INTRODUCTION OF PRIVATE EQUITY

By : Chetan Suresh Deulkar

OBJECTIVES
 Meaning of PE (Private Equity)
 Types of PE
 PE participant
 Structure of PE participations
 PE Process
MEANING OF PE (PRIVATE
EQUITY)
 Equity capital which is not quoted on a public
exchange
 Fund can be raised from retail and institutional
investors
 Investments directly into private companies

 Purpose
 To by new technologies, expand working capital within an
owned company, make acquisitions, or to strengthen a balance
sheet.  
TYPES OF PE
 Angel Investment
 Venture Capital
 Growth Capital
 Leveraged Buyout
 Private Investment in Public Ltd
ANGLE INVESTMENT
 Investment come with initial idea

 Less focus on Profit share

 Investment up to 1Crore
VENTURE CAPITAL
 Investment with perceived long-term growth potential

 Main focus on Profit share

 Financing in several stages of investment

 High risk investment

 Investment from 1 cror to 5 cror

GROWTH CAPITAL
 Investment comes in company at maturity stage.

 Main focus on the expansion of asset with the

help of equity capital

 Investment should above 5cror

LEVERAGED BUYOUT

 Investment comes after venture and growth

capital

 Main focus on control of a company

 Major stake in management

 Investment with no limit

PIPE
 It has mainly two types

1) Traditional PIPE: In which investor gets

preferential shares
2) Structured PIPE: In which investor gets
convertible debenture
PE PARTICIPANT
 PE funds are raised from pension funds,
insurance companies, large corporate,
HNWI, etc

 Investors in PE funds are called “Limited

Partners”

 PE funds are managed by the “General

Partners”
STRUCTURE OF PE
PARTICIPATIONS

Insurance Pension Large

LP company fund corporate
HNWI

GP The PE fund Manager

Portfolio Company A Company B Company C Company D Company E Company D

PE PROCESS
Mandate

Teaser

Information of Memorandum

Due diligence

Term Sheet
ADVANTAGES OF PE

 Companies are faster growing

 Job creation
 Productivity enhancement
 Economic growth
 Ownership diversification
 Corporate Governance.
STAGE-WISE DISTRIBUTION OF
PEVC INVESTMENT IN 2010
Stage No. of Amount in
Investment $ M
Early 74 342
Growth-PE 68 2017
late 111 3992
Pre IPO 10 196
PIPE 37 769
Buyout 8 123
WORLDS BIG PE INVESTOR

 KKR
 The Blackstone Group
 The Carlyle Group
 Goldman sach
THANK YOU