Marwar - - Cover Story - Text Joseph Rozario

Among the most suc­cess­ful sto­ries of the post-lib­er­al­i­sa­tion era in­clude Nir­mal Jain’s feat of cre­at­ing one of In­dia’s largest fi­nan­cial con­glom­er­ates from scratch. An IIM-Ahmed­abad alum­nus and char­tered ac­coun­tant, in a stim­u­lat­ing in­ter­ac­tion, Jain lets MARWAR in on his jour­ney from the cam­pus to head­ing the R25,000 crore IIFL Hold­ings Ltd as its founder chair­man, in a lit­tle over two-and- a-half decades.

Ex­cept for his ex­pan­sive of­fice, ev­ery­thing about Nir­mal Jain be­lies the bil­lion­aire in him. Sim­ple, in­for­mal and mod­est, he brushes off re­cent news­pa­per re­ports about his net worth touch­ing the $1 bil­lion mark, af­ter the pri­vate wealth unit of IIFL Hold­ings, the fi­nan­cial ser­vices com­pany of which he is the founder and chair­man, reg­is­tered un­usual growth, tak­ing the unit’s to­tal ‘as­sets un­der man­age­ment’ to $20 bil­lion.

For all his sim­plic­ity and hu­mil­ity, have no il­lu­sions about the man, how­ever, when it comes to en­ter­prise. Mo­ti­vated and driven, his bound­less en­ergy shows in his rest­less­ness, which com­bined with his sound aca­demic back­ground and at­tributes of hon­esty and hard work have helped him build what to­day is In­dia’s lead­ing fi­nan­cial ser­vices con­glom­er­ate—from scratch!

Hum­ble be­gin­nings

The son of a trader who moved to Bombay (now Mum­bai) at the age of eight from the Jains’ an­ces­tral home in Haldighati near Udaipur, Nir­mal Jain’s fa­ther’s be­quests to him were more in the na­ture of val­ues than a busi­ness legacy. “Hon­esty, in­tegrity and hard work are some of my great­est tak­ings from my fa­ther, and they have been a great con­trib­u­tor in my ap­proach to­wards life and busi­ness. One of the great­est lessons I have learnt from him is that one needs to be con­ser­va­tive, even as one should look for the best op­por­tu­ni­ties to grow," says Jain.

Val­ues apart, Nir­mal Jain is also en­dowed with su­pe­rior in­tel­lect, which he has put to good use by giv­ing him­self a sound ed­u­ca­tion. Con­sis­tently a good per­former aca­dem­i­cally, af­ter his BCom from the Uni­ver­sity of Mum­bai, he ap­peared for his char­tered ac­coun­tancy exam, pass­ing it with a bril­liant all-In­dia sec­ond rank­ing, while si­mul­ta­ne­ously ac­quir­ing a cost ac­count­ing qual­i­fi­ca­tion as well (ICWA). He next pro­ceeded to In­dian In­sti­tute of Man­age­ment, Ahmed­abad for his MBA, and that done, at the age of 23 stepped into the cor­po­rate world, join­ing Hin­dus­tan Unilever in 1989, where he han­dled the group’s com­mod­ity ex­port port­fo­lio for the next five years.

While most oth­ers would con­sider aca­demic qual­i­fi­ca­tions as a vi­tal step­ping stone in the jour­ney to suc­cess, Nir­mal Jain is of the opin­ion that aca­demic bril­liance is not the be all and end all of a suc­cess­ful ca­reer. “Aca­demic suc­cess helps, but I don’t think there is any di­rect cor­re­la­tion be­tween aca­demics and a suc­cess­ful ca­reer as such. Once you leave aca­demics, you reach the school of life, where you learn by hard knocks,” he says.

A fi­nan­cial ser­vices colos­sus

Nir­mal Jain is 51 now and he has al­ready achieved more than what you would ex­pect from a man who started his ca­reer as an em­ployee of Hin­dus­tan Unilever. IIFL, or In­dia In­fo­line Group, the con­glom­er­ate he heads as chair­man, com­prises hold­ing com­pany, IIFL Hold­ings Ltd which has three main busi­ness lines that come un­der IIFL Fi­nance Ltd, IIFL Wealth Man­age­ment Ltd and IIFL Se­cu­ri­ties, or In­dia In­fo­line Ltd. IIFL Fi­nance Ltd of­fers home loans, loans against prop­er­ties, SME and mi­cro fi­nance loans and oth­ers through a panIn­dia net­work of 1,387 branches in 25 states. Un­der IIFL Wealth Man­age­ment Ltd, a mar­ket leader, the group man­ages and ad­vises as­sets worth R1,31,762 crore from 10,000 high net worth fam­i­lies across the globe. Among its prod­ucts in­clude fam­ily of­fice, AIFs, ad­vi­sory and dis­tri­bu­tion ser­vices, etc. IIFL Se­cu­ri­ties, which also is a mar­ket leader in the broking space, has close to 1,200 ser­vice lo­ca­tions com­pris­ing a branch and sub-bro­ker net­work, through which un­par­al­leled re­search cov­er­age on over 500 com­pa­nies is pro­vided.

These apart, the group has its mo­bile trad­ing app, IIFL Mar­kets, on An­droid, which caters to a steadily in­creas­ing num­ber of clients trad­ing through the mo­bile plat­form. The app con­tin­ues to be the high­est rated among peers with over 15 lakh down­loads.

Over­all, IIFL Hold­ings serves 4 mil­lion sat­is­fied cus­tomers across var­i­ous busi­ness seg­ments, has a work­force of over 13,000 and was listed as the top se­cu­ri­ties trad­ing firm in In­dia in For­tune 500 In­dia list in 2014. For FY18, it has re­ported an in­come of R3,863.7 crore and profit of R1,162.1 crore. Its net profit has risen by 35 per cent on a com­pounded an­nual ba­sis since FY14.

A wild, gut-wrench­ing ride

How­ever, be­hind IIFL’s gi­gan­tic pro­por­tions and fame and for­tune lie years of hard work, tri­als, er­rors and misses and, of course, the “hard knocks” that Jain talks about. “Ex­pect your op­por­tu­nity and jour­ney to be a wild, gutwrench­ing ride that could last decades. Only one per­son in 10 mil­lion gets rich quick. The win­ners are end­lessly flex­i­ble, tena­cious folks, who never quit,” he says.

Com­ing from a small busi­ness fam­ily, Jain started his en­tre­pre­neur­ial ca­reer with al­most no cap­i­tal. The only

To be suc­cess­ful, one must al­ways be flex­i­ble and pay close at­ten­tion to mar­ket trends that can quickly cre­ate of de­stroy rel­e­vance. One must al­ways be will­ing to quickly change course to cap­ture new op­por­tu­ni­ties from trends

weapons in his ar­se­nal in those days were hard work, in­tegrity, flex­i­bil­ity and above all, his abil­ity to grasp new op­por­tu­ni­ties. The Hin­dus­tan Unilever stint did serve as a good start, stand­ing him in good stead, as, con­trary to pop­u­lar opin­ion that MNCs and en­trepreneur­ship are dis­con­nected, Jain says he has learnt a lot from the multi­na­tional, which at a later stage helped him put sys­tems and pro­cesses in place and also scale up his busi­ness.

In the mid-nineties Jain quit Hin­dus­tan Unilever to join the Moti­lal Oswal Group, where he helped launch the in­sti­tu­tional eq­ui­ties divi­sion of the group. Work­ing with group co-founder Raamdeo Agrawal, he set up a new re­search unit called ‘In­quire’ (‘In­quire’ be­ing the acro­nym for ‘In­dian Eq­uity Re­search’), which raised the bar of eq­uity re­search in In­dia. It was while work­ing for the group that the en­tre­pre­neur­ial bug bit him. Look­ing back, Jain says, “That was a time when In­dia was dream­ing of growth post eco­nomic re­forms by Dr Man­mo­han Singh and Prime Min­is­ter PV Narasimha Rao. Maybe I was at the right place at the right time, be­cause the cap­i­tal mar­kets were still very small and In­dia was about to take off.”

So, thank­ful for hav­ing learnt his first lessons of the cap­i­tal mar­ket from vet­er­ans like Moti­lal Oswal and Raamdeo Agrawal and con­sid­er­ing him­self for­tu­nate to be an early en­trant in the mar­ket, af­ter one-and-half years he left the Moti­lal Oswal Group to start on his own.

Feel­ing that there was dearth of qual­ity re­search in In­dia, Jain started Pro­bity Re­search in 1995. With lady luck smil­ing upon him, he found good clients soon, rak­ing up rev­enue of al­most a crore. Spurred on by the good start, a few years down, Pro­bity Re­search re­leased a re­port on the IT sec­tor which be­came a rage, given that it co­in­cided with the peak of the dot­com boom. As was nat­u­ral, it height­ened Jain’s ex­pec­ta­tions of see­ing a quan­tum leap in the com­pany’s sub­scriber base, con­sid­er­ing the fact that the re­ports were be­ing reads by thou­sands. But the sub­scrip­tions grew much slower than the us­age or pop­u­lar­ity of the re­ports, be­cause they were be­ing scanned, e-mailed, printed and shared with thou­sands of peo­ple. There was no law that could pre­vent that from hap­pen­ing. In ut­ter frus­tra­tion, he put the en­tire lot of re­search re­ports on the In­ter­net, in the hope that with in­creased read­er­ship, the com­pany would be able to gar­ner some ad­ver­tise­ment rev­enue in­stead. This, how­ever, did not go down well with some of his team mates, who called it “mad­ness”. But it was to serendip­i­tously re­de­fine the com­pany’s busi­ness by tak­ing Pro­bity Re­search in an­other di­rec­tion al­to­gether, mark­ing the be­gin­ning of a long, suc­cess­ful jour­ney.

Hav­ing learnt the bit­ter les­son that peo­ple were not will­ing to pay for in­for­ma­tion but would pay for trans­ac­tions, Nir­mal Jain and team turned to on­line broking in 2001—

which, in­ci­den­tally, was be­com­ing the pre­ferred mode of trans­ac­tions in USA. “We sensed the trends and de­cided to have a tech­nol­ogy-driven plat­form, as it was clear that for the next 20 years, tech­nol­ogy would in­flu­ence ev­ery­thing,” says Jain. So by 2002, the com­pany was a fully-fledged on­line re­tail bro­ker. “Our on­line broking plat­form was called ‘5paisa’, five paisa be­ing the bro­ker­age fee for a trans­ac­tion. This formed the foun­da­tion of the one-stop fi­nan­cial ser­vices shop that we know to­day as IIFL,” he con­tin­ues.

Mean­while, as the com­pany meta­mor­phosed from an in­de­pen­dent re­search house to a broking firm to a fi­nan­cial ser­vices con­glom­er­ate, the name changed too from Pro­bity Re­search to In­dia In­fo­line to IIFL Hold­ings Ltd, as it is now called.

Hon­our and glory

As could be ex­pected, along the jour­ney, IIFL has been hon­oured with pres­ti­gious list­ings and has picked up its fair share of awards too. The more prom­i­nent among these in­clude a Forbes 'In­dia's Super 50 Com­pa­nies' list­ing (a bench­mark to iden­tify In­dian com­pa­nies that ex­hibit high growth in prof­itabil­ity, sales and share­holder re­turns); a 'Out­look Busi­ness Out­per­form­ers' list­ing (a pres­ti­gious list of eight com­pa­nies which have beaten the Sen­sex over a five-year pe­riod); 'In­dia's Great­est CSR Brand' fe­lic­i­ta­tion by Asia One mag­a­zine; a '#1 In­vest­ment Banker in Eq­uity Is­suances for FY18' rank­ing by PRIME Data­base; a 'Great Places to Work' cer­ti­fi­ca­tion; 'The Best Pri­vate Banking Ser­vices Over­all, In­dia' award at Euromoney Pri­vate Banking and Wealth Man­age­ment Sur­vey, 2017; and 'In­dia's Most Trusted Fi­nan­cial Ser­vice Brand (NonBank)' recog­ni­tion by Brand Trust Re­port In­dia Study. These apart, IIFL has also re­ceived the 'Best Cus­tomer Cen­tric Com­pany – Fi­nan­cial Sec­tor' recog­ni­tion at World Qual­ity Congress & Awards, 2017, the 'Best IPO Bid­ding Mem­ber – Re­tail' award at the NSE Mar­ket Achiev­ers Awards, and oth­ers. On a per­sonal level, Nir­mal Jain has re­ceived the 'CA En­trepreneur Leader Award' in the Fi­nan­cial Ser­vices cat­e­gory for FY18, be­sides.

Rid­ing into the fu­ture

Given this blitz of suc­cesses, does it hint at a pos­si­ble plateau­ing of the busi­ness, or a sub­dued per­for­mance in the fore­see­able fu­ture? Jain negates this sen­ti­ment by

paint­ing an op­ti­mistic pic­ture for IIFL, sub­stan­ti­at­ing his growth ex­pec­ta­tions for the group with some quick maths: “In­dia’s Real GDP is 7.5 per cent, while the nom­i­nal GDP is 12-13 per cent. Fi­nan­cial ser­vices is a lever­aged play on the econ­omy, mean­ing, if the econ­omy does well, the fi­nan­cial ser­vices sec­tor will do even bet­ter. So the es­ti­mated growth rate should be 17-18 per cent. If the mar­kets re­main buoy­ant, we could ex­pect to grow at 25-30 per cent, and that would dou­ble our busi­nesses in less than three years. In a bad mar­ket, how­ever, this growth rate can be around 15-20 per cent.”

Though Jain’s op­ti­mism cen­tres around three ma­jor busi­nesses of IIFL—NBFC, wealth man­age­ment and cap­i­tal mar­kets— his over­all growth out­look for the in­dus­try as a whole is pos­i­tive too. In­dia’s fi­nan­cial in­dus­try, he feels, is still at an early stage of growth, con­sid­er­ing the enor­mous size of the In­dian econ­omy and the rel­a­tively low lev­els of pen­e­tra­tion of fi­nan­cial prod­ucts and ser­vices.

As the good times con­tinue to roll for IIFL Hold­ings, the com­pany has an­nounced de­merger of its fi­nance, cap­i­tal and wealth busi­nesses to cre­ate three dif­fer­ent listed en­ti­ties. Asked about the split, Jain re­veals the ra­tio­nale be­hind it: “We be­lieve that all our core busi­nesses have ac­quired a crit­i­cal mass and need flex­i­bil­ity and in­de­pen­dence to grow faster in to­day’s rapidly chang­ing tech­nol­ogy and in­no­va­tion driven en­vi­ron­ment. Each com­pany, listed sep­a­rately can at­tract and mo­ti­vate its key peo­ple with stock op­tions such that their re­wards are strongly cor­re­lated with their per­for­mance.”

Also, he feels that as sep­a­rate en­ti­ties, the com­pa­nies would be sub­ject to pub­lic, me­dia, an­a­lysts’ and reg­u­la­tory scru­tiny, and fur­ther, a clean cor­po­rate struc­ture with no cross hold­ings would en­sure trans­parency, high­est stan­dards of gov­er­nance and com­pli­ance.

Suc­cess mantras

Con­sid­er­ing that Jain has built a colos­sal busi­ness group from noth­ing in a mere span of 23 years, one can’t help won­der­ing about his mantras for suc­cess. Com­ment­ing about it, he says, “To be suc­cess­ful, one must al­ways be flex­i­ble and pay close at­ten­tion to mar­ket trends that can quickly cre­ate or de­stroy rel­e­vance. One must al­ways be will­ing to quickly change course to cap­ture new op­por­tu­ni­ties from trends.” His sec­ond mantra for suc­cess is his fa­mous ‘3Hs’ which he largely at­tributes to his fa­ther: Hon­est, Hard Work and Hu­mil­ity. “To reach the heights of suc­cess, you must be will­ing to do the low­est job,” he ex­plains. “The game is long, and your most valu­able re­source is your in­tegrity. A busi­ness, how­ever small, if run with in­tegrity is a great busi­ness, com­pared to a large busi­ness run with­out in­tegrity.”

To reach the heights of suc­cess, you must be will­ing to do the low­est job. The game is long, and your most valu­able re­source is your in­tegrity

A com­mit­ted phi­lan­thropist

In the midst of all the suc­cess, hon­our and glory, the plight of the less for­tu­nate has not re­mained lost on Jain. In the true spirit of Mar­wari phi­lan­thropy, he con­trib­utes gen­er­ously to so­ci­ety through his char­i­ta­ble unit, IIFL Foun­da­tion, es­pe­cially in the fields of ed­u­ca­tion and health­care. Apart from sup­port­ing the Ashoka Uni­ver­sity (in Haryana), he has un­der­taken the am­bi­tious project of en­sur­ing com­plete lit­er­acy of girls in Ra­jasthan by set­ting up schools in a thou­sand vil­lages over the next 10 years through IIFL Foun­da­tion, in part­ner­ship with the Govern­ment of Ra­jasthan. That apart, his wife Madhu par­tic­i­pates in so­cial wel­fare ini­tia­tives at both the fam­ily level as well as a part of IIFL Foun­da­tion.

Away from the world of fi­nance and en­ter­prise, Nir­mal Jain loves to go on leisurely hol­i­days abroad with his fam­ily, when­ever long va­ca­tions are avail­able. Oth­er­wise, he goes for long walks, or goes swim­ming in the club, or dab­bles in golf. At home, he loves to spend time with his chil­dren, watch­ing movies. He lives in Juhu, Mum­bai with his wife Madhu and three chil­dren Harshita, Kal­pita and Bhavya. Harshita has been work­ing in the wealth divi­sion of IIFL for the last one-and-a-half years and plans to go to Stan­ford Uni­ver­sity soon for her MBA, while Kal­pita and Bhavya are still in school. Asked about Harshita tak­ing on af­ter him at IIFL, he quickly re­minds us that IIFL is a pro­fes­sion­ally man­aged com­pany where all de­ci­sions are taken by an in­de­pen­dent board. And on that note, we wrap up our stim­u­lat­ing in­ter­ac­tion with the mod­est bil­lion­aire that is Nir­mal Jain.

Top left: Nir­mal Jain andR Venkatara­man ( Co­pro­moter and MD of IIFL Group) giv­ing award to an em­ployee at an IIFL em­ploy­ees’ off­site; Top right: Nir­mal Jain and R Venkatara­man wel­com­ing Fi­nance Min­is­ter Arun Jait­ley at the IIFL Wealth event 'Off The Cuff', hosted by em­i­nent jour­nal­ist Shekhar Gupta

From top: Nir­mal Jain and R Venkatara­man ring­ing the open­ing bell at IIFL Hold­ings’ list­ing cer­e­mony in 2005; Nir­mal Jain (cen­tre)with IIFL Hold­ings board mem­bers Kranti Sinha (ex­treme left), A K Pur­war (sec­ond from left), R Venkatara­man (sec­ond from right) and Nilesh Vikam­sey (ex­treme right) Fac­ing page: (Top) Nir­mal Jain and R Venkatara­man at an IIFL team build­ing ex­er­cise in Goa; (Bot­tom) Nir­mal Jain at a team com­pe­ti­tion on the side­lines of an em­ployee off­site in Goa

Top: An IIFL Foun­da­tion pic­ture show­ing Madhu Jain at the in­au­gu­ra­tion of a smart class­room, spon­sored by IIFL Foun­da­tion in Kadechavas, Udaipur Fac­ing page: Nir­mal Jain hol­i­day­ing with fam­ily in Europe: (L-R) Daugh­ter Harshita, daugh­ter Kal­pita, Nir­mal Jain, son Bhavya and wife Madhu

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