Warburg co-head Prasad quits

MUMBAI: A cold call made seven years ago from Express Towers in Nariman Point to an office bang opposite Qutub Minar remains the defining moment in private equity in India.

Pulak Prasad, then an associate with Warburg Pincus, was reaching out to Akhil Gupta, then group director of Bharti Enterprises.

The call - and due-diligence later - came the most famous deal to have been struck in the domestic investment banking firmament to date.

Warburg Pincus decided to pay $300 million — about Rs 1,300 crore — for a 20% stake in Bharti Tele-Ventures, then a New Delhi-centric cellphone operator, owned by Bharti Enterprises. The New York-based global venture capital and buyout firm has made gains six-and-a-half times that - or around Rs 8,000 crore — in the six-and-a-half years since.

But on Tuesday, the man behind the deal put in his papers. Speculation is rife that continuing ‘joint leadership’ at Warburg may be why he is exiting.

One of the most revered investment bankers locally, Pulak is planning to raise a hedge fund and will perhaps be based out of Singapore. He will stay on at Warburg till December.

A peer running his own advisory in Mumbai, who did not wish to be named, told DNA Money: “Pulak’s one of the rare investment bankers who has it all - great intellect, great ethics and is a great person.”

The 37-year-old IITian started life in a Hindi-medium school in Bihar, cantered through IIM Ahmedabad, and was one of the first recruits of McKinsey & Co from its hallowed portals.

Interestingly, it was a head-hunter’s cold call that persuaded Pulak to join Warburg Pincus in 1998 as an Associate. The army-man’s son was named managing director for India in September 2002, along with Rajesh Khanna. Both were shifted to Mumbai from Singapore in 2002, where they had been transferred in the interim.

But it has not been apple pie and fatherhood all the way. Perhaps the biggest drag among Warburg’s picks has been Moser Baer, where money was pumped in twice in the last 6 six years. Warburg may not have lost money here, but it indeed lost out on the opportunity costs.

The dotcom bust also hit Warburg - sources say it may have invested as much as $50 million plus during that period, but by then Bharti was gaining traction.

Another peer, who, too, did not wish to be named, remains in awe. “Pulak is very, very successful, but he is so humble. I have known some snooty S.O.Bs, including perhaps one of the fathers of private equity in India.”

Pulak himself has often said the key reason for Bharti’s success has been Sunil Mittal and his team.

But rest assured, Mittal knows Pulak’s value. India’s telecom czar is insistent on keeping Pulak on Bharti’s board, though traditionally, private equity players resign from boards once they exit their investment in the company.

He also remains a director of Aryan Coal Benefications, dotcom major Rediff, Sintex Industries, Radhakrishna Foodland (another Warburg underperformer), Venture Infotek, and BPO major WNS (another big winner).