Nirav Modi, Chairman, Firestar Diamond
Age: 43
Rank in the Rich List: 63
Net Worth: $1.52 billion
The Big Challenge Faced in the Last Year
With the global financial crisis, diamond prices fell by as much as 40 percent and industry morale dipped even further. There was widespread industry sentiment that consumers would simply stop buying diamond jewellery.
The Way Forward
From being an exclusive jewellery brand, Nirav Modi will now be sold at the brand’s flagship retail outlets. The first such store opened in New Delhi and the next one is slated for Mumbai.
Nirav Modi cannot draw, but design is his calling card. How this works: He communicates his ideas in writing or by verbally discussing the brief with his designers, who then create a prototype. Multiple iterations are a norm till he gets what he is looking for. Nothing is cleared without his approval.
His eye for design is what catapulted him onto the global stage and defines his uber luxury eponymous jewellery brand Nirav Modi. “And I draw inspiration from anywhere, and at any time,” he tells Forbes India. Like in 2008, when the third-generation diamantaire noticed his daughters playing with a non-descript hair band, taking turns to wear it as a bangle on their tiny wrists. He thought: Why not create an expandable bangle, set in diamonds, much like this hair band?
It took his craftsmen two years to produce a piece that met Modi’s exacting standards. Today, this 1,600-diamond Embrace bangle, with 800 locks, is considered one of his foremost creations. Priced at Rs 15 lakh, the bangle even fascinated American filmmaker Steven Spielberg so much that he insisted on trying it on, recalls Modi.
Over the years, the jeweller has become renowned for his fluid designs. There is minimal use of gold, so much so that it is almost invisible. His necklaces, for example, shift in tandem with the wearer’s body movements. His collection is priced between Rs 10 lakh and Rs 50 crore. Modi, among the leading super luxury diamond jewellers in the world, says he counts six of India’s top 10 billionaires among his regular clients. His company Firestar Diamond had a turnover of nearly Rs 10,800 crore for FY14. The company did not divulge its profits.
“Exclusivity is important for us. We make only exceptional pieces, many a times only one of a kind. That’s why every piece of ours is a labour of love,” says Modi, who was brought up in Antwerp, Belgium.
Till 2010, Modi only catered to the American markets, selling loose diamonds to jewellery makers, and ready jewellery to retail outlets in the US. It was at that point that he decided to create a luxury brand, and the very niche customer base for this was reached only by word of mouth.
But this year he has embarked on a new journey: He has taken a retail route, with plans for 100 Nirav Modi stores globally over the next 10 years. The first of his flagship stores was launched this March in New Delhi.
But this move sets Modi a new challenge: Balancing easier access to his designs with exclusivity, while not compromising on either.
A Family Business
Modi was born into the business. His late grandfather Keshavlal Modi was among the first set of diamond merchants from Palanpur (in the Banaskantha district of Gujarat) who entered the business in the 1920s, selling rough diamonds. He moved to Mumbai in the 1930s and to Singapore in the mid-1940s.
In the 1960s, Modi’s father Deepak Modi shifted his business to Antwerp, the industrial hub and the global centre for diamond trading. Nearly 84 percent of the world’s rough diamonds pass through Antwerp’s diamond district, also known as the Diamond Quarter.
Dinner-table conversations would almost always revolve around diamonds, chuckles Modi, recalling how he wanted to be a music conductor when he was young but lacked the flair for it.
He, however, knew where he was destined to be. In 1990, at the age of 19, he quit the Wharton School of the University of Pennsylvania in the US, and jumped straight into the trade. Modi’s maternal uncle, Mehul Choksi, chairman and managing director of Gitanjali Group, one of India’s largest diamond companies, was looking to start a jewellery factory in India and invited Modi to join the new initiative. Modi, who wanted to be in the emerging market, took up the offer and moved to India to learn the ropes of the diamond business.
With Choksi, Modi started out with a salary of Rs 3,500 per month. But his role kept expanding. With time, he began to earn a share of the profits from a business vertical focussed on procurement and design. This, along with his earnings from financial investments, would provide the seed capital for his entrepreneurial venture. In 1999, he floated Firestar Diamond, selling diamonds to the US market, with clients including large retail chains with over 20,000 stores and to the US Armed Forces.
The Investment Question
(This story appears in the 16 October, 2014 issue of Forbes India. To visit our Archives, click here.)