Sectoral Focus

sectoral_focus

Auto Ancillary Sector

India is known to be the hotbed for Auto R&D, with about 45% of top global R&D spenders having a presence in the country. India is becoming the Emerging Global Auto Components Sourcing Hub, with many MNCs setting shop.

The Indian auto-components industry is expected to register a turnover of USD 66 billion by FY16, with a likelihood to touch USD 115 billion by FY21 and USD 200 billion by 2026. In addition, industry exports are projected to reach USD 12 billion by FY16 and add up to USD 30 billion by FY21, further rising to USD 80 billion by 2026. The sector’s contribution to manufacturing GDP is expected to double from 5% in 2015 to 10% in 2026.

Focused Sub Segments

Centrum Capital is focused on pursuing PE and M&A opportunities in fast growing sub-segments including automotive electronics, automotive assemblies for OEMs, high capacity batteries, electric / hybrid automobiles, applied electronics, catalytic convertors and emission control components, etc.

Recent Deals Closed in Auto Ancillary Sector:

1. Fiem Industries Ltd.

Sole Book Running Lead Manager for fund raising of INR 1,200 mn via QIP.

2. Mayur Uniquoters

Sole advisor to the deal involving Westbridge Capital’s INR 1.1 Bn investment in the Company.

3. Escorts Ltd.

Sole Book Running Lead Manager for the Qualified Institutional Placement of the Company to raise INR 873 Mn.

4. Lumax Auto

Lead Manager for the IPO of the Company to raise INR 226 Mn.

auto_an

Consumer Products

India’s consumption story is going through an exceptional growth phase, where consumption spend is expected to grow from USD 750 billion in 2012 to USD 1.5 trillion by 2017. The rapid growth of retail consumption is creating a multiplier effect on several consumer focused industries. These industries present exciting opportunities for growth across geographies both organically and inorganically.

At Centrum Capital, we offer expertise to our clients across the sector, in the form of extensive sector and business understanding and superior execution capabilities, built through our experience across engagements with several consumer businesses, dedicated sector tracking and research and access to an extensive network of financial and strategic investors and partner investment banks.

The Consumer Group works on all consumer facing industries with a specific focus on followiing sectors:

  • Food and Beverages (both products and services)
  • FMCG Products
  • Personal Care Products
  • Home Care Products
  • Consumer ancillaries and services

Defence

Centrum Defence Systems Private Limited (CDSPL) provides specialized, niche defence services. Centrum, in association with industry body FICCI, released a report in 2015 highlighting the opportunities in the country’s Defence sector. This report suggests that the sector is poised to enter a high growth trajectory with an addressable opportunity of $41 billion by FY22. The report was launched by the Secretary, Defence Production, Mr. G. Mohan Kumar, who shared his views on private sector participation in the sector. The report has received wide participation from stakeholders across the defence value chain, including established MNCs like Lockheed Martin, Boeing, Israel Aerospace Industries, Airbus etc. The report has also been lauded by Government agencies such as the DRDO, Ministry of Defence, the Armed Forces, Russian Embassy etc. along with domestic players like Bharat Forge, Tata Group, Larsen & Toubro, Rolta etc. apart from a few private equity funds and senior journalists. The Report can be downloaded at http://goo.gl/C0SofE

Education

Benjamin Franklin rightly said, “An investment in knowledge always pays the best interest”; the only difference here is we mean it literally. Education has always played an integral role in the growth story of India and continues to do so. When one says India is all set to become the youngest nation by 2020, it can only happen if it’s young people are healthy, educated and appropriately skilled to contribute optimally to the economy. Needless to say, there is a huge untapped market for Education. The Education sector in India is poised to witness major growth in the comming years as India will have world’s largest tertiary-age population and second largest graduate talent pipeline globally by the end of 2020. Currently the Indian Education Market is estimated to be around $100 billion. Of this, Higher education contributes 59.7 per cent of the overall market, school education 38.1 per cent, pre-school segment 1.6 per cent, and technology & multi-media the remaining 0.6 per cent. With more than 1.5 million schools, 6.5 million teachers and 210 million students enrolled, India has one of the largest education systems in the world. Growing disposable income, willingness of people to spend on education coupled with various Government initiatives serve as key growth drivers for the sector. Robust growth potential has led to increased investor interest in the sector, resulting in a significant number of transactions in the same.The total amount of Foreign Direct Investments (FDI) inflow into the Education sector was US$ 1,171.10 million from April 2000 to June 2015. Centrum has been working extensively on the Education sector and has successfully closed some significant transactions in this space. We have a dedicated Education sector team, on Equity/Debt fund raising, Private Equity, IPO, advising on M&A, JVs etc. Some of our select education transactions:

  • Raised Private Equity for EveronnSystems India Ltd. from India-China Pre IPO Equity (Mauritius) Ltd.
  • Lead Manager to the IPO of EveronnSystems India Ltd.
  • Raised funds through PIPE for EveronnSystems India Ltd.
  • Book Running Lead Manager to the IPO of Career Point Infosystems Ltd.
  • Lead Manager to the Rights Issue of Grey Cells Education Ltd.

edu

Industrials Sector

The Government of India has set an ambitious target of increasing the contribution of manufacturing output to 25% of GDP by 2025 from the current 16%.’Make in India’ initiative of the Government is a key step to place India as a manufacturing hub on the world map and give it global recognition. India’s manufacturing sector could touch USD 1 trillion by 2025. In a major boost to the ‘Make in India’ initiative, the Government of India has received investment proposals of over USD 16.56 billion in the last 12 months from various companies including Airbus, Phillips, Thomson, Samsung, LG and Flextronics among others. India has become one of the most attractive destinations for investments in the manufacturing sector.

Focused Sub Segments

Centrum Capital is focused to pursue PE and M&A opportunities in Engineering & Process Equipment, Chemicals, Building Products and Plastics & Packaging.

Engineering and Process Equipment:

The Indian Engineering sector has witnessed a remarkable growth over the last few years, driven by increased investments in infrastructure and industrial production. Capital goods & engineering turnover in India is expected to reach USD 125.4 billion by FY17. Engineering exports from India are expected to cross USD 70 billion in FY15 registering a growth of 15% over the previous fiscal, as demand in key markets such as the US and the UAE is on the rise.

Chemicals:

In terms of volume of production, the Indian Chemical industry is the third largest producer in Asia and sixth largest in the world.

The Indian Chemical industry generated business worth USD 118 billion in 2014. Bulk chemicals account for 39% of the Indian Chemical industry, followed by agrochemicals at 20.3% and specialty chemicals at 19.5%. The remaining share is accounted by Pharmaceuticals and Biotechnology.

Building Products:

India has an estimated urban housing shortage of 18.8 million dwelling units. The housing shortage in rural India was estimated at 47.4 million units, in 2012. An investment of USD 1 trillion has been projected for the infrastructure sector until 2017, 40% of which is to be funded by the private sector. 45% of infrastructure investment will be funnelled into construction activity and 20% to modernise the construction industry. The Government has launched a number of ambitious building schemes in recent months, from ‘smart cities’ to housing projects to industrial parks, and technological businesses, all of which need supplies of cement, ceramics, paints, electricals, glass, windows and other construction materials.

Plastics & Packaging:

India is presently the third largest consumer of polymers in the world after the US and China, with a 6% global share. India’s per capita plastic consumption at 8 kg is way too little when compared to the current per capita consumption of plastics in the US at 109 kg and in China at 29 kg. The low per capita polymer consumption clearly indicates the enormous growth potential of the sector in India. Key players in the market believe that polymer consumption in India will double by 2020, to about 20 million metric tonnes.

Recent Deals Closed in Industrials Sector:

1. Mold-Tek Packaging Ltd. Deal Type: QIP, Funds Raised: INR 550 million Centrum advised the company in the placement by positioning and showcasing the company’s USP and Growth story impactfully to investors like DSP Blackrock, Canara Robeco, SBI Mutual Fund & Principal Mutual Fund. 2. Sarla Performance Fibres Ltd. Deal Type: QIP, Funds Raised: INR 470 million Centrum showcased the company via extensive road shows and positioned its Growth story impactfully to attract quality investors including DSP Blackrock, Canara Robeco, HDFC Mutual Fund & Tata Mutual Fund   ind

Infrastructure

Customer satisfaction and the best work practices are the cornerstones on which Centrum Infrastructure Advisory Ltd. (CIAL) has positioned itself as a dedicated investment banking platform. Committed to providing expert investment services to clients in the infrastructure sector, CIAL is a subsidiary of Centrum Capital Ltd. The company caters to a large clientele, covering the entire spectrum of the infrastructure value chain that includes corporates, private equity funds, banks & financial institutions and Government bodies.

Services Offered

Mergers & Acquisitions Private Equity Business & Financial Advisory (Strategic Business Plan, Entry Strategy, Pre-Bid Advisory, Bid Process Management, JV/Partnership formation etc.) Debt Advisory (Project Finance, Structured Finance, Promoter Funding, Mezzanine Funding, Securitisation, Restructuring etc.).

Sectoral Coverage

Transportation: Roads & Highways, Airports, Ports, and Railways & Metro Rails Energy: Generation (Conventional and Renewable Energy), Transmission & Distribution Urban Infrastructure: Water Infrastructure, Solid Waste Management and Urban Transportation Logistics: Warehousing, ICDs, CFS, Cold Storages, Third-party Logistics, Freight Forwarding Defence: System Integrators, Manufacturing, Solution Providers Centrum Infrastructure Advisory derives its core operational strengths from firmly entrenched relationships with top-notch decision-makers in the investment community, comprising private equity, sovereign & pension funds, HNIs, family offices, strategic investors, multi-lateral agencies, domestic & foreign banks, financial institutions, NBFCs and infrastructure finance companies. Centrum Infrastructure Advisory’s operations are managed by a team of expert financial professionals led by Sandeep Upadhyay. The team’s key strengths are its wide ranging experience in advising, developing and financing complex infrastructure projects.

What We Do

Business & Financial Advisory

Centrum Infrastructure Advisory provides advisory services to private and public sector clients to rationalise their financial operations. It also identifies strategic issues that can be leveraged for growth opportunities, prioritises business targets and formulates business strategies to maximise the clients’ return on investment.

Areas of Expertise

Developing Strategic Business Plans Offering Entry Strategy Management Consulting Pre-Bid Advisory Bid-Process Management JV/Partnership Formation

Mergers & Acquisitions

At Centrum Infrastructure Advisory, we leverage our strategic and tactical expertise, domain knowledge and integrated networks within business circles to help monetise/consolidate the business goals of our clients. We facilitate the entire process, from deal structuring to execution, including legal due diligence, negotiating binding agreements, setting up acquisition vehicles and optimising the capital and tax structure.

Areas of Expertise

Acquisitions Mergers Company and Asset Sales Buy-Side and Sell-Side Agreements Cross-border Acquisitions Strategic Alliances Joint Ventures Divestitures and Spin-Offs Corporate Restructuring Recapitalisation Management Buyouts

Private Equity

We have an exemplary track record in private equity advisory with experience in executing transactions with multiple financial sponsors across industries. We provide end-to-end services in private equity advisory. Our success is based on sectoral understanding of business imperatives, as well as long-term relationships with private equity and venture capital funds apart from multinational companies. Our advisory team ensures prompt closure of complex transactions involving equity/derivative-linked financing for both publicly traded as well as privately-held companies.

Debt Advisory

Centrum Infrastructure Advisory offers strategic debt advisory solutions to achieve the finest results in restructuring, securitisation, project finance and other funding solutions. We understand and assess the client’s business model and future plans which enable us to advise them on arriving at optimal solutions for their debt requirements. We offer services ranging from execution to closure of transactions.

Areas of Expertise

Project Finance Securitisation Restructuring – CDR/SDR Bonds/NCDs Structured Debt

Events

Federation of Indian Chambers of Commerce and Industry (FICCI) and Centrum Infrastructure Advisory Limited (CIAL) jointly organized a ‘Conclave on Infrastructure Financing’ on 29th September 2016. A theme paper was released to elaborate on the current challenges in the infrastructure sector and explore the emerging alternate financing options. Theme Paper prepared by CIAL on Emerging Options in Infrastructure Financing was released by Principal Secretary, Ashish Singh (IAS), Mr. Pathak, Director-MSEB Holdings and Mr. Barua, ED, SEBI The conclave had participation from CXOs and senior officials as delegates and speakers from leading Financial Institutions, Regulator/Government, Private Equity & Pension Funds, Banks, Mutual Funds, Advisors and Rating agencies. The theme paper can be downloaded Here.

Deals

1. Getting PE funds to invest in Transpole Logistics Pvt. Ltd.

We successfully raised Rs. 600 million for Transpole Logistics Pvt. Ltd. from Fidelity Growth Partners India. Transpole is an integrated, asset-light supply-chain solutions firm, with a pan-India focus and an Asian footprint. It offers integrated transportation and logistics solutions as a freight forwarder, consolidator, NVOCC company and MTO, delivering air and sea services, apart from land freight, warehousing and distribution, project logistics, contract logistics, LCL, supply chain consultancy and information management. The funds will be utilised to expand its operations in India and Singapore, as it plans to build a pan-Asian network.

Services Offered

  • Transaction Structuring
  • Financial Modelling
  • IM Preparation
  • Investor Identification
  • Structuring, Negotiation and Co-ordination in Documentation

We acted as the sole financial advisor to Transpole Logistics for the deal.

2. Advisor to Aegis Logistics Ltd for Preferential Allotment.

We were the sole advisor to Aegis Logistics Ltd for its preferential allotment of equities worth Rs. 750 million at Rs.322 per share. The allotment was done to Infrastructure India Holdings Fund LLC, issuing 2,120,190 equity shares having a face value of Rs.10 each. The issue represented 6.35% of the post-issue paid-up equity share capital (on a fully diluted basis). We have shared a long and productive relationship with Aegis in which we have helped it showcase its story to the investor community. Centrum’s institutional desk was solely responsible for the coverage. A number of options were evaluated before taking a final call on the transaction. Accordingly, we tried to identify the fund house whose long-term interest aligned with the issuer company. This deal has provided the much-needed growth capital to Aegis. Aegis Logistics is a leading player in the oil and gas logistics space and is thus well-placed to capitalise on emerging opportunities. It plans to build a network of port terminals, expand storage capacities and make a foray into new businesses such as crude oil storage and packaged commercial LPG cylinders.

4. Rights Issue of Rs.1,231 Mn by Jyoti Structures Ltd.

We have successfully raised Rs.1,231 million for Jyoti Structures Ltd. through a rights issue, which included an issue of 10,261,243 secured non-convertible debentures (NCDs) of face value Rs.120 each with 20,522,486 detachable warrants in the ratio of 1 NCD with 2 detachable warrants for every 8 equity shares held. The NCDs offered through the issue were rated “CARE A”. The issue size prior to conversion of warrants into equity shares is up to Rs.1,231 million. Assuming full conversion of warrants into equities during the warrant exercise period, the issue size would aggregate to Rs.3,694 million. Jyoti Structures is a leading provider of turnkey solutions in the field of power transmission. Its key deliverables include transmission lines, substations and rural electrification. The company undertakes turnkey projects on a global scale, offering a complete range of services from design, engineering and tower testing to manufacturing, construction and project management. It has so far executed projects in over 40 countries and has manufacturing plants in Nashik in Maharashtra and Raipur in Chhattisgarh with a combined capacity of 1,10,000 MT of transmission line towers. It also has an in-house tower testing facility at Ghoti near Igatpuri in Maharashtra. Jyoti Structures raised the funds for repayment of its working capital loans.

5. Lead Manager to Rs.1,500 Mn Initial Public Offer by Aqua Logistics Ltd.

We have successfully raised Rs.1,500 million for Aqua Logistic Ltd. through an Initial Public Offer. The IPO included issuing 68,72,852 equity shares of face value Rs.10 each for cash at a price of Rs.220 per equity share, including a premium of Rs.210 for non-institutional investors and qualified institutional buyers (QIBs), and Rs.215 per equity share, including a premium of Rs.205 per equity share for retail individual bidders, aggregating up to Rs.1,500 million. The issue constituted 33.53% of the fully diluted post-issue paid-up capital of the company. Aqua Logistics is a 3PL (third-party logistics player), delivering end-to-end solutions in the logistics and supply chain areas to customers. Its capabilities include supply chain consulting, logistics execution and project logistics. Headquartered in Mumbai, it has offices in New Delhi, Chennai, Bangalore, Ludhiana, Baroda, Kochi and Pune. Aqua’s international logistics operations are supported by a network of 3PL partners and vendors. It also has a multi-modal transport operator’s licence, an IATA accreditation and a Custom House Agent’s Licence. Aqua Logistics raised the money to fund purchase of specialized equipment, business expansion by opening more offices, possible acquisition, additional working capital requirements and other general corporate purposes. Centrum Capital acted as the Book Running Lead Manager for the public offering.

6. Corporate Debt Restructuring of Dighi Port Ltd.

Dighi Port Ltd. (DPL) successfully underwent a CDR process for its Rs.14 billion debt from a consortium of 17 lenders. The greenfield 30-million tonne Dighi Port is under development on a PPP model under a 50-year concession from the Maharashtra Maritime Board as an all-weather, deep draught, multipurpose, multi-cargo direct berthing port with a dedicated channel. The CDR package comprises refinancing Rs.8,236 million of existing debt and Rs.5,580 million of fresh debt. The new debt has enabled the port to handle 40% additional cargo over and above the capacity envisaged (30 MTPA) under the scope of the refinanced debt.

Services Offered

  • Liasoning with Lenders
  • CDR Documentation
  • Financial Modelling
  • Negotiating with Lenders on enhancing project scope
  • Negotiating on the restructuring terms

7. Advised Adlabs Entertainment for raising Rs.14 billion Debt

Raised Rs.14 billion debt from a consortium of 14 banks for Adlabs Entertainment run Amusement Park at Khopoli, 75 km off Mumbai. Well-connected to Mumbai, Pune and Nashik by road and rail, the park offers a combination of theme park, water park, hotel, conference centre, spa and retail, dining & entertainment area.

Services Offered

  • Transaction Structuring
  • Financial Modelling
  • IM Preparation
  • Consortium Formation
  • Documentation
  • Disbursements

8. Advisor to Indrajit Infrastructure Pvt. Ltd. for raising debt of Rs. 2,500 Mn

Advised Indrajit Infrastructure Pvt. Ltd. (IIPL) to raise project debt of Rs.2,500 million for an operational 80 MW coal-based thermal power plant in Wardha district of Maharashtra. Commercial operations began in September 2008 and the project was funded by a mix of equity and unsecured debt taken from corporates. The take-out financing deal was syndicated through a consortium of public sector banks.

Media & Entertainment Sector

The Indian M&E sector is taking its place on the global stage as a market with growth potential and investment opportunities. India is set to outperform growing economies with an expected CAGR from 2014-19 of ~14% – almost twice the global M&E growth – to grow from USD 16 billion in 2014 to USD 30 billion by 2019. Digital growth is contributing significantly in all areas – digital media, digital advertising, digital distribution, etc. With spiraling smart phone and internet reach along with affordability, digital channels of M&E are at the brink of an explosive growth trajectory. The growing E-commerce space in India has ensured higher advertising spends across media.

Focused Sub Segments

Centrum Capital is focused on pursueing PE and M&A opportunities in Post Production / Processing and Content Delivery mediums like Exhibition, Broadcast, Digital Media and Radio.

Recent Deals Closed in the Media Sector:

1. Reliance Mediaworks Ltd, Prime Focus Ltd. Reliance MediaWorks Ltd. acquired 46.34% stake in Mumbai based Prime Focus Ltd. for a total consideration of INR 7.2 Bn. Centrum Capital acted as Manager to the offer by Reliance MediaWorks Ltd. and Adviser to Prime Focus Ltd. 2. Prime Focus World, Double Negative Prime Focus World acquired ~80-85% of Double Negative. Centrum Capital acted as Sole Adviser to Prime Focus Ltd 3. Amagi Media Raised Private Equity funding of INR 300 Mn from Mayfield Partners 4. Naaptol Online Shopping Pvt Ltd. Raised Private Equity funding of INR 330 Mn from Canaan Partners. 5. Adlabs Films Ltd. Raised Term Loans, Managed IPO in 2000, Raised Private equity funding post IPO in 2004, advised on the strategic sale to ADAG in 2007, and have provided general Corporate advisory through the years.   m_en

Real Estate Group

The real estate sector, one of the backbones of our economy, has seen a major boom in recent years, thanks to an array of enabling factors such as a vastly changing demographic landscape, propelled by rapid urbanization and rising income levels, aggressive entry of private players into the education sector and a booming tourism industry.

There is growing demand across the board — from service apartments to office spaces, from posh residences to upscale shopping malls, from special economic zones to smart cities — sending the real estate market onto an upward trajectory.

The housing segment is also poised for rapid growth with the ‘Housing for All by 2022’ mission, unveiled by the Government recently, which has given an adrenalin shot to builders.

The plan for 100 self-sufficient smart cities is yet another driver for growth of the segment. The Government has also been propping up the sector by providing several sops in the form of relaxed guidelines for foreign investments, introduction of the Real Estate Investment Trusts (REITs) higher fund allocation for affordable housing and infrastructure projects in successive budgets since the past few years.

The Securities and Exchange Board (SEBI) has issued notifications for introducing the REITs, thus laying the foundation for creating financial instruments, through which long-term capital can be raised by realty developers and large real estate owners, both within the country and abroad. Commercial real estate developers will gain access to cheaper funding through the REITs.

It’s against this backdrop that we launched yet another innovative initiative called Real Estate Group.

Offerings & Solutions

The Real Estate Group provides varied solutions to clients through a strong professional network and relationship with investors, lenders and other stakeholders.

We provide financial solutions to

  • Residential units
  • Commercial offices
  • Township projects
  • Bungalows
  • Apartments
  • SEZs
  • Educational institutions
  • Shopping malls
  • Hotels
  • Hospitals

Our Offerings

  • Loan against property
  • Lease rental discounting
  • Construction/project finance
  • CC/OD limits
  • Private equity funding
  • Structured funding
  • NCDs
  • Capital markets
  • Facilitating joint ventures between land owners and developers
  • Land deals
  • Property deals from distressed assts such as hotels, schools, hospitals, commercial spaces, shopping malls, etc.
  • HNI funding
  • Advisory & strategic consulting

We have strong relationships with

  • Banks (Nationalised, Co-operatives, Private & MNCs)
  • NBFCs
  • PE players
  • Mutual Funds
  • HNIs
  • Wealth managers
  • < li>Real estate developers

  • Construction companies
  • Rating agencies
  • Valuers
  • Brokers
  • Research firms
  • Solicitors
OUR RELATIONSHIPS

Recent Deals Closed:

BFSI

The Lakshmi Vilas Bank Limited

Sole Book Running Lead Manager for fund raising of INR 1,678 mn via QIP.

Textile

S. P. Apparels Limited

Book Running Lead Manager to the IPO of S. P. Apparels Ltd., raising INR 2,391 mn.

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