Unimark Remedies IPO

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(No Transcript)
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What is Private Equity
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Private Equity

• Private equity is money invested in a company in
  exchange for an ownership interest.
• Traditionally, private equity is capital invested
  in a private company.
• PIPE refers to the investment of private
  capital in a public entity.
• Equity capital, unlike debt, is not intended to
  be repaid according to a specific schedule and is
  not secured, or guaranteed, by the companys
  assets.
• Instead, an equity investor expects that, within
  a certain timeframe, the ownership percentage it
  holds will be worth more than the original amount
  invested.

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Stages and Types of private equity
Business Stage
PE Type
Stage
Seed
Concept business plan
Angel
Start-up
Working prototype product or technology
Angel
Early Stage
Some sales or a major contract signed
Venture Capital
Expansion
Small company a few years of sales
Venture Capital or Private Equity
Later Stage Expansion
Larger private company acquisitions, mergers -
into new products or markets
Private Equity
LBO, MBO, MBI
Mature businesses, corporate asset carve-outs
(divestments)
Private Equity
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Indian Outlook
What Happened in India
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New Milestones

• For the first time ever, PE investments in India
  have crossed the 10 billion mark in a single
  calendar year.
• For the January- August period (8 months), the
  total announced value of PE deals stands at 10.8
  billion spread over 267 deals.
• Resulting in the average deal size of 40.5
  million.

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Growth of PE/ VC in India
USD Mn
Source Venture Intelligence India
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Sector wise PE Investment 2007
USD Mn
Source Venture Intelligence India
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How Does it works
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Selecting the right capital source
Financing Need
Operating Deficit
Non Traditional
WC, CAPEX, Acquisition
Risk Return
Higher risk with uncertain return
Low risk
Can offer high return
Weak Cash flow, High Leverage, Low growth.
Strong Cash flow, Low Leverage, Good Management
Growth, Niche market, Good Management
Non Traditional
Debt
Equity
Banks, Leasing, Factoring, Finance Companies
START - UP
Rapid Growth
Established
VC, Private Placement
Private Placement, Public Offering
High Growth Potential
Venture Capital
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What VC/ PE do ...

• Support the entrepreneurs in succeeding, e.g.
• financial, management and strategic advice
• contacting customers, channels, use their network
  
• implementing the business plan new products,
  new markets, technologies etc.
• assist in managing PRs activities
• assist in managing IP and legal issues
• headhunting and setting up advisory boards
• Sharing of experiences across portfolio companies
• Assist in identifying growth opportunities.
  Leverage network and other portfolio companies -
  joint ventures, alliances.
• Insist on good governance and full financial
  reporting. Also prepares company for
  responsibilities of eventually being a public
  company.

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Private Equity Prerequisites

• Good Management (owner/professional)
• Ethical conduct (company/promoter)
• Transparency
• Reasonable size of the operation
  (existing/contemplated)
• Will to have
• High standard of corporate governance
• Active Board participation
• Higher responsiveness towards HSES issues
• Ability to achieve
• High pace of growth
• Global competitiveness

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PE Indicative Time Line
Week 3
Week 11
Week 1
Week 2
Week 4
Week 5
Week 6
Week 7
Week 8
Week 9
Week 10
Week 12
Presentation and Discussions
Negotiation on MOU
Due Diligence
Shareholders Agreement Investment Terms
Deal Sign
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Structuring the Instrument

• Simplest - Equity share.
• Other Instruments are designed for
• Preference on dividend or liquidation or both.
• Exchange control sector limits.
• Flexibility of exit option.
• Alternative Investment Instruments
• Convertible Preference Shares.
• Convertible debentures.
• Warrants.
• Depository Receipts
• FCCBs

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Findings from the quantitative study

• PE-backed companies grew at a significantly
  higher rate compared to non Private Equity backed
  companies as well as market indices.
• About 96 of top executives at Private
  Equity-backed companies believe that without
  Private Equity/ Venture Capital financing, their
  companies would not have existed or would have
  developed slower.
• Wages at Private Equity-backed companies grew at
  a significantly higher rate compared to their
  peers who are not PE-backed.
• More than 60 of top executives at Private
  Equity-backed companies said that the number of
  employees at their companies had increased after
  the PE investment.
• Private Equity Impact study - conducted by
  Venture Intelligence

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Advantages Of PE Funding

• Increases the scope of business horizon and
  access to international technology.
• Companies, which do not qualify for entry IPOs
  and do not want to sell shares cheaply.
• Deep pockets allow for rapid deployment of
  additional growth capital.
• Limited time frame for involvement anticipated
  exit strategy.
• Provides the required initial funding to
  companies with strong project, brand, and revenue
  model during a bearish equity market and wait
  till the IPO market picks up.
• In summary, private equity capital has a highly
  beneficial impact on many companies performances
  in terms of higher sales growth, job creation,
  and higher investments in the business as a
  percent of sales.

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Disadvantages of PE Funding

• Special Veto powers for
• Further dilution
• Diversification
• Capital Expenditure
• Gearing
• Tag along rights.
• Pre planned exit option.

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Advantage/ Disadvantage of Private Equity
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Investment Bankers Value Add

• Investment bankers can help to maximize your
  efforts to obtain private equity
• Industry expertise.
• Contacts and network.
• Positioning in the marketplace.
• Determination of valuation benchmarks, while
  identifying ways to increase valuation.
• Development of a go to market strategy.
• Maintenance of confidentiality.
• Assessment of the relative importance of control
  issues, liquidity, price, and timing.
• Development of a competitive interest in the
  marketplace.
• Evaluation and negotiation of offers.

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• How Anand Rathi Group Can Help You

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Brief Background

• Set up in 1994
• Over 400 offices covering all the states in India
• International presence through offices in Dubai,
  Singapore and Bangkok
• Over 3000 professionals offering full range of
  financial services
• Equity Debt Portfolio of over Rs.50 billion

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Group Overview
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Best Private Bank
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Our Clientele
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Product Portfolio
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Services Offered
Investment Banking
ECM
MA Advisory
Debt Advisory
Private Equity Public Issue Right Issue Open
Offer/ Takeovers De-listing/ Buybacks
Mergers Acquisitions JVs/ Strategic
Alliances Business Sale/ Disposal Valuation
Rupee Foreign Currency Debt Raising Debt
Restructuring Creditors Settlement/ OTS
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ECM Recent Deals
Provogue (India) Limited Lead Manager Rs.650 Mn
Bombay Rayon Fashions Ltd Lead
Manager Rs.943 Mn
Emami Limited Lead Manager Rs.350 Mn
Plethico Pharmaceuticals Limited Sole Lead
Manager Rs.1.10 bn

• Hanung Toys and Textiles Limited
• Lead Manager
• Rs.902 Mn

• Prithvi Information
• Solutions Ltd
• Lead Manager
• Rs.1.35 bn

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ECM Recent Deals
Technocraft Industries Limited Lead
Manager Rs.873 Mn
XL Telecom Limited Lead Manager Rs.593 Mn
Indus Fila Limited Sole Lead Manager Rs.823 Mn
Kaveri Seed Company Ltd. Lead Manager Rs. 680 Mn
Spice Communication Limited Syndicate
Member Rs.5.20 bn
Allied Digital Services Ltd. Sole Lead
Manager Rs.859 Mn
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Mergers And Acquisitions
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Private Placement / QIP
Plethico Pharmaceuticals Limited Sole
Advisor Rs.178 Mn
Prithvi Information Solutions Ltd. Sole Advisor
XL Telecom Limited Sole Advisor Rs.100 Mn
Spice Communication Limited Sole Domestic
Arranger Rs. 221 Mn
Co - Lead Arranger Rs.6.81 bn
Allied Digital Services Ltd. Sole Advisor Rs.114
Mn
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Other Deals
Syndicate Deals
Syndicate Deals

• ESKAY
• KNIT
• Rs.500mn

Rs.540mn
Rs.3.35bn
Open Offers
SOFTBPO GLOBAL SERVICES LTD
RAIPUR ALLOYS
Open Offer Mr. Kishore Biyani Others
Open Offer
Open Offer
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Uniquely Positioned to Advise the Company

• Unparalleled relationships with senior
  decision-makers.
• Comprehensive Service Full Service Securities
  Firm
• Independent firm no conflicts.
• Senior-level execution focus.
• Demonstrated ability to achieve premium outcomes
  for our clients.
• Superior execution and structuring capabilities.
• Thought leadership combined with industry
  experience.
• Committed, experienced transaction teams.
• Independent Unbiased Approach Clients
  Interest First
• Extensive Research - Deep Industry Sector
  Knowledge

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Success of VC /PE Fund is dependent on success of
the venture. PE funds make sure that their star
entrepreneur are helped with all the resources
and learning which can be mustered by the fund to
help him realise his dream
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Contact Details
Padam Jain, Director Mobile [phone] Rahul
Porwal, Vice President Mobile [phone] Anand
Rathi Securities Limited 11th Floor, Times Tower,
Kamala City, Senapati Bapat Marg, Lower Parel,
Mumbai - 400 013 Tel. [phone] Fax
91-22-4047 7070, E-mail argib_at_rathi.com
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Stars dont wait for the future - they make the
future happen.
- Gail Evans