Golden Big Daddy

The women at Pushpagiri Agraharam, a locality of Iyer Brahmins in Thrissur, are in front of their houses drawing kolam . It is five in the evening, and not early morning when these traditional floor patterns are usually drawn using rice flour. But today is special. It is the eighth day of the 10-day Ramnavami festival held in March to celebrate the birth of Lord Rama. In two hours the golden chariot from the Sitarama temple, located in one corner of the neighbourhood, will emerge for its annual journey around the city.

These are important days for TS Kalyanaraman, chairman and managing director of Kalyan Jewellers.His granduncle TR Ramachandra Iyer had built the temple, and the festival reinstates the family legacy each year. Iyer had migrated to Thrissur from Kumbakonam, in Tamil Nadu, in the early part of the 20th century. Though from a family of priests, Iyer sowed the first seeds of business by setting up Sitaram Textiles in the 1940s. Even as the family business grew with each generation, the Agraharam and its temple remained the nucleus of their universe. Practices started back then have now become a tradition, including running a community kitchen at the temple for the duration of the festival. Kalyanaraman is often seen serving food, along with the rest of his family, and later joining in for the lunch.

It is past seven now and Kalyanaraman is at the temple, barefoot and in an angavastram . Surrounded by friends and relatives, he walks alongside the golden chariot as it comes out of the temple. His sons — Rajesh and Ramesh — are at the head of the procession, pulling the chariot by its ropes. Kalyanaraman had donated the ₹5-crore chariot in 2013, signalling his and the company’s rise to the top of India’s gold retail industry. Kalyan Jewellers has revenue of ₹10,000 crore.

This year, the festivities hold another significance for the 67-year-old billionaire. A month or two later, he and his sons and a daughter will move out of the Agraharam and make home at Sobha City, a modern township coming up on the Thrissur-Guruvayur highway. “Our families are becoming bigger. So we need bigger houses,” he says. He is building four houses at Sobha City, complete with a helipad nearby.

For someone seeped in tradition, Kalyanaraman’s move out of the Agraharam is significant. He has lived here all his life, growing up with his four brothers at the family’s periyaveedu (big house). One brother continues to live in that house, while the rest have moved to independent houses within the Agraharam. If not for the luxury cars parked on the porches, it would be difficult to mark out the family’s houses in this largely upper middle-class neighbourhood.

Each time Kalyanaraman’s Rolls-Royce Phantom drives out of the house, it circles the temple, seeking blessings before speeding away. Even when the businessman or either of his sons uses the helicopter or one of their two jets, they first fly over the temple before heading to their destination. “In all these years, and despite his riches, Swami (or ascetic, as everyone in Thrissur addresses him) hasn’t changed,” says D Ananthanarayanan, a childhood friend of Kalyanaraman and a constant presence at family functions. The friends are also around every time Kalyanaraman opens a new outlet anywhere in India, or even in Dubai, as happened last year.

This constancy is apparent in the tycoon’s daily lifestyle too. He wakes up at 5.45am and starts off with an hour of yoga, a regimen unbroken since 1965. Breakfast is a family affair. In office, he keeps a strict eye on schedule. In between, he takes the time to call up customers, at least 10, across the country each month. Back home by seven in the evening, his dinner is mostly curd rice. “I have often travelled with him on his jet. In the morning itself he will call and say that food, homemade idlis , has been arranged. He is organised,” says an industry associate.

Nevertheless, as an entrepreneur, Kalyanaraman has built a reputation for testing convention. He inherited a textile shop from his father, but spun out a jewellery retail giant.

From one to many

Thrissur looks like any other town in Kerala, but its history distinguishes it from the rest. Home to Guruvayur Temple and Kerala Sahitya Academy, it is often called the cultural and religious centre of the State. Thrissur was also an important link in international trade. It prospered greatly under Sakthan Thampuran, the 18th-century king of Cochin. In a significant move, he invited Syrian Christian families from Travancore to settle in Thrissur and set up businesses, including gold manufacturing and retailing.

The town’s High Road stands testimony to that royal offer. This busy commercial district is among the biggest hubs of gold retailing in the State. Still around are some of its earliest jewellery shops, including names such as Joy Alukkas and Chemmannur that are now familiar outside Thrissur. In 1993, when Kalyanaraman set up his first jewellery store — after his father had divided the family’s five textile outlets between his five sons — it was just an addition to a long list of local jewellers. “Like my father had done, I wanted to set up two jeweller stores — one each for my sons,” recounts Kalyanaraman of his initial ambition.

As Rajesh and, two years later, Ramesh joined the business with the second outlet in Palakkad, their father ensured that the learning of the last two generations was passed on. “I wanted to make sure that the two didn’t think they have [been born with] a silver spoon,” says Kalyanaraman, seated at the company’s plush headquarters in Thrissur’s Punkunnam. His own entrepreneurial journey had begun as a 12-year-old learning to measure cloth at his father’s textile shop.

“Both of us have sat at the counters, worked as cashier and sold gold ornaments to customers… we have made sure our shop employees follow the same principles and guidelines,” says Rajesh, who is executive director at Kalyan Jewellers and in charge of finance. Vitally, a few tricks of the trade were also passed on. “Instead of embarrassing the customer by asking about his budget, we observe his eye movement to understand what he is interested in,” says Ramesh, also an executive director and in charge of marketing.

Meanwhile, Kalyanaraman was eager to stand out in a crowded market. For that, he didn’t have to look further than his father’s dictum — sell the best quality at the most reasonable rate. It will give you a good turnover. Your profits might not be the highest, but your business will be profitable. “We always wanted to be a mass-market player,” says the businessman. Side by side, he introduced other changes that fetched his brand a loyal clientele. “He was the first to bring in price tags in an industry that is otherwise seen as opaque when it comes to pricing. Again, he was the first to introduce BIS certification for jewellery,” says PV Jose, chief patron, Jewellery Manufacturers’ Association.

Tasting big success at his first two outlets (the Thrissur outlet clocked ₹60 crore revenue in its first year), Kalyanaraman was emboldened to look beyond Kerala, towards Tamil Nadu. “Coimbatore is close to Palakkad, and logistically it was easier for us to expand. Also, customer tastes don’t differ too much,” says Rajesh. Today, as the company expands its retail network to touch 100 stores by the end of the 2016 fiscal, it has roped in Sanjay Raghuraman as chief operating officer. “Coming from a private company, I was pleasantly surprised by their execution capability,” says Raghuraman, who previously worked in HDFC.

“Swami’s growth has been a miracle. You need dhairyam (courage). Otherwise how do you open six outlets across UAE on a single day?” says Jose. Or, how do you explain hiring Amitabh Bachchan as a brand ambassador after opening an outlet in Ahmedabad; the Bollywood superstar’s fee was higher than the value of the shop’s stock. Or now, booking a third jet, worth ₹200 crore, to push ahead with the company’s overseas growth plan. “We save at least one working day a week by using the private jet instead of catching commercial flights,” says Ramesh.

That risk-taking ability has seen Kalyanaraman leapfrog over his rivals and peers in Thrissur. “Kalyan’s growth has been amazing. They have done a lot, introduced many new things,” says Boby Chemmanur, managing director of Boby Chemmanur International Group, which is also rapidly expanding its gold retail business. “The Thrissur gold industry is dominated by Christians. Swami is the only non-Christian jeweller who has made it so big. He has changed the dynamics,” adds a senior citizen who remembers Kalyanaraman from his ‘textile days’.

But not everyone agrees with Kalyanaraman’s growth strategy. One of them is Anthony Thottan, whose family was among the first to set up a jewellery outlet in Thrissur in the 19th century. “The jewellery industry is fast getting separated into two groups. On one side are companies that are looking for quantity, and on the other are those that are focusing on quality. We sometimes take 15 days to make a jewellery set. Others do it in a day,” says Thottan. His family’s two outlets in Thrissur also export gold jewellery.

A few others doubt whether Kalyanaraman can maintain his current pace of expansion without straining his finances. The ₹1,200-crore investment from private equity major Warburg Pincus for an undisclosed stake in late-2014 helped lower the company’s debt-equity ratio to 1:1.2. “Kalyan Jewellers is now opening in Chennai. Though it is the biggest market for gold retail in the country, others including Joy Alukkas have struggled there,” says a promoter of a jewellery retail company, who didn’t want to be named.

Biggest bet

Two weeks after Ramnavami, Kalyanaraman and his sons are at Chennai’s Taj Coromandel hotel for a press conference ahead of their outlet’s opening. Outside, their three Rolls-Royces with Kerala registration get admiring looks from passersby. Inside, Kalyanaraman is in his trademark dhoti, half-sleeve shirt and YSL sandals. Apart from a ring on his left hand, the only other jewellery on him is a gold-plated and diamond-studded watch. His sons flank him on the dais, while his family, including wife Rama, is in the audience.

The younger Kalyanaramans do most of the talking. “It was important to get the proposition right,” says Ramesh, explaining why the company took so long to arrive in Chennai’s booming market. “We have invested ₹200 crore in this outlet, which will display 600kg of gold,” adds Rajesh. Later, Rama explains why the Chennai opening is also an emotional moment. “I grew up in Chennai. In fact, my father’s house is just walking distance from the outlet,” she says.

The store’s opening saw a marketing blitz across the city— from hoardings to newspapers and railway platforms to FM stations. The store itself was opened by a galaxy of filmstars including Amitabh Bachchan, Aishwarya Rai Bachchan, Prabhu and Nagarjuna. Chennai’s T Nagar is often dubbed India’s biggest jewellery retail hub. Within a kilometre radius of Kalyan’s glittering showroom are many of its Kerala peers such as Joy Alukkas and Malabar Gold, and the local favourite GRT Jewellers.

When Alukkas opened its Chennai showroom in 2008, it was touted as the country’s largest. But industry observers say the size of the store did not prove enough to make a dent in the city’s gold market. Kalyanaraman and sons emphasise that their strategy is different. “We have customised our offering according to local taste and culture. Chennai is becoming a cosmopolitan city. Half of our staff in the T Nagar outlet speaks 10 languages,” says Rajesh.

For his father this is hardly foreign territory. In Thrissur he didn’t have the first-mover advantage, but turned that into his selling point. The stakes may be higher now. Success in Chennai, where he plans four more outlets within a year, will directly have a bearing on his grand plan to make Kalyan an international gold retailer. Equally at stake is the planned initial public offering in two years. And beyond all that is the succession plan for his sons. “They know that their strength is in unity. Still, if they want to separate in a way that doesn’t hurt the business, they can,” says the gold magnate.

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