Where the rich are investing - 2019

Hemant Jalan

An insight into the investment preferences of wealthy Indians 

It’s no wonder that Hemant Jalan sounds extremely pleased when he speaks about his business, and rightly so. Indigo Paints, a company he founded in 2000, has performed impressively. In FY19 alone, the two-decade old company posted a revenue of Rs.6 billion. The founder and MD now expects that number to hit Rs.8.5 billion this year. As expected, 99% of Jalan’s wealth is tied down in his company.

“No other asset class can deliver the kind of return I have generated from Indigo Paints,” says the 62-year-old quite proudly. He’s talking about a whopping CAGR of 35-40%. Jalan, who holds a little over 60% stake in the company -— the balance held by Sequoia Capital — plans to go public within a year. “I will sell a part of my holding and that will fetch me some liquidity,” reveals Jalan.

He plans to invest a part of the IPO proceeds in debt and equity. However, against Indigo Paints’ return, the gain from his equity and debt portfolio is rather modest — at 10% CAGR. His wealth managers send him a monthly statement that Jalan goes through but does not stress over. “It is divided between large-cap and small-cap mutual funds. Equities make sense only if you have a diversified portfolio,” he says, adding that trading in stocks is not his cup of tea as it “needs time to understand.”

While Jalan isn't willing to spend hours to understand equities, he is clear about how he wants to spend his wealth. Life has changed for Jalan since Indigo Paints. “Till I was 30, savings were insignificant. There was really no wealth to speak of. The only big purchase was a car and a house,” he says. Today, though he has money in plenty, Jalan does not want to indulge in things that would take his attention away from his business. Exposure to real estate is marginal. “Looking after a property is complicated. I would rather invest my time in scaling up the company.” A tastefully done up home in Pune is the only property that Jalan owns and also where his family has lived for two decades. Jalan is a man who lives modestly but aims for the deep blue sky.