 "Lunch with BS: Vikas Oberoi")
Vikas Oberoi tells Raghavendra Kamath that a successful real estate player follows a simple rule - offer good quality, good location, good price and deliver his project on time
I am kicked about my meeting with Vikas Oberoi, chairman and managing director of Oberoi Realty. Not just because he is close to Bollywood movie stars such as Akshay Kumar or because his wife is a former movie star; what impresses me is the fact that his company is one of lowest-debt realty companies in India today and commands a premium in the Mumbai property market. We are meeting at The Westin Mumbai Garden City in Goregaon, Mumbai, which also houses his office on the third floor.
Once I am at his office, he asks whether I would like to have lunch at his chamber or at the Prego, the hotel's plush Italian restaurant on the ground floor. We settle for the latter. Chef Antinelo and a steward recognise their guest almost immediately and greet Oberoi, also known among his friends and in the industry as Vikki Oberoi.
After exchanging pleasantries, Oberoi, a regular at the restaurant, orders an arugula salad and linguini with pesto - which, the chef tells us, has been prepared, following a 100-year-old recipe - and a pizza panera bread.
I choose a mushroom cappuccino soup. The chef recommends I should also order a cod fish with it when I tell him I really enjoy fish dishes.
I start by quizzing Oberoi about the prolonged slowdown in the real estate industry and whether he is worried about it. Oberoi, 45, says "slowdown" exists only for those who have not delivered their projects. "The last year (FY16) was the best for us. We had the best order book in our history," he says. With just two project launches in Mulund and Borivali, the company was able to sell Rs 3,000 crore worth of apartments. A server brings the pizza bread and mushroom soup. "Home buying never went out of fashion; one only needs to give good quality, good location, good price and deliver it on time," he says, as another server brings the arugula salad.
The mushroom soup tastes awesome, I observe. Given his food preferences, Oberoi seems a bit of a health and fitness enthusiast. Is he, I ask. "Yes. One should not go to a gym only when one falls sick," he says, adding that the same rule applies to business.
A regular at the gym, Oberoi does yoga every other day.
I direct the conversation to his company's strategy of going slow. Is he following the Tata growth strategy? Oberoi Realty is considered cash-rich, but conservative when it comes to buying new land. "Real estate is a capital-intensive business, where the costs are high and the business is cyclical. So, the speed at which you move should match your capabilities. I call it controlled aggression," he says.
For the uninitiated, Oberoi Realty was a zero-debt company, a rare phenomenon in the real estate landscape, which is full of debt strapped businesses. It had a debt of around Rs 200 crore as on March 31, 2016, making it one of the lowest-debt companies in the sector. Despite being cash-rich, why isn't he aggressively grabbing opportunities in the market like the Lodhas and the Runwals who have gone out and bought land parcels in different parts of the city and expanded their business at a brisk pace?
He says he has picked up the Tata Steel land in Mumbai and is open to buying new land parcels. "I do not want to end up stretching the company's financials and resources and jeopardise execution, which is very important. If I don't do that, I would land in the same soup as some others," he says.
In March 2014, Oberoi Realty bought Tata Steel's land in Borivali in Mumbai for Rs 1155 crore, outbidding five final bidders. The conversation is interrupted with unfailing regularity by people seated at nearby tables who all seem to know him and want to have a word.
The server brings his linguine with pesto and the cod fish I have ordered. The chef joins to say that the fish is one of the rarest and tastiest and has been added recently to the menu. The fish tastes really nice and I convey the message to the chef.
I ask if Oberoi's life has changed after the initial public issue of his company and how it feels to be constantly in the glare of shareholders, regulators and the media? Oberoi says there has been no change in his life after the listing. He has always been committed to his company's growth... even before the IPO. "I am a player who likes to be in the spotlight all the time. I want to win - be the best in terms of corporate governance and be a company preferred by investors."
That's all fine, but what about the high rate of attrition in the company? Actually, it is in the low teens, he says.
"We are one of the best real estate companies and headhunters are always looking to woo people from us. But many also return after a while," he smiles.
Do his long work days leave him with time to pursue a hobby? He says he is not a workaholic, but passionate about his work. He loves watching movies, as it is a great way to relax. He rattles off names of movies on his must-watch list. I start talking about his friends in Bollywood, including his best buddy Akshay Kumar. He stays in the Juhu area of Mumbai and so he has a lot of neighbours who are from the film background, Oberoi points out. Movies apart, he often goes for ski and deep water diving holidays abroad and flies his private jet to Ahmedabad, Surat and Jamnagar often during the weekends.
Lunch over, he orders a cup of coffee and suggests I try a tiramisu. Before we are quite finished, his aide comes to remind him, I surmise, about his next meeting. A brief shake of hands and he walks briskly to the elevator to go to his cabin on the third floor.
