The black Porsche Panamera parked outside the Dheeraj Arma building in suburban Mumbai’s Bandra (East) area looks out of place amid the lawyers in black coats streaming in and out of the neighbouring Bandra court, the crowd at the railway station around the corner and squatters all over.
I meet Sarang Wadhawan, the 33-year-old managing director of Housing Development and Infrastructure Ltd (HDIL), in his chamber on the ninth floor of the building. Tall and dressed, as usual, in well-tailored clothes, he looks less hurried this time.
Our last meeting, over a year ago, was in the midst of the economic downturn. Wadhawan and his team were busy setting things right—tweaking their business model and keeping away from new sectors, such as power, gas and hospitality, that they knew wouldn’t sustain them through the crisis.
He is a little more forthcoming this time too, possibly secure in the knowledge that the worst seems to be over for the real estate sector—and that they came out relatively unscathed.“The recession caught us all by surprise. But in the last one year we took the right decisions, were open and spoke to our investors almost on a daily basis,” he says.
Till 2008, Wadhawan may not have imagined that his firm, described as India’s largest slum redeveloper, would do anything else. Yet as the downturn hit in 2008-09, HDIL changed gear and tapped, for starters, the safer residential sector.
Transformer: Wadhawan has been focused on turning his company from a slum redeveloper into the corporate brand HDIL. Illustration: Jayachandran / Mint
Today, the firm’s got a different image. And he’d rather talk about his showcase project—the Mumbai International Airport Pvt. Ltd (Mial)—than why the firm had to opt out of the redevelopment of one of Asia’s largest slums, Dharavi, in 2009.
Wadhawan, who joined the company in 2000, believes two factors played a key role in HDIL’s corporate branding. One, a June 2007 initial public offering (IPO), which consolidated its real estate business. Two, the extravaganza called HDIL India Couture Week, a collaboration between the Fashion Design Council of India and HDIL, which started in 2007. “It was a conscious, well-thought decision and this association will help us,” he says of the Couture Week.
HDIL’s core remains its land banking business, in which it typically develops infrastructure and sells development rights. The Mumbai-focused developer has a land bank of 2,500-odd acres. Just before its IPO, HDIL had 45.5 million sq. ft of space under development, comparable only with India’s largest developer by market value DLF Ltd, which had 44 million sq. ft under construction.
HDIL probably never imagined that it would not be part of the Rs15,000 crore Dharavi redevelopment project. In one of our conversations in 2008, Wadhawan had said his firm was capable of single-handedly executing the project, and was ready to bid for all five sectors there. After the bankruptcy of its partner, Lehman Brothers Holdings Inc., in 2008, HDIL was forced to pull out completely from the Dharavi project in March 2009—an outcome that continues to surprise many. Senior Maharashtra government bureaucrats say it’s ironical that the best, and probably most eligible, firm in the business of slum redevelopment is out of the Dharavi project.
Sipping my second cup of coffee, I remind Wadhawan that the Dharavi project is yet to take off. He explains that the project has been “on the anvil for eight years, plagued by (the) overexpectations of people and the lack of someone to take responsibility”.
He is more forthcoming, however, about the seven-year Mial project that will relocate around 80,000 families. Under way despite the hiccups and delays, it will generate 43.4 million sq. ft of development rights and is valued at around Rs6,700 crore, according to a report by brokerage firm Prabhudas Lilladher Pvt. Ltd.
“Mial is just as difficult as Dharavi. If we can handle 80,000 slum dwellers, the government also can,” he says.
For a company that is one of the largest players in the real estate business after DLF Ltd and Unitech Ltd, there is, strangely, only one spokesperson—Wadhawan himself. A second-generation developer, he will tell you that he learnt the tricks of the trade from Rakesh Kumar Wadhawan, his father.
Wadhawan senior is the company executive chairman, but not as hands on as he was till the son took over. Sarang Wadhawan, however, says the veteran is still involved in the big decisions.
“The days are busy, so often between 10pm-1am, I sit down with him and chat. We talk about business, strategy,” says Wadhawan.
He says he was into the family run business for years before the company went for its IPO. From 2000, on his return to India after a management degree in finance and marketing from the University of Houston, followed by a six-month internship in “a small company that dealt with plasma reactors for garbage disposal”, Wadhawan was on home turf. In the run-up to the company’s IPO, he simply followed his father’s instructions, spending days at a project being developed in Mumbai’s Andheri area and interacting with government officials to understand the key rules of project approvals during countless rounds of Mantralaya, the state secretariat.
There isn’t a speck of dust on his designer shoes now but he still manages to watch every project site, workers and every bag of cement that comes in through webcams in his plush cabin.
Despite the fiercely competitive nature of the real estate business, Wadhawan does have friends within the industry. He counts Vikas Oberoi, managing director of Oberoi Constructions Pvt. Ltd, and Boman Irani, chairman and managing director of Keystone Realtors Pvt. Ltd, as two of them.
But right now he is ecstatic about his newborn boy. “We have named him Abhay,” he says His three-year-old daughter Sara, he adds, goes to a playschool close to their home in Pali Hill, Bandra.
He has a hectic schedule, shuttling between his home and office in a Ferrari F430 Spider, Porsche or Roll-Royce, and travelling to Delhi regularly for project approvals. But sometimes, on a lazy Sunday, Wadhawan goes for a cruise in his 90ft yacht, a Ferretti 881 he bought a year ago, and which is parked at the Gateway of India.
So where did he go for his last holiday? “I haven’t taken a holiday in two years. The recession, you know,” he chuckles.