Everstone sees wellness a big investment theme: Roshini Bakshi

For Roshini Bakshi, managing director (private equity) at Everstone Capital Asia Pte, life is putting on your running shoes and investing in quick succession in businesses, particularly brands, and help them grow. Even a portfolio size of $3.3 billion isn't slowing Everstone down. With the previous stint as managing director for the Walt Disney's consumer business for South Asia, where she was responsible for setting up and growing the business to over $200 million in revenues, Roshini is driving Everstone's focus on creating and nurturing brands. And with earlier investments such as school textbook publisher S Chand now being cashed in at a handsome profit through IPO, Bakshi is now busy nurturing brands like Modern Food. She shares with Sumit Moitra, the workings of the mind of an avid runner.

Everstone had launched its latest fund Everstone Capital Partners III LP with a corpus of $730 million. Where has it been invested?

Investment in Modern Foods has been through this fund. Under it, we have also invested in OmniActive Health Technologies, which supplies ingredients to the fast-growing nutraceuticals sector, and in Rubicon Research, a pioneering drug delivery technology company. As for all our funds taken together, we have so far invested in 30 companies and have exited partly or fully a few like S. Chand or Centrum Capital. We constantly look at exits from our older investments.

What are the big themes you are looking at?

The consumer continues to be an exciting sector for us - we all know that as India and its economy grow with millions of consumers coming out and joining the middle class every year, and the resultant urbanisation. In consumer sector, there are several exciting sectors like health and wellness, food, personal care, all of which are important for us. With people earning more, there is greater awareness about personal health and wellness. People are concerned about what goes inside their body. These apart, logistics and warehousing is another big theme we are excited about where investments are being made through Indospace (developer of industrial and warehousing parks formed as a joint venture with Realterm, a global industrial real estate leader), and also financial services space where we have investments in Hinduja Leyland Finance and Indostar Capital Finance, where we own 100%.

The logistics space was supposed to get a big boost from e-commerce, which has panned out partly. How bullish are you about logistics, particularly post Goods and Services Tax rollout?

The logistics and warehousing is something we are very bullish about. And in our investments, we are not dependent on just one sector like e-commerce as we are also into industrial parks that promote manufacturing. As for the GST, we are looking at it with the help of EY and others. We see GST benefiting the sector over a period of time, even an increase in margins. But as GST gets implemented there could be some disturbances though. But the fact that government is finally moving ahead with GST is a great, exciting thing. You won't believe I have been hearing about GST for the past 25 years. The next few years would be very exciting for India.

What about health and wellness?

While we mostly have companies that operate at the back end of health and neutraceuticals, we are excited about getting into companies that have consume-facing brands.

We keep reading that Indian consumers are sitting tight on their money; something is holding back their spending. Do you see the same?

It's not that Indian consumers are holding back their purchases. I believe, they are more value conscious. Are we throwing money the way western consumers do? We are not. But, are we spending more than what we had been doing earlier? I believe each one of us is. We are loosening our purse strings.

How do you see Indian brands evolving? Can they become international?

I believe a lot of our Indian brands are very sophisticated, be it Marico or Emami and others as well. A brand like Godrej is truly global. They are in so many markets. In Indonesia, they are a market leader in the entire mosquito repellent category. Or, look at Asian Paints. There are many Indian brands that are now growing beyond the shores. But our market is so big that every other market looks so small, a dwarf compared with India.

How is Everstone's management style?

We do take a very hands-on approach as in many of our businesses like Modern Foods, we have majority control. We are working very closely with the management of Modern Foods. In the case of S. Chand, while I wasn't there at the time of initial investment, we worked closely with them on the 'Chhaya Prakashani' acquisition in December, which is a vernacular textbook brand in West Bengal.

What did Everstone see in Modern when it took over the company in 2015?

When Everstone took over Modern, we were very excited, not because of the business but what the brand stood for, particularly those who are on the wrong side of 40. In my childhood, I still remember when my mother used to bring the fruity breads home and I used to nibble away all those small pieces of fruits. That's what Modern was to me. When you ask someone in her 20's, she probably won't know what the brand was. So the entire proposition of bringing back the joy excites us. With that perspective, we took a relook at the brands and what today's consumers want. Of course, consumers are changing. Today's women are no more wives or mothers. They are juggling so many things. Today's men respect what women bring to the table while women are able to manage better homes, jobs and children. As our lives become stressful, there is growing awareness about eating healthy. But the thing is consumers don't want to give up on taste in exchange of pure health. That was the genesis of reworking the product portfolio of Modern. We went back to consumers and learnt what things they want most from their bread. How do we propose to bring this brand back to the centre of the heart of the consumers is what we are working on. We are investing a lot behind media being launched in Bengaluru followed by Kolkata through advertisements in TV, cinema halls and social media.

Since you are investing so much in relaunching the brand, why you are not expanding the portfolio?

While it is fundamentally a bread company, the consumer feedback told us resoundingly that Modern can go much beyond bread, into, cakes, buns and rusks. In fact, we have launched chapati in Tamil Nadu and Karnataka and Malabar paratha in Kerala. Seeing the acceptability of the products in the south where the products are doing brilliantly, we plan to extend these products to other regions as well, targeted at young working couples demanding healthy food and wanting to avoid the hassles of making them. We are, in fact, planning to extend it to other regions as well. The primary reason we targeted south initially is that rolling chapatis is not something south Indians are used to. It's mainly targeted at working couples who would take healthy chapatis but want to avoid the hassles of making the dough.

What has been the journey of Modern since Everstone took over?

The journey has been exciting. After we took over the whole of the company with plant and people, what excited us was the brand. That's the most important thing a product company has. Everything else can be procured. Our first task was to energise the organisation. We also reworked the logo, removed the clutter and opened it out. Then we invested a lot in people, plant and machinery and the result is we now have an organisation that is ready to grow and touch a revenue milestone of Rs 1,000 crore.

Will this be a success story like S. Chand?

Absolutely! We usually stay invested for a period of between 5-10 years depending on how we plan to build the business. And for Modern we will stay put definitely till the IPO.