We bet big on biotech, media, shipping: ICICI Ventures

There has been a lot of action of late in the private equity and venture capital space. Renuka Ramnath, MD and CEO of ICICI Ventures, discusses spaces that the company has forayed into and gives her perspectives on what to expect in the future. 

After the initial effervescence in the dotcom space, Ramnath says that over the last five-six years, those who have emerged as winners have done so as they have the ability to appropriate a large segment of the market for themselves and deliver to these customers at very low cost.

She says these dotcom companies have extraordinary profitability margins and an ability to scale up their platform without having to invest a lot in terms of additional capital expenditure, which is why the valuations are high currently.

At current valuations, she advises to be careful about which company, which strategy and which management one is betting on. “When it comes to companies like Info Edge, where we have been an investor for almost seven years, we can say that they have created a foundation which can deliver that growth. So I certainly think that these valuations are well justified.”

As far as real estate is concerned, Ramnath states that ICICI Venture is helping developers acquire land parcels with their equity money along with the developers’ money and participate in the development risk and the development return.

“There would always be aberrations in a very euphoric market, such as the one we are experiencing today. But if one bets carefully and if one has the capability to encash the value of one's investments, I think one would seldom go wrong,” she informs.   

While she believes that the current scenario in the country is such that almost all industries have enormous potential for growth, she is currently looking at innovation led industries like biotechnology and infrastructure led industries like shipping.

She sees a lot of potential in the media sector. She says, “The beauty about private equity business is not about just running after the obvious and the glamorous industries, some of our bets in the retail space or in the media space have got a lot of visibility and attention. These are emerging areas.”

“A lot of big families and big business groups are entering and therefore it makes it a very interesting space for the world to watch. Below the radar also there are enormous opportunities that this country has to offer,” she adds.

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