A financial wizard who thinks big

By raising Rs 900 crore for the Aditya Birla PE Fund, Bharat Banka simultaneously added two feathers to his cap in the domestic private equity industry.

In achieving this, Mr Banka made Aditya Birla PE the first among the big three corporate houses — the others being Tata Group and ADAG — to close a fund, even as he managed to raise substantially more than the target of Rs 500 crore. Mr Banka, 41, has invested 10% of the corpus and is sniffing for opportunities.

He likes sectors such as infrastructure enablers, logistics, niche manufacturing, education and healthcare and companies in which he can play the role of a differentiator, rather than being a mere fund provider.

That guiding principle may slow the pace of his investment, but he is sure that Aditya Birla PE fund will guide some small companies in their journey towards making it big.

Gujarat-based Anupam Industries is a case in point. Within three months of investing around Rs 50 crore for a “significant minority stake” and joining the board, Mr Banka helped India’s largest industrial cranemaker join hands with Japan’s Mitsubishi.

Under the agreement, the local company will use the foreign firm’s technology to manufacture a wide range of port and container cranes, and material handling equipment and systems.

In his earlier avatar as head of corporate finance at Aditya Birla Group, his mandate was to help chairman Kumar Mangalam Birla in portfolio building. In other words, he was the group’s internal advisor to take stock on issues such as which business could grow faster? Where the group was losing momentum? Which sectors should the group enter?
    
He was a member of the crack team that helped the Aditya Birla Group execute a slew of fund-raising and M&A deals. Close to Mr Banka’s heart is the group’s acquisition of the cement business from Larsen & Toubro (L&T) and its consolidation in the telecom space. Reason? The role he played was much more than that of an advisor.
   
For example, Mr Banka and his team started working on the L&T cement deal much before it was announced. The team’s task began when the group found that it could have a larger play in the commodity material business beyond Grasim.

The team then chalked out the strategy on how the Aditya Birla Group could mount a takeover bid, what could be its plan in the event of a counter-offer, how it could raise funds.

In fact, Mr Banka’s job ended when the group acquired L&T’s cement business, re-named it UltraTech and listed it on the stock exchanges.
    
“An advisor’s job is to advise and then take a back seat. But Mr Banka’s role was to identify opportunities, create consensus from senior members of the group, be accountable for the decision, and implement strategy till a business manager took it to the next level.

His job was similar to that of an entrepreneur,” says an Aditya Birla Group insider who worked with Mr Banka. A rank holder in CA, Mr Banka wanted to help small companies with his ‘entrepreneurial’ touch. Also, he feels that the PE fund will add tremendous value to the Aditya Birla Group.

He is open to the idea of raising money overseas, although that’s not an immediate priority. His aim is to have a corpus of $1 billion (approximately Rs 4,600 crore at current exchange rates) in next three to five years.

In the long run, over the next 15 years or so, he wants to build a fund equal in size and stature of Blackstone. Those who know this corporate finance expert bet on his success.