India October 10 Weekly Newsletter 2011

This document covers news related to with a special focus on areas like mergers & acquisitions, private equity & venture capital.

Volume 105, October 10th, 2011

For the period October 3, 2011 to October 9, 2011 October 10, 2011 [INDIA WEEKLY NEWSLETTER]

Highlights

Gujarat NRE Coke May Acquire Sick Steel Maker - Shah Alloys…(3)

Dainik Bhaskar Acquires 2.7% Stake in EdServ…(4) Content Pages Sahara Group Acquires EnSearch Mergers & Acquisitions News 3-4 Petroleum…(5)

Mergers & Acquisitions Deals 4-9 Hitachi Buys Majority Stake In Hi-Rel Electronics…(6) Private Equity News 9-10 Carlyle Group Acquires 9% Stake In India Infoline…(7) Private Equity Deals 10-12 Red Hat Acquires Nexus Ventures-backed Venture Capital News 12-12 Gluster For $136 mn…(7)

Venture Capital Deals 12-13 Nomura Research Acquires 25.1% In - based Market Xcel Data…(8)

Pantaloon Retail To Raise Rs 1500 cr…(9)

Loylty Rewardz Raises $4.4 mn From Canaan Partners…(10)

CLSA Capital Invests $21.8 mn In Resonance Eduventures…(11)

KKR’s NBFC Invests In Coffee Day Group’s Way2Wealth…(12)

Nexus, Lightspeed Invest In Handicraft Portal- Craftsvilla.com…(13)

Confidential LKP Securities Limited 2 October 10, 2011 [INDIA WEEKLY NEWSLETTER]

Mergers & Acquisitions News

Gujarat NRE Coke May Acquire Sick Steel Maker - Shah Alloys

Gujarat NRE Coke has evinced interest in acquiring sick steel maker Shah Alloys Limited. Gujarat NRE Coke holds 4.9% stake in Shah Alloys. It also holds 3.22% stake in Shah Alloys’ group company, SAL Steel, a marginally profit-making company. Shah Alloys was declared a sick company in 2010 and it owes Rs.600 cr of which Rs.500 cr is principal to lenders which includes Union Bank Of India, SBI, PNB, IDBI, Axis Bank, Bank Of among others. Founded in 1990, Shah Alloys manufactures stainless steel, alloy & special steel, carbon /mild steel and armour steel in flat and long products. High interest expenses on the outstanding debt, high power and fuel costs and low margins have resulted in weak financial position of the company. In past three years, company's aggregate loss amounted to Rs.284 cr - Rs.120.45 cr in 2007-08, Rs.103.99 cr in 2008-09 and Rs.60.33 cr in 2009-10. Shah Alloys owns a 300,000- tonne steelmaking unit at Gandhinagar and is operating at 40-45% capacity. Shah Alloys owns 35% stake in SAL Steel which has 1.8 lakh tonnes sponge iron unit, ferro alloy unit of 36,000 MT and 45 mw power generation capacity at Gandhidham.

GAIL May Buy-Out ADB's 5.2% Stake In Petronet LNG

GAIL India may acquire Asian Development Bank's 5.2% stake in Petronet LNG Ltd for about Rs 600 cr. GAIL has proposed to the Oil Secretary G C Chaturvedi, who is the Chairman of Petronet, that it can buy the entire 5.2% stake of ADB. In case other companies are also interested, the ADB stake can be split equally among GAIL, IOC, ONGC and BPCL with each buying 1.3% stake. This transaction will transform Petronet into a public sector enterprise with the PSUs holding more than 50% stake. Currently the promoters - GAIL, ONGC, Indian Oil and Bharat Petroleum hold 12.5% each in the company, while Gaz De France holds 10% stake in the company. Petronet was formed by the government of India to import LNG and set up LNG Terminals. The company has also signed an LNG sale and purchase agreement with Ras Laffan Liquefied Natural Gas Company Ltd., Qatar for the supply of LNG to India. Petronet LNG Ltd. has set up its first LNG Terminal at Dahej in Gujarat with the capacity of 12.5 MMTPA and is in the process of setting up another terminal at Kochi in Kerala with the capacity of 2.5 MMTPA. It may also set up a terminal on Dhamra port in Orissa. ADB has been looking to exit the investment as it's internal regulations prohibits ADB from being a development lender and an owner. Petronet has signed a $169 mn loan agreement with ADB and German development bank KfW, but ADB can disburse the funds till the equity stake is divested. ADB norms also stipulate it to divest its equity holding in a company three years from the date of the company going public. Petronet's IPO came in 2004 and ADB was supposed to exit Petronet in 2007, but the deal didn’t go through.

Confidential LKP Securities Limited 3 October 10, 2011 [INDIA WEEKLY NEWSLETTER]

Walt Disney May Buy Out Indiagames

Mumbai-based Indiagames, the triple play (PC, mobile, DTH) gaming subsidiary of the media and entertainment group UTV Software Communications, may be acquired by the Walt Disney Company. Disney already owns majority stake in Indiagames via its Rs 2,000 crore acquisition of UTV in July this year. Almost immediately after the takeover, Disney announced a delisting offer for the BSE-listed UTV that would take the group private and cost it somewhere between Rs 2,100 crore and Rs 2,150 crore ($482 million). UTV Software had 58% stake in Indiagames. Now, Disney is apparently looking to acquire the rest of the stake from founder and CEO Vishal Gondal, as well as minority investors, such as Adobe and Cisco Systems. Earlier this year, it was reported that the Indiagames management and existing investors were looking to buy back UTV Software’s stake and that they were raising funds from private equity investors. Gondal is currently a partner at a seed venture capital fund called Sweat and Blood Venture Group, which has invested in three start-ups so far – -based Gama Entertainment Systems, a developer and manufacturer of entertainment hardware and software products for the retail industry, Instablogs, a blogging community, and Kyko, a start-up currently in stealth mode. Indiagames joined UTV’s fold in 2006, when it was acquired for Rs 68 crore. According to AllThingsD, which first reported the buy-out, Indiagames is now valued between $80 million and $100 million (Rs 390-Rs 490 crore).

Mergers & Acquisitions Deals

Dainik Bhaskar Acquires 2.7% Stake in EdServ

Chennai-based education support services company EdServ Softsystems Ltd has said that the country’s leading Hindi daily Dainik Bhaskar has acquired 2.7% stake in the company. Under this deal, EdServ will get advertisements worth Rs 15 crore over the next three years. EdServ had previously diluted stake to various ad-for-equity media investors including HT Media and Bennett, Coleman & Co. Ltd. In November 2010, Dainik Jagran – India’s third largest daily – had also picked up a small stake in the company by way of conversion of warrants to the tune of Rs 10 crore. In June 2011, EdServ Softsystems said that it was looking to raise up to $35 million through a GDR (global depositary receipts) issue to fund its expansion plans. The firm plans to expand its e-learning presence to overseas markets, with focus on schools (K-12), CA courses, international test preps, IT skills training and personality development. The company has also tied up with EducationAndhra.com, a Hyderabad-based portal featuring educational resources and offers its online courses for IIT JEE, AIEEE, CA & IT training to the registered users of the portal. Through this tie up, EdServ plans to grow its user base to more than 3.5 million students. The education service company has also tied up with Nokia to provide its educational content on Nokia smartphones – so that students can access its wide range of content through the HumThum apps. Confidential LKP Securities Limited 4 October 10, 2011 [INDIA WEEKLY NEWSLETTER]

MyDala Raises Rs 18 cr From Info Edge

Mydala.com, a fast-growing group buying site with three million users, has received a second investment in the span of six months. Info Edge India, the BSE-listed company backing websites such as Naukri.com and 99Acres.com, has invested Rs 18 crore in Delhi-based Kinobeo Software, which offers online group deals through the website Mydala.com. Info Edge has said it will be investing through optionally convertible cumulative redeemable preference shares this time around. The total investment in MyDala amounts to Rs 28.1 crore. Kinobeo raised Rs 9 crore from Info Edge in April 2011 and in 2010, raised Rs 1.1 crore in its series A round of funding from PE veterans Ajay Relan and Jayanta Basu, besides two unnamed US investors. With this round, Info Edge becomes the largest minority shareholder of Kinobeo. The promoters - Anisha Singh, Ashish Bhatnagar and Arjun Basu - continue to hold the majority share in the start-up. The funds will be used for scaling up MyDala's marketing activities and geographic expansion. MyDala has operational hubs in Delhi, Mumbai and Bangalore and is now expanding to nine more cities. It is also hiring a larger salesforce to reach 60 cities by March 2012. Currently, the website offers reaches 15 cities. The company will employ 400 by December 2011.

Vivimed Announces Third Acquisition In A Month - Klar Sehen Pvt Ltd

Vivimed has acquired based eye care pharma firm - Klar Sehen Pvt Ltd. The financial terms of the deal were not disclosed. 30 year old - Klar Sehen operates in a niche ophthalmic segment and owns about 50 trademarks and some very well known brands such as Renicol, Lysicon-V. Care Tears. Dexacort etc, in eye care segment. KSPL has cGMP compliant manufacturing facilities at Kolkata, Hyderabad and also has arrangements to manufacture some of its products in Uttaranchal. KSPL presently operates from its headquarters in Kolkata with over 150 medical sales professionals.

Sahara Group Acquires EnSearch Petroleum

Sahara Group has acquired Ensearch Petroleum Pvt Ltd from to foray into hydrocarbon exploration and production. According to information available on the Enso Group’s website, EnSearch Petroleum has 13 assets in its portfolio with a net combined acreage of around 33,207 sq km. It is the operator in four blocks, and apart from having one block in India is present in countries such as , , and Georgia. Enso Group was founded in 2005 by (one of the promoters of Himachal Futuristic Communications Ltd). Enso Group also operates businesses in sectors like energy, infrastructure development, real estate, technology research & development and security solutions. The Sahara group is planning to foray into the sugar sector in Uttar Pradesh, a politically sensitive sector in the state. It is in advanced talks with the owners of Baghauli sugar mill in Hardoi district. Apart from this, the group has announced a mega expansion plan in the fast-moving consumer goods retail space, with plans to launch a range of food and non-food Confidential LKP Securities Limited 5 October 10, 2011 [INDIA WEEKLY NEWSLETTER] items at over 10,000 retail outlets across 285 cities in India. The group plans to have 305 warehouses spread across 285 cities with more than 25,000 distribution vehicles.

Chakkilam Infotech Acquires Cigniti Inc For Rs10.44 cr

Chakkilam Infotech has acquired Texas based software testing firm Cigniti Inc in a Rs10.44 cr share swap deal. Chakkilam will allot 5.8 mn equity shares at an issue price of Rs18/- per share to the promoters of Cigniti Inc. The acquisition will help Chakkilam Infotech Ltd expand its footprint in the US market and set up Test Centers of Excellence for Ciginiti’s enterprise clients. Both the companies are into areas such as test consulting, test management, test automation and performance testing. Cigniti was established by Sudhakar Pennam in 2004. It has a 250- seater development center in Hyderabad. Ciginiti had declared revenues of $18 mn last year. Chakkilam Infotech Limited has been in the IT services business for the last 13 years providing Software Testing, Software Development Services and Healthcare related services to companies in the US, Europe and India.

Hitachi Buys Majority Stake In Hi-Rel Electronics

Hitachi has acquired majority stake in Ahmedabad based electronics components manufacturer - Hi-Rel Electronics Private Limited. Hi-Rel will be renamed as Hitachi Hi-Rel Power Electronics Pvt. Ltd. Hi-Rel will operate as electrical machinery manufacturing unit for Hitachi Limited. Hitachi will also construct a new manufacturing facility for medium-voltage inverters before the end of 2012 in the Sanand-II GIDC Estate, to expand the product line up and strengthen the local production system. Hi-Rel Electronics Pvt. Ltd. was incorporated in 1983.It manufactures industrial automation solutions, rotating machine controls, power controllers, uninterruptible power supply solutions and power conditioning products.

Tilaknagar Industries Acquires Expo Breweries

Tilaknagar Industries has acquired 100% stake in Punjab Expo Breweries. Punjab Expo Breweries is a bottling unit based out of Derabassi, Punjab. Tilaknagar Industries Ltd (TI) manufactures Indian Made Foreign Liquor (IMFL). It has a diversified brand portfolio comprising of more than 30 brands. It has 31 manufacturing facilities spread across India. It also operates through 2 subsidiaries, 7 lease arrangements and 21 tie-up arrangements.

Infrastructure India Plc Acquires Wind Farm Operator - Indian Energy Plc

Infrastructure India Plc has acquired wind farm operator - Indian Energy Plc. The all stock deal values Indian Energy Plc at $13 mn. According to the deal structure, the shareholders of Indian Energy Plc will receive 100 Infrastructure India shares for every 259 Indian energy shares. Utility, which had provided 2.5 mn Pound loan to Indian Energy Plc will also get a 5.9% stake in Infrastructure India Plc. Indian Energy Plc owns two wind farms in South India. It has a 24.8 MW

Confidential LKP Securities Limited 6 October 10, 2011 [INDIA WEEKLY NEWSLETTER] wind farm in Karnataka and 16.5 MW windfarm at Theni in Tamil Nadu. It got listed in Sept 2009, raising $16 mn through its IPO.

Akorn Inc Acquires Assets From Kilitch Drugs For $52 mn

Akorn Inc has acquired five manufacturing plants, a contract manufacturing and international business and products from Kilitch Drugs Ltd's Navi Mumbai plant and NBZ Pharma Ltd for $52 mn. The deal also involves an additional payment of $6 mn on achieving certain milestones. The transaction is subject to approval from shareholders and is expected to close in next three months.

Carlyle Group Acquires 9% Stake In India Infoline

Carlyle Group has invested about $40 mn for a 9% stake in India Infoline Ltd. The shares were purchased through open market transactions. The investment was made by Carlyle Mauritius Investment Advisors Limited, a part of Carlyle Asia Partners. IIFL and it's subsidiaries engaged in Credit & Finance, Wealth Management and Global Advisory services. IIFL offers loan against shares, mortgage loans, housing loans, gold loans and equipment financing and has built a loan book of more than US$778 mn as on June 30, 2011. Under Wealth Management, IIFL offers advisory and portfolio management services to high networth individuals and corporate clients with its assets under advisory (AUA) exceeding $4.8 bn. IIFL recently started its domestic asset management business with the launch of IIFL Mutual Fund. Under Global Advisory and distribution business, IIFL has a presence in the U.S., London, Dubai, and Sri Lanka.

Red Hat Acquires Nexus Ventures-backed Gluster For $136 mn

Open source solutions firm Red Hat Inc. has acquired Nexus Ventures-backed Gluster Inc., a provider of scale-out, open source storage solutions, for approximately $136 million in cash. As part of the transaction, Red Hat will also assume unvested Gluster equity outstanding on the closing date and issue certain equity-retention incentives. The transaction is expected to close this month, subject to customary closing conditions. Gluster was founded in 2005 by Hitesh Chellani and Anand Babu Periasamy. In late 2008, Gluster raised $4 million in the series A funding round, led by Nexus Venture Partners. Last November, it received $8.5 million in a series B funding round, led by Index Ventures, in which Nexus Venture Partners also participated. The heart of Gluster is GlusterFS, a software-only, scale-out storage system. It allows enterprises to combine large numbers of commodity storage and compute resources into a high-performance, centrally-managed and globally-accessible storage pool. By combining commodity economics with a scale-out approach, customers can deploy abundant storage without compromising on cost, performance and manageability. The acquisition is not expected to have any material impact to Red Hat's revenue this fiscal year but should begin to grow next year based on a subscription revenue model.

Confidential LKP Securities Limited 7 October 10, 2011 [INDIA WEEKLY NEWSLETTER]

EXL Acquires Trumbull Services From Hartford

Business process outsourcing company ExlService Holdings, Inc. (EXL) has acquired Trumbull Services, a specialized service provider to the insurance industry, for an undisclosed amount. The NASDAQ-listed EXL has bought Trumbull from its client, The Hartford Financial Services Group, which offers insurance and wealth management services. However, EXL will continue to provide services to The Hartford. Trumbull, which has offices in Hartford and Columbia, offers subrogation services for property and casualty insurers. All Trumbull employees have been retained and its president Brad Burdick will take up a leadership role at EXL. EXL now plans to invest in data analytics to grow and enhance the existing capabilities of Trumbull’s SubroSource platform, offered through the Cloud or via a platform BPO offering. This is the second acquisition by EXL this year. In May, it bought Outsource Partners International (OPI), a finance and accounting outsourcing services provider, for an enterprise valuation of $91 million (Rs 400 crore). Last year, EXL paid $14.1 million in cash to acquire PDMA Inc., which offers an insurance policy administration platform.

Nomura Research Acquires 25.1% In Delhi-based Market Xcel Data

Global consulting firm Nomura Research Institute (NRI) will acquire 25.1% stake in Market Xcel Data Matrix Pvt Ltd, a local research company, for an undisclosed sum, Nomura has said in a statement. Acquiring significant stake in the local research firm would help the Japanese research major to secure a strong base for research and consulting business activities in India, the statement further added. Market Xcel Data was established in 2000 as a data collection agency and the company now handles end-to-end research projects. Currently, the firm employs 38 people and has offices in Delhi, Mumbai, Bangalore and Kolkata, as well as a network of field offices in 10 cities across the country. The firm is also establishing an Indian subsidiary, Nomura Research Institute India Pvt Ltd, with a capital of Rs 41 crore, to develop the consulting business in the country. The Indian subsidiary will begin operation next month. Initially, it will have around 10 people on board but the number will rise to around 30 after five years. The Indian unit will prepare business strategies for Japanese companies in the automobile industry and also for those in other segments.

Russian Steelmaker NLMK Acquires National Laminations For $8 mn

Russian steelmaker NLMK has acquired National Laminations group, an electrical steel service centre in India, for an estimated valuation of $8 million (Rs 40 crore), according to a company statement. The acquisition will enhance NLMK’s position in the Indian market as one of the leading suppliers of grain-oriented electrical steel, controlling the entire process from crude steel production to final delivery. National Laminations group is a grain-oriented (transformer) steel processing and distribution company with around 50 employees and it caters processed materials to a wide range of national and international transformer producers. The company owns processing and warehousing units located near Mumbai, with capacities of 16,000 TPA Confidential LKP Securities Limited 8 October 10, 2011 [INDIA WEEKLY NEWSLETTER] and 15,000 TPA, respectively. It also owns another warehousing facility (with a capacity of 40,000 TPA) only 20 km away from Mumbai and its close proximity to the port facilitates easy delivery of imported materials. The strategic location of these units not only gives easy access to customers in western India but also enhances the company’s pan-India distribution capability by reducing delivery time. NLMK is an integrated global steel company with more than 15 MTPA crude steel production capacity. It is one of the world’s largest producers of grain-oriented (transformer) steel with a total capacity of about 340,000 TPA. The company expects to start manufacturing premium grades in 2012, reaching about 140,000 TPA or 40% of the total grain- oriented steel production capacity.

NDTV, Hindu Group Sell Metronation Chennai TV To Dina Thanthi Group

Media group New Delhi Television Ltd (NDTV) and Kasturi and Sons Ltd (publisher of The Hindu newspaper) are selling their two-year-old joint venture Metronation Chennai Television Ltd that runs the city-based English news channel, to Educational Trustee Company Pvt Ltd, for Rs 15 crore. NDTV, which operates several news and infotainment channels such as NDTV 24X7, NDTV India, NDTV Profit and NDTV Good Times, owns 51% stake in the venture, with the remaining 49% lying with Kasturi and Sons. Kasturi and Sons owns a number of publications such as The Hindu, The Hindu Business Line, The Sportstar and Frontline. Educational Trustee Company is also a media group that runs the leading Tamil daily Dina Thanthi. The group is led by B Sivanthi Adityan. This leads to a quick end to the JV that has been bleeding financially since it was launched at the time when the media ad market went downhill due to economic slowdown.

Private Equity News

Pantaloon Retail To Raise Rs 1500 cr

Kishore Biyani's Pantaloon Retail (India) Ltd has said that its board has approved a fundraising plan of up to Rs 1,500 crore through a range of instruments like a qualified institutional placement (QIP) or convertible instruments. India's largest retailer is looking to dilute up to 15% stake even as the company's share price hit a 52-week low. The decision comes as government is still some way from opening multi-brand retailing in the country. The government is considering allowing 100% FDI in single-brand retail as against upto 51% as of now. Although, a committee of top civil servants in July agreed to recommend to the cabinet allowing foreign firms to take a 51% stake in multi-brand retail operations, it is not expected to happen any time soon. This means the firm will have to rope in a financial investor rather than getting a strategic investor such as an international retail chain. Since the firm is looking to dilute only upto 15% stake and scoop as much as Rs 1,500 crore, it is eyeing share issue at a much higher valuation.

Confidential LKP Securities Limited 9 October 10, 2011 [INDIA WEEKLY NEWSLETTER]

Tata Opportunities Fund Reaches 2nd Close At $550 mn

Tata Opportunities Fund LP, a sector-agnostic private equity fund floated by Tata Capital (the financial services arm of the $83.6 billion Tata Group) has achieved the second closing for the fund at $550 million. The fund had commitments of about $450 million at the first closing. The fund had achieved its first closing earlier this year within five months of its launch and garnered subscriptions from global institutional investors. The total corpus being targeted by Tata Opportunities Fund is around $1 billion. The fund’s investors include global marquee institutions from North America and Asia who will not only participate as limited partners but will also co- invest directly into the portfolio companies. Tata Opportunities Fund is a sector-agnostic fund, looking to invest into companies through a mix of growth and buy-out strategies. This fund under Tata Capital is led by Mukund Rajan who joined Tata Capital in June 2010. Other key professionals include Padmanabh (Paddy) Sinha, chief investment officer and senior partner, and Rajesh Singhal, partner for the fund. Tata Capital, the financial services and asset management arm of Tata Sons, recently announced that it had raised $800 million for its private equity fund business and would be on track to raise $1 billion by 2012. The company has five funds including Tata Opportunities Fund, Growth Fund, Innovation Fund, Healthcare Fund and Special Situations Fund. So far, the PE firm has invested $150 million across six investments, including two Tata Group companies. And it has recently roped in Capvent’s Joe Sovran to help the firm’s PE arm raise funds from global investors.

Private Equity Deals

Loylty Rewardz Raises $4.4 mn From Canaan Partners

Mumbai-based Loylty Rewardz Mngt Pvt Ltd, engaged in the development and management of consumer loyalty programmes, has raised $4.4 million or Rs 22 crore through its series B funding from Canaan Partners, the company has said in a statement. The proceeds would be used to increase investments in the technology platform to support millions of transactions on a monthly basis, besides expanding sales and marketing to grow base of issuers, broaden the merchant network across tier 2 and tier 3 towns and launch new loyalty products for consumers with built-in mobile engagement. Incorporated in 2006, Loylty Rewardz is engaged in the development and management of consumer loyalty, rewards, data intelligence and direct marketing communication programmes. The company offers a wide range of services, including programme design and execution, contact centre management, direct communication, redemption platforms, technology solutions and loyalty points.

Confidential LKP Securities Limited 10 October 10, 2011 [INDIA WEEKLY NEWSLETTER]

Summit Partners Buys Into Zenith Infotech Unit

US-based private equity firm Summit Partners is acquiring a significant stake in the managed services business unit of BSE-listed Zenith Infotech, which was spun off last week. The deal involves Summit Partners making ‘a sizable growth equity investment,’ which may also involve taking a majority stake in the company, along with the management. Summit Partners is also appointing two team members to the board of Zenith RMM LLC, the spun-off unit. Boston-based Zenith RMM will provide a SaaS-based managed services platform that managed services providers (MSPs) use to monitor, troubleshoot and maintain desktops, servers and other endpoints for small and medium-sized businesses (SMBs). The company entered the managed services market in 2005 and currently has on board around 3,000 MSP partners using the Zenith RMM platform to manage almost 400,000 endpoints. Zenith RMM has also roped in Michael George as its new CEO, who had earlier led Greylock and Matrix Partners-backed RFID software leader OATSystems. The company was acquired by NASDAQ-listed Checkpoint Systems in 2008. Zenith’s other businesses including data backup and disaster recovery will stay with the listed company.

Affle Raises Rs 50 cr From D2 Communications

Singapore-headquartered mobile media start-up Affle has raised Rs 50 crore in its second round of funding from existing investor D2 Communications Inc., a joint venture between Japanese telco NTT DoCoMo Inc. and ad agency Dentsu. However, further details of the stake involved have not been revealed. D2 Communications invested in Affle in February this year, a ‘token investment’ as a part of a strategic alliance. Details of the deal size were not disclosed, though. Affle is also backed by Microsoft Corporation, Itochu Corporation, Bennett, Coleman & Co. Ltd (BCCL) and Centurion Private Equity.

CLSA Capital Invests $21.8 mn In Resonance Eduventures

Kota-based test preparation company Resonance Eduventures Pvt Ltd, which offers coaching for IIT-JEE, engineering and medical entrance exams, has raised $21.8 million or around Rs 100 crore from CLSA Capital Partners. CLSA has announced that it has picked an undisclosed minority stake in Resonance through ARIA Investment Partners III L.P. (ARIA III). The investment by the $333 million ARIA III fund closed on September 28, 2011. Founded in April 2001, Resonance is one of the largest coaching institutes in India for preparation of entrance exams in the fields of engineering and medical sciences. The company provides many courses, such as year-long classroom contact programmes (YCCPs), e-learning through online tests and in-school video learning. Last year, it had raised Rs 60 crore from Milestone Religare Investment Advisors Pvt Ltd, an education and healthcare-focused private equity firm. Resonance has more than 25,000 students who are enrolled across 38 centres and taught by a 400-strong faculty team and also 10,000 students who study through distance and e-learning programmes. The company has planned to open primary and secondary schools soon. Confidential LKP Securities Limited 11 October 10, 2011 [INDIA WEEKLY NEWSLETTER]

KKR’s NBFC Invests In Coffee Day Group’s Way2Wealth

Kohlberg Kravis Roberts & Co. (KKR & Co. L.P.) is backing the financial services arm of Coffee Day Resorts Pvt Ltd (CDRL), promoted by V.G. Siddhartha. KKR’s NBFC is lending to Way2Wealth, the wealth management and financial services arm of Coffee Day Co., as a part of its larger debt raising initiative. This comes after KKR, along with Standard Chartered Private Equity and New Silk Route Partners, invested Rs 960 crore or $200 million last year in Coffee Day Resorts, majority owner of India’s largest café chain Café Coffee Day. Earlier, the NBFC had also extended $85 million loan to V.G. Siddhartha to refinance a loan for one of the IT parks of the Coffee Day Group. Way2Wealth specializes in equity, derivatives, currency futures, commodities trading, IPOs, mutual funds, portfolio management and depository services, and has on board a team of over 1000 wealth managers. It has recently acquired Techno Shares & Stocks Ltd, a mid-sized securities broking firm with predominantly western Indian presence. The firm has over 296 branches spread across 108 locations. Established in 1984 as Sivan Securities, a financial intermediary and incubator for IT start-ups, the Coffee Day Group had spun off its securities broking & investment banking arm as Way2Wealth in 2000 and its venture capital division as Global Technology Ventures (which is one of the largest shareholders in Mindtree).

Venture Capital News

No news in the current week

Venture Capital Deals

Rural Marketing Startup-Frontier Markets Raises Funding From Seedfund

Jaipur based rural marketing and distribution startup - Frontier Markets has raised first round of funding from Seedfund. Frontier Markets will use the funds to set up a sustainable and scalable sales and servicing network in . Frontier was founded by Ajaita Shah. She has 5 years of microfinance experience in India with organizations like SKS Microfinance, and Ujjivan Financial Services. Frontier has partnered with Saral Jeevan, to set up its first branch in Chomu, near Jaipur, and is initially focusing on solar lighting products for rural households in the Jaipur district. Seedfund invests in media, mobile, internet, retail and consumer-facing businesses. Earlier this year, it invested $2.2 mn in Mumbai-based Jeevanti Healthcare Private Limited.

Confidential LKP Securities Limited 12 October 10, 2011 [INDIA WEEKLY NEWSLETTER]

Intel Capital Announces Investments in Six Tech Startups

Intel Capital is investing $20 mn in six tech companies in India. It is investing in Saankhya Labs, Testing Czars, Financial Inclusion Networks and Operations, What's On India, enStage and Duron Energy. It has already completed investments in Saankhya Labs, Testing Czars and FINO. Intel Capital has signed investment agreements with What’s on India, enStage and Duron Energy. These investments are being made out of the $250 mn Intel Capital India Technology Fund established in December 2005. Saankhya Lab is a semiconductor startup based out of Bangalore, India. Saankhya is developing a Universal Demodulator IC for Digital and Analog TV reception. What's on India is a TV channel guide. It has earlier raised funding from Sequoia Capital and Nexus Venture Partners. Bangalore based Testing Czars was established in 2004. It offers offers software testing and consulting services. The company’s clientele include Yahoo, Misys, CGI, Intel, LowerMyBills, Axentis, SAP, Qwest, INSZoom, Infact, and Intelligroup. FINO designs technology solutions for banks, MFIs), insurance companies, government entities and consultants. It had earlier raised funding from IFC, HSBC Private Equity and Intel Capital. enStage, Inc. provides banking systems and payment products to financial institutions and corporations. It raised funding from Accel Partners in 2009. Duron Energy makes energy generation products for rural markets.The product is manufactured by contractors in Ahmedabad and Bangalore in ISO 9001 facilities.

Nexus, Lightspeed Invest In Handicraft Portal-Craftsvilla.com

Handicraft natural product e-commerce portal - craftsvilla.com has raised early stage funding from Nexus Venture Partners and Lightspeed Venture Partners. The company will use the funds to expand operations within India as well as overseas in the US, the UK, Germany and Japan. Kriba Handicrafts Pvt Ltd, which runs the website craftsvilla.com was co-founded in December by Manoj Gupta, who was earlier principal at Nexus Venture Partners. He has already initiated talks for second round of funding. According to a statement by Manoj, Kriba needs an investment of around Rs100 cr over the next 2-3 years for expansion. The company has 500 vendors and more than 1,000 artisans supplying it products, including apparel, bags, jewellery, home furnishing, health and beauty accessories. Gupta plans to adopt Fabindia Overseas Pvt. Ltd’s community-owned companies model, where communities that represent artisans are shareholders.

Confidential LKP Securities Limited 13 October 10, 2011 [INDIA WEEKLY NEWSLETTER]

Disclaimer

This document is being communicated to you solely for the purposes of providing the current market trends and developments based on generally available information. This document is being communicated to you on a confidential basis and does not carry any right of publication or disclosure to any third party. By accepting delivery of this document each recipient undertakes not to reproduce or distribute this presentation in whole or in part, nor to disclose any of its contents without the prior written consent of LKP Securities Limited. The recipient will keep permanently confidential information contained herein and not already in the public domain.

This document is not an offer, invitation or solicitation of any kind to buy or sell any security and is not intended to create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. The use of any information set out in this document is entirely at the recipient's own risk and should not be regarded as a substitute for appropriate detailed professional advice.

LKP Securities Limited or any of its associates or employees do not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. We have not independently verified the accuracy of the contents contained in this document.

The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially however we assume no obligation to update you of any information pertaining to the contents of this document.

Visit us at: www.lkpsec.com

Confidential LKP Securities Limited 14