Speaker 1: Hollo On.
Speaker 2: Welcome from Davos. I am Siddhad Zarabi and with Mela,
Speaker 2: director of the Ada Group who oversees several businesses in
Speaker 2: the group and has founded many companies as well. Ananea Welcome.
Speaker 2: This is Brainstorm twenty twenty six, as we call our
Speaker 2: coverage from here, and I'm wondering, in the time that
Speaker 2: you've been here, what are the initial few stands of
Speaker 2: thoughts and developments that you're picking up on the ground
Speaker 2: here at Davos.
Speaker 1: Thank you so much for having me. It's really beautiful.
Speaker 1: You guys have chosen a fantastic spot and it's literally freezing,
Speaker 1: so you know, it's been great. I attended the seventh
Speaker 1: thirty session. I've been super keen about this a couple
Speaker 1: of priorities for this year. I think, you know, AI
Speaker 1: has is really transforming things quite rapidly, and we don't
Speaker 1: quite know where or how the landscape of this may change.
Speaker 1: Currently a group. There group stands at a market cap
Speaker 1: of one fifteen billion USD as of March twenty twenty five.
Speaker 1: We span across forty one countries. Global treading, for example,
Speaker 1: is eighty countries, twenty plus sectors, so it's a very
Speaker 1: interesting time for us to really understand what's the best
Speaker 1: way to go about global integration. I think human capital
Speaker 1: has become more important than ever. How does one train
Speaker 1: the workforce to become more productive so that there is
Speaker 1: no crunch in the labor force, so that there is
Speaker 1: no suffering of the middle class in any way, so
Speaker 1: that productivity goes up and there is no redundancy of
Speaker 1: human capital. Right, So there is a little bit of
Speaker 1: a moral dilemma when it comes to AI, and we
Speaker 1: want to make sure that we make the most of
Speaker 1: AI to increase our human efficiency and productivity and not
Speaker 1: in any way make anything that we are doing in
Speaker 1: terms of employment redundant. So there were point.
Speaker 2: Because there are fears about the impact of AI on
Speaker 2: the labor markets, and for a country like India, You're
Speaker 2: absolutely right, it's a very significant point.
Speaker 1: Also because the group our group is across at forty
Speaker 1: one percent of our operations is outside are outside of India,
Speaker 1: which means that global integration has become very, very very important,
Speaker 1: more important than it probably has ever been. So a
Speaker 1: huge question that we're asking ourselves is how do we
Speaker 1: go about doing that in the best way possible Across
Speaker 1: twenty plus sectors.
Speaker 2: Absolutely, And one of the points right here yesterday in
Speaker 2: our coverage that came out was about not just American
Speaker 2: companies investing in India. This point that came up was
Speaker 2: that the Group Group is also one of the largest
Speaker 2: Indian investors in the United States. And in the context
Speaker 2: of the US wanting more inbound investment, you know, what
Speaker 2: is happening. What's your sense.
Speaker 1: With such a wide.
Speaker 2: Span of businesses and geographical coverage, how significant is the
Speaker 2: trade related disruption that businesses are seeing. Also the fact
Speaker 2: that we continue to have fifty percent tariffs on Indian
Speaker 2: exports to the United States.
Speaker 1: I think from global trade point of view, From global trading,
Speaker 1: we're very still very much ranked on WTO and I
Speaker 1: know the United States has said something about has offered
Speaker 1: some reforms, so we'll see where that goes. As long
Speaker 1: term investors. For whoever's long term investor across the world,
Speaker 1: I think India is the market to be. We have
Speaker 1: the highest working population, we are the fastest in WACGR
Speaker 1: as well, we're the fastest moving short term. Of course,
Speaker 1: right now there's a lot of volatility and we'll have
Speaker 1: to wait and watch and see where that goes, but
Speaker 1: I think India is the place to be. India is
Speaker 1: the place to invest from a long term point of view,
Speaker 1: and it is a very very very exciting time for
Speaker 1: us as our Prime minister also mentioned, you know, Vick
Speaker 1: sidbarat twenty forty seven. So whether that comes to companies
Speaker 1: like Swatansa where inclusion becomes more important than ever. Again
Speaker 1: coming back to AI, some people are going to be
Speaker 1: able to given how diverse we are as a country,
Speaker 1: some people are going to be able to really adapt
Speaker 1: to this new way of working and some people are
Speaker 1: going to struggle with it. So bringing women into the working,
Speaker 1: into the formal banking absolutely becomes more important than ever. Infrastructure, right,
Speaker 1: Royal estate which I lead us HR was ninety two percent,
Speaker 1: So infrastructure is extremely important for US as a country
Speaker 1: as well of course policies as well. So there's a
Speaker 1: lot going on. There are a lot of moving parts
Speaker 1: and uh, you know, when the Internet has had come in,
Speaker 1: I was still a child at that time, but going
Speaker 1: back and reading, I think we haven't even understood the
Speaker 1: level of disruption or I would say evolution that AI
Speaker 1: can create.
Speaker 2: So that's what, according to you, is the single most
Speaker 2: you know point that struck you about AI, saying that
Speaker 2: oh wow, this is this is going to change everything.
Speaker 2: That that one kind of pivotal moment for you, yourself
Speaker 2: as a user and as a business person.
Speaker 1: So a lot of things are getting automated, right So
Speaker 1: I think from a softer point, as human beings, our
Speaker 1: emotional intelligence becomes more important than ever, so how we
Speaker 1: interact with each other. I think basically EQ becomes super
Speaker 1: super super important, because that's that's one thing right now
Speaker 1: the AI does not have that we have as human beings.
Speaker 1: One thing that really struck me I was reading was
Speaker 1: eighty five percent of companies institutions around the world are
Speaker 1: working with AI, ten percent are seeing someund changes, but
Speaker 1: only five percent are actually having some sort of impact
Speaker 1: on their bottom line, which means that we're not really
Speaker 1: there is some sort of a bottlenck when it comes
Speaker 1: to AI in institutions around the world. So how do
Speaker 1: we what is that bottleneck? Have we really understoody? I
Speaker 1: do even know where this is going? When there's uncertainty,
Speaker 1: there can it can either it can be fantastic because
Speaker 1: there can be opportunity, or they can be disaster because
Speaker 1: we don't really know what's going to happen? So have
Speaker 1: we prepared ourselves enough to understand what's going to happen?
Speaker 1: And go back to the point of human capital because
Speaker 1: they're you know, there are two really major things when
Speaker 1: it comes to productivity, which is something that I'm personally
Speaker 1: working on. One is mobilization of workforce. So how do
Speaker 1: we train our people, including myself to understand and things
Speaker 1: like AI better to improve our skills, improve our adapt
Speaker 1: rather right, things are changing, so how do we change
Speaker 1: with moving times? And this is second second thing is destabilization.
Speaker 1: So whether that comes to things like taxation which we
Speaker 1: don't have much control over, or things like have we
Speaker 1: linked or should we change what uh incentive? What sort
Speaker 1: of KPIs A incentives are linked to in the in
Speaker 1: this changing landscape. So I think these two points become
Speaker 1: extremely important as strategies. Mobilization of workforces strategy and destabilization
Speaker 1: of the workforce as a strategy. So again it comes
Speaker 1: back to human beings, uh, And it comes back to
Speaker 1: how do we use AI two improve our productivity, to
Speaker 1: use it as a tool to strengthen ourselves rather than
Speaker 1: to let take over labor markets.
Speaker 2: Absolutely, in fact, just a couple of hours ago, we
Speaker 2: released this global CEO survey alongside PwC, and one of
Speaker 2: the points about productivity and how many of the respondents
Speaker 2: have seen gains. One of the persons that I was
Speaker 2: speaking to said that for his company, a listed company,
Speaker 2: twenty five percent productivity gains is what they've seen, but
Speaker 2: they want much more. So that's a very important point
Speaker 2: that you made. Want to turn to microfinance that you've
Speaker 2: touched upon. In the past year or more, we've seen
Speaker 2: a softening of interest rates at the headline level the
Speaker 2: report rad I wonder if you have any thoughts about
Speaker 2: this lower interest rates scenario that is now feeding into
Speaker 2: the banking system, and more importantly, can you tell our
Speaker 2: viewers about the ground level changes that microfinance is witnessing.
Speaker 1: So you're a microplants industry as a whole went through
Speaker 1: a really hard time and now we have gotten out
Speaker 1: of it. So Tantra I started when I was seventeen.
Speaker 1: It's been a fantastic stick journey. We have seen some
Speaker 1: really hard black swan events, but the most important thing
Speaker 1: is that as an industry, we have always bounced back.
Speaker 1: It's also the sort of industry that people rely heavily
Speaker 1: on for vote banks. So we do get a lot
Speaker 1: of backlash unfortunately, but that's something that we It's the
Speaker 1: honest truth, and I am not afraid to share that
Speaker 1: SA Tantra is now the second largest since inception we
Speaker 1: have lent we have this persons of over sixty five
Speaker 1: thousand CROs. We are the second largest in terms of
Speaker 1: our AUM. However, if I'm allowed to say so, just factually,
Speaker 1: I can back it up. We are the best performing.
Speaker 1: Our ROA stands at about three point one percent, whereas
Speaker 1: the second best is at about one point three percent.
Speaker 1: NPAs stand at one point eight percent, whereas the second
Speaker 1: best is at four point eight percent. So my team
Speaker 1: has really been able to handle the market very well.
Speaker 1: We have I think, really understood our clients and we
Speaker 1: have been able to manage the balance between disbursements and collections.
Speaker 1: We have this term which I monitored very person It
Speaker 1: is called S one r F. That's the that's the
Speaker 1: first bucket of the first thirty days when someone doesn't repay,
Speaker 1: and that's the it's the most important to catch them
Speaker 1: at that time to understand what their pain points are.
Speaker 1: And so I think if you really we have we
Speaker 1: I personally really believe in the microphone's industry and I
Speaker 1: think that if we really power as a microphone's industry,
Speaker 1: we power entrepreneurs who are going to power the Indian economy.
Speaker 2: You interact with a lot of startup people, what is
Speaker 2: the dominant theme right now? Because that industry has also
Speaker 2: gone through a high of funding and then a deep
Speaker 2: in funding. But a lot of the well run startups
Speaker 2: are doing very very well. What's the mood of the
Speaker 2: startup Indian nation? If I were to ask you.
Speaker 1: That, I think we're very hut up. Someone coming from
Speaker 1: legacy and also having founded companies. I think legacy and
Speaker 1: innovation when come together correctly with the right vision, with
Speaker 1: the right team, it's a very very very powerful combination.
Speaker 1: I think India is again the place to be when
Speaker 1: it comes to startups. There's a lot of potential from
Speaker 1: a B two C consumer lens. To give you an example,
Speaker 1: whether that's Love et cetera, Bula Cosmetics, whether it's contraband.
Speaker 1: The perfumes that we've launched were doing extremely well. We
Speaker 1: are competing with international brands. It's about building India first products,
Speaker 1: building products in India for the Indian consumer, giving the
Speaker 1: Indian consumer an Indian option. We are contrabandists competing with
Speaker 1: I would say a discounted Hugo Boss, maybe even a
Speaker 1: Hugo Boss now with a new argent range. And when
Speaker 1: doing extremely well, and you know, all credit goes to
Speaker 1: the Indian consumer for seeing the quality that we're providing
Speaker 1: to them, for giving us feedback so that we can
Speaker 1: understand how we can give them a better product. If
Speaker 1: I personally, as a founder, as a director of the article,
Speaker 1: that group can give my Indian consumer a better value
Speaker 1: for their money, I am very bullish about that, and
Speaker 1: I think young founders, old founders, age doesn't matter founders
Speaker 1: in general in India, we want to now provide an
Speaker 1: Indian option. We want to take this made in India
Speaker 1: story forward by providing quality that is unmatched and that
Speaker 1: is unmatched globally. Okay, so that's where we are at.
Speaker 1: And from a funding point of view, you know, bubbles burst,
Speaker 1: new bubbles come up right now, AA is the big
Speaker 1: one where valuation is concerned. Let's see, Like I said,
Speaker 1: there's a lot of uncertainty, but it's something that I
Speaker 1: feel quite positively about. We just have to manage it correctly.
Speaker 2: That's a very good point. Can I just quickly do
Speaker 2: a follow up on this in terms of your understanding
Speaker 2: of the typical Indian consumer, how do they perceive brands?
Speaker 2: What is the brand perception of gen Z Indian uh
Speaker 2: and is that different from elsewhere in the world. Can
Speaker 2: you share any insights on that?
Speaker 1: Amazing? I think gens is amazing because it's really good
Speaker 1: because I have to be on my toes, which is
Speaker 1: really really good. There's no way you can fool them,
Speaker 1: which is fantastic. So whether that comes to what goes
Speaker 1: inside the product, the ingredients of the product, where the
Speaker 1: product is made, how the product is made, there is
Speaker 1: complete transparency, and I personally give complete complete transparency as well.
Speaker 1: What is go about the product, what is not so
Speaker 1: good about the product, what we're working on. Please give
Speaker 1: us your feedback. Founder led brands are taking the forefront,
Speaker 1: which I think is fantastic. Contraband, for example, is a
Speaker 1: very much founder lad brand. I think also now it's
Speaker 1: very important to find brand ambassadors who genuinely have skin
Speaker 1: in the game, who genuinely understand your brand, and who
Speaker 1: want to be a part of your brand as well,
Speaker 1: because consumers can see it and I don't want to
Speaker 1: bring on a brand ambassador who is not interested in
Speaker 1: what I'm.
Speaker 2: Selling and who doesn't own the story in.
Speaker 1: That and you see a lot of that happening with
Speaker 1: the brands that we are looking at as well.
Speaker 2: This is a very interesting insight and I can I
Speaker 2: can tell our viewers and you that Business Today is
Speaker 2: releasing its thirty fourth anniversary issue right here at Divorce
Speaker 2: tomorrow and the gen Z survey that we conduct it
Speaker 2: across India for several thousand respondents has given us some
Speaker 2: fascinating insights. We'll be sharing that with you as well,
Speaker 2: and hopefully that will inform the debate more as we
Speaker 2: probably take a couple of more questions. I want to
Speaker 2: come to real estate and your sense about how much
Speaker 2: of a runway is left in that sector. And why
Speaker 2: I'm asking you this is that if we sort of
Speaker 2: separate commercial and residential, we're seeing one phenomenon after COVID,
Speaker 2: which is premium super premium doing very well, but the
Speaker 2: so called affordable housing segment seeing a bit of a
Speaker 2: pain point and then of course input costs. What's your
Speaker 2: own sense about how much of a leeway is left
Speaker 2: for real estate growth in the next few quarters and
Speaker 2: years ahead.
Speaker 1: Perhaps as a prey. In real estate, we have a
Speaker 1: CGR like I said of ninety two, Like you said,
Speaker 1: luxury is booming, affordable is suffering a little bit right
Speaker 1: now after I think value their home a lot more.
Speaker 1: They want more space, more greenery, you know this whole
Speaker 1: work from home as well. Infrastructures become more important than ever,
Speaker 1: and I think we're contributing to that in a massive
Speaker 1: way as well. I am super super bolish about real estate.
Speaker 1: I think residential is the place to be. Of course,
Speaker 1: commercial will continue, but from a working cash flow point
Speaker 1: of view, from a working capital point of view, I
Speaker 1: think residential is extremely important. I think commercial is something
Speaker 1: that of course we have as well in our portfolio,
Speaker 1: but it's a smaller part of our portfolio. Think residential
Speaker 1: is a larger part of portfolio. It will continue to be.
Speaker 1: There is a little bit of a slum that's happened
Speaker 1: right now, but I think NCR, for example, we sold
Speaker 1: out in less than twenty four hours. Noida is something
Speaker 1: that we're extremely bullish about. The Noidra market is responding
Speaker 1: extremely well to us as a brand as well. Of course,
Speaker 1: Nyara the entire worldly area. Have a tower see that's
Speaker 1: going to be launching very very soon that has amenities
Speaker 1: that probably India has never seen before, which is something
Speaker 1: that I'm working very strongly with the team. Again, we
Speaker 1: want to give India and our people the best of
Speaker 1: the best, and that's where we're coming from. Uh So,
Speaker 1: you know, we've had a lunch with Mitsubishi the other day.
Speaker 1: They have partnered with us on a project in Bangalore Ivara,
Speaker 1: which is doing very well. They're coming on board for
Speaker 1: a couple of other projects as well. So they are
Speaker 1: very bullish on the Indian real estate market as well.
Speaker 1: I know for a fact that Canada Pension is very
Speaker 1: bullish about the Indian real estate market as well. And
Speaker 1: these are very established long term investors. So that gives
Speaker 1: me a lot of confidence that not only are they
Speaker 1: very bullish about the real estate Indian market, but they're
Speaker 1: also very bullish about partnering with us. You know, I
Speaker 1: would like to give investors confidence on the market. Small
Speaker 1: ups and downs will continue happening long term, I think
Speaker 1: on the right pass.
Speaker 2: As we wrap this conversation, Anana, I just want you
Speaker 2: to leave us with any thoughts about one sector in
Speaker 2: all that you do and your group does, which you
Speaker 2: think has the greatest potential for growth that you can
Speaker 2: share with our viewers at.
Speaker 1: This stage, Ha, I'm going to get into trouble. Look,
Speaker 1: I look into multiple different businesses. We've also I've also
Speaker 1: founded multiple different businesses. I think different businesses are going
Speaker 1: to see different trajectories of growth. I would just like
Speaker 1: to say that being at the cusp of legacy and
Speaker 1: innovation and new age, it's a very very interesting time.
Speaker 1: I feel very grateful. I am working extremely hard and
Speaker 1: extremely smart. I think I have a fantastic team. I
Speaker 1: think as Indians we are very proud of we are
Speaker 1: and our economy is booming. From a long term point
Speaker 1: of view, we are the right place at the right time,
Speaker 1: and I wouldn't have it any other way. Like I said,
Speaker 1: we stand at the market cap of one hundred and
Speaker 1: fifteen billion dollars a group, and I'm only seeing that.
Speaker 1: I only see that rapidly moving forward.
Speaker 2: You've given us your time and you've been very generous
Speaker 2: with that, and an I thank you very much for that.
Speaker 2: With that, it's a wrap on this conversation. From THATURS
Speaker 2: will be back with more interesting conversations like this until then, goodbye,