DEAL WATCHER

INDIA MARKET UPDATE FOR THE QUARTER

ENDED MARCH 2019
Dear Clients and Associates,

We are pleased to present to you the KNAV Deal Watcher providing the India market update for the
quarter ended March 2019. It includes an analysis of private equity & venture capital deals, key M&A
deals and select opportunities for this quarter.

KEY HIGHLIGHTS
❖ The quarter had over 51 private equity investments & 177 venture capital investments of upto USD
4.20 bn & USD 2.62 bn respectively. Some notable deals include:
▪ Carlyle Group’s investment of USD 652 mn in SBI Life Insurance.
▪ Hyundai and Kia Motors’ investment of USD 300 mn in cab-hailing startup Ola.

❖ The quarter had over 91 M&A transactions upto over USD 3.22 bn. The prominent deals are:
▪ L&T’s purchase of Café Coffee Day founder - VG Siddhartha’s stake in Mindtree for USD 476 mn.
▪ Strides Pharma’s sale of its Australian business for USD 342 mn.

Do share your comments and/or feedback on suparna.dua@knavcpa.com

Vaibhav Manek Suparna Dua

Partner – Advisory services Associate Director – Investment Banking

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INDEX

Sr. no Particular Page

1 Private equity and venture capital deals 4-9

2 Mergers and acquisitions 10-14

3 Analysis of key transactions 15-18

4 KNAV: Select opportunities 19-22

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PRIVATE EQUITY/ VENTURE CAPITAL DEALS
 CONSUMER INTERNET
PE / VC deals | Quarter ended March 2019

The following charts provide an analysis of the prominent sectors which have witnessed private equity/ venture capital investments in the
consumer internet space in terms of number of deals and transaction value for the quarter.

Number of deals Transaction Value (USD million)

Education 6 Payments 137

Agriculture 6 Food & Beverages 144

Marketplace 7 Healthcare 151

Food & Beverages 10 Media & Entertainment 179

Technology 11 Grocery 210

Professional Service 12 Finance 245

Travel 14 Technology 270

23 Travel 583
Finance

Of the total 143 deals in this quarter, the highest deals were
witnessed in the finance sector (23 deals), followed by travel (14
deals) and professional services (12 deals).
Of the total USD 2.50 bn invested in this quarter, the highest
amount of funds were invested in the travel sector (led by Ola’s
USD 300 mn deal), followed by technology (led by Rubrik’s USD
261 mn fundraise) and finance (led by Acko General Insurance’s
USD 65 mn deal).
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 BRICK & MORTAR
PE / VC deals | Quarter ended March 2019

The following charts provide an analysis of the prominent sectors which have witnessed private equity/ venture capital investments in the brick
and mortar space in terms of number of deals and transaction value for the quarter.

Number of Deals
Transaction values (USD million)

4 Pharmaceutical 111
Agriculture

Telecom 200
Technology 5
Technology 208
Power & Energy 5
Consumer 224

Manufacturing 5
Real Estate 283

Logistics 5 440
Power & Energy

Pharmaceutical 6 Logistics 564

Finance 2084
Finance 23

Of the total 85 deals in this quarter, the highest number of
investments were in finance (23 deals) and pharmaceutical (6
deals).
Of the total USD 4.32 bn invested in this quarter, the highest
amount of funds were invested in the finance sector (led by SBI
Life Insurance’s USD 652 mn deal) followed by logistics (led by
Delhivery’s USD 413 mn deal) and power & energy sector (led by
Ayana Renewable Power’s USD 330 mn deal).
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 CITY WISE ANALYSIS
PE / VC deals | Quarter ended March 2019

The following charts provide an analysis of the prominent sectors which have witnessed private equity/ venture capital investments in terms of
number of deals and the total transaction value for the quarter.

Bengaluru Mumbai Gurugram

21
10

8 3 3 3
7
6
2 2 2 2
4
6
4
3 3

Number of Deals
71 56 22

Transaction Value
(in USD mn) 1879 2520 616

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TOP PRIVATE EQUITY/ VENTURE CAPITAL DEALS
Quarter ended March 2019

Investment value
Investee Sector Investor
(USD mn)

Finance Carlyle Group 652

SoftBank, Carlyle Group and

Logistics Chinese conglomerate Fosun 413
International

EverSource Capital and the

Power & Energy National Investment and 330
Infrastructure Fund (NIIF)

South Korean automakers

Travel Hyundai Motor Co and Kia 300
Motors Corp

General Atlantic and Värde

Finance 268
Partners

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TOP PRIVATE EQUITY/ VENTURE CAPITAL DEALS
Quarter ended March 2019

Investment value
Investee Sector Investor
(USD mn)

Lightspeed Venture
Partners, Greylock Partners,
Technology 261
Bain Capital, Khosla
Ventures and IVP.

Caisse de dépôt et
Finance placement du Québec 250
(CDPQ)

Finance New Investment Solutions 230

PremjiInvest, IDFC, SBI

Consumer Mutual Fund and L&T Mutual 224
Fund

Technology Apax Partners 200

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MERGERS & ACQUISITIONS
MERGERS & ACQUISITIONS
Mergers & Acquisitions
Deals| Quarter ended March 2019

The following charts provide an analysis of the prominent sectors which have witnessed M&A transactions in terms of number of deals and
transaction value for the quarter.

Number of Deals Transaction Value (USD mn)

20 19
952
1000

15 800

583
10 600
10
7 389 382
6 400 344
309
5
5 4 4 4
200 146 125

0 0

Of the 91 M&A deals this quarter, the technology sector bagged
the highest number of deals (19 deals), followed by food &
beverages (10 deals) and healthcare (7 deals ).
Of the total USD 3.22 bn invested in this quarter, the highest
amount of funds were invested in the technology sector (USD 952
mn), followed by food and beverages (USD 583 mn) and minerals
& metals (USD 389 mn).
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 REASONS FOR M&A DEALS
Quarter ended March 2019

▪ There are several reasons for companies to venture into

inorganic growth strategies. We have analysed the major
reasons cited by the companies for having an M&A Top 5 Reasons for M&A Deals
transaction and the same have been graphically illustrated.

Consolidation 5
▪ Competitive advantage was the most cited reason, with 30
out of the 91 deals (i.e. 33% of the deals) justifying the same. New Business Model 5

Some notable deals citing this reason were : Strategic entry 6

• L&T’s acquisition of stake in Mindtree for USD 476 mn. 8

Backward/ forward integration
• Tata Steel’s sale of majority stake in its Southeast Asian
Technology Access 12
businesses to HBIS Group Co. Ltd for USD 327 mn.
Product/ service portfolio enhancement 20

Competitive advantage 30
▪ The second most popular reason for the deal was for
Product/Portfolio enhancement purposes with 20 deals. 0 10 20 30
(Number of M&A Deals)
Some notable acquisitions citing this reason were:

• Aurobindo Pharma Ltd’s acquisition of seven branded

oncology injectables from US-based Spectrum
Pharmaceuticals Inc. for USD 300 mn.

• Byju’s acquisition of Osmo for USD 120 mn.

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TOP M&A DEALS
Quarter ended March 2019

Transaction value
Target Acquirer Sector
(USD mn)

Technology 476

Arrotex Pharmaceuticals 342

( Australian business )

Minerals and Metals 327

Healthcare 300
(Seven branded oncology injectables)

Food & Beverages 239

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TOP M&A DEALS
Quarter ended March 2019

Transaction value
Target Acquirer Sector
(USD mn)

Infrastructure 175
Mumbai International Airport Ltd
(MIAL)

Food & Beverages 172

(UAE business)

Food & Beverages 146

Finance 143

Automobile 125

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ANALYSIS OF KEY TRANSACTIONS
 Reliance takes on Indian e-commerce

▪ India’s e-commerce market is worth USD 34 bn and is expected to grow to USD 84 bn by Reliance takes on E-commerce
2021*. To capitalise on this market, Reliance Industries Limited (RIL) has announced that
Reliance Retail and Reliance Jio Infocomm would jointly launch a new e-commerce platform
and integrate 3 crore offline stores across India.

▪ To derive synergistic benefits for this platform, Reliance has struck five acquisition deals this
quarter with:

❖ Hyperlocal delivery platform Grab for USD 15 mn.

❖ Software solutions firm C-Square for USD 11.56 mn.
❖ Reverie, a local language technology service startup.
❖ Easygov, a software service and data solutions company.
❖ SankhyaSutra Labs Pvt Ltd , a high-performance computing software simulation
services company

▪ Reliance Retail plans to use more than 5,100 Jio point stores in India as delivery points for its
e-commerce venture. Further, the support of a logistics firm like Grab and other acquisitions
in the software technology space will help Reliance to leverage its digital online-to-offline
(O2O) model.

▪ The new FDI rules in e-commerce prevent online entities with foreign investments from selling
products of retailers in which they hold equity stake. This is likely to have adverse effects on
e-commerce giants Flipkart and Amazon but is completely favourable to Reliance’s entry into
e-Commerce space.

▪ All-in-all, Reliance’s entry into e-commerce and consumer-oriented market is likely to

challenge global e-commerce giants, allay fears of digital colonisation and dramatically lower
costs, ultimately expecting to benefit the end consumers.

*Source: The Economic Times

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 Bharti Airtel set to consolidate its position

USD 3.5 bn
▪ Bharti Airtel, the world’s third largest mobile network operator, is set to consolidate its
position in the Indian and African markets through the following:
❖ USD 3.5 bn rights issue
❖ Qatar Investment Authority investment of USD 200 mn in Airtel Africa Ltd.
❖ Airtel Networks Kenya Ltd’s merger with Telkom Kenya Ltd

▪ Africa: It is one of the most important geographies for Airtel and it is a market leader in 8
out of 14 countries. Mobile data revenue is growing at a CAGR of 20%* in Africa. Airtel
has merged with Telkom Kenya to capitalize on the booming Kenyan market, the largest
telecom market in the Africa sub-continent.

▪ India: The telecom industry has begun to reach a mature stage, characterized by
consolidation of competition from 10, mostly regional operators, to 3 Pan-India operators.
This closely mirrors the path of the US telecom market where Verizon, AT&T and T-
Mobile have dominated the market in a co-operative oligopoly.

▪ Due to the entry of Jio in the market, declining revenues per user and heavy spectrum
costs, Bharti Airtel has suffered heavy losses in both market share and revenue.

▪ Fund deployment: The company will be using the infused capital to pay off its debt (over
USD 12 bn), fight competition in the Indian market and finance its expansion in the
African market.
Market Leader
In 8 out of 14
Countries

*Source: World Atlas, VenturesAfrica 17

 Ola on a fund raising spree

▪ Ola has raised USD 538 mn this quarter at a valuation of USD 5.8 bn, making it the third most valued Indian private internet company after
Flipkart (USD 22 bn) and Paytm (USD 16 bn).

▪ It has grown by leaps and bounds since it raised Series A funding in 2012 subsequent to which it has raised approximately USD 2.9 bn. Its
valuation has jumped by USD 1.5 bn in the last 6 months.

▪ Ola has undertaken several strategic moves to expand its markets. Of the USD 538 mn raised, USD 356 mn is deployed towards developing
India-specific electric vehicles and infrastructure.

▪ The company also intends to invest USD 500 mn to launch a ‘self-drive’ service offering . The scale of the proposed service will make Ola the
largest self-drive car rental company in India. At present, the sector is highly fragmented with small regional players and some larger players
including Myles, Sequoia Capital-backed Zoomcar, and Y Combinator-backed Drivezy.

▪ Ola went overseas in January 2018 targeting Australia, UK and New Zealand with a plan to further target 50 global cities by 2019. This, again,
validates the investor interest it has received.

Mar 19
Q1 2019: Raised US$ 538 mn Mar 19 USD 300 mn
Feb 19 USD 56 mn
Feb 19 USD 92 mn
USD 16 mn
Jan 19 Hyundai Motor and Kia
USD 74 mn Tiger Global and
Motors
Flipkart co-founder, Matrix Partners
Sachin Bansal
US based HNIs

Steadview Capital 18
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KNAV: Select opportunities
 Project Mobile Data driven mobile marketing business

Business model

▪ Innovative data driven mobile-marketing solutions provider.

▪ Over 150 iconic brands across sectors, with a high repeat rate of
customers over 75% in the last 5 years.
▪ Created a unique marketing cloud which combines the benefits of
Analytics, Artificial Intelligence and Machine Learning to deliver
messages to target audience at 25% lower costs.
▪ Current capabilities include 3 in-house developed communication
platforms, which generate over 5 billion consumer engagements every
year.
▪ Dynamic second layer of management, capable of running the business
post exit by promoters.

Financial snapshot

▪ Achieved USD 6.4 mn in revenue in FY 2019, projected to reach USD

19.53 mn by FY 2024

Proposed transaction

▪ Promoters of the company are looking at an exit from the business.

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 Project Light Developer of advanced materials

Business model
▪ Designs and produces ‘meta-materials’, a new class of advanced materials
capable of blocking, absorbing and enhancing light, using advanced
manufacturing techniques such as holography and lithography.
▪ Highly experienced management, comprising of scientists, MBAs and Ph.D
holders.
▪ Cost effective manufacturing and engineering processes.
▪ Existing partnerships with large OEMs like Airbus, Boeing, PPG, Fiat
Chrysler and Lockheed Martin.
▪ Has emerged as a key player in the metamaterials market, which is
currently valued at USD 13.45 bn.
▪ Growing IP portfolio with 88 patents.
▪ Raised USD 22 mn till date and has engaged in 2 M&A deals.

Financial snapshot
▪ With current development revenue of USD 1.15 mn, it plans to reach USD 120
mn by 2022
▪ It is currently in receipt of assistance from government and universities to
fund its projects

Investment
▪ Raising a Series B round of USD 10 mn to scale up production and team
expansion.

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 Project Learning Provider of learning & digital solutions

Business model
▪ Founded in 2010, the business provides bespoke learning and digital
solutions the help target specific performance goals.
▪ Hosts a strong platform with a talent pool of skilled resources, in-house
developed product frameworks and mature processes.
▪ The founding team includes industry experts and specialists in the learning
and technology domain with an average 15 years of industry experience.
▪ Clients include 10 of the Fortune 100 companies and over 20 of the Global
500 companies. Has customer retention & repeat business of over 83% &
over 90% respectively.
▪ With a development centre based in Pune, India, the key customer End to end service offerings
markets include Europe, North America, Middle East and India. This has
provided a geographical cost advantage with access to a scalable pool of
skilled technical resources.

Financial snapshot
▪ Profitable since inception with a revenue CAGR of 23% over the last 4
years
▪ Closing FY19 at a revenue of USD 4.5 mn with EBITDA margins at 29% at
USD 1.3mn
▪ Revenue growth of 49% in FY19 over FY18

Investment
▪ The founders are looking to raise equity capital through a combination of
primary and secondary round.

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CONTACT US
CONTACT US

Mumbai Bengaluru London

Vaibhav Manek Shrenik Kataria Amanjit Singh
E: vaibhav.manek@knavcpa.com E:shrenik.kataria@knavcpa.com E: aman.singh@knavcpa.com
Tel: +91 22 6164 4803 Tel: +91 8809 15363 Tel: +44 20 3617 6200

New Delhi Atlanta Singapore

Monish Chatrath Atul Deshmukh Boon Kiat Wong
E: monish.chatrath@knavcpa.com E:atul.deshmukh@knavcpa.com E: boon.kiat@knavcpa.com
Tel: +91 11 4106 9400 Tel: +1 678 584 1200 Tel: +65 93889878

Pune Leusden Toronto

Shishir Lagu Carlos Apopoe Harshad Parekh
E: shishir.lagu@knavcpa.com E:carlos.apopoe@knavcpa.com E:harshad.parekh@knavcpa.com
Tel: +91 9819013046 Tel: +31 (0)334347200 Tel: +1 416 229 1411

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ABOUT KNAV

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America are member firms of Allinial Global.

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Reach us - If you want to know more about KNAV or its services please contact Mr. Vaibhav Manek at vaibhav.manek@knavcpa.com. We will
be glad to hear from you.

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Editorial credits - Deals Snapshot Editorial Board: KNAV Business Advisory Services Team, Mumbai

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