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PE/VC Annual Roundup – 2018

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PE/VC Annual Roundup – 2018
Key Trends – Yearly

Investments

► PE/VC investments in India in 2018 witnessed a sharp increase in value on account of some very large deals (12 deals of
value US$500 million or greater, including eight US$1 billion plus deals).

► In 2018, investments increased by 35% in value terms compared to 2017 (US$35.1 billion vs US$26.1 billion in 2017) and
deal volume increased by 28% (761 deals compared to 594 deals in 2017). The growth was led by strong pickup in
buyouts and start-up investments.

(Note: The data includes deals that are announced but are awaiting closure on account of regulatory approvals etc. like the
PE funded UPL-Arysta deal, Samara-Aditya Birla Retail deal etc.)

► Notwithstanding the minor decline in 2017 buyouts are expected to be one of the major trends of the Indian PE/VC sector
in the years to come. We had highlighted this in our report PE/VC Agenda India Trend Book – 2018, released in early
2018. In 2018 there were 48 buyouts aggregating to US$9.8 billion, surpassing all the previous year highs and almost
equal to the value of buyouts in the previous three years combined.

► After record start-up investments in 2015 and subdued investments in 2016 and 2017, 2018 recorded a strong uptick in
start-up investments on the back of some mega deals that saw large venture capital investors like Softbank, Tencent and
Naspers deploy significant amounts of capital. On a Y-o-Y basis, investment in start-ups increased 83% to US$6.4 billion
compared to US$3.5 billion in 2017. 2018 was also the best year for start-up investments, surpassing the previous high
recorded in 2015.

► Growth investments, at US$12.7 billion, recorded a decline of 5% and saw its share in the total investment pie decline to
36% compared to over 50% in prior years. At US$3.9 billion, PIPE deals recorded a modest increase of 3% in terms of
value, impacted by volatility in the stock markets.

Page 3 EY Analysis of VCCEdge Data

 Key Trends – Yearly

Investments (cont’d.)

► As the Indian market matures, PE/VC deals are becoming larger and more complex. There were 76 deals of value greater
than US$100 million in 2018, aggregating to US$25.9 billion and accounting for 74% of total PE/VC investments made in
2018 compared to 54 deals, aggregating US$18.7 billion, of value greater than 100 million in 2017. The value and volume
of large deals has been progressively increasing over the past 4-5 years.
Cumulative value of deals greater than US$100 m Number of deals of value greater than US$100 m
US$m # 76
76
80
25,000
70
70
60 54
20,000 54 60 46
50
46 17,008 53
50 40 33
15,000 45
30 23
33 40 20 20 36
20 13 27
10,000 16,373 30 10 9
20 20 16 17 6
10 10 3
13 8,335 20 4
4,928 - 3
5,000 8,891
3,731 4,873 10 2012 2013 2014 2015 2016 2017 2018
2,321 2,505 3,192 2,295
- 460 1,402 931 - Number of control deals Number of other deals
2012 2013 2014 2015 2016 2017 2018
Total number of deals
Control deals (US$m) Others (US$m)
Total number of deals
► The largest deal during the year saw GIC, KKR, PremjiInvest and OMERS invest US$1.7 billion in HDFC Limited for a 3%
stake. This was followed by a consortium of investors including Warburg Pincus, Softbank, Temasek and others investing
US$1.3 billion to acquire 28% stake in Bharti Airtel’s Africa business. The largest deal in the Infrastructure and Real
Estate asset class saw Macquarie acquire tolling rights to select NHAI road assets for US$1.4 billion.

Page 4 EY Analysis of VCCEdge Data

Key Trends – Yearly

Investments (cont’d.)

► From a sector point of view, most of the sectors recoded significant increase in value invested. In 2018 11 sectors
recorded over US$1 billion in investments compared to seven in 2017. Notwithstanding the decline in deal activity in the
second half of 2018 following the liquidity issues faced by the NBFC sector, Financial Services continued to be the top
sector receiving US$7.5 billion in investments across 141 deals, a 6% increase over 2017. This was followed by Real
Estate (US$4.5 billion across 49 deals), 10% decline compared to 2017 and E-commerce (US$4.3 billion across 83
deals), 9% decline compared to 2017.

► Other sectors that recorded significant improvement in investments include Industrial Products (US$1.6 billion across 21
deals in 2018 vs US$62 million across 6 deals in 2017), Food & Agriculture (US$1.8 billion across 45 deals in 2018 vs
US$364 million across 47 deals in 2017), Retail and Consumer Products (US$1.9 billion across 41 deals in 2018 vs
US$678 million across 36 deals in 2017), Education (US$843 million across 38 deals in 2018 vs US$253 million across
20 deals in 2017).

Page 5 EY Analysis of VCCEdge Data

Key Trends - Yearly

Exits

► 2018 was the best year ever for exits. In 2018, PE/VC exits, at US$26 billion, increased by almost 100% compared to 2017
and are almost equal to the value of exits in the previous three years combined. The sharp rise was mainly on account of a
single large deal that saw Walmart acquire controlling stake in Flipkart for US$16 billion from a clutch of investors including
Softbank, Tiger Global and others. This is the largest deal in the Indian PE/VC market ever.

► As a result of volatility in stock markets, both open market exits and PE-backed IPOs recorded significant declines. 2018
recorded US$1.7 billion in open market exits across 56 deals compared to open market exits worth US$6.2 billion across
128 deals in 2017, more than 70% drop in terms of value and over 56% drop in terms of volume. Likewise, 2018 recorded
11 PE-backed IPOs worth US$760 million compared to 21 PE-backed IPOs worth US$1.8 billion in 2018, more than 50%
drop, both in terms of value and volume.

► This decline, was however, more than compensated by increase in strategic and secondary deals. Strategic exits (US$18.4
billion across 50 deals in 2018) were the highest in terms of value, more than 20x the value recorded in 2017, mainly on
account of the US$16 billion Walmart-Flipkart deal. Even after adjusting for the Walmart-Flipkart deal, at US$2.4 billion,
strategic exits in 2018 are almost 3x that of 2017 (US$881 million across 42 deals in 2017). Similarly, secondary exits
(US$4 billion across 41 deals in 2018) recoded a growth of 21% in 2018 compared to 2017.

► From a sector perspective, E-commerce (US$16.4 billion across 10 exits), Technology (US$1.8 billion across 24 exits),
Financial Services (US$1.5 billion across 34 exits) were the top sectors for PE/VC exits in 2018.

Page 6 EY Analysis of VCCEdge Data

Key Trends - Yearly

Fund Raise
► 2018 saw US$8.1 billion being raised across 51 fund raises by PE/VC funds, a 40% increase over 2017 and the highest
ever. Similarly, the fund raise plans announced stood at US$22.3 billion, which again is the highest ever. This further
reiterates the underlying trend, reflected in both investments and exits, of India’s improving attractiveness for global PE/VC
funds as the domestic PE/VC ecosystem flourishes.

► The largest fund raise during the year saw Indospace (Everstone managed real estate fund for building logistic parks) close
its third fund at US$1.2 billion, followed by Sequoia and True North raising US$695 million and US$600 million respectively.

Page 7 EY Analysis of VCCEdge Data

 PE/VC Yearly headline trends – Investments

US$m #
Total PE/VC Investments
1,000
30,000 767 761
800
588 589
20,000 470 600
392
400
10,000
200
9,116 11,683 19,635 16,203 26,804 35,148
- -
2013 2014 2015 2016 2017 2018

Value (US$m) # of deals

US$m
PE/VC Investments - split across asset classes 1,972
35,000
4,467
28,000 940
764 4,981
21,000
3,408 681
14,000 569 3,178
783
2,117
7,000 1,139
7,195 8,996 15,463 12,344 20,133 28,709
-
2013 2014 2015 2016 2017 2018

PE/VC Investment (other sectors) (US$m) Real Estate (US$m) Infrastructure (US$m)

Page 8 EY Analysis of VCCEdge Data

PE/VC Yearly headline trends – Exits

US$m #
Total PE/VC Exits
12,000 254 260 300

211 250
9,000
166 174 200
6,000 125 150
100
3,000
50
3,533 3,395 6,474 6,668 13,013 25,973
- 0
2013 2014 2015 2016 2017 2018

Value (US$m) # of deals

US$m
PE/VC Exits – split across asset classes
85
25,000 629
20,000
15,000 127
807
10,000 13 104
77 120 223 763 12,079
5,000
332 216 6,238 5,802 25,259
- 3,124 3,059
2013 2014 2015 2016 2017 2018

Other Sectors (US$m) Real Estate (US$m) Infrastructure (US$m)

Page 9 EY Analysis of VCCEdge Data

 PE/VC Yearly headline trends – Fund Raise

US$m Fund Raise #

51
60
8,000
7,000 41
44 50
6,000 36
40
5,000 29
26
4,000 30
3,000 20
2,000
10
1,000 2,248 3,609 6,440 4,313 5,774 8,092
- -
2013 2014 2015 2016 2017 2018

Total funds raised (US$m) Total # of funds raised

Page 10 EY Analysis of VCCEdge Data

Investments – (excluding Infrastructure and Real
Estate)
Total Investments (US$m) # of Deals
2018 705
2018 28,709
2017 533
2017 20,133

Deal Type US$m Deal Type #

1,017 Credit Investment 51

Credit Investment 1,175 34
6,345 Buyout 37
Buyout 1,205 13
3,603 PIPE 45
PIPE 3,653 38
Start-up/Early Start-up/Early 365
6,276 303
stage 2,946 stage
11,468 Expansion/Growth 207
Expansion/Growth 11,154 145

Deal Size US$m Deal Size #

> $100m 20,345 > $100m 55

14,043 36

$50m - $100m 3,388 $50m - $100m 41

2,561 35

$20m - $50m 2,724 $20m - $50m 83

1,585 49

$10m - $20m 1,165 $10m - $20m 80

917 60

< $10m 1,086 < $10m 330

1,025 245

Page 11 EY Analysis of VCCEdge Data

Investments – Infrastructure and Real Estate

Total Investments (US$m) # of Deals

2018 6,439 2018 56

2017 5,921 2017 61

Deal Type US$m Deal Type #

Credit 1,417 Credit Investment 16
1,340 23
Investment
3,442 Buyout 11
Buyout 1,753 11

295 PIPE 2
PIPE 119 4
Start-up/Early Start-up/Early 10
94 7
stage 540 stage
Expansion/Grow 1,191 Expansion/Growth 17
2,168 16
th

Deal Size US$m Deal Size #

> $100m 5,555 > $100m 21
4,624 18

$50m - $100m 546 $50m - $100m 7

591 10

$20m - $50m 143 $20m - $50m 4

547 16

$10m - $20m 170 $10m - $20m 11

127 8

< $10m 25 < $10m 8

32 7

Page 12 EY Analysis of VCCEdge Data

2018 Investments –Sector Cut

2018 2017 Top Sectors by value (US$m) Top Sectors by # of deals

7,453 Financial services 141

Financial Services 7,025 111

RHC 4,467 Technology 133

4,981 121

E-commerce 4,261 83
4,674 E-commerce 61

Technology 2,758
1,783 Healthcare 50
37
Infrastructure 1,972
940 RHC 49
53
Power & Utilities 1,888
1,120 45
Food and Agriculture 47
RCP 1,863
678
RCP 41
36
Food and Agriculture 1,844
364
Education 38
1,584 20
Industrial Products 62
Media & Entertainment 33
Telecom 1250 17
1012
Others 148
Others 5808 91
3414

*** RCP – Retail & Consumer Products ,RHC : Real Estate, Hospitality & Construction.
Page 13 EY Analysis of VCCEdge Data
Top PE Investments

Top PE investments excluding Infrastructure and Real Estate in 2018

Investment Stake
Company PE Investor Sector Stage US$m
Month (%)
GIC, KKR, Premjiinvest, Financial
HDFC PIPE Jan’18 1,731 3
OMERS & Others Services
Warburg Pincus, Temasek , Growth
Airtel Africa Ltd. Telecom Oct’18 1,250 28
SingTel Innov8, SoftBank Capital
Abu Dhabi Investment Council, Food and Growth
UPL Corporation Ltd. Aug’18 1,200 22
TPG Agriculture Capital
Lightspeed Venture, Sequoia Start-up/Early
Oravel Stays Pvt. Ltd. Ecommerce Sep’18 1,000 NA
Capital, SoftBank & Others Stage
Bundl Technologies DST Global, Naspers, Tencent Start-up/Early
Ecommerce Dec’18 1,000 NA
Pvt. Ltd. Hillhouse Capital & Others Stage
Star Health and Allied Madison India, Westbridge Financial
Buyout Aug’18 1,000 94
Insurance Co. Ltd. Capital Services
Vivtera Global Start-up/Early
Warburg Pincus Technology May’18 1,000 NA
Business Services LLP Stage
Larsen & Toubro’s
Temasek (balance stake with Industrial Growth
Electrical & May’18 760 35
Schneider Electric) Products Capital
Automation business
Retail and
Vishal Mega Mart Partners Group, Kedaara Consumer Buyout May’18 734 100
Products
Think and Learn Pvt. General Atlantic, Naspers & Growth
Education Dec’18 540 NA
Ltd. (Byju) CPPIB Capital

Page 14 EY Analysis of VCCEdge Data

Top PE Investments

Top Infrastructure and Real Estate investments in 2018

Stake
Company PE Investor Stage US$m
(%)
NHAI road assets Macquarie Buyout 1461 NA

Equinox Business Park Brookfield Buyout 384 NA

SP Infocity, IT Park Temasek Buyout 353 NA

Phoenix's Hyderabad office project Xander Buyout 350 100

Indiabulls Properties Pvt. Ltd. Blackstone Buyout 346 50

Hamstede Living Pvt. Ltd., a JV with

Warburg Pincus Buyout 291 68
Lemontree
Piramal Fund Credit
The Wadhwa Group 235 NA
Management Investment
Credit
Three developers’ projects Piramal Capital 214 NA
Investment
Growth
Azure Power India Pvt. Ltd CDPQ, IFC, Helion 185 NA
Capital
Island Star Mall Developers Pvt. Ltd.(Phoenix Growth
CPPIB 185 NA
Mills JV) Capital

Page 15 EY Analysis of VCCEdge Data

2018 Exits –Analysis

Total Exits (US$m) # of Deals

2018 25,973 2018 174

2017 13,013 2017 260

Exit Type US$m Exit Type #

1,692 Open Market 56

Open Market 6,238 128
4,043 Secondary 41
Secondary 3,353 44
18,425 Strategic 50
Strategic 881 42
1,053 Buyback 16
Buyback 753 25
760 IPO 11
IPO 1,788 21

Top Sectors US$m Top Sectors #

E-commerce 16,448 Financial Services 34

980 52
Technology 1,768 Technology 24
1,410 23
Financial Services 1,497 Food and Agriculture 13
3,863 17
Healthcare 1,323 Healthcare 11
878 27
Power & Utilites 1,003 RCP 11
417 17
Others 3,935 Others 81
5,464 124

*** RCP – Retail & Consumer Products

Page 16 EY Analysis of VCCEdge Data
Top Exits

Top Exits in 2018

Stake
Company Sector Sellers Buyer Exit Type US$m
(%)
Softbank, Naspers,Tiger,
Flipkart Pvt. Ltd. Ecommerce Walmart Inc. Strategic 16,000 77
Accel, IDG and others
Intelenet Global Services Teleperforman
Technology Blackstone Strategic 1,000 100
Pvt. Ltd. ce S.A.
Retail and Partners
Vishal Mega Mart Pvt.
Consumer TPG Capital & Others Group, Kedaara Secondary 769 NA
Ltd.
Products Capital
Madison India,
Motilal Oswal, Apis
Star Health and Allied Westbridge
Healthcare Growth, Sequoia & Secondary 745 70
Insurance Co. Ltd. Capital &
Others
Others
ReNew Power
Ostro Energy Pvt. Ltd. Power & Utilities Actis Strategic 692 NA
Ventures
IDG ventures, employees
Flipkart Pvt. Ltd. Ecommerce Buyback 350 NA
& Others

Healthium Medtech Healthcare TPG Growth, CX Partners Apax Partners Secondary 298 100
Real Estate, CPPIB and Shapoorji
SP Infocity ,IT Park Hospitality & Pallonji Investment Temasek Secondary 282 80
Construction Advisors
ICICI Lombard General Open
Financial Services Warburg Pincus NA 282 3
Insurance Company Ltd. Market
Arrow
E-Infochips Ltd. Technology GVFL Strategic 281 100
Electronics Inc.

Page 17 EY Analysis of VCCEdge Data

Fund Raise

Top Fund Raise in 2018

Status Fund US$m Strategy Investment Month

Raised Indospace 1,200 Real Estate Dec’18

Technology, Healthcare
Raised Sequoia India 695 Aug’18
& Consumer Products
Raised True North 600 Buyouts Aug’18
Godrej Fund
Raised 600 Real Estate Mar’18
Management
FS, Consumer and
Raised MOPE 313 Oct’18
Healthcare
Nexus Venture
Raised 313 Sector agnostic Jun’18
Partner

Page 18 EY Analysis of VCCEdge Data

Headline Trends– 2018
PE/VC monthly headline trends – Investments

US$m Total PE/VC Investments #

75
68 68 71 80
5,000 66 65
62 59 62 61
53 54
4,000 50 60

3,000 40
2,000
20
1,000
2,647 3,574 1,513 2,974 2,436 5,370 1,640 1,639 3,891 4,019 3,155 1,757 3,180
- 0
Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

Value (US$m) # of deals

US$m
PE/VC Investments – split across asset classes
-
440
5,000

4,000 - - -
11
360
- 820 185 -
3,000 378 363
1,634 -
335
2,000 435
- 146
2,212 - 8
243 15 392 723 2,817
1,000 388
2,753 1,270 953 2,101 4,931 1,480 1,247 3,531 4,009 2,593 1,025
-
Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

PE/VC Investments(other sectors) (US$m) Real Estate (US$m) Infrastructure (US$m)

Page 20 EY Analysis of VCCEdge Data

PE/VC monthly headline trends – Exits

US$m Total PE/VC Exits #

3,000
29

2,000 22
20 20 25
19
12 12 12 13
11 11
1,000 9 8

401 969 150 705 1,629 1,638 446 397 1,591 16,029 1,364 676 381
- -
Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

Value (US$m) # of exits

US$m
PE/VC Exits – split across asset classes
3,000

2,000
2 -
76 16,029 71
1,000 -
80 1,629
67 129 283
- 7
13 -
62 813 53 576 1,638 1,588 1,292 393
446 377 381
- 272 97
Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

Other Sectors (US$m) Real Estate (US$m) Infrastructure (US$m)

Page 21 EY Analysis of VCCEdge Data

PE/VC monthly headline trends – Fund Raise

US$m Fund Raise #

9 10

2,000 7 8
5 5 5 6
4 4
1,000 3 3 3 3 3 3 4

2
828 244 153 1,060 470 368 863 257 2,063 288 641 398 820
- -
Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

Total funds raised (US$m) Total # of funds raised

Page 22 EY Analysis of VCCEdge Data

Recent investment trends

Significant uptick in Infrastructure and Real Estate Large deals continue to dominate the deal landscape and
investment activity record a successive increase in overall share of deals

PE/VC investments (US$m) - split across Quarterly trend of deal share by size of
asset classes (Quarterly trend) investment (US$m)
100% 183 259 250 278 295
283 255 265 148 253 229 308 254 338 302 352 330 288
146 - 258 244 204 232
316 261 534
294 632 264
500 583 439 6821,011
447 477 523 627
9,000 302 789 763 193 80% 694 821 1,100
435
678 809 913 689
300 730 1,032 1,123 791 1,581
2,254 1,634 1,464
287 60% 601
6,000 78 1,440
1,451
632 51 1,033 914
350 1,019 40%
696 148 253
889 432 106 6,435
3,000
837 20%

3,7153,0713,0782,1544,0413,8744,6946,1305,4344,9758,5118,787 3,0772,3321,798 965 3,0242,4503,9776,9905,4565,6735,797 5,809

0% 3,945
-

Infrastructure (US$m) Real Estate (US$m) >100m 50-100m 20-50m 10-20m <10m
PE/VC (Other Investments)

 Investments in Infrastructure and Real Estate by PE/VC funds in
2018 added up to US$6.4 billion, accounting for 18.3% of all
investments in 2018
 In 2017 and 2018, Sovereign Wealth Funds and Pension Funds
stepped up their investments in Indian infrastructure and real
estate, investing close to US$2.9 billion of the total US$9.5 billion
PE/VC investment in these asset classes in 2017 and 2018
 There were 76 deals of value greater than US$100 million in
2018, aggregating to US$25.9 billion and accounting for 74% of
total PE/VC investments made in 2018
 The share of large deals has been significantly higher over the
past two years, as compared to earlier periods, accounting for
almost 2/3rd of all the value invested. As a consequence, the
average deal size has also been increasing

EY Analysis of VCCEdge Data

Page 23
Recent investment trends (cont’d.)

Buyouts emerge strong Credit deals record robust investment flows

3,500 13 12 12 14 1000 21 21 23 25
11 19
3,000 10 10 12 800 15 16 15 16 20
2,500 10 13 13
7 7 7 600 15
2,000 6 2,583 8 11
5 5 8 9
1,500 2,488 6 400 10
1,000 4
1 1,812 200 5
500 450 312 928 3982,3022991,685920 2,904 2 395 663 549 780 920 284 661 741 830 873 422 582 556
- 54 - 0 0

US$ m # of Deals US$ m # of deals

 Notwithstanding the minor decline in 2017, buyouts are expected to
be one of the major trends of the Indian PE/VC sector in the years to
come
 In 2018 there were 48 buyouts aggregating to US$9.8 billion,
surpassing all the previous year highs and almost equal to the value
of Buyouts in the previous three years combined
 Credit investment has emerged as a viable alternative for PE/VC
funds to invest in the Indian market, taking advantage of a lower risk
and an assured return
 PE/VC funds are better placed to structure credit transactions that
are a win-win for both the investor as well as the investee, which is
not possible through the regular banking channels, given various
regulatory constraints
 1Q18 recorded credit deals worth US$873 million across 15
transactions, the second highest quarterly value of credit
investment in the past four years

EY Analysis of VCCEdge Data

Page 24
Recent investment trends (cont’d.)

PIPE investments continue to grow, with direct investments by Growth and start-up investments record steady performance
large LPs
PIPE 21 25 6,000 62 Growth 62 59 64 70
2,000 50 60
15 20 5,000 46 44
1,500 13 40 38 39 39 50
11 11 4,000 32 31
10 10 9 15 … 40
1,000 7 8 8 3,000
6 10 1,4172,778
5,703 3,259 30
4 2,000 20
500 1,272 5 2,015 1,155 3,391
431 696 407 199 2491,692209 599 1,9301,253 80 635 1,000 2,637 1,171 1,668 4,200 10
1,348
- - - -

US$ m # of deals US$ m # of deals

 With large LPs investing directly in the Indian market, PIPE 2,500 Start-up 115 140
investments have witnessed a strong growth, with majority of the 93 92 120
2,000 90 86 83 85
investments flowing into the financial services sector, which is 76 84 68
79 71 100
considered by many investors to be a good proxy for the India 1,500 54 80
growth story. However, due to volatility in markets there has been a 1,000 60
1,751
dip in PIPE investment activity over the previous two quarters 1,628 40
500 426
 While growth capital still continues to be the leading mode of 1,130 624 565 497 487 681 723 685 1,830 20
2,103
investment by value, its % share of overall PE/VC investments has - -
declined to around a third compared to earlier years when it used to
account for more than 50% of all PE/VC investments, primarily on
account of the rise in buyout deals
 After record investments in 2015 and subdued investments in 2016
US$ m # of deals
and 2017, 2018 was a better year for start-up funding on account
of large investments made by Softbank

EY Analysis of VCCEdge Data

Page 25
Key sectors for investment

Financial Services Real Estate

3,500 50 60 2,500 21 21 25
19
3,000 50 2,000 16 17 18 16 20
2,500 35 33 33 33
3,198 40 13 13
2,000 24 25 25 1,500 11 11 15
20 20 18 30 8 1,033 9
1,500 15 13 1,836 1,000 10
2,458 20 1,451
1,000
10 500 253 2,254 763 5
500 1,2531,100280 454 662 8522,3571,359 1,599 819 696 889 432 8371,019 1,440 789 1,464
- - - -

US$ m # of deals US$ m # of deals

 Since 2017, Financial Services has emerged as a key sector of E-commerce

interest for PE/VC investments, with investments made across all
the varied business models ranging from pure play banks to 3,000 31 29 35
specialized NBFCs, small finance banks, online credit platforms, 2,500 24 23 30
insurance companies, and payment solution companies. There has 20 18 18 16 20 21 19
25
2,000 15
been a dip in activity off-late due to liquidity concerns in the NBFC 20
1,500 11 15
sector 1,000 10
1,206 375 757
 Real Estate sector witnessed a significant interest from PE/VC funds 500 677 764 307 327 109 85 5302,849 1,7631,367 5
in the previous year and the momentum has continued into 2018, - -
largely driven by investments in yield generating commercial assets
by large global funds like Blackstone, Brookfield etc
 With the closure of large Walmart-Flipkart deal which gave exit to
many early investors with healthy returns, there is a renewed
enthusiasm in the Indian E-commerce space as shown by the recent US$ m # of deals
mega investments in Swiggy and Byju’s

EY Analysis of VCCEdge Data

Page 26
Recent trends in exits

Open market exits Exits via IPO

10.0 119 128 150 2.0 30
19 21
91
100 15 20
56 1.0 11
5.0
50 10
2.4 1.7 6.2 1.7 0.2 0.9 1.8 0.8
- - - -
2015 2016 2017 2018 2015 2016 2017 2018

US$ m # of deals US$ m # of deals

Open market exits decline in 2018 amidst volatility in markets on PE-backed IPOs recorded best performance ever in 2017.
the back of escalating trade tariffs-related tensions between the However, with the broader markets losing some steam in 2H18,
US and other countries as well as volatility in the domestic especially for midcaps and small caps, the appetite for IPOs in
market due to headwinds on the macroeconomic front 2018 diminished

Secondary sale Strategic sale

6.0 44 60 20.0 73 US$16 b Walmart-Flipkart deal 100
41
32 55 50
4.0 23 40 42
10.0 50
2.0 20
1.4 0.5 3.4 4.0 2.1 2.7 0.9 18.4
- - - -
2015 2016 2017 2018 2015 2016 2017 2018
US$ m # of deals US$ m # of deals

With interest from global funds, secondary sale emerges as a
viable exit option
With the expected volatility in stock markets and macroeconomic
headwinds persisting, secondary transactions could potentially
gain further momentum
As buyouts become more prevalent, strategic sale is emerging as
a strong option with global corporates looking to get a foothold in
the Indian market and willing to give high valuations to quality
businesses e.g.. Walmart-Flipkart, Teleperformance-Intelenet.
Also, large platform plays, backed by deep-pocketed PE funds
(such as Renew) have emerged as a new set of strategic investors

EY Analysis of VCCEdge Data

Page 27
About EY’s Private Equity Services Practice

EY has been working with the private equity industry for more than 25 years, with approximately 25,000
seasoned professionals worldwide dedicated to the industry and its business issues. EY serves 74% of the
top 300 PE firms included in the Global PEI 300 firms list. Private equity firms, portfolio companies and
investment funds face complex challenges. They are under pressure to deploy capital amid geopolitical
uncertainty, increased competition, higher valuations and rising stakeholder expectations. Successful deals
depend on the ability to move faster, drive rapid and strategic growth and create greater value throughout the
transaction life cycle. EY taps its global network to help source deal opportunities and combines deep sector
insights with the proven, innovative strategies that have guided the world’s fastest growing companies.

In India, EY is among the leading providers of advisory, tax, transactions and assurance services. The
organization is also the number one professional services brand* in India, which is a testimony to our
relentless commitment to deliver exceptional client service and create a better working world. EY has 16
offices spread across 10 cities in India. Worldwide, our 247,570 people across 150+ countries and 700+ cities
are united by our shared values and their unwavering commitment to quality.

►EY’s India Private Equity Services Practice has been among the top advisors for private equity deals over
the past ten years. EY has been awarded the “Most Active Transaction Advisor” award by Venture
Intelligence for 2009-2013 and also the “Investment Bank of the Year, Private Equity” award by VC Circle in
2012 and 2017.

►EY’s India Private Equity Services Practice provides value to PE funds and their portfolio companies
through its deep sector and service expertise. EY India is organized around key industry verticals in a
matrix structure that enables us to offer an unparalleled blend of industry expertise and functional skills. We
actively track about 15 sectors with sector leads driving our penetration in each of those sectors.

Page 28
About EY’s Private Equity Services Practice
(cont’d..)
Deal count as per Annual Financial Advisory league tables published by respective databases

Merger market Thomson Reuters Bloomberg

38
49 34 34
40 39
41 43 28
26
29 29 33
24 21 21
19 24 16
18 21 20 15
15 18 19
12 11
10 11

2014 2015 2016 2017 2018* 2014 2015 2016 2017 2018* 2014 2015 2016 2017 2018*

EY Closest competitor

 # 1 advisor on deal count in Financial advisory league tables across databases

 Consistently maintaining a significant lead from closest compete

 Adjudged as the Investment Bank of the Year at the VC Circle Awards 2017
* 2018 data from Jan to Jun

Page 29
EY is the #1 PE Advisor
on both Deal Value and Deal Count
Venture Intelligence League Tables (Jan-Sep 2018)

Top Advisors – PE*

Rank Company Name No. of deals Amount ($m)

1 Ernst & Young 48 7,786

2 KPMG 24 2,865

3 JP Morgan 3 2,200

4 Barclays 3 1,995

5
Deloitte 10 1,224

*Summary for all PE deals advised (including M&A, Valuations, Diligence and Tax)
EY services for Private Equity
We offer an array of services to Private Equity funds and their portfolio/investee companies through our
various service lines.
Partners
(Personal tax)
Fund Raising
(Audit of fund performance)
Buyside advisory
(M&A and valuations,
Fraud, Investigation and Dispute
Services)
Exit readiness
(IPO, GAAP Conversion,
SOX Compliance, VDD,
Sale Mandates, Clause 49)
Distressed
(Bank intermediary, working
capital, cost reduction)
Page 31
Fund assurance
(Assurance and Tax Structuring)
Funds
Buyside support
(Financial Due Diligence, Tax
Transaction
Structuring and Diligence, Business
Advisory DD, Environmental Compliance,
Services CDM Human Capital, Valuations)
Portfolio Services
Transition
(Transaction Integration, GAAP
Conversion, Governance, Controls
Assessment, MIS Development,
Process Advisory, Standard
Operating Procedures)
Assurance Growth
(Assurance, Tax Compliance, Risk Management, (Strategic Options, Technology
Corporate Governance Advisory, Internal Audits and Security, IT Strategy, Operational
Fraud reviews) Improvement, Market Entry Options
& Working Capital Management)
Delivering issues-based solutions to the
entire PE enterprise Solutions

EY has established six distinct solutions reflecting the holistic set of challenges that PE firms
face across all levels of the organization – the management company, the funds, and their
portfolio companies.

A B

Operating model Global compliance Deal origination Integrated due Value creation Exit readiness
and automation and reporting diligence and IPO
Large asset managers The intense competition Private equity firms Private-equity firms face Private equity firms must
Alternative asset
have hundreds of non-US for a limited number of conduct diligence on increasing pressure to plan exits rigorously in
managers need to drive
legal entities in multiple deals raises stakes to win assets across strategic, attract fresh capital. This order to successfully
efficiency through multi-
countries, and continually for private equity firms. A financial, tax, operational requires generating monetize their investment
year target operating
models and infrastructure create new ones – all proprietary investment and HR issues. Firms greater investment during the exit process in
with different compliance approach, driven by historically used issue- returns and today’s challenging
strategies to remain
obligations. Many are sector insights, enables based advisors, demonstrating a environment. Executives
competitive. These align
outsourced and require firms to confidently place managing different consistent track record in must identify key short-
with strategic growth
local knowledge. EY winning bids that parties and consolidating creating value in their and long-term priorities
plans by leveraging
gathers the data, generate appropriate findings at the end of the portfolio. EY’s value prior to undertaking an
vendor and service
leverages local EY teams returns. EY’s global process. Employing EY’s creation solution IPO or alternative
provider activities. EY
familiar with accounting origination team turns integrated diligence addresses these transaction. EY can
defines and monitors
and tax laws, performs opportunities into approach at the early challenges across all five advise deal teams and
data analytics and key
data analytics to identify actionable strategies. Our stages of a transaction stages of the deal life portfolio companies on
performance indicators to
trends, risks and proprietary knowledge provides more effective, cycle, including deal exit alternatives, assess
annually assess data
opportunities and and advanced analytics comprehensive diligence origination, diligence, exit readiness, prepare a
governance and risk
monitors filing help develop strategic on an asset, giving firms inception, optimization business for exit/IPO and
against these target
requirements. capital options to help a distinct competitive and exit strategy. create a value story for
models.
firms achieve success. advantage. targeted buyers.

Page 32
Focused advisory solutions for private
equity backed portfolio companies
Having a broader perspective on the drivers of growth in your business and finding innovative
ways to accelerate and sustain that growth can give you a competitive advantage. That’s why
Growth Navigator - we’ve developed EY Growth Navigator™, an interactive experience that uses the EY 7 Drivers
Achieving your of Growth to help you and your leadership team assess your business’s current and aspirational
growth ambitions position, and create a strategic road map to help you get there.

EY identifies focused opportunities for optimizing cost and growth after full assessment; designs
Route to Market new RTM, including different approaches for different segments (customers, regions, seasonal
(RTM) – Deliver a demand); identifies the optimal concessionaires’ model taking into account different distribution
successful strategy approaches; and supports the implementation of the RTM by providing IT specs and additional
services (e.g., stock management options).
for your business

Depending on objectives and business context, EY helps the client develop a combination of
short-term and long-term strategies to reduce costs, optimize process and bring in efficiency and
Performance effectiveness across all layers of business to deliver positive impact on EBITDA by ensuring
improvement optimal utilization of both tangible and intangible resources.

Page 33
Focused advisory solutions for private
equity backed portfolio companies (cont’d..)
EY assists internal teams to build cyber awareness and conduct company-wide training, as well
as training of board of directors. EY supports in building regulations and compliance
requirements with audit and readiness services. EY helps transform the security program and
integrate information security and IT risk across the enterprise as well as help implement
Cyber security globalized data protection strategies to protect information that matters, with consideration of
regulatory and industry compliance.

EY helps clients build data and information strategies using various analytics tools to deal with
big data to address various areas of business, ranging from opportunity sizing and feasibility,
Analytics - Generate operations and customer modelling, executive decision making, merger acquisition and
insights to make valuation. EY helps across the capability value chain ranging from strategy, implementation,
smarter, faster hosting and running the analytics functions.
decisions

EY’s IPO readiness service is the first step in what we describe as the “IPO value journey” and is
designed to guide the client through a successful transformation from private to public status.
Achieving readiness will ensure a strong debut in the capital markets. Getting IPO readiness
IPO readiness – The
right means implementing change throughout the business, organization and the corporate
first step in the IPO culture. As a public company, the client will be subject to increased filing requirements,
value journey transparency, compliance, scrutiny by investors and analysts, and overall accountability for
delivering on promises. Successful businesses start to prepare typically 12 to 24 months before
the IPO — in many cases with an IPO readiness assessment.

Page 34
 Contacts
Ernst & Young LLP
Private Equity Services Practice
EY | Assurance | Tax | Transactions | Advisory
Vivek Soni Dilip Dusija
About EY Partner and National Leader Associate Partner
E: Vivek.Soni@in.ey.com E: Dilip.Dusija@in.ey.com
EY is a global leader in assurance, tax, transaction
and advisory services. The insights and quality Narendra Rohira Nachiket Deo
services we deliver help build trust and confidence Partner, Transaction Tax Partner, Transaction Tax
in the capital markets and in economies the world E: Narendra.Rohira@in.ey.com E: Nachiket.Deo@in.ey.com
over. We develop outstanding leaders who team to
deliver on our promises to all of our stakeholders. Subramaniam Krishnan
In so doing, we play a critical role in building a Partner, Tax & Regulatory Services
E: Subramaniam.Krishnan@in.ey.com
better working world for our people, for our clients
and for our communities.
Transaction Advisory Services (TAS)
EY refers to the global organization, and may refer
to one or more, of the member firms of Ernst & Amit Khandelwal Ajay Arora
Partner and National Leader Partner and National Leader
Young Global Limited, each of which is a separate
TAS Lead Advisory
legal entity. Ernst & Young Global Limited, a UK E: Ajay.Arora@in.ey.com
E: Amit.Khandelwal@in.ey.com
company limited by guarantee, does not provide
services to clients. For more information about our Kuldeep Tikkha Sailesh Rao
organization, please visit ey.com. Partner and National Leader Partner and National Leader
Transaction Diligence Corporate Finance Strategy
E: Kuldeep.Tikkha@in.ey.com E: Sailesh.Rao@in.ey.com
Ernst & Young LLP is one of the Indian client serving member firms
of EYGM Limited. For more information about our organization,
please visit www.ey.com/in. PE Value Creation and Operational Transaction
Ernst & Young LLP is a Limited Liability Partnership, registered Services
under the Limited Liability Partnership Act, 2008 in India, having
its registered office at 22 Camac Street, 3rd Floor, Block C, Akhil Puri Naveen Tiwari
Kolkata – 700016 Partner and National Leader Partner and National Leader
PE Value Creation Operational Transaction Services
© 2018 Ernst & Young LLP. Published in India. E: Akhil1.Puri@in.ey.com E: Naveen1.Tiwari@in.ey.com
All Rights Reserved.

This publication contains information in summary form and is Research and Insights
therefore intended for general guidance only. It is not intended to
be a substitute for detailed research or the exercise of professional
Allwyn D’Souza
judgment. Neither EYGM Limited nor any other member of the Senior Manager
global Ernst & Young organization can accept any responsibility for E: Allwyn.Dsouza@in.ey.com
loss occasioned to any person acting or refraining from action as a
result of any material in this publication. On any specific matter,
reference should be made to the appropriate advisor. Brand, Marketing and Communications
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