1. Private Equity

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PRIVATE EQUITYPresented by:Anchal Arora

Shabani NurpuriChetan Taneja

Aman AnandYashashvi Singh

Heena Mehta


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CONCEPT OF PRIVATE

EQUITYMEANING:Private equity is an asset class consisting of equity securities inoperating companies that are not publicly traded on a stockexchange.Capital for private equity is raised from retail and institutionalinvestors.

INVESTMENTS ARE DONE BY:Private equity firmsVenture capital firms : Investment firm that makes venture

investment.Angel investors: Provide capital for business start up usually inexchange of convertible debt or ownership equity.


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INVESTMENT STRATEGIES IN

PRIVATE EQUITY Leveraged buyouts :A private equity firm buys majority

control of an existing or mature firm. Venture capital: Refers to equity investments made,

typically in less mature companies, for the launch, earlydevelopment, or expansion of a business.

Growth capital: Likely to be more mature than [venturecapital] funded companies.

Distressed investments: To investments in equity ordebt securities of financially stressed companies.

Mezzanine capital: Often used by smaller companies

that are unable to access the high yield market.


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OTHER STRATEGIES(that can be considered private equity)

Infrastructure: Investments in various public works thatare made typically as part of a privatization initiative onthe part of a government entity

Energy and power :Investments in a wide variety of

companies (rather than assets) engaged in the productionand sale of energy and power

Fund of funds : Investments made in a fund whoseprimary activity is investing in other private equity funds.


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(Contd.)

Private equity firm:General Partner of the private equity fund andintermediary between investors and businessesseeking capital.

The investors agree to let the firm manage theinvestment and firm charges additional fees to theinvestors.

Unlimited liability and a strong control in its

investment decisions.Private equity investments:

Companies which the General Partner has chosento invest in.

Private equity firms invest in several different


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PRIVATE EQUITY INVESTMENT

PROCESS


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BENEFITS OF PRIVATE EQUITY

Provides large inflow of capital for long termproductivity investments. PE funds are used to expand working capital. PE funds facilitate mergers and acquisitions. General partner runs the company. Companies backed by PE funds are more efficient and

profitable.


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BENEFITS OF PRIVATE

EQUITYPE attracts high caliber and experienced managers.

PE helps if one wants to start a company, expand the business,buy out a portion of parent company and turn around acompany.

PE firms work outside the public eye.

PE induces motivation in the management of the company.


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WHY PRIVATE EQUITY IN

INDIA?Growing economy.Changing government policies.

Young population.

Poised to become the next big market in private equity.

Market address of strong middle class.


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MAJOR PLAYERS

ICICI:ICICIVenture is one


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MAJOR PLAYERS

KOTAK PRIVATE EQUITY GROUP(KPEG):

KPEG is a specialist India Private Equity firm of KotakMahindra Group- focused on helping emerging corporate and

mid-size enterprises evolve into tomorrow's industry leaders.

The size of their initial investment is typically between USD15mn and 40mn depending on the nature of the company's

business.

KPEG's investment objective is to achieve long term capitalappreciation through investments in privately negotiated equityand equity-related investments .


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JYOTHI LABORATORIES

LTD.It is a Mumbai based FMGC company founded in 1983by M.P Ramachandran-the current chairman andmanaging Director.The company has 21 manufacturing units at 14 locationsacross India.

It has 6 business divisions namely-Fabric CareHousehold InsecticideUtensil CleanersFragrancesPersonal CareFabric Care Service


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JYOTHIS ACQUISITION OF

HENKEL INDIA

ACQUISITION DETAILS On May 6, 2011,Jyothi announced that it had successfully

acquired a majority stake in Henkel India. Jyothi currently controls 65.87% of Henkel India and

has launched a mandatory open offer for an additional20%.

Jyothi will pay INR 3,308 million to acquire the 85.87%stake in Henkel India.

Jyothi bought Henkel AGs outstanding preference

shares for a cash consideration of INR 439 million.


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FMCG VIEW REGARDING

HENKEL INDIA ACQUISITION

BY JYOTHI LABORATORIES The acquisition scales up Jyothi to one

of the leading FMCG companies in India

with consolidated Performa FY2011revenue of INR 10,412 millioncompared to a standalone revenue of

INR 6,195 million. The acquisition helped Jyothi pave the

way for a more balanced revenue

stream by significantly enlarging thertf li f r t an r it


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JYOTHI LABORATORIES MAY

TAKE PRIVATE EQUITY ROUTETO SETTLE Rs. 600 CRORE

DEBT:MDET Now Jun 1,2011,3:04pm ISTIn an interview with ET Now, Ullhas Kamath, MD, JyothyLaboratories, talks about volume growth and the company's futureplans.

Acquisition of Henkel India stake as well as its liabilities:- On 5 May, Jyothi Lab bought Henkels 50.97% stake in itsIndian unit forRs.118.72 crore. Jyothi Lab also acquired the liabilities of Henkel and now has on

its books a debt of Rs.600 crore.


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ACTIS IN TALKS TO ENTER

JYOTHI AFTER HENKEL BUYActis, the UK private equity giant, has made a direct call to the

promoters of Jyothi Laboratories to re-enter the FMCG firm.Actis was one of the growth investors in Jyothi some yearsago.The latest approach comes at a time when Jyothi has askedinvestment bankers to bring in a global PE giant to digest theHenkel acquisition.


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BARING PRIVATE EQUITY

PARTNERS(BPEP), INDIABPEP India is an India focused private equity firm. The

group targets mid-market transactions and looks forcompanies with excellent management, recognized brands,

strong distribution. Baring had picked up a 10% stake in Jyothy Labs in 1999

for $4 million.

Another factor that attracted the fund to invest in the

Indian company was its ability to improve and growHenkel's brands like Pril, Neem and Fa deodorants.


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BENEFITS OF PRIVATE EQUITY

INCLUSION TO JYOTHI

LABORATORIES

It scales up Jyothi to one of the leading FMCG companies inIndia .

Jyothi Laboratories was able to raise about $150-$200million funds from private equity funds.

The Indian maker of fabric whiteners and detergents is intalk with clutch of private equity funds in Jyothi laboratories.

1. Private Equity

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