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BT DOTCOM: COVER STORY The Quiet Multi Millionaire Is Rajesh Jain a visionary? Or someone who got lucky being in the right place at the right time? Jain's IndiaWorld could well be a once-in-a-lifetime thing. But with the net evolving, there's really no telling if he could do an encore. By Roshni Jayakar
He doesn't look like a multi-millionaire. He certainly doesn't dress like one. His simple buttoned-down beige shirt and black slacks are almost a uniform-and no, they have no embroidered crests, no brands. He has that maroon Opel Astra-the same one that glides into Raheja Centre in Mumbai's skyscraper warren of Nariman Point-but then so does every other successful property dealer and senior-level corporate executive. The name of his company at his office on the ground floor-opposite parking slot number 13-is announced not by polished brass or luminous acrylic, but by a shoddy computer printout stuck to the glass door. It says Netcore Solutions. Follow him inside and instead of deep-pile carpets, space and real leather, his windowless cabin in a 250 square feet office of tiny cubicles is filled with a small desk, a whiteboard, three chairs, a bookshelf and a sofa cluttered with magazines and books. No palm pilots, no digital diaries-just a laptop. Five-star lunches at lunch time? No, home-cooked food does nicely, thank you. So just what did Rajesh Jain do with his fortune? Well, it gave him a luxury he always craved for: Time. This slight, humble-looking Marwari with a mild slouch and milder manner is after all, the man who made one of the best business deals in Indian history-and in doing so, rocked the Asian dotcom world and kicked off an era of unprecedented opportunism on the internet. The sale of his creation, IndiaWorld.co.in with its 13 websites targeted at the NRI community, for Rs 499 crore to Satyam in November 1999 does seem an era away. No one after him came close to a deal like that-and no one is likely to, for some years to come. If you meet him, here's one question he's unlikely to answer: Did he really get all that money? His short answer: ''That's in the past.'' And there's no more he wants to say to you if you are from the press. Well, frugal Jain did get all the money, his friends and associate say, and so claims Satyam too-though there are stories doing the rounds that he eventually got no more than Rs 80 crore. Even if that's true, it doesn't exactly make him a pauper. Making History The first part of the transaction happened in November 1999, when Sify acquired 24.5 per cent stake in IndiaWorld for Rs 122.20 crore ($28 million) and paid a deposit of Rs 51.30 crore ($12 million) to acquire an option to buy the remaining 75.5 per cent on paying a further amount of Rs 325.40 crore ($75 million), before June 30, 2000. Though the initial agreement was signed as an all cash deal, it was later converted to a cash and stock deal. In June 2000, Sify exercised the option to purchase the balance 75.5 per cent shares of IndiaWorld by paying Rs 215.40 crore in cash ($48 million at the $ rate in June 2000), and issued 268,500 fresh equity shares for Rs 110 crore ($25 million). Then, Sify shares were valued at Rs 4,097 per share ($91.75, equivalent to the price of four adrs on the nasdaq on June 23, 2000). So, while Jain got Rs 388.9 crore in cash, he has lost almost Rs 108.65 crore on the value of Sify shares. Sify is currently quoting at $1.05 on the NASDAQ. Money Is Irrelevant I am sure you must be still wondering what he did with all his millions? A quintessential Marwari by upbringing, Jain has a frugal way of life. Money has simply not changed him or his way of life. That's no cliché. Jain stays in a posh locality at Napeansea Road, with his wife Bhavna and his parents, but it's the same house he stayed in before he became a multi-millionaire. His friends say the house is as simple and cluttered with books and magazines as it used to be earlier. ''Money is irrelevant to him,'' says a friend. ''He is one of the few individuals who would be grateful for having got the money that gives him the luxury of time to get on to his next big idea.'' A loner, Jain would rather spend his time assimilating knowledge from every possible source-reading, surfing the net. You can attribute a part of this to his science and tech background. Jain is a B.Tech in electrical engineering from IIT, Bombay, and a ms in electrical engineering from Columbia University in New York. It's this spark of inquiry that keeps him thinking about what to create next. But is Jain a visionary? Or someone who just got plain lucky by being in the right place at the right time? It's hard to tell. The days following the great crash have shown that the difference between a visionary and an also-ran is sometimes slim in these turbulent days for technology. Sabeer Bhatia, like Jain, hit the big time with hotmail.com in the days when the dotcom was God, but when it died, his next creation arzoo.com sunk without a trace. Creating The Next Big Thing What about Jain? It's quite obvious that an IndiaWorld could never happen today. Having sold IndiaWorld, Jain is a member of Sify's advisory board, and has three responsibilities at Sify: he oversees IndiaWorld operations; provides strategic direction and inputs to Satyam; and is setting up an investment fund for technology companies out of India. The buzz is that from the money he got in the first leg of the transaction, he invested Rs 100 crore in setting up a venture fund along with Sify. This was quite a non-starter. Jain visits the Satyam office at Vile Parle in the suburbs of Mumbai once a week. Jain and his wife still work for IndiaWorld, still host to eight of the original 13 sites. Samachar.com, khoj.com, bawarchi.com, khel.com, manoranjan.com, samachargift.com, indiavotes.com and itihas.com are active, independent sites. The four other sites have been integrated into other active sites of Sify. Dhan.com is integrated into walletwatch.com, nagar.com is integrated into sifymail.com, manpasand.com is integrated with khoj.com and indiatravelog.com is integrated with travel.sify.com. Jain's main interest, though, is Netcore Solutions, where he is CEO. Jain set up Netcore in 1997, as an enterprise solutions company focused on messaging collaboration and security software. A low-cost solutions provider, Netcore has got over 100 clients, from Adidas to ICICI. Though the company is making profits-in the range of Rs 60 to 70 lakh-it's all really small change. Jain is currently working on taking Netcore to another level, and going on to make software products. But really, how far can you get with hosted services, mail gateways, proxy server and virus scanner and firewall services? Far enough, Jain believes, to be at least able to shift his 20 employees to a larger office of about 1,200 square feet in Parel, at the heart of the old mills' land to join a slew of companies taking their chances amid the rusting factories and dying chawls. Given his penchant for caution, Jain is unlikely to flirt with failure. Failure is no stranger. There was the nagar.com, launched as a free e-mail and calendar service, in 1998. But it failed and has since been integrated into sifymail. In March 2000, he also launched paisavasool.com, an internet shopping website, as a part of the IndiaWorld family, but that too has since shut shop. After he returned to India from New York in 1992-after a two-year stint with a company called nynex, where he worked as a member of the technical staff-Jain founded Ravi Database, a consulting and image-processing company for medical and metallurgical needs. He had a product, but given a lead time of two to three years, the company rapidly lost money. Jain said then, ''the business had to die''. It was after the collapse of Ravi Database in 1994 that Jain went to the West Coast, where Netscape had been launched and there was much talk of the internet. At this time, it was clearly visionary to think of using the internet to serve as an electronic bridge between nris to their homeland. It was an idea as unknown to most of us then, as esoteric as something like nanotechnology is today. We know of it vaguely. We know it is something that a bunch of scientists do in the confines of their labs and minds. We know it could change the world. But it isn't any more real than that. As the internet moves into year five of what experts believe is now a 25-year technology cycle, it is propelled by two kinds of ideas. Some are complex engineering questions that will change the structure of the net in its movement towards omniscence. Others are questions of human access, which needs a simple approach. Jain's friends insist this is his strength. As one says: ''His ideas are as simple as him. Not only was it the first of its kind, IndiaWorld lacked competition.'' As the net silently evolves, there's every possibility Jain could do an encore. There's every possibility too that it his first big thing, could be his last. |
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