• Opportunities

In the 1990s, there was an unmistakable buzz in the air about the emergence of the infrastructure sector. The government had set up the National Highways Authority of India (NHAI) with Deepak Dasgupta as its chairman. Seven power projects were put on fast track and proposals to upgrade ports and airports were chalked out.

 ”We realized that this sector was on the rise—that the government had something special planned for it,” says Vinayak Chatterjee, co-founder, Feedback Ventures Private Ltd., one of the country’s leading infrastructure consultants. Vinayak, Rumjhum Chatterjee and R.S. Ramasubramaniam are three of the five founders of Feedback Ventures who are still with the company.

 In the summer of 1985, Delhi-based Feedback opened its doors with a capital of about Rs. 75,000. “Manufacturing, as a business idea, was clearly out; our DNA was such that we wanted to explore the consulting space. My wife, Rumjhum, worked at IMRB at that time. We heard that a breakaway group that was headed by K.M.S. ‘Titoo’ Ahluwalia had left IMRB to turn entrepreneur. Titoo went on to form MARG, and we realized that there was definite potential in this space,” Vinayak says.

 Adds Rumjhum, “We took on a large number of clients; when we first approached them, we said we can take the brief, but can start work only two months from now. The clients usually agreed and paid in advance. I found it very weird and I realized that we can do better.”

 Thanks to her experience in the field, Rumjhum provided some great insights while developing their business model. “I was very familiar with the market research model. Also, I already knew the network that we needed in case we took on larger projects,” Rumjhum says.

 Many multinationals like Nestle and Amex were entering the Indian market at that time, and domestic corporate houses were setting up offices in Delhi. But there weren’t any market research companies headquartered in Delhi; the team saw this as a niche they could capitalize on. “To get started, the five of us pooled in Rs. 15,000 each,” Vinayak says. Adds Rumjhum, “Our initial work only involved market research. We were a very ambitious team, with a huge capacity for lateral thinking and sometimes a little before our time, too.”

 From 1985 to 1990, Feedback was purely a market research company. But then, one of their overseas clients wanted the team to push the boundary and set up a factory for them. “We decided to give it a shot, because some of us were engineers, some knew financial regulations well, and others knew the law of the land. So we decided to go beyond market research and ended up building that factory,” Vinayak says.

 The construction of the factory profoundly reshaped Feedback’s sense of itself. The team soon decided to change focus to project management, changing the firm’s name to Feedback Ventures. Says Vinayak, “That was back in 1991, during the time when de-licensing happened and liberalization opened the floodgates for multinationals to enter India. We positioned ourselves as venture management company for people who wished to start a new facility in India. We managed all elements of the project for our clients, right from clearances, market sizing and buying land to civil construction.”

 Work subsequently poured in and by the mid-‘90s, Feedback Ventures had managed to get mandates to set up investment parks for state governments. “We got an assignment from Tamil Nadu and also from Haryana, where we built Manesar. We suddenly found ourselves making very large industrial parks without really realizing that we were entering the infrastructure space. Till then, no one used the term ‘infrastructure’ in the sectoral sense,” Vinayak says.

 A chance meeting with Deepak Parekh, however, changed the way Feedback Ventures did business. Vinayak explains, “We sometimes over-exposed ourselves and went through very high levels of liquidity crunch—thrice, in fact. We built up overheads in anticipation of large projects and opened branch offices, but the projected revenue did not materialize. Banks and other lending institutes weren’t eager to lend to a firm like ours, which did not have an asset base. We needed people who believed in us to help us out—one of them was Parekh. He took it upon himself to see the company through, and HDFC picked up 10 percent stake. He continues to play an active role and is, in many ways, a mentor to us.”

 By 1997, the firm decided to get out of the routine business and position itself as an infrastructure services company. It added engineering, project management, construction supervision, roads/highway designing to its portfolio. “The infrastructure sector did not quite exist and possess the scale it does today back then. It was initially difficult to get business, other than a few industrial parks and fast track power projects. The lack of projects was a huge obstacle; we had to fight to survive,” Vinayak says, adding that attracting quality professionals was another problem.

 Much of the company’s success was because of the founding team’s exceptional chemistry. “The five of us had a strong bond and respected each other for our abilities. Vinayak was always the multi-faceted one,” says Ramasubramaniam. “But one month into our launch, I was diagnosed with cancer. For the better part of the first year, all my colleagues supported me—from chemotherapy sessions to all other medications. My contribution to building the organization was nothing; I was, in hindsight, a burden on the others. But I was never overwhelmed by the magnitude of the problem, because it was never a lonely battle for me. When it comes to bonding, there can probably be nothing greater than this. The chemistry has been particularly good.” Ramasubramaniam’s words find resonance with the entire team.

 The current team is multi-dimensional. While Vinayak is the public face of the organization due to his leadership skills and powers of persuasion, Ramasubramaniam is the internal administrator and a manager by nature. Rumjhum, on the other hand, is the HR person whose soft skills hold everybody together.

 Today, Feedback Ventures operates in sectors such as transportation and logistics, energy, water and sanitation, SEZs, industrial infrastructure, housing and townships, commercial infrastructure, retail and entertainment, hospitality, healthcare and urban development. It has a current headcount of 700 professionals and a turnover of Rs. 105 crore, pegging it between three and seven in the pecking order of consulting engineering services. In the next five years, it plans to become a Rs. 1,000-crore firm. It has seen a 46 percent growth in toplines in the last five years, and an equal growth in bottom lines. “If this continues, we would soon be employing 5,000-6,000 people,” says Chatterjee with a smile.

Tags:
consultancy, Deepak Parekh, Feedback Ventures, IIM-A, infrastructure, NHAI, R.S. Ramasubramaniam, road, Rumjhum Chatterjee, SEZ, Vinayak Chatterjee