Chinese-Everyone Wants to Invest in India, But It is Yet to See Actual Inflow
“Most things tend to happen a little faster with me,” says Rishi Khosla, CEO and co-founder of Copal Partners, a financial KPO catering to international clients. Khosla joined ABN Amro as an investment banker at just 20 and left the company as an associate director just three years later to join GE capital. At GE, he reported to Jack Welch who gave him 50 million dollars to establish an early stage venture fund for GE Capital. He was soon spotted by LN Mittal, the global steel magnate and began managing Mittal's personal portfolio. Just a little over 30, Rishi has established his own firm with his friend Joel Perlman, who is also the president of the firm. Taneesha Kulshrestha catches up with this investment whizkid to figure out his future plans in India and learn what the global investor community thinks about investments in Indian companies.
What is the nature of your business?
We offer value-added financial services. Our products and services are mainly focused on investment banking, equity research, credit research and strategic consulting for industry studies, competition analysis, SWOT analysis, Investment Banking etc.
Mostly, our clients are bulge bracket (high profit) banks, hedge funds and equity houses. We can perform services like analyzing companies and making target projections, make buyer target list, do thematic searches besides analyzing risk exposure, bankruptcy analysis and credit reports among other services.
But many of these firms and banks have internal divisions for the same. Why do they take your service? Also, India has a lot of such firms and institutions itself. They could easily do the same themselves? What will you do to tackle such competition?
It is true that a lot of our clients have a presence in India but we have found that our services are often taken to add value to a company's own department. A firm may have such a department itself but may work on a part of the needed services while we work on the rest. We may completely replace the division in some cases. So essentially, we have had no problems in getting business from such firms.
In fact there have been two—three clients who decided to go solo, but have come back to us. The same theory applies to firms with a presence in India as well. We have been able to double our business every year since 2002 when we came into operation and have been valued at over $ 300 million. We are also looking at an IPO over the next few years.
Why did you choose to make India a base for your KPO?
There was no other choice. Where else in the world do you find the KPO industry? There are BPOs in different countries, but I would think that the KPO industry is largely restricted to India. It is in India that one finds English-speaking people with the right skill profile. We are happy with the sort of people we have been able to hire. India has the required quality and also offers lower operational costs. It’s an ideal location for a KPO of our nature. So far, we have employed around 540 people in India and continue to add some 40 or so people every month.
What is your take on the UK investors wanting to invest in Indian companies? Are there a lot of people out there willing to take a bet on the Indian economy and companies?
There is a lot of appetite among investors for companies and investing opportunities in India. There is a lot of curiosity as well. However, if you ask me that whether this appetite translates into actual dollar inflow into the country, I would not say yes. There could be much more investments than the present levels, but they are not actually taking place right now. In comparison, investors from Silicon Valley are more open to in investing in India.
What are the reasons for this?
I would say that people with the money have not found the right people to guide them. It is not as if there are not enough people that can judge the merit of Indian companies, but simply that these high net worth individuals have not found people that they can trust.