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
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
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)
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.”