Currrent - Issue

Ms MONEY BAGS
Have an idea but no money? Try knocking at Renuka Ramanth’s door, the venture capital queen who’s most likely to pick the winner among struggling entrepreneurs.
                                                                                                          By Nupur Handa in Mumbai


FISC APPEAL : Ramnath with her A Team		   Venture capital is a high-risk business. There are those who describe it as lending money to friends, family and fools. But seriously, extending credit to small, obscure companies — which often have little more than a wispy idea — requires great business savvy, wisdom that comes from experience, and a strong heart. Yet the desire to gain first-mover advantage in an immensely lucrative future market keeps venture capitalists (VCs) going.

Right at the frontlines of this corporate equivalent of the Wild West is 42-year-old Renuka Ramnath. They say if you have an idea and no money, she’s the person you must call to get that seed money. An unassuming woman, who in a few years has transformed ICICI Venture into the country’s largest private equity outfit, she’s the one who’s most likely to venture out and bail out struggling entrepreneurs.

Growing up in a middle-class family in Chembur in suburban Mumbai, Ramnath never imagined she would one  day be a honcho in the rarefied world  of enterprise finance. But after  a  management  degree
from Mumbai University and specialization in finance, she was a shoo-in at ICICI.

That was in 1986. Since then she has worked steadily up the corporate ladder. Starting from the merchant banking division she shifted to ICICI Securities to head corporate finance and equities business,  setting  new benchmarks for the company in terms of revenue potential

Her big chance came in 2000 when she was asked to take over the e-commerce initiatives of ICICI. Soon she was managing director and CEO of ICICI Ventures after its merger with ICICI Econet. It helped that ICICI Bank’s star CEO K.V.Kamath gave her a virtual carte blanche.

Immediately after taking over, Ramnath began to stir things up at the 14-year-old subsidiary of ICICI Bank. She put together a handpicked team and started aggressively investing like the markets had never witnessed before. Today, ICICI Venture ranks not only as India’s largest private equity fund bu tcontrols a staggering Rs 2,500 crore of assets with investments in some of the most promising and fastest growing companies — Wellspun, Arvind Brands and Infomedia India.

"Currently, we make very large investments, take significant stakes in companies and want to build globally competitive companies. And we’ll support these companies over a long period of time."

- Renuka Ramnath -

So how do they leverage those million dollar dreams? Well for a start, the ICICI team seems gifted with an uncanny ability to spot new industry segments, just poised to grow. Sectors like biotech, media, retail, real estate, auto components — areas where other more established and conservative players were reluctant to venture into.

About the venture fund's future plans and priority areas, Ramnath says, "After being bullish on investing in entertainment and retail companies, ICICI Venture is investing in real estate, believing it can create mega real estate companies.

"And if past record is anything to go by, identifying winning sectors and companies early on is something ICICI Venture has proven time and time again it has fine-tuned to an art. Be it an upcoming pharmaceutical company like Sun Pharma where it invested way back in 1993 or retail pioneer Shoppers’ Stop, Geometric Software, Bangalore-based biotech major Biocon and TV Today in 2000 or more recent buys like Arvind Brands and Wellspun India.

A lot of the credit goes to the stringent and rigorous investing philosophy she practices. It’s a philosophy acquired over the years — it was in 1986 that Renuka joined ICICI' Merchant Banking division. For a start, Ramnath is careful and selective before parting with its funds. Only one or two out of every 15-10 proposals the company receives translate into investments. And the bar is pretty high. She looks for companies that are preferably leaders, operating in a unique and strategic sector with untapped potential.

Along with a proven record of performance, impeccable balance sheet, it must also have been promoted and be run by trustworthy businessmen or B-School pros. Then Ramnath xrays the technical, credit, banking and market reputation and standing of the company and its main directors.

Along with the numerous proposals that ICICI Venture routinely receives, there are also in-house teams that are constantly sniffing for new and emerging sectors and winning companies operating in them.

It’s easy to see why the business is so lucrative. Investing in start ups offers the most bang (and potential risk) for the buck.

Growth can be turbocharged if investors get a meaningful stake in a passel of promising start ups. VCs not only provide the seed money, usually on the basis of a business plan, they provide funds for moving on to the next business level.

Ramnath is aided by her A Team that includes director (investments) Bala Deshpande, chief financial officer Beena Chotal, general counsel P.M. Deviah and chief risk officer (Ravindra K.). After coming on top in India, Ramnath has set her sights abroad, going along with the trend of so many Indian companies venturing global. Says Ramnath: "Currently, we make very large investments, take significant stakes in companies and want to build globally competitive companies. So we are taking a much longer-term focus with substantial investments and with the promise that we will support our companies over a long period of time."

Last year was an excellent year. The company launched four new domestic funds, including the high-profile India Advantage Fund with a corpus of over Rs 750 crore.

And apart from work that involves frequent traveling — not to mention the long days — she’s currently focused on putting together ICICI Venture’s very own high-tech office in Mumbai’s Prabhadevi, moving from what it currently occupies in ICICI Bank’s building in the Bandra Kurla Complex. From the outskirts to bang in the center of the teeming metro, it’s typical of Ramanth’s style — cut straight to the middle of the action.

Just talk to any of the adrenaline-pumped senior managers at ICICI Ventures and you will realize that the growth story has only begun. The targets they have set are indeed impressive. In the next three years, ICICI Venture wants to grow at least three times in terms of the assets it manages and have a commanding presence in lucrative segments like management buyouts, corporate restructuring and cross border deals.

From investing seed capital in start-ups to gradually investing in longer-term projects and corporate expansion, it's carving out a niche for itself. Says Ramnath, "ICICI Venture is an institutional private equity player, acting as a bridge between enterprises and capital pools." Having helped support and finance over 250 companies so far, the queen of capital knows what she’s talking about.