Mumbai: The key men in Enam Securities Pvt. Ltd earned their spurs in the rough-and-tumble world of share investment and trading before they branched out into investment banking and broking. The proposed sale of these units to Axis Bank Ltd leaves Enam with its wealth management and asset management businesses.
After building one of India’s largest home-grown investment banks, they are back to where they began, on the “buy side” of the game.
Nemish Shah, the reclusive founding partner of Enam. learnt the ropes under the late Manu Manek, the legendary bear operator whose short-selling of Reliance Industries Ltd (RIL) shares in the early 1980s led to a battle with Dhirubhai Ambani and a temporary closure of the Bombay Stock Exchange.
When Shah, a trader with a penchant for taking bets on underpriced stocks, was honing his skills under Manek, he first met Vallabh Bhansali, a bright young chartered accountant who used to help the Big Bear with his tax returns.
Shah came from a well-to-do family. His father owned a pharma company, which Shah used to manage. A long lock-out in the company left him disillusioned. He drifted into the world of equity trading.
In 1984, Shah and late Manek Bhansali (Vallabh’s brother) decided to take a plunge by setting up Enam Securities, a stock brokerage. That’s how the investment bank got its name N–M; Enam is pronounced the way the acronym is spelt.
Later, Vallabh Bhansali and Jagdish Master came in and built the investment banking and distribution businesses. They prided themselves on taking promising unknown companies public. One of them was a little known software firm called Infosys Technologies Ltd, which did its initial public offer in 1993 with help from Enam.
Shah and Manek Bhansali between them discovered several multi-baggers. A senior executive working for a private equity firm said, “It was Nemish who discovered value in the auto sector and invested heavily in a range of automobile sector stocks including a few auto component firms.” Shah was conspicuous by his absence, but that was hardly surprising as he is known to have a Brigitte Bardot-like mystique about him, taking immense trouble in shunning the spotlight. The suave Bhansali took centre stage at media briefings as well as during interactions with investors.
Shah is known to be deeply spiritualistic, and shuns “sin stocks” of companies that dabble in sectors such as tobacco, cigarettes, liquor and hotels. So much so, that it was rumoured that when RIL picked up a stake in P.R.S. Oberoi’s EIH Ltd, Enam is said to have promptly offloaded its proprietary investment in RIL shares because the Oberoi hotels serve non-vegetarian food in their restaurants.
In an interview to Capital Ideas Online for their book India’s Money Monarchs, a series of interviews with leading Indian fund managers and investors, Manish Chokani, director and CEO, Enam Securities, spoke of the two personalities that moulded Enam. “Manekbhai was very much a value investor taking price as the primary cue. And then going down to business and then to management in that order. Nemish was focused extremely on the size of the win. He was interested in mispriced bets. And bets that could give outsized returns.”
Twenty-seven years later, the deal makers were on the other side of the deal table.