He did not like the idea of running a cement business much, even less the idea of living in a small town in Gujarat—even if it meant the tag of being the boss at the famous Ambuja Group. As luck would have it, a family friend gave him the opportunity to try his hand at building homes. It’s been 26 years since then and Harsh Neotia hasn’t stopped building. From luxury bungalows, five-star hotels, malls and super specialty hospitals, Neotia has created several architectural landmarks in Bengal. Now, the chairman of the Rs1,200 crore newly re-christened Ambuja Neotia Group plans to expand his horizons, albeit cautiously.

I did my schooling from the Le Martiniere for Boys, Calcutta and then did my B.Com from St Xavier’s College. In college, since I had classes only in the mornings, I would spend the rest of the day apprenticing with my dad at the Ambuja Group’s office in Park Street. I wasn’t really responsible for anything. Then, I’d just sit in meetings, try to understand the business and pick up insights. Our company was setting up a plant in Gujarat then. It started production in 1985, and became our flagship cement plant. In the early 1980s when I was going to the office, a lot of the buzz was around this.

 In fact, in 1983, I was asked to go to Gujarat to take charge of this plant, and oversee its construction. My father believed it was a good way to blood me in. But, when I visited the plant and the area and saw the nature of discussions that were happening there, I was overawed. I didn’t know what I was supposed to do there. It was too complicated for my liking. So, I came back and told my father what I felt. Looking back, I think I didn’t enjoy building a cement plant in a far-flung village in the middle of nowhere. I was too much of a city boy! Then, of course, I told my father that the project was too big and complicated for me to begin my career with.

I came into real estate by accident. As fate would have it, soon after I returned to Kolkata, a friend of my father who was moving to Mumbai came over to our house to ask what he could do with a 6 cottah piece of land he had in the upmarket Chowringhee Lane in central Kolkata. It struck me that may be I could build a multi-storied residential apartment block there. That excited me. I wanted to take on this project. Fortunately, my father and uncle agreed. 

I knew nothing about building nor did my family. My father hadn’t even built his own house. But I was 22 years old, and a lot more adventurous. I also took this up since it gave me a chance to stay on in Kolkata. It took us 18-20 months to do the project and we made more money than we had expected. My father’s friend was happy. And, I got a pat on the back from my father and uncles. In the bargain, I also made some money, a few lakhs in profit. Things picked up momentum. We got more properties to develop into residential projects. By 1989, we had done 7-8 projects, some of which were office complexes. 

I’d tasted independence by working on my own. The last thing I wanted to do was to report to my father directly.

By 1989, I began to feel cramped. I loved real estate and construction but I wanted to do bigger projects. I decided to move down the banks of the river Ganga in search of a good piece of land, to build a hotel, and a larger housing complex. We made 50 visits to different sites before setting our eyes on a 60-acre plot in Raichak, a Kolkata suburb. Raichak is just 90 minutes from the city centre but is well located for a hotel because it’s near the confluence of the Ganges and the Bay of Bengal. Here, the river looks like the sea, and you get to see dolphins if you’re lucky. This became my first big real estate deal. The local broker told us we would get hold of the land in a year’s time. It was a complicated exercise— over 400 people together owned those 60 acres! Eventually, it took us four years to purchase the land.

My father was livid. He felt I was wasting money on a large piece of land two hours away from the city, and in an area where only fishermen and farmers lived. I asked him to trust me on this one. He agreed even though he never really warmed up to the idea. It was more like he resigned himself to it. Of course, he was very disappointed that I hadn’t got into the cement business. But, over the past few years, I’d tasted independence by working on my own. The last thing I wanted to do was to report to my father directly. 

One of the Board of Advisors of AIESEC in Kolkata,  Harsh Neotia speaks about AIESEC and its impact on the society. 

In 1993-94, we began work on the site. We eventually opened FFort (a five start hotel modelled on a fortress on the river delta) in 1997. Today, we have over 100 residences, guest houses, and another five-star property, Ganga Kutir. For a few years, we franchised the FFort out to Radisson to operate. Three years back, we began managing it ourselves. This project has turned out to be great for us—both the hotels have been profitable over the past two years, and the residential units have been bought by leading corporate houses. 

Around the same time, we also got involved in what became a landmark, first-of-its kind project anywhere in India—a public-private joint housing project in West Bengal. The government came out with an ad asking for participation from the private sector for housing projects. We were one of the 15 companies that applied and were one of the two companies selected. Luck continued to favour us on this project. We got Balakrishna Doshi, a celebrated architect, to work for us. 

Even as my real estate venture was going well, the Ambuja Group was growing rapidly. My maternal uncle, Narottam Saxena and my uncle, Suresh Neotia, who was chairman along with my father, wanted me to get more involved in our primary business. Till then, I would just go to the annual meeting at the cement plant, and even there would spend most of my time in and around the temple complex in the plant. In fact, the meetings I attended, I was forced to do so. Clearly, I didn’t pick up much. 

Looking back, most of what I have done has been opportunity driven."
- Harsh Neotia  

In 1997, Ambuja Group bid for Modi Cement through the Board for Industrial and Financial Reconstruction (BIFR). We were a front ranking bidder. In fact, we finally won the bid in 1998. After this was done, I was summoned by Narottam mama who clearly told me that I had fooled around enough and now it was time to get down to the core business. So, I went to a few meetings during the bidding process. I was shocked when I went through the BIFR documents. There were astronomical liabilities we were getting into. Modi Cement had not paid royalty and sales tax dues, and had 400-odd litigations pending. Its dealer network had been all but demolished. In any case, I did not know the C of cement. How could I possibly work on such a complicated BIFR case?

But, I finally decided to plunge in—mainly, because of two reasons. One, at least, I was assured that even post-acquisition, Modi Cement, would be headquarted in Kolkata. I didn’t have to leave my city. Also, honestly, I realised I didn’t have the funds to do anything big in my real estate venture since I didn’t have access to resources. Also, my family had spent generations building the business. I had the responsibility of carrying forward the legacy. Despite convincing myself, the next two years were horrible. I regretted joining the cement business almost every day. Not only did Modi Cement have loads of problems, I found the cement business itself very boring and lacking in creativity.

By 2005, the family decided to move out of cement. The first trigger came in 1999 when we bought out a part of DLF, and then ACC. With these big moves, we bit off more than we could chew. At one point, we had to go for an open offer because we couldn’t keep the 14.5 % holding we had in ACC. We didn’t have the resources for it. To raise resources, we would have had to dilute our holding to a precarious level which was unsustainable in the long run. In hindsight, we needn’t have been so ambitious—we weren’t big enough to go on such an acquisition spree.

Reaping Profits: Building on goodwill, Harsh Neotia has turned his real estate enterprise into a Rs1000 crore plus company with Rs125 crore in profit during 2011-12.

By now, the senior generation was older. They had serious health issues to contend with. Selling our cement unit became inevitable. We sold it to HOLCIM in 2006 who have retained the various cement brand names. After this, I was left to go back to doing what I loved to do—real estate. Fortunately, although I hadn’t focused on the real estate business for almost ten years, we had completed four projects in that time. Also, our projects Swabhumi, City Centre and Udayan all turned out to be landmark sites. So, we had built up goodwill, but did not have the required scale. In 2006, we had only about 60-65 people in the real estate business and one office. We had a turnover of Rs90 crore and a net profit of Rs6 crore. Contrast that to now—we have grown to a Rs1,000 crore-plus company with Rs125 crore profit in 2011-12.

Today, we not only build townships of both luxury and affordable homes, we have super specialty hospitals (The Bhagirathi Neotia children’s hospital, for instance), five star hotels, malls, office complexes. We have also expanded beyond Bengal into Raipur and Patna. We’ve consciously not expanded much beyond Bengal. We don’t have that kind of financial power yet. Also, we’d rather fill the space where we already have goodwill before moving elsewhere. Today, we can proudly say West Bengal is Ambuja country. We have five star properties in the Sunderbans, Kolkata, Raichak, Santiniketan and Darjeeling. We’ve also built the best hospitals, malls and higher educational institutes.

I have realised that in life some things work and some things just don’t. There is not always a direct co-relation between efforts and results. 

Looking back, most of what I have done has been opportunity driven. For instance, in 1999, we built for a tender for an office-cumshop structure in Kolkata. Actually, we didn’t really have an idea what we’d bid for—it was supposed to be a mall. That bid actually led to the City Centre, India’s second mall. It was also twice as large as the first, the Crossroads mall in Mumbai. In 1999, there were no malls in India. For a year or two, we were at a loss about what to do with the land after having paid for it. Initially, we had appointed Charles Correa to make a design for a traditional shops and office set up. In the meantime, the Crossroads Mall opened in Mumbai. I happened to meet Ravi Raheja, the owner of Shoppers Stop, at a party. He advised me to make a mall and even booked a store at City Centre. When I went back to Charles Correa with the idea, he almost threw me out. In India, he said, no one goes to malls, they go to bazaars. He almost walked out of the project before we arrived at a compromise of a bazaar with a mall added to it. Luckily, that compromise turned out to be the project’s USP. We accidentally walked into a good idea.

Actually, I have realised that in life some things work and some things just don’t. There is not always a direct co-relation between efforts and results. It’s a lesson I learnt early in life—some things give you greater results with much less effort. So, today the slow down has hit us like most others. We are not starting anything new. It’s better not to fight the economic mood. Of course, we are going ahead with the projects we have in pipeline. Putting those on hold could prove to be more expensive. I would be concerned if the economy continues this way. I’m hoping that much like in 2008, things will look up in another 7-8 months.

Ambuja Realty isn’t my only dream though although the goodwill we have generated gives me great satisfaction. Of course, you can keep growing and growing. Even if things are good, it’s not good enough. I want to look ahead. After I retire, may be 10 years from now, I’d like to run a school. No one is likely to give me a dean or a principal’s role so I’ll have to start my own school.