'Amit is more of a risk-taker. Punit is someone who creates consensus'

Subhash Chandra, 63, has been a pioneer businessman in many ways - the first to enter into the satellite TV business, and the first to start an amusement park - and is still bubbling with ideas. He has quietly carved up the ownership of the Essel Group between himself and his three brothers, and gone further to provide independent roles to his two sons. Punit gets the media business and Amit, the infrastructure-related ones. He discusses his future challenges with Anand Adhikari and Mahesh Nayak. Edited excerpts from the interview:

Q. You carved up the family business amongst yourself and your three brothers some years ago. Is there a clear ownership structure for the brothers?

A. We had a clear demarcation all along, but in 2009/10 we sat down and we separated. All of us own a small stake in one another's businesses. But each brother owns majority stakes in his own. There is no group holding company, but the brand can be used among the brothers. The finances of each one's business are also separate, but we help one another. My brother Jawahar Goel owns and runs Dish TV. Ashok Goel is managing Esselworld and Essel Packaging. Laxmi Goel has real estate, movie distribution and the mall businesses. But each one is free to do what he wants to do.

Q. Is there a non-compete clause in the agreement between the brothers?

A. Yes, there is a non-compete clause. If someone is getting into a business where one of the brothers is already present, we take permission [from that brother]. For instance, the utility company has the mandate to do gas distribution. We are seeking permission and help from Laxmiji's company to do business in gas distribution. We have also written down that as far as possible we will avoid entering businesses where one brother is already operating.

Q. Do you have real estate ambitions, a sector where your brother Laxmi Goel is already present?

A. We are not that much into real estate. We will be developing a property besides Esselworld, but that would be more of an entertainment and tourism destination.

Q. Your elder son Punit has been handling the media business since 2008. Now you have put your younger son Amit in charge of the growing infrastructure business. Was this done with an eye on succession?

A. [I have] not thought from that angle, but if that is the way it happens, then it happens. Amit himself was interested in the non-media businesses. [Punit and Amit] are different from each other. Each has his strengths and weaknesses. Amit is more inclined to take risks and has his own mind, while Puneet is someone who creates consensus among people and then goes with it.

Q. What are the main challenges of the infrastructure business?

A. The issues surrounding infrastructure today are because of environmental and other external reasons. Infrastructure companies are in a stress situation. They have over-borrowed and profits are not there. At Essel Infra we have not gone that way. We are keeping a minimum profit in projects. I think Amit with his CEO make a good team. In three to four years, the infrastructure business will be a sizeable business.

The way the whole thing started was we [thought we] should be in the consumer interface business. It started with the lottery business. My feeling is that there is no private sector utility company in this country at this moment [so I thought] why don't you go into utility areas which is a consumer facing business? Then we said we will do power distribution, gas distribution and solid waste management for municipal corporations.

Roads started as a separate infrastructure company. At that time Amit was not handling infrastructure. This [utility company] started afterwards. Amit was doing consumer facing business so I asked him to get into these types of consumer facing businesses. This is how he bid for some cities in Madhya Pradesh, came into Maharashtra, took an existing franchise in Nagpur. We had already won a power supply project in Aurangabad. The company also won a water supply bid in Chhattisgarh. The projects are progressing well. We will make the utility vertical into a separate company. At that time, Amit was not looking after the infrastructure business. He showed interest in the infra business, so we merged the businesses.

Q. How do you divide your time between the two businesses - media and infra?

A. Well, I do not spend any time in either of these businesses. The media [business] is on autopilot. Personally, I am handling the health and wellness business in the US. It takes up 10 to 12 days of my time in a month. However, I do oversee the media and infra businesses to see if they are [going] in the right direction with a 2020 vision.

Q. Will the infra business be bigger than the media one by 2020?

A. It could become. The government has to put more emphasis on infrastructure.

Q. Any plans to get into new businesses?

A. The wellness business will take me one more year to settle. Then I will think of doing some other business. One thing at a time - that is what I have learnt. I have started nine new businesses in India. Two of them didn't work out - one being the Indian Cricket League and other the satellite project. Seven survived, and are doing well. Not a bad ratio.

Q. Tell us more about the health and wellness business in the US?

A. It is a 360-degree business. We started with a 24-hour business channel. Today, the TV station reaches 40 million American homes. We have our own website. On the channel, to get mass appeal we discuss diabetes and other ailments. On the website, we discuss niche issues and personal issues. This is the second pillar of the wellness business. The third is the 24x7 helpline where people can call if they feel lonely. They call us to discuss their psychological, relationship and health issues. We have trained staff which coaches them on how to cope with life. Then there is the fourth pillar - we sell natural products for skin and hair care. We give them ayurvedic herbal medicine, which we call self-optimisers. Then there is a fifth pillar - we are building a 250-room wellness centre in New York state, based on nature care and ayurvedic principles. It should open by the summer of 2015. From there we plan to go to other countries. We have invested $150 million in this business, but if you ask five years from now, it will be a $1-billion business.

Q. How are you financing your infrastructure business?

A. There is promoter funding. We have put `600 crore into the infra business. There is also quasi equity available from infrastructure development funds like IIFL. They give us quasi-equity which is taken as promoter equity for the project. There are couple of projects where we took third-party private equity investors to get funds. However, know that our projects are self-funded. We have borrowed at the promoter level long-term funding.

Q. What about your finance business?

A. The reason we entered that business was because ZEE itself was sitting on a lot of cash. We had burnt our fingers in the past. ZEE is a listed company and in the past we had taken money from ZEE for promoter use and that was not liked by the capital market and they punished us suitably. But now we are strictly following [the rule] that we will not be taking money from ZEE. But still, ZEE has plans to grow through inorganic growth and acquisitions, these will require funding. For example, we bid for an international company Chello, it's a Liberty Media company. We bid for $1 billion and somebody paid them i1 billion and we missed out. It [would have] fitted with our future plans on media business.

Today, ZEE's return of treasury is six to seven per cent. The idea is if ZEE puts money in the financial services company it will earn better returns. Essel Finance will raise money from companies like ZEE. We are also raising a real estate fund.

@AnandAdhikari, @MaheshNayak