Corporatizing Family Business
An IT engineer, Abhishek Kumar Agarwal, Director, Lotus Group of Companies entrepreneurial zeal led him to manage the family business and gradually take it towards a more corporate structure to keep up with the changing times.
The Lotus Group office on the top floor of their commercial building gives the feel of a professionally managed company with its open space planning, glass partitions and conveniences designed for the employee comfort. Abhishek elaborating on the same said, “Having visited offices of many of my peers in the real-estate, I felt that their office atmosphere seemed secretive. Therefore, in our own office I made sure it was planned in such a way to give a feel of transparency and open work culture.”
I am following my grandfather’s teachings of realizing one’s core competency and working towards creating an expertise on the same. The times may change and technologies may advance but the basic values remain true for all the generations.
Giving a brief on the journey of the company, Abhishek gives the credit of establishing the diversified business to his uncle Ashok Agrawal. “He was the first generation entrepreneur who started with import and export of building materials like stone, tiles, wood, laminates etc. in 1993 and then becoming the manufacturer of ply boards, setting up energy plant based on low ash metallic coal and eventually foraying into the real-estate vertical in 2005. So the company not only diversified in terms of business verticals but also changed the business roles over the years.”
As Abhishek explained, their family belongs to Rajasthan and then moved to Patna in Bihar and finally to Mumbai in 1999. After studying in the top schools of Gwalior and Delhi, he completed his B. Tech from Mumbai in 2007 and for one year worked in the Foreign exchange department of ICICI Bank to develop an algorithmic trading platform for global clients. In 2008, he enrolled for the family managed business program in SP Jain School of Global Management in Mumbai as well as started working in the family real-estate business overlooking functions of all departments of the company. “When I joined real-estate business, I got uncomfortable with the lack of process oriented approach. Operations function has always been the area of concern in real-estate and that is where I felt I can add value and where my core competency lies. I did bring my learning from the engineering background and corporate sector but every eco-system is different and what works in one eco-system might not work in the other, so correlating and then applying best practices from another sector has been my approach.”
Lotus Group started with a 400sqft office in Andheri in Mumbai and at present occupies 10,000 sqft office in the commercial building constructed by them in the same suburb. The company is working on projects in all asset classes from high-end residential priced at 5-10 Crore to residential stock costing 15-25 Lakhs, SRA and redevelopment projects to commercial office spaces in Andheri and retail mall in Kharghar, Navi Mumbai. “While my father Arun Agarwal manages all the other businesses of the group, I joined my Uncle Ashok Agarwal real-estate business. The company has been lucky that it chose the right projects and locations in Mumbai. Right now, I am the only one from second generation of our family to be in the jointly owned family business,” Abhishek informed.
Those who have been in the real-estate business from 2008-2018 have actually experienced 40 years of real-estate. This 10 years cycle has given insight of 40 years of real-estate as the business cycle has behaved and reacted very differently compared to the business cycles in previous years.
According to Abhishek, with new policies, development regulations and new generation coming in the business, realty sector has transformed in a big way. “Today developers instead of managing all the functions of the business singlehandedly are now engaging experts and professionals. In fact, a developer is more like a coordinator managing various functions and professionals. He has very limited control over risks involved as most of them are external factors like DCR rules change, government change, labour issues, project contractor challenge etc.”
The main noticeable transformations as per Abhishek have been the easier availability of structured finance, the products being designed as per the end-user requirements to the smallest of project detailing and finally the developers focusing on their core strengths and making their organizations more professional. Further adding he stated, “As rightly said, necessity is the mother of invention likewise, the professional broking agencies are the invention of necessity. For example, Sai Estate consultants appeared at the right time to fill that gap of bridging the connection between a developer and a buyer by correctly conveying the values of the developer. We are collaborating with the company because we are assured that the customers will get the same treatment from them as they will on meeting me.”
I am called the fire-fighter of the organization. Any issue or emergency in any department whether it is at construction site, design, finance or municipal department, I always like to be at the forefront to solve the problem.
Till now, the company has done 25 Lakh square feet of construction in Mumbai and going forward, the goal is to continue to sustain this growth graph. “My aspiration is to not be the top developer of the country but to be the most trusted developer brand. We would continue to focus on Mumbai city, acquiring more redevelopment projects and other such ventures.”
Concluding the conversation on the lighter note, Abhishek mentioned that he has been careless in terms of health due to work pressures which he plans to correct. For him the stress buster is to spend time with his colleagues. “Have lunch with staff at the office cafeteria gives a break from work pressure. Having a small but efficient team is what I believe in.” he said.