From baby boomer to millennials: the

changing flavor of entrepreneurial traits

Deepa Pillai and Leena B. Dam

mmersed in sipping green tea in his capacious office lounge, the octogenarian Arjun Deepa Pillai is Associate

I Mehta introspected on the trials and tribulations of his journey as an entrepreneur, the
voyage which started four decades ago. From 1976 to 2018, the business has now
Professor at Symbiosis
School of Banking and
Finance, Symbiosis
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traversed three generations. Starting with Spice Mart (Sole Proprietor) to Hindware and
International University,
Lament Construction (partnership firms) to Starlite Homes Pvt. Ltd. (corporate entity),
Pune, India. Leena B. Dam
Mr Mehta witnessed transformation and restructuring in organization with every new is Associate Professor at
generation which characterized the evolution of family business. Handholding children to Global Business School
take up the reins of Spice Mart was not a calculated choice. Yet it is remarkable to study the and Research Centre,
trans-generational transformation and growth in the organization structure of a regional Dr D.Y. Patil Vidyapeeth,
family business. As a self-made entrepreneur, morals, ethics and value system are vital Pune, India.
ingredients steering the organic growth story. Third-generation Mehta’s has established
themselves enterprising, aspiring and visionary. With the incorporation of a corporate entity,
they convinced themselves to bring inorganic growth in their business. Arjun Mehta
gleamed with pride as Spice Mart partakes an organized structure which had lost
prominence with the second-generation entrepreneurs. But Mehta was equally hammered
with juxtaposed thoughts as he contemplated whether the integration of retail business with
real estate corroborates sustainable innovation. Will independent businesses create the
brand’s footprints perpetually? Should the millennial confine business natively or should
they grow internationally and become a conglomerate?

Phase I – need-based entrepreneurship

The journey to a thousand miles begins with a single step.

1976. Arjun Mehta had a young family, and no means to provide for it. His native city had
bleak prospects. He did what adventurous men and women do: he moved. He migrated to
Pune, a bulging town in the shadows of India’s financial metropolis, Mumbai. He sought
appointments and openings. Some doors opened and just as many closed. He stumbled on
The authors are immensely
an acquaintance, and soon Mehta was selling wood and charcoal in the streets of Pune. grateful to the anonymous
Ten desperate, grueling years: That is how long it took him to scrimp INR 10,000. He started reviewers for comments that
greatly improved the manu-
Spice Mart, a small, cash-based grocery store. He launched his business on the streets and script. The authors thank the
graduated his way into a shop, his own shop. Mehta’s initial capex, naturally came from his Editor-in-chief and the editorial
team for assistance in refining
savings; more working capital, when needed, came from banks. Wheeling and dealing in the manuscript.
cash and inventory led him to a simple insight: clear objectives and streamlined activities Disclaimer. This case is written
anchor good businesses. In the years to come, Mehta would put this insight to profitable solely for educational purposes
and is not intended to represent
use. In 1986, INR 10,000 was a lot of money. So much money was not needed to start a successful or unsuccessful
grocery store and getting bank loan was very difficult. managerial decision-making.
The authors may have
disguised names; financial and
Arjun Mehta was his own man, introvert, frugal and conservative. As typical Indian family, all other recognizable information
the affiliates were very cohesive and appreciated hierarchy in decision-making. It was an to protect confidentiality.

DOI 10.1108/EEMCS-07-2017-0186 VOL. 9 NO. 1 2019, pp. 1-19, © Emerald Publishing Limited, ISSN 2045-0621 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 1
 elaborate system of patriarchy. Proprietorship and administration of Spice Mart vested with
Arjun Mehta being the sole decision maker. Familial figures inspired him to the occasional
risk: his spouse, Janaki Mehta. She as a fore bearing mother had substantial influence in the
strategic decisions and their two sons, Rakesh Mehta and Rajesh Mehta, and daughter,
Radhika Mehta, stood responsive. Indeed, Spice Mart was Janaki Mehta’s idea. She
envisioned fostering novel thoughts and talent and thus rendered best education to her
offspring with an ambition of charting potentially sustainable businesses across generation.
Mehta’s ancestral genes of integrity and commitment were perceptible in his business,
which eventually enhanced his revenue flows. Liquidity was his mantra, thus routing his
savings to informal chit funds set up with business associates, friends and relatives. Soon,
Spice Mart had become a well-oiled venture with a consistent top line yield. But businesses,
especially ambitious ones, must anticipate change; they must evolve. Spice Mart was not
doing well on that count. As a small-scale operation, it was owner-centric, inward-looking
and bedeviled with a conservative mindset.
Mehta needed to unlearn, re learn and learn quickly.

Missing the market cues

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Arjun Mehta failed to foresee dawdling growth in customer base as a sign for transformation
in business practice. Janaki’s affirmation of business expansion was overruled by Mr Mehta
many a times. Competition from local and international companies intensified due to
regulatory changes in the open trade policies. The dearth of funds restricted Spice Mart’s
prolific marketing strategies and people management ranked last in business skill set.
Spice Mart’s average monthly foot fall was approximately 50 customers, which steadily rose
by 1 per cent every month in the year 1976. Since 1977, customer base grew by 3 per cent
year on year (Figure 1).
Spice Mart was trusted for quality products, friends and relatives constituted a major subset
of repeat customers. Business principle of cash sales deterred the entrepreneur from
granting credit to customers, limiting business growth and credit risks. Indian economy is in
the transition phase, budding small business ventures were on upside. Further
Nationalization of Commercial banks amplified credit distribution toward private sector
flourishing small enterprises at local and national level. Year 1990 witnessed many new
entrants in the retail store segment in the geographical periphery of Spice Mart. Lesser
regulatory compliances for small business added flavor to the growth of new business
ventures. The nascent enterprises invested in infrastructure and wide range of products,
and service offerings were lucrative like “buy one get one free”, “combo prices” or discount
for repeat customers.

Figure 1 No. of customers of Spice Mart

Growth in the Number of Customers for Spice Mart

2,000 1656
No. of Customers

1428
1,500 1232
1063
791 917
1,000 606 682
500
0
1976 1980 1985 1990 1995 2000 2005 2010
Year

PAGE 2 j EMERALD EMERGING MARKETS CASE STUDIES j VOL. 9 NO. 1 2019

 Arjun Mehta: Thriving businesses will capture markets through unusual schemes, what
next?

Janaki Mehta: Business will grow only when risk is taken; hence devise a new marketing
strategy.

Arjun Mehta: No credit and no new markets. Can we think of new stimulating offers?

Janaki Mehta: Extending credit along with offers should aid in retaining the customers and
enticing the new ones.

Arjun Mehta: For me “Customer is King”, I would prefer to think about the one’s having long
term association with us rather hunting for new customers.

Personalized gifts were distributed to repeat customers on festive occasions and on New
Year eve. His business intent was principally “liquidity” for satisfying his business and
household needs. With the commencement of new phase of liberalization in 1990,
promising businesses started mushrooming at the regional level. Trepidation from losing the
accessible market share dissuaded him from expansion in Pune city. His business vision
was myopic.
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Spice Mart shadowed its conventional practices ignoring the altering dynamics of business.
Change was not embraced by the entrepreneur.

Phase II: genesis of second-generation entrepreneurship: leaving behind the

legacy
The Great use of Life is to spend it for something that will outlast it – William James

Arjun Mehta’s elder son Rakesh Mehta preferred financial solace and was disinterested in
affiliating with Spice Mart. Eyeing his father as risk averse and his hesitancy to magnify the
business, he perceived dreary future in being a retailer and confining the scale of operation
in a store in some nondescript corner of Pune city.
Liberalization policy brought a revolutionary change post 1990s in Indian economy, which
opened economic borders to foreign investments. Rakesh predicted evolution in the
financial service sector in upcoming years. On completion of post-graduation in finance
from State University, his entrepreneurial instincts and Janaki Mehta’s support prompted
him in venturing into financial services consulting “Prime Investments” funded partially
through his father’s savings and through a Bank term loan. Arjun Mehta was perturbed by
his son’s decision as he wanted his blood to take over the reins of his business to new
stature. Rakesh Mehta witnessed the slowdown of Spice Mart in the native market; thus, he
sensed the necessity of the family business to invest in different markets. His perception
was to generate wealth and thus counseled his father recurrently for escalating the business
in new ventures; however, all efforts went down the drain. Arjun Mehta was skeptical and
questioned himself, does economic objective succeed the non-economic goals for any
business? Arjun Mehta’s inflexibility and his passion for Spice Mart was unrelenting made
him independently manage the business at an elderly age. In a pensive mood, often Arjun
debated to himself “Does higher education renounce the notion of a family business? What
withdraws them from taking the reins of the family business?”

Chartering new territories

The enthusiasm and vigor of starting a professional firm could not sustain for long. Rakesh
Mehta realized that Indian investors were prejudiced by the socio-economic culture. Rather
than seeking professional advice for personal finance and investments, investors preferred
ideas and advise from their cohort. In early phase as an advisor, he offered to empower

VOL. 9 NO. 1 2019 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 3

 people with designing their portfolio in lieu of contacts only for building up his database. It is
sad; most people evaluated his forbearing step as a distraught proposition. Glamour, fancy,
reverence and his esteem of this profession all vanished into thin air.
What next was a big dilemma the 27 years old Rakesh Mehta encountered?

Janaki Mehta: Why not think about cement retailing business?

Rakesh Mehta: Again a new venture. No, absolutely no.

Janaki Mehta: Not new but the one of my cousins.

Arjun Mehta: Think, it would be right to join our business than of the relatives.

Janaki Mehta: Rakesh wants to explore new opportunities which our business will not
render.

Arjun Mehta: What a thought.

Rakesh Mehta: I would favor cousins business than a grocery shop business.

Rakesh Mehta started “Hindware” on a rented premise in the year 2003 as a partnership
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with his maternal relatives who were dormant partners. Capital was infused from previous
savings and chit funds, and employees were limited to three administrative resources. In
2003, India was one of the largest cement-producing country in the world.
Demand for cement surged by 1.5 times of the GDP[1] growth rate in India on account of
government and planning commission’s vision for infrastructure expansion in the years
ahead. Similarly, real estate demand in terms of housing and industrial projects propelled.
Rakesh Mehta favored developing a business plan for creating a successful business. His
contention was in a growth-led economy, cement business comprises low risk and minimal
expertise as threats from new entrants were negligible and no close substitutes existed. He
presumed higher growth prospects due to flourishing infrastructure investments made by
the government and indigenous players. Financial decision-making power vested with him;
eventually, sleepless nights and hard toil resulted in business growth (Exhibit 1) and new
collaborations.

Business model of Hindware – transforming landscape

Businesses in emerging economies pose many intricate and peculiar challenges. The number
of businesses led by families post-independence had gained momentum subsequently due to
opening up of economy. Indian family-run businesses have greater flexibility in terms of faster
decisions making, launch of new initiatives and continuously strive for new business
opportunities aiming wealth creation. These entities are apprehensive about personal wealth
creation, brand image and family reputation deciphering into higher self-discipline and
governance. Spice Mart survived in its traditional format at the local level. Conversely, the
second-generation entrepreneurship business lead by Rakesh Mehta was a registered firm.
Hindware was an intermediary firm, and procurement of cement was demand-specific, based
on the orders received from customers with a trade cycle from zero to five days. The firm was
largely dependent on five dealers of cement from the vicinity of Pune, Nasik and Nagpur well-
known to the family.
“Hindware” had no owned premises, which deterred the firm in meeting unanticipated
demand. Working capital was solely dependent on short-term bank loan. The firm was
progressive and captured aggregate of 20 per cent of the local market share within a span
of five years of establishment. Promoters predict a growth of market share to 35 per cent at
the local level in the forthcoming three years. The firm lacked adequate marketing of its
product; 90 per cent of sales were to real estate developers and contractors and retail

PAGE 4 j EMERALD EMERGING MARKETS CASE STUDIES j VOL. 9 NO. 1 2019

 constituted 0.2 per cent inclusive of distributors in the local periphery of Pune. Ethics,
governance and satisfying societal obligations were integral to business. Rakesh Mehta’s
philanthropic principles were in line with his father, which could be evidenced by his intense
desire to elevate the primary school (set up by Senior Mehta) made him partake in the daily
administration. In due course, he was appointed as the trustee of the school. The school
catered to the primary and secondary education of underprivileged students and actively
engaged in social activities such as conservation of natural resources, cleanliness drives,
and charity.

Entrepreneurial dilemma
The starting point for all Achievement is Desire – Napoleon

Rakesh Mehta explored economical options for fund raising and was primarily reliant on
bank finance. Physical asset investments were more preferred than investment in financial
instruments which corroborated the risk averse personality trait of the entrepreneur. Rakesh
Mehta alleged that technical competence and strategic planning were imperative for the
success of the business rather than only finances. His financial decision construct
unambiguously distinguished business needs from family needs and acknowledged on
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reinvesting profits into business ventures. This was in consensus with Janaki Mehta,
unfortunately which Arjun Mehta never anticipated.

Rajesh Mehta, younger son of Arjun Mehta, a Law graduate, was inspired by his elder
brother’s passion and exhibited his disposition in joining his brother’s business. It was
candidly approved by the family members only after completion of his master’s program.
Arjun Mehta’s daughter Radhika Mehta demonstrated least participation in the business
and preferred a career in media and communication.

Sadly, the Indian family-run community business hitherto did not encourage girl child’s
participation in business and education. She is to be reared and married off as early as
possible. Radhika’s life path saw her enter a new home as a married lady at the age of 19
years.
Rajesh Mehta’s passion for “scaling new altitudes for business excellence” encouraged him
to endeavor into the real estate business. The family members’ incessant empowerment to
their two sons had been a zeal for taking the business to the next level. Young Rajesh, on
completion of his master’s program from USA, had different plans for the business.
According to him, success of a business was its “business strategy” and hence started off
with designing a new operational strategy which eyed the probable sources of real estate
fund raising. Mentoring was robust within the family, and parental counseling was a regular
phenomenon for the brothers.
Witnessing Hindware’s cash crisis for capex and working capital, Rajesh Mehta
premeditated to team up with the renowned construction firm Lamco Developers, which
had 25 years of real estate presence. The firm was in the look out for a partner in the
year 2010 for their new township of ten residential towers in Pune, the expected
completion of which was 2017. Each tower had four floors comprising 12 flats (1-3 BHK
flats) with area ranging from 750 to 1,250 ft2 of. The township included wide range of
amenities from gymnasium to creche, garden to pharmacy and laundry to concierge
services on call.
The partnership was registered in the name “Lament Constructions” in the year 2010, where
both brothers partnered the contract for an expected profit margin of 25 per cent of the
overall project cost. The estimated project cost was 300 crores to be financed in equal ratio
by the company and Mehta brothers. Dilemma for both brothers was raising of funds and
the risk quotient.

VOL. 9 NO. 1 2019 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 5

 Rakesh Mehta: Would father encourage this?

Rajesh Mehta: Let us give it a try or else look out for borrowings from banks.

Rajesh Mehta: Real estate business will grow in future as working population of youth has
increased, people want to invest in real estate.

Rajesh Mehta: Father, Why can’t we explore this opportunity.

Rakesh Mehta: Father, it’s a matter of few years, the payback period is less.

Arjun Mehta: Raising funds from family sounds vesting personal investments at stake.

Mutually, the brothers decided to raise long-term debt from banks and to contribute 25 per
cent of total invested capital from the profits and reserves of the cement business.
Real estate business in India is labor-intensive. The new project required manpower of 200
contract workers, of which 150 workers were hired on contract and additional 50 workers
were to be arranged by Mehta brothers through their local contacts.
Emerging markets are the strongest drivers for real estate sector, especially residential real
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estate, due to their economic size and potential for future growth. Rising income, shift in
socio culture and population increase resulted in higher investments in residential
properties: new business was competitive. Both the brothers had no formal knowledge
about construction industry, they were management and law graduates. Equipment and
tools were on lease, and project implementation vested on 30 engineers who were on roll of
Lamco Developers. Capital, management and implementation of the project were entrusted
to Mehta brothers; planning and blue print of the project was to be completed by 2010. The
shift from family business to partnership firm was evident. Mehta brothers believed
segregation of accountabilities amid employees within business will endorse free flow of
communication and belongingness toward the institution and reduce information
asymmetry and conflicts. The obsession of both the brothers to excel and expansion of
business never deterred them from additional risk attitude.

Venturing current operations

By May 2010, INR 112 crores of capital was infused by way of debt from Maharashtra Bank
at an interest rate of 6.25 per cent, and INR 38 crores came from the profits of Hindware
(Exhibit 2). Also, 75 per cent of the material was supplied by Hindware for the new project
with average credit period of 45 days. Operational and marketing strategy was devised by
Mehta brothers in agreement with Lamco. Project became functional in 2010 in Chakan and
Pune. Hindware procurement credit cycle was five days, which exposed the new project to
cash and raw material crises during the first phase of construction, leading to a delay of six
months in completion. Mehtas faced the initial hitches of the new venture, which headed to
extension of credit period to 15 days and new vendors’ collaboration for cement, iron and
steel at local level near the vicinity of construction site. Short-term cash requirements were
fulfilled by raising cash credit from banks to the extent of INR 10 lakhs against the stock
lying at the premises of construction in 2014.
Rakesh, from his past experiences, strategically planned the resources prior to the
commencement of the project for the second and third phase. Social media was extensively
used by Rajesh for marketing. Further, he encouraged sales force to liaison with the retail
merchants and municipal and local bodies. He traveled and attended national and
international conferences and competitions on real estate and construction in search of
uniqueness of business propositions across the globe. He invested in technology at the
planning and development stages of projects and alleged in delivering the best within

PAGE 6 j EMERALD EMERGING MARKETS CASE STUDIES j VOL. 9 NO. 1 2019

 timelines. Quality was his concern and benchmarking business to the global standards was
always aimed at. He dreamt in creating the family business to a global entity.
Rakesh designed a subsidized meal facility for workers, one-time free meal for the children
of the laborers and rest hall on site for the workers’ kids. On site residence was provided to
the workers with basic sanitation necessities. Insurance facilities and health checkups were
add-ons to workers’ wages. The occupancy rate in the first phase was 85 per cent, and
most of the clients preferred loan as means of financing investment in real estate. At an
important juncture, one of the prospective clients could not invest in a house due to delay in
sanctioning of loan, which made Rakesh thought of collaborating with financial institutions
for provision of loan facility at site to reduce the turnaround time for loan approvals.

Leveraging innovations
For the second phase, they launched early bird schemes for the first five buyers at a
discount of 10 per cent of the cost of flat. Consumer durable gift vouchers were provided for
subsequent five buyers of INR 25,000 each. These schemes lead to increase in sale of flats
on cash basis by 5 per cent, which was sufficient for financing working capital requirement,
and the firm’s reliance on debt started decreasing due to cash purchase by clients. The
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second phase of the project was completed by 2014, and last phase started in the year
2014, targeted to be completed by 2017, and was given maximum time as all amenities
were to be completed. Both the brothers eyed for detail and incessant monitoring of the
processes throughout. The financial position of the Hindware multiplied with the fast phase
completion of projects and the anticipated returns from the partnership matured evenly
throughout the second and third phases of the project. The third phase of the project was
completed in the year 2017 within the predefined time period.
Each discussion of the Mehta family had some new thoughtful activity facilitating societal
accomplishments and adding value to their clients. Each client had a memorable story to
narrate on visiting the partnered firm, as they experienced hospitality and humility. Rajesh
and Rakesh were second-generation entrepreneurs with no prior knowledge about the
construction business; their perseverance and passion lead to the success of the firm.
Suppliers affirmed that Mehta brothers never compromised on the quality of raw materials
and believed in strong and steadfast relations. Sales force depicted satisfaction for the
exposure toward diverse training programs imparted for better client handling. Competitive
salary structure was designed and a sense of belonging was built up amongst the sales
force. The doctrine of “Customer is the king” also flowed in the blood of second-generation
Mehta’s. The Mehta brothers were clear in defining their core capabilities of the family
business, articulating and aligning them with the stakeholder’s aspirations and priorities for
achieving the business objective.

Fostering the third-generation entrepreneurs

Pampering the next generation and the aspiration to engage them in the company on
completion of their studies at senior positions is a common practice within Indian family
businesses. Rajesh Mehta’s younger son Manas Mehta and Rakesh Mehta’s elder son
Anand Mehta were of same age and pursuing last year of civil engineering from the State
University. Both siblings demonstrated intense wish for joining the partnership firm and were
associated with the firm since their first year of education.
The family ethos fostered by the fathers stimulated the third-generation brothers Manas and
Anand to venture a new set of business by transforming Spice Mart into a retail store
parallel to the construction business. Confident and desirous of venturing their own
construction enterprise, both siblings aspired for developing restful spacious homes edging
on the affordability attribute. The dissolution of partnership with Lamco was anticipated in
the year 2017 on completion of the project deal. On discontinuance, both siblings planned

VOL. 9 NO. 1 2019 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 7

 the unveiling of private limited firm Starlite Homes Private Limited. Their intent was to
establish a real estate firm and simultaneously expand the branches of Hindware to other
cities of Maharashtra State.
Their business philosophy was innovativeness through exposure to various practices and
unremitting learning. Manas was keen in investing the surplus funds of the business in stock
markets for a long term and also in other short-term financial instruments rather than
investing in physical assets. Anand’s financing plans were to raise loan from financial
institutions and to repay the loan within 10 years of time period out of the cash flows of the
business. Breakeven was anticipated by end of fourth or fifth year of their investments.
Marketing strategy was crucial for understanding the markets and demand; hence, their
focus was on learning from peers and conquer competition with a unique business
proposition; emphasis was on customer satisfaction. Conviction was delivering value to
customers’ thrust, which was on higher deliverables to the customers, resource constraints
were secondary, financing has multiple options and customers’ experience is one time.
They emphasized on four core elements for organizational building (Figure 2).
Family real estate business has the benefit of knowing their partners from day one.
Emerging market family businesses tend to endorse themselves little more on aspects of
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entrepreneurship; same was true for this entity. Millennial entrepreneurs’ vision was to build
a flexible business model and acknowledged customer referrals as a cost-effective medium
of promotion. They believed in nurturing new entrepreneurship, capitalizing on traditional
family business, transforming Spice Mart into retail chain of outlets in the residential
complexes under the umbrella of Starlite Homes Pvt. Ltd. The uniqueness of their business
plan was affordable housing. The motivational driver of their business plan was to make
finest of what one has to get what one needs.
They anticipated future in terms of diversifying into newer areas and elaborated in building
their current ventures into world-class enterprise. There was a drift in their social attitude
toward risks and business failures, and their pragmatism for serving the society remained
undeterred and was in parlance with their grandfather’s belief. Baby boomer Mr Mehta
envisaged the dynamism in the different ventures that the family ventured and could also
understand the transformation in the acumen and traits of the entrepreneurs over the three

Figure 2 Essentials of organization building

Short term and

long term goal for Strategy
achieving formulaon and
sustainable Aligning strategy
business to the end goal of
the business

Transparency and
Leveraging
Governance for
customers for
building
cost effecve
confidence and
promoons and
trust within family
brand building
and stakeholders.

PAGE 8 j EMERALD EMERGING MARKETS CASE STUDIES j VOL. 9 NO. 1 2019

 generations as indicated in Exhibit 3. Being a family-run business, Mehtas had an
advantage as most of the matters were internally discussed. Thus, all opinions were sought
before the final decision, and mutual consensus facilitated in managing conflicts.

Job sharing
Ownership and succession differ from family to family. Mehtas contemplated that if the next
generation is passionate about business, they can take over the reins with galloping stride.
They also confided if the next generation pursued other interests, they may possibly retain
ownership and professional management may be roped in; focus will be on hiring and
retention of efficient talent pool. Manas believed in job sharing. Allocation of business
responsibilities amongst the siblings was a critical decision. Manas exhibited his interest in
networking for government projects and managing financials of the firm. Anand was keen
on administrative tasks and resource management. After the enactment of Real Estate
Regulation Act 2017, real estate business needs perfect professional approach. Arjun
Mehta sensed that the millennial had an unshakable growth strategy in their mind and had
the ability to execute it with defined initiatives and ownership.
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The road ahead

Mehta Group’s third-generation entrepreneurs geared up with their stratagem and action
plan. Initially, the family was loath of the transition that came in the offing; they were
ambiguous about the new practices to be evolved and were naive on the entry of external
entrants in their family business. Wrenching themselves to all sets of the unknown, the family
was optimistic about the choice of their progeny. Arjun Mehta’s eyes sparkled with joy and
his heart skipped a beat, Spice Mart – a retail chain today – which expands to a global
chain in the foreseeable future. Ecstasy and elation let him soak in the moment of pride. He
cheerfully endorsed the spreading out of Spice Mart as retail chain outlet. In hindsight,
Mr Mehta felt gratified of sowing the right entrepreneurial seeds. Spice Mart was reinstated
as “Spice Mart Retail” with an array of branded and unbranded products. What the second
generation did not do, the third generation has turned a new leaf of business expansion and
diversification. Beginning of year 2018 witnessed the incorporation of “Starlite Homes Pvt.
Ltd.” It initiated its first endeavor of ecofriendly residential township with amenities ranging
from Spice Mart retail and health to recreational facilities at three different locations in
Maharashtra under the new umbrella. The first phase of the township launched in Pune city
is expected completion and handed over possession by mid of 2019. For the usage of
green products and innovative facilities, this project evidenced a favored reaction with pre
booking of 80 per cent of the residential homes. During the year 2018, the millennial
participated at international trade fairs and exhibitions to gauge the international markets
and liaison with regulatory agencies. This heralds a new beginning for the millennial, and
they aspire at internationalizing their family business in the years to come. Keywords:
Family firms,
The golden ager inhaled deeply an insurmountable feeling of contentment that his business Entrepreneurial skills,
promises to grow perpetually. Janaki Mehta too rejoiced – the days of frugal means have Entrepreneurship,
long gone by and a pioneering conglomerate is in the offing. Diversification

Note
1. Growth Acceleration for year 2005 for India was based on Gross Domestic Product (GDP), Average
Per capita Income and Average Personal Consumption.
Demand side growth: Investment rate doubled, Import accelerated, Low oil prices.
Supply side growth: Increase in saving rate, private investments etc.

VOL. 9 NO. 1 2019 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 9

 Exhibit 1. Statement of income and expenditure of Hindware for 10 years

Table EI
Year ended March 31 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Income
Sales Revenue in INR hundreds
Cement 125 131 120 142 155 210 275 350 326 410 643
Sand 300 200 350 456 678 669 712 734 869 950 852
Plumbing & sanitary ware 10 23 34 56 67 89 86 94 98 100 1120
Plywood 500 760 567 549 768 665 672 876 889 965 990
Others 100 230 340 379 410 457 498 567 589 552 667
Total Income 1,035 1,344 1,411 1,582 2,078 2,090 2,243 2,621 2,771 2,977 4,272
Expenditure in INR hundreds
Material 100 104.8 96 113.6 124 168 220 280 260.8 328 514.4
Employee cost 120 132 145 160 176 193 213 234 257 283 311
Electricity expenses 125 131 120 142 155 210 275 350 326 410 643
Stationary 134 135 147 153 156 157 167 180 187 192 198
Others 30 43 47 49 56 58 67 68 77 89 92
Total Expenditure in INR hundreds 509 545.8 555 617.6 667 786 942 1,112 1,108 1,302 1,758
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Profits in INR hundreds 526 798.2 856 964.4 1,411 1,304 1,301 1,509 1,663 1,675 2,514

Exhibit 2. Statement of income and expenditure of ‘Lament constructions’

Table EII
Year ended March 31 2010 2011 2012 2013 2014 2015 2016

Income (INR hundred thousands)

Booking Amount 1,091 1,385 1,424 1,437 1,490 1,539 1,625
Scrap sale 1 1 1 2 3 6 8
Revenues 30,000 38,130 39,150 39,497 40,728 41,920 43,920
Total 31,092 39,516 40,575 40,936 42,221 43,465 45,553
Expenditure (INR hundred thousands)
Material 7,773 9,879 10,144 10,234 10,555 10,866 11,388
Manpower 3,000 3,813 3,915 3,950 4,073 4,192 4,392
Consultancy 2 2 2 2 3 3 10
Administration 1 2 3 3 5 5 5
Sundry expenses 10 1 1 2 2 2 5
Depreciation 133 157 176 186 266 323 464
Total 10,919 13,854 14,241 14,376 1,4903 15,391 16,264
Profit before interest and tax 20,173 25,662 26,334 26,559 27,318 28,074 29,290
Interest 1,792 1,920 2,080 2,400 1,920 1,600 2,080
PBT 18,381 23,742 24,254 24,159 25,398 26,474 27,210
Tax 7,352 9,497 9,702 9,664 10,159 10,590 10,884
PAT 11,029 14,245 14,552 14,496 15,239 15,884 16,326

PAGE 10 j EMERALD EMERGING MARKETS CASE STUDIES j VOL. 9 NO. 1 2019

 Table EIII Balance sheet of Lament constructions
Year ended March 31 2010 2011 2012 2013 2014 2015 2016

Liabilities (INR hundred thousand)

Lamco share 15,000 15,000 15,000 15,000 15,000 15,000 15,000
Mehta Brothers 9,000 9,000 9,000 9,000 9,000 9,000 9,000
Surplus 10,912 13,851 14,235 14,366 14,899 15,391 16,254
Bank Loan 11,200 12,000 1,3000 15,000 12,000 10,000 13,000
Creditors 183 139 207 268 494 688 1,023
Cash Credit 475 269 590 872 767 1,055 918
Outstanding expenses 1,000 1,600 1,300 1,000 1,200 1,000 1,200
Total (INR hundred thousand) 47,770 51,859 53,333 55,506 53,360 52,134 56,395
Assets (INR hundred thousand)
Fixed assets 1,330 1,571 1,762 1,856 2,659 3,227 4,636
Leasehold assets 5,300 6,300 7,300 9,300 6,300 4,300 6,300
Premises 29,484 29,375 29,196 28,982 2,8760 28,634 28,382
Investments 0 3 5 5 6 7 10
Inventory 777 988 1,014 1,023 1,056 1,087 1,139
Debtors 6,000 7,626 7,830 7,899 8,146 8,384 8,784
Bank Balance 3,109 3,952 4,057 4,094 4,222 4,347 4,555
Downloaded by Australian Catholic University At 03:17 08 April 2019 (PT)

Cash Balance 299 145 228 413 179 31 412

Advance tax payment 1,470 1,899 1,940 1,933 2,032 2,118 2,177
Total (INR hundred thousand) 47,770 51,859 53,333 55,506 53,360 52,134 56,395

Exhibit 3. Rating acquired on perception attributes of business success from first

generation to third generation entrepreneurs [Scale of 1 to 12] 12 being highest and
1 being lowest score

Table EIV
Parameters Spice mart Hindware Lament constructions Starlite homes

Conflict of interest amongst family members 12 7 1 3

Formulation of Mission and Vision and strategy 2 8 11 9
Employee retention 4 9 5 7
Governance and compliances 10 6 6 8
Competition 5 12 9 10
Succession planning 3 1 2 2
Financial Resources 11 11 8 11
Investments 6 4 4 4
Prior knowledge about business 1 5 3 1
Profit/revenue forecasting 9 10 7 12
Expansion of business 7 3 12 6
Business diversification 8 2 10 5

About the authors

Dr Deepa Pillai is Associate Professor at SSBF, Pune. Her area of interest is
Entrepreneurship, Corporate Finance and Banking. Deepa Pillai is the corresponding
author and can be contacted at: pillai.deepa6@gmail.com

Dr Leena B. Dam is Associate Professor at GBSRC, Pune. Her area of interest is

Entrepreneurship, Corporate Finance and Foreign Direct Investment.

VOL. 9 NO. 1 2019 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 11