How one man's effort is changing Kolkata's landscape
From palatial colonial buildings in dilapidated condition in the dingy bylanes of the city to posh neighborhoods with modern structures and swanky malls – Kolkata’s landscape has seen a major overhaul in the last four decades. Harshavardhan Neotia should be credited for all of it. A Havard Business School graduate, Neotia had a humble start at his father’s cement business but saw a major turn-around with real estate. In 1999, he was conferred the Padmashri for his outstanding contribution to the social housing sector. In an exclusive interview, Neotia talks about his future plans for the beloved city and its entrepreneurs.
Contrary to the popular belief that West Bengal is not business-friendly, you started a new incubator. How convinced are you with the idea?
In 2016, as the FICCI president, I traveled across the country and was really impressed to see how the government is working towards fueling the startup culture in India. Also, I traveled to Israel and interacted with few startups there. It got me thinking, why can’t we have something similar in Kolkata. Here, the concept is new and not very well explored. I discussed the idea with one of my former colleagues who really got excited. He is well aware of the ecosystem, much more than I am. When I proposed him to build something similar, he read about it, spoke to people and traveled around to see how it functions in other parts of the world. Last year, around March-April, we figured out how it works and within next two months, the incubator was ready. The response has been very good.
How is this sort of a set up different from the conventional business practices?
In conventional businesses, you have to sketch a plan and take some amount of risk. In the new setup, businesses respond differently, you cannot predict things. It will take at least two-three years to even know whether we are on the right track or not.
So, it is a one-year incubation set up?
It depends. For the first batch, we had taken in 10 people but two of them left within two months as their ideas were not going anywhere. Not necessarily everybody will complete a year. So it depends from batch to batch.
From the early 80s till now, you can be highly credited for changing Kolkata’s landscape. However, personally what is the reflection of yourself when you look back?
I was born into a 150-year-old business legacy and grew up in a joint family set up. The three generations lived in the same house with their different set of beliefs and values. Business was the topic of discussion from breakfast to dinner. So, I was brought up with no choice and was always aware that eventually, I have to join the business. When I was 21, my father asked me to join him. At that time, he was building a cement factory in Gujarat.
The project did well and boosted my confidence. Then, we acquired Modi Cement. It turned out to be a sick company, a victim of labour unrest and was on the verge of closing down. For the next 10 years, I was reviving it and simultaneously, experimenting with real estate. That was an exciting phase. Then the family decided to diverse their business interests that dislocated my life for a while.
How hard was it to cope up with the situation?
I had to restart my life at 45. Just to give you an example in term of numbers, I was part of a business with a turnover of Rs 1000 crore. I stepped down and took over as the Managing Director of the real estate business, which was worth only Rs 40 crore. When I signed cheques, I saw some zeroes missing. It was actually Rs 15,000 and Rs 20,000 instead of lacs; it was a bit of a shocker initially. It was straining psychologically too.
I had the opportunity and the money but had to adjust to a new reality. It was not a crisis but an inflection point where you transform because of some larger family decision. So, I thought, it might take few years but would be addressed. My father and uncles had decided to retire so I had a clean slate to experiment.
Why did you choose real estate and architecture?
Being born into a family that had deep interests in cultural activities, I got the opportunities to meet artists and painters, philosophers and thinkers from a very early age. Moreover, I grew up in (then) Calcutta, which is home for all of these things, I think I am a product of that milieu. As a part of a joint family, I was dragged to every cultural event we were invited to. My uncle was a great enthusiast of heritage buildings and often visited archaeological sites, he used to take me along. My legs would be paining and the sun would be too hot to bear.
However, what at that time seemed like a terrible torture, now when I look back, seems like a blessing. Today, I thank them for pushing me and opening my horizons. So, maybe art and architecture was imbibed inside me in this way. Architecture is something that I really enjoy. That’s why I design and put in my thoughts behind the creatives. Obviously, I have architects working under me but I lead the design conceptualization.
When you wanted to expand, how did you choose the sectors you got into?
I do not get into any business without a sound reasoning. First, all the four sectors have strong links to real estate. Second, I set up the hospital and a non profit organization in memory of my grandmother and my wife is looking after those two verticals. They are doing great business. Thirdly, education happened under the societal trust.
As a business team when you are pursuing an acquisition, what kind of profit do you look for?
We take a slice of the equity from these companies and in return, we provide them with mentorship, infrastructure, seed funding etc. When they start doing well, we sync along. So that’s how the system works. But, what makes our model interesting is the fact that if any of them are doing work in the four sectors that our company has interest in then we permit them to test their trial round. It gives us more confident products.
What were the few things that you did right in business?
The nature of all businesses is different. However, there are few fundamental things that never change. I am a bit overwhelmed by the fact that the company has managed to remain on the top for the past 12 years. Today when I look back, there were many opportunities that I feel I had missed out.
But who would have known that Lehman Brothers collapse would come in 2008 and change everything. If the company had bagged those projects, we would have been in deep trouble. So, what was very disappointing at that time became a bigtime relief now. Losing those battles at that time is victory now!
(This article was first published in the July 2018 issue of Entrepreneur Magazine. To subscribe, click here)