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Saturday, July 07, 2007

When you’re building in a new India

Sanjay Chandra wants to meet at The Oberoi’s Belvedere, the private business club that reminds me of umpteen sessions with bankers and industrialists spent prodding for what’s happening in corporate India. Not what I’d call relaxing. I was hoping Chandra, a Delhiite, would pick an undiscovered watering hole that a 35-year-old like him ought to frequent, so I could rediscover the hip bits of the city that have passed me by in the decade that I have been away.

“You sure, it’s your favourite watering hole, where you go for the odd tipple?” I ask over the phone.

“Hmm... I don’t drink,” he responds, instantly shattering a somewhat stereotypical power-broking-over-drinks image.

By the time I get to the Belvedere, Chandra is already there, waiting by the door. “How about 360 instead?” he asks, almost reading my mind and, no doubt, my expression. “Except, it’ll probably be full of people I know.”

We’ve barely walked into the lounge-cum-restaurant when an acquaintance waves and Chandra reaches out to shake hands. Another private equity fund looking for opportunity in India, no doubt.

Unitech Ltd, the company Chandra oversees as managing director, already has a string of international investors and counts the iconic George Soros as one of them.

And if you ask Chandra, he’ll tell you the list of overseas investors looking for real estate deals is long and weighty. With real estate prices zooming nearly 300% in

India’s top cities in just few years, it’s among the hottest destinations in the world for investors. But it hasn’t always been that way. Not for Unitech, at least.

The company’s origins go back to the early 1970s, when Chandra’s father, Ramesh
Chandra, fresh from a construction engineering course in the UK, joined a private firm upon his return. Finding that he had time and expertise on his hands, he started consulting on construction projects in his spare time. Business was good, so he formed a company called United Technical Consultants Pte Ltd, along with a group of partners.

By 1974, aided by funding from Ramesh Chandra’s wife’s (Sanjay’s mother) well-established gynaecology consultancy, the company decided to move on to the next step, construction contracts from companies—long before outsourcing became popular parlance in India. In a few years, the company had started doing projects overseas, coinciding with, and riding on, the wealth generation in Libyan and West

Asian economies that were swelling with money from the oil trade.
I interrupt Chandra’s story and remind him we should order drinks, and he picks a watermelon juice. I get a lemon juice while he goads me to move on to a wine. I’m almost tempted, but desist—Delhi’s heat and inefficient air conditioning at work have left me nursing a miserable headache. We order yakitori and halfway through munching, he turns back to his story.

In 1986, after more than a decade of construction work, Unitech sold shares to the public to raise about Rs3 crore and fund its expansion, somewhat setting it on the path to becoming among India’s top developers.

Chandra recalls growing up in the house that was his mother’s clinic and the family residence in the South Delhi neighbourhood of Mayfair Garden. The family still lives in the combined property made up of two adjoining houses.

“She’s in her 60s and she delivers 80 to 90 babies a month,” he says, barely able to mask the pride. “And at the same clinic.”

Chandra is quick to add that the family does not own any property aside from the home-cum-clinic unit he grew up in. I give him an incredulous look. The promoter of India’s second-largest listed real estate company has no homes besides the one he grew up in? “Impossible,” I counter. “We are building a farmhouse in Vasant Kunj and that’s where we will move in. That’s really it,” says Chandra. I’m slowly moving my head, as Indians do to indicate disbelief. “A hundred per cent of our assets are held by the company, not individuals,” he counters.

So, how early did Chandra get involved in business? Was he groomed for the role?
More surprises.

Married to Preeti, who now runs a chain of trendy womenswear called GFO or Girl Forever, the couple spent their early years in North America, sourcing garments for large department stores. That’s where they had their two children Trisha, 9, and Karan, 6.

In the 1990s, Unitech started to move from construction to owning and developing properties, and bought out some of the partners in the firm. That’s when Chandra decided to return, motivated partly by greater control in taking decisions.

“We had more focus,” he says.

That may have helped build Unitech into a developer with one of India’s largest land banks of more than 10,000 acres, but many feel its challenges are yet to come.

While his firm is among the oldest listed developers in the country, it has been upstaged in market capitalization by rival DLF Ltd, which concluded a Rs9,187 crore share sale last month. And, as more and more Indians purchase homes, it’s spawning an industry that is not just full of bold upstarts but also unscrupulous fly-by-night operators.

“We tell our employees to be as transparent as possible because we deal with customers, contractors, architects, bankers lawyers… the whole lot. So, never do anything which you have to hide from a partner or a stakeholder. Be in touch with reality.”

With customer expectations changing rapidly, Chandra says the biggest issue is to keep pace with their needs. “You can’t sit in an ivory tower and sell.” And with property ownership becoming expensive, it means downsizing apartments, making them more compact and user friendly. His biggest fear is overcommitment, or promising more than he can deliver. “You have to be very careful about keeping the quality there.”

So, what’s his management style?

I manage a lot by SMS—it’s an unobtrusive way to tell them what I have to.” Meetings at Chandra’s office in Gurgaon are unstructured and employees can walk in without having pencilled in time, for discussions. The Chandras are active in the planning phase of projects but once a deal is signed, they leave the execution to their managers.

The man doesn’t drink, doesn’t keep five homes to shuttle between. How does he unwind?

“I like spending time with my family. We keep weekends for our kids and we like taking a lot of holidays together,” he says. “No business on weekends.”
His biggest concern as a parent is to make sure the children don’t grow up complacent.

“My kids have probably made some 20 overseas trips, whereas I first went overseas to Libya where we were building things, at nine,” he says. But their ambitions are in

“My son wants to be a builder,” he says with a toss of the head and a happy grin. “Bob the builder, for now.”

Name: Sanjay Chandra
Born: 1972 (New Delhi)
Education: Bachelor of Business Administration from Boston University.
Work Profile: Founder president of Ikon Clothing Inc., New York, from 1996 to 2001. He joined Unitech Ltd as head of sales and marketing in August 2002, then became managing director of the company in 2005. He is on the board of Unitech Developers and Hotels Ltd and Unitech Amusement Parks Ltd, which is building the largest amusement parks in the country.
Interests: A foodie who loves to travel.