Investing all my money in biz not best way to grow wealth: Ambit's Wadhwa

Veteran financier Ashok Wadhwa talks to Pavan Lall about mistakes and opportunities

When it comes to Mumbai’s money men, Ashok Wadhwa needs little introduction. The accountant-turned-investment banker is best known for his bordering-on-brash style and the creation of Ambit Securities, which provides capital and advisory services ranging from business loans to investment banking, asset management, institutional equities and more.

Wadhwa's is a classic tale of a small-town boy turning up in a big city to play in the big leagues –– and making a mark.  

Today, Ambit employs 800 people and its lending business has 55 branches with franchises in Mumbai, Delhi, Bengaluru, Singapore and New York. Its assets under advisory stand at Rs 40,000 crore and assets under management at Rs 18,000 crore.

After having had to put off our lunch plans a couple of times because of family emergencies, we are finally meeting at San:Qi at the Four Seasons. As he pulls in in a silver Porsche SUV, dressed in a navy blue two-piece suit and business shirt minus the tie, Wadhwa looks the way he did when I first met him about a decade ago – a result of regular workouts, swimming and moderate eating. "It's all about a disciplined schedule – no matter what. I'm in bed by 11 pm and am not really as social as many imagine me to be," he says. 

Originally from Kanpur, Wadhwa moved to Mumbai as a child, went to school at Don Bosco (Ravi Shastri was a classmate and neighbour) and then studied commerce at the University of Mumbai. He wanted an overseas education but that was out of the means of his father, who was a modest textile businessman. So he stayed on in India and became a chartered accountant. 

Thereafter, he chanced upon a recruitment ad by global accounting firm, Arthur Andersen. “They were looking for a 35-year-old specialist; I was all of 21,” he says. He applied nonetheless, “got lucky, landed the job, and spent the next 15 years heading their tax business”. He went on to become Arthur Andersen’s managing partner in Mumbai. 

We pause to place the orders, and Wadhwa knows exactly what he wants: “Two pieces of salmon sushi, a small bowl of jasmine rice, and a half-order of kung pao chicken.” I opt for a chicken wonton soup, steamed broccoli with asparagus and sparkling water. 

Wadhwa shares that he is typically conservative about his diet, watching what he eats and also makes it a point to have lunch every Sunday with his 88-year-old mother who still cooks from time to time. I also learn that spirituality runs in the family. "My father was a great follower of Swami Chinmayananda. I was married by Swami Chinmayananda in his temple in Powai, and in our family, every important occasion is celebrated with a visit to the temple. For example, my daughter who was married last week went to the temple to give the first card.” 

Arthur Andersen brought much success. “Perhaps an overdose of success makes one a little arrogant. So, I can't say that during my latter years at Andersen's, I was not a little arrogant,” he admits. That, he adds, has changed quite a bit. 

Lunch is here and he reaches out for a piece of sushi, while I tackle my soup. 

In 1997, Andersen wanted him to shift to Hong Kong but his priority was India, so he moved out and with a few friends, set up a tax and advisory services firm called RSM (for Ratan S Mama & Co) on April 6, 1997. At that time, New York-based private equity firm Warburg Pincus reached out and said it was looking to do something in India “and whether we would be willing to set up a boutique investment bank”. Thus was born Ambit (in 1998), initially identifying transactions for Warburg Pincus. 

The initial capital to set up Ambit came from senior financier Deepak Parekh. He gave Wadhwa Rs 2 crore with which he leased the office space, “and that's how Ambit in its old avatar as Ambit RSM was born”. 

In 2007, Wadhwa wanted to focus on building an investment bank, so he exited the RSM business, and in Aprilthat year, Ambit took on its current avatar. “The only other full-service investment bank then was Edelweiss, run by Rashesh Shah and Venkat (Ramaswamy), both of whom I admired; they served as early motivation.”

In due course, Wadhwa added other business units – equities, asset management and so on, roping in professionals like Andrew Holland. The company had an independent board from the get-go, which consisted of RV Gupta, SM Datta, and later Pradeep Shah, Rama Bijapurkar and Ashwini Kakkar. 

Key deals followed and have included the United Breweries transaction with Scottish & Newcastle, Viacom in India including their first joint venture with Raghav Bahl, Patni/ Apax-iGate transaction, the Centurion Bank of Punjab-HDFC and the Brookfield-Reliance Jio tower deal.

We dig into the main course, and share the chicken and broccoli, both of which are better than they have ever been at the Four Seasons. Is it me, or Wadhwa? Perhaps both, I decide. 

What makes a good investment banker a great one?

Three things, says Wadhwa: “Building trust. To build trust in my business, you have to put your interest behind your client’s at all times, but that doesn't mean you should not be prepared to tell a client when they are wrong. And, the ability to listen and not be judgmental.”

Inspiration for him has come from other business leaders. "Deepak Parekh, Uday Kotak, Aditya Puri from my business environment – these are people I have always admired.” Internationally, his favourite has been Jeff Immelt of General Electric who, despite the ups and some downs, built a world-class company and lived by values. 

Success, famously, also comes at the cost of mistakes, Wadhwa says. The example he gives is of investing in PE firm Ambit Pragma. “I had been very successful in launching the India Value Fund (True North) at the time. I was one of the co-founders, but that was not a licence for me to start a second private equity fund. Clearly, allocating any capital was a wrong decision on my part,” he admits.

“We also set up an asset reconstruction company (ARC), not realising that the success of an ARC is really dependent upon the depth of your pocket, and it is a capital-intensive business; people with limited capital really should not be spending and wasting their time.” The good thing, he says, is they withdrew quickly from those businesses.  

The other is when you empower people and make them independent, it has to come with accountability, says the 61-year-old. "That's where we lost some of our progress. So I would say, my two big weaknesses were – having an over-compassionate attitude, and the inability to hold myself and people accountable."

Where does he see the big opportunities?

"The private wealth business is a huge opportunity given the number of new millionaires being born," he says. “For the first time, I have successful Indian entrepreneurs saying, ‘Investing all my money in my business is not the best way to grow my wealth’.” Also, with most global banks having withdrawn from India, the timing, he says, “is perfect”.