Moguls of Real Estate

By Manoj Namburu

Vivid and detailed, Moguls of Real Estate aims to preserve for posterity the business biographies of five of the most successful leaders of the real estate industry in India - KP Singh of DLF, Niranjan Hiranandani of Hiranandani Constructions, Sushil Ansal of Ansal API, Shapoor Pallonji Mistry of Shapoorji Pallonji & Co. Ltd. and Irfan Razack of Prestige Group. The book examines their lives closely and reveals how they overcame obstacles, forged their own management philosophies and revolutionized the business world. It celebrates their larger than life ambition, inspired leadership and hard work. The book traces the growth - including the highs and lows - of the Indian real estate market and is as much for general readers as for those particularly interested in the Indian real estate industry.

• Language: English
• Publisher: Roli Books
• Release date: Oct 1, 2007
• ISBN: 9789351940746

Book preview

[ INTRODUCTION ]

THE YEN TO DO SOMETHING ‘BETTER’, ‘BIGGER’ AND ‘DIFFERENT’: that’s the most singular trait I discerned among five of India’s most successful real estate developers – KP Singh of DLF, Niranjan Hiranandani of Hiranandani Constructions, Sushil Ansal of AnsalAPI, Shapoor Pallonji of SPCL Group, Irfan Razack of Prestige Group. While recording the business biographies of these bellwethers of the industry for posterity, I was also able to get a fascinatingly close look at the explosive growth dynamics of India’s real estate.

From all accounts, organized real estate development in India is a relatively recent phenomenon and this sector has, therefore, had to fight hard to be recognized as an industry. With the real estate industry continuously recording the highest growth rates in the post-reforms era, it has finally been able to secure for itself the recognition it deserves.

The growth of the industry in the early years of the country’s independence was rather haphazard and often driven largely by those who came to be known as ‘fly-by-night operators’ (FBNO). To make matters worse, many of them were mixed up with unsavoury characters like smugglers and gangsters. The very term ‘builder’ came to represent something sinister. So much so that many self-respecting developers avoided using it to describe themselves.

The government of the day did not obviously help matters by trying to take matters in its own hand and banning all private property development, particularly in the residential sector in various cities across the country. While this initially helped in providing affordable housing to the middle and lower middle classes, the rampant corruption in most housing boards soon adversely impacted the quality of their construction and rendered them ineffective and unviable. Not only that, they were completely unequal to the task of coping with the burgeoning demand for housing.

It is against this backdrop that the emergence of these real estate pioneers has to be viewed. Many of them have become legends in their own lifetime by developing and putting up contemporary landmark buildings and sprawling integrated townships. How did they go about their business? What were the challenges they faced and how did they manage to overcome them? Did they have a vision when they started out? What effect has globalization had on their ventures? What, in short, have been the ‘mantras’ of their success?

All the biographies featured in this volume provide fascinating answers to these and other related questions. Coming from totally different backgrounds, each of them has achieved phenomenal success through sheer persistence. It certainly has not been ‘roses all the way’ for them.

Beginning his career as a Cavalry Officer in the Indian Army and later inheriting his father-in-law’s real estate business, KP Singh of DLF went on to emerge as the country’s largest developer, thanks to a series of ‘turning points’ that included chance meetings with people like Rajiv Gandhi and association with corporate honchos like GE’s Jack Welch and George Hoddy.

Niranjan Hiranandani as a young boy saw and met many rich and famous businessmen, patients of his father, the world renowned ENT specialist Dr LH Hiranandani, which triggered the urge in him to emulate them. His over-riding passion to work on a large canvas saw him creating one of India’s most elegant and prestigious townships called Hiranandani Gardens in Powai, Mumbai.

One can virtually trace the growth of India’s capital and the National Capital Region (NCR) in Sushil Ansal’s biography as his group went about constructing several landmark high-rise buildings in the heart of New Delhi, as also its first mall, ‘Ansal Plaza’, and residential and commercial complexes in Gurgaon and Noida.

The story of Shapoor Pallonji Mistry is quite different as he hails from a reputed 142-year-old family firm – the oldest involved in the construction industry in Mumbai. It was an interesting experience to learn first-hand how Shapoor plans to literally take the company to new heights with India’s tallest residential building – ‘Imperial Towers’ at Tardeo, Mumbai.

Equally fascinating is the story of Bangalore’s suave and savvy real estate Mogul, Irfan Razack, who has given a distinct facelift to this IT-driven city by putting up several beautiful and commercially successful landmarks like ‘UB City’, the Forum, Prestige Acropolis, Meridian, Monte Carlo and Angsana Spa.

All the five ‘Moguls’ are upbeat about the exponential growth of the Indian real estate industry, with increased involvement of the private sector even in infrastructure projects. I am very happy to have been able to pen their biographies. I must thank each one of them for not only spending their valuable time with me but also generously sharing personal and business information and perspectives for this volume.

Finally, I hope readers would find Moguls of Real Estate both informative and enjoyable.

KUSHAL PAL SINGH >>

[ DESTINED FOR GLORY ]

‘DAMN LUCKY FELLOW’ IS THE EPITHET THAT WAS USED BY SOME TO describe KP Singh’s late father-in-law, the founder of DLF (Delhi Land & Finance Co.) Chaudhury Raghvendra Singh, way back in the 1950s. After inheriting his business and transforming it into the country’s largest real estate company (3000-acre township in Gurgaon worth Rs 50,000 crore), the tall and dapper Kushal Pal Singh (KP to his friends) can also share this envious description.

In fact, KP is the first to admit life for him has been a series of accidents and encounters that have propelled him and DLF to the dominant position in India’s burgeoning real estate industry. From a young dashing cavalry officer in the army in newly independent India to becoming the No. 1 Mogul of real estate fifty years later, his has been an eventful journey without a parallel.

And he is candid enough to acknowledge the people and circumstances (‘turning points’ as he prefers to term them) that have made him what he is today. If it was polo that made army his first career way back in 1948, all subsequent shifts and breaks came through fortuitous twists of destiny. In the process, he also learnt a lot from his mentors whose key lessons he steadfastly strove to implement in all his dealings.

One of these – Jack Welch, former CEO of GE – has even gone on to describe KP as a ‘true ambassador for India’. He openly admits that it was solely because of KP’s all-out efforts to woo GE to invest in India that converted him into ‘the champion for India’ from one who saw no future for the country.

Interestingly, 3 Gs – Gurgaon, GE and former prime minister Rajiv Gandhi – have played a decisive role in the life and career of KP. It was GE’s entry into Gurgaon, a sleepy town just south of Delhi, in the 1980s that triggered off a massive, unparalleled construction activity – residential, commercial and retail – there. Skyscrapers dotting its skyline today make it look like a mini-Manhattan.

EARLY YEARS – TWISTS AND TURNS

Even before Gurgaon and GE, KP’s life witnessed other interesting twists and turns. He was born into the family of a leading lawyer of Bulandshehar (a district town in western Uttar Pradesh), Chaudhury Mukhtiar Singh on 15 August 1931. Kushal Pal had a fairly carefree childhood and completed his schooling there. A self-confessed average student, he graduated in physics from Meerut College.

Till this stage, he was totally oblivious of any career path or choices. But finding that some of his close friends were going to the UK to pursue a course in aeronautical engineering, he also secured admission in the Air Service Training Institute at Hamble in England. By his own admission, he neither had flair nor any passion for this branch of engineering.

Passion, if he had any then, was for sports in general, and polo in particular. He had picked up polo in his childhood from his maternal uncle Colonel Shevdam Singh. Hockey and tennis were the other games his father had played and encouraged him to play. And in England it was his participation in a polo game that caught the eye of General Wadalia, the first military adviser of the Indian High Commission.

The general, struck by the young boy’s obvious skills in polo, told him that he would not go far in polo if he were to continue with aeronautical engineering. Join the army and pursue your passion for polo, was his advice to him. Seventeen-year-old KP Singh thus came to apply for the army in 1948. Despite a half-hearted attempt at the five-day interview held by the War Service Selection Board, UK, KP was selected and informed by the Indian High Commission that he should report to the Indian Military Academy (IMA) in Dehradun.

Despite his selection, KP was still not sure he wanted to join the army, notwithstanding the fact that many family members were from an army background. General Wadalia, who told him he should report to the IMA on 3 January 1949, soon dispelled his doubts. Still dragging his feet, KP sought more time from the authorities again and again, and each time he was, much to everyone’s surprise, given an extension to join. To this General Wadalia commented he must have done exceptionally well in the interview to get so many extensions. Not only that, in an unprecedented gesture the Indian government even paid for his passage back to India.

FIRST LESSON IN LIFE

Eventually, KP joined the IMA in April, a good three months late. On arrival, he had a surprise in store for him. As a newcomer, he faced severe ragging; from getting his hair shaved off to being forced to do silly things. As the ragging continued, KP began entertaining thoughts of running away.

Out of utter despair, he wrote to a friend in London he would leave the academy and return to England as he could not take the ragging any more. In his letter, he gave a detailed description of how he planned to run away from the academy within the next fifteen days. There used to be only one train that left Dehradun for Delhi in the evening and he hoped to escape in it. Confident his plan would work, he continued his normal day-to-day activities.

It was at this stage that KP Singh’s life took a turn for the second time. Within days, much to his surprise, he was asked to meet his battalion commander Colonel Baljeet Singh. Puzzled, he went into the colonel’s room, who was reputed to be a tough disciplinarian. As he entered the colonel asked the hawaldar standing nearby to leave the room. He then asked KP Singh to take a seat and make himself comfortable. The colonel even offered him a cup of tea. KP Singh was astounded; a cadet was normally never asked to sit while speaking to a senior officer in the military academy.

But he complied without questioning. The colonel gave him a jolt by telling him he was aware of KP Singh’s plan to escape by the 7 o’clock train the day after next. All mails of shaky cadets were screened at the academy, something KP was until then blissfully unaware of.

The colonel told him that he could help him escape in his car because he did not want him to get caught by the military police looking out for cadets on the run at the railway station. He did not want KP Singh to be seized somewhere en route and proceeded against.

The colonel asked him not to talk to anybody regarding the plan as he would get into trouble. KP Singh was taken aback and all the while kept wondering what the colonel had in mind. But his next sentence made him sit up straight. The colonel told him there was, however, one aspect of the entire matter in which he would not be able to help him. He would be called a bhagoda for the rest of his life.

‘Bhagoda means one who runs away or is a weakling,’ said the colonel. ‘But it will make no difference to you as you’ll return to England. There people won’t even know who you are. But if you come back to India, your friends and acquaintances will treat you as a bhagoda. So you take a view on what you want to do.’

The colonel also observed that he must have secured an outstanding rating from the selection board because of which the government had paid for his passage. ‘You must have done well in your interview. There is a very superlative report by the selection board in UK about you. But running away will prove that you are a coward.’

Marvelling at the way he was handled, KP Singh is even today overwhelmed at the colonel’s ability to influence him. ‘It was a master stroke in dealing with human-relation issues,’ he exclaims. ‘The message was gentle but nevertheless effective, direct but without being too tough.’

KP Singh went back to his room pondering hard; his mind was in a whirlwind. Was he a weakling? What should he do? Should he stay back or return to England? He confided in one of his close friends about his predicament. The friend gave him a suggestion. He asked him to stay back for just another three months when the first six-month term would end. In case he did not like it even after three months, he could take a break and not return. He asked him to be patient and try for some more time.

Eventually, after much soul-searching, Gentleman Cadet KP Singh decided to stay back at IMA. He worked hard and acquitted himself well enough during the tough two-year term to be selected to command the passing out parade on 30 December 1950, an honour bestowed on the best cadet of the course. Interestingly, General Wadalia had by then been posted as the commandant of IMA and he was able to appreciate his protégé’s progress first-hand. KP was to be later posted with him for a long time.

For KP Singh, his eight-year army career in the Deccan Horse Regiment, beginning in 1951, proved to be an enriching experience. The discipline he imbibed there, he used to his advantage in his later-day business career.

[ MATRIMONY THROUGH ARMY NETWORK ]

KP’S ARMY CAREER WAS TO HAVE A DIRECT BEARING ON HIS LIFE IN more ways than one. For one, he met his future wife through the army network. Then a dashing young captain in the Cavalry regiment, KP was introduced to Chaudhury Raghvendra Singh by General Wadalia himself. At that time Chaudhury Raghvendra Singh was actively looking for a suitable match for his daughter Indira. She had just completed her Junior Cambridge from St Lawrence School, Sanawar, near Shimla.

Both were from prominent families of the Jat community, one hailing from western Uttar Pradesh and the other from Rohtak, Haryana. As Chaudhury Raghvendra Singh also had an army background, the alliance appeared promising.

KP and Indira were introduced to each other at a cricket test match in Delhi’s historic Ferozeshah Kotla grounds. He still has fond memories of that rendezvous – a ‘test match’ venue for a lifetime match! For Indira, who was just seventeen years old and until then very reluctant to get married, it was ‘love at first sight’. She fell head over heels for the strapping, handsome, 6’2’’ 21-year-old army captain. So apparently did KP with her!

More than half a century later, Indira recalls: ‘He was so incredibly good looking, I can’t tell you. He created quite an impression on my father and me. He’s got that sort of personality that all those he meets are greatly impressed. After I met him, all my doubts faded away.’

It was a traditionally arranged marriage, back in 1954. Their close and happy companionship has continued since then with minimum hiccups. KP regards his wife as a ‘friend, companion and soulmate’. For him the relationship is still blossoming and after fifty-one years together, he feels as if he met her just the other day. Considering they married very young, they practically grew up together.

FATHER-IN-LAW

After marriage, the person to influence KP Singh most was his father-in-law. Their relationship was more like that of a father and son. As Chaudhury Raghvendra Singh had only two daughters and no son, he treated KP as his own son.

Raghvendra Singh himself was a great visionary and entrepreneur who took many risky decisions in his life. After serving as a simple Punjab Civil Service officer, he joined the army during the Second World War and worked his way up to the rank of a colonel. He had the foresight to anticipate how Delhi’s real estate market would boom when the Partition took place. Shortly after India gained independence, countless refugees poured into Delhi, the most promising haven in North India. There was a sudden surge in demand for housing. Delhi’s population doubled overnight and there was a great demand for homes at affordable rates. The government drew up comprehensive plans and housing development schemes to urbanize Delhi and other cities across India.

It was at this stage that Raghvendra Singh ventured into the business of developing land and selling it to eager buyers. He carefully planned and executed his land development ventures systematically though he hardly had any financial backing. Being a straightforward man, his honesty and generosity won for him a very high degree of credibility within a short time in Delhi.

Incredible as it may sound now, he approached the farmers owning agricultural land in Delhi and persuaded them to part with their property without paying a single penny! His mantra – ‘payable when able’ – meant he took land on credit from the farmers, making them partners in business.

Once he acquired the land, he would develop it and sell it to prospective buyers. The price would cover the cost of the land and also a reasonable margin. Instead of appropriating all the profits, he shared them with the farmer who had sold the land to him on credit. Over a period of time, as people started to trust, they began to invest more money with him as deposits, which till date have no record of defaults. So in two to three years time, his name became synonymous with credit-worthiness and his real estate business in India’s capital flourished. And herein lies the origin of his company’s name – Delhi Land and Financing Company, or DLF.

His initial developmental projects were concentrated mostly in north, west and east Delhi areas like Model Town, Krishna Nagar, Rajouri Garden and Rana Pratap Bagh. But as his business expanded, he started undertaking more sophisticated developmental activities in the emerging up-market South Delhi. These included plotted developments of posh colonies like Greater Kailash, South Extension, Hauz Khas Enclave and Hauz Khas Extension. Within ten to twelve years, DLF became the biggest name among Delhi’s private developers.

However, luck did not favour him for very long. The urban development activity was nationalised by an Act of Parliament. This Act froze all private land development in the Union Territory. The government acquired everything, and for nearly thirty years farmers did not receive any compensation. Land value was frozen much to the detriment of the landowners.

All the while, land prices and the requirements for housing were shooting up. Instead of regulating private developers, the government decided to monopolize and take over the entire urban land development business. That is how, in 1961, DDA (Delhi Development Authority), and all other urban development authorities in India were formed. And DLF, responsible for the plotted development of as many as eighteen residential colonies in Delhi between 1949 and 1965, found itself virtually out of business overnight.

The government’s avowed objective of putting an end to private players was to have a better, planned development, to see that prices did not increase, to check corruption and to ensure that every house owner was given access to civic facilities.

THE ERA OF THE FBNO

Though the Act was enforced with good intentions, the task was so enormous that the government could not even scratch its surface. Thus, for the next two decades, a new breed of unauthorized developers came in. They, according to KP Singh, established a nexus with politicians, planners and bureaucrats. Their entry started the saga of corruption, black marketing and uncontrollable soaring prices. In his view, all unauthorized and haphazard urban development all over India is mainly due to this phenomenon.

Unlike other industries whose interests were looked after by various trade bodies like the chambers of commerce, consultative committees or other government recognized business councils, the real estate industry at that time did not have any professional body to represent it. The chambers of commerce never got involved because the unauthorized operators were not their members. So this sector