 "Who gave Yajee's firm generous loans?")
Onkareshwar Properties was a non-descript entity that made a meagre profit of Rs 77,949 for the financial year ended March 31, 2006. The next year was better with profit going up to rs 1.68 lakh, but still small in absolute terms. But, something unusual happened in FY 2008.
Robert Vadra, son-in-law of Congress President Sonia Gandhi decided to enter real estate business. And, Onkareshwar seems to have been at the proverbial right place at the right time.
Two people with close association with Haryana's political establishment, as is clear from local media reports following a Business Standard report on Saturday, entered Onkareshwar on February 28, 2008. Satyanand Yajee, Haryana Chief Minister Bhupinder Hooda's fellow office bearer in freedom fighters body All India Freedom Fighters Organisation and Sandeep Dahiya, a relative of the CM from his wife Asha Dahiya Hooda's side become directors.
Following this Yajee infused a capital of Rs 24 lakh in to the company. But the most significant boost to the company's operation came from short term loans. During the year the company's short term loans increased by a whopping Rs 66.55 crore to Rs 87.93 crore.
It is not clear from the balancesheet, who were these generous lenders who took the risk of lending the start up a sum some 250 times its networth of Rs 25 lakh.
Out of these Rs 53 crore lay as investments in the company's books at the end of FY08. Fixed assets swelled from Rs 12.11 lakh to Rs 17.76 crore. Thus, Onkareshwar too was practising the model found in many Vadra entities, funding long term assets through short term loans.
Short term loans hit a high of Rs 106 crore in FY10, before dropping to Rs 56.83 crore in Fy 11.
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These generous loans almost immediately help company rake in significant profits. In FY09, the first full financial year after Yajee entered Onkareshwar and helped Vadra buy the 3.5 acre Shikohpur land, the company booked a profit of some Rs 43.04 crore. This was an increase of 173 times over FY08 net profit of Rs 24.85 lakh.
The entire FY09 profits were retained in the business as reserves and surplus. There was no remarkable increase in reserves in FY10. But by FY11, the company's reserves grew to a formidable Rs 136.55 crore. Out of this share capital was just rs 25 lakh. Rest was internal accruals in just three years. The company was sitting on a cash of rs 70.83 crore.
Dahiya quit the company on March 31, 2011. Subsequent numbers are yet to be published.
If they managed this miracle purely by their business acumen and managerial talents, Yajee and Dahiya must be the most sought after turnaround artists in India Inc. Or, Did they also get around with