Shyamal Majumdar: The mother of private equity

Will Renuka Ramnath, MD & CEO of ICICI Venture Funds quit the company?

Will she, won’t she? At a time when there is intense speculation over whether she would quit ICICI, Renuka Ramnath, MD & CEO of ICICI Venture Funds (I-Venture), has been making headlines for yet another reason. The 48-year old ICICI veteran, who is often referred to as the mother of Indian private equity, finds herself locked in a war of words with troubled retail chain Subhiksha’s Managing Director and promoter R Subramanian.

The public spat is over who is to blame for the state of affairs at Subhiksha. While Subramanian fired the first salvo by claiming that I-Venture, which has 23 per cent stake in his company, was in ‘control’ of the retail chain and hence responsible for the mess, Ramnath hit back, and how. She says the Chennai-based retailer had misguided everybody and that she and other independent directors on Subhiksha’s board quit because they hadn’t been informed about the full extent of the liquidity and operational issues the retailer faced — a charge Subramanian denies.

The lady also didn’t miss the opportunity of telling the world that she is beyond such petty bickering — statements that could project her as an elder statesman. Her firm, she says, is working together with everybody to salvage the discount-retailer. Observers say this is obviously aimed at pacifying Azim Premji Investments, which is reportedly peeved with I-Venture for leading it up the garden path. Premji bought 10 per cent of I-Ventures’ 33 per cent stake in Subhiksha in March 2008, for Rs 230 crore.

But Ramnath says this is a preposterous suggestion as Subhiksha started facing liquidity problems much later and there was no whiff of the liquidity crisis facing the company before September 2008.

Subramanian should better watch out, as this is not the first time Ramnath has faced a tough situation in her illustrious career. And she has come out on top every time. Consider Welspun where I-Venture withdrew its investments after a controversy. Her firm also declared a war on RelQ after the war between the co-founders had put the company on the brink of collapse.

This ability to make tough calls was probably what prompted K V Kamath, ICICI Bank’s MD & CEO, to put her in charge of a business that was (and still is) considered to be a male bastion. Ramnath hasn’t disappointed her boss: She took over I-Venture in 2001 and changed the firm from a pure-play private equity fund to a full-fledged asset management company. In 2003, the firm had $50 million assets under management. That number has grown to $2.4 billion.

Over the years, I-Venture has been a trendsetter: Ramnath invested in emerging sectors such as retail, biotech, media and aviation, much ahead of others and pushed the firm from just venture funding to late-stage investing and even buyouts.

The engineer-cum-MBA from Mumbai’s Chetna College, who has spent over 20 years with the ICICI group, is also credited with creating a highly-successful structured finance portfolio, which within two years of its existence, contributed more than 40 per cent of ICICI’s incremental assets.

The rise to the top was inevitable when in 2000, she was put in charge of ICICI Bank’s e-commerce initiatives — a pet project of Kamath.

Meanwhile, let’s get back to the first point: Will she quit ICICI? It’s ‘pure speculation’ at this point. And it could just be a coincidence that Shikha Sharma, MD of ICICI Prudential Life Insurance, whose name also figures on the ‘exit list’, happens to be one of her closest friends.