Post on 27-Feb-2018
transcript
D
LF’s K P Singh — KP to his
friends — an army officer
who quit the service to join
his father-in-law’s Delhi Land
& Finance in 1961, became, in
2007, after he listed the firm, the
world’s richest real estate baron. The
offering helped him boost his fortune
to Rs 85,666 crore on his company's
listing day in 2007. In January 2009, a
50 per cent drop in demand and a 20
per cent drop in real estate prices, and
correction in real estate stocks, saw
him lose Rs 31,657 crore or 63 per cent
of his wealth. The melt-
down has forced one of
India’s biggest real es-
tate developers to defer
plans to raise another
$1.5 billion by listing
an arm in Singapore.
Fellow developer
Unitech’s Ramesh
Chandra was worse off.
The sixth richest man
in India in 2008
dropped 20 places to
26th rank in 2009 as
the correction in realty
stocks saw his wealth
shrink by Rs 52,788
crore or 93 per cent. A
structural engineer,
Chandra moved into real estate in 1985
to build middle-class homes. The cred-
it crunch and fall in stock prices has re-
strained the developer’s ability to raise
money to fund Unitech’s homes, of-
fices and shopping malls in Delhi’s
suburbs, and across other cities in the
country.
In many ways, the change in for-
tunes of these two developers sum-
marises the story of the country’s bil-
lionaires this year. The law of nature
has been brutal on them — the bigger
they were, the larger has been their loss
of wealth. Mukesh Ambani, the coun-
try’s wealthiest Indian, lost Rs 1,39,925
crore, or 58 per cent of his wealth, as
his flagship Reliance Industries fell on
concerns of flagging demand for petro-
leum and petrochemicals in its key ex-
port markets in the West, and the delay
in kicking off gas supplies from the
Krishna-Godavari basin.
Brother Anil Ambani, the second
wealthiest Indian, lost Rs 1,10,082
crore, or 66 per cent of his wealth, as
his flagship Reliance Communications
fell in line with the broader market
even as buyout talks with South
African telco MTN failed. Mega power
projects under Reliance Power will test
his execution skills.
While the brothers retained the top
two slots, telecom czar Sunil Mittal
swapped places with DLF promoter K P
Singh to move up a rank to No 3, while
Singh settled for No 4 despite eroding
his wealth 80 per cent.
Several billionaires in the realty and
infrastructure space lost 80-89 per cent
of their wealth this year. This included
JK Jain of Jai Corp (his son Anand Jain,
is a close associate of RIL CMD Mukesh
Ambani), which is setting up two SEZs
near Mumbai; PNC Menon and family
of Shobha Developers; Ravi Purvankara
of Purvankara Projects; Rakeshkumar
Wadhawan of HDIL. Perhaps the only
exceptions were Vyomesh M Shah and
Mahipatray V Shah of Akruti City, who
lost only 41 per cent of their wealth.
Among the biggest losers was Tulsi
Tanti of Suzlon Energy, who fell eight
places in the billionaire rankings to set-
tle at 20th place. Tanti lost 86 per cent
in the 12 months trailing January 2009
as the wind turbine maker’s stock came
under fire after Edison International,
one of its biggest customers in the US,
cancelled an order for 150 turbines af-
ter cracks appeared in the rotor blades.
Customers were reassured only when
Suzlon shipped out new turbines made
of reinforced plastic. Its biggest acqui-
sition, Repower (which makes large
turbines), has been a roller-coaster
ride. Its initial financ-
ing plans fell through
when markets crum-
bled. In late December,
it announced it would
pay ¤270m to increase
its stake to 91 per cent,
as required under Ger-
man law to control the
company. In early Janu-
ary, Suzlon sold a 10
per cent stake in its Bel-
gium arm, Hansen, to a
London-based invest-
ment firm for an undis-
closed amount. This
could help Tanti bridge
the gap and gain control
of Repower.
Another big loser was metals maven
Anil Agarwal, with interests in alu-
minium, copper and iron ore, who saw
his wealth shrink by Rs 43,176 crore or
63 per cent. While much of this was
due to the fall in commodity prices,
Agarwal also paid the price for an ill-
advised restructuring plan, aborted im-
mediately after a few institutional in-
vestors opposed it for favouring pro-
moters.
Of the 44 top losers whose net
worth is down over 80 per cent, 25 are
from realty related sectors. Billionaires
in commodities, oil, agriculture and
metals lost over 70 per cent each. The
cement and steel billionaires lost heav-
ily on government efforts to control ris-
ing inflation.
Defying the trend
A few billionaires added to their
wealth in an otherwise gloomy year for
wealth-makers. Nitin Sandesara, the
CMD of Sterling Biotech, increased his
wealth by Rs 806 crore, or 28.54 per
cent, by creating a globally-competitive
gelatine business. In the mid-1990s,
the Sandesaras exited the traditional
tea-trading business to set up a plant to
manufacture gelatine at Karakhadi near
Vadodara. They were looking to enter a
business that would be globally com-
petitive, high-tech and high-growth
with strong entry barriers. In less than
a decade, Sterling has emerged as the
largest gelatin manufacturer in Asia,
with key customers in the US.
Sterling’s advantage is access to cheap-
er raw material (bovine bones, which it
sources 30-60 per cent cheaper than
plants in the West) and labour, helping
it emerge among the lowest cost pro-
ducers.
THE LAW OF
NATURE HAS BEEN
BRUTAL WITH OUR
BILLIONAIRES —
THE BIGGER THEY
WERE, THE LARGER
HAS BEEN THEIR
LOSS OF WEALTH.
MUKESH AMBANI
LOST 58 PER CENT
OF HIS WEALTH
POOR LITTLE
RICH BOYS The meltdown has wiped away 61 per cent of the wealth of the country’s
top billionaires. B G SHIRSAT & RANJU SARKAR report
THE COMPANY OF CROREPATIS
Rank Wealth (Rs crore)
‘08 ‘09 Promoters Flagship company Industry Jan '08 Jan '09
1 1 MUKESH AMBANI Reliance Ind Refineries 2,42,902.02 1,02,976.76
2 2 ANIL AMBANI Reliance Communications Telecommunication 1,66,308.96 56,226.71
4 3 SUNIL MITTAL Bharti Airtel Telecommunication 77,776.69 55,027.08
3 4 K P SINGH & FAMILY DLF Realty 1,56,400.46 31,657.29
7 5 AZIM PREMJI Wipro IT 53,470.03 27,246.74
5 6 ANIL AGARWAL Sterlite Ind Metals 68,727.81 25,551.66
8 7 GAUTAM S ADANI Adani Enterprises Trading 53,332.89 17,661.54
16 8 DILIP S SHANGHVI Sun Pharma Pharmaceutical 15,949.03 15,047.99
10 9 KUMAR MANGALAM BIRLA Grasim Industries Diversified 38,462.81 13,256.32
57 10 MALVINDER & SHIVINDER SINGH Religare Enterprises Diversified 10,611.88 12,184.30
50 11 SAURAV TAYAL FAMILY Jaybharat Textiles Textiles 5,643.57 11,085.81
9 12 PRITHVIRAJ, SAJJAN & NAVEEN JINDAL Jindal Steel Metals 40,784.05 11,010.94
12 13 G M RAO GMR Infrastructure Infrastructure 28,588.16 10,180.67
18 14 SHIV NADAR HCL Technologies IT 14,686.51 5,953.34
27 15 RAHUL BAJAJ Bajaj Auto Automobiles 10,323.17 5,890.29
14 16 VIJAY MALLYA United Breweries Breweries 22,345.63 5,825.03
15 17 UDAY KOTAK Kotak Mahindra Bank Bank 21,857.51 5,811.47
44 18 Y K HAMIED Cipla Pharmaceutical 6,109.73 5,712.24
38 19 V C BURMAN FAMILY Dabur FMCG 6,734.65 5,389.03
11 20 TULSI R TANTI Suzlon Energy Capital goods 38,300.17 5,215.78
21 21 KALANITHI MARAN Sun TV Network Media-entertainment 11,605.47 5,070.51
66 22 BRIJMOHAN LALL MUNJAL Hero Honda Automobiles 4,041.05 4,596.39
13 23 JAIPRAKASH GAUR Jaiprakash Associates Cement 23,975.03 4,411.82
34 24 VYOMESH M SHAH & MAHIPATRAY V SHAH Akruti City Realty 7,171.00 4,227.86
54 25 ASHWIN CHOKSI, ASHWIN DANI, ABHAY VAKIL Asian Paints FMCG 5,279.77 4,203.21
6 26 RAMESH CHANDRA Unitech Realty 56,965.44 4,177.05
22 27 ADI GODREJ Godrej Industries FMCG 11,598.21 4,034.66
20 28 SUBHASH CHANDRA Zee Entertainment Media-entertainment 12,131.50 4,005.43
49 29 MURALI KRISHNA PRASAD DIVI Divi's Lab Pharmaceutical 5,836.05 3,819.60
94 30 NITIN SANDESARA Sterling Biotech Pharmaceutical 2,825.06 3,631.20
58 31 N R NARAYANA MURTHY Infosys Technologies IT 4,821.72 3,468.29
— 32 S KISHORE & K A SASTRY KSK Energy Power NR 3,157.43
35 33 GLENN SALDHANHA Glenmark Pharma Pharmaceutical 7,056.91 3,081.56
30 34 KESHUB MAHINDRA Mahindra & Mahindra Automobiles 8,338.01 2,951.48
— 35 VIRENDRA D MHAISKAR IRB Infrastructure Developers Realty NR 2,858.72
45 36 SUDHIR MEHTA Torrent Pharma Pharmaceutical 6,046.24 2,725.48
25 37 SHASHI & RAVI RUIA Essar Oil Refineries 10,551.11 2,535.29
90 38 PANKAJ R PATEL Cadila Healthcare Pharmaceutical 2,853.93 2,517.43
105 39 D B GUPTA Lupin Pharmaceutical 2,422.92 2,481.01
63 40 SRIRAM THYGARAJ Shriram Transport Finance Financial services 4,212.00 2,463.21
28 41 B N KALYANI Bharat Forge Auto ancillaries 10,095.33 2,457.96
72 42 AJAY PIRAMAL Piramal Healthcare Pharmaceutical 3,441.40 2,430.34
75 43 NANDAN M NILEKANI Infosys Technologies IT 3,326.99 2,393.12
81 44 S GOPALAKRISHNAN Infosys Technologies IT 3,230.56 2,323.76
47 45 GAUTAM THAPAR Crompton Greaves Capital goods 5,992.60 2,323.09
52 46 KISHORE BIYANI Pantaloon Retail Retail 5,536.72 2,321.81
32 47 B K GOENKA Welspun India Textiles 7,647.96 2,223.37
101 48 HARSH C MARIWALA Marico FMCG 2,611.69 2,207.99
39 49 R P GOENKA CESC Diversified 6,731.49 2,199.08
40 50 RAJAN RAHEJA Exide Ind Diversified 4,319.60 2,107.03
India’s top five: While Mukesh and
Anil Ambani retained the top two
slots, telecom czar Sunil Mittal
traded places with DLF’s K P Singh
to emerge third richest, and Azim
Premji moved up two notches
BIG, BIGGER, BIGGEST
Continued on page 3
Continued on page 3
TOP 100 BILLIONAIRES: HOW THEY STACK UP
ILLUSTRATION BY BINAY SINHA
The other big surprise was
Saurabh Tayal, chairman of KSL and
Industries, who gained Rs 5,442
crore, or 96 per cent in wealth. A
third-generation scion of an old tex-
tile family, Tayal has
transformed the
50-year-old textile
business and forayed
into real estate — the
group is developing
properties in several
locations. While
many textile ex-
porters are grappling
with the US scrap-
ping of the textile
quota regime, KSL’s
revenue and net
profits have grown
36 per cent and 116 per cent respec-
tively year-on-year over three years
till March 2007, helping it emerge
among the top five companies in the
mid-cap space (Rs 100-500 crore) in
a study last year. Tayal’s growth was
fuelled by acquisitions as KSL
bought ailing textile rivals including
Surat Co-operative Mills, Kamlesh-
war Textile Mills, Empress Textile
Mills and Deccan Co-operative
Mills. These gave KSL the opportu-
nity to develop land banks, and the
group is developing 15 realty proj-
ects: townships, hotels, commercial
complexes, malls, multiplexes, and
warehouses across Maharashtra,
Punjab and Dadra and Nagar Haveli.
Among other billionaires who de-
fied a falling market
and increased their
wealth are Lupin
Laboratories’ D B
Gupta, who added
Rs 58 crore, or 2 per
cent, to his wealth in
the 12 months trail-
ing January 2009;
pharma billionaires
Dilip Shanghvi of
Sun Pharma and Y K
Hamied of Cipla
managed to retain
their wealth. The
biggest gainers were brothers
Malvinder and Shivinder Singh,
who sold their 34.86 per cent stake
in Ranbaxy Laboratories to Japan’s
Daiichi Sankyo at a hefty premium
to its current stock price. They
added Rs 1,572 crore to their com-
bined wealth, taking their net worth
to Rs 10,611 crore. Had they not sold
out, they would have been poorer by
Rs 4,654 crore.
Brijmohan Lall Munjal, patriarch
of the Hero Group, managed to hold
on to his wealth on the basis of a
good show by the flagship Hero Hon-
da, which consolidated its share of
the two-wheelers market at the cost
of rivals like Bajaj and TVS Motors.
A few others who defied the odds in-
cluded Chandir Gidwani and
Khushroo P Byramjee of Centrul
Capital, Sudhir Shankar Moravekar
of Panoramic Universal (hotels),
Prem Adip of MVL (constructions)
and Harish Belwal of Intra Infotech.
These billionaires had the highest
increase in wealth in percentage
terms.
Of India’s 367 billionaires, only
17 are new entrants, including 14
who took their companies public.
Sixty-eight billionaires in 2008 were
also dollar billionaires (rupee:dollar
conversion rate of Rs 39.37 for Janu-
ary 2008), but in 2009, only 20 figure
as dollar billionaires (rupee:dollar
exchange rate of Rs 48.88 for
January 2009).
Prominent among those who’ve
ceased to be dollar billionaires are
Kalanithi Maran of Sun TV,
Jaiprakash Gaur of Jaiprakash Asso-
ciates, Glenn Saldhanha of Glen-
mark Pharma, Brijmohan Lall Mun-
jal of Hero Honda, Subhash Chandra
of Zee Entertainment, and Adi Go-
drej of Godrej group.
Despite the sharp corrections in
their stocks, the realty, infrastruc-
ture and construction sector pro-
duced 46 billionaires, followed by
capital goods (including engineer-
ing) and pharmaceuticals (32 each),
IT (31), diversified (27), metals (25),
media and textiles (21 each). Auto-
mobiles, financial services, FMCG
and cement sectors together added
65 billionaires, while the remaining
104 billionaires were from sectors
such as services, retail, sugar,
telecom, trading, and gems and
jewellery.
Falling out of favour
The fall in the Sensex saw 207 bil-
lionaires drop out of the 2009 Bil-
lionaire Club. Among the well-
known were IT entrepreneurs Atul K
Nishar (Hexaware), M V Srinivas
(Northgate Technologies) and K Pad-
manabhan (Teledatata Informatics),
and Hyderabad-based infrastructure
developers like Nama Nageswar Rao
and Nama Seethaiah of Madhucon
Projects, and D S Chandra Mohan
Reddy of Prajay
Realty developers like Lalit Gand-
hi and Naina Shah of Lok Housing,
and Deepak Kulkarni of DS Kulkarni
& Brothers, who became billionaires
on the back of their IPOs, could not
sustain their position. Big investors
like Vinod Khosla (Praj Industries),
Ranjitsinh A Parmar (Suzlon Ener-
gy), Vivek Mundra (Aban Offshore),
Bharat K Sheth (Financial Technolo-
gies — though he remains MD of
Great Eastern Shipping), GR
Gopinath (Kingfisher Airlines) and
Vineet Nayyar also went off the list
as the value of their investments fell
sharply.
The poster boys of media and en-
tertainment who exited from the list
included Ajay Bijli of PVR, Subhash
Ghai of Mukta Arts, Nirmal N
Kotecha and P S Saminatha of Pyra-
mid Saimira, Anuradha Shukla of
BAG Films & Media, Rasesh B
Kanakia of Cinemax India, and Raa-
jhendhran of Raj TV. Key pharma-
ceutical players excluded from The
Billionaire Club are the Sarabhai
family of Ambalal Sarabhai Enter-
prises, K R Ravishankar and Arun
Kumar of Strides Arcolab, and S De-
vendra of Sashun Chemicals.
Casualties in auto components
included Jag Mohan Kapur of Sona
Kayo Steering, Arvind Kapur of Rico
Auto, and D K Jain of Lumax. Sever-
al billionaires in the metals space,
especially of midcap companies,
also fell by the wayside after riding
the commodity cycle for two years. �
Rank Wealth (Rs crore)
‘08 ‘09 Promoters Flagship company Industry Jan '08 Jan '09
17 51 RAKESHKUMAR WADHAWAN HDIL Realty 15,812.50 2,080.86
62 52 NUSLI WADIA Bombay Dyeing Diversified 4,224.87 2,079.53
64 53 MANOJ G TIRODKAR GTL IT 4,185.71 2,065.26
70 54 PRS OBEROI EIH Services-hotels 3,532.71 2,038.68
24 55 LAGADAPATI MADHUSUDAN RAO Lanco Infratech Engineering 11,114.12 2,018.01
74 56 MURUGAPPAN FAMILY EID Parry Diversified 3,389.69 2,002.10
61 57 SHANTANU PRAKASH Educomp Solutions IT 4,226.35 1,950.09
33 58 G V KRISHNA REDDY GVK Power & Infra Infrastructure 7,444.48 1,948.53
96 59 K ANJI REDDY Dr Reddy's Labs Pharmaceutical 2,772.75 1,931.99
79 60 B K PARKEH & FAMILY Pidilite Ind Chemicals 3,265.69 1,842.39
59 61 SAMIR JAIN & FAMILY Entertainment Network Media-entertainment 4,616.66 1,756.06
106 62 K DINESH Infosys Technologies IT 2,420.50 1,741.08
80 63 RAJJU D SHROFF United Phosphorus Pesticides 3,232.00 1,682.86
29 64 V N DHOOT & FAMILY Videocon Ind Diversified 9,916.80 1,633.46
41 65 RAGHAV BAHL TV18 Media-news 6,482.12 1,626.41
36 66 SATYA NARIAN PRAKASH PUNJ Punj Lloyd Constructions 6,842.70 1,578.21
48 67 HINDUJA BROTHERS Hinduja TMT Diversified 5,917.18 1,564.54
102 68 VIVEK CHAAND SEHGAL Motherson Sumi Auto ancillaries 2,572.62 1,550.10
108 69 S D SHIBULAL Infosys Technologies IT 2,121.56 1,526.04
26 70 REJI ABRAHAM Aban Offshore Oil exploration 10,407.97 1,400.98
82 71 KIRAN MAZUMDAR SHAW Biocon Pharmaceutical 3,131.96 1,381.56
85 72 RAKESH & REKHA JHUNJHUNWALA Investor Diversified 3,078.69 1,362.79
69 73 VENU SRINIVASAN & SURESH KRISHNA TVS Motors Automobiles 3,743.09 1,317.84
51 74 ANU AGA Thermax Capital goods 5,552.91 1,304.24
128 75 R S AGARWAL Emami FMCG 1,817.91 1,279.48
97 76 KARSANBHAI KHODIDAS PATEL Nirma FMCG 2,771.65 1,279.48
43 77 ASHOK SARIN & ANIL SARIN Anant Raj Ind Realty 6,349.53 1,238.63
77 78 B G BANGUR Shree Cement Cement 3,295.66 1,232.43
129 79 SANDIP & SANJAY JHUNJHUNWALA Rei Agro Agro products 1,817.22 1,199.54
144 80 SHASHI KIRAN SHETTY Allcargo Global Logistics 1,563.59 1,189.67
46 81 NARESH GOYAL Jet Airways Aviation 6,004.01 1,185.39
42 82 NIMESH NAGINDAS KAMPANI JM Financial Financial services 6,477.58 1,119.12
83 83 SHYAM SUNDER BHARTIA Jubilant Organosys Chemicals 3,123.32 1,080.41
180 84 MAM RAMASWAMY & GEETHA MUTHIAH Chettinad Cement Cement 1,141.96 1,051.63
92 85 K M SHETH & FAMILY G E Shipping Shipping 2,834.48 1,047.23
56 86 JIGNESH P SHAH Financial Technology IT 4,890.04 1,029.69
121 87 BS & GS SAWHNEY, DPS KOHILI Koutons Retail Retail 1,962.48 1,016.50
53 88 S N KIRLOSKAR Kirloskar Brothers Engineering 5,353.15 1,007.45
– 89 ISMAIL G MEMON & FAMILY KGN Industries Miscellaneous NR 985.75
116 90 P K KHURANA Everest Kanto Cylinder Packaging 1,992.46 978.39
134 91 ABHIJIT RAJAN Gammon India Engineering 1,737.12 948.50
73 92 H F KHORAKIWALA Wockhardt Pharmaceutical 3,401.90 940.94
84 93 D P JINDAL Maharashtra Seamless Metals 3,087.01 913.39
19 94 J K JAIN Jai Corp Infrastructure 14,293.84 912.78
60 95 B G RAGHUPATHY BGR Energy Sys Engineering 4,269.41 897.17
55 96 B K BIRLA Century Textiles Diversified 4,981.00 891.19
115 97 H S BEDI Tulip Telecom Telecommunication 2,002.30 874.79
198 98 ARVIND T SHAH Asian Star Gems & Jewellery 1,033.36 872.51
37 99 ROHTAS GOEL & FAMILY Omaxe Realty 6,819.65 856.01
127 100 ANALJIT SINGH Max India Pharmaceutical 1,821.47 841.01
POOR LITTLE
RICH BOYScontinued from page 1
OF INDIA’S 367
BILLIONAIRES,
ONLY 17 ARE NEW
ENTRANTS,
INCLUDING 14
WHO TOOK THEIR
COMPANIES
PUBLIC
(From top) Metal merchant Anil
Agarwal’s wealth shrank by
63 per cent; Gautam S Adani lost
too; unlike Dilip Shanghvi, Kumar
Mangalam Birla and Malvinder
Singh of Religare who got richer
STACKING UP