If India is a huge opportunity, there are hundreds out there trying to grab a slice of the action. Here are some of the success stories.
Arvind Rao loves to sail. The man who built OnMobile Global into a Rs 260 crore company with his friend Chandramouli Janakiraman, makes time almost every other weekend to get away from it all in his own boat in Mumbai. He needs to log off– in the seven years or so since the mobile value-added services (VAS) business was started, Rao hasn’t had a holiday.
After all, he’s had to keep pace with an industry that’s been growing at over 50 per cent and hasn’t done too badly with a market share of 35 per cent. The tennis and squash that he plays regularly, has stood him in good stead. The VAS market will continue to grow annually at 50 per cent for the next few years, says the 50 year old Rao, who believes personalised and interactive mobile advertising –for a group as large as 100 million people at a time–will be the next big thing, transforming the way advertising works.
He’s hoping all the ground work done at OnMobile will help it reach a critical size in the next couple of years–revenues for 2008-10 are expected to be in the region of Rs 400 crore. Needless to say, he doesn’t regret having chucked up his job with a private equity fund in the US though he does want to set up a venture capital fund for the wireless space sometime soon.
Rao is a big admirer of McKinsey, where he worked for many years; he loves it for its strong value systems and its policy meritocracy. He’s also a fan of Goldman Sachs’ passion to excel. And to help musicians in this country reach out to bigger audiences, Rao has set up a music website – riffmobile.com.
May be Sunder Genomal should log onto that site one of these days. The managing director of Page Industries is passionate about music and was once a member of a rock band. Despite his busy schedule he tries to make it on Friday evenings to the Taj Westend in Bangalore where he jams with other amateurs. His favourite numbers: Cat Stevens’ ‘Moon Shadow’ and Elton John’s ‘Your Song’. Genomal keeps track of other numbers too; Page Industries, a franchisee for Jockey innerwear, commands a market share of around 25 per cent and should clock revenues of Rs close to Rs 250 crore this year.
Jockey, a 135 year old brand was launched in India in 1995 by the Genomal family, which has had the licence for nearly 50 years; the family owns licences for Sri Lanka and Nepal too. The combined addressable market for both menswear and womenswear, Genomal estimates, would be in the region of around 2,600 crore and he’s hoping the company’s share would go up from the current 25 per cent. ‘With consumers becoming more discerning and modern trade also growing, the market should grow at a brisk pace,” he says.
Understa-ndably, Page is increasing manufacturing capacity by 30 per cent and plans to double its presence in multi-branded outlets over the next year or so. Genomal’s older son is already working with the firm so that leaves the 55 year old some time to catch up on his golf which he started about a year back. And of course to party. After all, there’s more to life than just work.
Ranjit Chougule will be thrilled to know that. His company Indage Vintners sold seven lakh cases of wine last year and hopes to make it a million this year. To make sure he hits the target, Chougule has launc-hed several brands at the lower price points, ‘to beat the recession. The managing director says it’s becoming fashionable in India to drink wine, especially among the younger lot. That’s why over the next three years, he wants his wine to be selling across another 2000 outlets—they currently retail in around 3000 stores.
Chougule believes his edge over the competition lies in the ‘grapes to glass’ model. A sister concern cultivates the grapes in Narayangaon, Maharashtra and sells them to Indage, so that it has control over the quality of the fruit. Another group company runs wine bars, which of course stock other brands as well. Chougule, who has spent the better part of his 35 years in the UK where he went to school and college, admits that profit margins might fall with the company exploring lower price points but feels that might be the best way to grow both the market and market share.
Recently Indage Vintners invested in a couple of wine companies in the UK and Australia, both of which are doing reasonably well. Chougule, for whom cars are a passion–he drives a Porsche—doesn’t touch alcohol though of late he’s discovered a taste for Japanese whisky. But he doesn’t mind a glass of wine any time of the day and certainly has one every night. Preferably red, because, that generally calms rather than energise.
Shantanu Prakash could do with some calming after the recent harrowing experience when his company’s stock price crashed 25 per cent following allegations of accounting irregularities. The creator of Educomp, which is into digital education, says his work isn’t otherwise stressful, handled it all rather well though reassuring investors that there wasn’t anything amiss. It must help that the CEO doesn’t miss out on his daily yoga. Asked how he ventured into the business, Prakash, who misses playing cricket the way he did in college, says it was part accident and part vision.
“I was lucky to be in India at the right time –the demographics of this country provided me with an opportunity. The for-profit education market is so under-served that one doesn’t really need to do anything new, just keep growing the footprint. India can easily accommodate another ten Educomps.” His company clocked revenues of Rs 286 crore in 2007-08 and, given that spending on education is relatively insulated from economic slowdowns, the top line could well cross Rs 600 crore this year.
Execution risks, says Prakash, who’s a great admirer of both Warren Buffet and Bill Gates, are much the same for the digital education space as they are for any other business. But since it’s a long-term business, there’s a need to plan from a 20-year perspective. The CEO says he’s paid a lot of attention to picking his team and apart form being a good paymaster, he also tries to keep his people charged up and instill in them a sense of entrepreneurship. His advice to youngsters who want to start their own businesses: “No problem is too daunting. Just go out and do it.”
Like Prakash, Thyagarajan Shivaraman too believes India is a big opportunity. That’s why he stayed back when most of his batch mates from IIT Chennai took off for the US, after they graduated in 1987. The other reason why the managing director of Shriram EPC, didn’t go abroad was because he felt he might not be able to come back. Attached to Chennai, and fond of both Carnatic and western classical music, he certainly doesn’t regret his stint at ICI Kanpur and is enjoying his work at Shriram EPC.
The firm, whose ownership is controlled by a trust, and in which senior executives have a stake, handles turnkey projects for bio mass plants, water treatment, sewage plants, wind power and air pollution units. A science buff, Shivaraman is unfazed that his firm is up against competition from the likes of Punj Lloyd and Larsen and Toubro. He’s now planning to tap the overseas markets for business. “We have nearly ten technical collaborations with foreign firms and have set up an office in Europe to tap customers in that geography,” he says.
The company’s game plan is to compete on price and, to get started, it has acquired a small company with a view to leveraging its client relationships. When he’s not travelling, he spends time with his five year old son Aditya at their home in Gopalapuram, Chennai. A voracious reader, he enjoys books on both science and history. Having read Richard Dawkins’ “Unweaving the Rainbow”, he ‘s now devouring Philips Talbot’s ‘An American Witness to India’s Partition.’ He wishes though that he spent as much time exercising. “I barely manage to hit the treadmill thrice a week,” he says.
Vinit Kumar though doesn’t worry too much that he’s not shedding the extra pounds. A self-confessed foodie, the chairman and managing director of Temptation Foods quit Reliance Industries in 1996 to pick up a stake in the ailing company. He bought out the owners for about Rs 1 crore – the company’s losses at the time were in the region of Rs 5 crore—and restructured it. Working in Reliance, he says, inspired him to become an entrepreneur and armed with a 13 per cent stake, he’s now in the midst of a takeover battle with the Arora family for control of Kohinoor Foods.
Kumar, who enjoys Italian and Japanese food, as much as the ‘thali’ at Golden Star on Mumbai’s Charni road, wants to sell processed and ready-to-eat foods and create brands for spices, snacks, frozen vegetables and rice. Currently, nearly 85 per cent of the products are exported and the company’s looking to earn revenues of close to Rs 1,000 crore in 2009-10 which would be a three fold increase over the Rs 328 crore posted in 2007-08. “Several super markets and retailers overseas already stock our products,” he observes. If there’s something that he’s more passionate about than food, it’s art. Kumar, whose apartment is full of paintings, believes that the secret to success lies in hiring good people and retaining them.
So does Rahul Dhir who doesn’t miss an opportunity to bond with his team whether at the corporate headquarters or at an exploration site. Dhir quite enjoys spending time with employees; he’s always there for a well-naming ceremony. The CEO of Cairn India is happy to be back home in India after having lived abroad for more than 20 years. Especially when he’s rediscovering Indian Chinese food, which he says, one doesn’t get anywhere else. Of course, being a Punjabi, he’s partial to good north Indian food.
“One of the best things about being home is the food,” admits the IIT Delhi and Wharton student. But Dhir makes sure he works it all off playing tennis regularly and spending time at the golf course. Not that he has much time to spare these days. Cairn India contributes 90 per cent of Cairn plc’s revenues, of which it is a subsidiary and, after the recent find in Rajasthan, where production is scheduled to start in 2009, the CEO’s busier than ever. There’s also a lot of action in Kerala and with the wells in Gujarat and Andhra Pradesh now mature, peak production could hit 175,000 barrels a day.
That would amount to around a fifth of India’s oil production. Cairn’s revenues should cross Rs 3,100 crore in 2009 even though crude oil prices have fallen sharply; revenues in the year to December 2008 were Rs 2,186 crore. Dhir isn’t worried. He believes prices could stay weak till the global economy recovers and is focussed on costs. “From a shareholder’s point of view, it’s true high prices do benefit us. But low prices bring in discipline and we’re banking on our low cost of operations,” he explains. Lower costs may not solve all of Cairn’s problems, but it will go some way in helping Cairn achieve its profit targets.