BLU OAK Capital : Boutique Speciality Financial Services Platform
Headquartered in the financial capital of India, Blu Oak Capital is a boutique speciality financial services platform that offers a range of customized services that meet the critical needs of promoters and their enterprises. The company’s value proposition is driven by its critical client access, product expertise and global connections along with a team of seasoned professionals. The team has cross-cultural experience and complementary expertise with a demonstrated track record of building and managing similar client-centric platforms. Blu Oak’s critical platform structures and creates customized solutions to meet the client needs with the investment metrics of its investment partners who straddle geographies and categories – both domestic and offshore. The categories range from Structured Credit, Distressed, Hedge, Development Funds, Global family offices internationally. On the domestic front, they comprise PE funds, HNIs, Family offices and other Institutional Lenders. Blu Oak works in close and some cases exclusive partnership with some of them. “Our primary value proposition is to connect Critical Capital to Compelling Ideas / Themes / Structures and Propositions,” speaks Nandakumar Ranganathan, Managing Partner and Founder.
The Ideation
Nandakumar’s professional stints over two and a half decades have helped him to closely interact and build relationships clients and investors across geographies cultures. Over the years, he built and managed capital market, investment banking and structured products platforms at ING Barings & DBS Bank. As the Managing Director & Country Head of Cushman & Wakefield Capital Asia, he was instrumental in creating an integrated investment banking & investment management platform. He has to his credit a number of firsts including India’s first Rupee Indexed Note, first Non-Recourse Steel Securitization, and the first REIT Issuance out of India. Such an exciting career path and the experience of working with several promoters and partnering them through the point of implosion over two decades eventually encouraged him to build a focused value proposition with differentiated offering targeted at emerging businesses. He also understood the need for established businesses to realign their financial metrics. He co-founded Blu Oak Capital in which got operational in 2015.
Throwing light on the same, he says, “As an Investment Banker, I have had the opportunity of either building platforms or businesses in platforms and scaling them up. There I noticed one of the common themes was raising critical capital for companies in the throes of growth across markets and structuring innovative credit solutions. Many of these deals delivered customized solutions to meet the critical needs of promoters and won critical acclaim. An innovative structuring for a Cellular Company enabled them to raise equity funding(in the form of a Rupee Indexed Note) from an Overseas Corporate Body(OCB).
There has also been a body of work also in the M&A space– driving deals in Telecom, Technology, FMCG, amongst others. We had the opportunity of driving the first FCCB of the platform and also partnered in delivering India’s first REIT transaction.”
The expertise encapsulated in Blu Oak Capital as a brand encompasses sectors ranging from Telecom, Technology, Real Estate, Consumer Products and others. There is also a legacy of strong relationships and transactions with these promoters and their businesses. The company helps in delivering critical capital, defining acquisitions and strategic advice through their lifecycle from their IPO days through their growth to billion-dollar conglomerates. “It is this experiential journey that has inspired us and positioned us to work with emerging enterprises in the small and mid-cap space that have the growth impetus to be tomorrow’s monoliths. This philosophy has led itself to articulation as cradle to cusp while it undermines our operating philosophy,” informs Ranganathan. We have worked on transactions in unchartered sectors that were poised at the point of newer beginnings – like the cellular business in the 2000/01 period, the m&a activity in Indian software domain (acquiring overseas consultancies)in 2001- 03 orthe acquisition of European OEM manufacturers in 2003-2005. These experiential experiences can be transmigrated into assisting and guiding companies in many of todays emerging sectors. This is a compelling value proposition offered and delivered by team Blu oak
To epitomize its cradle to cusp credential, the company has assisted a speciality chemical company called Fusolve(providing critical solutions in Defense, Railways and Automobiles) in terms of blast mitigation and corrosion resistance. Over the last 18 months, the team has tirelessly worked with the promoter – right from the inception of the concept, helping with the business plan to getting in an early investor and progressing to a strategic investor. “As the company grows we are partnering it to mentor it to the cusp, guiding them to an acquisition and effect a listing in the next 36 months, he avers.
Blu Oak is also working with a few another early/mid-stage revenue-generating businesses in the area of enabled telecom services, media telecom disruptor, cloud-based logistics services provider, unique cyber-security solution provider, unique education services platform to name a few.
How does it Work?
Acting as trusted advisors to clients, Blu Oak Capital lends a hand to companies looking to raise growth/ critical capital (ranging from MSME’s to Small caps to emerging midcaps) who are unable to access requisite funding from their ecosystem. The team has delivered and is working with asset-light companies with strong cash flows and operating models, which do not possess the requisite hard collateral that traditional lenders seek. “Through a risk mitigant structure, we work in delivering solutions to meet their requirements. We continuously deliver solutions to small/midcap Software
companies, water treatment companies, and other service-oriented businesses. In order to deliver solutions, we work with specific investor groups with aligned risk and structural metrics, he says.
"As a niche financial services start-up, Blu Oak has strived and built a focused platform driven by clearly defined value propositions but centered on critical capital financing and M&A"
What makes the company stand out in the crowd is its ability to assess the difference between actual and perceived risk, develop an effective structure and price it appropriately The team invests significant time and energy to develop a strong understanding of the clients, their businesses and their promoter metrics. “Our demonstrated transactional experience of having effected the tightly structured, risk mitigated and ring-fenced credit solutions for challenged credits along with our ability to articulate to our investors the mitigable and open risks in each transaction are the differentiating factors. In the course of our iterative interaction with our investor partners, we calibrate the pricing to reflect the benefits of the risk mitigation,” he explains further.
Speaking of the transaction sizes, typical transactions currently underway range from software companies seeking growth capital Rs 25 cr to a water treatment company seeking structured credit facility of Rs 50cr to a healthcare business seeking last mile funding of Rs 80 Cr, a manufacturing business seeking a debt realignment of over INR 250cr. “While we have critical expertise and demonstrated experience in a host of sectors- we are sector and size agnostic in this platform and are driven by delivering customized solutions to our clients,” he adds.
Blu Oak’s strategic overseas partners provide access to over 18 countries. It works closely with them to deliver solutions for Indian companies looking to acquire or get acquired by overseas companies. Additionally, it provides a platform for overseas entities seeking stakes or JV opportunities with Indian companies. “This stream of activity is likely to be a focus area in the ensuing year. The valuation contraction in Indian markets, the muted growth expectations and restricted domestic capital access provide a good opportunity for structuring suitable stake sale or JV’s,” shares Nandakumar.
The Success Saga
Over the last one year, Blu Oak has been approached by many of its legacy clients to work with them in realigning their financial structure. Ranganathan mentions,“Most of these companies are in reasonably good operating conditions but have financial structures that are out of alignment and need to be recalibrated with the suitable infusion of equity or realigning the debt through appropriate structures.”
In addition to selecting local investors,team Blu Oak works in partnership with select Structured Credit funds housed in the US, Singapore and the Middle East to deliver structured credit solutions to Indian entities. “Our transactions and current pipeline encompass transactions where we take out the existing lenders and induct in the new lenders with a terminal maturity of at least seven years. Further, the transaction structure typically envisions a low coupon in the early that ratchets up in keeping with the projected cash flows. Many of these transactions involve a huge degree of financial and other due diligence to ensure that they are in alignment with acceptable governance standards. Our overseas investor partners derive their comfort on structuring and other facets from our platform,” he adds further.
As a niche financial services start-up, Blu Oak has strived and built a focused platform driven by clearly defined value propositions but centered on critical capital financing and M&A. The company is currently self-financed and is looking to infuse in capital to effect the next phase of growth.
“One of the opportunities that have presented itself in our journey of creating a Structured Finance platform is the value proposition to move to a capital play. We are engaging with some of our investor partners in setting up a Capital platform that with focus on mezzanine /Structured Debt. The proposition would focus on delivering funding solutions for 4 clearly defined transaction templates. We expect this fund to be in place by mid next year,” Nandakumar concludes.
Key Management
Nandakumar Ranganathan, Managing Partner Nandakumar is an alumnus of two of the nation’s most prestigious academic institutions, IIT Madras and IIM Ahmedabad and brings with him the expertise of partnering anchor clients in the entire life cycle of their businesses. His transaction roadmap spans across sectors but with a concentration on Consumer, Telecom & Technology, and Real Estate. He has the experience of dealing with clients and investors across cultures and enjoys a successful track record as a consummate dealmaker. In the course of his dynamic career, he has led a multitude of domestic & cross- border M&A (both buy and sell side), Advisory, Capital Access and Structured Finance transactions aggregating over USD 2.5 billion. These include marquee transactions that have featured in M&A and Convertible Bond League Tables and Euro money Deal of the Year. He has built and managed capital market, investment banking & structured products platforms at ING Barings & DBS Bank. As the Managing Director & Country Head of Cushman & Wakefield Capital Asia, he was instrumental in creating an integrated investment banking & investment management platform. He has partnered in working with many of India’s leading conglomerates over the last two decades in partnering with them from their IPO’s through a number of critical capital access, M&A and value monetizing transactions through their business life cycles.
Pranam Shetty, Co-founding Partner
Starting off his career in 2007 with JPMorgan, Pranam has developed a niche for himself at the intersection of technology,design and business.
Pranam manages early-stage deals at Blu Oak Capital with a focus on Education, FinTech and Consumer Internet. He offers the strategic marketing, design and technology perspective to complement the team’s core capabilities in investment banking & investment management. Pranam holds an MBA from the UCLA Anderson School of Management and a Bachelor's degree in Computer Engineering from the Sardar Patel College of Engineering, Mumbai. He also advises several startups and small businesses on building customer-centric operations and is actively involved with non-profit initiatives in education and healthcare.
Darin Bifani – Based in the America’s, Darin is a strategic alliance partner and coordinates on cross border deals. Darin has worked with some of the world’s largest investment banks and law firms, including GE Capital, Lehman Brothers and Sullivan &Cromwell. He has to his credit billions of dollars’ worth of transactions in over twenty countries – including the United States, Japan, Hong Kong and Chile. He has authored over thirty publications, including books titled ‘Managing BRIC Real Estate Investment Risk’and ‘Managing European Real Estate Investment Risk.
Panel 2:
What They Offer
Investment Banking
As trusted advisors to the clients, Blu Oak delivers domestic and cross-border solutions for M&A and critical client access. Further, it structures & accesses critical finance - growth capital & speciality financing, structured credit, including buyouts. It also advises third-party funds on their investments into select opportunities in India. In close partnership with its alliance partners based in the Americas, Blu Oak delivers inbound and outbound solutions in over 18 countries across the globe.
Investment Management
Working as an integrated platform with its international partners, Blu Oak delivers value propositions to investors and promoters. Its India-focused platform provides attractive opportunities for domestic and offshore investors, leveraging off its differential domain expertise. It is in the process of raising a dedicated fund focused on speciality financing and mezzanine debt.
Structured Products
Blu Oak delivers compelling investment opportunities in select sectors for domestic and offshore investors. The platform leverages its track record, domain expertise and critical finance access to deliver customized structured credit and mezzanine solutions to the clients.
Panel 3:
Key clients range from large conglomerates (legacy relationships) with market caps over USD 1 billon to midcaps(manufacturing, technology, hospitality, real estate)to small caps/MSME’S (FMCG, manufacturing, technology, logistics, speciality chemicals, enabled telecom services, media telecom disruptor, cloud-based logistics services provider, unique cyber-security solution provider, unique education services platform)
"As a niche financial services start-up, Blu Oak has strived and built a focused platform driven by clearly defined value propositions but centered on critical capital financing and M&A"
What makes the company stand out in the crowd is its ability to assess the difference between actual and perceived risk, develop an effective structure and price it appropriately The team invests significant time and energy to develop a strong understanding of the clients, their businesses and their promoter metrics. “Our demonstrated transactional experience of having effected the tightly structured, risk mitigated and ring-fenced credit solutions for challenged credits along with our ability to articulate to our investors the mitigable and open risks in each transaction are the differentiating factors. In the course of our iterative interaction with our investor partners, we calibrate the pricing to reflect the benefits of the risk mitigation,” he explains further.
Speaking of the transaction sizes, typical transactions currently underway range from software companies seeking growth capital Rs 25 cr to a water treatment company seeking structured credit facility of Rs 50cr to a healthcare business seeking last mile funding of Rs 80 Cr, a manufacturing business seeking a debt realignment of over INR 250cr. “While we have critical expertise and demonstrated experience in a host of sectors- we are sector and size agnostic in this platform and are driven by delivering customized solutions to our clients,” he adds.
Blu Oak’s strategic overseas partners provide access to over 18 countries. It works closely with them to deliver solutions for Indian companies looking to acquire or get acquired by overseas companies. Additionally, it provides a platform for overseas entities seeking stakes or JV opportunities with Indian companies. “This stream of activity is likely to be a focus area in the ensuing year. The valuation contraction in Indian markets, the muted growth expectations and restricted domestic capital access provide a good opportunity for structuring suitable stake sale or JV’s,” shares Nandakumar.
The Success Saga
Over the last one year, Blu Oak has been approached by many of its legacy clients to work with them in realigning their financial structure. Ranganathan mentions,“Most of these companies are in reasonably good operating conditions but have financial structures that are out of alignment and need to be recalibrated with the suitable infusion of equity or realigning the debt through appropriate structures.”
In addition to selecting local investors,team Blu Oak works in partnership with select Structured Credit funds housed in the US, Singapore and the Middle East to deliver structured credit solutions to Indian entities. “Our transactions and current pipeline encompass transactions where we take out the existing lenders and induct in the new lenders with a terminal maturity of at least seven years. Further, the transaction structure typically envisions a low coupon in the early that ratchets up in keeping with the projected cash flows. Many of these transactions involve a huge degree of financial and other due diligence to ensure that they are in alignment with acceptable governance standards. Our overseas investor partners derive their comfort on structuring and other facets from our platform,” he adds further.
As a niche financial services start-up, Blu Oak has strived and built a focused platform driven by clearly defined value propositions but centered on critical capital financing and M&A. The company is currently self-financed and is looking to infuse in capital to effect the next phase of growth.
“One of the opportunities that have presented itself in our journey of creating a Structured Finance platform is the value proposition to move to a capital play. We are engaging with some of our investor partners in setting up a Capital platform that with focus on mezzanine /Structured Debt. The proposition would focus on delivering funding solutions for 4 clearly defined transaction templates. We expect this fund to be in place by mid next year,” Nandakumar concludes.
Key Management
Nandakumar Ranganathan, Managing Partner Nandakumar is an alumnus of two of the nation’s most prestigious academic institutions, IIT Madras and IIM Ahmedabad and brings with him the expertise of partnering anchor clients in the entire life cycle of their businesses. His transaction roadmap spans across sectors but with a concentration on Consumer, Telecom & Technology, and Real Estate. He has the experience of dealing with clients and investors across cultures and enjoys a successful track record as a consummate dealmaker. In the course of his dynamic career, he has led a multitude of domestic & cross- border M&A (both buy and sell side), Advisory, Capital Access and Structured Finance transactions aggregating over USD 2.5 billion. These include marquee transactions that have featured in M&A and Convertible Bond League Tables and Euro money Deal of the Year. He has built and managed capital market, investment banking & structured products platforms at ING Barings & DBS Bank. As the Managing Director & Country Head of Cushman & Wakefield Capital Asia, he was instrumental in creating an integrated investment banking & investment management platform. He has partnered in working with many of India’s leading conglomerates over the last two decades in partnering with them from their IPO’s through a number of critical capital access, M&A and value monetizing transactions through their business life cycles.
Pranam Shetty, Co-founding Partner
Starting off his career in 2007 with JPMorgan, Pranam has developed a niche for himself at the intersection of technology,design and business.
Pranam manages early-stage deals at Blu Oak Capital with a focus on Education, FinTech and Consumer Internet. He offers the strategic marketing, design and technology perspective to complement the team’s core capabilities in investment banking & investment management. Pranam holds an MBA from the UCLA Anderson School of Management and a Bachelor's degree in Computer Engineering from the Sardar Patel College of Engineering, Mumbai. He also advises several startups and small businesses on building customer-centric operations and is actively involved with non-profit initiatives in education and healthcare.
Darin Bifani – Based in the America’s, Darin is a strategic alliance partner and coordinates on cross border deals. Darin has worked with some of the world’s largest investment banks and law firms, including GE Capital, Lehman Brothers and Sullivan &Cromwell. He has to his credit billions of dollars’ worth of transactions in over twenty countries – including the United States, Japan, Hong Kong and Chile. He has authored over thirty publications, including books titled ‘Managing BRIC Real Estate Investment Risk’and ‘Managing European Real Estate Investment Risk.
Panel 2:
What They Offer
Investment Banking
As trusted advisors to the clients, Blu Oak delivers domestic and cross-border solutions for M&A and critical client access. Further, it structures & accesses critical finance - growth capital & speciality financing, structured credit, including buyouts. It also advises third-party funds on their investments into select opportunities in India. In close partnership with its alliance partners based in the Americas, Blu Oak delivers inbound and outbound solutions in over 18 countries across the globe.
Investment Management
Working as an integrated platform with its international partners, Blu Oak delivers value propositions to investors and promoters. Its India-focused platform provides attractive opportunities for domestic and offshore investors, leveraging off its differential domain expertise. It is in the process of raising a dedicated fund focused on speciality financing and mezzanine debt.
Structured Products
Blu Oak delivers compelling investment opportunities in select sectors for domestic and offshore investors. The platform leverages its track record, domain expertise and critical finance access to deliver customized structured credit and mezzanine solutions to the clients.
Panel 3:
Key clients range from large conglomerates (legacy relationships) with market caps over USD 1 billon to midcaps(manufacturing, technology, hospitality, real estate)to small caps/MSME’S (FMCG, manufacturing, technology, logistics, speciality chemicals, enabled telecom services, media telecom disruptor, cloud-based logistics services provider, unique cyber-security solution provider, unique education services platform)
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