Cap­i­tal First

Business Sphere - - CONTENTS - By Our Correspondent

In­dia-ded­i­cated pri­vate equity firm Kedaara Cap­i­tal, ven­ture cap­i­tal firm SAIF Part­ners, pri­vate-sec­tor lender Cap­i­tal First Ltd and the com­pany be­hind wom­enswear la­bel W are among the win­ners of VCCir­cle Awards 2018. The an­nual awards, now in their sev­enth year, recog­nise and fe­lic­i­tate PE- and VC-backed port­fo­lio com­pa­nies in key sec­tors, be­sides the key play­ers in the ecosys­tem in­clud­ing in­vest­ment funds, law firms and in­vest­ment bankers. The win­ners, awarded on Tues­day as part of the on­go­ing VCCir­cle In­dia Lim­ited Part­ners Sum­mit 2018, be­ing held at Tri­dent Ho­tel, Mum­bai, were cho­sen based on the rec­om­men­da­tion of an em­i­nent sixmem­ber jury. This year’s jury of in­dus­try vet­er­ans and long-time watch­ers of busi­ness in In­dia eval­u­ated the nom­i­nees on a va­ri­ety of qual­i­ta­tive and quan­ti­ta­tive pa­ram­e­ters such as fi­nan­cial per­for­mance, brand salience and man­age­ment qual­ity. The jury com­prised Vikram Li­maye, man­ag­ing di­rec­tor and CEO, Na­tional Stock Ex­change; Vishakha Mu­lye, ex­ec­u­tive di­rec­tor, ICICI Bank and for­mer head of ICICI Ven­ture; Gopal Srini­vasan, founder of TVS Cap­i­tal and chair­man of the PE-VC in­dus­try body IVCA; Deep Kalra, founder, chair­man and CEO, MakeMyTrip; Ab­hishek Lodha, man­ag­ing di­rec­tor, Lodha Group; and Shailen­der Ku­mar, CEO, Or­a­cle In­dia. TCNS Cloth­ing Co Pvt. Ltd, which owns the ‘W’ brand of cloth­ing for women, juice maker Man­pasand Bev­er­ages Pvt Ltd, ed­u­ca­tion ser­vices firm Peo­ple Com­bine Av­enues Ltd, con­tract re­search man­u­fac­tur­ing firm Syn­gene In­ter­na­tional Ltd, Cap­i­tal First—which is merg­ing with IDFC Bank—and in­fra­struc­ture so­lu­tions firm Enzen Global So­lu­tions Pvt Ltd bagged the port­fo­lio com­pany awards in their re­spec­tive sec­tors. The awards also rec­og­nized top PE and VC fundrais­ers, as also exit of the year based on an­nu­alised re­turn or in­ter­nal rate of re­turn (IRR). Kedaara Cap­i­tal, which raised the largest con­ven­tional sec­tor-ag­nos­tic PE fund ded­i­cated for In­dia in a decade, bagged the PE fundraiser of the year award. PE gi­ant KKR re­ceived the exit of the year award for the high re­turns it clocked from Gland Pharma Ltd in what was a land­mark inbound ac­qui­si­tion deal in­volv­ing a Chi­nese firm. While VC firm IDG Ven­tures lost out to SAIF Part­ners for the VC fundraiser of the year, it was picked for a spe­cial jury award in recog­ni­tion of its do­mes­tic fundrais­ing that opened up new av­enues of fundrais­ing from lo­cal fam­ily of­fices, which oth­er­wise did not bet on al­ter­na­tive in­vest­ment in­dus­try in the past. The best in­ter­me­di­aries—in­vest­ment banks and law firms—were hon­oured, too. Aven­dus Cap­i­tal and Ko­tak Mahin­dra Cap­i­tal bagged the I-bank of the year award for PE and M&A cat­e­gories. AZB & Part­ners and Cyril Amarc­hand Man­gal­das re­ceived the law firms of the year award un­der the PE and M&A cat­e­gories, re­spec­tively. This year’s awards also in­tro­duced the VCCir­cle Hall of Fame, which

recog­nise the funds raised over the years by an In­dian PE firm and the amount de­ployed by a global PE ma­jor. The Hall of Fame awards went to ICICI Ven­ture and Black­stone. The nom­i­na­tions for the awards were pow­ered by VCCEdge, the data re­search plat­form of News Corp VCCir­cle. The Hall of Fame awardees were picked solely based on the data col­lated by VCCEdge.

Bud­get 2018: Ru­ral All The Way

There was a gen­eral con­sen­sus in all com­men­tary be­fore the bud­get that in the light of the agrar­ian dis­tress, and the last full bud­get be­fore the next elec­tion, that there will be a big fo­cus on ru­ral In­dia. But the sheer scale and mag­ni­tude of the fo­cus on ru­ral In­dia has blown minds away. In 2018-19, eight crore more poor women will get new LPG con­nec­tions, four crore more poor peo­ple will get power con­nec­tions, two crore more toi­lets will be con­structed un­der Swach Bharat Mis­sion, one crore houses will be built un­der Prad­han Mantri Awas Yo­jana in ru­ral ar­eas, a health in­sur­ance of Rs. 5 lacs for 100 mil­lion fam­i­lies will be rolled out, and Rs. 1 lac crore will be spent for ed­u­ca­tion. In terms of di­rect in­vest­ments, the gov­ern­ment plans to spend Rs 14.34 lac crores for cre­ation of liveli­hood in ru­ral ar­eas, make cap­i­tal in­vest­ment in rail­ways of Rs. 1,47,000 crores, invest Rs. 6 lac crores into in­fra­struc­ture for build­ing roads and air­ports, 2 lac crores for smart cities. Fur­ther, spend­ing Rs.10,000 crores for rolling out 5 lakh Wi-Fi hotspots to boost broad­band con­nec­tiv­ity which will help bridge the dig­i­tal di­vide in ru­ral In­dia. My first thoughts when the FM was read­ing out the bud­get, and had not yet come to the tax pro­pos­als was “but how’s he go­ing to fund this? What are the new taxes com­ing up? As it turned out there no big stings. The one that caught the at­ten­tion was the 10% tax on long term cap­i­tal gains on equities, but this too will be di­gested and for­got­ten over time. As com­pared to all other as­set classes, only equities en­joyed a zero LTCG. The mar­kets re­acted the next day by 800 points, but mar­kets re­act to many fac­tors- it’s dif­fi­cult to pin it down. It’s more prob­a­ble that mar­kets are wor­ried about fis­cal deficit and gov­ern­ment bor­row­ing turn­ing out higher than bud­geted-but that will solve it­self out as the year rolls by if the num­bers stay the course. It is im­por­tant to note that credit rat­ing agency Moodys com­mented af­ter the bud­get that In­dia’s fis­cal con­sol­i­da­tion is on track. What the mar­kets are prob­a­bly not fac­tor­ing is that, such in­vest­ments and gov­ern­ment spends will lead to a huge kick-off of con­sump­tion and de­mand, power up a long list of sup­ple­men­tary in­dus­tries, and build an In­dia with mod­ern in­fra­struc­ture with roads ports and high­ways. No mat­ter what in­dus­try lead­ers ex­pected, I had no ex­pec­ta­tion on cor­po­rate tax cuts this year, con­sid­er­ing the agrar­ian stress and this be­ing an elec­tion year. At best the ex­pec­ta­tion was that the thresh­old for 25% tax rate will move to turnover of Rs. 100 crores. The in­crease of thresh­old for SMEs to avail the re­duced tax rate be­ing re­vised to Rs. 250 crores was a pos­i­tive sur­prise. It is quite ob­vi­ous by now that the FM is de­liv­er­ing on the promise of 25% cor­po­rate tax, but in phases, start­ing with the most de­serv­ing. The way the gov­ern­ment has gone about in­creas­ing farm in­come in­stead of go­ing for farm waivers is the best ex­am­ple of the theme “em­pow­er­ment in­stead of en­ti­tle­ment” as waiv­ing loans would have been a one-time relief with moral haz­ards, while in­creas­ing farm in­comes would en­able them to ser­vice loans, and it will keep out moral haz­ards. There is a say­ing that there are decades where noth­ing hap­pens, but then there are weeks when decades hap­pen. If we suc­cess­fully im­ple­ment all these ini­tia­tives for ru­ral In­dia, the first week of Fe­bru­ary 2018 would turn out one such week. Dis­claimer: The views ex­pressed in the ar­ti­cle above are those of the au­thors' and do not nec­es­sar­ily rep­re­sent or re­flect the views of this pub­lish­ing house. Un­less oth­er­wise noted, the au­thor is writ­ing in his/ her per­sonal ca­pac­ity. They are not in­tended and should not be thought to rep­re­sent of­fi­cial ideas, at­ti­tudes, or poli­cies of any agency or in­sti­tu­tion.

V. Vaidyanathan, Chair­man and Man­ag­ing Di­rec­tor of Cap­i­tal First Ltd.

V. Vaidyanathan, Chair­man and Man­ag­ing Di­rec­tor of Cap­i­tal First Ltd. re­ceived VCCIR­CLE Awards 2018

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