In December 1985, a newly married, out-of-work chartered accountant interviewed for a job with Narotam S. Sekhsaria. The then managing director of Gujarat Ambuja Cements Ltd was impressed with the young man’s credentials, but before offering him a job, he wanted to know how long he could stay committed to the cement firm. After all, in his previous job at Century Enka, the chartered accountant had stuck around for only six months. The job-seeker assured Sekhsaria that he would be there “as long as you want me”.
True to his word, Anil Singhvi quit the top post at Gujarat Ambuja on 30 April 2007, a year after Sekhsaria sold his stake in the company to Swiss cement maker, Holcim, and more than 21 years after that conversation.
Last fortnight, Singhvi embarked on his new assignment, as chief executive officer of Ican Investment Advisors Ltd, the Indian advisory arm of Swiss asset management company, Notz Stucki.
Incidentally, both Notz Stucki and Holcim are Swiss firms. And the Sekhsaria family that sold its stake in Gujarat Ambuja to Holcim holds about 10% in Ican. Singhvi's holding in Ican is 26%. In fact, Singhvi’s new office is just across the floor from his old one.
Perhaps it’s not such a dramatic switch. After all, Singhvi has been the in-house investment banker for Gujarat Ambuja for more than two decades. “I am going back to my first love—finance. With the corporate finance team of Holcim looking after this aspect, I asked myself, do I want to be an operating cement man? The answer was ‘no’,” Singhvi says.
We meet over drinks at the crowded Jewel of India bar in Worli on Singhvi’s second day at his new assignment. The 47-year-old says he’s wanted to make the move for three years now. “I’ve had enough of cement. Cement is a very capital-intensive business. Money is as important a raw material here as limestone in the cement industry.”
Till last month, he ran a team of more than 5,000 employees spread over 40 locations across India. Now, he has 10 people, including his trusted secretary of eight years. Perhaps it is a dramatic transition. “How many people does Warren Buffett have? Finance is a different ball game. You don't need too many people to add value to wealth,” he says as he swigs his Foster’s.
In India, Ican manages some $400 million (or about Rs1,640 crore) of Notz Stucki's $16 billion assets. Singhvi wants to raise that amount to $1 billion in 15 to 18 months. “I don’t want to be a typical fund manager and write cheques,” he says.
He also wants to start a wealth management business in due course. “We don’t want to be only in the business of multiplying money. The focus won’t be on returns, but customization of one’s needs. We will offer tailor-made products with personalized services. For instance, we will identify the ideal philanthropic organization if you want to make good use of your money for charity and find you the right law firm when you want to pick your heir,” he says.
I ask him whether his wealth management wing will buy air tickets for its customers, do hotel bookings and take their dogs for morning walks as a few others do. But Singhvi would rather discuss the third area of his new business—private equity. “We will be a boutique private-equity firm and invest small money, between $5 million and $20 million, in chosen unlisted companies. We will form consortiums in the private-equity space,” he says.
Singhvi was the brain behind one of India’s first private-equity transactions in 2000. In 1999, Gujarat Ambuja bought the Tata group’s stake of more than 14% in India’s largest cement maker, ACC, for Rs1,000 crore, pipping to the post bigger rivals such as Larsen & Toubro, Grasim and Lafarge.
Back then, the deal created a sensation. The Tatas had decided they would exit the cement business after Indian financial institutions resisted a move by the group to raise its stake in ACC to 20% through a preferential allotment.
How was the deal struck? Gujarat Ambuja formed a special purpose vehicle, Ambuja Cement India Ltd, to buy the Tata Group’s holding in ACC. The very next year, the newly-formed company offered General Insurance Company and AIG 40% private equity in the special purpose vehicle.
Five years later, in 2005, Holcim took a controlling stake in ACC by buying out GIC and AIG, along with part of Gujarat Ambuja’s stake. By 2008, the special purpose vehicle will be wholly owned by Holcim, taking its stake in ACC to 38%.
That deal was one of the biggest highs in Singhvi’s career at Gujarat Ambuja. “What differentiated us from others was the speed at which we worked. Everything, from structuring the SPV to arranging funds, was done at electrifying speed,” Singhvi says.
Speed has always been his forte. Before the big bang ACC deal, Gujarat Ambuja acquired the ailing Mody Cement in record time. He also made Bank of America disburse Rs350 crore at 24 hours’ notice to fund Gujarat Ambuja’s acquisition of DLF Cement.
The net result of all these acquisitions? In financial year 1986 when Singhvi joined Gujarat Ambuja Cements as an assistant manager, its market capitalization was $5 million, the first plant with 0.7 million capacity had not been set up and its balance sheet did not have the profit and loss account. Today, its market capitalization is $5 billion, production capacity 17 million and expected net profit in 2007 is $350 million.
Singhvi says the Ican venture will keep him going for the next five years, until he retires at 52. “I have other things to do. I will work for the orphanages which my uncle has set up and play the tabla,” he says with a straight face. Samparc, an initiative of Singhvi’s uncle, now runs seven orphanages across Maharashtra which house 550 children. The plan is to expand it by setting up rural hospitals and homes for elderly people. He has been learning the tabla from Guru Vinayak for seven years now.
Can he repeat the Ambuja success story with Ican, and that too in a span of five years? “I am a born entrepreneur and will die an entrepreneur. My sole objective is creation of value,” he says. Then, couldn’t he have continued with Gujarat Ambuja? “It’s best to leave when you are at your peak. It’s like calling it a day after leading your team to the victory in World Cup cricket.” Wonder if Ponting would agree.
Name: Anil Singhvi
Born: 1960 (in Rajasthan)
Education:B.Com from Jodhpur University. Completed the articleship for his CA from Deloitte Touche.
Work Profile: Started with Blowplast in 1982; after three years, joined Century Enka for a short stint. Moved to Gujarat Ambuja Cements in 1986 as assistant manager and rose to become MD in 2006. He left the firm in April and is now chief executive officer at Ican Investments Advisors Ltd.