Lone ranger

By her own admission, nothing has come easy for Renuka Ramnath. Right from the time of pursuing her higher education, she has bravely confronted gender biases and stood her ground. In 1979, Ramnath opted for engineering at Veermata Jijabai Technological Institute, only to be cautioned by the principal that she might be the only woman in the class. Though she ended up having another female classmate for company, her male counterparts often taunted them about how they occupied the seat of a deserving male candidate.

This sort of discrimination only strengthened her resolve to work harder. After securing a degree in textile engineering in 1982, Ramnath decided to get an MBA from Mumbai University. Here, she was introduced to the subject of finance, about which she says, “I took to it like fish to water. Also, I had some great professors in college like my mentor Vijay Gopalan, who explained financial concepts using textile engineering examples which made it easier
to relate to.”

During campus recruitment, Ramnath got an offer from ICICI but she declined it for a job at Crompton Greaves. “There was this fascination with shop-floor dynamics, manufacturing and engineering tools back then. I felt that with ICICI, if you sit with a cheque book from day one then you become a de-facto power centre, which I didn’t want to be,” she explains. But she eventually did move to ICICI and then there was no looking back. Ramnath went on to build group subsidiary ICICI Venture into a name to reckon with. Today, the 53-year-old PE veteran runs her own investment advisory firm Multiples Alternate Asset Management, but like in all success stories, the early curve was all about learning something every day.

Shop floor to boardroom

She approached ICICI in 1986. Convinced that being an engineer, she would be deployed in the loan department, Ramnath was in for a surprise when her prospective employer informed her that she was to join the merchant banking department. Ramnath was eager to be a part of the IPO desk, which she felt was the “more happening department” but instead found herself delivering corporate advice. “Steve Jobs once said that you can only connect the dots looking backwards. These were the gentle blows that destiny threw my way which shaped my career,” Ramnath confesses.

“Back then I resented the job and thought to myself that here I was building a business that was non-existent. But that was it. Right from the time I stepped into ICICI, I was learning how to build a business.” Ramnath soon learnt the tricks of the trade and in 1992 was appointed the head of corporate finance and equities at ICICI Securities. This new appointment saw Ramnath head to the US for a three-month training programme.

Armed with her learning and experience, she set up the structured finance business for ICICI. Proud of her accomplishment in the structured finance unit and on the lookout for the next big opportunity, in 1999, Ramnath left for Boston to pursue an advanced management programme at Harvard Business School. Draped in her silk saris, Ramnath attended class and was the youngest of the lot.

“I had decided that for one week I will observe the class proceedings before participating. I was very quiet in the beginning, people around me thought I didn’t speak English. Once I gained confidence I felt that I had the masala in me to stand up to global competition,” she says. Ramnath was fortunate to have attended Harvard at the time of the dotcom bubble. The case studies, assignments taught her a lot about entrepreneurship. “I realised that nobody has ever had it easy in life. Be it a Starbucks or a Nike, every organisation has had their moments of doubt.”

Building a new business

Fascinated with the wonders of the internet and bursting with new entrepreneurial ideas, Ramnath approached ICICI chairman KV Kamath with a proposal to set up the two missing links she spotted. “I told Kamath, I see two gaps — we don’t have a private bank and no internet-enabled services. I am happy to take up either of these.”

Kamath agreed with Ramnath’s assessment and encouraged her to set up the e-commerce group at ICICI. Thus, she began building another business from scratch. Ramnath was instrumental in building ICICI e-payments, BillJunction and Traveljini. “This was my first brush with entrepreneurship, conceptualising, building a team, working with limited capital and dealing with the uncertainty of the future,” she recalls.

Ramnath explains how some ventures were a huge hit, while some failed. She attributes her success to Kamath who she claims set tight boundaries within which employees were allowed to take risks. “In that limited playground, you have an opportunity to build and grow.” That’s exactly what Ramnath did and was made the head of ICICI Venture in January 2001.

Ramnath labels this period as the most challenging, “When I started out I thought this could not be tough since we had the ICICI card. Here is a reputed brand that people trust and want to do business with. Little did I know that the market would not buy my story of why India needs private equity. And the market didn’t buy into this story for a long time.”

But Ramnath adjusted to the prevalent situation and changed tact. She explains how she shifted focus from early-stage investing to providing more growth capital. But Ramnath’s resolve to turn the fund into one of the top private equity firms in India propelled her to push ahead with her set targets. In 2004, the fund had $50 million assets under management and in 2007 that grew to $2.4 billion.

However, Ramnath calls the India Advantage Fund that raised $267 million as the ‘mother of all challenges’. Ramnath talks about her approach, “People asked questions like ‘Kya dhandha ho sakta hai?’ But, I realised that if 70% of the money to be raised was third-party money, then I had to get my strategy right. I managed the legacy assets smartly. I shut down companies that had no potential and invested in companies that showed scope for growth.” Ramnath is credited for the handsome return of ₹195 crore that ICICI Venture earned in 2007 from its investment in cinema operator PVR. The PE fund also made a smart exit in 2007 by selling its stake in ACE Refractories for ₹550 crore. 

In April 2009, Ramnath decided it was time to fly solo. “After all, ICICI Venture was a subsidiary of the ICICI group. The objectives of a subsidiary become subordinated to those of the parent company. After a certain point, it becomes more of a limitation than a competitive strength,” she explains as she talks about the tough decision to quit ICICI. She bid goodbye to ICICI on a Monday in April 2009 and on Tuesday morning she was making a list of the people she wished to seek advice from.

“ICICI said that I could keep my email id for two more days, so I wondered if I should note down my appointments. I was living in an ICICI house, had an ICICI phone, car and a driver. I had to look for a new house since my daughter was moving to the US for further studies, had to visit my son in another state for his graduation ceremony,” she recounts.

“I sent emails seeking an appointment with people like Deepak Parekh, Ashok Ganguly, NA Soonawala, Arun Gandhi, etc. I doubted if they would want to meet me now that I was a nobody,” she adds. Not only did the above-mentioned recipients of her mail respond, but she was approached by the heads of a few banks for the top post. That gave her the confidence that people had faith in her investing track record.

Within eight months, Ramnath founded Multiples with ex-ICICI Venture colleague Sudhir Variyar. Multiples carries the distinction of raising money from 15 institutional investors across the globe. The PE fund, which adopts a sector-agnostic approach to investing, has roped in marquee investors such as the Canada Pension Investment Board (CPIB).

Ramnath narrates the incident when CPIB visited Mumbai to conduct a due diligence of the firm, “We had a tiny office back then, so Sudhir and I figured that we would meet them at the Four Seasons and then ask them if they wished to visit our office. They were keen on seeing the place we operated out of and were impressed. They said this is how a start-up should be. Why must you invest in a fancy office when you’re not sure if this business will take off or not?”

But flourish the business did. With around $1 billion in AUM, Multiples has made its mark. Ramnath believes women should not be constrained by gender biases, instead they must first think of themselves as the most qualified for the job at hand. This seems to be the mantra followed by the mother of two who lost her husband in a car accident in 1995.

Even then, diligently working towards the one goal she set for herself — “My children will continue to lead the same lifestyle” — saw her achieve much more. She doesn’t forget to mention the support of her parents right from the time she applied for an MBA, to the time she quit ICICI, to when she untimely lost her husband and even now. “I am a big believer that if you do the right thing, then the universe will make it successful, itna anyay bhi nahi hai iss duniya mein.”