Innovations

PROJECT OF INNOVATIONS IN BANKING &

INSURANCE

VENTURE CAPITAL

GROUP MEMBERS

RUDRA KHANNA 19

VINITA KUMAR 20

SHARADA KUSANALE 21

H

IMANI LAPASIA 22

ANISHA LEWIS 23

VERNON LEWIS 24

ACKNOWLEDGEMENTACKNOWLEDGEMENT

I WOULD LIKE TO THANK THE I WOULD LIKE TO THANK THE SIES COLLEGE OF SIES COLLEGE OF COMMERCE & ECONOMICSCOMMERCE & ECONOMICS FOR INTRODUCING BANKING & FOR INTRODUCING BANKING & INSURANCE COURSE, THEREBY GIVING ITS STUDENT A INSURANCE COURSE, THEREBY GIVING ITS STUDENT A PLATFORM TO ABREAST WITH CHANGING EDUCATION PLATFORM TO ABREAST WITH CHANGING EDUCATION SCENARIO.SCENARIO.

I AM INDEBTED TO THE RECEIVER OF THE PROJECT I AM INDEBTED TO THE RECEIVER OF THE PROJECT MRS. AARTHI KALYANRAMANMRS. AARTHI KALYANRAMAN OUR PROJECT GUIDE FOR OUR PROJECT GUIDE FOR HIS SUPPORT & GUIDANCE. HIS SUPPORT & GUIDANCE.

I WOULD ALSO LIKE TO THANK OUR PRINCIPAL, I WOULD ALSO LIKE TO THANK OUR PRINCIPAL, MRS. MRS. MINU THOMASMINU THOMAS & CO-ORDINATOR OF BANKING & INSURANCE & CO-ORDINATOR OF BANKING & INSURANCE MRS. AARTHI KALYANRAMANMRS. AARTHI KALYANRAMAN & ALL THE & ALL THE LIBRARY STAFFLIBRARY STAFF OF OF OUR COLLEGE.OUR COLLEGE.

LAST BUT NOT THE LEAST; I WOULD LIKE TO THANK MY LAST BUT NOT THE LEAST; I WOULD LIKE TO THANK MY PARENTSPARENTS FOR GIVING THE BEST EDUCATION & FOR GIVING THE BEST EDUCATION & GROUP GROUP MEMBERSMEMBERS FOR THEIR SUPPORT & CONTRIBUTION WITHOUT FOR THEIR SUPPORT & CONTRIBUTION WITHOUT WHICH THIS PROJECT WOULD HAVE NOT BEEN POSSIBLE.WHICH THIS PROJECT WOULD HAVE NOT BEEN POSSIBLE.

INTRODUCTIONVenture Capital is a form of "risk capital". In other words, capital that is invested in a business where

there is a substantial element of risk relating to the future creation of profits and cash flows. Risk capital is invested as shares (equity) rather than as a loan

and the investor requires a higher "rate of return" to compensate him for his risk.

Venture Capital provides long-term, committed share capital, to help unquoted companies grow and

succeed. If an entrepreneur is looking to start-up, expand, buy-into a business, buy-out a business in

which he works, turnaround or revitalize a company, venture capital could help do this. Obtaining venture

capital is substantially different from raising debt or a loan from a lender. Lenders have a legal right to interest on a loan and repayment of the capital,

irrespective of the success or failure of a business. As a shareholder, the venture capitalist's return is

dependent on the growth and profitability of the business. This return is generally earned when the

venture capitalist "exits" by selling its shareholding in the business.

VENTURE CAPITAL IN INDIA

History of Venture Capital in India dates back to early

70's when Govt of India appointed a committee laid by Late Shri R.S.Bhatt to find out the ways to meet a void

in conventional financing for funding start-up companies based on absolutely new innovative

technologies. Such companies either did not get any financial support or the funding was inadequate which

resulted into their early mortality. The committee recommended starting of Venture Capital industry in India. In mid 80's three all India financial institutions

viz IDBI, ICICI, IFCI started investing into the equity of small technological companies.

In Nov 1988, Govt of India decided to institutionalize Venture Capital Industry and announce guidelines in

the parliament. Controller of Capital issues implemented these guidelines known as CCI for VC.

This made VC investment highly risky and unattractive. Nonetheless many private initiatives

were taken. At the same time World Bank selected 6 institutions to start VC investment in India. This included TD ICICI (ICICI), GVFL, Canbank Venture

Capital Fund, APIDC, RCTC (now known as IFCI Venture Capital Funds Ltd.) and ILF (now known as Pathfinder).

In 1995, Govt of India permitted Foreign Finance companies to make investments in India and many

foreign VC private equity firms entered India. In 1996, government announced guidelines to regulate the VC

industry. Though there were many shortcomings these guidelines were the starting point.

In 1997, IT boom in India made VC industry more significant. Due to symbiotic relationship between VC and IT industry, VC got more prominence as a major source of funding for the rapidly growing IT industry.

Indian VC's which were so far investing in all the sectors changed their focus to IT and telecom

industry.

The recession during 1999 - 2001 took the wind out of VC industry. Most of the VC either closed down or

wound-up their operations. Almost all of them changed their focus to existing successful firms for

their growth and expansion. VC firms also got engaged into funding buyouts, privatisation and restructuring.

Currently, just a few firms are taking the risk of investing into the start-up technology based

companies.

DIFFERENCE BETWEEN PRIVATE EQUITY AND VENTURE CAPITAL

Private equity refers to equity or quasi-equity investments in high-growth companies and includes

buyouts, mezzanine financing, privatization and public as well as private deals. The private equity asset class

includes venture capital, buyouts, and mezzanine

investment activity. While venture capital focuses on investing in private, young, fast growing companies, private equity players largely provide mezzanine or

bridge funding.

WHAT KIND OF BUSINESSES ARE ATTRACTIVE TO VENTURE CAPITALISTS

Venture capitalists prefer to invest in "entrepreneurial businesses". This does not necessarily mean small or

new businesses. Rather, it is more about the investment's aspirations and potential for growth,

rather by current size. Venture capital investors are interested in companies with high growth prospects,

which are managed by experienced and ambitious teams who are capable of turning their business plan

into reality.

PROCESS OF INVESTMENT BY VENTURE CAPITAL INVESTORS:

VC funds receive the proposals for investment either directly or through financial intermediaries.

The process of investment by a VC funds begins with desk research on a deal.

In case the deal evinces interest of VC funds, the Management Team is requested to present the Business model of company, unique aspects of

business, future prospects and the investment proposal.

During interaction, VC fund assesses the quality & competence of Management team with a view to get perspective on overall business prospects of

investment proposal.

In case, after discussions with Management team, VC investor finds the deal as investible

proposition, a document containing terms of proposed investment known as term sheet, is

devised and negotiated with Promoters for their concurrence.

VC funds take up the venture for DETAILED DUE DILIGENCE after getting final concurrence of

Entrepreneurs on terms of proposed investment negotiated with them. The detailed due diligence

of project is carried out by VC funds themselves or assigned to independent Advisors.

The detailed due diligence of project is carried out to examine Business, financial and legal aspects of

proposed investment. During the process of due diligence, VC funds also assess requirement of

funds, stages & quantum of investment and related milestones for investment. The investee

company is expected to provide all the cooperation to VC fund/ independent Advisor carrying out due diligence of its venture and

explain material transactions undertaken by the company in the past.

On successful completion of due diligence, depending on findings and in process of getting

internal approvals for investment, VC funds may modify or stipulate such other conditions as are

considered appropriate by them for investment in the company and accordingly negotiate changes/

modifications in the term sheet with the Entrepreneurs (also called Promoters).

In case revised terms for investment are agreeable to Entrepreneurs, VC funds issue

LETTER OF INTENT for investment and require investee companies to complete formalities for availing investment. These formalities include execution of legal agreements by Promoters/

Investee companies, passing of requisite Board/ Company's resolution, obtaining approval of Govt. & other statutory approvals, etc. for facilitating

investment.

Thereafter, on request by companies for release of the investment, VC funds, subject to compliance of pre-disbursement conditions and achievement of

milestones stipulated for same, undertake investment in the company.

During currency of investment, VC funds regularly monitor functioning of Investee companies, give

inputs on strategic plans and guide companies for optimizing their performance.

VC funds also pursue the Investee companies to orient their business plans & achieve performance

targets to qualify for bringing out Initial Public offers (IPOs) and get listed on stock exchanges for

providing exit from investment to VC funds.

The process of investment and level of participation of

VC funds in management of venture indicated above is illustrative and may vary depending on merits of a venture or strategy of a VC fund.

IFCI VENTURE CAPITAL

Mission“To become the leading institutional player in Venture

Capital industry of the country.”

Vision“To emerge as the most trusted partner for upcoming enterprises in the country, thereby contributing to the growth of the economy and in the process, optimizing

returns on investment.”

IFCI Venture Capital Funds Ltd, a subsidiary of IFCI Ltd. (IFCI) was set-up in 1975, with the objective to

broaden entrepreneurs’ base in India by providing risk capital mainly to first generation entrepreneurs under

“Risk Capital Scheme”. In 1988, IFCI Venture Capital Funds Ltd launched “Technology Finance & Development Scheme”, to provide financial assistance for setting up projects

aimed at commercialization of indigenous technologies.

In July, 1991, IFCI Venture Capital Funds Ltd took up management of Venture Capital Fund named VECAUS-

III, floated by UTI & IFCI. The assistance under VECAUS-III was to promote high profitability ventures

with potential involving innovative products/ technologies/ services, aimed at futuristic or new

markets and having the twin characteristics of high risk and high return.

In the above schemes, IFCI Venture Capital Funds Ltd provided assistance to 400 projects in diversified sectors spread across the country. Most of these

projects were set-up as Small and Medium Enterprises (SMEs) and some of these companies have since

significantly grown their business activities.

Consequently, over the years, IFCI Venture Capital Funds Ltd gained considerable experience in process of investing in small enterprises. On the sidelines of these developments, IFCI Venture Capital Funds Ltd

was positioned as a PE/ VC arm of the IFCI Ltd. It also enjoys status of a Public Financial Institution under

Sec 4A of the Companies Act 1956.

BACKGROUND

IFCI Venture Capital Funds Ltd. is a Public Financial Institution (Notified in the Gazette of India) and Venture Capital arm of the IFCI Ltd., India’s first

financial institution.IFCI Venture Capital Funds Ltd is also registered with

RBI as a NBFC and provides secured short term loan to profit making mid market companies in the range of

Rs.5-20 Crores.The company has a well defined credit policy for

sanction of loans to its clients. The maximum tenor of the loan is 3 years. The loans allowed by the company generally have minimum 200% security coverage. The company has zero Gross/Net NPA level. Initially, IFCI

Venture Capital Funds Ltd was promoted as an institution to promote small entrepreneurs. Since

2008-09, IFCI Venture Capital Funds Ltd is operating as a commercial organization. IFCI Venture Capital Funds Ltd undertook management of 3 new PE/VC

funds viz., India Automotive Component Manufacturers Private Equity Fund – 1-Domestic

(IACM-1-D), Green India Venture Fund (GIVF) and India Enterprise Development Fund (IEDF).

All the three funds focus on investments in mid sized companies involved in setting up niche business

models in respective industry sectors with prospects of scalability, with a ticket size of Rs.10-30 Crores.In the course of Management of fund, IFCI Venture

Capital Funds Ltd earns annual management fee @2% p.a. on the outstanding fund corpus of Rs.512 Crores. Besides, IFCI Venture Capital Funds Ltd would also be

entitled to profit sharing on investment subject to certain parameters.

Apart from the above two activities, IFCI Venture Capital Funds Ltd also capable of providing Corporate

Advisory Services to Corporates at all levels of

investment cycle such as Preparation of Detailed Project Reports,Investment Memorandums, Devising

Business & Strategic Plan for Companies/ Entrepreneurs, Arrangement of ECBs & FCCBs for companies, Fund (Equity & Debt) syndication for projects, Due Diligence, Appraisals & Feasibility

Studies, Corporate restructuring etc.

INVESTMENT PROCESS IN IFCI FUNDS

At IFCI Venture, the process of taking an investment decision broadly includes the following steps :

Initial/ Preliminary discussions with promoters.

Submission of business plan by the promoters.

Due-diligence/ Investment appraisal.

Investment decision/ Further direction.

FUNDS INITIATED BY IFCI

1) Green India Venture Fund (GIVF)

OBJECTIVE OF THE FUND:

The objective of GIVF would be to invest in companies setting up Clean Development Mechanism (CDM) projects and other commercially viable projects/ business aiming at following :

Reduce or eliminate negative ecological impact

Improve the productive and responsible use of

natural/other resources

Promoting use of alternative/non-conventional/renewable energy sources

Synchronizing business practices for maintaining ecological balance and sustainable environment.

NEED FOR SUCH FUND:

Climate change is among the most challenging issues mankind has ever faced. Greenhouse gases form a blanket layer over earth's atmosphere and trap heat waves within atmosphere, thus, gradually leading to rise in global temperature. GIVF proposes to contribute to cleaner environment and sustainable development and also generate substantial revenues for all willing to espouse the cause of clean environment.

STRUCTURE OF THE FUND:

Domestic Fund

Green India Venture Fund is SEBI registered Trust Fund.

IFCI Venture has been appointed as Investment Manager of the Fund.

The constitution / structure of the Overseas fund is decided after careful examination of all aspects such as taxation and other advantages. To enable the overseas investors to get benefit from the double tax avoidance treaty, the part of fund may be Overseas domiciled fund in the tax advantage territory.

SIZE OF THE FUND:

The corpus size of the fund is INR 3300 Million approx. with Green Shoe option.

The size of the overseas fund would be decided based on the mutual agreement between IFCI Venture and the overseas investors.

2) India Automotive Components Manufacturers Private Equity Fund-1- Domestic (IACM-1-D)


To invest at least 60% of the corpus in the automotive component sector. In addition, up to 40% of the corpus may be invested in companies in other sectors including, but not limited to companies engaged in manufacture, supply and/ or marketing of components or equipments for machinery, engineering, defence, aviation or any other sector.

NEED FOR SUCH FUND:

To augment equity capital needs of Small and medium sized companies in Indian Automotive component industry and other component manufacturing sector.


IACM-1-D is SEBI registered Trust Fund. IFCI Venture has been appointed as Investment Manager of the Fund.

The constitution / structure of the Overseas fund may be decided after careful examination of all aspects such as taxation and other advantages. To enable the overseas investors to get benefit from the double tax avoidance treaty, the part of fund may be Overseas domiciled fund in the tax advantage territory.

SIZE OF THE FUND:

The total corpus of the fund is envisaged at Euro 66 Million equivalent to INR 3300 Million approx. (on exchange of 1 Euro = INR 55). Out of the said corpus, IFCI (parent Organisation) has committed to invest INR 1650 million and LIC has committed to invest INR 200 million towards the Domestic Fund.


3) India Enterprise Development Fund (IEDF)


To invest in knowledge based projects with relatively high entry barriers, critical applications, prospects for high growth and global scalability. The projects/ ventures for investment under the fund would be identified in diversified and/ or emerging sectors of the economy.

NEED FOR SUCH FUND:

The Indian Private Equity/ Venture Capital industry is in process of evolution. The investments by the industry have so far remained concentrated in sectors, viz. Information Technology, Communication, Entertainment, Retail, Real estate and are yet to percolate in broad-based industry sectors.

The investment under IEDF would be made to avail opportunities for investment in key & emerging sectors of the Indian economy. The Companies identified for investment under the fund will have promising business strategy and scalable business

models.


IEDF is SEBI registered Trust Fund. IFCI Venture has been appointed as Investment Manager of the Fund.

The constitution / structure of the Overseas fund would be decided after careful examination of all aspects such as taxation and other advantages. To enable the overseas investors to get benefit from the double tax avoidance treaty, the part of fund may be Overseas domiciled fund in the tax advantage territory.

SIZE OF THE FUND:

The corpus size of the domestic fund is INR 250 crores.


POST INVESTMENT ROLE OF IFCI

At IFCI Venture, the objective is to create value by evolving a long term relationship with the entrepreneur. Besides, IFCI Venture's proactive and responsive approach ensures congruence of interests. The presence of IFCI Venture, not only lends credibility to the project but also raises the confidence level of promoters to deal with situations of strategic importance.

Besides financing, IFCI Venture believes in playing an active role through:

Value Addition : IFCI Venture adds value to its investee companies by closely associating with entrepreneurs in upgrading management systems, formulating and implementing growth strategies, marketing tie-ups, facilitating technological upgradations, etc., without interfering in day to day affairs.

Domain Knowledge: IFCI Venture, since its inception in 1975, has a track record of investments in over 400 ventures spread all over India in diversified industrial sectors. The insight gained by IFCI Venture enables it to help investee companies in crisis resolution as well as growth orientation.

Advisory Services: IFCI Venture also offers Advisory Services to Companies providing strategic inputs for realizing growth plan and optimizing returns on investment.

Syndication of Investment: IFCI Venture after assessing requirement of funds of investee Companies helps them Syndicate investment from their investor.

SIDBI VENTURE CAPITAL LIMITED

Mission

"To catalyse entrepreneurship by providing capital and other strategic inputs for building businesses

around growth opportunities and maximize returns on investment "

SIDBI Venture Capital Limited (SVCL) is a wholly owned subsidiary of SIDBI, incorporated in July 1999.

CURRENT FUNDS managed by SVCL are:

1. National Venture Fund for Software and Information Technology (NFSIT):

The National Venture Fund for Software and Information Technology Industry (NFSIT) has been set

up by Small Industries Development Bank of India (SIDBI) in association with Ministry of Information

Technology (MIT), Govt. of India during 1999-2000.

It is a close ended 10 year fund with a corpus of Rs. 1 billion.

SIDBI, Ministry of Information Technology (MIT), Govt. Of India and IDBI are the initial contributors to

the fund.

2. SME GROWTH FUND(SGF):

Venture Funds are recognized globally as the most suitable form of providing risk capital to innovative

and high technology businesses.

In order to meet the venture capital needs of SME units and enable them to achieve rapid growth by taking advantage of opportunities in the emerging sectors, SIDBI Venture Capital Ltd. has set up SME GROWTH FUND. The fund has a targeted corpus of

Rs.500 crore with a life of 8 years.

MARKETING STRATEGY

Key clients, major orders executed for them

Details of ratings (if any) of major foreign clients. Other relevant information on the clients like ‘DUN’

number etc. may be given

Details of overseas site offices, representative offices, subsidiary/ associate companies set up abroad

for marketing/ offshore development

Cost of venture and proposed means of finance

Present status of the proposed project

Financial projections with underlying assumption

Implementation schedule

Risk Analysis

Clearly laid out exit plan

Contact persons at the company, with e-mail address and website, if any.

RECENT HAPPENINGSSIDBI has received the ADFIAP Award for establishment of Role Model Fund (NFSIT)

SIDBI Venture Capital Ltd and Karnataka IT Venture Fund exit from ECAD Technologies Ltd., Bangalore

“SIDBI Launches SME GROWTH FUND - a Rs. 500 crore Venture Capital fund In Participation With Major

Commercial Banks”

Press Release -SIDBI Venture Capital, rakes in 30 % IRR from its first exit of its VC funding

International Venture Capital Seminar on India-Silicon Valley Partnership' 2000

National Venture Fund for Software and Information Technology (NFSIT)

was launched by the Hon'ble Prime Minister Shri Atal Behari Vajpayee on December 10, 1999.

INVESTMENT REQUIREMENTS & CRITERIAS TO BE FULFILLED

Q1)How does the Company approach SVCL for funding?

A)The details of both the funds i.e. NFSIT & SGF being

managed by SVCL are given in the website www.sidbiventure.co.in. It would be preferable if the company submits the business plan in a format given in the website. Based on a preliminary assessment of the business plan, course of further interaction with

SVCL can be decided.

Q2)How is a plan submitted to SVCL?

A)An Email can be sent to [email protected] by forwarding a copy of the executive summary of the business plan including the profile of management

team. The company can simultaneously forward a hard copy of business plan along with supporting documents to enable to make a preliminary

assessment of the proposal.

Q3)What sort of companies does SVCL associate with?

A)SVCL invests in companies engaged in wide range of growth sectors, such as life sciences, retailing, light engineering, food processing, information technology, infrastructure related services, healthcare, logistics and distribution, etc with focus on SME units. The

Company should have high growth potential so that it can scale up sufficiently to make an IPO within 3 - 5

years of investment.

Q4)At what stage does SVCL invest?

A)SVCL is focusing on all stages on investment. The Company at the time of investment should be unlisted.

Q5)Is there any geographic focus to SVCL?

A)SVCL proposes to make investment on an all India basis. Both the funds being managed by SVCL are domestic fund and the investee Company must be

incorporated in India. Part of the investment can be utilised for investment in opening overseas branch

offices/ subsidiaries provided the investment is beneficial to the parent Company in India.

Q6)What is the project evaluation process followed by SVCL?

A)The Process of evaluation of the proposal involves

scrutiny of a business plan,

detailed due diligence including visit to existing facilities/ operation site

reference check

feedback from clients etc.

All proposals are reviewed by an Investment Committee (IC) which also involves a presentation by

the promoters.

Q7)How long does it take SVCL to make an investment or participation decision?

A) On an average it should be possible to complete the full cycle of processing of the proposal including due diligence, sanction, documentation etc. between 6 – 8 weeks. However it is difficult to specify time frames as

is depends on a numbers of factors including the availability of information with the promoters and the speed with which additional information is furnished.

CANBANK VENTURE CAPITAL FUND (CVCF):

INTRODUCTION

Canbank Venture Capital Fund (CVCF) is a Trust set up by Canara Bank on 21st October, 1989, for

undertaking Venture Capital activities.

Canara Bank is the first Public Sector Bank to set up a Venture Capital Fund, duly registered with

SEBI.

Canbank Venture Capital Fund Ltd (CVCFL) is a wholly owned Subsidiary of Canara Bank.

CVCF has so far setup Five Funds with a total corpus of INR 6200 Million, of which two are

closed. The portfolio investments are spread across

diverse industrial segments.

CANBANK VENTURE CAPITAL HAS LAUNCHED THE FIFTH RS.500-CR FUND (EIGF).

EMERGING INDIA GROWTH FUND (EIGF)

The Fifth Fund (EIGF) of CVCF was launched in the month of June 2010 with a corpus of Rs.500

crores.

Canara Bank is the Anchor investor and the rest of the contributions are by Domestic PSU Banks/ Financial Institutions and Insurance Companies.

Emerging India Growth Fund is a Sector Agnostic, Domestic Fund which shall invest in

diverse sectors.

The Prime focus will be on extending assistance to units in MSME(Micro, Small & Medium Enterprises) sector and investments in industries with positive

outlook.

FUNDS

Canbank Venture Capital Fund, has through its funds,

invested in companies covering a broad spectrum of industries.

Canbank Venture is a premier domestic Venture Capital Fund. An experienced fund management

company, Canbank Venture believes in adopting a General Fund philosophy and has a good portfolio of investments in several promising sectors.The

fund's corpus is contributed by Public Sector Banks and Financial Institutions and Insurance

Companies.

Over the last 20 Years Canbank Venture has invested in several promising companies,

partnered progress and posted successful exits. It invests in businesses with an established

technological or market positioning edge and good growth potential.

The company has a well qualified team to invest, manage and create value in its investee

companies.

Canbank Venture shall be investing from Emerging India Growth Fund (EIGF). EIGF is a Close Ended, Domestic & General Fund set up to achieve long term capital appreciation from equity and equity related investments in a broad based portfolio of well established Indian companies managed by

professional teams.

The objectives of this (EIGF) Fund are :

Focus on expansion and growth, capital investment in companies owned/ managed by

experienced entrepreneurs/ management teams.

Investment in mid-stage to late-stage enterprises

Preference for companies in the MSME sector.

CanBank venture capital funding PORTFOLIO

CanBank Venture has a diverse portfolio of investments in different sectors. Some of the

investments are:

1. ASIATIC ELECTRICAL & SWITCHGEAR PVT LTD.

Asiatic is a leading supplier of standardized power distribution and protection solutions for uninterrupted power supply. It manufactures a range of low voltage and high voltage distribution products including Silicone Rubber Range of HT Products.

2. MERCHEM LTD.

Merchem Limited is one of India's leading manufacturers of rubber & specialty chemicals, serving rubber-processing and allied industries. With state-of-the-art technology and world-class manufacturing facilities, Merchem consistently delivers superior quality products that are on par with international standards.

3. COLOUR ROOF (INDIA) LTD.

COLOUR ROOF (INDIA) LTD (CRiL) is dedicated exclusively to manufacture of roof and wall cladding profiled sheets, and is a highly customer focused organisation in cladding profiles.

4. M-TECH INNOVATIONS LTD.

M-Tech Innovations Ltd., is one of the leading manufacturers of high-tech Security Cards, Bank Cards, Smart Cards, Pre paid Cards, etc for Banking/ Telecom / Automobile & Electronic Sectors. M-Tech is an ISO 9001:2000 / TS 16949:2002 certified company.

5. UNITHERM ENGINEERS LTD.

Unitherm is a Diversified, leading Engineering Group in the business of manufacturing Industrial Furnaces and Heat Treatment Services. The Fund has exited from

this company.

6. POLYGEL TECHNOLOGIES (I) PVT. LTD.

Polygel is a Specialty Chemicals company, engaged in manufacture of Adhesives and Sealants, Cable Gels, Organic Titanates, etc. The Fund has exited from this company.

7. ITEAMIC PRIVATE LTD.

An IT / ITES integrated business and technology solutions and consulting services provider, offering domain knowledge in the financial services and education sectors. The Fund has exited from this company.

8. KLT AUTOMOTIVE & TUBULAR PRODUCTS LTD.

A major manufacturer for automotive products, precision tubes, chassis frames, chassis components and body components / assemblies.The company is a leading supplier of Automotive chassis frame assemblies for MUV's , Pick-ups, and other light commercial vehicles. The Fund has exited from this company.

9. AVASARALA TECHNOLOGIES LTD.

The Avasarala Group of companies is a Bangalore based, well diversified group with interests in Engineering Design, Process Machinery, Conveyors & Automation Systems, Electron Guns for picture tubes and CDT Tungsten Rod, Wire and Powder products and Health Care.The Group is a leader in manufacture of capital machinery for engineering and electronic industries. The Fund has exited from this company.

10. RT OUTSOURCING SERVICES LIMITED

An ITES Company providing web enabled customer relationship management solutions and services. The Fund has exited from this company.

11. PRATHISTA INDUSTRIES LIMITED

Manufacturer of Bio-Fertilizers, Bio-Pesticides & Gluconate salts.The Fund has exited from this company.

12. OMNITECH INFOSOLUTIONS LIMITED

The company offers customized end to end solutions in the areas of e-commerce, web technology, database management etc. The Fund has exited from this company.

INVESTMENT CRITERIAS CONSIDERED BY CanBank:

a)ACTIVITY: Focuses mainly on Growth and Expansion financing.

b)TECHNOLOGY AND BUSINESS: It invests in businesses with established technological or market

positioning edge with sustainable competitive advantage, operating efficiencies and attractive profit

margins.

c)MANAGEMENT TEAM: CanBank has a Strong Management Team with a demonstrated track record

of performance, integrity, commitment and enterprise.

d)SECTOR: Investment will be in sectors with sustainable high growth potential.

e)NATURE OF ASSISTANCES: Investment in Equity/Equity related instruments/debt instruments in

unlisted mid / late stage companies.

f)SIZE OF ASSISTANCES: In the range of Rs. 25-50 crore, subject to relaxation based on deal specificity.

g)GEOGRAPHIC LIMITATION: The Fund intends to invest in Portfolio Companies based in India.

h) ROLE IN THE VENTURE: CanBank nurtures the project by way of hands-on after care through

proactive participation in the Board.

ICICI Venture Funds Management Company Limited

INTRODUCTION

ICICI Venture (formerly TDICI-Technology Development and Information Company of India Limited) was

founded in 1988 as a joint venture with the Unit Trust of India. Subsequently, ICICI bought out UTI's stake in

1998 and ICICI Venture became a fully owned subsidiary of ICICI. ICICI Venture also has an affiliation

with the Trust Company of the West (TCW), which provides it a platform for networking Indian

companies with global markets and technology. Strong parentage and affiliates for ICICI Venture also

translates into access to a broad spectrum of financial and analytical resources thus enabling a keen

understanding of the Indian financial markets and entrepreneurial ethos.

ICICI PROFILE OVER YEARS

ICICI Venture is one of the largest and most successful private equity firms in India with funds under

management to the tune of USD 2 billion.

ICICI Venture, over the years has built an enviable portfolio of companies across sectors including

pharmaceuticals, Information Technology, media,

manufacturing, logistics, textiles, real estate etc thereby building sustainable value.

It has several “firsts” to its credit in the Indian Private Equity industry. Amongst them are India’s first

leveraged buyout (Infomedia), the first real estate investment (Cyber Gateway), the first mezzanine

financing for a acquisition (Arch Pharmalabs) and the first ‘royalty-based’ structured deal in Pharma

Research & Development (Dr Reddy’s).

ICICI Venture is a subsidiary of ICICI Bank, the largest private sector financial services group in India

ICICI Venture funding team

The team at ICICI Venture is a mix of investment professionals, entrepreneurs, industry professionals,

and structured finance professionals. The complementary strengths of the various team

members ensures not only the best deal sourcing and the most optimum structuring but also the ability to

add significant value to the portfolio companies.

ICICI Venture has the largest team strength amongst all private equity firms in India. In addition, what

makes the team unique is the presence of in-house legal, finance, compliance and risk departments. The

management team at ICICI Venture has the experience of executing large and complex transactions, structuring innovative deals and creating new

investment landscapes through each of its investments.

Investments made by ICICI Venture fund from 2007:

ICICI- INDIA ADVANTAGE FUND

ICICI Prudential Asset Management Company - the guardian company of ICICI Venture, is amongst the

largest asset management companies (AMCs) operating in India today. ICICI Venture manages and invests in ICICI India advantage fund Series 1 and 2 respectively. It manages assets worth ` 37,906.24 crore (as on year ended, 31.03.2007). It manages a wide portfolio of schemes to cater to the varying

investment needs of its investors and also provides retail financial services products and services.

The prominent private equity funds invested and managed by ICICI Venture are -

ICICI India advantage fund Series 1 (IAF series 1) - raised USD 245 million in 2003; its investment is over.

ICICI India advantage fund Series 2 (IAF series 2) - raised USD 810 million in 2006; its investments are

still going on

Apart from this, ICICI India Advantage Fund also manages a portfolio of private equity investments

amounting to USD 425 million.

ICICI-India Advantage Fund investments are subject to income tax exemptions as per Chapter III of the

Income Tax Act, 1961 which states a few specified types of income on which a person can get tax

exemptions. It means that at the time of calculating annual income, this type of income will not be added

to his total annual income. ICICI-India Advantage Fund generally maintains the following rules of the SEBI

while offering tax benefits on this scheme -

Any special tax benefits for the mutual fund company and its shareholders (only section numbers

of the Income Tax Act and their

substance should be mentioned, without reproducing the text of the sections).

Tax benefits are to be declared under the column of "objects of the offering".

INVESTMENTS IN PRIVATE EQUITY1.India Advantage Fund Series 3 (IAF Series 3)

(USD 400 million)

2. India Advantage Fund Series 2 (IAF Series 2)

(USD 810 million)

3. India Advantage Fund Series 1 (IAF Series 1)

(USD 245 million)

4.ICICI Emerging Sector Fund / Others

(USD 692 million)

Real Estate

5.India Advantage Fund (Real Estate Series 1)

(USD 562 million)

Mezzanine Fund

This new segment was added in 2007. ICICI Venture is a first mover in Mezzanine in the Indian PE industry. The India Advantage Fund VII (Mezzanine Fund I) is conceptualized as a USD 51 million fund that would focus on Mezzanine investment opportunities. The

fund has already concluded its first few investments.

Mezzanine finance typically is a structured debt like instrument, with a component of cash income and benefits from potential upside return from equity

kickers. It often bridges the gap in corporate capital

structure between senior debt and equity. Mezzanine offers flexibility to meet both the investor’s and

investee company’s requirements and also provides medium to long term capital without significant

ownership dilution.

6.India Advantage Fund (Mezzanine Series 1)

(USD 51 million)

STRATEGIES FOLLOWED BY ICICI VENTURE FUND

INVESTMENT PRIVATE EQUITY PRACTICE

ICICI Venture currently manages 3 third party capital funds in its Private Equity practice: India Advantage Fund Series 1, India Advantage Fund Series 2 and India Advantage Fund Series 3, representing an

aggregate original corpus of USD 1.45 billion between the 3 funds.The firm is currently investing out of

Series 3 which is a diversified, buyout & late stage growth capital Fund, India Advantage Fund Series 3.

The investment philosophy is to pursue transactions with a established enterprise that are leaders or potential leaders in their respective markets and

where there is a clear proposition for value creation.

The investment thesis is driven by focusing on the following:

Buyouts

ICICI Venture has been a pioneer in buyout investing in India. Buyouts continue to form a key focus area for the firm and its funds. ICICI Venture has developed the requisite capability to manage these buyouts and has

developed a rich repository of knowledge and experience through its earlier buyout transactions.

Structured transactions

Focused on effective structuring of transactions

through innovative use of multiple investment instruments.

Growth Capital

The Funds managed by ICICI Venture endeavor to provide financial assistance to well

established/existing enterprises with robust business models and healthy balance sheets through a variety

of investment instruments.

Roll-ups

ICICI Venture is also a pioneer in identifying unique scalable platforms that are ideal for investments in the form of roll-ups. The firm seeks to use its vast

experience and resources to effectively structure such transactions and add value to realize significant

synergies.

ICICI Venture fund PORTFOLIO : ICICI Venture has over the years built an enviable portfolio of companies covering a wide range of

sectors spread across private equity, buyouts and real estate investments.

IAF Series 1

ACE Refractories Ltd.

Gateway Distriparks

Infomedia 18

I-Ven Pharma

I-Ven Realty (Glaxo)

Kingfisher Airlines Ltd.

Maladi Drugs & Pharmaceuticals

PVR Ltd.

Ranbaxy Fine Chemicals Ltd.

Reliance Petroleum Ltd.

Sangam India Ltd.

Subhiksha Trading Services Ltd.

IAF Series 2

Arch Pharmalabs

HDFC Bank Ltd.

Home Solutions Retail (India) Pvt. Ltd.

I-Ven Medicare India Pvt. Ltd

JMC Projects Ltd

Kalpataru Power Transmission Ltd.

Karvy Stock Broking Ltd.

Mahindra Gears & Transmissions Pvt. Ltd.

Mahindra Retail Pvt. Ltd.

Perlecan Pharma

PVR Limited

PVR Pictures Ltd.

IAF Series 3

Devyani International Limited

ING Vysya Bank

Star Health and Allied Insurance

TeamLease

Real estate Fund

Corolla Realty Ltd.

Delta Corp Limited

Entertainment World Developers Pvt. Ltd.

Express Towers

I-Ven Kolte Patil (Projects) Pvt Ltd.

Jubilee Hills Landmark Projects Ltd.

Kolte Patil I-Ven Township (Pune) Pvt.Ltd.

Lodha Elevation Buildcon Pvt. Ltd.

ICICI Emerging Sectors Fund/Others

Shoppers' Stop

TV Today (Aaj Tak)

Crossword

Pantaloon Retail

Trinethra

Mezzanine Fund

Avesthagen Limited

I-Ven Interactive Ltd.

People Combine Avenues Limited

POST INVESTMENT ROLE OF ICICI VENTURE :

(As told by some of the entrepreneurs who have been financed by ICICI Venture for making their dreams

come true)

ICICI Venture makes the entrepreneurs imagine a future for their company which they never might

have thought to be possible. they support the emerging company all along the way, egging the company on to newer successes and higherachievements.

BIBLIOGRAPHY

www.wikipedia.com

www.google.com

www.canbankventure.com

www.iciciventure.com

www.sidbiventure.com

www.ifciventure.com

http://www.ifciventure.com/

http://www.sidbiventure.com/

http://www.iciciventure.com/

http://www.canbankventure.com/

http://www.google.com/

http://www.wikipedia.com/

Innovations

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