A Noteworthy presentation laying out basics of private equity as a source of capital enabling aspiring women entrepreneurs to nurture their fledgling business- By Mr. Ranjeet Kulkarni, Sr Consultant, GDA Management Consulting Pvt Ltd. Pune

1. Private Equity
-An introduction
26th June, 2014. Pune
GDA
Consulting

2. (Wo)Men Money
Machine
&Materials
Market
Introduction
The 4M’s for running any business.

3.  Money Capital/Finance/Basic force to turn on and keep
running, the business.
Capital / Equity Borrowed Money
- Internal -External
- No fixed cash outgo every year -fixed repayment schedule
- e.g. Owner’s capital, - e.g. Term loans from Banks
Quasi equity in the nature of loans Debentures etc.
from Relatives etc.
Introduction
Confidential
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Consulting
Money
PRIVATE EQUITY= EQUITY/DEBT

4.  PE in finance is an asset class consisting of equity and debt securities in
companies that are not publically traded on any stock exchange.
 Direct investment by an investor in the company with specific set of goals
for which the funds are to be utilised.
 Purpose of Private equity
 Nurture expansion,
 Development of new-product or
 Restructuring of company’s operations, management, or ownership
Private Equity (PE)
Confidential
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Consulting

5. GDA
consulting
Stages of Funding
Angel
investments
V C investments
Private Equity &
Mezz Funding
Public Market -
PIPE Deals
(INR 5 cr to 10 cr)
(INR above 200 cr)
(INR 10 cr to 30 cr)
(INR 30 cr to 200 cr)

6. GDA
consulting
Pre- requisites
An Equity Funding raised through Private Markets and Private Placement is known
as ‘Private Equity'. Thus, in such funding the Investors are not from Public
markets. Pre-requisites of private Equity Funding:
1. SEBI registration of the Fund & Investor;
2. Investee should be a registered Company under ‘Indian companies act, 1956.
3. The RBI regulations have been complied with respect to sectoral guidelines.

7.  Long term Capital for Company’s Growth
 Increased visibility with Bankers, Suppliers, Clients
 A partnership; Sharing risk and rewards
 Adoption of high performance management standards
 Strategic, Operational and Financial Support
 Assistance owing to Investors’ network of Contacts and portfolio of investments
Advantage- PE
Confidential
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Consulting

8.  Indian companies signed as many as 655 Private Equity deals totalling USD10.68
billion in 2013; 12 % increase than 2012. (USD10.68 billion in 2013 than USD9.5
billion in 2012).
 Sector wise no of deals
Information technology attracted 210 ,
Consumer discretionary (152 Deals)
Financials (99 Deals)
Health care (73 Deals)
Industrials (60 Deals)
 Sectors attracted Private Equity firms to invest worth USD 2771 million
Consumer discretionary (USD 1,812 million)
Information technology (USD 1,642 million),
Health care (USD 1,264 million) and
Telecommunication services (USD 1,264 million).
Some Statistics
Confidential
GDA
Consulting

9.  No Security
 No Personal Guarantee
 No Interest Obligations
 No Fixed cash outflow every year
 Expectations of High returns on equity
Financial and operational Discipline
 Intervention in Overall Management
The Trade off
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GDA
Consulting

10. Process of PE
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GDA
Consulting
Identify need for PE
Appointing PE
Advisors
Preparation/Evaluat
ion of Business Plan
and Valuation of
Business
Deciding the Capital
Structure
Approaching PE
Investor- initial
Enquiries
Due Diligence
Final Negotiation
and Completion
Monitoring
Exit

11.  Investee Company
 PE Investors/PE Fund
 Investment Advisors/Investment Bankers
 Due Diligence Agencies
 Legal Agencies
 Internal Auditors
Parties to PE Investing
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12.  Are you prepared to take responsibility of
being an entrepreneur? - to run a organised
business;
-to delegate responsibilities to a team and
knowhow to motivate them,
-to take on the legal responsibilities
-- in short, to take a plunge?
 Are you prepared to give up a part of your
Company’s capital to a private equity
investor?
 Does your business operate in a growth
market?
 Are your Company’s development
prospects sufficiently ambitious?
 Does your company have a certain
technological or competitive advantage that
can be developed or exploited?
Is Private Equity right for your
Business
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What is the PE Investor looking
for?
Quality and stable management
team – capable of turning goals into
reality?
Solid management procedures
Transparent legal structure
High growth, Competitive products
and services
In case of disposal or transfer, loan
capacity and recurring profits

13.  Time taken to raise PE- 5 to 8 months
 Costs involved
 For Investment Advisor- anywhere between 2% to4% of equity to be raised
Payment to Due Diligence Agencies- A lumpsum fee
Payment to Legal Agencies
 Raising of PE is just the beginning not the end
 Negotiation is the key word.
 Relations with the Investor will matter
Other factors
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Prepare a Business
Plan
Find a PE Investor
Accelerate the Growth
of your Business

14.  Consulting arm of the prestigious Chartered Accountancy firm G.D.Apte & Co.
Chartered Accountants
 Presence of 8 decades through the firm
 Involved in several mergers, acquisitions, valuations, due diligence assignments,
debt and equity syndications
Team comprising Chartered Accountants, MBA’s, Lawyers, Company Secretaries,
Ex-Bankers
 Profound understanding of Businesses across sectors and sizes and their financial
needs.
An all pervasive solution for raising of Equity Finance .
About GDA Consulting
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GDA
Consulting

15. GDA Consulting
Pune
GDA House
Plot No. 85, Bhusari Colony (Right)
Paud Road, Pune - 411 038, India
Email : audit@gdaca.com
Phone : +91 20 2528 0081
Fax : +91 20 2528 0275
Mumbai
Office No.83 – 87 ,8th Floor, B Wing ,Mittal Tower,
Nariman Point, Mumbai
Phone : +91 22 4922 0555
Bangalore
D-II, 207, Shriram White House,
15th Cross, 6th Main, R.T. Nagar,
IInd Block, Bangalore - 560 032
Phone : +91 80 2354 2436
GDA
Consulting