Secret Diary of VG Siddhartha, founder, Coffee Day Group | Biography Part- 1 | Outlook Business
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Secret Diary Of An Entrepreneur

"Entrepreneurs Don't Retire... They Die"
Secret Diary of VG Siddhartha Part-1

N Mahalakshmi

VG Siddhartha, founder, Coffee Day Group

 

 

Biography VG SiddharthaI can’t forget Azra Miss. The day she held me and started howling. I didn’t know how to react. I remember asking her repeatedly what happened. She was inconsolable. Raghu and Ashok came along, and asked her again, she was still inconsolable. Then she looked up at us and asked, “Why can’t you all put in more effort and study well?” We were so stunned. We stared at her, then at each other. We didn’t know whether to laugh or cry, but we reassured her we would study well…that calmed her. All of us had a mixed feeling that day. Azra Miss was very progressive – at a time when Muslim women were not allowed to study, leave alone stepping out for work, she started a school in Chikmagalur. As the founder and principal of Mountain View it was important to her that we studied well. Her crying probably made a bigger impact than if she had simply yelled at us. It made us take classes seriously at least for a few days – or may be a few hours. But the lesson that stayed with me was – pouring your heart out is better than screaming your lungs out. 

I so wished for itBeing home is great when you are away for a long time – that’s the one advantage of studying in a boarding school. School days were fun, but the time I used to visit home was even better. When I came home for the holidays, Amma used to shower all her affection on to my plate. How I loved that attention. I would play cricket all day with friends, come home dripping in sweat, notwithstanding the breezy weather, and mother would tell us a dozen times to wash our hands and feet before laying the mat on the floor and serving curd rice and pickle.

I was very depressed when I didn’t clear the NDA entrance. After NCC, I was so sure that I wanted to be in the army. I didn’t know what life had in store but that day it felt like nothing in life would make me as happy as being in the army. I wanted to fight for the country.

Das capitalInstead, here I was, studying economics at St. Aloysius College in Mangalore. The subject, slowly, grew on me, but what really kept me interested was the Communist Party public library next to the college…the membership fee was 10 and you could borrow a big book every week. Das Capital made me a huge fan of Karl Marx. Those days, I was totally convinced the communist system was the best way forward. Then came the U-turn. I read about Stalin, the Russian administration…all those men lived like kings, that wasn’t fair. 

I wanted to be Robin Hood – rob the rich and give to the poor! But then I realised, India was a really poor country. There was nothing to rob, really. It was better to make your own money – to get into business. When I told my father that I wanted to start my own business, he reacted instantly: “foolish”. “What are you chasing?” he asked. “This is a good life.”

VG Siddhartha family photo then and nowIn the family, too much money was never seen as a good thing. Too much spending, outlandish living was seen with some disdain – it never invoked respect. The most respected – and loved – people were ones who did good for the society. I heard so many stories about so many men around Chikmagalur who were dead and gone but had become legends because of their good deeds. One gentleman who had started a bus service in 1920 was among the largest coffee growers…people never tired talking about him. That man became my role model. There were so many other moneyed men, who helped out with marriage, education – they were the admired lot. Everyone talked fondly about them, they were respected. I grew up hearing these stories from my dad, uncles, just everyone around. My father always said, “Name is more important than money.” I keep repeating this to my kids, Ishan and Amartya. 

It’s sort of funny – when Dad came to admit me in St. Aloysius, the principal, it seems told him, “If you have too much money, burn it; don’t give it to your son. If you burn it, you’ll lose only your money; if you give it to your son, you’ll lose the money and your son.”

My father gave me money anyway when I wanted to set up my own business. Of course, he wasn’t too pleased when I decided to go to Bombay to pursue trading in stocks – what could be more blasphemous than stock market trading when money is not your main pursuit! But it was nothing short of an adventure for me. 

It was 1983. I had never been to the city of the rich and the famous – where big money was made. I took a bus to Belgaum, and then another to Bombay, got off at Fort, walked into a hotel that rented rooms with a shared toilet. Next day, I went to meet Mahendrabhai Kampani – I had read about him in an investment magazine. I was sure I wanted to train under him. But I had never spoken to him earlier. 

bombay the city of dreamsI did not have an appointment when I landed up at his office in Tulsiani Chambers, Nariman Point. I was mesmerised by the tall building. When I entered the building, I felt intimidated by the two elevators. I had never taken an elevator in my life. I climbed the six floors and met his secretary. As luck would have it, he was a Tamilian from Bangalore…he let me meet him. Thankfully, Mahendrabhai didn’t throw a fit – he asked me to sit, offered me a glass of water, heard me out and then asked me to take the rounds of the research department before meeting him again in the evening. I met him again, and he was gracious enough to accommodate me. 

Trading in stocks was exciting. Every day I learnt something interesting. I would get to work at 7 AM, and would be the last one to leave along with Mahendrabhai, invariably after 9 PM. I was committed, I had no qualms carrying his files and dabba to the car or just about anything he would ask – he trusted me so much, was so open, he taught me everything about investing. It was an unlikely bond – a Gujarati Seth and a South-Indian rookie – that’s not a combination you hear of often, but we truly connected. The people I befriended in my two years of working in Bombay – Durgesh, Nimesh – are some of the best people I have come across. 

the bull and bearI remember the morning I went to Mahendrabhai and said I am leaving – I had completed two years…I had told him on the day of joining that I wanted to work with him only for two years… I thanked him profusely, said how indebted I was to him…But he said, no, I owed him nothing, on the contrary, he had to pay me back for some past life debt.

Mahendrabhai believed in karma. I can’t forget the story he told me: In Rajasthan, there was a Jain guru, who was walking along with his disciples – Jain sadhus are known to walk thousands of kilometers barefoot, with little to protect them from harsh weather. The king was passing by, carried in a palkhi by his men. A disciple asked the guru, why he, being such a noble man, had to go through this tough ordeal of walking through this treacherous path while the king was travelling in ultimate comfort. The sadhu replied – the king and his comfort was his fruit for his sukarma during his previous janam. In his last birth, he was a Jain guru and did exactly the same. 

MahindrabhaiOver the years, I have come to realise that our actions, many a times, take a long time to show their true outcome. That’s true in business, but even more in real life. I didn’t feel like parting from Mahendrabhai but I wanted to do something on my own. I didn’t know that Mahendrabhai would say goodbye and leave us so soon. It was a pity I got to know about his untimely accident only three days later – that day I cried the most in my life. It was unbelievable, unbearable… 

Mahendrabhai was a great guide, and I loved talking to his father Naveenbhai even more. I used to go see him during lunchtime and quiz him about the stock market. He used to say, ‘you got to be patient, you can’t be in a hurry otherwise you’ll burn your fingers.’ If I hadn’t taken his advice to take a portion of whatever I made in stocks and put it somewhere else, I may have been badly stuck after the Harshad crash. Thank God, I had the good mind to take him seriously, and start buying plantations right then. 

buy-line,sell-line,lifelineWhen I went home and asked my father for capital to set up my own firm, he didn’t bat an eyelid – he gave me 7.5 lakh – that was quite some money in 1985. But he added, “When you lose it, you can come home!” I couldn’t lose the money. So I bought a plot for 5 lakh – that was my security. My idea was that I would trade in stocks for five years, and if I did not succeed, my property would have grown to at least 7.5 lakh. So I could sell that and payoff at least my father’s capital. With the rest, I rented an office, furnished it with computers and phone lines, and Sivan Securities was up and trading. My god, those were some days – such easy trades. The inter-market arbitrage was so high you could make tonnes of money and that’s what I did thanks to my friends in Bombay. Buy something for 10 in Bombay; sell for 11 in Bangalore, 11.50 in Jaipur and so on. 

VG Siddhartha with DurgeshThose were the days of quick gains and quick losses. There was never a dull day. I was lucky to have made money in stocks because none of it was because of any higher order thinking – they were just easy trades. The one call that would have ensured I retired rich doing nothing else I managed to throw away…Infosys! I remember Vallabhbhai, Nimesh and I went to meet NRN in Bangalore. Vallabhbhai was impressed, even though none of us knew anything about technology. He said, “I am going to price the issue at 105”. Nimesh said that’s really expensive, I said who the hell will apply. But Vallabhbhai decided to price it at what he thought was right, and underwrote the issue. Underwriting was a good deal because you got a 3.5% commission. The next thing I hear from Nimesh was “issue bhara nahi.” I laughed. “Yeh to hona hi tha – we all knew it, right.” Nimesh said, “Baat mat kar, paisa laga!” I bought 60,000 shares. But I promptly exited in six months. I had only paid the call money, and thus ended up making about 6x my money, netting off interest expenses. But goodness gracious, if I had held on, that investment would today be worth 1,000 crore – 1,500 crore.

This is Part 1 of a three-part series. You can read Part 2 here and Part 3 here

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