Finvolve Pre-ipo Fund Deck

• The pre-IPO market is a unique investment segment targeting companies poised for public listing.

1. The pre-IPO market is a unique investment segment targeting companies poised for public listing
2. These businesses are typically in their final stages of growth before an IPO, offering investors the opportunity to buy equity stakes at valuations significantly lower than post-IPO prices
3. This phase of investment captures the substantial upside potential as companies transition to public markets, combining the growth characteristics of private equity with the liquidity of public markets
4. According to recent data, the IPO Index has outperformed the Nifty 50 by approximately 9% over the last ten years.

Balanced Risk-Reward Profile: A balanced risk-reward profile provides a middle path between risky investments in early-stage companies and lower-reward stocks after they go public. In the last ten years, investments made before companies go public have consistently performed better than the overall stock market. Specifically, the index tracking these pre-public investments has shown around 9% better performance compared to India’s Nifty50 index.

Influence and Growth Potential: Before a company goes public, investors have the opportunity to influence important decisions and help the company grow. Historical data indicates that companies receiving investments before their IPOs have typically seen returns ranging from 25% to 40%. At Finvolve, they take an active role by offering guidance and support to enhance the growth of these companies.

Attractive Valuations: Investors can buy shares at prices much lower than what they would pay after the company goes public. This opportunity also includes the chance to buy shares from existing shareholders. This investment phase offers the potential for significant profit as companies move towards becoming publicly traded.

Liquidity Opportunities: Moving to public markets offers liquidity, letting investors sell shares for profit once trading starts. Historical performance of pre-IPO funds shows that an INR 100 Crores investment could potentially grow to INR 371.3 Crores in 5 years, assuming a 30% annual return.

1. High Net Worth Individuals (HNIs): Individuals with substantial wealth, as defined by SEBI.
2. Institutional Investors: Entities such as banks, financial institutions, insurance companies, and pension funds.
3. Family Offices: Offices managing the wealth of affluent families.
4. Corporate Entities: Companies, trusts, partnership firms, LLPs, and other corporate bodies.
5. Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs): NRIs and OCIs are subject to specific conditions and regulatory approvals.
6. Foreign Portfolio Investors (FPIs): FPIs registered with SEBI.

1. Growth Opportunities in Underpenetrated Indian Sectors
   -Focus on sectors poised for growth due to low current market penetration, such as digital payments, healthcare, edtech, and renewable energy.
   -Sectors with clear and sustainable growth drivers over the next 5 YEARS, supported by trends like digitalization and urbanisation.
2. Leadership in High Growth Industries
   -Investing in companies that are either market leaders or have a clear trajectory towards market leadership, leveraging strong brand recognition and competitive advantages.
   -These companies show growth rates higher than industry averages, indicating increasing market share and competitive advantages.
3. Profitable Growth with Financial Stability
   -Prioritizing companies that show higher revenues and profitability growth compared to industry peers, reflecting robust financial performance.
   -Focusing on companies with proven unit economics and capital-efficient models.
4. Strategic Rationale
   -Risk Management: Investing in market leaders and financially strong companies mitigates risks and enhances resilience to economic changes.
   -Opportunities in Growing Sectors: Investing in underpenetrated high-growth sectors with structural drivers offers significant potential for capital appreciation.

• • Overestimated Company Valuation
  • Weak Financial Health
  • Insufficient Market Preparation
  • Poor Corporate Governance
  • Inadequate Risk Management
  • Lack of Scalability
  • Regulatory Non- Compliance
  • Inexperienced Management Team
  • Mega IPOs

For Companies:
Support in positioning the IPO
Capital support for acquisitions/ de-leveraging
Leverage IA/FV ecosystem for expansion.

For Investors:
Institutional access to high-demand IPOs
Risk management
Reduced lock-in period
Exit optimization

For Fund:
Partial liquidity prior to IPO
Potential for Alpha (Excess Returns)
Early Exit Options
Reduce locked-in shares