Family business entrepreneurs


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Family business entrepreneurs

  1. 1. NEW BUSINESS FAMILIES Presented by: Fenella Andrade Masters in European Studies and Management (MESM) 2010-2012 Manipal Centre for European Studies Manipal University, Karnataka, India Source: Business Today April 17,2011
  2. 2. GMR Group <ul><li>Founder: Grandhi Mallikarjuna Rao, Andhra Pradesh </li></ul><ul><li>Age: 60 </li></ul><ul><li>Main Companies: </li></ul><ul><ul><li>GMR Infrastructure </li></ul></ul><ul><ul><li>GMR Industires </li></ul></ul><ul><li>Sons: </li></ul><ul><ul><li>G.B.S Raju – Chairman, Corporate and International Business </li></ul></ul><ul><ul><li>Kiran K. Grandhi – Chairman, Airports </li></ul></ul><ul><li>Son in law: </li></ul><ul><ul><li>Srinivas Bommidala - Chairman Urban Infrastructure and Highways </li></ul></ul><ul><li>Total turnover: Rs 4,560 crore (Rs 25,000 crore assets) </li></ul>
  3. 3. <ul><li>Grew up in Ranjam village, 120 km northeast of Vishakapatnam </li></ul><ul><li>Graduate in Mechanical Engineering from Andhra University </li></ul><ul><li>Worked for a Public Works Department (PWD) executive engineer </li></ul><ul><li>1973 – worked for a brief period at a paper mill </li></ul><ul><li>“ My life can be split into five parts: student, leader, trader, manufacturer, banker and infrastructure developer,” says Rao </li></ul><ul><li>1978 – set up his first manufacturing operation – a jute unit in Ranjam, and over the Licence Raj years, he set up 28 units in steel rolling, ferro alloys, sugar and alcohol, among others </li></ul><ul><li>Due to prohibition in AP under the N.T. Rama Rao government in 1983, he was forced to look outside the state </li></ul><ul><li>Ended up family controlling a bank – ING Vysya, the country’s second private power generation company, several road projects and eventually airports </li></ul>
  4. 4. The Management <ul><li>Family council: Son-in-law Srinivas Bommidala and sons Kiran K. Grandhi and G.B.S. Raju as members </li></ul><ul><li>Their motto: Run the family like a business and run the business like a family </li></ul><ul><li>Family members are involved in the business </li></ul><ul><li>Some of their group’s highways and urban infrastructure business, Grandhi airports, and Raju International business, won’t be in operations after Rao plans to retire in 10 yrs – after which they will either work as a three person unit or rotate chairmanship </li></ul><ul><li>Regular meetings which include women too </li></ul><ul><li>The circle is not complete without family governance </li></ul>
  5. 5. ADANI Group <ul><li>Founder: Gautam Shantilal Adani, Ahmedabad </li></ul><ul><li>Age: 48 </li></ul><ul><li>Main Companies: </li></ul><ul><ul><li>Adani Enterprises </li></ul></ul><ul><ul><li>Adani Power </li></ul></ul><ul><ul><li>Adani Wilmer </li></ul></ul><ul><ul><li>Mundra Port </li></ul></ul><ul><li>Wife: Priti manages Adani Foundation </li></ul><ul><li>Son: Karan handles ports business </li></ul><ul><li>Brother: Rajesh oversees the trading business </li></ul><ul><li>Nephew: Pranav looks after agri business </li></ul><ul><li>Total turnover: Rs 28,000 crore in 2009/10 </li></ul>
  6. 6. <ul><li>1980 – teenaged Adani travelled from Ahmedabad to Mumbai to dabble in diamond business </li></ul><ul><li>He initially honed his skills as a diamond sorter, observed how trade was being carried out and soon graduated to diamond trading </li></ul><ul><li>1988 – started Adani Exports, a partnership trading firm in Ahmadabad dealing in agricultural products, dye intermediates and plastic products with a seed capital of Rs 5 lakh </li></ul><ul><li>His vision is to have an integrated operation for his group – from coal mining to power generation </li></ul><ul><li>The group mines the coal, transports it by rail or water using its own tracks, jetty and vessels, and unloads it at its own port. </li></ul><ul><li>“ There is no other integrated power company in India,” says Ravi Sharma, CEO of Adani Power </li></ul><ul><li>Apart from Mundra port, plans of expanding its port presence in Goa, Hazira and Dahej </li></ul>
  7. 7. <ul><li>The group today chatters between 60 and 70 ships for its trading operations and they plan to buy 20 ships by 2020, two ships are already sailing </li></ul><ul><li>The group is fast moving from being largely family run to being more professional driven </li></ul><ul><li>All his businesses from power, port, oil and gas exploration to agriculture are manned by professionals </li></ul><ul><li>He trusts and supports his core team and never bothers to intervene but is always kept in the loop </li></ul><ul><li>Adani’s message to his team, “We should be the best in whatever we do.” </li></ul><ul><li>He plans to expand his core team to implement his vision 2020 – achieving 200 million metric tonnes of cargo, 20,000 MW of power generation and 200 million metric tonnes of coal mining </li></ul>
  8. 8. DECCAN 360 / DECCAN CHARTERS LTD <ul><li>Founder: Capt. G.R. Gopinath </li></ul><ul><li>Age: 59 </li></ul><ul><li>Wife: Bhargavi runs a bakery venture, Bun World </li></ul><ul><li>Daughters: </li></ul><ul><ul><li>Pallavi works for Deccan 360 </li></ul></ul><ul><ul><li>Krithika is with Deccan Charters </li></ul></ul><ul><li>Total turnover: Rs 375 crore in 2009/10 </li></ul>
  9. 9. <ul><li>The ex-Army officer’s entry into aviation came after he had tried at a series of business ventures in his native district – Hassan, Karnataka </li></ul><ul><li>He reared cattle to sell milk, poultry farming, silkworm farming, motorcycle dealer, Udupi hotel owner, stockbroker, irrigation equipment dealer, agriculture consultant, politician and now finally an aviation entrepreneur </li></ul><ul><li>His wife - equally successful entrepreneur - smaller scale, bakery in the upscale Malleshwaram neighbourhood of Bangalore – expanding </li></ul><ul><li>1997 – Capt. Gopinath and Capt. K.J. Samuel started with a single leased helicopter operating out of a small office on Bangalore’s Infantry road – grown into a mature business with a fleet of 13 choppers and 3 aircrafts </li></ul><ul><li>Air Deccan would have passed into history but it did show how the low cost model was the way forward for the airline business </li></ul>
  10. 10. <ul><li>New start up – Deccan 360 – is pinning similar hopes on the growth potential India holds in the express logistics space </li></ul><ul><li>Roped in Mukesh Ambani as a strategic investor </li></ul><ul><li>He tweaked his management structure to demarcate the line between the owners and the managers, CEO of Deccan 360 report to the company’s board and not to him </li></ul><ul><li>“ I have put in place a good corporate governance structure and have distanced myself from the management,’’ says Gopinath, who is its chairman </li></ul><ul><li>Both his daughters have decided to join their father and Pallavi,29 who looks after Business Development at Air Deccan and Krithika,23 is employed at Deccan Charters Ltd </li></ul><ul><li>Having placed his business in the hands of his trusted CEO’s, he uses his time to sew up big plans and give big surprises </li></ul><ul><li>They also host Indian classical music concerts in their bungalow in Bangalore </li></ul>
  11. 11. MOSER BAER INDIA <ul><li>Founder: Deepak Puri, New Delhi </li></ul><ul><li>Age: 70 </li></ul><ul><li>Main Companies: Moser Baer India </li></ul><ul><li>Wife: Nita heads the Administrative wing </li></ul><ul><li>Son: Ratul, Executive Director </li></ul><ul><li>Total turnover: Rs 5,500 crore in 2010/11 </li></ul>
  12. 12. <ul><li>Hailing from a family of landlords </li></ul><ul><li>Junior executive – oil company ESSO (Kolkata) </li></ul><ul><li>Shalimar Paints – to master the art of management techniques, marketing tricks and to receive a firsthand experience before venturing into his own business </li></ul><ul><li>1964 – Metal industries in Kolkata, trading in aluminum wires and furniture. Two yrs later he moved into manufacturing </li></ul><ul><li>Frequent strikes and deteriorating business environment forced him to migrate to Delhi </li></ul><ul><li>Started Moser Baer India at first as a 51:49 joint venture with Switzerland based co. Moser Baer (time machines) </li></ul>
  13. 13. <ul><li>Technological changes: Death of cassette and video cassette – replaced by CD’s, floopy’s and Digital Versatile Discs (DVD’s) </li></ul><ul><li>In three years the revenues shot up from Rs138.5 crore to Rs 1,585.6 crore. Net profits Rs 325.9 crore </li></ul><ul><li>In 2003/04 Moser Baer India was the world’s second largest manufacturer </li></ul><ul><li>By mid 2000’s, demand for CD’s and DVD’s too stopped rising </li></ul><ul><li>Diversified into manufacturing solar panels </li></ul><ul><li>Moser Baer Solar, a fully owned subsidiary of Moser Baer India – earned revenues of Rs 1,000 crore in 2009/10 </li></ul><ul><li>Still has growth for flash storage but the big revenue growth will be in solar </li></ul>
  14. 14. BALAJI GROUP <ul><li>Founder: Jeetendra Kapoor, Punjab </li></ul><ul><li>Age: 68 </li></ul><ul><li>Main Companies: </li></ul><ul><ul><li>Balaji Telefilms </li></ul></ul><ul><ul><li>Balaji Motion Pictures </li></ul></ul><ul><li>Wife: Shobha, Managing Director, Balaji Telefilms </li></ul><ul><li>Daughter: Ekta, Joint MD, Balaji Telefilms </li></ul><ul><li>Son: Tusshar, Executive Director, Balaji Motion Pictures </li></ul><ul><li>Total turnover: Rs 170 crore </li></ul>
  15. 15. <ul><li>1990 – asked to produce a programme for the channel TV Asia </li></ul><ul><li>Market research and family coaxing, took a plunge </li></ul><ul><li>“ We were left with a lot of software but no slot to put it on air,” says Jeetendra </li></ul><ul><li>Balaji Telefilms was born </li></ul><ul><li>Ekta took over as Creative Director at 19 </li></ul><ul><li>First break on Zee TV on paranormal activity, Mano Ya Na Mano </li></ul><ul><li>Bull’s eye with Hum Paanch </li></ul><ul><li>Then began the ‘K’ soaps that topped the charts for years – Kyunki Saas Bhi Kabhi Bahu Thi and Kahaani Ghar Ghar Ki </li></ul><ul><li>Tie up with Star TV turned into a money spinner </li></ul><ul><li>2008 – cracks appeared between the partners, trends changed and ratings dipped </li></ul><ul><li>Star took the ‘K’ soaps off the air </li></ul>
  16. 16. <ul><li>Revenues started crashing from Rs 95 crore in 2007/08 to Rs 4 lakh in 2008/09 </li></ul><ul><li>Family realized the need for professionalism </li></ul><ul><li>Appointed Puneet Kinara as CEO </li></ul><ul><li>Promptly rose to prominence again, pulling off the two biggest sleeper hits of 2010 – Love, Sex and Dhoka and Once Upon a Time in Mumbai </li></ul><ul><li>“ We want to emerge as a leading content player in television and movies in the next five to 10 years,” says Kinara </li></ul><ul><li>“ The falling out with Star was a learning experience as it enables us to emerge as an entertainment powerhouse,” says MD Shobha </li></ul>
  17. 17. <ul><li>Rapidly turning technology in every field have increased business risk and the mortality rate of business families too </li></ul><ul><li>Succession challenge </li></ul><ul><li>Families today are aligned but the future cannot be predicted </li></ul>