PRESENTATION FOR

VIVA
Name:-Akshata Sunil masrankar
Seat No:-HPGD/JA22/1679
Specialization:- Finance
Topic:- Private Equity Companies In India
 INTRODUCTION

 The Private Equity industry in India has developed over two decades. Starting
from a nascent stage, the industry has evolved over time to a level that
attracts global investors. In simple words, private equity refers to
an alternative investment of capital into a business.

 He various methods adopted by the PE firms to invest in companies include

buyout or leveraged buyout, merger, venture capital, growth capital, distress
funding, fund of funds, etc.

 PE firms charge a management fee of typically 2% of AMU and a performance

fee of 20% of the profits.
What is Private Equity?

 Private equity describes investment partnerships that buy and manage companies before
selling them. Private equity firms operate these investment funds on behalf of institutional
and accredited investors. Private equity funds may acquire private companies or public
ones in their entirety, or invest in such buyouts as part of a consortium.

 Capital for private equity is raised from retail and institutional investors and can be used
to fund new technologies, expand working capital within an owned company, make
acquisition, or to strengthen a balance sheet.

 Private equity (PE) refers to capital investment made into companies that are not publicly
traded. Most PE firms are open to accredited investors or high-net-worth individuals, and
successful PE managers can earn over a million dollars a year. Leveraged buyouts (LBOs)
and venture capital (VC) investments are two key PE investment sub-fields.
How do private equity firms make
money
 Private equity firms buy companies and overhaul them to earn a profit when
the business is sold again. Capital for the acquisitions comes from outside
investors in the private equity funds the firms establish and manage, usually
supplemented by debt.

 Investors can choose between various investments in the market that can
provide returns. Each of these assets comes with some risks as well. Usually,
investors manage their portfolios themselves. However, some investors may
also pool their funds together.
 This way, they can hire a manager to handle their investments. These
investments may come in various forms, such as mutual or equity-traded
funds.
Outsiders equity
Outsiders equity refers to the funds that a company raises from individuals or
organizations that are not a part of the company's ownership structure. This can
include equity financing, bond financing, and other forms of long-term
borrowing. Common Stock: Companies can issue new shares of common stock to
outside investors in exchange for funds.

The outsider investor invests in the entrepreneur and not the business. Hence, it
is the duty of the entrepreneur to respect the investor's money and to make
maximum use of the opportunity they are presented with, in terms of using the
investor's money and investor's network.
General Partner
A general partner (GP) refers to the private equity firm responsible for managing
a private equity fund. The private equity firm acts as a GP, and the external
investors are LPs. The investors who have invested in the fund would be known as
Limited Partners (LP), and the PE firm would be known as General Partner (GP).
Who are General Partners?

A general partner (GP) is typically paid a management fee, which is a percentage

of the total capital invested in the fund by its limited partners and are also
entitled to a performance-based carried interest, which is usually around 20%.
Individual Fund Manager
A fund manager is responsible for implementing a fund's investing strategy and
managing its portfolio trading activities. The fund can be managed by one
person, by two people as co-managers, or by a team of three or more people.
Fund managers are paid a fee for their work, which is a percentage of the fund's
average assets under management (AUM).

In choosing appropriate investments, a fund manager may have the support of

the analyst team which does a lot of the aforementioned tasks and presents their
results in an investment committee. After an internal brainstorming, the
committee selects the right investment avenues for a fund.
The Top 10 Private Equity Firms

1. KOTAK PRIVATE EQUITY

2. CHRYS CAPITAL
3. TRUE NORTH’S INDIA VALUE FUND
4. MOTILAL OSWAL PRIVATE EQUITY
5. IDFC PRIVATE EQUITY FUND
6. ICICI VENTURE FUND
7. CX PARTNERS
8. PREMJI INVEST
9. KEDAARA CAPITAL
10. JM FINANCIAL PRIVATE EQUITY
TYPES OF EQUITY STRATEGIES

 Venture capital,
 Growth equity
 Buyouts
VENTURE CAPITAL

 Venture capital (VC) is a form of private equity and a type of financing that
investors provide to startup companies and small businesses that are believed to
have long-term growth potential. Venture capital generally comes from well-off
investors, investment banks, and any other financial institutions.
 Venture capital is a term used to describe financing that is provided to companies
and entrepreneurs. Venture capitalists can provide backing through capital
financing, technological expertise, and/or managerial experience.VC can be
provided at different stages of their evolution, although it often involves early and
seed round funding
 TYPES OF VENTURE CAPITAL

 Stages of Venture Capital Funding Seed money Low-level financing for proving a
new ideaStart-upNew firms needing funds for expenses related to marketing and
product development
 First stage Funds for actual product manufacturing and sales, as well as increased
 marketing Expansion stage At this stage the company is seeing exponential
growth and needs additional funding to keep up with the demands.
 Bridge stage Funds used to support activities like mergers, acquisitions, or IPOs
GROWTH CAPITAL

 Growth equity firms invest in companies with proven business models that need
the capital to fund a specified expansion strategy as outlined in their business plan.
Similar to early-stage start-ups, these high-growth companies are in the process of
disrupting existing products/services in established markets.
 Why is growth equity important? Invest in fast growing sectors – growth equity
tends to invest in leading companies in the fastest growing markets
BUYOUT

 buyout fund is a type of private equity fund that typically seeks to gain controlling
or majority (>50%) ownership of a company,

 with the goal of creating value by improving the operations of the company. The
fund later seeks to sell or take these companies public at higher valuations.
How Does Private Equity Work?
 How Does Private Equity Work?
 Private equity works through a series of steps. First, a group of private equity investors or a
private equity firm raises a pool of capital by forming a private equity fund. This fund is
then invested in specific companies or a group of companies that show promise for growth.
 The main goal is to provide immediate capital to financially distressed companies or those
needing funds for expansion or regular operations. The influx of capital helps these
companies overcome their financial difficulties and get back on track. Private equity
investors aim to gain returns from their investments as the companies improve their
operations and become profitable.
 They are generally not involved in running the company or making business decisions, but
they may provide advice and help develop strategies. Once the company turns its fortunes
around, the private equity investors can exit the investment and enjoy their returns. This
can be done through various strategies, such as selling their stake or facilitating an initial
public offering (IPO).Private equity investments offer high-net-worth individuals the
opportunity to access the potential of equity markets and diversify their investment
portfolios. It provides an avenue to be part of promising companies with growth potential,
contributing to their success and sharing in the resulting returns.
 CONCLUSION

 private equity in India has proven to be a valuable capital source, supporting

financially distressed companies and fueling the growth of profitable businesses. It
offers high-net-worth individuals and institutional investors opportunities to tap
into equity markets, diversify portfolios, and participate in the success of
promising companies. Private equity firms in India provide valuable services,
contributing to the overall value proposition. As India's economy continues to
evolve, private equity remains poised to play a vital role in fueling
entrepreneurship, job creation, and economic growth. It is a dynamic sector that
offers unique investment opportunities and potentially attractive returns, shaping
India's business landscape and contributing to its economic development