Bengaluru’s stock of billionaires is growing

K Giriprakash | | Updated on: Dec 06, 2021

As stock options get vested, start-up capital will be awash in wealth

Bengaluru will add more billionaires and millionaires than other metros in the next five years as stock options of hundreds in start-ups will start getting vested soon, and as next-gen companies’ valuations grow at a faster clip.

Bengaluru has eight (dollar) billionaires and about 7,500 millionaires, all of whom made their wealth during the past 20 years. Mumbai, Delhi and Chennai have a higher number of super-rich people, but theirs is ‘old wealth’, created over a longer period.

Mumbai has 100-plus billionaires, Delhi 50-plus and Chennai 10-15.

Among the Bengaluru billionaires are a few old faithfuls — Azim Premji, Nandan Nilekani, and Kiran Mazumdar-Shaw. Many others, including Sachin and Binny Bansal, are on the threshold of becoming billionaires, while the new millionaires are from companies like Flipkart and Ola.

Bengaluru will add another eight to 10 billionaires in the next five years, while the number of millionaires is growing at 15-20 per cent a year, according to Avendus Capital, an investment banking and asset management company.

“The city has the potential to become the centre of wealth creation like Silicon Valley. With ESOPs getting vested, quite a few start-ups with a healthy growth rate have 50 to 100 employees who are decently rich,” Avendus Capital’s Managing Director Kaushal Aggarwal told BusinessLine .

Some places in the city will become clusters for creating wealth, much like California’s Menlo Park, he said.

Late last year, Flipkart completed its $100-million repurchase of employee stock options, the largest-ever share buyback in Indian start-up history. Overnight, quite a few employees became millionaires.

Aggarwal said Bengaluru is in its early stage of wealth creation, but going forward, it will churn wealth faster faster than other metros because all the new business models get delivered out of the city. All the new companies that are scaling up come out of Bengaluru, he said.

Bengaluru is also the heart of the venture capital industry: it accounts for nearly 80 per cent of all VCs.

He expects start-ups such as Ola and Flipkart to become $50-100 billion companies (in valuation terms) over time, which in turn will attract tens of billions of dollars in funding.

Founders of successful start-ups will also start moving to the city because of its huge talent pool, he felt. Ola co-founder Bhavish Aggarwal and Quikr’s Pranay Chulet have already relocated to Bengaluru.

“It is under-served relative to the wealth it has and is likely to create in the future,” Aggarwal said.

Ravindra Pai, MD, Century Real Estate, which owns the largest land bank parcel in the city and whose chairman, P Dayananda Pai, too is a billionaire, said people settle in Bengaluru because of their companies’ growth prospects and the availability of land for commercial or residential purposes.

Published on February 09, 2018
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