Where the rich are investing 2016

Sanjeev Kapoor

The chairman of SK restaurants hasn't forgotten his father's investing advice

Sanjeev Kapoor’s father worked for many years with the State Bank of India. There were many nuggets in the form of advice that he got from him, though only a couple are etched in the celebrity chef’s mind. “Do not take debt, but neither hold back when you need to spend,” says Kapoor, who also dons the hat of an entrepreneur and runs The Yellow Chilli, a chain of restaurants.

To preserve his wealth, Kapoor adopts a conservative and balanced approach, splitting it equally between debt (fixed deposits and AAA bonds) and equity. Though the return from debt is modest, he says it is important to preserve capital. On equities, Kapoor says he understands how the market works. “In the long-term, it is the best investment and one that has been well-proven. My approach is to invest in blue chip stocks and stay put for 4-5 years,” he adds.

Kapoor says he is not obsessed about the return from his investments and the approach is not to bother once the money has been committed. “Money will grow if you have chosen the right asset class. To me a post-tax return of 12% is a good return,” he says. Over the past decade, his asset allocation strategy has not changed remarkably, but for the increasing capital being reinvested in his business. “There has been no better investment than my own business,” he says. Of the 50% that he holds in equities, a substantial chunk of the gain gets ploughed back into his own ventures.

Today, his business interests, apart from restaurants, include a television channel in a JV with Discovery, ready-to-cook meals and cookware. Mostly, he owns 75% of the equity. An asset class that he has not focused on seriously is real estate, though that is likely to change. “So far, it has been only for personal consumption, which is largely residential and offices. But now, I am looking at overseas locations such as Dubai,” says Kapoor.