Ramcharan: The little-known entity that got $4.14-bn funding in RE space

US-based fund TFCC Intl picks up 46% stake in the firm at $9 bn valuation; firm plans to use some if the funds in two plants in Tamil Nadu and Gujarat, and set up EV charging infra in various cities

On Wednesday, a little-known Chennai-based firm Ramcharan Co Pvt Ltd sprang a surprise by garnering $4.14-billion investment for its 46 per cent stake from the US-based fund TFCC International, which took the company's valuation to over $9 billion.

There were several questions emerging, including the reason for a higher valuation, why the investor TFCC's India arm and its target company are holding the same addresses at Anna Salai in Chennai, why a fund is investing so much in an unknown waste-to-power technology and what Ramcharan's is business all about.  Talking to Business Standard, Kaushik Palicha, owner of Ramcharan, said the company wants to use around $1.25 billion each in two manufacturing units in Tamil Nadu and Gujarat. It is also gearing up to set up electric vehicle charging infrastructure in various cities and also plans to form a separate subsidiary to take forward its chemical trading business.

Ramcharan's business

The group had a humble beginning at Alappuzha in Kerala starting with the pepper trading business in the 1960s. As the location shifted to Chennai, the focus too shifted to chemical distribution. Kaushik and his brother Divyesh took charge of the business in 1996-97, which marked the turning point for the company as they entered into new product terrains -- including rubber and plastic products. Palicha said from around Rs 60 crore revenue in 2009-10, the company has grown to around Rs 300 crore company in 2020-21. "We grew organically with the country and through our logistics hubs too,"  he said.

According to TFCC International chairman Chris Curtis, Ramcharan is among the top 100 companies in the world in terms of generational activities and are into sectors like chemicals and rubber, reportedly having over 700 products and 24 warehouses. Now, the company's client list includes the likes of tyre majors, paint industry and players in plastic industry."The chemical business will be moved to a subsidiary and will be running as a separate business, whereas Ramcharan will take on the manufacturing business," Palicha said.

New technology and reason for a higher valuation

The reason for a higher valuation according to Curtis was the unique technology that Ramcharan has in waste management. "Globally waste management industry is $400 billion and the same industry is less than $4 billion. Our headroom to grow is humongous. That is why the valuation is so high," said Palicha, who is in his mid-40s.

Not revealing much about the technology citing not having full IP coverage as a reason, Palicha said that it will be branded as Entity 1 in India. The company claims that from wastes, it first removes recyclable particles using converters, screens and magnetic technology. Then it is treated using new technology and with some of the additives that Ramcharan makes and gets converted into power. 

"Everything that goes in will come back as energy, so there will be no residue. That is where we have an advantage. There is nothing that we are letting out, air or water or solid wastes. It is one of the cleanest technologies in the world," he added thrusting on the reason for a higher valuation adding that it is the rising number of 'cancer cases' that forced him to think about this clean energy project as a plastic manufacturer.

Why do TFCC and the target company are having the same addresses? Ramcharan claims that when TFCC decided to have a registered office in India early this year, they set it up at the Chennai-based company's address. "Anyway, 46 per cent of the company belong to them.  They will have other investment companies in India, but needed a face in Ramcharan," Palicha added. Wednesday's announcement was also marked by the absence of Ramcharan officials, which according to them was due to a non-disclosure agreement.

Future roadmap

While veterans in the renewable industry are yet to come to terms with the big-bang numbers and the technology, Palicha said the entire money will be used for business expansion  -- for setting up manufacturing units and research and development. The company would require only require less than 50 acres of land each for its two planned manufacturing units in Tamil Nadu and Gujarat.

"We are planning to expand to other countries and there it will be branded as Entity 2 and so on. We are looking at a global footprint, especially island nations that can clear a huge parcel of land that is currently occupied for waste management," he added.