Vishal Nevatia and his team of buyout specialists believe in the companies they invest, sometimes more than the founders themselves
Neeraj Gupta was getting ready to fold. His company V-Link had enjoyed five years of sensational growth supplying cars and buses to BPO companies to ferry their staff. Then competition arrived, growth slowed and it appeared that the company would “hit the wall” in a few years. Perhaps it was best to sell, take the cash and get out. “My advisors had lined up a few potential investors,” says Gupta. That’s how he met Vikram Nirula of India Value Fund Advisors (IVFA). Nirula looked at the deal and turned it down. “I told him that apart from the fleet business I was also planning to get into radio taxis. Vikram told me: ‘If you get the license then let’s talk’,” says Gupta.
Though venture funds are highly secretive about their business there are three ways to assess their performance. The first is whether the businesses they fund improve their market position. Three of IVFA’s current portfolio companies are among the market leaders in their segment. Meru is the largest radio taxi service in the country. Radio City is among the top three radio businesses by size. RDC Concrete is the fifth largest ready-mix concrete company in the country.
“My head of business development, head of IT and head of projects came through their inputs. Most of these guys are still with me,” says Shroff. While the regular movie business through a multiplex was where Shravan and his family’s insights were most useful, Thomas, an ex-HUL man and a partner at IVFA, had other things to worry about. “I had come from a foods background and for me the real challenge was to build a Rs. 1-2 crore business selling popcorn and chai for a film turnover of Rs. 10 crore,” he says. The team worked so closely that as Arte puts it, “I think Shravan spent more time with me than with his wife. I had his number on my ‘friends and family’ free calling list.”
(This story appears in the 11 September, 2009 issue of Forbes India. To visit our Archives, click here.)