Work in Progress - Found from the Closet

THE OPTION

Part – I

Sreela had always known herself as someone who had to struggle for whatever she had to do. When she was born, it was raining very very hard. Her mother had to protect her from the trickling downpour from the leaking roof and in the process she caught pneumonia herself. Sreela’s post-natal life was spent in the arms of sympathetic neighbors and a drunk father, who drank a few more of his desis, since he knew not where to sell her off. New borns in that part of the country where one had to walk at least ten kilometers for every basic needs of life – water, education, anything other than shelter and food. The first was the source from where one walked and the second was at the behest of a bitter fight of survival between neighbors, sale of children, contract labor in a growing economy in exchange of a hefty commission to the local politician – cum – henchman agent, in cash or kind.

By the time she was three, Sreela had grown up with scores of stories of her own to regale. She had been fondled by traders, molested by starved neighbors, securitized for three lunches for her family of five excluding her and had been rescued by a local NGO from the altar of the local deity where she was being soon to be made an offering in want of rains. The court had instructed her father to put her into play school to which he had a hearty laugh at the court room in the revelry of his perpetual inebriation. That was his sense of humor, the same kind he had exhibited in the silence of one night when he could not withstand of his coughing wife whom he had treated to some “neat” country to alleviate her sufferings, oblivious of her small intestinal ulcer which needed immediate surgical treatment.

To which better sense prevailed to his Highness who gave the custody of the child to the NGO. Now in a country like India everyone knows the conditions of such benevolent organizations where “means” and “will” are like two lines of the same railway track. If you look at such track fading away towards the horizon, you seem to believe that they meet at the horizon, the truth however is otherwise. By the time she was barely in her teens, Sreela had seen it all, she had three passports, a formal education of the basic comprehension skills of English, Arabic, Hindi, Urdu, a smattering of Gujarati, Bollywood and Anatomy.

Part - II

Rashesh Patel always wanted that his son should have a formal education from somewhere outside the country. He had been known as one of the most suave investors from the whole of Surat if not Gujarat. Many people around swore by his name and had they been made to write their autobiographies on rags to millions, Rashesh Patel was sure to capture a huge majority of all such newsprint. Rashesh Patel, repented one decision that he had made long ago in life, the decision to give up formal education or may be the lack of means to complete the same. Rashesh Patel had left his state for chasing the Dream at Bombay, the city of opportunities. His father, a small time salt trader did not disagree to what he said. At fourteen, Rashesh was a bit better built than boys of his age which meant that everyone wanted him to join their side, just in case there was a melee with some rival group. His father found an opportunity in this decision, since Rashesh would live under the patronage of his maternal uncle in Mumbai, who was just beginning to find his footing in the newly establishing silk and polyester trade. Rashesh, would hence gain an apprenticeship in a new profession or help his father further his own business in newer geographies as well as have his education in better climes.

Three months after landing at the Victoria Terminus, things had changed which only future would say for better or for worse. Rashesh saw that there was rising popularity of a new asset class some which people called equities, since every one who subscribed became part owner of the business he was investing in, to the tune of the face value the shares. It gave a revolutionary way of owning of a business for someone who did not have the appetite of being an entrepreneur himself. In times where gaining licenses was as tough as providing the right kind of fermentation from breweries and finding the right kind of companions for escort, businesses based of Mumbai had the right kind of liasoning to be done at the high offices in Delhi and people to pull the tugs at the right kind of financial institutions for the right kind of projects. At such a time after a maze of coincidences, when someone did really muster the strength to role out the projects, the challenge came in implementing them more by the lack of capital. And this is where equities came as a boon, since if the general public was convinced they opened their savings of their lives.

And when Rashesh dropped out of class eight at Bombay Scottish and started peddling, a decision which came as godsend to Rashesh’s clients, but something which created a vast expanse of barrenness within Rashesh himself. By the time Rashesh’s own son had started attending the same Bombay Scottish, Rashesh had started sharing the same dias as Dhirubhai at the elaborate AGMs, which in Bombay broker parlance often was referred as “Majhli Diwali” for the unprecedented blessings Dhirubhai showered. On a cumulative basis by that time, Rashesh Patel had erased debt and created wealth for his investors comparable to the net increment of the GDP of his own state during the same period since what Rashesh lacked by education, he more than made up by his sense of enterprise, perseverance and foresight not only to cherrypick the right kind of stock and backing the right kind of company. People swore by Rashesh Patel, entrepreneurs swooned to keep him in good humor and his rivals used to say that he had access to insider information, manipulative that he was. In a span of a few years after trading became an institutionalized activity, Rashesh had set up a group of trusted lieutenants and a small organization and came to be known as one of the pioneers of the brokerage business in India.

Part III

During the plummeting bond market in the US [check the fall of LTCM year], Hiten Patel, a intern bond trader with Long Term Capital Management fled the US and landed at the Mumbai International Airport. By the time, Hiten had started establishing himself into his father’s business, Rashesh had started spending lesser and lesser time in the business, and not because he did not like the newer and evolving instruments of trade, but because trivialization of human relationships hurt him a lot and the profession which had been his passion for so long seemed to be nothing more than a money churning device where the longevity of the client depended solely on minimizing mistakes and maximizing returns for him at the quickest possible time. Trading had changed its format from the normal decibel comparisons to the more sedate desk job, settlements had become more formalized and the speed at which money changed hands had increased manifold times. Transacting in equities had transformed from investing to a more day to day activity and people wanted to multiply wealth in matters of months rather than decades. Rashesh was not from such a school of thought and more often than not they found themselves way out of space. Newer generations came into this activity more as a search of a good way of life rather than as a business interest, loyalties were passé and more often than not trading as an activity were so much more different than what Rashesh had gained by experience and Hiten by education. During the time Hiten had completed his education, internship and limited professional experience in some of the world’s most mature economies, he had inculcated the typical conservatism seen in seasoned traders in India more out of experience by having burnt one’s fingers. Rashesh’s business dwindled by the day during this period, his risk averseness proving to be his biggest bane. At times when leveraged capital for bigger returns was the order of the day, Rashesh despised such credit drunkenness.

Hiten tried hard to expand the business in such changing paradigms. He realized that the scale of the game in which his father had operated had changed long ago. Rashesh had by logical inheritance passed on his relationships to his new batch of trusted executives, while Hiten tried to market the new look organization scourging for new clients.

In one such road show the father and son reached Dubai, in order to promote some capital inflow from the land of black gold. After days of running around arranging client meetings, explaining ideas and selling the Indian story, Hiten understood that they were quite late in entering the trade in this part of the market at least with the principles that they sold. In the midst of one such meeting, Hiten’s phone rang up as he saw the number of Anton flashing on his screen. Anton was a journalist from one of the big business dailies, who had the nose for big news. Most of the people in this trade tried to keep in good terms with Anton in the hope that he would trade such information, albeit at a price, before any such information spilled into the market. Anton was known to be an auctioneer for such information in trading circles and hence keeping him in hood humor was of utmost importance. Hiten, hence excused himself and took the call.

The call was short, of seven minutes to be precise, the summary of which turned out to be thus. In an unprecedented coup, the traders of his firm backed by a powerful private equity firm had launched a management buyout of Hiten’s firm and that since Hiten and Rajesh did not hold significant majority of the firm, they had little say into the matter. However, the only thing that made sense was that it made them a bit richer. The meeting ended without much formalities.

That was their last night in the Persian sojourn which should have turned out to be a fairy tale, but turned out worse than was expected. Rashesh himself did not have much faith in starting afresh. He had come a long way from the salt and silk trade, seen life in all its glories, travesties and darknesses and counted human relationship as the biggest asset he would take along. He had lost his battle and had been trounced by a betrayal of his own beliefs. That night Rashesh had a cerebral attack and lost his sensation on the left side of his anatomy - forever.

Part – IV

At the hospital, Rashesh remained bed ridden for more than a month. Hiten could not stay for long since he had to go back to complete the formalities of what had happened in India. He had to appoint lawyers, sign the share purchase agreement, nod to due diligences, speak to the media and answer to investors and clients, a faith lost never to be gained again. He knew that it would be tough to tread these paths again for a long time to come and with Rashesh being adamant that he really did not care to be deporting himself to another country, tough times lay ahead. For the month he had hired a young female at the hospital who would take care of his father. People at the hospital had nicknamed her Roohafza since she had gained a phenomenal reputation for concocting and treating everyone around some of the finest sherbets, a God’s gift for a parched land.

Everything about Roohafza had a touch of rough abruptness, but there seemed to be a mysterious tenderness in her eyes unlike her nature. Roohafza would spend all her time at Rashesh’s bedside. Rashesh took almost ten days to regain his power of utterance, more than speech since he would speak in incomprehensible syllables. By the fifteenth day, proximity began to bear fruit as Roohafza could in parts understand what Rashesh had to say. Soon Rashesh could barely sit up and by the time Hiten returned to pay his father a visit, Rashesh could dangle his feet from the bed and return his smile through his eyes, a feat Hiten understood could not have been possible without the untiring effort of Roohafza and the hospital staff. Hiten thought that it would be better to let his father stay put here for his rehabilitation and physiotherapy while he tried to rebuild a dome from the ruins of despair. After a weekend, Hiten left for the US to start all over where he had left off.

Within two months, Rashesh could speak slowly and started picking up his newspaper. He would read to Roohafza. He really liked the business sections as Roohafza listened with great intent. She had unusually sharp powers of retention which Rashesh had started to notice. At night after the lights of his cabin had been compulsorily dimmed, Roohafza would relate to Rashesh her story, the story of Sreela, the story of transmogrification from the hinterlands of starvation to the dark alleys of prosperity.

Rashesh would look out at the horizons outside and would joke to himself that in the Middle East there were three kinds of weather – hot, hotter and hottest and would smile at his own gestering abilities. His two month anniversary stay at the hospital was marked by a quiet dinner after which he went to sleep with a magazine. At around midnight he was awakened by a commotion, that of people running to make a move. By the time he could grab himself to levels of sanity from his slumber, a team of doctors, nurses and attendants had barged into the room. Before long he was pegged onto an artificial respiratory system with various monitors bugging in. All his protests turned feeble soon with sedatives finding their targets through his veins as phials of intravenous were pumped in. Sreela looked in intent from the corner of the room, as the doctor in charge proclaimed in calm authenticity to stay cool. As Rashesh was passing out for another of his languor, he saw a deep trough on the electroencephalogram monitor close to his bed side table.

Rashesh woke to a cheery tune of a doctor on duty. “How do you feel, Sir?” asked the doctor cheerfully. “Awfully groggy, but I do not get why you guys did whatever you did to me last night,” Rashesh complained. “Oh, you had another mighty myocardial dystema again last night and was saved just at the right time,” said the doctor, “but Roohafza warned us just at the right time.” Rashesh remained stoic under the stoning effect of the sedatives still at work. “We have had a brilliant history as far as cardiac and other such incidental symptomic illnesses are concerned after Roohafza has joined us. She seems to have an uncanny sense of déjà vu,” continued the doctor. Rashesh could not believe what he was hearing.

The rehabilitation was a long and painful process, and Rashesh would writhe in pain, his distorted face turning uglier and Sreela would egg him on trying to comfort him. After his endeavors Sreela and Rashesh would sit for their daylong discussions. Rashesh would teach her the intricacies of finance and of his first love – trading. At first Sreela would continue to feign how attracted she was, just to see Rashesh’s eyes light up at the very mention of her passion. Sreela would continue to try to infuse the idea of starting on his own again, to which a languid smile. As time passed, even Sreela seemed to be slowly enraptured in the maze of trading. She seemed particularly captivated by derivatives, a typical asset class with equities or commodities as an underlying. Depending on the expectations of the investor, he could take full exposures through a future or a limited exposure through an option or devise exotics to hedge his upsides and downsides.

Every month Hiten would fly down trying to fathom how his father was faring. On one such visit Rashesh spoke slowly that he wanted to go back home soon. He said that he would take Sreela along and try to help her rebuild her own destiny. Rashesh asked his son to help him in his endeavors. Hiten had been smarting under the embarrassment at what had happened at the numerous press meets during his last few days in his own country. He had tried and failed to rejuvenate his father and no one was happier than he was, at what could be. But with a steadied jubilation on his face he took his father’s trembling hands in his own and said that he would help in all ways that he could.


Part – VI

On the Holi of 2004, at the wee hours of the morning an Emirates flight landed in Mumbai and three people walked out of the counter and took a cab for a small runaway hotel in the suburbs. After a small rest, Rashesh left for the bank and Hiten in search of a Company Secretary. For two straight months Hiten carried out the incorporation of a new company, trying to forge new relationships, most of where he was scoffed at. Rashesh found new mastery at the new online trading formats.

By May of that year, things lingered on in the same way. A battered Hiten, a recuperating Rashesh and a befuddling Sreela trying to hold each other on, faltering and trying to stand up on their own yet again. During the first week of the month, Hiten came in one day with a bottle of champagne and an envelope. SRH Associates had been formed with three independent directors with Rashesh as the majority partner and two other partners and directors – Sreela and Hiten.

17th of May was Sreela’s birthday, the day which had seen tumultuous downpour many moons ago, the day Sreela was born. That was the day when SRH Associates would make their first trade. All the three of them woke up early and did a small puja at their terminal. It was going to be an eventful day, the day when the general election results were supposed to be announced. The exit polls had suggested a rerun of the NDA government. Street rumours suggested that traders had already taken their exposures. At the start of the trade, Rashesh cleared his throat and said, “We all know what our equity capital is. And for now we have not been able to garner any clientele of our own. Hence, SRH Associates would make their trades from their prop desk and on behalf of its partners.” Sreela and Hiten took essential notes as minutes of their first general meeting. Rashesh continued, “I commit my share, rupees nineteen crores sixty seven lakhs and thirty two rupees as part of my share of sale of my ex organization as executive director of my previous organization and capital gains arising out of subsequent trades made in the course of the last one year.” Hiten said, “As part of SRH, I commit rupees eighteen crores twenty seven lakhs four thousand and eighty seven rupees as part of the aforementioned sale, capital gains, all subsequent investments and remunerations earned.” Sreela declared, “To the same effect I commit my share of thirteen lakhs, forty seven thousand five hundred and eleven.” With whatever remained of his distorted face, Hiten could make out, Rashesh smiled and said, “Lets begin!”

Part – VII

Rashesh was preparing himself for the premarket trade. As he was trying to punch in the premiums for the Nifty calls, he heard the calm baritone of Sreela as she said, “Saab put le lo.” Rashesh was aback at the calm assurance of her tone. “Saab, please ek baar mera baat maan lo, mein age se kabhi apko nahi bolungi agar galti hua (Sir, please heed to what I say for once, I will not request you again if I commit a mistake now).” For the next quarter of an hour the father and son duo wanted to rationalize with this simpleton, about whom it was impossible to convince Hiten that she even remotely understood trading. After Rashesh intervened, they finally went along with Sreela’s suggestion much to the dismay of Hiten. He could not comprehend such contrarian thought.

However, within the next half an hour the TV screens began to elicit Sreela’s triumph. As the result trends came in and bastions after bastions of the saffron brigade fell, markets started plunging. Within an hour, SRH had a capital appreciation of more than 100%. But Sreela was in no mood to relent. Within moments, markets were suspended having crossed circuit limits and when it reopened it plummeted again. By the time SRH squared off, they had made a record single day earnings in the entire professional lifespan of Rashesh.
For the next three years, SRH charted gains unheard of in the history of brokerage businesses in India. With a prop desk asset under management which would put many of the large business houses in India to shame, SRH had been asked by all sub account holders, foreign investors, prominent hedge funds to act as their broker, custodian to which the founding members did not pay any heed. In the summer of 2007, SRH came into the forefront again as they made a hostile bid for a private equity backed brokerage named Sonata, the first hostile bid in India. In the adulation that followed, Hiten became a media darling but, few remembered that it had been co-founded by Mr. Rashesh Shah with a strong employee retention contract made mandatory on the key executives.