The former boss of Gujarat Ambuja who oversaw Holcim’s takeover of ACC and Gujarat Ambuja is still the hottest deal-maker in town. But he has more ammo up his sleeve
With at least five deals spanning over ten years till 2006, Singhvi, the former boss of Gujarat Ambuja, is the last word in cement consolidation. But a financial services merger? That’s bit of an oddball. He’s been a company treasurer, a CFO, is a qualified CA and doubled up as an in-house investment banker for Gujarat Ambuja. But what amazes me the most is after close to three decades of corporate life, he still gets excited enough to roll up his sleeves and do a deal. I have been dying to ask him these questions for long and finally, on a lazy afternoon, we agree to catch up for lunch where he agrees to patiently answer all my queries.
After a two-year stint with the Anil Ambani Group where he was spearheading the group’s ambitious cement plans that never really took off, Singhvi has returned to run Ican Investment Advisors — the Indian advisory arm of Swiss asset management company, Notz Stucki. His office is in Nariman Point, so we plan to lunch at Ziya, Michelin-starred Vineet Bhatia’s (of Rasoi, London fame) avant garde Indian restaurant at the Oberoi.
Ziya’s food is daring. And Bhatia’s fusion of using western European techniques of glazing, foaming and textures gives traditional classics an audacious twist. But for Singhvi, “food is incidental” and today, I am willing to forgo my gourmet instincts. I have a million things to ask. Singhvi looks relaxed, just back from a week’s holiday from Dubai with family. And within five minutes into our conversation, I realise what gives him the leverage to so effortlessly move into corporate board rooms and convince a promoter to do a deal. His hook lies in the relationships that he has nurtured over the years. He’s like the old school banker who would help an entrepreneur friend organise funds and also double up to advise him on the best MBA course for his son.
“Bit of an advisor, bit of a counsellor and a confidante,” that’s how he sums it up as the starters are served momentarily interrupting the thought flow. Dhungar (charcoal) paneer tikka with roasted vegetable chaat and a warm tamarind sauce and subz platter: tandoori cauliflower, hariyali seekh kebab in pomegranate raita set the agenda. But I don’t want to digress.
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Singhvi has seen an Uday Kotak, a Nimesh Kampani or Hemendra Kothari or Vallabh Bhansali in action building institutions over years “banking” on such trust quotient. And that’s where he draws his inspiration. Call it relationship banking, in its truest merchant banking form. “You don’t need to wine and dine to win people’s trust,” he quips. “You just need to keep in touch, keep talking to understand what a person is planning to do to grow his business, challenges, both from outside and within a business family. A lot of emotions are at play.”
Similar conversations with Enam’s promoter Vallabh Bhansali were also how Singhvi figured that Bhansali was open to the idea of a partner to take his business to the next stage of evolution. “But he’s always very value conscious. So from the outset he was clear that any potential suitor has to take care of his team, add value and imbibe the ethos that he stands for.” Singhvi mulled over the idea for a few days and then approached old friend Shikha Sharma at Axis Bank. The idea culminated in the Rs 2,067-crore frontline transaction of the year.
Deal structuring is critical and working in strong promoter-led companies throughout gives Singhvi the instinct to put a premium on people’s emotions. “Joint ventures (JVs) don’t work in the financial sector. From Hemendrabhai to Nimeshbhai and Uday, they’ve all seen that. Axis-Enam had to be a merger. Enam gets the balance sheet support that it so desperately needed, Axis gets IBanking and equity capital markets team and the promoters of Enam become a key shareholder of Axis with board representation,” Singhvi’s post-mortem is candid. The Axis-Enam family portrait is the best that can be. And as he puts it: “I am not a banker. So the promoters can have full faith in me because I understand the sensitivity of these things. Nobody had a clue that we were working on something like that. There were no leaks whatsoever.” And even though that’s been a sore point for our journalistic egos, I have to confess it’s a valid point.
Just like Enam, Singhvi spots tremendous opportunity in the consolidation story of several family-run or promoter-led businesses and that’s where he now wants to focus. “I don’t want to do hands-on operations work any more.” he says. With family shareholding getting fragmented and newer generation stepping in, such businesses will take a new and interesting turn and the role of a brain trust will be very strategic.
Our main course is served. Its dum parda subz biriyani for Singhvi, which, for the uninitiated, is assorted vegetables layered with aromatic rice, encased in a flaky crust served with kachumber raita. For me its patti aloo — potato rolls filled with asparagus and corn, kokum-coconut sauce, south Indian beetroot and curry leaf khichdi.
News follows Singhvi who is known for his plainspeak. And it hasn’t stopped at Axis-Enam. Being a minority shareholder, he has been one of the first to criticise the Hero-Honda split. The opacity surrounding the deal made Singhvi raise questions of corporate governance. “The trust that the Hero brand had generated over 25 years, they diluted it in one day,” he says. “I don’t think the contours of the deal, pricing, the royalty issue were settled now. To me it was a done deal when Honda Motors decided to go it alone and the Munjals had agreed to it. Had I been the CFO, I would have disclosed all details to shareholders right then.”
At Ican, a firm he floated with a lot of fanfare, things are beginning to stabilise. It went through its own share of churning, with the market meltdown. It had then downsized operations, slashed the capital deployed and reduced its portfolio of heavyweights and large-cap investments like ABB, Seimens.
Today bellwethers like Hero Honda, Maruti, L&T, HDFC, Infosys or ACC are still stories that Singhvi firmly believes in, even though, sectorally speaking, he’s turned bearish on cement at least for the next 12 to 18 months, he tells me over our post-lunch masala tea. But now newer entrepreneurs and small-cap ideas – from Zodiac to Camlin and Navneet Publications – attract him equally if not a little more. There is a better manoeuvrability too as Singhvi has bought out the other promoters in the company and is in complete control. “We no longer are into constant portfolio churning or actively managing day-to-day investments for the funds. That would mean I again get sucked into an oprerational role,” he points out. So now with a smaller team of six, Singhvi is content playing an advisory role even for the fund. That way he has time to do much more — this includes devoting more time to Samparc’s seven-but-soon-to-be-nine orphanages, an organisation with which he is deeply involved.
After all, there is more to life than stitching together deals.