It is only natural that investment bankers make the news, but Ashok Wadhwa, the 52-year-old chief executive officer (CEO) of Ambit Holdings Pvt. Ltd, has quietly gone about making a name for himself as the best dealmaker as far as news and newsmakers are concerned.
His Ambit Holdings is the common factor linking recent big-ticket deals—Diageo Plc’s acquisition of a majority stake in United Spirits Ltd (USL), iGate Corp.’s purchase of Patni Computer Systems Ltd, Aditya Birla Group’s acquisition of a stake in Living Media India Ltd, and Reliance Industries Ltd’s investment in the Network18 Group.
Wadhwa rates the USL-Diageo deal among the most “complicated, challenging and satisfying” transactions he has handled, because of the Indian spirits maker’s sizeable distribution and manufacturing assets and the various regulatory barriers in the industry.
In November, the UK-based Diageo agreed to buy 53.4% of USL for Rs.11,170 crore.
“As a friend, it was my job to help him (USL chairman Vijay Mallya) make up his mind on whether he should offer a majority stake in the company, and as an adviser it was my duty to structure the deal correctly,” Wadhwa says, sitting in the rooftop lounge of Ambit House, his company’s head office in central Mumbai.
As an intermediary who has had a ringside view to more corporations growing by divesting assets and investing in new ones, Wadhwa, Ambit Group’s CEO, says Indian companies are maturing fast with promoters increasingly turning amenable to separate value creation from emotional attachments.
A case in point is another large deal brokered by Ambit—Living Media India’s 26% stake sale to the Aditya Birla Group. While the media conglomerate’s top management and Wadhwa’s team brainstormed over the best suitor for the stake, promoter Arun Poorie kept a distance.
Wadhwa believes the promoter selling his stake should remain a few steps away from the initial stages of a deal-making process, like Poorie did.
“They are the ultimate decision-makers and can’t afford to commit themselves at an early stage. They should retain their flexibility, which may be required at a later stage,” Wadhwa says. “Many a times, transactions remain incomplete due to the emotions of the promoter taking over his sensibilities.”
With transactions such as the Living Media-Aditya Birla and the USL-Diageo deals, 2012 was a good year for Wadhwa and Ambit, which completed 15 years of existence in 2012.
Over the years, Ambit has consistently helped seal deals in the media and entertainment sector. The investment bank has worked with almost all major media houses in the country, including UTV, ABP Group and Balaji Telefilms, helping them raise funds or foster strategic partnerships.
But media isn’t the only success story for Wadhwa, a chartered accountant who was born in Kanpur and raised in a middle-class housing society at Mahim in central Mumbai.
In the 15 years since he left what was then Arthur Andersen, five years before the accounting firm imploded after details of its role in the Enron scandal emerged, Wadhwa has built a group that spans corporate finance, private equity, capital markets and institutional equity broking, investment advisory, and private wealth management.
So, what makes Wadhwa tick?
One of Wadhwa’s strengths, his friends and colleagues say, is his ability to foster relationships and sustain them in the long run.
Dinesh Kanabar, one of Wadhwa’s first business associates and long-time friend who is currently deputy CEO and chairman of the tax practice at KPMG, says Wadhwa can even advise a client against going ahead with a deal if he feels the time is not right, even if it means sacrificing his own fees. “Whether a transaction happens or not, he remains committed to maintaining relationships,” says Kanabar.
Wadhwa and Kanabar co-founded Ambit RSM Pvt. Ltd in 1997. The two amicably parted ways when a decade later the taxation advisory part of the business got merged with PricewaterhouseCoopers, where Kanabar moved to as chairman of the tax practice.
Another strength is his conservative approach to running his business.
When the economy was going through a rough patch in 2011-12, an acquisition deal that the Ambit Group’s investment banking arm had advised on fell through. “Ashok said we need to take the revenue hit in real time without blinking,” says Saurabh Mukherjea, head of equities at Ambit. “He immediately sent an email to the shareholders of the company apprising them of the situation rather than trying to procrastinate or prevaricate.”
The founding principles of Ambit—“think straight and talk straight”, “quality in everything you do”, and “client first”—have been inspired by Wadhwa’s stint at Andersen, says Mukherjea, who has worked closely with Wadhwa in the past two years.
Wadhwa’s contemporaries praise his marketing skills as well—also nurtured from his days at Arthur Andersen.
“When I had joined, the tax profession wasn’t as dynamic as it is now. It was hard to attract young talent into the space,” says Mukesh Butani, chairman at BMR Advisors and managing partner of BMR Legal, who was hired at Andersen by Wadhwa. “Ashok changed that with his leadership, focus on multinational clients and marketing skills.”
For sure, it isn’t as if Wadhwa has been a success at everything he’s done or touched.
He admits to “erroneous recruitments” and his inability to retain some good employees as Ambit was growing. Wadhwa was unable to retain a former head of Ambit’s equity research division for too long, before Mukherjea stepped in. The institutional equities business too has seen a lot of churn, including at the top with the head of equity research being changed thrice in as many years.
“In the last five years, the institutional equities business has gone through serious highs and lows,” Wadhwa says. “We have to acknowledge that we made some errors in recruiting people. Also, as the high was occurring, we couldn’t retain some of the good people.”
Nowadays, with an established team of professionals taking the workload off him, Wadhwa spends more time with his family, making up for all that he missed during the initial days of Ambit.
He enjoys travelling and watching movies with his wife, Reena Wadhwa, a television actress-turned-entrepreneur whose company Luxury Goods Retail Pvt. Ltd is the India partner of Italian luxury brand Gucci. Owing to Reena’s business interests, one trip to Italy every year is a given for the couple.
Reena recalls Wadhwa being “aggressive” and “impatient” in achieving his goals in the initial days of their marriage. This sometimes led to him “losing patience with the people around him”, but “over the years, he has become more accepting of the strengths and weaknesses of people, including his own”, Reena says.
“My belief is that I run Ambit not because I am the largest shareholder, but because I am the best qualified person to manage it,” Wadhwa says. “Should there be a better qualified person than me to run the company, then for the sake of my own investment, I will hand over the reins.”