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October 31, 2005

Warburg Pincus-Bharti saga ends; Nets $1.324 Billion for PE firm

The Investment (1999-2001)

Between September 1999 and July 2001, Warburg Pincus invests $292 million in Bharti Tele-Ventures in return for a 19% stake, the first tranche being invested in September 1999. Dalip Phatak and Pulak Prasad of Warburg joined Bharti's board.

Company Valuation: $1.537-B

The IPO (January 2002)

Bharti goes public (which, I assume, diluted Warburg's stake to 15%.)

The Exit (2004-2005)

August 2004: Warburg sells a 3.35% stake for about $208 million.

Company Valuation: $6.210-B

March 2005: Warburg sells another 6% stake for $560 million, marking the largest ever equity deal in a single scrip on an Indian stock exchange.

Company Valuation: $9.333-B

October 2005: Warburg sells its final 5.65% stake to UK-based Vodafone for $847.5 million.

Company Valuation: $15-B or 10 times that when Warburg invested in the company five years ago.

Warburg's total realization: $1.616 Billion - i.e., over 5.5 times its investment amount.

Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.