Playing To Our Strengths

Like all successful organisations, at Ambit Pragma, we believe in playing to our strengths. Over the years we have built operational expertise in our five focus sectors of:

• Media & Entertainment
• Healthcare
• Logistics
• Branded Food
• Support Services in Infrastructure

With over 50 years of collective experience between us, we bring unparalleled domain insights to our portfolio companies.

With us, portfolio companies are assured, not just of capital, but also of a wealth of experience to help them develop operational excellence.

Entertainment & Leisure

The Indian entertainment and media industry is worth US$ 13 billion and has been a high-growth sector. This growth is aided by increase in consumer spending and driven by a rise in disposable income and reduction of personal income tax over the last decade. An environment conducive to FDI supporting one of the most liberal regimes among emerging economies, duty concessions on capital equipment import and financial support for local content creation are strong growth enablers.

There are many opportunities across the entertainment value chain. As an illustration, tourism & hospitality presents an excellent opportunity and is ranked among the top 4 preferred holiday destinations in the world by "Condé Nast Traveller". The growth is supported by a conditional 10-year tax holiday for all tourism projects in the country.

We believe that the entertainment & leisure sectors present an exciting opportunity and if you are building a business in these sectors, we would love to learn more about you.

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Logistics

The Indian logistics industry, with a market size of US$ 90 billion, representing 13% of the country's GDP, is at an inflection point of growth. With GDP expanding at 9% per year and the manufacturing sector growth in double digits, India’s container trade has grown at around 15% over the past five years. Datamonitor estimates that the logistics services business will grow at a multiple of the box trade, probably around 20% and more per year, and that the industry will reach a market size of US$ 125 billion in 2010.

The growth in traded goods, both domestic and exports, presents significant opportunities for the logistics industry. In India, nearly 15% of product costs are logistics related. Worldwide, logistics is a US $2 trillion a year industry, but represents not more than 10% of the end product costs. Services of specialized logistics players are needed to reduce the inefficiencies in the system, which offers opportunities in multiple segments across the value chain from 3PL, contract logistics, transporters and freight carriers to technology providers in the domain. As an illustration, the 3PL market in India is estimated at just US$ 16 billion in revenues but growing at more than 30% a year.

Strong growth enablers in the form of over US$500+ billion in infrastructure investments, phased introduction of value-added-tax (VAT), development of organized retail and agri-processing industries, and strong FDI inflows in automotive and capital goods add to the opportunity in the logistics domain.

The logistics sector offers an exciting opportunity and if you are managing a business in this sector, we would love to learn more about you.

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Branded Food

Food represents India's largest consumption category, accounting for almost 55% of the consumer's total spending. This consumption of food by India is mostly in the raw form today with most of the processing happening inside the kitchen. If one does an audit of a typical Indian kitchen, it won't be a surprise to find that almost 4/5th of the food items purchased are unprocessed - mostly staple commodities or fresh fruits & vegetables.

We believe that convenience is a mega trend that is leading the shift in the consumption basket towards processed food. Higher proportion of working women, diminishing culinary skills and busy urban lifestyles are a few causes for the growing need for convenience, thereby fueling growth in processed food consumption. Changing consumption patterns and the growth of modern retail are some of the other reasons why we believe food processing growth rates are north-bound.

A processed food business, either on the product side (food fmcg) or on the services side (eating places), is of interest to us. Businesses that are building value at the branded end, rather than the commodity end, and that are highly scalable, are the ones of interest to us.

We believe that the food processing sector presents a tremendous opportunity for building a sustainable, profitable business and if you are building such a business, we would love to learn more about you.

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Healthcare

Healthcare delivery is one of the largest service sector industries in India, estimated at about US$ 30 billion in FY05, constituting 5% of the GDP, and has grown at over 12% per annum in the previous four years. The industry receives little support from the government with 70% of all the hospital beds accounted for by the private sector.

The industry is, however, fragmented across the entire services value chain with a large number of independent, privately-run hospital and healthcare centers offering investment opportunities in multiple segments. These include healthcare delivery services, diagnostics and even healthcare BPO. The penetration of health insurance, at less than 10% of the total spent, also presents significant opportunities. A proactive government policy permitting 100% FDI in all health-related services under the automatic route, lower tariffs, higher depreciation on medical equipment and an income tax exemption to hospitals for five years are factors supporting the growth of the industry. A PWC study estimates the demand for healthcare services to grow to US$ 40 billion by 2012 or to 7.5% of GDP.

Complementing this growth, the wellness industry is also supported by lifestyle-induced illnesses, and while it remains nascent, is still estimated to be at US$ 9 billion by CII at the end of the financial year in March, 2007. Mushrooming gyms, spas, holistic centers and a growing interest in yoga and other forms of alternative medicine across the country are all contributing to the many investment opportunities in this space.

We believe that the healthcare & wellness sectors offer tremendous potential and if you are building a business in these sectors, we would like to connect with you.

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Infrastructure Services

The Economic Survey of the Government of India, 2008 indicates that India’s capital spending on infrastructure is 5% of GDP in 2006-07, as compared to 10.6% in China. Recognizing the role of infrastructure development in both economic growth and poverty reduction, the government is inviting investments in the sector through multiple initiatives including (a) formation of the India Infrastructure Finance Co (IIFC) with a sovereign guarantee that backs all borrowings, (b) a scheme to support public-private-partnerships (PPPs) in infrastructure, and (c) a special purpose vehicle created from foreign exchange reserves to fund infrastructure projects. The government expects to attract nearly US $500 billion in funds to support the creation of infrastructure over the next five years.

With the increasing amount of spending on infrastructure, there is immense opportunity in industries ancillary to or supporting the growth of core projects. As an illustration, the growth of air traffic by 25% plus CAGR over the last few years has created an urgent need to expand the metro and non-metro airports. Creation of modern airports will bring opportunities in the areas of baggage handling, crew management, multi-tier parking facilities, catering services, etc.

Similarly, multiple investment opportunities are being created around other infrastructure projects such as roads, power, telecom, ports and public utilities.

Infrastructure Services offers a wide range of opportunities and if you are building a business in this area, we would love to learn more about you.

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