Friday, 24 January 2014

[] Subramani Rags to riches: From Rs 30K to Rs 10 crore


 Subramani Ramachandrappa Rags to riches: From Rs 30K to Rs 10 crore :-
It's the classic rags-to-riches saga. Subramani Ramachandrappa's father was a weaver who started out as a daily-wage earner but saved enough to start his own silk factory. Unfortunately, Ramachandrappa senior decided to retire, leaving the business to his younger brother, who ran it to the ground.

Subramani Ramachandrappa. Photograph: Outlook MoneyA depressed Ramachandrappa committed suicide in 1997. Subramani was then in his third year of college, studying textile engineering.

With the death of the patriarch, the family of nine looked to Subramani to lead them out of a financial mess. His uncle, who had incurred debts of over Rs 3 crore (Rs 30 million), including Rs 2.5 crore (Rs 25 million) of unsecured personal debts, refused to take any responsibility for either the financial liability or the family.

Deep in debt: Struggling to appease the stream of creditors and moneylenders, Subramani was named in over 32 cases. That year, he attended court more often than his classes and soon learnt that he would have to know law as well as finance if he was to disentangle his inheritance. But he decided that he would continue with his studies. Subramani graduated in 1998, ranked fourth in the university.

He needed money to pay for family expenses and to take care of lawyers' fees. But good jobs were hard to come by, and so Subramani took the first one that came his way -- as a supervisor in a small waterproofing company. He was promised a salary of Rs 2,000, but after two months of work, he was given only Rs 1,500.

In 2001, he started Richcore. He was already deep in debt, but was able to borrow Rs 25,000 to buy a PC. The office was at home, and he had no staff other than his wife, Richa.

Sunrise sector: Richcore began as a marketing outfit. The company's first two clients were Biocon and Mohan Breweries. Marketing was difficult as the field required extensive domain knowledge and clients were looking at proven track records. To add to his woes, any gains Subramani made from Biocon were wiped out as Mohan Breweries wasn't paying up. But he persevered, and began getting better clients. In 2002, he set up his own R&D facility at a cost of Rs 5 lakh (Rs 500,000) -- funded from internal accruals. That year, Richcore had an office of its own.

Today, Richcore is worth Rs 10 crore (Rs 100 million) but Subramani's days of debt are still not at an end. He stills shells out Rs 50,000-60,000 a month to pay off creditors. Which is why he travels economy class and stays at budget hotels.

But moderation in his personal life has not rubbed off on his business; he has diversified into manufacturing enzyme products for the animal feed, textile, paper, leather and distillery industries and providing global marketing services to pharmaceutical and neutraceutical companies.

Richcore has an office in Washington and an R&D facility in Hosur.

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