MoneyTree TM India Report Q4 2016

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www.pwc.com/globalmoneytree www.pwc.in PricewaterhouseCoopers India Pvt Ltd MoneyTree TM India Report Technology Institute This special report provides summary results of Q4 15, Q3 16, and Q4 16.

Table of contents 1. Overview 3 2. Analysis of PE investments 5 Total equity investments in PE-backed companies 5 Investments by industry 6 Investments by stage of development 8 Investments by region 9 Top 20 PE deals 10 3. Analysis of PE exits 11 Exits by industry 12 Exits by type 13 Top five PE exits 14 4. Active PE firms 15 5. Sector focus IT & ITeS sector 16 Total PE investments 17 Investments by stage of development 18 Investments by region 19 Investments by subsector 20 PE exits in the sector 21 Definitions 22 PwC MoneyTree India 2

1. Overview The year 2016 witnessed a slight slowdown in private equity (PE) activity, with 17 billion USD worth of investments across 682 deals as compared to 19.8 billion USD across 852 deals in 2015. Technology and e-commerce together accounted for 30% of the PE investments in terms of value and 57% of the deal volume in 2016, with 5.1 billion USD invested across 388 deals. Financial services attracted investments worth 3.1 billion USD across 65 deals a majority of them in the non-banking financial company (NBFC)/microfinance institutions (MFI) space. Other sectors which contributed towards the investment activity were Energy (2 billion USD), mainly driven by an increased interest in the renewables space, Telecom (1.7 billion USD) and Manufacturing (1.2 billion USD). In terms of stage of funding, late stage and buyouts together accounted for 57% of the investment value in 2016, with a combined value of 9.7 billion USD across 121 deals. This was partly attributable to the higher levels of activity from sovereign wealth and pension funds, in particular in the second half of the year. This trend is expected to continue in 2017, with numerous opportunities to support the deleveraging of Indian balance sheets and sector consolidation. Early stage and growth investments amounted to 1 billion USD and 4.2 billion USD, respectively, in 2016. 2016 saw exits worth 7.7 billion USD across 214 deals. In terms of sectors, Manufacturing saw the highest level of exit activity (2.3 billion USD), closely followed by Technology and e-commerce (1.5 billion USD) and Financial services (1.1 billion USD). Over 44% of the exit value came from strategic sales, which could be a precursor to higher corporate buyer activity in 2017. The last quarter of 2016 witnessed the highest activity of the year, with PE investments of around 5 billion USD across 169 deals. Telecom accounted for a third of the investment value this quarter on account of Reliance Communications agreement to sell a majority stake in its tower assets housed under Reliance Infratel to Brookfield Asset Management for 1.7 billion USD. Financial services also witnessed significant activity, with 0.8 billion USD across 16 deals. PE exits saw a 34% decline in value and a 25% decline in volume as compared to the previous quarter. reported 53 exits worth 1.6 billion USD, with manufacturing accounting for 45% of the exit value. Despite decreased PE activity in 2016, investments across 2015 and 2016 broke through the 9 11 billion USD levels of the previous three to four years. Likewise, the exit levels across the two years have been significantly higher than those from previous years. The Goods and Services Act, which is expected to come into play in 2017, will have a positive effect on India s growth trajectory. Growth in businesses is expected to stabilise by mid-2017 after the sudden impact of demonetisation, which went beyond the traditional consumer-centric businesses. Availability of debt financing is likely to be higher in 2017 as banks attempt to increase the size of their loan book, thus increasing the likelihood of challenging non-banking finance channels. The tax and regulatory frameworks for the real estate investment trust (REIT) and infrastructure investment trust (InvIT) regimes have been enabled, and 2017 is likely to see some public offers in the infrastructure space and possibly allow some existing private investors to exit. Global political and economic volatility is likely to impact certain industry segments primarily technology outsourcing and pharmaceuticals. Brexit and other global political changes hinge on nationalist fervour and could have an impact on the flow of funds into India in 2017. The much-anticipated interest rate hikes PwC MoneyTree India 3

in the US will perhaps be the biggest trigger for the flow of funds back to the US and potentially result in further depreciation of emerging market currencies, including the rupee. The momentum towards the end of 2016 is expected to continue in the first few months of 2017, spurred by the tax exemption available on investments made until 31 March 2017 from Mauritius. The activity levels over the rest of the year will depend on how the Indian economy and, specifically, businesses respond to the expected volatility. Sanjeev Krishan Leader, Private Equity and Transaction Services PwC India PwC MoneyTree India 4

2. Analysis of PE investments Total equity investments in PE-backed companies The fourth quarter of 2016 proved to be a stellar one for Indian private equity (PE). Investments touched an annual high of 5.0 billion USD in 169 deals, a 47% increase in value terms and a 17% increase in deal volume compared to Q3 16, which saw investments worth 3.4 billion USD in 144 deals. Further, as compared to Q4 15 (where investments stood at 4.0 billion USD in 199 deals), the value of deals in this quarter has grown by 27%, although volume has declined by 15%. The average deal size for Q4 16 was 29.6 million USD. The Telecom sector seized the top spot this quarter with Reliance Communications agreement to sell the majority stake in its tower assets housed under Reliance Infratel to Brookfield Asset Management for around 1.7 billion USD. The Information technology & IT-enabled services (IT & ITeS) sector dropped to the third rank in Q4 16, with an investment flow of 748 million USD in 96 deals. The sector witnessed a 40% decline compared to Q3 16 and the year-ago period in value terms, although there was a 22% spike in terms of number of deals compared to the previous quarter. The Fast-moving consumer goods (FMCG), Manufacturing and Energy sectors have all seen significant growth in Q4 16. There was a significant rise in buyouts in this quarter with a total of eight deals worth 2.2 billion USD. Overall, PE investments performed well as compared to both the previous quarter and the year-ago period, with late-stage investments worth 1.2 billion USD in 22 deals and growth-stage investments coming in third with 778 million USD in 32 deals. Early-stage investments remained sluggish, seeing 295 million USD in 95 deals. Regionally, Mumbai continued to lead with around 2.6 billion USD, while the National Capital Region (NCR) stayed put at number two with investments worth 932 million USD. Gaining a slight edge over Bengaluru, Chennai climbed to the third spot in this quarter. Total private equity investments (in US$ mn) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 No. of deals 4,577 5,403 2,164 2,578 2,006 2,128 1,790 1,384 101 89 108 99 118 96 140 179 167 109 135 86 81 50 72 103 100 93 128 106 135 138 152 135 147 133 143 122 120 127 125 111 156 135 136 146 225 187 241 199 206 163 144 169 3,825 2,729 2,581 1,749 2,114 2,397 2,198 1,196 814 865 755 Value of deals (in US$ mn) 4,848 4,273 4,026 3,952 3,172 2,314 2,348 2,882 2,565 2,456 1,948 2,165 1,853 1,571 1,384 1,299 6,897 4,667 4,465 4,315 4,999 4,460 4,180 3,951 3,400 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q1 2016 Q2 2016 PwC MoneyTree India 5

Analysis of PE investments Investments by industry Q4 15, Q3 16 and Q4 16 The Telecom sector emerged as a surprise winner in the last quarter of 2016, based purely on the strength of Brookfield s 1.7-billion USD commitment to invest in Reliance Infratel. This single deal helped Telecom race past the front runner for the last two quarters the IT & ITeS sector which slipped to the third position. Although BFSI continued to hold on to the second position in Q4 16, attracting 846 million USD in 16 deals, this marked a 7% and 13% decline as compared to the previous quarter and year-ago period, respectively. The IT & ITeS sector experienced a slump in this quarter, with 96 deals worth just 748 million USD. This was as against the average of around 1.2 billion USD the sector racked up across 79 and 122 deals in Q3 16 and Q4 15, respectively. The FMCG sector displayed an enormous 3,430% jump over the past quarter, with investments worth 71 million USD in two deals. Energy and manufacturing also deserve a special mention, with both showing significant growth and finishing with 601 million USD in 10 deals and 393 million USD in seven deals respectively. Note: Others include Other services, Hotels & resorts, Sports & fitness, Agribusiness and Retail. Investments by industry (in US$ mn) 1,247 Information technology (IT) & IT enabled services 748 1,255 356 Energy 140 601 1 Telecom 0 1,673 973 Banking, financial services & insurance 908 846 27 Manufacturing 88 393 217 Healthcare & life sciences 265 196 Food & beverages Agri-business 80 21 11 103 42 22 57 Engineering & construction 9 271 39 Fast-moving consumer goods (FMCG) 2 71 414 Media & entertainment 26 36 437 Others 382 393 0 500 1,000 1,500 2,000 PwC MoneyTree India 6

Analysis of PE investments BFSI continues to be an area of focus, with ongoing investments every quarter. A growing economy and poor credit expansion by non-performing asset-hit banks, together with government reforms and a push on digital payments, should encourage more deals in 2017 in asset restructuring companies, real estate companies and non-banking financial companies, as well as fintechs. Bharti Gupta Ramola Leader, Financial Services PwC India IT & ITeS companies, backed by a number of e-commerce and Internet-based start-ups, have dominated PE investments over the last several quarters, accounting for a large share of deal volumes and deal values in 2016. This quarter, however, saw a decline in the total investment in the IT & ITeS space on account of issues with the valuation of e-commerce companies and declining margins in IT & ITeS. It is expected that 2017 may experience a boost in investment activity in India. Further, sovereign wealth funds as well as pension funds are increasingly investing in companies directly instead of investing in PE firms, which might boost the growth prospects of the industry. Sandeep Ladda Leader, Technology PwC India PwC MoneyTree India 7

Analysis of PE investments Investments by stage of development Q4 15, Q3 16 and Q4 16 Buyouts were the top source of PE investment inflow in the fourth quarter of the year, with around 2.2 billion USD in eight deals. Late-stage investments came in next, having brought in 1.2 billion USD in 22 deals. In the third position, growth-stage investments attracted 778 million USD in 32 deals, showing a 35% decline in terms of value over the previous quarter. With 346 million USD across 10 deals, PIPE deals bounced back in this quarter, reflecting a 148% jump in value as compared to Q3 16. Investments by stage development (in US$ mn) 367 Early 285 295 1,179 Growth 1,200 778 Late 1,202 1,449 1,605 Pre-IPO 0 0 0 PIPE 139 346 452 Buyout 209 282 2,173 Note: Definitions for the stage of development categories can be found in the definitions section of this report. Growth stage in the above graph includes both growth and growth-pe stages. 138 Other 45 204 0 500 1,000 1,500 2,000 2,500 PwC MoneyTree India 8

Analysis of PE investments Investments by region Q4 15, Q3 16 and Q4 16 Regionally, Mumbai continued to outstrip the other cities by a large margin. With around 2.6 billion USD in 34 deals, the city enjoyed a remarkable 77% increase in investment value over the previous quarter. Coming in second place, NCR received 932 million USD. Chennai and Bengaluru followed with 243 and 210 million USD, respectively, the latter showing a 57% decline in PE investment value as compared to Q3 16. Investments by region (in US$ mn) 754 Bengaluru 487 210 Mumbai 1,441 1,877 2,556 NCR Hyderabad 70 71 74 448 982 932 Chennai 76 184 243 Note: NCR includes Delhi, Gurgaon and Noida. Others 236 726 983 0 500 1,000 1,500 2,000 2,500 3,000 PwC MoneyTree India 9

Analysis of PE investments Top 20 PE deals Q4 16 The top 20 deals comprised 76% of the total deal value in Q4 16. The top five deals together accounted for nearly 51% of the total deal value. The average deal value for this quarter was 29.6 million USD. Top 20 PE deals in Company Industry Investors Amount (US$ mn) Reliance Infratel Telecom Brookfield 1650 SBI Life BFSI KKR, Temasek 265 Sigma Electric Manufacturing Argand Capital Partners 250 Avantha Holdings - Promoter Holding Co Energy KKR 210 TVS Logistics Services Shipping & logistics CDPQ 155 C3 Connect IT & ITeS Everstone, Others 150 Hindustan Clean Energy Energy Farallon Capital, Merrill Lynch 130 ASK Group BFSI Advent International 125 Arvind Fashions Textiles & garments Multiples PE 110 Edelweiss Asset Reconstruction BFSI CDPQ 100 Azure Power Energy CDPQ 75 PNB Housing Finance BFSI General Atlantic 75 TrucksFirst IT & ITeS Warburg Pincus 75 ACME Cleantech Solutions Energy Piramal Enterprises 74 TVS Motors Manufacturing Cartica Capital 71 Vijaya Diagnostic Centre Healthcare & life sciences Kedaara Capital 63.5 Dialhealth Retail Everstone 63 Utkarsh Microfinance BFSI Faering Capital, Arpwood Capital, Others 60 Marico FMCG Cartica Capital 55.6 Freshdesk IT & ITeS Sequoia Capital India, Accel India 55 PwC MoneyTree India 10

3. Analysis of PE exits Total PE exits Q4 16 PE exits in the fourth quarter of 2016 were 34% lower in value than the previous quarter. In all, there were 53 deals worth 1.6 billion USD. In Q3 2016, the total exits were worth around 2.5 billion USD in 71 deals. Further, there was a 7% decline in value from Q4 15 (approximately 1.8 billion USD in 69 deals). With 10 exit deals worth 720 million USD, the Manufacturing sector emerged at the top, followed by Healthcare & life sciences with 333 million USD in seven deals. IT & ITeS, which occupied the number one position in the last quarter, experienced a 94% decline in exit value in this quarter, with exits worth 53 million USD in 10 deals. Public market sale was the most preferred exit route in this quarter, with a total value of 628 million USD in 31 deals. Secondary sale and strategic sale followed almost neck and neck, with total exit values of 488 million USD in eight deals and 483 million USD in 12 deals, respectively. Total PE exits (in US$ mn) 4500 4000 3500 3000 2500 2000 1500 1000 500 0 3,079 Value of deals (in US$ mn) 1,913 1,978 1,514 1,597 1,476 1,820 1,774 1,227 1,324 948 801 789 948 1,080 1,216 1,238 1,644 1,331 973 1,289 1,333 554 706 604 1,005 795 1,122 669 268 277 780 574 607 308 210 370 431 403 448 470 3,977 2,478 2,333 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q1 2016 Q2 2016 No. of deals 21 18 23 32 35 39 38 33 34 15 21 11 17 42 32 31 48 37 44 61 34 33 31 31 46 35 34 37 37 41 22 34 27 61 49 54 68 71 55 59 39 49 63 PwC MoneyTree India 11

Analysis of PE exits Exits by industry Q3 15, Q2 16 and Q3 16 The Manufacturing sector led exits by industry, with 10 deals worth 720 million USD. This was more than three times the exit value of Q3 16 (238 million USD in eight deals) and includes the exit of Blackstone from International Tractors and of Goldman Sachs from Sigma Electric the top two exits in this quarter. Exits by industry (in US$ mn) Telecom 0 0 250 Healthcare & life sciences was the second largest sector for exits. In Q4 16, there were seven exits worth 333 million USD, including the exit of Cipla New Ventures from Chase Pharma. This represents a nearly 50% decline in value compared to the previous quarter, which saw exits worth 653 million USD in 10 deals. In Q4 15, there were a total of 10 exits worth 219 million USD. BFSI came in third with 11 exits worth 264 million USD. While this was a negligible drop compared to the previous quarter (276 million USD in 13 deals), IT & ITeS witnessed a large decline in exits from 879 million USD in 18 deals in Q3 16 to 53 million USD in 10 deals in this quarter. BFSI IT & ITeS Manufacturing Energy 53 36 10 29 197 276 264 260 238 622 720 879 Healthcare & life sciences 219 333 653 Others 190 244 422 Note: Others include Shipping & logistics, Other services, Retail, Food & beverages and Hotels & resorts. 0 100 200 300 400 500 600 700 800 900 PwC MoneyTree India 12

Analysis of PE exits Exits by type Q4 15, Q3 16 and Q4 16 Public market sale was the preferred exit route for PE investors in this quarter, with a total exit value of 628 million USD in 31 deals. In Q3 16, public market sale deals were worth 671 million USD in 37 deals, while in Q4 15, the figures were 632 million USD in 33 deals. Secondary sales saw exits worth 488 million USD in eight deals, while strategic sales saw 12 deals worth 483 million USD. Two exits worth 46 million USD were made via the buyback route in this quarter. Exits by type (in US$ mn) 7 Buyback 46 Public market sale 632 671 628 Secondary sale 409 756 488 380 Strategic sale 1,398 483 0 200 400 600 800 1,000 1,200 1,400 1,600 PwC MoneyTree India 13

Analysis of PE exits Top five PE exits Q4 16 The top five exits comprised 55% of the total exit value in Q4 16. Top 5 PE exits in Company Industry Investor Deal Amount (US$ mn) International Tractors Manufacturing Blackstone 250 Sigma Electric Manufacturing Goldman Sachs 200 Chase Pharma Healthcare & life sciences Cipla New Ventures 167 TVS Logistics Services Shipping & logistics Goldman Sachs, KKR 155 Endurance Technologies Manufacturing Actis 136 PwC MoneyTree India 14

4. Active PE firms Sequoia Capital India entered into 12 deals in this quarter; Kalaari Capital followed with six deals. The most active PE investors in Q4 16 are listed at right. Investors No of deals Sequoia Capital India 12 Kalaari Capital 6 SAIF 6 Accel India 5 Quarizon 5 Aarin Capital 5 RB Investments 5 Axilor Ventures 5 India Quotient 5 IDG Ventures India 5 Omidyar Network 4 * Number of deals includes both single and coinvestments by PE firms. Cases where two or more firms have invested in a single deal are accounted for as one deal for each firm. PwC MoneyTree India 15

5. Sector focus IT & ITeS sector This quarter saw several major developments around the business and regulatory environment which might have a significant long-term impact on the technology and e-commerce industry. In this year s budget, the government has given a big push to the digital economy. Plans that aim to promote the use of the Bharat Interface for Money (BHIM) app, AadhaarPay, introduction of point-of-sale terminals and related tax exemptions will have a positive impact on the economy. Demonetisation has also brought the digital agenda to the fore like never before. Moreover, the Finance Minister pointedly highlighted the low rate of tax compliance in the country in his budget speech. Hence, the government clearly recognises that quantum leaps in the levels of compliance and overall tax revenues can be achieved through digital payment infrastructure and the Goods and Services Tax (GST). With the setting up of a Payments Regulatory Board under the Reserve Bank of India, the narrative will remain centred around the digital economy in the short to medium term. Additionally, Make in India was given a significant boost in the budget through increased allocation for electronics manufacturing under incentive schemes like the Modified Special Incentive Package Scheme (M-SIPS) and Electronic Development Fund (EDF). For start-ups in the technology industry, carry forward of losses and profit-linked deduction for start-ups for three out of seven years will provide a boost. Fintech start-ups have benefitted significantly from the government s demonetisation move and with the rise in business, recruitment plans of these companies are likely to see a significant uptrend in the coming months. The e-commerce industry in India is facing issues around valuation markdowns amid tough market conditions and slow growth, and several companies are rethinking their workforce strategies in order to control costs and improve operating fundamentals. The industry was also affected by demonetisation and with a cash scarcity in the markets, cash on delivery was impacted. Consolidation is also expected in the coming year, with many companies likely to come together either to fend off competition, enhance offerings, strengthen their market position or survive. In terms of the international regulatory environment, with the new US government focusing on new immigration policies and visa reforms, many Indian IT companies might have to make changes to some of their business strategies and plans. The reforms might affect the mobility of tech specialists, and Indian technology companies will need to do some rethinking around hiring more local personnel and increasing wages, setting up offshore/near-shore centres, or outsourcing their work to American subcontractors, all of which could impact their capital expenditure and operating margins. A major part of the revenue of Indian IT firms comes from the US market, and at a time when the Indian IT sector is struggling with issues around declining profitability and market value erosion, the reforms could pose some core challenges. Sandeep Ladda Leader, Technology PwC India PwC MoneyTree India 16

Sector focus IT & ITeS sector Total PE investments PE investments in the IT & ITeS sector witnessed a 40% drop in this quarter. There were a total of 96 deals worth 748 million USD. In comparison, there were 79 deals worth around 1.3 billion USD in Q3 16 and 122 deals worth 1.2 billion USD in the yearago period. The growth stage retained the top spot in terms of stage of investing, despite a 35% decline in terms of deal value. In all, this quarter saw 17 growth-stage deals worth 315 million USD. Early-stage investments, which came next, attracted 227 million USD in 73 deals. Further, there was a notable increase in buyouts in the IT & ITeS sector, with three deals amounting to 185 million USD in Q4 16. In terms of region, NCR led the race in this quarter with respect to deal value, and Chennai displayed a substantial jump compared to the previous quarter. Finally, in terms of subsector, Online services attracted the highest investment in this quarter, receiving 366 million USD across 52 deals. At the other end of the spectrum, IT services faced a dry spell. The average deal size this quarter was around 7.8 million USD compared to about 15.9 million USD in the last quarter. In Q4 16, funding growth for the IT & ITeS sector and overall PE investment moved in opposite directions. While tech investment dropped by 40% compared to the last quarter, total PE funding enjoyed a 47% increase Value of PE Investments in IT & ITeS sector (in US$ mn) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 No. of deals 850 625 647 555 366 307 422 217 151 165 353 233 99 28 18 35 21 34 35 35 Value of PE Investments in IT & ITeS sector (in US$ mn) 397 65 106 273 311 111148 791 2,423 1,568 988985 648 443 772 347 312 481 515 303 181 150 2,635 1,992 3,846 1,645 1,893 1,467 1,255 1,247 748 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q1 2016 Q2 2016 32 33 27 47 26 24 16 21 21 28 16 36 24 40 47 43 43 47 49 60 40 44 43 48 48 70 61 78 79 114 106 119 109 103 92. PwC MoneyTree India 17

Sector focus IT & ITeS sector Investments by stage of development Q4 15, Q3 16 and Q4 16 Investments by stage of development (in US$ mn) Growth-stage deals were the preferred mode of entry into the IT & ITeS segment in this quarter. In total, there were 17 deals worth 315 million USD. This marked a 35% drop in value compared to Q3 16, which saw the same number of deals bring in 488 million USD. However, growth stage witnessed an 18% increase in value compared to the year-ago period, which saw 15 deals worth 268 million USD. Buyout Early 90 185 214 227 302 Early-stage investments, which attracted 227 million USD in 73 deals, came in next. Buyouts more than doubled in value from 90 million USD in the previous quarter to 185 million USD in this one. Lastly, both PIPE and late-stage deals showed a steep fall in this quarter with 11 million USD in one deal (Q3 16: 30 million USD in 1 deal) and 10 million USD in two deals (Q3 16: 428 million USD in four deals), respectively. Growth Late 10 268 315 428 488 527 PIPE 30 11 148 Other 3 5 0 100 200 300 400 500 600 PwC MoneyTree India 18

Sector focus IT & ITeS sector Investments by region Q3 15, Q2 16 and Q3 16 With 177 million USD in 25 deals, NCR remained the top region for tech investments. However, the gap between NCR and the other cities was narrower in Q4 16. Bengaluru and Mumbai came in second and third place, with 119 million USD in 28 deals and 110 million USD in 19 deals, respectively. Investments by region (in US$ mn) Bengaluru 243 119 452 Mumbai 110 189 242 NCR 144 177 635 Chennai 13 50 64 Others 123 277 412 0 100 200 300 400 500 600 700 PwC MoneyTree India 19

Sector focus IT & ITeS sector Investments by subsector Q4 15, Q3 16 and Q4 16 Online services emerged as the clear front runner in Q4 16, with 366 million USD in 52 deals. Mobile VAS, which was the top subsector in the previous quarter, slipped to the fourth position in this quarter. Investments by subsector (in US$ mn) Online services 354 366 469 BPO 115 166 270 Mobile VAS 47 89 588 Enterprise software 39 133 128 IT services 31 305 Other 34 41 75 0 100 200 300 400 500 600 700 PwC MoneyTree India 20

Sector focus IT & ITeS sector PE exits in the sector Q3 15, Q2 16 and Q3 16 As compared to Q3 16, there was a sharp drop in exits in the IT & ITeS sector in Q4 16. The sector saw exits worth 53 million USD in 10 deals compared to 879 million USD in 18 deals in the previous quarter. Strategic sales remained the preferred exit route with nine deals worth 33 million USD. PE exits in the sector (in US$ mn) 2500 2000 Value of deals (in US$ mn) 1,719 1,944 1500 1000 500 0 1,056 879 679 685 612 622 519 498 379 393 448 440 176 316 261 287 340 225 258 93 22 77 29 58 26 81 10578 67 32 162 156 56 19 1212 48 25 154 96 129 181 185 103 98 225 53 106 194 10 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q1 2016 Q2 2016 No. of deals 3 12 6 11 12 9 16 8 14 11 4 13 9 11 5 10 9 14 6 15 18 15 9 16 13 14 18 10 8 4 5 6 8 8 7 7 8 9 5 4 3 5 4 8 9 8 4 9 8 9 9 7 PwC MoneyTree India 21

Definitions Stages of development Early stage This refers to the first or second round of institutional investments in companies that adhere to the following: Less than five years old Not part of a larger business group Investment is less than 20 million USD Growth stage This refers to investments of less than 20 million USD. Also, investments meeting the following criteria are considered to be in the growth stage: Third or fourth round funding of institutional investments First or second round of institutional investments in companies that are more than 5 years old and less than 10 years old or spinouts from larger businesses Growth stage PE: This includes the following: First or second round of investments worth 20 million USD or more Third or fourth round funding in companies that are more than 5 years old and less than 10 years old, or subsidiaries or spin-outs from larger businesses Fifth or sixth round of institutional investments Late stage This comprises the following: Investment in companies that are a decade old Seventh or later round of institutional investments PIPEs The following constitute PIPEs: PE investments in publicly listed companies via preferential allotments or private placements Acquisition of shares by PE firms via the secondary market Buyout This is an acquisition of controlling stake via purchase of stakes of existing shareholders. Buyout large This includes buyout deals of 100 million USD or more in value. Other This includes PE investments in special purpose vehicle (SPV) or project-level investments. Types of PE exits Buyback This includes the purchase of PE or VC investors equity stakes by either the investee company or its founders or promoters. Strategic sale This includes the sale of PE or VC investors equity stakes (or the entire investee company itself) to a third-party company (which is typically a larger company in the same sector). Secondary sale Any purchase of PE or VC investors equity stakes by another PE or VC investors constitutes secondary sale. Public market sale This includes the sale of PE or VC investors equity stakes in a listed company through the public market. Initial public offering (IPO) This includes the sale of PE or VC investors equity stake in an unlisted company through its first public offering of stock. www.pwc.com/ globalmoneytree www.pwc.in PwC MoneyTree India 22

Contacts Sandeep Ladda Leader, Technology PwC India sandeep.ladda@in.pwc.com Sanjeev Krishan Leader, Private Equity PwC India sanjeev.krishan@in.pwc.com About PwC s Technology Institute The Technology Institute is PwC s global research network that studies the business of technology and the technology of business with the purpose of creating thought leadership that offers both fact-based analysis and experience-based perspectives. Technology Institute insights and viewpoints originate from active collaboration between our professionals across the globe and their first-hand experiences working in and with the technology industry. For more information, please contact Raman Chitkara, Global Technology Industry Leader, at raman.chitkara@us.pwc.com About PwC At PwC, our purpose is to build trust in society and solve important problems. We re a network of firms in 157 countries with more than 223,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com This report was researched and written by the following: Pradyumna Sahu Executive Director, Markets & Industries PwC India pradyumna.sahu@in.pwc.com Dion D Souza Manager, Markets & Industries PwC India dion.dsouza@in.pwc.com Jitesh Bijlani Knowledge Manager, Technology PwC Inida jitesh.bijlani@in.pwc.com In India, PwC has offices in these cities: Ahmedabad, Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai and Pune. For more information about PwC India s service offerings, visit www.pwc.com/in 2017 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see pwc.com/structure for further details. PricewaterhouseCoopers and Venture Intelligence have taken responsible steps to ensure that the information contained in the MoneyTreeTM report has been obtained from reliable sources. However, neither of the parties can warrant the ultimate validity of the data obtained. Results are updated periodically. Therefore, all data is subject to change at any time. Before making any decision or taking any action, you should consult a competent professional adviser. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. PwC refers to the PwC International network and/or one or more of its member firms, each of which is a separate, independent and distinct legal entity. Please see www.pwc.com/structure for further details. www.pwc.com