APEX

Supported By

Economic Laws Practice


SBISG
 
Session Partners
Avalon Consulting

HSBC

Lexcounsel

 

 

EVENT PROCEEDINGS

The event kicked off with a Data Filled presentation on "The State of Indian Private Equity" by Venture Intelligence. The "India Private Equity Trend Report - 2018" referenced in the presentation is available for download here.

Private Equity - The Road Ahead

2017 turned out to be the biggest ever year for both Private Equity Investments & Exits. Does this signal the beginning of a sustainable resurgence of the PE segment? What are the potential pitfalls ahead ?

Big Picture

(L-R): Sridhar Venkiteswaran, CEO, Avalon Consulting; Pranav Parikh, Managing Partner, Edelweiss PE; Gopal Jain, Managing Partner, Gaja Capital; Sanjay Kukreja, Partner, ChrysCapital &
Ajay Candade, Director - Private Equity, KKR

Sanjay Kukreja:

Macro View:
Seeing the large investment numbers - $24 billion, etc. - makes me uneasy and a little nervous. These are the kinds of times when investors tend to make mistakes on the valuation side. While those mistakes are understandable and firm specific, what is not ok are mistakes on governance, (increased) debt, misalignment in sectors and exits.

PE is becoming more mainstream in India: i) CEOs of large companies wanting to startup and ii) Large business wanting to sell assets

The focus at ChrysCapital & Sectoral View:

We were focused on exits in 2017 - with a 10:1 ratio emphasis on exits vs investments. We however plan to get deploy capital in the second half of 2018 in select sectors where we see reasonable valuation.

The Electronics space - especially light manufacturing - is a space where Indian companies seem ready to occupy the space that Chinese companies are vacating. This however is not happening as much on the auto components side.

New sectors are rising out the unorganised sector moving to organized and GST has been a catalyst in that.

Ajay Candade:

Consistent low interest rates have elevated valuations of all assets. Overall, we will probably see a slow down in 2018 (vs continuation of 2017 trends).

We will see a larger role for Private Equity in India due to large conglomerates wanting to become more efficient on capital allocation and hence sell off their non-core assets. Also, distressed groups will be forced to sell off their crown jewels (owing to lack of interest in their distressed group companies). These will together lead to substantial de-conglomeration of Corporate India.

On Chinese Strategic Interest in India: China’s economy is increasingly focused on its domestic economy and on being competitive globally. They require IP for global dominance. And the space being vacated by China in manufacturing is being occupied by SE Asia.

Indian corporates are not acquiring Indian success stories like the unicorns because they are not cash flow generating. Indian unicorns which have cash in the bank and have niche bits they want to acquire e.g. by Flipkart in payments and robotics. You are going to see more of this as the early universe of Flipkart like startups start maturing.

Pranav Parikh:

One of the significant changes we will see playing over the next few years is the impact of increasing supply of capital to Private Equity firms from domestic sources.

Thanks to the Insolvency and Bankruptcy Code (IBC) and the current environment (where a number of good businesses with bad balance sheets are available for acquisitions), it presents an opportunity for more funds to enter the reconstruction (turnaround) space .

Gopal Jain:

Macro View:
The high growth rates are likely to affect the commodity prices in the subsequent quarters. India is a net commodity importer. So when the rest of the world is doing really well, India does a little less well.”

We are going to see a shift from “Low Touch” Private Equity in India to “High Touch” Private Equity due to the rising PE ownership of private company cap tables. “It has been years since we have seen a company - approaching us for capital - without some investors already in their cap table.”

On Exits:

There has been an order of magnitude shift in Exits. In the past, investors got comfortable with the Public Markets in India, where they could put in capital and also take it out. This is now happening in India Private Equity.

On China:

More Chinese investments will follow in 2018 as China tries to offset the trade deficit. China wants more access to India’s capital, but the Indian government is yet to decide on the same.

On Sectors:

We are going to see kernels of pure tech plays emerging in India based on domestic consumption of technology. Indian companies are missing out on two fronts - Commodities and Electronics.

More Event Pics Here

back to top

New Opportunities

Which are the sectors that are looking the most promising for investments in 2018 and beyond? Is the Fintech Opportunity for real? Are Blockchain and Cryptocurrencies on the radar of Indian investors? What are the Opportunities in Distressed Investing? What is the outlook for innovative companies in the Life Sciences sector?

RE

(L-R) Sesh A.V, Managing Director, Basiz Fund Services; TCM Sundaram, MD, IDG Ventures India;
Ramesh Radhakrishnan, Partner, Artiman Capital; Darshan Upadhyay, Partner, Economic Laws Practice & Divyesh Dalal, Head- Global Payments & Cash Mgmt, HSBC

More Event Pics Here

back to top

Entrepreneurs Experience

The session featured Real Life stories of Entrepreneurs who have successfully raised external capital and the challenges they faced along the way.

 

(L-R) Hari Krishnan, Fund Manager, Astarc Ventures (Session Chair); Sachin Jaiswal, Co-founder & CEO, niki.ai; Akanksha Hazari, Founder & CEO, m.Paani; Sachin Jain, Co-Founder & CEO, Oriano Solar & G. Ramasubramanian, Co-Founder, SiriusOne Capital & E-Bramha Technologies

 

More Event Pics Here
 

back to top

Focus on Venture Capital

Even as overall PE investments hit record highs in 2017, numbers in the VC segment slid for the second continuous year. What are the challenges facing this segment - from the perspective of both investors and entrepreneurs? What will the “New Normal” look like?

Growth

(L-R) Sanjeev Naryani, MD & CEO, ‎SBI-SG Global Securities Services; Takeshi Ebihara, Founding General Partner, Rebright Partners; Arihant Patni, Managing Director, Ideaspring Capital; Ritesh Banglani, Founding Partner, Stellaris Venture Partners; Kunjan Chikhlikar, Head, RPG Ventures &
Seema Jhingan, Partner, LexCounsel

Ritesh:

How Stellaris is differentiating itself as a "2016-era" firm (vs the two 2006-era firms he worked at previously):

1) “OFP” (Ola, Flipkart and Paytm) is the "BAT" (Baidu, Alibaba and Tencent) of India

Stellaris is leveraging such young founders as both investors in its fund as well as "differentiated deal flow" generators.

2) Content Creation.

Unlike in the US, where firms like Andreessen Horowitz, Founders Fund and others create a lot of original "thought leadership" content, Indian VC firms hardly put out any content in an organized fashion. Stellaris is focusing significant efforts in making its investment theses available in public domain. Apart from overall branding as a more transparent firm, by shining more light on the theses, it helps refine the firm's thinking as well as attracts deal flow from founders who resonate with the theses.

3) Realization that the VC business is not a scalable one

A typical operating business scales by adding people, and that happens when you have a pyramid structure through which entrepreneurs delegate more and more to the next levels. A VC business is very on-the-ground business. If the investors are not meeting entrepreneurs day in, day out vigorously - even though 99% will not result in investments - we are going to be irrelevant within two years.

Changing Role of a VC: From Monitoring to Supporting


Era of "Monitoring Investments" is over. The differentiator is now how you support your investee companies.

Ebihara:


The Softbank phenomenon is a creation of the excess liquidity (in the global financial system)

Arihant Patni:

On the excesses of 2015: Too many entrepreneurs started turning into angel investors (versus focusing on running their own businesses). "It's scary - ie, indicative of a bubble - when this kind of thing happens."

 

back to top

Supporting Partners

IAN

TiE

Key

Nasscom

Venture Garage

SmartCeo
Copyright ©  TSJ Media Pvt Ltd, All rights reserved.

back to top

Venture Intelligence - APEX' 12 Summit & Awards