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Ace deal-maker whom the Ambanis trust
Shyamal Majumdar & Kausik Datta | April 03, 2007
When Mukesh and Anil Ambani called him up separately for assistance on dividing the Reliance empire, Nimesh Kampani was in a dilemma as he didn't want to advise one brother against the other.
The problem was, however, quickly resolved when their mother Kokilaben asked him to hammer out a solution. Ask Kampani about this, and the answer you get is a smile. That's not a surprise as trying to get the 60-year-old ace deal-maker to talk about his relationships, isn't easy.
The only thing he would say is "no one else but a mother can ensure a fair share for her children. I feel comfortable in neutral territory."
This ability to stay in neutral territory has served him well. He is perhaps the only investment banker who has represented both Dhirubhai Ambani and Nusli Wadia on many deals in the past while being on the board of Essar Shipping. It's also why Kampani's JM Financial remains the port of call for people from vastly different - often opposing - camps.
We are at the Kandahar restaurant on the second floor of the Oberoi and the view from the window is breathtaking as the afternoon sun glistens on the Arabian sea - a good enough reason to ignore the rather noisy family get-together party on the next table.
Kampani says his formula on how to win friends is no rocket science - it's nothing but the credibility and trust nurtured over decades. Some of his industrialist-acquaintances became friends only after he passed the litmus test of keeping things confidential. "They have often tested me by asking me what's going on in other camps. But my lips have always been sealed on such occasions," Kampani says.
His "sealed lips" aren't something we are enthused about, but Kampani is unstoppable when he is harping on the virtues of confidentiality in the business that he is in. He refuses starters, orders a lassi (he doesn't want to "add to his waist line") and says one doesn't need non-stop partying for building a network, as personal meetings are the best way to understand each other.
"Investment banking is difficult to teach. Gut feel and the ability to think on your feet are what matter. When clients talk to you about their problems, they want an instant and practical solution. Strike when the iron is hot; power point presentations can come later," says the man whose ability to turn out landmark transactions on a regular basis has become part of corporate folklore.
So how has life changed after the Rs 1,900 crore (Rs 19 billion) deal to part ways with Morgan Stanley? Kampani shrugs and says he continues to lead a simple life as before, does his one-hour yoga every day (a reason why he goes to office an hour later than usual) and does puja in the family temple every day - a habit for over 50 years now. He used to get angry earlier but the yoga has helped him control it. "I feel much more at peace with myself these days. At 60, one has to learn to let go," he says.
Probably sensing that his fondness for sealed lips has ensured we don't share his feeling of peace, the six-feet tall former cricketer says the playing field looks bigger and greener than ever before with India's growth story set to continue at least for the next 25 years.
He says he ended his seven-year old relationship with Morgan Stanley only because they wanted full control of the venture. After working so hard for so many years - he founded JM Financial in 1973 with Rs 5,000 capital - Kampani didn't want to give up so easily.
He orders only a vegetable biryani as he doesn't want to go to sleep before catching a flight to Delhi in the afternoon and says he firmly believes an Indian investment bank can stand on its own, especially with the market growing at such a fast pace. "Advisory services are about lateral thinking and you don't need a global network for that. And even in the case of big offshore deals, there is no bar on us getting into alliances with overseas banks, he says.
But he agrees that Indian investment bankers have to increasingly reinvent themselves so that they don't remain just boutique domestic advisory firms - a reason why JM Financial is on overdrive these days, entering new businesses like private equity, distressed assets, real estate funding and mezzanine financing.
A portion of the Rs 1900 crore cash will be used to further capitalise JM's NBFC operations and kickstart new businesses such as institutional securities trading and an asset reconstruction firm.
JM is also looking at a local brokerage (talk of the acquisition of Sharekhan is in the air but Kampani denies this) to rebuild the equity sales and research teams it sold to Morgan Stanley. Under the deal with the New York-based investment bank, JM has only retained the retail, investment banking and fixed-income units that generated 45 per cent of the revenue.
The four pillars identified for growth by JM include investment banking; alternative asset classes like private equity and real estate funds; capital market activities like retail broking, institutional equities; and asset management.
Kampani takes a break and signals to the waiter that he is through with the biryani even though it's mostly left untouched, and orders coffee. Private equity will be one of the strongest focus areas, he says.
The company has raised around $500 million for a private equity and a real estate fund and Kampani is confident of growing the corpus to $3 billion in three years. JM will invest in growth-oriented, largely unlisted companies with a size of Rs 500-1,000 crore (Rs 5-10 billion) and says that sectors that look interesting are retail, financial services, business process outsourcing and auto ancillaries.
Along with private equity, Kampani says, JM will increase its mutual fund (which is already in the top 10 in the country ranked by assets) outlets from 21 now to 75 in 18 months. The retail broking outlets will also increase from 18 to 30 in two years.
Apart from this, JM will start its institutional securities business and a special situation fund where there will be substantial focus on investment management, investment banking and wealth management.
"We may not have a very high market share initially but please remember, we will get 100 per cent of whatever we earn from this, unlike our earlier share of just 50 per cent," Kampani says, adding his main priority will continue to be on the 15,000-odd high net worth clients from where the growth would come.
As we wait for his silver-coloured Merc to roll in, Kampani says he is glad that Vishal (his 30-year old son who is now the MD of the corporate finance division) has been able to make his mark.
"My friends are fast becoming his friends too," the visibly proud father says. But since lineage alone is not all that matters in the business that he is in, Kampani Sr has also told Vishal that he would of course get his father's wealth, but has to prove his worth if he has to get "my chair" at JM.Neutral territory?