New Delhi: Nandan Nilekani, a co-founder of one of India’s biggest information technology services companies, is an older billionaire but a young investor. In his nearly 30 years of starting and then building up Infosys, he did not have the time to focus on investing anywhere else, he said. Not to mention that most of his wealth was tied up in the company.
His next step was public service, as he set up India’s unique identification system, where, once again, he did not have the luxury to think about personal investments. Now that he is finally a free man at the age of 61, he is more focused on what to do with his money.
Nilekani says he is concerned about the bad debt piling up on the balance sheets of banks in India, but he worries more about an increase in anti-globalisation sentiment.
“Between ‘Brexit’ and Trump, are we entering a world that’s less enchanted with globalisation?” he asked.
His concern is because of his continuing investment in Infosys, which has a strong global exposure with nearly 90 per cent of its revenue coming from the US and Europe. But Nilekani is betting on India.
“Enormous aspirations have been unleashed,” he said. “And there’s a huge hunger to improve lives,” which he said had inspired him. “The question is if we as a nation can provide that opportunity to everyone.”
Being true to his IT services roots, he is more interested in services than in the manufacturing sector. Manufacturing, he says, is vulnerable to automation and Chinese overcapacity. (In the last few years, several Indian companies of all sizes have complained about the dumping of goods by their Chinese competitors in sectors as varying as steel, solar power equipment and tyres.)
While he has some of his money in real estate and debt, most of it is in equity. But he is investing 5 per cent of his large pie in startups.
“I’m a believer in technology-led disruption,” Nilekani said. In the next 20 years, he said, a large part of the Indian economy will go from the unorganised or informal sector to the organised and formal sector. “I’m looking for technology that can do that,” he added.
He thinks he might have found a few. One of his recent investments is in 10i Commerce Services, an e-commerce company that, through its ShopX app, is recruiting small neighbourhood businesses to sell their products online (nearly 40,000 retailers in 180 towns have signed up).
“Technology can be used to organise India,” Nilekani said. “About 80 to 85 per cent of Indian retail sales are done through mum-and-pop shops, so aggregating them makes a lot of sense.” Some of these entrepreneurs, he said, are “trying to go into the root of what’s happening in the country and see if tech or new tools can make a difference”.
He is also optimistic about Fortigo Network Logistics, which has developed technology that lets truck drivers and owners, as well as brokers and transport companies, look for cargo for their next destination at the best rates possible. It is a sort of Uber for truckers, with cargo as the passenger.
Nilekani has a couple of guidelines he follows as he looks for investments: the quality of the entrepreneur and how susceptible a sector or the company is to domestic policy, which can vacillate depending on the political whims of the party in power.
“One thing I’ve realised in the last two years is that the quality of the entrepreneur is key,” he said. “Good ideas are common. Many people have ideas, but the ability to execute and make a strategy is relatively rare.”
Vital statistics: India
The people: The 1.3 billion people in India speak a wide variety of languages and dialects, with the urban population making up a third of the overall total. Despite strong economic growth, around one-fifth of the country lives in poverty, and gross domestic product per capita is just $1,500.
The economy: While India fought double-digit inflation, a weakening currency and a struggling stock market as recently as 2013, its economy is now growing at a robust pace and enjoying the lowest inflation rate in decades. Job growth, however, has not taken off, and tensions over management of the economy led to the departure of Raghuram Rajan, the nation’s widely respected central bank chief.
The markets: India’s benchmark BSE Sensex index has gained on the year, and the Indian rupee, the country’s currency, has largely held steady against the dollar over the course of the year.
