‘Family businesses emerging stronger, more specialised’

Drawing more strength from skill sets available among their family members, there is an emerging trend of more family businesses finding their place on the country’s corporate map.

Analysts see that the family businesses of the future would come in certain specialised areas including wealth management.

“We see that there will be more family businesses. Counsels, family wealth management, mentors and family business advisors are the areas that are emerging. We have not heard of them in India even as recently as five years ago. This is a very happy and healthy situation,” Vallabh Bhanshali, chairman of Enam Securities, said. He was speaking at an Asian Invitational Conference on family business.

“Of the total 5,000 or 6,000 listed companies in the country not even 2,000 companies are listening to the market analysis. They basically came to markets to raise money. They failed to integrate with market intelligence,” Bhanshali said.

He further said a lot of companies do not have regular investor relations programmes and their corporate governance is suspicious. “The businesses are not growing and some of the companies are not traceable,” he said.

Prof K Ramachandran, professor of family business and wealth management at the ISB, said in the growing family business there are multiple trends. “One is there is greater awareness about what the family strength is and how the families can stay together and work together and build the family business. The awareness is growing across the country for the past few years,” he said.

Replying to a question on the separation of Ambani brothers, he said, “Complexity in family business comes as the growth comes. The complexity is how to run the business. When the business is small there is not much complexity. Team management and delegation of powers are easy. If it expands, the transition and transformation challenges are there to face.”