Amit Rathi Says Family-Run Business Pose As Safe Investment Options

Family-run businesses have once again emerged as safe investment options, said Amit Rathi of AnandRathi Brokerage. This is precisely because family-run businesses make for easy, stable and resilient investments.

Family-run businesses are attractive also because they have been tried and tested over a period of time and have survived the changing business environment.

Another reason cited by funds to pick family-run businesses is because they are in established brick and mortar businesses where there is greater assurance of steady returns as compared with some of the new economy sectors.

“Family-run businesses are more resilient than professional peers. They have lower cost structures and operate in stable industries, have lower attrition rates and pursue long-term strategies,”said Adi Godrej, chairman of Godrej group while speaking at the Family Business Conclave organized by the Indian School of Business (ISB) in Mumbai.

Amit Rathi, managing director of Anand Rathi Financial Services, said, “ Almost 90% of private equity investments made by our company would be in family-owned businesses as there are few widely held companies such as Larsen and Toubro Ltd in India.”

“80% of our investments are in family-run businesses,” said Sanjay Nayar, chief executive officer of KKR India Advisors Pvt. Ltd (KKR), an arm of Kohlberg Kravis Roberts and Co. LP.

KKR India has invested about Rs.17,000 crore so far to 55 companies including GMR Holdings Pvt. Ltd, Avantha Group and Apollo Hospitals Enterprise Ltd, which are all family-entrepreneurial ventures.

Roughly half of the funds that Apax Partners India has invested is in companies associated with large promoter families such as the Reddy family-led Apollo Group, the Murugappa Group, the Piramal Group and the RPG Group.

The only problem with family owned business is when there ensues a dispute in the family, leading towards splitting of assets.


9 thoughts on “Amit Rathi Says Family-Run Business Pose As Safe Investment Options”

  1. Madhukar says:

    Great idea and thoughts of Amit Rathi on family-Run Business to make a right and
    safe investment on a right place at the right time. Thanks to familiarized us
    with this strong investment option.i want to know more details of it.

  2. Ajay Rathore says:

    By reading this article got to know about Amit and Anand rathi services as they are providing safe investment option. Thanks for this useful article.

  3. Suman kashturi says:

    since 2 years I am closely associated with Amit Rathi for the financial services, it’s a well known name in brokerage. Give a better and easy approach to making your investment on a right place.

  4. Rahana Zubaidah says:

    No wonder companies like Tata, Birla, Reliance and Godrej have been prospering. It is way easy to handle an already existing empire than to create one

  5. Brittani Bishbas says:

    I am in full agreement with Amit Rathi. Family owned businesses tend to be more robust. Basically, they have been through a lot of changing scenarios and have endured. This makes them sturdy and stable

  6. Sachin Verma says:

    Along with that, the key to retain a family business is to constantly innovate with it and keep it abreast with the changing times. Financial scenarios are quite prone to fluctuations caused by global situations. Having a seasoned guide is one of the easiest ways to tackle them.

  7. Rohit kindra says:

    After reading this article, my opinion towards family businesses have changed. I think I might just join my father’s ancestral business. It will be challenging at some level and satisfying at others.

  8. Ashwani Patel says:

    Great intricacies explained. Very few analysts talk about issues that you talk about..I think I will get in touch with Anand Rathi Financial Services for some consultations.

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