JOURNEY OF ENTERPRENUER

MR. NIRMAL JAIN

THE UNBEATABLES

PREPARED BY

KARAN CHIKNE
SHASHI PRAKASH SINGH
PERVEZ

GROUP TASK 2 EMTERPRENUERSHIP

Founder & Chairman : IIFL Group.

Qualification : Chartered Accountant, Cost Accountant

Graduation : Narsee Monjee College of Commerce &

Economics.
SOURCE OF PASSION
Mr Nirmal Jain from an early age had seen his father and elder brother both
creating their own businesses, which inspired him to become an entrepreneur.
He considers his father as the foundation of his business ideas and regards his
mother for setting the foundation of his ethical values. All this brought about a
passion in him to create his own enterprise.

ACEDAMICS
Nirmal is an alumnus of IIM Ahmedabad, a Chartered Accountant and a Cost
Accountant. He acquired all three top professional qualifications in Finance
even before he was 23 years of age and stood second at an all-India level in
Chartered Accountancy. 

PROFESSIONAL LIFE
After successfully completing his post-graduation, he worked with
Hindustan Lever Ltd (now Hindustan Unilever) for five years. He then
helped set up the equity research unit for a brokerage before commencing
an illustrious entrepreneurial journey.

JOURNEY AS ENTERPRENUER
In 1995, Nirmal started a business on the premise that brokers set up their own
research and cover top 200 stocks, which accounted for more than 90% or 95%
of market volumes. An idea emerged that such a move could be side-stepped if
somebody did quality research and supplied this research to brokers, domestic
and institutional investors for a fee. Thus was born Probity Research and
Services Private Limited on October 18, 1995. The idea began with Nirmal’s
strong finance background and interest in the stock market. He was comfortably
able to make sense of the data and this excited him further to understand the
dynamics of the stock market values. However, he continued to innovate and
thanks to path breaking trading innovations with 5paisa.com, which brought a
revolution with its technology and created a paradigm shift in the broking
industry bringing down prices forever; their business grew and they became one
of the leading brokers in India. He further expanded the group with institutional
business, non-banking finance company, wealth management, asset
Management Company and financial products distribution among others.
Other than this ingenious idea, there were also many other turning points
for the company. The first private equity investment by Commonwealth
Development Corporation, now Actis Capital helped them gain
momentum in the early stages. Trader Terminal was next among the
unique initiatives in the broking business with the retail investor armed
with a never-before offering. The company launched features like
streaming market quotes, very minimal delay, instant order confirmation,
charts, technical tools, ease of use and all features to be used with a click
with minimal requirement of the mouse. Importantly, they successfully
integrated their research with the online accounts and the trading terminal
to make it very powerful and easily accessible.

WHAT MAKES IIFL DIFFERENT FROM OTHER

FINACIAL HOLDINGS?
IFL Holdings Limited (formerly known as India Infoline Limited) is the apex
holding company of the entire IIFL Group, which is a leading financial services
company in India, promoted by Nirmal and his partner Mr Venkat. They have a
diversified business model that includes credit and finance, wealth management,
financial product distribution, asset management, capital market advisory and
investment banking. They have a largely retail focused model, servicing over 2
million customers, including several lakh first-time customers for mutual funds,
insurance and consumer credit. This has been achieved due to their extensive
distribution reach across the length and breadth of the country and also
innovative methods like seminar sales and use of mobile vans for marketing in
smaller areas.

JOURNEY FROM STARTUP TO MARKET LEADER

The evolution of the company from an entrepreneurial start-up to a market
leadership position is a story of steady growth by adapting to the changing
environment, without losing focus on their core domain of financial services.
Their NBFC and lending business accounts for 71% of their consolidated
income in FY14 and has a diversified product portfolio rather than remaining a
mono-line NBFC. They are a leader in distribution of life insurance and mutual
funds among non-bank entities. IIFL remains a leading player in broking space,
both, retail and institutional.   
VISION
The motto- ‘When it’s about Money’ is to exemplify that IIFL is a one stop
shop for all financial service needs and represents their vision to be the most
respected company in the financial services space in India.

 THE UPS AND DOWN S

But every entrepreneur’s journey is a roller-coaster ride. To be in the market,
one faces many cyclical ups and downs and so did he. In the late nineties, India
had a recessionary environment. Stock markets were in doldrums and it was
really difficult to sell research reports for a fee. A problem that continues to
pose a challenge for Nirmal even now is attracting and retaining talent. He
believes that persistence, perseverance and patience are the key to overcome
any obstacle. And it is due to this hard work and quality that the company
managed to survive and even grow. In the broking business, they were the
pioneers in online trading but due to bandwidth issues there were many
challenges in investors embracing this technology. Around this time, Nirmal
learnt about the power of internet, he decided to scale up his company’s
research offerings through internet. That was the turning point. The more he
read and understood about the internet, the more passionate he became about it.
In Nirmal’s words, “It was one of those many things that make you sleepless
during the night and restless during the day”. He saw an opportunity and his
only thought was to find a way to put his best foot forward. And finally he had a
Eureka moment. He knew that while the internet is the vehicle, his company’s
core competency is in financial services. They had about 250 clients but around
5000 people who used their research, photocopied it and distribute the reports
without proper permissions. It was necessary but increasingly difficult to
control this practice. Somebody in his team said more out of frustration that if
they couldn’t control piracy after working so hard, they might as well put up
everything free for the users. Though meant in banter, his comment was the big
idea Nirmal had been waiting for. He says “I thought if we could charge even
10paise, it may recover our cost. But that meant we would have to forego our
revenues of Rs. 1 crore per annum. It also required investment and technology.
In short it meant that our business needs to take a re-birth. For this the pre-
requisite was death.”

PROUD MOMENTS
After setting up the business, the IPO was one of the high moments. Another
big moment was when Nirmal was successfully able to get on board a high-
quality institutional team from a leading global brokerage. It was considered an
audacious move and some others tried to replicate it but not with much success.
This was followed by setting up an extremely successful wealth management
business from scratch, when the global financial crisis had engulfed the business
world.
For IIFL, it the technology and knowledge they use that give it the edge. Its
website www.indiainfoline has become one of the most popular websites and
was recommended as a ‘must read’ by Forbes. Having built the business this
far, Nirmal now wants to look at consolidating the business and continuing to
grow and become the most respected financial company in India.
MESSAGES TO ALL ENTERPREUERS FROM
NIRMAL JAIN