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March 17, 2017

Did "Tranching" of Investments by VCs lead to the Undoing of Stayzilla?


In a LinkedIN post titled "What We MUST learn from the #Stayzilla Incident. But are we?", Vijay Anand, Founder of Chennai-based accelerator The Startup Centre, suspected that VC investors in the company might not have transferred the entire funding amount as available in public sources like TechCrunch, etc. 


Venture Intelligence Research Head Vinoth jumped into action to pull out regulatory filings based information from the Venture Intelligence PE/VC Deals Database. And advised Vijay Anand that the investors had indeed paid up the committed capital of $13.5 M (INR 87.77 Cr to be specific) in full.


Here's an extract from Stayzilla's FY16 annual report acknowledging the receipt of the investor's committed capital.

While tranching of funding has caused problems at other startups, it does not seem to have been the villain in the case of Stayzilla.

In all cases though, think of Venture Intelligence whenever you need validated information on Private Company Financials, Transactions & their Valuations - based on actual filings. This kind of validated stuff is simply not available in any other database. Free or Paid. Foreign or Indian.


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

March 16, 2017

Media Mention: TA Associates invests in pharma products supplier Ideal Cures

Mint's coverage of the deal quotes Venture Intelligence data.

According to Venture Intelligence, this will be TA Associates’ third investment in the healthcare space in the last three years. It has previously backed Dr Lal Pathlabs Ltd, which went public in December 2015. It invested about $26 million in drug ingredients maker Shilpa Medicare in January this year.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

March 12, 2017

Media Mentions: VC and angel investment on slow track in February - Times of India & Business Standard


From the Times of India report:
Indian startups may need to brace up for a fund squeeze with VC and angel investments touching new lows in February. According to data from Venture Intelligence, VC investments touched a 5 month low while angel investments hit a 14 month low in February.
With 32 VC investments worth $241 million, activity levels in February 2016 were 20% lower than February 2015 and 36% lower than the average activity witnessed in the Oct-Dec quarter. Data from the research firm shows that except for a slight uptick in series B funding, all other categories saw a dip or remained flat.
From the Business Standard report:
The angel, seed, Series A, Series C and Series D investments were down compared to the previous months, while there was a minor increase in terms of number of investments into Series B. Angel investment has seen a 14-month low and declined to 21 deals during February 2017, compared to 49 deals during the same month of last year. 
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

March 06, 2017

Why are VCs and Angels slowing down?

On the back of chilling news of mass layoffs at home grown E-Commerce Unicorn Snapdeal and a “reboot” at homestays aggregator Stayzilla, Venture Capital investment activity hit a five month low in February 2017, down for a third month in a row.
Venture Intelligence tracked 32 VC investments* worth $241 million in February. The activity or number of investments were 20% lower compared to the same period last year as well immediate previous month and 36% lower than the average activity levels witnessed in the Oct-Dec quarter. (*Seed to Series D round investments of up to $20-M in companies less than 10 years old. The monthly analysis includes investments of over $20-M as well in tech startups that are less than 10 years old.) Except for a minor uptick in the Series B category, investment volumes were either flat or lower across all other rounds.

The largest VC investment in the period was the $54 million raised by Cartrade.com led by existing investor Temasek – the same company had raised $145 million in January 2016. Furniture e-tailer UrbanLadder.com was another company that raised an “inside round” (i.e., from existing investors) of $15 million, compared to the $50 million it raised previously in April 2015.
Enterprise Software companies – including Cloud1 Enterprises, HyperTrack, Fyle Technologies, Belong and Sigtuple - continued to get the favourable attention of investors in February. Angel investments continued to slide to register a 14 month low at 21 transactions in February 2017.The ET-Now Startup Central show, anchored by Chandra Srikanth, carried a debate on the latest VC numbers compiled by Venture Intelligence featuring IDG Ventures India Co-founder TCM Sundaram and active angel investor Sanjay Mehta.


Venture Intelligence
 is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Catch more Venture Capital related debates at Venture Intelligence's APEX'17 PE-VC Summit in Bangalore on March 22.

February 27, 2017

Mint-Venture Intelligence Deal Tracker (Feb 20)

Venture Intelligence is powering the (Weekly) Deal Tracker on The Mint. The Deal Tracker is featured in the Deals Section (Page 3) every Monday.



Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.



February 21, 2017

Japanese power utilities join investors in India’s energy sector: The Japan Times

A Japan Times article quotes Venture Intelligence data on PE investments in the energy sector in India:
Venture Intelligence, which tracks private equity deals in India, estimates that energy companies in the country attracted $1.2 billion worth of such investments (across 27 deals) in 2015, which was more than twice that in 2014. 
Major energy investments in 2015 included the $265 million investment in ReNew Power Ventures that was led by the Abu Dhabi Investment Authority, followed by the $256 million buyout of Greenko Group’s Indian assets by GIC Singapore, according to Venture Intelligence. In 2016, private equity deals in India stood at $662 million.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

February 18, 2017

$25m to $400m: SAIF Partners exits MakeMyTrip, makes 16 times on its investment

An Economic Times article quotes Venture Intelligence data on venture exits:
Exits for venture-backed companies added up to $1.5 billion across 64 deals in 2016, as compared to $1.56 billion across 66 deals in 2015, show data from Venture Intelligence. Total investments added up to $2.2 billion last year, down from $4.9 billion in 2015.
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.


SoftBank's markdowns imply reduced visibility on profitable growth for India's top startups: Forbes

A Forbes article quotes Venture Intelligence data on VC investments in 2016:
In 2016, as many as 620 transactions were sealed in the PE/VC space, according to data available with research firm Venture Intelligence. Of this, about 65 percent comprised startup investments. In 2015, the year that created history for the highest amount of PE and VC investments, both by value and volume, of the total of 775 investments sealed in the January-December period that year, 512 were startup deals.
Related:
Venture Capital Report India - 2016: Selectivity is the keyword as Venture Capital investments dip 21% in 2016 
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.


February 17, 2017

Mint-Venture Intelligence Deal Tracker (Feb 6)

Venture Intelligence is powering the (Weekly) Deal Tracker on The Mint. The Deal Tracker is featured in the Deals Section (Page 3) every Monday.



Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

February 13, 2017

Infosys: On a downward spiral - Financial Chronicle

A Financial Chronicle quotes Venture Intelligence data on acquisitions and investments by Infosys:


The article also quotes Arun Natarajan, Founder of Venture Intelligence:
Infosys has never been prolific on acquisitions. In all, it had nine acquisitions and sale activities, and it seemed to have relied more organic growth largely.
“While it is true that, with the exception of Lodestone Holdings (in 2012), the "founder era" at Infosys (until mid-2014) did not see any "big bang" acquisitions (costing $200m or above), the Indian IT services industry was largely focussed on making "tuck in" acquisitions until then,” says Arun Natarajan, founder and managing director, Venture Intelligence, a firm that tracks mergers & acquisitions across sectors. 
For example, until the $2.7 billion Trizetto acquisition in September 2014, Cognizant's largest reported acquisition was a $135 million buy (marketRx in October 2007). Also, Wipro, with the exception of the $600 million Infocrossing deal in 2007, did not make any acquisition crossing $200 million until 2016. “Clearly, while Wipro and Cognizant have done more acquisitions overall (both of which have done 20+ acquisitions compared to Infosys' nine), the industry overall had stayed away from any "bet the company" acquisitions until 2014,” Natarajan explained.
“Minority investments in start-ups (including by Infosys and Wipro), might lead to potential acquisitions down the line, but is not something that seems oriented towards growth in the short term-- especially since it takes a lot to "move the needle" for such large companies. They are more a way to get an inside track of technologies and innovation (including especially in the US) that will affect their own industry as well as those of customers in the medium to long-term,” Natarajan pointed out.
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

February 09, 2017

As interest rate drop, realty developers, private equity companies go for refinancing: Economic Times

An Economic Times article quotes Venture intelligence data on PE Exits in the Real Estate space:
Private equity real estate firms announced 24 exits during entire 2016. Of these, 22 transactions had an announced value of $1.02 billion, up 13% compared to $905 million across 16 transactions announced in 2015. Thirteen of the exits were through buybacks followed by secondary sales involving sale of stake to another PE investor, which accounted for five exits, according to data from Venture Intelligence.  
Among secondary transactions, which involves stake sale to another private equity investor, Kotak Realty exited Mumbai-based developer Nirmal Lifestyle in which Altico Capital invested INR 500 crore. Urban infrastructure Venture Capital received full exit from Ozone Group's Urbana Project that was funded by structured debt raised from another financier. Urban Infrastructure had invested INR 200 crore in the Urbana project in 2009.
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.


February 08, 2017

Mint-Venture Intelligence Deal Tracker (Jan 30)

Venture Intelligence is powering the (Weekly) Deal Tracker on The Mint. The Weekly update is usually featured in the Deals Section (Page 3) every Monday.


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.


Investment firm Stellaris raises $50 million for early-stage funding of ideas: Economic Times

An ET article quotes Venture Intelligence data of VC fund raising in India:
Led by local affiliates of Silicon Valley heavyweights, Sequoia Capital and Accel, VC funds dedicated to India raised $2.2 billion in 2016, up from $1.5 billion in the previous year, according to data from Venture Intelligence. 
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.


February 01, 2017

Budget 2017- The Key Initiatives Affecting Start-ups - Analysis by Economic Laws Practice

An analysis by


The Finance Minister on February 1 presented to the union budget for the financial year 2017-2018. The budget offered the following concessions to the start-ups:

1. Extension to the Period of Tax Break 

 Presently an eligible start-up is allowed a deduction of the entire amount of the profits and gains derived from eligible business for three consecutive assessment years out of five years beginning from the year in which such eligible start-up is incorporated. However, keeping in mind the time taken to derive profits by start-ups, it proposed that an eligible start-up can avail the tax break for any three consecutive assessment years out of seven years beginning from the year in which such eligible start-up is incorporated.

2. Carry Forward of Losses 

Presently a company, not being a company in which public are substantially interested, cannot carry forward its losses, unless it has continuous holding of more than 51% (fifty one) percent of the company. Now it is proposed that the eligible start-ups can carry forward losses and set off against the income of the previous year, even if the continuous holding of the company has fallen below 51% (fifty one) percent, if all the shareholders of such company who held shares carrying voting power on the last day of the year or years in which the loss was incurred continue to hold those shares on the last day of such previous year. This exemption is proposed for the eligible start-ups if the loss has been incurred during the period of seven years beginning from the year in which such eligible start-up is incorporated.

3. Carry Forward of MAT Credit 

The Finance Bill 2017 has further proposed to extend the period for carry forward of Minimum Alternate Tax (MAT) credit to fifteen years as opposed to the present period of ten years. In addition to the above, the Finance Minister in his budget speech has also proposed following amendments to: 

(i) the existing labour laws and has proposed to form them into four codes on (i) wages, (ii) industrial relations, (iii) social security and welfare, and (iv) safety and working conditions; and

(ii) the Companies Act, 2013 to remove difficulties and impediments to the ease of doing business. 

The above exemptions proposed for the start-ups and the proposed amendments to the labour and company laws are definitely encouraging and will provide the much needed impetus to the growth of the start-up industry.

Authors: Darshan Upadhyay - Partner and Amruta Kelkar - Senior Associate



Economic Laws Practice ("ELP") is a leading full-service Indian law firm established in the year 2001 by eminent lawyers from diverse fields. The firm’s Private Equity & Venture Capital practice brings onboard a unique understanding of commercial matters and legalese to be able to provide effective solutions to all stakeholders in a transaction. The team looks at providing a bespoke legal service experience, which is sector agnostic in nature and driven towards successful consummation of the relevant transactions.

ELP advises clients on all aspects of private equity and venture capital transactions, whether from a fund formation perspective or a potential portfolio investment or a relevant exit transaction. Our services include right from conceptualising a structure, to conducting the legal due diligence exercise, to the preparation of the relevant documentation, to providing assistance to the final closure including negotiations and corporate secretarial assistance.


ELP is the firm of choice for clients because of its in-depth expertise, continuous availability, geographic reach, transparent approach, competitive pricing and most importantly the involvement of partners in every assignment.

Mint-Venture Intelligence Deal Tracker (Jan 23)

Venture Intelligence is powering the (Weekly) Deal Tracker on The Mint. The Weekly update is usually featured in the Deals Section (Page 3) every Monday.

(Click to enlarge)

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.


January 31, 2017

Double Take on Donald Trump: The Frail Ego & The Negotiator

Extracts from "Black & White and More"  by  Raj Nair, Chairman, Avalon Consulting which discusses the impact in 2017, of the 3 Black Swan events of 2016: Brexit, Trump’s Presidency and Modi’s demonetization (emphasis ours):
There is enough material to understand Trump’s DNA including his own book, “Art of the Deal.” He displays a megalomaniac exterior to cover his insecurities and his very vulnerable ego. He is more a deal maker than a leader.
...He recommends and also uses ‘hope’ and ‘fear’ most of the time to soften his counter party or his own people to accept his proposition and then sells them a grand dream which is beyond their stretch, to win them over. The electorate lapped it up. He gave them some hope and a lot of fear during his campaign. He will continue to do that with counterparties in negotiations. His ego is easily punctured and vengeful acts are par for the course.
...It is therefore safe to conclude that eventually, Trump’s bite as the President will be markedly weaker than his bark during his campaign. After, the initially flurry of decisions in his first few weeks in office, office, to show that he acted as threatened, he will let his chosen team do more reasonable things.
Agree with the Raj's take? Disagree? Meet and interact with him at:



Raj's take concurs with that of Cartoonist Scott Adams, who seems set to become as famous as the man who could predict Trump's actions (including his election win) correctly as for creating Dilbert. According to Adams, the key to understanding Trump is to understanding his standard negotiating technique: Open with an extreme first offer which provides him (Trump) enough room to "negotiate back to something reasonable". "If you don’t recognize the method, it looks crazy, random, and racist."

Extracts from Adams post on Trump's temporary ban on immigration from select Islamic nations - a move that has evoked wide protests in Silicon Valley as well as the predictable outrage across social media (emphasis ours):

Trump’s temporary immigration ban set a mental anchor in your brain that is frankly shocking. It will make his eventual permanent immigration plan (”extreme vetting”) look tame by comparison....He acts the same way every time. He wrote a book about it. He talks about it publicly. Then he does it right in front of us, over and over. And no matter how many times he does it, half the country still thinks the opening offer is the real one. 
..The system (America) is actively trying to eject Trump like some sort of cancer cell. And the worse it gets, with protests and whatnot, the more leverage Trump has to tell his far right supporters that he has gone as far as the country will let him go. He needed that. The protests are working in his favor. He couldn’t negotiate with the extreme right without them.
...Trump has created a situation – or will soon – in which the peaceful Muslims will either have to do a lot more to help law enforcement find the terrorists in their midst or else live with an increasingly tainted brand. Trump is issuing no free passes for minding your own business. His model makes you part of the solution or part of the problem. No one gets to sit this one out.
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

January 30, 2017

IDG Ventures India closes Rs $200 M fund: Economic Times

An ET article quotes Venture Intelligence data of VC fund raising in India:
Led by local affiliates of Silicon Valley heavyweights, Sequoia Capital and Accel, VC (with) funds dedicated to India raised $2.2 billion in 2016, up from $1.5 billion in the previous year, according to Venture Intelligence. Another VC fund which made a final close in 2017 was Saama Capital, which mopped up $58 million for its third fund. 
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.


Bombay Stock Exchange: PE Backed IPO Analysis


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

Don't Raise Money From VC In First Round Seed Stage

In a Linkedin article, one of India's most active angel investor Sanjay Mehta advises startups not to raise seed funding from VCs for the following reasons:
  • There is reluctance among new investors at Series A if the VC at seed stage doesn't participate. " For start-up if the VC firm decides not to write the second cheque Series A then it's sure shot curtains for that business as NO other VC firm in the town is going to write that second cheque.."
  • Startups can have "enough & more expertise, face time and mentoring" from the lead angel investor as "Seed stage first cheque funded companies will never be a priority for a VC firm."
  • VCs are more willing to write off investments than angel investors as "losing money is accepted norm for the VC firm with the seed stage first cheque invested companies". ".. VCs are playing a high-stakes all-or-nothing game."
  • Raising a seed round from VCs denies entrepreneurs "the only opportunity for entrepreneurs to bring in marquee names or valuable experts on the cap table."
  • Raising large sums of capital early from VCs "creates a pressure cooker type situation for entrepreneur and forces them to throw money to problems. VC capital always comes with non negotiable deadline to deliver. In comparison, the angel investor rounds are more measured, it's optimum use of capital and focused approach to experimentation and more flexibly to adapt the learning as it's not a stoned deadline."
Click here to read the entire article.

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.



PE investors may go slow on startup funding: Forbes

A Forbes article quotes Venture Intelligence data on venture capital investments:
In 2016, as many as 620 transactions were sealed in the PE/VC space, according to data available with research firm Venture Intelligence. Of this, about 65 percent comprised startup investments. In 2015, the year that created history for the highest amount of PE and VC investments, both by value and volume, of the total of 775 investments sealed in the January-December period that year, 512 were startup deals. 
Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

January 25, 2017

Financial Sector Reforms – Developments and Opportunities

Analysis by

In past one year the Government has put in motion a number of reforms with the intent to attract more foreign direct investment in India and simplify ease of doing business in India. As the year draws to a close, we look back upon the pivotal developments in financial laws effected or proposed during the year. Although there are several areas which could be discussed, such as, change in securities law, land bill, etc; in this article we have covered a brief overview of the developments in (i) corporate bankruptcy laws, (ii) debt restructuring and (iii) foreign direct investment policy.

Corporate Bankruptcy Laws


The corporate insolvency procedure is presently covered under the Recovery of Debt Due to Banks and Financial Institutions Act, 1993, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) 2002, the Companies Act 2013 and Sick Industrial Companies (Special Provisions) Act (SICA), 1985.  Under different laws, different forums, such as, debt recovery tribunals (DRTs), Board of Industrial and Financial Reconstruction (BIFR), the proposed National Company Law Tribunal (“NCLT”) have jurisdiction. This fragmented framework leads to ambiguity in determining jurisdiction. Most of the times the forum is not equipped to handle bankruptcy cases, which leads to inordinate delays.  Keeping in mind these difficulties, the Government has placed before the Parliament the Insolvency and Bankruptcy Bill, 2015 (the “Bill”) with the intent to introduce swift time bound bankruptcy resolution process which simultaneously helps in preserving economic value of the creditors. Some of the significant features of the Bill are as follows:

  • Adjudicating Authority: In case of default in payment of debt by the corporate debtor, the NCLT has the authority to adjudicate the insolvency resolution process, with the appellate authority being entrusted with the National Company Law Appellate Tribunal (NCLAT).
  • Time bound Process: The corporate debtor is provided with 10 (ten) days to make payment of undisputed debts or to provide a proof of dispute to the creditors as opposed to 21 days as presently required. Other than in exceptional circumstances like on account of complexity of the matter or pursuant to approval by the committee of creditors and shareholders, the adjudicating authority is required to complete the insolvency resolution process within 180 days of date of admission of the application.
  • Preservation of Economic Value  Once the application has been admitted and moratorium has been declared by the Adjudicating Authority, the secured creditors cannot enforce their security, the corporate debtor which is subject to insolvency cannot alienate any of the It’s assets and suspension of delivery of essential goods cannot be put into effect. However, if the Adjudicating Authority has approved a resolution plan or the committee of the creditors has resolved to liquidate the corporate debtor, the moratorium ceases to have effect. Significant powers have been given to committee of creditors to decide the best suited course of action.
  • Interim Resolution Professional: During insolvency resolution process, the management of the corporate debtors is placed in the hands of interim resolution professional and powers of the directors are suspended. Such interim resolution professional is entrusted with preserving the value of the corporate debtor. They are also given wide powers to ensure that assets are not stolen from the company and also examine check of the transactions of the company for the last two years to look for illegal diversion of assets. Such diversion of assets would induce criminal charges. The proposal would go a long way in curbing asset stripping by promoters.
  • Fast-track insolvency resolution: The fast-track insolvency resolution process envisages completion of insolvency process of eligible corporate debtors within 90 days of the commencement date. 

Private equity industry especially the start-ups and companies laden by heavy debt has often seen that the current bankruptcy regime has not proved effective to protect the investors interest nor provide effective liquidation in a time bound manner. With the changes proposed in the Bill it is expected to address these two concerns and also consolidate the bankruptcy laws.

Debt Restructuring

With the intent to strengthen the debt-restructuring framework in the country, the Reserve Bank of India, on June 8, 2015, notified the “Strategic Debt Restructuring Scheme” (“SDR Scheme”).  The SDR Scheme enables the lenders to convert the whole or part of their outstanding loan and interest into equity. The SDR Scheme requires the banks to take over control of the borrower, which gives the banks more control in recovering their debts.  The SDR Scheme stipulates the pricing formula of conversion. 

Upon conversion of debt into equity, such lenders are required to divest, as soon as practical, their shareholding in the borrower to a “new promoter” who is not a part of the existing promoter group of the borrower. Once the lenders have divested their holdings, the asset classification of the account may be upgraded to “standard” and the loan may be refinanced. However, the recent newspaper reports suggest that those lenders who have converted their debt into equity under the SDR Scheme may be staring at the possibility of significant write-offs in their effort to sell the equity to a new promoter. 

Going by the stock exchange notifications, the lenders of Gammon India Limited, IVRCL Limited, Monnet Ispat and Energy Limited, Electrosteel Steels Limited, VISA Steel Limited, and Jyoti Structures Limited appear to have decided to convert their debt to equity of the borrowing company. However it appears that not the entire amount of debt is converted into equity. In case of Gammon India Limited, the lenders have decided to convert debt worth 245 crores out of the entire outstanding debt of 3500 crore in 60.1% of equity capital of the borrower. Keeping in mind such large amount of debt still remaining outstanding, the “new promoter” acquiring the equity stake is likely ask for a haircut from the lenders. The Reserve Bank of India is presently seeking feedback from the banks and is likely to tweak the SDR Scheme to make it more viable for the banks. 

The above could potentially lead to opportunities for private equity funds looking for possibilities of investing in special situation assets. Although such a market in India is very nascent, with possibility of getting substantial control and effective management in such companies does create a new area of investment opportunities. 

FDI Reforms


With the objective of attracting more foreign direct investment in India, the government has liberalized the foreign direct investment (FDI) policy.  These reforms broadly fall in the category of (i) increase in sectoral caps, (ii) relaxation of conditions, and (iii) FDI permitted in new sectors. 

We have discussed below some of the key reforms which will be play a significant role in attracting FDI in the country:

  • FDI in Limited Liability Partnerships (LLPs):  Earlier FDI in LLPs was not permitted without the prior approval of the Government. With the introduction of new reforms, FDI is LLPs is permitted without the Government approval if the LLP is engaged in the sectors where 100% FDI is permitted under the automatic route and no FDI-linked performance conditions are prescribed (the “Permitted Sectors”).
  • Downstream Investment by LLPs: LLPs with FDI can also make downward investment in companies or other LLPs which are engaged in Permitted Sectors.
  • FDI in Construction Sector: Earlier, to procure FDI, the companies engaged in construction and development sector were required to comply with a number of conditions, including the minimum area of development, requirement to remain invested till completion of the project, which are now are done away with.  After the reforms, foreign investor can exit the company before the completion of the project if the lock-in period of 3 years from each tranche of investment is completed.  The companies receiving FDI can now also engage in the business of leasing properties. These positive steps by the Government will pave the way to attract investment in Real Estate Investment Trusts and Infrastructure Investment Trusts.  FDI compliant entities would now also be able to engage in property leasing business.
  • Swap of Shares: Earlier swap of shares between a resident and a non-resident entity required an approval from the Government. After the reforms the shares of two companies can be swapped without any approval, provided both companies are engaged in sectors in which FDI is permitted under the automatic route. However, for sectors under the Government approval route, investment by way of swap of shares will still need the approval of the Government. In case of a distressed sale, the foreign investor can seek to obtain shares of the purchaser with the prospect of getting an upside at a later date without seeking any Government approval.
  • Liberalised sectors: 100% FDI under the automatic route is now permitted in sectors such as non- scheduled air transport service, ground handling services, teleports, Up-linking of Non-‘News & Current Affairs’ TV Channels / Down-linking of TV Channels, credit information companies and duty free shops. 
The Government has certainly taken a number of steps in the right direction and we will hopefully get to see the positive impact of these reforms in the coming year.  The above could only get better with the “Startup India” initiative of the Government, which is expected to give investment push to start-up sector in India and potentially create more opportunities for venture and angel funds.

Darshan Upadhyay and Amruta Kelkar are Partner and Associate Manager at Economic Laws Practice (ELP), Advocates & Solicitors. They can be reached at darshanupadhyay@elp-in.com and amrutakelkar@elp-in.com  for any comment or query. 

The information provided in the article is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein.

January 24, 2017

Mint-Venture Intelligence Deal Tracker (Jan 16)

Venture Intelligence is powering the (Weekly) Deal Tracker on The Mint. The Weekly update is usually featured in the Deals Section (Page 3) on every Monday.


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.


Wydr raises Series A from Stellaris, Bessemer and Jungle Ventures: Forbes

A Forbes article quotes Venture Intelligence data on PE/VC investments in India:
The funding signals how risk capital investors are still betting big on the burgeoning startup ecosystem. In 2016, as many as 620 transactions were sealed in the PE/VC space, according to data available with research firm Venture Intelligence. Of this, about 65 percent comprised startup investments. In 2015, the year that created history for the highest amount of PE and VC investments both by value and volume, of the total of 775 investments sealed in the January-December period that year, as many as 512 were startup deals. 

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

FDI outflows matches FPIs’ in volatility: Economic Times

An Et article quotes Venture Intelligence data on PE/VC Exits in 2016:
In the April-November period, PE exits were valued at $4.8 billion, according to industry data tracking firm Venture Intelligence. 


Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

January 23, 2017

Cyril Amarchand Mangaldas Tops League Table for Legal Advisors to M&A Transactions in 2016

J Sagar Associates, AZB & Partners claim the No.2 & No.3 slots


Cyril Amarchand Mangaldas(CAM) topped the Venture Intelligence League Tables for Legal Advisors to M&A transactions in 2016 advising deals with a value tag of $25.8 billion (across 38 qualifying transactions). CAM was followed by J Sagar Associates(JSA) which advised deals worth $15.5 billion (across 37 deals) and AZB & Partners ($13.8 billion across 50 deals).

The Venture Intelligence League Tables, the first such initiative exclusively tracking transactions involving India-based companies, are based on value of PE and M&A transactions advised by Transaction and Legal Advisory firms.

CAM advised M&A deals during the period included the merger of Max Life and HDFC Life and the $1.4 billion acquisition of cement assets of Lafarge Holcim by Nirma. Transactions advised by JSA included the $1.6 billion acquisition of a majority stake in telecom tower arm of Reliance Communications by Brookfield and the acquisition of Essar Oil by Rosneftatan enterprise value of $13 Billion. AZB advised deals included the $1.37 billion acquisition of Weslpun Renewable Energy by Tata Power and the $1.2 billion acquisition of Alliance Tire Group by Yokohama Tire Corporation.

International law firm Slaughter & May ($11.3 billion across 2 deals) and Khaitan & Co.(KCO) ($10.5 billion across 46 deals) completed the top five for 2016.

AZB topped the tables in terms of deal volume, while KCO and CAM rounded up the top 3 slots. JSA and Shardul Amarchand Mangaldas (SAM) ($9.3 billion across 37 deals) finished the year at fourth spot while Luthra & Luthra ($3.1 billion across 28 deals) took the fifth spot in terms of quantum of deals advised.

By Industry


Platinum Partners advised two PE deals worth $1.5 billion involving Information Technology (IT) focused companies, followed by Samvad Partners ($1.3 billion across six deals) and SAM ($1.2 billion across six deals). SAM topped the BFSI deal table advising nine deals with a value tag of $4.1 billion, followed by AZB  ($3.8 billion across 10 deals) at second spot while Majmudar & Partners and S&R Associates - who advised the MAX Life and HDFC Life merger - finished at third spot.

JSA topped the Infrastructure deals table, advising eight deals worth $15 billion. CAM (15 deals worth $14.8 billion) and Slaughter & May ($11.3 billion across 2 deals) completed the top 3 slots.

KCO led the Healthcare deals table advising 10 deals with a value tag of $1.53 billion whereas CAM (six deals worth $1.3 billion) and Simpson Thacher & Barlett (Gland Pharma – Fosun Pharma worth $1.26 billion) accounted for the second and third spots. Among Education deals, AZB (ChhayaPrakashani – S Chand & Co worth $25 million) led the table while the second spot was claimed by IndusLaw, Nishith Desai Associates and Samvad Partners (who advised the $8 million majority acquisition of Edupristine by Kaizen PE and Devry). JSA which advised the acquisition of ThinkLABS by FitKids finished at third spot.

New entrants to the Venture Intelligence League Table Legal Advisors for M&A deals during the year included Spice Route Legal, CounsePro – Formerly Menon Associates, and TRA Law.

The full league tables can be viewed online at 

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

January 22, 2017

Arpwood Capital tops Transaction Advisor League Tables for M&A Deals in 2016

EY, Standard Chartered Bank take no.2 and no.3 slots; EY, PwC top inclusive of due diligence services



Arpwood Capital topped the Venture Intelligence League Tables for Transaction Advisor to M&A transactions for 2016 advising M&A deals worth $11 billion (across four qualifying deals) followed by Ernst & Young ($8.5 billion across 13 deals) and Standard Chartered Bank ($7.7 billion across four deals).

The Venture Intelligence League Tables, the first such initiative exclusively tracking transactions involving India-based companies, are based on value of PE and M&A transactions advised by Transaction and Legal Advisory firms.

Arpwood Capital advised M&A deals during the year included the acquisition of Essar Oil by Rosneftat an enterprise value of $13 Billion and the merger of Max Life and HDFC Life. Ernst & Young advised deals included the merger of wireless business of Reliance Communications with Aircel and the $23 million acquisition of online poker service adda52.com by Delta Corp. Standard Chartered Bank advised the $2.4 billion acquisition of the cement capacity of Jaiprakash Associates by Ultratech Cement and the $93 million acquisition of Excel Crop Care by Sumitomo.

SBI Capital Markets ($7.6 billion across five deals) and Kotak Investment Banking ($6.7 billion across seven deals) completed the List of Top 5 for 2016.

Inclusive of its roles in due diligence and related advisory activities, EY topped the League Tables for Transaction Advisor for M&A in 2016 advising 54 deals worth $17.1 billion (13 being for pure financial advisory). PwC came in next advising M&A Deals worth $11.1 billion across 45 deals (8 of them were pure financial advisory). M&A deals advised by PwC included the $21 million acquisition of Andhra Pradesh Expressway by Cube Highways and the $24 million acquisition of foundry unit of Larsen & Toubro by Bradken. EY also topped the tables in terms of deal volume, followed by Axis Capital (8 deals worth $3.8 billion), PwC (8 financials advisory deals worth $91 million) and Technology Holdings (8 deals worth $280 million). Kotak and KPMG (7 deals worth $5.3 billion) came in third. Deloitte (6 deals worth $25 million) and JM Financial (6 deals worth $4.7 billion) came in next while Ambit Corporate Finance (5 deals worth $4.7 billion), Equirus (5 deals worth $126 million) and SBI Caps (5 deals worth $7.6 billion) rounded up the top five slots in terms of deal volume.

By Industry

Technology Holding advised 8 M&A deals worth $280 million involving Information Technology (IT) focused companies, followed by JM Financial (Geometric – HCL Technologies worth $263 million), Deloitte ($200 million across two deals). EY topped the BFSI tables advising five deals with a value tag of $3.5 billion, followed by Kotak ($3.5 billion across three deals) and Arpwood Capital ($3.1 billion across two deals).

SBI Caps topped the Infrastructure deals table, advising four deals worth $7.6 billion. Arpwood Capital (Essar Oil – Rosneft, Others) and Standard Chartered (two deals worth $5.2 billion) completed the top 3 slots.

Jefferies & Co. led the Healthcare deals table advising two deals with a value tag of $1.9 billion whereas Credit Suisse (Claris Lifesciences - Baxter International worth $630 million) and Mehta Partners (Novartis - Sun Pharma worth $300 million) accounted for the second and third spots.

Among Education deals, Sprout Capital led the table advising the $40 million acquisition of the Real Estate assets of Jain Group School by Cerestra, followed by The RainMaker Group which advised the acquisition of a majority stake in EduPristine by Kaizen PE and DeVry.

New Entrants to the Venture Intelligence M&A table for Transaction Advisors during 2016 include The RainMaker Group, Lastaki Advisors, Ladderup, BDA Partners and Greenstone Energy Advisors.

The full league tables can be viewed online at 

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

January 19, 2017

Shardul Amarchand Mangaldas tops Legal Advisor League Table for PE deals in 2016

AZB & Partners, Cyril Amarchand Mangaldas claim the No.2 & No.3 slots



Shardul Amarchand Mangaldas (SAM) topped the Venture Intelligence League Table for Legal Advisor to Private Equity Transactions during 2016. SAM advised PE deals worth $6,500 million (across 47 qualifying deals) during 2016. AZB & Partners ($5,778 million across 58 deals) and Cyril Amarchand Mangaldas ($3,243 million across 34 deals) followed next. J Sagar Associates ($2,378 million across 28 deals) and Samvad Partners ($2,082 million across 43 deals) completed the top five for 2016.

The Venture Intelligence League Tables, the first such initiative exclusively tracking transactions involving India-based companies, are based on value of PE and M&A transactions advised by Transaction and Legal Advisory firms.

SAM advised its Canadian PE firm client Brookfield on the $1,630 million acquisition of a majority stake in telecom tower arm of Reliance Infratel and the $1,000 million acquisition of office and retail space unit of the Hiranandani Group. 

Transactions advised by AZB included the $200 million investment in Snapdeal by Ontario Teachers’ Pension Plan and the $300 million investment in Sanmar Group by Fairfax Holdings. Transactions advised by CAM included the $321 million investment in Bangalore International Airport by Fairfax Holdings and the $175 million investment in Hike by Tiger Global, Tencent and Foxconn.

AZB topped the tables in terms of deal volume, while SAM and Samvad Partners came in next. Samvad Partners advised deals included the $85 million investment in Western UP Tollway by I Squared Capital and the $17 million investment in Treebo Hotels by Bertelsmann India Investments, SAIF and Matrix Partners India. BMR Legal ($867 million across 41 deals) and CAM finished the year at fourth and fifth spot in terms of quantum of deals advised. Debutant law firm VERTICES PARTNERS advised as many as 23 deals (Approx $101 million) in 2016 - in just ten months after kicking off operations - to break into the list of Top 10 law firms.

Among Early Stage investments, NovoJuris led the tables in terms of deal volume advising 22 deals while VERTICES PARTNERS took the second spot advising 21 early stage deals.

By Industry

SAM advised 14 PE deals worth $1,655 million involving Information Technology (IT) focused companies, followed by Platinum Partners ($1,520 million across two deals) and Samvad Partners ($1,325 million across 25 deals). SAM also topped BFSI tables advising nine deals with a value tag of $1,055 million, followed by AZB & Partners ($940 million across 14 deals) and CAM ($525 million across five deals).

SAM topped the Infrastructure deals table, advising six deals worth $1,892 million. J Sagar Associates (three deals worth $1,658 million) and international law firm Herbert Smith Freehills which advised the Reliance Infratel – Brookfield deal worth $1,630 million completed the top 3 slots.

Khaitan & Co. led the Healthcare deals table advising seven deals with a value tag of $385 million whereas CAM (four deals worth $174 million) and J Sagar Associates (eight deals worth $134 million) accounted for the second and third spots. Among Education deals, BMR Legal led the table advising four deals worth $91 million. Nishith Desai Associates ($67 million across two deals) and Khaitan & Co which advised NSPIRA – CX Partners worth $59 million, completed the top three slots.

Apart from VERTICES PARTNERS, other new entrants into the Venture Intelligence league table in the PE category during 2016 included CounsePro (Formerly Menon Associates), TRA, Avigna Law, Spice Route Legal and King Stubb & Kasiva.

The full league tables can be viewed online at http://www.ventureintelligence.com/leagues.php

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

January 18, 2017

SBI Capital Markets Tops League Table for Financial Advisor to Private Equity Transactions in 2016

Unitus Capital tops by deal volume; PwC, EY top table inclusive of due diligence & other services


SBI Capital Markets claimed the top position in the Venture Intelligence League Table for Transaction Advisor to Private Equity deals in 2016 acting as financial advisor to three qualifying PE investments worth $2,030 million. SBI Caps which advised the $1,630 million acquisition of tower assets of Reliance Infratel by Brookfield was followed by Ambit Corporate Finance ($1,645 million across two deals) and UBS Securities ($1,630 million across one deal). All the three investment banks were advisors to the biggest PE deal of 2016: the $1,630 million acquisition of telecom tower assets of Reliance Infratel by Brookfield.

The Venture Intelligence League Tables, the first such initiative exclusively tracking transactions involving India-based companies, are based on value of PE and M&A transactions advised by Transaction and Legal Advisory firms.

Kotak Investment Banking ($825 million across eight deals) and Avendus ($811 million across 15 deals) completed the top 5 slots for 2016 by value.

Unitus Capital topped the 2016 tables in terms of deal volume, advising a total of 16 deals ($72 million). Avendus and Spark Capital Advisors ($380 million across 12 deals) completed the top 3 slots in terms of deal volume. Unitus Capital advised deals included the $14 million fund raise by school financing NBFC firm Varthana from Kaizen PE, Zephyr Peacock, Omidyar Network, LGT Venture Philanthropy and Elevar Equity. Spark Capital advised the $68 million investment in Apollo Health and Lifestyle by IFC.

o3 Capital ($320 million across 11 deals) and Masterkey Holdings ($42 million across 10 deals) took the fourth and fifth spots in terms of deal volume.

Inclusive of its roles in due diligence and related advisory activities, PwC topped the league table for transaction advisor for PE deals in 2016 advising deals with a value tag of $4,044 million (across a total of 59 deals). PwC advised deals included the $30 million investment in Maiyas Foods by Peepul Capital. Ernst & Young came in second advising 47 deals worth $3,277 million, which included the $18 million investment in Anthea Aromatics by ICICI Venture.

Among Impact / Social Venture investments, Unitus Capital was followed by Intellecap in terms of number of deals advised - eight deals with a value tag of $38 million including the $25 million investment in Electronic Payment and Services by Apis Partners.

Among Early Stage investments, IndigoEdge topped advising eight deals worth $32 million. IndigoEdge advised deals included the $10 million investment in Shadowfax by Eight Roads Ventures. Dexter Capital which advised the $2 million investment in Sheroes by Lumis Partners, The HR Fund and others took the second spot advising six deals worth $12 million.

By Industry


Avendus advised 10 PE deals worth $494 million involving Information Technology (IT) focused companies, followed by Credit Suisse and Jefferies & Co. (who advised the Quest Global – Advent International deal worth $80 million.) Signal Hill Capital finished third advising three tech deals worth $57 million.

Kotak led the BFSI tables advising three deals with a value tag of $448 million, followed by SBI Caps ($400 million across two deals) and Ernst &Young($268 million across two deals).

Among Education deals, o3 Capital topped the tables advising deals worth $135 million across two deals. Anand Rathi which advised the NSPIRA – CX Partners deal ($59 million) and Avendus which advised the $50 million fund raise by Byjus Classes, completed the top three slots.

Morgan Stanley which led the Energy deals table advising the PE investment by GIC and ADIA in Greenko Group was followed by Ernst & Young (Hero Future Energy – IFC worth $125 million) and Deloitte (Azure Power – CDPQ worth $75 million)

Among Cleantech investments, Greenstone Energy Advisors advised the Punj Lloyd Solar Power – IDFC Alternatives deal while Encito Advisors acted on the fund raise by EcoCentric Mangement from individual seed investors.

2016 saw lot of new transaction advisors entering the Venture Intelligence League Table including TheRainMaker Group, Mazars India, Encito Advisors, Sparrow Advisory, BDA Partners and Proficio Advisors.

The full league tables can be viewed online at 

Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.

PE/VC investments in auto components hits all-time low in 2016: Business Standard

A Business Standard article quotes Venture Intelligence data on PE/VC investments in the Auto components space:
According to Venture Intelligence data, PE and VC investors invested $38 million in 2016 as against $144 million in 2015 and $158 million in 2014. The value of investments stood at $58 million and $633 million in 2012 and 2013 respectively. The year 2013 was a blockbuster year for auto component industry with KKR making an investment of $460 million in Alliance Tire Group. Top deal in 2016 was $17 million, lowest since 2011.
..$1.05 billion exit of IFC and KKR from Alliance Tire Group in March 2016, when the shares were acquired by Yokohama Rubber Co. KKR reported 2.38 X in this exit.
 The other two major exits were Actis through IPO in Endurance Technologies in October 2016 and Navis Capital selling its investments to promoters in Classic Stripes in April 2016. The two investors made 2.46X and 0.42X respectively.

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Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.