The Moolahwallahs

The latest Forbes’ annual list of global billionaires threw up an interesting sidelight. The number of billionaires is higher in India (27) than China (10). (If one includes Hong Kong as a part of mainland China, the number of billionaires does go up to 32.) And going by the list of the 40 wealthiest individuals and business families in Asia, published by the magazine in December last year, what stands out is that the net worth of the Top 40 in India is a mammoth $106 billion, compared to only $26 billion that their Chinese counterparts can boast of. It also shows that 28, or nearly 70 per cent of the 40 rich Indians, have made their fortunes in the last 10-15 years, competing with the very best in an increasingly globalised world. It’s a clear pointer that post liberalisation, India has one of the most vibrant entrepreneurial communities in the world.

Not all of them are products of the country’s famed IT/BPO boom. In fact, the majority of them, like Mukesh Ambani, Kumar Mangalam Birla, Baba Kalyani, Laxmi Mittal and Tulsi Tanti are very much a part of the old economy. This is probably why global businessmen at the recently-held World Economic Forum and the US president, George W. Bush, during his visit to India earlier this month, couldn’t stop marvelling at India’s private enterprise, which is said to be responsible for the robust 8 per cent GDP growth in the past few years.

Even the Global Entrepreneurship Monitor (GEM) report, which is brought out annually by the London Business School, acknowledges the fact that individual enterprise in India is on the upswing. An India-specific GEM report (in 2003) found that nearly 18 per cent of the country’s workforce (which included the population in the 18-64 age group) was engaged in some form of entrepreneurial activity compared to a mere two per cent in Japan, 10.2 per cent in the US and a global average of seven per cent. Only Thailand ranked ahead of India in the study conducted across 37 developed and emerging economies that represented three-fifths of the world’s population and 92 per cent of its GDP. Another overall GEM report (in 2004) cited the fact that new enterprises in India created 17 million jobs in 2003, which was the second highest in the world after China where 84 million jobs were created by new businesses.

Such activity is impressive as it has happened, according to Mathew J. Manimala, chair professor of entrepreneurship at IIM Bangalore and the author of the GEM India Report, "despite poor physical infrastructure, with the exception of IT and telecom, and the gradual recession of governmental support towards new enterprises". Adds Saurabh Srivastava, chairman of BPO firm Xansa who also heads the Delhi chapter of The Indus Entreprenuers (TiE), "You will find more and more Indians on the lists such as Forbes because role models for entreprenuers are easy to find. That has increased their willingness to take risks. And these days capital is relatively easy to raise." A study by investment bank Merrill Lynch found that in India there are nearly 61,000 high-networth individuals—or those with over $1 million to spare for investments with a total wealth of $270 billion. And their numbers are growing rapidly at an estimated rate of nearly 25 per cent annually.

So, has liberalisation unleashed a process that’s likely to create thousands of new entrepreneurs in India every year? Not really. The authors of the GEM report point out that Indians may be forcibly turning into entrepreneurs due to the lack of employment opportunities in the organised sector. It’s only the services sector that’s creating jobs, and it’s here that it’s easier to become a self-employed individual than to work for others. "Most economies in the world (including the US) are driven by small enterprises. But that’s still not the case in India. Small entrepreneur-led growth is small," says Alok Mittal, who founded Jobsahead.com during the internet boom and now works for the private equity firm, Barings. But what’s still true is that India is throwing up a crop of "unlikely" billionaires and millionaires. There are many who are waiting to leap into the Forbes’ elite list. Here’s a snapshot.

Net worth: $2.4 billion
Business: Media

She’s probably in the Forbes’ list of billionaires by default, as the matriarch in the Jain family which owns one of the country’s largest media groups and the powerful The Times of India brand. Those who know her or interact with her are cagey talking about their chairperson—they just say she’s "nice" and that the TOI’s slight religious bent (like the column, The Speaking Tree, on its edit page) is due to Indu Jain. But it’s brothers Samir and Vineet who manage the empire. Samir transformed TOI from a strong editorial product into a marketing juggernaut and decided to sell a newspaper like a soap or a toothpaste. He believes TOI is all-powerful and one has to change the contents of the newspaper to cater to the growing number of younger readers who are generally not that interested in politics. His dream was to give the paper free to readers; although he was asked not to do so, TOI followed an aggressive pricing strategy and forced competitors to follow suit. In comparison, Vineet became the man of the New Economy and he led Bennett Coleman & Co into the internet territory. Even during the dotcom bust, he continued to have faith in the new medium although a number of his ambitious plans (including a proposed IPO and a Nasdaq listing in the summer of 2000) were derailed. He is also interested in other lucrative areas like TV, as is clear from TOI’s re-entry into news and entertainment channels, retail and radio.

Net worth: $1.4 billion
Business: Wind energy, textiles

Those meeting Tanti for the first time won’t believe he is a member of the elite billionaires’ club. Wearing his trademark full-sleeve shirt and tie, he can easily pass off as a senior manager, and not the chairman of Suzlon. Despite business interests across the globe, which keep him on the road for 15 days a month, he says he’s firmly rooted in India and loves nothing more than home-cooked food. In less than a decade, what started off as a cost-saving measure for his company has ended up making him one of the richest men in the world. High cost of electricity was bleeding his textile business and so the Gujarati businessman was forced to think in terms of building a small captive power unit that used alternate sources of fuel. Thereafter, his life changed and he switched from textiles to windmills. In 1995, he founded Suzlon Energy, which is today among the top ten companies in the world producing wind energy. After the IPO, the market cap of the company soared to $7 billion and Tanti and his family still own 70 per cent in Suzlon. "We are the only wind energy company in the developing world to be among the Top 10. Suzlon operates some of the most technologically advanced wind parks. With favourable policies from the government, we can help the country to reduce dependence on conventional energy sources in a big way," he says.

Net worth: $3.1 billion
Business: Online gambling

One of the youngest billionaires on the Forbes’ list of rich Indians, Dikshit, 33, is a vegetarian, teetotaller and someone who’s never bet a dime in his life. Ironically, he has made his billions from the world of online gambling. He co-founded PartyGaming, the parent company that owns PartyPoker.com, the world’s largest online casino, along with Ruth Parasol, a California-based entrepreneur who’d earlier made a small fortune through online porn. Eight years ago, Parasol asked the young software engineer to write a proprietary code for a gaming site, and when the company was formed, she gave Dikshit a majority chunk of the firm’s capital to retain him. Last year, the IIT Delhi alumnus made a killing by divesting 23 per cent of his 53 per cent stake during the company’s IPO. He is still the largest shareholder in PartyGaming, now worth an estimated $10 billion. In just three years, PartyGaming’s profits have jumped from $5.8 million to $372 million. The reclusive Dikshit, who lives in Gibraltar (where PartyGaming is HQed), is an avid follower of chess and collects antiques. But he’s still waiting to enter India, where gambling is banned. He feels online gambling revenues in the country can cross $1 billion within a couple of years.

Net worth: $1.7 billion
Business: Auto components

Baba Kalyani is the posterboy of India’s high-skill, low-cost manufacturing excellence. Insiders consider him the country’s answer to China. At a recent seminar on the auto industry, a McKinsey analyst said Bharat Forge proved that skill-based manufacturing—as opposed to merely competing on the basis of costs—is the future face of India. When most of India’s manufacturing firms were rattled by huge waves of liberalisation in the early ’90s, Kalyani, in his own words, saw it "as a point of inflexion" and "as markets restructuring themselves". His answer: derisk the group’s business model by diversifying in the US, Europe and China. With a market capitalisation of nearly $2 billion, Bharat Forge is the world’s second largest forgings company with a client list that includes Ford, GM, DaimlerChrysler and Volvo. He was born into a family of sugarcane farmers in Maharashtra. But given the politics of sugar in the state, he wanted to branch out into manufacturing. In the late 1960s, he started a small unit which would forge diesel engine parts for tractors and small pump sets. The mild-mannered Kalyani still prefers to travel economy and his only indulgence is the occasional purchase of Indian art.

Net worth: $3.6 billion
Business: Construction, key shareholder in Tata Sons

Known as the Phantom of Bombay house, the HQ of the sprawling Tata group, the secretive Mistry has hardly ever given an interview. But he is the largest individual shareholder in Tata Sons, the holding company of the Tata group, with a nearly 18 per cent stake—three times higher than what chairman Ratan Tata has. (It’s a different matter that Ratan Tata controls a sizeable holding in Tata Sons through the powerful Tata trusts). Because of the large holding, Pallonji has always been in the news; there were rumours of a sale of part of it to Nusli Wadia. In a few years, when Ratan Tata quits the chairmanship of the group, Mistry, 77, is likely to be a key figure in deciding the new boss. Mistry also owns the home appliances direct-selling outfit Eureka Forbes that was once the subject of a Harvard case study, along with the premium apparel brand DAKS. He spends much time at his 200-acre Manjiri stud farm (near Pune). His two sons, Cyrus and Shapoor, are on the board of a few Tata-owned firms and run the family’s construction business.

Net worth: $5 billion
Business: Real estate

His global status can be gauged from the fact that he received a lengthy and glowing mention in the legendary ex-GE CEO Jack Welch’s autobiography. The story goes that when Welch turned down a dinner invitation from the late PM, Rajiv Gandhi, it was Singh who intervened and made the meeting happen. Singh, who holds nearly 95 per cent in the hugely profitable Rs 1,000-crore DLF Group, has become synonymous with the growth of Delhi’s satellite town, Gurgaon. During the ’80s, Singh purchased vast tracts of land from farmers in Gurgaon at dirt-cheap rates to build the DLF city. Today, the 3,000-acre DLF City in Gurgaon is the only integrated township of its kind in India. DLF has completed projects of over 35 million sq ft across its residential, commercial and retail businesses. It plans to develop around 1,00,000 acres over the next couple of years, besides getting into constructing special economic zones (SEZ). Singh attended the Royal Military Academy at Sandhurst in the UK and later served the British Indian Army’s Deccan Horse cavalry regiment.

Net worth: $2 billion
Business: Pharmaceuticals

In 1983, when Sun Pharma entered the market, it made five products that were mostly sold in West Bengal and Bihar. Today, it is the fifth largest Indian drugmaker and one of the fastest-growing generic companies in the world. Forty per cent of its revenues come from global operations. Analysts feel the success is due to Shanghvi’s conservative and low-risk approach, which is clearly visible in the company’s recent acquisition strategy. For four successive years, the company was named by Forbes Global as one of the best performing in its sector. Dilip Shanghvi, who owns a 70 per cent stake, is known to be a workaholic and still puts in 16 hours each day. He was chosen as the Ernst and Young Entrepreneur of the year for 2005 in the healthcare and life sciences category. He is also the chairman of Caraco Pharma Labs, a US-based subsidiary of Sun Pharma, with annual sales of $300 million. He owns several private investment firms, pumping in money in the emerging technology areas. His confidence can be gauged from an unforgettable sentence he told a reporter in 2004: "There is very little I have said, and then regretted."

Net worth: $1 billion
Business: Pharmaceuticals

Khorakiwala broke away from his family’s retailing business to start Wockhardt, which is now a leading pharma firm with annual revenues of $288 million. Highly ambitious, image-conscious and aggressive, his company now employs over 4,500 people, and owns nine plants and 12 offices worldwide. Wockhardt is also among India’s largest research-oriented and globally competitive pharma companies with presence in more than 90 countries. Today, it has businesses ranging from the manufacture and marketing of formulations, bulk drugs, vaccines, medical nutrition, animal health products and hospitals. A front-runner in biotechnology, Wockhardt has an active multi-disciplinary r&d programme employing over 400 scientists whose products include a homegrown insulin, Wosulin. It recently started the Wockhardt Biotech Park, the country’s largest such complex with six plants at Aurangabad. The Rs 200-crore complex has capacities to cater to 10-15 per cent of the global demand for major biopharmaceuticals. Khorakiwala’s two sons, Huzaifa and Murtaza, work with him. But it’s the patriarch who’s the soul of the group— if only he can professionalise his team and delegate powers down the hierarchy.

Net worth: $650 million
Business: Software

Patni Computer Systems and its founder Narendra K. Patni have had a bit of an image issue in the past. Despite being the pioneer in perfecting the now-common offshore outsourcing model for software development, and a hugely successful IPO last year, Patni is better known for being the Infosys nursery. Almost all of Infosys’ founders, including N.R. Narayanamurthy, were Patni employees. Patni and his wife Poonam started to experiment with the outsourcing business out of their apartment in Boston way back in 1972; their drawing room was designated as US and the bedroom India. In ‘US’, they would write the instructions for the conversion of data from paper documents to computers. In ‘India’, a bunch of MIT students typed out the data into a machine that gave out paper tape. To get used to the fact that phone lines from the US to India hardly worked, there was a rule that there would be no oral communication between the two rooms. They would only talk through notes and paper slips. That training certainly helped as Patni has played a vital role in the development of the Indian IT industry. Prior to founding his first company, Data Conversion Inc in 1972, he also worked with the US Trust company and was a consultant to Arthur D. Little Inc.

Net worth: $770 million
Business: Pharmaceuticals, textiles, retail

Better known as the takeover tycoon of the pharma industry, Piramal was 29 when his father died suddenly in New York. His brother Ashok took over the reins of the family business soon after, but he too died of cancer within five years. And so the baton passed into the hands of the young Ajay. Just before that, his other brother Dilip had decided to separate his business. Meanwhile, a year-long textile strike led by Datta Samant dealt a crippling blow to the textile industry and Morarjee Mills, the group’s main business venture then, was deep in the red. "But I survived as the lord carried me when I needed him the most," Piramal says. Today, he’s the chairman of the Rs 4,000-crore Piramal Enterprises which has interests in sectors ranging from pharmaceuticals to real estate. In the last 15 years, Piramal has effected high-profile takeovers of several Indian subsidiaries of mnc pharma companies like Rhone Poulenc, Roche and Boehringer Mannhiem.

The group also owns Piramyd Retail which was one of the first to enter the mall business. Like a lot of his other fellow billionaires, Piramal is also passionate about horses. The favourite in his stable is a pure white filly called Daffodil.