IIPM : EXECUTIVE EDUCATION AKRAM HOQUE says that Unitech’s Sanjay Chandra was among the first to market complexes as premium & semi-premium products
There is a saying ‘when luck follows you, destiny is at your feet’. Whether it is luck, destiny, or strategic decision-making, real estate giant Unitec’s Chairman Ramesh Chandra has made his debut in the Forbes list of India’s richest self-made billionaires. And one of the three MDs of the company, Sanjay Chandra, the son of chairman Ramesh Chandra, is largely credited with catapulting Unitech group from a family-run business into a professional empire. His entry into the business marked a transformation that made Unitech a national player to reckon with – and at par with the likes of DLF.
“It feels good but there is still so much to learn from the veterans of the trade,” says Sanjay. He adds, “my mantra is to work diligently towards sustaining Unitech as one of the leaders in the sector and to contribute to the real estate business at large. The team at Unitech shares the common vision and has contributed to growth. It is the collective effort of the team.” But modesty apart, he seems to have learnt fast in the recent past, and has ventured quite ahead in achieving his strategic objectives.
For example, when he joined Unitech in 2001, the real estate sector in India was still recovering from 1997-2001 crash, prices in most areas were flat, and the business was unorganised and unexciting. Plots and apartments were still sold as commodities. However, Sanjay was among the first to market complexes as semi-premium or premium products. “I joined as the business development manager and my first project was Unitech World City, which was one of the first branded products. What I concentrated on was to create a unique and distinct image for Unitech’s complexes,” he explains.
Over the next few years, Sanjay focused on issues relating to branding, and finding ways to create a distinct and unique image for Unitech. “I think packaging made a difference to two products – UniWorld City and Nirvana Country. Packaging and positioning became the key differentiators.” In fact, all real estate developers adopted it in the subsequent years. Today, even the smallest of the players use the advertising & marketing tools to establish their constructions as products in buyers’ minds.
Sanjay’s biggest business challenge was the Noida mall project, which is spread over 1 million sq. ft. and has the largest number of retailers compared to any other mall in the area. Initially he thought of a mall of 200,000 sq ft, just like other builders such as DLF and MGF had done before. But then he started thinking a bit bigger. He met small retailers and persuaded them to buy/rent space in the proposed project. Although it was tough to handle both internal and external stakeholders, he succeeded.
For all his achievements, it is quite ironic that Sanjay was not inclined to join the family business. Born and brought up in Delhi, he left the country after his schooling in Modern School, Vasant Vihar, Delhi. He completed his graduation in business and administration from Massachusetts University, and preferred to stay back in the US as he wanted to do something on his own. He started an apparel business, importing clothes from India to supply to large US brands like Macy’s and Gap, and ran it for a few years.
The garment business boomed; in 1990, the turnover was $14-15 million, which was higher than Unitech’s. But he says that his love for the nation and an intention to finally settle down in Delhi forced him to return. In addition, garment exports became tougher due to increasing competition and a fragmented and unorganized supply chain. “We are no longer into exports. After my two kids were born, I shifted to India.” It marked the beginnings of another success story – in organised retail and real estate.
Like many NewGen promoters, Sanjay is busy with work, but still manages to be with his family whenever he gets the time. Ask him about his personal life, and he replies: “I met Preeti, a fashion designer, through friends almost 15 years ago. We have now been married for 11 years and have 2 children, Trisha (aged 9) and Karan (6 years).” He works ten hours a day and loves to visit places like Goa and Phuket for holidays.
Like most NewGen promoters, Sanjay, being young and enthusiastic, is a sort of a risk taker. Fortunately, Unitech has evolved with time and accepted changes as and when they happened. “Risks are involved in everything we do. One has to plan taking all risks into consideration and with contingency plans. Young people do take risks but the risks have to be coupled with prudence,” he cautions. His father, Ramesh, provided the prudence required to save the group from adverse business shocks.
Using foresight and thorough planning, Unitech recently replaced IPCL as a Nifty index stock, and became the first realty firm to be included in the list. It is also the sole representative of the sector to be listed on the National Stock Exchange. With a land bank of over 10,600 acres (as in September 2006), Unitech is now expanding in many of the fastest-growing cities in the country. Also, Unitech’s diversified portfolio is growing, both across products and across geographies. It is slowly acquiring a pan-India presence.
As real estate sees a tectonic transformation from being family-owned to becoming professional, Sanjay seems to be in the right place at the right time. The resident director of CREDAI, G.P. Savlani, agrees, “Recent policy changes have brought in transparency in the business. Family-run businesses are, therefore, corporatising their businesses.”
However, he still needs to tackle new challenges that are looming on the horizon. Urban areas are getting saturated, and Ramesh will have to, with the same prudent aggression, establish in small cities. The fact is that real estate is still highly-unorganised and the lack of regulators makes it difficult to inculcate professionalism. Although there are enormous opportunities, large business houses like Reliance, A. V. Birla and M&M are eyeing both real estate and retail. Their aggressive entry can spell trouble for focused realtors like DLF and Unitech. Policy changes too could derail business plans. Concludes Pavas Bhatia, analyst, KSA Technopak, “In real estate, it takes a long time to reach break even point and in family-run businesses, it becomes crucial that Generation Next is efficient enough to make profits. On this ground, Unitech can rest assured as they have Sanjay Chandra who knows the rules of the game.” In fact, he should also be prepared for new games.
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