Opportunities in Private equity

May 2008

Agenda

Introduction to Private Equity (PE)

PE Growth Story in India
Benefits of Private Equity

Indian PE success stories

ICICI Group : Value proposition & credentials
Process of PE Investment

Introduction to Private Equity

Private equity is medium to long term finance provided in return for an
equity stake in growth oriented companies, which could be both listed
and unlisted.

Role of Private Equity - To help ambitious entrepreneurs to achieve

success - fuelled by capital, business expertise and improved
governance.

Private equity investment is a transformational, value-added ,active

investment strategy

Agenda

Introduction to Private Equity (PE)

PE Growth Story in India

Benefits of Private Equity

Indian PE success stories
ICICI Group : Value proposition & credentials
Process of PE Investment

Growth of the asset class

Growth of Private Equity in India (2002 2007)

US$17.3bn
356
299

145
61

51

63

US$0.9bn US$0.9bn US$1.5bn

2002

2003

2004

US$2.2bn

2005

Number of deals increased more than 5 folds since 2002

Value of deals increased more than 18 folds to reach US$ 17.3 billion in 2007

Source: AVCJ.

US$7.5bn

2006

2007

Considerable diversification across industry

2002
Others
11%

Telecom
20%

Services NonFinancial 7%

Number
of Deals

2007
Service NonFinancial 5%

Financial
Services
20%
Others
27%

Manufacturing
7%
Financial
Services 8%

Computer
Related
19%

Medical
10%

Electronics
5%
Computer
Related 6%

Information
Technology 18%

Medical 5%

Others
5%

Computer
Related 10%

Value of
Deals

Information
Technology
14%

Source: AVCJ.

Telecom
21%

Transportation/
Distribution 9%
Telecom Medical
7%
8%

Transportation/
Distribution 5%
Financial
Services
35%

Manufacturing
10%

Information
Technology
13%

Others
23%
Medical
4%
Infrastructure
5%
Construction
5%

Financial
Services
34%
Telecom
24%

Growth across segments

2002
Buy-outs
(MBO/MBI/LBO)
3%
Start-up/
Early Stage
13%

Number
of Deals

PIPE
Financing
13%

Turnaround/
Restructuring 4%

Value of
Deals

Start-up/
Early Stage
6%

PIPE
Financing
35%

Source: AVCJ.

2007

Turnaround/
Restructuring 3%
Mezzanine/
Pre-IPO 2%

Expansion/
Growth
Capital
66%

Buy-outs
(MBO/MBI/LBO) 2%
Mezzanine/
Pre-IPO 1%

Expansion/
Growth
Capital
52%

Buy-outs
(MBO/MBI/LBO) 3%
Mezzanine/
Pre-IPO 9%

PIPE
Financing
18%

Seed/R&D 1%
Expansion/
Growth
Capital
49%

Start-up/
Early Stage
21%
Mezzanine/
Pre-IPO 5%
Buy-outs
(MBO/MBI/LBO) 6%
Start-up/
Early Stage
16%

Expansion/
Growth
Capital
41%

PIPE
Financing
32%

Agenda

Introduction to Private Equity (PE)

PE Growth Story in India
Benefits of Private Equity

Indian PE success stories

ICICI Group : Value proposition & credentials
Process of PE Investment

Benefits of Private Equity

Access to
financial
capital

- Expansion capital / Acquisition capital

- Restructuring business MBOs, divestment, consolidation
- Restructuring of balance sheet
- Providing networking linkages across the globe

Business
Development
Access to
global
Best
Practices

- Helping develop new product lines and entering new markets

-Active support to secure domestic & global business partners
- Ensuring high standards of corporate governance
- Facilitating proper MIS systems for control and monitoring
- Ensuring maintenance of proper organizational structure
- Balance sheet management
- Providing Risk management tools

Strategic
value
addition

- Facilitating outpacing of Competition

- Conceiving and conceptualizing New business line
- Gearing up for IPO

Agenda

Introduction to Private Equity (PE)

PE Growth Story in India
Benefits of Private Equity

Indian PE success stories

ICICI Group : Value proposition & credentials
Process of PE Investment

Indian PE success stories

SUZLON
Sales

EBIT

Profitability

5000

INR crore

INR crore

6000
4000
3000
2000
1000
0
2004

PE Investment

2005

2006

2007

PE backed IPO ~ INR 1700 cr

SHOPPER'S STOP

1000
900
800
700
600
500
400
300
200
100
0

Sales

2004

PE Investment in 2000

EBIT

2005

Profitability

2006

2007

PE backed IPO ~ INR 130 cr

800
700

250

EBIT

200

Sales

Profitability

PVR CINEMA

500
400

INR crore

INR crores

600

ABG SHIPYARD

300
200

150

Sales

EBIT

Profitability

100
50

100

0
2004

2005

2006

2004

2007

PE Investment in 2003
PE Investment of INR 140 cr
Source: moneycontrol.com

2005

2006

2007

PE backed IPO ~ INR 128 cr

Agenda

Introduction to Private Equity (PE)

PE Growth Story in India
Benefits of Private Equity

Indian PE success stories

ICICI Group : Value proposition & credentials
Process of PE Investment

ICICI Group : Value proposition (1/2)

Value

Debt
syndication

Public to Private
transaction

Mergers,
acquisitions
and disposals

Takeovers
Strategic
financial
advice

ICICI
Deal
structuring
Private
equity

Valuation and
pricing
analysis

Mezzanine/
hybrid
financing

Listed company Financing

Pre-IPO Placements
Management Buyouts

Debt/ Structured Financing

Venture/ Developmental Capital

Full spectrum of services throughout the corporate development cycle

ICICI Group: Value proposition (2/2)

IB services portfolio
Investment banking capabilities
PE syndication, structured finance
and advisory, acquisition funding
ICICI Group companies
ICICI Securities for Capital Market
access, ICICI Ventures

Investors Base
HNIs / Family offices / Financial
Institutions : Middle East, UK,
US, South Africa, Singapore
+
Access to prominent India
dedicated PE funds / Financial
institutions / HNIs

Integrated Investment banking

services, with access to best of
breed global and domestic
investors, offering value throughout
the lifecycle of company

ICICI Group: Credentials ( 2004 2007 )

McLeod Russell

Acquisition of spirits
business of
Shaw Wallace

Acquisition of Doom
Dooma Tea Company

Acquisition of Corus
Group PLC
USD 12.8 billion

USD 17 million
USD 300 million
Advisor

Financing
Advisor

Employee buyout of
Tata Tea plantations
USD 13 million

Sale of assets and

financial restructuring

Advisor
Advisor

Acquisition Hansen
Technologies
USD 565 million
Structuring &
Financing

ICICI Group: Credentials ( 2004 2007 )

Acquisition of Whyte &

Mackay

Acquisition of a
South African tyre
manufacturer

Employee buyout of
Tata Tea plantations
USD 13 million

USD 1,188 million

USD 62 million
Advisor

Advisory & Financing

Acquisition of
REpower
USD 1,560 million
Structuring &
Financing

Guarantee facility

Acquisition of
Keyline Brands

Acquisition of
Negma Labs

GBP 18 million

USD 266 million

Sole Arranger

Structuring & Financing

ICICI Group: Credentials ( 2004 2007 )

Art Auction Company

Equity Broking company

Infrastructure Company

Fresh Equity Issue

Management Buy Out

Fresh Equity Issue

USD 8.5 million

USD 11 million

USD 28 million

PE Syndication from HNI

investors

Coinvestment with PE fund

PE Funding

Power Transformer
Manufacturing Company

Garment Manufacturer

Fresh Equity Issue

Fresh Equity Issue

USD 18.20 million

USD 5 million

PE Funding

PE Funding

ICICI Group: Credentials ( 2004 2007 )

M&A Deals by Industry (2004-07)

M&A Deals by Geography (2004-07)

3%

6%

6%

3%

18%

6%
39%

7%

19%

16%

12%
13%

28%

Capital Goods

Consumer Goods

Chemicals

Healthcare

Electronics

Auto/ Ancillaries

Others

Hospitality

Softw are

Germany
Domestic
UK
SA

US
Belgium
Ireland
Netherlands

14%

Norw ay
France
Uzbekistan
Australia

Scotland
Egypt
Sw itzerland
Italy

Agenda

Introduction to Private Equity (PE)

PE Growth Story in India
Benefits of Private Equity

Indian PE success stories

ICICI Group : Value proposition & credentials
Process of PE Investment

Process of PE investment : Indicative timeline (36 m)

After a formal mandate
Data collection and IM preparation

Funding
disbursement

Marketing and prospecting investors

Concalls and meetings conducted with potential investors

Term sheet

Discussions over Valuations and

rights
Commercial and Legal DD

Shareholder/share purchase agreement

No of weeks

Agreements
discussion

10

11

12

13

14

Thank you

Contact information
Amit Ratanpal, amit.ratanpal@icicibank.com
Aishwarya Parthsarthy, aishwarya.parthasarthy@icicibank.com, +91 9833245675
Himani Bhalla, himani.bhalla@icicibank.com, +91 9867596685
Purna Mishra, purna.mishra@icicibank.com +91 9833299827

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