Private Equity

Presented by
Ashwin kumar
& Nivedita

Under the guidence of

Prof.RKSharma
 What is private equity????
• Investment in private company or public company
through buyout

• Hopes for better future of the company

• Generally waits for long time

• They enter the company with the plan to exit

History of private equity
• Origin can be traced back to 1946

• In India private equity started in 1990

• Investment beyond IT

• Development mainly due to conducive

business environment
Parties involved in private equity
• Issuer

• Intermediaries

• Investors

• Agents and advisors

Types of private equity
investments
• Leveraged buyout

• Venture capital

• Growth capital

• Distressed capital
Cont….
• Mezzanine capital

• Secondary's

• Other strategies like

-Real estate
-Infrastructure
-Energy and power
Exit strategies
• Sale

• Public listing

• Recapitalization

• Secondary sale
Critics for private equity
• Media

• Public response

• Employment
Performance of Private Equity in India

 India is emerged as a favoured destinations for

private equity investments
 India now Similar to the US in the 1970s

 Less Time Horizon, But IRR Expectations Higher

 As GDP grows there is more opportunities in
investment targets
Why Invest in Private Equity?
Long-term historical out performance
True stock picking in a low inflation, low growth
environment
Absolute returns
Portfolio diversification improves risk and
volatility characteristics
Exposure to the smaller companies market
Influence over management and flexibility of
implementation
Stages In PE Investment
Process
 Approaching the private equity firm
 Initial Enquiries and Negotiations
 Business Valuation
 Due Diligence
 Structuring the Deal / Final
Negotiation and Deal Completion
 Monitoring and performance
evaluation
 Exit Strategy
Top 10 companies in the world
• TPG
• Goldman Sachs Capital Partners
• The Carlyle Group
• Kohlberg Kravis Roberts
• Apollo Global Management
• Bain Capital
• CVC Capital Partners
• The Blackstone Group
• Warburg Pincus
• Apax Partners
Top 10 PE firms operating in
India
• ICICI Venture
• ChrysCapital
• Sequoia Capital
• India Value Fund
• Kotak Private Equity Group
• Baring Private Equity Partners
• Ascent Capital
• CX Partners
• Everstone Capital
• Blackstone Group
 e nt
e s tm
in v
f P E
i o o )
n a r 0 1 0
s ce 0 7 -2
en t (2 0
res
P
Number and Value (in USD million) of Deals
in India during 2007–10
YEAR 2007 2008 2009 2010(H)

No of deals 227 510 560 620

Value of 8028 15500 17500 20000

deals(in
USD
million)
 Number and Value (in USD
million) of Deals in India during
2007–10
25000

20000

15000
No of deals
Value of deals(in USD
10000 million)

5000

0
2007 2008 2009 2010(H)
ICICI Venture as an example of
largest Private Equity firm in
India
 ICICI Venture is a subsidiary of ICICI
Bank
 It is one of the largest and most successful
private equity firms in India
 over the years it has built an enviable
portfolio of companies
 It has several firsts to its credit in the Indian
Private Equity industry
 ICICI Venture currently manages 3 third
party capital funds in its Private Equity
practice i.e. India Advantage Fund Series
1,2,3
To conclude…….
  
……
O U
K Y
A N
TH