For someone who built a fortune in the construction business, investing in physical assets is second nature and it’s no different for Devarajan, whose current networth stands at Rs.400 crore. The reason why the fascination for farmland and urban land has continued is because till the early 50s, Devarajan’s family was engaged in agriculture. Not surprising that when the opportunity arose, he bought a 300-acre coffee estate in Kodaikanal in a distress sale. Today, the family’s real estate portfolio comprises buildings and lands across Erode, Madurai, Chennai, Bangalore and Delhi. The other reason for owning real estate is also because it has helped Devarajan to keep his business going. “We used these properties as collateral to get loans from banks. It has helped that the asset class appreciated quite a lot in the last two decades,” says Devarajan.
No guesses why equities do not find favour with Devarajan, who is also the chairman of CII Erode Zone. “We don’t invest in equities because we don’t have a great handle on the market as our business takes our entire bandwidth and we would rather focus on that,” he says, adding that his son and nephew, though, are investing small sums in the market.
While a chunk of the family’s wealth is locked in real estate, Devarajan is now looking at improving liquidity in the portfolio by increasing the proportion of fixed deposits and gold, currently restricted at 5%. “We are working on our asset reallocation to de-risk our portfolio,” reveals Devarajan, who expects the rejig to happen over the next two years.
While down south it is normal practice for entrepreneurs to use their personal assets as collateral, Devarajan is changing tack. “We want to grow the business but without taking too much risk with our personal wealth. We are planning to go to public over the next 18 to 24 months,” reveals Devarajan.