Packing A Punch - Dilip Piramal & Family VIP & WINDSOR MACHINES Worth: Rs 334 cr

VIP

Headquarters: Mumbai
Market Cap: $ 24.062 million
Revenue: $ 116.363 million
Earnings: $ 4.334 million


Second behind to Samsonite as the world's largest manufacturer of luggage, VIP Industries is India's biggest name in suitcases. Its brands include VIP, Alfa, Footloose, and Buddy. It also has distribution rights in India for Delsey products.

Dilip Piramal & Family
VIP & WINDSOR MACHINES Worth: Rs 334 cr

When ace investor Rakesh Jhunjhunwala picks up stake in a company, you are likely to seriously consider investing in it and, more often than not, you will hit the bull’s eye. Of late, the stock of VIP Industries has been making headlines for the interest shown by investors such as Jhunjhunwala and Ramesh Damani. Last month, Jhunjhunwala added 1.34 per cent stake to take his total holding in VIP Industries to about 6 per cent. “They saw potential in our company and invested, and are extremely happy today,” says Dilip Piramal, chairman of VIP Industries, whose stock price jumped 10-fold over the past 16 months — from Rs 33.80 on 31 March 2009 to Rs 365.30 on 12 July 2010. During the same period, Piramal’s personal wealth also swelled from Rs 41 crore to Rs 450 crore.


 

Piramal says this stellar growth is the result of a strategy shift last year. “We had increased prices of our mass premium product (VIP brand); the strategy didn’t work. In fact the competition ate into our market share. Last year we repositioned our brands, which gave us very good results,” he says.

The results were tangible. VIP overtook Samsonite’s American Tourister last year in the mid-segment market. The company’s revenues and profits also improved. It reported a net profit of Rs 50 crore in FY2009-10 against Rs 9 crore in the previous year, and revenues of Rs 636 crore against Rs 525 crore. “In any given year, if the sales go up by 15 per cent with the overheads remaining the same, the net margin can increase by 30-45 per cent,” says Piramal, who credits the company’s growth to his daughter Radhika, who took over as managing director on 1 May 2010. “Long-term planning, adapting to situations and the ability to carry managers along with her have been her strong points,” says Piramal, a music buff who is now busy selecting 100 songs for Saregama for a collection of CDs to be launched this Diwali.


By this year-end, VIP plans to become debt-free. Last year, it brought down debt from Rs 135 crore to Rs 85 crore and in the first quarter of FY2011, it further reduced it to Rs 35 crore. The company earns 90 per cent of its revenues from the domestic market, with the major chunk coming from the mass segment. It has 350 exclusive retail outlets, of which 125 are company-owned. “Our approach has been mostly through the franchise model. But if dealers aren’t willing to open franchises in certain regions, we open our own stores,” says Piramal.


Despite buying premium luggage maker Carlton of the UK six years ago, VIP had not launched the brand in India as it was offering Delsey at the top-end. “The premium segment being quite small, we felt it did not make sense to have two brands,” says Piramal. “But with the termination of the contract with Delsey, we plan to introduce Carlton in India.”


Piramal hints at getting into other lines of business, but doesn’t give details. However, the market seems to have already sensed it. No wonder the stock is still attractive despite trading at a PE (price-to-earnings) multiple of 21 times on a one-year trailing basis. Jhunjhunwala seems to have got this one right, too.

(This story was published in Businessworld Issue Dated 26-07-2010)

The Right Prescription

YOGESH AGARWAL & FAMILY
AJANTA PHARMA Worth: Rs 142 cr

Many may still recall Bollywood’s Jumping Jack Jeetendra endorsing male ‘energiser’ Thirty Plus on national television in the 1990s. But few will remember Mumbai’s Ajanta Pharma as the company behind the product. Ajanta, it appears, is only too happy for that to be the case. For it has moved on. And Ajanta’s founding family scion Yogesh Agarwal is making sure there’s no looking back.


For the better part of this decade, Yogesh, 38, has presided over a strategic overhaul of the firm that has seen it shift focus away from over-the-counter (OTC) products such as Thirty Plus (no longer available in India, though exported) to speciality prescription drugs in ophthalmology, dermatology and cardiology in the Indian market. The company also pared down exposure to high-risk markets such as Russia and strengthened its presence in South-east Asia, Africa, and West Asia with a similar product focus. “The specialty focus was a measure to restructure our Indian operations,” says Yogesh. “We firmly believed that Ajanta had the ability to make this transition and become a player focusing on key therapeutic areas.”

With good result, it appears. Total income has more than doubled to Rs 384 crore on a standalone basis from five years ago. In 2009-10, the company grew total income by 18 per cent while net profit rose 33 per cent to Rs 28.54 crore. In the last fiscal, its shares on the Bombay Stock Exchange almost tripled to Rs 182. Some of that also factored in a buyback that the company launched a year ago. “Yogesh is responsible for our tunaround and reorientation,” says Arvind Agarwal, chief financial officer of Ajanta and a spokesperson for the company.


The founding family of Ajanta, the Agarwals, are Marwaris from Bansod village in Maharashtra. Ajanta was founded in 1973 by Yogesh’s uncle Purushottam Agarwal, a pharmacist by training. The company, and Purushottam’s extended family, shifted to Mumbai in 1989.


Starting with ‘Pinkoo’ brand of baby’s gripe water, the company built a portfolio of OTC products. But it lacked the resources to make a big enough splash because OTC products need sustained marketing support. While it spotted the export opportunity early, it burnt its fingers in Russia during the ruble crisis.


Under Yogesh, an MBA from the Johnson & Wales University, US, who joined Ajanta over seven years ago, the company changed its avatar. It began looking at prescription drugs where the doctor is the company’s immediate customer and chose less-competitive areas such as ophthalmology. The company invested in research and development (R&D) of differentiated formulations such as a once-daily version of a thrice-daily tablet to improve patient compliance. “The challenge was to introduce products that are not ‘me-too’,” says Yogesh. “We could tide over that with our R&D efforts.” A majority of the products that it launched in the past three years in the Indian market, for instance, were new drug delivery systems.


In spite of its smart rebound under Yogesh, the company just cannot afford to rest on its laurels. For one, Ajanta Pharma is still undersized in an industry where the largest company Ranbaxy tops a billion dollars in revenues. Two, it is now making plans to enter the US market, which can be an expensive exercise. Three, it needs to keep churning out new products in a tighter drug patent regime. Against this backdrop, will the company continue to demonstrate its fitness and vitality well into its 40s?

(This story was published in Businessworld Issue Dated 26-07-2010)

The World's Billionaires

Rank	Name	Citizenship	Age	Net Worth ($bil)	Residence
1	Carlos Slim Helu & family	Mexico	70	53.5	Mexico
2	William Gates III	United States	54	53.0	United States
3	Warren Buffett	United States	79	47.0	United States
4	Mukesh Ambani	India	52	29.0	India
5	Lakshmi Mittal	India	59	28.7	United Kingdom
6	Lawrence Ellison	United States	65	28.0	United States
7	Bernard Arnault	France	61	27.5	France
8	Eike Batista	Brazil	53	27.0	Brazil
9	Amancio Ortega	Spain	74	25.0	Spain
10	Karl Albrecht	Germany	90	23.5	Germany
11	Ingvar Kamprad & family	Sweden	83	23.0	Switzerland
12	Christy Walton & family	United States	55	22.5	United States
13	Stefan Persson	Sweden	62	22.4	Sweden
14	Li Ka-shing	Hong Kong	81	21.0	Hong Kong
15	Jim Walton	United States	62	20.7	United States
16	Alice Walton	United States	60	20.6	United States
17	Liliane Bettencourt	France	87	20.0	France
18	S. Robson Walton	United States	66	19.8	United States
19	Prince Alwaleed Bin Talal Alsaud	Saudi Arabia	55	19.4	Saudi Arabia
20	David Thomson & family	Canada	52	19.0	Canada
21	Michael Otto & family	Germany	66	18.7	Germany
22	Lee Shau Kee	Hong Kong	82	18.5	Hong Kong
23	Michael Bloomberg	United States	68	18.0	United States
24	Sergey Brin	United States	36	17.5	United States
24	Charles Koch	United States	74	17.5	United States

Rank Name Citizenship Age Net Worth ($bil) Residence 24 David Koch United States 69 17.5 United States 24 Larry Page United States 37 17.5 United States 28 Michele Ferrero & family Italy 83 17.0 Monaco 28 Kwok family Hong Kong NA 17.0 Hong Kong 28 Azim Premji India 64 17.0 India 31 Theo Albrecht Germany 88 16.7 Germany 32 Vladimir Lisin Russia 53 15.8 Russia 33 Steven Ballmer United States 54 14.5 United States 33 Robert Kuok Malaysia 86 14.5 Hong Kong 35 George Soros United States 79 14.0 United States 36 Anil Ambani India 50 13.7 India 37 Paul Allen United States 57 13.5 United States 37 Michael Dell United States 45 13.5 United States 39 Mikhail Prokhorov Russia 44 13.4 Russia 40 Birgit Rausing & family Sweden 86 13.0 Switzerland 40 Shashi & Ravi Ruia India 66 13.0 India 42 Mikhail Fridman Russia 45 12.7 Russia 43 Jeffrey Bezos United States 46 12.3 United States 44 Savitri Jindal India 60 12.2 India 45 Donald Bren United States 77 12.0 United States 45 Gerald Cavendish Grosvenor & family United Kingdom 58 12.0 United Kingdom 45 John Paulson United States 54 12.0 United States 48 Abigail Johnson United States 48 11.5 United States 48 Jorge Paulo Lemann Brazil 70 11.5 Brazil 50 Roman Abramovich Russia 43 11.2 Russia Rank Name Citizenship Age Net Worth ($bil) Residence 51 Susanne Klatten Germany 47 11.1 Germany 52 Iris Fontbona & family Chile NA 11.0 Chile 52 Forrest Mars Jr United States 78 11.0 United States 52 Jacqueline Mars United States 70 11.0 United States 52 John Mars United States 73 11.0 United States 52 Ronald Perelman United States 67 11.0 United States 57 Oleg Deripaska Russia 42 10.7 Russia 58 Vagit Alekperov Russia 59 10.6 Russia 59 Leonardo Del Vecchio Italy 74 10.5 Italy 59 Carl Icahn United States 74 10.5 United States 61 Vladimir Potanin Russia 49 10.3 Russia 62 Philip Knight United States 72 10.2 United States 63 Ricardo Salinas Pliego & family Mexico 54 10.1 Mexico 64 Mohammed Al Amoudi Saudi Arabia 65 10.0 Saudi Arabia 64 Ernesto Bertarelli & family Switzerland 44 10.0 Switzerland 64 Anne Cox Chambers United States 90 10.0 United States 64 George Kaiser United States 67 10.0 United States 64 Hans Rausing Sweden 84 10.0 United Kingdom 64 Joseph Safra Brazil 71 10.0 Brazil 70 Alexei Mordashov Russia 44 9.9 Russia 71 Viktor Rashnikov Russia 61 9.8 Russia 72 German Larrea Mota Velasco & family Mexico 56 9.7 Mexico 73 Sheldon Adelson United States 76 9.3 United States 74 Silvio Berlusconi & family Italy 73 9.0 Italy 74 Dan Duncan United States 77 9.0 United States          Rank Name Citizenship Age Net Worth ($bil) Residence 74 Kushal Pal Singh India 78 9.0 India 77 Nasser Al-Kharafi & family Kuwait 66 8.7 Kuwait 77 Francois Pinault & family France 73 8.7 France 79 Dmitry Rybolovlev Russia 43 8.6 Russia 80 Iskander Makhmudov Russia 46 8.5 Russia 80 James Simons United States 71 8.5 United States 82 Alberto Bailleres & family Mexico 77 8.3 Mexico 83 German Khan Russia 48 8.2 Russia 84 Eliodoro, Bernardo & Patricia Matte Chile NA 8.1 Chile 85 Edward Johnson III United States 79 8.0 United States 86 Kumar Birla India 42 7.9 India 87 Sunil Mittal India 52 7.8 India 88 John Fredriksen Cyprus 65 7.7 United Kingdom 89 Serge Dassault & family France 84 7.6 France 89 Petr Kellner Czech Republic 45 7.6 Czech Republic 89 Ananda Krishnan Malaysia 71 7.6 Malaysia 89 Tadashi Yanai & family Japan 61 7.6 Japan 93 Mohamed Bin Issa Al Jaber Saudi Arabia 51 7.5 Saudi Arabia 93 Len Blavatnik United States 52 7.5 United Kingdom 93 David & Simon Reuben United Kingdom 67 7.5 United Kingdom 93 Nobutada Saji & family Japan 64 7.5 Japan 93 Alain & Gerard Wertheimer France NA 7.5 NA 93 Vladimir Yevtushenkov Russia 61 7.5 Russia 99 August von Finck Germany 80 7.3 Switzerland 100 Lee Kun-Hee South Korea 68 7.2 South Korea

India's rich list shrinks by 37%

The meltdown in the global financial markets has taken its toll on India, with the country’s rich list shrinking by 39,000 high net worth individuals, according to Merrill Lynch Wealth Management and Capgemini’s annual World Wealth Report.

“The total number of HNIs in India has dropped to 84,000 at the end of 2008. A year prior to that the HNI strength in the country was 123,000," said Pradeep Dokania, head-global private client, DSP Merrill Lynch. This means, the number of HNIs is in the country dropped by 32 per cent.

This drop also puts India as the second-worst performer, just behind Hong Kong, if the growth of HNIs in Asia Pacific countries is taken into account. As per last year’s report, India had witnessed the fastest growth of HNI numbers in 2007.

The wealth of the world’s rich people dropped 19.5 per cent to $32.8 trillion in 2008, shrinking the global HNI population by 14.9 per cent to 8.6 million. Merrill Lynch and Capgemini define HNIs as those individuals who have net assets of at least $1 million, excluding their primary residence and consumables. The report also stated that those with net asset of $30 million or above, again, excluding primary residence and consumables, are ultra-HNIs. And this population suffered the most, globally. The number of ultra HNIs fell 24.6 per cent.

“The unprecedented declines wiped out two years of robust growth in 2006 and 2007, reducing the HNI population and its wealth to below the levels at the close of 2005,” the report observed.

But this shrinkage is set to change, once the global economy recovers. The two researchers believe global HNI wealth will grow to $48.5 trillion (from the current $32.8 trillion) by 2013.

India's 10 top who dropped off billionaire club

Ramesh Chandra

What a difference a year can make. In March 2008, when we published the last billionaire rankings, India's wealthiest citizens were flying high, buoyed by a soaring stock market and a booming economy. Cumulatively, they were Asia's wealthiest, with a collective net worth of an astonishing $335 billion.

Ramesh Chandra

In 2008 his net worth was: $9.6 billion

Now his estimated loss is: $9 billion

Cash-strapped property tycoon saw shares of Unitech, in which he holds a 67% stake, crash by 90% amid real estate meltdown. In October, agreed to sell 60% in telecom arm for $1.2 billion to Norway's Telenor; has yet to receive money. Put some properties on the block to raise cash.

Tulsi Tanti

But India's economy, although driven by domestic demand, hasn't been immune to the global slowdown. In the quarter ending December 2008, gross domestic product grew by 5.3%, down from 9% the previous year.

Tulsi Tanti

2008 Net Worth: $3 billion

Estimated Loss: $2.6 billion

Fortune of Asia's wind-power entrepreneur blown away. Shares of his Suzlon Energy dropped 85% in past year, precipitated by foul economy and poor quality wind turbine blades. Suzlon spent $45 million in latest quarter replacing cracked blades.

Naresh Goyal

Not surprisingly, India's richest are facing a major reality check. A volatile stock market that dropped 44% in the past 12 months and a depreciating rupee, which fell about one-fifth against the dollar, sent their fortunes tumbling. Only 24 of last year's 53 billionaires made the cut this year, and everyone but the Singh brothers, who sold their generic drug firm Ranbaxy at its peak, lost money.

Naresh Goyal

2008 Net Worth: $1.4 billion

Estimated Loss: $1.1 billion

Mounting losses--$45 million in the last quarter--and declining passenger loads caused his flagship Jet Airways' stock price to plunge 77%. In desperation, called off rivalry with Vijay Mallya, forging alliance with his Kingfisher Airlines last October; deal is yet to take off.

As a result, mainland China for the first time has more billionaires than India. Still, the Indian survivors, with a combined net worth of $107 billion, are a lot richer than their Chinese counterparts, who are worth $44 billion.

Nimesh Kampani

2008 Net Worth: $1.3 billion

Estimated Loss: $1 billion

Veteran investment banker and one-time partner of Morgan Stanley; shares in his J.M. Financial plunged 90% in a falling stock market. A finance firm of which Kampani was once on the board allegedly defrauded depositors after he'd resigned. In what is seen as a political vendetta, police targeting Kampani, who reportedly left the country to evade arrest.

Four Indians were among the world's top 10 richest in 2008, worth a combined $160 billion. Today, that same foursome is worth just $54 billion. Mukesh Ambani and Lakshmi Mittal still managed to hold on to their spots at Nos. 7 and 8, respectively. The same can't be said for Anil Ambani, who lost $32 billion this past year, more than any other billionaire in the world, or K.P. Singh, briefly the world's richest real estate baron, who lost $25 billion and is now ranked No. 98, worth $5 billion.

Sameer Gehlaut

2008 Net Worth: $1.2 billion

Estimated Loss: $1 billion

Until recently a fast-rising star, his fortune, derived from real estate and financial services, evaporated as both those sectors collapsed. Companies of his Lakshmi Mittal-backed Indiabulls group lost over 80% of their market values.

K.P. Singh is in much better standing than fellow property developer Ramesh Chandra. His cash-strapped Unitech lost half its market capitalization in one day last October; now Chandra is poorer by an estimated $9 billion from the $9.6 billion he was worth in 2008. He was the highest-ranked billionaire from 2008 to drop off the list.

Vijay Mallya

2008 Net Worth: $1.2 billion

Estimated Loss: $900 million

Financially stretched liquor baron felt heat of downturn in his loss-making airline business. Is looking to sell stake in one of his three listed companies, United Spirits; suitors include Diageo, where his son Siddharth works. Despite financial troubles, paid $1.8 million at a recent auction to acquire memorabilia of Mahatma Gandhi that he will gift to Indian government.

At least Singh has plenty of company. The 28 other drop-offs include a number of well-known businesspeople. Among the notables is flamboyant liquor and airlines tycoon Vijay Mallya, whose UB Group acquired Scottish distiller Whyte & Mackay for $1.2 billion in May 2007 to become the world's second-largest spirits group.

Gautam Thapar

2008 Net Worth: $1.4 billion

Estimated Loss: $850 million

Runs Avantha group, successful offshoot of old-line family conglomerate. Is India's largest paper maker. Stock of Crompton Greaves, his engineering flagship, tumbled 50% this past year.

Mallya could probably use a stiff drink right about now, as his various booze companies lost between half and 90% of their values. Despite financial troubles, Mallya paid $1.8 million at a recent New York auction to acquire memorabilia of Mahatma Gandhi's that he will gift to the Indian government.

Anand Jain

2008 Net Worth: $3.4 billion

Estimated Loss: $2.9 billion

Mukesh Ambani's school buddy, shares in his Jai Corp. fell 90% this year. The special economic zones he's developing in Mumbai with Mukesh is facing land acquisition problems. Income tax sleuths recently raided his office and home.

Also gone from the billionaires' club are Jignesh Shah, whose listed financial software firm Financial Technologies dropped by 75%, and Sameer Gehlaut, who was India's youngest billionaire briefly before the stock price of his Indiabulls Financial Services and Indiabulls Real Estate both tanked 80% in the bear market. India's wind-power man, Tulsi Tanti, and his brothers lost an estimated 90% of their combined fortunes amid reports of poor quality of Suzlon's wind turbine blades.

Jignesh Shah

2008 Net Worth: $1.1 billion

Estimated Loss: $880 million

Stock market fall took toll on his Financial Technologies, which provides financial software to stockbrokers. Stock dropped 75%. Shah took the National Stock Exchange to court for putting his firm on a "watch list" on grounds that its software allegedly has glitches. Initial public offering of MCX, his commodities exchange, stalled.

The winds of wealth can change quickly, as this year has illustrated. They may yet again blow favorably in the direction of these tycoons.

Gracias Saldanha

2008 Net Worth: $1.5 billion

Estimated Loss: $1.1 billion

Former pharma executive, stock of his generics outfit Glenmark Pharmaceuticals, run by son Glenn, sank when Eli Lilly suspended trials of a pain-management molecule they were jointly developing last fall. Hasn't recovered since.