Intermission E01 - Asian Paints [PART 1]

I want to take you back in time to 1997 and to a particular day in 1997 which I think is one of the most interesting and

eventful days in Indian corporate history. It's 30th July 1997.

history. It's 30th July 1997.

>> Very specific.

>> Yes, it's very specific. And I almost didn't believe the number of events that happened on this day till I actually went through and did all the research.

That's the day Champaglal Choxy who's one of the four co-founders of Asian Paints and he's at this point the last of the four co-founders to be still

alive.

>> He decides to sell most of his shares in Asian Paints. At this point, he owns

Asian Paints. At this point, he owns about 9.5% of Asian paints and he decides to sell most of these shares.

Now, you know, I I'm I'm sort of trying to wonder, he's also the chairman of Asian Pains board, right? So, if you're an Asian Pays shareholder at this point in time, you've been a shareholder.

Asian Paints went public in 1982. So, at

this point in 1997, it's been a public company for 15 years.

>> Yeah. If you're a shareholder, the last communication that you read from Champaglal Choki was just in March that year when he as the chairman of

Asian Pain's board wrote his chairman's letter to you in which he said the opportunities ahead of us are galore. We

continue to invest into the future. The

dream was very much alive when Champaal Choki communicated to shareholders. But

the dream ended >> but the dream had ended on 30th July 1997. I mean it's a 55 year old dream.

1997. I mean it's a 55 year old dream.

This is a company that he co-ounded in 1942.

It's the same year that his first son Girish was born. It's older than India itself. So there is a death of a dream

itself. So there is a death of a dream for Champaglal Choki. But if you're an Asian pain shareholder, I mean the dream is still very much alive. I cut back to

that very same day and Champaglal Choki calls up his grandson Ankur. Now Ankur

is I think by my estimates in his early 30s. He speaks to him over the phone. I

30s. He speaks to him over the phone. I

think Ankor is in Pune. Chaklal Choxy

tells Ankor.

>> No, I think it's the other way around. I

think Chaklal Choki was in Pune and >> Oh, is it the other way? Okay. Okay,

that's right. Then I stand corrected. M

>> Chaklal Choki calls up Ankor and tells him Ankor now you have to create the next Asian >> the Asian being. So you see what's happening right there is the death of a

dream for Champaglal Choki because he's kind of selling his baby and there is the passing of a dream or the passing of the baton that he's doing to his

grandson Ankur by saying you have to create the next Asian right >> no pressure >> no pressure but then

you know it's not it's let me say it's non-trivial to create this organization because the story of Asian Paints is not just the story of a company which is once in a generation. It's possibly the

story of a company which is once in a nation's lifetime.

>> 100%. But what exactly is Asian Paints, right? Like you said, it's a company

right? Like you said, it's a company founded in 1942.

It became the market leader in pains in just 25 years in 1967.

Its market share crossed 40% in the late '90s, 50% in the 2010s, and then almost 60% in the 2020s. 60%

of a particular industry controlled by one company. I don't think you can find

one company. I don't think you can find too many examples like this, not just in India but pretty much around the world.

And we're talking about a company that's been a market leader for 60 years now.

That's just mindboggling.

And like you said, the company went public in 1982 and it's been a stock market darling that has rewarded investors quite handsomely over the past four decades.

Yeah. And this is also a company that pioneered it's not just a stock market darling. The the fact that it's a stock

darling. The the fact that it's a stock market darling is a function of the fact that it pioneers modern management techniques in India. It pioneers supply

chain. It pioneers technology. It

chain. It pioneers technology. It

pioneers organizational culture all as an organization which people often peoratively at some point might refer to as a laala company because in some senses

>> the other four-letter word >> that's right right but it is not it is this absolute beacon of modern management right and the other thing that it does is it operates in a

category which is a commodity paints >> and over the decades Asian paints has singlehandedly converted what is a commodity into an aspirational and emotional brand.

>> Yeah.

>> For many people >> and it basically sort of you know gave the playbook to companies and other sectors to do the same. Turn a commodity into a brand. You take steel, cement,

adhesives. You have brands in each of

adhesives. You have brands in each of these product categories and that's all thanks to Asian paints. And to come back to Champaglal Choki when he was selling

his stake in Asian PES and this is about 9 12% and he sells about 9.1% of it. The

approximate market value for that bank then was about 128 crores.

Now imagine an alternate universe where he doesn't sell those shares and holds on to those shares. Take a guess what those 128 crores from 1997 would be

worth today.

>> I can imagine that universe and I can guess how much his stake would be worth today because the company is worth 2.3 lakh cr which means his stake would have

been worth 20,000 cr rupes.

>> What an alternate timeline right? I mean

I mean 20,000 crores a company which is worth 2.3 lakh crores >> which has had its origins in a garage where these four founders got their

start by mixing paint by hand.

>> Yeah. And of course over the time they become this gargantuan company with so much of profit and so much of market share. When that happens, typically what

share. When that happens, typically what like in any space if somebody is too rich, too powerful, it tends to attract attention and it did over the years from

various competitors who look at this company and say, I would like to have a piece of that. I would like to have some of that market share. And Asian Paints has done fantastically at keeping most

and all of those competitors at bay year after year, decade after decade >> till 2024.

I know why you said 2024 because 2024 is when the most formidable yet of Asian Payne's rivals arrives on the scene and that's Bila Opus a paint from the Aditya

Birla group they launched with a 10,000 cr investment and just a few years ago in 2019 the JSW group which is one of the

largest business groups in India also entered the paint space with some hundreds of crores till they decide to up the ante in 2025

by acquiring a majority stake in Axonobel which is a paints company. So

now there's the Bira Opus from Aditya Birla. There's Axon Nobel from JSW. And

Birla. There's Axon Nobel from JSW. And

if you think that these are the only two players, there's Burgger Paints which is a company which is actually older than Asian Paints itself.

And over the years, over the decades actually, Burgger Paints has gone through multiple owners till in the 1980s, it lands up being owned by the

Dhingra brothers in Punjab. And since

then it's had an incredible rise. It

goes up from being the seventh player in India >> to being the second largest player in India.

>> And an origin story that can only uh that can that's >> that rivals Asian games actually on its own. It's possibly as interesting.

own. It's possibly as interesting.

>> Now what's happened is all of these rivals and these are just three there are others as well. Right.

>> They're replicating Asian Payne's playbooks.

They're going and offering discounts to its dealers. They're poaching its

its dealers. They're poaching its talent. They're essentially taking away

talent. They're essentially taking away everything that Asian Pays has worked so hard over the decades to build. And the

result of that is very visible. Asian

Payne's revenue is down 4.5%. This is a company that's known for just hitting it out of the park over decades. Its

profits are down 33%.

Its market share from a peak of 59% is down to 52%.

Its stock is down 20% over the last 2 years which is all the more gling when you look at during the same period the nifty is up 15%.

>> It's it's absolutely astonishing that this would happen to a company like Asian Paints and it's a different organization. It's a completely

organization. It's a completely different company right now. It's been

what 30 years since Champakl Chuki the first among equals of the four founders died and the founder culture of the company sort of gave way to a CEO culture

and it's been 20 years since they got their first CEO which was in 2009 and it's a new Asian paints but it also

has new rivals. Can it fend them off? To

answer that question, we actually have to go back in time to understand Asian Paints history [music] and what allowed it to become Asian Paints in the first

place.

If this were a movie, this is the part where [music] actually the lights start to come on, the screen starts [music] to

flicker and the words intermission flash on screen. Welcome to Intermission, a

on screen. Welcome to Intermission, a brand [music] new business podcast from the Ken. I'm Rohin Dharmmakumar, nervous

the Ken. I'm Rohin Dharmmakumar, nervous and excited to be one of your hosts. I'm

also the co-founder of The Ken.

>> And I'm Sitha Raman Ganes and I'm the Ken's deputy editor and the second host of the show and I'm an absolute sucker for great stories.

>> Intermission is a podcast about the making of India's greatest companies [music] and what comes next. What do I mean by the making of companies? Well,

how these companies came to be, the people and places [music] that made them, their culture, how they fight, how they survived, and how they won, and

more importantly, how they're [music] poised. We're sure that by telling you

poised. We're sure that by telling you these incredible stories of the histories of India's greatest companies, we'll be able to leave you in a [music]

place where you're able to predict what happens next with these companies as they go into an era where they face [music] newer rivals, newer markets and

well a changing India itself. To create

this episode of Intermission, we've spent the last few months speaking to dozens of people, employees of Asian Paints, ex employees of Asian Paints,

rival [music] executives, analysts, dealers, painters, and customers so that you have a better sense of [music] this company. We've read numerous books,

company. We've read numerous books, research reports, case studies, financial analysis. Intermission was

financial analysis. Intermission was produced with vital [music] support and assistance from Zeroda, our season sponsor. And yes, that means we will

sponsor. And yes, that means we will [music] have more seasons than one to tell the story of Asian Pain's history. Now you must be wondering this

history. Now you must be wondering this is a company which is older than India.

We must start somewhere.

>> Yeah.

>> And yes, we do want to start somewhere.

So we're going to take you back in time and and I want to take you back in time as well to 1662.

1662 because that's the year when Britain's King Charles II marries Portugal's

Katherine Bragza if I'm not mistaken and he gets a very interesting diary.

>> Yeah.

>> The diary is called it's called Bombaya.

>> I have another fact for you. This was

actually part of what was then the largest diary ever.

>> Wow.

>> Bombay was one part of it.

Okay, they got trading rights to Brazil and the East Indies and Tangier in North Africa. But I think we're getting ahead

Africa. But I think we're getting ahead of ourselves. You know, we have to go

of ourselves. You know, we have to go even earlier to tell the story of Bombay. And like you said, to understand

Bombay. And like you said, to understand Asian pains, you need to understand Bombay. But I'll put something else in

Bombay. But I'll put something else in the middle. To understand Asian pains,

the middle. To understand Asian pains, you need to understand Gujarati. And to

understand Gujarati, you need to understand Bombay. And that's where I've

understand Bombay. And that's where I've lived for 18 years. And there are neighborhoods in Bombay where you'll hear way more Gujarati than Marathi or

Hindi. So much so my wife was walking in

Hindi. So much so my wife was walking in this neighborhood called Muland. And she

was so used to hearing Gujarati that when she heard Marathi, she just turned around. Right. And so much of Bombay is

around. Right. And so much of Bombay is influenced by Gujarati.

>> Gujarati. I'm I'm assuming you're stressing the fact Gujarati because all four of the co-founders of Asian Paints were also Gujarati.

>> Yep. And which is why this company couldn't have been founded by anyone else in any other city.

>> Oh, that's a tall order. Okay.

>> Through Bombay, Gujarati's entrepreneurship in India, none of the three would be what it is without the other two.

>> All right. So, are we in 1662?

>> No, we're not earlier. Where are we?

>> We're not. Did you know that Bombay or the the the islands of Bombay were part of trading routes with Persia and Egypt as far as a thousand years ago?

>> Vaguely not exactly.

>> Yeah, it started then and then we get to the 13th century when this king Raj Bin Dave actually comes from Gujarat because he's forced to leave Gujarat and he

comes to Bombay with what I would call the first immigrants to Bombay. Until

then the islands were populated by the kohi community >> which is the fisher community >> right they were the only ones in these islands right and then came this king

with some people with him right and he brought in you know the kundies who are farmers and then he brought in this community called the patare prahus who

are accountants and merchants right so because the story of Bombay is also a story of migration right and this is how far back you have to go to understand the kind of migration that Bombay has

seen and how that's influenced the city right uh not long after that you have the Sultan of Gujarat annexing these

seven islands of Bombay right so it's a it's an absolutely fascinating story right it doesn't stop there >> Gujarat and Bombay >> have had a long

association and I think flow between them because if I'm not mistaken in 1662 is when King Charles II gets these seven

islands which are then called Bombaya which eventually becomes Bombay and >> Bombaya was actually one of the one of the islands. M

the islands. M >> so u so it was called bombaya which means good bay or bombay right and then you have six other islands right

>> got it so he gets this in 1662 but if I'm not mistaken just there is another city which is actually equally interesting do you know which is the

other city which is drawing commerce and is where the seat of business is in that part of India at that point in time >> sur >> it's absolutely right

>> and Surat will play a huge role in shaping Bombay and Asian paints right the East India company comes to Surat that's their first port you know when

they come to India this is in the early 17th century right and then they uh set up a factory by getting permission from Jangir in Surat

and then they get the communities there the Zorastrians or Paris as we know them right they had left Persia centuries earlier and come to Gujarat.

They were not merchants, they were farmers, right? But then they became

farmers, right? But then they became agents and interpreters for uh the East India Company. And then they got around

India Company. And then they got around to building ships as well for them because that was very important to sort of to keep the the

trade machine with China welloiled and a lot of other communities also started building ships. I I actually thought

building ships. I I actually thought something very interesting happened with Surat around that point because just a few years earlier before Bombay was

gifted to King Charles II as Dowi in many ways if you really uh look at it the rival city to Bombay's future rise would be Surat because Surat is this

magnet of business and trade and what happens is a very famous Maharashtran king Shivaji he decides to attack Surat

>> and it's because of that the East India Company moves its headquarters from Surat to >> that's right so Bombay >> King Shivaji would attack Surat twice if I'm not mistaken once just a few years

before Bombay's handed over as dowi and then once again in 1970 and of course there's a lot of ransacking and pillaging but what that does to sur >> hold on hold on the pillaging you know

reminds me of something absolutely fascinating that I found there was this Gujarati Jen trader in Surat named Viji

Vora whom the East India Company actually called the richest trader in the world and he paid off Shivaji's

soldiers to protect the city and he was worth 80 lakh rupees then so >> and this is 1,600 1660 >> 1650 1660 so I wanted to do a little

math try and figure out how much he would be worth today right and there was no inflation tracker And so we just did something very basic which is you know

try to understand how much uh silver a rupee could buy then right and then do the same math now he would be worth roughly 8,000 cr but but to go back to

surat so sur is interesting because surat is this really powerful magnetic you know dynamic city it gets attacked um it's it's been fairly stable but it

gets attacked by king shivaji in the 1660s and again in 1670 and that in many ways causes its relative decline which means that like you know I mean there's

this um interesting book that I read which says that look every time the maratas are even near the sea people panic traders take their goods dump them into ships take them out into the sea

people flee the city into their villages etc so that confidence even the Britishers actually abandon the city because they're afraid that there's going to be another attack so that confidence takes a hit So businesses are

no longer now as confront about Surat as they were earlier. And that also sets off over the next not just decades but

hundreds of years a wave of migration from Gujarat from cities in Gujarat of course and specifically Surat to Bombay.

>> Yeah. And a bunch of different kinds of merchants. You have Hindu merchants, Jan

merchants. You have Hindu merchants, Jan merchants, Pari merchants and a whole bunch of Muslim communities. the Boras,

the the Kojas, the Mammons, they all follow the East India Company to Bombay.

And what's really fascinating about the the evolution of commerce and industry in Bombay is that like I said, they began building ships uh for the East

India Company and they get into the opium trade which is obviously dominated by you know uh Parsi merchants, the Gigi Boys, the Kas, the Vyas, the Obviously,

I don't think it's obvious. I don't

think a lot of people know that part of history very well.

>> Yeah. I mean, and this is the JJ that you find everywhere in South Bombay. JJ

School of JJ flyover, right? That

Jamshed Gi Gib, right?

>> Who was the most >> funded a bunch of it?

>> Yeah. He was the most influential uh you know uh opium trader. A lot of other communities as well, you know, sort of parttook of that. And then a lot of

English agencies started getting into ship building and the opium trade and they squeezed out all these Indian merchants.

>> So they had to find something else, right? And they had to they had to keep

right? And they had to they had to keep their businesses going and they had to look for opportunities elsewhere. And

that's when the civil war happens in America in the early 1860s, right? So

Lancasher in in in in Britain which is the hub of cotton production stops getting cotton from America >> because there's a war going on.

>> Yeah. Right. And they need to find raw cotton >> elsewhere and that's when all these guys step in. And again the most influential

step in. And again the most influential player here is a merchant from Surat.

>> Is it one of the people who end up is he the person who sets up Bombay stock exchange also?

>> Yeah. Prechan Rochan. That's right.

Another person who on whom there isn't a lot of documented history.

>> Yeah. And he got this absolutely fascinating title, >> the supreme pontiff of speculation.

>> Who gave him that title?

>> I don't know. [laughter]

>> It's like a tabloid came up with that.

The supreme pontiff of speculation.

>> It sounds so good even now.

>> I'd love to have a t-shirt that says that.

>> The supreme pontiff of speculation.

[laughter] You know who else comes drawn to Bombay in [snorts] the 1800s drawn to Bombay because of the potential

to make money from the cotton trade etc. It's a person called Hilal Choki who is Chaglal Chok's father >> and he was a cotton trader.

>> He was a cotton trader as well.

>> Yeah.

>> Right. So the reason now now he comes here to Bombay he's a cotton trader and of course in 1915 um is Champagl Choki that's when he's

born so Bombay exists at this point in time it is this fascinating beautiful city it's this it's the heady stuff of business

enterprise where there is lots of Gujarati businessmen entrepreneurs cotton merchants traders etc. >> And a lot of uh migrant workers from other parts of the country you know who

had to work in these factories right I read somewhere that the population of Bombay around the turn of the 20th century was a million right and only a

quarter of those people uh were born in Bombay that tells you how much you need to know about the city of immigrants and the city of commerce obviously. So this is

the Bombay in which Asian paints would be born. This is the Bombay in which

be born. This is the Bombay in which Champaglal Choki is born. Now he's born his dad is a cotton trader. Uh he grows up he grows up to be this fairly

headstrong and I think this is a great point to mention that a lot of our research actually comes from this wonderful book was written by Anupam Gupta >> rather the only book.

>> That's right. Um we will definitely link to it in the show notes. Um and it's a fascinating history of this company because he's managed to speak to many of

the people um the founders founding families etc. And so many of the facts that we're drawing in today's conversation actually come from Anupam Gupta's book so you should absolutely buy that book if you like Asian Paints

as a company but to go back to Champagl Choki. Now Champagli is born he goes to

Choki. Now Champagli is born he goes to school in Bombay he grows up to this very headstrong kid um he ends up as a cotton jobber

>> this term is familiar to me because of the the hashid meta series scam 1992 >> mhm >> where he's a jobber he starts out as a jobber on on on Dalal street but I guess

it's a different kind of job >> must be a different jobber >> the the people who are essentially running these cotton mills And I mean this is we not we're not talking about businesses that are large businesses

with management teams and like you know >> uh documented um steps on what's to be done. It's people who own the business

done. It's people who own the business and they like you know someone's got to run it. The jobers usually run it. What

run it. The jobers usually run it. What

do the jobbers do? The jobers

essentially figure out where do I find workers >> right? Once I found workers they don't

>> right? Once I found workers they don't know how to run these things. How do I train them? Right? Once I train these

train them? Right? Once I train these people then it's like how do I make sure that these machines are scheduled so that there never any downtime and somebody spends eight hours here and then 8 hours here. So in some senses

it's the jobber whose job it is to make sure that these cotton mills are running.

>> I thought yeah I thought the role was a lot less significant than this. I mean

it depends right like depending on I'm sure many of the larger places would have multiple jobbers and many of the smaller places may have a few but it was a sort of horizontal role where in some

senses you had to understand all aspects of a business because you got to find out where do I find people from how do I train them how do I assign work to them if someone leaves how do I find

replacement so if you really think about it it's sort of like a mini um training course to running your own company. If you're Champaglal Choki,

company. If you're Champaglal Choki, you're a headstrong guy in your early 20s. I mean, you're probably like just

20s. I mean, you're probably like just hitting 20. He doesn't enjoy that well,

hitting 20. He doesn't enjoy that well, but he does it.

>> Nor do most other Gujarati, right?

>> I can imagine they don't because Gujarati don't enjoy salary jobs for far too long. It's a cliche, but I think

too long. It's a cliche, but I think there's a logic. Champaglal Choxy is a cotton jobber. He works as a cotton

cotton jobber. He works as a cotton jobber for a year or two, but he doesn't really enjoy it >> because I guess he wants to go out on his own.

>> I think it's a little early for that. I

mean, he's what 2021?

I mean, when we were Do you remember? I

mean, let's go back to 1997. When I was 20 21, I had no clue what I want to do with my life. So, it's

>> Nuash is Gujarati. [laughter]

>> Why? Why do you say that? Why would it be different if we were gojarati?

>> They do say danda dh >> translate that >> business or making money is religion.

>> That's that's actually absolutely right.

Um and I'm going to quote from a book um which we researched as part of this.

It's called the Gujarati and it's written by Salatrai who's a former journalist. is a fantastic book and he

journalist. is a fantastic book and he says being a trader or vapari is only a small part of our identity. Most

Gujarati are shopkeepers not entrepreneurs or industrialists and we are transactional in business and in society and very importantly he says

sizing up the customer is key and being close to the market and understanding the customer. If the customer seems

the customer. If the customer seems slippery the shopkeeper will insist on cash and not offer credit.

So and and you know this thing of business and profit u is comes very naturally to the Gujarati community. The

prospect of pho you can call it gain you can call it profit you can call it benefit is what makes us get out of bed and I'm quoting here not me is makes us

get out of bed every morning. We haggle

over prices not because we want to spend less and get more but because we like that sport. We want to understand the

that sport. We want to understand the true worth of whatever it is that we are buying.

>> Business is in Gujarati blood.

>> Not surprised he wasn't happy being a jobber, right? For someone else.

jobber, right? For someone else.

>> By the way, he quits being a jobber and he spends he fights with his dad. Hi

Alal Choxy. I told you Champagl Joy is fairly headstrong. He fights with his

fairly headstrong. He fights with his dad. He leaves home.

dad. He leaves home.

>> Yeah. Yeah.

>> And he says, "I'm nevering setting foot in this home back again." He roams the streets. He even sleeps um on Chopati

streets. He even sleeps um on Chopati beach.

>> Yeah.

>> And at this point in time, he's alo he's got a great friend who's also around the same age as him >> also >> who's also a Gujarati >> whose name is Suryakan Dani.

>> I hope I pronounce that right. So

he also as some of the nights he actually crashes couple of nights at Suryan Dani's place and they're very thick as friends.

Then what happens is very interesting right like there are these two young Gujaratis and they are offered

a paint dealership by you can guess another >> Gujarati >> absolutely Bombay is a city of enterprise there's been a lot of

immigration that's taking place business is in the Gujarati blood so therefore um this if I'm not mistaken his name because

V wasi he's a paint dealer um he calls these people up and says would you like to run an agency and at first Chakl chosy refuses but then like through some other friends and eventually comes

around and the two of these Champakl choki and Surya Khan Dani decide to take up a paint dealership >> dealership yeah

>> and this is Bombay this is the mid 1930s we've skipped from the heady days of Bombay uh and its cotton boom which sort of like Peter do you know when that

cotton boom ended we talking about um 1800s and we were talking about that and you >> talking after the civil war ended by crash right so it was roughly this what

like 6 10 period 10 year period when the American war civil war was taking place where suddenly you couldn't get cotton from there >> and therefore India saw this boom and

once the American civil war got over um the India's cotton boom sort of like you know Peter but by that time of course Bombay was well on its way to become

much more than just a city >> if you if you were in Bombay right then you know in Parli Mahalakshmi right you couldn't miss a

textile mill you wouldn't be able to walk 500 m without coming across a textile right so much so that you know that whole central Bombay area was

called Giranga which means village of >> Is that what's called Gir?

>> That's different. Gir is a neighborhood of which is near Chapati.

>> I'm really bad at Bombay geography.

>> That's okay. That's okay. But it's not very hard to figure out. It's not a circular city. So

circular city. So >> yes, I get it. Everyone tells me there is one line and the city is bisected.

[laughter] It's it's on this side and that side.

But yet it's been decades and I've probably never invested the time to figure it out.

>> Absolutely fascinating. You know, I came across this side. I came across this really fascinating term uh in the context of the language spoken in

Bombay. It's called hug me. Okay.

Bombay. It's called hug me. Okay.

Wait. Okay. I think I've seen this. I

know what G is. Okay. G is gojarati.

M is marati.

H must be Hindi.

E will be English. And therefore that leaves you you must be udu. So is it Hindi, Udu, Gujarati, Marathi and English.

>> It was an Salman Rushi coined it in in a novel called uh the ground beneath her feet, right? To describe the language

feet, right? To describe the language spoken in Bombay. How you sort of very easily move from one language to another in the same sentence. I once overheard a

woman telling another woman ma [laughter] right and I just couldn't stop laughing.

Right? She was talking about her husband passing away and she said mr tapaga but I'm assuming that in the cultural

context of Bombay these are very words that are used very normally so uh like someone else saying that my husband

passed away she's saying mr tapaga right and oh >> so that's hug me yeah so I've I've learned that today

>> so gujati great at business. Great

Gujarati are great at three things. It's

called bhar, gertar and gant. It means

they're great at learning, at character and at counting.

So this entire so the thing of Gujarati being great with numbers that's only one part of it. The other is learning and character right and the last point and

this is important about Gujarati is that very they're very communitydriven.

>> Yeah.

>> They value family.

>> Yeah.

>> Have you come across that as well?

>> Yeah. Uh have you heard of Jodi Flats?

>> Okay. I cannot figure out is that the name of a person or is it is it is the name of >> exactly my thought and you'll see this only in Bombay you'll see holdings

advertising say a new residential building and it'll say jodi flats available I kept thinking what is this is supposed to be a French designer is supposed to be jodi what what the hell

is this right I thought of everything but what it's supposed to mean just jodi >> oh jodi as in a A pair.

>> A pair.

>> Yeah.

>> So, because apartments there are very small, >> you get to buy two apartments next to each other and they'll build it that way without walls in between.

>> And I asked a developer once how many people a lot of people buy these flats.

So, it's basically say, you know, father, mother, and two sons who are married or going to be married, they all want to live together. So they buy three or three B two three BHKs or four BHKs

together and they all live together.

It's it's very hamsad sadim and this happens in my building also. I can think of at least three families where it's the parents and two brothers either living in the same house or on different

floors.

>> This is this is very interesting right?

Like you know I've heard of the concept of cutting chai where you take a chai and split it into two. Yeah,

>> but this thing of jodi flats is very interesting to come back to Gujarati which might be some of the prominent Gujarati families business families in

there and I'll tell you MKkesh Amani of Reliance Industries Godamadani of the Adani group Kotak of Kotak Mahindra Bank Kasani Patel of the Nirmma group Pankash

Patel of Zidus life sciences Dilip Shangvi of Sunarma Kasurbay Lalhai of Vvin Mills and of the Lalai group uh Tulsi Tanti Suzlon energy Azim Prem gi

founder of Vipro so the list actually goes of pedilite >> that's right so there is obviously this

very strong community which is which is driven by uh you know business uh by numbers by you know by a sense of

kinship and of family which is the Gujarati community that surandani and chapli are part of interestingly do you know what they

called in in most of the books including in Anupam's book etc uh they're called Champak Bhai and Bhai of course his

brother or Chiman Bhai or Suryakan Bhai >> yeah I've been to press conferences where they say you know Rajesh Bhai who's the CEO will now talk to everyone

>> so it it is it is sort of like an honorific which is you you're calling the a brother but it's also a it's a respectful addition to someone because you want to show that respect. The most

interesting thing for me is at some point some people graduate from being a bhai to a sate >> right. So chak bhai chakl bh bhai or

>> right. So chak bhai chakl bh bhai or chak bh bh bh bh bh bh bh bh bh bhai will become chak.

Now sate means let's say what like a rich businessman >> like I mean that would be the closest approximation right >> so

so the difference is and the you know as much as I could understand it is that everyone of a certain age or a certain this thing it can be a bai

>> but the you really need to earn the other title >> that's right and and which is not to say that you need to be running a conglomerate you be a you could be running a kirana so it could still be a >> you know what the the the painter is

who's been painting my home for roughly the last I think 15 years he's from Maharashtra >> okay >> right like you know Krishna Gquad his

painters call him Sat >> right so that sate thing is a relative it's like a in some sense it's like a power equation

>> if you're only working with others right You're by right then and you have people working for you. You become a sat.

>> That's right.

>> So we come back to Bombay to Suryakand Dani and Champaklal Choki. Uh both of them starting out as bies on their way to becoming Saints. Uh they're running

this paint trading agency. It's called

Neptune Trading Agency. Um they're

really selling paints which have been manufactured by this other person who employed them. And something very

employed them. And something very interesting happens that makes the market for paints suddenly rise very soon. Do you know what that is?

soon. Do you know what that is?

>> No. I guess I missed this.

>> It's the World War.

>> Oh. Oh yeah.

>> It's the second world war.

>> Yeah.

>> And the British just like remember when we were talking about cotton and we said that you know I mean sometimes things get affected in ways that you can't see.

The American Civil War led to a boom in India for cotton which sort of propelled Bombay to become what it is today.

>> Something similar happens to paints in the early stages >> because of another war.

>> That's right. And this time is a much bigger war. It's the world war

bigger war. It's the world war >> and the British ban paint imports to India. And so suddenly now this country

India. And so suddenly now this country this um still not independent uh but obviously still a sizable country needs paint and that paint must come

>> and paint not for homes.

>> That's right. At this point paints home paint is a much small amount >> almost a non-existent category relative to industrial paints. Right. This was

needed for the ships that were coming to Bombay.

>> Yes. That's one of the biggest segments.

So, so you have this market where now suddenly for [snorts] fortuitously uh these two bays uh uh Gujarati

businessmen very young right have started this business and that business now there's no imports so it must be fulfilled domestically within India

right so that's what and so which means that their business starts growing and you know they're doing really well at it over the next couple of years what

happens is and and I think this is around 1939 or so they start to feel that their business is doing well but they're not very happy with the quality

of the paint that they're selling >> is it also about I'm selling someone else's why can't I sell my own >> possibly but I think there's a step before that because um I mean that and

that comes to play as well right because they they realize that if they want to grow their business more. They need to fundamentally have a better product.

Because all great businessmen know that you cannot build a lasting business if your underlying product isn't that good.

They realize that. They go back to Vasani and they tell him that you got to give us better paint. He's not

interested. Look, he's just running a business. They say, "We're leaving." He

business. They say, "We're leaving." He

tries to offer them a share of equity in order to get them to stay back. They

say, "No, we are done." They go and say, "Look, we got to start a new business on our own, but they need money for that."

>> Right.

>> Right. So, they're stuck now. And so, in order to bring in money, you they end up bringing in two new partners into the

business as well, right? And what and those become the four founders of what would become Asian Paint.

>> The Fab four of Asian Paints.

>> The Fab 4 of Asian Paints. Right.

>> In this case, it happens to be two other similarly young slightly uh maybe couple of years older gentlemen. One of them is called Chimanal Chokshi again a Gujarati and the other one is called Arvind

Wakil. Now Arvind Wakil is also the

Wakil. Now Arvind Wakil is also the brother-in-law of Suryakandhani. So as

you can see >> and there's no connection.

[clears throat] There's no connection between the two chokes.

>> No, there isn't. And it's interesting because the only differences are you cannot make them out in speech. You can

only make them out in the written form because Champaglal choki is C H O K S E Y.

>> Yeah.

>> And Chimanlal Choki is C H O K >> S I >> S I. Right. So there is no one is ends with an I. Right. That's the only difference. But

difference. But >> um and and so if you're listening to this, you will not make out um the difference in this. Right? So now there are four of them and the business does

even well, right? like, you know, I mean, there's World War, there's paint bands, uh, they're mixing paint by hand because they don't have a factory yet.

You have to understand that they're buying different types of >> garage. It's a garage. Um, you know, the

>> garage. It's a garage. Um, you know, the classic pre-tech garage. We talk we talk so much about how important Google was born out of a garage, but Asian Paints

was also literally born out of a garage >> where these four friends and the workers that they've hired are essentially mixing colors by hand. They're mixing

paints, they're mixing pigments, etc. >> One of the most popular paints that they sell back then is red lead paint. Red is

therefore it has a very strong association with um Asian paints cuz that's what they're selling. The other

paint that they're selling is it's called battleship gray.

>> Yeah.

>> And it's painted literally on ships to prevent >> correct to that name.

>> They want to expand. They want to do more things. And again, a few years

more things. And again, a few years later, they hit a capital. Uh they need more money.

>> Do you know how they came up with the name? I'm sure this story is apocryphal,

name? I'm sure this story is apocryphal, but for what it's worth, apparently I guess it was um Dani who looked up the

phone book and apparently chose a name at random >> and they named it Asian Oil and Paint Company.

>> That's right. I've I've come across this too. But tell me something. Why is that

too. But tell me something. Why is that so bad in the larger scheme of things?

>> Turned out quite all right. Right. Like

you know what if it came out of a dictionary? No, no. I'm saying the fact

dictionary? No, no. I'm saying the fact that the story that he actually did this, I'm not sure how true that is. I

mean, it just adds to the the legend of Asian Paints, right? That the company was set up on November 9th, 1942, >> right? Very interesting time. We've been

>> right? Very interesting time. We've been

talking about how the story of Asian Paints and the story of India have been sort of running, you know, alongside each other. And this is actually all

each other. And this is actually all pre-India because this India is this we are still talking 1942 India is still not independent it's not a nation yet.

>> Yeah. And just 3 months earlier 3 months before the founding of Asian Paints is when the Quit India movement was launched a few kilometers away from that garage

at a session of the All India Congress.

What interesting times do we have alive in right imagine if you're back in 1942 and all of this is going on >> in Bombay u if only you knew how this

would pan out. I I don't know if they knew how close independence was but I guess everyone knew that it was only a matter of time before it happened right so and the quit India movement obviously

sort of furthered that along and fascinating time yeah around the same time um slightly maybe about a year or so earlier they again ran out of money

and they had to bring in a fifth partner his name was Jamalas uh Vora and he came in and he brought in money and it must

have been a significant amount of money because at one point he and his wife and son together they held 36% of Asian.

>> So which means the other 64% was divided between the original fourounders.

>> That's right. Right. So it must have been a significant amount of money and as luck would have it apparently uh

Jamnadas Bora's family fell upon hard times. So he ended up selling his stake

times. So he ended up selling his stake back to the four founders and they ended up becoming equal shareholders in the business.

>> That was in a few years right >> around 1948 49.

>> That's right.

>> So the thing is imagine again like you know I mean with Asian pins is always a sense of if only you knew what would happen to this company over the next 40

50 60 years. Uh but I think I mean that's a great thing about business histories right there is there's always interesting stories that are sort of buried there which you only realize that

really at one point in time one person held 36% of Asian paints and then he had to sell it back to the founders because he was on hard days >> and remember this point I'll come back

to this again this thing of selling back to the founders because this makes a very significant entry later on in the story this would happen again

>> as they say selling back to the founders but that's where we are. So Asian

Paynees is born in 1942.

>> Four founders, five founders, back to four founders.

>> That's it. Since this is the very first episode of Intermission, I hope our listeners will indulge us in a little bit of backstory about how intermission itself came about. And for

that, I need to go back as well, but not so much not to the 16th century.

>> Yes. Yes. I wish I could go back, right?

But for now I just want to go back to 2024 and I think it was August. I had

gone down to the offices of Zerodha in JP Nagar Bangalore. I had met um Nathan Kamat.

>> I think I was that far back 24.

>> Yeah. Yeah. Um I met Nathan Kamat its co-founder and CEO. Now um Zeroda through one of its uh companies Rain Matter is an investor in the Ken's

parent company and now Nathan has [clears throat] been giving me feedback about our podcast for a while [snorts] right he listened to a bunch of podcast

as well for instance he would tell me I listen to my podcast at 1.5 to 1.75x why doesn't the Ken's app allow us uh to do that and we didn't have that feature

we do have that now >> right Um, and then he told me that why can't all of the Ken's articles be in audio form so that I can just listen to

them. We've still not done that as well.

them. We've still not done that as well.

Um, and then of course, uh, he said that I interrupt guests on podcast far too often. Oh,

often. Oh, >> you do? [laughter]

>> I still do.

Right. And then we got round to talking about podcasts and some of the podcasts that we're doing. And I think we got around talking why there weren't more

ambitious and longer and more deeper and immersive podcast which essentially tell the stories of not just what's happening right now um in terms of trends or

companies etc but really long arc stories on some of India's best companies right like you know >> which I mean with with stories that stretch back decades >> for which

>> or even centuries right >> or centuries right for which you would need to spend spend an incredible amount of time researching, talking to people, understanding, etc. I mean, I'll be

honest, at that point in time, I honestly didn't think that we had the bandwidth. We are a lean organization at

bandwidth. We are a lean organization at the Ken. And so, I sort of put it on my

the Ken. And so, I sort of put it on my mental back burner. You know that, right? Like when when something

right? Like when when something interesting happens and you're like, it's interesting, but we're not really sure. So I put on my mental back burner

sure. So I put on my mental back burner and I sort of moved on from it till I think it was May the next year May 2025.

>> Yeah, May or June, right?

>> It was May May. Uh yeah. Um that's

right. I think it was June because that date got postponed where I met Nathan again at one of the events hosted by the Ken uh a subscriber event which was called the next 10 years for finance,

wealth and investing and Nathan was one of the guest speakers there. And after

the event on the sidelines when we were talking I think we got round again to speaking about the podcast and Nathan said so and so then again for me it was a signal that like you know oh it's been

on my back burner for a while I haven't done something about it and that was the second time and then a few >> you had thought about it between these two conversations.

>> Well let's just say I had thought about it in my back burner. [laughter]

So no.

>> Yeah.

>> And then May I spoke with Nithan about it again. Then in a couple of months

it again. Then in a couple of months later I went back to his office and I had a much longer discussion about by then I had started thinking about it in my defense

and therefore I think it was in August of last year, August 2025 when I finally got round to kind of being convinced. Do you remember? I had

being convinced. Do you remember? I had

actually called you up. Uh

>> no we actually met we discussed this in in Bangalore when I was here for a week.

You said let's go up to the terrace. We

were just talking about some other thing. I don't know what it was. And

thing. I don't know what it was. And

then you said should we do this? Are you

on? I said yeah okay. I had no idea.

>> You had no idea what you were in [laughter] for.

>> I said okay because we do discuss a lot of such things at the Kent, right?

Because we're a lean team. We do discuss a lot of things but they take a bit of time to uh come together. So I said yeah let's do it. Right. [laughter] And that

evening I left for Bombay and I go back and I think around 9:30 10 you told a bunch of our colleagues on Slack Sitha and I are doing this what we are okay

>> see that's that's the thing right once like when it's on the back burner it's on the back burner but once it comes on then it's on right so we decided

>> here we are Asian paints has been formed and of course it's still four friends and their employees mixing paint by

themselves and they've gone past this stage which is I mean in many ways they they've gone past the first four five six years of that phase of a company where like will anyone want what we are

making will we find enough customers >> product market fit >> absolutely what is now called product market fit they have postp productduct market fit at this point they're trying

scale and they start facing a lot of >> issues. In fact, you know what? Who else

>> issues. In fact, you know what? Who else

was trying to achieve product market fit at this stage?

>> India.

>> Yes.

Because we are post 1947. India is a young country. It's a young democracy.

young country. It's a young democracy.

It is trying to figure out heck the >> has it got product market fit yet?

>> No. Well, let me ask you that question.

Has it found [laughter] product market fit yet?

Right. So, but anyway to go back to those times the let's say the late 1940s or so India is independent and I think we haven't mentioned this earlier. We've

talked a lot about Bombay.

>> Bombay is not a city at this point.

Bombay is a state.

>> Y >> right. It's the state of Bombay that we

>> right. It's the state of Bombay that we are talking about and this is newly independent India and >> which includes Gujarat by the way.

>> That's right. Thank you. Another thing

honestly I had forgotten about where are these things that you learn in history and in civics and especially if you've grown up >> well in the 70s and 80s with um Indian

school boards a lot of it is just wrote crammed right so you read through the history without really understanding it and then when suddenly sometime in your adulthood you're like wait what

>> Bombay was a state and Gujarat was part of it and and I mean yes you're absolutely right like to go ect to that.

Yes, that's where we are. That's where

Asian pains is at this point.

>> Yeah. But it's not just any moment, right? It it sort of it finds itself at

right? It it sort of it finds itself at a time when it's squeezed on different fronts, right? For instance, it's

fronts, right? For instance, it's squeezed between competitors, right?

We've only talked about Asian Paints right now, but it's not operating in a vacuum, right? It's not a market devoid

vacuum, right? It's not a market devoid of brands. There are a bunch of brands,

of brands. There are a bunch of brands, almost all of them global. You have

Shalomar which incidentally set up the first paint factory in the country and you have uh ICI which later became Axonobel and then Jensen and Nicholson

and British Paints. Some of these still exist under different names >> but just not in different names. Yeah.

>> Yeah. Yeah. Then you have the unorganized sector right which dominates the bottom half of the market and they're also squeezed between segments.

M >> now we think of Asian Paints as a company that you turn to to have the walls of your home painted or the walls of your offices painted. But this as we

discussed earlier is not really the market for paints. paint what's called a decorative space, >> right? It's all industrial, right? So,

>> right? It's all industrial, right? So,

>> at that point in the 1940s, >> Asian paints got its break painting ships, right? And um it was dominated by

ships, right? And um it was dominated by the government and it was not a brandled market. It was a price market. Whoever

market. It was a price market. Whoever

quoted the lowest got the project and survived. And of course by that you mean

survived. And of course by that you mean that the government was one of the largest buyers of paint and all the other large paint companies were essentially selling to the government.

Yeah.

>> Not a place for a young startup to be >> yeah what what did what does disruption look like at this point? I don't know because the decorative market is pretty

much entirely distemper which we call tuna right which is nothing but uh you know coloring agents chalk and lime >> right uh I think it's just

>> have you have you had any experience with tuna paint in your life?

>> No.

>> Well, I have.

>> Oh, okay.

>> Maybe it's because >> the age. [laughter]

>> Yeah. But I've I've um I grew up in Delhi and I've had uh times um we used to stay in government apartments and therefore when our house used to get

repainted it was with um you know I mean in the early times distemper and what's called white wash and stuff like that >> whiteash I think is a step below.

>> Yeah both we've done whitewash and distemper and I can tell you to today the paint that exists to back then it was a world of difference. Yeah.

>> And whitewash, incidentally, apparently was used as a disinfectant during the plague outbreak uh in the 1890s in Britain.

>> Oh, really? Wow.

>> Strong stuff. [laughter]

>> I hope nothing much happened to me from all that white wash.

>> And incidentally, it's around the same time that doctors start wearing white coats.

>> Ah, >> I don't know if there is a connection, but interesting that they both have. You

know, there's a bunch of white things in my head right now, but I'm just going to stop there cuz it's going to go on a bunch of different tangents. But let's

come back to that point about being squeezed. You said they're squeezed

squeezed. You said they're squeezed between competitors, squeezed between segments.

>> Let me give you another one which is squeeze between which is there squeezed between distributors and retailers. This is very interesting for me personally because

remember we talked earlier about Gujaratis as people and they're inherently shopkeepers at heart and they know how to do business. They know how

to find customers right and and they pride themselves on that firsthand understanding of what a customer wants and that is essentially again based on a

relationship with a customer. Now when

they're Asian pains, when the four of um you know the the friends are running Asian pains and they start going out into the market they realize that I mean because the market is largely dominated

by industrial as a segment >> global brands yeah >> and by global brands most of the selling actually doesn't happen directly from these companies to dealers instead it happens to

distributors and these are large distributors that essentially have exclusive relation relationships with these large paint companies >> and they they get the paint from these

paint companies and then they distribute it to smaller retailers. And because

these relationships are so powerful, many of these distributors essentially have great relationships with these paint companies on even payment terms. For instance, you could essentially get

paint from one of these large companies and be required to pay for it only maybe at the end of 6 months or even sometimes as much as 12 months.

>> Yeah.

>> Right. So that's how big the credit period for these large distributors goes. Right. And there's obviously no

goes. Right. And there's obviously no way that a small company manages to forge a strong relation with these distributors.

>> Yeah. Because they when they can turn to when they can distribute ICIs and shalom pink why would you why would you punt on a company you wouldn't >> which is a few years old

>> you wouldn't and on the other hand are small retailers now India has always been a country where a lot of the business is driven by small shopkeepers

and retailers right it's true for uh paints as well but nobody gives them much importance >> yeah no one gives them the time of day, >> right? So there's Asian Paints again and

>> right? So there's Asian Paints again and on one hand you have these large powerful distributors who want nothing to do with this small upstart and you have these small shopkeepers who are

like nobody pays us enough attention and once again Asian Paints finds itself squeezed between these two because the small shopkeepers have demands but they don't have the market isn't there yet

right because as you rightly said the decorative market isn't that big in India >> so you can't you can't go directly to the shopkeepers because you don't really

have the network and you can't you do want to go to these distributors but they don't really care for you.

>> Yes, they're squeezed there.

>> Yeah.

>> And I'll tell you the final place where they're squeezed. They're squeezed

they're squeezed. They're squeezed between consumers. So you know they

between consumers. So you know they squeeze between urban consumers much of the market the limited small market for decorative paints that exist in India even it be distemper tuna etc and other

paints like let's say um you know enamels etc is largely in urban India yeah >> remember this is a newly independent country right and so if this new company

I mean that market is largely taken it's used by existing companies so they are forced to go out of urban India

and find rural consumers in small towns and in villages etc. But again many of those people don't have the pricing power. They're not even used to remember

power. They're not even used to remember this is a very poor country. It's

>> a lot of homes in rural India must have been not must not have been paka houses.

Right.

>> That's right. Right. Right. So there's

all of that. So now again they're squeezed between these two segments. And

what do you do if if you see this period right I see it as Asian pains is sort of like at this I could call it I'm a huge fan of analogies. Is it squeezed? Is it

at crossroads?

>> It's it's both, right? So they find that there are look, it's industrial versus decorative, but it's largely industrial.

We don't do this. We can't be. It's

distributors versus retailers. It's

urban consumers versus rural consumers.

It's segments. What do they do? It feels

almost at this point that the system is conspiring against them.

>> Yeah. I mean, if it didn't have these constraints, would it have become what it is today?

>> Absolutely no. I am a huge believer in the fact that the best businesses are forged out of very tight constraints.

But at this point, if you think about it, if you zoom out, and of course we can do this with the benefit of hindsight because we are sitting in 2026 and we are able to second guessess what

actually happened during this time. But

if I could transport myself back in time and sort of like in a god mode observe what's going on really who all are squeezed and unhappy Asian paints is unhappy >> because there it's like a company

bursting with energy which wants to do so much more but it cannot >> small shopkeepers >> are frustrated because they want to do more they want to be able to sell paints

they right >> consumers Indian uh well it's probably too early to call not even consumers but citizens at some point I But I would say I mean the ones in urban India who

actually wanted to paint their homes they already had a bunch of options >> and we've already established that the urban consumer is not what we're talking about. We're talking about the rural

about. We're talking about the rural remember the this is a large country and that if you there is a saying right like you know I mean an enemy of my enemy is

my friend sort of thing. So that's what sort of happens over time. You know,

Asian Pains finds itself with its back to the wall and it's almost seeming like the system is against them.

>> Yeah.

>> And they decide, you know what? We got

to change the system itself.

>> Okay. Remember, and this is something that I I cannot stop myself from going back to again and again. The four

partners are Gujaratis. So they've got their backs to the wall and they've got the system against them. So obviously

they got to go where the opportunities are available. It's not in urban India.

are available. It's not in urban India.

It's not in the industrial paint space.

>> It's not through distributors.

>> It's not through distributors. So you

one by one if you view them as doors these doors have been shut off. So they

say and especially and at this pa um stage I think the the the most outspoken of these at least in our research is Champakl choki right he says leave this

I'm going to go and find uh a market where nobody else is I'm going to go to rural India and I'm going to sell to rural consumers and I'm going to sell to

them through small shopkeepers if the system is against me I will build a new system. Yeah,

system. Yeah, >> that will not completely rigged against you. Chaklal

Choki and Asian Pin says, "You know what? We're just not playing this game.

what? We're just not playing this game.

We're going to devise a new game for ourselves and they start doing that and they devise a new system and that new system essentially has four pillars on

which it stands.

>> Yeah, absolutely right. And the first one is retail.

>> Yeah. I mean, it's all about understanding the needs and aspirations of these rural consumers, right? You

know, they don't have a lot of money.

They can't I mean, maybe their homes are not worth painting because they're not paka. Uh you don't need to paint these

paka. Uh you don't need to paint these homes, right? But it's not like they

homes, right? But it's not like they don't need paint at all. So, he observed this. You know, there are festivals

this. You know, there are festivals where bull's horns are painted. Oh th

this is that holy chestnut of a story which you read in every single Asian pains this tell us tell us because it's still fascinating >> in what is the festival called I I

forget in in Maharashtra right um and it I know it happens in Tamara festival >> pungal also pretty much the same concept right so the horns are painted in a

bright yellow or orange or red right and you don't need a lot of paint for that how much do you need you can't expect me to buy like 25 liters of paint for

So, Asian Paints launches 50 to 100 ml cans. That's I don't know how much 50 ml

cans. That's I don't know how much 50 ml that's like a cough syrup bottle. Yeah.

>> Oh, [laughter] how much cough syrup have you had in your >> So, you know 50 to 100 ml and you mix it with water, right? It's really really tiny. And there's a quote in in one of

tiny. And there's a quote in in one of these books that we read which said that you know there's a someone saying used to say that You can I I like your Hindi.

>> It's come a long way. [laughter]

>> Let me allow allow me to translate that for you. A poor person

for you. A poor person will definitely color their threshold well even if they cannot or or

definitely paint their threshold well even if they cannot paint their entire home well enough. And I think that goes back to those days

and it's a festivalce to look special. So they buy these small containers of paints and they paint the >> thresholds to their home.

>> And also I mean it reflects in the in the brands that they they launch right the first one is called tractor distemper right. Would this resonate with anyone

right. Would this resonate with anyone in in Bombay? Certainly not. Right. So

and then they move from tractor to stemper.

>> Well, you're saying they won't launch it today.

>> No, even then tractor to stemper in Bombay, >> right?

>> What kind of resonance would it have?

>> It's it's definitely a rural kind of >> they move from tractor to stemper which is slightly better than the the the standard issue to tempeer. From there

they move to tractor imulsion, right?

And that's where they get their head start in rural India. And you know one of the you know executives many executives that we spoke to who spent you know a couple of decades in the

company said everyone thinks that you know there was this great strategy you know uh Asian Paints thought of all of these things right but there were a lot of things they couldn't do so they had

to go somewhere else like you said you know if this game was rigged they had to it's not like it was it was forced upon them it's not like they wanted to I'm sure when they founded Asian Paints I

don't know if they actually thought that rural the rural market was a great market that is >> what was available right like like all constraints they went there because that was what was possible >> and they were in I mean you have to

remember that they were in Bombay right with I mean all the other paint companies they may have been headquartered in in Kolkata but they all must have had a very strong presence in Bombay right so you can see your

competitors you know competing in this market why would you think of something that that that you can't even visualize right so they were forced into this and That turned out to be a blessing in disguise for them.

>> Yep. That's pillar one of their system.

Pillar two. Now, if you have to as a company go to rural India and sell to rural Indians, you can't be doing that through distributors, right? You can't

be doing that. You need to have small shopkeepers and dealers who will do your selling for you, which actually then becomes their second pillar. And

[snorts] this is where I think you know Asian Paints has done a fantast and it did these partnerships and >> you know people don't realize how big a

deal that is so much so that paints are the only mass market product category now where the retailer gets the product

directly from the manufacturer.

Right? The one other distribution network which is widely studied is the FMCG distribution network.

>> But that has multiple layers. You have

the company HOL and you have the super stockist then you have the distributor and you have the wholesaler right then you have the retailer right and in the 50s they basically got rid of this

layer. I mean they said we're going to

layer. I mean they said we're going to go directly to uh these small retailers.

The result now 97% of all paint sold in the country is directly from the manufacturer to the retailer.

>> This is a true business model innovation like you know it took guts to pull it off. to go back to that time. I mean as

off. to go back to that time. I mean as they go to these small shopkeepers and dealers they realize that and this is where I think the the financial acumen

comes into play as well because paint or many of these commodities like you know I mean when we walk into a shop we walk in let's say you want to buy paint what do you do let's say you're not buying

paint let's say you're buying something else let's say you're buying whatever groceries you walk into a shop you tell the shopkeeper what you want. The

shopkeeper gives you what you want. What

do you give them back in return?

>> Money.

>> Thank you. Right now, what do you think happens when Asian Paints or any other paints uh company does the same to a shopkeeper? It goes to a shopkeeper. It

shopkeeper? It goes to a shopkeeper. It

gives them the paint. What does the shopkeeper give them back in return?

>> A lot of love.

>> Well, I mean, I I'll rephrase that.

Nothing. because it operates on credit.

>> Yeah.

>> Right. Cash is paid by customers to shopkeepers but there is always a credit period that exists between the shopkeepers and dealers or distributors.

In this case there were no distributors and the company itself.

>> Yeah.

>> Now before Asian pains going direct we explained to you that uh the large distributors typically enjoyed credit periods of 6 months to 12 months etc.

Now imagine if you're a small company.

Imagine if you're Asian paints and let's say a distributor says fine I will stock your products. Uh send me thousand cans

your products. Uh send me thousand cans of your paints right and I will pay you 12 months later.

For a small company that's death nail.

>> Yeah >> because you have essentially manufactured 1,000 cans of paint handed it over to one distributor.

>> You've probably borrowed money to man, you know, manufacture.

>> Most definitely. Right? And that person will then take you a year to return it back to you or 6 months and their entire capital is tied up. So at this point,

Asian Pays decides that they're not going to follow this model. If they're

doing away with this dependence on large distributors and large, you know, the the business model of large companies, they come up with something called an open market

policy where they say it doesn't matter who you are, whether you're large, small, etc. We will sell paint to anyone and they set a very low credit period.

And they say as long as you pay us within this credit period, we will sell to you. And this is completely different

to you. And this is completely different because for most other paint companies, you have to >> partner with them. You have to commit to buying a certain amount to them. If

you're a large distributor, you arm twist the paint paint company to say you cannot appoint anyone else near me, etc. And by the way, that still happens in FMCG. Yeah.

FMCG. Yeah.

>> Right. I mean, have you seen that in any FMCG company?

>> Yeah. Yeah. Absolutely. I mean uh but and someone told me that uh you know large companies like HOL tend to have uh you know leverage. So they someone said

someone who's worked in FMCG for years told me that if your sales cross a certain threshold in a in a 5 km radius you have to have a new distributor right

no matter I don't care what the current distributor feels about this but there are times when distributors we've seen this happen you know multiple times they they have their association they say we're not happy with this you're selling

to e-commerce you're selling some of your brands on Amazon first we're not okay with that right so they do have some leverage but now you've just taken them out of the equation. It's just me

and the shopkeepers, right? And I don't care. You're small, large, like you

care. You're small, large, like you said, you know, you want it, you pay up.

You can't take 6 months for sure because we can't afford that. That's right. So,

what this means is large distributors had originally ignored Asian PES cuz it's a young company and there's lots of other companies, right? And Asian Paints comes up with this and it's a fast

growing company also. It comes up with this open market policy. So suddenly a lot of small shopkeepers and dealers start signing up with it. So after some

point the large distributors notice this and say what's the point of holding out because this is happening anyway and they also decide to join.

This was called the Muhammad Gazni tactic by Biji Kuran who was actually one of the earliest hires at um Asian PES later on we'll come across his name

later on and he went on to become CEO of Burgger Pains as well because you essentially go and capture the surrounding areas first or the smaller

towns first and then the bigger fish realize that like you know I mean uh that's they have no option left with them. Yeah. And this this actually

them. Yeah. And this this actually helped them do one other thing which people underestimate a lot. When you

have a distributor, your relationship with the shopkeepers is through the distributor. It's mediated by the

distributor. It's mediated by the distributor right?

>> Yeah. They're a middleman.

>> Yeah. So, so you don't I mean whatever the distributor tells you the shopkeeper wants or doesn't like, you have to believe them, right? I think one of the one of the you know uh great outcomes of

this is they get to build these relationships with these shopkeepers. I

mean uh Anupang Gupta's book has this term kitchen relationships right they go to them talk to them they go to them talk to them about their family you know uh you know this happens I mean even now

you ask any good distributor FMCG sales executive they would tell you this that you go to a shopkeeper it's not just about you know taking the order and telling them when to fulfill this right you need to know them but I don't think

it happens to that extent now I mean and and that's what they say all the CEOs of Asian Paints until today they know several retailers by name they meet them

and this is continued you can't find a single FMCG CEO who knows shopkeepers right because that's not how the system is structured right and this benefits

them to a great extent and there's also this fascinating anecdote in the book right about uh you know you know when dealers would visit their offices in Bombay Dani would make sure you know

they were treated well give them a tour of uh Bombay and make sure there were gifts for their kids and you know uh >> you know what's the I mean again I can't tell you whether you've seen this or not

because if you go to any have you been to hardware shops right >> have you seen typically the area behind where the proprietor stands which is the

billing counter there'll be a bunch of framed uh photos typically in any major large hardware store most of the times

they are of them being felicitated. They

will almost always be an Asian Paints photo. Almost always

photo. Almost always >> they are being felicitated by Asian Pays for being a leader distributor in that area or it's a foreign junket. It's a

photo from Thailand or Vietnam where they went after meeting their sales target. So this thing of Asian paints

target. So this thing of Asian paints valuing their dealers has continued to this day as well. But to go back to that point in time, I want to bring back

because I'm always trying to fuse how did this come about and I can only think that look again it is the Gujarati ethos

of community and family and connections and you know genuine desire to kind of forge those connections. So I think at that point this this layer that they've built

>> that makes your business sustainable nothing like it.

>> Absolutely. Gujarati business networks.

I mean we talk about Japanese business networks and keritsus etc. But I think Gujarati business networks and the you know the connections that exist within them are as powerful. And this is a

great example because if I were to say that what is one of the strongest pillars of Asian pains system that it kind of creates to take on this thing it is the fact that they have these

shopkeepers and dealers as almost a part of an extended family >> family. Right? These choices make them

>> family. Right? These choices make them do certain things that haven't been done until this point, which is that if you have shopkeepers,

not like 20 large retailers, but 200 small shopkeepers around the country, you can't have one warehouse, right? You

can't have a very streamlined centralized supply chain. It has to be distributed.

>> Can I give you an example of that which is from more modern times? Um, let's

take Quickcommerce. What was the model before Quickcommerce? When we used to

before Quickcommerce? When we used to order, let's say you ordered from a Flipkart or an Amazon, right? They would

typically have these large distribution centers from where an order is picked and then it comes to something near you and then is delivered. But obviously

that doesn't work when you have >> hundreds and thousands of people ordering in a dispers. So what happens with um quick commerce is proliferation

of dark stores, smaller warehouses.

>> You need to have smaller stores more frequently and closer to where the customers are.

>> Yeah, that's a great analogy. But you

know that also means that you have to make sure that your products reach the the store from your factory in time.

>> And this is pre this is five decades before not even five decades it's like >> seven decades before.

>> Yeah. There's no GPSure. There's no no there's no GPS. You don't know where your truck is, right?

>> So, it's it's fascinating how how they pull it off at a time like this, right?

But they do. They're not a very large company now. Even so, to be able to

company now. Even so, to be able to their factories are now I think they just have one factory now which is in Bombay.

>> Bandup.

>> Yeah. And Sangi is now at least 6 7 hours away. Okay. I'm sure they were you

hours away. Okay. I'm sure they were you know they they were selling in other parts of Maharashtra and Gujarat right it's still almost like 10 12 hours by

road maybe even more in those days right so how do you make sure they it reaches all those shops you're you're not responsible for delivering all that stuff to one large distributor you have

to go shop to shop right and they do that >> incredible and when I look back at this era and and I I think we're approaching like we're

crossing over from the ' 50s to the 60s.

It is definitely what I'd call the founder era because it's the sheer energy and passion and enthusiasm of these founders, none of who, by the way,

have come in from any kind of formal education around paints.

>> Everything that they know is self-taught, right? Other than the

self-taught, right? Other than the business acumen, they're essentially learning as they go. They started by literally mixing paints by hand in a garage and they're learning and building and growing as they go along is

definitely the >> They knew nothing about paints. They

knew nothing about retail. They knew

nothing about supply chain.

>> As you say that, I realized that that was their advantage, right? Because they

were the classic outsiders. Yeah.

>> Right. They did not take on the way others operated. And because they were

others operated. And because they were shut off from the way others operated, they were also like we are just going to figure this out on our own in a way that works for your favorite first principles

thinking right [laughter] >> I can't run away from it right but at this point I mean I do say it's the era of founders but this is also the time in

1960 Arvind Bakil who's one of the four founders um passes away. So this is the first time where the four of them are down to three and they realize that look

I mean we've started this business it's now close to 20 years and one of us is no longer there that some reality start hitting right because sheer passion and

energy I'm I'm sure that many of most of the founders are now in their 40s mid-4s or later >> yeah still very young >> still very young Asian paints is still

very young India is still very young and I think this is the absolute beginning for a fantastic

50-year arc which covers in my opinion three broad aspects right first is the nature of product itself changes as

India gets more developed richer etc people start moving away from just tuna and whitewash and distemper to more paints right so the nature of pain

changes and I think we will definitely come back to how what a magical thing paints is, right? Second is geographies change, right? the center of I think the

change, right? the center of I think the the gravity uh for paints >> paints yeah >> and actually not just paints right like you know pretty much everything was Kolkata like literature paints power etc

pre-independence >> stop trading you know >> right yeah >> it was Kolkata but it shifts to Bombay where um Asian >> all these companies large uh foreign

competitors they're all headquartered in Kolkata shalom I think factory was also in Kolkata right so the yeah the >> and and of course the third arc is very

key. The third arc is as India starts to

key. The third arc is as India starts to become more independent and self-sustained there is a shift of focus from not just who the company or brand

of paint maker is but whether it's foreignowned or Indian-owned and the arc is going to shift towards Indian-owned companies. These three things over the

companies. These three things over the next 50 years are going to dramatically compound in a way that benefits Asian paints that no one saw coming.

>> Absolutely. I mean I don't think at this point you could imagine a large paint company, not just paint company, right?

You take any sector. Can you imagine in post-independent India that there's going to be a large company but an upstart becoming the leader in a sector dominated by British players?

Unthinkable.

Even though we're now independent, it's been like 15 years. It's unthinkable.

That's exactly what happens. And in just a few years we are with Asian Paints as India is growing and Asian Paints is growing and Asian Paints is in this space where

they're going deeper into India and they're meeting with small shopkeepers and small dealers and they begin to learn in this process. they begin to

learn not just how much a consumer can pay for paint but really the the deeper emotion like just to go back exactly right to go

back to that earlier quote where you said uh Chambaklal Chok's observation that a poor person will buy it's not that a poor person like you know the binary thinking that exists is like

prior to this would be this person is too poor no point selling him or her paint whereas it became sure this person is poor but they have their aspirations

perhaps they can buy a 50 ml or 100 ml thing right because it respects that person's emotions and aspirations and I think this could have only come about

had they gone the direct route because they are meeting you know kitchen relationships that you mentioned because they are meeting these shopkeepers and dealers and customers and their

executives this is going on day by day you can't not understand these things and see these In another one

gets mediated at the distributor level and their understanding of the world is through the eyes of the distributor.

>> Yeah.

>> This is not true of Asian paints. Which

means that as Asian Paints goes and grows in India, its understanding grows and after some point they realize that

look there are these latent emotions.

>> Yeah.

And it's we need to be able to address these emotions.

>> Yeah. I guess they've also seen what their competitors have done elsewhere, right? And even in India like you do

right? And even in India like you do have newspapers, you have magazines, you have uh public radio, right? Uh even if their competitors Jensen and Nicholson,

ICI uh didn't advertise in India, right?

I'm sure they're doing it in their, you know, home territory. I'm sure they, you know, the four the three founders now are exposed to that. So they are

probably beginning to sense the importance of uh having a brand and not just a product.

>> Right.

>> That's right. So you're saying that they put two and two together. They put two which is a keen understanding of the Indian consumer and the other two which

is the importance of brand from let's say foreign markets or other categories etc. and they connect it together and say we need to have brands of our own

and some of the earliest brands that they have you'd never to you mentioned that earlier right like it's called tractor >> because obviously it speaks to u the Indian consumer

>> and also I think you know they probably realized it it was only a matter of time before the others also came into the same market right then what do you do now you're the only you know sort of uh

uhh game in town well This is where I sort of stop because this is my hindsight wisdom boundary. Did they know this then

boundary. Did they know this then >> or perhaps they did, perhaps they didn't. But like, you know, I mean, I I

didn't. But like, you know, I mean, I I can't bring myself to were they doing it defensively. I sort of see them as doing

defensively. I sort of see them as doing it naturally because you know so for me it's a keen extension of their customer

awareness their direct relationships and at some point when they observe all of this they sort of put two and two together and say let's create a brand they build tractor by the way what do you know do you know what tractor

distemper's tagline is from back then >> no >> don't lose your temper use tractor distemper >> that's that you know those days. I think

that >> so I mean in many ways it's a golden age of advertising and I think Asian Paints is >> has to be credited for some of the best advertising and taglines that came from

back then.

>> They introduced another brand. It's

called Three Mangoes.

>> Three Mangoes.

>> Have you ever heard of that? I mean

>> I mean I did come across I'm wondering why they named it tractor. I understand

but mango >> I don't know. Well I mean it is it is called Mangifera Indika. It is the fruit that literally came from India and we you know I mean I can't

>> probably you know ratnagiri opened up as a market. I'm not I'm not getting into

a market. I'm not I'm not getting into the hapus versus like you know mango >> you know they they they were present in Maharashtra so they're already selling in Satara so they're like other parts of

Maharashra atiri mangoes okay >> I don't know is it maybe >> mango in you know what's mango in Hindi [laughter] >> you know where I'm going right common man

>> oh okay admi right I don't know right but they did have a brand called three mangoes

And to the extent that their salesmen were known as mango salesmen and this is said by bijikuryan as well in the book

by Anupang Gupta mango salesmen and here's what you will not know. Do

you know that three mangoes paint still exists?

>> No.

>> Yes. For some reason Asian paints continues to maintain and sell three mangoes aluminum paint. Oh,

>> I think that's the only category that they sell it in. Maybe they It's like one of those corporate history.

>> Maybe the last five people from that generation are still alive. They're

like, we can't sell this. Maybe it's a piece of living history where it's a piece of living archival history where they say this brand, you know what? This

is what actually did it for us back in the 60s. We can't ever let it die. My

the 60s. We can't ever let it die. My

guess is that it's come down from categories to categories till it's at the final category. Maybe it happened 10 years ago. Maybe it happened 20 years

years ago. Maybe it happened 20 years ago. At some point, somebody within

ago. At some point, somebody within Asian bins is saying, "Boss, we've got this random brand which existed. It's

called three mangoes. Can I kill it?"

And then his boss comes to him and said, "Do you know what this brand is?"

[laughter] Right? And then he goes back and he

Right? And then he goes back and he tells that story to his next person, his next person, and that brand is kept alive. And that's my reading. I have no

alive. And that's my reading. I have no understanding whether this is true or not.

>> Yeah. Well, they don't they don't stop here, right? the the the the biggest

here, right? the the the the biggest um branding exercise until then and probably one of the biggest until now,

right? The creation of their mascot Gut,

right? The creation of their mascot Gut, right? Happens around the mid-50s.

right? Happens around the mid-50s.

>> What a brand. What a mascot.

>> Yeah. I mean, we to remember the Amul girl came 12 years later.

>> So, I think there's a very good chance that this inspired the Amul girl.

There's no way that's not possible.

>> Again, Gojunati again, >> right? Amul though there's a different

>> right? Amul though there's a different connection there to um Asian Paints as well.

>> Okay. So, you know, and it was obviously made by AK the character was created by AK Lakshman, right? And the story goes that you know, u he was chain smoking.

Again, a lot of these stories, I mean, they just lovely to recount, right? But

>> you don't hear these stories these days.

>> I don't know. I guess you know 50 years down the line when you're talking about a company that existed now like you're talking about Flipkart or Amazon would you have these stories like you know this says someone was chain smoking Raku

was chain smoking and he saw the outline of this mascot emerging in the smoke right I don't know if he was doing rings I have no idea you know so >> wouldn't that be a story

>> yeah yeah it was it was it was a massive success right I mean you you I don't know you know you measure it in like you know ad dollars But how much is this worth? Like you know a mascot like this

worth? Like you know a mascot like this that every >> Tell us what the mascot is. Gu

>> a painter holding a paintbrush right and is a kid mischievous kid. The the one brief they I guess they had for him was this can't be a very urban character.

All right. You're calling him Gutu and you know that your market is in rural India. So you want something that

India. So you want something that appeals to >> and by the way Gutu that name was submitted Asian Paints did a competition

>> asking its customers to suggest names for this character and it got a it got many thousands of responses and I think it selected one of them. If I'm not mistaken the person who selected

received a 500 rupee cash award but the name Gutu came from Asian business.

Again think about the fact how ahead of a time it is for a company to be able to remember this thing about networks and right it is asking it yes it is

crowdsourcing again thank you for using that phrase in modern times these days we'd say why don't you connect to your community or your network and crowdsource the intelligence from them that's what Asian pains did back then in

the ' 50s >> yeah and I think they uh they continued with gut for how long you until 20 25 years ago. Until 2002.

years ago. Until 2002.

>> Yes. 2002.

>> Wow. I mean, as far as mascots go, that's quite something.

>> Can I tell you something very interesting? Um,

interesting? Um, Asian Paints actually did this uh black and white um full page advert in 2015

when RK Lakshman passed away.

>> Oh, >> right. And it said for the one who saw

>> right. And it said for the one who saw every color of life in black and white.

I thought that was very beautiful because RK Lakman is very famously this black and white cartoonist and he's created this character for which is the mascot of a company which is inherently

about color >> color >> right so I thought it's uh you know final message on his death really captured that the one who saw

color of life in black and white but yeah Gutu is a fantastic fantastic um it's not just a mascot by the way right it also ends up

helping the company become recognizable among its c customers and it becomes subbrand in many places where gut can

then be used as a brand in a particular segment where it is for rural um India and um you know stuff like that. But I

guess I think over time I mean I understand why you know uh the mascot sort of outlived his utility because the company itself changed dramatically

>> and India changed >> India changed right it was no longer just about rural it was no longer just about distempers and not just any emulsion people start buying expensive ones we'll come to that right so I

understand why Asian pains had to sort of move past gut >> yeah we briefly spoke about it but when you talk about gut said, "Yes, it is a a

boy wearing shorts with his hair disheveled.

Um, you know, holding up a paintbrush in his hand, paints dripping from it, and the boy has got a mischievous grin on his face. Now, let's come back to 2026.

his face. Now, let's come back to 2026.

You're getting your house painted. Is

that the vision of the painter that you have bro?"

have bro?" >> Right? I mean, you could say, "Look,

>> Right? I mean, you could say, "Look, that's not the painter. That's the

mascot of the paint." But at the same point, you know, that is the the the the vision of the company that >> honestly the the people that paint our homes,

it's it's still largely poor migrant workers from UP, Bihar, >> Madhya Pradesh, >> Jhark, >> Maharashtra.

>> Right. So I don't think the profile of those people has changed.

>> Yes. But the profile of the consumers and their desire of how they associate.

So you're absolutely right. You've

actually hit on a very interesting point. Right. Back in the 50s and 60s,

point. Right. Back in the 50s and 60s, there was still, I would say, some semblance of I think both the people getting their

homes and the people painting them.

There was sort of some semblance of equality. You could see them right. I

equality. You could see them right. I

think India has developed and grown much more and premierization has happened. So

in urban India now you want your paint to be much more premium and therefore perhaps you're not comfortable with the fact that I mean know at this point I'm just theorizing but that's a great point

that you mentioned that's why uh in 2002 they retire gut and they move to just typography Asian paints just the logo there is no more any

>> but by what a great gets them through >> 50 years >> yeah sitha It's impossible actually for me to

overstate the importance of community to Asian pins and so much of what this company becomes and has become till now is because of the community. Community

is what brought the four partners together. Community is what actually got

together. Community is what actually got them into the business in the first place. Community is what got them access

place. Community is what got them access to capital.

>> Yeah. Community is how they found many of their early employees who essentially work with them and help grow the business itself. Community is how their

business itself. Community is how their entire you know the dealer network sort of ended up becoming. So actually

community is the superpower that's carried them so far. In fact it's so strong a superpower that this company which was started in 1942 is by 1967

it's just 25 years later the number one in India. It dethrones Shalimar Paints

in India. It dethrones Shalimar Paints the company which has been the leader so far. It's headquartered out of um

far. It's headquartered out of um Kolkata and it's it's a company that's still around in 2026. So Asian Paints becomes number one in 1967.

It's an incredible run and honestly at this point I look back and I look at what could have been the reason for this success and the thing that comes out to

me most is like it's just community. And

since this is a promoterowned as what they call it right now or a founderowned company remember this is not a public company this company is still owned by the four founders.

>> Yeah.

>> So the next generation of their children starts to enter the business around this time in the 1960s and '7s. In 1965

Ashwin >> until then they've not been part of the business at all the next gen. No, it's

been primarily the first generation, right? I mean, three founders left now.

right? I mean, three founders left now.

In 1965, Ashwin Choki joins um >> Chi with an eye.

>> This is Chi with an I, right? This is uh right. In 1967,

right. In 1967, >> Ash Champakl's son, >> not Champagaklan. This is Chiman Lal.

>> Chiml, right?

>> Uh or Champagai and Chiman Bhai >> or Champak and they've right they're all kind of like crossing over at this point time. So in 1965 is when Ashwin Choki

time. So in 1965 is when Ashwin Choki joins Asian Paints. Uh in 1967 Ashwin Dani there's a second Ashwin in the

which is um Surikand Dani's son. He

actually goes to the US and joins InMont Corporation which we now know as BSF corporation. He's a chemical engineer

corporation. He's a chemical engineer right and the very next year 1968 he comes back to India and he joins Asian Pins as well >> and he joins a board later in 1970

itself. In 1973

itself. In 1973 Atul Choki, >> this is Champaglal Chok's son.

>> He joins Asian Paints. And in 1974, Arvind Wakil joins. So between 1965 to 1974,

one each of the four founders sons join Asian Pins. Wow.

Asian Pins. Wow.

But you know it's I feel it's not enough.

Community and family has brought them together and brought the company so far till now. But it may not be enough.

till now. But it may not be enough.

That's the sense that I get.

>> Yeah. I mean like you said they're market leaders by now, right? The

revenue was 4.5 cr in 1967 when they went past Shalom, right? So you're

market leader now. So like you said, community can't take the company much further.

>> This is a company that's grown and become number one in India. I mean if you really think of the paint market in India as a pie >> at that point in time,

>> right? And Asian paints has grown within

>> right? And Asian paints has grown within that pie and it has become number one.

>> It has grown the pie too.

>> It has grown the pie but think about it.

It's 4.5 crores as number one player. So

the pie is not that big, >> right? So the opportunity that lies

>> right? So the opportunity that lies ahead of it over the next many decades is not just to get a larger share of that pie is to but instead it's to

dramatically grow the pie itself.

>> Yeah.

>> It's can we grow the pi thousand times?

Can we grow the pi 500 times to do that community is not enough.

>> Yeah agree with you. uh you know what we call MOAT which is nothing but a distinct advantage right the community was that distinct advantage until this

point but then on it couldn't be right they needed you know a strong marketing and sales function and they need dealer relationships which couldn't always be

personal right you couldn't possibly have you know like 20,000 dealers and know all of them right but you do need to build >> you have kitchen relationship with 20,000 dealers.

>> Yeah. I I would love to meet a brand that has kitchen relationships with so many, right? And uh

many, right? And uh you need to know when to sell, where to sell, and you need to be able to stay ahead of your competition, right? And

that would require multiple distinct advantages which aren't just community.

So like you said, community is not going to be enough and not just capital. I'm

sure at this point they could raise a lot of capital if they wanted to. I'm

sure no bank would turn them down right now. It's the largest pay company. It's

now. It's the largest pay company. It's

been around for 25 years. I'm sure they already have relationships with banks.

So, no one's going to turn them down, but that's not going to be enough. And

you know, >> Yeah. Capital is not enough.

>> Yeah. Capital is not enough.

>> Yeah. Yeah. And you do have the second generation of the family already in the company, but how many is that?

>> And they're young. They're in their 20ies themselves.

>> And what? Four, five, right?

>> Four of them. Yeah.

>> So, you can't run a company of this scale with just family.

You need talent and you need lots of talent, right? But they are great.

talent, right? But they are great.

Gujaratis are great businessmen, not employees. So, where do they go for this

employees. So, where do they go for this talent, right? They're already down one

talent, right? They're already down one founder right?

>> Yeah. So, so I have a very interesting quote and this is from Salupraati's book. I found it fascinating and I quote

book. I found it fascinating and I quote him. He says the maxis laurate Ilabhatt

him. He says the maxis laurate Ilabhatt told me that for Gujarati being an employee was a distant third in priorities.

Working your own land comes first and running your own business comes a close second. So if you're a Gujarati I mean I

second. So if you're a Gujarati I mean I think we spoke about it earlier as well right? uh being an employee to someone

right? uh being an employee to someone isn't and and which is why you see so many Gujarati businessman because they ultimately want to learn the ropes of business and start their own business

right they don't want those salaried jobs for too long unless of course a salaried job is a step to understanding what the underlying business is and effectively at some point they can start something

>> yeah I'm sure I mean they knew I'm sure they knew enough smart people in the community in Bombay right and maybe even sura who could help them, but would they

be interested in sticking around at Asian Paints for too long? Right? You

they had to find other people.

>> And remember these founders themselves were running Neptune Trading Agency and they left to start their own business and their former quote let's say

employer or at least like you know benefactor tried to hold them back by offering equity and they didn't because they wanted to do their own thing. Yeah.

So they're very well aware of this >> and and I'm sure by now you know they I mean Chapakl Choki you know has been part of multiple industry bodies by now which were dominated by all the global

brands. So he knows what's happening

brands. So he knows what's happening elsewhere right he knows how global companies in pains and in other sectors are built with professional talent. Can

I tell you an example of another organization I won't say company that has been built on the basis of a partnership between a

Gujarati businessman and a professional manager and comes from Gujarat and is operating around the same time and is a great example of what professional talent can do. It's Ammun.

>> Yeah.

>> Right. So you have uh Vargis Kuryan who had returned from the US. He's a US returned engineer and he's recruited by Thuhandas Patel and I mean they're trying to solve the production uh the

problem of milk production in Gujarat and this happens >> you know 1949.

So this example has been playing out now for a while.

>> So it's visible to the founders of Asian PES. It's not just that look these

PES. It's not just that look these examples exist in global MNC's where they use professional talent but they're able to look at Gujarat they're able to

look at milk production and cooperatives and see what even an outsider a Malayali outsider coming from the US can so dramatically change something which has

been happening in India for what centuries like you know I mean >> yeah but they need they probably need a dozen Koreans >> Koreans Koreans >> as a Malali I take objection. You almost

said Koreans. [laughter]

>> Yes, you're right. So, so this this phase essentially is what I call I mean sort of the pre-booting phase. The phase

that they're about to enter into is this we've reached this far as an organization and to go far we have to dramatically expand the pie and we have to think of

things that nobody has thought of before. It's no longer enough to sign up

before. It's no longer enough to sign up more shopkeepers to create more brain brands. We have to do things that nobody

brands. We have to do things that nobody has thought of before. For that, we need lots of talent. But how do we get lots?

>> So, I think it something like this would have required recalibrating your whole approach to business. Right here, it's until now

business. Right here, it's until now it's been about control, right? I own

the business. I control the business. I

determine what's done. Right? The three

founders and their and their sons, right? Now, you're saying I'm going to

right? Now, you're saying I'm going to bring in a lot of people. So I know that I need to, you know, uh, give them some leeway, you know. So, you know what?

You're right.

But probably 10 years from now, because at this point, I don't think I think they have only progressively come to the realization that we need lots of talent.

I don't think they have arrived at what you're talking about. Yes. That in order for that talent to be successful, we need to give them autonomy. So at this stage they're like we need lots of talent.

>> They just need warm bodies.

>> Well, intelligent, smart, warm bodies who are not interested in just learning our ropes and starting competing businesses of their own. They would

turns out they would be wrong about that as well. But we'll come to that.

as well. But we'll come to that.

>> I mean back when I was a kid and we used to go to >> computer lab in school, you used to have these floppy discs in which you had to boot up the computer, right? Can you

take a guess where the word bootstrap comes from? No, I'm

comes from? No, I'm >> Have you seen those tabs behind boots?

Those things, those leather.

>> Oh, >> right. Which are behind So when you put

>> right. Which are behind So when you put your foot into the boots, you can use them. So there used to be this phrase

them. So there used to be this phrase called lifting yourself up by your own bootstrap. Millennial.

bootstrap. Millennial.

>> This is like a like an inbuilt shoehorn, right?

>> Well, a shoe horn is to allow you to Now I'm getting pedantic. It's to allow you to put your foot into the slide. You're

>> You just told me about booting up. You

know, you spoke like a true 50led no 50-year-old computer science engineer.

Is that is that what you are?

>> Well, all right. Let's let's as they say moving [laughter] on, [gasps] >> right? So this act of bootstrapping or

>> right? So this act of bootstrapping or booting is to essentially I mean at its simplest it is you're trying to achieve something much bigger by starting with

something very small like lifting yourself up by your bootstrap bootloading and that's what is about to happen to Asian pains right >> why why do you say that this is a market leader right

>> because I remember let's let's go back to that point about the pie and what share of it like it is the market leader

in a very small mediumsiz pie, right?

The dramatic expansion of the pie that happened of the painting market, right?

Happened because it loaded up this new operating system which I'm just going to call it the Asian paints operating system. There is no such thing. There is

system. There is no such thing. There is

nothing called less someone think that where can I find the Asian paint operating system and buy it. You cannot

buy the Asian paints operating system.

>> Not even the pirated one. you cannot buy the pirated one and we certainly do not condone that as well.

So Asian Pays needs to bring in a set of outside talent that's going to help it dramatically redefine the size of the pie and of course grow and gain a larger share of the pie within it for

themselves. And the first set of

themselves. And the first set of professionals that it brings in are interesting because they are many of them are technically very accomplished.

Like for example, one of the first people that it hires is this person called Jeram Mangesh Nadarni. He joins

him in 1952. He's the gold medalist from the university department of chemical technology now known as Institute of Chemical Technology. You know that

Chemical Technology. You know that college?

>> Yeah. I It's in Mumbai. I I've been walking by that institute which is at Matunga every weekend but now every time I walk by it I'm going to take a second

look because it's such a I mean you talk about IITs you talk about IM but this is such an influential college in the history of so many companies right Asian

paints is one >> and even Ashwandani ended up going to this college right That's right.

>> And MKkesh Amani >> Yes.

>> is an alumnest of this. And in fact, last year I think he donated 150 cr.

>> That's right.

>> To this college. It's very unassuming.

>> It is. It's you.

>> And back in the 1950s, it's one of the best places to learn chemical engineering in India. And Jaram

Nadkarnney is of course a gold medalist from there. He he was one of the best

from there. He he was one of the best polymer scientists of his time. So after

um you know I mean after he'd studied there he'd gone off to Europe if I'm not mistaken Berlin um for his PhD but then he abandoned it midway and he came back

to India and he joined Asian Paints and and I think that set off a chain reaction for Asian Paints transformation into a technologically advanced chemical

company right because up till now they've been a great paints company but >> it's all about I think all the all the disruption in distribution uh even product size all of that has

happened now I think begins the the phase of like you know R&D >> absolutely he literally sets up Asian PI's R&D lab the very next year in 1953

he becomes AsianP's first technical director >> he was the one who helped design um an architect it's Bandup factory

>> right and like you know I mean within that he sets up manufacturing lines to produce synthetic enamels like Appolyte,

distempers, oilbound distempers like um tractor and a bunch of other products all at a fraction of the cost of what international rivals would do which is

he's not just advanced technically but he's able to do it cost efficiently in a very Indian exactly right you know it's like one of those fortuitous things that

happened but they also say fortune favors the brave right Asian paints is nothing but a brave company. Um he also

you know is a you know a pioneer in something called rosinated alky resins.

Right.

>> These are things Yep. I I lost myself there. What are you talking about?

there. What are you talking about?

[laughter] >> Right. He makes them these are things

>> Right. He makes them these are things that essentially hasten the drying and hardness of paints once they are like you know applied right like you know I mean these are these are now the technical nature of what's actually

going into these paints. talking about

uh a period when you had to literally wait days for the paint to dry, right?

>> Again, I've been through that. Like I

said, I remember getting painted >> about these it would you would paint and then you'd leave the fan on and then the fan would be on for 24 hours and then sometimes 48 hours and it's still drying

and even after that you know powder would flake off from the walls and stuff like that. That's very different from

like that. That's very different from how it is right now, right?

>> Um so he actually sets Asian paints.

Jaram Nadkarnney sets Asian Paints on this I think dramatic track to chemical technological superiority.

>> Y >> he's there with the company for just 8 years by the way. He leaves in 1960 to start out on his own.

>> Well, certainly not as long as the founders wanted him to be around, but he's done enough for them.

>> Yes. Right.

>> He's been the catalyst that has given Asian pins a decided technological advantage. It's set up its R&D lab. It's

advantage. It's set up its R&D lab. It's

able to do things better than others, cheaper than others, etc. And that would just compound. He set that up, right?

just compound. He set that up, right?

And he's left. Um the other person which is very interesting, right? Because you

know who joins them in 1958 is this person called D. Maduker and his story is actually very interesting. Now

he's not a >> scientist.

>> He's not a scientist. He's not an engineer. He's not an MBA. In fact, this

engineer. He's not an MBA. In fact, this is not the era of MBAs at all. Right. Um

he was actually working as a lecturer in political science.

>> Right. So uh

>> who would have seen that coming?

>> Well, no one.

>> The company decides to go hire from the Institute of Chemical Technology and then you hire a political science graduate >> from Osmana University in Hyderabad.

political science graduates were then employable.

>> Yeah.

>> Well, yes. Like we are also in 2026 in the era of post AI where I mean that question could be widened to a lot of degrees and professions. But um there's

something about like I think Champaglal Choki especially is a is a great judge of talent or perhaps it's also the fact that he's the only one on whom we have great history available because of

Anupam Gupta's book but he spots uh de Madukar and he hires him at the age of 34 as I think it's loosely into an executive assistant e-year-old

>> and then over the years Madukar rises he performs and rises up to become an executive director, right? Additionally,

>> she gives him imparts all this wisdom because he knows he's not going to go and start up.

>> Well, um surprise surprise, Madukar leaves in 1971 and he ends up joining British Paints.

>> Oh no.

>> Uh where he ends up becoming CEO and uh subsequently the managing director.

Right. So that's there. But again,

Madukar during the time he's there from 1958 to 1971 does a lot of stuff. He actually like

you know I mean I mean if if Jaram Nadgarni actually set Asian pains onto the path for technological prowess on the chemical engineering and sciences

side I think Maduka did it on the organizational side and I'll explain why that as well right like um >> but I think the the the person who had the most

influential role in shaping Asian Paints as a company run by professionals. right

is someone that Madhukar brought to Asian paints. A friend of his from

Asian paints. A friend of his from Osmana University, right?

>> Osmani University again >> again.

>> K. Raj Gopalachari. I mean everyone refers to him as Chari, right? Uh and uh he would go on to become this shock

absorber of sorts, right? He sort of stands between the he's the go-between, right? You have professionals all this

right? You have professionals all this young talent that Asian Paints is hiring and then you still have the family right so he is the go-between and someone I

met said that he is responsible for creating what is truly the most professional rule book for familyowned businesses in India large family-owned

businesses if there's one person who's to be credited with this it's Raja Palachari >> very interesting right because and I can go back and I can think about it with

the benefit of hindsight. You you look at this company, it is a founder company. The founders own 100% of the

company. The founders own 100% of the business. Their word is gospel, right?

business. Their word is gospel, right?

And [snorts] they want to modernize and they bring in a bunch of people. Now,

you do require someone who's able to both speak the founders's language.

>> Yeah.

>> Right. of let's say frugality of growth of profits of revenue and at the same time be able to interface with the aspirations of this newer talent that you're bringing in because we're working

in this company what is in it for us what's the future etc and that person is of course >> I mean he's exactly the kind of executive they need at that point they don't though they don't know that know it then he stays on with the company

until he dies >> that's right I mean that's like a >> find of the centuries sort almost 50 years right and completely reshapes the company.

>> Then there's another person called CV Abraham who joins in 1960. He joined

them from Bangalore. Now if you notice like you know these are all the talent is coming from different parts of the country and I think it's credit to Asian Paints at this point that they have started looking outside of closed

networks in Bombay or their families itself. So it's coming from it's coming

itself. So it's coming from it's coming from Hyderabad it's coming from Bangalore. Again CV I Abraham joins in

Bangalore. Again CV I Abraham joins in 1960. spends 32 years with the company,

1960. spends 32 years with the company, >> right? So, this is a company where by

>> right? So, this is a company where by and large once it finds great people, it's able to give them the time and space to just stay with the company.

Like, you know, it's a kind of company which is the envy of anyone. There's

another person called Bipin Javi who joins in 1962. Interestingly, this

person, he's a he's he's a CA, chartered accountant and a CS, a company secretary, and he's a double graduate in arts and commerce. also happens to be Champaglal Chok's nephew.

>> So I'm not surprised he stayed on for 35 years.

>> Do you want to guess when he left Asian Paints?

>> Uh I guess when Champagl sold the >> bang on. Absolutely. These five people together.

Uh right would end up essentially becoming the bootloader or the booting phase of Asian Pain's operating system.

I'm amazed at how well they hire, right?

It's not like I mean they do know the value of networks. I'm sure people that are around them, they know what they can offer, but here you're bringing on board people from different parts of the

country, right? They have nothing to do

country, right? They have nothing to do with the paints business, right? uh they

know nothing about retail distribution but you still see something in them and you do hire them and they go on to change the trajectory of the company

right that sort of that sort of foresight is what is truly commendable about this company >> I'm thinking is this is this another squeeze moment for the company but in a

different sort of way in the 1960s again it's not boxed in in the sense that it's number one you literally cannot say that it's boxed in but it realizes is that the current construct it has to break.

Therefore, it has to think outside the box. So, full credit to the founders in

box. So, full credit to the founders in order to be able to do that progressively in stages because many companies are able to do this once in their lifetimes or twice in their lifetimes. They've got their backs to

lifetimes. They've got their backs to the wall and they pull a rabbit out of the hat and it's a magic moment but then never again.

>> Yeah. But I think to Asian Pain's credit they do it again when they bring in this set of and that's not even all of it because these people then the initial I

think these five key people and then a few other people convinced the founders and the founders let themselves be convinced to their credit >> to make the ambit

wider and to bring in a much broader pool of talent on a much more sustained basis year after year after year which actually I'll tell you is the secret

source for Asian pains that they were about to step into.

>> I wouldn't disagree there at all. You

know this is not you talk about HUL which is a similar sort of company right people join the company straight out of B school or you know and they stay on for decades right but they have the

global playbook it's not an Indian company though I mean a lot of people would think it's an Indian company because it's been here for over a century but it is a global company it's an Anglo Dutch company now right this is an Indian company it didn't have access

to any of these labels I'm sure you know it must have as an outsider it could have seen all of these things right but it still felt that it had to do it and

it bet on these young exact 20somes and they bet on like hundreds of 20somes, right? And we have the Asian pizza

right? And we have the Asian pizza today.

I'd like to just point out how you know counterintuitive and interesting your point is because today when we talk about management if you look at 2026 or

the years leading up to it we talk about we're in this place where globally the best CEOs that we know of anyone from like Elon Mus to Peter the

etc say look education is not a marker for success in fact we will pay people Peter Theiel has this foundation where he pays students to quit college and

instead go and work and learn right so so the pendulum has swung a long way where today people say that look it's not just MBAs who know how to do something it's not just engineers who do anyone can be a great but I'm saying

that's today >> but if you go back to 1967 and said like we're just going to hire >> this this was a country where literacy was not very high right so you would automatically value someone who's not

just finished >> the founders themselves were not >> school dropouts right someone who's not just finished school but college and not karnney went abroad for his PhD right that's

>> gold medalist one of the reasons is like when you bring in someone as smart into the company is that why he left within 8 years because he figured out and he left to start his own company by the way

>> oh >> right so but again like that's these are all I think points of conjecture but I think at this point they are poised to

become something dramatically different to in to to bring in and such an influx of talent that will change the very nature of the pie and of the

organization itself. So we're at this

organization itself. So we're at this pivotal stage in Asian Pain's journey where they've got the first set of outside professionals who are really talented to

come in and start transforming the organization and the first set now needs a second much larger set >> of professionals to come in and who can

do many many more things that they don't even know as of yet.

If only >> they could find them somewhere. Yeah,

>> this is 60s India. So where do they find them?

>> Yeah, I mean I think it's as if the government sort of uh you know heard their sort of plea you know because this was NU's time and he was talking about temples of modern India. I think it was

in the context of >> not literal temples but temples of modern India. What's the difference?

modern India. What's the difference?

>> He was talking about I mean it's a it's a newly independent country impoverished. So he's talking about

impoverished. So he's talking about large infrastructure projects like dams and such and then the IITs had been set up what a decade earlier I karapur uh in

the early 50s right so you already had this um institution which could produce engineers to build these dams and to to

to you know uh to work at uh public sector companies right but they needed another kind of talent right again for public sector companies right managers,

right? Where do they find them? They

right? Where do they find them? They

don't I mean at least IIIT and some of some other engineering colleges were producing these engineer engineers who could uh work for these companies but not managers. So that's when the

not managers. So that's when the government actually invited professor George Robbins of the graduate school of business at the University of California

to actually put together a plan of sorts for an all-India institute of management studies.

Thank god they didn't name it finally like as >> yeah it turns out yeah as yeah but >> today that's the allindia institute of medical sciences thank god for that

>> and based on his recommendation I am Kolkata the Indian institute of management kolkata and I am Ahmedabad are set up in 1961

right and the central government was supposed to fund this while the states the respective states in which these colleges were set up were supposed to provide the land, right? And what's

interesting is it's a it's a it's a three four-way collaboration between the government and the Ford foundation which gave the the government a grant and uh

in the case of IM Kolkata it was MIT Sloan school of management and with >> that's the college that's the US college with whom the partnership was established that would work to set up the

>> yeah because obviously we had no B school then right so you had to >> so the entire concept of MBA itself at this point would it be fair to say is an imported concept.

>> Yeah. Yeah. I mean what what we didn't know anything about that. We didn't have that at all. Right. So you know and and with Ahmedabad it was Harvard and again Ford foundation. Right. And that's how

Ford foundation. Right. And that's how they set up these two colleges. Right.

>> Part of temples of modern India >> which they would become later right. And

more importantly, you know, for Asian Paints, they would turn out to be the the greatest pools of talent that they'd ever come across.

>> How convenient.

>> Yeah. Like I said, it's as if NU and the government sort of heard their plea for talent. Earlier talked to you about a

talent. Earlier talked to you about a Mallayali Gujarati partnership which turned out to be fantastic which was

Amul Dr. Argis Kuran and um Tribundas Patel do you know that I am Ahmedabad's first full-time director uh professor

Ravi John Matai he was also a Malali um he was earlier working at IM Kolkata as a professor he was poached and brought to I am Ahmedabad by Dr. Vikram Sarabhai

who had actually helped set up uh Imabad and you know um he was his director not the full-time one and of course and the most interesting thing is that he's

actually uh professor John Matai is actually a cousin >> oh >> to Amul's Dr. Korean >> two malarities in Gujarat >> in Gujarat creating institutions that

last to this day Amul and I am Ahmedabad how interesting is that >> temples of both temples of modern India >> you I bet you didn't think of Mallayali Gujarati partnerships before that do you

but now I bet you going to unthink it >> never no [laughter] >> so both of them start u their setup in

the same year in 1961 the first batch from both colleges graduates in 1964 right and Asian Paints I mean obviously

it it doesn't visit um in 1964 itself but it's not too far off Asian Paints visits I am Ahmedabad in 1968 just 4 years after its first batch has

graduated uh Champakl choki and D Maduker visited this is why I was telling you that D Madukar is important because uh um research says and it's

specifically I think um Anupam's book as well mentions that D. Maduker was the one who convinced uh the founders of the need to go to IM

and hire MBAs. You have to remember back then from these from the point of view of founders they're like what are these MBAs? Why do we need them? Why do we

MBAs? Why do we need them? Why do we need to pay so much money? Why do we need to go to this college and hire them from there? What do they know that like

from there? What do they know that like you know I mean this is this doesn't chi and Elon Musk have the same view.

[laughter] >> Yes. Yes. Life and death apart five

>> Yes. Yes. Life and death apart five decades apart three decades apart. Yes

you're absolutely right. Uh but then yeah I mean but to to to to be fair you know chapli hadn't seen anything with MBAs right? Elon Musk is saying this

MBAs right? Elon Musk is saying this after what decades of MBAs. He hadn't

seen anything like that. So he's like ah show me you know where's the proof of the pudding.

>> Um so anyway to come back to >> so they go to both IM and >> no they don't they go to IM Ahmedabad probably because they're in Bombay.

>> Okay >> the other IM is in Kolkata >> which not only is very far from where you are. It is also the geographical

you are. It is also the geographical >> center of power for your original rivals. Shalomar PES British Pains etc.

rivals. Shalomar PES British Pains etc. They're all headquartered out of so if you're one of the four co-founders of three now at this stage of Asian paints

in your head you still have that thing of Kolkata you know on the map it's like here be enemies >> but they don't they don't wait too long uh >> that's but I was just trying to answer

that why I am Ahmedabad first cuz it's closer cuz it's conceptually more related they go to IM Ahmedabad they hire two MBAs in 1968 itself but very

soon within the first decade etc. they rise up through the ranks and become one of the top five recruiters from Imam Ahmedabad.

>> Yeah.

>> Right. And um they 3 years later I mean 1968 they go to Immedabad 1971 they go to IM Kolkata right and they hire from

IM Kolkata itself.

>> So what 25 26 years later you go to that exact college? Uh well I went I

exact college? Uh well I went I graduated in 2001 and they went to IM Kolkata in 1971.

So yeah >> but was your u email after graduating from amalcata ever rohin.c

because I I did come across a guy whose email was first name.kgp@gmail.com

iatkgp@gmail.com was >> I am as frustrated as you are with people who try to attach their college to their identity. I am not one

[laughter] of those people. So I would like to reassure you at no point did I have at no point I'm proud to say categorically no uncertain term at no point in my entire career have I heard

the had the words I am see in my email on my business card anywhere etc. Right?

But but to kind of come back to IM's this is where it starts. This is the beginning of I would say an incredibly

innovative run for Asian pains where it kind of accesses this wellspring of uh talent that is available to it. Um and

factoid we talked about Biji Kuran um earlier who went who joined and then left. He was one of the first people

left. He was one of the first people that they hired from Immedabad. If I'm

not mistaken, his salary was 750 rupees and that was considered a fairly princely salary.

>> Must have been Yeah. 750 bucks then.

Yeah.

>> Yeah.

>> Must have been a lot of money. But they

they were not the highest paying uh recruiters, right? I guess even then

recruiters, right? I guess even then they weren't, you know. Uh

>> well, I don't have the records for that.

I don't know that. But I'm guessing not because I like >> but when you were in college also I I guess they were not among the >> Asian pains has never been one of the

highest pay masters on campus yet it has been consistently one of the most sought after jobs on IM campuses typically um

you know I mean um recruiting in IM's and and most uh business schools is based on day 0, day 1, day 22 etc. They're typically a day one company and it's highly sought after.

>> That's a bit of a that's a bit of a contradiction, right? I mean the ones

contradiction, right? I mean the ones who go on day zero like consultancies, they do tend to pay the highest salaries. So

salaries. So >> yes, >> so why is Asian pain so sought after if it's not if it doesn't pay all that well?

>> I will tell you that answer as we go deeper into what made this partnership between IM and MBAs and Asian PES so

successful. But before I tell you that,

successful. But before I tell you that, do you know that most Gujarati actually consider themselves MBAs?

>> Yeah. Yeah. I know this MBA.

>> What is that? It's a

which means I know everything.

So they believe that they're born with it, right? It's ingrained in them. So

it, right? It's ingrained in them. So

why get an MBA, right? when I already know how to run a business, how to make money, what more can a B school teach me?

>> Funny as that phrase is, it is also very if you go back and if you look at like the list of businesses which are run by Gujarati businessmen in India, you would say, yeah, I mean this is

right.

>> Yeah. All the four does not have an MBA.

>> Yeah. But they they they all had Gujarati MBAs, right? All the four founders. But they still went and

founders. But they still went and recruited the other kind of MBAs as you >> that's right because at this point Asian pains doesn't want the Gujarati kind of

MBA which is I know everything right because it doesn't want that because we spoke about this earlier right it doesn't want people who come into the business to spend 2 3 4 years to

understand how the business is run because in many cases many of them see oh I get how this works I can do this better myself or keep a larger

percentage of the profits for myself if I do this on my own. Right? But I think they I mean by going to I am Ahmedabad and I am Kolkata I think they sort of

solved for that because they didn't have to worry about it's not 2025 right when someone from I am Ahmedabad or I am Kolkata would want to be a founder right

you're talking about a time when jobs were scarce right the ones who wanted to start up anyway started up >> I I would actually argue that even today

that's not true uh many of of the U MBAs passing out in recent times do not want to be a founder and one reason for that is many of them take on large loans and they've got to repay those large loans

so they're fairly riskover so many of them think that I will spend the first four five years of my career earning high salaries and paying off my loan >> and then I will become >> but that's a thought they at least

entertain right I mean given what's happened but not back in 1967 >> right if you wanted to start up you could start up anyway like these four founders did right So I guess they knew

that this is the kind of talent that's not going to leave to startup. Right.

This is the executive carter that we need.

>> Yes.

>> Right. And and

>> and then they train to be that. U this

is a point where I actually want to read out a very interesting um anecdote from Salraati's book and he says that when a Gujarati businessman is looking for an

employee he would always hire a marathi candidate over a Gujarati candidate because a marathi candidate would work for him whereas a Gujarati would learn the intricacies of the business and compete with him in the future right this is the point that I was making earlier

>> this is in the context of Bombay I suppose you know >> yeah absolutely like you know you could replace the heard Marati there with Mallayali or like you know from some

other state or something like that right >> at this point Asian pains actually wants the second kind of MBAs MBAs who are motivated by let's say learning and

growth not necessarily wealth those who want to or just replicating their employees business they want what the new word is

which is masters of business administration not Right. Therefore, when in the 60s, late

Right. Therefore, when in the 60s, late 60s, early '7s, they stumble into the IM and the IM start churning out these, you know, two-year trained managers. It's

great because young MBAs are containers of ambition, of curiosity, of knowledge, learning, smarts. They're trained to

learning, smarts. They're trained to expect salaries. They're trained to to

expect salaries. They're trained to to be honest. They're trained to have high

be honest. They're trained to have high ethics. Right? In many ways, they're

ethics. Right? In many ways, they're sort of like these learners, planners, executors. You can almost think of them

executors. You can almost think of them as Swiss Army knives that a business can deploy within them. You figure this out, you run this business, you hire these people, >> you make them sound like mercenaries,

you know.

>> I mean, you would not be far off from that in the sense that that's what a lot of MBAs like, you know, would want to be as well that like, you know, I mean, pay me really well and ask me what to do and

I'll do it for you. And a lot of companies also look at him in that way that you spend two years um at an institute and you're like really smart I'm going to throw you at a problem

because it sort of works both ways right so for Asian pains this influx of ambitious fresh-minded ethical

salarydriven people who want to learn and innovate is a great thing because it brings in this you know people who no longer accept the

system as it is, right? Why is the pi like this? At the

right? Why is the pi like this? At the

margins of the pi, it starts to kind of like, you know, say you run this experiment, you change this, you do this. Most of the times when you're

this. Most of the times when you're hiring, I mean, up till now, if you're hiring through your networks, where do you hire from? You hire people who are >> close to you, friends and family in the

same town, in the same city. For the

first time now you're going to these campuses where people from all over India have unmarred themselves from their homes gone and studied there and are ready to unmmer themselves from

those cities and go to any cities. So in

in that sense you've got this mobile talent.

>> Yeah.

>> Which is which doesn't consider this a punishment.

>> Yeah.

>> Right. For most people if they've lived in their home city all their life their family is there their friends are there and you tell them every two three four years five years I'm going to post you to different part >> and you need these people to go to sangi

kapur >> absolutely >> right >> so to the MBA and especially if you cons you know kind of condition them from day one this is part of the job

>> yeah but they also you know they wanted them to be in different parts of the country in rural areas which weren't obviously the most livable places uh but they needed all these people to go to

these different places but they still wanted them to understand the Asian paints ethos right so which is why we spoke to a number of people and everyone

talks about the the initiation into >> the induction >> yeah Asian paints right it doesn't matter what you've been hired for right what you're going to end up doing you need to know certain things about the

company right this is our business you may be in in finance finance, you may be in IT, you may be in ops, but you need to understand certain basics about the

business of paints, right? So, everyone

is, you know, made to do marketing, sales, they made to work in factories.

So, you know, we met people who still remembered all that they learned, right?

And there's something called bomb which kept coming up, right? Which is what >> the branch operating manual >> manual, right? And people know what's in it.

>> It is this tome that existed. This is

we're still talking pre uh computerization days in the sense that not everyone had a computer. This is

pre- internet days. So when you're sent to a branch as a new MBA or like a fresh MBA and you're like asked to kind of either like

assist with the existing branch manager or essentially run it. So you have these really thick books which are called branch operating manuals or bombs which have earlier talked about the fact that

there was a rule book for professional management. This is the rule book for

management. This is the rule book for running a branch >> and it contains everything >> from what kind of business that you can do, what kind of discounts you can give, what kind of vehicles you are allowed to

kind of >> stock units you have, right? Uh I mean people even remember 0014 is is the code

for tractor synthetic dis dister and 0908 is for standard white color. You

know what? I have heard this from multiple people that I've spoken to.

Almost everyone who's joined Asian paints sort of has to go through this induction and and they have to memorize the paint codes for the paints. So,

everyone will tell you, "Yeah, yeah. The

first three letters of the paint is this. The next three letters of the

this. The next three letters of the paint is this." And that is incredible.

And these are >> people ask me to be quizzed. Do you have the manual on you? You can ask me anything. I'll tell you. I quit Asian

anything. I'll tell you. I quit Asian Paint like 20 years ago, but I can still tell you. I cannot remember the phone

tell you. I cannot remember the phone numbers of you know my family members and these are people who haven't worked with Asian paints in 20 years and they can tell you paint codes

and and this is fantastic right because and that's not the only thing actually I mean um when they join for the induction

they also meet with I mean the founders back in those days and the management and they're brought and put up in these hotels and they're told about what Asian

Chimp's culture and ethoses. They're

told about kitchen relationships.

They're told about look, you're entering a business where you think you may be the smartest guy in the room because you've gone to an IM, but please remember the person, the shopkeeper that you're dealing with. Maybe they're the

second generation of someone who's been running that thing for the last 30 years. They know 10 times as more than

years. They know 10 times as more than you do. So, always be aware of that. So,

you do. So, always be aware of that. So,

they're essentially kind of punched down, punched down, grounded down.

Someone actually used this phrase which is very interesting. They said

showmanship is never tolerated Asian beats right you know someone who keeps talking a lot straight out of B school for instance without really

understanding the what the terms mean right such people are shown the door sooner than later or they leave because such is the quality of talent there and

like you said everyone is made to understand that they have a long way to go. There are certain things which are

go. There are certain things which are non-negotiable right about the business about how they do it and how to treat shopkeepers right painters right everyone everyone in the ecosystem

everyone in the value chain how they need to be treated that sort of drilled into them the moment they join the company and decades after they leave the

company they still have it in them >> absolutely do you know that they're expected new uh people who go through the induction um in Bombay um and I

think the hotel they're also supposed to learn the chemistry of the paints right so it's a fairly intense induction and they're actually supposed to there was a

area I think if it was in the Bandu factory or somewhere near which has been set and marked aside for painting where a new inductee would be asked to

paint a wall and next to him there would be an experienced painter and they would be told to use specific techniques techniques, specific paints and then they would be like at the end of two

days my wall looked like crap whereas the professional painter did a much better job and that kind of >> this is like ground you play tennis with Nadal.

>> You're getting a you play tennis?

>> No, I don't. [laughter]

>> That's the first step. The first step towards being forced to play tennis exactly like that, right? I'm straight

out of college. I know nothing about paints. I'm made to paint a wall right

paints. I'm made to paint a wall right next to someone. Why do you think why do you think they did that? Why do you think they did that >> or why they do that?

>> This is their idea of throwing them at the deep end >> and showing to them that you know nothing, >> right? It's in some sense it's the same

>> right? It's in some sense it's the same continuation of the trend. Ground them.

Ground them. Ground them. You may be smart but you don't know this business.

You think your cat's whiskers. Look how

you're painting. You think something as basic as painting and when we give you the supplies you could do it as well as someone who's not nearly half as educated or you're not even close. Look

what you've done. So I think at the end of it what when people emerge from that by the way there is itself this a bunch of people that I spoke to who worked at Asian paints for various years ranging

from 5 years to 10 years etc say that there is this sort of broad theme that connects the people that Asian paints hires typically I mean I don't know if

it's changed now because many of the people I was speaking to was from like maybe less 10 years ago 20 years ago etc which is in some senses I'm using a word which is used typically in many of the ions. It's country.

ions. It's country.

>> Country. Have you heard that word before? When you call someone country?

before? When you call someone country?

Yes, it is. It is. It is derogatory in the sense that >> it is like calling someone a villager in a derogatory sense.

>> But like in this case the when you say you know this person is a little country it means that they they literally many of the times they're grounded.

>> They they don't come from >> you know you know Delhi, Bombay, from fancy colleges etc. they also come from smaller town this thing they are

grounded etc like so they there is a deliberate effort to hire people who are grounded themselves and who've come from the wider milu of India

>> so Rohan Asian pains has its first set of MBAs from IMA and IMC right we already talked about how they given the

branch operations manual right and they sort of told how Asian paints works and how They're supposed to treat shopkeepers and whatnot, right? But

they've hired these Swiss Army knives in your words. Uh they're supposed to solve

your words. Uh they're supposed to solve some of >> Show us the results now.

>> Yep. Showtime.

>> Okay. Yeah.

>> So, one of Asian Paint's biggest problem at this point is, you know, getting payments on time from their dealers. I

mean, they love their dealers, right?

They have kitchen relationships with them, but payments continue to be a problem, right? They the they have a

problem, right? They the they have a system now where they they give uh a credit period of 45 days, right, to all retailers and up to 60 days to some of

the larger ones, right? And to get them to pay faster, they actually gave them a 1.5% cash discount, right? Which means

that you know what they do is when they raise the invoice the deal the to the retailer, they actually deduct it, right? And tell them you have to pay us

right? And tell them you have to pay us within 21 days. So if I'm a retailer and you're Asian paints and I bought paint from you worth 100 rupees, you're saying

you'll invoice me for 98.5 rupees >> and I have 21 days to pay you for >> Yes. Yes. Right. This wasn't working

>> Yes. Yes. Right. This wasn't working because dealers would get the discount, right? And

right? And >> but dealers are smart. I'm assuming many of them are as good businessmen as well.

It's free money. Yeah.

>> Yeah. And they wouldn't pay up on time.

They would take 30, 40, 50, 60 days, right? And this was a problem because

right? And this was a problem because this affected Asian pain's cash flow. So

they told Biji Kuryan whom we've talked about earlier and a couple of other IM grads to come up with a solution right >> you know this this is the kind of thing

that you hire these new set of people for and I think from the outside we don't understand it which is here is this problem so today we solve it using

LLMs right here is this problem solve it for me in that era Asian pains threw MBAs at the problem and say hey you now go and solve this for for us. What did

they do?

>> They come up with something. Obviously,

the the name is not something that is going to sort of go down in history as being super memorable. It's called

>> It's not gut.

>> No. So, RPPD is regular payment performance discount, right? It's a

mouthful, right? It doesn't really have a great ring to it, but it is what it >> Why is so great?

>> Why is it so great?

>> Yeah.

>> The discount?

>> No. RPBD. Why is Why is it so great?

>> I'll tell you why. because they up the discount from 1.5 to 2.5. They extend

the credit period from 21 to 30 days.

But this is not what actually makes it so successful. What they do is they tell

so successful. What they do is they tell dealers, I'm not going to give you the discount upfront. Okay? When I give you

discount upfront. Okay? When I give you the invoice for the paint that you've bought, I'm not going to deduct that 1.5% or 2.5% now and you know give you a

bill for 97.5.

you have to pay me the 100 bucks that you owe me, then I'll give you your discount. Right? So now they've actually

discount. Right? So now they've actually shifted the responsibility of payments, collecting payments from themselves to the dealer,

right? And the dealers know that they

right? And the dealers know that they get to obviously save more if they pay on time. And there's no getting around

on time. And there's no getting around the fact that you have to pay on time.

I mean it is a beautifully designed system because I'm trying to think of it from the dealer's point of view right because I'm sure that's what they're trying to figure out that how do you break this system and it is so

beautifully designed because in order to be eligible for this you have to pay us within 30 days otherwise you never get it from us because the discount is given

subsequent to your payment >> and if you never make this payment on time you never get that discount >> I think they just changed the incentive structure.

>> They were chasing the dealer earlier for on-time payments. Now the dealer is

on-time payments. Now the dealer is chasing them for discounts after making on time payments.

>> Yeah, it's been 29 days. It's been 30 days. Please take my money and I'm I

days. Please take my money and I'm I want my discount. Right. That's that's

exactly what happened. And it turned out to be super successful. Right. Their

cash flow became a lot more manageable.

Just this one I don't know where they got this insight from, >> but it's so sharp, right? and it

immediately turned around, you know, it immediately fixed their problem.

>> Now, think of it, right? Um, I was speaking to one of the people who worked at Asian Paints and and I'll tell you exactly what he said and he was talking about RPPD, right? This is ingrained

into your bloody DNA if you're an Asian Paints guy. You wake up anybody nation

Paints guy. You wake up anybody nation pains middle of the night at 2 am and you ask them for the formula of RPPD and they will tell you that >> just like the the the tractor distemper code.

>> Yeah. Tractor distemper code or or generally bunch of other codes as well.

By the way, there's backstory behind it.

Right. This is the reason why I think a lot of these are so structured where each code has the first three digits is this because this is pre-days of computerization etc. where they're

taking orders on phone, they're writing invoices on this thing. So they cannot afford to make mistakes on those. So

therefore by I mean and this this person was explaining to me that look there's a reason why these exist. There's a reason why those numbers are in those way.

There's a reason why everyone memorizes.

There's a reason why everyone knows it so that no one will make a mistake. No

one will say I ordered for a different paint. I was sent a different paint.

paint. I was sent a different paint.

Right? And this is preerp and error correction etc and all that. So there's

certain you know I mean it's a business built on first principles right they're sort of going and improving things bit by bit as they go along >> so I mean we talked about Biji Kuran

right we've talked about him multiple times so far >> but he is not the only you know stretch by stretch >> so there is uh I mean they're all hired

roughly you know around this time there is PM Morti right hired in 71 and uh he would end up becoming the first professional CEO of Asian Paints

right in 2008.

>> He comes from IMC.

>> Yeah. And then there is uh KBS Anand who would succeed PM Morti right and there is Bhat Puri >> also KBS Anand also I am Kolkata >> I am Kolkata and then Bhat Puri from I

am Ahmedabad who was hired in the early 80s right he didn't stick around for as long as the other two he left for Cadbury in 98 and then went on to and

then joined Pilite and went on to become its CEO right and Pitoolite itself got into paints just before he quit

Right. And Bharat Puri was instrumental

Right. And Bharat Puri was instrumental in Asian Paints marketing campaigns in the 80s and '90s. Right. Uh I think he worked very closely with Push Pande on

some of their campaigns. So all these people who who sort of reshaped Asian Paints were all hired in this 10ear period in the 70s and ' 80s. But you've

got all these people, right? But

retaining them is not just about money, is not just about foisting your culture on them. So they have to learn the Asian

on them. So they have to learn the Asian paints way of doing things, but there has to be something else. Absolutely. So

we're in the 70s right now. And if you if you're Champaglal Choki or two of the other remaining founders and you're Asian paints or you're their sons who

are in um the business in the second generation and you're sort of thinking ahead for the next 20 years and you're wondering how do I get people who will stick with

me for the long run and you're looking at the first set of professionals that you hired um I think uh Jaram Nadkarnney who left and then started his own

company and D Maduk who left and went to British Paints. Then you're looking at

British Paints. Then you're looking at the second generation of professionals that you hired which are the MBAs of which Biji Kuran left and a few others

also left. So you're sort of now

also left. So you're sort of now questioning that entire assumption of okay I think we've managed to solve for hiring people at scale because remember

Asian PES at this point is now going to IM is one of the largest recruiters.

It's hiring dozens of MBAs a year.

>> Yeah.

>> Right. Literally dozens of MBAs. So,

it's got this massive pipeline of talent coming into it and it trains them >> and it coaches them and it sends them to these branches and if they work well

they get promoted and promoted and they're still not getting paid the most.

Actually, this is a very interesting thing. I must say this like you know I

thing. I must say this like you know I mean this is from Anupam Gupta's book.

Uh this is a quote from Champagakli which is very illustrative right?

Someone once asked Chaklal Choki why Asian Paints does not pay the managers well. He answered that whilst we are the

well. He answered that whilst we are the best pay masters to salesmen to clerks and laborers we don't need to pay the managers well when I bring or very

highly when I bring these boys from business schools there is a price that they have to pay to get experience here.

I know some of them will leave after getting trained because they will be offered a better salary within the first 3 to 5 years of joining but those that remain with me over the longer term will

be looked after well by the organization on all fronts.

>> Right?

>> So the interesting point is I think there is a at this point there is a sophisticated understanding among Champakl and the founders that look if you're going to bring all these smart people here we cannot expect that all of them will stay.

>> Yeah.

>> Right. Many of them will leave but even if they leave after 3 to 5 years I think they might have done their work right >> but he also knows that he wants a whole bunch of them to stick around.

>> Absolutely. Right. It's not that he's fatalistic about it saying >> the chips fall where they fall. He does

realize that >> you know I mean there has to be something more because he says that it's not money.

>> They're not throwing money at the problem right?

>> If they're not throwing money >> they don't have esops. Well this is 70s right? Nobody has ESOPs. Uh to be fair

right? Nobody has ESOPs. Uh to be fair to them, they would not have that later as well. We'll criticize that at the

as well. We'll criticize that at the right moment in their history, but at this moment in history, I don't think it's right to criticize that.

>> So they're they're not paying the highest salaries, right? They're very

clear that these people are coming to them as day one candidates because Asian pins is actually one of the places where they learn a lot. So he figures it out

saying that if that's what causes people to come to us then we need to double down on that as the thing that makes them stick around. It's really the culture.

>> Yeah.

>> How do we create something which is not salary and obviously which is not the path to CEO as well because this is still a um founder you know held organiz

closed organization. There is no path to

closed organization. There is no path to the top because there is a second line of family as well. Right? So how do you bring in all these smart people you know and as they progress through the system

they will realize that there is some kind of a ceiling at some point beyond which they can't grow and they'll leave.

What else can you device that makes them so happy within the Asian paints ecosystem that they're like I don't want to leave this company.

>> Yeah.

>> And that's culture. I would also say it's talent density, right?

>> Chicken and egg. How do you keep talent density if there is [snorts] nothing to hold on to that talent density? Right.

Like talent density is you're right.

You're absolutely right that they go and start to kind of >> prime the organization with talent.

Yeah.

>> Right. Like it's it's a sort of like you know I mean if you don't do that then what's the point of building culture or if you don't build culture how do you hold on to that talent density? So it's

that talent density and then they build this incredible culture which now I go back to that point remember you were saying 10 years ago like you know I mean you know in the 50s when you were saying

that look what's the point of bringing these people if you're not going to empower them and I told you there would be a point in time where this would make sense this is that point in time

>> it's the ' 70s now and they realized that we need to bring in we've brought all these Swiss Army knives we've empowered them we've trained them we've sent them to a branch branch offices, some of them are in sales, some of them

are in uh technology, some of them are in finance. They need to now do their

in finance. They need to now do their own thing. Yeah. So they start creating

own thing. Yeah. So they start creating this like >> I think they also to be fair I think the the the whole sort of rule book here or rather the uh what the Asian paints

culture is going to be now wasn't just set by uh you know the founders right you had people like Chari Raj Kopalari

right again a professional right so he knows what these young recruits from Ahmedabad and Kolkata are looking for right what would make them happy, what

would make them stick around for for for you know decades right that a lot of um you know the early executives were from the southern states right he said Asian

paints has a very south Indian DNA right and he said >> that was very interesting a Gujarati company to have a very south Indian DNA >> yeah by that he meant you know do the

right thing and results will follow right operate with a strong conscience these are his words Right. And he said Chari stressed on the ethical way to

deal with customers and trade unions.

Right? And he sort of contrasted this this with what say Burgger and Narolac were doing. He said they had a very

were doing. He said they had a very north Indian DNA very opportunistic.

Okay. If there is an opportunity to make a quick buck here, why don't I do it, right? How why do I care what's going to

right? How why do I care what's going to happen to my brand 10 years down the line? there's money to be made here. Why

line? there's money to be made here. Why

do I leave money on the table?

>> Or in relationships, it's a zero sum game between you and the dealer. If I

win, they lose or they Right.

>> Yeah. So why do I so let's let me just go ahead and make money right now, right? And that was the difference,

right? And that was the difference, right? And this was possible because

right? And this was possible because people like Chari made sure that Asian paints was steered in a certain way, in a certain direction, right? And that I

think was super important in sort of retaining all this talent, right?

>> The credit to the founders for >> for letting them do it.

>> Yeah. For letting them do it. Cuz

>> I can imagine this is by far an exception. If we are discussing closely

exception. If we are discussing closely held businesses in India by let's say Gujarati families and you look at you know the history arc and you say that

you know outside talent comes in and says you need to modernize you need to empower you need to make this thing nine times out of 10 it would not happen in the this thing so this is one of

>> now a lot of you know familyowned groups are resistant to this kind of change right >> uh and we're talking about a time when how many I mean there was There's no difference between owners and managers,

right? Uh I'm sure I mean as companies

right? Uh I'm sure I mean as companies got bigger, you had to get more people, but you didn't give them the kind of autonomy that you know you sort of you were beginning to see at Asian Paints, right? Okay, this is what you want.

right? Okay, this is what you want.

Sure. This is what you think.

>> Can I give you an example of this autonomy? So this is you know earlier I

autonomy? So this is you know earlier I was talking to you about Sri Khan. Srian

Raja Kopalan is actually um from I am Kolkata. He had joined I am sorry he had

Kolkata. He had joined I am sorry he had joined um Asian Paints back in the 90s and by this time Asian pains had got sophisticated enough to try and look at

a person's history to see which state they are from. Now Shriant

actually is like you know Tamilan but he um his family was in Kolkata. So once he went for induction he realized that he'd been posted to Maduray.

>> So at this point they're trying to figure out how to it's it's not just that we'll just throw you anywhere over the place right? So he goes to Maduray and he learns the ropes of the system and stuff like that right and he's

actually sorry he's in the Triti deport uh right um he's a unit head and he goes there and he observes that in the

December to March trimester right there is this incredible jump and this goes back to some of the stories that you told earlier right there is this

incredible jump in sales of three products 50 ml golden yellow 50 ml bus green and 50 ml po red.

>> Okay.

>> Do you know what po red is? Take a

guess.

>> Pongal.

>> No.

>> Post office red.

>> Okay. I mean that was the first thing I thought of. Yeah. Okay.

thought of. Yeah. Okay.

>> In future what was the first thing that you think of is that's the right [laughter] answer.

>> Right. So, and these three would just jump through the roof in that um you know three months of the year every year and he sort of you know you think it's such a sophisticated organization and he

goes back and he asks his people that what's going on here and they don't know it and then he goes back up the chain to say what's going on here we don't know it we just send it it's been like this

for years right and then of course he kind of goes to the market he asks and figures out and then he figures out this is that the Pongal festival season where

people are painting their bull's horns and they're painting their like homes etc. So these three are the specific paints that sell the most. Right now the interesting thing is when he goes out

into the market he finds out that even though Asian paint sales are sort of jumping up significantly in this quarter when he goes to the villages he finds out that

people who are essentially doing something else during the year farmers carpenters etc during these three months they become painters. They buy local

paints they mix it by themselves and they paint. And that market is way

they paint. And that market is way bigger than whatever Asian paints is selling, >> right? So he goes back then up the chain

>> right? So he goes back then up the chain and then he says this is happening and how can we take because we thought that this is high but you know what the real market is actually way higher than this

as well. How do we get it? And then

as well. How do we get it? And then

people come back to look those are local paints. They operate at a much lower and

paints. They operate at a much lower and cheaper price point. We can't sell it as Asian paints there.

>> Okay. And he says that but it's a much much bigger market. What do we do? So he

actually goes to this group which is called I think the product management group and he tells them that you know I mean obviously does the calculations is known as well. An average farmer has two heads of cattle and you know I mean the

four horns to paint. So they need about 120 ml of paint for two coats >> right? He figures this out. He goes back

>> right? He figures this out. He goes back to them and like you know to product management group and like you know they send someone to the village to take a look and see the economics and stuff like that say no no no I don't think we

can do that etc. >> The economics of bullhorns >> the economics of making a paint by themselves but he says this is a much bigger market we can do something much more he says why don't we just outsource

it just for those three months we don't need to make it we can just buy the paint we can outsource the manufacturer to someone else. Yeah,

>> sell it as temporarily take advantage of those 3 months when the sales spiked.

>> I guess they didn't take advantage.

>> Well, they did.

>> They did.

>> That's my point about empowerment, right? And autonomy to young managers.

right? And autonomy to young managers.

Now, Shriant is a young uh MBA who's been stationed in Triti and like you know to what does he know about what the market is and they actually call it gut enamel. Oh,

enamel. Oh, >> to go back to that point about Gutu and you know I mean now I sort of realize why Asian Paints has this it never fully retires those brands

>> right like Gutu may no longer be the mascot but you know it can be used strategically or tactically in certain cases just like three mangoes. So they

for those three months they sort of create this gut enamel which is outsourced where they buy the paint they put them in their boxes they sell it and >> but you know I mean I wonder you know

how what kind of brand equity gut had in Tamara because it's not a very >> it's Asian paints right remember like it's a distribution muscle when you go

so it's it's not that it's gut paint it's gut from Asian paints and because now they're able to drop their price significantly ly they're able to kind of

obviously they can't compete with uh you know a com the cheapest of local paints but now their sales dramatically jump up because now they've got this other product I use this example to tell you

what empowerment meant because you cannot imagine this being true >> any most other companies right especially with young uh you know MBAs

>> while we're talking of Asian pains culture you know I mean the thing that we got to understand is that how is this a company that has since 1967

not just continued to be relevant but continue to create new categories, expand the market etc. Right. That can

only happen if an organization is sort of continuously innovating.

>> Yeah. Yeah. And I think they've done that decade after decade and different kinds of innovation. Right. And you've

already mentioned a few.

>> Yeah. I I'll give you another example.

Like there is this very there's a very have you heard of this concept called the not invented here syndrome.

Essentially means if you're a large and successful company and something happens outside your company which you realize is actually very valuable but you didn't invent it there

is a natural resistance towards adopting that idea.

>> Oh okay.

>> Right.

>> And and I think you must have seen that as well. Right. Like you know I mean

as well. Right. Like you know I mean even at the ken for instance right? So

when somebody else does something there is this it's true. It's natural. So that

part is one of the hardest things to get over because there is always this inherent pride within organizations and managers and teams that we didn't think of that we are not going to do it.

>> I'll give you a counter example again this comes from Sri Kant right so they need about a kg of distemper to paint their homes.

>> This is during Pongal >> right? This is Pongal right north India

>> right? This is Pongal right north India I think it's during Diwali the people paint their homes >> right >> and just like all these you know uh farmers or farm workers becoming painters

>> I was told about rickshaw pullers in in Delhi turning painters during the valley >> yes so painting as an occupation as a profession as an industry is fascinating and we will talk about that later like I

said it's magical what happens to that through the year in a country as complex in India >> so something that sounds so monumentally really boring.

>> Yes, it is. It's it's a it's it's almost like a migration of people, of behaviors, of patterns, etc. But we we'll come to that later. Um and I and I do want to go deep into that, right? But

here, what do you do? Because the

product that you have, let's say it's um you know, I mean, tractor distemper, which itself is a fairly affordable product, but it is too expensive for them, right? Right. So Shrihan talks

them, right? Right. So Shrihan talks about how about we bring something like much cheaper. Let's say a tenth of the

much cheaper. Let's say a tenth of the price of tractor >> distrib. So so the point is what is

>> distrib. So so the point is what is already one of Asian Paint's cheapest products is still too expensive for a a big >> chunk of their target market.

>> Absolutely. Absolutely right. And you

know so they launched something called Utsaf means of course festival in Hindi. uh

disters in pouches. So it's a 1 kg pouch right you don't understand that like you know I mean for >> I'm not sure it was for Tamil Nad itself because with Asian paints they would

have obviously like you know I mean you know taken it to multiple cities etc but it's it's 1 kg distemper in a pouch operating at one/10enth of the price

point of tractor uh distemper right >> now this is a good part like and to this I think like you know when I asked Shriant like you How does something like that happen? Because in any other

that happen? Because in any other company, you would think that no, we're not going to undercut our own product at this price point. You know, it's cannibalization and all of that, right?

To Asian Bane's credit, there was never a not invented here syndrome. There was

nothing that it was okay. Okay, we

missed this. Let's just see what happens. Let's take a shot. And they

happens. Let's take a shot. And they

did. They didn't foresee what would happen when you start selling paint in pouches. What happens during

pouches. What happens during distribution? like milk pouches.

distribution? like milk pouches.

>> Yeah, it's pouches, right? Like, you

know, I mean, they break.

>> It's it's not the hardiest when you're trying to reduce the cost of your product and so that you can make it really affordable and like you end up with pouches, you end up paying the cost

somewhere else, which is that it's not the best thing >> [snorts] >> uh to transport and many of them break as well. It led to high wastage

as well. It led to high wastage uh losses etc and stuff like that. But I

think you know the point that he wanted to make was that look back then everything was entrepreneurial and back then was of course like you know I'm referring to the '90s like you know late '9s early 2000s right it was very

entrepreneurial it was very ownership and independence driven you have an idea you take it up the chain if it works it doesn't matter if we can't manufacture it we'll outsource it if it needs a new packaging we'll do it and this so you

can see sort of how the structure of the company has changed from the founders and the managers taking the decisions to now you have these hundreds and thousands of people who are coming to

work each day and trying to figure out how can I change this, how can I make this better, how do I come up with RPPD, how do I make sell paint in a pouch, how do I outsource uh manufacturer of paints

only during 3 months so that I can sell it cheaper and and all of this is incredibly happening in this company.

Yeah, I would I mean I would be very happy if I got to do the economics of painting four horns, right? And if it actually results in something like the

company launching a new product just to cater to that, uh I think that sort of makes up for not getting paid as much as some of my colleagues who joined a

consultancy or an FMCG firm. Right.

>> Yeah. I mean this feedback comes from a lot of MBAs who joined that you know I mean and MBAs who pass out are fairly

in the loop when they know what their peers are earning.

>> Yeah.

>> Right. They know they're not the best paid but year after year when they meet their peers they realize that they're actually doing the most interesting work. They've been charged with some of

work. They've been charged with some of the fastest broadest responsibilities whereas their peers might be earning more but they're sort of stuck in these jobs where they're told what to do what

they cannot do etc. And I think that's the difference that comes in. This goes

back to that astute observation by Champaglal Choki that I don't need to pay MBAs the highest salaries they'll come to me because they learn the most here.

>> Yeah. And what I I think also said about uh you know MBAs being mercenaries, right? I guess the ones that Asian

right? I guess the ones that Asian Paints hires are less so >> because it controls that at the point of hiring by looking for grounded people as well.

>> Yeah. And also I think it allows them to not be mercenaries, right? Allows them

to be entrepreneurial like you said, right? And take these executive calls

right? And take these executive calls which their peers and other companies would have to wait probably a decade or two decades to be able to do. And

there's a reason why that leads to Asian pins being called the CEO factory.

>> Yeah, >> you realize that, right? Because many of these people learn so much, grow so fast that at some point when they start leaving, they go directly into leadership roles, CEO roles in other

companies because the Asian Paints talent density, culture, empowerment has given them so much that they can effectively make up for foregone salary

in 10 15 years >> by the jump that they get later.