We don’t want to create an identity which is distinct from our company and would rather maximise the wealth machine that we have created,” says Nishant Arya, sitting out of his office in Gurgaon. Quite clearly, running the family business is central to the second generation entrepreneur whose father SK Arya built an auto ancillary business over the past three decades.
Auto component maker JBM group has been a good proxy play on India’s automotive boom, primarily led by Maruti. While the senior Arya created a $1.3 billion auto parts major, Nishant has been driving the overseas business. The family’s 62% stake in the flagship company is worth Rs.700 crore today, and also fetched them close to Rs.5 crore in dividend last year. The reason why the Aryas are not looking at wealth management in a conventional way is the ticket size and time it takes. “Small investments here and there can consume a lot of valuable time. Instead ploughing back money into your own business is more rewarding,” says Arya. That’s true as over the past four years, the promoter’s networth has grown four-fold. With a compound annual growth rate of 62% in the past three years, Arya does not want to look further than JBM. “I can’t think of any other asset class than can fetch us this kind of return,” he says.
A good part of the wealth maximisation was also led by niche international acquisitions. Four companies were acquired in the past six years, including a European company (JBM Tesco) in 2012. “We turned it around and there’s nothing more exciting to see an investment call turn right,” says Arya.
Despite all the talk of a sputtering realty market, Arya believes the market has still not bottomed out. “Prices in rural or semi-rural pockets have not changed compared with urban and semi-urban markets,” opines Arya, who is looking at buying more land for setting up new manufacturing facilities and for solar generation. The family is de-risking the core business by diversifying into bus manufacturing and solar. It has a tie-up with Solaris for manufacturing electric buses.