SHRI VILE PARLE KELAVANI MANDAL’S

NARSEE MONJEE COLLEGE OF COMMERCE

AND ECONOMICS
VILE PARLE (WEST), MUMBAI – 400056.

CERTIFICATE
This is to certify that Ms. Khushbu Gada has worked and duly completed his Project
on “PRIVATE EQUIITY IN INDIA” for the degree of Bachelor of Commerce
(Financial Markets), in the academic year 2018-19.
I further certify that the entire work has been done by the learner under my guidance
and that no part has been submitted previously for Degree or Diploma of any
University.
It is his own work and facts reported by his personal findings and investigations.

_____________________ ____________________
Ms. Pooja Singh Dr. Parag Ajagaonkar
Project Guide Principal

_____________________
External Examiner

i|Page
Declaration by learner

I the undersigned Ms. Khushbu Gada hereby declare that the work embodied in this
project work titled “ PRIVATE EQUITY IN INDIA”, forms my own contribution to
the research work carried out under the guidance of Ms. Pooja Singh. It has not been
submitted previously for Degree or Diploma of any University.
Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

_________________________
Ms. Khushbu Gada

ii | P a g e
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are numerous and the depth is
so enormous.
I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance to do
this project.
I would like to thank my Principal, Dr. PARAG AJAGAONKAR for providing the
necessary facilities required for completion of this project.
I take this opportunity to thank my Coordinator MS. POOJA SINGH, for her moral
support and guidance.
I would also like to express my sincere gratitude towards my project guide
MR. JINEN JADHAV, whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various reference
books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly helped
me in the completion of the project especially my Parents and Peers who supported
me throughout my project.

iii | P a g e
 PRIVATE EQUITY IN INDIA

BY KHUSHBU GADA
A009

PROJECT GUIDE : MR JINEN JADHAV

iv | P a g e
 INDEX

CHAPTER TITLE OF CHAPTER PAGE

NO. NO

Chapter 1 Introduction to Private Equity 1

Chapter 2 Need for Private Equity Investments in Companies 4

Chapter 3 Forms of Private Equity Funds 6

Chapter 4 Private Equity Structure and Fees 11

Chapter 5 Portfolio Company Valuation and Due Diligence 15

Chapter 6 Exit Strategies 18

Chapter 7 Potential Benefits and Risks of Private Equity 21

Chapter 8 Private Equity in India : Past , Current & Scenario 23

Chapter 9 PE Firms in India 35

Chapter 10 Private Equity Services offered in India 38

Chapter 11 Advantages of PE Funding to Indian SME’S(Small & 40

Medium Enterprises)

Chapter 12 Regulatory Norms in India 43

Chapter 13 Case Study: Why investors are betting big on BYJU’s: 47

The Learning App

Chapter 14 Case Study: OYO Rooms: The Journey to Top 54

Chapter 15 Future Outlook for PE Industry 59

Chapter 16 Conclusion 63

Chapter 17 Bibliography 65

v|Page
 Executive Summary

Private Equity refers to the equity capital invested by investors directly into private
companies which is not quoted on any stock exchange. These investors make big
ticket sized investments into these private companies for longer periods to earn return
on their investment. Typically these investments help the private company to fund
their expansions, technological developments and make acquisitions too. Private
Equity is thus the opposite of holding equity shares in a public company which is
listed on the exchange.

Initially this project aims to understand the various forms of Private Equity (PE)
funding ; the major sectors involved in the deals ; the structure of the industry and the
fees involved ; the way in which a private company is valued and evaluated for due
diligence before investing in the same. Also it highlights the factors that influence a
PE deal ; the various strategies that investors use to exit their investments and the kind
of returns and risk associated with the same. The project would mainly focus on
understanding the Indian scenario of Private Equity, their success in the Indian
Financial market and its advantages to Indian companies. It would also include the
regulatory norms involved and the future of the Indian PE Industry.
The major Private Equity firms in India as well as those having a global presence play
an important role in all the funding deals. Some examples include TPG , The
Blackstone Group and Warburg Pincus . India has been witnessing a dramatic shift in
the size and composition of foreign investment inflows over the couple of years.
Investors are continuously seeking alternative investments apart from the traditional
ones. Private Equity plays an important role in bridging this gap between investing
and borrowing. The year 2017 had been a year for big ticket Private Equity deals in
India. In order to have a deeper understanding of how the deals work practically , two
case studies have been incorporated.First, on the very recent success story of Byju’s:
The Learning App and the reason that is attracting private equity investors to invest in
the same. Second, is a case study on Oyo Rooms which gives an insight on its
business model and funding rounds by SoftBank.

vi | P a g e
The study involved while working for this project has helped me to gain an insight as
to how the Private Equity deals work and its investment patterns and due diligence
involved. I am sure that this project has been very useful to know future outlook and
the growth potential of this industry in India. The case studies have helped in
understanding some of the major deals in India and the exit strategies too.

vii | P a g e