Yeshwant Moreshwar Deosthalee, 65, calls financial services a young man’s business. But earlier this week, he beat many younger men in the race to acquire the prized assets of Fidelity India in an estimated Rs 550-crore deal. In 2010, L&T Finance was a rank outsider, without even having applied for a licence to do asset management business. Today, led by Deosthalee, it has become a serious player in the fund management industry.
"It's a good fit for our business. We have more debt assets and they (Fidelity) have larger equity assets," said Deosthalee. "Another point which is important is that L&T AMC is largely dependent on individual financial advisors for its distribution and Fidelity complements with its other distribution channels," Deosthalee said after the buy. Experts also agree that having picked up two contrasting but complementary sets of assets from DBS Chola and Fidelity, L&T Finance now has a solid foundation and is well placed to give the dozen bigger funds a run for their money.
Deosthalee's shopping bag holds more than just funds. Only a couple of weeks back, he gobbled down Indo Pacific Housing Finance, marking an entry into a lucrative, but highly competitive housing finance market.
That is not all. As and when Reserve Bank of India makes up its mind on the framework for new bank licences, L&T Finance is likely to throw its hat. A banking licence is a "natural extension," Deosthalee had told Business Standard, few months ago.
Becoming a bank may take a while, but the man who likes his breathing exercises and brisk walking, is keen on growing the existing businesses which already have a good urban and rural mix. It also has put up a holding company structure to hold these various existing businesses, which in some circles is considered a pre-requisite for a banking licence. L&T Finance Holdings, a non-operating holding company, offers a diverse range of financial products and services across the corporate, retail and infrastructure finance sectors, through its direct and indirect wholly-owned subsidiaries, namely, L&T Finance, L&T Infrastructure Finance Company, L&T Investment Management and L&T FinCorp. As of December 2011, L&T Finance Holdings had loans and advances of Rs 23,500 crore (consolidated).
Though Deosthalee has been buying out companies at will at L&T Finance, in his earlier role as chief financial officer of L&T Finance's parent Larsen & Toubro, he focused on managing cash flow. Development project companies can borrow through special purpose vehicles, but the parent company, which is the engineering, procurement and construction company, should always manage its cash, he is fond of saying.
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Eliminating risk to maximise profits has been his theme song. "That may sound boring, but it helped us maintain our profit margins," he says, adding how he involved treasury right from bidding to completion of projects, making sure that risks arising from currency movements and commodity price fluctuations were minimised.
His financial acumen has been noticed by the government as well. In 2008, at the height of the global financial crisis, when the government constituted a committee to address the liquidity issue, Deosthalee was the only CFO to be nominated to represent industry. He was also chosen as a member of the Securities and Exchange Board of India committee that recommended a total overhaul of the takeover rules.
Deosthalee is quite unlike a conventional workaholic CEO. He goes home by 6.30 p m; does not work on Sundays; believes one shouldn't stick to the chair thinking he is irreplaceable (he started grooming his successor in L&T at least two years before he retired); and likes to give the CEOs of individual businesses enough elbow room to operate. He hasn't been to a business school either, preferring to do chartered accountancy and law-the latter helped "clear thinking and sharpened his ability to articulate".
Most importantly, he believes there is life beyond work. That has even meant walking the ramp and jointly cutting a music album, of course for a cause. Approached by the Joy of Giving Week, an organisation that wants to inspire Indians to do their bit for the underprivileged, Deosthalee readily agreed to sing and selected one of his favourites: Puccho Na Kaise Maine Rain Beetai from the 1963 movie Meri Surat Teri Aankhen. "It was a tough job because the song has a classical music base. On the recording day, I was a little nervous," he later said.
Music has been an abiding passion. He learnt Hindustani classical music for three years and even found time to jam with Shankar Mahadevan at the launch of an academy to train L&Tites.
Deosthalee has two hobbies. First is music and second is talking to people. "My wife says
I don't talk much, but people in office think otherwise," he once said.