The finance company’s new chairman and managing director may be more low-profile than its promoters, but he’s no less ambitious.
Brothers Malvinder and Shivinder Singh love to be in the news. But when they announced that they had resigned their board positions in Religare earlier this week, there was some disbelief. Would they exit the financial services company, just like they exited Ranbaxy? Is it because Religare wants a bank licence? Whatever the reason, Religare, they said, will now be in the hands of Sunil Godhwani; the chief executive has been made chairman and managing director.
Just who is Godhwani? He is as low-profile as his company’s promoters are high-profile. He comes from an old business family of Delhi with interests in leather, though the Godhwanis were never a part of the city’s corporate elite. Their friendship with the Singhs goes back two generations. Like the Singh brothers, Godhwani is a follower of the Radhasoami Satsang. The Singh brothers treat him like an older brother.
Some time in 2001, the brothers felt the need to grow their financial services business. The family had acquired a non-banking finance company called Empire Capital and renamed it Fortis Securities. It was a small outfit. They asked Godhwani, who had an analytical mind but knew little about financial services and less still about stock markets, to run it. He came on board on August 1, 2001. Godhwani was given a small office at Connaught Place to lead a team of 19. His desk was brought on a pushcart from the furniture market close by.
Eight years later, the company has been renamed Religare Enterprises (Religare is Latin for religion or values that bind people together; the brand is owned by the Singhs). Its headquarters has moved to two huge offices in south Delhi and Noida spread over 750,000 square feet. It has made three acquisitions in India and abroad, and failed in at least one: AIG Investments which was bought by Richard Li.
Godhwani — aggressive, assertive, tough-talker and butt-kicker — wants to make Religare one of the top five global names in financial services “much sooner than others think.” (In the past, Malvinder would often talk of taking Religare to the same league as Merrill Lynch.)
The Singhs moved out, according to Godhwani, purely for corporate governance reasons. Regulators abroad, he says, take a positive view when they find only professionals on the board. But does it mean the Singhs will disengage from Religare? Not really, along with Godhwani, they form the promoters’ council, which takes a view on all strategic matters. And they continue to be the largest shareholders. Godhwani owns less than 1 per cent of Religare. He is in talks with three people of international repute to now join the Religare board. “If you read international business magazines, you’ll recognise the names,” he says.
The three began to discuss the matter after Fortis acquired Parkway hospitals of Singapore last month for over $650 million. It was decided that Malvinder will drive Parkway, Shivinder Fortis and Godhwani Religare. Malvinder will, thus, relocate to Singapore. That the Singhs would exit the Religare board was decided just last weekend, Godhwani discloses.
The incident shows Godhwani’s importance in the Singh brothers’ business — they made Rs 10,000 crore in 2008 when they sold Ranbaxy to Daiichi Sankyo of Japan. He is on the board of Fortis as well as Parkway (he was also on the Ranbaxy board till it was sold.) He advised the brothers on the Ranbaxy sale and the acquisition of Wockhardt Hospitals. He also drove the Parkway acquisition. This was an asset the Singhs had eyed for a long time. “I initiated the talks with TPG Capital, which wanted to hold on to the investment for another three to four years. Malvinder and Shivinder came in only in the last one month,” he says.
“I have a huge fascination for healthcare. It’s all about relationships,” he added. What Godhwani means is that Religare can now build contacts in Singapore on the back of the Parkway acquisition.
Will the exit of the Singhs and Godhwani’s elevation in any way change the way Religare functions? That doesn’t look likely. Religare has always been Godhwani’s show. There are chief executives to run the various businesses. He will continue to do that. “I will look at vision and global acquisition,” he says.
Godhwani’s subordinates say he is a people’s man and is willing to give elbow room, of course with checks and balances in place. “I run the company like I own it. I have passed on this empowerment to my chief executives. It is the Religare virus,” Godhwani recently told Business Standard.
When he had joined Religare in 2001, Godhwani had asked his men to write on a plain sheet of paper where they thought the company would be in 2005, 2010 and 2014. The responses were sealed in an envelope and kept in a safe place. The 2010 envelope will be opened in November. Will Godhwani have surpassed the expectations of his first team (more than half of the 19 are still with him)? In 2005, he did.
