Venture Capital & Private Equity in India

Last Update: October 2007 Email: info@indiavca.org

Overseas.Venture Capital in India  Phase I .Entry of Foreign Venture Capital funds (VCF) between 1995-1999 Phase III . Phase II .(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.Formation of TDICI in the 80’s and regional funds as GVFL & APIDC in the early 90s. Domestic)     . Corporate.Setting the stage .

semiconductor. India moving beyond supplier of low-cost services to higher-value products. wireless.  . Quality of entrepreneurship on ascending curve. pharmaceutical. Several emerging centers of innovation – biotech. IT. less affected by domestic issues.The Opportunity      High Growth in Technology and Knowledge based Industries (KBI) KBI growing fast and mostly global. Ability to build market leading companies in India that serve both global and domestic markets.

Growth of PE/VC in India 2000 – 1H2007 (US$ millions) 8000 7000 6000 5000 4000 3000 2000 1000 0 2000 2001 2002 2003 2004 2005 2006 First Half 2007 1160 (110) 937 (78) 591 1650 (71) (146) 2200 (56) 470 (161) (280) (299) 7500 5648 350 300 250 200 150 100 50 0 Value of Deals (Number of Deals) .

financial services & insurance . Media & Entertainment. garments. Retail Eng/Construction. Food & Beverage.Investments by Sector Number of Deals Others BFSI* Healthcare & Lifesciences Manufacturing IT & ITES 0 20 40 2004 2006: Others Textiles. Real Estate Source: TSJ Venture Intelligence 60 2005 80 2006 100 120 *Banking.

Investment by Stage Number of Deals Other Buyout PIPE Late stage Growth stage Early stage 0 20 40 2004 60 2005 80 2006 100 120 PIPE – Private investment in public equity Source: TSJ Venture Intelligence .

5bn invested in 2006 across 299 deals. followed by manufacturing and real estate. IT & ITES retained its status as the favorite industry among PE investors. Largest PE deal was $900M LBO of Flextronics by Kohlberg Kravis Roberts (KKR).2006 – PE/VC Trends     US$7. . M&A and IPO activity continued to remain strong.

& Construction Food & Beverage Others *Banking.2006 PE/VC Investments by industry Total US$7.8% 7.1% 12% 7.2% IT & ITES Manufacturing Real Estate Healthcare & Lifesciences BFSI* Shipping & Logistics 2.1% Travel & Leisure Eng.5Bn 23.1% 6.5% 0.8% 12. financial services & insurance Source: TSJ Venture Intelligence India .9% 0.5% 27.

auto components) . pharma.PE Investments by Stage : 2006 Stage of Company Early Stage Growth Stage Late Stage PIPE Buyout Others  No. of Deals 59 42 104 61 11 22 Amount (US$M) 236 393 3663 1314 1125 769 Source: TSJ Venture Intelligence India Late stage and PIPE deals accounted for ~70% of overall value of PE transactions (PIPE: banking.

SBI Iris Capital Baring PE Sequoia Capital Sequoia Capital Matrix Partners 10 10 8 8 1 11 10 10 7 Online travel services Mobile Content HR BPO Online Services Software Testing Marketing Analytics Software Testing Mobile VAS Online movie rentals . Sequoia. Individuals Amount (US$-M) 10 Sector Online education services Travelguru People Infocom (Mauj) Secova BillDesk Indium Software PharmARC AppLabs Bubble Motion Seventymm WestBridge (Sequoia) WestBridge. SIDBI.Selected ES IT/ITES Investments 2006 Source: TSJ Venture Intelligence India Others: Animation services: Rich Crest. chip design firm InSilica Company 24x7 Learning Investors KITVEN. remote IT infrastructure management Microland. Intel Barings PE Clearstone.

GE Capital RR Donnelly SAIF New Vernon. Volarado 115 25 250 21 32 Infosys Tech IPO RR Donnelly SAIF IPO BPO IT Services BPO IT Services Logistics Source: TSJ Venture Intelligence India .Selected IT/ITES Exits 2006 Company MphasiS Investors Baring PE Amount (US$-M) 380 (for 52%) Acquirer Sector EDS BPO Progeon R Systems OfficeTiger CSS Group Allcargo Citigroup Intel Capital.

of Deals 69 41 40 22 17 10 Value(US$M) 1.525 354 492 1.780 395 1.114 Source: TSJ Venture Intelligence India .Top Cities attracting PE Investments (2006) City Mumbai Delhi/NCR* Bangalore Chennai Hyderabad Pune * National Capital Region No.

6B (First Half of 2007) 2% 5% 1% 4% 16% IT & ITES Manufacturing Healthcare & Life Sciences Textiles & Garments BFSI* Hotels & Resorts Media & Entertainment Engg.PE/VC Investments by Industry Total US$5. financial services & insurance 14% 7% 2% 3% 7% 2% 37% Source: TSJ Venture Intelligence India . & Construction Shipping & Logistics Energy Telecom Others * Banking.

of Deals Amount (US$M) 24 154 25 1082 67 2162 34 1714 6 440 6 47 Source: TSJ Venture Intelligence India Total number of deals: 162 with total amount invested at ~ US$5.PE Investments by Stage : 2007 (First Half) Stage of Company Early Stage Growth Stage Late Stage PIPE Buyout Others  No.6B .

648 % Share 15. of Deals IT & ITES Manufacturing Healthcare & Life Sciences Textiles & Garments BFSI* Hotels & Resorts Media & Entertainment Engg.55% 1. financial services & insurance Value US $M 876 389 126 160 2121 104 413 812 257 98 50 242 5.28% 48 14 13 6 26 3 9 13 9 3 2 16 162 .51% 6.89% 2.83% 37.84% 7.89% 4.38% 4. & Construction Shipping & Logistics Energy Telecom Others * Banking.PE Investments by Stage : 2007 Source: TSJ Venture Intelligence India No.23% 2.31% 14.55% 1.74% 0.

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