Sanjay Guglani recalls his entrepreneurial journey that led him to reinvent himself repeatedly, culminating in the launch of Silverdale
12/11/2017 5:33:59 PM
|written By : NIthya Subramanian|
Always up for a challenge, Sanjay Guglani has what it takes to be a winner. His foresight and understanding of financial markets has helped him lead Silverdale Capital to success.
Here is an exclusive interview with Guglani, 49.
India Se: Tell us a little about yourself.
Sanjay Guglani: In 1968, almost immediately after my birth, my father took up the challenge of joining EDP (Electronic Data Processing) Department of Indian Railways, where he wrote programs which today run the Bombay local trains. When I was nine years old, he joined Hindustan Zinc at Udaipur. I remember I was refused admission at St Paul’s School for not knowing Hindi, because Hindi wasn’t taught in Bombay where I lived earlier. I not only learnt Hindi but became a topper, earning a National Talent Scholarship. Subsequently, I obtained my Chartered Accountant (CA), Management Accountant (ICWA) and Company Secretary (CS) degrees. I chose chartered accountancy as I wanted to be an income tax expert. In those days, the tax rates were over 50 per cent and CAs ruled the roost.
India Se: So what took you to the investment world?
Sanjay Guglani: I started my formal career in Elite Stock Management, then one of the largest brokerage houses, and ended up launching one of the first retail portfolio management schemes (PMS) in India. Thereafter, I moved to SRF Finance (now, GE Capital) where I managed India’s largest badla cash-future arbitrage book.
India Se: How did you embark on your entrepreneurial journey?
Sanjay Guglani: Independently managing proprietary investments of SRF Finance gave me the confidence to start Saksham Financial Services in 1994. Subsequently, it became one of the top distributors of mutual funds in India. In 1999, an LIC agent suggested my father take out an LIC Jeevan Shri policy. My father asked me to evaluate the policy as it gave assured tax-free returns of 9.5 per cent which meant pre-tax returns of about 18 per cent. That was unbelievably good. Armed with a laptop, I made my first big presentation to an industrialist friend. He was impressed, and asked me what amount of policy should he take. Not knowing the typical size of LIC policies (Rs 25,000 to Rs 50,000 as I learnt later), I suggested he could put 10 per cent of his profits for the year into the policy. He bought the policy for Rs 1 crore (Rs 10 million, $208,500), which became one of the largest policies then. Positioning insurance policy as guaranteed investment product enabled my firm to become the second biggest distributor for LIC, India’s largest insurance company. Of course, it also forced LIC to reduce policy returns and put numerous restrictions on taking the policy!
India Se: Haven’t you dabbled in venture capital too?
Sanjay Guglani: Yes, I had launched VCline.com which became the holy Bible for venture capital in India, so much so that it was referred to in the first guidelines on venture capital issued by SEBI (Securities Exchange Board of India). I got the first foreign investment into last-mile broadband in India. But my firm was paid a fraction of what was paid to a Big Four firm to endorse the valuation of the company. “No more,” I said to myself, and set out to reboot myself.