A RESEARCH PUBLICATION | December 2009

09 ANNUAL DEAL ROUNDUP

Statistics and analysis of Private Equity, Venture Capital
and Mergers & Acquisitions in India in 2009
Contents
Page Number
Executive Summary 1

The Year 2009 2

Private Equity

Introduction 3
Deal Breakdown 5
Sectoral Breakdown 6
Regional Breakdown 7
Top 10 Private Equity Deals 8
Private Equity Exits 9

M&A

Introduction 10
Deal Breakdown 12
Sectoral Breakdown 13
Regional Breakdown 14
Top 10 M&A Deals 15
EXECUTIVE SUMMARY

The deal economy worldwide had suffered in the last two years since the global economy went
through one of its worst crises since the Great Depression of 1929. The legendary financial
institutions like Lehman Brothers collapsed while several other financial behemoths had to be saved
from going into bankruptcy. Naturally, there was less money available to do deals and corporates cut
down on expansion both organically and inorganically. The effect was showing on in India too even
though the economy showed signs of revival in the latter part of the year.

VCCEdge puts the Indian dealscape in context by bringing to you the data on Indian M&A, private
equity and venture capital for the last five years in this Annual Deal Roundup. The total private equity
investment in India fell more than 60% from $11.9 billion in 2008 to $4.4 billion in 2009. As for M&A,
the deal value plummeted to $12.5 billion in 2009 from $25.1 billion in 2008.

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THE YEAR 2009
Value Wise Deal Summary ($mn)

The year saw 650 private equity and M&A deals with a
100,000
total announced value of $16.9 billion compared to 948
deals worth $37.1 billion in the year 2008 and 858 deals

Deal Value
80,000
with an announced value of $58.9 billion in 2007.
60,000

The value of inbound deals reduced from $13.6 billion 40,000

in 2007 and $9.7 billion in 2008 to $4.6 billion this year.
20,000
Total

The value of outbound deals was $1.8 billion in 2009 0 PE
compared to $26.8 billion in 2007 and $9.94 billion in 2005 M&A
2006
2008. 2007
2008
2009
(Source: VCCEdge)

The year 2009 saw a surge of domestic M&A activity.
The value of domestic deals disclosed has increased Volume Wise Deal Summary
from $2.8 billion and $5.4 billion in 2007 and 2008
1000
respectively to $6.02 billion in 2009, even though the
volume of domestic deals has decreased from 207 900
deals in 2008 to 187 in 2009. 800

Deal Volume
700

PE deals 2009 numbered 287 amounting to $4.4 600 PE
billion as against 502 amounting to $11.9 billion in 500 Domestic
2008. 400 Outbound
300 Inbound

The total value and volume of PE deals reduced by
60% and 40% respectively compared to 2008 which 200
can be attributed to the impact of the global credit 100
crisis. 0
2005 2006 2007 2008 2009
(Source: VCCEdge)

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 PRIVATE EQUITY
INTRODUCTION

Private equity has experienced a phenomenal growth over the
last two decades as institutional investors, seeking higher
returns, embraced this alternative to traditional asset classes.
The last few years leading into the current financial crisis was a
boom period for private equity in terms of the size and number
of deals, driven primarily by buoyant credit markets that have
since squandered.
In the year shrouded by an aura of uncertainty, India witnessed
287 deals in 2009 at a disclosed value of $4.43 billion compared
to 502 deals with a total disclosed value of $11.98 billion in the
year 2008 and 488 deals with an announced value of $15.61
billion in 2007.

Highest quarterly volume of

PE transactions - 195 deals
worth more than $5 billion
Sensex breaks into 21000
levels supported by high
25,000 The 30-share BSE index was down 250
market confidence of
2.64 percent, after having fallen as
increased FII investment &
much as 2.81 percent at open to
strong corporate results.
20,000 its lowest level since June 2006 200

Sensex closes above

Deal Volume
Sensex

15,000 150
10,000 points on
7th February 2006.
10,000 100
Private equity Investment
5,000 activity has slowed down. 50
Several deals called off due
to improper valuations.
0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2005 2006 2007 2008 2009

Sensex Deal Volume 3

(Source: VCCEdge)
 Some of the large private equity deals in 2009 included KKR and
CPP Investment Board’s $255 million investment in Aricent Inc. ,
Siva Ventures Ltd. acquisition of 51% stake in S Tel Ltd. for $230
million and TPG Capital‘s $200 million investment in Mumbai
based Indiabulls Real Estate.

With respect to high value deals there were 14 and 9 deals over
$50 million and $100 million respectively in 2009 as compared
to 30 and 25 deals of over $50 million and $100 million
respectively in 2008. According to investors, the deal ticket size
is likely to go down further. Average deal size was $20 million in
2009, lower than the $35 million seen in 2008.
The road ahead will see reduced valuations and more deals.
However there will be a flight to quality as competition to invest in
high quality portfolio companies increases. Funds will enhance
diligence of their proposed investments and also encourage deal
making within their existing portfolios to improve competitive
dynamics.

6000 $5,581 250

$5,049 $5,065
5000 195
200
160
4000
Deal Value ($mn)

140
$3,221
127 150
113 $2,636

Deal Volume
3000 $2,524 $2,459 102 104
$2,570
92 97 93
86 100
73 $1,678 76
2000 66 65 62 68
61
$1,371 $1,351
41 43 $1,199 $1,132 $1,334
$717 $655 $1,135 50
1000 $668
$379 $353

0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2005 2006 2007 2008 2009

Deal Value Deal Volume

4
(Source: VCCEdge)
 DEAL BREAKDOWN Exhibit 1: Private Equity Breakdown
450
With the global private equity markets shrinking, investors
400 381 368
have turned away from angel and venture capital deals in
general – and India is no exception. 350
300 283

Deal Volume
Early stage business, are also struggling in India, despite the
250
general robustness of the economy. 196
200 174
150 117
VC investments in India have halved from 117 deals at an 89
Angel/Seed
100 76 80
announced value of $0.66 billion in 2008 to 80 deals at a VC
50 33 18
value of $0.31 billion in 2009. 4 16 17 11
PE
0
2005 2006 2007 2008 2009
Exhibit 2:Number of deals across deal size $2.1 bn $6.8 bn $15.6 bn $11.9 bn $4.4 bn
180 (Source: VCCEdge)
160
Exhibit 3:Average deal size in ($million)
140 $ million
Deal Volume

120 2005 2006 2007 2008 2009 2009 20.1 Poly. ($ million)
100
2008 34.95
80
60 2007 47.07
40
20 2006 26.66
0
2005 13.93
Undisclosed 0 to 5 5 to 10 10 to 15 15 to 25 25 to 50 50 to 100 100 +
(Source: VCCEdge)
0 20 40 60
With respect to high value deals there were 14 and 9 deals over $50 million and (Source: VCCEdge)
$100 million respectively in 2009 as compared to 30 and 25 of over $50 million According to investors, the private equity deal
and $100 million respectively in 2008 ticket size is likely to go down further. Average
deal size was $20 million in 2009, lower than the
$35 million in 2008.
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 SECTORAL BREAKDOWN
The major PE investments influencing the deal values of these
Telecom,$336 Real
sectors were investments in Aricent Inc., Indiabulls Real Estate
Logistics, $ 354 Estate,$657
Ltd., Mohtisham Estates and Ind-Barath Power Infra Pvt. Ltd. The
other sectors, which have significantly contributed to private
equity deal value in the year 2009, are Logistics and Telecom
accounting for 15% of total deal value.

Digital Media, 19 IT/IT Services, 47

Real Estate, 20
IT/IT
Services,$621
Energy, $538
Exhibit 4: Top 5 Sectors by Deal Value for the year 2009 ($mn)
(Source: VCCEdge)

Real estate, IT/IT Services and Energy were the most targeted sectors
for investment with deals worth $0.65 billion, $0.62 billion and $0.54
billion respectively. Together, they accounted for more than 40% of
total private equity deal value during the period. Banking, Finance
& Insurance, 32 Manufacturing , 34
Exhibit 5: Sector Summary
Sector Volume Deal Value ($mn) Average Deal Size Exhibit 6: Top 5 Sectors by Deal Volume for the year 2009
Real Estate 20 657 43.8 (Source: VCCEdge)
IT/IT services 47 621 15.9 The most active sectors in terms of deal volume were IT/IT Services
Energy 16 538 41.4 and Manufacturing which lead with 17% and 11% of deal volume
Logistics 15 354 23.6 respectively in 2009. Other sectors contributing significantly to
deal volume were Banking, Finance and Insurance and Real estate
Telecom 5 336 84
accounting for 11% and 7% of deal volumes respectively. As seen in
Banking, Finance &
the year 2008, 2009 too saw large number of deals in IT/IT
Insurance 32 244 8.4
Services, Manufacturing, Banking, Finance and Insurance and Real
estate.
Manufacturing 34 242 9.3
6
(Source: VCCEdge)
REGIONAL BREAKDOWN DELHI
(Metro City - Fast industrial & economic
A detailed analysis on the existing and developing growth; Several auto components
infrastructure, manufacturing clusters and manufacturers, general manufacturing
consumer markets has brought to fore key clusters )
locations that have witnessed increased Private
Equity investments. Amritsar
Jalandhar Exhibit 8 : Top 5 cities according to deal
Exhibit 7 : Top 5 states according to deal Dehradun value
Ludhiana
value
City Volume Value ($mn)
States Volume Value ($mn)
Jaipur Lucknow
Delhi 23 840
Delhi 23 840 Kanpur

Mumbai 66 693
Maharashtra 80 748
Bhopal
Ahmedabad Hyderabad 23 547
Karnataka 51 666
Indore
Baroda Bangalore 47 486
Andhra Pradesh 31 594
Surat
Chennai 19 423
Tamil Nadu 23 459 Mumbai
(Source: VCCEdge)
(Source: VCCEdge)
Pune Hyderabad
Vizag

MUMBAI
(Financial capital of India; Fast industrial & HYDERABAD
economic growth; preferred destination Tier I
Bangalore Chennai (IT/ITES and pharmaceuticals hub)
for companies)
Mangalore Tier II
Mysore
BANGALORE
(IT hub of India; Garments and textile Coimbatore CHENNAI
clusters & emerging biotechnology (Metro city; IT & manufacturing hub
industry) Cochin and healthcare industries)
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Exhibit 9 : Top private equity deals in 2009
S.NO. Industry Target Buyer Price ($ million)
1 IT/IT Services Aricent Inc. Kohlberg Kravis Roberts & Co. 255
2 Telecom S Tel Ltd. Siva Ventures Ltd. 230
3 Real Estate Indiabulls Real Estate Ltd. TPG Capital Inc. 200
Krishnapatnam Port Co. Ltd. 3i India Infrastructure Fund 161
4 Logistics
5 Real estate Mohtisham Estates Oman Investment Fund 125
Karuturi Global Ltd. Emerging India Focus Funds, India Focus 124
Cardinal Fund, Elara India Opportunities Fund,
6 Agriculture Monsoon India Inflection Fund Ltd.
Capricorn Hospitality Services New Silk Route Partners 124
7 Hospitality & Travel Pvt. Ltd.
8 Healthcare & Services Max India Goldman Sachs 115
Century Real Estate, Seven Star Goldman Sachs Whitehall Real Estate Fund 104
9 Real estate Hotel Project
Ind-Barath Power Infra Pvt. Ltd. Bessemer Venture Partners India , Citi Venture 100
10 Energy Capital International, Sequoia Capital India
(Source: VCCEdge)

Top 10 Private Equity Deals

The largest deal by value was KKR’s $255 million buyout of Aricent,
followed by Siva Ventures investment in S Tel Ltd. and TPG’s $200 million
investment in Indiabulls Real Estate.
Top deals occurred across various sectors, with 3 of the top 10 deals in
Real Estate.
The top 10 private equity deals accounted for
more than 36% of total private equity deals in
2009. In 2008, top 10 deals accounted for about
40% of total deal value for the year.

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Exhibit 10 : Top Private Equity Exits in 2009
S.No. Target Seller Type Price ($mn)
1 DLF Assets Pvt. Ltd. DE Shaw Composite Investments (Mauritius) Ltd. Buyback 470
Temasek Holdings Pte. Ltd., GIC Special
2 ICICI Bank Ltd. Investments Pte Ltd. Open Market 460
3 Shriram Transport Finance Co. Ltd. ChrysCapital III LLC Open Market 221
4 XCEL Telecom Pvt. Ltd. Q Investments LP M&A 150
5 Cognizant Technology Solutions Corp. Sequoia Capital India Open Market 60
Galleon Special Opportunities Master Fund SPC
6 Edelweiss Capital Ltd. Ltd. Open Market 54.93
Orient Global Tamarind Fund Pte Ltd, Orient Global
7 India Infoline Ltd. Cinnamon Capital Ltd. Open Market 51.9
8 Max India Ltd. Warburg Pincus India Pvt. Ltd. Open Market 50.5
9 Financial Software & Systems Pvt. Ltd. Carlyle Asia Venture Partners I Secondary Sales 51
Capital International Global Emerging Markets
10 MindTree Ltd. Private Equity Fund LP. Open Market 47
(Source: VCCEdge)

Private Equity Exits Breakdown

Secondary Sale, 6 IPO, 1 Buyback, 5
2009 saw 96 exits compared to 44 in 2008 (not
M&A, 18 including the PE stake sale in Centurion Bank of
Punjab to HDFC Bank). Total exit value rose to $2.2
billion in 2009 compared to $0.93 billion in in
2008.

Funds utilized the sharp rise in the stock markets

to cash out and return some money to LP’s. There
were 66 open market exits and only one IPO exit –
the part sale of Warburg Pincus’ stake in DB Corp.

Open Market, 66

Exhibit 11: Private Equity Exits in 2009 9

(Source: VCCEdge)
MERGERS AND ACQUISITION
INTRODUCTION
India, over the last few years, witnessed heightened deal 17% and 18.5% respectively to the overall GDP, which grew at 6.7% in
activity on the back of a fast growing Indian economy. During FY 2009. (Source : RBI)
this time, the economy grew at an average of 8.8%. Although, In the year shrouded by an aura of uncertainty, the markets have
India has not been immune to the recent economic slowdown, seen downward and upward movements with Sensex losing over 50%
the country’s growing middle class and lack of dependence on of its value in mid 2008, after having enjoyed an average annual gain
exports have helped it better weather the financial crisis than greater than 40% for the last three years. Since then the public
many of its emerging market peers. markets have rebounded with the BSE index trading above 17,000 in
The highlight of this growth has been the service sector, which Dec’09, exhibiting improving investor confidence, narrowing spreads
contributed approximately 86% of the growth in GDP in FY and reduced volatility.
2009. Services, Agriculture and Industry contributed 64.5%,
The 30-share BSE index was down
2.64 percent, after having fallen as
M&A deal value clocks up to
much as 2.81 percent at open to
$8.7 billion for 136 deals in
Sensex breaks into 21000 its lowest level since June 2006
the quarter.
levels supported by high
25,000 market confidence of 160
increased FII investment &
140
strong corporate results.
20,000
Sensex closes above 120
10,000 points on
7th February 2006. 100
15,000
80
10,000 60

40
5,000
20

0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2005 2006 2007 2008 2009

10
Sensex Deal Volume
 Despite the global slowdown, the year 2009 has seen some
India witnessed 371 deals in 2009 at a disclosed value of $12.52 billion
significant deals in India. Over the past few years, India has
compared to 446 deals with a total disclosed value of $25.16 billion in
shown resilience by not only being an important destination for
the year 2008 and 380 deals with an announced value of $43.4 billion
M&A’s but also by being active in acquiring international
in 2007.
companies. The year presented both challenges and
opportunities for Indian corporates and investors active in the
The year ahead will offer significant deal making opportunities to
M&A market.
companies that innovate, consolidate and develop niche financing
and non cash structures. There will be an increase in value and
In the current scenario, there will be more encouragement for
volume of Indian M&A activity as investors confidence and liquidity
consolidation and profitability than for improving scale
return to the market. Corporates and investors will return to secure
operations.
a share of growth in the recovering markets.

25000 160
136
$20,424 140
20000
107 110 120
$16,763 104 103
95 97 97 99
100
Deal Value ($mn)

15000 84 83

Deal Volume
$12,501 103 77 81
67 70 80
64 $10,755
10000 $8,722 60
43
38
32 40
$4,486 $4,215 $3,655
5000 $3,684 $3,314 $3,206
$2,468 $2,741 $2,303 $2,039 $1,771 $2,367 $1,444 20
$679 $482
0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2005 2006 2007 2008 2009

Deal Value Deal Volume

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 DEAL BREAKDOWN Exhibit 11: M&A Breakdown
250
The number of domestic deals declined slightly from 191 and 207
207 in 2007 & 2008 respectively to 187 in 2009. The value of 200 191 187
domestic deals was $6 billion in 2009 compared to $5.48 170
billion in 2008. 138 Inbound

Deal Volume
150
In terms of volume, the number of outbound deals dropped 115
103 Outbound
drastically from 170 in 2008 to 90 in 2009., while in terms of 100 89 90
72 75 Domestic
value the fall was nearly 80%. 61 64 69

However, there was an increase in the number of inbound 50 28

deals from 69 in 2008 to 89 in 2009 but at lower value.
0
2005 2006 2007 2008 2009

(Source: VCCEdge)
Exhibit 12:Average deal size in ($ million) Exhibit 13:M&A breakdown deal size in ($ million) in 2009

Inbound, $4,630
2005 61.3 Domestic, $6,021

2006 116.6

Average deal Size

2007 231.0
Poly. (Average deal
2008 124.5 Size)

2009 69.2
Outbound, $1,839
0.0 50.0 100.0 150.0 200.0 250.0
(Source: VCCEdge)
(Source: VCCEdge)
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 SECTORAL BREAKDOWN
Some of the major deals influencing deal values were
Pharmaceuticals Banking,Finance transactions in Reliance Petroleum Ltd., Shantha Biotechnics,
& Research, $857 & Insurance, $721 Mahindra Satyam & General Motors India Pvt. Ltd.. The other
Energy, $3,613 sectors, which have significantly contributed to the deal value in
IT/IT Services,
$1,142 the year 2009, are Banking, finance & Insurance and Media &
Entertainment accounting for 8% of the total deal value.

Media &
Entertainment, 20 Manufacturing ,
Energy, 26 76

Manufacturing,
$1,615 Telecom, $1,663

Exhibit 14: Top 5 Sectors by M&A Deal Value ($mn) for the year 2009
(Source: VCCEdge)

Energy, Telecom and Manufacturing were the most targeted sectors

for M&A’s with deals worth $3.61 billion, $1.66 billion and $1.61
billion respectively. Together, they accounted for more than 55% of
Banking, Finance IT/ITES, 50
total M&A deal value during the period.
& Insurance, 36
Exhibit 15: Sector Summary
Exhibit 16: Top 5 Sectors by M&A Deal Volume for the year 2009
Sector Volume Value ($mn) Average deal Value (Source: VCCEdge)
Energy 26 3,613 212.5
The most active sectors in terms of deal volume were
Telecom 20 1,663 138.6 Manufacturing and IT/IT Services and which lead with 20% and
Manufacturing 76 1,615 43.65 13% of deal volume respectively in 2009. Other sectors
IT/IT Services 50 1,142 47.58 contributing significantly to deal volumes were Banking, Finance
Pharmaceuticals & and Insurance and Energy accounting for 9% and 7% of deal
Research 19 857 171.4 volumes respectively. As seen in the year 2008, 2009 too saw large
Banking,Finance &
number of deals in IT/IT Services, Manufacturing & Banking.
Insurance 36 721 31.3
Media & Entertainment 20 325 29.55
13
(Source: VCCEdge)
REGIONAL BREAKDOWN DELHI
(Metro City - Fast industrial & economic
growth; Several auto components
manufacturers, general manufacturing
clusters )

Amritsar
Jalandhar
Exhibit 17 : Top 5 states according to M&A Dehradun UTTAR PRADESH
Ludhiana
deal value and volume (Manufacturing centre of sports goods,
sharp tools ; Top IT destination; Several
States Volume Value ($mn)
auto components manufacturers,
Jaipur general manufacturing clusters )
Maharashtra 102 4715 Kanpur Lucknow

Andhra Pradesh 29 1763

Delhi 21 857 Ahmedabad Bhopal

Indore
Karnataka 27 744 Baroda

Uttar Pradesh 6 486 Surat

Mumbai
(Source: VCCEdge)
Pune Hyderabad
Vizag

MAHARASHTRA
(Fast industrial & economic growth; Tier I
preferred destination for companies) Bangalore Chennai
ANDHRA PRADESH
Mangalore Tier II
(IT/ITES and pharmaceuticals hub)
Mysore

KARNATAKA Coimbatore
(IT hub; Garments and textile clusters &
emerging biotechnology industry) Cochin
14
 Exhibit 18 : Top M&A deals closed in 2009

S.No. Target Buyer Seller Price

1 Reliance Petroleum Ltd. Reliance Industries Ltd. 1,667
2 Shantha Biotechnics Ltd. Sanofi-aventis BioMerieux SA 625
3 Mahindra Satyam Tech Mahindra Ltd. 591
Shanghai Automotive
4 General Motors India Pvt. Ltd. Industry Corp. General Motors Company 500
5 REpower Systems AG Suzlon Energy Ltd. Martifer SGPS 499
Quippo Telecom Tata Teleservices
6 Wireless TT Info Services Ltd. Infrastructure Ltd. (Maharashtra) Ltd. 489
7 Unitech Wireless Ltd. Telenor ASA Unitech Ltd. 475
Indian Oil Corporation Ltd.,
Bharat Petroleum Corp. Ltd.,
Hindustan Petroleum Corp.
8 Oil India Ltd. Ltd. The Government of India 450
9 V S Dempo & Co Pvt. Ltd. Sesa Goa Ltd. 366
10 Reliance Petroleum Ltd. Reliance Industries Ltd. Chevron India Holdings 272
(Source: VCCEdge)

The largest M&A deal in India was the Reliance Petroleum-Reliance The top 10 M&A deals accounted for about
Industries merger, followed by Sanofi-aventis acquistion of Shantha 47% of the total M&A deals in 2009.
Biotechnics and the Tech Mahindra buyout of Satyam .

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