It is 8.15 on a monsoon morning in Mumbai. The sky is overcast and the joggers along Marine Drive are enjoying the breeze. But inside the hushed environs of The Oberoi hotel, in the “members only” Belvedere club, Arun Duggal is up and working. He stands up when I arrive, pushing aside his Apple Mac and iPad.
“I worked for 26 years for Bank of America. But today, I don’t know how cool it is to say you are a banker. After all, they are the guys who rip their clients off, make too much money and take too much risk,” he says by way of introduction. He is joking, but only just.
For the truth is, despite playing the part of the foreign banker dressed in suit and tie to perfection, and hobnobbing with the private equity crowd, Duggal is also something of an activist. This 67-year-old may drive a Mazda sports car to work every day and have his own private retreat in the Himalayas, but he is also studying micro-banking and is actively involved with helping talented women get on company boards.
He’s based in Delhi now; after spending almost 23 years in different corners of the globe—the Philippines, Hong Kong, San Francisco and Tokyo. But he remains a frequent flyer and a regular business traveller. At The Belvedere, he is clearly a regular, and the waiter who arrives to take our orders seems surprised when he skips ordering his customary boiled egg, though he relaxes slightly when Duggal orders his usual dalia porridge and a plate of fruits, while I opt for a cappuccino and multigrain toast.
As a young mechanical engineering graduate from the Indian Institute of Technology (IIT), Delhi, in 1967, Duggal spent five years working in different factories before completing his MBA, in 1974, at the Indian Institute of Management, Ahmedabad (IIM-A). He then joined Bank of America, working mostly in corporate banking with oil and gas sector companies like Schlumberger while in New York and then heading the investment banking division for Asia while in Hong Kong, among other assignments.
Duggal retired from Bank of America in 2001. Then he worked as the chief financial officer at HCL Technologies. In 2003, officially retired, Duggal now had the network and the expertise to turn to what gave him the most satisfaction—deal-making. Besides that, he was also involved with microfinance and causes like environmental protection and transparency in business.
We talk about what triggered his latest venture—creating a mentoring programme for women who are good candidates to sit on company boards. “A few months ago, I was attending the Dish TV (the direct-to-home entertainment company) board meeting. Subhash (Chandra) ji (chairman of the board) was also there; he had just come back from Pakistan and was impressed with the quality of programming there. We talked about some major programming initiatives. We also talked about formulating the sexual harassment policy for the company.”
Walking out of the meeting, it hit Duggal that while these important decisions were being taken and policies were being formulated, there was not a single woman in the room, both among the directors or the executives present. “Women are probably bigger watchers of TV serials than men, yet when we discussed an important programming initiative, there was not a single woman present,” he says.
Duggal’s porridge is served; he picks at it a trifle half-heartedly while I perk up at the sight of my cappuccino in a classic Wedgwood cup, as we continue to discuss the need for women in boardrooms.
The former banker talks about another board meeting, this time at Zuari Agro Chemicals Ltd. Duggal met former Union home secretary and fellow board member Gopal K. Pillai, whose wife Sudha was former secretary, Planning Commission. “We were batchmates in the IAS and both retired at the same time, but since then, I have got three invitations to join company boards and Sudha, who is equally qualified, has got zero,” said Pillai.
All of which prompted Duggal to partner with Anjali Bansal, managing director of the Indian business of the executive search consulting firm Spencer Stuart, earlier this year, and begin mentoring a programme for women who can take their place on company boards (the Companies Bill mandates firms to have at least one woman director on their boards).
Duggal talks with pride about his two daughters. “Guess what business my younger daughter Anu wanted to start when she came to Mumbai in 2003? He says: “She wanted to start—a wine bar. And here I was, hoping she would join Morgan Stanley,” he says ruefully. Anu did go on to launch a wine bar, the chic The Tasting Room in Mumbai. Today, both his daughters are entrepreneurs, based in New York.
Duggal is chairman of Shriram Capital, and has a wonderful story on what drew him to the Shriram Group. “When I went in 2004 to visit the founder R. Thyagarajan at his Chennai office, I was really not impressed. It was a small office on top of what was really a middle-class mall. Then I heard the group does second-hand truck financing. For a banker like me, used to doing billion-dollar deals, it really wasn’t impressive,” says Duggal.
"IN PARENTHESISArun Duggal enjoys playing tennis; and driving early mornings from his home in Delhi’s posh West End to the Delhi Gymkhana Club. On weekends in summer, he flies, drives or takes the train to join his wife Rita in Kasauli, at their summer home in a 110-year-old bungalow in the cantonment town. Duggal is a director on eight company boards. These range from e-commerce companies like Naukri.com to infrastructure companies like Adani Ports and Special Economic Zone Ltd."
But a closer examination of the Shriram balance sheet stunned Duggal with the unexpected profitability of metrics like net interest margins, the revenue-to-expense ratio and the low rate of credit losses. Duggal quickly became a believer. Realizing the business could benefit from scale, he tried to raise funding from venture capitalists, most of whom in those days scoffed at NBFCs (non-bank financial companies). Finally, he says, Ashish Dhawan, the founder of private equity firm ChrysCapital, agreed, in a weak moment, to make the trip to Chennai to visit the Shriram offices. Dhawan saw the logic of the Shriram story and ChrysCapital invested $30 million (about Rs.198 crore now), thus cementing Duggal’s first-ever private equity deal.
Duggal teaches a course on venture capital and private equity every year at his alma mater IIM-A. He talks about a recent class discussion: “I took a few sessions on business ethics and the young students there said to me what is this oxymoron? Either you are in business or you are ethical. What is business ethics?” This is clearly a question that engages Duggal and he says he was happy with the discussion. “It was a good starting point”.
By now it’s 9.15am and time for Duggal to leave for his next meeting. He signals to the waiter who brings his black bag and his mobile phone, he says bye and less than a minute later, he’s gone, stepping into a silver Volkswagen and into what is now a bustling Mumbai morning.