Saumil Bhansali

There was a recent stir in India's capital markets as a US-based short seller leveled serious allegations pertaining to #ConflictofInterest against the top brass of our regulatory body ie Securities and Exchange Board of India (SEBI) Are #VC Firms free of from this glare ? Not really The gravity of this situation highlights a chilling potential for a #ConflictofInterest that could cast #Founding Partners and "Members of the IC/ Key Persons" into a damaging spotlight in the following scenario : ✳️ Selective Share Acquisition : Founding Partner purchases shares in "cherry-picked" folio company that is at an advanced stage of revenue, profitability and, a risk profile that is << rest of folio where Fund Investors ie #LPs are invested e.g. the company may be at Series C while balance folio is mostly at pre A/ A or even written off due to a large governance lapse ✳️ Personal or Related Party Purchases : Make the purchase in their own names or that of #relatedparties, clearly for personal gain ✳️ Insider Markups : They buy shares with insider knowledge of a say 3x fund raise, anticipating substantial markups that only they benefit from ✳️Exclusion of LPs : The Fund doesn't purchase any shares and LPs lose out on the capital gains ✳️ Lack of Disclosure : There's no transparency or consent sought from #LPs ✳️ Coercion Tactics : Pressure is applied on key personnel, IC Members, or even #founders of portfolio companies to facilitate these transactions What would this lead to ? Regulation #24 of #AIF Regulations 2012 outlines the obligations and procedures related to managing #Conflictofinterest It states : ✅ Disclosure of Conflicts: The investment manager and other key personnel must disclose any conflicts of interest to the AIF and its investors. This includes any potential conflicts arising from personal interests, business interests, or financial arrangements This puts the onus on all "Key Persons/ IC Members" & Chief Compliance Officer, legal team that enabled such a transaction, to come forward and inform #LPs and Securities and Exchange Board of India (SEBI) if they have been a party to this Else, it creates an immediate co-liability that may hurt careers and ability to operate in capital markets, when called into question from a prospective / existing #LP or even an internal #whistleblower For #LPs esp from Government of India Official handling tax payer monies, I would recommend a simple question to be asked as part of #Duediligence to uncover such a violation : ✅ Did any member of the IC/ Key persons/ Designated partner of the VC firm purchase any shares of any folio company under their name or their related parties, without making a full disclosure to #LPs OR without offering the same opportunity to the Fund OR without taking permission from #LPs ? Hope this is useful to those in #VCcareers and to prospective LPs ( Useful links in comments) #Governance #transparency #EnhanceDuediligence

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JP Morgan Bond Index inclusion date is passing in an uneventful manner with USDINR appreciating a little to 83.40 on opening and now at 83.46. Bond yields also a tad higher with 10yr at 7%. Most of the impact was already built in with long lead time between the announcement and the event. During this phase of USD strength (DXY106), INR did touch 83.60 but has not sustained due to central bank's stance in line with lower USDCNY, range bound crude and good inflows into equity and debt markets in last few days. FPIs turning bullish on supposedly undervalued or fairly valued largecap stocks has helped. Slight appreciation of INR may be expected. Dollar made a comeback with higher yields due to expectations of higher long-term inflation building up. While the short-term indicators in the US are showing a slowdown with highest jobless claims since Nov'21, lower capital goods orders (-0.60% vs +0.1% expected) and tepid GDP growth of 1.4% in 1st qrtr, though revised up from 1.3% but still much lower than 3.4% in the prev qrter. Markets keenly await the PCE inflation today and is concerned about the uptick in inflation Australia and Canada. While Australia in on a rate hike path, Canada has cut rates already. Looking at the global commodity price increases, tariff wars and numerous geo-political hotspots opening up affecting the supply side, the inflation over a longer term is likely becoming well entrenched and the self-imposed inflation targets of 2% across the developed world may not be seen very soon. This means that the rates markets are experiencing a sort of schizophrenia - building in rate cuts by the FED and ECB over next six months but still pushing long term yields higher. Higher chances of Trump's winning are contributing to dollar strength as well and tonight's debate will be watched for the signs of upcoming tariff regimes. USDJPY touched 161 in spite of furious statements by multiple ministers and govt officials. Japan also changed its top currency management official today, sparking anticipation of intervention. However, the last intervention in April '24 cost USD 61bn, causing USDJPY to fall to a low of 152 and it took two months to reclaim 160. Hence, BOJ has to come up with something innovative this time. Otherwise, a lower than expected core PCE in US can only save the day for JPY. Iron ore prices recovered above $106 on news of local govt support to real estate but the actual reason may be short covering. Most commodities are rangebound around the recently elevated levels. Natural gas in US corrected with HH at $2.68 on news of higher than usual storage. Gold ($2320) traded weak due to dollar strength and will await today's inflation data. Overall market scenario feels very similar to the 2007 time with low vols, tight credit spreads, high liquidity supporting equity and commodity prices, high interest rates not deterring the risk taking and last but most important, the USDJPY carry trade pushing new levels every day. 

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We have seen almost $6.5 Billion USD of Private equity deals in hospital chains in the last 8 odd years. That's a staggering number in a single sector and a considerable uptick compared to the previous decade. I looked up this detail after listening to Shantanu Deshpande's podcast with Deepak Garg (Founder and CEO of Rivigo) where he brings up the demographics of India and drops value bombs on macro trends, one of which being the aging population of the country. Digging deeper, lately PE firms have taken over significant stake in many major hospital chains bringing in PE expertise and guidance in capital allocation and optimizing workflows, at the same time, allowing the promoters to monetise their holdings. All of this amidst sectoral tailwinds like increasing revenue per occupied bed/day to ~38k INR, rising insurance penetration and medical tourism and added to that, an ever aging population that require medical treatment in some shape or form from the age 40. In the e-commerce equivalent words, this is a case of rising AOV and # of orders, compounding the revenues every year. The operational synergies brought in by the consolidation have started showing significant outcomes already. Max healthcare, in the last two financial years has seen a 30% increase in Revenue while the net profit rose by almost 75%. This is in stark contrast to a promoter led chain which has 4x the revenue but the net profits are lower than Max. These investments will be ripe for multi bagger exits in 10-12 years time, which is usually the fund cycle of a typical PE firm. No wonder the allied sectors like Elder care has been under the radar of many VCs lately. Even with the PE activity and expansion recently, we still have half the physicians per 10k people as most western countries. In 10 years time we will most likely begin to see the signs of our demographic strength turning to demographic liability if the health care infra doesn’t catch up with the needs. It would be very interesting to see what kind of companies come up to solve in this space in next few years. Image source : ESCAP

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𝐊𝐊𝐑 𝐟𝐫𝐨𝐧𝐭𝐫𝐮𝐧𝐧𝐞𝐫 𝐭𝐨 𝐚𝐜𝐪𝐮𝐢𝐫𝐞 𝐦𝐚𝐣𝐨𝐫𝐢𝐭𝐲 𝐬𝐭𝐚𝐤𝐞 𝐢𝐧 𝐇𝐂𝐆 KKR has started exclusive negotiations to acquire a majority stake in HCG, owned by private equity firm CVC Capital, valued at nearly Rs 7,000 crore. CVC owns 60.36% of the company, worth Rs 3,613.97 crore. If KKR can acquire CVC’s stake, it will trigger a mandatory open offer for an additional 26% stake owned by public shareholders. The Indian hospital sector has turned out to be a goldmine for KKR, with the private equity firm making a $2 billion exit from Max Healthcare in 2022, five times the capital it invested in the hospital chain in 2018. While KKR had been selling its Max stake on the market through small block deals, in August 2022, it sold its remaining 27.5 percent holding worth around Rs 9,200 crore in the biggest-ever block deal on the Indian market at that time, highlighting strong investor interest in the country’s hospital sector. #exclusive #negotiations #acquire #stake #privateequity #company #shareholders #hospital #sector #deals #investor

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“Globally, venture capital funds make up one-third of the private impact fund universe; but in India, they account for 85 per cent” Good insights by FT on how Indian venture capitalists are leading the way in private market impact investing (Glad to see our fund parrners mentioned in the report). Few other funds that are not mentioned are also driving real change by investing in entrepreneurs who are truly driving ‘Innovation for Impact’. India’s venture capitalists seek to verify the impact they make https://lnkd.in/dDVgKFgA British International Investment, Mark Kahn

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Holy Grail of Asset Management Companies are returns and governance. Any miss on either of them creates an outflow of capital.. which can break the AMC... Case in point in India... Quant MF and Franklin Templeton MF... Very recently papers reported that a big PMS firm in India is facing redemption pressure more for returns issue... In US, Franklin Templeton reported outflows of $37 Billion in last quarter due to governance lapse on derivative trades #sec #amc #markets

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How NPCI's Auto Pay has changed the way we pay for subscriptions and how this has helped in retention for these platforms. AutoPay by National Payments Corporation Of India (NPCI) is a masterstroke in its own way as it not only provides convenience to consumers but also helps players in the market to improve their retention rate. It is already showing good results for platforms and banks. Here are two main indicators of its success: 1. "Bengali OTT player Hoichoi sees UPI AutoPay making a big difference to customer retention" reported by BusinessToday in September 2023. 2. "UPI AutoPay top of charts in low-ticket recurring payments" reported by The Economic Times in December 2023. Launched in 2020 by NPCI, AutoPay is a groundbreaking innovation trying to transform consumer behavior in India. With AutoPay, customers can effortlessly set up recurring payments from their existing UPI account, making subscription management a breeze. What is even more interesting is that AutoPay has already started to become a standard for startups as well. I recently saw an OTT-based startup's deck where they highlighted that X percentage of subscribers renew their subscriptions every month without AutoPay. In this particular case, if the startup gets AutoPay enabled on their platform, then surely this percentage will be increased by another 20%, which will increase the user retention rate by X + 20%. This, in my view, is a great indicator of a healthy growing startup. AutoPay has the potential to revolutionize the way we make recurring payments. However, I have serious concerns about its implementation and how apps and platforms can use it silently to misuse recurring payments. Please let me know what you think about this. DMs as well as comment sections are always open.

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#Weekly_Indian_Startup_Funding_Update   Kyro Capital Private Limited 1. Zepto, a quick commerce company, raised $ 665 M in its Series F funding round led by Glade Brook, Nexus, and StepStone. They plan to use the funds to double the number of its dark stores to 700 and also scale up Zepto Café. 2. Aye Finance, a fintech company specializing in lending, secured $30 M in debt financing from FMO, a Dutch Development Bank. They plan to mobilize these funds to expand financial inclusion to underserved MSME sector in India. 3. Bira 91, an alcoholic beverage company, secured $ 25 M in debt financing from Kirin Holdings. They plan to expand their manufacturing base to new regions in North India. 4. EKA Mobility, a cleantech company focused on electric vehicles, raised $ 23.9 M in an undisclosed round of funding. Mitsui and Co. Ltd served as the sole investor. The raise will assist in expansion of product portfolio and to meet capex needs. 5. OrbitShift, an enterprise software company specializing in horizontal SaaS solutions, raised $ 7 M in a seed funding round co-led by Peak XV Partners and Stellaris Venture Partners. The proceeds will be used to expand the company’s base in the U.S. 6. Alyve Health, a healthtech company focused on fitness and wellness, secured $ 5.5 M in its Series A funding round led by Axilor Ventures. The funds will be used for strategic growth initiatives like talent acquisition, operation expansion etc. 7. AVIOM Housing Finance, a fintech company specializing in lending, secured $ 5 M in debt financing from the InsuResilience Investment Fund. 8. Balwaan Krishi, an agritech company focused on farm inputs, secured $ 4.8 M in its Series A funding round led by JM Financial Private Equity. The funds will be utilized to buy new products and channelize its distribution network. 9. The Pant Project, an e-commerce company with a direct-to-consumer model, secured $ 4.2 M in its Series A funding round led by Sorin Investments. The funds will be used for offline store retail expansion, branding and marketing, tech development. 10. Supermoney, a fintech company specializing in lending, secured $ 3.4 M in its Series A funding round co-led by Capital 2B and Capria Ventures. The company would increase disbursement volume and leverage tech to optimize operations. 11. Distil, an e-commerce company specializing in business-to-business e-commerce, secured $ 3.1 M in a seed funding round co-led by Jungle Ventures and IndiaQuotient. They will utilize the money to expand its teams across sales, research and development and other areas. 12. Maxim AI, an enterprise software company specializing in horizontal SaaS solutions, secured    $ 3 M in a seed funding round led by Elevation Capital. The company plans to use the funds to expand its team and scale its operations to partner with more leading enterprises building AI products.   Feel free to reach out to us for fundraising solutions at [email protected]

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Why U.S. Tech Companies considering India for Accounting Services? In an increasingly interconnected global economy, U.S. tech companies seeking efficiency and expertise in their accounting processes should consider India as a strategic partner.  Here are three most important reasons that I found to be shared: Cost Efficiency: India offers a cost-effective solution for accounting services without compromising quality. The average cost of accounting professionals in India is significantly lower than in the U.S., allowing companies to allocate resources more effectively. Skilled Workforce: India boasts a large pool of highly qualified accounting professionals. Many are well-versed in international accounting standards and possess certifications like CPA and CA. This expertise ensures that companies can rely on accurate and compliant financial reporting. Advanced Technology Adoption: Indian accounting firms are at the forefront of adopting advanced technologies, including AI and cloud-based solutions. This not only streamlines processes but also enhances accuracy and real-time reporting capabilities. Example: A leading U.S. tech firm partners  with an Indian accounting service provider to manage their financial reporting. This collaboration not only reduces their accounting costs by 30% but also improves the turnaround time for financial audits. By leveraging India’s advantages in cost, talent, and technology, U.S. tech companies can enhance their accounting operations and focus on core business strategies. #USoutsourcing #UStaxcompliances #USbusinesssupport #USaccounting

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India's IPO market 2024 is set to feature high-profile entries across various sectors, reflecting the country's dynamic and evolving economic landscape. These IPOs will drive growth and innovation in their respective industries. FirstCry.com (BrainBees Solutions Ltd.): > Sector: E-commerce > Details: FirstCry is a leading online retailer specialising in baby and kids' products. Its extensive inventory includes clothing, toys, and other essentials. > Impact: As the most significant player in its niche, FirstCry's IPO is anticipated to boost the e-commerce sector and provide significant growth opportunities in the rapidly expanding market for children's products in India​​. Ola Electric: > Sector: Electric Vehicles > Details: OLA Electric is a prominent player in the electric vehicle industry, known for its electric scooters and ambitious plans for expanding EV infrastructure. > Impact: The IPO is expected to accelerate the adoption of electric vehicles in India, supporting the country's transition to sustainable transportation solutions and reducing dependence on fossil fuels​​. MobiKwik: > Sector: Financial services > Details: MobiKwik is India's leading digital banking platform, offering a wide range of financial products for both consumers and merchants, including payments, digital credit, and investments. > Impact: This IPO is expected to fuel financial & payment services growth, investments in AI & technology, and product expansion. Hyundai Motor India Ltd.: > Sector: Automotive > Details: Hyundai India is a South Korean automobile giant Hyundai Motor Company subsidiary. It is one of the top car manufacturers in India, offering a range of popular models. > Impact: This IPO is expected to be one of the largest in 2024, potentially raising ₹25,000 crore. It will strengthen Hyundai's investment in new technologies and product development in the Indian market​​. These IPOs represent diverse sectors and can potentially drive significant economic growth and innovation in India throughout 2024. #corpwisadvisorsprivatelimited #ipo #india #companies #stockmarket #market #upcomingipos #economy

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Japan’s Mizuho Financial Group is in discussions to acquire a portion of KKR’s stake in financial services unicorn InCred Finance at a premium to its most recent valuation of $1.2 Bn. Global investment firm KKR may divest around 10% of its stake in the Mumbai-based tech-driven non-banking finance company (NBFC), though this may change depending on how the talks progress. The negotiations are being held for a premium of up to 30-40% over the $1.2 Bn valuation at which InCred raised $60 Mn in December 2023. This is contrary to typical secondary sales, which usually occur at a lower valuation. 🔗 To read more in detail, click here: https://lnkd.in/g6KqudeB #unicorn #startup #valuation #finance

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#MCPersonalFinance | Capitalmind’s Deepak Shenoy on why cash isn’t king & this is the best time to stay invested 💵💰📈 writes Abhinav Kaul Tap to know more 👇 https://lnkd.in/gmVxfXHi #Capitalmind #Cash #Investment | Kayezad Adajania

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Trifecta Capital is looking to raise $240 million for a fourth Venture Debt fund #Trifecta Capital, a prominent venture debt firm, has launched its fourth fund, targeting up to Rs 2,000 crore (approximately $240 million), including a greenshoe option of Rs 500 crore. This latest initiative was shared by Rahul Khanna, the firm's founder and managing partner, in an interview with The Economic Times. Established in 2015 by Rahul Khanna and Nilesh Kothari, Trifecta Capital has earned a solid reputation in the venture debt space, backing successful startups like Zepto, Meesho, BlueStone, and Urban Company. The firm has deployed Rs 6,000 crore across its three previous funds, including recycled capital, showcasing its robust investment strategy and track record. Khanna emphasized that the new fund will continue Trifecta's proven formula, while adapting to evolving market opportunities. The firm plans to deploy the funds across various sectors, strategically avoiding high-risk areas such as cryptocurrencies, gaming, and peer-to-peer lending. This cautious approach has contributed to Trifecta's impressive performance, maintaining total write-offs at just 0.6% of its investments. In a challenging venture investment climate, Trifecta Capital's disciplined strategy and rigorous underwriting process have paid off. Despite a downcycle, the firm has minimized losses by limiting exposure to any single sector or sponsor. Khanna noted that venture capital losses have been higher in comparison, highlighting the effectiveness of Trifecta's risk management framework. The firm’s prudent approach included slowing down the pace of deployment during 2022 and 2023, with a 20% reduction in 2023 compared to 2022. However, the pace picked up in 2024, with an anticipated deployment of Rs 1,400-1,500 crore this year, capitalizing on emerging opportunities. Trifecta's strategy of trading off slightly lower internal rates of return (IRR) for capital safety has proven beneficial, especially during the funding winter that saw several venture-backed startups shut down. Trifecta’s focus on maintaining a strong credit profile has helped it navigate these turbulent times with minimal credit hits. The venture debt landscape in India is competitive, with players like Stride Ventures, Alteria Capital, and InnoVen Capital also making significant strides. Alteria Capital recently closed its third fund at Rs 1,550 crore ($195 million), and Stride Ventures announced the final close of its third fund at $165 million, indicating a thriving ecosystem for venture debt in India. Want to stay up to date with the market? Here my newsletter: - Linkedin: https://lnkd.in/d4h8zqKA  - Substack: https://lnkd.in/dzfGJzmW

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A good summary of Digit Insurance #IPO - a more tech forward #insurer than most and a rich #valuation comapred to global peers - again highlighting that the #indian bourses are a good place to list at the moment. #indiaadvantage #insurance #insurtech India Insurtech Association

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Interesting week for I-Bankers. (1) DAM Capital files for IPO Started by Dharmesh Anil Mehta (hence DAM xD), they did ~₹180Cr with ~40% PAT at ~₹70Cr. Complete OFS with the promoters & investors offloading some stake in the business. Interestingly, before DAM he was at ENAM - one of India's earliest Investment Banking behemoths which was later acquired by Axis Bank. In 2019 he along with a few marquee investors acquired IDFC Securities & renamed it as DAM Capital. Pretty solid background & story. (2) KKR to sell Avendus PE funds Carlyle, Mizuho & Premji Invest are competing to acquire Avendus. Btw, KKR had acquired Avendus at a valuation of ~$200Mn & exiting at a valuation of ~$700Mn in just 9 years! Avendus will do ~₹1400Cr in topline with ~17% PAT of ~₹250Cr in FY'25 (3) CCI Nod must for deals >₹2,000Cr Talk about additional compliance & slower deal timelines for Bankers because of this regulatory huddle. Not at all saying this is not needed. Once again reiterates the fact that we'll see a lot more mid-market deals in the next 2-4 years. On another note, seeing a lot of deal activity in the 5-50Cr valuation range. Done Deal Rohit | Aneesh | Shubhang | Gaurav | Neha #india #deals #investments #startups #ipo #economy #business #stocks #stockmarket #mergers #acquisitions

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Continuation Funds, more common globally are seeing an uptick in India.  With limited opportunities for meaningful exits through IPOs, mergers and acquisitions (M&As), or buybacks, investors are opting for Continuation Funds. How do Continuation Funds work? Instead of liquidating assets at the fund's term end, PE/VC firms transfer them to a new Continuation Fund. Existing investors then transition into this new fund, maintaining their investment in the same assets. Continuation Funds allow investors to prolong their investment in PE assets beyond the typical fund term. Here’s a quick explainer on Continuation Funds. #PrivateEquity #Investing #ContinuationFunds #createwealth

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Big News from Bluestone! Bluestone, an omnichannel jewelry retailer, has secured ₹100 crore ($12 million) in debt from Neo Markets. This is Bluestone's third debt investment this year. The board approved the issuance of 10,000 debentures at ₹1,00,000 each to raise this amount. This move comes as Bluestone is gearing up to raise $100 million in its pre-IPO round, which will include both primary and secondary funding. Founded in 2011 by Gaurav Singh Kushwaha, Bluestone offers an extensive jewelry collection for men and women. The company operates over 190 stores across 75 cities, in addition to its online presence. In the fiscal year ending March 2023, Bluestone achieved impressive growth. The company reported a 65% year-on-year revenue increase, reaching ₹787 crore. Additionally, its losses dwindled by 87% to ₹167 crore. With major investors like Accel (holding a 21.2% stake) and Kalari Capital (holding a 12.35% stake), Bluestone is poised for significant growth. The company competes with other jewelry retailers such as Melorra, Giva, and CaratLane. Stay tuned for more updates related to Fundraising and M&A. To Connect with right investors for your business, you can check our private investors network at IndiaBizForSale.com #Fundraising #IPO #Investment

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Link to 2Point2 Capital's Q1 FY25 Investor Update - https://lnkd.in/djb83-fD In this update, we talk about Base Rate Neglect and Absurd Valuations in the Indian stock market.

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