Will Raj Kundra's Big Bet on IPL Pay Off Yet Again?
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A missed opportunity at a point in time does come back calling. That's precisely the case with Raj Kundra and his tryst with the Indian Poker League (IPL). The Man who was banished by the Indian Premier League (IPL) on proven allegations of betting is all set to shake off the gambling stigma from poker.
We heard you started early as an entrepreneur, will you take us through the journey so far?
I am a college drop-out. My father gave me six months to take stock of my life otherwise he would make me run his restaurant. That time, I was 17 and was sure that I would do bigger things. I saved some money and travelled around Europe, then Dubai and Nepal.
It was in a Nepali market, I first came accross Pashmina shawls and realized it had huge potential. With around $2000 which I had in my card, I bought shawls in every colour. Immediately, I flew back to London and knocked every door possible, called all the designers there. But, things did not work out as no one knew me. I was forced to look for employment and took a part-time job as a chauffeur.
Luckily, one of my client turned out to the head purchaser for a popular brand called Joseph in London. One day while I was driving him down, I purposely left the shawls on the backseat. He was excited to see the shawl and it helped me start a conversation.
I explained to him what it was which led us to sit for another meeting. He gave me my first hundred thousand dollar order. So, this way at the age of 19, I became one of the largest Pashmina shawl importers in the UK.
Next I went to Belgium where I targeted the diamond merchant. I started selling my shawls mostly to their wives and eventually started making really good contacts. These people helped me to look at other businesses and I started pumping in money into various sectors but mostly small investments.
Out of the various businesses you were into, which do you think have been the best bets?
I think Rajasthan Royals was the best bet. Back then, everyone tried to discourage me into making such a big investment of $12 million in one shot for my 12 per cent stake that had a 100 million valuation. I was the single largest investor then and 10 years down the line, I am still the single largest investor.
Everyone else came in with a few millions to buy the teams in the beginning and got a license fee every year from the business. So for me, if you look at it now, after 10 years, obviously without all the headaches, it was a great business investment.
Which incident taught you your biggest business lesson?
A couple of years ago, we had set up a home shopping brand in India. We saw it to be a pro t-making business. But unfortunately, the cost of putting your channel on the various platforms in the country was so expensive. We were paying about INR 22 crores a year to be on all the channels. And another INR 30 crore a year for distribution. Moreover, we tried to bring in too many things for the customer, which was a little overboard.
Unfortunately the business failed. Instead of profits, we lost INR 120 crore.
Are there businesses you want to get into or any brands you want to bring into the Indian market?
I am really satisfied with what I have at the moment. We have our company called the Viaan industries. It's a listed company. It's into wellness and my wife Shilpa oversees it from time-to-time.
Apart from that we are into licencing, technology, gaming and animation. These are the areas that excite me most. On the entertainment space, we started a new TV show "Aunty boli lagao boli' on Colors. It is India's first live game show where you could sit at home and bid through your mobile phone. The lowest unique bidder gets a chance to win a INR10 lakh car every Sunday. Under the umbrella of Viaan industries, we have managed to create several innovative products, we licenced match IPL, India's first official poker league.
And Poker is something that you yourself love to play....
I love poker and honoured to be the chairman of the Indian Poker League. Within friends and family, I have sold seven teams already for about INR 50 lakh. From next year, we're going to introduce more teams and sell them for higher valuation. The winning team will represent the national team at the World Cup.
Have you planned as to when is it going to be a profitable model?
I honestly think that in one year, most of the teams will break even or be profitable. As a league, we are profitable already with the kind of infrastructure we have set up.
Any future investment which you'd like to share or do?
So Viaan industries is focusing right now on three different channels in three different categories. We have entered the entertainment space and doing a lot of production. A Punjabi lm will be launched soon. We have got one game show and another game show is in the pipeline.
(This article was first published in the December issue of Entrepreneur Magazine. To subscribe, click here)