Ms. Radhika Gupta, MD and CEO, Edelweiss Mutual Fund, in conversation with Rtn. Tahera Mandviwala

Ms. Radhika Gupta, MD and CEO, Edelweiss Mutual Fund, in conversation with Rtn. Tahera Mandviwala

You’re the daughter of a diplomat and a teacher born in Pakistan, brought up over four continents; what has the journey been like? What drove you to choose a career in finance? What got you here?

Firstly, thank you to the entire Rotary for having me. I must compliment all of you for the bond that you have. I heard a member say that they have been Rotarians for 50 years. We keep talking about longevity and compounding in finance, but this is incredible. And to have so many of you out here to bond and to listen on a weekday afternoon is incredible. On a lighter note, I must also thank you. My husband is Albert’s nephew. And I don’t think in my 20 years of dating him or being married, my in-laws have praised me as much as Albert did today. So, thank you for that.

 

I dislike talking too much about my journey because what appears to be a little bit of an extraordinary journey is actually the journey of an ordinary person. And I think that’s true of many of us. The part of my identity that I hold on to the closest is being the daughter of a diplomat because my father represented India from 1976 until 2010. He changed countries every three years and the one thing that has had a definitive impact on who I’ve become is seeing him.

First, because he represented a very much changing India. He always told me that in the’70s, when he started his career, Indian and Chinese diplomats were the guys you made fun of. And today, when he sees his contemporary Dr. S. Jaishankar, you know he runs the world like an international Rajinikanth, that’s the transition that India has seen. So, that has been a very important part of my journey. Second, he moved countries every three years and some of those places were less exciting like Pakistan and Zambia and Nigeria, and some of them were more exciting. But we grew up with a childhood that was constantly changing and change has been a very constant part of my journey; experimenting with what comes my way, trying something new, and not necessarily having the best opportunities, but taking whatever has come to me and making it the best.

When we were in Nigeria, my father always said that this is a terrible place, your life is at risk if you go out after six o’clock. there’s not a decent place to buy clothing, and there’s not a mall, and we were teenagers. But he said our promise is that we’re going to make these three years in Nigeria the best three years anyone can ever have in Nigeria. at inherent sense of optimism and making the best of your circumstances has been very core. Outside of that, I joined financial services on a lark. I come from a background where there is no differentiation between being a consultant or in technology or finance.

My father was in the public sector, and everybody else was in the private sector. And the private sector, to be honest, in our home, was not a very good word. His biggest wish was for me to join the services. When I didn’t take the civil services exam, he was heartbroken. He offcially forgave me about four years ago, I think. And my career is a little bit like an arranged marriage. I joined financial services because I went to a business school. I didn’t grow up thinking I wanted to do it, but I fell in love with it along the way and I think that’s the story of many of our careers in India. Some people are fortunate enough to grow up knowing they always wanted to be an actor or cricketer. But many of us nd our passion in our profession. The financial services in India today have the potential to touch the life of every Indian, and it’s a great opportunity to make an impact. We’re glad you made that shift and didn’t go into civil services.

You obviously did great for yourself. I didn’t want to disclose the age, but I think it was out in the introduction already. You’re 41, a young leader. Still 40, not turned 41. Okay, taking that back. You’re 40, and a very young leader who has been a CEO for several years now. Early in your career, you said that your ambition was to create an impact. What is this impact that you talk about and do you think the stint you’ve had so far as CEO has helped you create it at least to a certain extent? I think we all underestimate the opportunities we have. I see all of you and myself in the roles that we have to create impact. You know, when I moved back from the U.S. to India, one of the primary reasons was that this generation of India has tremendous opportunity to create impact.

My impact is a work in progress; I think there are three parts to it. One is professional impact. We have a population of 140 crore Indians; only 4 crore are mutual fund investors. Many ordinary Indians today are subject to chit funds. In fact, 12 crore people were invested in the Sahara scam. And there are only 4 crore mutual fund investors in India today. So, taking the message of financial independence and financial prosperity to more Indians is my professional impact. I’ll tell you a story. My son is looked after by a lovely lady. She’s a nurse and she must earn Rs 50,000- 60,000 a month. She’s from Kerala and she’s been working for about 20 years.

She sees me at home having these conversations about mutual funds and SIPs, and I’m always on call. One day, she came to me, and she said, “Didi, I’m in a situation. Guess what my savings are?” I did the financial math, and I said, “You earn Rs 50,000, so it’s this much for the year, 20 years, minus expenses, some lakhs, whatever, whatever.” She said, “Didi, it is less than Rs 3000.” Some of you are surprised; you know what the reason was? Her husband takes everything and she is still paying o his debt.

This is the story of many, many women. And she said, “You say SIP-SIP on the phone, can you do something for me?” All she wanted was for me to do something that would redirect her money to an investment rather than her husband. I hear stories like this every day. And in our profession, all of us can create impact second impact that all of us, especially as women, can create is just by the tremendous power of role modelling. One of the reasons I believe in spending so much time on social media is because I do believe stories are very powerful. Young women set up conversations with me, nd my secretary and nd time to get on the calendar. Do you know the 2 most common questions they ask when they have one-on-one conversations with me? They’re not career-related and they’re not entrepreneurship-related and they’re not on how to get funding. One is: “What kind of person should I get married to?” And the second, for many young women, is: “Should I think of having a kid if I want to be a serious career woman because you talk about it so much.” In all our ways, whether it’s you or me, through our work and stories, if we can convince one more girl that it’s possible to have the lives that we live, then I think that’s a form of impact. And the third one is a journey I’m just starting – Shark Tank. And paying it back to a generation of Indians who are entrepreneurs and are building the next 20 years of India. So, the impact journey is a work-in-progress, but I shared it because I think all of us have the ability to create much more impact than we imagine.

We’ll talk a bit more about Shark Tank, because that’s an interesting bit, but you also spoke a bit about being a woman in this industry; let’s talk about that a bit more. Firstly, I’m very thankful when this woman topic comes up. Nearly every panel I’m at starts by asking me a question: you’re a woman in corporate India, what are all the problems you faced? And I detest the question. I mean I absolutely detest the question because it makes you sound and feel like some kind of “poor thing.” I want to spin the question. I am not saying everything is perfect for women in corporate India; it is far from perfect and believe me, every woman leader I’ve spoken to has had some drama in her journey. Every woman leader has had it incrementally a little more diffcult and there’s nothing to take away from that. But I tell every young woman that you just have to accept that that is a part of the journey and stop cribbing about it and focus on all the advantages to your point and all the uniquenesses that comes with being a woman.

Women naturally have a lot of qualities that are needed in the workplace. Whether it is empathy, an orientation towards customers or an understanding of 50% of the population that happens to be the consumer base of most of the companies that we run. So, focus on those advantages and max it out. On a lighter note, I keep giving my own example. I am in the asset management industry, and there are 50 asset management companies in India today. Only one of them happens to be helmed by a female CEO.

At least people know the one woman out of 50. But it’s much harder to compete in a pool of 49… In today’s ESG and DEI focussed context if you are a talented ambitious woman, you are actually at an advantage because they raise demand for you. In financial services itself so many times I’ve had people come and say I’m hiring for this position, can you recommend someone for it? I am a woman candidate because we really want to increase diversity. Often, supply is the problem. So, if you are a talented, good, ambitious girl out there, I genuinely believe you’re at an advantage, not a disadvantage. Do you want to answer the questions for us as well of who should you marry, and should you have kids? I think you should marry a partner who will be the wind beneath your wings, and someone who will make marriage a partnership. What I tell women on these calls is, love is a very romantic thing. I married my husband Nalin when I was 24 but one of the reasons I did is because our values aligned, well before I took the decision to get married, because that’s what will make the partnership work. Look, I come from the investing profession, and we believe that diligence and questioning should happen beforehand, ensuring a long-term journey thereafter.

And that would be my advice. Should you have kids? You should absolutely have children if you want to have children. I’m not saying children are for everyone but I’m saying, that the fear of living a life as a CEO and a mother should not dissuade you from trying. I had my son two years ago when I was 39. And I was terrified. I travel three days a week because I have a branch presence across India. Before my son, I travelled four-five days a week.

People told me, you’re not going to be able to travel, how are you going to manage? Of course, nobody asks men this question. And I was actually sitting and Googling examples of Indian women CEOs who were pregnant because 38 is late, most women have had kids early. And I could not find those examples. I found promoters, but I didn’t nd CEOs of reasonably large entities. I only found one example that was Marissa Mayer of the US. But what I’ve learned through my pregnancy and subsequent motherhood journey is that while you don’t have plans, plans figure themselves out.

If you’re willing to ask for help, if you’re willing to forgive yourself a little and realise you do not have to be a super mum every day, and if you have a supportive partner, things work out. So, don’t be overcome by fear. You need to take that first step. Let’s talk a bit about leadership now. You’re a strong leader yourself, you interact with a lot of leaders across jurisdictions, across sectors; would you see some common traits and skills that you need as a leader today and what skills you need to have, without which you can’t be a leader for the future? I always struggle to answer this question and there are a lot of tenured leaders in this room and leadership is probably the topic on which the maximum number of books and case studies are written.

And yet, most people will tell you leadership cannot be learnt from a book. So, I’m also a leadership work-in-progress, I think all of us are. I was talking to two people from my team, maybe 35-40 years old and we have a reasonably young leadership team but because it’s financial services we also have older tenured folks, so we have people from 20 all the way to 55. Now, when I talk to people in the 30s and early 40s, the biggest challenge is in managing the incoming generation of kids who are in their 20s. I see some of you nodding, so many of you agree with that. Both these leaders I was talking to in mid-management Article continues on Page 6 in their 30s were like, “those kids, they don’t have any gratitude; they quit in six months. They don’t know anything, we also did it.” And I said, “You’re just 10 years older, and you’re having this conversation.” Managing a generation of young Indians is going to require challenges that we haven’t understood. There are, broadly speaking, three generations of India, as I see it. One is the generation of Indians born in scarcity. Like, my father was born to an India of scarcity. I was born in the early ’80s, to an India of transition, where you saw the 10-year wait for a scooter, but you also saw the internet and a reasonable part of our life has been borne in prosperity.

 

The 20-year-old who’s joined the workforce is born to an India of prosperity, to an India of abundance. So, when my father-in-law started working, he said, “We did not talk about things like purpose in our time. My mother was a single parent, I had 5 sisters, we had to get them married. Tyat was purpose.” All this corporate workplace purpose didn’t exist. Their needs from the workplace were very, very dierent. ey saw purpose in the people they worked for, they saw happiness in their day-to-day jobs. eir hunger for growth was much higher than our hunger for growth. And so, I think, that is the greatest challenge of leadership today.

If you look at Gen Z India, less than 50% of them spend more than a year in a job. And we grew up with parents who spent 30-40 years in a single company, right? So, a big challenge for leadership is, and I do believe corporate India’s leadership should get younger and younger; for me, the biggest learning is leadership, and it was in your question, leadership is not a designation, it’s a role. And there is a dierence between a designation and a role. Today, I can’t get my two-year-old son to do something because I claim I’m his mother. So, just because someone reports to you in a hierarchy, it’s very hard for you to get them to do something. We are all playing dierent roles in an organisation. How do you get out of the cabin and bond and build bonds? And topics like well-being, mental health, ESG didn’t exist, and now the new generation is judging work, social media, and purpose – none of this existed. I had a conversation with the head of marketing, and she said, “I keep sending my people books to read and training sessions to go to, and none of them want to go to anything. These people don’t want to learn.” I said, “Okay, I’m doing Shark Tank. Why don’t you bring our entire marketing team to the sets of Shark Tank every day that I’m shooting.” Mehek is part of that team. Believe me, all our employees in marketing, and Shark Tank is 15 hours of shoot a day on Fridays, Saturdays, and Sundays. They were happily sitting there. It was a set, there was only a vanity van, and it was scorching, and you don’t get food, and it is chaos. THese are not comfortable conditions. But most of them will count it as the best experience of their lives.

So, I told her, “It’s not that your people don’t want to learn, but their way of learning is different from your way of learning. Why don’t you try and understand that? And go and ask them, how do you guys want to learn?” Radhika, let’s talk a bit about your work in industry now. You’ve said that dealing in mutual funds is like selling trust. So, how is the business of selling trust going on nowadays? Tell us a bit about the current trends, and some tips and investments for us. Investment tips. You even asked me for a stock tip, although I have an answer to a stock tip, which I can give you later.

So I think that financialisation is a massive trend that India will see. Again, if you go back to my three generations of India, the scarcity generation was very, very risk-averse. Your first investment was a fixed deposit, your irst investment was a National Saving Certificate. My generation started investing in equities late because the share market, as it was called in the ’90s, was still a speculative term. As India grows up and gets more aspirational, financialisation will happen. Today, mutual fund AUM is about 16% of India’s GDP. Can I ask you to get what the world average is? Not even the US numbers. What is the world average? Mutual fund assets to GDP. It’s 80%. So, one, you have to believe India’s GDP will expand, and everything that we hear about economic growth will come true. The second is that the 16% has to bridge a gap of 80%. So, if you are working in financial services today, whether it’s equities, life insurance, or mutual funds, there is a tremendous penetration story ahead of you. And one of the things that Rashesh and Venkat, and Venkat is the one who pushed me to be here, keep telling me is that you don’t have to push yourself to be number one in an industry like mutual funds. You have to be reasonably large.

But this industry is going to be so large and around for so long that if you’re just a meaningful player, you will build a good business. So, I think fundamentally India has a very exciting road ahead. The business of building trust is a uniquely exciting one. My friends who run consumer businesses in the context of Shark Tank were like you guys don’t really know consumers because we come from consumer businesses, and you are the finance person. And I told them that finance is the greatest consumer business alive because if I’m selling you a phone, I’m selling you this product. And within five minutes or five days or five months, you will realise if the product is good, and you know what you’re buying. And if I’m selling you lipstick, I’m selling you a lipstick. But when I’m selling you a mutual fund, what am I selling you? I’m just selling you a promise that future returns may or may not happen. And sometimes, despite my best intent, you will not earn those future returns. So, your only reason to invest with me or to buy my product is because you trust me. And so, what I sell is trust. And that’s why financial services is the ultimate business of a brand. And building that has been very interesting, especially because in the context of Edelweiss Mutual Fund, our parent company is not a bank.

You know, when your name is SBI, you have branches on the borders of Bhopal and Meghalaya. But when your name is Edelweiss, people can’t even pronounce that name in many parts of India. So how do you convince someone to trust you – that has been the journey of the last six-seven years. It’s a continuing journey. You’ve already spoken a bit about Shark Tank. Tell us a bit more about that. I’ll tell you the funny stu first and then the serious. So, Shark Tank came to me last year. Season two was happening and at that point, I said no because I was two months out of delivery and they said, “Come do an audition,” which is really funny. I haven’t spoken about this too much. So, two months out of delivery, and I was looking like a complete ball, and I went to Yashraj studios in Andheri and in my cotton sari out of some meeting, looking very far from a millennial Shark Tank-type judge. And I go into this room in Yashraj, and on one side, there’s a big wall with a picture of Katrina Kaif from Dhoom 3 or something. And on the other side, there’s a big wall with Aishwarya Rai and Kajra re. And I’m sitting in my sari and my pregnancy overweight, being like, why am I here? But anyway, I think that audition went well. I said no to last season, and then this season came up. And I’ve always been someone who’s enjoyed experimenting. I think the boundaries of what a conventional CEO can do are changing.

I was also very ambivalent because unlike the other folks on the show, I’m not a traditional startup founder. I must tell you, I come from an extremely conservative industry where if I do something or say something, it’s very highly judged. In fact, every investment deal that I’ve made, people are like, oh, this is how she invested in that company. Is this how she’s going to invest in her funds? So, the level of scrutiny, and it’s a highly regulated business. And I had long conversations with Rashesh and Venkat about doing this. But finally, I said, I’m a business builder; this is great for the Edelweiss brand. And second, it’s a chance. Whatever all of us are, I’m a product of Indian entrepreneurship. And my business is to invest in Indian entrepreneurs. And this is where it’s all starting. So that’s how I did it. I have tremendous respect for the television industry after doing Shark Tank.

Not many people know that a shoot is Friday, Saturday, Sunday, back-to-back. And it is 15- to 16-hour days, from 7 in the morning to 10 at night, with only a makeup van on set. And, you are lucky if you get lunch at 4 o’clock. I think I will go back and tell folks in my company that in financial services, if you’re feeling sick, you’re like, “I am not coming to once, I am not in the mood, etc.” On television, if you’re feeling sick, you take a croissant and report on set because 300 other people are waiting for you. In fact, the neighbouring set to Shark Tank was KBC. And someone told me that you guys are whining about this 15-hour thing. Mr. Bachchan starts at six in the morning and shoots till 11 at night, and he’s 70 plus. So, I have a lot of respect for television. And I think, finally, through Shark Tank, if you want to feel optimistic about where India is going, you should hang out on the Shark Tank set because most of the entrepreneurs are, by the way, between 20 and 30. They come from tier three, four, five, India, and they want to take risks. they are full of aspiration. They are tremendously resilient. The stories they’ve gone through in COVID and their ability to build a business with very limited resources… It is much higher than ours. And so, it has been a privilege.

I always say, I think I have come out with much more than I’ve given. I’ll give you two stories. There’s a pitch that aired called Design Template, where the guy is, I think, a 24-year-old once boy from a town in Maharashtra called Beed that must have 20,000-25,000 people. He started his career as an once boy, learned design, and learned coding. He’s teaching himself AI concepts and is running a profitable venture. at’s cool. There’s a second one where I’m an investor, which is a company called Two Hands. It’s a calculator. e guy is 22.

He’s from Pratapgarh in UP. And he’s identified a very uniquely Indian problem. e shopkeepers who get paid by credit or paid in cash, they can’t afford a fancy point-of-sale system. And so, I said, why don’t they do the maths on their phone? And he said, but the one thing they do use is a calculator. So, he’s created a calculator that integrates point-of-sale. It’s a uniquely Indian solution, as I said, to a uniquely Indian problem at mass scale. And he spent six years understanding the problems of India’s retailers. I’ve made that investment.

And the amount I’m learning from him about the ability to solve a consumer problem is immense. And there are hundreds of such stories. So net-net, I’m very grateful. As for being a TV celebrity, thankfully, I’ve gradually risen up the fame curve. I take a few more selfes at airports. What do you want me to say? Agreed. Well said. It’s very inspiring looking at Shark Tank and everything that people come up with. And that’s our story, right? at’s India’s story, where the world’s fastest-growing economy, largest population, good youth population, and we have a lot to look forward to. Can you look at your crystal ball and tell us what does the future look like for yourself, for your industry, and for India as a whole? So, look, the rst disclaimer is that I’m a mutual fund CEO, so I’m structurally a very bullish person. But I do believe, as many of us do, that the next 20 years are going to be incredible ones for India. And I have three reasons. • One, as you rightly said, is demographics. India is enjoying the demographic dividend today that China enjoyed 15 years ago.

Of course, 70% of our population is young. If we can channelise the energy, the consumption, the saving, the investment of this young population, then nothing will hold us back. If we can’t, then we have a huge demographic liability. But if we can, then there’s a lot ahead of us. Second is this spirit of entrepreneurship that exists in this country. I think the magic of India is not politics. It’s demographics plus entrepreneurship. And today, whether you look at grassroots shark tanks or the ambition of some of our largest corporate houses, you see the animal instincts of the private sector coming out. And India has gone from being a capital decient to a capital surplus country where, if you have an idea today, you will nd capital to back it. • Third is what I call policy, supporting demographics and entrepreneurship. And it could be a policy like PLI, that is supporting business. It could be infrastructure that is being built. It could be digital public infrastructure that is being built, but a policy environment that is supporting demographics and entrepreneurship. So those of us who are building for the next 20 years in India are really lucky people. I mean, I really say the finest decision I’ve taken in my life is to move back to India in 2009.

So, what’s the future for you and Edelweiss?

I think for Edelweiss Mutual Fund, the mutual fund industry is Rs 50 lakh crores today. It can easily be Rs 200 lakh crores, it can easily be Rs 500 lakh crores. In fact, I believe in the next five years it is going to double in size. So, for Edelweiss Mutual Fund to be a meaningful player in that industry, it’s a very meaningful future.

We’ll be a listed company, there’s a lot ahead. And I think the mutual fund industry, hopefully we’ll have 50 crore investors. I mean, we have 50 crore people who use Zomato and 40 crore people who use Netflix. I’m sure someone who pays Netflix Rs 100 a month can afford to do SIPs of Rs 100 a month. I know we are not as entertaining as Netflix. So that’s the journey for us. For me, I don’t know. I have never planned my career.

I do believe life is a series of opportunities that compound. I never knew when I started out of college that I would be back in India. I never imagined I’d be doing retail financial services. And never ever did I imagine that I would be a judge of a reality TV show. This is all stuff that has happened in the last Ive years. My attempt is to give my best shot at what comes my way, and I’m sure India will nd its answers. Life is what happens to you. Last question: any life mantra, life lesson, advice that you’d like to share with us? I’m too young to be giving life advice to the people in this room but I will share something that I’ve increasingly been thinking about for myself and also as a mother of a child. I go to a number of forums and I get to meet lots of different people.

I go to forums where they’re very well-to-do people, and you know one of the nest Su singers will be called, and people will go on a nice trip. Yet somehow people aren’t having fun. And then I go to forums where people don’t have as much; some of our oces are o-site where we have people from smaller branches in India. And you’ll maybe not have such a famous singer or such great food, but people will be having so much fun. Everything will feel like a Wow moment for them. I was just at an oce o- site in Kochi.

They’re almost like what I call Alice in Wonderland, like “Wow, this has happened to me,” and I think for all of us as we have achieved so much and had so much, you want to have that constant sense of being Alice in Wonderland. A sense of gratitude for what you have achieved, that sense of gratitude for what you have, excitement for the small things in life rather than: Oh, he was a good Su singer but when I went to Monaco, I heard a better one… or whatever it is, right? at constant sense of Alice in Wonderland because we are so fortunate and so I use these words — ambition for the future but also amazement at how far you have come, is a mantra I am trying to adopt in life, and with all the good things that are happening to me. Increasingly, I have started telling myself, I can’t believe this happened to me, I can’t believe I got this, I can’t believe I got that.

So, I’m trying to nd that inner Alice in Wonderland, and I think it’s important for us, and it’s even more important for our children, because as I think of my son, he’s going to grow up with a lot more than I had, and much, much, much more than my father ever had. And if there’s one quality I want to instil in him, it is gratitude.