PROJECT OF INNOVATIONS IN BANKING & INSURANCE

VENTURE CAPITAL

GROUP MEMBERS
RUDRA KHANNA VINITA KUMAR 20 21 SHARADA KUSANALE H 19

IMANI LAPASIA 22 ANISHA LEWIS VERNON LEWIS 23 24

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

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

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

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

INTRODUCTION
Venture 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

To become the leading institutional player in Venture Capital industry of the country. Vision

Mission

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

To emerge as the most trusted partner for upcoming

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 setup 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., Indias 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 1Domestic (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 natural/other resources

Improve the productive and responsible use of 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)

OBJECTIVE OF THE FUND: 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.

STRUCTURE OF THE FUND: 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.

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

3) India Enterprise Development Fund (IEDF)

OBJECTIVE OF THE FUND: 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.

STRUCTURE OF THE FUND: 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.

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

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 HAPPENINGS
SIDBI 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 info@sidbiventure.co.in 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 management teams. Investment in mid-stage to late-stage enterprises Preference for companies in the MSME sector.

companies owned/ managed by experienced entrepreneurs/

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 Products. a range of low voltage and high voltage distribution products including Silicone Rubber Range of HT

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 worldclass 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 of Care.The Group for is a leader in and manufacture capital machinery engineering

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 Indias 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 Reddys).

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 EQUITY

1. 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 investors and investee companys 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 rollups. 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 higher

achievements.

BIBLIOGRAPHY
www.wikipedia.com www.google.com www.canbankventure.com www.iciciventure.com www.sidbiventure.com www.ifciventure.com