Philanthropy may be slowly emerging as one the key talking points for the ultra rich in the last few years with platforms like the Gi­ving Pledge becoming more dominant in global forums.

What follows business success is often philanthropy and increasingly many wealthy entrepreneurs and business fa­m­ilies in India too are realising it and have started contributing towards bridging social, educational, digital and other divides. Indian philanthropy is at Rs 2,334 crore with an average donation per philanthropist being Rs 86 crore, as per the Hurun India Philanthropy List 2016. India has around 2 per cent of the world’s millionaires and 5 per cent of its billionaires, but it is also home to the hig­hest population of undernourished in the world. This contrast of excess wealth and destitution is a motivating factor to give, according to a recent media statement by the Philanthropy for Social Justice and Peace.

Pledging to education

Rakesh Jhunjhunwala, regarded as India’s Warren Buffet, has pledged Rs 5,000 crore to charity. He’s a big supporter of various non-profit organisations and education trusts including Agastya and Ashoka University. Also diamantaire and philanthropic social activist, Laljibhai Patel, has pledged Rs 200 crore for the welfare of 10,000 girls of the Patidar community. About Rs 2 lakh would be transferred from this kitty to the second daughter born in a Patidar family when she attains 21 years of age.

Anas Rahman Junaid, managing dir­ector and chief researcher, Hurun Rep­ort India, said, “India being a young cou­ntry would take a few more years before consistent philanthropic donations from the entrepreneurs. We would have miss­ed some of the major donors. However, based on the information received, 2016 has been a dull year for Indian philanthropy. If we were to consider the international CSR and philanthropic donations, the list would be much longer.”

Serial entrepreneur, billionaire and founder of the HCL Group, Shiv Nadar, 72, is clearly an early mover on this fr­ont. He started giving back some 30 yea­rs ago by setting up an engineering institute, SSN College of Engineering in Chennai, named after his father Siv­as­ubramaniya Nadar, a former district ju­dge. So far, the institution has sponsored scholarships to the tune of Rs 65 crore.

Nadar, who has already given away over Rs 700 crore for various charitable initiatives, is currently focusing on HCL Samuday, a project in the areas of water, agriculture, sanitation, health and education, in Hardoi in UP. Na­dar tops the latest Hurun India Philan­thropy List with a contribution of Rs 630 crore towards education within the cou­ntry. “Corporate governance and philanthropy can work together to transform societies. For Indian companies, social ventures can become a competitive tool as well,” is something Nadar vouches for.

The Shiv Nadar Foundation (SNF) has expanded philanthropic efforts to support ventures in arts, education and healthcare over the years. Nadar’s wife, Kiran, is mostly spearheading this initiative as trustee at SNF, and as chairperson of Kiran Nadar Museum of Art (KNMA). Nadars’ only child, Roshni Nadar Malhotra, executive director and CEO of HCL Corporation and trustee of Shiv Nadar Foundation, is a creative philanthropist, and believes young Indians should take philanthropy very seriously and they need not wait until they grow grey hair. She has been actively working in this space and has inspired young women leaders who try to strike a balance between their corporate responsibilities and an equally impact-making social responsibility.

Hurun India Philanthropy List 2016, released by the Hurun Research Inst­itute, declares the names and rankings of most generous individuals from India. Donations were measured by the value of their cash or cash equivalent from January 1, 2016 to December 31, 2016 – the 2017 list will be released in March. This is the fourth year of the list and it follows on from the Hurun India Rich List, a ranking of 339 richest individuals in India, released in September 2016.

Focus areas

With the same cut-off as last year of Rs 10 crore, the Hurun India Philanthropy List 2016 features 27 Indians, down by 9 from last year. Shiv Nadar takes the first position in the list, and then comes Infosys co-founder Kris Gopalakrishnan (62) and wife Sudha Gopalakrishnan with a donation of Rs 313 crore primarily towards healthcare, social development and education. The couple channelise their philanthropic activities through a trust, The Pratiksha Trust, which focuses on education, healthcare, research and entrepreneurship. It also provides scholarships to medical and engineering students and monthly pensions to senior citizens.

Industrialist Mukesh Ambani (60) of Reliance, came in third with a donation of Rs 303 crore made towards causes su­ch as education, rural development, spo­rts, health and sanitation. He channelises his philanthropic initiative thr­ough Reliance Foundation. Besides hea­lthcare, Ambani’s philanthropic interests include rural development and education.

Vaccine billionaire Cyrus S. Poonawalla, 72, who set up Serum Inst­itute, has donated Rs 250 crore, and is fourth in the list of givers. The funds were used to fuel various philanthropic activities of him including setting up educational institutes and hospitals.

Businessman, politician and philanthropist billionaire Rahul Bajaj (79) and his family have contributed Rs 244 crore through the company’s corporate social responsibility arm. Education, healthcare and social development are Bajaj’s focus areas.

Ronnie Screwvala (55), the founder of the Swades Foundation and Unilazer Ventures, donated Rs 160 crore. Swades Foundation works in the areas of creating livelihood, water, sanitation, education and health.

Piramal Group chairman Ajay Pira­mal (62), donated Rs 111 crore towards education, healthcare rural developm­ent and women’s empowerment. It includes activities for education (PFEL), healthcare (Swasthya), water purification (Sarvajal), rural development (Udg­am) and women empowerment (Piramal Udgam).

Industrialist, Adi Godrej (76) and family have contributed Rs 74.5 crore out of which Rs 44.60 crore has been donated through the Pirojsha Godrej Fou­ndation and Soonabai Godrej Foun­dation for causes such as education and medical aid. In addition to this, Godrej has contributed another Rs 4.5 crore to philanthropy in his personal capacity.

India’s bio-technology icon Kiran Mazumdar-Shaw (64), CMD Biocon and the only self-made woman entrepreneur on the Hurun list, donated Rs 45 crore to healthcare, education and social development. Her focus areas include science start-ups, civic and social issues, art and artists.

With a donation of Rs 21 crore, Ku­m­ar Mangalam Birla (49) of Aditya Birla Group is the youngest philanthropist on the list; the eldest being the construction magnate and chairman of Pallonji Group, Shapoorji Pallonji Mistry (87) who contributed Rs 68 crore for social development, livelihood enhancement, healthcare, education and environment sustainability. His contribution is mainly attributable to CSR spending of the Tata group companies on account of his 18.40 per cent stake in them, said the Hurun Philanthropy List 2016. Eight­een individuals on the list are self-made and another eight prospered from inherited wealth. Only two women featu­red on the list of philanthropists compared to four the previous year. The average age of these philanthropists was 65.

Sunil Bharti Mittal, chairman of Bharti Airtel, has pledged 10 per cent of his family’s wealth, amounting to over Rs 7,000 crore, to the Bharti Foun­dation. Much of this will be used to set up the Satya Bharti University, which seeks to offer free science and technology education to the poor.

The net worth of Mittal and his family is over $10 billion. The Satya Bharti University is expected to enrol over 10,000 students and faculty from across the world. The Mittal family is also involved in other charitable initiatives, like Nyaya Bharti, aimed at providing aid for undertrials and Satya Bharti Abhiyan, which pledges support to sanitation.

Subhash Chandra, chairman of Ess­el Group, and his three brothers pledged over Rs 5,000 crore last year to their DSC Foundation, to mark the 90th anniversary of the Essel Group. Its activities include funding social entrepreneurs. Chandra himself has given away money through the Ekal Global that has provided free education to tribal children in 55,000 villages.

The causes

Interestingly, education attracted 35 per cent of the donations, being the most favoured philanthropic cause. Educ­ation remains the most favoured philanthropic cause followed by healthcare and social development. Shiv Nadar is the highest Individual contributor for education and his primary objective is to create a measurable impact in the lives of the children and youth.

In 2016, there has been a rise of philanthropic contribution towards social and rural development, livelihood enhancement and sanitation; this is led by Mukesh Ambani contributing Rs 49.74 crore towards social and rural development, Cyrus Poonawalla, the chairman of Poonawalla Group, which owns Ser­um Institute of India, the Indian biotech company that manufactures paediatric vaccines, donating Rs 130 crore towards sanitation and Anil Agarwal, the founder and chairman of Vedanta Resources con­tributing Rs 8.7 crore towards livelihood enhancement. Poonawalla aspires to make Indian Urban Cities more livable.­

As per Junaid Hurun Report India, with initiatives such as Digital India, rural electrification, the Modi government has been pushing the need for overall societal development. Taking advantage of such schemes, the Indian entrepreneurs are investing more into rural areas as part of long-term business goals.

“My philanthropic efforts are directed towards building a society, where ever­yone has equal access to quality healthcare irrespective of a person’s econo­mic and social status,” said Mazumdar-Shaw of Biocon to Hurun Report India.

New entrepreneurs

India seems to be creating hundreds of new wealthy entrepreneurs on an annual basis, who could become philanthropists in the future. During calendar year 2017, 302 rich Indians were identified by the sixth edition of Hurun Report under its Hurun India Rich List 2017.

The Hurun Report is widely recognised for its comprehensive evaluation of the world’s wealthiest individuals. It has been closely tracking India from 2012 and bringing out successful stories of entrepreneurs in the country.

The number of dollar billionaires has increased to 136 from 126 last year, a record number since the inception of Hurun Rich List in 2012. However, 100 individuals saw their wealth decline this year. At the age of 34, Divyank Turakhia of Media.net has emerged as the youngest self-made billionaire. He joins five other self-made individuals under 40, all from new technology businesses, as per the report.

Mukesh Ambani’s wealth shot up by a staggering 58 per cent to Rs 2,57,900 crore and he retains the richest Indian tag for the 6th consecutive year. His wealth is 50 per cent more than the GDP of the country of his birth – Yemen, said the report.

Patanjali’s CEO Yogi Acharya Balkrishna is now among the top 10 rich people in India, reaching the eighth spot from 25th last year. His wealth grew by 173 per cent to Rs 70,000 crore last year.

Radhakishan Damani, of Dmart is the biggest gainer with his wealth from retailing business increasing to 320 per cent. The blockbuster listing of Avenue Supermarts, which operates Dmart, brought in a lot of value, as per Hurun India Rich List 2017.

Bangalore-based Ambiga Subra­manian (42) is the youngest self-made woman on the list. She sold her shares in Mu-Sigma, the data analytics unicorn that she co-founded. Interestingly, there are 51 women on the Hurun India Rich List 2017.

Pharma and FMCG had a stellar year in the Hurun India Rich List 2017 by doubling the number of entrants to 79 and 63 respectively.

The Hurun list has become a benchmark for the private sector and has become widely accepted to be the most robust attempt at covering entrepreneurship in India. On an average, the wealth of Hurun India Rich Listers has increased by 11 per cent compared to that of last year. At least, 16 people saw their wealth double year on year.

Anas Rahman Junaid, MD and Chief Researcher at Hurun Report India said, “Demonetisation, GST implementation and so on have not impacted wealth creation in the organised sector. In fact, going by the trend in the list, these factors seem to have positively impacted the mega rich and their companies. Despite solid performance of the corporates, a declining trend in national GDP growth points to impact of such schemes on the unorganised sectors.”

Success stories

Said Junaid: “The market capitalisation of all listed companies is now equivalent to 84 per cent of India’s nominal GDP which is the highest in emerging markets. This year, we have expanded the list to highlight the success stories of some of the emerging entrepreneurs.”

Rupert Hoogewerf, chairman and chief researcher, Hurun Report Global said, “We have never seen such a wide margin between the richest and the second richest in big countries that include the US, the UK, China or Russia.”

The biggest gain registered was a 321 per cent increase by Damani followed by Anurang Jain (55) and family, managing director of endurance technologies with a wealth increase of 286 per cent.

The top three on the list of the biggest gainers are backed by the IPO performance of their companies. Damani’s wealth increase was backed by the IPO of Avenue Supermarts. The shares of Avenue Supermarts were listed at a premium of 102 per cent and rallied a further 43 per cent as on July 31, 2017.

Another notable performer was Kishore Biyani of Future Retail who registered a 259 per cent wealth increase. Merger of Future Retail and Bharti Retail created the biggest supermarket chain with a turnover of Rs 15,000 crore and its subsequent relisting resulted in significant wealth creation for Biyani, said the report.

Eklavya Juneja (24) of Mankind Pharma is the youngest person on the list. He owns 12 per cent of Mankind Pharma which was founded by father Rajeev Juneja. All the under 40 entrepreneurs in Hurun India Rich List 2017 derive their wealth from innovative technological ventures. Turakhia of Media.net bootstrapped his company without any external funding. Rest of the entrepreneurs raised money from some of the top international funds.

As per the Hurun list, Kushal Pal Singh (86) of DLF is the richest real estate billionaire with a wealth of Rs 27,400 crore. Mangal Prabhat Lodha (61), founder of Lodha Group is the richest private real estate developer in the list with a wealth of Rs 15,700 crore followed by Jithendra Virwani (51) of Embassy Property Developments with Rs 8,800 crore.

“This year (2017), we have split out siblings, so companies like Muthoot Finance have been split across four individuals,” said Junaid.

Mumbai tops the list with 182 super rich individuals followed by New Delhi (117) and Bangalore (51). Chennai and Kanpur enter the top 10 cities for the first time with 15 and eight new additions, respectively. Mumbai registered an increase of 78 individuals in the rich list while Delhi added 52.

It is evident that more people and newer cities and towns are getting added to the list, indicating that

even tier I and tier II cities have

started contributing to wealth creation. There are 18 new cities in this latest list compared to last year. Chennai and Kanpur have performed well this year with a 35 per cent and 27 per cent increase in number of India Rich Listers respectively.

Interestingly, Udaipur has three Indian rich listers, Vadodara has two, and Kanchipuram and Faridabad have one each on the Hurun India Rich List 2017. Hoogewerf said valuing wealth of India’s richest is as much an art as it is a science. “Sure, we have missed some, but we believe the Hurun India Rich List to be the most serious attempt to identify India’s top entrepreneurs and to measure their holdings. Our team of researchers has – for the sixth year running – travelled the length and breadth of the country cross-checking information with entrepreneurs, industry experts, journalists, bankers, and regulators, as well as previous years’ databases.”

He said that for non-listed companies, valuation was based on a comparison with their listed equivalents using prevailing industry multiples such as Price to Earnings, Price to Sales, EV to Sales, EV to EBITDA and also other methodologies including Discounted Cash Flow and Tobin’s Q. In certain cases of early stage companies, First Chicago Method for valuation was used. The First Chicago Method or Venture Capital Method is a context specific business valuation approach used by venture capital and private equity investors that combines elements of both a multiples-based valuation and a discounted cash flow (DCF) valuation approach, he said.