A Helpline for Senior Citizens by Arun Nanda
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| Image: Vikas Khot |
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What was the turning point for Mahindra Holidays? When did it become a good story?
I think when people started using the product, the team has put in a lot of effort tin Mahindra Holidays – our product is different. It’s a very composite business model, very different business model, very well thought through and I think – consistent delivery of service to the customer. That is something we have mastered. But the first 5 years Club Mahindra made losses. It tolk us a lot fo effort to build this institution. But look at it today, its rocking. We are already the third most valuable hospitality company, Taj, Oberoi and us, and we’re a close second to Oberoi. And I started this company with 18 crores of rupees. That’s what we put in to this company. When we did the pre IPO values last year we got a billion dollar valuation. Today its about 4300 crores in 12 years. And first 5 years we made losses. Most people didn’t know Mahindra Holidays would do this well. Its 4300 market cap, 27 resorts, 110,000 members. Its growing steadily.
How did Mahindra Holidays all start?
You know how I started Mahindra Holidays? We used to run Guestline Hotels and at some stage we realized that one of the Mahindra philosophies is that we should be leaders in the business we are in and we realized that given the headstart the big boys have we wont be able to be number one in the hospitality because it requires huge capital. Around that time I used to read newspaper articles "Times Share or Times Scare – fun filled holidays or hassles"- becase most timeshare operators had taken people for a ride. One day I went to the Chairman and Anand and I said you know I've been reading these articles none of these articles criticize the product. They criticize people behind the product. And our strength is our reputation. Because it’s a promise to deliver.
Most of your businesses, whether Timeshare or Mahindra World City or Mahindra Life Space which is a developer, all need land. Several infrastructure projects have been held up because of land problems like in Nandigram, Maharashtra and Orissa. What has been your experience?
I built that 3000 acres of land for Mahindra World City in Rajasthan by not greasing any palm. But you have to build a reputation that you don’t give handouts. I say that my files get cleared faster because if Mr X pays money then the officer also sits on the file saying I'll wait for the money and sit on the file and only clear it after it arrives. If they say Mahindras don’t pay – he has no incentive to sit on the file. But why did Jaipur happen? Jaipur happened because the then CM – wanted to bring IT into the city and she had seen what we had done in Chennai and was told by Infosys – get Mahindras in to build Mahindra world city. And I delivered to her. In 14 months time we had Infosys and Deustche bank operating out of that project. Credibility also you must have.
How difficult was it getting the first Mahindra World City to take off in Chennai?
I've had some very difficult times – when I got into this Mahindra World City in Chennai it took me 5 years to accumulate land. Because that land was private acquisition. And after I built it, for the first 2 years I had no customer. In fact, people used to come and tell that these projects will not work. Both Anand and the Chairman believed in my conviction. If they had not supported me that project would not have taken off. We used to get some small customer here and there but I had told my colleagues look if youre building a project of that type the anchor customer has to be a blue chip. I would get phone calls that some hosiery unit wants land, some Korean company wants to buy land to build handtools, and I would – it was very difficult when your budget says plan so much and the actual is nil – to turn away a customer at that time, is very diffcult. But somehow good sense prevailed Mr. Narayan Murthy was the person who believed in my dream and supported me by being the first customer.
How did Mr. Murthy become involved?
We were talking to Infosys but there was resistance we knew they were looking for space, but there was resistance. Then I went to Mr Murthy and Mr Mohandas Pai and I said to them look you're a visionary – whether you take the land or not, but this is my dream. Why don’t you please have a look at it? And you'll be surprised that Mr. Murthy went there at 6 am in the morning to see that land. And rest is history. Because he told his people this is the future. And I want to be part of the future. And that’s what turned it all around.
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