M&A Critique
Sameer Gehlaut | Indiabulls Group

Zeal to Excel : Sameer Gehlaut

Sameer Gehlaut, the chairman of Indiabulls Group is a firm believer in taking the bull by the horns. After fighting several odds, the 40-year old entrepreneur has created a Rs 34,000-crore company (market capitalization) from scratch in just about 15 years. The Group’s net worth is over Rs 19,000 crore and has a strong presence in crucial sectors like financial services, real estate, and power through independently listed companies and the group continues its journey of building businesses with strong cash flows.

How the Group was built

A Mechanical Engineering from IIT, Delhi, Gehlaut, worked for Halliburton in the United States and returned to India to start an earth moving and mining business. In 2000, Sameer Gehlaut was only 26 when he started Indiabulls with the help of Saurabh Mittal and Rajiv Rattan, who were his friends at IIT Delhi.

In early 1999, when e-commerce was taking shape in India, Gehlaut bought a defunct securities company Inorbit Securities in New Delhi with an NSE membership and started offering brokerage services. The company built one of the first online platforms offering internet brokerage services and in January 2000, Indiabulls Financial Services was incorporated as the flagship company. In late 2000, Indiabulls Securities, a subsidiary of Indiabulls Financial Services started offering online brokerage services and simultaneously opened physical offices across India. By 2003, Indiabulls Securities had established a strong all-India presence and client base through its offices and on the internet.

The company had a young management team and were able to raise money from time to time. Its investors included LN Mittal and Farallon Capital. The big leap happened when Gehlaut to make Indiabulls public. In September 2004, Indiabulls Financial Services went public with an IPO at Rs 19 a share. In late 2004, Indiabulls Financial Services started its financing business with consumer loans and in March 2005, Indiabulls Properties Private Ltd, a subsidiary of Indiabulls Financial Services, participated in a government auction of Jupiter Mills, a defunct 11-acre textile mill owned by NTC in Lower Parel, Mumbai. Indiabulls Properties Private Ltd. won the mill in the auction, which made the company foray into real estate business. A few months later, Indiabulls Real Estate Company (IBREL) bought Elphinstone Mill in Lower Parel, another textile mill auctioned by NTC.

Building on real estate business

Since its inception, Indiabulls Real Estate has excelled in building projects that turn spaces into inspiring places. With prime focus on construction and development of residential, commercial and SEZ projects across major cities in the country and even in London, Indiabulls Real Estate is a force to reckon with. Today, it is the third-largest real estate company by net worth and assets and has delivered a record 4.7 million sq ft developed space. Indiabulls Real Estate’s strategic partnership with Farallon Capital Management LLC of USA was instrumental in bringing the first FDI into real estate in India. Currently, IBREL has 10 on-going projects in India with total saleable area of 30.14

million square feet. It also has four new projects that are planned to be launched shortly with total saleable area of 7.77 million square feet. The company has a fully paid for a land bank of 1,017 acres and also possesses 2,588 acres of SEZ land at Nashik, Maharashtra.

IBREL is currently developing 72.86 million sqft into premium quality, high-end commercial, residential and retail spaces in the Metros- Mumbai, Delhi NCR & Chennai, apart from Tier I cities. With its recent acquisition of the prime property, 22 Hanover Square in central London for Rs 1,630 crore IBREL is consolidating its presence internationally as well. Some of the iconic landmarks of IBREL that have redefined commercial spaces in Mumbai are One Indiabulls Centre & Indiabulls Financial Centre with over 3 million sq.ft. of sprawling commercial space. Indiabulls Real Estate has delivered a record 3.3 million sq ft developed space valued at $ 1.75 billion (within 4 years of inception). This is fastest and largest delivery in a value of terms by any Indian real estate developer in the same time period. IBREL has been assigned credit rating of AA- for long-term debt and A1+ for short term loan by CARE and International ratings of B+/B1/B+ by S&P/Moody’s/Fitch, respectively.

With real estate business gaining momentum, Indiabulls Financial Services demerged the real estate business under Indiabulls Real Estate and each shareholder of Indiabulls Financial Services received an additional share of Indiabulls Real Estate through the demerger. Subsequently, Indiabulls Financial Services also demerged Indiabulls Securities and each shareholder of Indiabulls Financial Services also received a share of Indiabulls Securities. Indiabulls has also entered into a joint venture with Sogecap for its foray into the life insurance business. Sogecap is the life insurance subsidiary of the French company SocieteGenerale. Indiabulls Housing Finance is the second-largest private housing finance company in the country and has done over Rs 1 lakh crore of disbursals to round 6.5 lakh customers. It is AAA rated by credit rating agencies.

Youngest billionaire

Sameer Gehlaut is India’s youngest self-made billionaire. According to Forbes, he has a net worth of $1.5 billion (in 2015) and is the 1415th richest person in the world and 80th richest in India. He is the highest paid executive in the non-banking financial services and diversified financial services industry in the country. He also figured as the fourth highest-paid corporate executive from an Indian public listed firm in 2014. After splitting the diversified group with his partners a couple of years ago, Gehlaut now independently controls Indiabulls Housing Finance, Indiabulls Real Estate, Indiabulls Securities and Indiabulls Wholesale Services.  He recently increased his stake in the company to 23.8% from 23.51%.

The aggressive steps taken by Gehlaut and risk taking are not too common with young Indian entrepreneurs. But it has yielded good results and Indiabulls is on a very firm footing. Competitors who’ve been around for decades wonder how Indiabulls has been able to grow at such a heady pace, others can’t hide their awe about the group’s marquee of investors. While most people talk about technology-driven start-ups in India, Sameer Gehlaut is really the unsung hero of Indian business as he had ventured into a business which needed political heft. He has made a big success and is an inspiration to millions of young entrepreneurs.


M & A Critique