In 1990, I finished my 10th standard from a CBSE school - one of the few such schools in Junagadh. That marked the end of my formal education and the beginning of my business education. My father was employed in the postal service. I have 5 sisters and am their lone brother. The burden of providing for the family was heavy on my father's shoulders, and I thought I must do my bit to ease his pressure.
"Yeh acche forms laata hai"
A local paanwala introduced me to the world of IPOs. In Junagadh, we used to have this unofficial stock market where people would gather in the evening to trade stocks as well as look at new issues to invest in. I started sitting there in the evenings, put out my cloth, placed my lot of IPO forms on it, and started my business. Whatever forms I collected, I used to go next morning by the 6 am train to Rajkot to deposit in the collection centres. If clients got refund orders, I would take them to Rajkot to deposit in their accounts. If clients wanted to make demand drafts for their IPO applications, I used to take the money from them, get DDs in Rajkot and deposit the completed forms in the designated collection centres. By evening, I would be back in Junagadh, with my IPO forms to distribute for the day. This was a daily effort as in those days, Junagadh did not have collection centres for IPOs. I always had some spare time during the day at Rajkot before catching my return train. This I would use productively to look out for IPO forms that were selling back home in Junagadh with "on money". Some IPOs in those days were hot, so application forms in Junagadh used to be sold for Rs.20-25. I used to scout out for these forms in Rajkot, procure them, and then distribute them in the evening, at zero cost. More and more people started coming to me for IPOs since they found I was taking that extra effort to procure forms of quality issues, and not charging them. "Yeh acche forms laata hai" - that was the buzz that got created, and that set me up in business.
The Mastergain moment
1992 was a defining moment for everyone in the IPO business - it was the year of the Mastergain craze. Virenbhai Shah - a respected IFA from Rajkot and my guru, told me to take up a UTI code and focus on Mastergain. I acted on his advice and procured a UTI code. Forms were being rationed - so all my sisters and I would stand in line, collect 25 forms each when our turn came and then go right back and stand in line for 25 more. That effort ensured that I had the maximum forms in Junagadh for Mastergain. I also got the maximum brokerage from the Mastergain new issue in Junagadh - Rs.10,000 - which was huge for me at that time. I was now established in the IPO business, with this big success.
My BIG break
My next BIG break came in 2000. Reliance Industries had announced conversion terms of TOCD debentures and its merchant banker Karvy was appointing franchisees across the country to proactively reach out to every TOCD holder and convince them to opt for conversion into equity shares. I got a franchise from Karvy for Junagadh city and was given a complete database of TOCD investors to approach for this exercise. I went into this activity in mission mode - there was not only some money to be made, but a readymade database of investors to connect with and establish a rapport for future opportunities. The activity was a big success, and with the amount of conversions that I facilitated in Junagadh, I received a huge commission of Rs.70,000. I got two of my sisters married with this brokerage. Reliance is anyway a household name in Junagadh - being the hometown of Dhirubhai Ambani. For me, Reliance became even more special as it helped me pay for my sisters' marriages.
Into the world of mutual funds
In 2002, Sandeep Gandhi - a leading IFA from Rajkot, advised me to broaden my business by expanding into mutual funds in a serious way. He told me he was going to Chennai to meet Kothari Pioneer and get a distribution code, and advised me to go along with him. I took his advice, went with him, and got myself a code from Kothari Pioneer - which later was taken over by Templeton. That move got me started in mutual fund distribution in a serious way.
I recommended Kothari Pioneer Bluechip (Now FT Bluechip) to a number of my clients. Its performance and its bonus issue gave a lot of cheer for my clients, and they started recommending me to their friends. My business in mutual fund distribution started growing steadily after this early success, and I began devoting more and more time to make this my main activity.
Undisputed market leader
Today, I have over 2400 investors in mutual funds and my mutual fund AuM is Rs.95 crores. Junagadh's total MF AuM is around Rs.450 crores. I am today the leading distributor in the district of Junagadh, with around 20% market share. We have many big players active in Junagadh - including Prudent, NJ, Karvy - but I have managed to remain ahead of all of them. There are about 7000 MF investors in Junagadh out of a total population of 350,000. About 35% of all MF investors in Junagadh are my clients.
I am very active in the local media as well as social media. I contribute my thoughts regularly in local media, which gives me a lot of coverage and ensures that I stay top of mind for investors in my city.
My first BIG dream
I believe a lot in self motivation - I set personal targets for myself and work towards fulfilling them. My first dream was to meet Anil Ambani - the son of Junagadh's most famous son. I always wanted to attend Reliance MF's annual convention where they called their top distributors, and have a chance to meet Anilbhai, who would come to address this gathering. I used to send text messages to Sundeep Sikka, requesting him to give me this opportunity. Three years ago, although I knew I wasn't yet in their top 200 distributors list, Sundeep Sikka nominated me for their convention. When I went there, he took me backstage and introduced me to Anilbhai as his hometown's leading distributor. It was a dream come true for me, and a moment I will always thank Sundeep Sikka for.
My aim for 2016
After that, I set myself my next aim - to reach Rs.100 cr AuM by Dec 2016. I have been working doubly hard in the last two years to achieve this milestone. In 2016 alone, I have added Rs.20 crores to my AuM. Right now, my AuM stands at Rs.95 crores and I have four weeks to go before close of this year. I am working on a couple of transactions, which I am confident will help me cross the 100 cr milestone before the end of 2016.
My aim for 2017
For 2017, my aim is to get into the top of the league clubs - the Platinum equivalents - of all the big 4 fund houses. I am already there for Reliance, I am getting there for Birla but I have more work to do in the other big fund houses including ICICI Pru and HDFC. For me, getting into the top clubs of all the big 4 will be an important statement - that there is no glass ceiling for small town distributors. The size of our markets need not limit the scale of our ambitions.
Dealing with commission disclosure
I have really no concerns around commission disclosure. 3 years ago, when I completed 25 years in this business, I organised a big musical event for all my clients - an initiative which has now become an annual event for me. In these events, I publicly state my exact commission earning for the year and thank all my clients for their business. My clients are very happy for me because they know that I earn money by first helping them earn money. I am very transparent about my income.
When I came back from one of the fund house trips to Japan, I went to a couple of my leading clients with sweets and bouquets - to thank them for giving me their business, which enabled me to get this experience of travelling to Japan.
I have nothing to hide from my clients - I am very upfront with them about how much I earn in my business. So, when account statements are now going out with commission details, I have a clear cut answer should any query come my way. If and when any client asks me about the new commission disclosure, I remind them about what I have been sharing every year publicly in my annual events. That ends the discussion on commissions.
Dealing with proposed RIA regulations
First of all, I think we must accept that we cannot fight the regulator or the Government. Any effort in that direction is a waste of energy. We have to accept change and adapt to change, but at the same time, keep looking for and working towards solutions rather than agitating about the problems.
On the specific RIA proposals, I keep my thinking simple. I continue to believe that the regulator wants to see more and more retail penetration in small cities and towns. The final regulation is unlikely to be one which will inhibit growth in small towns. I operate in a small town. So, I believe that the new regulations are unlikely to cause me to shut down my business. At the end of the day, you need to be transparent with your clients and you need to serve them well. If you do that, you can work out any solution that is a win-win for your clients and for yourself. If you have your clients on your side, there is nothing to worry.
Content is created by Wealth Forum and must not be construed as an opinion by Reliance Mutual Fund.
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