RPG Bets on Young Team to Shep­herd New-age Ven­tures

Cor­po­rates such as Tata Sons, Re­liance In­dus­tries, Aditya Birla Group, RPG are in­creas­ingly giv­ing a free hand to young and dy­namic ex­ec­u­tives to run pres­ti­gious projects. They feel the younger lot are more aware of the mar­kets and can pre-empt trends Gr

The Economic Times - - Companies - Dev­ina.Sengupta @times­group.com

Mum­bai: Kun­jan Chikhlikar went through five rounds of in­ter­view, two of which were with Harsh Goenka, be­fore the tyreto-plan­ta­tions RPG Group picked him. The 34-year-old con­vinced the RPG En­ter­prises chair­man that the ex­pe­ri­ence he gained from work­ing 10 years at pri­vate equity firms, along with the energy and en­thu­si­asm he brought in, he is the right one to han­dle the group’s ven­ture into new-age busi­nesses. Goenka had the op­tion of pick­ing any of his top brass from group com­pa­nies to lead RPG Ven­tures that seeks to roll out new busi­nesses and make in­vest­ment in star­tups. But he opted for peo­ple who are young but also have ex­pe­ri­ence of about a decade at con­sul­tants, in­vest­ment banks, star­tups and PE funds. Sev­eral other con­glom­er­ates are also fol­low­ing a sim­i­lar strat­egy, as they in­creas­ingly look for op­por­tu­ni­ties in star­tups and other emerg­ing busi­nesses.

“Young blood is needed to build a team and we will have to res­onate with the youth if we are look­ing at new ven­tures,” said Chikhlikar. His pre­vi­ous em­ploy­ers in­cluded Eight Roads Ven­tures, Light­house Funds and IDFC Pri­vate Equity. The Whar­ton alum­nus, who also has a de­gree in busi­ness and fi­nance from NYU Stern, was roped in by the RPG Group two months ago. The con­glom­er­ate with a mar­ket cap of about .₹ 18,150 crore has more than 15 com­pa­nies spread across six busi­nesses in in­fra­struc­ture, au­to­mo­tive tyres, IT, pharmaceuticals, plan­ta­tions and energy. It has kept aside .₹ 100 crore for RPG Ven­tures to in­vest in new busi­nesses. The fu­ture of these busi­nesses will be de­cided by Chikhlikar’s team of seven, where the av­er­age age is 30. Their job is to come up with two-three new busi­ness ideas a year which will gen­er­ate .₹ 1,000 crore of rev­enue in the next three years. “We needed a team of young, en­er­getic in­di­vid­u­als who have high risk-tak­ing abil­ity, yet have the in­tel­lec­tual cap­i­tal to eval­u­ate ev­ery propo­si­tion from the lens of a startup busi­ness,” Goenka said.

To at­tract tal­ent, the group has cre­ated a sep­a­rate salary struc­ture for the ven­ture where re­wards are given on a mile­stone ba­sis and suc­cess of the projects. “We have not only hired young peo­ple, but looked at the un­der­ly­ing model of how pri­vate equity and ven­ture cap­i­tal firms work. The re­mu­ner­a­tion struc­ture for this young lot is quite in line with how salaries are struc­tured at RPG group with a few tweaks to bring in prac­tices from the PE and VC world,” said Sachin Nandgaonkar, chief ex­ec­u­tive of the group’s spe­cial­ity sec­tor. He has an ad­vi­sory role for the ven­ture.

Bat­tling the bar­rage of star­tups and des­per­ate to get out of a brick and mor­tar im­age, con­glom­er­ates, in­clud­ing Tata Sons, Re­liance In­dus­tries, Aditya Birla Group and Mahin­dra, have their own ecomm ven­tures or are about to­launch them. Sev­eral of these com­pa­nies are in­creas­ingly in­volved in star­tups, es­pe­cially where they find op­por­tu­ni­ties com­ple­ment­ing their ex­ist­ing busi­nesses.

To man­age these oper­a­tions,

Qual­i­fi­ca­tion PGDM (IIM-A) Ex­pe­ri­ence Ac­cen­ture, BCG

IIT Bom­bay (B. Tech),

Head – RPG Ven­tures

Qual­i­fi­ca­tion The Whar­ton School (MBA), NYU Stern (BS, Fi­nance) Ex­pe­ri­ence Eight Roads Ven­tures, Light­house Funds, IDFC Pri­vate Equity

AB­HAY RAMCHANDRAN,

Qual­i­fi­ca­tion

Ex­pe­ri­ence

KPMG

Qual­i­fi­ca­tion

Ex­pe­ri­ence

ISB (MBA), CA

ISB (MBA), CA

ICRA they are mostly de­pend­ing on young tal­ent. In the case of Ku­mar Man­galam Birla-owned fash­ion re­tail site Abof.com, for in­stance, the head is 37-year-old Prashant Gupta. Mukesh Am­bani’s chil­dren are deeply in­volved in Re­liance In­dus­try’s com­mu­ni­ca­tions busi­ness, Re­liance Jio In­fo­comm.

“Com­pa­nies are re­al­is­ing that the younger lot are more aware of the mar­kets and can pre­empt trends,” said Nir­mala Menon, founder of In­ter­weave Con­sult­ing that ad­vises com­pa­nies on di­ver­sity is­sues. “The com­pany can then make their se­nior man­agers ex­e­cute the plan … This is es­pe­cially seen Qual­i­fi­ca­tion Masters in In­dus­trial Engg, La­mar Univ, Hous­tan-Texas Ex­pe­ri­ence IBM, Eicher Con­sul­tancy, HCL Tech­nol­ogy

To at­tract tal­ent, the group has cre­ated a sep­a­rate salary struc­ture for the ven­ture where re­wards are given on a mile­stone ba­sis

AVARTAN BOKIL, 35,

(ad­di­tional role Head, Group Strat­egy)

Qual­i­fi­ca­tion IIT Madras (B. Tech), MBA (XLRI)

Ex­pe­ri­ence

BCG when they want to foray into new and emerg­ing busi­nesses.”

For young ex­ec­u­tives like Chikhlikar, work­ing for large busi­ness houses of­fers the op­por­tu­nity to over­see mul­ti­ple ven­tures than con­cen­trate on just one. “We would like RPG Ven­tures to be run with high pro­fes­sional stan­dards like any re­puted PE or VC firm,” said S Venkatesh, pres­i­dent of group HR at RPG En­ter­prises. “Clearly, ex­pe­ri­ence and ex­per­tise in this area was a key re­quire­ment to kick-start RPG Ven­tures… It is for this rea­son we de­cided to get an ex­pe­ri­enced pro­fes­sional like Kun­jan into the ven­tures team.”

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