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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.

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slide2

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

slide3

Introduction to Private Equity

Private equity is medium to long term finance provided in return for an equity stake in growthoriented 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

slide4

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 the asset class

Growth of Private Equity in India (2002 – 2007)

  • 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.

considerable diversification across industry

Service Non-Financial 5%

Financial Services 20%

Others 27%

Information Technology 13%

Electronics 5%

Transportation/Distribution 9%

Computer Related 6%

Telecom 7%

Medical 8%

Others 5%

Transportation/Distribution 5%

Medical 5%

Computer Related 10%

Financial Services 35%

Others 23%

Financial Services 34%

Manufacturing 10%

Medical 4%

Infrastructure 5%

Telecom 24%

Telecom21%

Information Technology 14%

Construction 5%

Considerable diversification across industry

2002

2007

Others 11%

Number of Deals

Telecom20%

Services Non-Financial 7%

Manufacturing 7%

Financial Services 8%

Computer Related19%

Medical 10%

Information Technology 18%

Value of Deals

Source: AVCJ.

slide7

Buy-outs (MBO/MBI/LBO) 3%

Seed/R&D 1%

Mezzanine/ Pre-IPO 9%

Expansion/Growth Capital 49%

PIPE Financing 18%

Start-up/Early Stage 21%

Mezzanine/ Pre-IPO 5%

Buy-outs (MBO/MBI/LBO) 6%

Expansion/Growth Capital 41%

Start-up/Early Stage 16%

PIPE Financing 32%

Growth across segments

2002

2007

Buy-outs (MBO/MBI/LBO) 3%

Turnaround/ Restructuring 3%

Number of Deals

Mezzanine/Pre-IPO 2%

Start-up/ Early Stage 13%

Expansion/ Growth Capital 66%

PIPE Financing 13%

Buy-outs (MBO/MBI/LBO) 2%

Turnaround/ Restructuring 4%

Value of Deals

Mezzanine/Pre-IPO 1%

Start-up/ Early Stage 6%

Expansion/ Growth Capital 52%

PIPE Financing 35%

Source: AVCJ.

slide8

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

slide9

Benefits of Private Equity

- Expansion capital / Acquisition capital

  • Restructuring business – MBOs, divestment, consolidation
  • Restructuring of balance sheet

Access to financial capital

  • Providing networking linkages across the globe
  • Helping develop new product lines and entering new markets
  • Active support to secure domestic & global business partners

Business

Development

Access to global

Best

Practices

- Ensuring high standards of corporate governance

  • Facilitating proper MIS systems for control and monitoring
  • Ensuring maintenance of proper organizational structure
  • Balance sheet management

Strategic

value

addition

  • Providing Risk management tools
  • Facilitating outpacing of Competition
  • Conceiving and conceptualizing New business line
  • Gearing up for IPO
slide10

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

slide11

Indian PE success stories

SUZLON

SHOPPER'S STOP

1000

900

6000

Sales

EBIT

Profitability

800

Sales

EBIT

Profitability

5000

700

600

4000

INR crore

INR crore

500

3000

400

2000

300

200

1000

100

0

0

2004

2005

2006

2007

2004

2005

2006

2007

PE Investment

PE backed IPO ~ INR 1700 cr

PE Investment in 2000

PE backed IPO ~ INR 130 cr

ABG SHIPYARD

250

PVR CINEMA

200

Sales

EBIT

Profitability

150

INR crore

100

50

0

2004

2005

2006

2007

PE backed IPO ~ INR 128 cr

PE Investment in 2003

PE Investment of INR 140 cr

Source: moneycontrol.com

slide12

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

full spectrum of services throughout the corporate development cycle

ICICI Group : Value proposition (1/2)

Full spectrum of services throughout the corporate development cycle

Value

Public to Private transaction

Mergers, acquisitionsand disposals

Takeovers

Debt

syndication

Strategic financial advice

Listed company Financing

Pre-IPO Placements

ICICI

Valuation and pricing analysis

Management Buyouts

Debt/ Structured Financing

Deal

structuring

Mezzanine/ hybrid financing

Venture/ Developmental Capital

Private equity

slide14

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

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

Investors Base

HNIs / Family offices / Financial Institutions : Middle East, UK, US, South Africa, Singapore

+

Access to prominent India dedicated PE funds / Financial institutions / HNIs

slide15

Acquisition of spirits business of

Shaw Wallace

USD 300 million

Advisor

Acquisition of Corus Group PLC

USD 12.8 billion

Financing

Employee buyout of Tata Tea plantations

USD 13 million

Advisor

Acquisition Hansen Technologies

USD 565 million

Structuring & Financing

ICICI Group: Credentials ( 2004 – 2007 )

McLeod Russell

Acquisition of Doom Dooma Tea Company

USD 17 million

Advisor

Sale of assets and financial restructuring

Advisor

slide16

Acquisition of Keyline Brands

GBP 18 million

Sole Arranger

Acquisition of a South African tyre manufacturer

USD 62 million

Guarantee facility

Employee buyout of Tata Tea plantations

USD 13 million

Advisor

Acquisition of

Negma Labs

USD 266 million

Structuring & Financing

ICICI Group: Credentials ( 2004 – 2007 )

Acquisition of Whyte & Mackay

USD 1,188 million

Advisory & Financing

Acquisition of REpower

USD 1,560 million

Structuring & Financing

slide17

ICICI Group: Credentials ( 2004 – 2007 )

Art Auction Company

Fresh Equity Issue

USD 8.5 million

PE Syndication from HNI investors

Equity Broking company

Management Buy Out

USD 11 million

Coinvestment with PE fund

Infrastructure Company

Fresh Equity Issue

USD 28 million

PE Funding

Power Transformer Manufacturing Company

Fresh Equity Issue

USD 18.20 million

PE Funding

Garment Manufacturer

Fresh Equity Issue

USD 5 million

PE Funding

slide18

ICICI Group: Credentials ( 2004 – 2007 )

M&A Deals by Industry (2004-07)

M&A Deals by Geography (2004-07)

slide19

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

slide20

Process of PE investment : Indicative timeline (3–6 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

Agreements discussion

11

12

5

6

7

8

9

10

13

14

1

2

3

4

No of weeks

thank you

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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