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  NIKHIL INAMDAR

  ROKDA

  How Baniyas Do Business

  RANDOM HOUSE INDIA

  Contents

  A Note on the Author

  Introduction

  The Millionaire Cabbie

  The Emamiwallahs

  The Online Baniya

  Mission Sanitation and The Man Behind

  The Coach

  Acknowledgments

  Copyright

  Follow Random House

  A NOTE ON THE AUTHOR

  Nikhil Inamdar is a Mumbai based financial journalist and currently consulting columnist at Business Standard Online. He was a prime time news presenter for NDTV Profit and worked for several years as a television correspondent at reputed news channels after completing a postgraduate degree in broadcast journalism from the UK. This is his first book.

  For my big, fat, thriving, shining Indian household

  Introduction

  The ‘Baniya’ is a loosely used expression in India, employed interchangeably to refer to the corner shop kiranawallah, the calculating money lender or the quintessential Marwari businessman next door. The connotation is often negative, but the etymology of the word is found in the Sanskrit term, vānij, which simply means trader or merchant. Originating primarily in the northern and western parts of India, the Baniyas have historically been engaged in professions ranging from money lending, commodities trading, stock broking, and shop keeping. In the present day however, they straddle sectors of the modern economy as varied as internet enabled retail, mobile telephony, and oil and gas exploration.

  They are a separate Indian caste with specific sub-castes—Maheshwaris, Agarwalas etc, religious affiliations— Hindu and Jain, distinctive social customs, also have typical surnames on the basis of the clan to which they belong— Bansal, Mittal, Singhal, Goel, Garg and so on. In a wider context, the term Baniya is also used in parts of the country to refer to a conglomeration of people from diverse geographical and religious backgrounds, engaged broadly in commerce.

  When I was approached to do this book that would feature the growth stories of five Baniya entrepreneurs, the first thought that crossed my mind was whether entrepreneurship could be dissected from the prism of caste alone. Could I possibly use old social segregations and hierarchies as a basis to pick a group of entrepreneurs and tell their stories? Wouldn’t that only restate community stereotypes that may or may not hold true any longer?

  As I began approaching people I was interested in featuring in the book, one young whiz kid—whose online restaurant-discovery portal had just received millions of dollars in private equity funding—banged the phone down on me asking never to call again. ‘Baniyas in business?! Why would you want to categorize me in that manner?’ he almost shrieked, evidently annoyed at my appeal to let his new-age success story be identified by the caste to which he was born.

  If for a moment that incident made me circumspect about this project, all my doubts subsided once I began the interviews. For every person that was dismissive of the role their community may have played in influencing the choices they made in life, I met five others who reiterated the conscious and imperceptible weight that caste-based idiosyncrasies had on their psyche. That is not to say that those featured in this book are solely or even primarily defined by their Baniya identity. Far from it actually! After all modernity and the global nature of enterprise will have blunted old typecasts and altered our DNA considerably, wouldn’t it?

  But to fully discount the peculiarities of a clan established by generations of cultural and organizational frameworks would be arrogant and ill-conceived. Which is why, uncovering through these case studies why the Baniyas in particular could have long held hegemony on Indian enterprise, and continue to remain such a dominating force in the orb of commerce and trade was an exciting endeavor. From their stomach for risk and high trust culture to the strong joint family and community support infrastructure that could enable their initial rise, from their amazing ability to adapt and adjust well in unfamiliar environments to their penchant for keeping a close tab on costs and spend conscientiously; there are more positive stereotypes about the Baniyas that hold true than don’t.

  ‘They have an intrinsic understanding of money and commerce. Business is second nature to them’ reckons Kunal Bahl of Snapdeal.com. He is surrounded by Baniyas—from his own partner Rohit, to all his competitors that inhabit India’s e-commerce landscape. But, it is what Rohit Bansal himself shared with me that strikes a deeper chord. The community he says is inherently comfortable with uncertainty, and remains undaunted by the constant oscillations in their financial circumstances. What a virtue that is for a good businessman to have!

  The five stories in this book—of the men behind Emami, Snapdeal, Meru Cabs, Hindware, and Bansal Classes—seek to bring out the matchless ingenuity of this community, and demonstrate through them how the Baniya has evolved with times, whilst continuing to retain his own unique cultural identity. I attempt to do this without necessarily keeping the caste factor at the fore, but with hope that the spirit of the Baniya DNA, which is wired for enterprise, will shine through in the narrative time and again.

  The companies I’ve chosen not only represent different sectors of the Indian economy, but also the changing landscape of doing business in India. Emami and Hindware are brands that have withstood the test of time, blossomed in the face of cataclysmic changes. Meru Cabs and Snapdeal symbolize the spectacular opportunity liberalization has afforded to entrepreneurship and Bansal Classes is a tale of triumph in adversity.

  July 16, 2014

  THE MILLIONAIRE CABBIE

  NEERAJ GUPTA – MERU CABS

  Circa 2006—It was a regular day at work. Neeraj Gupta was in a meeting at his sprawling, newly acquired office in Goregaon when the dreaded call first came.

  ‘Come out and take a look…’ hollered that familiar intimidating voice on the other side of the line. Gupta skipped a heartbeat and rushed out, dashing down the stairs to the garage below, praying to the lord to give him strength to face what was about to greet him.

  The scene he witnessed still flashes like a strobe in his memory. Broken windows, cracked windshields, and splintered glass on the floor—the brand new garage below the office, where he parked his fleet of taxis, had been rummaged through by one of the biggest names in Mumbai underworld. Gun shots had been fired, property had been damaged, a business for which Gupta had given his sweat and blood was being seized up literally. His life was in grave danger.

  ONE DAY, 24 HOURS

  The first set of calls had started a year earlier. On the morning of 26 July 2005 to be precise—the fateful day that ravaged Mumbai as torrential rains inundated the city, causing large-scale destruction of life and property. Curiously, just the night before, four of Neeraj’s vehicles had met with fatal accidents all at once, forcing him to spend the entire night at Lilavati Hospital in Bandra, attending to his staff.

  ‘One of the drivers has died,’ a shaken Neeraj remembers telling wife Farhat on the phone, perplexed at how four vehicles from his staff transportation business were involved in mishaps on one single night. She asked him to come home early, sounding anxious. He did, but only the next morning—weary and fatigued. And just as he was about to crash into bed the cell phone rang.

  ‘Dubai se baat kar raha hoon…,’ someone said in Hindi. It wasn’t a voice Gupta recognized, but the tone was telling enough. Thankfully, the minute he uttered ‘Dubai’, Gupta had the presence of mind to start recording the conversation.

  ‘Do crore,’ the man threatened and hung up, elaborating no further. His instinct had been proven correct. It was an extortion call asking him to pay up.

  Everything that could go wrong did on that day. Mumbai was devastated by such a ferocious downpour that b
y 4 pm large parts of the city had completely flooded, Neeraj lost contact with his wife and would have to walk chest deep in water for hours, looking for his missing family. It didn’t stop at that. A dozen more of his cars were smashed beyond repair as the garage was inundated by water.

  ‘Even the newspapers had splashed photos of one of our car wrecks on the front page,’ Gupta remembers. ‘The accident, the underworld threats, the terror of a missing family, and large scale financial losses—I was staring at, it was easily the worst day of my life, and I still shudder when I think of it.’

  Ironically it is this day of adversity that also proved to be a turning point for Gupta in life, and particularly in business.

  GROWING UP

  Neeraj Gupta was born in Mumbai in a family of second generation entrepreneurs. His grandfather’s story is a quintessential rags to riches saga.

  ‘As many unemployed young men in those days would, he boarded a train from Lucknow to arrive in (then) Bombay, with pretty much nothing but a suitcase in hand and a family to feed,’ Gupta’s father would tell him. In the course of the next few years he established a flourishing business, owning by the time of his passing, a chain of 14 eateries across the city—little shops in cinema halls, outside railway stations, and crowded business districts that sold snacks and tea to office goers. It was hard work, but it propelled the family out of poverty.

  Neeraj’s father, Vishnu Kumar Puranchan Gupta himself, a docile, happy-go-lucky man, wasn’t really a desirous contender who harboured any ambition to steer the business into the big league. But the family always led a comfortable, middle-class life. With his grandfather’s untimely death at the age of 40, it was Neeraj’s uncle who handled the trade, running all but one restaurant, and eventually changing his line of business entirely to get into the manufacturing of corrugated boxes.

  The one restaurant his father did inherit was leased out to a ‘Shetty’ man to run. Vishnu was a carefree soul and had decided very early on in life that making money and doing business did not excite him. Endowed sufficiently with an inheritance and with a steady income from the restaurant he had leased out, he spent his days pursuing other interests—which meant starting his day with a morning swim at the Mafatlal Club on Charni Road, an afternoon session of badminton at Khar Gymkhana, evenings at the Santacruz club, playing billiards, and finally calling it a day with a game of cards with his friends. Quite evidently, the family wasn’t swiftly climbing the ladder of monetary success, but, were a happy and contented lot.

  If business had skipped Vishnu’s genes, there was enough of it happening around Neeraj for the seed of enterprise to be sown somewhere. Whether within the paternal side of the family, or in his mother’s maternal home where the nana and mamas operated steel mills and ready garment stores, people were always engaged in some entrepreneurial activity or the other. Neeraj never knew anyone who did a job. And so right from the early days, it was very clear to him that he will not work for someone else, but create something of his own.

  A creator he was of trouble, mischief, and commotion for starters! At the age of five, he walked two kilometers from school to a hospital, unaccompanied, to see his new born sister. By seven he had almost burnt the house down while playing with fire. His adventurous streak made him a hugely popular kid, famous for organizing festivals, dandiya nights, and New Year parties in the modest MHADA building where the Guptas lived. He enjoyed being at the forefront, bossing around friends, delegating work, and managing events. So popular did their events become in the next few years, that they even started garnering sponsorships, drawing crowds of more than three thousand people. These activities continued right through college and the young boy even managed to make good money occasionally.

  ‘I remember raking in Rs 20,000 for a college fest that we organized. In 1991, for a teenager still to hit twenty, that was a princely sum,’ reminisces a grinning Neeraj.

  College was a breeze—a ‘paid holiday’ Gupta calls it—spent hanging around campus and the canteen. ‘A girlfriend by our side on day one!’ proclaimed a friend of his, as they geared up for the first day of college at Mithibai. The dogged determination, aside of finishing a B. Com degree, was to get a girlfriend. And so, filmy as it may sound, Gupta fell in love on day one, and started wooing Farhat—now his wife—on day two.

  With no pressure from home to excel in academics or follow a particular stream of discipline, he was an average student at best, more interested in girlfriends, extracurricular activities and in pursuing a myriad different hobbies, which on most occasions he managed to successfully monetize.

  The first of these sideline fads that caught his fancy was inspired by a gentleman he met on a family holiday. ‘He sold us a grain of rice with an inscription on it and I instantly thought—why can’t I do this as well? And so I did it—gifting one to my thoroughly impressed girlfriend,’ Gupta laughs. He was also crafting these by the dozen for friends who implored him with requests to flatter the ladies, and even sold in bulk to a trader who peddled them at stores like Archies and Hallmark that were all the rage back in the day.

  ‘I will pay you Rs 20 a piece. Make me 500 of these,’ the trader told him. And so, Neeraj got his first paycheck crafting 500 assiduously inscribed one-liners on rice grain. It made him richer by Rs 10,000. The moneymaking seed was in him right from childhood. ‘I am sick of having to travel in the trains. I will be jet-setting around the world first-class one day, mark my words,’ he would tell his mother, in school.

  ‘Ja re…kitni badi baatein karta hai,’ she would scold in Hindi.

  By the third year of college, Farhat had a job with Jet Airways as cabin crew. Her father passed away early and she took it up to support her family. Neeraj too graduated with a decent score and with ample time on hand with not much to do. He wasn’t travelling first-class yet, but his routine now revolved around flight arrivals and departures. He was Farhat’s official chauffeur, dropping her off to and picking her up from the airport, much to the chagrin of his otherwise composed parents.

  ‘You must do something, Neeraj. This is not the age to be sitting at home,’ his father said at last. ‘A friend of mine runs a textile manufacturing company, I have spoken to him about you, and he has agreed to have you on board.’

  And so with no good enough reason to defy his dad, Gupta reluctantly began work at Tunicas. It was the first and the only time he worked for somebody else. Three months was how long the stint lasted.

  IN BUSINESS

  Around Diwali that year, Neeraj’s new company was handing out little gifts to employees—those classic faux-leather boxes with a pen, a key chain and a wallet. That souvenir, he says, proved to be a trigger for his first serious, grown-up business venture and a chance to get out of a boring job.

  A friend of Neeraj’s sister, working at the time for Hindustan Unilever had come home one evening. Neeraj was lounging around, passing time after work, when he overheard the friend telling his sister about a product launch for which her boss had asked her to think of ideas for corporate gifting.

  ‘I can’t think of anything appropriate for the occasion,’ she said. ‘Any ideas Neeraj?’

  He rushed in at once, opened his bag and handed over the present he’d had received at office. ‘I can supply as many of these as you want,’ he said, not thinking for a moment where from and how he was going to source the leather boxes.

  ‘Ok. I will take this along and show it to my manager.’

  Surely the next day he got a call from the HUL head office asking him to come over for a meeting.

  ‘How much would these cost?’ asked the manager. Neeraj stared at him blank as a wall, with not a clue as to how much he should quote.

  ‘Rs 800,’ he said, taking a leap of faith.

  ‘Will you be able to supply in bulk?’ asked the manager.

  ‘Yes!’ said Neeraj, surprised at his own confidence about accomplishing a job about which he knew nothing.

  ‘Okay, let’s do this,’ the manager said within a fra
ction of a second. ‘I will issue a P.O. (purchase order) for 500 pieces. What company do you represent?’

  ‘Delta Exports,’ Neeraj blurted out, as if on cue. He is still not quite sure just how that name popped up in his head out of the blue, but sure as hell, at age 21, he had bagged his first big order of Rs 4 lakh, for a product he knew nothing about and in the name of a company that was but a figment of his wacky imagination. He was thrilled!

  The product was a hit and Delta Exports got repeat orders from HUL. Within a span of three months, the company had made a killing—a profit of Rs 3 lakh, a figure that was several times more than his salary at Tunicas.

  The business was a huge learning experience for Gupta. Not only had he proved to himself that he had the capability to confidently deal with large customers, but also that he could do business with integrity, and still make a comfortable margin, having been determined to execute an all-white transaction in a trade where black money was the norm.

  With a swagger in his stride and a sizable amount of money in the bank, he handed in his resignation, setting out to spend the next three years toying with no less than seven-eight different business ideas—from exporting embroidered garments to setting up a new company (ingeniously named Willow Paper Craft) manufacturing paper bags.

  Some worked, others didn’t, but the money he made selling leather gift cases to HUL sustained these experiments till he turned twenty four, giving him a chance to dabble in a number of small ventures. His only mantra was, no matter which business he got into, he would recover his investment, make a reasonable margin, and never lose money—a fundamental rule he adheres to, till date.

  THE GARAGE GUY