An excellent new book Daughters of Legacy: How a New Generation of Women Is Redefining India Inc (Penguin Random House) looks at the lives of 12 women business-inheritors who have not only kept the family’s legacies alive but have also gone on to carve a niche for themselves as individuals beyond their famous last names.
This is an excerpt from the chapter on Priti Sureka, director at Emami Ltd, and the first woman to be appointed to the Emami Board.
By Rinku Paul and Puja Singhal
June 2015. The entire industry was buzzing with the news of the acquisition of the hair care brand Kesh King, the largest acquisition ever in the 40-plus year history of Emami. At Rs 1,651 crore, the valuation was pegged at over five times Kesh King’s sales, equivalent to about 15 percent of Emami’s Rs 2,030-crore turnover in the previous fiscal.
The deal had analysts questioning the “valuation for a brand whose sales derived mostly from smaller markets that too at a time when the hair care category was not growing exponentially”. The market reaction was an instant thumbs down on the BSE where Emami’s share price registered a decline.
It was a test by fire for Priti Sureka, daughter of Radhe Shyam Agarwal, the co-founder of Emami. This wasn’t the first time that Emami had made what was being seen as a risky acquisition. “Our strength lies in being able to identify categories with high potential. We like to enter under-penetrated, niche categories and turn them into blockbuster businesses,” says Priti.
But she admits that the extent of the negative market reactions at the time of Kesh King’s acquisition had left even her, someone who was no stranger to dealing with naysayers, shocked.
Although the deal itself was fraught with risk, it was the aftermath that proved an even bigger challenge for her. The company was saddled with a substantial amount of inventory that came by way of under-reported stocks, which significantly impacted profitability in the short term. What followed was the unusual move of buying back of old stocks by Emami, in an effort to stabilize the prices.
All the blood and sweat paid off when Emami could report profits sooner than expected and in November 2016 the same analysts reported how Emami had put its “best foot forward to push sales of Kesh King”.
The brand was reported to be contributing an estimated Rs 75-80 crore to the Rs 584 crore Emami top line in the second quarter of the fiscal. “I personally consider turning Kesh King around one of my biggest successes in what has been a fairly long and eventful career at Emami,” says Priti.
A long association it certainly has been. “I was in grade five or six when I would walk down to my father’s office right after school. To every question of what I wanted to be when I grow up, my answer was always a businesswoman.”
Unlike many other business families of the time, her father didn’t discourage his daughter’s interest in the business. In turn Priti found herself increasingly fascinated by the different facets that go into building a product.
“Emami has been my training ground from a very young age, my karmabhoomi so to say. I have learnt more observing my father than what a business school could have possibly taught me. The endless experimentations with formulations, the customer insight, and finally the design and marketing were all very intriguing. I got hooked to the business without even realizing it.”
Set up by Priti’s father Radhe Shyam Agarwal and his namesake and best friend Radhe Shyam Goenka, the company that started with a meager capital of Rs 20,000 is today a diversified conglomerate with its FMCG business alone having a market cap of over Rs 25,000 crore.
A chip off the same block, there was no holding Priti back when it came to joining the family business, even though she was aware of the many challenges. The business community in Kolkata in those times, comprising largely of Marwari businesses, was a close-knit group of men who strongly discouraged their wives or daughters from joining the business. Daughters were traditionally married off early, mostly as soon as they completed graduation, and sons were groomed to carry the legacy forward.
“Everyone advised my father to get me married so that I would be busy managing my home and hearth and the thoughts of joining the business would recede into the background,” says Priti. The fact that she had two brothers further gave credence to the theory of there being no need for her to be brought into the business.
Priti, however, was not one to be easily deterred. “It helped that I had a very disciplined and focused approach in life. As a child, I would get up as early as 4 a.m. to complete my studies, all before the household was up and about. This left me with enough time in the evenings to spend at office.” Seeing her determination, her father did concede to her decision, though she had to go through a rigorous initiation process.
Priti’s early portfolios comprised the brands Gold Turmeric and then Boroplus. Later she was also given charge of a paper mill that Emami had diversified into. Today that small unit has grown into a Rs 500 crore company that counts marquee newspaper brands among its clients.
Excerpted from Daughters of Legacy with permission from Penguin Random House India