The Specialist

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He’s a valuable advisor to ambitious Indian businesses with global dreams. Meet Vishesh Chandiok, National Managing Partner, Grant Thornton India or should we call him the prized merchant of the great Indian dream...

Those traditional mahogany interiors, the plush couch, complete with leather upholstery and, of course, fine tobacco smoke circles wafting from the pipe, held carelessly between his lips. Simple and sober, yet exuding dollops of classic old world charm. That’s Vishesh Chandiok for you, National Managing Partner, Grant Thornton (GT), India.

Gordon Gekko, a character from the 1987 film Wall Street (that even won Michael Douglas an Oscar) said that “Money never sleeps” and Vishesh Chandiok, who specialises in helping his clients multiply their money and investments, agrees wholeheartedly: “You make money in this business by charging time, so work life balance is to some extent a fallacy.”

In the business of money, somebody wins and somebody loses, but for Vishesh and his firm Grant Thornton, the success of their clients is their success, as their firm has aligned its growth with the success of its 1200-odd active client base. As the fifth largest accountancy firm globally and one of the oldest in India, Grant Thornton claims to cover anything and everything under the entire advisory value chain. “It depends by service really, from an idea to compliance and possibly exit; or business plan to implementing that plan; or designing an India-entry strategy, if it’s a global company; we even do HR issues, like compensation structure and organisation design; or cross border transactions, including inward and outward M&As and helping a PE/VC firm identify an investee,” boasts the man at the helm of Grant Thornton’s Indian affairs.

So what differentiates GT from the once big eight, to now the big four global accounting and consulting firms (PwC, Deloitte, Ernst & Young, KPMG). “We have no ambitions of wanting to be a part of that group. Our focus is quite different from the focus of those firms, which is to be the auditors of the top 1000 companies. Our focus is to concentrate on the mid-market segment,” explains Chandiok. Besides, GT’s focus clearly remains on privately-held businesses or promoter driven companies, where the promoters require solutions; it could be listed, it could be unlisted, very large firms, generally where promoters are actively involved in the management and where the requirement stems beyond merely the compliance requirement of audit. This is in stark contrast to other accounting firms that are present through the length and breadth of the industry. “Whatever market we specialise in, we remain the leading firm. So, if in India our key focus areas are technology, real estate and healthcare, we are the clear leader in real estate,” Chandiok points out.

As Indian businesses continue to realise their ambition to become global companies by scaling their operations, advisors too are raking in big money. The total deal value including M&A and Private Equity has reached $70.14 billion ($51.11 billion for M&As and $19.03 billion for PE) in 2007, as against $28.16 billion in the previous year. Consider PE investments only in India. From just 60 deals worth $1.1 billion in 2004, the number has reached a whopping 405 deals worth $19.03 billion in 2007. “Outbound acquisitions is one area where we have worked a lot. We were involved with some of the most high profile ones,” says Chandiok. These include the i-flex’s acquisition of Mantas, Subex acquisition of Azure systems, formula one acquisition by Vijay Mallya, just to name a few. But the jewel in GT’s crown is being ‘the most active nominated advisor (merchant banker)’ for companies looking to list at the Alternate Investment Market (AIM) platform on London Stock Exchange (LSE).

“AIM of the LSE is the best market to provide growth capital for early to mid stage companies,” feels Chandiok. Rather than assessing a company on the basis of its past performance, AIM values it on future potential. Moreover, the advantages of AIM are that it offers flexibility and has no minimum requirement; secondary issues are very clear and thus fund raising is much easier. “No doubt designed primarily for emerging or smaller companies, AIM is considerably the best, with balanced regulation and not loosely held, what many critics feel. Besides, it’s not cheap,” defends the ‘specialist’ when it comes to AIM listing’. There have been other successful growth markets KOSDAQ (Korea), SASDAQ (Singapore), TXSV (Toronto), GEM (Germany), but no one is close AIM. In 2007, as many as nine India centric companies were listed on AIM, raising a total of $846 million, as per a fact sheet by the London Stock Exchange. Some of these companies include UTV Motion Pictures, Dev Property Development, Evolvence India, Promethean India and Indian Film Company.

But what is that crucial element that GT looks for before associating with companies? “First and the foremost belief in management team; expertise in the sector, what they have done before in the same business or previous business and generally me and my collegeue who come from Grant Thornton UK, all of them have been very impressed with quality of management overall. Second thing that we look for is future potential, so immediate profits don’t matter,” he avers, adding that lastly, there must be a reason good enough, as to why they want to raise international equity. “Of course, we can also educate them about the positives of overseas listing,” he says.

“As a nominated advisor or a nomad (as it is known), GT sits on top of the head of a company and ensures proper functioning, in accordance with the rules and the regulation with various authorities,” says Chandiok with finality, adding that at the end of the day, if you want returns on investment, you need to be really on your toes all the time. Did someone say, making moolah was a cakewalk?

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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