After investing in two start-ups, CESC Ventures, part of the RP-Sanjiv Goenka Group (RPSG), is planning to invest in more start-ups — primarily in the FMCG space — as a venture capitalist (VC).
“We are looking at investing in 10-20 start-ups, primarily from the FMCG vertical, to help them grow. At present, we want to remain a VC and don’t intend to take over companies in which we are investing,” Shashwat Goenka, director at CESC Ventures, said on the sidelines of the first annual general meeting.
After establishing a Rs. 100-crore fund to invest in such up-starts, the firm has raised it to Rs. 300 crore.
Goenka said that while profitability is not the sole parameter for making such investments, he looks at the business model and the potential to succeed in the market as the main criteria.
The company, in November last year, had invested in The Souled Store, a pop culture merchandise brand, which designs and prints artwork on various products such as apparels and phone covers.
Apart from financing start-ups, the company has also been on an acquisition mode and is leading futuristic businesses, such as FMCG, for the group.
In June, it picked up a majority stake in Herbolab India, which manufactures Ayurvedic medicines and products under the Dr. Vaidya’s brand name, for Rs. 32.18 crore. It gave the acquirer immediate access to around 60 Ayurvedic products and a total portfolio of over 150 items.
The FMCG vertical, led by Guiltfree Industries, posted revenue of Rs. 358.44 crore in the last fiscal year. Goenka is targeting Rs. 10,000 crore in seven years.
During the AGM, the firm sought approval from shareholders to create a charge on the movable and immovable properties of the company, both present and future, for securing any financial assistance or credit facilities from lenders for a maximum of Rs.100 crore.
In the ongoing fiscal year, Spencer’s Retail, which got listed as a separate entity after a demerger, will be opening another 20-30 stores except in west India.
While the focus will be on large-format stores and a substantial chunk of these will be in the hypermarket format, some will also be neighbourhood stores to stock groceries.
“These new stores will add another 2.5 lakh square foot of retailing space to the existing 13.7 lakh square foot,” Goenka said.
Each of the hypermarket format stores will entail investment of Rs. 2-4 crore.