Kerala is not just God's own country, where tourism and tradition define its global appeal. Wealth and entrepreneurship also distinguish Malayalis on the global map. The Times of India brings you a list of the 10 richest Malayalis on the basis of their net worth
Even as his wealth has multiplied, M A Yussuffali, the world's second-richest Malayali with headquarters in Abu Dhabi and a net worth of about Rs16,300 crore, makes it a point to stay connected to his small-town roots.His 113 hypermarkets spread across nine countries rake in around Rs37,000 crore annually ."Around 24,000 out of 32,000 employees are from Kerala; 4,000 are from my own village Nattika," Yusuffali says.
"Do you know that I don't have to pay for fish back in my native village? I have given jobs to the youth from all communities, some of whom are from fishermen's families.So, when I'm around, their parents always make sure that I get fresh fish." A unique aspect is the composition of this rich list--it cuts across religions. Many in the list, including the top three, are self-made. Coming from a milieu where money-making was almost considered a sin, their small trader background was often their only capital when they started. The list of the 10 richest Malayalis is as diverse as it is impressive. The core businesses of these magnates range from construction, retail and jewellery to education, banking and software.
Billionaires rarely talk about their wealth. Almost all the businessmen on our original shortlist were happy to speak to TOI - until we started asking them about their personal wealth. One of them deflected us by saying, "I didn't worry about riches as long as I have appam and egg curry on my breakfast table."
That made our life a lot more difficult, because most of them own either private or closely held companies which are not listed on stock exchanges and therefore do not lend themselves to ready estimates of their market value. So, our Malayali rich list is born not out of any one standardized methodology but a mix of valuation processes like street or stock market value, and peer comparison. We also relied on company data; interviews with promoters, competitors, investors and analysts; and background checks. In cases where we could not get the exact value of wealth, we have tried to arrive at its fair value (please see accompanying report on methodology). Our calculations also do not take into account assets such as private residential properties and art collections. They are, at best, ballpark estimates. But they do convey a sense of what our richlisters are worth.
Amirs From Kerala
Ravi Pillai, chairman of the Bahrain-headquartered RP Group, tops the list with a net worth of Rs18,500 crore (see Top 10); much of the wealth of this construction tycoon comes from the profits of Nasser S AlHajri Corporation (NSH), a company he founded in 1978 in Saudi Arabia. Says Pillai, "I was a contractor with public enterprises in Kerala before I came to the Middle East. A strike at one of the undertakings forced me to look for opportunity elsewhere. Of the 500 people working with me, I took 200 to Saudi Arabia. If the strike hadn't happened, I wouldn't have made my fortune." Half of those who figure in the Top 10 made their fortunes in the Middle East in the 1970s. Partly , this has to do with the fact that despite new-found oil reserves, the region was quite backward then and lacked local initiative.
Yusuffali created a retail empire that originated in the UAE. He recalls those early days: "I landed in Dubai in a ship named Dumra on December 31, 1973. I found Abu Dhabi a town without a steady supply of electricity or a proper sewage system. Whenever temperatures rose - sometimes up to 52 degree Celsius, along with 84 percent humidity - we used to sleep on the roof."
Pillai is a first-generation entrepreneur with roots in Chavara, near Kollam; his parents were farmers. Between NSH and 25 other companies he owns, they generate revenues of Rs26,800 crore annually. Other than construction, Pillai has a strong presence in travel and tourism, healthcare and education, mainly in India and the Middle East.
Often called 'Ambani of the Gulf', Pillai shot into limelight when he acquired Leela Resorts in Kovalam from the Mumbai-based family of C P Krishnan Nair, who was for decades one of the best-known faces of Malayali entrepreneurship. (For the last few years Capt Nair's elder son Vivek has been working hard to reduce the group's large debt burden.) P N C Menon is the third-richest Malayali in the world with a net worth of Rs13,000 crore. His holding company, the Dubai-headquartered PNC Investments, generated revenues of 1.2 billion dirham (Rs 2,107 crore) during 2013, with net profits of 88.4 million Dhs (Rs150crore).
Having lost his father when he was 10, Menon discontinued college to become an interior designer at Thrissur where his father once ran a small business. One day in 1976 his fortunes changed when he met Brig Gen Suleiman Al-Adawi from Oman in the lobby of a Kochi hotel. The general invited him to Muscat where the duo founded an interior design firm with a bank loan of 3,000 riyals. Talk of the right connection!
Small Towns, Big Dreams
Yusuffali's companies gen e r a t e d r eve n u e s o f Rs37,000 crore in 2014. He learnt the tricks of the trade during his four-year stay in Ahmedabad, where his paternal uncle ran a general store. In 1973, he moved to Abu Dhabi where his father and uncle ran MK Stores, a kirana shop. "In 1983 came my first foreign trip.With 10 years of experience in retailing, I went to Singapore, Sydney , Brisbane, Melbourne and Perth. Australia's supermarkets impressed me the most. I decided to set up big supermarkets in Abu Dhabi instead of small grocery shops," Yusuffali says.
Running In The Family
Their businesses couldn't be more different but a common thread unites T S Kalyanaraman, George Muthoot and Sunny Varkey - their families gave them a foundation on which to build their futures.
Varkey , who has a net worth of Rs11,200 crore, is fourth on the list. A second-generation entrepreneur, Varkey came to Dubai in 1959 at the age of two along with his banker father.During their free time, his parents gave English lessons to workers; their efforts culminated in a formal school - Our Own English High School.When his father retired in 1980, Varkey took over the reins of the organisation and started expanding, spurred by the belief that there was a huge potential for quality education not only in the Middle East, or on the subcontinent, but also in developed countries. His company Gems Education, headquartered in Dubai, operates a global network of schools and pre-schools in the Middle East, Africa, various parts of Asia, the UK and the US.
A third-generation businessman, Kalyanaraman started helping his father right from school, in the family's textile business. In 1993, he ventured into gold jewellery retail, which pushed him into the list of billionaires. As chairman and MD of the Thrissur-headquartered Kalyan Jewellers, Kalyanaraman is sixth in the list with an estimated net worth of Rs6,600 crore. His company generated revenues of Rs 7,400 crore in 2014. During that time, private equity firm Warburg Pincus invested Rs 1,200 crore in the company for a minority stake.T he company now has 77 stores in India, the UAE and Kuwait, and plans to open 16 more by March 2016. Says Kalya naraman, "I never expected to be rich like this. While I first started a jewellery showroom in 1993, I was using an Ambassador. Then, I used a Maruti 800. Now, between me and my two sons, we own three Rolls Royces". And then are his private jets (but more of that later).
M G George Muthoot, chairman of Muthoot Group, takes seventh position with a net worth of Rs5,550 crore. Between Muthoot and his 12 family members, they own 29.8 crore shares of Muthoot Finance, the largest gold loan company in the country . Muthoot is a thirdgeneration businessman with origins in Kozhencherry, a small town south-east of Kochi, where his group is headquartered. A graduate in mechanical engineering from the Manipal Institute of Technology , he entered the business in the 1970s. The group has since spread into education, healthcare, IT, plantations, travel and tourism, and power generation.In Kerala, gold loans have become synonymous with Muthoot Finance.
Senapathy 'Kris' Gopala krishnan, co-founder and one-time CEO of Infosys, India's second-largest software firm, is the fifth richest Malayali. Along with wife Sudha and daughter Meghana, he holds more than 3.9 crore shares of the company , with an estimated market cap of Rs7,860 crore. A graduate in physics from the University of Kerala, Gopalakrishan did his master's in computer science at the Indian Institute of Technology-Madras.
Like Gopalakrishnan, S D Shibulal, another co-founder of Infosys (and the last of the owner-CEOs), comes in ninth in the rich list with a net worth of Rs5,250 crore. He, too, is a product of the University of Kerala, where he did his master's in physics. In Shibulal's case, the street value of his 2.3 crore shares of Infosys and that of his wife and children have been added up to calculate his net worth, along with the value of his more than 700 apartments in the US.
Azad Moopen, chairman of the Dubai-headquartered Aster DM Healthcare LLC, is in the eighth position with a net worth of Rs5,500 crore. An MBBS gold medallist, he started his career as a lecturer at the Cali cut Medical College in 1982 before arriving in Dubai five years later. Aster Group now operates close to 260 hospitals and pharmacies in the Middle East and India. Moopen also owns a medical college in Wayanad district of Kerala. Moopen told TOI, "Everybody in my family , including my father and brothers, have been in business. I was an exception; I went into academics." But clearly , business ran in his blood, too.
In tenth position is Arun Kumar, founder and group CEO of Strides Arcolab, a pharma company . With roots in Kollam district, he was brought up in Ooty , worked in Mumbai, and shifted the headquarters of the company he founded 25 years ago to Bengaluru. In 2013, his company sold Agila Specialties, one of its divisions, to US pharma giant Mylan for $1.75 billion.According to industry sources, he has sold businesses worth $2.2 billion in the past three years. His personal net worth is estimated at Rs4,800 crore. He still controls Strides Arcolab, along with Sequent Scientific and Alivira Animal Health. Agnus Capital, his family's investment vehicle, has stakes in a number of high-value start-ups.
The scale of operations of the Malayali barons from the Middle East is immense. Some of them operate in almost all continents. It is estimated that nearly 7.1 lakh customers walk into Yusuffali's Lulu hypermarkets daily, mainly in the Middle East. His company sources from 51 countries and has set up procurement offices in 36 nations around the world. Likewise, Ravi Pillai also operates across a vast geography - from Africa to Australia, employing 90,000 people. "Within two months, we'll have 1 lakh employees as we are recruiting 10,000 workers for our projects in Kuwait," says Pillai.
Live Life King-Size
They may not be deliberately ostentatious but all these magnates live luxuriously - and peripatetically.Yusuffali's staff keeps 40 cars, including a fleet of Rolls Royces, BMWs and Mercedes-Benzes, and a private executive jet Embraer Legacy 650 waiting for him in Dubai or Kochi. And wherever needed, he rents helicopters locally for short trips. Apart from residential homes in Abu Dhabi, London and Kochi, he owns commercial properties in London, Muscat, Doha, Mumbai and New Delhi. Kalyanaraman owns two jets, an Embraer Phenom 100 and an Embraer Legacy 650, as well as a Bell 427 helicopter, which allow him to hop between his stores.
HOW WE DID IT
For listed Indian companies, we used the direct valuation method, where the wealth was calculated using `street'or stock market value. In cases where multiple family members held significant number of shares of a company, we took the wealth of the family head combining the shares held by immediate relatives. MG George Muthoot, seventh on the list, is a case in point.
In some rare instances, where private companies revealed their numbers, we again employed a direct method of how the assets of these entrepreneurial companies exceeded the total liabilities. But for valuing promoter wealth of most private companies - where business numbers were not forthcoming - we used the comparable company analysis (CCA) methodology. We used price-to-earnings (PE) multiple or rule-of-thumb (a method of calculating wealth based on company revenues and inventory) in arriving at a fair value of the wealth these entrepreneurs made over decades.
Valuing Aster DM Healthcare of Dr Azad Moopen involved identifying peer companies, London-listed Al-Noor and NMC Healthcare, looking at their current market value and PE multiples. Like Aster DM, both Al-Noor and NMC too have significant part of their businesses flowing in from the Middle East.Sunny Varkey's education empire Gems Education and TS Kalyanaraman's Kalyan Jewellers were valued based on recent private equity interest in their respective businesses, which is used as a benchmark in valuing private enterprises globally. During the course of the valuation process, we trawled through annual reports, profit and loss accounts and draft prospectuses before reaching a final list of Malayali rainmakers.
The most notable exceptions are the Dubai-headquartered gold retailer Joy Alukkas and the Chennai-based KM Mammen of MRF Ltd, who richly deserved to be in the list. We did not have enough verifiable data like the shareholding pattern and revenues of holding company, Joyalukkas Jewellery, in the first case. And the Mammens were strong contenders for the Top 10 but fell below our cut-off despite being arguably the best-known business house out of Kerala.
Courtesy of Times of India