At Prime, we focused on creating a business that would focus on
advisory and implementation services. We started with a differentiated approach: we
selected the non-mandated route to customer access where we would study companies,
identify their pain points from the outside, curate a proposed solution and then present
this to the company.
This solution was generally curated not on the basis of what the
company was but what it could be. Besides, because the solution would be non-mandated, we
would be crafting a single shoe to fit just one foot.
This contrarian approach did not generate the conventional ‘We did
not ask you for this solution' but a more welcome ‘Surprisingly, we had never
seen things presented this way'.
Inevitably, the proposed solution would be enhanced business
sustainability, increased viability and a superior market valuation.
I am pleased to communicate that during the last few years, we have
been able to deepen the credibility of this pitch. Virtually every single of our
non-mandated approaches resulted in the target company arriving at the conclusion that
what we were proposing was realistic, doable and logical. I must also mention in the same
breath that despite the lucidity of this reality, many of them would not have contemplated
such an approach.
So what were the approaches in most cases?
The approaches represented a coming together of intellectual property
and the networking capability, to be able to present our proposed solution to decision
makers within the target companies.
If we have grown over the years, it has been because of a widening
circle of goodwill. More managements to whom we delivered superior outcomes spoke well
about us; more and different doors opened. We were able to go into more targeted companies
with structured proposals of how we could make them more competitive.
The last number of years have also been kind to us, even as the
external world and business models of established companies came under threat from a host
of quarters, not the least being technology. Companies that were cantering began to
falter; a number of business models that appeared robust began to look vulnerable. Our
services became increasingly relevant to such companies as more managements grappled to
get out of their issues.
There is another set of tailwind that has taken our business ahead.
India has begun to accelerate; there is a premium on speed. The large and strong do not
necessarily need to turn to us only in their moments of weakness; they seek to acquire;
they seek target companies of the right fit; they need advisors who can get pieces to
their table that fit their gaps. During the last few years, a large number of deals that
we did were in this direction - the strong seeking to get stronger, quickly, through
consolidation.
The result is that Prime reported its highest revenues in the last
financial year. Revenues across the quarters may have been lumpy but the year generated
deals of progressively larger sizes. I am pleased to state that the company is presently
engaged in complex deals that should translate into even more profitable outcomes during
the current financial year.
Where is Prime headed?
There is a certain uniqueness about Prime and its business model. There
is no company focusing purely on corporate advisory deals as a means of generating
revenues. Our thirty three- year history has created a rich legacy of problem solving and
value-added advisory, through use of our network and capability repository.
We have invested deep within and hence should become increasingly
valuable for investment banking companies seeking to enter India and open to buying a
stake as a way of shrinking their time- to-market. We also seek to position ourselves as
value-enhancing adjuncts to banks and financial institutions who by the nature of their
business may be wired to think conventionally; we seek to enhance value through
integration with consolidators or consolidating others into ourself, where the value of
the outcome becomes larger than the sum of the constituents.
Our objective will be to build corporate value through the prudent use
of ourcash and cash equivalents: through stakes in start-ups whose deals we help advise,
intermediate and conclude; we believe that these stakes could generate a value
disproportionately higher than if we returned the cash to shareholders through dividends
or share buybacks. We will invest selectively in technology so that we can sweat our
intellectual capital resources more effectively. Even as we remain a relatively small
company in terms of the number of professionals, we expect to generate progressively
higher per person revenues.
Simultaneously, we endeavor to build annuity revenues in addition to
one-time fee incomes, enhancing the predictability of our business.
Our objective will be to hire young talent, where their ease with
technology transforms into an organisational advantage.
I am optimistic that a bright future awaits us.
This is an exciting time to be in India!
N Jayakumar,
Managing Director and Group CEO