Where The Rich Are Investing 2017

Ravi Jaipuria

While investing, the bottling tycoon likes to bet on the people behind the venture than the business itself

Vishal Koul

In 1987, Chunilal Jaipuria split his business among his three sons. As part of the division, a bottling plant in Agra is what Ravi Jaipuria ended up with. Today, the 63 year old lords over a beverages-to-fast food empire, which clocks more than $1.5 billion in revenues. Over the years, an aggressive Jaipuria expanded into fast food by picking up the franchises for KFC and Pizza Hut, under the ambit of Devyani International, while the bottling business flourished under Varun Beverages. Varun is PepsiCo's second-biggest bottler and also the first business from Jaipuria’s stable to get listed. Counted among the country’s biggest billionaires, Jaipuria says rather modestly, “God has been kind…we have seen a return of 24% CAGR for quite a long period.”

Putting his investment philosophy in perspective, the father of two, says. “For the past 25 years, we have been deploying dividend declared from profit-making ventures into new businesses which are in the investment phase and need capital to sustain operations. This [his business] is where I get maximum return on my capital, much higher than or at par with the best performing asset class,” explains Jaipuria. Born and brought up in a business family, Jaipuria continues to invest his savings in related sectors of his flagship business. “I have always preferred to venture into food, beverage and hospitality from scratch and, in the process, create long-term value for all stakeholders,” points out Jaipuria. Costa Coffee, US ice cream chain Swensen, fast food chain Vaango, and Cream Bell ice cream are some of the other businesses that the group has nurtured over the years. 

Jaipuria also makes strategic investments. “My philosophy is to invest in people, be it in my own business or strategic investments,” explains Jaipuria, who owns stakes in Lemon Tree Hotels and Medanta-The Medicity. “I invested in Lemon Tree when the first hotel was being set up. Today, after 13 years, the company is going public and I have secured good return on my investment. Similarly, our investment [3% stake] in Medanta looks promising, and we are sure it will fetch healthy multiples,” reveals Jaipuria. Lemon Tree, which is selling 25% stake, including Jaipuria’s 5% holding, has 40 hotels across 24 cities. Post the IPO, Jaipuria will hold 7% in the hotel chain. Incidentally, this will be his first strategic investment to get listed. Among other asset classes, real estate has never been a big favourite. The only exposure that the billionaire has is through a tract of commercial land in Mumbai. “It’s a stressed asset which we purchased from banks at a more than reasonable price,” says Jaipuria, without revealing further details.

For now Jaipuria has his hands full with promising businesses, but he has a piece of advice for entrepreneurs looking to invest outside of their own ventures. "Transparency and high governance levels are crucial at any point in time, so invest in such businesses which reflect these values in their operations.”

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