The Growth Guru
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Taking part in the new history being written on the wall are some of the biggest names, who not only build a name for themselves, but are now also helping others achieve growth. In a quest to find leaders who are playing a major role in advising companies on a growth path, is Rajeev Chitrabhanu, CEO and MD, JM Financial Services.
Rajeev comes across as a person well travelled, well read and well experienced. He knows where he is coming from and where he can add value. His thoughts are clear as he guides his way in a meeting with promoters and entrepreneurs, who he believes might be able to take on the world. Here’s more on the growth guru.
When Rajeev met Vikash and his son Nitish, he instantly liked them. Then, nineteen-year-old Nitish was trying to build an internet media business. Intuitively, it seemed like the right founders and Rajeev immediately decided to invest in the company. However, the business did not scale as planned, as the internet revenue model was opaque.
What followed were some really rough years, but the father-son duo kept morphing until they got into the telecom short code service and then to mobile gaming sector. During this time, Rajeev kept meeting them regularly, over the weekend. Vikash always wanted to do the right thing, even though at one point the company was cash-strapped. They stuck to it and never evaded the investors and or thought of closing the shop.
Today, the company,Nazara Technologies,has grown to become India’s largest mobile game publisher, with an estimated valuation of Rs.3000 crore. Rajeev Chitrabhanu has made investments in several fast-moving consumer tech companies, like Nazara and also established companies like Furtados Music, Omniactive and Global Hospitals Mumbai. These companies regularly seek his advice on business strategy, organization structures and the right capital structure.
Rajeev had started off as an investment banker. Later, he initiated a few businesses for JM Financial (erstwhile JM Morgan Stanley), which include securities, lending through the NBFC, brokerage and wealth management business etc. From planning a strategy to technology and processes, Rajeev helped them to build their business from scratch. Under his leadership, JM Financial won several awards, including the UTI Mutual, CNBC TV 18, Best National Financial Advisor (Insitutional) and Great Places to Work Awards. Rajeev says, “From my several years of experience, I know what issues and opportunity a company has,”.
Very few people have such experience in providing advising assistance in so many sectors, which includes growth strategy and capital raising. Rajeev seems to have done it all. He knows what a company needs, based on the stage at which they are in. Sharing one such incident, he says, “Safari was an interesting journey. Sudhir (Sudhir Jatia, MD, Safari Industries India Ltd) had just left VIP and had planned to take it easy. But, I knew it wouldn’t be like that for long. It was not about money but the challenges that come with it. Within two weeks he became restless. We kept meeting and discussing various ideas. Then an opportunity in Safari luggage came along. The original founding family had done a good job in keeping the brand.
It was a household name, and had the potentially to go global. We discussed the scope of buying it out and presented a open offer to the founder. He put up the initial capital, and I too invested. We were sure about making a capital growth later. Sudhir bit the bullet, and started working relentlessly. In four years, the company’s market cap grew more than eight times.”
Talking about the value, Rajeev has been able to add, Jatia, says, “In 2009, I was looking at buying the luggage brand Safari. That’s when I approached Rajeev. He has been a great support and helping me process the entire deal. We kept meeting every three months, and he kept on adding value. He played a key role in branding, policy framework and everything else.”
Working for different companies and countries has helped in Rajeev’s practices. Sharing his experience, he says, “My working in USA, then Europe and Asia taught me a lot. There is a way of solving problems and approaching situations. In the developed countries there is a lot of focus on organizational structures, efficiency, which is very important as you start to scale. While having worked in Asia you see a lot more entrepreneurship at lower levels and the speed at which things happen is much faster. This is important as you build companies. As you become bigger, structure and processes become very important.”
Talking about his inspiration, Chitrabhanu says, “I have learnt a lot from three people - my parents, Mark Mobius and Nimesh Kampani. My father has taught me the importance of being around great people and staying happy. And my mother taught me to be compassionate. Mark has taught me how to look at the bigger picture and think long term. He taught me to invest on a company, as if its my own. Nimesh Kampani taught me to be simple.He taught me deal making, value unlocking and to build great companies, doing the right thing by giving the right advice. If you do it right, capital will follow.”
Investing in Mega Growth
There are three trends to note. 1) Many people in the government are working like entrepreneurs. 2) The young professionals are willing to take risk 3) Indians are now tech-savvy and becoming tech powered at one of the fastest paces in the world. With the youngest population in the world, second largest engineering base, a domestic consumption market, a high savings rate, the markets are ready to be the second or third largest
consumer of capital.
Rajeev Chitrabhanu’s investment ideology is simple. He would find broad spaces that have macro-tailwinds or are disrupting an existing space. He looks for areas that are of high consumption with low margins, as he believes these businesses have huge demand, but are driven with bad supply chain dynamics. His focus is on areas that he can understand. His eye goes for an entrepreneur, who is passionate, positive, and flexible to morph. His philosophy is even simpler, “At times too much knowledge is a baggage, that’s why the right amount of experience and innocence is the best!”
Sharing his investment criterion, Rajeev gives a clear-cut reply, “I need to like the founder. He or she should be in a market where the idea seems scalable.” His only principle is of marginal costing, where after a certain point everything goes to the bottom line. Talking about his favourite sectors he adds, “I like vertical marketplaces, where customers and product/services meet.”
Taking out time for a professional doesn’t come easy. On Saturdays or bank holidays you can see Rajeev meeting the founders. Sharing his nuggets of wisdom, as other professionals think of turning investors, Rajeev says, “You need to take investing seriously, and it makes sense if you are going to do a few investments and not one or two. You need to understand the business and enjoy meeting the founder, as this needs to be done outside your professional time.”
Sharing how he raised a small round in the beginning from Rajeev Chitrabhanu, Geetansh Bamania, Founder, Rentomojo shares, “I met him because my brother has worked with him.
We had him at the very beginning. My brother is also an angel investor with us. Rajeev helped me in the right direction, by helping me figure out the right business model. He brought in the clarity on what not to do.” In Rentomojo, Accel and IDG came in much later, that too through Rajeev. After having invested in so many companies, what advice he has for ventures that are seeking the right guidance, Rajeev says, “Look for investors who will add value. For strong founders with a good idea, money is a commodity. The right advice is invaluable, and investors who understand the sector and operational issues add the most value. Leave enough room to pivot and experiment. All the analysis on market size etc. is ok but not at the expense of customer experience.”
As the curtain unveils on India’s entrepreneurial environment, a lot has changed over the years. We are at a time in India, where all of a sudden entrepreneurship has been unleashed. The social stigma of failure is fading fast, and infact not taking risk at a younger age is more uncool.
(This article first appeared in the Indian edition of Entrepreneur magazine (October 2016 Issue).