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Manish Chokhani Unfiltered: Money, Power & Wealth Creation in Stock Markets — Transcript

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0:00I've often heard you say this Larry
0:01Summers quote that Japan is a hospital
0:04uh Europe is a museum and China is a
0:05jail. So where does one invest? So it's
0:08on this generation really of how we
0:09build up because historically we've been
0:11processors for rest of the world like
0:13our service companies will make you know
0:15work you were working in meta for
0:16example Infosys may be doing work for
0:17meta but Infosys doesn't own the
0:19platform and Infosys doesn't own the
0:21underlying IP and the protocols on which
0:24these platforms are built and therefore
0:25like one Microsoft makes more money than
0:27the entire Indian IT pack put together.
0:29Has your relationship with money, power
0:31and fame changed after all the inner
0:33work that you did? Number one, I think
0:35we tend to be born with some sanscars of
0:37our last line. And I can now reflect
0:39back and say I always knew I was going
0:41to do well in life and I had this self
0:43asssurance even when our business was
0:45going downhill. I didn't have fear. You
0:47were able to become like the household
0:49name in terms of a banker that everyone
0:51trusted be it the builders, Rahas,
0:53Infosys. How did you build that level of
0:56trust with all these people? Honestly,
0:58credit must go to the founders of INAP.
1:00Like I've always said, they were the
1:02architects. I was only the interior
1:03designer. So they built the house and
1:05the cultures values uh and what I call
1:07the benefit of good sat good company bay
1:10and walabay. What were some of the core
1:12principles or wisdom that you embied
1:14investing? Everyone says I'm Warren
1:16Buffett but there's there was also a
1:18Peter Lynch and each person comes with
1:20his or her own style and if you can't be
1:23original you you know you got to suffer.
1:27Hello and welcome everyone to the India
1:29opportunity show. Our guest today is
1:31Manish Chokani, one of the most
1:33respected voices in the Indian public
1:35markets ecosystem. Manish is not only a
1:37market veteran but also a rare thinker
1:40who blends investment wisdom with
1:42timeless life principles. He was the MD
1:44and CEO of Inam Securities which was
1:47sold to Access Capital for over $400
1:49million. After Enam's merger with
1:51Access, he served as the MD of Access
1:53Capital. What you'll really appreciate
1:55in this conversation is Manisha's
1:57ability to zoom out and be a global
1:59thinker and investor. I really enjoyed
2:02all the snippets of spirituality that he
2:04blended with timeless investing wisdom.
2:06Hope you enjoy watching as well. Hello
2:08Manish, welcome to the India opportunity
2:10show. Thank you for taking the time to
2:12be with me here today. Thanks for having
2:14me Shushi. Honestly, I have to tell you
2:16this is such a dream come true moment
2:17for me to be hosting you today. I've
2:19always watched you on TV and just to be
2:21with you here in person is a dream dream
2:24come true. No, really kind of you and I
2:26think you're my son's age. So I hope we
2:28get those kind of audiences listening in
2:30as well. Absolutely. There's so much
2:32wisdom that people can learn from you
2:34and today we'll dive into that and a lot
2:35more. But uh Manish you know even after
2:38accomplishing so much uh when my team
2:40reached out to you your words were that
2:42anything that we can do to help our
2:44fellow countrymen in India's wealth
2:46creation journey that is what you wanted
2:48to contribute towards and I thought that
2:50was a great starting point even for this
2:52conversation because you actually
2:54personally lived this message. Uh what
2:56do you think India's wealth creation
2:58journey will look like over the next 15
3:0020 years? Wow good question. So look
3:03shash we are what average 28 29 year old
3:06you represent the young India and if I
3:09look back at my sort of 35 year journey
3:12you see the normally the Indian industry
3:15makes about a 15% type ROI which means
3:18the index itself doubles every 5 years
3:21and you go four times in 10 years and
3:24therefore it could be 16 times in the
3:26next 20 even if we don't hit that just
3:30on pure math
3:3290% of your wealth creation lies ahead
3:34of you in in the journey. So all of you
3:37are blessed because you came into
3:38existence when uh like when I came from
3:41my dad's generation they at the end of
3:43their life they had a bungalow and a car
3:46we guys probably worked hard and we
3:48started getting a car while the kids
3:50were still you know being born and so on
3:52and you guys are coming in already with
3:54all the basic needs fulfilled. So you
3:56can really aim for the moon and the
3:58stars and I think the best period of
4:00India therefore lies ahead of us as we
4:02climb up this league of nations uh and
4:04hopefully make an impact on the whole
4:06world. Yeah, I think it's so fascinating
4:08that all of you legends constantly say
4:11that the India's next decade is going to
4:13be the best one. And where do you think
4:16in terms of you know just from an Indian
4:18investor's perspective? Because I often
4:20heard I've often heard you say this
4:21Larry Summers quote that Japan is a
4:23hospital, Europe is a museum and China
4:26is a jail. So where does one invest? Um
4:29how would you suggest Indian investors
4:30invest in today's day? No, look Indian
4:33investors can't take it for granted that
4:35we are going to arrive. I I also say
4:37that Argentina was the richest country
4:39like 150 years ago and then they blew
4:41their opportunity. So it's on this
4:44generation really of how we build up
4:46because historically we've been
4:47processors for rest of the world like
4:49our service companies will make you know
4:51work you were working in meta for
4:52example Infosys may be doing work for
4:54meta but Infosys doesn't own the
4:56platform. Yeah. And Infosys doesn't own
4:59the underlying IP and the protocols on
5:01which these platforms are built. And
5:03therefore like one Microsoft makes more
5:05money than the entire Indian IT pack put
5:07together. Yeah. So unless we go up that
5:09value chain in the coming 1015 years
5:11which we will China has demonstrated
5:14that they've taken ownership of all
5:15these protocols and the platforms I
5:18think that's really you know where we
5:19should be heading. That's one. Number
5:22two I think in the next couple of years
5:23we'll be the third largest economy
5:25behind US and China. Yeah. But we are
5:27still a very inward-looking and a closed
5:29economy. So as a both as a business
5:31person and also as an investor, if
5:34you're not aware of what's going on in
5:35the world and you're not addressing
5:36either a business opportunity elsewhere
5:39or you're not starting to invest outside
5:41in the world, so your horizons expand,
5:43you're doing yourself a disservice. So
5:45surely India will be a large part of
5:47global indices. But it won't be like US
5:50with 70% of you know the world market
5:52cap. It's not like it's the only market
5:53in the world, right? People do invest
5:55and they do grow their businesses
5:57outside the US as well. You yourself
5:59worked in Meta. If they hadn't come to
6:01India and they hadn't found you and they
6:03wouldn't have built up their business
6:04over here, they would have done a
6:06disservice to themselves. And today I
6:07think the largest user base user base is
6:09in India. So you need lot more
6:11aspiration and lot more ambition to come
6:13out from India. Uh and that's what I'm
6:15really excited about over the next 105
6:17years. And you've personally bagged
6:19startups as well and you do publicly
6:21listed companies. What do you think we
6:23don't get right? Why do we not have
6:25examples that have taken over the globe?
6:27Yeah, you know, I think it's a matter of
6:29time as well because look, we came out
6:31of great deprivation after independence.
6:34So to just meet our basic needs, you
6:35know, your generation won't even know we
6:37were having to import food at some point
6:40uh and we were beholden to rest of the
6:42world from there to being the food
6:43granary. We didn't make enough of our
6:45own steel. We never had a car company
6:47until you know Maroti really came and
6:48started building volume. Yeah. So we've
6:51come out of a lot and it it's like a
6:53step process that you build your balance
6:55sheet, you build your capabilities, you
6:56build your confidence and the analogy I
6:59give is of the Indian cricket team that
7:01you know till the late '7s if they went
7:04out and played a cricket match abroad it
7:06was a big deal. Yeah. We got a turning
7:08point in 83 when we won the World Cup
7:10but it was you know considered a one-off
7:12that can you be a regular world beater
7:14and that only happened in the next
7:16generation when the Sachins came even
7:18though the gawas and the capill had
7:20great talent they they weren't world
7:22beaters they got their one-off in 83 and
7:2485 but the Indian team really came into
7:26its own in this suchin raid and other
7:28era and then you needed a small town
7:30Dhoni to come and say that you know we
7:32can then go and smash the rest of the
7:33world and today we dominate the you know
7:36cricket field So it's that sort of
7:38evolution will happen to Indian business
7:40and industry as well. So we are waiting
7:42for our suchins and dhoni to come. Well
7:44the suchins are there. We need the dhoni
7:45to come and be the world world leaders
7:47because suchin was a great individual
7:49player. He wasn't the team captain. So
7:51we need the dhoni to come and I'm sure
7:54they'll come from some small town. Do
7:56you think any of these new age companies
7:58that you see getting listed now there
8:00are so many companies you know private
8:02startups that have gone public as well.
8:04Do you see any of those exactly? They're
8:06all great, you know, entrepreneurs and
8:09they've built great businesses, but it's
8:11still what I still think we are doing is
8:13cut, copy, paste for the types you're
8:15mentioning. Yeah. Which are coming to
8:16market. So, you know, a Flipkart would
8:19have had copied an Amazon over there, an
8:22Ola would have copied an Uber over
8:23there, oo would have copied a Airbnb
8:26over there and so on. Zomato already got
8:28Maitan and others for example in China
8:30doing the so it's great what they're
8:32doing but these are like I said we don't
8:34own the underlying IP and protocol or
8:37the platform for example we've built the
8:40India stack uh it's great what the UPI
8:43has done but what have we done on top of
8:44it because already it's now Google pay
8:46and others they control that platform so
8:49if you don't take the whole value stack
8:52uh you won't get the complete uh how do
8:54I say profit pool coming into your
8:56pocket and we are happy we've built for
8:58example the previous generation built
9:00the IT services company uh and 2002 $250
9:03billion worth of Indian IT exports is
9:06equal to oil from Saudi Arabia in terms
9:08of actual absolute number of foreign
9:11exchange earning similarly the Indian
9:13pharmaceutical industry built a large
9:15generics business but in terms of
9:17absolute profit like I said one
9:20Microsoft makes more money than the
9:22whole Indian IT sector put together so
9:25it's that sort sort of thinking which I
9:27think because there's now adequate
9:29capital available in India through the
9:31VC world unfortunately a lot of it still
9:33comes from overseas but I think that's
9:36available B we need our kids to get a
9:38lot more exposed to the world and I
9:40remember even in the '9s I backed a
9:42company called Ramco systems which was
9:44taking on SAP back in the day and they
9:46had the first client server architecture
9:48based ERP whereas SAP was mainframe but
9:51they lost out because they didn't have
9:53the feature richness which you need or
9:54the UX experience which you know
9:56ultimately the customers want in those
9:58markets and those investments were not
10:00made same way Indian branding companies
10:02if you take the Indian brands how much
10:04have they traveled out you'll hear of a
10:06bajaj but it'll be going into a Nigeria
10:08or a Sri Lanka or an Indonesia will have
10:10TVS or a Marico will go into you know
10:13Bangladesh or a Godidge will go into
10:15some other emerging markets because the
10:17wherewithal to go and build those brands
10:19and invest for the long term may not yet
10:21be there so I think that's number one
10:23number two this ease of doing business
10:26in India is I think a bug bear I hear
10:28from most people. Yeah. So there was a
10:30period where a lot of our startups went
10:32overseas to set up and then a number of
10:34them have flipped back but it's not
10:36flipped back for business reason. They
10:37flipped back because the Indian market
10:39seems to giving them valuation because
10:41they are so rare. Yeah. And that's why
10:42we call them unicorns because it's a
10:44rare mythical creature but other than
10:46valuation this is not the market to go
10:48and test yourself. like the IPL became a
10:51global thing because you played with the
10:52best in the world and when you beat them
10:54there then you realize I can take on
10:56these chaps elsewhere in the world. So
10:58you need some version of that I guess uh
11:00you know to happen over here. Yeah,
11:01you're so right because you know in the
11:03private market world where I've been an
11:06active investor earlier the
11:07conversations used to be that go and
11:09register yourselves in Delaware, right?
11:11And that was well-meaning advice that
11:12every VC would tell you. uh but now the
11:15conversations have changed because
11:16people are flipping their structures or
11:18setting up in Mauritius or Cayman
11:20Islands etc because people have realized
11:22that listing in the US for Indian
11:23companies you get lost in the absolutely
11:25and you're too tiny to get noticed and
11:27here the valuations are frankly
11:30you know you get surprised on the upside
11:32over here yeah but you know when because
11:34you touched upon pharma and IT sectors
11:36uh you've been able to predict trends
11:38ahead of the curve and you were talking
11:40about you know banks and financials
11:42coming back into the picture and pharma
11:44and it getting affected and we seeing
11:47all those cycles play out now. Uh a what
11:50do you think of the cycles going forward
11:51but b also how do you identify these
11:54cycles at large?
11:56Well number one is we have to recognize
11:58their cycles because we all come out of
12:00financial background and we all grew up
12:02on Excel spreadsheets and the easiest
12:04thing was to take a line and draw it for
12:06the next 5 years and 10 years and it
12:07went straight and nature is cyclical.
12:10There's nothing linear in the world. You
12:12have day and night and you have you know
12:14a season four seasons in the year. So
12:17everything that you observe even our own
12:19life we you know we go through a life
12:21cycle and so companies have a life cycle
12:23sectors have a life cycle nations have a
12:25life cycle our world has a life cycle
12:28the way we were discussing before we
12:29started the show the kind of souls
12:31coming into this world are coming with
12:33different life cycles. So once you play
12:37according to the laws of nature that
12:39there is a life cycle and there are
12:40clearly life cycles of economies and I
12:43learned very early from the great Mark
12:45Faber he used to write about life cycles
12:47of emerging markets then there were also
12:50an economic theory there's the shampirin
12:51analysis of where they talked of
12:53disruptive trends uh then I also
12:56observed post the 1970s Bretonwoods that
12:59how every decade you created a bubble
13:02once we broke the gold standard and you
13:04went away from financial assets in one
13:06decade to hard assets in another decade.
13:09So with all that sort of there at the
13:11back of the mind you can almost see uh
13:14what's coming ahead because in some
13:15sense as I'm older I can say this now I
13:17didn't realize it then you're kind of in
13:20sync with nature and it's like when you
13:22know a person you can predict that
13:24person's nature now same way with most
13:28other things you you almost have a
13:29predictive intuitive sense about you
13:32know what lies ahead like you meet some
13:34people you get a creepy feeling right
13:35you don't want to meet that person and
13:37with some people you know
13:39you feel like you've, you know, known
13:40each other forever. So, there's some
13:42things that work. I don't know. It's
13:44hard to explain. I guess some things
13:46that align with you
13:47naturally. It's like, and not that I'm
13:50saying I'm similar, but it's like asking
13:52Sachin when you see the ball, how do you
13:53hit it? I mean, he sees the ball like a
13:55football and we get bowled on the same
13:56ball. So, it I think it's a bit like
13:59that. It comes with both your own nature
14:01has to be there. Uh, and B, you got to
14:03just keep at it. uh like this Malcolm
14:07Gladwell had that lovely book. No, he
14:08said 10,000 hours of practice. Uh that's
14:11what differentiated the Suchin from the
14:13Kamli who when they were kids in school
14:15there was a Venote Kami who was supposed
14:17to be more talented than Suchin and then
14:19his life he took in another direction
14:21and Suchin stayed very disciplined uh
14:23and kept honing his craft and you know
14:25look where he reached. So it applies to
14:27all of us in all the fields we operate
14:29in. Yeah, absolutely. And we'll dive
14:31into the spirituality aspect for sure.
14:33But where do you see we are in the
14:35cycle, you know, with Trump on Twitter,
14:37he comes up uh comes up with some really
14:40disturbing stuff sometimes and you know,
14:42it's really affecting how people across
14:44countries are thinking about decision-
14:46making or investments in you know they
14:48wanted to if they want to invest in
14:50different setting up different ventures
14:52etc. So there's truly uh globalization
14:56is at risk right and globalization as we
14:58knew it is at risk. Uh so how do you see
15:00this geopolitical tension affecting the
15:03region? So again great question and you
15:06have to go back in history to realize
15:08what we saw in the last 100 years was an
15:10exception. The world didn't really have
15:12one superpower dictating the rules of
15:15the world forever. Yeah. And even the
15:17rules which came about were actually
15:19post the second world war where the sort
15:22of two big colonial powers UK and France
15:25were counterweighted by the non-colonial
15:28powers which were then the US and Russia
15:31to say let's now set the rules of the
15:33world uh and draw up a kind of a map on
15:36the way we want to now rule the world
15:38and the way we want rules to operate and
15:40you therefore saw how even the security
15:42council was created with the big powers
15:44then sitting there and then they you
15:46grudgingly took in Germany, Japan, India
15:48was given a chance to come in but you
15:50know we for whatever reason said let the
15:52Asian seed go away to China and so on
15:54but that's one part of it then they also
15:57designed the world the way the monetary
15:58system would work and so on so it was
16:00all rules designed to play to the
16:02strength of the west now with the
16:05falling of the uh Berlin wall and the
16:08demise of the Soviet Union effectively
16:10the US was left as the only power in the
16:12world so the era that I've lived through
16:141990 to today just saw a complete
16:18explosion of US exceptionalism and the
16:21rise of capitalism which was completely
16:23unbridled because the era before that
16:25remember was the cold war and you didn't
16:27really have a world which could trade
16:29freely and you therefore had a very
16:31inflationary world and dollar printing
16:33therefore gave you these bouts of you
16:35know bull markets in in the then
16:37emerging market of Japan and Taiwan and
16:39so on the previous decade was gold and
16:41so on so as these rules have to get
16:43overturned because the West has lived
16:45beyond their
16:46means. Their only recourse to every
16:49problem that now occurs uh is let's
16:51print more money because we have the
16:52ability to do so. And 2008 in my view
16:56marked the end of that period where they
16:59used that money printing press to great
17:01effect and they realized the world in
17:03react like India was 40 rupees to the
17:06dollar. The yuan was if I if I'm not if
17:08I remember correct it was probably six
17:10to the dollar and post that they printed
17:143x the dollars which were in existence.
17:17Yeah. And yet oddly the rupee has gone
17:19from 40 to almost 90. The UN has almost
17:22stayed steady and they use that excess
17:25money by keeping the currency stable to
17:27go and build hard assets and
17:29infrastructure and productive capacities
17:32whereas we went and did you know narga
17:34and uh you know basically lost all the
17:37money and didn't build up our
17:38manufacturing infrastructure at the
17:40right time. So as this game is now
17:42tilting and China has clearly taken
17:44control and leadership of the world they
17:46produce probably half of all the world's
17:48manufacturing output. uh they control
17:51most of the supply chain for energy
17:53which also we we haven't solved this for
17:55for decades. So as
17:58this this kind of new world which is
18:01Russia, China, Saudi saying why are we
18:04playing by the rules set by the US and
18:06UK this world has to change. So this
18:09chessboard is changing completely. How
18:12it lands uh and where it lands we have
18:14to see because if India had gone into
18:16bed with the bricks Yeah. uh this would
18:19have become the new G7 but for strange
18:22reasons I still can't understand why
18:23China did what it did in Ladak if that
18:26episode had not happened bricks would
18:29have already started emerging as the new
18:30power center of the world we would
18:32probably have already seen the emergence
18:34of a new sort of multi-purpose currency
18:37block I don't think people as yet will
18:39trust uh Russia and China to be the
18:42reserve currency in terms of store of
18:44value
18:45but they've done with sips which is the
18:47counter to the the Swift trading system
18:51where money transfers are now happening
18:52electronically. Yeah. So, SIPs is
18:54actually like the new UPI of the world
18:57in a way where Swift takes you 3 days to
19:00transfer your money, you can do it on
19:01SIPs in like pretty much a few seconds.
19:03Yeah. So, if a currency has both uh
19:07transacting power and a store of value,
19:09the transacting power is clearly moving
19:11away from the dollar. the store of value
19:13we are not finding and therefore this
19:15whole move going to gold going away to
19:17cryptocurrencies and so on is happening
19:19but it's also a redesign of the whole
19:21geopolitical chess board in terms of
19:22power play uh and how India plays in
19:26this will determine really how our next
19:2820 years go because even in the WTO post
19:322001 China got all the advantages as US
19:35embraced and brought them in and we were
19:37still seen as close to the Soviets or
19:39the Russians at that point so we were
19:41kind of kept out as parayas. We never
19:43had a trade agreement with anyone of
19:45significance. So it's only now that
19:47you're seeing Europe has reached out, US
19:49has reached out. If you get a good trade
19:51deal going bilaterally with these
19:53economies, India being 3% of world
19:56market share, world economy is just
19:58terrible. Yeah. Uh historically, India
20:02and China used to be a third of the
20:04world GDP. China is already well on its
20:06path there. India is at least 15 20
20:08years behind. But if we don't play this
20:10game right this time, the way we
20:13collapse when we miss the industrial
20:14revolution,
20:16uh it's it's again it's not a given that
20:18our rise is inevitable in the next 20
20:20years if we don't play both this
20:22geopolitical game right as well as this
20:24new emerging technological game right.
20:26So we'll see. I'm optimistic. Uh I live
20:29life on that basis. But again like I
20:31said it's not a given. Let's see how it
20:33evolves. Yeah absolutely. what you're
20:34saying is so true because you know we
20:36sometimes get trapped in our own echo
20:38chambers that India is great the India
20:40opportunity as the shows fall etc but
20:42it's so important to keep updated with
20:45keep yeah absolutely but what are other
20:48potential risks that you foresee that
20:50could derail us from this story I think
20:52biggest challenge in India is when we
20:55think of an idea we think it's already
20:56done so there's complacency risk in
20:58India is is like our market cap is
21:01whatever 4 trillion and we think we
21:02already you know Look, China has not
21:04performed for 10 years. We are so great.
21:07You know, markets are paying for
21:09potential. But if you don't deliver to
21:11potential, these valuations don't last
21:13forever. So, I think biggest challenge
21:15for us is our feeling of complacency and
21:18almost a lack of ambition that can I go
21:20and conquer the world. If enough people
21:21of your generation already feel, you
21:24know, we are rich, dad's left me like a
21:26billion dollar family office, why do I
21:27need to go and work anywhere? And more
21:29and more people think like that and we
21:30don't go and build and we remain kind of
21:33a technological how do I say
21:35colonial back on the back foot on the
21:39back foot
21:40it's not a given B the way we have built
21:44up our governance systems it's it's
21:46basically the edifice of the Indian
21:47economy is built on the British Raj
21:49which was control uh and for better or
21:52worse our bureaucracy may have held the
21:54country together but the amount of rules
21:56and regulations you now have to deal
21:58with as a business person you would know
22:00the center the state the city the
22:04municipality there's so much corruption
22:07at every level and because when you make
22:09so many toll gates each and every person
22:12in that toll gate knows if I delay you
22:15your time has value his time has no
22:17value and he has no consequences of that
22:19so unless there's a fundamental reset of
22:22our governance which is possible like we
22:25did the IT system faceless with use of
22:27technology
22:28If you did the whole India stack on
22:30payments by use of technology a lot of
22:32that also used to be you know cases of
22:34graph you have a digiatra for example
22:36today where you go seamlessly through
22:37the airport so it's not that it can't be
22:39done but unless we use this for
22:42governance and most importantly for the
22:45judiciary you got 6 million cases
22:47sitting in the courts in the high courts
22:49and in India the process is the
22:51punishment so a lot of the startups who
22:53come here to set up for valuation they
22:55eventually get frustrated know they
22:57don't like you reach a point and say who
22:59wants to deal with this forget about
23:00scaling. Yeah. That I have enough in my
23:03life. I can't fight this back. I don't
23:04want to spend 20 years in the court. So
23:07you know two three major stumbling
23:09blocks are there. But having said that
23:10the entrepreneurs journey is an odyssey
23:12of adventure. And part of that adventure
23:15is dealing with this and that's why you
23:16make margin on how much stress you can
23:18take. Uh that's the margin you get. But
23:20the challenge still remains that this
23:22throttles your ambition because it kills
23:24your spirit from time to time. that I
23:26did so much and yet this is how I'm
23:28being treated. Yeah. And we've all at
23:30you know even if I'll go across people
23:31in my age group in our friend circle all
23:34of us at some point have felt that
23:36despair that why is you know this
23:39treatment being meed out to me like you
23:41just wish that it wasn't so hard right
23:43to and sometimes you go out and do
23:45business outside and you know you're
23:46looking that there must be something
23:48more that I need to be compliant with
23:50and you realize there is nothing. Yeah.
23:52And just you know when you can take
23:54people for their word for example in the
23:56US people are so straightforward they
23:59completely in your face they will
24:00objectively tell you versus in India
24:02where it's like you know you got to keep
24:04follow up follow up follow up follow up
24:05follow up and then follow up and it's
24:08it's therefore it's not a Indian problem
24:11because look the whole Silicon Valley is
24:13being run by Indians and now even a lot
24:15of political power has come to Indians
24:18outside so it's not a problem with
24:20Indians it's the way we are being
24:21governed Yeah, that I think needs a
24:24reboot of some sense. We have the best
24:26of the you know government today
24:28compared to what we had. But is it going
24:31to take us from here to where we ought
24:32to be in the next 20 years? I I hopeful
24:35that there will be a bigger reboot of of
24:37this whole thing. Yeah, absolutely. And
24:39the hope is that people like you
24:41continue to nurture the next generation
24:42of entrepreneurs. Well, entrepreneurs
24:44and also people who govern us because
24:47lot of us like normally anywhere in the
24:49world, people of our generation would
24:51have already gone into some form of
24:53public service. In India, you don't even
24:54think of it. Yeah. Like we don't want to
24:56deal with for India. Yeah. Yeah. Yeah.
24:58Yeah. But but anyway, let's let's stay
25:00optimistic. There's lot of good things.
25:02Absolutely. So I don't want to go down
25:03that was called the India opportunity.
25:06But you know coming to valuations
25:08because you touched upon that you know
25:10like everyone talks about how the Indian
25:12valuations are obviously at a premium
25:14compared to what you see in China and
25:16when you look at some of these global
25:18players sometimes you often wonder how
25:19can you justify the valuations and the
25:21premiums that you end up paying in
25:23India. Uh what is your mental model for
25:25thinking around that? No. So look be
25:27honest if if your capital was allowed to
25:30leave India we would not have had these
25:32valuations because your capital is
25:34trapped over here. Yeah LS LS is like I
25:36mean 200 $250,000
25:39how much can you realistically set out
25:41but let's say India had a free tradable
25:44currency on the capital account uh
25:47business people have all gone and you
25:49know Tata has acquired a JLR and BA has
25:51gone and acquired a novelist and so on.
25:53So people have gone and made bets up
25:54abroad but yet not at that scale which
25:58I'm saying India ought to be doing. Even
26:00our IT pharma companies they could have
26:02been a lot larger outside and the Indian
26:04investors like we I don't think are less
26:07smart than any of the investors in the
26:09world and if we had been allowed to
26:11invest imagine what kind of reverse
26:13inflow we could have got as we booked
26:15capital gains abroad and brought them
26:16back because it's the Indians who were
26:18building all the you know the great tech
26:20companies in the US. Yeah. And everyone
26:23you know in our circle knew about
26:25Amazon, Google, Microsoft, Nvidia doing
26:28well months in advance. Yeah. And we
26:30would have made tons of money if we had
26:32all been allowed to invest much more
26:34capital outside India. So if that kind
26:37of phenomenon doesn't happen, then you
26:39know I don't know what we are up to. But
26:41with this trapped capital, what happens
26:43that rarity in India gets
26:45disproportionately rewarded. Yeah. So
26:48you know you if you look at say
26:50valuations even even in traditional
26:52business I'm not even going into the new
26:53age one because they're still so rare in
26:55the listed space that if you look at
26:57today say a marauti marauti suzuki which
27:01is owned 60% by suzuki is worth more
27:04than the entire market cap of suzuki
27:07even if you subscribe only that 60% or
27:1070% of its value to suzuki same forel
27:14and bharti I mean bharti of course the
27:16parent is But like even take a uni liver
27:19maybe 60 70% of global uni liver's
27:21market cap is India and these companies
27:24are growing in single digits uh even lot
27:27of our you know much heralded IT
27:30services company these are now mature
27:33low singledigit growth companies and
27:35they all trading at you know north of 25
27:38multiples when you look around the world
27:40uh you would find you know many many
27:43companies like this so I think if unless
27:46this kind of how shall I say this frog
27:48in the well syndrome changes we are
27:51doing ourselves a disservice. Uh also
27:54the foreign funds which come into India
27:56are not really knowledgeable in the
27:58sense that they hear oh India is doing
28:00well uh and money comes into an ETF and
28:03lot of trade nowadays happens through
28:04algorithms. Yeah. So as long as the
28:08trend continues the trend keeps
28:09continuing until it doesn't and then
28:11when it reverses it gets very painful.
28:13So we are currently enjoying the boom of
28:16the last four five years. Yeah. But a
28:18lot of people don't have memory of the
28:20post 2007 bust of emerging markets when
28:22bricks were center stage and China was
28:25the center of that bull market and India
28:26had done very well also. We went through
28:28a decade of underperformance. Now China
28:31came and shot itself in the foot with
28:33what you know Xiinpen tried to do to JMA
28:35and others to just keep them in line.
28:37Yeah. Otherwise China would have rode
28:38ahead and in between actually the China
28:42BU Alibaba 10-centent they had become
28:44like what the magnificent seven were in
28:46the US. Uh the Chinese wealth creation
28:48was enormous in between. So while the
28:50indices never showed it people made
28:52tremendous money in China as well.
28:53Absolutely.
28:55So I I just say enjoy it while it lasts
28:59but I don't think you should take these
29:01valuations as your birthright and that
29:03these will last forever. Yeah. Because a
29:05lot of people especially who got into
29:07the markets after co in their 20s and
29:0930s this is pretty much their first
29:11cycle that they're experiencing and that
29:13would not a proper cycle because this is
29:15barely a no it was pent up and you had a
29:17lot of pent-up demand also and we
29:19discovered trading on our phones so it
29:21became a pastime as well so everything's
29:23gified and which is a good thing look
29:25you want Indians to come and be owners
29:28of equity because the whole previous
29:30generation only went for safety and they
29:32had money sitting in fixed deposits or
29:34they used to go in land and park you
29:35know cash money over there and so on. So
29:37this financialization it's a great thing
29:39to happen but this awareness of cycles
29:42of economies of markets and you know
29:45even if the economy grows 10fold in the
29:47next 10 15 years it's not a given that
29:50the market has to follow because we may
29:51have already priced a lot of that growth
29:52ahead of ourselves so I would just leave
29:55a note of caution on that. Yeah,
29:56absolutely. And you know, one would even
29:58say even the companies which you talk
30:00about this rate of change concept,
30:02right? I think we can talk about that
30:04also because there is a lot of capital
30:06which is being thrown at companies which
30:08show high growth and unfortunately I
30:11feel that is also the reason why a lot
30:13of bad actors come into the system where
30:15we've seen so many corporate governance
30:17issues being highlighted over the last
30:18few weeks and also I think years. Uh so
30:21how does one compensate and balance for
30:23that? Right? because it's a very
30:24delicate balance. As founders, you have
30:27to find opportunity. As investors, you
30:29have to find opportunities which have
30:30like integrity in place, corporate
30:32governance in place. But then on the
30:33other side, there's also a lack of
30:35investable securities to get yourself
30:37into in some ways. No. Well, at one
30:40level, the good news is in India,
30:42there's a lot of opportunity and there's
30:44a lot of assets. It's actually a very
30:46broad and diversified market. What's
30:49happening is we tend to look at one
30:50sector at at a time which is doing very
30:52well and then you get FOMO that I'm not
30:54participating here but in every bull or
30:58bubble phase there is also something
31:00else which is having a bare face. Yeah.
31:02uh and I'll draw the analogy to say the
31:042000 TMT bubble where when the TMT
31:08bubble bust it's not like the market
31:10died completely because on the other
31:12side you had all these a hard assets and
31:15PSUs which then took off and you made 20
31:1830 time returns in lot of those
31:20companies which looked boring
31:22even in the current market while
31:24attention is focused a lot on you know
31:26the narrative stocks and you know the
31:28new internet companies have come out as
31:30well it's in dull boring companies which
31:33have also you know given you 10 times in
31:35the last you know 3 four years. So it's
31:38not that if you don't participate
31:40somewhere you won't get it right. B as
31:42you rightly said this force feeding a
31:46child to make him an adult quickly has
31:48been the bane of our startup world and
31:50they started with this soft bank trying
31:52to say that if you go and you pick the
31:54winner and you over capitalize it
31:57this child will become an adult
31:58overnight. Life is not like that because
32:00even the entrepreneur has to go through
32:02that journey of having that experience.
32:04It's like a mother has to take nine
32:06months to deliver a baby. You can't you
32:09know get
32:10maybe nine girls pregnant and get the
32:12baby in one month. It doesn't happen.
32:14And that's what I think they were trying
32:15and softbang itself has had its own
32:17share of troubles. And I'm just using
32:19them as an example that in this urge to
32:22get rich quick uh they did something
32:24which was against nature. And in that
32:26therefore you've had these consequences
32:28of it's like with most things in nature
32:31right that if if you kind of take a drug
32:34you're going to bear consequences of
32:36that drug. So if you keep that aside and
32:39you come back to basics that what is the
32:41character of a person and I go back to
32:44this every time someone asked me to
32:46describe how do you pick entrepreneurs
32:48how do you pick people how do you gel I
32:52go back to a old concept which we had in
32:54our you know vic philosophy but which
32:57which people kind of denigrated it and
32:58made it sound very cast it's not about
33:01that they said there are people with
33:03different characteristics there's
33:05someone who has a chhatria type
33:06mentality. It doesn't mean you have to
33:08be born, but you have that mentality.
33:09Yeah. That person by nature is a warrior
33:13and that person is an expansionist and
33:16they want to grow the empire. And in
33:18that urge to grow an empire, they often
33:21fight battles where they might die. But
33:24that's the nature of that beast. He
33:25can't stop fighting. Yeah. Uh they they
33:28can't live if they are not expanding.
33:30They can't live if they don't have, you
33:31know, maybe 2x debt. in that
33:33occasionally you will get a great kind
33:35of noble king who is worried about his
33:38subjects and you know that's what you
33:40call Ram Raji and so on but they are
33:42there are kings who are just wanting to
33:44expand territory for the sake of
33:45expanding territory because I'll be the
33:47largest largest because they won't
33:49realize there is no end to largeness in
33:51the world because it is one world so at
33:53that spiritual level right then there
33:56are the brahmans who are the most
33:57knowledgeable but they don't have
33:59king-like characteristics so they will
34:01go to a certain level they get their
34:02kind of fame, their knowledge is
34:04respected and that's good enough but he
34:06won't scale. So he's the opposite of the
34:08shatri or then there's the trading
34:10community which is just happy to make a
34:13profit opportunity. You may get a PLI
34:15scheme sometime. You may get a
34:17regulatory arbitrage. Yeah. And you make
34:19that two three years of profit and
34:21you're happy to take that. Uh like lot
34:24of our startups when I allude to it, you
34:26actually just doing a regulatory
34:27arbitrage and a copying of someone
34:29else's model. It's not something unique
34:31that you're building out. I mean no
34:32disre disrespect meant to anyone but
34:34that's the character of what you're
34:36doing. So now you imagine if someone has
34:39force-fed
34:41uh you know one of these merchant types
34:42or one of these Brahman types and said
34:44now you go and behave like a king he
34:46can't do it. If someone had told me go
34:47and build an empire like Adani Amani
34:49it's not my nature I can't do it. You
34:51can give me all the capital. I may even
34:53have the managerial wherewithal to put
34:56the resources lead a team mentor them
34:58and all of that but if it's not there in
35:00the pit of my stomach that I want to go
35:02and build this it's not going to happen.
35:03And I think that disconnect is where you
35:06often find that these companies are
35:08going wrong. So in that eagerness to say
35:11how come his kingdom is bigger than
35:13mine, you end up doing stupid things.
35:14Yeah. Uh and occasionally you get these
35:18rare characters who's like a a Brahman
35:21with sort of chhatria traits or a
35:24chhatria with a brahminical trait or a
35:27merchant uh guy with a little more sort
35:30of brahminical kind of thinking and
35:34those companies become tremendous wealth
35:35creators for extended periods of time
35:37and that's really what you look for. Can
35:39can you exemplify that because I'm sure
35:41you would see the best in India like we
35:43all we our the house of enam really got
35:46built on something like Infosys right it
35:48was the company why did it become so
35:51famous because everyone was wow someone
35:54with knowledge and someone working in a
35:57clean manner sharing wealth with
35:59everyone can create this kind of wealth
36:01for everyone and I think if there wasn't
36:04an Infosys we would not have had a tech
36:05ecosystem in India because the others
36:08remember Tata TCS great company but it
36:10was private so the story wasn't well
36:12known. Vipro which was the other great
36:14company was almost entirely held by
36:16Premi and the division in the beginning
36:18was held within a conglomerate structure
36:20because he also had consumer electronic
36:23consumer care and so on and so forth. So
36:25that became the aha moment which
36:27unleashed India and India post 1990
36:30reform of Narima Rao is what unleashed
36:33what I call the era of brains and
36:34brands. So you know coming of Marico
36:37which built a brand he came out of
36:39Bombay oil mills and he built a you know
36:41branded company. ZTV came out where all
36:43we had in our life growing up was Dur
36:45Dashan and we watched I don't know one
36:48Chayagita Mahabharat and Mahabharat and
36:50you know that was entertainment and
36:52that's it. So things like that came and
36:55for the first time the Indian
36:56entrepreneurs saw I can go and do
36:58something at the world level and compete
37:01with the best and I remember I used to
37:03serve one of the largest institutional
37:05investors from abroad and it was a aha
37:08moment for me when one of the heads came
37:10and he saw Infosys and he was shocked
37:12with the quality he saw and he's saying
37:14why is this company not trading at 10
37:16times sales. Now we guys were 10 time P
37:19multiple buyers. Remember back in the
37:21day to hear someone use that terminology
37:23is like for a student of Graham and Dodd
37:27discovering Warren Buffett that he talks
37:29about businesses and characteristics of
37:31businesses and people. So it's those
37:33kinds of things when you find uh you you
37:36really hit jackpots on those kind of
37:37companies. Yeah. Actually I've read a
37:39quote by Masa and he often likes to
37:42compare entrepreneurs to great athletes
37:44um where he says that you know how great
37:47athletes just by wishing on some things
37:49can often bend reality that's what great
37:51founders also can do but you know given
37:55the performance of some of the companies
37:57uh you know that is questionable at the
37:58end of the day because what you are
38:00saying is it has to align with it look
38:02to each his own because there are so
38:04many people that's why you have a market
38:05because if we all have the same view
38:07there would be no buyer seller. Yeah.
38:09And that's what creates opportunities
38:10for you. And there's nothing right or
38:11wrong. What works for you works for you.
38:14And like I said, you know, you you can
38:15be the richest guy in India and then you
38:18realize there's someone five times
38:19better than me in China and the Chinese
38:21realizes they're sometimes five times
38:23better than me in the US. It's a never
38:25ending. And yeah, it's I mean if if you
38:28lead your life on the basis of money,
38:30power, fame, you're only going to get
38:31disappointed because like they say
38:32innish that there eventually there's no
38:35joy in the finite. You'll find joy only
38:37in the infinite. And that's our journey
38:39which we keep coming back to as we kind
38:41of more and more realization comes. We
38:43get more and more humbled by how little
38:45and meaningless we are in this world.
38:46Yeah. Absolutely. Has your relationship
38:48with money, power and fame changed after
38:51all the inner work that you did. Yeah.
38:52Yeah. Look, number one, I think we tend
38:55to be born with some sanscars of our
38:58last life. Uh and I can now reflect back
39:01and say I always knew I was going to do
39:03well in life. I I had this self
39:05asssurance even when our business was
39:08going downhill. I I I didn't have fear.
39:12Uh it's it's like you you know I'll come
39:14out okay. Uh and as you grow uh it's
39:19like the vision and the opportunities
39:20keep expanding as well. And as you
39:23expand, you realize how little you need
39:25because I'm not going to wear more fancy
39:27clothes. As you get older, you can't
39:28even eat a lot more food. You don't
39:31really have bad habits. You want good
39:32company and good friends and that's not
39:34going to change. If your friends change
39:35because of who you become, then you know
39:37you're really sad person. So if it it's
39:41like a scorecard when you're in school,
39:43you get a good score in your mark sheet.
39:45It's it's the joy is in the learning,
39:48not in the mark sheet, right? Yeah. It's
39:50maybe a validation, but nothing beyond
39:52that. And what are you doing? In the
39:54beginning, I remember you would carry
39:55your mark sheet or your degree and I
39:57would write it next to my name and then
39:58after a couple of years like why am I
39:59writing my degree? this is not who I am.
40:02Same way it's not your company or your
40:04you know the card you were carrying was
40:06a very powerful card and then you
40:08realize this card doesn't define me like
40:10again you say in uh in our scripture
40:12that uh I'm not a body with a soul. I'm
40:14a soul that has a body. Yeah. Uh so
40:16therefore all this doesn't define us. So
40:19we all spiritual beings having a human
40:21experience. So it's a profound thought
40:23when you say I'm a soul that has a body.
40:25Otherwise, we are so consumed with our
40:26body and therefore our selfimage and our
40:29ego and our perception of ourselves and
40:32it's like if you think I'm the richest
40:34guy in the world, there's always someone
40:35ahead of you. If you think you're a
40:37powerful person, there's always someone
40:38more ahead. If you're famous, someone
40:40ahead and I saw this very early in life
40:44that uh and I was fortunate. I had a lot
40:47of friends who came from families which
40:49were either very rich or very famous and
40:53those families went through lots of ups
40:54and downs and the kids were not
40:56particularly happy. So I said this can't
40:58be the real meaning of life, right? Uh
41:01so it it comes I I I don't want to sound
41:03preachy on a show like this. Your
41:05audience is very young. Not at all
41:07because I think people can make very
41:09informed decisions in their earlier
41:11years if they have this kind of
41:12spiritual knowledge. I can I explain in
41:15the most simple way that if you can have
41:17an attitude that I'm an actor in a play
41:21and the role that I'm playing is in this
41:24play therefore I'm not this character.
41:27If you start thinking I am Shah Ruk Khan
41:30uh and therefore this life revolves
41:32around me you're doing a disservice to
41:35yourself. So you know in this play I may
41:37be the hero in the next play God will
41:39put me in the villain's role so that I
41:41could learn from that villain's
41:43perspective why he or she was behaving
41:44in this manner. Yeah. In another life I
41:47may come as the father of the hero to
41:49get that person's perspective. In
41:51another life I may come as the female
41:53character to get that perspective. So
41:55our soul's journey is to actually do
41:57this kind of learning like we come to
41:59college. We learn physics in one life
42:01but we may come and do mathematics in
42:03our next life and third life maybe
42:04philosophy or whatever. So we're coming
42:06here to learn certain life lessons and
42:09if I start thinking because of the role
42:11that I'm playing in this current life
42:14if I'm you know Elon Musk in this life
42:16I'm a very rich dude and very smart next
42:19life who knows where you're going to
42:20come. You may end up in Russia in your
42:22next life for example. Yeah. Uh so you
42:24just therefore very early in life you
42:27can find out your true nature. What is
42:29your purpose or why you are here in this
42:31life? It could be to solve some
42:33relationship issue. It need not be
42:34something so grandio as solving the
42:36world or making a billion dollars or
42:38whatever. Those are all incidental.
42:39Yeah. what you call memorandum of
42:41articles main object is finding this out
42:45that solve this life's purpose and then
42:48the ancillary objects will take care of
42:50self as kind of helping you in this
42:52journey so you may become very
42:54successful but it may be to find out how
42:57people behave how do you deal with envy
42:59and jealousy how do you cope with envy
43:01of someone who's doing better than you
43:03if you can be economous in that journey
43:06that is a successful journey right yeah
43:08I think Charlie mango often talks about
43:10this right envy, resentment, comparison,
43:13all these things are completely fluted.
43:15Can you imagine Warren Buffett's worth
43:17what more than $200 billion his partner
43:19Charlie Mer dies at age 99 almost 100 at
43:22$2 billion. He's 1% of his partner. But
43:26you never heard them comparing with each
43:28other. Never heard envy coming out of
43:30even one sentence of Charlie Mer. Never
43:33looked at Buffett talking of Mer in a
43:35little condescending tone. And Charlie
43:37was the intellectual powerhouse behind
43:40you know the building of Bkshire
43:41Hathaway and Warren Buffett often says
43:43that also at the end of the day okay you
43:45have 200 or you have two billion what
43:47are you going to do
43:48who is it going to like Nimish he tells
43:50me very well he's saying three things
43:52will only happen you'll pay more tax you
43:54may do more charity or your descendants
43:56will be frying you know private jets how
43:59much can you consume in your life so and
44:01even if you even if let's say you I
44:04don't know you stumble but let's say Mer
44:06has two billion. He couldn't consume the
44:08two billion. No, he left 1.99999 for his
44:12descendants or the charities that he
44:13supported. Yeah. So what what's the
44:15point of just chasing that compounding
44:17also? I've come to realize it may be
44:19sort of heretic to say it. What are you
44:22compounding for if you're not able to
44:25lead a life on your terms? Yeah. Which
44:28which is your definition of success and
44:30happiness? Uh you know just having a
44:33mathematical number at the end of your
44:34life is of no consequence. Yeah, going
44:36back to your example of you know saying
44:38that you know finding one's true nature
44:40and realizing that early on really helps
44:43you. Um I think you had that same
44:45intuition or before starting your
44:47investment venture enam holdings at that
44:50point. So was that something that you
44:51were in tune with even then because you
44:53know for people I'm asking this for
44:55people in their 20s and 30s? No it like
44:58I'll be honest uh my father started his
45:00life very humble way. He started as a
45:03supervisor in a factory and grew up to
45:04then eventually own his own company. His
45:07aim and hope in life was that I would
45:09come and then run the company which was
45:10in flexible packaging and it was an
45:12industry of the future. Uh and all my
45:15training I did CA because I need to get
45:17numerate. It wasn't an engineering bent
45:19of mind. Uh and then the MBA was really
45:22to go and broaden the horizons and see
45:23the world as I'm saying uh and see what
45:25else is happening in the world. So then
45:26you can apply it to your business. In
45:28the course of my journey in London where
45:30I was doing my MBA, I had the chance to
45:33work for a leverage buyout fund over a
45:35summer project and a second year project
45:37and I was like wow this is like second
45:39nature to me and it's not a world I had
45:41been exposed to at all. Uh and when I
45:43came back unfortunately the family
45:45business was going down the tubes. We
45:47used to supply to Hindustan lever and
45:48Nestle and all of that and I'm like I
45:50can't be doing this my whole life
45:52sitting outside the purchase officer's
45:54cabin and like begging him for business.
45:56uh and then they changed their mind and
45:58at their whims and fancies and they have
45:59all the bargaining power because by then
46:01doing an MBA you know Michael Porter
46:03competitive forces and all and in that
46:05journey then my father introduced me to
46:08uh through one of his friends to
46:09Walabay's eldest brother who's no more
46:11now Man Hanibai and one thing led to
46:14another uh where Walabay had you know he
46:18said something which he may not remember
46:20but I never forget to remember the
46:22moment of epiphany for me he said son
46:25you come from a business family uh you
46:27will look for opportunities then you'll
46:29put resources around that opportunity to
46:32you know take advantage of that
46:33opportunity and then you'll have control
46:35of that business but back in 1990 or '
46:3889 uh 90 you may not have an exit
46:42because there wasn't such an easy M&A
46:44market and we were indeed suffering our
46:45business is going down we're seeing it
46:46going down and how do we even exit it we
46:48can't even close the business nor can
46:50you sell it so he said but if you come
46:52with that same mindset here look for the
46:54opportunities They are often ready-made
46:56management teams because someone has
46:58also taken it. It's nothing unique that
46:59you're doing. Yeah. Someone else is
47:01playing. You can find out who the
47:02leaders are and at appropriate times you
47:05can have as much ownership of those
47:06businesses as you want in the listed
47:08market. The only trade-off you have to
47:10make is in your mind that you will not
47:12have control. You'll have ownership but
47:14you won't have control. But remember you
47:15have exit which means you can take the
47:17boom of different industries and
47:19different cycles and do much better. And
47:22actually by God's grace from where I am
47:24maybe more than a 100,000 times up from
47:27where I started my life. If I had been
47:29doing that business if I had been maybe
47:31even thousand times up or 10,000 times
47:33up it would have been you know fairly
47:35successful. But this just opened a
47:38completely new world and the fun of our
47:40profession is you meet the best people
47:42in the world. You're learning all the
47:44time. Yeah. And that plays to my nature.
47:46Right. I'm a student. Till the last day
47:47of my life I'll be reading. Till the
47:49last day of my life, I'll be meeting
47:50people and learning. Till the last day
47:52of my life, I hope I can travel and see
47:54what's happening in the world because
47:56being aware with what is going on in the
47:58world is what makes you a better human
48:00and a better investor. It's it's it's
48:02the same thing actually. Uh and that
48:04epiphany, I'm glad it happened to me
48:06early in life. Otherwise, I could have
48:08been running some factory somewhere. Uh
48:10and you would have still done a great
48:12job. Like I said, from a young age, I
48:16knew I'm going to be successful whatever
48:17I do. I don't think I had a doubt that
48:19whatever I do I do with excellence. Uh I
48:21have a nature even in school I I had
48:24leadership you know traits where even
48:27then building up you know class
48:29monitors, house captains uh became head
48:31boy early. So all all that thing just
48:33came naturally. Uh but you know
48:36sometimes you may not get that
48:37opportunity you may not have that luck
48:38in life. Yeah. So if you start kind of
48:41manifesting and going in a direction
48:43which is in tune with your nature, you
48:45just make yourself more and more open to
48:48getting that luck. I I I think that's
48:50all you can do. Position yourself. You
48:51come to the right place because I call
48:53the tagline for this show is a front row
48:55seat to people building India's future.
48:57So I think because that's truly the most
48:59exciting if you're if we are born in
49:01India now you know when you said in the
49:03beginning let's say you're born in
49:05Europe and you're very bright. What do
49:06you do when that you know the
49:08demographics have gone against you?
49:09Yeah. The regulatory environment is
49:11frankly hostile. It's the greatest place
49:13to go for a holiday but if you have to
49:15live your life there you wonder like you
49:17know will I be able to work there four
49:19years. But it's again it's like what I'm
49:21saying here will apply like they are
49:23already rich if you're at 80 $90,000 per
49:25capita income and you're next gen and
49:28you've inherited couple of million
49:29dollars and you're living on the French
49:30Riviera like why do I need to work?
49:32Yeah. So you see the laziest people in
49:34the world they happen to be in the best
49:37places right you'll go to Spain
49:39Portugal you don't find them working the
49:41people who are working hard are those
49:42who have come from a little hostile
49:44environment the Scandinavian countries
49:45you'll find even in India you see the
49:47entrepreneurs from where they come they
49:48don't come from the resourcerich states
49:51they come from the states where you have
49:52to go out and make a buck for yourself
49:54so I'm again saying God's putting you in
49:57a certain situation uh to draw the best
50:00out of your soul for a particular
50:01learning to come from Let's say Warren
50:03Buffett had said this famously. He's
50:05saying if I wasn't born in US and he was
50:06born in Bangladesh with capital
50:08allocation skills, where would he have
50:10been? Yeah. So if we are being born in a
50:13country where frankly you know you still
50:15have 90% of your GDP ahead of you, 90%
50:19of wealth creation ahead of you, you're
50:20looking in the front. If you're in
50:22Japan, you're in Europe, you're looking
50:24in the rearview mirror. The best years
50:25are gone. Yeah. But those countries were
50:28built by people who came out of hardship
50:30and struggle post second world war.
50:32Would you have given a chance to Japan
50:34and look what they created? India and
50:36South Korea had the same per capita
50:38income in 1950. Look where South Korea
50:40is and look where we are. So you can
50:42make bad choices. You can be dealt a
50:44good hand and you can make bad choices
50:45and still not benefit. So all I'm saying
50:47is try and find what you're good at. Go
50:50in that direction and get yourself open.
50:53Be ready to get lucky. Yeah. If you if
50:55you don't have that readiness, you can't
50:57just sit back and say, "Oh, I'll wait
50:59and you know, someone will throw me a
51:00stock tip and I'll make money and I'll
51:01get lucky." Doesn't happen. Yeah. And
51:03what you said about, you know, being
51:04expansive is I think it's so true
51:06because when you set out on that path,
51:08then the opportunities just magnify. I
51:11think there is serendipity. Look our
51:13nature is again it'll again come back to
51:15the same thing again and again that if
51:17we are basically that one soul which
51:19permeates the whole world we have taken
51:22a particular form in this play to
51:24experience certain learnings and
51:26emotions. Yeah. But your nature is I
51:28want to be expansionist. So a spiritual
51:31person is very unhappy living in a city.
51:34Like you call me to lower parel it's not
51:37joy. But you say we'll meet you know on
51:39a hilltop and I'm looking down at the
51:41river and I'm looking at snow cap
51:43mountain your soul feels alive because
51:45that's recording.
51:48So but that you you'll find people who
51:50are who enjoy that openness and vastness
51:54that is spirituality is nothing else but
51:56being one with everyone else. Yeah.
51:58You're not distinct. You the minute your
52:00ego and your sense of self being very
52:02great goes uh you'll dissolve into
52:05everything else. Absolutely. And you
52:07know coming back to Enam's journey
52:08because I find it very fascinating that
52:10in in such a short span of time you were
52:13able to become like the household name
52:14in terms of a banker that everyone
52:16trusted be it the builders, Rahas,
52:19Infosys. Um how did you inculcate that
52:22or how did you build that level of trust
52:24with all these people? So honestly
52:26credit must go to the founders of INM. I
52:28was like I've always said they were the
52:30architects. I was only the interior
52:32designer. So they build the house and
52:35the cultures values and what I call the
52:38benefit of good sat good company that
52:40that spirit even after we've had this
52:43whole journey together the businesses
52:45are largely sold yet everyone sticks
52:47together as a family because you were
52:49there united by those values it was not
52:51about that business ever and so those
52:54values because both walabay and nimishai
52:57they come from a jane background I may
53:00have come from you know sanatan
53:03background Then I've also gone into
53:04vapasa and Buddhism but I also
53:07understand and follow and respect uh you
53:09know janism because the basic precepts
53:11are all the same it's all dissolution of
53:14identity right attitude in life uh you
53:17know right speech right action right
53:19profession and so on and so forth and it
53:21was out of a sense of service uh that
53:23the firm operated uh and I mean that's
53:27how you resonate right the first meeting
53:28if I meet for me at that point walaba is
53:30a stranger
53:32and when he says this one one sentence
53:34which I told you earlier I basically
53:36said can I start from today we had no
53:39think made him bet on new at that point
53:41so there's certain backstory to it I I
53:44won't get into it but even he saw a
53:45spark because my question to him was
53:47will I get that chair one day or not and
53:49he was if you don't want this chair why
53:50would you come here whereas if I had
53:52gone you know elsewhere and done a job
53:54with a you know large industrial house
53:56that chair was always out of bounds that
53:58at best you can you know be the number
54:00two to the owner's son And and my father
54:04used to say, "Do you want to be
54:05someone's chauffeur for your whole life
54:07or isn't it better you drive your own
54:08taxi?" And my dad used to say this also
54:11that if if you look for a kashi office,
54:14you will live in the extreme end of the
54:15suburbs at the end of your life. In the
54:17beginning, you'll enjoy the home and the
54:19chauffeur and all, but when you retire,
54:20you'll be back there. That's what I felt
54:22about working at Meta,
54:24but I don't know in hindsight if it was
54:26a good financial decision or not. But
54:28that is question. No, because if you
54:30take something and you make it great,
54:33that is really the real purpose. But
54:36look, it may work for us, for someone
54:37else, it may not. Someone may need a
54:39steady income and there may be different
54:40life this thing. So, no disrespect to
54:42anyone, but like I said, things come
54:45together at certain moments, you know,
54:47this is it for me. Yeah. And it works.
54:49There were enough times in the journey
54:50where a lot of the foreign clients I
54:51serviced, they all knew there's a bright
54:54chap and he can be of great value. I
54:55could have been India head for you know
54:57firm A firm B firm C relocated elsewhere
55:00left my family behind gone to US gone to
55:03Singapore wherever you make certain
55:05choices which land you where you land
55:07eventually uh and like we also describe
55:10it your young audience will understand
55:11it's like a multiplayer game which is
55:12set out but the game is not
55:14predeterministic that you'll only be
55:16you'll start from here and you'll end
55:18there depends on what choice you make
55:19there may be eight or nine outcomes but
55:21it's not beyond that in in kind of the
55:24role that you're So in that context I
55:27think the group of people who got
55:28together at NM the values which all of
55:31us live by we all lead balanced lives on
55:34aside I say we also need to all be good
55:36cricketers and we all need to be good
55:38singers otherwise we don't qualify but
55:41is that still happening? Yeah, very very
55:43much. So, but you know at at at another
55:46level it it is that familiar feeling of
55:49building a company. uh and then as the
55:51journey grows you realize uh you know
55:53how the game expands more and more and
55:55more till you come to a point where you
55:57say look now this investment bank which
55:59was really built to help younger
56:01companies of the sort you're describing
56:03today uh to bring them to their great
56:05stature and some of them we could
56:07co-invest and some of them we only help
56:08them as investment
56:10bankers but now it's become an army
56:12which needs to be fed because you need
56:14deal flow to stay on the league table
56:17then it's no longer the original
56:18objective we set out for and it needs a
56:20natural home to fit into. Also, it's
56:22becoming a balance sheet game. If you
56:24want to do M&A, you also need to be good
56:26to your clients. You have to provide
56:28debt and we are not a debt house. So,
56:30from that perspective, the kind of uh
56:33business needed a natural home as well.
56:36And again, we went through series with
56:37you know there were people from Japan,
56:39there were people from US who were going
56:41us. We eventually chose to go with an
56:43Indian firm and merge with Access Bank.
56:45Yeah. Uh but I think the journey was
56:47done gracefully. money was left for all
56:49our colleagues in the company as well
56:51and we still remain friends and there
56:54are enough people Walabai has trained
56:56that I have had the fortune to train who
56:57are you know doing well and successful
56:59and you feel happy one more thing I'll
57:01say of our capital market profession is
57:05most people in this market are very
57:07happy to see somebody else's success
57:10when I look at normal industrialists
57:12they're very envious of it's not true in
57:15other industries it's not true
57:17Therefore, I find it's like that I I
57:19wrote a piece many many years ago for
57:21the economic times on calling the
57:23capital markets is the path to nirvana
57:25because this concept of being attached
57:27and detached. Yeah. You're investing and
57:30you're helping and yet when you sell out
57:33you're detached. Yeah. And you have to
57:35be objective because at certain point if
57:36you don't sell out in living in the
57:38bubble uh you know you're going to
57:40destroy your capital as well and and
57:42your peace of mind. So it I think it's a
57:44fast-paced spiritual laboratory. That's
57:47why you end up in the capital market.
57:48Either you go berserk and you become
57:50like one of those famous stock operators
57:52who try and then eventually blow up or
57:54you end up on the spiritual side over
57:56here because it's a really fast-paced
57:57laboratory. Yeah, absolutely. I I
57:59couldn't agree more. But when it comes
58:01to you know the $400 million sale to
58:03access capital um you know at that point
58:06what were the strategic and emotional
58:07implications on the founding team
58:09because you that's what I said that
58:11there is some innate logic to what the
58:14business needs what the team needs and
58:16if we are not the right stewards of that
58:18to take it to the next level then it's
58:20only right that it's like how you get
58:22your daughter married no you don't say
58:24I'll keep my daughter for myself there
58:25is a emotion attached to it but there's
58:27also a joy that the daughter is going to
58:29a you know you better family and a
58:31rightful place for her. Uh I I think
58:34okay maybe it was most emotional for
58:36Walabay because at heart I'm an investor
58:39uh I was running the investment bank
58:41really as his uh steward as his almost
58:44like adopted son to say you know take it
58:46forward but he knew well also is not in
58:48my heart. We were looking also for other
58:50people to be a CEO at different points.
58:52Uh Nimshai who was the partner has
58:54always been an investor through and
58:55through. Uh Akash who's uh you know
58:58Walabay's nephew Man's son been an
59:00investor through and through. So if
59:02you're an investor, I and I say this
59:04again with no disrespect. You're
59:06basically a farmer. You're planting a
59:08seed. You're waiting for the crop to
59:09grow and then you may reap it, harvest
59:11it or you may let the crop continue.
59:13Yeah. But an investment banker is a
59:15service provider or at certain level
59:17when you go to a certain size, you're
59:19also a hunter because you're looking for
59:21a mandate from someone, you're looking
59:22to make fees from someone, you're
59:24looking for something. So if you're
59:26doing it with the service mindset which
59:27I think we were originally and all the
59:29investment banks originally start with
59:31that that how can I help this other
59:33person grow till there comes a point
59:35where it becomes
59:37uh like a listed company no it's a it's
59:41a how do you say a treadmill that you
59:44know 30 assignments treadmill that and
59:47each IPO has become like one more potato
59:49and potato out for you and that's not
59:51the right way to be doing that as a
59:52business then you're like a doctor who
59:55was a family doctor and when you asked
59:57us earlier about how did we build trust
59:58because our behavior pattern was of a
1:00:00trusted family doctor we were not
1:00:03prescribing a medicine which we would
1:00:05not take ourselves we would not do a
1:00:07transaction if it wasn't right for the
1:00:09person but if I'm now running a
1:00:11investment bank with you know 500,000
1:00:13employees who need bonuses at the end of
1:00:15the year the mentality become very
1:00:17different and already by 2005 67 with
1:00:20what was happening in the US you could
1:00:21see how greedy the world had become and
1:00:24how this crazy bonusing system had
1:00:26changed people's behaviors in our own
1:00:29firm also I saw it and I remember
1:00:31feeling a great sense of discomfort at
1:00:33that time and I I think I even wrote in
1:00:35that article and we used to have
1:00:37frequent discussions that we guys are
1:00:39being rewarded far beyond what we should
1:00:41be you take a doctor you take a nuclear
1:00:44scientist you take you know any other
1:00:46profession analyst is coming here
1:00:48writing wrong English and he's getting
1:00:49two crores a year and still thinking
1:00:51he's the cat's whiskers there's
1:00:53something innately wrong with this
1:00:54system is going to blow. So not that I
1:00:56knew about subprime in the US, I was
1:00:58some you know great knowledgeable person
1:01:00but how you get that sense from the
1:01:02world that this is going to blow. Yeah.
1:01:04So I think it's a combination of things
1:01:06that you know what was meant to be I
1:01:08think we did the right thing and we've
1:01:10all been very very happy about it. I
1:01:12think that's the natural evolution of
1:01:14funds as well, right? Like we see
1:01:16private fund in the private space like
1:01:18fund sizes just get bigger and bigger
1:01:20because everyone's after the management
1:01:22fees and then you have to like question
1:01:24the quality of some of the investors.
1:01:25We've seen that happen to the creators
1:01:27of funds right I mean in this round I
1:01:29think SEOA has been the popular name but
1:01:32back in the day it used to be Kleiner
1:01:33Perkins. Yeah. And what happens fund
1:01:36management as a profession and investing
1:01:39as a business are two differing things
1:01:42in that fund management business
1:01:45marketing is the key role that how much
1:01:47more resources can you bring from where
1:01:49and the CIO is not necessarily the most
1:01:52important character it's the chief
1:01:53marketing guy who's bringing in the
1:01:55bucks even in investment banking I had
1:01:57this terminology we used to call them
1:01:58finders minders and grinders right which
1:02:01will apply in most service businesses
1:02:03and eventually
1:02:04The minders are always thinking that hey
1:02:06I'm doing all the hard work I'm the
1:02:07knowledge worker but is this character
1:02:09who knows how to network and bring a
1:02:11bandit in or charm the client and bring
1:02:12him in who's you know making all the
1:02:14bucks and then how the pay goes and how
1:02:17the bonusing system works just creates a
1:02:19system which is inherently unstable
1:02:21beyond the point and I think the same
1:02:23applies to the fund management business
1:02:25because P funds are now investment banks
1:02:27with a wallet and they're behaving as
1:02:29such and therefore you're finding those
1:02:32trades coming out more and therefore
1:02:34we've chosen we could have gone and
1:02:36raised you know billions and billions
1:02:37and billions of funds but by grace of
1:02:40God we've all done very well financially
1:02:42and if you can run investing for
1:02:44yourself and you're not running against
1:02:46a benchmark you truly make better
1:02:48investments better informed judgments
1:02:50and you're building crops which you
1:02:52hopefully are proud of uh and more than
1:02:54that you're building character and
1:02:56culture in your own families in which
1:02:58you're living
1:02:59so I think that's that's been what it's
1:03:01about yeah because I you know in the
1:03:03startup space especially uh with soft
1:03:06bank coming out with a hundred billion
1:03:08fund then I think SEOA came out with a
1:03:11multi-billion dollar fund which is 4x of
1:03:13what they had previously done so it just
1:03:15kept on inflating fund sizes because of
1:03:17which I think over capitalization
1:03:19happened and we've gone through this
1:03:20whole vicious cycle I would call it but
1:03:23there will be corrections but it's a
1:03:25cycle I mean everything plays out and
1:03:27the firms with the good cultures and
1:03:28good traits will always outlast and live
1:03:31beyond it's happened in every business
1:03:34and but having said that the fortune 500
1:03:37changes the the nifty 50 changes the
1:03:40fund management 50 change but there
1:03:42always those three four five which are
1:03:44left yeah and coming back to nimhay and
1:03:47walabay what were some of the core uh
1:03:49principles or wisdom that you embied
1:03:51from oh lots I mean look it's it's not
1:03:53like you're not writing it down
1:03:56like that you've applied so there are
1:03:58lots I think I had done an interview I
1:04:00don't know if I shared also
1:04:03The first thing there has to start with
1:04:04is like first of all know
1:04:07yourself and I give that in the example
1:04:09if like if your basic characteristic is
1:04:12Ravi Shastri don't try to hit the ball
1:04:13like Sachin Tendulkar right I could be
1:04:15sitting in the room with Nimshi he has a
1:04:18different risk appetite he has a
1:04:19different knack of grasping certain
1:04:22businesses which I don't have so don't
1:04:23copy me build your own style right the
1:04:26the Xerox copy we say I do my
1:04:28presentations at flame now I said the
1:04:30Xerox copy is 50 pis the original is the
1:04:33one which is the masterpiece right so in
1:04:35the art world the guy who copies a
1:04:37Hussein will not sell a painting at a cr
1:04:39he's going to get one lakh only
1:04:41same way in investing everyone says I'm
1:04:43Warren Buffett but there's there was
1:04:45also a you know George Soros there was
1:04:48also a Peter Lynch so and each person
1:04:51comes with his or her own style and if
1:04:53you can't be original you know you're
1:04:55going to suffer B is understand there
1:04:58are cycles in everything in life and the
1:05:00cycles of nature and apply that to
1:05:03investing. uh three everything is
1:05:06impermanent again spiritual background
1:05:08that this two shall pass the bull market
1:05:10will pass a bare market will pass this
1:05:12company's glorious journey will also
1:05:14pass this person's journey will pass and
1:05:16so on so lot of those kinds of little
1:05:18little things which I think if you kind
1:05:21of infuse spirituality into whatever you
1:05:23do in life whether it's business or
1:05:24investing or whatever I think those are
1:05:27really daily life lessons that one
1:05:29learned from them we didn't have FOMO
1:05:31the market's going up you know we lived
1:05:32through ketan parak we live through
1:05:34harsh metha nobody in the firm bought
1:05:36any of those crap companies you never
1:05:38have for more even now there are a lot
1:05:39of companies which are going up you know
1:05:41100 multiple 200 multiple you can have
1:05:43for more and the market I know what's
1:05:44happening we will not participate it's
1:05:46okay like they had that self-restraint
1:05:49which comes from you know even janism
1:05:51that we will not participate in anything
1:05:53to the harming of animals tobacco liquor
1:05:56and so on so when when you decide this
1:05:59is my kind of boundaries and this is
1:06:01also my circle of competence uh and
1:06:03you're playing to your strengths and
1:06:06then you only swing like Buffett says
1:06:08you swing when you get a fat pitch you
1:06:10know I can hit this ball for a six other
1:06:11why you swinging we're not trying to
1:06:12make two runs and it's our own money so
1:06:15you don't have to participate in
1:06:17everything you can miss 80% of the
1:06:18market and still end up very wealthy and
1:06:20even if you miss one cycle you're there
1:06:22in the next cycle
1:06:23and I mean when I say compounding of
1:06:27100,000 times in 30 years even if you do
1:06:3110 times in 10 years you'll be 120
1:06:34you'll be,0 in 30. Yeah. So the rate of
1:06:37compounding can be incredible in India
1:06:39because the opportunities are so much
1:06:41and I don't consider myself some
1:06:42fantastic investor slightly above
1:06:44average guy too. But that opportunity no
1:06:47but I I honestly mean it. There are much
1:06:49better investors out there. I also saw
1:06:51the flip when I when I went overseas.
1:06:53What is so great in these guys? We
1:06:56woriing them. Yeah. I even uh you know
1:06:58work for a a large P firm globally other
1:07:01than the currency being you know 80 90
1:07:03to the rupee the units they were
1:07:06handling were the same the brain power
1:07:08is the same like it's like your Facebook
1:07:11I mean sure you know Mark is a great guy
1:07:13and Cheryl was a great lady and so on
1:07:15but it's like if you had been there in
1:07:18that place you would have done it as
1:07:19well like today Satya Nadella has done
1:07:21wonders at Microsoft so it's not about
1:07:24Indian versus someone over there it's
1:07:26about opportunity you are in and what
1:07:28your relative currency or your relative
1:07:30balance sheet is. Yeah. So I think
1:07:32knowledge wise there are enough people
1:07:33in India with as much knowledge wisdom
1:07:36on investing or business as they are
1:07:38elsewhere in the world. I think the
1:07:39economies are ahead of us. Maybe their
1:07:42governance systems are ahead of us.
1:07:44Maybe their revolution stage is ahead of
1:07:46us and therefore they are where they
1:07:47are. But I never doubt for a minute that
1:07:49our country is destined and bound to
1:07:51catch up. And even though we may have
1:07:54periods of darkness uh if we miss even
1:07:56the next 10 years I think of ourselves
1:07:58as a civilizational you know country not
1:08:01next 10 at some point we'll catch up
1:08:03because youngsters will come and
1:08:06eventually a nation rules because of
1:08:07tech proess it's about knowledge end of
1:08:10the day those countries rule we used to
1:08:12be the knowledge center of the world
1:08:14back in the days of Nalanda and so on
1:08:16then we went down and we're coming back
1:08:18slowly we are not yet there we are still
1:08:20processors for the world but the day we
1:08:22say no, we want to have technological
1:08:24leadership the way the Chinese did. I'm
1:08:26so amazed with what they've done in the
1:08:28last 15 years. They no longer behave
1:08:30subservient to western tech and they're
1:08:33leading in almost all tech. Their
1:08:34attitude was ourselves. They're going to
1:08:37lead on that. It's their governance
1:08:39which may blow them up. The attitude of
1:08:41you know I'm the king and I know best
1:08:43entrepreneurs or this very abrasive
1:08:46behavior with rest of the world that may
1:08:47blow them up which indeed it happened to
1:08:48us as well. Yeah. At till the point the
1:08:51US was this nice liberal power looking
1:08:54after the world as elder brother as
1:08:56opposed to now trying to behave like
1:08:58this very canitarious cousin brother
1:09:00fighting for his rights. It's a
1:09:02character change and that result will
1:09:03show in the world isn't so same thing
1:09:05for us. You said that you admire some
1:09:08other investors in India. Who do you
1:09:10look up? No no there are lots
1:09:15honestly all you're saying is there is
1:09:17God in everyone. There's something to
1:09:19learn from everyone. There's something
1:09:20to learn there. You you started with
1:09:22saying something I sent you. But there
1:09:24was a call which you made to me and it
1:09:26took me what 30 seconds. Yeah. I was so
1:09:29surprised because you you described your
1:09:31journey and I know where your journey is
1:09:32going and that's all it took to say you
1:09:34know I can connect with this person.
1:09:36There's something to learn. See even you
1:09:38need guts to call up like you're sitting
1:09:39in UP. You're calling some random guy in
1:09:42Bombay and then you're saying look at
1:09:44what I'm doing and this is what I want
1:09:45to do. I'd like to be helpful because if
1:09:48it helps another there 100 million
1:09:50investors coming out of UP if UP doesn't
1:09:53become a trillion dollars there's
1:09:55something wrong with our country so let
1:09:57those guys come let them participate why
1:09:58should only the foreigners make money in
1:10:00India let our Indians get rich as well
1:10:02and if more than that if we can
1:10:05rediscover our rich spiritual heritage
1:10:08to become really true true like what I
1:10:11call human beings I think it's about
1:10:13that it's not this western thing of more
1:10:15money, more fame, more
1:10:18power be if you're if you're what 30
1:10:21years old in 20 years if you don't go
1:10:23100 times which is 24% compounding%
1:10:2815% is 15 16 times in 20 years you'll
1:10:32still be enormously rich so it's going
1:10:34to happen you are in a country which is
1:10:36progressing we'll grow at 6 8% plus 3 4%
1:10:39of
1:10:41inflation so why are we so anxious
1:10:46Enjoy the journey. I think this
1:10:47generation also comes with a lot of FOMO
1:10:49and you know like hustle culture. No,
1:10:51it's it's true. At a young age, I can't
1:10:53say you know when you're 25 and I want
1:10:55to be like I need to make it in life.
1:10:57What would you tell your 25 year old
1:10:58self? No, I think 25 year old life today
1:11:01I would have spent more time getting
1:11:03spiritual far earlier. Uh that time it
1:11:06was about you know you become dana when
1:11:08you CAB like even now I tell my kids
1:11:11they're both Ivy League. They come back
1:11:13with like that certain cockiness which
1:11:14US builds into you, right? And with no
1:11:16disrespect, they're very knowledgeable.
1:11:17They've gone and compete with the best
1:11:19in the world. They can take on the best
1:11:20in the world. But that surrender uh and
1:11:24that humility which comes from knowing
1:11:25I'm no different from anyone else in the
1:11:27world. Yeah. And I'm playing a role in a
1:11:30play where I've got this particular
1:11:32character to play in this life. There
1:11:35has to be some gratitude attached to it.
1:11:37M like the people I met in my life the
1:11:39people I served as a banker to them like
1:11:41where if I was running you know flexible
1:11:44packaging you think I would be sitting
1:11:46in the rim same room with Mr. Naran
1:11:48Morti with Mr. MKkesh Amani and so many
1:11:51of these legends to get to meet them. I
1:11:53just feel humbled and grateful in our
1:11:55market. The kind of investors one has
1:11:57dealt with from Nimish Bay, Radhak
1:11:58Krishnan GI, Rakkesh G so many you learn
1:12:01from everyone. Then you meet the
1:12:03youngsters who are coming and showing
1:12:04you new tech and what's going on and if
1:12:06you don't stay contemporary, you're
1:12:08going to be a you know obsolete
1:12:10dinosaur. Yeah. So it it's that whole
1:12:13feeling of being engaged and alive all
1:12:15the time is is what the whole fun of
1:12:17this profession is. Yeah.
1:12:19Absolutely. And you know, you always
1:12:20talk about asymmetrical bets uh because
1:12:23and I'm a big fan of that you have to
1:12:26figure out, you know, where you can have
1:12:27tremendous upside. Dive into that
1:12:30concept a little bit more. What made you
1:12:32realize that, you know, there were
1:12:33opportunities that you could spot? Well,
1:12:35to be honest, that is first is Nimish.
1:12:37He's he says if it's not you have to be
1:12:41right on all the 10 bets, but when you
1:12:43win, you shouldn't regret that I only
1:12:45won so much. So both uh so okay let me
1:12:49take a step back. He's saying the only
1:12:51thing in your control is your entry.
1:12:53After that what the entrepreneur does,
1:12:55what the economy does, what the world
1:12:57does is not in your hands. Right? You
1:12:59may think I know perfectly this is the
1:13:01momentum of this business. This is where
1:13:03it will go. Regulation can change. The
1:13:05entrepreneurs mindset may change. He may
1:13:07start stealing money like you said in
1:13:08some companies with all good intentions.
1:13:09Everyone
1:13:10starts regulation may change from the
1:13:12US. Some tariff may come blah blah blah
1:13:14whatever. So only if your entry price is
1:13:16so attractive that even the most bearish
1:13:20guy cannot come and shake your
1:13:21conviction. So you have to start with
1:13:23that knowledge and that conviction to
1:13:26know that what I'm betting on works for
1:13:28me and you're going somewhat against the
1:13:30world because it won't be a popular
1:13:32stock at that time. But he taught us to
1:13:35think in terms of possibilities before
1:13:36probabilities that is it possible this
1:13:39company can earn its market cap in its
1:13:42lifetime maybe 10 years later 20 years
1:13:44later. Is it possible if you're buying a
1:13:46company for whatever $100 million total
1:13:49value? Can this company ever make a $100
1:13:51million profit? Otherwise, why are you
1:13:53going in? I have converted it to a more
1:13:55easy one for uh for youngsters today. I
1:13:58say in 5 years, can this company be a 5p
1:14:01stock? So, if it's very very high
1:14:03growth, how many years ahead are you
1:14:05paying for? So, if you think no, it's
1:14:06five 5p after 10 years, then do you have
1:14:09the horizon of 10 years to be with that
1:14:11company? Because after that your real
1:14:13earning will start because eventual
1:14:15destination of most most companies will
1:14:17end up somewhere between 15 and 25 like
1:14:19even take the great IT companies of
1:14:21today they finally went to the journey
1:14:23of 100 and they're now closer to 20. So
1:14:26at some point in that journey it'll be
1:14:27and the more you pay up front the longer
1:14:29you have to wait. So if that
1:14:31asymmetrical bet then looks outside that
1:14:34if I buy this at a say a five multiple
1:14:36five years hence a I know what journey
1:14:40could be which means I better know the
1:14:42business and what could impact it uh and
1:14:44b I'm giving a chance for myself to get
1:14:46a p upside because if I'm already paying
1:14:4950p then what is my upside my downside
1:14:51is on P and my only upside is earnings
1:14:54here I can get both so worst case I'll
1:14:57make 15 p will be three times in 5 years
1:15:00which is 24% compounding. And if I'm
1:15:04hopefully I'm in a good business, I can
1:15:05make five times which is 40%
1:15:07compounding. And if you get a kind of
1:15:09bubble going, which occasionally happens
1:15:11in life, and you get to a 50p, then wow,
1:15:13you're in heaven. But when you get
1:15:15those, then don't be pussyooting.
1:15:18The second thing he taught us was
1:15:20position position sizing. That then
1:15:22don't buy 50 stocks two% each. Then you
1:15:25load up. like my son he made an
1:15:27investment two three years ago and he he
1:15:29had a kitty of whatever let's just say
1:15:31100 uh and he found a company which I've
1:15:34spoken about publicly so I'll share
1:15:36called gravitar for example so very old
1:15:38business picking up waste lead from
1:15:41batteries discarded from cars
1:15:44macroim is yeah it will go into ESG blah
1:15:47blah doing good for the world and he's
1:15:49also impact oriented chef
1:15:51you can see the profit of this company
1:15:53back in the day you could see easily
1:15:55they will do three times times in terms
1:15:57of profit
1:15:58there were fears because they were
1:16:00sourcing from rest of the world Africa
1:16:02will the money come back how clean how
1:16:04dodgy whatever because when you're
1:16:06unknown everyone asks questions when
1:16:08you're P 10 their question when you're
1:16:11P30 then broker reports will come with
1:16:1350 multiples on them so he he met them
1:16:16he went visited he came back very
1:16:18convinced that yeah they can make this
1:16:1910 11% type margin this is the volume
1:16:21growth possible on lead aluminium
1:16:23plastic still lies ahead of you rubber
1:16:25So many things they can do. Uh the team
1:16:28is completely united team which was
1:16:30built together from you know the
1:16:32founders college colleagues and so on
1:16:34all been there for very long and the
1:16:35runway looks clear and because he was
1:16:39early in life a young guy he would have
1:16:40bought maybe two crores out of his 100.
1:16:45So I say now you size up over here and
1:16:47then you know this is where you'll make
1:16:49100 crores. So that's what I mean by
1:16:52it's a asymmetrical bet. You start with
1:16:54a multiple of I think it was probably 10
1:16:57or thereabouts and then it went all the
1:16:59way to 30 and it's gone 10x for him in
1:17:01like 3 years. So he I'm saying it
1:17:03doesn't have to be necessarily a sexy
1:17:05business and a tech business and he
1:17:07comes from a that sort of background
1:17:09where he enjoys tech and biotech and
1:17:11even find the but this is the learning
1:17:13that money is to be made everywhere.
1:17:15There are cycles like the last decade
1:17:17may have belonged to tech. I am of the
1:17:19view this decade belongs to hard assets
1:17:21like gold is going to do well, silver is
1:17:23doing well, uranium will do well, copper
1:17:25will do well, real estate is doing well.
1:17:26So there there are waves in the world
1:17:28and you have to get aligned to them.
1:17:30Yeah. And that's the sort of learning
1:17:32which which comes out. Yeah. And you
1:17:34know value investing has always been
1:17:35your forte. So this there is only value
1:17:38investing in the world. Anyone who tells
1:17:39you otherwise Yeah. But has otherwise
1:17:41it's momentum investing.
1:17:43So you may call it growth investing but
1:17:46growth is saying what is the value I'm
1:17:48getting for this future growth at what
1:17:50point that's how I described it that
1:17:53let's say you bought meta at certain
1:17:56point at what point in life was meta
1:17:59also of IP stock no looking back from
1:18:01that period in time like Nvidia before
1:18:042019 what are the earnings now if you
1:18:06were the person who knew the tech and he
1:18:08said this earnings are going to go up
1:18:10what it's gone up what 60 times some
1:18:12some crazy number like that. Now I don't
1:18:14understand that tech. So I have no
1:18:15reason to participate there. But I used
1:18:17to also wonder someone buying this at 20
1:18:1930 40 time sales but that sales actually
1:18:23materialized. I've not seen in my life.
1:18:24I'm stunned with the rate of change in
1:18:26Nvidia. Yeah. It's like a bubble which
1:18:28parallels what happened to Cisco in 2000
1:18:31and it will also I feel go the same way
1:18:33eventually because it's a capeex good
1:18:35stock. But if the earnings is going to
1:18:37go up 30 40 times, if you're paying 30
1:18:39times sales, 20 times sales, in 3 years,
1:18:42you're going to look damn smart. But if
1:18:44I don't know it and I'm just chasing,
1:18:45you know, that train and it stops
1:18:47suddenly, I'll be left holding the baby.
1:18:50So that's why I say, do you know
1:18:52longevity of this business and what
1:18:54could drive its earnings? If you're
1:18:56looking like Buffett used to buy in the
1:18:57old days, he bought brands. He was also
1:18:59paying a lot for the future. He was not
1:19:01buying 10p stocks when you're buying
1:19:03brands because the brands were the
1:19:04platform companies of that era. Today we
1:19:07are using a you know more cool term
1:19:08called it's a platform play. Platform
1:19:11play means I'm doing all my investments
1:19:13up front through my P&L and then I'll
1:19:16get operating leverage. So say we did
1:19:18lens card when I in my TPG days we paid
1:19:21a lot for the future but guy is 28 super
1:19:24sharp knows what he's doing maturity
1:19:26beyond his years. 25% of India needs
1:19:29eyewear plus he can go overseas and you
1:19:31know that I'm going to make a 60% kind
1:19:33of gross margin over here eventually it
1:19:36has to come to a 15 20% type I on that
1:19:39basis I can know what multiple of sale I
1:19:41can pay for this company because I know
1:19:42what the PAT will be of this company
1:19:44let's say he ends up with a 10 time post
1:19:47tax profit on his sales and he'll trade
1:19:50eventually at 2025 multiple let's say so
1:19:52three times sales if you pay for someone
1:19:54like that uh you're in business and if
1:19:56you're growing at 50% that means I've
1:19:59taken a bet two years ahead of time so I
1:20:01paid five times or six times sales. So
1:20:04you can slice and dice anyway but
1:20:06eventually you're looking for value and
1:20:08what am I going to capture and in what
1:20:09time frame the fund with being a private
1:20:12proprietary investor is our time frame
1:20:14can be very different from the market.
1:20:16It's evergreen cap. A local fund can be
1:20:18you know benchmarked every quarter. They
1:20:20may suffer one or two years until the
1:20:22trustees or the customers will fire
1:20:23them. A private equity fund by
1:20:25definition has a five year sevenyear
1:20:27life cycle. There's a company which
1:20:29we've been involved in now for you know
1:20:31maybe 10 more than 10 years now uh and
1:20:34he's he's gone from basically zero to
1:20:37you know 300 million uh dollars of
1:20:39profit. Wow. Now if you were a fund you
1:20:42would have sold out many times over like
1:20:43even lens card because of the life of
1:20:45the fund. I was going to ask how does
1:20:47one decide when to sell these? No that
1:20:49was in TPG days. So they had a fun life
1:20:50and they have to they can't keep ever
1:20:52greeting. So they they made the exit and
1:20:53the next funds have come and they've
1:20:55taken it forward and but that's why the
1:20:57SEO of the world have now come back and
1:20:59said we want permanent capital because
1:21:01we're helping these companies come to
1:21:02this stage and then from here again they
1:21:04become 10x 100x and we feel left out.
1:21:06Yeah. So that whole journey how much do
1:21:08you want to play and be part of is up to
1:21:10you and therefore being the ultimate
1:21:12nirvana as a investor is to be a private
1:21:14investor. I'm not answerable to anyone.
1:21:16Yeah. And if I get things wrong, only my
1:21:19wife knows and she anyway beats me up
1:21:21for various other things, not only this.
1:21:24But yeah, you like I said, you design
1:21:26the life you want. Yeah. But in your
1:21:28son's case, for example, uh going back
1:21:31to the example that you shared, when
1:21:33would you advise him to start thinking
1:21:34about selling or would you? So he sold
1:21:36he's he did sell half his position in
1:21:38that company. Uh not because it went up
1:21:4110 times, but it was already trading. Uh
1:21:44so the benchmark I gave him that if this
1:21:46stock from this price falls by 33%. Are
1:21:50you going to be a buyer because you
1:21:52won't get that 5p from that price? But
1:21:55to get back from a 100 falling to 66 now
1:21:59the stock needs to go up 50%. And if at
1:22:02that 66 you're not going to buy it then
1:22:04you better be thinking of selling it
1:22:06because you often as an individual we
1:22:07pay tax. So sometime that tax starts you
1:22:10know messing up your brain. I said don't
1:22:12let tax affect your consideration
1:22:14because the market doesn't know your tax
1:22:16problem. The market doesn't like the
1:22:18price. It's going to sell it off. Yeah.
1:22:19Uh and I think it had gone to it was a
1:22:22forward 60 multiple at that time. So I
1:22:26think it was a no-brainer to do it.
1:22:28Having said that, I've learned
1:22:30separately differently from Manika.
1:22:31Again, a story I've narrated in the past
1:22:34is I used to be the original TMT
1:22:35analyst. So I used to buy telecom and
1:22:38media stocks back in the '90s and I had
1:22:41written the business plan for the URSTW
1:22:43ZTV which came public in '
1:22:469192. Uh and by 98 it had come back to
1:22:50its IPO listing price. It was 70 rupees
1:22:5316 cr equity. So like you can't imagine
1:22:56130 140 cr market cap for ZTV. I'm like
1:23:00this is a no-brainer. I I know this
1:23:02business. The world was worried because
1:23:04Sony and I think there were other not
1:23:06Sony but other foreign channels were
1:23:08coming plus Rert Murdoch had just bought
1:23:10Star Trek so they were going to enter
1:23:12the market was selling off and like
1:23:15nothing doing the guy who's sitting in
1:23:16India will eventually win because they
1:23:19know how to do cost they know what
1:23:20creative and so on so forth but long
1:23:22story short the price was so attractive
1:23:24like I can buy this as much as I could
1:23:26buy I didn't have that much money back
1:23:27in that day I bought it and within 12 to
1:23:3018 months it was up 10x so you think
1:23:32you're the cat whiskers right young guy
1:23:34uh like what 20 30 years old 30 33 years
1:23:37old your age I made a 10 bagger I'm damn
1:23:40smart I know this business well and I
1:23:42start selling managing by sitting there
1:23:44and saying Manish this market is telling
1:23:46me something else is happening don't
1:23:48sell it so I'm like I don't care about
1:23:51the market if I believe the market I
1:23:52won't have bought it so you're a cocky
1:23:55young kid I'm like I'm selling it and
1:23:57let's assume I put 10 lakhs and it
1:24:00became a CR and a cr back in 98 is a big
1:24:04money. In 3 months it went up 20 times.
1:24:08Oh wow. 800 rupees went to 16,000.
1:24:13Wow. Okay. That is the era of Ketan
1:24:15Parik. It was completely crazy.
1:24:17Eventually it turned and came back to
1:24:18that 800 or equivalent only because they
1:24:20split it and made it a one rupee share.
1:24:23But imagine if you had just listened to
1:24:26the market and he said look at what you
1:24:28call higher top higher bottom formation.
1:24:30Let the market tell you sell it from a
1:24:32fundamental portfolio to a technical
1:24:34portfolio. After this day you know I'm
1:24:37selling based on price. Don't discuss
1:24:39fundamentals. When you see the turn,
1:24:41sell it. You will still get a higher
1:24:44average price than what you're selling
1:24:45at fundamental. So he taught me to take
1:24:47signals from the market. Nimish by style
1:24:50is still very fundamental oriented. He
1:24:51will buy when he wants, he will sell
1:24:53when he wants. Pure value based. He may
1:24:55hold for 20 years also. He doesn't care
1:24:57if stocks fall 50%. Some some of us
1:25:00would say no no we should put a
1:25:01stop-loss amount blah blah blah. So very
1:25:03distinct style. Again what works for you
1:25:05works for you. Yeah. But do you uh still
1:25:08have those feelings of like you know 30
1:25:1050% draw downs in your portfolio and
1:25:12yeah it happens. It happens. How do you
1:25:14emotionally regulate? No. If my business
1:25:16is compounding, I don't care and I buy
1:25:18at underlying valuations which I know
1:25:20what this business is worth. See from
1:25:22early days in NM, we were trained to be
1:25:24business buyers. We don't think as stock
1:25:26guys. I'm I'm buying I'm buying the
1:25:29whole company at what price am I buying
1:25:31the whole company. Then whether I bought
1:25:321% or 5% of the company determines the
1:25:34stock price. Yeah. I get people my
1:25:37relatives even today they call me and I
1:25:38can't change their behavior. like
1:25:40someone will call and I'll say you
1:25:41should be buying let's say ICIC bank or
1:25:43HDFC bank and they're like
1:25:49share yeah that operating on stocks like
1:25:53that is not the way what is the price
1:25:55you're paying for the company they are
1:25:56buying that 10 most traded share in
1:25:59India vodafone idea because it's six
1:26:00rupees but people don't know what the
1:26:02debt in the company they don't know the
1:26:04equity has ballooned beyond imagination
1:26:06so I feel sad when I see this I mean The
1:26:09reason to do shows like this is think
1:26:11like a owner. You're buying the whole
1:26:12company. Would you buy the whole company
1:26:14at this price? If not, what are you
1:26:15doing there? Are you buying on greater
1:26:18full theory
1:26:20that that can't be the basis? Would you
1:26:23buy a company like that? But if you
1:26:25can't buy a company at at the price
1:26:28you're buying and then you really make
1:26:30wealth if you're sitting on 5 10 15
1:26:32years on that company, right? Because
1:26:33that company will compound for you.
1:26:35That's when serious money is made.
1:26:37Otherwise, every 3 months I buy and
1:26:38sell, buy and sell, buy and sell and I
1:26:40pay my short-term capital gains tax. My
1:26:42end result is going to be nowhere.
1:26:44Another mentor of mine has been Doresh
1:26:46Sha. He has a great line. He says
1:26:48activity and achievement are not
1:26:49related. True. And a second thing I'll
1:26:52say since you're interviewing me, he's
1:26:53saying don't mistake articulation for
1:26:55achievement. So the best investors are
1:26:58the silent ones who don't come on your
1:26:59show. Yeah. They they always decline.
1:27:02Absolutely. Some of the really great
1:27:04ones. They always just politely decline
1:27:06saying that we don't want to be seen
1:27:07because we know how many bullets we've
1:27:09taken, how many losses we have and what
1:27:11all we've gone through to get to and
1:27:13what is the role of luck and patience
1:27:15and persistence in this as well. How
1:27:17would you quantify the role of luck in
1:27:19your journey? If we don't admit we are
1:27:21lucky a why were we born in this family?
1:27:24Why were we born in this country? Why
1:27:26were we born in this profession? Why did
1:27:28we have this kind of colleagues around
1:27:29us? I think we giving us too much
1:27:32importance for our own success. Yeah. So
1:27:36that's a beautiful way. Let's think 99%
1:27:38luck 1% but effort on you have to be
1:27:41deserving of that luck. So all you have
1:27:43to do in life is work with whatever you
1:27:44do. My dad taught me even when you go to
1:27:46a bathroom. You must leave it as clean
1:27:48as you expect it to be when you go in.
1:27:50So everything you do, do it with
1:27:52perfection. Uh and do it as if the next
1:27:55person will get the same as what you are
1:27:57getting. So even when you're selling a
1:27:58stock, you want the next person to make
1:28:01money. I don't want to sell it at the
1:28:02absolute top.
1:28:05But your mentality is very different
1:28:06from what we see otherwise fund managers
1:28:08do. How do you mean? You know, like um
1:28:11in at least the private space, you know,
1:28:13numbers don't change meaningfully, but
1:28:15the rounds keep happening, our markups
1:28:18keep happening and like valuations get
1:28:20inflated on paper. Yeah. But we don't do
1:28:21that. So preo unlisted, but we don't
1:28:24play that game. Yeah. That's a very So
1:28:25we are buying see whenever we we buy
1:28:27very few private company but when we are
1:28:29buying like first of all why is this
1:28:31deal coming to us because we are not the
1:28:32top dollar payers some fund will pay a
1:28:34lot more. So if they're coming for
1:28:36either I can help this company to think
1:28:38through what they're doing or they're
1:28:40coming from my ecosystem or I can help
1:28:42them hire from again people I know then
1:28:44I am actually like a partner and then
1:28:47it's worth devoting time and then I want
1:28:49to be like at least 20% of the company
1:28:51otherwise why am I there? Yeah. So we
1:28:53not doing these 60 rupee bets across 500
1:28:56companies and then what do you call
1:28:58spray and pray that two of them will
1:28:59make up for 98 losses because for us our
1:29:02rule has been rule number one don't lose
1:29:04money. So if you're buying on that basis
1:29:07two or three won't do as well as we
1:29:08expect. Two or three will do much better
1:29:10than we expect. Four five will be
1:29:11average. But the venture way of
1:29:13investing is you don't know what will be
1:29:16successful. You just basically you're
1:29:18fishing in the right
1:29:19lake. Like say you'll do EVs today you
1:29:22know EVA I would not do EVs today until
1:29:25I know BYD and Xiaomi has come out as a
1:29:27winner because why before they come out
1:29:29then I know and you you can then load up
1:29:32at that time because it's position
1:29:33sizing the absolute money you make is
1:29:35much more there then by having 50 of
1:29:37these over here so it's a different
1:29:39mindset nothing right or wrong is just
1:29:41the way uh you know I enjoy playing the
1:29:43game that's a great way to think about
1:29:44it and putting it as well um but you
1:29:47know with the advent of so much
1:29:49technological disrup
1:29:51of a lot of people feel that you know
1:29:53you can't really hold on to companies
1:29:55for 10 20 years now because the world is
1:29:57so changing so quickly so how does one
1:30:00think about that so you know first of
1:30:02all I do accept that the rate of change
1:30:04is very fast and I myself I'm a
1:30:06proponent I've come and presented to a
1:30:08lot of my colleagues in the industry as
1:30:10well on technological change and
1:30:12disruption and I we do invest as a
1:30:15family overseas as well uh so I'm
1:30:18completely cognizant of That having said
1:30:20that there are companies which by their
1:30:22character tend to be a little more agile
1:30:24and forwardlooking like let's take
1:30:26fintech is a big change which is
1:30:28happening in the world in question is in
1:30:30India can the ICICIs and the HDFCs and
1:30:33even the SBIS embrace that technology
1:30:36and bring it inside because now they
1:30:38already have the customer base and can
1:30:40they move and at the same time there may
1:30:42be a new age bank being created like at
1:30:44one level there was Baj Finance which we
1:30:47early IDFC for example is doing a good
1:30:49job on that front and then there would
1:30:51be a fintech which has come out also
1:30:54which I won't name as yet but if you
1:30:57play this whole chain eventually how
1:30:59this ecosystem evolves you know I'm in
1:31:01the right place with the right players
1:31:03over here and these will be industry and
1:31:04sector leaders uh at another level if
1:31:08the person is oblivious to the
1:31:10disruptive changes coming in their
1:31:12business uh we won't participate even if
1:31:14the stocks do well so I gave you
1:31:16examples I did a program at singularity
1:31:18I think in 2016 or 17 and ever since
1:31:21then I've not been able to buy auto
1:31:23stocks in India. They've all done well
1:31:25but I know the EV revolution is coming.
1:31:27I don't want to be sitting in Maruti the
1:31:29day it goes from a 25p to maybe a 5p
1:31:32because the earnings will collapse.
1:31:33We've had stocks for example like we saw
1:31:35this happening with folkswagen abroad
1:31:37trades on a 4p multiple. Their stocks in
1:31:40China which were partners with BMW trade
1:31:42on a 4p multiple. So the rate of change
1:31:44is very very rapid when market loses
1:31:46confidence in the terminal value. Yeah.
1:31:50Same way on on pharmaceuticals as well.
1:31:52I have a view that the world will go a
1:31:54lot more towards uh you know genetics
1:31:56and biotech and away from chemistry
1:31:58based farmer. India is largely playing
1:32:00in you know generic farmer chemistry
1:32:03based. I think that industry is ripe for
1:32:06disruption in the next four five years.
1:32:07Terminal values will change. So I I take
1:32:10the point absolutely and we stay alive
1:32:12to that which is why the reason we're
1:32:14looking and investing all over the world
1:32:15and learning all the time. any other
1:32:17industries that you think you see almost
1:32:20everything in India you take the brands
1:32:22now the D2C brands can come and dislodge
1:32:24a lot of the earthw brands uh the
1:32:26pharmaceuticals I've already told you
1:32:28what's going happening over there our
1:32:30original IT services business is ripe
1:32:32for disruption I I don't see how these
1:32:34valuations hold for them absolute number
1:32:37they might scale down reduce employees
1:32:39and you know morph into little more AI
1:32:42enabled companies but the fundamental
1:32:44character will change media has already
1:32:46changed irreversibly. Telecom also kind
1:32:49of it's now a dumb pipe. It's what
1:32:51content you're putting through the pipe
1:32:52then eventually can you do retail
1:32:54through it? Can you do financial through
1:32:56it? Uh can you put more media through
1:32:58it? That's the value of your pipe and
1:33:00how many subscribers can you so that
1:33:01game has changed. Fintech and financials
1:33:03we spoke about uh manufacturing with the
1:33:06advent of threei robotics. Yeah. this
1:33:09whole advantage of like in in I think in
1:33:12four years I would expect my mom, she
1:33:14right now has four people as caregivers.
1:33:16I need one robot and that robot can come
1:33:19at $25,000 which is what $1,200 a year
1:33:22on a rental. Uh you know four people are
1:33:25going to be unemployed and they're not
1:33:27particularly doing a great job and we
1:33:29have no choice to so manufacturing
1:33:31disrupted. Uh the only thing which may
1:33:33not be disrupted is actually the old
1:33:35industries. You'll still need the cement
1:33:37and you'll still need the copper to come
1:33:38out from the ground. You may bring it
1:33:40out more efficiently, but everything is
1:33:42a tech business and people who think
1:33:45otherwise are fooling themselves because
1:33:47even in steel, what are the wealth
1:33:49creation that Sajjan Jindel did by
1:33:51bringing Corex technology? Steel is 150
1:33:53year old business from Andrew Carnegie.
1:33:55He played the game right and he brought
1:33:57it. Yeah. And you know that made the
1:33:59fortune over there. So if the owner does
1:34:02not have a tech bent of mind in the
1:34:04business, you're going to be in trouble.
1:34:06You can be HDFC Bank and think I'm great
1:34:08and you can be disrupted. So I think
1:34:11it's it's part of our checkbox when we
1:34:13are meeting people to figure out how
1:34:15they're thinking, how they think. Again,
1:34:17I'm going back to what is the character
1:34:18of this guy? Uh and is he going to share
1:34:22rewards with the shareholders or is it
1:34:24the empire builder who everything
1:34:25belongs to me? It tells you a lot. What
1:34:28are other things on the checklist for
1:34:30you? There are lots. I don't want to do
1:34:31that here. But see, I'm telling you,
1:34:33there's a basic trait of a
1:34:39person. He's never going to be a, you
1:34:42know, good partner with you. Like lot of
1:34:44PE deals. I was again, you know, even in
1:34:46TPG day, you sign these long form legal
1:34:49agreements with the entrepreneur. The
1:34:50CEO can do what the hell he wants.
1:34:52You're not there setting whatever board
1:34:53you put. I've been on boards where we
1:34:55don't know what the hell happened in the
1:34:56company. Yeah. What will you do? You are
1:34:59the CEO is doing the team is going to
1:35:02follow the instruction. The CFO is going
1:35:04to you know probably support or may not
1:35:06even realize in many cases the auditors
1:35:08coming auditors looking I'm getting fees
1:35:09from you the auditor signing off. It
1:35:11comes to audit committee where the chair
1:35:12is actually looking at everything. Poor
1:35:14chaps coming four times a year he'll
1:35:16spend 8 hours. How much more is he going
1:35:17to spend? So you're not going and doing
1:35:19a forensic audit on every company. So to
1:35:21think I can sign a legal agreement and
1:35:23have a good business with a crook is
1:35:24never going to happen. Yeah. Like
1:35:26Buffett said it well. You know he said
1:35:27look for some of the energy, integrity
1:35:29and passion. Yeah. And if he doesn't
1:35:30have integrity, don't bother about the
1:35:32other two. And that only you you have to
1:35:35will this leopard change his uh you know
1:35:36spots. Yeah.
1:35:39Hard. You don't you can't make a good
1:35:40deal with a bad person. You know these
1:35:42things unless you know you track them
1:35:44over a long time. But you see it in you
1:35:46see behavior like if you're very nice to
1:35:49me and then you go out and you're
1:35:50talking very badly to the watchman or
1:35:52the lift man, it tells me something
1:35:53about it. A good person is a good
1:35:55person. He's not looking I have to be
1:35:57good with this person and bad with that
1:35:58person. I can afford to be bad there. So
1:36:01you pick it up. I I I can't I mean it's
1:36:04something you learn with experience. It
1:36:05comes over time. Yeah. And you know you
1:36:08since we covered the founder aspect and
1:36:10builder aspect of changing with
1:36:12technological advancement. How do you
1:36:14think the investment business will
1:36:16change because there's so much algorithm
1:36:18trading, algorithmic trading, quant
1:36:20investing which is now uh gaining
1:36:22traction as well. How do you see the
1:36:24investing? It's changed already. So the
1:36:25west is largely run by ETFs and alos. So
1:36:29in more predictable markets and more
1:36:31predictable economies you you'll find
1:36:34the quans taking over and already the
1:36:35old renaissances and all have made
1:36:38returns better than buffet even the the
1:36:41thing is again investing as a business
1:36:44what gives you the right to make 2 and
1:36:4520 what is so great so it it's it's
1:36:48really like I said an investment bank
1:36:50with a wallet attached and it's become a
1:36:52marketing game uh in the investment
1:36:54management business and it's a scale
1:36:56business like for example forget Even
1:36:59equities when mutual funds are selling
1:37:01debt products. Yeah. Do they really have
1:37:03the risk management teams and the credit
1:37:06assessment teams that banks have? Do you
1:37:08think banks are stupid to be having such
1:37:10large credit departments to go and
1:37:12assess what's going on? So the funds are
1:37:14getting the benefit of someone else's
1:37:15work today. Yeah. Same thing in
1:37:17equities. The screeners have become more
1:37:19powerful. My in my day and age to even
1:37:22get the balance sheet of the company was
1:37:23a big deal. Now I get everything
1:37:24pre-screened ready with a forecast and
1:37:26everything ready to go. which means
1:37:28what's my edge? Either it is a time
1:37:31horizon or it is some certain knowledge
1:37:33about the business or my position
1:37:35sizing. I have no information advantage
1:37:37anymore. So if we don't evolve towards
1:37:40that world and with AI now being much
1:37:42much smarter in analysis than even you
1:37:44and me. Yeah. Uh I don't even have that
1:37:46analytical edge I feel anymore. So this
1:37:48business as long as the trends are
1:37:51established the quant will always beat
1:37:53you where you're finding the change and
1:37:55you are able to capture that change
1:37:57that's where you'll win and I think you
1:37:58should be humble enough to say at
1:38:00certain scale like today we scale back
1:38:03and think if we make 15% return a year
1:38:06on our base we're very happy it's still
1:38:09a very large number there'll be
1:38:10youngsters listening and saying what is
1:38:12this old uncle talking you know we 24% a
1:38:16week or a month like what is this guy
1:38:18talking about but you will get to a
1:38:21scale where you should be looking more
1:38:23for permanence and longevity to build
1:38:25that capital preservation more than and
1:38:28again Buffett he's absolute master he
1:38:30says rule number one don't lose money
1:38:32rule number two don't forget rule number
1:38:34one he says it eloquently because if
1:38:36you're in an economy with a tailwind
1:38:38like the Americans had
1:38:41if you don't lose money over time you're
1:38:43bound to make money like I said yeah if
1:38:44you don't make 15 20 times in your next
1:38:4720 years even as a average person uh
1:38:50you'll be unlucky. Yeah. So if you just
1:38:53don't do stupid things and don't get
1:38:55greedy don't have FOMO you'll be up 15
1:38:57times in the next 20 years. So just just
1:39:01keep that faith I guess and keep going.
1:39:04Amazing. I think well last question
1:39:06before I let you go. How do you think of
1:39:08legacy now? Now now that you've had such
1:39:10an accomplish I don't think about
1:39:12legacy. There is a you've attained moa.
1:39:16No, no, it's not actually be before
1:39:18moshian janism there's the concept of
1:39:20arant which is where you're a how do you
1:39:24call bodyless soul
1:39:26where you attachment yeah you've got and
1:39:29you know you're able to see things
1:39:31objectively you don't your perception is
1:39:33not wrong you're not deluded you're not
1:39:36attached that you can't even enjoy even
1:39:38enjoyment is nature of the spirit but
1:39:42also that oh I can't give money away to
1:39:44someone is als also something is wrong
1:39:47with you. That's also a form of attach
1:39:50because it's like you are the wire
1:39:51through which the current is passing
1:39:54from from you know the god or whatever
1:39:56we call to to the world. uh in another
1:40:00place I spoke about it as the you know
1:40:01the river drop the drop of rain which
1:40:04falls becomes a puddle becomes you know
1:40:07rivlet goes into the river goes into the
1:40:09ocean your only choice you're thinking I
1:40:12want to go to Indian Ocean and not
1:40:13Arabian sea but actually you have no
1:40:15choice you're going to land up in the
1:40:16ocean then it ocean heats up form steam
1:40:19and you go and become a cloud and that's
1:40:20your cycle going on so if you get this
1:40:24that this is who I am I'm just this drop
1:40:28uh You can't think of legacy which did
1:40:30the sun think of a legacy and the
1:40:32raindrop think of a legacy. There's no
1:40:33legacy.
1:40:35Live a life. Yeah. What a profound
1:40:37message to end the episode with. Thank
1:40:38you so much Manish for taking out the
1:40:40time. It was an absolute pleasure. I
1:40:42think the audience will benefit so much
1:40:44from your life investing and spiritual
1:40:46wisdom. We'll have lots really blessed
1:40:48to be here and I've had this
1:40:49opportunity. Thanks. Thank you.
1:40:53[Music]

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