A College Dropout Still a Successful Entrepreneur- Vinod Goenka
Vinod Goenka, the charismatic MD of DB Realty and a billionaire real estate promoter hit the headlines and came into the limelight when the 2G Spectrum scam rocked the entire country in 2009. Of all the bigwigs who were alleged to be involved in the rip-off including the erstwhile union telecom minister Mr. A. Raja, Mr Vinod Gupta’s name figured as well). Despite the scam Mr. Goenka was a familiar and well-known figure in the real estate industry in the country.
Vinod Goenka’s rise to prominence
Vinod Goenka’s humble beginnings as a real estate promoter are nothing less than remarkable as he rose to prominence in a very short time. He opted out of college and took to participating in his family’s construction business. Vinod hailed from a family with a strictly business background. His family was engaged in constructing residential buildings and structures under the banner of ‘Conwood Constructions and Developers Private Ltd’. During his stint in the family construction venture, because of his sagacious business skills, he was instrumental in and development that eventually went on to become the Dynamix Group. The core competency of the Dynamix Group lay in the commercial area of dairy.
Later on, Goenka entered into a partnership with Shahid Balwa of the Balwa Group to form the DB Realty. The ‘D’ stood for Dynamix and ‘B’ stood for Balwa. It certainly won’t be out of context to mention that Shahid Balwa came from a family that was also deeply involved in the real estate sector. Shahid’s family was into developing and promoting hotels. Vinod and Balwa had equal stakes in the partnership firm they incorporated and their first joint venture was the development of Le Meridien Hotel near the Sahar International Airport (now known as Chatrapati Shivaji International Airport) in Mumbai.
The DB Realty got a head start when Mr. Goenka played a key role in developing and promoting the Le Meridien Hotel near the Chatrapati Shivaji Internatinal Airport in Mumbai (formerly known as Sahar International Airport). He also helped the enterprise in refurbish its image by hiring the advertising agency Ogilvy and Mather. DB Realty had made consistent profits and recorded uninterrupted growth in its initial years and during times when other developers found the going tough. The first IPO of the DB Realty valued at INR 1,500 crores was subscribed by more than twice it original value even though the response from small and retail investors were lukewarm.
The year 2009-10 was a slack year for most real estate developers and promoters. However, in that year which proved to be a tough economic year for a majority of developers, as far as revenues were concerned, DB Realty managed to increase their net profit by almost 77%. The enterprise also registered a two fold increase in sales. The first IPO of DB Realty catapulted Goenka into the Indian billionaire club. According to the Forbes India’s Richest listing of 2010, Vinod Goenka was estimated to have assets amounting to $ 1.18 billion and was the 54th richest Indian.
DB Realty’s forays in the telecom and hospitality industry
Later on, DB Realty ventured into the telecom industry and won licenses for 2G broadband spectrums to offer their services in 15 specific zones or circles. Subsequently, a 45% stake in Swan Telecom-the company floated to manage the telecommunications and broadband business of the DB Group-was sold to Etisalat-a multinational based in UAE. The sale was valued at an estimated INR 42 billion. After this sale, DB Realty became DB Etisalat. The company had an uninterrupted run as far as clocking profits and posting growth were concerned.
Since its inception, the DB Group under the stewardship of Vinod Goenka asserts that it has completed the development of several residential and commercial projects including the construction of several hotels. It has numerous projects in the pipeline that are in various stages of construction. The group is building a hotel in the Marine Lines suburb of Mumbai (Hotel India Tower) which it maintains will be its showpiece project. Once complete, it will be the tallest hotel in India at a height of 720 meters. Park Hyatt has bagged the contract for the upcoming hotel’s management.
Vinod Goenka is a multifaceted personality serving on the boards of numerous companies
Vinod Goenka, who is 52 years old, married and settled in Mumbai, is the father of two children and is an entrepreneur to the boot. He didn’t even complete his graduation when he teamed up with his father in the real estate business. Vinod Goenka is a living testimony of the generalization that you can attain the pinnacle of success and glory even if you aren’t highly educated. It is however alleged that he has a B.com degree from Mumbai University. Vinod K. Goenka, besides serving as the chairman and managing director of DB Realty Ltd is also on the board of 4 other organizations that are engaged in 4 different industrial segments. His total annual compensation for the year 2012 was more than 2 crores. Mr Goenka has been serving the real estate industry for almost 25 years.
He has also garnered extensive experience in the development of residential communities and commercial complexes. Starting with real estate, Mr Goenka later on diversified into the production of dairy products, granite and cement pavement blocks, cement and marble blocks. He also ventured into the hospitality segment and made big ticket investments including the construction of the Le Meridien Hotel.
Goenka is the managing director of Hillside Construction Co. Pvt. Ltd., Crystal Granite & Marble Pvt. Ltd. and Goan Real Estate & Construction Pvt. Ltd. He serves as an executive director on the boards of Excon Developers Pvt Ltd, Conwood Investments Pvt. Ltd., NeelKamal Realtors Tower Pvt. Ltd, Eversmile Construction Company Pvt. Ltd, Conwood Ceramics and Tiles (India) Pvt. Ltd, and many other companies.
How Vinod Goenka got embroiled in the 2G spectrum imbroglio
The meteoric rise of the DB Group was halted and received a rude jolt when charges were levelled against the firm for contravening rules to obtain licenses for 2G spectrum allotment in 15 distinct circles throughout the country. The CAG’s (comptroller and auditor general) white paper relating to the scam maintained that Swan Telecom had submitted phony certificates and did not comply with the specifications of UASL (unified access service license).
CAG also maintained that Swan Telecom was allocated spectrum in the Punjab zone although it was much lower in the precedence list of companies who deserved to get allotment in that circle. However, getting unwittingly involved in the scam has not ruffled Vinod Goenka in any way and he has always asserted that DB Realty’s prospects will not in any way be adversely affected because of the scam. As everybody awaits the verdict of the court case pertaining to the scam, it remains to be seen how Vinod Goenka steers the firm in its most turbulent phase.
Salary of Vinod Goenka
We have not found salary data of Vinod Goenka as an MD of DB Realty, MD of DB Etisalat and as MDs in various other companies from any reliable sources like ToI, Forbes, ET and other reputed news papers and Media houses, but once investing section of a magazine businessweek published the salary of Vinod Goenka i.e 12,000,000 INR per year.
Last Updated: June 20, 2013