Fundraising and M&A are necessary ability units {that a} CFO ought to have: Dhiresh Bansal, CFO, Meesho
Picture: Nishant Ratnakar for Forbes India

TookIn Bengaluru in November, interviewees and interviewees have been taking a leap of religion. Actually, it was a primary for each of them. Vidit Atre was scrambling for one thing further in his subsequent Chief Monetary Officer (CFO). The founder and CEO of Web commerce platform Meesho, which raised $570 million (about ₹4,227 crore) in its Collection F spherical in September, spoke in regards to the want for his enterprise, which was valued at $4.9 billion. As an organization approaches a milestone comparable to an IPO, he defined, loads of competencies and capabilities turn into necessary in a CFO that may in any other case be discarded in the course of the early phases of progress.

Atre outlines his guidelines. The potential candidate ought to be somebody with in-depth public market expertise round fundraising. The claimant also needs to be a grasp in Mergers and Acquisitions (M&A). And lastly, the applicant ought to have a deep understanding of the technical professions. All three qualities have been indispensable. “Have a look at America… all late-stage tech corporations have CFOs from funding banking backgrounds,” he mentioned.

Again in India, Dhiresh Bansal displayed an impeccable background. The IIT-Bombay grad and IIM-Ahmedabad alum began his profession with JP Morgan Chase in 2010. After three years, the funding banker had a one-year stint with ChrysCapital, after which moved again to JPMorgan, the place he was govt director till final yr. , “As an funding banker, normally your shopper turns into the CFO,” he laughs. Apparently, final November, the 35-year-old was in search of the place of CFO, his first and first interview in seven years.

Nonetheless, Bansal didn’t present any indicators of neuralgia. In spite of everything, she had ticked off all of the packing containers that Atre was searching for. “What in regards to the belongings you’re not doing persistently?” A kind of questions was making an attempt to check the sobriety of an individual who just isn’t a Chartered Accountant (CA). “How do you take care of conditions you are not going through?” There was a observe up question. Bansal remained unconcerned. My function as a CFO, he replied, just isn’t solely to train monetary management, but additionally to leverage the CEO. There are areas the place funding bankers have slightly extra expertise than conventional CFOs.

Again in 2017, Bansal was doing one of many issues {that a} CA just isn’t outfitted to do. India’s third largest non-public financial institution, Axis Financial institution, had reportedly witnessed a decline in its asset high quality, primarily attributable to adjustments in asset-quality classification by the Reserve Financial institution of India. Bansal, who was working with JP Morgan on the time, claimed, “We have been advising the administration staff of Axis. Nonetheless, the financial institution had no selection: both to lift funds or to get rid of sure belongings.

Meesho's Dhiresh Bansal and a banker's dozen

Additionally Bansal was in contact with some potential main huge traders. “We have been capable of persuade Bain Capital,” says Bansal, who labored on the deal as the first protection banker. In November, Axis Financial institution introduced that it was elevating fairness and equity-linked capital from some giant traders. Bain Capital Non-public Fairness affiliated entities proposed to take a position ₹6,854 crore.

Three years later, in 2020, Bansal was within the midst of one other deal-making. He was advising Japan’s second largest lender Sumitomo Mitsui Monetary Group to purchase a stake in Fullerton India. Put up-Covid, the deal was placed on maintain, however was revived a yr later. Final July, Sumitomo Mitsui Monetary Group purchased a 74.9 p.c stake for $2 billion. Three months later, in October 2021, Bansal was in motion once more. This time, he was tailoring Paytm’s insurance coverage take care of Swiss Re, during which the Zurich-based reinsurer purchased a 23 per cent stake in Paytm’s insurance coverage arm for ₹920 crore.

In Bengaluru, that is precisely what Meesho’s Aatre wished: a person for all causes and all seasons. Dhiresh, he affirmed, has nice expertise of public markets round fundraising, M&A and likewise has a deep understanding of tech companies. Ask him what he did for a CFO who does not occur to be a CA, and listing three strategic roles performed by the founding CFO. The primary is to form the technique of the corporate and construct the shareholder base in step with the technique. Subsequent comes enterprise finance, which entails capital allocation choices. And eventually, there’s accounting and taxes. “For late-stage corporations, the primary two matter much more than the third,” he says. In November final yr, Meesho appointed Bansal as its first non-CA CFO.

Meesho's Dhiresh Bansal and a banker's dozen

Bansal, for his half, believes the function of CFO has advanced. “Now it is extra of a strategic function than simply plain-vanilla bookkeeping,” he says. However what about age? A decade in the past, CFOs weren’t of their 30s. Bansal smiled. “It isn’t about age anymore,” he says. It is extra about competency and doing the job. There could also be people who find themselves a lot youthful and could also be higher fitted to the function. “It isn’t about age or diploma,” he says. What makes the function all of the extra thrilling for the younger CFO is having a pores and skin deep within the recreation. As an funding banker, he explains, somebody is influencing them quite than making a call.

Aside from the function, what has modified is the mindset and angle of the brand new breed of officers. And the character of the trade has quite a bit to do with it. For instance, in manufacturing industries, what was historically added below capex would now be below a separate bucket. In new age companies, capex is definitely inside the P&L itself. Says Bansal, “So what you might be spending on consumer acquisition is to some extent an funding sooner or later.

However how does one decide whether or not an funding made now will yield leads to the subsequent few years? Does the intestine play a job within the lifetime of a CFO? Bansal places issues in context. “I might have been doing my function an amazing injustice if I used to be solely coping with the intestine,” he smiles. In B2C companies, loads of information is required to make calls. “Most evaluation must be harder-core information than the rest,” he hints.

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(This story seems within the February 25, 2022 subject of Forbes India. To go to our archives, click on right here.)



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