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February 29, 2012

"Can PE become PSPD?"

The Venture Intelligence APEX Awards event is a unique gathering of top executives in the Indian Deal ecosystem including from Limited Partners, PE/VC firms, Investment Banks, Consultants, Corporate Law firms, HR firms etc. The event features a High Power PE/VC industry panel that reflects on the recent trends and the challenges that lie ahead from a dealmaker's perspective.This year's LP-GP Panel, chaired by A V Seshadrinathan, Managing Director of Basiz Fund Services, was titled "Can PE become PSPD?" and focused on how Indian PE managers can build their firms for sustainable success.

Can PE Become PSPD (L-R) Sesh A.V. of Basiz Fund Services, Vishal Tulsyan of Motilal Oswal Private Equity, Paresh Thakker of Religare, Anand RP of Squadron Capital, Avnish Bajaj of Matrix Partners India

More about the topic: Infosys became the darling of investors with Narayana Murthy’s famous Predictability-Sustainability-Profitability-De-risking (PSPD) formula. With 900+ investments turning over 4+ years old this year and with so many GP teams having been on the road for 12+ months, 2012 will clearly be a year of reckoning for Indian Private Equity & Venture Capital. Can the industry take a leaf from Infy’s Mantra to re-assure LPs that the best years are ahead of us?

Avnish Bajaj, Managing Director, Matrix Partners India, said that since sentiment related market (and hence valuation) swings in India is very high, his firm has decided to time its investments and exits - within its focus sectors - accordingly. For instance, the recent bursting of the second "Internet bubble" in India is presenting the firm with interesting investment opportunities. "We have to combine strategy and opportunism. Within a strategy, you have to be opportunistic. However, opportunism cannot be a strategy," he remarked. Bajaj also pointed out that identifying new sectors - that are not represented in the public markets - is the best way for PE fund managers to showcase the edge this asset class enjoys over public market strategies.

Paresh Thakker, Head – Global Asset Management and Group M&A, Religare, felt one of the main reasons for disappointing exits in Indian private equity is that Indian GPs tend to pay high entry prices on deals - often at premiums to listed peers. The fact that their contracts tend to have a "put option" on the investee company or its promoters tends to make Indian PE firms more lax on valuations. Thakker agreed that having more local capital - especially institutions like banks and insurance companies - participate more in the PE asset class would be good for the overall ecosystem. For instance, it would help the issues faced by growth-oriented SMEs get heard at various fora that these large institutions can influence.

Vishal Tulsyan, CEO, Motilal Oswal Private Equity, pointed how the issue of entry valuations is a bit more nuanced since it's not easy for investors to get sizeable exposure in mid-market listed firms without driving up the price. Also, PE firms investing in unlisted companies have other levers to create value rather than just depend on "Mr.Market" to deliver the upside. He felt that strategic sales will continue to present good exit opportunities for PE/VC investors over the next few years.


Anand RP, Investment Director, Squadron Capital, said it is important for regulations to be designed such that there is not any significant difference in the treatment of domestic and foreign capital. He advised GP teams to "stick to their knitting" and said that trying to combine VC and PE strategies within the same firm might not be a good idea. Also, GPs - especially those running their first funds - need to display a bootstrapped approach when it comes to their salaries, etc - so that they have the creditability when they ask entrepreneurs that they fund to treat the investment frugally. Venture Intelligence is the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports.

February 16, 2012

Deal Alert: Jacob Ballas fund invests in DBM Geotechnics and Constructions

From the Press Release:

Mumbai-based DBM Geotechnics and Constructions Pvt. Ltd. ("DBM") today announced that it has received Rs.100 crores as an equity investment from NYLIM Jacob Ballas India Fund III, LLC (“NYLIM-JB Fund”), a Mauritius based Private Equity investor, for a significant minority stake. DBM is a market leader in geotechnical services and is also engaged in EPC services, mainly in the areas of foundation engineering and marine infrastructure construction.

Commenting on the deal Mr. D B Mahajan, Chairman and Managing Director of DBM said: “We are delighted to induct NYLIM-Jacob Ballas as a partner and with this DBM has achieved one more growth milestone. We believe NYLIM-JB's understanding of the Indian infrastructure sector and global best practices will help DBM to expand business to new heights and create value for all stakeholders. The customers have expressed their faith and trust in our services till date and we remain committed to maintain consistent quality. We are confident that in the near future, DBM will be seen as one of the prominent business organizations contributing to the infrastructure growth of the nation.”

Mr. Sunil Chawla, Partner, Jacob Ballas Capital India Pvt Ltd (“JBC”), investment advisor to the investment manager of NYLIM-JB Fund, said “DBM has carved a niche for itself in the geotechnical investigations and foundation engineering businesses. While these two verticals will continue to aid the infrastructure growth in the country, the engine for growth for DBM in the years ahead will be marine infrastructure construction, given the amount of activity being witnessed, both at the major and non-major ports. NYLIM Jacob Ballas India Fund is happy to partner with DBM and we look forward to contributing to the company's continued success.”

Mr. Chawla will be joining the Board of Directors of DBM.

YES Bank acted as exclusive advisors to DBM on this transaction.

About DBM Geotechnics and Constructions Private Limited

DBM was set up in 1990 by Mr. D B Mahajan, Chairman and Managing Director, as a specialised geotechnical services provider. The Company today enjoys a market leadership position and strong brand equity in the organised geotechnical investigations space in India. Having executed more than 3000 geotechnical projects till date, the Company possesses a wealth of geological data covering virtually the entire coastline and all the states in India. Leveraging on its experience and first-hand knowledge of geotechnical strata, DBM moved into foundation engineering in 2004 and then into ports and marine infrastructure construction in 2008. It is now one of the few players providing full service offerings related to ports and marine infrastructure construction, including design, engineering and project management services.

DBM employs about 440 people and operates about 175 rigs for drilling and piling operations, with capability to drill up to 1,200 meters below the surface level. The Company has a soil mechanics laboratory and an engineering workshop at Taloja, Navi Mumbai. Over the years, DBM has executed projects for various premier public sector organisations including BARC, MMRDA, NTPC, Department of Atomic Energy, Port Trusts like JNPT, MbPT, NMPT, KPT and others, besides working with many large private sector companies.

The full suite of DBM's services includes:
(1) Geotechnical Services - Marine and non-marine geotechnical investigations, topographic and hydrographic surveys, mineral exploration and ground improvement services.
(2) Foundation Engineering - Piling, diaphragm wall, micro piling, pre-stressed rock anchoring and drilling and grouting.
(3) Marine infrastructure construction - Construction of berths/ jetties, diaphragm walls, dolphins, block-wall jetties, breakwaters and supporting infrastructure, etc.

For more information please visit www.dbm.in

About NYLIM Jacob Ballas India Fund III, LLC

NYLIM Jacob Ballas India Fund III, LLC is a Mauritius-based fund with an investment objective of achieving long-term capital appreciation through equity or equity-related investments into companies based in or with significant operations in India. NYLIM-JB Fund and its predecessor Funds have so far invested in 24 companies in a diverse range of sectors including telecom, ports, power, engineering construction, shipbuilding, auto components, IT consulting, general manufacturing, pharmaceuticals, financial services etc. Some of the earlier investments by the Funds include Bharti Airtel, Gujarat Pipavav Port, Punj Lloyd, ABG Shipyard, Reliance Infrastructure, Pipavav Defence & Offshore Engineering Co., Commercial Engineers & Body Builders Co. (CEBBCO), Bhilwara Energy, Mahindra Holidays & Resorts, Financial Software and Systems, SEW Infrastructure, Vivimed Labs and Religare Finvest.

About Jacob Ballas Capital India Pvt Ltd

Jacob Ballas Capital India Pvt. Ltd (“JBC”), based in New Delhi, is the investment advisor to the investment manager(s) of three India focused private equity funds, New York Life International India Fund (Mauritius), LLC, New York Life Investment Management India Fund II LLC and NYLIM Jacob Ballas India Fund III, LLC. JBC’s ten member investment team has over 150 years of collective operating and investing experience, with over 50 years focused on private equity investments in India.

JBC was founded by Mr. Rajan Jetley, Chairman, who is a well known professional and entrepreneur. Mr. Jetley has previously served as CEO of Air India and India Tourism Development Corporation, and as Director of International Airports Authority of India. JBC’s shareholders, apart from Mr. Jetley, include (i) NYLCAP Holdings (Mauritius) which is wholly owned by New York Life Investment Management Holdings LLC, a wholly owned subsidiary of New York Life Insurance Company, (ii) Excelfin Pte Ltd, promoted by Mr B S Ong and Mr David Ban, reputed Asian entrepreneurs with extensive interests in property, retail and lifestyle businesses and (iii) the JBC senior management team, which includes Mr. Srinivas Chidambaram, Mr. Sunil Chawla Mr. Bharat Bakhshi and Mr. Anurag Kumar.

For more information please visit www.jbindia.co.in.

February 05, 2012

Warburg Pincus, Gaja Capital, Inventus Capital win APEX PE/VC Fund Awards

Warburg Pincus, Gaja Capital and Inventus Capital were adjudged the leading Private Equity, Growth Capital and Early Stage investors in India for 2011 at the latest Venture Intelligence APEX Awards. Among corporate law firms, AZB & Partners topped the Venture Intelligence League Tables as the Most Active Legal Advisors (for both Private Equity and M&A transactions) in 2011, while Ernst & Young topped the League Tables as the Most Active Transaction Advisor (PE and M&A) for the year.

The awards were given away as part of Venture Intelligence APEX‘12, the annual conclave of the Indian Private Equity & Venture Capital industry, by Mr. Harsh Mariwala, Chairman of Marico Ltd and Mr.M.Damodaran, Former Chairman of SEBI. Fund accounting KPO firm Basiz was the co-host for the APEX’12 Awards function.

Receiving the “Best Early Stage Investor-2011” Award, Kanwal Rekhi, Managing Director, Inventus said, “This award is especially welcome as it comes at a time when the early stage venture ecosystem in India is maturing rapidly opening up tremendous opportunities for investments. On the back of our strong performance in our first fund, of which this award is a recognition, we look forward to continue backing innovative businesses operating in India as well as the Indo-US corridor.”

Receiving the “Best Growth Capital Investor-2011” Award, Gopal Jain, Managing Partner, Gaja Capital said, "The real winners of this award are the entrepreneurs we back. This is a testament to their efforts and vision as they build the future champions of our economy."

Accepting the “Best Private Equity Investor-2011” Award on behalf of Warburg Pincus, Niten Malhan, Managing Director, said "We see this award as recognition of our team work and our partnerships with distinctive entrepreneurs and management teams. Warburg Pincus has been one of the earliest private equity investors in India and remains committed to helping build durable businesses.

Started in 2007, the Venture Intelligence APEX Awards are the first awards of its kind for Private Equity & Venture Capital funds in India as well as related advisory firms. A key feature about the APEX Fund Awards is that the awardees are chosen by a Jury Panel consisting exclusively of Limited Partners (i.e., investors in PE/VC funds). The jury members for the APEX’12 Fund Awards included executives from Adams Street Partners, Asia Alternatives, Capvent, CDC Group, Evolvence India Fund, Morgan Creek Capital, Pantheon Ventures, Religare Global Asset Management, Siguler Guff, SEDCO and Squadron Capital.

The Most Active Advisor Awards are awarded to the toppers of the Venture Intelligence League Tables for the corresponding year. The League Tables (http://www.ventureintelligence.in/league.htm) are based on the volume of PE and M&A transactions advised by the Transaction Advisory and Legal Advisory firms during the calendar year.

About Basiz
Basiz fund service is a fund accounting service provider that services Fund administrators, Custodians and Prime brokers, based out of Chennai, India. We specialize in various accounting standards and instrument structures. The primary focus is on servicing Hedge Funds, Mutual Funds, Private Equity Firms, Family Offices, Insurance Portfolios and Managed Accounts.

About Venture Intelligence
Venture Intelligence, a division of Chennai, India-based TSJ Media Pvt. Ltd., is the leading provider of data and analysis on Private Equity/Venture Capital and M&A deals in India. For more information, please visit http://www.ventureintelligence.in