Have you heard fintech company BharatPe’s founder Ashneer Grover on the show ‘Shark Tank India’? If you have, chances are, you have found him to be an abrasive, rude and unpleasant man – not to mention, an entitled one. But then, he’s among the most successful entrepreneurs of India, and it is rather evident that he has used his abrasion to his advantage all through these years. Ashneer Grover does not sugarcoat his opinion. He is rather straightforward, and really takes down budding entrepreneurs who he thinks do not have it in them to make the cut.
In a major scandal, Ashneer Grover was heard abusing a Kotak Mahindra Bank employee. The leaked call recording startled everyone. It was the classic “Mercedes vs cycle” rhetoric at work here. If someone is rich, he must be guilty of everything he’s accused of. Isn’t that the stereotype around the world? But is this the case here? Is Ashneer Grover really at fault? Should he be judged for what to us, appears to be an expected outburst?
Ashneer Grover Trusted Kotak to Finance his Nykaa IPO Shares Purchase; Got Dumped
The Nykaa IPO gave investors as much as a 79% premium on their share purchases. Guess how much Ashneer Grover wanted to put into this IPO? Whopping 500 crore rupees! However, Kotak failed to purchase Nykaa shares on Grover’s behalf.
Essentially, Ashneer Grover was deprived of a 79% premium on what was supposed to be a 500 crore rupees investment by him.
Do the math. If you were putting in so much money into an IPO and were ready to relish in the 79% premiums that followed, and yet, your financier failed to put the money in at the right time, what would your reaction be like? Would you talk politely with the person responsible to make sure that the Nykaa shares worth 500 crores were purchased on time? Of course not. You would be mad as hell.
And that’s what Ashneer Grover was. He got mad, and in a moment of fury, ended up abusing the Kotak employee. Ashneer Grover and his wife even sent a notice to Kotak for not informing them well in advance that the bank would be unable to make the funds available on time.
According to the legal notice, while Kotak had informed Grover and his wife that the subscription formalities for the Nykaa IPO were done, they were soon informed that the bank would not be able to provide the IPO financing due to ‘erratic FII movements’ and ‘very high lending rates.
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The legal notice really sheds light on what transpired between Grover and Kotak, and how the bank ended up depriving the entrepreneur of some serious financial gains. It said, “Kotak’s refusal to provide IPO financing to our clients at the eleventh hour has completely crippled our clients’ ability to participate in the Nykaa IPO and deprived them of a business/investment opportunity about which they had informed Kotak more than a month in advance of the launch of the IPO. Had Kotak informed our clients at the very beginning that it would be unable to provide IPO financing for the Nykaa IPO, our clients would have approached other financiers who were ready and willing to provide IPO financing to our clients for this IPO.”
Kotak, it seems, has not issued a point-by-point rebuttal to Ashneer Grover’s accusations, which makes us believe that the BharatPe founder’s version is the only one that there is. Previously, Grover had used Kotak’s services to invest more than Rs 100 crore each in the IPOs of Zomato and CarTrade through IPO financing.
Is it justified to crucify a man based on a moment of absolute fury that he encountered, upon knowing that he was no longer going to make a profit of hundreds of crores of rupees because the financing agency failed to fulfil its obligations, without even informing Ashneer about the same well in advance?
Following the fiasco, Ashneer Grover has taken voluntary leave till March-end. In a statement, BharatPe said, “For now, the board has accepted Ashneer’s decision which we agree is in the best interests of the ‘company, our employees and investors, and the millions of merchants we support each day.”
The company which Ashneer Grover founded and built from scratch also does not appear to stand by him. The view being taken by all of the entire situations is highly myopic and stereotypical. The Grover-Kotak fiasco needs to be seen in context, and unfortunately, nobody is willing to do so.
