Podcast | Editor’s pick of the day - Forbes India Rich List: How much money is too much money?

Billions. That’s too much money. Or is it?

What can a billion dollars get you? Well, not a confirmed spot on the list of 100 richest Indians by Forbes, we can assure you of that. Thirty candidates worth over a billion dollars did not make it to this year’s list, a list consumed by the billion plus of the country with equal parts admiration and envy.

From the great philosophers – Sophocles to Socrates to Plato – to some of the wealthiest men history has seen – Andrew Carnegie to Henry Ford to John D. Rockefeller... we have heard them all emphasize the uselessness of wealth if it didn’t also contribute to the betterment of mankind.

We have heard them all, at various points, speak of happiness and contentment as the greatest wealth, far superior to material wealth. We read those quotes; we nod in agreement; say Om; and while participating in the morally superior act of denouncing the worth of wealth, we still entertain that small voice in our heads which asks, “What would I do with a billion dollars?”

In this podcast, we will entertain a slightly different question – what did these billionaires do to get to be billionaires? On the latest Forbes List of the Richest Indians, Mukesh Ambani, with a net worth of $47.3 billion, comes up tops again, his eleventh consecutive time claiming Mt Moneybags India.

With a net worth of $21 billion dollars – less than half of Ambani’s – is Wipro’s Azim Premji. Laxmi Mittal, the Hinduja Brothers, and Pallonji Mistry round up the top five this year. With their combined wealth of just over $120 billion, these men are worth more than the combined GDP of Uruguay and Luxembourg; or well, more than the combined GDP of the bottom 46 countries of the world (IMF data, 2017). How much money is too much money? That. That is too much money.

India's wealthiest

The bygone year was momentous for the Indian economy. As the effects of demonetization and the rollout of the goods and services tax (GST) wore off, new hurdles sprang up, by means of a weakening rupee and escalating crude oil prices.

In spite of the inopportune financial situation, Indian entrepreneurs have managed to multiply their wealth in the past 12 months, albeit slower. Naazneen Karmali, India Editor of Forbes Asia, writes, “It was a slow year for the growth of net worth of India’s richest. The combined net worth of the 100 wealthiest individuals grew by only 2.7 percent to $492 billion from $479 billion in 2017.” Sad.

Let’s quickly run through the list of the top ten richest Indians, and then delve into some notable rises and additions on the list. Reliance’s Mukesh Ambani ($47.3 billion), Wipro’s Azim Premji ($21 billion), ArcelorMittal’s Laxmi Mittal ($18.3 billion), Hinduja Group’s Hinduja Brothers - Ashok, Gopichand, Prakash and Srichand ($18 billion), former chairman of Shapoorji Pallonji Group, Pallonji Mistry ($15.7 billion), HCL’s Shiv Nadar ($14.6 billion), the Godrej Family ($14 billion), Sun Pharma’s Dilip Shanghvi ($12.6 billion), Aditya Birla Group’s Kumaramangalam Birla ($12.5 billion), and Adani Group’s Gautam Adani ($11.9 billion) make  up the top ten club.

If you don’t have at least ten billion dollars to your name, you are not part of this club. Azim Premji’s wealth rose by about $2 billion; and that of Mittal by about $1.8 billion.

The first rule of the Top Ten Billionaire Club is - have 11.9 billion dollars or more. The second rule is – read the first rule again. To be counted among the top 100, the entry level wealth is $1.48 billion, an increase of $20 million from last year.

Top ladies

Only four women are part of this club – Savitri Jindal at Rank 14 has a net worth of $8.35 billion; Biocon’s Kiran Mazumdar Shaw occupies Rank 39 with a wealth of $3.6 billion; pharma company heiress Leena Tewari, with a fortune of $2.5 billion, is ranked 64^th.

Kiran Shaw was also the biggest gainer percentage-wise – she saw her wealth soar by two thirds. Shares of her Biocon jumped when it received approval from the U.S. Food & Drug Administration last December for a cancer drug co-developed with Mylan and have nearly doubled in the past 12 months.

Vinod Rai Gupta of Havells Group is also on the list, along with her son Anil. Mallika Srinivasan, as part of the Amalgamations Family wealth is also included in the list.

Age is just a number, but so is a billion

Another rule of the Billionaires Club is also that you be at least 40. Read another way, it takes time to make billions. The youngest on the list is certainly no fresher to the list  – Paytm’s Vijay Shekhar Sharma, his second time on the list. Being a household name in as little as two years takes work, and the dividends are billions – 2.15 billions to be precise.

The recent endorsement of Paytm by the Oracle of Omaha, and one-time richest man on the planet, Warren Buffett, has certainly rubbed off the right way. Paytm was valued at $10 billion by Berkshire Hathaway, which also pumped in $300 million in the firm joining the ranks of marquee investors like Alibaba and SoftBank. 2018 might have been a difficult year for many on many counts, but it has certainly brought vijay to one V Shekhar Sharma.

To all those young daydreamers out there, the youngest on the list after Sharma is trained radiologist and son-in-law of a Gulf retailing billionaire MA Yussuff Ali (ranked 26 on the list) Shamsheer Vayalil of VPS Healthcare (41 years; $1.54 billion).

If you think it’s only family and connections that can get you there as early as your 40s, we offer you the third youngest on the list at Rank 29 of age 44 – Sameer Gehlaut of Indiabulls Housing Finance, a company he started with two of his pals from IIT Delhi in 1999, sits pretty – much like the prime real estate that the company has acquired in Mumbai – with $4.2 billion against his name.

Ranjan Pai at 45 ($1.86 billion), Patanjali’s Acharya Balakrishna at 46 with $4.8 billion, and Vikas Oberoi, 48 years of age and not related to the Oberois of hospitality fame, are among the small group of richest Indians under 50. Patanjali Ayurved’s co-founder Acharya Balkrishna saw his wealth erode by more than a fourth as sales of the herbal consumer goods company slowed. Balkrishna’s rank dropped six notches to number 25 with his wealth shrinking to $4.8 billion this year from $6.55 billion in 2017.

If Sharma is the youngest on the list, the oldest, at 92 is pharmaceutical sector Grand Old Man, Samprada Singh, chairman emeritus and founder of Alkem Laboratories. He spends his tenth decade in relative material comfort - $3.3 billion don’t go amiss.

Pallonji Mistry, at 89, is among the oldest occupiers of this list. The Mistry family's biggest asset is an 18.4% stake in Tata Sons, holding outfit of the $100 billion (revenue) Tata Group, a conglomerate of 100 companies. But it is with the Tatas that the younger son of Pallonji, Cyrus, has been waging a battle – Cyrus is embroiled in a legal battle with the Tata Group after he was suddenly ousted as chairman of Tata Sons in October 2016.

The thrill of being Mukesh Ambani

Mukesh Ambani, the king of the list and a Stanford dropout (take that, Stanford), added $9.3 billion to his wealth this year. His latest mega venture Jio has signed on 215 million customers by offering free domestic voice calls, dirt-cheap data services and virtually free smartphones.

How much money he stands to make (and lose) via Jio is not yet entirely known, but when it comes to sparking off a price war in the telecom sector and being among the biggest disruptors in Indian industry, Mukesh tops that list as well.

According to a report by the Barclays Hurun India Rich List 2018, Mukesh Ambani’s wealth rose by Rs 300 crore per day over the past one year. Can you imagine? You and I spend a weekend doing nothing but Netflix and veg, and Mukesh Ambani would have made a cool Rs 600 crores.

Newcomers and dropouts

Forbes India noted that the 2018 list saw five newcomers and eight dropouts. The new faces include Graphite India’s Krishna Kumar Bangur at rank 91 ($1.7 billion), Sridhar Vembu of Zoho (rank 96; $1.56 billion), Tarang Jain of Varroc Engineering (rank 95; $1.59 billion). South India’s infrastructure magnate P. P. Reddy of Megha Engineering & Infrastructure is the richest newcomer ($3.1 billion), debuting at rank 47.

Graphite India's shares have tripled in rupee terms in the past 12 months, earning Krishna Kumar Bangur, who owns a 65% stake, a debut spot in the top 100. He's listed at No. 91 with $1.7 billion. Despite the windfall, Bangur, 58, has jubilation on hold. "It's a feel-good factor--nothing else," he said to Forbes India. "We cannot afford to lose our heads. I feel more of a sense of responsibility now."

Among the more significant dropouts this year is Yes Bank's Rana Kapoor after the Reserve Bank of India asked him to step down as CEO in January. The announcement saw the bank's share price drop 29 percent in a day.

Speaking of drops, low-cost airline Indigo’s father-son duo, Kapil and Rahul Bhatia, took the hit of higher fuel prices. Their ranking fell 10 notches on the list to number 41, with $3.55 billion in wealth, compared to $4.4 billion in year ago period.

No longer on the list – Nirav Modi and Vijay Mallya. Wonder what happened to those guys.

Non-resident billionaire Indians

Like Nirav Modi and Vijay Mallya but also extremely not like them, there is a growing tribe of Indians living abroad, expanding abroad, while also retaining strong roots and business ties here in India. On this year’s list, we see a fair few of them. The latest entrant into the list, Bangur, is one such, being as he is a permanent resident now of Singapore.

Dinesh Kanabar, CEO of Mumbai tax and regulatory firm Dhruva Advisors said to Anu Ranganathan of Forbes Asia, "People want to diversify their assets or their businesses overseas or are seeking more tax-friendly options." With its low corporate tax rates of 17 percent (compared with India's 25-30 percent) and exemptions on income earned overseas, Singapore is among the more popular havens, writes Anu.

Shyam Bhartia, founder and chairman of Jubilant Bhartia Group, and ranked 75 this year, has been living in Singapore on an employment pass since 2015. Malvinder Singh of Fortis, erstwhile occupant of the list and currently occupying territory marked Deep Trouble, was also a Singapore resident.

Forbes Asia, in its coverage of the list, writes, “India's reputation as a difficult place to do business is one reason why some tycoons opt for such a peripatetic existence.

While the country moved up several notches in the World Bank's Ease of Doing Business ranking in 2018, to 100 from 130 a year earlier, rules for starting a business, for example, or even to register property, remain complex. (Singapore ranks No. 2 on the list; Cyprus is No. 53.)” Cyprus is also the destination one-time occupant of the list Surendra Hiranandani opted.

Pallonji Mistry, whose wife Patsy is Irish, has been an Irish citizen since 2003.

What does a billion dollars buy you?

We end with the same question we started with: What can a billion dollars get you?

You can buy the White House, if you are so inclined. Valued at about $400 million, the White House is well within a billionaire’s reach. Although, in view of its most recent occupant, I imagine there has been depreciation in its property value.

If you would rather not American polity, you can opt for British aristocracy. You can’t buy Buckingham Palace (that comes in at $1.4 billion), but you can buy Balmoral Castle, one of the properties the Queen owns in Scotland. You can take your family of four on a trip to space, and still have over half a billion left.

You can (hypothetically) buy 20 1962 Ferrari 250 GTOs and still have 300 million left. You can buy Larry Ellison’s Hawaiian island of Lanai with those 300 million you have left. If you want mobile luxury, you can spend the same 300 millions on a boat like Dennis Washington did on his Attessa IV. You can buy the Chicago Cubs for a billion.

You can give away a lot of it to your alma mater and encourage research and education, like Michael Bloomberg did when he gave away $350 million to Johns Hopkins.

Or not.

The question is how much money is too much money?

Where does the buck stop?