Kicc

Submitted on: 29th November 2011

Quick Facts

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Major rise in PE and VC financing over past 8 years 96% top executives attribute existence of their companies

to PE backing

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Above 60% top executives say employment by their company increased after PE investment

Comparative Annual Exports Growth (200-05)

35% 30% 25% 20% 15% 10% 5% 0%

Impact of PE Investme nt on Exports 0% 100%

Increased Almost same Decreased

PE-Backed

Non-PE

Nifty

Previous Funding Pattern

Funding before PE/VC Funding

Foreign Currency Loans, FCCB's IPO

Bank Loans/ Domestic Convertible Debt Angel Funding Family/Friends Self-funded

Angels of Growth

Annual Sales Growth

25 20 15 10 5 0 PE Backed

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Annual Sales Growth

Nifty

Non PE

PE/VC Backed firms grow at 1.5 times that of the NIFTY. Firms without such backing grow much slower

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Trend seen across all industries over a 5 year period

PE-backed Pharma firms realized a higher sales growth as compared to the CNX Pharma index 10 / 15 India’s top ranked BPO companies have benefited from PE/VC backing In addition to the capital PE firms also provide strategic direction and operational guidance

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Where does the money go?

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Companies need money to expand both in the short run and long run To remain competitive in the long run, a significant amount goes into R & D. 50% of PE/VC capital that flows in goes towards capital expenditure. 30% of PE/VC capital is invested in R&D India is making a strategic shift from being just BPO’s to KPO’s and more R&D investments are especially important for the Pharma sector and the Technology industry

Indian Private Equity History: Bharti Airtel

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PE Investor: Warlburg Pincus (WP) Funding raised: $292 million over a 2-year period ending September 2001 Exit: In October 2005 with total gains of $1.3 billion

Bharti Airtel required urgent PE funds for rapid expansion in 1998  WP provided additional benefits to Bharti...