Ratan Tata’s investment in start-ups rises 30 per cent in fiscal 2016

Ratan Tata’s personal investment firm RNT Associates had invested up to ₹80 crore in about 30 start-ups in fiscal 2016. This is 30 per cent higher than the ₹61-crore the company invested in FY-15.

According to the company’s latest filings with the RoC, accessed by BusinessLine via business research platform Tofler, the Mumbai-based investment firm, set up by Ratan Tata in March 2009, made small ticket-size investments in the range of ₹25 lakh to about ₹5 crore on an average. However, in 2015-2016, RNT's highest investment of about ₹31 crore was made in a company called Human Longevity.

The San Diego-based company is creating the world's largest and comprehensive database of whole genome, phenotype and clinical data. RNT also made a small investment of ₹3.25 crore in the world's largest community driven hospitality start-up Airbnb. Besides, RNT Associates has also invested in venture and seed funds, including Kay Capital, Charme II and Charme III, Lets Venture, Online Pte and Seedplus Singapore.

The 79-year-old former chairman of Tata Sons has made some early stage investments in Indian unicorns such as Snapdeal, Ola and Paytm, through RNT Associates in which he holds about 99.9 per cent stake.

His close aide Krishna Kumar Kuttambally (aka KK), who was earlier his right hand man in Tata Sons, holds a very minority stake of 0.01 per cent. R Venkataramanan or Venky is also a Director on the board but has no shareholding in the company. The company has a subsidiary in Singapore, according to the RoC filing.

However, it seems that the valuations of RNT's investee companies have eroded given that the revenues and profits of the company has declined in FY-16.

RNT's consolidated revenues in 2016 stood at ₹6.9 crore, down by 175 per cent from ₹19 crore in 2015, the RoC data shows. The profits have also come down by 25 per cent at ₹2.7 crore in 2016 against ₹ 11 crore in the year-ago period. There is usually a lag of six months to nine months when it comes to unlisted companies filing their annual numbers with the RoC, hence fiscal numbers are available only in December to February period.

Compared to 2015, the year 2016 had remained a very challenging one for the Indian start-up ecosystem as the valuations of several heavily funded companies such as Flipkart and Snapdeal came down following markdowns by their respective investors. Many well-funded start-ups shut down and a few merged with other bigger start-ups at lower valuations, thus marking the start of consolidation period in that segment.

Many of Tata's investee companies such as Zivame, Snapdeal and Ola have seen major restructuring and reshuffle at the top management level and are facing severe cash crunch as global investors have tightened their purses. Meanwhile, a few like Bluestone and Urban Ladder are restructuring their businesses and reworking on their strategies.

COMMENT NOW