Motilal Oswal PE

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Potential unlocked. Growth uncapped

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This brochure is for the personal information of the authorised recipient and does not constitute an offer to sell or a solicitation to buy. Further, this brochure also does not construe any legal or taxation advice and is strictly meant for private circulation and not for public distribution. The brochure has been furnished solely for your information and should not be reproduced or redistributed to any other person in any form. Information and statistical data herein have been extracted from publicly available information and obtained from sources we believe to be reliable, but in no way are warranted by us as to accuracy or completeness. MOPE directors and officers accept no responsibility for any losses resulting from the use or transmission of the data or views represented in this brochure.


Imagine a small dot. At first glance it hardly catches attention. Now consider, that this is the same dot that could be the first step to a masterpiece. Or, an architectural marvel. Or, simply one long line that can go around the earth and more. In reality, therefore, it is the transformative potential of this tiny dot that makes it so remarkable. And important.

Motilal Oswal Private Equity understands the power of potential and thus tries to look beyond what meets the eye. A combination of knowledge

and entrepreneurial

instinct helps MOPE look harder, delve deeper and identify opportunities that may appear unexciting on the surface , but have the potential to deliver extraordinary results. MOPE believes that just spotting potential is not enough. Unlocking it is what leads to growth uncapped. 01


Potential unlocked. Growth uncapped

Motilal Oswal

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Raamdeo Agrawal

MOPE spirit Motilal Oswal and Raamdeo Agrawal, founders of Motilal

them to share their experience of building MOFSL to mentor

Oswal Financial Services Ltd. (MOFSL), built a successful

budding entrepreneurs in shaping their business dreams.

financial services business based on the core principles of knowledge and long-term investing philosophy. MOFSL owes the success of it’s stock broking business to the partnership-led business model, which has unleashed the entrepreneurial spirit in its most admired franchisee network. The two partners visualised that small and mid-cap companies would be significant beneficiaries of India’s rapidly unravelling growth story. They realised that the private equity business will facilitate risk capital to such firms and will allow

Motilal Oswal Private Equity (MOPE) was thus founded in 2006 with the vision of partnering high potential mid-market companies. Vishal Tulsyan came on board as the founding CEO. Under his leadership, MOPE has raised funds for India Business Excellence Fund (IBEF) and India Realty Excellence Fund (IREF) to invest in mid-market companies and real estate projects, respectively.


$1,000,000,000,000 A trillion dollar economic powerhouse India took well over half a century to become a trillion dollar

2020

$4tn

2014

$2tn

2008

$1tn

2000

$451bn

1990

$293bn

1980

$150bn

1970

$57bn

economy in 2008. It is expected that by 2014 it would become a two trillion dollar economy. This period, of adding another trillion dollars to the Indian economy has been termed by us as the Next Trillion Dollar Era (NTD Era). The NTD Era will bring structural transformations to the Indian economy, unleashing several years of secular growth product categories. MOPE’s central investment strategy capitalises on this transformation in the NTD Era.

The India growth story

Motilal Oswal Private Equity

and sizeable investment opportunities across sectors and

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Potential unlocked. Growth uncapped

Large-cap (> ` 10bn)

Mid-cap (` 1-10bn)

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MOPE’s < sweet spot

Mid-market attractiveness Being the largest constituent of the Indian GDP, mid-market companies offer compelling investment opportunities. The

Small-cap (<` 1bn)

business models of such companies are well evolved and have potential to grow exponentially. Providing growth capital to these companies present an opportunity to benefit from such businesses and vision of Indian entrepreneurs. AU Financiers, Time Technoplast, Parag Milk Foods,

Mid-cap optimism

Powermech and Electromech represent a few such examples

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Visionary entrepreneurs with strong execution capabilities

from the IBEF-I portfolio.

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Inherent growth potential

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High growth capital demand

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Multiple exit options within 60 months

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Opportunity to exercise rights and controls


MOPE scope

Funds managed by MOPE

MOPE’s vision is to emerge as India’s most preferred PE

India Business Excellence Fund – I (IBEF)

fund manager in the mid-market space with a differentiated investment approach. In line with this vision, MOPE has launched two funds over the last four years and has built a credible presence in Indian PE space. It has a strong management team, a well articulated investment strategy and an approach enriched with Indian sensibilities.

IBEF-I is an ~ ` 550 crores ($125 mn) sector-agnostic private equity fund, raised in 2007. It has since invested in 13 midmarket companies across sectors. MOPE is currently raising IBEF-II, a sector-agnostic fund with a target corpus of ~ ` 1000 crores ($200 mn).

India Realty Excellence Fund (IREF) raised in 2009 focused on residential housing in Tier I and Tier II cities. It has since deployed 70% of its corpus in 5 projects. MOPE is currently raising IREF-II, a domestic real estate fund with a target corpus of ~ ` 750 crores ($165 mn).

Motilal Oswal Private Equity

IREF-I is an ~ ` 200 crores ($ 45 mn) domestic real estate fund

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Potential unlocked. Growth uncapped

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MOPE edge The convergence of Parent, People and Process provides

MOFSL has a market capitalization of ~ ` 2,425 crores($540mn)

MOPE a solid delivery platform that gives an edge to its

and a net worth of `1,063 crores ($236mn) as on Dec 31, 2010.

Portfolio.

Parentage

MOPE leverages its parentage through l

MOFSL has a market-leading equity research franchise, well established institutional equities business and corporate access. It is India’s leading retail brokerage house with over 7,00,000 customers and 1,500 business locations across 560 cities. The Group is fast emerging as a financial services powerhouse with rapidly growing presence in Asset Management [with an AUM of ~ ` 2,250 crores ($500mn)] and Investment Banking business.

Deal Sourcing: 200 + relationships with boutique advisors

(10 investments were sourced from this network)

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Depth: 5 investments in Tier II & Tier III cities

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Knowledge: access to world-class insightful research

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Reach: easy institutional access to portfolio companies

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Brand equity: the association with the Group enhances credibility, which is highly valued by mid-size companies


People MOPE has an experienced team with multi-sectoral investing experience. Experience, access, influence and discipline combine to provide a sustainable competitive advantage in a challenging private equity environment.

The team Inspired

by

the

investment

philosophy

of

Sitting from left to right Vishal Gupta-Principal, Vishal Tulsyan-CEO & Director, Raamdeo Agrawal-Chairman, Raakesh Sony-Director, Harvesp Mehta-Director (Real Estate) Standing from left to right Anuranjan Mohnot-AVP, Santosh Jha-AVP, Prakash Bagla-VP, Abhishek Jain-Associate, Abhishek Poddar-AVP, Karishma Kotwani-Associate-(Investor Relations), Prakash Dhoot-VP & Head-(Finance), Abhishek Prabhu-Assistant Manager, Bhavesh Pandya-Assistant Manager, Mohit Khaitan-Assistant Manager

Raamdeo

Agarwal, Chairman and led by Vishal Tulsyan, CEO; the team possesses over 100 person-years of experience, The team derives its strength from diverse background of its

and a deep understanding of family-driven businesses. This

members, encompassing investing, corporate finance,

helps the team to engage pro-actively with the portfolio

investment banking and corporate strategy functions. Some

companies to strengthen their business models and enhance

members also possess significant entrepreneurial experience

corporate values.

Motilal Oswal Private Equity

applicable across the lifecycle of private equity investing.

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Potential unlocked. Growth uncapped

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Process MOPE enjoys a credible track record as a private equity fund manager in India. MOPE has developed deep knowledge of various domestic businesses and on the ground understanding

806

Deals sourced

of financial and legal issues, helping it to close transactions in time bound period. MOPE recognises that successful investment is derived from a stringent and efficient investment process, whose key elements are: l

Proactive deal sourcing

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Efficient deal evaluation process

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Comprehensive due-diligence

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Innovative deal structuring

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Effective post-investment monitoring

This has resulted in investment across 13 companies out of 806 deals sourced over 4 years

150

13

Detailed evaluations

Investments


Portfolio MOPE’s differentiated investment strategy for IBEF-I has

IBEF-I’s portfolio largely mirrors the optimism of the NTD

resulted in one of the most robust portfolios amongst

Era that is driven by increasing consumption-led demand,

PE funds in India. The fund’s corpus of ` 550 crores

domestic savings boom and infrastructural outlay.

is invested in 13 companies across high growth sectors Investment portfolio by industry (%)

38

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Driven by consumption-led demand l Parag Milkfoods

l Mrs. Bector’s Food Specialities

l Dixon Technologies

l AU Financiers

Consumer

Driven by infrastructural outlay and capital expenditure cycle

Infrastructure

l GR Infra Projects

l Powermech Projects

Services

l IMP Powers

l Electromech Material Handling Systems

Industrial

Motilal Oswal Private Equity

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Portfolio congruent with optimism of NTD Era

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Potential unlocked. Growth uncapped

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Deal structuring Deal structuring is another key strength of MOPE, reflected in its innovative investment structures. In addition to the typical PE Rights, the team prioritises the importance of margin of safety and follows conservative valuation benchmarks that are critical for successful investments.

Extensive pan-India penetration

The MOPE way – How we work Proactive deal sourcing MOPE’s key strength is its deal sourcing strategy which enables it to identify profitable investment opportunities.

MOPE has demonstrated the ability to source and execute transactions across India, including non-metro cities. Investment across Tier II and Tier III cities l AU Financiers l Mrs. Bector’s Food Specialities

Jaipur

across industries and geographies. More than 75% of

l Powermech Projects l Electromech Material Handling Systems

Vijaywada

IBEF-I’s deals are through such advisors.

l Parag

Manchar

MOPE has relationships with over 200 niche corporate advisors across India allowing access to deals and entrepreneurs

Ludhiana Pune


The MOPE way – How we nurture Working with Indian sensibilities MOPE has developed a deep local insight and holistic understanding of the Indian business environment. It believes that a different level of emotional intelligence is required to connect with most Indian entrepreneurs. The team works with empathy, respect and positivity with the promoters to help them surmount multiple challenges.

the value-addition approach to

mid-market companies, needs to be more partnership-

Financial management and fund raising*

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Corporate strategy

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Corporate transformation

The team enjoys enduring relationships with the promoters of all portfolio companies. During the challenging financial environment of FY‘09 this approach served as a reassurance

l AU Financiers l inTarvo Technologies

2.23x from IFC Washington 1.53x from New Enterprise Associates and 1.67x by IDFC (secondary) Motilal Oswal Private Equity

oriented rather than interfering or overbearing.

to these companies.

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*Additional equity capital raised from marquee investors at premium to IBEF-I’s investment price

Value-addition MOPE believes that

MOPE has been a proactive partner in the following areas

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Potential unlocked. Growth uncapped

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“The investor of today does not profit from yesterday’s growth.” - Warren Buffett Tomorrow’s growth lies in spotting potential today. MOPE’s sound investing philosophy and unique investing approach help do just that. This, coupled with the MOPE edge - of Parentage, People, Process and a robust Portfolio - has put it on the right track to unlock potential and uncap growth. Thus converting the passive capital provided to MOPE into active capital that generates alpha returns.


Contacts E pe@motilaloswal.com T +91 22 3982 5500 F +91 22 2282 3499 W pe.motilaloswal.com


Motilal Oswal Private Equity Advisors Private Limited Hoechst House, 3rd Floor, Nariman Point, Mumbai 400 021, India.


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