What prompted you to enter financial services after an engineering degree and an MBA course?

I always had, and continue to have an interest in the sciences. That is what led me to engineering. I always saw it as my passport to becoming an entrepreneur. Since I felt that one needed an exposure to finance to become a successful entrepreneur, I went on to study Management after working for some time in a project company. I do not come from a business family, and hence the need to work and gather experience before becoming a businessman. Since I began to like finance, I pursued opportunities that presented themselves to me! I must also mention that, I come from a family where banking was a dinner table topic! My father and grandfather have both been renowned bankers in India.

While pursuing my MBA and for some time after, I was an understudy to a renowned developer by name DSKulkarni, in Pune. This experience proved to be among my most valuable, as I learnt the importance of managing customers. If customer is king, I saw it practiced there – and adapted it to my business subsequently.



What prompted you to move out of the NBFC world and start up Hexagon in 1997? How were the initial years and the transition to entrepreneurship?

Since I always had the intention of becoming an entrepreneur, I guess the wait was for the right confluence of the stars! And experience. I learnt corporate finance, hire purchase and leasing in my early days in the NBFC industry. I subsequently wanted something more exciting to do and moved into merchant banking. My experience here eventually was very valuable in understanding risk.



What was Hexagon's business profile in the initial years and how has it changed over time? Did you have a clearly defined client segment and business model in mind when you set up or is it something that evolved as you grew your business?

Hexagon was fashioned to be an NBFC when it started. It was the simplest business to start, given my experience in the field. Though we were reasonably successful in doing this, the opening up of this sector to the banks sent danger signals to me. Given their bigger balance sheets they could offer loans at much lower rates and take away the best risks. That left us with the sub-primes!! Not wanting any part of the high risk business, I decided that soft skills such as advisory would enable us to stand up to any sort of competition. In hind sight, that was a good decision as the industry began to get saddled with high levels of NPAs. We were relatively untouched.

We were lucky to latch on to the mutual fund wave that started in 1999. Given my methodical approach and evaluation models followed, convincing institutional clients to invest in Income funds was easy. It was a first for many of the banks, at the time. (You may not believe, Rolling Returns, Sharpe Ratios were unheard of at the time. Introducing these to India made my job much easier to sell.) As competition hotted up, ‘incentives’ were invented! The margins from institutional business started falling and I decided to focus on retail to build greater loyalty. I saw the relationship with a client as a life long one, which started with the sale – not ending with the sale. Wanting to keep the client continuously engaged, I though that keeping him updated on his investments would be the best way. That is when my struggle to build a good software for the purpose, started. In 2000, when we launched our CRM initiative to track portfolios online, we were probably the first in the country.

I learnt financial planning by observing the progress of this business in the USA, and implemented here. Given the amount of time that I had to spend on a client, it was economically unviable to handle small accounts, and thence my focus on the HNI segment.



You have a private wealth management unit as well as a financial planning unit within Hexagon. What are the similarities and the key differences between both these units, what are the relative contributions of these units to Hexagon's overall business and how do you manage these seemingly different businesses?

I do not believe that the two are essentially different. Both are financial planning. Since wealthy families require more complex solutions due to their lifestyles, quantum of wealth, goals and risk taking capacities, the term ‘private wealth management’ has been coined. Here too, if one does not follow the principles of investing with a clear aim, the likely-hood of failure is high. This is the bedrock of financial planning.

At Hexagon, since all our accounts are high networth, there is no distinction. But not all accounts follow a planned philosophy due to the client’s own choice. Approximately 70% of our revenue is from clients following the planned approach.



What has been the biggest moment for Hexagon so far?

Winning the CNBC – TV18 award was by far the best moment. It was like an acknowledgement of the good work done through thick and thin.



Can you take us through what it took to win your largest client (no names required)?

I will not consider institutional clients.
Our biggest clients are those that have grown with us. They were not so big when they started off – nor were they as wealthy. Our recognition that risk tolerance varies form person to person, and factoring that into the portfolio construction is what impressed the clients. Consistency in our approach also helped a lot .Other factors that helped were our transparency, honesty and clear commitment to the client.