“He is a busy soul,” says D. Kohli of Torque PR, who worked closely with Shravan Gupta in the past. It seems like perfect description for an entrepreneur, who challenged the status quo, dared to tread the less-trodden path, and pushed the family business into uncharted waters. Shravan, Executive VC & MD, Emaar MGF Land, represents the ambitious breed of realtors who wish to bring in an infrastructure revolution in the country. Says Satish Kannav, Analyst, Arihant Capital Markets, “We saw the era of IT, now real estate is the sector to look out for. Major real estate players will be the Infosys and Wipro of tomorrow.”
So, what has Shravan really done? First, he spearheaded MGF’s (Motor and General Finance) diversification into real estate. This was when he realised that the margins in the traditional financing business were shrinking and eroding, and competition was likely to intensify as leading banks entered the retail and personal loans segment. His realty plans were measured too. “He is a data-driven man,” exudes someone who works closely with the group, about this graduate from SRCC, Delhi University.
Once convinced, Shravan thought big and different. For instance, MGF joined hands with Emaar Properties, one of the world’s leading real estate companies that built the world’s tallest building, Burj Tower, to bring in the largest FDI in the real estate infrastructure sector. Analysts agree that the alliance was one of the turning points for MGF, as it was catapulted into the big league that includes names like DLF.
Explains Ginetta Vedrickas of India Development Forum, “Having taken Dubai skywards, Emaar is doing the same in India.” Adds Rajan Ahuja, Realty & Verticals, a commercial property agency, “MGF’s focus is on real estate and the credit goes to Shravan.” Another close aide feels that Shravan “is a visionary with strong viewpoints, and his focus is the development of infrastructure.” Take the case of how MGF ventured into malls. Its primary focus is in the high-growth NCR region.
Moreover, it has tried to be at the high end. MGF’s malls are planned, situated only at prime locations, and have shops of leading brands like is the case with Delhi’s ‘MGF Metropolitan’. “All our projects are undertaken only after extensive market research,” remarks Shravan. This strategy enabled MGF to dispel any possible question marks. Agrees Kannav, “The growing mall culture is certainly maddening, however, the sustainability of many players is questionable.” True, for future development will be demand-led, and the second-rate malls will die their unnatural deaths.
An edupreneur at heart, Shravan is of the view that the immediate need of the society is higher and quality education for the coming generation. That’s the impetus for his next big venture, he has rolled out a plan to open 100 schools across India. It will lead to a balanced portfolio of businesses. Explains P. Banerjee, an equity analyst, “He is aware of the benefits of a diversified portfolio; there is no dearth of funds and diversifying into education will help enhance MGF’s brand image and credibility.”
However, the biggest challenge for Shravan is staring him in the face. In 2007, several real estate players raised funds from the capital markets and even gave handsome returns to investors. Agrees Sunil Rao, Analyst, Arihant Capital Markets, “The general trend was of real estate and infrastructure; considering the development spree and the performance of companies in implementing their order books positions. DLF was a huge success, and many real estate IPOs have been slated for 2008.”
One of them will be Emaar MGF’s, which is estimated to raise $1.7 billion and is slated to be the second-largest IPO in the sector. Asserts Shravan, “The IPO is only the first step in a long journey.” Company sources contend that while part of the proceeds will be used to construct hospitality verticals, malls and IT parks, another chunk will go towards repaying debt, and the balance for land acquisition. Comments P. Venkatesh, analyst, P. N. Vijayan, “Ever since the tie-up with Emaar, MGF has taken great strides, and its IPO will be sought after as they are long term players.”
In the next few years, Shravan hopes to develop integrated townships of global standards. Says Sanjay Kumar, Quebrex, a commercial property agency, “He is leading the business in the right direction and all projects have been highly successful.” Echoes Ahuja, “A lot of innovative thought and human perspective has been put in and, in the last two years, the ripple effect has been great.”
This is even reflected in the manner in which former employees talk about Shravan. “He is employee-friendly and has no airs about himself. We looked up to him for advice and the experience of working with MGF was a great learning process,” says one of them. “The working culture has changed, employees have become more responsive, and customer service has become great,” is how another one describes the management style of Emaar MGF.
But there are risk factors in the offing for realtors. The property market can crash. Any policy changes can wreck havoc with plans. But as Shravan leads MGF to newer paths, he can probably make a New India happen soon.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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