As a prodigious 15-year-old, Vijay Shekhar Sharma needed special permission to enroll in the Delhi College of Engineering (DCE). It is a pattern he would repeat often: Not to let age come in the way. He was rich way before he could get a drink at a bar.
At 19, Sharma, the founder of One97 Communications Ltd, which runs the company’s flagship e-commerce marketplace Paytm, graduated from the Delhi College of Engineering. It was 1998. It was an exciting time for India. The internet was expanding its grip as a business. Sharma decided to ditch the Rs1,600 ($24) a month job—the highest salary on the DCE campus that year —to work on the web portal and search engine he had started with his friend Harinder Pal Singh Takhar in their dorm room.
Barely twelve months later, Living Media India, owners of the India Today Group, acquired his start-up. Apart from a search engine and web-guided services, they had built an election tracking software. India Today bought it for half-a-million dollars. They used it to cover the general elections of 1999. It was the election in which the Bharatiya Janata Party-led National Democratic Alliance formed a stable government for the first time.
Thanks to the part-cash, part-contractual agreement—the start-up moved within the studios of the television network to manage their web operations—Sharma had, at the turn of the century, an annual personal income of Rs36 lakh ($54,000). Every fifteen days, there would be a deposit of Rs1.5 lakh ($2,250) in his bank account. It was life changing for a young man. “In many countries, you get voting rights only at twenty-one but by that age, I was earning more money than my father had earned in his lifetime,” Sharma says.
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New kids on the block
Sharma’s introduction and journey to wealth is cinematic: A rags-to-riches story, a genre made so popular and symbolic in the Hindi film industry of the 1980s. Yet, for someone like me, who has been writing about Indian entrepreneurial success stories for many years, Sharma’s trajectory from a lower-middle-class dreamer to a breakthrough business success story isn’t an aberration in India’s contemporary economic landscape.
India has witnessed an unprecedented phase of wealth creation over the past two decades, a trend that has sharply accelerated in the past ten years. India’s wealth increased by $2.284 trillion (Rs15,24,227 crore) between 2000 and 2015, making it one of the world’s fastest growing economies with a 211% increase in overall wealth, according to Credit Suisse.
A growing number of equity dilutions, stake sales and real estate deals have led to this never-before pace of wealth being created and unlocked in India; it has also given way to the emergence of a new group of the first-generation wealthy.
Be it cut-throat deals or generosity, it’s the new wealthy who are making waves.
Let’s take a look at Shanghai-based Hurun’s India Philanthropy List of 2014, for example. Seventy-three per cent of the people named on the list, on the criteria that they must give away Rs10 crore ($1.5 million) or more in philanthropy, were self-made.
India’s economic progress has provided the bedrock for this growth, expanding as it has from being a $1-trillion (Rs66,73,500 crore) economy in terms of its GDP in 2007 to double of that by 2015. To put it simply, it has taken India just seven years to add another trillion dollars to its GDP compared to the nearly sixty it took us to accumulate the first trillion. This has spawned new businesses and industries, giving way to market opportunities for business owners and entrepreneurs to exploit.
In the past fifteen years itself, the size of the Indian economy has grown by more than four times.
These new wealthy fall into three broad categories.
First-generation entrepreneurs who either through equity dilutions or a constant expansion of their businesses have been able to amass wealth; second-generation entrepreneurs—or the mezzanine generation—where the business might have been started by the previous generation but the real scaling up happened only in the past decade or so; and an emergent cadre of rich professionals, mainly senior corporate executives in industries such as financial services, consulting, information technology and well-funded e-commerce and technology start-ups.
This expansion of wealth beyond the clutch of a small group of business families and industrial houses to successful first-generation entrepreneurs as well as a strongly emergent cadre of professionals/CXOs mirrors the changes in the entrepreneurship and corporate landscape in India in the past two decades.
Unlike the movers and shakers of yore, their money is also “cleaner.”
Excerpted with permission from The Wealth Wallahs published by Bloomsbury India. We welcome your comments at ideas.india@qz.com.