Knowledge Partners

 Basiz Fund Service    Economic Laws Practice    Avalon Consulting  

 Spark Capital    Tatva Legal

January 30, 2014

Unitus Capital, BMR Top Transaction Advisor League Tables for Private Equity, M&A in 2013

Ernst & Young retains Most Active Transaction Advisor status inclusive of due diligence, other services

Unitus Capital and BMR Advisors made their entry into the top of the Venture Intelligence League Tables for the Most Active Transaction Advisors for Private Equity and Mergers & Acquisitions deals respectively in calendar 2013.

The Venture Intelligence League Tables, the first such initiative exclusively tracking transactions involving India-based companies, are based on volume of PE and M&A transactions (combined with credits based on fulfilment of criteria) advised by Transaction and Legal Advisory firms.

Private Equity

Unitus Capital made its entry into the top of the Venture Intelligence League Table for Most Active Transaction Advisor (Private Equity) for calendar 2013 acting as financial advisor to 13 qualifying PE investments during the year (and notching up 50 points). Among the transactions advised by Unitus were the $57 million investment by Citi, Morgan Stanley, Tata Capital and India Financial Inclusion Fund in Janalakshmi Financial Services and Lok Capital’s exit from Satin Creditcare Network.

Intellecap and o3 Capital shared the second spot with 32 point (across eight deals) each. o3 Capital advised deals included Multiples PE’s $43-M investment in Milltec Group and TPG’s investment in Sutures India. Intellecap advised investments included Aavishkaar Goodwell and MSDF investing in Arohan Financial Services and SIDBI VC’s investment in Gramco Infratech.

Inclusive of its roles in due diligence and related advisory activities, Ernst & Young retained its status as overall Most Active Transaction Advisor for Private Equity in 2013. Ernst & Young notched up a total of 75 points across a total of 57 deals (6 of them for pure financial advisory). PE deals advised by Ernst & Young during 2013 included Everstone’s $33-M investment in Hinduja Leyland and Warburg Pincus’ investment in Avtec.

MAPE Advisory and Masterkey Holdings, which advised six deals each, completed the top five for 2013. New entrants into the Venture Intelligence league table in the category during 2013 included Cipher Capital Advisors, Signal Hill Capital and Sapphire Professional Services.  

M&A

BMR Advisors made its entry into the top of the Venture Intelligence League Table for the Most Active Transaction Advisor for Mergers & Acquisitions deals for calendar 2013 with 30 points (across 10 qualifying deals). Ernst & Young finished second with 28 points (across 7 deals) while Allegro Advisors followed close for the third spot with 26 points (across 7 deals).

BMR ended the year with 30 points having advised 10 qualifying deals including the $194-M acquisition of Claris Lifesciences’ Infusions Products Business by Japan’s Otsuka and the $45-M acquisition of Four Soft by Kewill Group.

Inclusive of due diligence and related advisory activities, Ernst & Young retained its status as Overall Most Active Transaction Advisor for M&A in 2013 with 76 points across a total of 52 deals (7 of them in a pure financial advisory capacity). Ernst & Young advised M&A transactions included TRIL Roads’ acquisition of IVRCL’s three highway projects and DHFL’s acquisition of DLF’s stake in DLF Pramerica. Allegro Advisors earned 26 points across 7 deals during the same period, while Deloitte earned 29 points across 18 deals.

Other transaction advisors who had advised a significant number of M&A deals during the year include Kotak Investment Banking (5 deals), o3 Capital and Axis Capital (4 deals each).

Some of the new entrants to this year’s M&A league tables included Merisis Advisors, J R Laddha Financial Services and Sapphire Professional Services.

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

Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Most Exhaustive Transactions Newsletter.

January 22, 2014

Deal update: Nexus Venture Partners invests in Uniken

Nexus Venture Partners, India’s leading venture capital firm, announced investment in Uniken (www.uniken.com), a market leader in creating ‘Secure Digital Enterprises’.

“Uniken is disrupting the digital security space with its REL-ID platform that provides military grade security with rich digital experience. We are very impressed with the Uniken team’s passion and speed of execution and excited about this partnership.” said Sandeep Singhal, Co-founder, Managing Director, Nexus Venture Partners who will be joining Uniken’s board. 

Uniken, is a proven security and innovation partner to leading banks and financial institutions, and currently has over a million users on its flagship REL-ID platform. REL-ID, a next generation secure digital platform developed at the Uniken Innovation Center, is a holistic plug and play solution which secures the trusted relationships of an enterprise and enables the delivery of a rich, ubiquitous and secure digital experience to its customers, partners and employees across various platforms and devices. 

Founded in 2003 by a team of senior executives from Tata Research Center, Infosys, IMR Global Services, Uniken is headquartered in Odessa, Florida with its Innovation Center based in Pune, India. “The advent of technologically advanced ways to deliver online services to customers, collaborate digitally with partners and provide a digital workspace to employees – has given birth to new set of threats which are capable of thwarting traditional security controls thereby breaking trust between the organisation and its customers, partners and employees” said Gopi Gopalan, Chairman of Uniken Board. “We are seeing rapid adoption of our path breaking REL-ID platform which provides secure, rich and consistent experience with simplified infrastructure and low investment. With this round of funding, we expect to further leverage the massive market opportunity and accelerate our growth.” 

Sanjay Deshpande, Founder Director, CEO and Chief Innovation Officer, Uniken said “Nexus Venture Partners’ confidence in Uniken validates our longstanding belief that the use of internet for service delivery puts organizations at risk and no amount of security patches will help as internet was never designed to be a secure channel. REL-ID is the only platform that solves this problem at the foundation.” 

About Nexus Venture Partners 

Nexus Venture Partners is India’s leading venture capital fund, with offices in India and Silicon Valley. Nexus team consists of entrepreneurs who have founded and scaled large global companies. The team has invested in a variety of companies leading to numerous successful public offerings and M&A transactions. Nexus has around $600mn under management with an active portfolio of over 50 companies across Technology, Internet, Media, Consumer, and Business Services sectors. The Nexus team plays an active role in helping entrepreneurs and management teams build market leading businesses. 

Nexus partner companies include Cloud.com (acquired by Citrix), Gluster (acquired by Red Hat), Komli, Pubmatic, DimDim (acquired by Salesforce), Snapdeal.com, Netmagic (acquired by NTT Com), Indix, ScaleArc. 

About Uniken 

Uniken is a market leader in creating ‘Secure Digital Enterprises’ through its patented technologies which secure the trusted relationships of an organization with its customers, employees and partners, and also provide a next generation digital experience. Uniken, has been a proven security and innovation partner to the leading organizations, and currently has over a million users on its flagship REL-ID™ platform. 

Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Most Exhaustive Transactions Newsletter.

January 21, 2014

VCs turn cautious in 2013; investment activity down 18% to 206 deals worth $805-M

IT & Healthcare deals dominate while Education, Financial Services and Cleantech cos drop from favor

Venture Capital firms invested about $805 million over 206 deals in India during the twelve months ended December 2013, according to analysis by Venture Intelligence, a research service focused on private company financials, transactions and valuations. The VC investment activity was about 18% lower compared to 2012 which had witnessed 252 transactions worth $898 million.

Top Investments

The largest VC investments of 2013 were the $20 million rounds raised by restaurant chain Barbeque Nation (from CX Partners) and online taxi booking service Olacabs (from Matrix Partners India and existing investor Tiger Global).

Investments by Industry

With 130 investments worth about $404 million, the Information Technology and IT-Enabled Services (IT & ITES) industry retained its status as the favorite among VC investors during 2013 accounting for 63% of the investment activity (50% by value). Healthcare & Life Sciences emerged as the second favorite destination attracting 27 investments worth $181 million, the Venture Intelligence research showed. Agri-business and Food & Beverages attracted seven investments (worth $20 million) and six investments ($30 million) respectively.


Within IT, the other larger sized investments apart from Olacabs, included the $15 million investment in online car listing firm Cardekho (by Sequoia Capital); the $14 million received by online health supplies retailer Healthkart (led by Intel Capital with participation from existing investors Omidyar Network and Sequoia Capital) and the $12.3 million investment in database software firm ScaleArc (from Accel India and existing investor Nexus Ventures).

Online Services companies, which attracted 68 investments worth $237 million in 2013, continued to account for over 50% of IT & ITES investments. Enterprise Software companies that attracted 29 investments worth $97 million in 2013 (compared to 21 investments worth $78 million in 2012) were the next favorite sector within IT & ITES, followed by Mobile VAS companies at 22 investments worth $46 million (as compared 18 investments worth $41 million in 2012).

Investments by Stage
Early Stage investments accounted for 68% of all VC investment activity (44% in value terms) during 2013. The share of Early Stage investment activity however declined significantly from the 83% during 2012.

Investments by Region
Companies based in South India accounted for 41% of all VC investments (55% by value) during 2013. Their peers in Western India accounted for 29% of the pie in 2013 (27% by value). Companies based in North India accounted for 24% of the investments in 2013 (23% by value).

Among cities, companies headquartered in Bangalore and Mumbai were the favorite among VC investors during 2013 attracting 49 investments each, followed by Delhi based companies that accounted for 24 investments and Chennai based companies with 21 investments. Gurgaon and Hyderabad followed with 15 deals and 8 deals respectively.

Most Active VC Firms
Blume Ventures was the most active VC investor during 2013 with 23 investments (22 of them in new companies). Blume was followed by Accel India with 15 investments (5 new); Nexus Ventures and Kae Capital with 14 investments each (with seven and 12 new investments respectively); Sequoia Capital India with 12 investments (8 new) and while Matrix Partners India made 10 investments (8 new).

Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Most Exhaustive Transactions Newsletter.

January 20, 2014

Wacky Forecasts for Digital in 2014

Ramesh Srivats of digital branding firm TenTenTen provided some hilarious ones in Businessworld:
All births will be announced on Facebook, and all deaths on Twitter. Google Plus will look on enviously.
Flipkart will get a few hundred million dollars from VCs in March, July, and maybe November"
The unkindest cut however was reserved for the future of the newspaper:
The newspaper, in the meanwhile, will become a useful archive of all the stuff you read the previous day. It will totally integrate with your digestive system — wrapper for samosas, napkin to wipe mouth, fan to keep you cool while digesting, and companion while ejecting said samosas.
Ouch! Ouch! and Ouch!

PS: Obviously, the article was published well before the sad passing away of Sunanda Tharoor

Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Most Exhaustive Transactions Newsletter.

January 07, 2014

Deal Alert: Blume Ventures invests in health video portal Homeveda

Homeveda, a health video content site focusing on natural health and wellness, has raised funding from Blume Ventures. The company provides short 2 to 3 minute do-it-yourself (DIY) videos on its website, YouTube and Blinkx, as well as via telecom operators Airtel and Vodafone. They are also available on DTH, with Tata Sky. Homeveda will use the funding to scale up operations as well as develop mobile apps. 

The company recently launched on Roku as a standalone channel, and claims to have done over 150,000 views in the first month. Homeveda was launched in May 2012, by Harsh Rohatgi, Vinay Mishra and Hitesh Bhagia, and claims over 200,000 subscribers and close to 30 Million views on YouTube.

Source: MediaNama.com

Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Most Exhaustive Transactions Newsletter.

Deal Alert: Matrix Partners, Axis Bank invest Rs.29.57 Cr more in mobile POS firm Mswipe

Mswipe, a Mumbai-based company which provides point of sale (POS) solutions which enable merchants to accept card payments using their phones, has raised its second round of funding of INR 29.57 crore ($4.77M) for 22.82% stake from Matrix Partners and Axis Bank reveal regulatory filings.  

From the Venture Intelligence PE Deal database: In Jan 2013 Matrix Partners and Axis Bank along with other Angel Investors had invested INR 10.38 Cr for a 19.12% stake. 

Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Most Exhaustive Transactions Newsletter.

Deal Alert: Indian Angel Network, Li Bu Tan invest in xSi Semiconductors

The Indian Angel Network has invested in Bangalore-based integrated chip solutions provider xSi Semiconductors. Lip Bu Tan, the chairman of global venture capital firm, Walden International, has also participated in the round of funding. IAN member Hemant Kanakia will join the board of the company. 

Founded in 2012, the start-up's core focus area is in power management, primarily in LED drivers and voltage regulators. 

 
Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Most Exhaustive Transactions Newsletter.

January 02, 2014

Pros and Cons of investing in Holding Companies: The PE Perspective

Darius Pandole, Partner at PE Firm New Silk Route, has an article in Business Standard on the topic. Extracts:


The +ves:
Secondly, it can assist in raising capital based on the consolidated financial strength of its subsidiaries, which otherwise could be difficult for each individual subsidiary company. Flexibility to reorganize and structure finances is also available for individual businesses. Another key advantage of a holding company structure is that while it allows investment in multiple businesses under one parent company, it also ringfences each business from the risks of the other, by preventing the business performance of one business from affecting the performance and valuation of another.For investors, this offers the option to gain an exposure to any preferred business along with the flexibility to structure the investment (as debt, equity etc.) to meet their investment objectives.
The -ves:
As per the regulatory framework in India, holding companies which do not undertake any operations and are engaged only in the business of holding investments in other companies, may be classified as Non-banking Financial Companies (‘NBFC’). There are a separate set of regulations applicable to NBFCs in India, which need to be complied with. Also, foreign investment in such investment holding companies is subject to approval from the Foreign Investment Promotion Board of India. According to the new Companies Act 2013, a company will be regarded as a holding company of another, if the former holds or controls more than 50% of the total share capital of the latter, i.e., equity (voting and otherwise) and preference share capital. This is significantly wider than the test under the Old Act and will have an impact on the determination of related-party transactions, inter-company loans, etc. 
 
In addition to a cumbersome regulatory framework, the holding company structure has certain inefficiencies that need to be recognized. For instance, in cases where the holding company is not the sole owner of its group companies, distribution of dividends is accompanied by two layers of dividend distribution tax. Secondly, there is a requirement for a holding company to transfer a part of its profits to its reserves which may result in trapped cash that is difficult to upstream to the ultimate shareholders. Thirdly there is limited liquidity for minority shareholders in a holding company as the promoters can retrieve profits from the subsidiaries disproportionately through mergers and demergers; due to which minority investors often seek fall back options along with related structures to secure an exit. As a consequence, the capital markets have often attributed a ‘holding company discount’ when valuing such companies.

Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Most Exhaustive Transactions Newsletter.

Secondary transactions between PE firms dominate landscape in 2013

Overall PE investments plunge to lowest levels since 2009

Private Equity firms invested $7.5 billion (over 384 deals) in India during the 12 months ending December 2013, according to analysis by Venture Intelligence, a research service focused on private company financials, transactions and valuations. The 2013 PE investment numbers, down over 18.5% compared to the $9.2 billion (across 484 deals) invested in 2012, represent the lowest levels witnessed in the last four years in both value and volume terms.

Led by KKR’s $460 million investment in Alliance Tire Group, the four largest investments during 2013 involved global PE investors buying majority stakes from existing investors. The next three largest transactions were all in the IT Outsourcing sector: the $443 million buyout of publicly listed Hexaware Technologies by Baring Asia; the $420 million buyout of GlobalLogic by Apax Partners; and the $270 million buyout of CSS Group by Partners Group. The 18 investments of over $100 million in value during 2013, accounted for as much as 47% of the value pie during the year.

By Industry

With 154 investments worth about $2.3 billion, Information Technology and IT-Enabled Services (IT & ITES) companies topped in terms of both investment value and volume during 2013. The mega buyout transactions in the mature IT Services sector were followed by leaders in the sunrise E-Commerce sector - Flipkart and Snapdeal – that received reported commitments of about $500 million between them during the year. 2013 also witnessed PE firms betting serious dollars on Indian IT products firms going global. The trend was exemplified by well known US-based PE firm Silver Lake Partners choosing to lead a $40 million round in commodities trading software firm Eka Software for its inaugural investment in India. In other significant sized – and departure from the normal - IT industry bets, Peepul Capital, which typically focuses on control transactions, acquired a minority stake in online advertising firm Komli Media (leading a $30 million round with participating from the company’s existing VC backers), while Sequoia Capital India invested $37 million in online restaurants reviews service Zomato Media by joining hands with the company’s existing strategic investor and majority owner, the publicly listed online classifieds firm Info Edge.

The Healthcare & Life Sciences industry was the next largest destination for PE investments in 2013 attracting $1.2 billion across 57 transactions. Here too, the top three transactions involved secondary purchases from existing investors  – the $200 million investment in Gland Pharma (by KKR); the $161 million investment in Dr.Naresh Trehan promoted hospital Medicity (by Carlyle); and the $113 million investment in Emcure Pharmaceuticals (by Bain Capital). Led by KKR’s Alliance Tire buyout, Manufacturing companies attracted about $1.1 billion from PE investors during 2013 across 30 transactions.  Baring Asia's INR 1,400 crore (about $233 million) investment in Lafarge India, the Indian subsidiary of French cement giant Lafarge, was the second largest transaction, followed by buyouts of two more auto components firms: Agile Electric (by Blackstone) and Sansera Engineering (by Citi). The BFSI industry came in next attracting $727 million across 44 transactions, led by banking aspirant JM Financial Products; the private sector Ratnakar Bank; microfinance companies Janalakshmi and Equitas; and non-banking lenders like Cholamandalam, Hinduja Leyland Finance and Repco Home Finance.

By Stage
Buyout deals which accounted for less than 5% of the PE investments in volume terms during 2013, accounted for as much as 27% of the value pie. Late Stage deals accounted for 20% of the investments in volume terms and about 27% in value terms during 2013, the Venture Intelligence research showed. Venture Capital investments accounted for 53% in volume terms and 11% in value terms. Acquisition of minority stakes in listed companies accounted for 14% in volume terms and 10% in value terms.

By Region
Companies based in South India and West India accounted for 36% of the PE investments each (in value terms) during 2013. While the amount (about $2.7 billion) was spread across 148 investments in South India-based companies, it got spread across 127 transactions among West India-based companies. Companies in North India attracted investments worth $1.8 billion (24% of the value pie) across 84 deals.

Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Most Exhaustive Transactions Newsletter.