In 1983, if someone had told coffee baron V.G. Siddhartha that one day he would own an impressive multi-storied office on Vittal Mallya Road, Bangalore’s tony residential and shopping address, he would have called them crazy. Siddhartha was then just a rookie analyst at JM Financial and Investment Consultancy.
Today Coffee Day Square, his Group’s headquarters, a glitzy glass-fronted building, stands right across UB City from where Vittal Mallya laid the foundation of the multibillion dollar UB Group managed today by his son Vijay.
Siddhartha’s office, occupying an entire floor, has glass walls that offer a breathtaking view of Bangalore. On the day we visit, the founder of Café Coffee Day, India’s largest cafe chain, is waiting by the lift. A strapping tall man, who looks much too young to be 50, he opens the conversation with the typical south Indian greeting, “Have you eaten?”
Nandan Nilekani who has known him since the early ’90s, and is a close friend and mentor, describes Siddhartha as a natural born entrepreneur with an uncanny ability to sniff out a good deal. “He is extremely restless and is very quick and decisive. Once he gets an idea, he will quickly go and implement it. He is very methodical and also very big on backward integration,” says Nilekani. Combine that with his ability to work 12-14 hour days, seven days a week and the result is a business empire that straddles retail (Café Coffee Day), financial services (Way2Wealth Securities), venture capital, hospitality, logistics (Sical), land development and now an upcoming furniture business.
Last year Siddhartha brought all his businesses (except agriculture) under a common holding company, Coffee Day Resorts Holdings. The group’s combined turnover is Rs. 2,000 crore to Rs. 2,250 crore. He owns about 10,000 acres of plantations which grow coffee and other commodities. “In the next seven years, at least three or four of these businesses will be doing revenues of $1 billion each,” he says.
But even as his empire stretches and his bets become bigger, Siddhartha remains completely hands on. In the late ’90s, two of his businesses, Way2Wealth and Café Coffee Day (CCD), were both at a crucial stage. This was when the retail financial industry was taking off. It was also the time his father-in-law S.M. Krishna, the present Indian Minister for External Affairs, was chief minister of Karnataka. Friends say that between 1999 and 2004, Siddhartha managed his companies in the day and spent the evenings helping his family look after state politics.
Strapped for time, he had to make the painful choice of focussing on one business. In the next few years, CCD raced ahead and today is India’s largest retail brand. Way2Wealth, on the other hand, lost the battle to Kotak and India Infoline, companies which started at the same time.
Friends say that succession planning — in particular, building a strong second tier of leaders — is on his mind a lot these days. Over the years, Siddhartha has received coaching from global consultants on this. But investors seem to be less concerned about succession issues.
K.P. Balaraj, of Westbridge Capital, which invested $20 million in CCD in 2004 (worth at least five times more today), says that at this stage of the company’s growth, succession is not a burning issue. “No one’s asking Mukesh Ambani this question,” he says.
Last year, a consortium of three private equity (PE) firms, Kohlberg Kravis Roberts, New Silk Route and StanChart PE, picked up a 25 percent stake for around $200 million in the holding company. “It is very rare for PE funds to invest in a holding company. Normally, they invest in business directly,” says Balaraj. The funding rounds closed in just two months, and one investor says that the venture capital funds were falling all over themselves to pick a stake.
Siddhartha’s biggest success story till date is Café Coffee Day, which at 1,000 plus outlets, is India’s largest retail brand. He is equally bullish about his other businesses: SEZ, Way2Weath, Sical, and agriculture. “We haven’t done anything great till now, but the next 10 years will be extremely crucial for us,” he says.
His biggest bet though might be on a business that is still below the radar. He wants to build India’s largest retail furniture business. “My dream is to create an IKEA from India,” he says.
Bean to Cup, Log to Wardrobe
Even before a single piece of furniture has been shipped from the factory, Siddhartha has already won a contract to supply Rs. 30 crore to Rs. 40 crore worth of furniture to Home Town, a Future Group company. Mahesh Shah, CEO, Home Town, who was a key negotiator in the deal, says that Siddhartha reminds him of Kishore Biyani, Future Group’s founder: “They have the same intuitive sense for business and are very quick,” he says. “When we were negotiating the rates, his team had come with all kinds of spread sheets and reports and we kept going over the numbers. Siddhartha on the other hand just did the numbers in the head and in a few minutes we had a decision.”
(This story appears in the 01 July, 2011 issue of Forbes India. To visit our Archives, click here.)
chikkamangalor king very good person
on Aug 11, 2014he is a very brrillient person
on Apr 23, 2014he is a very brrillient person
on Apr 23, 2014never again anything else can beat it.............
on Aug 20, 2013Cafe Coffee Day cafes are visited/frequented by a microscopically small no. of people compared to numbers who would like to drink a cup of hot, refreshing traditional FILTER COFFEE.The present types of coffee served in CCDs is not relished by people who have taken for filter coffee. Moreover the coffee served in CCDs is not affordable to the common man who otherwise would happily spend a few Rupees on a cup of good filter coffee. It is suggested that hot freshly brewed filter coffee be served in CCD outlets. Even starting exclusive FILTER COFFEE kiosks in busy areas can be considered . Popularity of such a concept can be seen in Maiyas restaurant in Jayanagar IV Block- Banglore. I come from a coffee growing family and am a avid coffee drinker. Hence the suggestion
on Jan 20, 2013I frequent cafe' coffee day at the Uday Shankar Sarani facility at Kolkata with pleasure. I have experience in visiting Starbucks - now I enjoy being with Cafe' Coffee day.
on Oct 28, 2011cafe coffee day rocks!!!
on Sep 17, 2011Hats Off!
on Aug 25, 2011He is a idol person for youngsters. He made a brand to coffee in india. but now we should increase it in out of india then whole world know that indian have power to defeat M.N brands. Thax
on Jul 17, 2011He is very shain and simple.
on Aug 8, 2013