MILESTONE DOMESTIC SCHEME III (MDS III)

A Real Estate Fund with Equity like Returns & Debt like Security

PAGE NO.

FUND SUMMARY

1-3

MILESTONE CAPITAL - OVERVIEW & PAST PERFORMANCE

4-6

STRUCTURED / MEZZANINE FUNDING - OVERVIEW & RATIONALE

7-10

FUND - STRUCTURE, INVESTMENT PROCESS, INVESTMENT PHILOSOPHY & TEAM

11-14

RISK, MITIGANTS & INVESTOR PROTECTION

15-16

APPENDIX

17-23

DISCLAIMER: THIS PRESENTATION IS INTENDED ONLY FOR THE BENEFIT OF POTENTIAL INVESTORS TO WHOM THE PRESENTATION IS MADE OR DELIVERED FOR THE PURPOSE OF CONSIDERING A POSSIBLE INVESTMENT IN THE MILESTONE DOMESTIC SCHEME III (The Fund). THE PRESENTATION IS NOT AND SHOULD NOT BE DEEMED TO
CONSTITUTE AN OFFER TO INVEST OR A SOLICITATION OF AN OFFER TO INVEST, TO OR FROM THE PUBLIC IN GENERAL OR TO OR FROM ANY PERSON OTHER THAN THE PERSON TO WHOM THE SAME IS ADDRESSED.
ANY REPRODUCTION HEREOF IN WHOLE OR IN PART, OR THE DISCLOSURE OF ITS CONTENTS OR THE DISTRIBUTION OF THE PRESENTATION, WITHOUT THE PRIOR WRITTEN CONSENT OF MILESTONE CAPITAL ADVISORS LIMITED, IS PROHIBITED.
THE CONTENTS OF THE PRESENTATION ARE PROVISIONAL AND MAY BE SUBJECT TO CHANGE. THE PRESENTATION IS NEITHER A PROSPECTUS NOR AN OFFER OR INVITATION TO APPLY FOR UNITS OF FUND. THE INFORMATION CONTAINED HEREIN IS NOT EXHAUSTIVE AND MUST BE READ IN CONJUNCTION WITH THE INFORMATION MEMORANDUM
AND OTHER DOCUMENTS.
WHILE REASONABLE CARE HAS BEEN TAKEN TO ENSURE THAT THE INFORMATION INCLUDED HEREIN IS CORRECTLY AND FAIRLY REPRESENTED, MILESTONE AND OTHER PARTIES INVOLVED IN THE PREPARATION HEREOF ASSUME NO LIABILITY FOR THE RELEVANCE, ACCURACY OR COMPLETENESS OF THE CONTENTS HEREIN.
CERTAIN INFORMATION CONTAINED IN THIS PRESENTATION CONSTITUTES FORWARD-LOOKING STATEMENTS, OPINIONS OR BELIEFS. DUE TO VARIOUS RISKS AND UNCERTAINTIES, ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY FROM SUCH FORWARD-LOOKING STATEMENTS, OPINIONS OR BELIEFS. CERTAIN INFORMATION CONTAINED
IN THIS PRESENTATION (INCLUDING MARKET DATA) HAS BEEN OBTAINED FORM THIRD PARTY SOURCES. WHILE SUCH INFORMATION IS BELIEVED TO BE RELIABLE FOR THE PURPOSES USED HEREIN, NO REPRESENTATIONS ARE MADE AS TO ACCURACY OR COMPLETENESS THEREOF AND MILESTONE DOES NOT TAKE ANY RESPONSIBILITY FOR
SUCH INFORMATION
IN MAKING AN INVESTMENT DECISION, POTENTIAL INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE FUND DOCUMENTS AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. BEFORE MAKING AN INVESTMENT, EACH POTENTIAL INVESTOR SHOULD MAKE ITS INDEPENDENT ASSESSMENT AND INQUIRIES
AND CONSULT ITS OWN ADVISORS AS TO LEGAL, BUSINESS, TAX AND RELATED MATTERS CONCERNING AN INVESTMENT IN FUND.
THE FUND AND ITS PORTFOLIO COMPANIES ARE SUBJECT TO SEVERAL RISK FACTORS THAT MAY AFFECT THE FUND PERFORMANCE.

FUND SUMMARY

FUND SUMMARY

FUND OVERVIEW

d)NDIAFOCUSED3%")REGISTERED2EAL%STATE&UNDWITHAN)NVESTMENT(ORIZONOFYEARS

d!TTRACTIVERETURNSWITHLOWERRISKTHROUGHINVESTMENTINREALESTATEPROJECTSWHICHHAVEMADESIGNICANTPROGRESSANDHAVETEMPORARYFUNDINGGAPS
d&UND3IZE2SCRORESPLUS'REEN3HOEOPTIONOF2SCRORES

STRUCTURED/MEZZANINE
FINANCING OPPORTUNITIES
IN REAL ESTATE

d,ACKOFDEBTNANCINGEQUITYFUNDINGFALLINREALESTATEPRICESCOUPLEDWITHRENANCINGNEEDSHAVECREATEDFUNDINGISSUESANDTHEREBY

CREATEDOPPORTUNITIESFOR3TRUCTURED-EZZANINE&INANCEWHICHHAVECHARACTERISTICSOFBOTHEQUITYANDDEBT

INVESTMENT STRATEGY

d)NVESTMENTINHIGHQUALITYPROJECTSWHICHAREEITHERUNDERCONSTRUCTIONORPROJECTSWHICHARETOBELAUNCHEDWITHINMONTHS
d&OCUSON4OPCITIESALONGWITHDEVELOPMENTPARTNERSWHOHAVETHEMARKETEXPERTISECONSTRUCTIONMANAGEMENTCAPACITYANDGOODTRACK
RECORDOFPROJECTEXECUTION
d)NVESTMENTSAREBASEDONSTRONGDILIGENCEANDCARRYAPREFERREDXEDRETURNWITHANUPSIDEVARIABLERETURN

INVESTMENT ADVISOR

d-ILESTONE#APITAL!DVISORS,IMITED
d3IGNICANTEXPERIENCEIN2EAL%STATEAND0RIVATE%QUITY
d!DVISES)NDIAFOCUSEDREALESTATEFUNDSAGGREGATING2SCRORES
d4EAMHASACOLLECTIVEEXPERIENCEOFADVISINGINVESTMENTSOFOVER2SCRORESINVARIOUSREALESTATEPROJECTS

4HEFUNDCANOPTIONALLYINCREASETHEFUNDLIFEBYTWOONE YEAREXTENSIONSFROMNALCLOSINGDATE

FUND SUMMARY

UNIQUE
INVESTMENT OPPORTUNITY

PROVEN TRACK
RECORD OF
INVESTMENT ADVISOR

LOW COSTS AND

ADVISOR SHARE LINKED
TO PERFORMANCE

d5NIQUEOPPORTUNITYINMEDIUMTERMSTRUCTUREDREALESTATEINVESTMENTSAIMEDATGENERATINGSUPERIORRETURNS

The Advisors proven investment strategy of applying the rigor of private equity evaluation approach to real estate opportunities
ensures attractive returns on capital
d!DVISEDONSIMILARDEALSINTHEPASTWITHQUALITYDEVELOPERS
d!DVISES)NDIASRSTPRIVATE2%)4 LIKEFUNDSTRUCTUREINPARTNERSHIPWITH),&&3)NVESTMENT-ANAGERS,TD WHICHHASDISTRIBUTEDQUARTERLYRETURNSTO
INVESTORSFORQUARTERSIN),&&3-ILESTONE&UND )ANDFORQUARTERSIN),&&3-ILESTONE&UND ))
d-ILESTONE$OMESTIC3CHEME )SINCEITSLAUNCHINHASNALISEDEXITSFOROFITCORPUSATINVESTMENTMULTIPLESRANGINGBETWEENX X
d),&&3-ILESTONE&UND )SINCEITSLAUNCHINHASNALISEDEXITSFOROFITCORPUSATINVESTMENTMULTIPLESOFOVERX
d2ELATIVELYLOWERANNUALMANAGEMENTFEEPA COMPAREDTOTHEMARKETPRACTICEOFPA
d3HAREINPROTSWITHCATCH UP ONLYAERTHEINVESTORSRECEIVETHEIRHURDLERATEOFRETURNPRE TAXANNUALIZED

KEY FUND TERMS

FUND LIFE

YEARSOPTIONOFEXTENSIONOFTWOTERMSOFONEYEAREACH

MINIMUM COMMITMENT

d2SCROREFOR"ANKSAND)NSTITUTIONS
d2SLAKHSFOR#ORPORATES4RUSTS
d2SLAKHSFOR)NDIVIDUALINVESTORS2SLAKHSIFPAYMENTISMADEINASINGLEINSTALLMENT

DRAWDOWN

d/PTION5PFRONTPAYMENT-INIMUM2SLAKHS
d/PTIONUPFRONTANDBALANCEINTWOINSTALLMENTSOFEACH-INIMUM2SLAKHS

COMMITMENT PERIOD

-ONTHSFROMNALCLOSINGDATE

HURDLE RATE

0RE4AX0OST%XPENSES PA

TARGET RETURN

0RE4AX0OST%XPENSES PA

CARRIED INTEREST



MANAGEMENT FEE

!NNUAL-ANAGEMENT&EESOFCOMMITMENTAMOUNT
/NE4IME3ETUP&EESOFCOMMITMENTAMOUNT

REDEMPTION AND DISTRIBUTIONS

d#APITALREDEMPTIONEXPECTEDTOSTARTRDYEARONWARDS
d0OSSIBILITYOFANNUALYIELDDISTRIBUTIONS

#ARRIED)NTERESTWILLBECHARGEDAERDISTRIBUTIONOFTOTALINVESTMENTAMOUNTANDHURDLERATEOFRETURNWITHCATCH UP

MILESTONE CAPITAL OVERVIEW AND

PAST PERFORMANCE

MILESTONE CAPITAL ADVISORS - OVERVIEW

EXPERIENCE IN REAL ESTATE

d3IGNICANTEXPERIENCEIN2EAL%STATEANDMANAGINGAN!5-OFOVER2SCRORESSINCE
dOFTHATISCOMMITTEDINPROJECTSACROSSCITIESEXCL-ILESTONE&UND,,#
d4HETOTALAREAUNDERDEVELOPMENTISOVERMILLIONSQANDUNDEROPERATIONALMANAGEMENTISABOUTMILLIONSQ
d)NDIASRSTPRIVATE2%)4 LIKEFUNDSTRUCTUREANDREALESTATEFUNDIN)NDIATODISTRIBUTEQUARTERLYRETURNSTOINVESTORS
Real Estate Funds Asset Class Mix (Area)

Real Estate Funds Raised (Rs. Crores)

525

505
425

400

RESIDENTIAL 45%
COMMERCIAL 25%

230

RETAIL 1%
LOGISTIC PARKS 29%
MDS I
2007

IL&FS
Milestone I
2007

MDS II
2008

Milestone
IL&FS
Milestone II Fund LLC
2009
2009

WELL RESOURCED
INVESTMENT PLATFORM

d7IDERESOURCEBASEANDANEXPERIENCEDMANAGEMENTTEAMWITHACOLLECTIVEEXPERIENCEOFOVERYEARS
d)N HOUSETEAMOFPEOPLEFORINVESTMENTMANAGEMENTLEGALRISKTECHNICALANDDEVELOPMENTANDOPERATIONALASSESSMENT

RAPID BUSINESS GROWTH

d!SSETSUNDER-ANAGEMENT!5- OF2SCRORES7HICH)NCLUDES!5-OF2S#ROREIN2EAL%STATE

d/VER(.)INVESTORSACROSSDOMESTICFUNDS

PERFORMANCE

d$ELIVEREDCONSISTENTRETURNSTOINVESTORSEVENINDICULTMARKETCONDITIONS
d%XITEDFROMSELECTINVESTMENTSINPREVIOUSDEVELOPMENT&YIELDFUNDS-ILESTONE$OMESTIC3CHEME )& IL&&3-ILESTONE&UND )
d),&&3-ILESTONE&UND )&))HAVEMADEREGULARQUARTERLYYIELDPAYOUTSTOTHEIRINVESTORS

CORPORATE GOVERNANCE

d3TRONG#ORPORATE'OVERNANCEPRACTICES
d %MINENT )NDUSTRY LEADERS AS "OARD OF $IRECTORS ;!MIT $ALAL %XECUTIVE $IRECTOR 4ATA )NVESTMENT #ORPORATION ,IMITED  .AWSHIR +HURODY %X -$
6OLTAS 2AJ.ARAIN"HARADWAJ%X #HAIRMAN&-$,)# "HAGYAM2AMANI%$')# 6+#HOPRA%X #HAIRMAN&-$#ORPORATION"ANK  3)$") $R0RAVIN
3HAH#HARTERED!CCOUNTANT !RVIND"ANSAL%MINENT)NVESTMENT"ANKER 6ED0RAKASH!RYA#%/&-$-ILESTONE#APITAL!DVISORS,IMITED =

The team includes professionals with investment, development and management skills who are actively involved and add value at each stage of the investment lifecycle
4

MILESTONE CAPITAL ADVISORS - DEVELOPMENT FUNDS PERFORMANCE

DETAILS OF EXITS
Location

Fund

Development Type

Exit Extent

Investment
Date

Exit Date

Investment Multiple
(Times)

-UMBAI+ALINA

-$3)

2ESIDENTIAL

0ARTIAL%XIT

&EB

!UG

X

#HENNAI

-$3)

2ESIDENTIALAND#OMMERCIAL

0ARTIAL%XIT

-AR

!UG

X

!HMEDABAD3'(IGHWAY

-$3)

0LOTTED$EVELOPMENTS

&ULL%XIT

&EB

!UG

X

-$3)

2ESIDENTIAL4OWNSHIP

0ARTIAL%XIT

!UG

3EPT

X

+OLKATA3ODEPUR

Since its launch in 2007-$3)HASALREADYNALISEDEXITSFOROFTHEINVESTEDCORPUSATANEXITMULTIPLEOFXX

MILESTONE CAPITAL ADVISORS - YIELD FUNDS PERFORMANCE

DETAILS OF EXITS
Location

Fund

Development Type

Exit Extent

Investment
Date

Exit Date

Investment Multiple
(Times)

+OLKATA3ALT,AKE

), & &3-ILESTONE&UND )

#OMMERCIAL

&ULL%XIT

-ARCH

!UG

X

-UMBAI*OGESHWARI

), & &3-ILESTONE&UND )

#OMMERCIAL

&ULL%XIT

$EC

/CT

X

Regular quarterly payouts to investors have been made in the range of 10% -12% from IL&FS Milestone Fund-I & II
Since its launch in 2007, IL&&3)HASALREADYNALISEDEXITSFOROFTHEINVESTEDCORPUSATANEXITMULTIPLEOFOVERX

STRUCTURED / MEZZANINE FUNDING OVERVIEW AND RATIONALE

MARKET SCENARIO AND OPPORTUNITY

CURRENT MARKET SCENARIO

d3UBSTANTIALLANDACQUISITIONSBY$EVELOPERSANDLARGEEXECUTIONPIPELINEHAVERESULTEDINSATURATIONOFTHEFUNDINGPIPELINE
d-ANY$EVELOPERSARENDINGITDICULTTORAISECONSTRUCTIONNANCEANDHENCEAREUNABLETOEITHERCOMMENCEORCOMPLETECONSTRUCTIONOFCOMMERCIALANDRESIDENTIALPROJECTS
d,ACKOFFUNDINGFROM"ANKS#APITAL-ARKETSANDLIMITEDFUNDINGFROM0RIVATE%QUITY
d4HOUGHTHESECTORHASWITNESSEDABOUNCEBACKHOWEVERANANTICIPATEDPRICECORRECTIONWILLRESULTINSTRESSONCASHOWS
d(IGHGEARINGOFCOMPANIESISCREATINGSTRESSONTHEBALANCESHEET

PROPOSED STRATEGY: MDS III Investment Horizon of 3 years [option of extension of two terms of one year each]
d4HESTRATEGYFOR-$3)))ISTOTARGETQUALITYPROJECTSWHICHHAVEMADESIGNICANTPROGRESSANDFACINGTEMPORARYFUNDINGGAPS4HESTRATEGYFORA-$3)))ISBASEDONTHEFOLLOWINGFACTORS
Nature of Funding:#HARACTERISTICSOFBOTHEQUITYANDDEBTWITHAMULTILAYEROFSECURITYFORTHEINVESTMENT
Attractive Returns:3UPERIORRETURNSATLOWERRISKTHROUGHINVESTMENTATXEDPREFERREDRETURNWITHBUILTINUPSIDEVARIABLERETURN
Lower Risk:3INCEINVESTMENTWILLBEMADEINPROJECTSWHICHHAVEMADESIGNICANTPROGRESSTHEDEVELOPMENTRISKISSIGNICANTLYLOWER
Pricing:/PPORTUNITYTOBENETFROMPRICINGANOMALIESANDEXTRACTMAXIMUMVALUEONANOPPORTUNISTICBASIS
Short Tenure:5NLIKE$EVELOPMENTNANCEFOR2EAL%STATE3TRUCTUREd  -EZZANINE&INANCEISUSUALLYFORAPREDENEDSHORTERDURATION
Origination:4HEABILITYTOORIGINATEDEALSCANBELEVERAGEDTOSOURCEQUALITYTRANSACTIONS

CONCEPT OF STRUCTURED / MEZZANINE FINANCING

FEATURES

ATTRACTIVENESS

KEY CONSIDERATIONS

d #HARACTERISTICSOFBOTHEQUITYANDDEBTSINCEITISA
NANCINGLAYERBETWEENLONGTERMDEBTANDEQUITY
d ,IQUIDATIONPRIORITYTHANEQUITYINCASEOFBANKRUPTCY
WHILSTRETAININGARETURNUPSIDEMOREATTRACTIVETOTHATOF
CONVENTIONALSENIORNANCING
d 0ARTICIPATESINCOMPANYSNANCIALSUCCESSWITHOUT
SIGNICANTDILUTIONOFEXISTINGEQUITY
d -ULTILAYEROFSECURITIESAND0ROMOTERS'UARANTEETOHEDGE
AGAINSTDEFAULT

d 0ROVIDESRETURNSHIGHERTHANDEBTANDHAS
LOWERRISKSTHANEQUITY
d(IGHERREALESTATEYIELDSWILLSUPPORT
HIGHERLEVERAGE
d,IKELYANNUALCOUPONPAYOUT
d 3INCENANCINGISUSUALLYFORADENED
PERIODTHEREISVISIBILITYOFEXIT

d4RANSACTIONSELECTIONANDSOURCING
d(IGHQUALITYPROJECTS
d'OODANDREPUTEDDEVELOPERS
d&OCUSONADEQUATESECURITY
d%ECTIVETRANSACTIONSTRUCTURING
FOCUSINGONRETURNSANDEASEOFEXIT

0GPH0CQROK.OLIC

Indicative Capital Structure

DEBT 45%
EQUITY 25%
MEZZANINE STRUCTURE 30%

Typical Annual Return (%)

30

Equity

25
20

Mezzanine
15

Debt
10

Risk (Volatility)

REAL ESTATE FUNDING - COMPARISON

DEVELOPMENT FINANCE

COMPLETED PROJECTS FINANCE

STRUCTURED/MEZZANINE FINANCE

Investment Strategy

&OCUSONFUNDINGTHEDEVELOPMENT
LIFECYCLEOFTHEPROJECT

&OCUSONFUNDINGACOMPLETEDPROJECT
WHICHISSUBSTANTIALLYOCCUPIEDBYTENANTS
PAYINGRENTALS

&OCUSONBRIDGINGTHEFUNDINGGAP
BETWEENEQUITYANDDEBTFORAPROJECT
HAVINGMADESIGNICANTPROGRESS

Stake

-INORITY -AJORITY)NTERESTS

-AJORITY)NTERESTS

-INORITY)NTERESTS

Evaluation Approach

)N $EPTH&OCUSONAMULTITUDEOFFACTORS

,ESSINTENSE&OCUSON#ONSTRUCTIONAND
4ENANT1UALITY

)N $EPTH&OCUSONAMULTITUDEOFFACTORS

Investment Term

,ONG4ERM YEARS

-EDIUM4ERM YEARS

3HORT -EDIUM4ERM YEARS

Security

0HYSICALOWNERSHIPOFPROPERTY
TOTHEEXTENTOFSTAKE

0HYSICALOWNERSHIPOFPROPERTY
TOTHEEXTENTOFSTAKE

-ULTILAYEROFSECURITIESAND0ROMOTERS
'UARANTEE

Return

 PA

 PA

 PA

Periodicity of Returns

/NEXIT

2EGULARYIELD/NEXIT

0RIMARILYONEXITWITHAPOSSIBILITYOF
REGULARYIELD

Rights at Liquidation

3ECONDARYTO$EBT3TRUCTUREDAND
0REFERRED#APITAL

3ECONDARYTO$EBT3TRUCTUREDAND
0REFERRED#APITAL

0OST$EBTPRIORTO%QUITY#APITAL

COMPLETED SIMILAR INVESTMENTS

The following are select completed investments in existing funds with a similar investment strategy to that of MDS III

Godrej Prakriti
$EVELOPMENT4YPE

-IXEDUSE

4OTAL!REA

MN3Q

0ROJECT4IMEFRAME

 YEARS

,OCATION

+OLKATA

Dheeraj Insignia
$EVELOPMENT4YPE

2ESIDENTIAL

4OTAL!REA

MN3Q

0ROJECT4IMEFRAME

 YEARS

,OCATION

-UMBAI

Neptune Swarajya
$EVELOPMENT4YPE

2ESIDENTIAL

4OTAL!REA

MN3Q

0ROJECT4IMEFRAME

 YEARS

,OCATION

.AVI-UMBAI

The above investment are structured transactions with adequate security coverage
for investment

10

FUND STRUCTURE, INVESTMENT PROCESS,

INVESTMENT PHILOSOPHY AND TEAM

MDS III - FUND STRUCTURE AND TAXATION

Investors

Investment Advisor
Milestone Capital
Advisors Limited

Investment

Distribution

Management
Fees

Milestone Domestic Scheme - III

(A SEBI Registered Venture Capital Fund)
Investment by way of
Equity & Equity Linked Instruments

Portfolio Company 1

Trustee
),&34RUST#OMPANY,TD
Milestone Trusteeship
Services Private Limited

Exit
Proceeds

Portfolio Company 2

Portfolio Company 3

TAXATION
d&UNDWOULDMAINLYHAVEINTERESTINCOMEANDLONGTERMCAPITALGAINATTHETIMEOFSALEOFPROJECT
d4HE&UNDHASBEENSTRUCTUREDASADISCRETIONARYTRUST4HEREISNODOUBLETAXATIONASPER3ECTIONOFTHE)NCOME4AX!CT&UNDWILLBEPAYINGTHETAXASPER
3ECTIONOFTHE)NCOME4AX!CT
d)NTERESTINCOMEARISINGFROM0ORTFOLIO#OMPANYISTAXABLEATMAXIMUMMARGINALRATEAPPLICABLETO&UND
d,ONGTERMCAPITALGAINTAXONSALEOFSECURITIES CURRENTLYEXCLUDINGAPPLICABLESURCHAGE & CESS INUNLISTEDSECURITIES

11

MDS III - INVESTMENT PROCESS

IC
Approval

b0ROPRIETARYDEALOWTHROUGHA
network of extensive
relationships
b)NTERMEDIARYRELATIONSHIPSWITH
investment banks, brokers,
property agents

b$ESKTOPEVALUATIONOFTHE
opportunity

b)NDEPTHANALYSISOFTHEMARKET
including catchment area SWOT
analysis

b0REFEASIBILITYSTUDYANDINTERNAL
discussions

Transaction Sourcing

b"UILDER$EVELOPERPROLINGFOR
judging construction & project
execution capability

Preliminary Screening

Detailed Review

Deal
Monitoring

b2EVIEWINGTHEDEVELOPMENTANDMARKETING
plans and providing valuable inputs to the
developers if required at various stages

b0REPARINGDETAILEDPROPOSALFOR
the Investment Committee and
obtaining their approval

Presentation to
Investment Committee (IC)
Term
Sheet

Deal
Closure

b%XECUTIONOFAGREEMENTS
and security creation

b#ONTINUOUSMONITORINGOFOPERATIONSAND
NANCESOFTHEPORTFOLIOCOMPANY

b&INANCIALDETAILEDDUEDILIGENCE
conducted by the team/third
party

b4RANSACTION3TRUCTURING
b0REPARINGANDSIGNINGTHE
term sheet

b,EGALDUEDILIGENCETOBE
conducted by external agencies

b-ONTHLYREPORTINGANDMAINTENANCEOF-)3

$ENITIVE!GREEMENT
Signing

Active Management

Detailed Due Diligence

Negotiation

Exit
Proceeds

b%VALUATIONOFEXITMODEANDFEASIBILITY
as well as timing including selection
of bankers
b%XITTHROUGHBUYBACKSTRATEGICSALE
capital redemption

Investor
Returns

-ANAGING%XIT

12

MDS III - INVESTMENT PHILOSOPHY

MDS III - Segment Focus

MDS III - Geographical Focus

RESIDENTIAL 75%

WEST 60%

COMMERCIAL 15%

SOUTH 25%

OTHERS 10%

OTHERS 15%

DERISKING *

13

Investment Focus

4OPCITIESANDDEVELOPMENTPARTNERSWHOHAVETHEMARKETEXPERTISECONSTRUCTIONMANAGEMENTCAPACITYGOODTRACKRECORDOF

PROJECTEXECUTION

Single Company Level Investment Limits

5PTO OFCORPUS

Single Developers/Group Level Investment Limits

5PTO OFCORPUS

+INDLYNOTETHATTHEREMIGHTBEVARIATIONINTHEABOVEINVESTMENTPHILOSOPHYDEPENDINGUPONTHEMARKETCONDITIONAND)NVESTMENT!DVISORSSTRATEGY

MDS III - TEAM PROFILE

Ashish Joshi-ANAGING0ARTNER2EAL%STATE)NVESTMENTS -ILESTONE#APITAL!DVISORS

d!SHISHHASOVERYEARSOFEXPERIENCEINACROSSREALESTATELOGISTICSANDTELECOMINDUSTRY
d0REVIOUSLYASSOCIATEDWITH0ENINSULA,AND#&/ %X $IRECTOR"USINESS$EVELOPMENTAND!DMINISTRATIONOF(APAG,LOYD
d#HARTERED!CCOUNTANTANDA#OST!CCOUNTANT
Mahesh Payannavar3ENIOR0RINCIPAL2EAL%STATE)NVESTMENTS -ILESTONE#APITAL!DVISORS
d-AHESHHASOVERYEARSOFEXPERIENCEINCAPITALMARKETSANDREALESTATEINVESTMENTS
d%X60WITH5RBAN)NFRASTRUCTURE6ENTURE#APITALHISPRIMARYRESPONSIBILITYWASTOMANAGETOTALFUNDINVESTMENTOF2SCRORES
d--3IN&INANCEFROM-UMBAI5NIVERSITYAND"%#HEM FROM"ANGALORE5NIVERSITY
Bhavya Bagrecha!602EAL%STATE)NVESTMENTS -ILESTONE#APITAL!DVISORS
d"HAVYAHASOVERYEARSOFNANCIALSECTOREXPERIENCEWITHAFOCUSONTHESTEELANDREALESTATEINDUSTRY
d"HAVYAWASWORKINGAS#ONSULTANTTOVARIOUSREALESTATEENTITIES(EHASALSOWORKEDWITH4!4!3TEELASANANCIALANALYSTINTHEIR&INANCIAL
-ANAGEMENTAND#OSTING'ROUP
d#HARTERED!CCOUNTANT#OST!CCOUNTANTAND#OMPANY3ECRETARY
Nilesh Karkhanis!602EAL%STATE)NVESTMENT-ANAGEMENT -ILESTONE#APITAL!DVISORS
d.ILESHHASOVERYEARSOFEXPERIENCEASAPROFESSIONALARCHITECT
d%XTENSIVEEXPERIENCEINPLANNINGANDDESIGNFORALLASSETCLASSES
d,ICENSED!RCHITECTWITHSIGNICANTINTERNATIONALEXPOSUREINARCHITECTURE
Rahul Deshpande!602EAL%STATE)NVESTMENT-ANAGEMENT -ILESTONE#APITAL!DVISORS
d2AHULHASOVERYEARSOFEXPERIENCEINREALESTATEPROJECTMANAGEMENT
d7ORKEDFOR0ROZONE%NTERPRISE0VT,TDAS'- 0ROJECTSANDINVOLVEDOVERALLPROJECTMANAGEMENTINCLUDINGINTERACTIONWITHARCHITECTSAND
OVERSEASJOINTPARTNERSFORUNDERSTANDINGTHEOPERATIONSREQUIREMENTSETC
d0OSTGRADUATEIN!DVANCED#ONSTRUCTION-ANAGEMENTFROM.)#-!20UNE

14

RISK, MITIGANTS AND INVESTOR PROTECTION

MDS III - KEY RISK CONSIDERATIONS AND MITIGANTS

Key Risk Type

Key Risk Factors

Key Mitigants

d#HANGESINTHEECONOMICCONDITIONS
d#HANGESINREGULATIONSPERTAININGTOREALESTATE
d)NTERESTRATEMOVEMENTS

d)NVESTMENTSTRATEGYOFTHEFUNDFOCUSESONSHORTTERMTO
MEDIUMINVESTMENTS
d#ONTINUOUSMONITORINGOFTHE%CONOMICAND2EGULATORY
CONDITIONSANDADAPTINGINVESTMENTSACCORDINGLY

Execution Risk

d3LIPPAGESINDEVELOPMENTTIMELINES
d#HANGESIN'OVERNMENTPOLICYANDORLEGISLATIONWITHRESPECT
TODEVELOPMENTALNORMS
d$ELAYSINOBTAININGAPPROVALS

d3ELECTIONOFPROJECTSWITHREPUTEDDEVELOPERSWHOHAVE
CONSTRUCTIONEXPERIENCE
d2EVIEWOFCONSTRUCTIONPLANSANDPROGRESSANDSTATUSAPPROVALS
PRIORTOINVESTING

Financial Risk

d6ALUATION-ISMATCH
d3TOPPAGEOFEXISTINGDEBTEQUITYCAPITALINFUSIONBY
LENDERSSTAKEHOLDERS
d$ELAYINENDUSERABSORPTION

d5SINGCONSERVATIVENANCIALASSUMPTIONS
d6ISIBILITYONREVENUESTHROUGHPRE LEASINGANDPRE SALES
d3TRATEGICALLIANCESWITHSTRONGINTERMEDIARIES

Exit Risk

d,OWERVALUATIONS
d,ACKOFANEXITROUTEATTHETIMEOFEXIT

d)NVESTMENTTOBESTRUCTUREDWITH0UT#ALLOPTIONTOSELLBUYTHE
SHARESATTHEAGREEDVALUATION
d5SINGCONSERVATIVENANCIALASSUMPTIONSATTHETIMEOFINVESTMENT

General Risks

d-ALPRACTICESORMISREPRESENTATIONSBYTHEDEVELOPERCOMPANY

d!RMATIVERIGHTSONCRITICALMANAGEMENTDECISIONS
d2IGHTTOAPPOINTDIRECTORSONTHEBOARDOFTHE3060ORTFOLIOCOMPANY

Economic and
Regulatory Risks

15

TYPICAL PROTECTION RIGHTS

SECURITIES ON INSTRUMENTS

16

CONTROL AND MANAGEMENT

Put / Call Option

Investment to be structured with Put / Call option to

sell / buy the shares at the agreed valuation

Board Seat

Right to appoint directors on the board of the

SPV /Portfolio company

Share Pledge/
Escrow

Promoters shares in the SPV/Portfolio company would

be pledged in an escrow account and pledge would be
released only upon receiving the agreed return

Escrow mechanism

The sale proceeds of the project would be deposited

in the Escrow account which would be jointly
managed by Investor and Promoter / Developer

Guarantee

Corporate or personal guarantee of the Promoters

to be invoked in case of default in payment of
agreed return

OJ?QGSCOGEFQP

!RMATIVERIGHTSONCRITICALMANAGEMENTDECISIONS

APPENDIX

APPENDIX A

17

INDICATIVE DEAL PIPELINE

Project

Location

Development
Type

Project 1

,OWER0AREL -UMBAI

2ESIDENTIAL





Project 2

#HEMBUR -UMBAI

2ESIDENTIAL





Project 3

"ANGALORE

2ESIDENTIAL





Project 4

.OIDA .#2

2ESIDENTIAL





Project 5

6ARIOUS,OCATIONS 0UNE

2ESIDENTIAL





Project 6

3HADNAGAR (YDERABAD

2ESIDENTIAL





Project 7

6IRAR -UMBAI

2ESIDENTIAL





OC?PN 

Indicative Amount
(Rs. crores)

APPENDIX B

INDIA MACROECONOMICS - STEADY GROWTH IN POPULATION AND URBANIZATION

Total number of Households (million)

Urban CAGR
Rural CAGR

3%
2%

Population (million) and Annual Growth Rates (%)

180

1200

160

1150

3%
2%

140
120

1100

100

1050

2%

1000

1%

80
60
40

950

20

Source: NCAER

08-09

07-08

06-07

05-06

850

04-05

Rural Households

03-04

2009-10

02-03

Urban Households

2005-06

01-02

2001-02

00-01

1998-99

99-00

1995-96

98-99

1%

900

0%

3OURCE0LANNING#OMMISSION2")

d7ITHAPOPULATIONOFOVERCRORES)NDIAISTHESECONDMOSTPOPULOUSCOUNTRYINTHEWORLDANDACCOUNTSFORAROUNDOFTHEGLOBALPOPULATION

d!NESTIMATEDOFTHEPOPULATIONISBELOWYEARSAGEANDAPPROXIMATELYOFTHEPOPULATIONISINTHE YEARAGECATEGORY
d-AJORITY^ OFTHEPOPULATIONOF)NDIARESIDESINRURALAREASACROSSVILLAGES WHILE^OFTHEPOPULATIONRESIDESIN5RBAN)NDIAACROSSAROUNDTOWNSCITIES

18

APPENDIX B

INDIA MACROECONOMICS - GDP GROWTH LED BY SERVICES & INDUSTRIAL PERFORMANCE

'$0&ACTOR#OSTAND'ROWTH2ATES

'$0#OMPONENTS'ROWTH2ATES
12%

50,000
45,000

10%

40,000
35,000

8%

30,000

12%
10%
8%

6%

25,000

6%

20,000
4%

15,000
10,000

2005

2006

2007

'$0 &ACTOR#OST2S"N

2008

2009

2010

4%

2%

2%

0%

0%

5,000
0

14%

Growth Rate (%)

2005

2006
Agriculture

2007

2008

Manufacturing

2009

2010

Services

3OURCE2")

d'OVERNMENTMEASURESSUPPORTEDAROBUSTANDRAPIDRECOVERYWITH)NDIARECORDINGTHESECOND FASTESTECONOMICGROWTHRATEINTHEWORLD

d!EREXPERIENCINGAVERAGE'$0GROWTHOFBETWEENANDTHEPACEOF)NDIASECONOMICGROWTHSLOWEDDOWNINANDTOANDRESPECTIVELY
)NCOMPARISONTHEGLOBALECONOMYCONTRACTEDBYIN
d4HESHAREOFTHESERVICESECTORINOVERALL'$0HASINCREASEDFROMOF'$0INTO^INSCALYEAR&9 4HESERVICEANDMANUFACTURINGSECTORSCONTINUETO
EXPERIENCEDYNAMICGROWTHRECORDINGANDRESPECTIVELYIN1&9
d!GGRESSIVESCALSTIMULIANDMONETARYEASINGWEREEMPLOYEDBYTHE)NDIANGOVERNMENTTOMAINTAINTHEECONOMYSHISTORICALGROWTHTRAJECTORY4HERESULTINGBUDGETDECITS
INCREASEDTHECOUNTRYSDEBT TO '$0RATIO)NDIAHASANEXTERNALDEBT TO '$0RATIOOFVSFORTHE53ANDFOR5+

19

3OURCE2")

APPENDIX B

INDIA MACROECONOMICS - OTHER FACTORS ALSO INDICATE A FAVOURABLE TREND

Foreign Investment (US$ bn)

Performance of the Indian Stock Indices and Dow Jones

25000

45



40

20000



35
15000

30
25

10000

20





15

5000

10

Construction

Housing & Real Estate

Other Sectors

3OURCE2")*ONES,ANG,A3ALLE-ORGAN3TANLEY

.IY

3ENSEX

May-10

Jan-10

Mar-10

Sep-09

Nov-09

Jul-09

May-09

Jan-09

Mar-09

Nov-08

Jul-08

Sep-08

2009-10

May-08

2008-09

Jan-08

 
2007-08

0
Mar-08



2006-07



Nov-07

 



Jul-07



Sep-07

2005-06



Mar-07

 

May-07

Dow Jones

3OURCE"LOOMBERG

d)NDIACONTINUESTOBENETFROMASERIESOFGOVERNMENTREFORMSTHATHASINCREASEDTHECOUNTRYSCAPACITYFORFOREIGNINVESTMENTANDFACILITATEDTRADEWITHRESTOFTHEWORLD
&URTHER)NDIAHASRELATIVELYBECOMEANATTRACTIVEDESTINATIONFORMOSTFOREIGNINVESTORS
d+EYINDICESOF)NDIASCAPITALMARKETSHAVEAPPRECIATEDSIGNICANTLYSINCETHEIRTROUGHSINCEEARLY4HERISEHASBEENDRIVENBYSTRONGECONOMICANDCORPORATEFUNDAMENTALS
ANUPTURNINGLOBALEQUITYMARKETSSTRONGBUYINGFROMMUTUALFUNDSANDFOREIGNINSTITUTIONALINVESTORSANDCAPITALMARKETFRIENDLYTAXREFORMS
d)NATIONWHICHHADBEENNEGATIVEAS!UGHASTURNEDPOSITIVEDRIVENLARGELYBYSUPPLY SIDECONSTRAINTSINFOODPRODUCTSANDINCREASESINFUELPRICES4OCOMBATRISINGINATION
THE2")HASINCREASEDITSKEYLENDINGANDBORROWINGRATES
d)NDIAHASWITNESSEDARELATIVELYSTABLECURRENCYREGIMEBASEDONIMPROVINGEXPORTSRAPIDECONOMICGROWTHANDCAPITALINOWS

20

APPENDIX B

INDIA REAL ESTATE - IN RECOVERY MODE.

)NDIA2EAL%STATE)NDEX

14,000

12,000

6OLUMESKEEPDRYINGUP
DEVELOPERSADOPTWAITAND
WATCHATTITUDE

&INANCINGCOSTSSTART
RISINGSHARPLY

10,000

$EVELOPERNANCINGCOMPLETELY
HALTS)NCREMENTALSALESATA
STANDSTILL!SSETLIABILITYMISMATCH
ONBALANCESHEETWORSENS

8,000

6,000

4,000

2,000

6OLUMESPICKUPINTHEMASS
RESIDENTIALLAUNCHES
AT DISCOUNTTOPEAK
0RICESHOWINGSIGNSOF
STABILIZATIONANDEVENSTART
TOINCREASEIN-UMBAI.#2

0RICES&VOLUMES
CONTINUETOFALL
,ENDINGCONTRACTION
BEGINS
&INANCINGCOSTS
STARTRISING

3TOCKSFELL EVENFROMTHESE
LEVELSEVENASTHEYTRADEDONDISCOUNTS
TO.!6SESTIMATEDATTHATPOINT

0ROVISIONINGNORMSFOR
COMMERCIALREALESTATE
RAISEDTOFROM
2")DISALLOWED
RESTRUCTURINGOFLOANS

%QUITYRAISINGSSTART
,EVERAGECONCERNSALLAY

0OLICYBREATHER 2")PERMITTEDREALESTATE
LOANRESTRUCTURINGCOMESASABREATHER
(OMELOANRATECUTSANNOUNCED

3IGNSOFREVIVALINOCEMARKET
WITHLEASEENQUIRIESPICKINGUP

)NTRODUCINGOFSERVICE
TAXONRESIDENTIALSALES
3")($&#EXTENDS
TEASERHOMELOANS

2ESIDENTIALVOLUMESSTARTTOTAPERO
ESPIN-UMBAIASPRICESINCREASE
0ICKUPINTRANSACTIONSINLANDMARKET
)NCIDENCEOFSERVICETAXREDUCED

07  08 08 08 08   08 08 08 08 08  09 09 09 09   09 09 09 09 09  10 10 10 10   10
c- AN eb- ar- pr- ay- UN *UL ug- ep- ct- ov- ec- AN eb- ar- pr- ay- UN *UL ug- ep- ct- ov- ec- AN eb- ar- pr- ay- UN *UL uge
*
*
*
*
*
*
O N
O N
F
F
F
M A M
D
M A M
D
M A M
D
S
S
A
A
A

21

APPENDIX B

LED BY IMPROVEMENT IN RESIDENTIAL LAUNCHES AND SALES

Absorption Rate (%)

120%
100%
80%

40%
30%
20%
10%
0%
1Q08

2Q08

60%
Absorption Rate (%)

40%
20%

Pune

Hyderabad

4Q08

1Q09

NCR-Delhi

2Q09

3Q09

Chennai

4Q09

1Q10

2Q10

"ANGALORE

40%
30%
20%
10%
0%
1Q08

2Q10

2Q08

3Q08

4Q08

Hyderabad

1Q09

2Q09

Kolkata

3Q09

4Q09

1Q10

2Q10

Pune

Kolkata

3OURCE*ONES,ANG,A3ALLE

3OURCE*ONES,ANG,A3ALLE

70000

30%

60000

25%

50000

20%

40000
15%
30000
10%

20000

New Launches

Net Absorption

2Q10

0%
1Q10

0
4Q09

5%

3Q09

10000
2Q09

Chennai

1Q10

1Q09

"ANGALORE

4Q09

4Q08

Mumbai

3Q09

3Q08

NCR-Delhi

2Q09

2Q08

1Q09

1Q08

0%

3Q08

Mumbai

Absorption Rate
3OURCE*ONES,ANG,A3ALLE

22

APPENDIX C

23

SUPPORT PARTNERS

LEGAL ADVISORS

.ISHITH$ESAI&!SSOCIATES

TAX AND STRUCTURING

ADVISORS

'-+APADIA&#O

AUDITOR

32"ATLIBOI&#O%RNST9OUNG

VALUATION AND MARKET

INTELLIGENCE

KnIGHT&RANK)NDIA 0RIVATE,IMITED

REGISTRAR AND TRANSFER

AGENT

#OMPUTER!GE-ANAGEMENT3ERVICES#HENNAI

CONTACT INFORMATION - For Fund related queries

Mahesh Payannavar - Sr. Principal, Real Estate Investments
Email
: mahesh@milestonecapital.in
/CEPHONE  
#ELL
 

Amit Kumar - Regional Head North, Fund Raising & Investor Services
Email
: amit.kumar@milestonecapital.in
/CEPHONE  
#ELL
 

Sachin Tulsyan - !60"USINESS3TRATEGY& Development

Email
: sachin@milestonecapital.in
/CEPHONE  
#ELL
 

Ujwal Parekh - Associate, Real Estate Investments

Email
: ujwal@milestonecapital.in
/CEPHONE  
#ELL
 

Afaque Ahmed - VP, Real Estate Investments

Email
: afaque@milestonecapital.in
/CEPHONE  
#ELL
 

CONTACT INFORMATION - For Operational queries

Namrata Sharma - AVP, Investor Relations & Fund Raising
Email
: namrata@milestonecapital.in
/CEPHONE  
Cell
: 

Ami Jhaveri - Manager, Investor Relations

Email
: ami@milestonecapital.in
/CEPHONE  
Cell
: 

Prabhu A - Sr. Executive, Investor Relations

Email
: prabhu@milestonecapital.in
/CEPHONE  
Cell
: 

MILESTONE CAPITAL ADVISORS LIMITED

(ALLMARK"USINESS0LAZA/PP'URU.ANAK(OSPITAL"ANDRA% -UMBAI -AHARASHTRA).$)!
4EL&AXEMAILINFO MILESTONECAPITALIN\WEBSITEWWWMILESTONECAPITALIN