There are two views about Vijay Mallya’s current predicament. The majority view is that Mallya had a good thing going in his liquor empire. It did not need much attention, and it was throwing up enough cash to fund his lavish lifestyle and his flamboyant parties. And then he had to get over-ambitious and set up an airline — not the easiest business to run even in the best of times. Now his airline is more or less grounded, and he has lost control of the liquor business as he was forced to offload half his stake to Diageo. In essence, this is more or less the beginning of the end of Mallya’s story as a high-flying businessman.
The other view, admittedly held by a minority, is that Mallya has been in tight spots earlier. He has often appeared to be on the verge of losing some business battles. But every time, he has bounced back. And in the liquor business, which is one of the toughest businesses to survive in, he knows all the tricks of the trade. Sooner or later, he will figure out a way of getting back majority control of his liquor empire. He may be down but not out.
I have met Vijay Mallya only a few times. My impression from those, admittedly brief, meetings is that he is bursting with ideas but lacks the patience to pore over details. And that he is an extremely intelligent man who perhaps gets a little less credit than he deserves, but who also gets away with a lot because attention always gets focused more on his lifestyle than on the details
of his businesses.
When senior associate editor Venkatesha Babu proposed that we look at Mallya’s business history, we decided to keep the exercise relatively simple. We took a look at what he inherited, what he started, and how far he took each business. While researching the story, Venkatesha found 29 companies that once formed part of Mallya’s empire — he had either inherited them or started them. He has since sold, shut or otherwise exited all these businesses. The research seemed to vindicate my initial impressions — that while he is good at ideas, he does not often execute things all that well (the liquor business is an exception).
While on the subject of failed businesses, do read the special report on the great emu farming scam — and how it has caused hundreds of investors to lose lakhs of rupees — on page 38.
(This story was published in Businessworld Issue Dated 03-12-2012)