Accenture Acquires Impendi, A Private Equity Cos. Focussed Sourcer/Procurer

Accenture Expands Capabilities for Private Equity Clients with Acquisition of Impendi

Accenture has acquired Impendi, a sourcing and procurement services provider with a focus on private equity clients, expanding a critical capability to Accenture’s growing offerings for this industry.

Impendi helps private equity companies make sourcing and procurement decisions that increase their profitability and improve the bottom line of their portfolio companies. The firm’s procurement analytics offering allows clients to track spend, identify opportunities for savings and cash release, and improve supplier diversity across their portfolio, as well as conduct due diligence and investment research – leading to faster time to value with their investments.

Accenture has been significantly expanding its private equity capabilities and senior talent in the past year to address growing demand from private equity investors.

“We’ve been focused on adapting Accenture’s leading industry and technology expertise into repeatable solutions tailored to the needs and prioritized levers of private equity portfolio company executives, investment professionals and operating partners,” said Jay Scanlan, global lead of Accenture’s Private Equity group. “Impendi will help us accelerate that mission with their innovative sourcing and procurement solutions, proven advisory, execution and analytics services for the private equity industry from due diligence to value creation and value delivery."

Accenture’s capabilities for private equity clients span advisory, analytics, digital, growth, operations and technology, including rapid IT diagnostics, cloud migration and managed services like cyber security. Additionally, the private equity group focuses on acquiring better assets more effectively, reducing operational complexity, realizing margin expansion and revenue growth and managing risk more comprehensively. They are designed to drive end-to-end outcomes identified in investment theses and to help produce better returns on investment and sustained growth.

“By joining our Sourcing and Procurement practice, Impendi can help bring the full breadth of our third-party cost reduction and procurement transformation capabilities – from advisory to technology and managed services – to private equity clients and their portfolio companies,” added Jack Azagury, group chief executive for Strategy & Consulting at Accenture. “This move is part of our continued investment to serve our private equity clients and enables us to further expand the Sourcing and Procurement practice while building capabilities that help our clients on their path of continuous reinvention and to realize value at pace.”

Founded in 2014, New York-based Impendi was founded by former partners of one of the world's largest Big Data firms and has approximately 130 sourcing and procurement professionals in the U.S. and India. Beyond leading private equity firms, its clients include companies in the financial and professional services, manufacturing, consumer goods and technology industries.

Nathan MacCarter, managing partner and CEO of Impendi, commented: “Leaders in private equity and other industries trust Impendi for our knowledge of strategic sourcing, expertise in spend categories and data-driven insights that help guide decision-making and enhance enterprise value. As part of Accenture, we will be able to capture even greater value for clients.”

Terms of the agreement were not disclosed.

Private Equity Firms Entered 2024 with Massive $2.59 Trillion in Unspent Cash

The private equity industry has entered 2024 with massive amounts of unspent investor cash ( ~ dry powder) and an unparalleled stockpile of ageing deals that firms must sell in coming years.

Private equity firms were sitting on a record $2.59 trillion in cash reserves available for buyouts and other investments as of December 15, according to S&P Global Market Intelligence.

Nearly a quarter of that cash was held by 25 of the industry's largest groups, including Apollo Global, Blackstone, KKR, CVC Capital and Advent International. Notably, 19 out of these 25 firms were headquartered in the US.

It is to be noted that this analysis report is limited to the top 25 global private equity investors by dry powder with investments announced or completed between Jan. 1, 2023, and Nov. 30, 2023.

Industry executives and their advisers believe the new year presents a big test for private equity investors as they seek ways to sell down large large investment while searching for new opportunities.

The dry powder total as of Dec. 1 represented close to an 8% increase over the December 2022 total of $2.39 trillion, according to S&P Global Market Intelligence and Preqin data.

Apollo Global Management Inc. led the list of these PE firms, with $55.14 billion in unspent capital available to its private equity strategies, followed by KKR & Co. Inc. and CVC Capital Partners SICAV-FIS SA. 

According to consultancy Bain & Co., the number of private equity exit transactions in last quarter was near a decade low, which left buyout groups with a record $2.8 trillion in unsold investments and what Bain described as “a towering backlog” of companies to exit.

In India, the country's startup ecosystem is currently sitting on $20 billion (~ ₹ 1.6 trillion) in dry powder waiting to be allocated, according to Rajan Anandan, managing partner, Peak XV Partners (formerly Sequoia India).

According to Financial Times, the private equity groups selling businesses to each other had increasingly used complex structures. Those included performance-based earn-outs — which pay sellers additional cash if a business performs better than expected — or other tools such as deferred payments from buyers and large rollover investments from sellers in order to get deals done.

Quoting Chris Zochowski, a private equity partner at Shearman & Sterling, the Market Intelligence report states that the buyers want lower asset prices, and the resulting valuation gap creates hesitancy to execute deals.

Chris forecasts an upward trend in deal activity in the next 12 months, at a much greater rate than what was witnessed in 2023.

Deployment of the massive Capital, raised by PE firms, could begin in 2024 if inflation sinks down and interest rates begin to stabilize.

In An Asia's Largest of 2023, Bain Capital Closes 5th Pan-Asia PE Fund At $7.1 Bn, Exceeds Target by 40%

Boston-based private investment firm, Bain Capital, has completed the final close of its 5th pan-Asia private equity fund (Bain Capital Asia Fund V) at $7.1 billion, exceeding its target by 40%, reported news agency Reuters.

With an initial target of $5 billion, Bain Capital started fundraising for 5th Fund in the second half of last year.

At $7.1 Billion, the fund is Bain Capital's biggest to date for Asia and also the region's largest private equity fund raised this year, according to Preqin data.

The investment firm itself committed $750 million to this latest fund. Japan will be the focus area of the latest fund.

David Gross, Bain Capital's Asia managing partner, told Reuters that he sees investment opportunities in service businesses for healthcare, information and entertainment sectors, software companies and consumer sectors especially in Japan and India.

This comes within a month after Bain Capital and Smith Hill Capital, an affiliate of Procaccianti Companies, formed a joint venture to launch a private lending platform with the objective of deploying $1 billion of gross capital over the next several years.

Asia-focused fundraising totalled $73 billion so far this year, nearly half of 2022's annual amount and less than a third of the $299 billion raised in 2021, said the Reuters report on the basis of Preqin data.

In June this year, Bain Capital was ranked 13th in Private Equity International's PEI 300 ranking of the largest private equity firms in the world.

Bain Capital's businesses include private equity, venture capital, public equity, and credit.

Tata Capital Healthcare Fund II Invests Upto $10 Mn in Apex Kidney Care

Investment to help the chain expand its dialysis services across India

Tata Capital Healthcare Fund II (TCHF II), the healthcare focused private equity fund of Tata Capital Ltd., announced that it has invested an amount of upto $10 million in Apex Kidney Care (AKC) for an undisclosed equity stake. AKC is India’s second largest dialysis chain in the country and will utilize the newly infused capital to expand its dialysis services across the country.

India has an estimated 2 mn Chronic Kidney Disease (CKD) Stage -5 patients (kidney function below 15%). There are 0.2mn to 0.22mn CKD-5 patients getting added annually. Currently, ~21mn dialysis sessions are conducted on an annual basis in India, and this is estimated to be an abysmal ~11% of the overall annual need of the country. This indicates a significant need gap caused due to a combination of accessibility, affordability and compliance challenges.

Vamesh Chovatia, Partner, Tata Capital Healthcare Fund II

Speaking on the partnership, Mr. Vamesh Chovatia, Partner, Tata Capital Healthcare Fund II said, “We’re excited to partner with Apex Kidney Care, a leader in the dialysis space in the country. At TCHF II, we take a holistic approach to investing capital and backing companies like AKC that address glaring gaps in healthcare. We look forward to working closely with AKC and making high-quality and cost- effective services available to nephrology patients. We believe India needs many more Apex kind of organisations to deliver dialysis services and effectively address the healthcare need gap in the industry.”

Dr. Jatin Kothari, Co-founder and Director, Apex Kidney Care said, “Today is a milestone in the life story of Apex Kidney Care as we announce our partnership with Tata Capital Healthcare Fund II, a relationship that will strengthen our commitment to revolutionize kidney care in India. This new partnership underscores the value of our business model and our vision in delivering high quality dialysis services. The combined strength promises to open many new avenues to advance the business, and favorably touch the lives of thousands of patients fighting kidney disease. We begin this journey with an immense sense of excitement, energy and confidence to be at the forefront in spearheading the change we want to see for all our patients.”

Indranil Roy Choudhury, CEO, Apex Kidney Care said, “This is a defining moment for us at Apex Kidney Care and we are honoured to be associated with Tata Capital Healthcare Fund II. This association will significantly augment our servicing capabilities and will play a critical role in realizing our mission of creating a kidney care ecosystem for patients – built on compassion, respect, transparency and desired treatment outcomes. Tata Capital Healthcare Fund II's support will help us make dialysis and allied services accessible and affordable to all. We will continue to partner with clinicians both in existing and newer geographies as we embark on our journey to significantly ramp up our existing infrastructure. Delivering the desired treatment outcomes and thus improving patient survival will continue to be our purpose.”

About Tata Capital Limited: Tata Capital Limited, a holistic financial services provider caters to the diverse needs of retail, corporate and institutional customers. Its range of offerings include Consumer Finance, Advisory Services, Commercial Finance, Infrastructure Finance, Microfinance, Project Finance, debt syndication, Investment Banking, Private Equity Advisory and Credit Cards. For more information about Tata Capital, please visit www.tatacapital.com

About Tata Capital Healthcare Fund: (TCHF) is a growth oriented private equity fund focused on the healthcare and lifesciences sector in India. The fund is sponsored by Tata Capital Limited, a subsidiary of Tata Sons Limited. TCHF has raised ~ US$ 200 million across two funds - TCHF I (2012) and TCHF II (2022). Across both the funds, TCHF has invested in 16 companies, and has successfully exited 6 companies thus far. For more information about Tata Capital, please visit www.tatacapitalhealthcarefund.com

About Apex Kidney Care: Apex Kidney Care Pvt. Ltd. (AKC) provides comprehensive kidney care and dialysis services at affordable rates to patients suffering from kidney diseases. AKC runs a chain of worldclass dialysis centres and is one of its kind being launched, owned and managed by group of nephrologists. While AKC commands a leadership position in Western India, today it operates more than 180 centres across 120 cities and is all set to emerge as the most dominant dialysis services brand also providing allied services to patients. For more information about AKC please visit www.apexkidneycare.com.

ASK Property Fund Announces Exit of ₹120 crore

In CY 2022, ASK makes cumulative exits of ₹1,000 crore

ASK Property Fund (“ASK”), the real estate private equity arm of the ASK Group, announced an exit of ₹120 cr from Eldeco Centre. The exit amount was ₹120 cr and has achieved multiple of 2.54x and IRR of 21%. The project is a commercial development comprising of retail and office spaces in South Delhi.

Mr. Amit Bhagat, CEO & MD, ASK Property Fund said, “We identified this counter cyclical opportunity post demonetization and decided to capitalise on South Delhi’s robust commercial demand. The healthy returns are the outcome of entry point, asset, and partner selection. In a supply-constrained market, the acquisition of city-centre built to lease commercial development provided a rewarding exit.”

“Excellent metro connectivity, established neighbourhood, availability of public transport & social amenities are the primary reasons of robust demand in the area. New Delhi is an established office market with total stock of more than 12 million sq. ft. and stable vacancy rate of around 10-12%”, he added.

With the latest exit, ASK has made cumulative exits of ₹1,000 cr in calendar year 2022. It has been an eventful year for ASK Property Fund across fund-raising, investments and exits. They’ve raised approx. ₹800 cr and are targeting ₹1,500 cr by March 2023. Out of this fund, they’ve already committed ₹500 cr.

About ASK Property Fund | ASK Property Fund, [Registered entity: ASK Property Investment Advisors Pvt. Ltd. (ASK PIA)] is the alternate asset investment arm of the ASK group set up to manage and advise real estate dedicated funds. The focus is on private equity investments in self-liquidating mid-income & affordable residential and commercial segments. ASK PIA has raised around ₹5,000 cr (US$ 800 mn) since 2009 and investors include Family Offices, Ultra High Net Worth Individuals (UHNI), High Net Worth Individual (HNI) and Institutions.

About ASK Group | ASK is a leading player in the asset & wealth management business and primarily caters to the HNI and UHNI market with over three decades of presence. ASK has been a true believer in the Indian growth story and over the years has grown hand-in-hand with its clients across the globe. ASK is represented in India through its three key businesses: Portfolio Management Services & Alternative Investment Funds – ASK Investment Managers Ltd.; Real Estate Private Equity – ASK Property Fund; and Wealth Advisory and Multi-Family Office Service – ASK Private Wealth. It has over 25 offices and branches across India, Dubai, and Singapore. It caters to multiple asset classes and investors (such as HNI, institutional, family office, pension funds, funds of funds and sovereign wealth funds) across Asia, the Middle East, Africa, and Europe. ASK group manages assets over ₹79,500 cr (US$ 9.8 bn) as on November 30, 2022.

Blackstone Acquires a Majority Stake in ASK Investment Managers

Blackstone Acquires a Majority Stake in ASK Investment Managers, India’s Leading Asset and Wealth Management Company

Blackstone (NYSE:BX) announced today that private equity funds managed by Blackstone (“Blackstone”) have acquired a majority stake in ASK Investment Mangers Limited (“ASK”), one of India’s largest asset and wealth management companies, from Advent International and other sellers.

ASK is one of the leading asset and wealth managers in India catering to clients across Asia, the Middle East, Africa, and Europe, and manages more than $10.6 billion in assets (as of December 31, 2021). It is one of the first portfolio managers in India, with nearly three decades of experience in managing the investment needs of India’s high-net-worth individuals, family offices and institutions. ASK also specializes in property investment advisory and wealth advisory services. The company follows a cycle-tested investment philosophy, which prioritizes capital preservation and delivering returns through consistent growth. Its flagship portfolio, Indian Entrepreneur Portfolio, is the largest discretionary Portfolio Management Services (PMS) scheme in the country and along with ASK’s other strategies like Growth and India Select has consistently outperformed markets since inception.

Amit Dixit, Head of Asia for Blackstone Private Equity, said: “Asset and wealth management in India is a sunrise industry benefitting from secular tailwinds including the financialization of household savings and an emerging wealthy population seeking personalized financial advice and products. ASK is one of the most trusted brands in wealth management, built through a track record of consistent performance, customer-centric approach, and best-in-class distributors. The company is led by an entrepreneurial management team and founder who have been together for more than a decade and established a market-leading business. We are excited to partner with ASK in the next phase of its journey.”

Sameer Koticha, Founder Promoter & Chairman, ASK, said: "We are excited about the investment from Blackstone, as a long-term strategic partner. This partnership is a testament to ASK’s high-quality management team and the business we have built over decades. Blackstone’s global reach and deep knowledge of the financial services sector will further strengthen our asset and wealth management businesses and help us grow significantly."

Sunil Rohokale, Managing Director and Chief Executive Officer, ASK, said: “We have built our business with industry-defining products and client-centricity. We are excited to partner with Blackstone in the ASK 2.0 journey to further enhance our capabilities. The existing leadership team will continue to drive us forward, in alignment with our core values. We will continue to bring relevant products and solutions to our customers. We plan to expand our geographic reach to 30+ cities in India as well as in select international markets. Technology will play a significant role in this endeavor as a force multiplier in delivering impeccable client experiences and unlocking efficiencies. We will leverage Blackstone’s global network as a leading alternate asset manager to scale ASK’s various business lines.”

Shweta Jalan, Managing Partner at Advent International, said: “We are immensely proud of all that has been achieved at the business since we became a partner over five years ago. During this period, ASK has undergone transformational change and continued to grow significantly. We would like to thank the management team for all their hard work throughout our time together and we wish the company great success in the future.”

Nomura acted as the exclusive financial advisor to ASK and Advent on the transaction. KPMG and AZB & Partners acted as advisors to ASK. BCG, Ernst & Young, Moelis, Simpson Thacher & Bartlett, and Trilegal acted as advisors to Blackstone.

Blackstone is the world’s largest alternative asset manager. Blackstone seek to create positive economic impact and long-term value for our investors, the companies we invest in, and the communities in which we work. The PE firm do this by using extraordinary people and flexible capital to help companies solve problems. 

Blackstone's $881 billion in assets under management include investment vehicles focused on private equity, real estate, public debt and equity, infrastructure, life sciences, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on a global basis. Further information is available at www.blackstone.com. Follow @blackstone on LinkedIn, Twitter, and Instagram.

ASK is a leading player in the asset & wealth management business and primarily caters to the HNI and UHNI market with over three decades of presence. ASK has been a true believer in the Indian growth story and over the years has grown hand-in-hand with its clients across the globe. 

ASK is represented in India through its three key businesses: Portfolio Management Services & Alternative Investment Funds – ASK Investment Managers Ltd.; Real Estate Private Equity – ASK Property Investment Advisors; and Wealth Advisory and Multi-Family Office Service – ASK Wealth Advisors. 

It has 20 offices and branches across India, Dubai, and Singapore through which it services the needs of clients. It caters to multiple asset classes and investors (such as HNI, institutional, family office, pension funds, funds of funds and sovereign wealth funds) across Asia, the Middle East, Africa, and Europe. ASK’s flagship Indian Entrepreneur Portfolio is the largest discretionary PMS in India as on 31st December 2021 (Source: SEBI website). ASK group manages assets over Rs. 78,500 Cr / USD 10.6 Bn. as on 31st December 2021.

Credence Family Office Enters Into a Strategic Partnership and Invests in Cumulative Ventures

Credence Family Office and Cumulative Ventures today announced a strategic partnership that will help them offer an enhanced set of services and products to their clientele. Serving prominent business families, tech entrepreneurs, angel investors, celebrities across sports and entertainment, amongst others, Credence is one of India’s leading wealth management firms while Cumulative Ventures is an investment banking and corporate advisory company.

Established in 2010 and backed by TIW Private Equity fund, Credence Family is a pioneer in multi-family spaces, offering bespoke solutions for a discerning clientele. The firm caters to the financial needs of a niche set of clientele globally. Their research-led approach ensures timely and intelligent solutions which are customized to the specific needs of each client and include holistic investment advisory on an open architecture platform, tax advisory (domestic and overseas), estate planning and legal assistance, business mentorship, amongst others. It has a stellar team of 50+ people, with offices in 5 cities, serving the needs of 250 + families with advisory assets of nearly US$1billion.

Mr. Mitesh Shah, Founder & CEO, Credence Family Office

Commenting on the announcement, Mr. Mitesh Shah, Founder & CEO, Credence Family Office said “This deal with Cumulative Ventures LLP, demonstrates our intent to continuously expand our client offerings. The team at Cumulative Ventures LLP has managed complex transaction advisory, business consulting, and fund-raising mandates. We intend to launch strategic investor relations for entrepreneurs, micro VC funds, and family offices, a novel idea which is certain of adding value in addition to offering a platform for informed investors."

Mr. Swapnilsagar Vithalani, Founder & Managing Partner of Cumulative Ventures LLP

"Strategic Investment by Credence is a strong endorsement of our team’s entrepreneurial venture now on the path to becoming an institution. With this collaboration, we intend to expand our product offerings and leverage on Credence’s extensive network and client base to enhance each of our business lines" said Mr. Swapnilsagar Vithalani, Founder & Managing Partner of Cumulative Ventures LLP.

Cumulative Ventures was started in 2017 and currently has a team of 40+ people working across Business Consulting and Investment Banking wherein it has handled transactions aggregating to US$100+ Mn. With this alliance, Cumulative Ventures is looking to increase its product offering to a wider spectrum of business families, tech entrepreneurs, and celebrity circuits by offering comprehensive financial solutions across consulting, capital raising through capital market / private markets, and CFO services focusing on business and finance-related activities

Private Equity party set to Continue in New Year; May See 15-20% Growth in Investments

Private equity investments in the country are expected to grow 15-20 per cent in 2020 as investors pin hopes on the country's long growth potential after a blockbuster year when credit flow through regular channels turned slow, according to experts.

While the final figures vary, the amount of PE investments in the year gone by is estimated to be more than the total inflows recorded in 2017 and 2018.

Reflecting bullish sentiments, PE and VC (venture capital) investments soared 18 per cent to USD 44.2 billion at the end of November 2019 compared to the entire 2018, mainly on the back of large inflows into the infrastructure sector, according to global professional services organisation EY.

Prashant Mehra, Partner at leading consultancy Grant Thornton India LLP, said PE investments would have been more than USD 31 billion in 2019.

"We think we will end the year (2019) at USD 48-50 billion of PE/VC investments, which is around 1.7-1.8 per cent of GDP. This is in line with Chinese and OECD country norms, and so it appears that PE/ VC industry has come of age in India.

"Going forward, we expect PE/ VC investments to grow at may be 15-20 per cent in calendar year 2020," Vivek Soni, Partner and National Leader, Private Equity Services, EY (India) said.

Experts opined that various government initiatives, improvement in ease of doing business as well as investment structures like Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) are helping in attracting new class of investors.

Mehra said PE fund raising would continue to show an encouraging trend and termed domestic economic slowdown a temporary factor.

"The macro-economic factors seem positive and the larger objective of continued long-term potential coupled with weak global cues would retain investor interest in India Inc," he noted.

Soni said with yields in the US, Europe and Japan generally on a declining trend, large pools of global capital are hungry for long dated investments in yield generating assets.

"Hence, we are seeing large global pension funds like Canada Pension Plan Investment Board (CPPIB), CDPQ etc as well as sovereign wealth funds like GIC, the Abu Dhabi Investment Authority (ADIA) etc make large investments in the Indian infrastructure sector," he said.

The growth in PE investments was aided by deal sizes becoming larger owing to increasing number of buyouts.

In 2019, there have been at least 99 large deals, valued at more than USD 100 million, aggregating USD 32.9 billion. This compares to 81 large deals aggregating USD 27.9 billion in 2018.

Last year, at least 56 buyout deals worth USD 15.1 billion were recorded. Overall, there were 49 deals valued at USD 10.4 billion in entire 2018.

Sector wise, in 2019, more than 50 per cent of deal values came again from core sectors such as telecom, infrastructure management, energy & natural resources and banking & financial services. The year 2020 would probably be dominated by BFSI and Consumer/ Retail.

Tarun Bhatia, MD and Head of South Asia at risk management firm Kroll, said post IL&FS crisis in late 2018, the credit market dried up and many companies were left wanting for funds for growth.

"PEs took advantage of this opportunity and have been actively investing at attractive valuations. There is growing interest for taking substantial minority or majority stakes. Even buyout market has picked up. Almost a third of transactions are over 50 per cent stake," he said.

In the upcoming Budget, investors are hoping that the government would focus on economic growth, Bhatia noted.

If they don't see that, then investors will re-evaluate investments. They are increasingly asking questions about geo-political risks and growing social unrest – its impact on the broader economy and growing incidence of frauds in listed and private companies, he said. PTI DRR RAM

India's Oldest PE Firm ChrysCapital Raises $850 Mn in Record 4 Months

India’s oldest Private Equity (PE) firm ChrysCapital has closed its latest eighth fund of $850 million corpus in record four months making it fastest fund-raising by any India-bred private equity firm.

This speedy fund-raise suggests that global risk capital providers are positive despite of macro-economic uncertainties worldwide.

The four partners of the asset manager pumped in about $75 million from their side, taking the overall corpus of the fund closer to $925 million.

Founded in 1999, ChrysCapital's partners are -- former Goldman Sachs executive Kunal Shroff, ex-Ranbaxy honcho Sanjiv Kaul, former KPMG executive Ashley Menezes and manufacturing expert Sanjay Kukreja as partners.

[caption id="attachment_128054" align="aligncenter" width="621"] (From left) ChrysCapital partners Ashley Menezes, Sanjiv Kaul, Sanjay Kukreja and Kunal Shroff. Photo: Manoj Verma/LiveMint.com[/caption]

ChrysCapital, which has $4 billion worth of total assets under its management, is known for its 2016 investment in India’s largest stock exchange NSE and cutting other lucrative deals in non-bank financial services company Hero FinCorp and skin care specialist Curatio.

“Given our strong pace of deployment of over $200 million per year and an active pipeline, we decided to embark on raising eighth fund in August 2018,” said Kunal Shroff, managing partner at ChrysCapital.

ChrysCapital has made 80 investments in India and exited 60 of these since its inception. The firm's notable investments in the past include Axis Bank, HCL Technologies, and KPIT Technologies.

Last month, ChrysCapital has acquired a controlling stake of 80% in US-based healthcare service provider GeBBS Healthcare Solutions, in a deal worth Rs 1,000 crore ($140 million).

In April last year, the PE firm has hired former SBI chairperson Arundhati Bhattacharya as an advisor.

Source - Times of India

Softbank Contributes Nearly 24% To India's PE Investments Till Date

With almost nine months down on the calendar of 2017, transaction research firm Venture Intelligence decided to evaluate the progress of private equity investments recorded in the country in the year so far and unearthed some interesting facts and figures.

The firm found out that, the first nine months of 2017 has seen private equity firms investing about a whopping USD 17.6 billion in Indian firms, a figure which is already past the previous record of USD 17.3 billion in the year 2015.

Divulging details about the sizes of the deals witnessed, the firm revealed that, in the nine months that have passed since the year starting, India has seen as many as 21 investments over USD 200 million in addition to 15 deals between USD 100 million and USD 200 million.

One of the most interesting facts highlighted by Venture Intelligence is that, Japanese multinational telecommunications and Internet corporation, SoftBank has alone contributed over USD 4 billion of the investment value or 24 per cent of the total amount in the year gone by so far.

The investments which helped the Japanese major achieve this feat include a USD 2.5 billion investment in Indian e-commerce giant, Flipkart; a USD 1.4 billion investment in Indian mobile wallet giant, Paytm; and a USD 250 million investment in Indian-origin hotel room aggregator website, Oyo.

Interestingly, at 402, the number of deals witnessed so far in the year are 23 per cent lower than what was recorded during the same period last year.

Coming to the latest quarter, July-September, about 106 private equity deals took place this time garnering about USD 5.7 billion. This means, the quarter was the second best quarter in the year gone by so far, only behind Jan–Mar 2017, which saw 163 deals going through that churned out a whopping USD 6.4 billion.

In what could be considered as an encouraging figure for the Indian startup scene, the latest quarter saw 13 investments above USD 100 million going through as compared to 10 in the same period last year.

While SoftBank’s USD 2.5 billion investment in Flipkart was the largest investment that took place in the quarter, the other investments that made headlines were made for by BFSI companies- General Atlantic’s USD 240 million buyout of investor services firm Karvy Computershare; Carlyle’s USD 300 million into SBI Cards and the USD 260 million raised by RBL Bank.

Last year saw the Indian startup industry going through a sluggish period when it came to the number of investment deals taking place. The Indian startup industry, which was once the apple of every investor's eye saw experienced investors tightening heir pursue strings and taking much longer than before concluding transactions. But, the latest figures made available by Venture Intelligence show that the industry is bouncing back and how.

This development was first reported in MoneyControl.

Startups Must Develop Stronger Biz Plans To Receive PE/VC Funding: Study

Startup ecosystem has become the buzzword in today’s time. And for any startup funding is the lifeblood for them. Industry experts, institutes, and ministries are trying their best to help aspiring entrepreneurs by providing them with solutions and researchers. Recently, in a report by Assocham-Hammurabi & Solomon, highlighted that startups need to develop stronger and sustainable business plans to receive private equity/venture capital (PE/VC) funding.

The ASSOCHAM-Hammurabi & Solomon joint report titled ‘M&A landscape in India,’ noted that after registering 26 percent dip in fund raising by PE firms last year i.e. from $5.7 billion in 2015 to $4.2 billion in 2016, the year 2017 could be the one for consolidation, with PE/VC (venture capital) firms chasing a business having a strong biz model with a focus on unit economics and profit.

Noting that PE has been a broad-based source of equity capital, both in terms of sectors covered and individual companies, the study said that PE in India has invested in over 3,100 companies across 12 major sectors like telecommunications and others which are critical to the country’s development.

Highlighting the role of PE investments in India’s economy, the study stated that the sector invested a total of more than $103 billion between 2001 and 2014.

It also said that despite a drop in 2008, capital inflows from PE have been more reliable than those from other sources of equity funding, including foreign institutional investment, IPOs and equity issuances, such as secondary offers and convertible instruments.

PE inflows have remained strong, even though India’s GDP (gross domestic product) growth rates have plunged from 9.6 per cent in fiscal 2007 to 4.7 per cent in fiscal 2014 amid high market volatility.Report further stated that to

Report further stated that to fulfill the expectations, the government provided a boost to startups with a number of favorable announcements in the Union Budget 2017, which also addresses certain other concerns of the PE/VC investor community.

The study also said that Indian PE industry, finds itself in the thick of opportunities to map a new route to re-emergence. “Factors like improving business sentiment, making the strategic benefits of PE familiar among Indian enterprises and a pro-reform government would accelerate re-emergence.”

According to the report, the core area to focus on should be the PE/VC exits to generate returns for Limited partners (Lps) and free-up capital for further investment. “M&A activity and a strong primary market are expected to buoy the exits.”

Not only this, the study further highlighted that a strong alliance between stakeholders within the industry and the country’s economic objectives would be required for PE to deliver its full potential to the country’s economy.

“The key factors for the success of private equity are – suitable growth opportunities for the industry and supportive regulatory framework,” said the ASSOCHAM-Hammurabi & Solomon joint study.

It also noted that regulatory framework governing the broader financial services and securities industry in India has a direct impact on private equity investors.

“With the introduction of safe harbor norms for offshore funds which are to benefit PE and VC industry and General Anti-Avoidance Rule (GAAR) from April 1, 2017, which is aimed at improving transparency in tax matters and help curb tax evasion the route to re-emergence looks more realistic now. Considering that external environment provides a unique opportunity similar to the government’s ‘Make in India’ campaign, floating a new campaign on the same lines – ‘Manage Indian investments from India,’ could increase capital investment from domestic and foreign sources. With PE contributing more than 40 percent of equity financing today, a set of cohesive and cogent policies specifically aimed at encouraging the flow of PE should be welcomed,” the report added.

Besides, PE appears to accelerate job growth through its portfolio companies. “Between 2001 and 2016, the number of jobs at companies backed by PE posted a compounded annual growth rate (CAGR) on average of almost 9 per cent during the first five years after investment, while the annual growth rate at comparable companies without PE funds was just under three per cent,” concludes report.