Aditya Birla Private Equity - Sunrise Fund

Innovation themed investments in Lifestyle, Lifeskills & Education, Lifecare & Applied Technologies

Aditya Birla Private Equity

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Innovation themed investments in Sunrise Sectors

Lifestyle, Lifeskills & Education, Lifecare & Applied Technologies Aditya Birla Capital Advisors: Proprietary deals and mature insights
Decades of experience and know-how: C. INR 880 crore under management in Fund I Cross-sector early-stage development experience Extensive Indian and global network Culture of entrepreneurship Strong corporate governance Rigorous financial discipline and controls

Investment team: Sunrise sector specialists

Richly experienced, multi-functional team: Deep experience of team members across sunrise sectors over the last two decades Track record of 11 exits in past careers with average IRR @58% p.a. over 3-5 years Attained superior returns through commercial and operational inputs to sunrise sector deals

Aditya Birla Private Equity - Sunrise Fund: Compelling Investment Opportunity in Key Sunrise Sectors
Innovation themed growth capital investments within sunrise sectors: Lifestyle, Lifeskills & Education, Lifecare and Applied Technologies Placed strongly to build a portfolio of winners through careful deal selection backed by strong monitoring and hands on value addition as required Focus on proprietary deal flow to generate high alpha returns: developed a ready database of 60 plus companies which have undergone preliminary evaluation by the team

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Executive Summary
INR 350 crore Fund + Greenshoe option and upsizing
Early cycle mover in sunrise sectors to target public market beating IRR, commensurate with higher risk Sunrise sector companies focused on Lifestyle, Lifeskills & Education, Lifecare and Applied Technologies

Fund Details for Investors

Target Returns: Pre-Tax IRR @30% p.a. (Not Guaranteed)
Investments over 2.5 years & Exits between 3.5 6 years (+ 1 year extension, investment managers discretion) Hurdle Rate: 10% p.a., compounded Upfront Load: 2.25% (fixed) Management Fee: 2% p.a. + Applicable Taxes

Carried Interest: 20% (With Catch-Up)

Investment characteristics
Focus on sizeable sunrise sectors with innovation as a super theme Based on proven venture investing and exit credentials of senior team in similar sectors Portfolio Companies: Revenues about INR 25 crore, nearing break-even/ profitable, in the year of investment Portfolio Companies: Professionally managed, adaptive companies Individual Portfolio Investment ticket size: INR 25-50 crore

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Aditya Birla Private Equity Sunrise Fund

Features Snapshot
The Fund Target Fund Corpus Sponsor Commitment Investment Manager Target Return/ IRR Term of the Fund Minimum Commitment * Hurdle Rate Draw Down Schedule Aditya Birla Private Equity - Sunrise Fund (ABPE-SF) INR 350 crore (with Greenshoe and upsizing at the option of the Investment Manager) 10% of the Fund Corpus; up to INR 50 crore Aditya Birla Capital Advisors Private Limited Pre-Tax 30% p.a. (Not Guaranteed) 2.5 years for investments + further 3.5 years for exits (+1 year extension at discretion of IM)

Non institutional investors: Institutional investors:

10% IRR p.a., Compounded Institutions: Non institutional investors:

INR 0.10 crores INR 2.00 crores

Initial 10% (subsequent calls, as per requirements) Initial 100% (INR 0.10 crore) Initial 20%; mini Rs.7.5 lakh (INR 0.15-0.45 crore) * Initial 10% (INR 0.50 crore & above) *

Management Fee
Upfront Load (one-time) Distribution of Returns Operating Expenditure Performance Linked Fee
* Commitments

2% p.a. of the Committed Capital + applicable taxes; 1st year fee in advance and charged quarterly from 2nd year 2.25% (fixed); Subscriptions after 1st close charged 1% per month (i.e. fewer units allotted for the same commitment amount) Distribution net of all taxes as applicable OPEX charged to the Fund on actual basis and capped at 0.30% p.a. of Committed Capital. Besides, a fixed sum of INR 200,000 p.a. charged to the Fund towards Trusteeship Fee Carried Interest @20% of the Pre-Tax returns (With Catch-Up)

will be accepted in increments of INR 5 Lakh up to INR 50 lakh; and in increments of INR 25 lakh thereafter

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Innovation themed Investments in Sunrise Sectors

Lifestyle, Lifeskills & Education, Lifecare and Applied Technologies Wellness & Beauty Media, Entertainment & Leisure Value Added Processed Foods

Lifestyle
20% CAGR to 2015

Innovation themed investments in sunrise sectors poised to deliver 22% revenue CAGR till 2015

Lifeskills & Education

22% CAGR to 2015

Education Delivery Channels Learning Solutions R&D, CRAMS

Lifecare
25% CAGR to 2015

Specialty Devices Specialty Care Pharma Retail

Applied Technologies
25% CAGR to 2015

Cleantech Mobile VAS Intellectual Property applications Automation

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Selecting innovation themed Sunrise Sectors

Generating superior IRR by targeting exceptional early growth stories

Overweight on sectors with the following characteristics:

Growing annually @20% plus, i.e. 2.5x-3x GDP growth in India Driven by aspirations of the prospering mass population to improve overall quality of life Supported by the benefits of higher disposable incomes and improving infrastructure Have a higher percentage of passionate and visionary professional management Have currently a relatively lower share of wallet and limited number of organized vendors

Proprietary deal flow

Based on the Investment teams extensive business network in overweight sectors: 60 high quality early stage proposals received over the last 12 months, a large proportion through direct networks

Experienced investment team to complement disruptive business models and visionary managements by:
Providing proactive inputs on macro strategy, operations and business development areas Ensuring focused execution of business plans by aligning people, process and technology

Maximizing Fund IRR through timing and selection of appropriate mode from multiple exit options

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Investment Super Theme

Innovation in sunrise sectors Globally, cutting-edge innovation focuses on delivering the following objectives:
Improving quality of lifecare Improving quality of lifestyle Improving skills

Improving the environment and obtaining sustainable sources of energy

In India, c. INR 610,000 crores market in above sectors is set to grow at > 20% p.a. till 2015 and fulfill ALL the selection criteria
Lifecare, INR 39,500 cr
Applied Technologies, INR 153,000 cr

CAGR till 2015

25%
22% 25%

20%

Lifestyle, INR 232,800 cr Lifeskills & Education, INR 70,900 cr

Applied Technologies

Lifeskills & Education

Lifestyle

Lifecare

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Investment Rationale
Early exposure to innovation in sunrise areas potentially yields exceptional returns

Illustrations demonstrating historical evidence for success of similar investment strategy

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INR 100 invested in a mobile network provider in 1998 yielded INR 640 for its venture capital investor in 2005

INR 100 invested in a fast food chain in 2009 yielded INR 880 in 2010 for its venture capital investor

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Practice Leadership
Bharat is the youngest CEO at the Aditya Birla Group and is founder of Aditya Birla Private Equity
Over 20 year of strategy, principal investing, M&A, post-merger integration, capital markets & CXO-level experience. As Founding CEO, he led the initiative to set ABPE practice, build the team and raise $200m in its maiden domestic fund in trying environment of 2009. In his earlier role as Head of Group Finance at the Aditya Birla Group, he played a pivotal role in expanding the Group through complex M&A and organic means. Earlier he worked with the Indian JV of J P Morgan with ICICI, where he was responsible for primary capital markets and corporate advisory, leading PSU practice. He is Fellow Chartered Accountant, Cost Accountant, Company Secretary and Bachelor of Commerce
Bharat Banka

Career highlights

Formation of Indias 5 largest mobile company, Idea Cellular, through merger of Birla AT&T and Tata, acquiring RPG Cell and Escotel, providing exit to JV Partners Tata and Cingular, US $ 1 billion sale pre-IPO and US$ 550 million IPO, creating a US$ 5 billion company and creating 2.5x value in less than 2 years Creation of Indias largest $7 billion cement company by acquiring L&T Cement in a complex deal, rebranding and consolidation of L&T Cement with Grasim Cement to form UltraTech Cement Establishing $6 billion non-ferrous giant Hindalco by merging Birla Copper & INDAL with Hindalco and raising finance in excess of $2 billion in innovative structures Formation of US$ 2 billion Aditya Birla Nuvo by merging Indian Rayon, Fertilizer & Financial Services Private Equity investments into Anupam Industries, a leading material handling equipment player, into CARE, the second largest credit rating agency in India, into V-Mart Retail, the fastest growing value retail store chain in North & West India; and into BSE, Indias premier stock exchange Active member of Indian Angel Network, Mentor Square & expert panel of Hottest Startups (NEN), mentoring entrepreneurs. A Member of National Committee on Capital Markets, Confederation of Indian Industry (CII). He is a member of the Boards at a leading materials handling equipment company and a fast growing apparel company, He is also on the Advisory Councils of an upcoming healthcare solutions company and a unique social media platform. Accolades: Recipient of Professional Achiever Finance Sector Award from ICAI, 2008 Publications: Writes his column Bankanomics in Network 18 business magazine The Entrepreneur and had co-authored book on Project Finance for the ICAI

th

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Key Senior Team Members

Over 22 years of experience in private equity, business strategy, entrepreneurship and management consultancy; of which the last 12 were spent leading Indian private equity firm IIML, sponsored by IL&FS, large Indian financial house. Has an in-depth understanding of the full life-cycle of private equity investment management across diverse sectors and an exceptional track record of managing growth investments through to exit, often guiding portfolio companies through directorship to the board. He is a Chartered Accountant from the ICAI and a Bachelor in Commerce from the University of Mumbai. Over 18 years of experience in entrepreneurship, equity research, principal investing and consulting with firms like Accenture, Bank of America & DLJ, in India & Europe. He was previously partner with corporate finance firm Europa Partners LLP in London and combines deep operational, entrepreneurial and corporate finance backgrounds with senior level experience working alongside international private equity firms. Shamik also made successful principal investments in early stage ventures and holds a Masters in Finance from the London Business School UK, an MBA from XLRI - Jamshedpur, India and a Bachelors in Science with Honors in Physics from the University of Delhi.

Rahul Shah Investment Director

Shamik Moitra General Principal

Mehul Maroo General Principal

Over 14 years of experience in private equity advisory and consulting in India and the US. Was formerly an Associate Partner with the global management consulting firm Kurt Salmon Associates, where he jointly led development of their practice in India. Brings a strong background in strategic consulting for leading global and Indian lifestyle and consumer-facing companies. Holds a Masters degree in Engineering and Management, and a Bachelors degree in Industrial and Systems Engineering, both from Stanford University.

Sandeep Bhat CFO and Head of Compliance

Over 25 years of varied experience in accounting, financial control, tax management & operational risk control, legal and compliance, and optimization of IT and administration resources; of which the last 16 in the financial services industry, with firms like UBS and ABN AMRO Equities. Has extensive experience in directing Finance & Accounting, treasury and risk management functions for financial institutions. Sandeep is a Chartered Accountant from the ICAI and holds a Bachelor of Commerce degree from the University of Mumbai.

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Successful Track Record of Generating Superior IRR

11 exits with an average 58% annual IRR, in the past careers of the team
Total Cash Outflow (US$ mn) 0.5 2.0 Total Cash Inflow incl. Div (US$ mn) 1.0 6.2 Manner of Divestment Company Name TECHNOLOGY Mro-Tek Ltd Future Software Sasken Communication Technologies Ltd Active Hotels Ltd CONSUMER Shoppers Stop Ltd Godrej Beverages & Foods Far Pavilions Tours and Travels Pvt Ltd Indian August Tours & Travels Pvt Ltd ITES Secova eServices Ltd MEDIA & ENTERTAINMENT Indiagames Ltd DQ Entertainment LTd Gaming Media-- 2D & 3D Animation 0.3 4.7 71.9 33.7 57.7 Strategic Sale IPO ON AIM Ex. Sector/Business IRR (%) 31.5 91.0

Sunrise sectors: Team competence

- 11 exits with 58% IRR p.a. underline senior team members proven credentials

Internet Access Products Telecom Software - Telecom Equipment Vendors Telecom Software - Telecom Equipment Vendors Internet software - Online hotel reservation system

IPO Strategic Sale

3.8

7.0

64.3

IPO

in overweight sectors - Investing track record from start up to exit - Direct entrepreneurial experience

7.0

62.0

72.5

Strategic Sale

Retailing Consumer Goods Leisure, Hotels and Travel Services Leisure, Hotels and Travel Services

3.4 24.8 3.0 2.4

12.6 38 5.5 14.0

23.4 53.6 34.0 140.0

IPO Strategic Sale Strategic Sale Strategic Sale

- Largely proprietary deal origination with 60+ deals already evaluated for the sunrise fund

Sunrise sectors: Build on groups reach

BPO 2.0 3 19.3 Trade Sale

- Build on the Sponsors 100+ years operating experience and reach in Education (schools) and Healthcare (hospitals)
1.0 3.3 Average IRR (%)

Data depicted in the table above pertain to the experience of individual team members prior to joining Aditya Birla Private Equity

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Performance of maiden ABPE Fund I

Marquee investments made by ABPE in the previous Fund Company Description
India's leading manufacturer of EOT cranes; now has a technical collaboration with Mitsubishi Heavy Industries. Anupam has a demonstrated track record of profitable growth and has a solid order book and prospects. Promoted by major banks and financial institutions, CARE is India's second largest credit analysis and research institution. Formed in 1993, CARE specializes in providing credit rating and grading services across sectors and in line with best internationally accepted practices. India's oldest and second largest stock exchange. Following changes in leadership and a dynamic program of business growth, the company is poised to improve its market share and consolidate its historical strengths

Size of Duration of Investment Investment (INR Crs)

Exit Route

Anupam Industries

50

3 -4 years

Public issue or sale to 3rd party

CARE

65

3 years

Public issue or sale to 3rd party

Bombay Stock Exchange

21

3 years

Public issue or sale to 3rd party

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Deal Flow for ABPE Sunrise Fund

Illustrative Transactions (*eventual deals by Fund might differ from these) Theme Company
An Education Technology company

Description
The company delivers interactive whiteboard based learning solutions for the K12 segment. It has an extensive library of lessons and audio visual tools across all subjects. It has been growing at a high double digit rate and is poised to accelerate further The company runs a private university focused on higher education in professional disciplines such as engineering, medicine and management. It is looking to expand into new regions within India The company delivers diagnosis and technology intensive care for critical illnesses. It has an asset light model based on acquiring outsourced departments within existing, successful regional hospitals across the country. Its poised for rapid growth based on new partnerships and outsourcing arrangements.

Duration of Investment

Exit Route

Lifeskills and Education

3-4 years

Sale to 3rd party

A Private Professional University

3 years

Public issue or sale to 3rd party

Lifecare

A Specialty Critical Care Company

3-4 years

Sale to 3rd party

A chain of regional general hospitals

The company runs a successful chain of hospitals in its region and is looking to expand into new geographies. It has tied up with reputed international private hospitals for technology and cutting edge care practices

3-4 years

Public issue or sale to 3rd party

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Deal Flow for ABPE Sunrise Fund

Illustrative Transactions (*eventual deals by Fund might differ from these)

Theme

Company

Description
The company operated medium to luxury branded hotels under management contract as well as self owned properties. It is looking to expand further in fast growing tier 2 business centres The company specializes in managing a chain of EBOs for a portfolio of brands. It is looking to expand its footprint in new regions The company has a powerful IP based aggregation tool which connects hotels and transport companies with travelers through a community search engine. It has already acquired a significant market share and is rapidly expanding its global footprint

Duration of Investment

Exit Route

Lifestyle

A chain of business and family hotels

3 years

Public issue or sale to 3rd party

A company managing a portfolio of brands

3 years

Public issue or sale to 3rd party

Applied Technology

A global travel search engine provider

3 years

Sale to 3rd party

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Risks associated with the Fund and Mitigation

Risks
- With a good probability of high IRR, there is an equal risk of losing entire investment in some of the portfolio companies - The overall portfolio and underlying investments will remain largely illiquid till the eventual exit - The prospects of an IPO of portfolio companies in this Fund are likely to be more muted compared with late-stage investments - With the focus on disruptive business models, investments may be with first-time unproven entrepreneurs/ management

besides products/ offerings of portfolio companies might have muted precedents of success
- Investment exits in specific cases may exceed 3 years with an extended holding period - Limited prospects of negotiating collateral securities to securitize against capital loss - Investors must seek expert advise from competent advisors on percentage of their Net Worth to be allocated to this Fund

Mitigation
- The Fund expects to be diversified and balanced across a judicious mix of early stage assets across overweight sectors Investment teams track record of investing and entrepreneurial experience may: Help filling the management gaps while keeping the promoters on track to achieving business milestones Help mentoring the portfolio companies to retain focus to achieve profitability and scales of operation Keep an eye on timing and selecting an appropriate mode of exit out of multiple options

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Key Contacts
Aditya Birla Capital Advisors Private Limited
One Indiabulls Centre, Tower 1, Level 18, Senapati Bapat Marg, Mumbai 400013, India
Mr. Rahul Shah Investment Director Mr. Shamik Moitra General Principal Mr. Sandeep Bhat Chief Finance & Compliance Officer

Tel: +91-22-4356-7403
Mob: +91 97022 88252 rahul.d.shah@adityabirla.com

Tel: +91-22-4356-7404
Mob: +91 97020 47383 shamik.moitra@adityabirla.com

Tel: +91-22-4356-7401

sandeep.bhat@adityabirla.com

Website: www.adityabirla-pe.com
Cautionary Statement This Presentation is for informational purposes only and does not constitute an offer to sell the shares of Aditya Birla Capital Advisors Private Limited (the Company) or an offer to participate in the funds proposed to be managed by it. This information profile has been provided to its recipient upon the express understanding that the information contained herein, or made available in connection with any further investigation, is strictly confidential and is intended for the exclusive use of its recipient. It shall not be photocopied, reproduced or distributed to others at any time. This document is neither a prospectus nor an invitation to subscribe to the shares of the Company. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. The information herein is subject to change without notice. Statements in this Presentation describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of the applicable securities laws and regulations. Actual results could differ materially from those expressed or implied in this Presentation. Important factors that could make a difference to the Companys operations include global and Indian demand-supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations The information including facts and figures have been derived from public sources and should be relied upon by the reader at his or her own risk and the Company, its directors or officers assume no responsibility, expressed or implied, for the completeness or accuracy of the information contained or views expressed herein or for any direct or consequential loss arising from any use of this publication or its contents. 1110v1.0

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