Capability Statement Corporate Finance

Transcription

1 2011 Capability Statement Corporate Finance ICRA Management Consulting Services Limited

2 IMaCS - An introduction ICRA Management Consulting Services Limited (IMaCS) is a multi-line management consulting firm headquartered in India. It has an established track record of 17 years in management and development consulting across various sectors and countries. IMaCS has completed more than 1200 consulting assignments with about 600 clients and has worked in over 40 countries across the globe. IMaCS is a wholly-owned subsidiary of ICRA Limited (ICRA), one of India s leading credit rating agencies. IMaCS operated as an independent division of ICRA till March , when it was de-merged from ICRA and became a standalone company in its present form. About Group ICRA Launched in 1991, ICRA has been set up by a number of prominent Indian financial institutions, banks, and insurance companies. In September 2001, Moody s Investment Company India (Private) Limited, a 100% subsidiary of Moody s Investors Service, USA, became the single largest shareholder in ICRA. Post a successful IPO in 2007, ICRA is a publicly listed company. ICRA has subsidiaries in Indonesia and Sri Lanka. Group ICRA comprises four businesses, namely, Credit Rating, Management GROUP ICRA Consulting, Information Technology, and Outsourcing, offered by four different companies comprising ICRA Credit Rating Management Consulting IT (Software) BPO and its three subsidiaries, namely, IMaCS, ICRA Techno Analytics Ltd. (ICTEAS) and ICRA Online Limited. ICRA is listed on the National Stock Exchange ICRA Limited ICRA Management Consulting Services Limited ICRA Techno Analytics Ltd. ICRA Online Ltd. and the Bombay Stock Exchange in Mumbai, India. IMaCS Virtus Global Partners, Inc. ICRA Techno Analytics Inc. The main driver for IMaCS growth has been a growing need for unbiased professional views on adopting best business practices arising from economic deregulation, deepening of international trade and integration, increasing uncertainty in business due to advancement of technology and rising volatility in the market place, and the compelling need to be globally competitive. IMaCS began as a firm operating in India and has since worked in several parts of the world on its own 1 Under the name ICRA Advisory Services 2

3 and through strategic partners. Our clientele includes banks & financial service companies, private corporates (manufacturing and service organizations), governments, government-owned organizations, financial investors and fund managers, regulators, and multilateral agencies. Our New York based subsidiary, IMaCS Virtus Global Partners, Inc. ( offers Strategy and Transactional Advisory services to companies in North America and in India seeking to operate in the Indo-American corridor. Through the process of carrying out several assignments over the past 17 years, IMaCS has accumulated considerable analytical and consulting expertise, backed by the following organisational capabilities: An extensive and organised database on several sectors. Knowledge of key factors of success in different projects and program. An ability to research emerging global trends, both in specific countries as well as in different sectors, based on primary and secondary data. Performance benchmarking Quantitative and financial modelling Ability to identify the various types of risks and suggest appropriate strategies to mitigate the same Ability to work in different geographies on its own and through affiliate partners IMaCS Business Groups and Practice Areas IMaCS has six practice areas grouped under Strategy, Risk Management, Process Consulting, Transaction Advisory, Policy Advisory, and Capacity Building. The different business groups and practice areas within IMaCS form our matrix of service offerings. Multi-disciplinary teams are used on most assignments. The diversity of experience in IMaCS teams helps it to adopt a creative and cross-functional approach to problem solving, which has not only been very successful in practice, but has also been well appreciated by all our clients Strategy Risk Management Process Consulting Transaction Advisory Policy & Regulation Capacity Building Enhancing Competitiveness / Market Assessment / Product development/ Market Intelligence / Profit improvement Credit Risk / Market Risk/ Operational Risk / Enterprise wide Risk management/ Risk Analytics/ Risk Software Cost reduction / Process re-engineering / Organisation design / / Supply Chain Management / Outsourcing M&A / Due diligence / Project Advisory / Bid advisory / Financial restructuring Policy Advisory / Regulatory Economics / PPP Models/ Governance Investment Institutional Programme Sustainable Monitoring Climate Strengthening Management Development & Evaluation Most consultants at IMaCS have advanced academic degrees and also have experience in reputed firms before joining IMaCS. Both fresh graduates and experienced consultants undergo formal and informal training in IMaCS to deliver high quality solutions to clients. IMaCS clients also have the benefit of the considerable organisational expertise that IMaCS has built up over the past 15 years. 3

4 Services offered by IMaCS IMaCS has executed assignments in several sectors of the Indian economy and its consulting activities are organised along five major functional groups: 1. The Banking and Finance Group focuses on assisting banks and financial service companies in the areas of Strategy, Risk management, Process improvement and Transaction advisory. Our services span the areas of M&A, purchase/sale of portfolios, setting up risk management systems across credit/ market/ operations, strategic and business planning, organisation design and restructuring, developing credit and portfolio risk models, derivatives strategy, corporate debt restructuring, developing risk control processes and profit improvement studies. Besides providing consulting services to banks, IMaCS also develops and installs software programmes in the areas of risk management and workflow automation related to credit management. IMaCS also designs and conducts a variety of training programmes in risk management for banks and other financial service organisations. 2. The Corporate Advisory Group focuses on enhancing the competitiveness of clients across the different constituents of its value chain. Its work has spanned multiple sectors and industries, with strong expertise and experience in certain sectors such as, metals, automotive and engineering, healthcare, hospitality and tourism, textile, retail, consumer goods and food processing. Specific areas of consulting include competitiveness studies at firm/industry/region/country levels, shareholder value maximisation, business process design and improvement, entry strategies and product positioning, enterprise-wide risk management, evaluation of acquisition or divestiture plans, and transaction assistance (e.g. partner search, valuation, due diligence, structuring deals and business and financial restructuring). 3. The Infrastructure Group focuses on policy and transactional projects in the areas of sector reform and restructuring, creating public private partnerships, and building capacity in government and public sector institutions. At the policy level, IMaCS seeks to serve regulators, governments and multilateral agencies in formulating or refining sector-wide policy issues such as licensing, regulation, business rules, competition, tariffs, service level obligations, and subsidies. At a transaction level, the Group has accumulated substantial experience and skills in handling engagements related to regulatory representations, financial modeling, structuring payment and security mechanisms, designing project contracts and concession agreements, and providing assistance in financial closure for various infrastructure projects. 4. The Energy Group focuses on strategy, policy and transactional issues related to the Electricity, Renewable energy, and the Oil and Gas sectors. The Group has garnered significant expertise in the restructuring and reform process in the electricity sector by having been associated with multiple entities such as the government, regulators, state owned and private power companies since the 4

5 beginning of the reforms process in the sector. Our services in the energy domain encompass regulatory assistance to utilities and regulatory commissions, restructuring and privatization, formulating strategies and business plans for utilities, conducting market assessment studies for investors/utilities, providing assistance to developers/project appraisal/project risk assessment, and investment and transaction assistance. IMaCS has also assisted Indian and international business groups in formulating strategies to enter the energy business. IMaCS has completed several projects in the renewable sector covering diverse technologies such as wind, hydro, co-generation, and biomass, and has also worked on policy level assignments. 5. IMaCS Development Consulting Group has emerged out of IMaCS experience in working with profit-seeking organisations and investors that the principles and practices that commercial enterprises follow are just as applicable for organizations working in the not-for-profit, government and social development. The significant difference between for-profit and not-for-profit organizations is essentially in how they are funded and/or in the expectations of returns of their respective sponsors. As far as operations or efficiency is concerned, there should not be too much difference between the ways they work, if they are to be successful. The quest for strategic clarity, operating efficiency, and financial sustainability remain the top priorities for senior management of all kinds of organizations, spanning from profit-seeking enterprises to not-for-profit organizations in the development sector. IMaCS works with governments at various levels national, state or local government - in a bid to help them become more effective in achieving their objectives. Our clients include Government institutions at central, state and local levels, bilateral and multilateral aid agencies in India and overseas. 5

6 IMaCS Consulting Services in the Corporate Advisory Group Our Corporate Advisory practice focuses on enhancing client competitiveness in all areas of operation. We focus on how to improve a firm's competitiveness across its value chain for different industry sectors such as manufacturing and services, as well as capacity building initiatives for the government and government-owned organisations. Our service offerings are grouped across the functions of Strategy, Operations Improvement, and Corporate Finance. Our clients include large and medium-size corporates, family-run businesses, SME units, Central and State Government, Government-owned undertakings, and national/state-level industry associations. With inhouse consultants and partnerships with some leading industry associations like Society of Indian Automotive Manufacturers (SIAM), Automotive Component Manufacturers Association (ACMA), Confederation of Indian Industry (CII) and India Brand Equity Foundation (IBEF), the Corporate Advisory Group of IMaCS enjoys the trust of a wide repertoire of clients. While our work has spanned multiple sectors of the economy, we have built up expertise and are more active in certain sectors such as Retail and Consumer Markets, Automotive & Engineering, Metals & Mining, Education & Skill Development, Tourism & Hospitality, Healthcare & Life Sciences, and Media & Entertainment. IMaCS experience and expertise in Corporate Finance Over the last decade, there have been four big drivers of change in the financial strategies of Indian businesses. They are: (1) The implementation of financial sector reforms has compelled banks and financial institutions to revamp their lending strategies and risk management systems, forcing borrowers to examine their financial strategies. (2) The increasing liberalisation of Indian financial markets and their 6

7 progressive integration with global financial markets has changed the absolute and relative cost of equity and debt funds, throwing up new financing options for Indian businesses. (3) Thinning operating margins in the face of increasing competition has forced Indian companies to undertake financial restructuring to pare down financial costs (4) Increasing demand for better disclosure and corporate governance in Indian businesses from equity shareholders has forced Indian businesses to focus sharply on financial structure and strategy Going forward, IMaCS expects that the reforms in the Indian banking sector and capital markets will continue, and there will be added pressure on Indian businesses due to lowering of tariff and non-tariff barriers. Global competitiveness will be the key to success for most organisations, and this will necessitate consolidation, business restructuring, financial restructuring, and adoption of best practices. The continuous reforms in the banking and capital markets sector will enable innovative financial products, increased M&A activity, and in general, provide for more efficient allocation of finances in the Indian financial markets. IMaCS offers consulting services in the area of Corporate Finance, as follows: i. Mergers & Acquisitions ii. Financial Restructuring IMaCS offerings in Mergers & Acquisitions IMaCS offers assistance to organisations in the manufacturing, services, and banking sectors in their initiatives to acquire or sell businesses. Every organisation, depending on the capabilities and circumstances, seeks a certain level of external assistance for an M&A exercise, whether for acquisition or sell-off. Other than providing arranging funds by way of a public issue (equity and debt), IMaCS provides all other advisory services that are necessary to consummate an M&A transaction. Some of the areas of assistance are: Advising organisations on strategy prior to an acquisition (this will typically include finalisation of an acquisition strategy, funding strategies, and other issues such as organisational implications, regulatory constraints, and legal requirements); Assisting organisations implement an acquisition (short-listing candidates for acquisition, due diligence, valuation, assistance in negotiation, deal closure, and post-acquisition integration); Advising potential buyers on bidding strategies (e.g. during privatisation or M&A); Advising organisations implement a sale of businesses / divisions (assistance in negotiations with buyers, facilitate due diligence and valuation, and deal closure); Joint venture structuring (partner search, risk assessment, facilitating due diligence, and finalisation of agreement). 7

8 IMaCS service offerings in Financial Restructuring As part of this, IMaCS offers consulting under two areas: Turnaround / Restructuring strategies for financially distressed organisations IMaCS works with Corporates and banks and financial institutions in restructuring financially distressed organisations, with a view to turning them around and making them viable. The strengths of IMaCS in this area principally arise from its ability to analyse the causes for sickness or distress, arrive at appropriate benchmarks for recovery, and work out the organisational imperatives for framing a turnaround plan that addresses the legitimate demands of various stakeholders. The assistance of IMaCS is valued by the different stakeholders in such assignments, primarily due to IMaCS independent and non-partisan standing, and our objective and transparent approach to such exercises. The underlying reasons for engaging our services could be problems plaguing the industry as a whole or borrower specific issues necessitating a recast of the financial structure of the company. The objective of the financial structuring exercise would typically be to ensure a transparent and reasonable distribution of the cost of nursing the company back to health amongst the various stakeholders, leading to a more viable entity that can meet its obligations. Many a time, IMaCS is appointed by apex government agencies or industry associations (besides lenders and corporate entities) for such turnaround / restructuring exercises. Strategies for maximising shareholder value IMaCS is engaged by many organisations to assist in formulating financial strategies that improve profits and / or reduce business and financial risks, thereby contributing to value creation. Such assignments are driven by companies that are committed to maximising the wealth of their shareholders. In the following paragraphs, we highlight some of the assignments that IMaCS has undertaken in the area of Corporate Finance: 8

9 Select Assignments in M&A Advisory 1. A company involved in operating lease of cars: Valuation, capital structuring and fund raising IMaCS has been engaged by a financial services company in India offering operating lease of cars for valuation, capital structuring and raising funds for future expansion. IMaCS assessed the business of the company and projected its future cash-flows to arrive at an optimal capital structure and equity value of the company. IMaCS is currently in the process of assisting the company in raising funds for future expansion. 2. A company involved in content sharing and social networking on mobile platform: Valuation and fund-raising IMaCS has been engaged by a media & technology company in India offering a platform for sharing premium and user-generated content on mobile platform along with social networking on mobile. IMaCS assessed the business of the company and projected its future cash-flows to arrive at the equity value of the company. IMaCS is currently in the process of assisting the company in raising funds for commercial launch and future expansion. 3. A company involved in manufacturing pigments: Due diligence, valuation and assistance in acquisition of a target company. IMaCS was engaged by one of the largest manufacturers and exporters of pigment Green-7 in India for assistance in acquiring a competitor. IMaCS assessed the business of the company, projected its future cash-flows to arrive at the equity value of the company. IMaCS also projected the cash-flows of the client after the acquisition and compared it with Greenfield expansion of similar capacity to arrive at the walkaway price for the transaction. 4. A large engineering conglomerate, with business interests in sectors such as Engineering and Construction (E&C) and cement: Evaluation of strategic options for corporate restructuring. The client contemplated de-merger of its cement division with the aim of enhancing shareholder value. It received proposals from financial investors as well as an existing shareholder of the company. IMaCS was mandated to evaluate the two proposals from the point of view of selecting the proposal that would maximise shareholder value. IMaCS analysed the E&C business, the cement business and other areas of operation of the company with a view to evaluate current and likely demand-supply conditions, assess regulations and other drivers impacting the businesses and highlight key competitive attributes and critical success factors. This was followed by an enterprise level analysis to evaluate the key drivers of 9

10 profitability and understand the company s positioning vis-à-vis its key competitors. This was followed by an evaluation of the two proposals, principally with respect to the impact of the two proposals on the structure of and prospects for the company and implications of each proposal on the shareholder value of the client company and / or its successor entities due to changes in the competitive abilities of the E&C and cement businesses under the two options. The study also focussed on the ownership rights of the companies after the completion of the transaction, the conditions for transfer of shares, dilution etc. 5. One of the largest manufacturers of salt in India in the Public Sector: Assistance in Financial feasibility, capital structuring, partner selection and transaction closure for setting up of solution mining, salt and caustic soda plants on Joint Venture basis. This study was mandated by one of the Public Sector Undertakings engaged in the manufacture of a variety of salts. The company also owned rock salt mines in northern India. The company was considering a proposal for setting up of a JV for solution mining (hitherto not practiced in India), salt production and caustic soda production. IMaCS was appointed by the company to assist in valuation of mining assets, financial assessment of the project, deciding on capital structure, selection of JV partner and assistance in transaction closure for setting up of the proposed project on Joint Venture (JV) basis. IMaCS assessed the overview of the salt and chlor-alkali industry in India and estimated the market size of the same. We carried out the financial feasibility study of the proposed project in terms of three separate business units viz. solution mining, salt production and caustic soda production on standalone basis as well as combination of these units. Considering key financial metrics such as profitability, IRR, ROCE and debt servicing capability, we recommended suitable capital structure to enhance value for both the firm and JV partner. We also estimated the equity stake of the company and the JV partner in the proposed project. 6. A large discount retail chain in India: Assessing the viability of the discount retail chain s business plan. The client, a discount retail chain in India, suffered huge losses and was forced to close down its operations. The steering group of a consortium of banks was working on a package that would facilitate the revival of the Company under CDR. As part of this exercise there was a need for an independent review of the value-based retail (discount retail) market towards arriving at an assessment of the viability of Company s proposed business plan. IMaCS assessed economics of the discount retail model in India and then assessed the viability of the business plan prepared by the retail chain company and assessed the potential risks and mitigation factors for the successful re-launch of the discount retail stores by the company. 10

11 7. A large real estate developer in India: Assisted in bidding for a prestigious theme based real estate development project in Navi Mumbai. IMaCS was engaged by one of the large real estate players in India to assist in bidding for a prestigious theme based real estate development project encompassing around 100 acre of land in Navi Mumbai. Based on an extensive study of the world class theme based developments across the globe, IMaCS suggested a unique concept of Centre of Innovation and Excellence moulded in Indian context. The proposed real estate development, focussing at knowledge driven innovation and excellence, included centres for advanced education and continuous learning, research and development centre, a tertiary care hospital, a 5-starbusiness hotel, a convention centre and development of residential and commercial real estate. IMaCS carried out detailed market assessment for each of the components of the proposed components and conducted an assessment of financial viability of the proposed development. IMaCS also assisted the real estate developer in presenting the concept to the technical evaluation committee (of the government agency) and achieved highest technical score amongst the three bidders. 8. A real estate developer in India: Independent assessment of their proposed high end real estate development project in Bangalore. IMaCS was engaged by one of the real estate developers for conducting an independent assessment of two of their proposed real estate developments - high-end residential development and a township in Bangalore. The high-end residential development included premium quality luxury apartments with 3,4,5,6 bedrooms, ample car parking facility, plush swimming pool and club house with developed area of around 0.5 million square feet while the township project encompassing residential, commercial, retail, hospitality, education etc. in Bangalore involving development of 30 million square feet of area. IMaCS carried out an extensive market assessment of the residential market in Bangalore stressing on premium segment. On the basis of the market assessment and in consultation with real estate experts, IMaCS has prepared separate financial projections for the proposed real estate and township development projects. IMaCS has also suggested suitable funding structure and prepared a detailed project feasibility report to be shared with potential lenders. 11

12 9. A large private player in India: Market Assessment and Financial feasibility for setting up a world class amusement park (Theme park, water park, Retail Dining & Entertainment area and hotel project) The client was conceptualizing a state of the art theme park and water park in India spread across 500 acres of land. The project also included a 4-star hotel and Retail, Dining and Entertainment area for development. In order to raise funding for the project, the client engaged IMaCS to conduct an Independent appraisal of the proposed amusement park project and to prepare a Detailed Project Report (market assessment and financial assessment) to be shared with potential investors. The scope of the project did not include preparation of Technical design and / or drawings for the project. IMaCS conducted a detailed assessment of the market (Indian theme parks and comparable International theme parks) alongwith the assessment of the population in primary and secondary catchment areas to determine the potential visitor flow to the parks. IMaCS conducted the project appraisal of the project, sensitivity analysis of the key financial parameters and also recommended the capital structure for the project. The project is expected to get operationalised after 3-4 years. 10. A company engaged in the manufacture and sale of equipment in the packaging industry: Valuation and fund-raising. IMaCS has been engaged by a Private Limited Company engaged in the manufacture and sale of equipment in the packaging industry, and has pioneered High Density Polyethylene (HDPE) / Polypropylene (PP) woven application technology in India and offers complete turnkey solutions for the packaging industry. The company has been in operation for the past two decades and has installed around 5000 machines for clients across India and other parts of the world. The company has successfully exported its machines to countries in SAARC region, Middle East, South East Asia and Africa. IMaCS assessed the business of the company and projected its future cash-flows to arrive at the equity value of the company. IMaCS is currently in the process of assisting the company in raising funds for future expansion and growth. 11. One of the largest PSUs in India in Metals and Mining industry: Valuation and due diligence of prospective JV partner and its affiliates in Indonesia. The client had mandated IMaCS to carry out a legal and accounting due-diligence as well as valuation of a prospective JV partner in Indonesia. As a part of this exercise, IMaCS has carried out the accounting due diligence, business due diligence, legal due-diligence and business valuation of the prospective partner s projects in Indonesia. As part of this exercise, IMaCS evaluated the corporate structure of the prospective partner which included more than 15 entities (holding companies as well as their subsidiaries). 12

13 12. A company involved in development and implementation of electronic patient medical record systems: Valuation and fund-raising. IMaCS has been engaged by a Private Limited Company engaged in the business of implementing electronic patient medical record systems for hospitals, public healthcare delivery systems, and maintaining health portals for and virtual consultation platform for individuals. The company has launched two health portals for chronic diseases and implemented electronic medical record (EMR) systems at few leading hospitals in South India. It is keen to induct a strategic equity investor to effectively address its capital requirements for future expansion into newer geographies and development of new products / applications. IMaCS assessed the business of the company and projected its future cash-flows to arrive at the equity value of the company. IMaCS is currently in the process of assisting the company in raising funds for future expansion and growth. 13. A company engaged in the business of construction of roads, layouts, commercial and industrial buildings and other infrastructure: Valuation and fund-raising. IMaCS had been mandated by an ISO 9001:2000 Company engaged in the business of construction of roads, layouts, commercial and industrial buildings and other infrastructure. The company, had executed several construction projects in South India for reputed clients and was keen to induct a strategic equity investor to effectively address its capital requirements to ensure timely execution of its current and future order book. IMaCS assessed the business of the company and projected its future cash-flows to arrive at the equity value of the company. IMaCS also assisted the company in raising funds by contacting several Private Equity and strategic investors. However, the deal could not be concluded because of a lack of consensus on the valuation among investors and the promoters. 14. One of the leading shipbuilders in India in the Public Sector: Assistance in setting up of Design Centre on Joint Venture basis in shipping sector. This study was mandated by one of the leading shipbuilders in India in the Public Sector. The shipyard builds a range of ships, such as modern warships, sophisticated commercial vessels, small harbor craft, and fast patrol vessels. It is among the few shipyards in India with its own engineering and engine manufacturing divisions. The shipbuilder was considering a proposal for setting up of a JV in design related activities to be formed with participation of renowned Indian and international shipyards/it-enabled design organisations. IMaCS was appointed by the shipbuilder to assist in setting up of the proposed Design Centre on Joint Venture (JV) basis in respect of Information Technology (IT)-enabled ship design, and potentially other engineering design services. 13

14 We presented an overview of the shipbuilding industry in India and the world, including naval shipbuilding and commercial shipbuilding. We also estimated the market size for shipbuilding and ship design services both in India and abroad. Further, various factors impacting the competitiveness of the shipbuilder s design team and areas where it was required to partner with a suitable entity were also factored in the feasibility report. As a part of this study, IMaCS assessed the outsourcing potential in ship design services to develop an industry level demand estimate. We also estimated the share of the JV in this market, the estimated sources of revenue from Inida and abroad, and sized the JV in terms of investments required, manpower and infrastructure requirements, including hardware and software. IMaCS also carried out the financial feasibility study of the JV considering key financial metrics such as profitability, IRR, ROCE. Subsequently, IMaCS assisted the client in evaluating the JV partners to select the most preferred partner. 15. Valuation of CoOptions Ltd stae in a proposed Joint Venture between UTI & CoOptions: Valuation of technology firm in the financial services area in a proposed Joint Venture between one of India s largest financial institutions & the company. IMaCS was appointed by one of India s largest financial institutions to evaluate the option of entering into a Joint Venture with technology firm in the financial services area to cater to the huge rural financial services market. IMaCS assessed the partner, conducted a valuation and advised on the conditions to be incorporated in the Joint Venture agreement from a business and shareholding perspectives. 16. A leading North American Bank: Advisory for acquisition of a NBFC in the retail finance area. We advised a leading North American Bank in the acquisition of a Non-Banking Finance company in the retail finance area. The study included the valuation of the target company and assistance to the Bank in negotiating the deal with the target. 17. One of India s largest Government Sponsored Financial Institutions: Valuation and divestment of equity stake in more than 60 companies. IMaCS was appointed to assist in the valuation exercises for over 60 companies in diverse sectors and facilitate the divestment process by seeking bidders for buying stake & assist in closing the deals. IMaCS assisted in transactions of over Rs 18 crores during the course of the mandate. 14

15 18. One of India s leading Venture Capital Firms: Valuation and divestment of equity stake in more than 45 companies. IMaCS was appointed to assist in the valuation exercises for over 45 companies in diverse sectors and facilitate the divestment process by seeking bidders for buying stake & assist in closing the deals. 19. A foreign player in the engineering design market: Identification of a takeover target for an engineering company. The client, a foreign player in the engineering design market, wished to takeover companies in the Pune regions and mandated IMaCS in identifying appropriate companies in which they could acquire a stake in. IMaCS, through a mix of primary and secondary search prepared an initial shortlist of companies that the client could evaluate based. Based on feedback from the client, IMaCS further research a shortlisted list of companies and established initial discussions with the management of the target companies for a sale of stake. 20. One of the largest media houses in India: Valuation and assistance in acquisition of one of the largest gaming companies in India. IMaCS was engaged by one of the largest media and entertainment companies in India in India for valuation and assistance in acquisition of a large Indian gaming company. The company was involved in mobile gaming as well as online gaming. IMaCS assessed the business of the company and projected its future cash-flows to arrive at the equity value of the company. 21. A large diversified company in India: Valuation and business strategy of one of a startup gaming company in India. IMaCS was engaged by a large diversified company in India for the valuation and assistance in business strategy of a start up Indian gaming company. The company was evaluating gaming business on mobile, internet and set-top boxes. IMaCS assessed the business of the company and projected its future cashflows to arrive at the equity value of the company. IMaCS also assisted in finalizing the business plan of the company. 22. A large global private equity fund: Due-diligence, Financial modeling and Market Assessment for a 1500 bed multi-specialty tertiary-care hospital in Mumbai. The client, a leading US based Private Equity was interested acquiring an equity stake in a 1500 bed hospital project in Mumbai and sought IMaCS assistance in conducting due-diligence of the project. The study involved conducting market assessment of tertiary-care hospital beds in Mumbai, conducting an 15

16 assessment of technical, cost and compliance requirements for the hospital, conducting a due-diligence on the financials and analysing the major risks associated with the project. 23. A PSU manufacturing heavy plates and vessels: Valuation and due diligence of an engineering firm to be taken over by a large PSU engineering company. The client had mandated IMaCS to carry out a valuation of firm on a standalone basis and as a going concern. As a part of this exercise, IMaCS has carried out the accounting due diligence, business due diligence and business valuation of the engineering firm. The backdrop to the study is the fact that the net worth of the firm had been eroded as a result of successive years of losses and the Government of India (GOI) was evaluating various options to revive the company. The proposal of taking over the firm by a PSU was being examined by GOI and an in-principle approval had been provided for the same. The GOI wished that the valuation of the firm should be carried out based on application of prudent accounting principles. The accounting due diligence carried out by IMaCS indicated the need to restate the assets, liabilities and the contingent liabilities of the company based on more accurate assessment of the same. 24. A metal container manufacturer: Identifying a strategic investor and assistance in financial closure. We have been retained by a metal container manufacturer to assist them in finding a strategic partner and structuring the relationship. The exercise involves identifying a strategic investor and, drafting the shareholders agreement and finalising the business and commercial conditions for the company after the induction of the partner. 25. A leading international firm: Financial Due Diligence of Power Project in Karnataka. A Strategic Investor, interested in acquiring a stake in 1015 MW Nagarjuna Thermal Power Project, Mangalore, appointed IMaCS to carry out a financial and contract due diligence, conduct a valuation and advise on the bidding strategy of the Power Project. The study entailed estimation of the Demand-Supply scenario, assessment of the Project cost, due diligence of the Project Documents/Contracts, development of the Financial Model for assessment of project viability and business valuation, identification of risks and mitigation strategy, etc. to advising the investor on the bid value. 26. A foreign developer: Valuation of a state owned public sector Utility firm. A foreign developer interested in acquiring a stake in a State Owned Public Sector Utility appointed IMaCS as an advisor to carry out a valuation of the Utility firm. IMaCS was mandated to estimate the value of the equity of the Utility, and the possible risk factors, which could affect the valuation. IMaCS adopted a two - phased approach to the exercise, wherein the first phase involved risk diagnosis and the second phase focussed on financial valuation. The risk audit involved a detailed analysis of the Utility's 16

17 markets, its financial and operational performance, future plans and ongoing projects and the Utility's inter-face with the Regulators. IMaCS identified the prevalent risk factors and the possible options of mitigating these risks. In the second phase, IMaCS estimated the market potential, projected the likely financial performance, the expected expenditure on the ongoing Projects and annual cash flows. 27. An international Power Generating Company: Financial assessment and valuation of a Power Generation Company. An international Power Generating Company appointed IMaCS to carry out a financial assessment and valuation of a Power Generation Company. The risk audit involved a detailed analysis of the Utility's markets, its financial and operational performance, ongoing Projects, plans, and the Utility's interface with Regulators. IMaCS provided a range for the value of the Company, and identified the key parameters that could potentially affect the valuation. 28. An equity investor: Formulation of an Investment Strategy for an equity investor. IMaCS was involved with the formulation of an Investment Strategy for an equity investor in the power sector. The equity investor intended to invest up to the specified corpus of funds in various projects to achieve its investment objectives. The study entailed estimation of the Demand-Supply scenario in various States, strategy formulation, and identification of specific investment opportunities. 29. A large financial institution: Due diligence and valuation exercise on two housing finance companies (2002). We have assisted a large financial institution, which had identified Housing Finance as a possible growth area. The financial institution was keen to acquire a suitable company that had well-developed systems and procedures to sustain strong growth. IMaCS undertook a due diligence and valuation exercise on two housing finance companies, one based in Western India and the other based in Northern India, to provide a fair price for outright acquisition. 30. A multinational conglomerate: Valuation of two engineering companies in India. IMaCS assisted a multinational conglomerate, which was keen to acquire companies in the engineering sector in India. We carried out an economic valuation of two engineering companies belonging to a leading business group and recommended appropriate prices for acquiring a controlling stake in the companies. 17

18 31. Disinvestment Commission: Valuation and disinvestment strategy. We had been appointed as advisor by the Disinvestment Commission to conduct valuation and disinvestment strategy for public sector undertakings in diverse sectors including oil and gas, fertiliser, transportation, food-processing, aluminium, electronics and hotels. IMaCS estimated the value of government s shareholding in these enterprises, besides recommending restructuring strategies in some of the companies to maximise the value for the Government of India. In all cases, IMaCS made recommendations on the disinvestment strategies that reflected the guidelines formulated by Government of India, and the chances for the organisations' success going forward. IMaCS has worked in over 30 such cases for Government of India. 32. A state government: Disinvestment of MAFCO. IMaCS had been appointed by a State Government to assist in the disinvestment of a prominent state level public sector undertaking. The company to be disinvested has several revenue streams from related and unrelated businesses, and is likely to be the model case for the state government's disinvestment programme. IMaCS role involved finalisation of the disinvestment strategy, recommending restructuring options prior to disinvestment, and assisting the state government in completing the transaction. 33. A medium-sized logistics company in India: Advisory for acquisition. A medium-sized logistics company that was seeking to get acquired by an international logistics leader appointed IMaCS as an advisor. The client needed assistance in the assessing if the proposition from the counter-party was financially in his interest, and how returns from the transaction could be maximised. 34. A large diversified business house: Assessment of Cement Business of a large diversified business house. A large industrial house in diverse businesses such as cement, textiles, automotive, and other commodities, was undergoing a business restructuring exercise. IMaCS was appointed to analyse the risks of the cement business, and recommend financial options to facilitate a spin-off of the business to raise money for the group; 35. A large telecom player: Independent Appraisal of the Basic Services Project of a leading telecom player. A large business house with interests in several sectors appointed IMaCS to conduct a valuation of a few of its cell-phone circles a prelude to an outright sale. There were several complications in the case arising from disputes over validity of licenses, evolving regulations in the telecom sector, and pending litigation; 18

19 36. A large company in the oil and gas sector in India: Investment Valuation study of an oil refinery. A large company in the oil and gas sector in India appointed IMaCS to carry out a due diligence and valuation of a potential investment in an oil refinery. The client needed clarity on the nature and quantum of risks the investment involved, and whether it fitted in with its investment policies; 37. A Central Public Sector Undertaking: Valuation of a subsidiary in the electronics and instrumentation sector as part of its divestment strategy. A Central Public Sector Undertaking mandated IMaCS to conduct a valuation of its subsidiary, a Mini Navratna in the electronics and instrumentation sector as part of its divestment strategy. We conducted a detailed valuation of the company and recommended a range of values to enable the client negotiate with prospective buyers. We also suggested the various divestment options and its impact on the valuation. 38. An Indian private player: Due-Diligence & Valuation Assistance in making out the financial bid of ITDC properties. IMaCS was appointed by an organisation to assist it in submitting a bid for acquisition of two hotel properties that had come up for sale, consequent to a disinvestment programme of Government of India. The hotels were in different business segments and in different cities of northern India, and represented a good challenge to economic valuation. The bidding exercise was a competitive process, and in the end while the client had submitted good bids, was not willing to pay the additional premium for outright acquisition that some others in the fray were prepared to fork out. 39. An investor: Valuation of two pharmaceutical companies. The client, an investor in two pharmaceutical companies in the business of bulk drugs, mandated IMaCS to carry out a business valuation of the two companies. This served as a vital input for the corporate restructuring initiatives being carried out by the two promoter families in these companies. Select assignments in the area of Financial Restructuring 40. An eminent public sector engineering enterprise: Developing the restructuring plan to turnaround the watch making subsidiary. The company, an eminent public sector engineering enterprise under the Ministry of Heavy Industry and Public Enterprises, is also one of India s most recognized brands. One of the subsidiaries, once the premier Indian watch manufacturer, had gone into losses over the past decade and had approached the 19

20 Ministry for financial assistance towards revival. The Ministry, as a key stakeholder, wanted an independent assessment of the Indian watch market to first verify the possibility of revival of the unit. Based on the directions of the key stakeholder, IMaCS was mandated by the company s subsidiary to independently validate their assumptions for the proposed restructuring plan, assess the market for watches and accordingly develop a comprehensive restructuring plan with focus on induction of a private sector partner. As part of this exercise, IMaCS assessed the domestic market for watches, current business trends both international and national and further, the salience of the client s brand among urban and rural consumers pan-india. Having determined demand for the client s products, IMaCS then assessed the current state of operations of the watch making subsidiary from the perspective of business drivers (product development capabilities, marketing infrastructure) and business enablers (manufacturing/operations capabilities, technology and human resources). IMaCS determined the feasibility of current operations and recommended suitable restructuring focusing on manufacturing/outsourcing strategy, manpower reorganization, skill enhancement and capacity building especially in the areas of marketing. A suitable business plan was then prepared considering the existing and potential capabilities. IMaCS undertook the financial feasibility of the proposed business plan and recommended the capital restructuring measures to be undertaken towards turnaround of the company. The need for strategic business alliance towards improving long term profitability of the existing watch business as well as possible diversification options were also analyzed, and suitable strategic measures incorporated into the business plan. We subsequently represented the client at meetings with the Ministry of Heavy Industry and Public Enterprises. 41. A public sector enterprise: Developing the restructuring plan to turnaround a sick PSE in pharmaceutical sector. A loss making public sector enterprise, a subsidiary of one of the largest central pharmaceuticals PSE in India, had been asked by the Honorable High Court of Orissa to submit a restructuring plan. IMaCS was mandated by the parent company to independently validate their assumptions for the proposed restructuring plan and accordingly draft a plan based on the guidelines of Board for Restructuring of Public Sector Enterprises (BRPSE) as applicable for PSEs. IMaCS assessed the current state of operations of the company, analyzing the growth trends in the industry and then developing a business plan considering the existing and potential capabilities of the client. IMaCS undertook the financial feasibility of the proposed business plan and recommended the capital restructuring measures and reliefs and concessions required from various stakeholders (Orissa Government, Financial Institutions and the Parent PSU) to turn around the company. 20

21 42. A public sector enterprise: Developing the restructuring plan to turnaround a sick unit in the Food Processing sector. The client, previously a multi-business corporation under the Ministry of Food and Civil Supplies, pioneered the manufacture of processed cereal (breakfast food, extruded meal supplements etc) in India. Now a sick public sector enterprise solely engaged in manufacture of breakfast foods, it had been referred to the Board for Restructuring of Public Sector Enterprises (BRPSE) for restructuring. The Board had allowed the submission of a restructuring plan developed by an independent agency. As a key stakeholder, the Government of India also wanted an assessment of possible induction of a private partner under a PPP business model. IMaCS assessed the current state of operations of the breakfast foods unit, analyzed the growth trends in the breakfast cereal industry and then developed a business plan considering the existing and potential capabilities of the client. IMaCS undertook the financial feasibility of the proposed business plan and recommended the capital restructuring measures and reliefs and concessions required from the Government as well as proposed role of a private partner. As part of the mandate, we represented the client at meetings with the BRPSE. 43. A large manufacturing company in the tinplate industry: Capital structuring. Financial restructuring for a large manufacturing company in the tinplate industry. The entity was part of one of India's largest business houses, and had undertaken an expansion-cum-modernisation project. The management had put in place a strategy to reduce operational inefficiencies, and sought assistance in negotiating with lenders an appropriate financial restructuring plan. 44. A 100-year old diversified company: Business Restructuring and Organisational Restructuring. Assessing the rehabilitation plan proposed by a 100-year-old company in diverse businesses such as, Electrical products, office equipment, and power transmission equipment. The company was in acute financial distress due to some loss-making businesses, while some businesses had good prospects. The company also had substantial under-valued assets, which it was seeking to unlock from its balance sheet. The company at the behest of banks and lending institutions appointed IMaCS for an independent assessment of its rehabilitation plan. 45. A large tyre manufacturing company: Revival Strategy of the company. Assessing the feasibility of a turnaround plan for a large tyre manufacturing that was seeking to present its case for rehabilitation 21