Monday, August 13, 2012

Is Subhash Chandra finally passing on the sceptre?

As subhash chandra plans a gradual exit, B&E catches up with him and his two sons to discover more of what’s going on at work

It’s strange that someone who’s worth $2.5 billion has “poverty” on his mind; Subhash Chandra does! And it’s a tale that even you would have never ever heard before, or at best, would have discarded, as just another dig from the grapevine. As a young lad, Subhash Chandra wanted to become an engineer. He found the first step in the dark and managed to make his way through the gates of an engineering college. But much before he could justify his faith in Newton, he was asked to empty his hostel dormitory; the reason: Nandakishore Goenka’s pocket (Chandra’s father) wasn’t deep enough to keep his son’s engineering dreams alive. Chandra isn’t too shy about it, as he tells B&E, “I still remember the day I was asked to leave the engineering college, as my family could not afford the fees and the expenses thereof. Otherwise, life would have been different.” This Hissar-born, seventeen year-old lad had to leave college, as his father considered his education a big liability and preferred that Chandra came back to his father’s rescue in the family agricultural business; Chandra’s future, a big black question mark!

Mechanics to agriculture is a transition that few would embrace with a happy heart, but Chandra had no choice. Then, everything changed. Within a year of his joining his father’s business, he had proven the turnaround CEO for dad. A year later, he started a vegetable oil unit and he bloomed yet again. This once self-proclaimed dreamer of hi-tech machines, had heard his calling!

Today, Chandra easily finds a handsome position in any list that would feature the world’s billionaires. Technology’s loss proved media’s gain, and for the past three decades, Chandra has steered his brainchild – the Essel Group. This November he will also turn 60, and as any seasoned lion, in the course of natural progression, he has been in the thick of succession planning activities at work. And he has been gradually passing on the baton to his two sons: Punit and Amit Goenka. Chandra himself has been making public his intentions to give up control over his company for quite some time now. Punit Goenka, Chandra’s elder son, says, “He has given a time of two years, but I don’t think he will ever retire completely.” The younger lad Amit’s response (on when he expected Chandra to retire) was dramatically different. “What?” was his exclamation!

Punit however says, “Five years ago, my father was actively taking all key decisions in the company, but today I see his transition into more of a non-executive Chairman. He doesn’t interfere in the day-to-day business.” Today, Chandra doesn’t even attend the monthly meetings of the company. “I send him a report about these meetings today, but I don’t know whether he checks it or not. But two years down the line, I think we will just see him at board meetings or at dinner tables.”

Meanwhile, the GenNext at Zee and other businesses of the Essel Group looks all charged up and ready. Punit Goenka is spearheading the group’s flagship company Zee Entertainment Enterprises Ltd. (ZEEL), while Amit Goenka is the vanguard of the technology frontier of the Essel group and is responsible for evaluating and identifying innovations. Amit is the CEO of Pan India Network Pvt. Ltd. He is actively involved in managing the affairs of the lottery business of the group.

Incidentally, Punit’s first love was also technology. In fact, it was Punit who was actively involved in the launch of Dish TV. But later, he was convinced by father to get more involved in the media business. Thus, Punit joined Zee TV in March 2005, a time when the company was struggling hard to retain viewers & advertisers. Even its revenues were falling dangerously. “After KBC happened to Star Plus, it destroyed other channels. But Zee TV made an unbelievable comeback after 2005 and since then, they have been growing steadily. I think they have been lucky to finally get Punit Goenka as their captain. Hope he can keep the momentum going in the face of stiff competition,” said a senior executive working with a General Entertainment Channel.

Today, Zee TV is running neck-to-neck with the top two GECs (Star Plus and Colors). Sample this: the average channel share of Zee TV in the GEC category during the last four weeks has been 19%, just short of the top two – Star Plus (23%) and Colors (22%; refer table). But quiz Punit about competition and he says with a characteristic calm, “My view is that a lot of cheap money has come in, and they have tried hard to capture market share. But we at Zee, are frankly not in this business to raise money from third parties. In terms of profitability, no one can match Zee. So that way, I am already number 1. Number 1 in rating terms is of no use, if you don’t monetise!”




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