We will look at a wider spectrum of Green economy companies: Renuka Ramnath

Multiples Alternate Asset Management, along with co-investors like State Bank of India, is investing Rs 1,200 crore in TI Clean Mobility Pvt Ltd (TICMPL), a Murugappa group company. TICMPL is a wholly owned subsidiary of Tube Investments of India. Renuka Ramnath, founder, managing director, and chief executive officer, Multiples, says in an exclusive interview to Manojit Saha the home-grown private-equity firm is gearing up to invest in green-economy companies.

Who are Multiples’ co-investors in TI Clean Mobility?

State Bank of India (SBI) is one and it has committed Rs 200 crore. In the first phase we, with SBI, will invest Rs 600 crore. The balance will be at a later date. We may bring in other investors along the way.

What is the rationale behind this investment?

If you look at Multiples’ investment choices, we were early to catch on to e-commerce growth. We invested in Delhivery way back in 2013. Then we decided to incubate Vastu Housing in 2014 when the Prime Minister announced affordable housing in the country. We invested in Dream11 and other digital platforms in 2017. We have done a whole host of new-age companies like Acko Insurance, Licious (a direct-to-consumer company), and Niyo Solutions, which offers financial solutions on digital platforms, and is also a direct-to-consumer company. When there is clarity this is the way the world is going to go, we are quick to move in that direction.

Consistent with that strategy, we feel that “clean mobility” is going to be a space that will create growth. That is the macro concept why we want to invest in clean mobility. In an emerging economy like India it is a fantastic place to play where you can get this explosive growth. Therefore, there are huge returns for our investors.

The TI group has established a name for itself and capability in manufacturing. To pull off a large capex project like this, you have to manufacture those products and you have to tie up distribution and financing -- a lot of hard work on the ground. This is something the TI group has the experience and credentials for, given the number of businesses they run so successfully. We have worked with S Vellayan, vice-chairman, TII and TICMPL, in the past and we invested in Cholamandalam Finance when he was running it. We know his working-style and derive comfort from the fact that we are investing for an entrepreneur with whom we had a successful experience in the past.

How much has Multiples invested so far?

A little over $2 billion, including co-investment.

How green are your investments?

All our companies are compliant with environmental, social and governance (ESG) norms. I would say they would be setting benchmarks. That has been a focus for us right from the beginning, and over the years the emphasis has only increased. Recently we have added a senior team member who has 20 years’ experience in ESG alone in corporate India. This shows Multiples’ commitment to ESG.

Which are the sectors you are looking to invest in?

Our sectors have remained constant for the past 10 years -- financial services, consumer, pharma and health care, and B2B enterprise technology. Now the only change that has happened is that in financial services we have added fintech, and in consumer we have added consumer tech. That is the change that we have made. Now recently what we added are green-economy companies. TI Clean Mobility is our first investment in a green-economy company and we will look at a wider spectrum of those -- whether it is waste management or any innovations that help the environment.

Are you planning to earmark funds to invest in green-economy companies?

We want to build a portfolio of the best companies of any vintage. Within that we look for diversification and are careful how we build our portfolio. We are conscious that we are portfolio investors and not just finding 10 good companies. It also has to be a diversified portfolio in many dimensions.