Vivek Oberoi: Money talks, from reel to real
The actor believes in a well-spread-out portfolio—mutual funds, equity, residential property and real estate
The actor, who made his debut in Hindi cinema with Company in 2002, might not have made as much of a mark in a career spanning more than 30 films as one would have liked, but his other ventures have been making headlines. He is setting up his own production house, has invested in start-ups, has been involved in philanthropic activities, and has turned real-estate developer with his company Karrm Infrastructure Pvt. Ltd and a stake in Raghuleela Infrastructure Pvt. Ltd.
Like his business interests, Oberoi’s financial portfolio is diverse. “When it comes to personal finance, I believe in security and I am not speculative,” he says.
“I have a portfolio which is well spread out in terms of mutual funds, equity, residential property and revenue-generating real estate. I believe in a larger and diversified spread. My thought process is about wealth creation and I don’t enjoy surfing the wave.”
In 2012, Oberoi entered the construction business with Raghuleela Infrastructure, in which he owns the majority equity. Last year, the company announced its investment plans in Gujarat, where it is now developing a luxury township and a theme-based resort called Royal Beach City—The Goa. The prices start from Rs25 lakh.
This September, he launched Karrm Infrastructure, entering the affordable-housing segment in Maharashtra. “Now I am going one step down into the sub-Rs10 lakh ticket-size category. The project will take five years for completion. We are targeting 150 million sq. ft in 360 talukas and going rural.”
Oberoi is set to enter movie production with a biopic based on the life of Muthappa Rai, in which he essays the lead role: a man who started as a bank clerk and, accidentally, went on to become a don in Bengaluru. Work on the film will begin by December-January, he says.
So will he be producing gangster films? “I am open to new ideas,” he says. “In fact, I am getting it (the content for the biopic) developed for me from different spaces. I may not act in it but I am getting it developed because that is the kind of story I would like to produce. Movies that will have some kind of social relevance too. I think content is king and I already have a writer on the payroll and people commissioned to write for me.” There will be two more verticals in the production venture other than films: the Web and television.
The start-up investor
Oberoi has invested in several start-ups, mostly in the healthcare and education space, in the last five years. “I have my own family office that takes care of my investments.” And as far as opportunities go, he says, he works on a timeline to exit the venture he invests in, “usually depending on the return of interest that we are comfortable with”. On what he looks for in a start-up, he says: “There are two things to look out for—value or valuation. Value is when there is inherent value where people make money. Valuation is extrapolating a potential number on what the service could be. I invest where there is a value even if it is less. If a business is not self-sustainable, it will go bust with the bubble.” He is not speculative, he explains.
Oberoi says he has come across some exceptional ideas. “I recently met a gentleman who is coming up with thermocatalytic machines for pyrolysis”, an indigenous technology. Pyrolysis machines are used to recycle waste. But there are “haughty kids” too who, he says, “assume that I don’t know anything and they will pitch and think I will throw money. The ratio is 8:2.”
The 40-year-old runs a non-profit called One Foundation. “It purely focuses on empowerment and nation-building.” Under this umbrella, Oberoi runs schools in north India. “We do work around rescuing girls from child prostitution and forced labour. We give free food, healthcare, education, and empower girls.”
Oberoi, who has been working on social causes for 14 years, says he began working with cancer patients initially. “So far, we have helped over 250,000 cancer kids who came from below the poverty line and needed therapy. We also do health check-ups. Now we are empowering women to become financially independent.”
When the tsunami struck in 2004, Oberoi helped in rebuilding the villages affected. “That was my first exposure with housing. We got people from all over the country.”
When asked if he had ever made any financial mistakes, he says he played the speculative wave in real estate in 2005-06 and lost money. “It was a painful process. I realized that the world is not on a calculator, it has so many possible permutations and combinations. It is not as robust as you think when it comes to economic systems. If something happens in China, you get impacted in India. I was getting properties at 10%, acquiring them, making 5-8% above that, flipping them, making 60-70% inherently on return. I was leveraging on that leverage. One day it all crashed. And I suddenly had to pay on multiple properties I had booked and didn’t have the cash flow. It was a hard lesson.”
Now he makes sure everything is in place. “Also I am not a spendthrift. Put together, it is a good, balanced life.”
Name: Vivek Oberoi
Business interests: Real estate and infrastructure
‘I invest where there is a value even if it is less. If a business is not self-sustainable, it will go bust with the bubble.’
Got burnt in the real-estate crash. ‘I was getting properties at 10%, acquiring them, making 5-8% above that, flipping them, making 60-70% inherently on return. I was leveraging on that leverage. One day it all crashed. And I suddenly had to pay on multiple properties I had booked and didn’t have the cash flow. It was a hard lesson.’