Reliance PE Fund India Oct 2013 update on investments

8/13/2019 Reliance PE Fund India Oct 2013 update on investments

1/20

Private & Confidential

ALTERNATIVE INVESTMENTS UPDATE

RELIANCE PE SCHEME I


2/20


ABOUT THE FUND

India focused sector agnostic with a focus on fast growing sunrise industries with established

revenue and profitability track record

Registered with SEBI as a Venture Capital revocable trust

Key investment themes: Domestic demand, Infrastructure and skilled manpower

Sector focus : Logistics, retail, education, media, infrastructure ancillaries and FMCG

Single sector exposure capped at 30% and single company exposure capped at 155 of aggregate

commitments

Target investment holding period 3-5 years

Commitment period: 4 years from initial closing of December 2009, i.e till December 2013

Fund tenure : 6 years from December 2009 i.e. till December 2015; extendible by up to 2 years

Annual Management fees : 2% of aggregate commitment

Hurdle rate of 10%; 20% carried interest with 100% catch-up

2


3/20


CURRENT

PORTFOLIO

HOLDINGS

AND

VALUATION


4/20


SHANKARA INFRASTRUCTURE MATERIALS LTD.

Incorporated in 1995 and headquartered in Bangalore, Shankara is in the business of aggregation

and distribution of infrastructure materials (like steel, steel tubes / pipes, PVC pipes, welding

electrodes etc.) with backend integration into manufacturing ; an ISO 9001-2008 Company

Largest organized, scaled-up, multi-store player in distribution and retailing of infrastructure

materials; Authorized dealer of leading manufacturers like TATA Steel, JSW, Ispat Industries,

Welspun Corp, Arcellor Mital, SAIL, Bhushan, APLApollo, Asian Tubes & Astral, etc.

Construction boom and rapid development in India led to Shankara becoming a significant player

in the infrastructure materials market. The company started it's retail foray to become a one stop

shop for builders, fabricators, IHBs and SMEs

Marketing network and branch offices span the states of Karnataka, Kerala, Tamil Nadu, Andhra

Pradesh, Maharashtra, Gujarat, Orissa and Goa

Operating through 21 offices, 56 formatted retail outlets spread over 132,000 sq. ft. and 33

warehouses spread over 600,000 sq. ft. and distributing over 2000 SKUs

The company also owns three manufacturing units with installed capacity of 84,000 MTPA of

tubes. Further, own logistics infrastructure improves efficiency and increases inventory turns

4


5/20


SHANKARA INFRASTRUCTURE MATERIALS LTD.

The newly commissioned manufacturing facility in Hyderabad is fully operational now and ismanufacturing ~6000 tonnes/month

Production from own facilities now contribute to ~30% of the total steel tubes and pipes sales of

the company. Future plans include setup of boutique manufacturing units and service centres in

ties I, II & III cities

The company is further planning to enhance its product range by including agricultural,

plumbing equipment, motors, fittings and accessories, fencing solutions among others

The company has added 12 retail outlets in FY13 and plans to expand further into North India

The fund invested Rs. 80 crores in March 2011 at a pre-money valuation of Rs. 150 crores

To know more do visit WEBSITE : http://www.shankarainfra.com/

5

(in Rs. Crores) FY 10 (A) FY 11 (A) FY 12 (A) FY 13 (E)

Revenue 715 1000 1415 1767

Revenue growth over prev. FY - 40% 41.5% 25%

EBITDA 28 46 74 -


6/20


SARLA HOLDINGS PVT. LTD.

Operates 3 schools in the Delhi NCR region (Gurgaon, Aravali & Noida) under the brand Pathway

World School for students from Pre-nursery to Grade 12; an ISO 9001facility

The world school has been accredited by Council of International Schools, UK

The curriculum includes the Primary Years and Diploma Programmes of the InternationalBaccalaureate Organisation of Geneva and the International General Certificate for Secondary

Education of the University of Cambridge, England

First school was launched in 2003 in Aravali, Sohna Road, NCR, which offers residential facilities

as well. The total enrollments in this campus has crossed 1100 students. The other two schools

are ramping-up fast; are already in the 3rd year of operation. Total enrollments across schools has

crossed 2300 this year6

* The Day-cum-Residential school in Aravali, NCR


7/20


SARLA HOLDINGS PVT. LTD.

7

Pathways school have being awarded : The Aravali school has been Ranked 2nd International Day

cum Residential School in India in 2013 by Education World C-Fore Survey while the two

campuses (in Gurgaon and Noida) set-up just 3 years back have been Ranked 8th and 11th best

International Day schools in India respectively in 2013.

It has also launched its pre-school format under the brand Pathways Early Years; six playschools

now operational in NCR region

The fund invested Rs. 123 crores in 2010 for 45% stake at a pre-money valuation of Rs. 150 Cr

Top-line of the company has doubled since investment; Revenues in FY11, FY12 and FY13 were

Rs. 44 Cr, Rs. 64 Cr and Rs. 90 Cr respectively

To know more do visit WEBSITE: http://www.pathways.in/

* The Schools in Gurgaonand Noida


8/20


MAX FLEX AND IMAGING SYSTEMS LIMITED

Founded in 2002, among Indias largest, organized distributors and manufacturers of digital andoffset printing consumables. In 2009, the Promoter, Mr. Hitesh Jobalia, was awarded the Udyog

Rattan Award by Economic Review

The fund has invested Rs. 110 crores in October 2011 in this company for a 29% stake at a pre-

money valuation of Rs. 380 crores

Customer / product user base includes digital and offset printers, print service providers, billboard

companies, publication houses, newspaper publishers, magazines, and advertising agencies.

Bouquet of products includes over 9300 variations of media, ink, plate, chemical products and

accessories. Products are sold under our own brand MAXXX - Generation Next and are

manufactured by ODMs in China and South Korea

Indian printing industry is expected to grow exponentially over the next few years with digital wide

format media industry, where Max is already a leader, growing at a CAGR of 17-18% for the next

3 years

Max enjoys about 12% of .total market share and about 60% of organized market share of the

Indian flex industry

The Company recently began trial production of wall wrap flex, a product that seeks to replace

hand-painted signs in rural and semi-urban areas, a market traditionally dominated by local

painters. The product is being well received by telecom, insurance and FMCG companies and

others who undertake outdoor advertising in tier II, III, IV towns and in rural areas, and require a

high degree of standardization in execution

8


9/20


MAX FLEX AND IMAGING SYSTEMS LIMITED

The company has a Pan-India presence and markets its products across 19 states in India through18 owned branches, C&F agents at 4 locations, 17 warehouses, 175 dealers and commission

agents giving them access to over 4000 direct customers across the country

It has strong operating growth potential over FY10 to FY15, having clocked revenue of Rs. 436

crores in 2011, and it aims to achieve more than 25% per annum growth over the next few years.

Max plans to start new manufacturing operations in India for some of Digital Printing products such

as flex, ink and sun board sheets. It will soon start a new LED assembly facility.

The Company also plans to open additional showrooms and display centers in new geographies

thereby further strengthening its distribution strength; Recently opened two branches in Indore and

Aurangabad

The company has signed an MoU with a large local Flex manufacturer to reduce high dependence

on imports

To know more do visit WEBSITE: http://www.maxflex.in/aboutmax.html

9

(in Rs. Crores) FY 11 (A) FY 12 (A) FY 13 (E)

Revenue 430 540 710

Revenue growth over prev. FY - 25.6% 31.5%


10/20


VEGETABLE VITAMIN FOODS LIMITED

Founded in 1939, VVF is in the business of oleo-chemicals and contract manufacturing of

personal care products

The fund has invested Rs.136 Cr in this company in October 2011 through a mix of pure equity

and CCPS for a equity stake of 20%

Significant presence in contract manufacturing of personal care products for large global and

domestic FMCG companies with four state-of-art facilities across India; 25% of business

revenues from this segment. Manufacturing facilities spread across Far east, Middle East,

Europe and North America

The company manufactures the entire range of personal care products including personal wash

products (all variants of bar soaps, liquid soaps, shower gels, hand washes, face washes), hair

care products (shampoos, conditioner and hair colour) and other toiletries like mouthwashes,

antiseptic liquid, Deodorants, after shave, talcum powders, colognes/perfumes and moisturizer

in multiple packaging options

The company manufactures 3,00,000 MT to bar soaps annually

VVF also has its own brands

Jo, a popular segment beauty soap --- Bacter Shield, a hygiene and antiseptic soap

10


11/20


VEGETABLE VITAMIN FOODS LIMITED

The company is currently in the process of setting up manufacturing operations in Indonesiawhich is expected to be up operational by Q3 FY 14

They have recently forayed into the Rs. 1000 cr powder hair-dye market.

Synergy India Marketing Pvt. Ltd., a wholly owned subsidiary of VVF acts as the distribution arm

and employs a professional network of 28 CFAs, 1500 stockists, 200 super stockists, 2000 sub-

stockists across 19 states covering 3500 towns

A current portfolio of 30SKUs is distributed across 9,00,000 retail outlets

The company faced a drop in top-line in FY13 on account of lower realizations due to drop in

palm oil and related input prices

To know more do visit WEBSITE: http://www.vvfltd.com/

11

(in Rs. Crores) FY 11 (A) FY 12 (A) FY 13 (E)

Revenue 1780 2019 1750

Revenue growth

over prev. FY- 13.4% -13.3%


12/20


AMBER ENTERPRISES LIMITED

Incorporated in 1992 and an ISO 9001-2008 company, Amber enterprises is amongst the largest

Original Equipment Manufacturers (OEM) of consumer durables in India and has been growing at

twice the industry growth rate since past 5 years due to cost competitiveness due to backward

integration and economies of scale and strong R&D

The company manufactures air conditioners, microwaves, luminaries and components for

refrigerators, and other consumer durables for a wide range of large international and Indian

brands such as LG, Panasonic, Philips, Whirlpool, Voltas, John Deree, Swaraj Mazda, Indian

Railways, Onida, Videocon and others across 9 manufacturing facilities The fund has invested Rs.70 Cr in this company in July 2012 through a mix of pure equity and

convertible debt

A new manufacturing facility at Jhajjar, Haryana has been set up. Amber has recently concluded

the acquisition of a motor manufacturing company, PICL in Faridabad, which will complement its

existing business by reducing costs and adding new customers, and also plans to increase focus

on exports

The company boasts of one of the finest testing facilities in the country that test Package ACs for

Railways and Window & Split ACs, microwaves, washing machines and refrigerators for the

electronic consumer segment

The company has clocked a consolidated revenue of ~ Rs. 820 crs in FY 2013, representing 51%

growth in revenue over the previous year and has received A- credit rating from Fitch

To know more do visit WEBSITE: http://www.ambergroupindia.com/

12


13/20


BUTTERFLY GANDHIMATI APPLIANCES LTD

Butterfly Gandhimathi Appliances Limited (BGAL), a listed company, is among the largestmanufacturers of kitchen appliances and cookware in India.

Products include: Liquid Petroleum Gas (LPG) stoves, tabletop wet grinders, mixer-grinders,

pressure cookers and pressure pans are sold under the brand name Butterfly and are

manufactured across four state-of-art manufacturing sites.

The Company has also launched Hand Blenders and Electric Chimneys as new product

categories in Q1 FY14

The Company has a presence in 10 states in India through its 12 branches and has a particularly

strong presence in the southern states of India through an extensive distribution network.

It has a network of 160 dealers serving 16,000 retail outlets. Besides it has a tie-up with 3000 LPG

dealers of oil marketing companies (HPCL, IOCL and BPCL).

Products are also exported to the United Kingdom, Canada, Australia, Japan, Middle East and the

East Asian Countries.

The Company has opened its Branch in the U.K. in October 2012 focusing the U.K. and its

neighboring European Countries in the expectation of larger export volumes in the current

financial year

13


14/20


BUTTERFLY GANDHIMATI APPLIANCES LTD

The Company has bagged a Tamil Nadu government contract of Rs. 460 crs for supplying table-top wet grinders and mixer grinders and is well on track to deliver the contract.

The fund has invested Rs. 100 Cr in the company in May 2012

End of Q1 FY14, the Company has already launched 30 new SKUs and is on track to bring a total

of 70 to 75 new SKUs as planned for the Financial Year 2013-14

In FY13, sales turnover recorded impressive growth of 25.62% to Rs. 806.99 Cr and profit before

interest and depreciation also improved by 18.52% to Rs. 74.92 Crores as compared to the

previous financial year

It has efficiently managed its working capital and has reduced debt significantly from Rs. 106 crore

in FY12 to Rs. 47 crore in March 2013 and the credit rating of the company has been upgraded by

CRISIL from BBB+ to A- in Q4FY13.

To know more do visit WEBSITE:

http://gandhimathiappliances.com/

14

Sales Including Excise Duty

(Rs. Cr) Annualized CAGR 60%


15/20


KHADIM'S FOOTWEAR

Staring in 1993, Khadim's is the 2nd largest footwear retailer in India today in terms of organizedfootwear retailing.

It has more than 630 exclusive retail outlets (doubled in past 5 years) across 21 states of the

country being supplied through a distribution centre capacity in excess of 2,00,000 sq. ft. spread

across West Bengal, Chennai and Delhi. It is by far, the leading shoe retailer in the East.

It is an ISO 9001:2008 certified company with 4 manufacturing locations and a total installed

capacity of 8.27 million pairs per annum. The company is in the process of adding 3,50,000 sq. ft.of additional manufacturing area

An in-house Design Studio is also being proposed to cater to high-end products and Mould Repair

Shop capable of Teflon coating

The business focus is on tier-II and III footwear demand with a motto ofAffordable fashion for

everyone

The company also operates several Gold retail store units across Kolkata under the Brand

Khadims Sona Khazana

The fund has invested Rs. 90 Cr in the company recently

15

NEW INVESTMENT


16/20

Private & Confidential 16

APPENDIX


17/20


SCHEDULE ON INVESTMENT ASSETS OF THE FUNDAs at Mar 31, 2013

Particulars (Rs. Cr )

Portfolio investments (at Fair Value) At cost At Fair Value

Un-quoted:

Sarla Holdings

Compulsorily Convertible Preference

Shares50.6

195.5

Equity shares 72.3

Shankara InfrastructureEquity shares* 72.6

160.9Compulsorily Convertible Debentures 7.4

Max flex Equity shares110.0 183.8

VVF LimitedEquity shares - -

Compulsorily Convertible Debentures - -

VVF (India) Limited Equity shares** 136.0 144.0

Amber EnterprisesEquity shares 44.8

91.0Compulsorily Convertible Debentures 25.2

Sub - total 518.9 775.22

Quoted:Butterfly GanddhimathiAppliances

Limited Equity shares100 100

Sub - total100 100

TOTAL618.9 875.2

* On July 4, 2012 8,56,559 CCD of Shankara Infrastructure Materials Limited were converted into 8,56,559 Equity Shares as per the investment agreement** On September 9, 2012, 136,000,000 compulsorily convertible debentures were converted into 10,241 equity shares of face value of Rs. 10 each of VVF (India)

Limited. On February 5, 2013, 25,50,507 bonus shares of face value Rs. 10 each fully paid up were received.


18/20


RELIANCE ALTERNATIVE INVESTMENTS

FUND SCHEME-I FINANCIALS

Part iculars (Rs. Cr) As at Mar 31, 2013 As at Mar 31, 2012

Portfolio Investments 875.2 448.9

Current Investments 93.6 137.3

Balance in Current Accounts 0.9 2.2

Other Current Assets - 0.0

Total Assets 969.7 588.3

Less: Current Liabilities -17.9 -2.8

Net Assets 951.8 585.5

Represented by:

Unit Capital 762.6 633.6

Initial settlement 0.0 0.0

Reserves and Surplus 189.2 -48.1

Total 951.8 585.5


19/20


SCHEME -I REVENUE ACCOUNT

Particulars (Rs. Cr )Apr 1, 2012 to Mar 31, 2013 Apr 1, 2011 to Mar 31, 2012

Dividend Income from Portfolio Investments 1.8 0.0

Interest Income from Portfolio Companies 0.1 0.3

Dividend Income from current investments 7.5 6.3

Less: income assigned to Type I & II investors -6.0 -5.1

Total Income 3.4 1.5

Investment Management Fees 20.8 21.2

Establishment Costs - 0.0

Administrative Expenses 1.6 0.6

Total Expenditure 22.4 21.9

Net Deficit fo r the Period -19.1 -20.3

Deficit from previous period -48.1 -27.8

Deficit Carried to Balance Sheet -67.1 -48.1


20/20


DisclaimersThis presentation has been issued by Anand Rathi Financial Services Limited (ARFSL), which is regulated by SEBI. The information herein wasobtained from various sources; we do not guarantee its accuracy or completeness. Neither the information nor any opinion expressed constitutes an

offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities ("relatedinvestments"). ARFSL and its affiliates may trade for their own accounts as market maker / jobber and/or arbitrageur in any securities of this issuer(s) orin related investments, and may be on the opposite side of public orders. ARFSL, its affiliates, directors, officers, and employees may have a long or

short position in any securities of this issuer(s) or in related investments. ARFSL or its affiliates may from time to time perform investment banking orother services for,or solicit investmentbanking or other business from, any entity mentionedin this presentation.

THANK YOU

Reliance PE Fund India Oct 2013 update on investments

Documents