India’s Journey to a $7 Trillion Economy Needs Stronger Mid-Sized Companies, Says Renuka Ramnath

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Why India’s Corporate Middle Matters More Than Ever

India has set its sights on becoming a $7 trillion economy. According to Renuka Ramnath, Founder, Managing Director and Chief Executive Officer of Multiples Alternate Asset Management Company, achieving this ambition will require much more than business as usual.

Speaking at the India Investor Conference 2026, Ramnath highlighted that India currently stands at around a $4 trillion economy. Moving from $4 trillion to $7 trillion will require investments of at least $1 trillion, along with significant changes in the structure of the economy itself.

She pointed out that consumption currently contributes 61% of India’s Gross Domestic Product. While consumption has supported growth, she believes India cannot reach its economic aspirations through consumption alone. Manufacturing, which contributes roughly 15-18% of Gross Domestic Product, will need to expand significantly if the country is to achieve its long-term goals.

At the same time, challenges arising from artificial intelligence, global disruptions, changing savings patterns and rising personal borrowing add further complexity to the task ahead.

The Hidden Challenge Within Corporate India

Ramnath drew attention to what she described as the "belly" of corporate India.

She excluded the government and the country's largest listed companies from her analysis, arguing that these groups generally possess the resources, capital and strategic direction needed to navigate future challenges.

The concern, she said, lies with thousands of small and mid-sized businesses.

According to her assessment, India has close to 4,000 companies with revenues of approximately $100 million or less. Their profits are often limited, reducing their ability to invest in technology, talent, expansion and future readiness.

Comparing India with Japan, she noted that Japan has fewer than 700 companies in a similar category, while the average company size there is significantly larger.

For Ramnath, this points to a fragile corporate middle that could become a major obstacle to India's economic ambitions if left unaddressed.

Why Growth Cannot Be Optional

One of the central themes of her address was the importance of continuous growth.

She argued that companies cannot remain static in a rapidly changing world. Businesses that fail to grow risk becoming weaker over time, whether they recognize it or not.

The challenge is particularly acute for mid-sized companies that face fragmented ownership structures, limited access to risk capital and difficulties attracting professional talent. Many are family-owned businesses with multiple stakeholders, making decision-making and capital raising more complicated.

These limitations often prevent companies from investing in advanced technology, global partnerships and leadership capabilities that are increasingly necessary for long-term success.

The Role of Alternative Asset Managers

Ramnath believes alternative asset managers can play a major role in addressing these challenges.

She emphasized that alternative asset management involves much more than providing capital. In her view, the sector actively participates in building businesses, strengthening governance, enabling consolidation and preparing companies for future growth.

India currently has around 180 local alternative asset managers, alongside many global investors operating in the country.

To explain how this model works in practice, she shared several examples from Multiples' investment journey.

Building Scale Through Consolidation in the Entertainment Industry

One of the examples discussed was PVR.

Ramnath said she first invested in the company in 2003 when it operated only 11 screens and had a valuation of around ₹100 crore.

Over time, the company expanded to approximately 1,800 screens through a combination of organic growth and strategic acquisitions. The consolidation of Satyam Cinemas, DT Cinemas, Cinemax and eventually the merger of PVR and Inox created a much larger exhibition business.

She described the PVR-Inox combination as an unusual transaction where two family-run businesses came together with governance arrangements that enabled one family to manage the combined company.

According to Ramnath, this scale created stronger cash flows, a healthier capital structure and greater capacity for future investment in technology and expansion.

Creating an Affordable Housing Finance Platform

Another example came from the financial services sector.

Multiples backed two professionals who wanted to build an affordable housing finance company. The opportunity emerged when the need for 55 million affordable homes was clearly articulated.

The company was built around technology-enabled credit processes designed to improve efficiency while maintaining lower operating costs.

The business has since grown to an asset book exceeding ₹15,000 crore and has expanded into other lending categories, including vehicle finance and additional consumer-focused products.

She presented this as an example of how alternative asset managers can support entrepreneurs in building scalable businesses that address significant market needs.

Transforming an Animal Health Business

A third example involved the acquisition of the animal health division of Zydus.

Ramnath explained that Zydus chose to focus its resources on human healthcare and decided to separate its animal health operations.

Following the acquisition, Multiples expanded the company's product portfolio beyond its traditional therapeutic and poultry vaccine businesses.

The company entered herbal products, acquired a business from the Burman family, expanded into Europe through an acquisition in the Netherlands and revived its pet care operations.

According to Ramnath, these initiatives are expected to reshape the company's business mix and strengthen its position in the animal health sector while increasing its presence in developed markets.

Supporting Entrepreneurs and Future-Proofing Businesses

Throughout her address, Ramnath repeatedly emphasized the importance of entrepreneurship.

She spoke about the passion and commitment demonstrated by Indian entrepreneurs who take the first step toward building businesses despite uncertainties around capital, talent and resources.

At the same time, she stressed that entrepreneurs must prepare their companies for the future. Stronger balance sheets, healthier profit and loss accounts, better governance and access to capital will be critical for sustaining growth.

She argued that strengthening mid-sized businesses is about more than shareholder value. Jobs, suppliers, distributors and broader economic activity are also tied to the health of these companies.

Why Domestic Capital Must Play a Bigger Role

Ramnath also addressed the funding structure of India's alternative asset industry.

Despite being an India-focused firm led by Indian professionals, she noted that a large portion of the capital managed by Multiples comes from international investors.

She believes domestic savings should play a larger role in funding India's growth journey.

According to her, institutions such as the Life Insurance Corporation of India, the Employees' Provident Fund Organisation and the National Pension System collectively manage approximately $1.2 trillion. Yet only a very small portion of these funds is allocated to alternative assets.

She argued that enabling greater participation from domestic institutions could accelerate the flow of capital into mid-sized companies and help unlock value creation within India itself.

A National Mission for Corporate Transformation

Looking ahead, Ramnath estimated that annual investments of $20 billion to $30 billion could be deployed into this segment, with at least half of that capital ideally coming from Indian savings.

She called for supportive regulations, clearer guidelines and institutional encouragement to facilitate greater participation in alternative assets.

For her, the goal extends beyond funding companies. It is about building stronger businesses, improving governance, attracting talent and creating sustainable value across the economy.

Conclusion

Renuka Ramnath's message at the India Investor Conference 2026 was clear. India's ambition of becoming a $7 trillion economy depends heavily on the strength of its mid-sized companies.

While large corporations and government initiatives will remain important, the future of economic growth will also be shaped by thousands of businesses that need capital, governance support, technology investments and strategic transformation.

She believes alternative asset managers can play a central role in this process by helping companies scale, consolidate and prepare for future challenges. With greater participation from domestic capital and stronger institutional support, these businesses could become powerful contributors to India's next phase of growth.

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