Book Excerpt: Gautam Adani Called "Toofani", Why He Dropped Out Of College

For Gautambhai, life is all about transformation. First, he transforms himself, and then he expects this from others as well. And while he is great at delegation, he expects every member of his team to report to him directly on the progress of the work he has been assigned. He lends a hand, if the job has hit an unexpected obstacle and helps to decide quickly on the go/no-go options.Even today, he works for nearly eleven to twelve hours a day at his office.

In earlier years too, nobody ever thought of him as a contented child, or at peace with the world. For him, life offered, at each stage, one more opportunity to push forward, one more chance to dream the impossible dream. As the previous chapter stated, the favourite word to describe him was toofani. Gautambhai moved to Ahmedabad with his parents in the early 1970s, and his academic competence won him an admission at Sheth C.N. Vidyalaya, in 1974, a highly reputed school in Ahmedabad. He appeared for his secondary school exams (SSC) in 1977; his performance won him admission in the coveted science stream in Standard XI at the school.

After heeding his uncle's advice, the teenager decided to move to Bombay (now Mumbai) to pursue his dreams. He stayed with his elder brother Vinodbhai, a wholesaler of cut-piece fabrics for Bipin Mills and Rajesh Mills, and decided to try his hand at trading in diamonds.

Gautambhai would have preferred to embrace the earn-and-you-learn model for growth and development. But the fates had other plans for him.

Diamonds beckon 

Gautam studied for a couple of months at a South Mumbai college. The diamond trading office was very close to the college. He went to the diamond markets in the morning, learned diamond sorting and assessment at Mahendra Brothers and then went to college. But in his attempt to excel at business, he found it difficult to mark attendance at college. Realizing that he could not meet attendance norms as well as do business the way he wanted to, he decided, within six months of life as a college student, to become a full-time diamond trader in Dhanji Street. 

Devendra R. Amin, who has now retired from the Adani Group, and who was senior VP, corporate communications, says, 'Gautambhai is not constrained by a "formal" education. Formal education teaches you what has been done and how it has been done in the past in a variety of disciplines ranging from science to business. 

Gautambhai was lucky that he did not go through such an education, which normally produces consultants and not entrepreneurs, or say, "worker bees" and not the "queen bee". What is needed for growth and progress is the queen bee. A lack of formal education allows him to think out of the box and make swift decisions.'

Vinod Adani recalls how within a month of joining college, Gautambhai had begun to feel burdened by the pressures of attending college and coping with the demands of the diamond trade. He would be so tired that he would often go to sleep in the suburban train, overshooting the station he was supposed to get off at. Everything conspired to the eventual decision to give up studying. He began to solely focus on diamond trading instead.

He entered into a partnership with his maternal cousins, Girish and Prakash, to trade in diamonds. In many ways, diamond trading honed Gautam's instincts in finance.

Diamonds, being very precious stones, are traded on wafer-thin margins - just a few basis points. Just to give an idea on how the diamond trading works: trades must be concluded quickly, because diamonds are purchased in one country and in one currency, sorted and traded in another country, then (usually) cut and processed in India. The process pipeline is usually three to six months. They are then sold to a fourth country. The longer the time, the greater are the exchange risk variables, and the interest burden on the inventory. One has, therefore, to meet other diamond traders in quick succession, show them samples of the stones you have, make a quote, and quickly strike a deal. Most commitments are oral in nature, and trades are settled in cash within a couple of days at best. Deals, at the smallest broker's level, were worth a few thousand rupees in those days (in today's values the trades would be upwards of Rs 1 lakh), or a few tens of thousands at most.

Even in those days, Girish talks about Gautambhai's overarching desire to strike big deals. He recalls how one day, Gautambhai had gone out with some diamonds, had sold them to a trader without informing his office, and then left for a couple of days' holiday. When Girish returned to his office, he found the inventory short by diamonds worth Rs 1.5 lakh, a princely sum in those days. But there was nothing to show that a corresponding amount of money had been deposited in the bank. He waited for Gautambhai's return. 

A few days later, Gautambhai returned to Mumbai and breezily informed his cousins that he had struck a deal with another trader for this huge amount and had happily gone back home to his native place, confident that a spoken deal was enough to ensure that he would get his money back.

Unfortunately, the trader could not pay back in time, and failed to turn up at the diamond market. Nor would he take telephone calls. Promptly, Gautam and Girish worked out a plan. They decided to go to the trader's house at 6 a.m. when the milk delivery boy rang the doorbell. The wife was surprised to see two young boys there.

They then explained their purpose, and finally met the trader. The trader said that he had fallen on bad days and, after a bit of negotiation, finally settled his part of the trade with an offer of another set of precious stones. There wasn't much profit that Gautam and Girish made in this transaction, but the deal got squared off. That was perhaps Gautam's first brush with the unexpected factors in trading.

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Published with permission of Penguin Random House from 'Gautam Adani: Reimagining Business In India And The World' by R.N. Bhaskar. Order your copy here.

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