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Lunch with BS: Renuka Ramnath

Multiplying Multiples

Shyamal Majumdar  |  Mumbai 

The ‘mother of private equities’ says she is enjoying her comeback as an entrepreneur after her much-questioned exit from ICICI Ventures

Renuka Ramnath In April 2009 when she quit ICICI Ventures, Renuka Ramnath felt like “a mother whose child has been snatched away”. A year and a half later, she has hit the ground running again by raising $350 million for her new baby — Mutiples Alternate Asset Management, writes Shyamal Majumdar.

It was tough, she says, to walk out alone from an institution that had been almost a second home for 23 years — the last eight of them as head of India’s largest domestic private equity firm. By the time she left, was managing funds of over $2 billion, earning Ramnath the sobriquet of “the mother of private equities” for her mega success in an industry that has traditionally been a male bastion.

We are at Masala Bay at Bandra’s Taj Lands End and Ramnath orders jasmine tea.

She dismisses speculation over quitting because got the top job at ICICI Bank. “I never wanted to join the bank because the centre of my universe was private equity. So I was least bothered about what was going on in the bank,” Ramnath says, rearranging her hair which has a careful hint of grey.

Did her exit then have anything to do with the huge controversy over a partial sale of ICICI Venture’s stake in distressed retailer Subhiksha to a company owned by Wipro Chairman The latter was extremely upset because he thought Ramnath had deliberately sold his firm a lemon.

Ramnath, 49, says even K V Kamath, ICICI’s chairman, had told her that such speculation is bound to arise since her exit coincided with the Subhiksha controversy. But she believes that when clinched the sale deal with Premji Invest, it was a genuinely good one.

“Informed people should understand that there is no guaranteed return in this business. So one should be prepared to live with the disappointment of a failure as much as one enjoyed when the returns were flowing in,” Ramnath says, ordering prawn tikka for me and paneer masala for herself as starters.

Our meeting has been pending for a long time, because Ramnath was, first, travelling extensively, including the trips to her spiritual guru in Chennai, and then wanted the “shradh” (days dedicated by Hindus to the departed souls of ancestors) period to be over before she did anything new.

Has she always been so spiritual? Ramnath says religion has been an integral part of middle-class south Indian girls like her. Religion and some of her close friends like Shikha Sharma (who also left ICICI around the same time as she did, and now heads Axis Bank) have been the anchors when her husband died in a car accident. Ramnath was just 32 then and a mother of two.

“The world did come crashing down when he died. But I didn’t cry even once because religion gave me the inner strength and taught me to be responsible. I didn’t want to deprive my two kids of anything in life just because their father was no more,” Ramnath says.

The resolve to give her children the best of facilities (both are studying abroad now) has meant a 12-hour daily routine for over two decades — a period that saw her climbing the ladder pretty fast at ICICI. Ramnath says she is immensely grateful to Kamath for allowing her to work as an entrepreneur and just “let her be”.

Then why did she leave in a huff, that too without a job? Ramnath chooses her words carefully to say that she had “hit the glass ceiling” at ICICI Venture. After managing funds of over $2 billion, there was little scope to scale up, particularly when international investors too were reluctant to pour big money into funds such as because their objective may not be in sync with those of shareholders.

Ramnath opts for a not-so-exciting dal makhni, chestnut mutter, bhindi amchoori and tandoori rotis for the main course. The engineer-MBA, who has also done a “game-changer” three-month Advanced Management Course at Harvard, sounds much more at ease when she’s talking about Mutiples, which, many say, is a rare instance of a non-institutional and independently-led PE fund in India raising a significant amount in such a short span.

But that was not surprising since ICICI Venture was also a trendsetter under Ramnath who 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. She was also credited with creating a highly-successful structured portfolio that, within two years of its existence, contributed more than 40 per cent of ICICI’s incremental assets.

has a dual-fund structure in which the domestic portion has been anchored by several banks, including Indian Overseas Bank and Andhra Bank, and the international portion by Canada Pension Plan Investment Board and CDC. Canada Pension, which is one of the world’s largest private equity investors, has committed up to $100 million. will be the first India-focused fund to be backed by that firm.

Ramnath says will be sector-agnostic and make investments in Indian companies, management-led buyouts and spin-offs of divisions from large Indian groups — something she did at ICICI Ventures with great success. “My dream is to build Multiples as a bridge between providers of long-term risk capital and the new generation of capital-hungry entrepreneurs in India,” she says.

Her expectations about her own skills have, however, toned down a bit. At ICICI Ventures, she was known to give her investors outsized returns — the India Advantage Fund realised an internal rate of return of over 70 per cent. She says she would consider a job well done if she can give investors in Multiples a 25 per cent return.

The main course is over and Ramnath settles for kulfi as dessert. I shed my reluctance after she tells me that kulfi is Multiple’s signature dish. “We order kulfi in office whenever there is a reason to celebrate,” she says.

Isn’t raising capital abroad still a challenge, specially in these uncertain times? Ramnath admits it is challenging, but capital will come if you do proper planning and detailed orientation on how to time the market. The fund size, purpose and goals should be clearly defined.

The kulfi arrives quickly and Ramnath is in a visibly happy mood. She remembers how Multiples worked for over three months out of her son’s bedroom; how she moved to a temporary office lent by a friend and had to go out for cutting-chai, the local Mumbai term for a glass of tea shared by two people, to the friendly neighbourhood tea shop; and how the first recruitment Multiples made was that of a maid. The team has, of course, increased to 12, comprising some of the top-notch financial talent in the country, and Multiples has moved to a plush office in one of Mumbai’s tony localities.

The last one year has been great stress, but great fun as well — fun because her parents haven’t stopped smiling after her spectacular comeback.

As we wait at the hotel foyer for our cars, Ramnath says the good part of her life as an entrepreneur is that she doesn’t have to retire. But even better is the fact that she now doesn’t need to report to anybody except investors — a reason she didn’t respond to feelers from large family businesses to join them in a role similar to the one she had at ICICI Venture.

First Published: Tue, October 19 2010. 00:42 IST