Entreprenurship Assignment Mohit Sindhu.docx

18PGPM091

Entrepreneurial Lessons From Uday Kotak’s Life

ASSIGNMENT: 1

MOHIT SINDHU 18PGPM091 Sec-“B” Group – B2

UDAY KOTAK

Brief Life History: Uday Kotak (born 15 March 1959) is an Indian billionaire banker, and the executive vice chairman and managing director of Kotak Mahindra Bank. Kotak was raised in an upper middle class Gujarati Lohana joint-family household with 60 persons sharing a common kitchen under one roof. The family was originally into cotton trading. He called this "Capitalism at work and Socialism at home". His two pastimes had been cricket and playing the sitar. In a 2014 interview with NDTV he admitted that he was no longer pursuing his playing of the sitar. His talent in mathematics influenced his choice of career. He earned a bachelor's degree from Sydenham College and completed a postgraduate degree in management studies in 1982 from Jamnalal Bajaj Institute of Management Studies. In 2015, Kotak enters the general insurance business and is partnering telecom magnate Sunil Mittal's Bharti Airtel to start a small payments bank.

Turning point for Uday Kotak: Uday realized the vital importance of the banking industry in the flourishing market like India and the stringent control of the government over this sector. After having established himself firmly as a service provider in the non banking sector, he wanted to make an entry and explore the banking sector. He observed that the sector was controlled by ineffective state owned banks and also the helplessness of the foreign banks to open new branches because of the regulatory approvals. He predicted that since Central Bank has barricaded foreign banks to acquire more than 5% of any domestic banks till 2009, his bank will derive its market share at the cost of state-owned banks. Therefore Mr. Kotak decided to make an entry into the banking sector by applying for a banking license with the RBI and was finally granted with the same in 2003. The banking license allowed Uday to operate at least six different businesses from a single dais. As quoted by Uday himself “A dramatic change has taken place in India. This nation of savers has turned into a nation of investors and spenders. That's an exploding opportunity for a banker”.

Lessons from Uday Kotak’s Life One of the keys to success is to build a customer centric business. Uday highlighted how he was able to spot opportunities in the bill discounting and car financing businesses when he started. He understood the customer pain points and developed profitable solutions that meet customer needs. 1. When something is too good to be true, it usually is. It may not sting now, but will sting later. So go into the details carefully and keep watching it carefully. 2. It is never as good as it looks, it is never as bad as it looks. When things look up it’s never that good, ditto when things are down. The ability to not get carried away is important. Go after opportunities but he grounded. Getting over optimistic leads to the downfall. Keep an equilibrium. 3. Your biggest enemy is success. Because you are successful in the past, don’t believe you will be successful in the future. Never live in the past. 4. Cultivate 3 human qualities A good company needs to have 3 human qualities in place to succeed in an uncertain future: a. Quality of prudence- no excess leverage in your business to be able to withstand shocks. b. Human quality of simplicity. Customers want things simple and stupid. Keep things simple. c. Quality of humility. As success comes don’t let it go to your head. A lot of CEO’s begin to believe they own the universe. Be humble. 5. It is about the journey, not the destination. If you make your decisions as a one time outcome it will be a challenge. Think of yourself as being in a train. The train and the journey must continue forever. Therefore institutions must outlive individuals. Never build a model which is dependent on government policies as that may change at anytime. Be ready for death and shocks in your business. Uday shared how his bill discounting business, which accounted for 85% in the early 80’s died overnight because of a change of government policies.