New Chips Off The Old Block

Meet Mohit Burman, the 32-year-old son of V C Burman, the chairman of the hugely successful Dabur India (1999-2000 turnover: Rs 1,042 crore). While his father is busy running the affairs of the ethnic medicine and foods company, Mohit

is busy sewing up a joint venture with Allstate International, a US-based company, for a foray into the life insurance business. Ask him which are the sectors that interest him and he will

tell you with a gleam in his eyes that it is entertainment. "I find what is happening in television and the print media absolutely fascinating," he says. He has already made a beginning by obtaining a licence to run frequency modulation (FM) radio stations in eight centres in the country.

 

Wait a second _ what is the Dabur chairman's son doing? Aren't sons supposed to take over from their fathers, especially amongst Delhi's business families? That was the trend but in the past, not now. Mohit is just one among a growing tribe of the scions of these families who are out to blaze a new trail.

And how. No traditional bricks and mortar businesses in cement, tyres and textiles for these youngsters, it's ICE, restaurants, direct marketing and finance that's luring them away from the family gaddi .

Mohit's cousin Amit is seeking a future in infotech and not ethnic prescriptions, not even the foods business he heads. Sidharth Shriram's son Krishna has resigned from the board of his father's flagship, Siel, only to team up with a few friends to start a restaurant called Soul Kitchen in south Delhi. Gaurav Dalmia has set up a flourishing investment banking firm, First Capital, outside his family's cement business _ it owns Orissa Cements. Manish Modi, the son of M K Modi who runs a chemical business, will have nothing to do with chemicals; instead, he has set up Net Across, a company that specializes in intranet solutions.

The list is long and growing rapidly. And the change is not restricted to venturing into new areas. The younger generation has come into business with a whole new mindset. They are focused on the bottomline and their style of work is spartan. Walk into the cramped office of Abhishek Singhania, the CEO of JK Technosoft and the son of JK Synthetics chairman Gaur Hari Singhania. Even as you say that the office is too small for a Singhania, Abhishek will tell you that he could have accommodated two more software professionals in the extra space he has in his office. "For this luxury, I have to forgo an income of Rs six lakh every month," he says. What a change from the days of not so long ago when Delhi's business royals lived in opulence, secure under the cover of the licence raj.

Delhi's business families have long revelled in their connections in the corridors of power. This made them indispensable business partners. With bureaucratic controls being unshackled by the day, the workload to be passed on to the next generation has come down. Also, as families grow, there isn't enough business to accommodate all the members of the new generation. The push to new sectors is a natural fallout.

For instance, all Abhishek was slated to get was JK Synthetics, once a blue chip but now on the operating table of the Board of Industrial & Financial Reconstruction. "There was little to be done," says Abhishek. Fortunately for him, there was a software division within JK Synthetics. This was transferred to JK Technologies, a company privately held by the Singhania family. Abhishek is now focused on his new business _ there are plans to take the company public, he is eyeing the Japanese market and a stock option scheme is being put in place.

Ask him about his idols and he rattles off the names of Dhirubhai Ambani and Narayan Murthy without a pause to think. "I find what they have done absolutely fascinating," says he. Point to note: he doesn't have a Singhania as his idol.

Still other families do have a good business but the fear of losing it makes its sons look at new avenues of growth. K K Modi is the chairman of company Godfrey Philip India (GPI). The company is into tobacco and tea. Any businessman would love to run the adrenalin-pumping businesses. But

Modi's sons do not want to have any part of it. While Mumbai-based Lalit is into entertainment, Modi's younger son Samir has set up Modicare, a direct marketing company.

Two factors could have influenced the decision of the Modi brothers. One, Philip Morris, Modi's partner in GPI, could one day wrest control of the company. And two, the threat by M Modi (Modi's cousin) to sell the 15 per cent GPI shares he is sitting on which could eventually destabilise the company's management.

A couple of years back, discloses Samir, he sat with his father to decide what Indian businessmen had to offer in these days of multinational onslaught. The conclusion: neither production nor marketing skills, but certainly distribution. This led to the setting up of Modicare.

In the last decade or so, seeing the writing on the wall, some of Delhi's families have appointed professionals to run their business. There has been a paradigm shift from being an owner-manager to just an owner. This has given the current generation the space to try out its entrepreneurial skills. "This is not to say that the older generation lacked in enterprise. But the job of running the existing business kept it from venturing into new fields. My father (Dabur India vice-chairman G C Dabur) is still my idol," says 30-year-old Amit Burman.

Though he is the CEO of Dabur Foods, a 100 per cent Dabur India subsidiary, Amit has found the time to tie up with his Los Angeles-based brother-in-law Sandeep Tandon of Tandon Computers to start Angel Softech, a 50:50 joint venture between the two. This company is setting up two portals: Smartbahu.com for the middle-class housewife and emedlife.com, a health portal.

In at least one case, the heir apparent has moved out for the simple reason that he did not like his father's business. "A tyre is black and round. I don't find it interesting," says Raja R S Kanwar, the elder son of Onkar Singh Kanwar of Apollo Tyres.

After completing his education from the US in 1993, Raja returned to India to work in Apollo International, a trading firm of the group. But his true calling was the Internet. Thus, in late-1998, was born Dusk Valley, a company that helps other companies e-corporatise. The name derives from the aim Raja has set for himself: take the old way of doing business to its sunset.

In a year-and-a-half, Kanwar has acquired a company in the US and is actively scanning for business in the US and Europe. But has Raja been able to create value on his own? An answer should be available soon _ consultancy firm KPMG has been appointed to carry out the valuation of Dusk Valley.

Like Kanwar, Gaurav Dalmiya too felt an irresistible pull towards investment banking. "I was always interested in finance," he says. So, while he continues to be on the board of Orissa Cements, in 1996 he set up First Capital which specialises in private equity deals, asset management and mergers and acquisitions. In private equity, Dalmiya is already being spoken of as a big player. "It is a serious business," he says.

First Capital has a healthy bottomline, he discloses, though it is not so significant as Orissa Cements'. But, as the scion of another business family comments, you can't go wrong if you are a Dalmiya: "They have all it takes to succeed _ they work hard and lead a dull life." Dalmiya doesn't disagree: "There has been a work ethic in the family and diversions were few," he says.

Though these people are charting a new course, the family still remains a big support. Apart from financial help, being part of a business family helps in other ways too.

Thus, Raja Kanwar's first two clients were Apollo Tyres and Apollo International. Manish Modi got his first contract from his father's Modipon. Dalmiya too admits that the family's network helped him get a lot of business. "But in the end, you have to stand at your own feet," he says.

QED? Not really. But at least the attitude is right.