 52 Week
Index 16-Mar-12 23-Mar-12 Change (%) High Low
NASDAQ 3,055.26 3,067.92 0.41% 3,090.08 2,298.89
Dow Jones Industrial Average 13,232.62 13,080.73 -1.16% 13,289.08 10,404.49
S&P 500 1,404.17 1,397.11 -0.51% 1,414.00 1,074.77
NIKKEI 225 10,129.83 10,011.47 -1.18% 10,207.90 8,135.79
Hang Seng 21,317.85 20,668.80 -3.14% 24,468.64 16,250.27
Straits Times Index 3,010.68 2,990.08 -0.69% 3,227.28 2,521.95
FTSE 100 5,965.58 5,854.89 -1.89% 6,103.73 4,791.01
Source: Yahoo Finance
Indian Private Equity Weekly Update
19th – 25th March, 2012

6. About Four-S Services
Four-s is a boutique firm focusing on cutting-edge Financial Research, Business Advisory and Investment Banking services for
clients. Through our deep research into India's high growth industries and accurate and objective advice we have helped many
marquee institutional investors take informed investment decisions in private equity and public markets. Four-S has proven
success in business advisory, investment banking and investor relations mandates with 100+ corporate clients and large PE
funds. For further information on the company please visit www.four-s.com
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Indian Private Equity Weekly Update
19th – 25th March, 2012