RS Agarwal & RS Goenka

It was in 1974 that two childhood friends, Radhe Shyam Agarwal and Radhe Shyam Goenka, quit their jobs as accountants and pooled in Rs.20,000 to start a cosmetic manufacturing company. Today, Emami is a formidable Rs.12,000 crore group present across sectors such as FMCG, retail, newsprint, pharmacy, infrastructure, cement, biodiesel, and healthcare. In these 43 years, as their business flourished so did their bonding — the two families have been jointly deploying their personal wealth all these years. “The idea is to ensure equality and that no one family will grow its wealth independently, and the beauty of our relationship is that this understanding has also been passed down to our next generation,” says Agarwal. Right from buying shares to investing in new ventures, buying expensive cars to shopping for jewellery, all the decisions are mutually arrived at. “It’s not a rigid binding contract but so far it has worked wonderfully well,” adds Goenka. 

Every fortnight each and every member of both the families meet to take stock of their business and also their personal wealth. “Every single person has to be present at the meeting and anyone who can’t make it to the meeting needs to take prior permission. The minutes are recorded so that there is no ambiguity whatsoever,” mentions Agarwal. 

While a majority of the families’ wealth is invested in group businesses, whatever surplus is available goes towards real estate, equity and gold. But there are also some strict no-nos. “We won’t invest in liquor, tobacco, and meat businesses. That is why we haven’t branched out into the hospitality space,” reveals Goenka. Venture capital and private equity is the other asset class that the families don’t invest in. “Exposure to gold is largely in the form of jewellery and not as a portfolio hedge,” mentions Agarwal. The expectation from equities is that the return should not be less 20-25% post tax, adds Goenka. While there is no cap bias, the prime criterion is to back transparent promoters and sound businesses. As far the founders’ holding in real estate is concerned, their land bank is spread across Madhya Pradesh, Uttar Pradesh, Odisha, Chennai and Bangalore. “In tier I cities, return on investment is very low, hence, we are looking beyond metros,” says Goenka. 

Going ahead, the duo believe Emami will remain their best bet. “We are still reaping the reward of our initial investment,” smile the friends as they happily pose for the camera.