Anant Goenka: Capital preservation with an element of risk
Anant Goenka likes to consistently update and hone his skills, and implement the lessons learnt on the shop floor. A cautious investor, the Ceat MD is a believer in fast prototyping and exposure to innovation across countries
Enjoy what you do, do your best and keep learning," writes Anant Goenka, son of Harsh Goenka, chairman, RPG Group, a $3.1 billion (around Rs19,840 crore) company in revenue, in his bio on the Ceat website. And, the 36-year-old managing director (MD) of the tyre maker, with a market capitalization of over Rs7,000 crore, lives by this motto.
When it comes to business, he incorporates everything he has learnt—from Japanese philosophy to technology from Silicon Valley. But when it comes to money management, he is conservative. He believes in capital preservation.
Goenka studied business administration at the Kellogg School of Management and economics at The Wharton School in the US. He often travels to various institutes across the world to attend new programmes. Over the years, he says, he has tried out much of what he has learnt at Ceat Ltd. His current management process, for instance, is based on Japanese philosophy. “I attended a 10-day programme in 2006-07 in Tokyo by the Union of Japanese Scientists and Engineers (Juse). It had an impact on me. We started to try it out in Ceat with some degree of scepticism in 2008-09. But we managed to get some good successes out of it."
“One area where we have incorporated the philosophy is on the shop floor. There was always some amount of conflict between the workers and the management. However, everyone has the same goal of working towards improvement in the organization. If everyone’s goal is the same, why should there be conflict? We first worked on building trust. Then we did programmes to tell them that spending time with their families will make them happier in life. We did basic investment in infrastructure, improving the way they lived, and safety—we took it to a higher level," Goenka explains.
Goenka believes in constantly updating his skills. “I try and travel sometimes for education. Last year, for example, I spent three days at Silicon Valley just to understand what is going on there. That is where I saw some things in the automotive world. Similarly, possibly in the next six-eight months, I would like to make another visit to see what is happening in China. That is how I have been able to keep myself updated." This exercise, he says, opens the mind to new possibilities.
“For example, I recently visited Stanford Design School. I spent just a few hours there. They spoke about fast innovation and prototyping. We are working on something to bring that to Ceat as well. Fast innovation means you do something very quickly. In an hour, you can create a broad prototype and get feedback from customers on what are the areas of improvement and then work on improvements and come up with versions. And in a very short time you have a very low-cost prototype ready which you can launch in the market. That is one business tool that I learnt there."
Since RPG Group is a diversified conglomerate, Goenka has multiple options to choose from apart from Ceat, be it software outfit Zensar Technologies or the transmission business KEC International, where he worked as executive director, supply chain, from 2007-2010. But he was always attracted to Ceat, though he took the MD role in year 2012 because it fit his credentials. “It was the only product that was visible and understandable from a basic consumer point of view. Attachment with Ceat was always there. But joining Ceat was from a fit perspective, based on the skills I had got from past experiences."
Goenka says he is used to working in “discomfort", first with KEC and now Ceat. “When I joined KEC, I was much younger. I had just finished my graduation and was doing a smaller role. I was looking at the supply-chain business." He joined Ceat as deputy MD. “Both times, I got into a role which was possibly of discomfort for me immediately because I had limited experience (working on the ground)."
The Goenkas have a family office to take care of their finances. As a family, he says, they look at investing in new businesses. “We have RPG Ventures, which invests in some amount of start-ups, and new emerging businesses such as healthcare and IT companies."
“When it comes to money, I would say my strategy is more towards capital preservation with an element of risk so that there is an upside as well. But the larger philosophy is towards preservation," he says.
Goenka has been investing in new businesses too. But, with abundant caution. “There is so much change happening in the digital world. I think sometimes valuations can get extreme when you look at multiples of sales. I would say go by your simple old-fashioned methodology of doing discounted cash flow and making sure that over time the road to profitability is there."
Like his father Harsh, he too is fond of art, but doesn’t invest. “Since my father buys, I critique it."
Goenka tries to give back to society. “We have the RPG Foundation, where we look at two-three areas. Our biggest initiative is on blindness. India has the highest level of blindness in the world. We work with truck drivers to prevent accidents." The foundation also has a programme on English teaching for schoolchildren and empowers women by training them to drive.
In the last five years at Ceat, Goenka says he has been able to create a niche for the brand in the two-wheeler segment. “We are among the top players in the two-wheeler segment, with a very strong distribution network."
Goenka says the market capitalization of Ceat has gone up 20 times in the last five years. “Our market cap was Rs300 crore in 2012. We are now at about Rs7,000 crore."
Name: Anant Goenka
Designation: Managing director, Ceat Ltd
Education: Bachelor’s in economics from Wharton School, University of Pennsylvania, and MBA from Kellogg School of Management.
What is your money mantra?
When it comes to money, I would say it is more towards capital preservation with an element of risk so that there is an upside as well. But the larger philosophy is towards preservation.
Name: Harsh Goenka
Net worth: $2.3 billion
Source of wealth: Diversified
Education: Master of business administration, International Institute for Management Development, Switzerland
Brief: Harsh Goenka, fifth generation of a storied Indian business clan, chairs the $3.1 billion (revenue) RPG Group, named after his late father who divided the family empire between him and his younger sibling Sanjiv. Key companies in the diversified conglomerate include tyre maker Ceat, run by son Anant, and software outfit Zensar Technologies. Keen to back start-ups, Goenka has set up RPG Ventures and encourages staff to become entrepreneurs. One new venture is an online store for senior citizens. Goenka is an avid art collector.
Source: Forbes Rich List