The head of India’s pioneering rating agency focuses on other businesses to buoy revenues but sees no reason to distinguish between work and leisure
When we invited Roopa Kudva to choose a restaurant for lunch, she had a counter-invitation for us. “Let’s meet at the Crisil office instead of a hotel,” she said. This was less to do with a lack of time – though the 49-year-old CEO and MD of Crisil certainly has her hands full – but the desire to highlight the finer points of the rating agency’s “green” building in downtown Powai in its silver jubilee year, write Rajesh Bhayani and Abhijit Lele.
With schedules hard to coordinate, we finally settle for a chat over tea and are ensconced on the seventh floor of Crisil House, which, we are told, ranks among the 15 platinum standard green buildings in India, as certified by Leadership in Energy and Environmental Design. The seventh floor is special, Kudva adds proudly. It is the only floor in which tea or any hot item can be served outside a specified area because it is reserved for guests. Apparently, allowing hot drinks to be served any and everywhere increases heat generation inside a building and, therefore, the power required to cool it.
As a result of its heat-reducing, light-enhancing design, Crisil House uses less brick and more glass to allow natural sunlight to provide the light. Open on all sides, the design has cut electricity bills by 30 per cent, even after using double the space of the earlier office a few kilometers away.
“Sometimes I feel that, subject to clearance by internal securities, school-going children should be allowed to visit Crisil House so that they understand the concept of green buildings and learn how to focus on the environment,” Kudva muses.
Kudva, one of India’s most powerful but understated businesswomen, has completed two decades with Crisil and is, therefore, uniquely placed to comment on the development of the business and the company in India. But before we get down to business, Kudva opts for green tea. The other options are standard tea, coffee and buttermilk. Since the latter does not generate heat, we virtuously opt for it.
Crisil was founded by financial institutions in 1987. In 1996, Standard & Poor’s picked up a 9.66 per cent stake, and became the majority equity holder in 2005 with a 52.4 per cent shareholding. Although it remains the leader among the five rating agencies in the country, it derives 60 per cent of its revenues from other businesses.
This revenue mix is driven by necessity since the Indian corporate bond market, the business that generates the demand for ratings worldwide, remains under-developed for various reasons, government policy and borrowing being two. This focus, Kudva says, is unlikely to change as the company starts planning for the next stage of growth. “We are very clear that our diversified revenue equation will continue. Our financial strength and absence of over-dependence on any one business or any individual client, allows us to be truly independent in our analysis and opinions.” The bulk of the revenues from the non-ratings business comes from research (global research that includes equity and derivatives research and risk and analytics, and India research that includes economy, industry and capital markets).
Going forward, Kudva says, the goal is for ratings to account for one-third of the business and non-ratings for the rest and the domestic-global mix will be 50:50. Since she sees the growth potential as huge – Crisil’s topline grew at a staggering 33 per cent compounded annual growth rate for the past five years – the company is also in the market for talent. Last year, for instance, Crisil hired 15 people for senior positions (and 250 from campus) and Kudva says this trend will continue in 2012.
Some promotions, however, will be from in-house staff. “Half our team leaders will be promoted from in-house talents and the rest may be recruited from outside,” she tells us as she sips her green tea. “The idea is to ensure that in-house personnel should feel that there is enough room to grow in the company.”
In fact, Crisil has sent several executives to head its overseas branches. It is expanding its global research units in Poland and Argentina and recently opened an office in Huangzhou in China. From a team of 100 senior executives in the company, 26 were recently been assigned new roles.
Kudva is acutely aware that getting talent may be easy but retaining it can be tough and she has, in a trademark businesslike fashion, drawn up a five-point agenda to develop in-house talent — strengthening the leadership team, coaching and job rotation…the usual suspects.
Of the core ratings business itself, Kudva doesn’t exactly plan to be inactive. With the shallow bond market crimping growth opportunities here, she introduced in 2005 the concept of rating small and medium enterprises (SMEs), a unique exercise globally. Crisil now rates some 30,000 SMEs — and the demand here is huge since a rated SME will have an easier time accessing scarce bank loans at competitive interest rates.
“We did a study based on our rated SMEs and we found that a one per cent increase in interest rate eats up 15 per cent of their net profit,” she said. The SME focus has a long-term implication since Kudva reckons that it might generate future business for Crisil once these companies grow bigger. She also plans to take this concept to the global market.
We point out that this will not be easy given the state of the European and American economies and that growth will be tough in this competitive business as a result. Her reply is typically business-like. “Don’t let what you can’t do get in the way of what you can do,” she says, as we opt for another round of green tea and buttermilk.
That brings the conversation round to what she does to unwind. She reads a lot, she tells us, the product of a youthful passion to be a teacher. Biographies of leaders attract her the most — though the current book is The Emperor of All Maladies by Siddhartha Mukherjee, which is a biography of cancer. Her favourite book, though, is Personal History the autobiography of Katherine Graham, the housewife who famously came to head The Washington Post after her husband’s suicide and took it to new heights during the Watergate scandal.
The wife of a high-profile global fund manager, Vivek Kudva, she says she does not distinguish between work and life in the work-life balance equation. “Both carry equal relevance in my life. There are no boundaries to be transcended and the two worlds will gradually blend into each other. I enjoy my work and I enjoy my life.” She works for 10 hours a day but is faithful to a fitness regime in regular visits to the gym.
Since she has a board meeting for which she has to prepare, the meeting draws to a close and we drain the last of the buttermilk and head out from the green pastures of Crisil House into the unabashed pollution of Mumbai.
