Facilitator without any fears
Ranu Vohra is the kind of guy you would seek out in a crowd if you were lost. The chief executive of financial services firm Avendus Capital Pvt. Ltd has an air of kindness about him that puts people at ease instantly. We are interrupted at least four times during our 2-hour conversation. Each time, Vohra is ready with a warm smile and a firm handshake, meeting everyone (from ex-classmates to private equity investors) with equal friendliness.
His geniality has other benefits too; it’s probably the reason why his start-up, initiated 14 years ago with partners Gaurav Deepak and Kaushal Aggarwal to connect fledgling firms and venture capital investors, has today emerged as a leading diversified financial services firm, housing one of the largest domestic investment banks in the country, also one of the most preferred by mid-caps.
Vohra, 41, was born to an educator couple in Karnal, Haryana. His father wanted the bright student to be an IAS officer but the child had other ideas. By the time he was 13, Vohra had decided he was not cut out for a government job. “I have clarity on what I can and cannot do,” he says, matter-of-factly.
Vohra certainly seems to know what he can do. His decisions are a combination of gut instinct and a well-researched, calculated reading of market needs. That is how the alumnus from the Indian Institute of Technology, Delhi, and Faculty of Management Studies, or FMS (he did his MBA from there), took his entrepreneurial plunge.
Vohra and his partners started Avendus (then called Coolstartups) from a garage in 1999. Riding high on the dot-com boom, their plan was to connect fledgling firms with investors who could fund them. The timing of the new business, however, coincided with the dot-com bust which brought venture capital funding to a screeching halt.
In 18 months, the trio closed only three deals.
“It was time for us to think clearly on what we wanted and we decided to start an investment bank,” Vohra says. The reasoning—Vohra and Aggarwal had earlier worked for Communications Equity Associates (CEA), an investment bank in Mumbai, and Deepak had been investing in technology companies for ICICI Bank.
In 2000, they changed the company’s name to Avendus. Today, the financial services firm has an asset and wealth management business, investment banking arm, institutional equities and PE funds. Since 2003, Avendus’ investment banking, or i-banking, arm has closed nearly 200 deals, including the likes of MphasiS Ltd’s $202 million (around Rs.11 billion) acquisition of Digital Risk Llc, Serco’s $536 million acquisition of Intelenet Global Services, and co-advising Satyam in its sale to Tech Mahindra for $582 million. “At Avendus, we never wanted to do the retail business,” says Vohra.
I meet Vohra on a balmy Thursday afternoon at the Trident in the Bandra Kurla Complex (BKC) in Mumbai. He is in a white-and-purple check Brooks Brothers’ shirt with a black striped jacket (no tie), black formal shoes, and sporting a Tag Heuer watch that his wife Nandita gifted him seven years ago on their wedding anniversary. He chooses a cappuccino and a platter of cookies, with clear instructions to keep out chocolate chips.
In India, investment banking is a big guys’ game, with global banks having the lion’s share on the back of their balance sheets, reach and international connections. Home-grown Avendus has slowly and gradually made its way into this club. “We pitched for $1 billion mandates with as much enthusiasm as for smaller deals. We never limited ourselves to smaller deals, we went for all,” Vohra says. “We had no fears, we had an inherent optimism that there is nothing we can’t do that a Merrill Lynch or Morgan Stanley could.”
Between 2000 and 2003, the team closed 10 deals, and they have never looked back.
Vohra says he and his partners believe in working on a five-year plan for the company. In 2007, they decided to add new businesses like trading securities, managing corporate mergers and acquisitions, and diversifying into new areas for i-banking. The trio felt the insights they had acquired in the information technology/business process outsourcing deal-making space could be replicated in sectors like life sciences as well as consumption-driven sectors like healthcare, education, fast-moving consumer goods, etc. “As we experimented, our model evolved and we diversified into industrials, digital media, real estate in 2005. We knew which vertical to add,” says Vohra, a self-confessed gadget chaser who is “your go-to person for gadgets. I can tell you what to buy, where to buy.”
Through its wealth management business, which is headed by Vohra himself, Avendus manages nearly Rs.2,000 crore for 120 families. Its i-banking business has a market share of 5% and has been among the top five domestic i-banks in the country in the annual league tables.
It is, however, yet to make its mark as an IPO, or initial public offering, underwriter. Vohra acknowledges this and is hopeful of plugging this gap over the next two-three years. “It’s a closed big boys club dealing with quality businesses. In that sense, it’s not easy to break into. It’s a product where people need a long track record,” he says.
While the three partners have been together for more than a decade now, their roles were clearly demarcated only recently. Wealth management and asset management is handled by Vohra, while Deepak and Aggarwal are i-banking co-heads. Aggarwal also leads the structured finance business. For the last one year, the rumour mill has been rife with speculation about Avendus being approached for a strategic alliance (including acquisition) and the trio having differences.
“Our roles are based on who loves doing what,” says Vohra. “We are tightly integrated on our vision for the company and ethics. We don’t sit together to understand our relationship. There is a long-term intent to what we are doing,” he says.
The three partners have different personalities and that’s how they complement each other, say industry experts who have seen the team work together. For example, Vohra is more indulgent, keen on understanding the “agenda behind the agenda”. Deepak is famous in the i-banking industry for understanding and deciphering a company’s fund-raising pitch in less than 5 minutes. More often than not, Deepak’s predictions come true. Aggarwal is renowned for knowing the “story” of a sector, its past, present hurdles and future potential.
"IN PARENTHESIS: Ranu Vohra is almost zealously protective of his family time. He compensates for “lost time” with a mandatory family vacation once a year with wife Nandita and daughters Ananya (13) and Tarika (10). His Sundays are exclusively for friends and family and he makes it a point to be there for his extended family on special occasions like marriages. Ananya is a national-level basketball player, so his interest in the sport has peaked now. While he dotes on his daughters, he accepts that the girls are closer to his wife. “I am the go-to parent during their math and physics exams,” he says."
“We are certainly not off the hill. We don’t have investors who are in a hurry to exit. The motivation for transition among the founders is not there. We want to see the business reach a considerable size...we are too young,” Vohra emphasizes.
Fond of spending time with his family, Vohra credits wife Nandita, who he met at FMS and has been married for 16 years, for her support in his entrepreneurial plunge. Nandita is a consultant with the World Bank on water and sanitation planning. He clocks at least 1,000km a year running, three-four days a week. He is preparing for next year’s Barcelona marathon.
Coming back to what he can and cannot do well, Vohra, a food lover whose preferred cuisine is Oriental, cannot cook. “I have only cooked once in my life and never repeated it. It was a Mangalorean fish curry,” he says.
“It was a disaster.”