At the India Today Conclave 2025, Rishabh Shroff, Partner at Cyril Amarchand Mangaldas, discussed the growing role of family offices in India's journey towards becoming a developed economy by 2047. In a session titled "A Case for Tomorrow", moderated by Siddharth Zarabi, Shroff explained why family offices are vital for India's economic expansion and how they can contribute to achieving a Rs 30 trillion GDP target in the coming decades.
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00:00My pleasure to introduce for this session Rishabh Shroff, partner at Cyril Amarchand
00:07Mangaldas, India's largest corporate law firm.
00:11He co-heads the private client business and also is the head of international business.
00:17Welcome Rishabh.
00:19After the youngest grandmaster in the world, we now have someone who can help us understand
00:27the chess that is played in corporate boardrooms.
00:31But Rishabh, I want to begin by telling our audience of a certain context, you are the
00:36fourth generation of the family business, you've been around for decades and decades
00:42and have an absolutely fantastic overview of what's happening in corporate India.
00:48But I want to start with referring to a recent statement by Uday Kotak, where he seemed to
00:53suggest that the younger generation of business families is perhaps not as interested in the
01:00grind of doing business, especially in the Indian context, and would rather manage their
01:05wealth through family offices and not really sweat it out.
01:10Do you agree with that categorization?
01:12Firstly, thank you for inviting me for this, Siddharth, and to the India Today team.
01:19It's a very hard act to follow after India's best robot and India's youngest chess champion,
01:24so please bear with us.
01:28So I kind of agree and disagree with what Mr. Kotak said.
01:32It's taken a life of his own, his article.
01:33Now there was a rejoinder by Mr. Sajan Jindal, I think a few days ago, and by Mr. Harsh Goenka
01:38as well.
01:39They kind of are saying the same thing, that today's next gen, today's, you know, leaders
01:43in their 30s and 40s are really spending more time investing in businesses through their
01:48family office and not really doing the hard grind, sitting on factory floors and dealing
01:52with unions and tax and all that stuff.
01:56So there are two parts to what he was saying.
01:57One, I think, is just how they spend their time in just terms of deploying capital through,
02:02you know, family offices.
02:03I think that's a good thing for India.
02:05I think it's showing a sign of a very mature economy that we move to a situation, business
02:10are in third for generations today, where you have professionals running the business,
02:14you have the next gen freed up to focus on, I guess, their passions, their interest.
02:20And they're kind of following the Prime Minister's dream of building a Vixit Bharat by 2047,
02:24where you need something 30 trillion GDP coming.
02:26And where is it going to come from?
02:28I think a large chunk of it or a healthy chunk of it will come from this family office capital.
02:33So whatever reports I've seen, there are about 400 or so in India.
02:37I think we are 10 times too short for where we need to be in terms of family offices.
02:41If you see the US today, same kind of ecosystem, they have 8,000 family offices, we have 400.
02:47So I think in terms of Mr. Kotak's premise that maybe there are too many today, I don't
02:52agree with that.
02:53But in terms of his view that people spend too much time on it, yes, I agree.
02:58I think next gen, I think, spends too much time sometimes on the investing side, not
03:02on the build side.
03:04So I think unless you've been on the factory floor, you've been in the boardroom, you've
03:08been in the kind of, you know, sweatshop, you don't really understand how to value and
03:11invest in businesses.
03:12So that is something I think we should let our seniors really groom on next gen and focus on.
03:18We were sitting right there in the hall when Mukesh was on the stage and, you know, that's
03:24a fantastic story of hard work, entrepreneurship and dreams.
03:29While you were watching him, did this thought ever cross your mind that, hey, this is a
03:33business that I could invest in?
03:36Yeah, so actually, I think this also, I think in your earlier session with Amita Thapar,
03:40I think she also, something she was saying about not every business has to be for a profitable
03:45investment, sometimes also for social capital.
03:48And I was thinking if, you know, Mukesh set up a chess academy and does, you know, in
03:51terms of free coaching for, you know, students who want to learn chess, you may not get the
03:56investment from a large MNC or somebody who may not want to see the business case in that.
04:01But from a social impact investment, a family office would eye shut, I think invest in that.
04:05So I think they have a place in society, family businesses for stuff like this.
04:09Did you face this choice when you were starting off on your professional journey, a choice
04:15between doing something on your own or continuing with what is a family business in some ways?
04:22Yeah, so I kind of asked myself this question at many inflection points in my career.
04:28Today we are a hundred and eight year old family business and as you said, I'm generation
04:32four in the business.
04:33So there already have been two successful transitions which have happened before me.
04:39My father took over in ninety four when my grandfather passed away and now he's sort
04:44of sixty five-ish.
04:45He's thinking also about, you know, what next, how does he want to spend the rest of his
04:50active career as well.
04:51So I think succession has come up in terms of our family as well.
05:03Will a law firm only have lawyers, will we have robots like the ones we saw earlier,
05:26will we be sort of a different kind of business model and the like?
05:29So that's what excites me.
05:31I mean, the legal sector is ripe for disruption from AI.
05:38So it's going to be a very challenging next couple of years for us.
05:41Let's spend a minute on that since we've come to that topic.
05:44AI is sweeping across all sectors.
05:48What's happening?
05:49What is likely to happen in the legal sector, especially with the advent of such models?
05:58So as it so happens, law is one of the world's two oldest professions.
06:03We are the only one that charges by the hour.
06:06The other one is not something you can say in polite company on a stage.
06:11So in terms of what we are seeing AI technology do in law firms today, it's kind of disrupting
06:15the labor arbitrage side of it.
06:18What would take a young lawyer twenty, thirty, forty, fifty hours to do, AI can do it in
06:22five seconds.
06:24And that saving of time is pure profit.
06:26So in terms of how we see the disruption in the hiring, promotion, grooming, mentorship,
06:31et cetera, I think AI is going to be a big disruptor.
06:34And how are you leveraging it as a firm?
06:36So we are demoing a product, launched it about ten, twelve days ago.
06:40It's actually, unfortunately, a US LLM model, which you're trying out over here.
06:44There I've not seen any Indian LLM model for law firms yet.
06:47So huge, huge gap in the market.
06:49Anybody who is looking at that would be very happy to demo it.
06:52But we are the early baby steps of AI in our firm.
06:55Okay, let's come back to the business context.
06:58And you spoke about succession planning.
07:01Let me ask you about something that your family also went through almost a decade ago, a split
07:09in the business for people to understand, why did that happen?
07:14And as a consequence, what have been the results for both sides?
07:21So taking a kind of step back, I think, while I call myself a family business lawyer, what
07:28I spend most of the time doing is actually help families separate out in an efficient
07:32and peaceful manner.
07:34And we are seeing this playing out in corporate boardrooms across India today, a lot of companies
07:38in generation two, three, four, some in five as well.
07:42I think we're seeing a lot of realignment in terms of interest, passion and desire to
07:46stay together as a family really kind of playing out.
07:49One of the biggest ones that went through a few months ago was the Godrej family, which
07:52did a very efficient realignment of its kind of two branches.
07:56So that's playing out.
07:57And I think the difference is coming, including for our case as well, kind of difference in
08:01aspiration in the next gen versus the current or now gen.
08:04I mean, they are mostly in their 60s, some in their 70s, different perceptions of risk,
08:09how they want to be involved in the business, management style, who's in the boardroom with
08:13them, etc.
08:15Next gen, as we heard in the sessions today, are more interested in things like AI technology,
08:20kind of more in terms of less labor intensive businesses, more tech driven investments.
08:24So that's manifesting in going their own ways, I think sometimes in a peaceful way, sometimes
08:29in Indian courts, but that's a very common trend we are seeing playing out.
08:33And in our own case, unfortunately, it's very ironic that it happened from a case of bad
08:37succession planning for my kind of grandmother's will in 2014.
08:42The lesson I took away is that sometimes a timely intervention or succession is better
08:48than kind of going through a painful separation later.
08:50So it's like sometimes a cancer which can spread in case you don't treat it early.
08:54So the earlier you look at the root cause and address it is better for the family and
08:58for the business.
08:59So is that the formula for and the difference between a happy business family and unhappy
09:05business family?
09:08I kind of think so.
09:10I think the families who are still happy, but not as a family business together, I think
09:15they've done something like that, where they've taken somebody wise in the family, typically
09:20elder generation says that, you know, these kids cannot work together, they're not compatible
09:24in terms of business risk, whatever, and done a very kind of timely separation without it
09:28becoming very toxic for the family.
09:30I think it happened for the Bajaj family in 2007, 2008, it happened for the Goenka families
09:37in the late 90s also.
09:39And I think both families on either side have done very well, they prospered.
09:42The family still goes on vacations and, you know, spends time together.
09:46So I think timely is more important than doing a painful process later.
09:51Let's touch upon another topic and this is the flight of capital.
09:55We are seeing a flight of FII money from India for the last some months and that's taken
10:01a toll of the stock markets.
10:04This week has been a pretty good one after a bit of a gap.
10:09But when it comes to a lot of business people, second generation, we keep hearing these reports
10:15about people leaving India, acquiring foreign passports and, you know, some people even
10:21say that this was on account of difficulties of doing business.
10:25Also that has now become far, far easier.
10:29What's the situation?
10:30Is it correct to say that a lot more family, business members are now leaving India?
10:40I would say definitely yes, forget the exact number, but I think in 2023, 2024, something
10:46like seven-ish thousand people left India, in a country of 1.7 billion is not a big number
10:51in absolute terms, but who has left is very important.
10:54These are your 1% of the 1% of the 1%, so who create jobs, who pay the highest taxes,
10:59who create sort of India on the map, they are leaving India and they are getting, you
11:04know, residency, passports in Dubai, in Singapore, in the US, UK, Trump also launched his golden
11:09card scheme a little while ago, aimed exactly at this kind of individual.
11:13So that for me is most concerning that why these, you know, captains of industry leaving
11:18India and why they're seeing other countries as better prospects for their business and
11:21for their personal wealth.
11:23So why indeed in your view?
11:26So I think part of it also is a bit of India hedge, India diversification, I mean, no matter
11:30how diverse your India portfolio is, equity, debt, start-ups, whatever, it's still an India
11:34exposure that you have.
11:36A lot of these guys have a lot of liquidity, they want a global footprint, they want to
11:40invest in exotic assets, crypto to private debt to, you know, buying the meta Google
11:44stocks, etc., and you can't kind of do it from an Indian regulatory ecosystem.
11:49So look at sort of parking family office money in Singapore, in Abu Dhabi, in Dubai, and
11:54it's sort of very custom schemes created in those markets for Indians to actually invest
11:57over there.
11:58So taking advantage of it, sometimes you can have a next-gen kid living in Dubai, sort
12:02of running that global family office from there.
12:05And it's been a successful-ish business model for most families today, to have a kind of
12:10global diversification from there.
12:12What is likely to happen on account of the US gold card scheme?
12:16We had the US Commerce Secretary, you know, do a virtual hard sell here, and it seems
12:22clear that they are looking at the 1% or the 1% or the 1% in India.
12:28So it's incredibly expensive.
12:30It was $800,000 up to a few months ago, it's 43 crores today.
12:35So I think just the absolute number has a bit of sticker shock to it.
12:38But I don't feel for a lot of Indian families, it makes too much economic sense to do.
12:43We were chatting in our break as well that you can get the same thing in Malta for $650,000.
12:48Why would you pay $5 million for pretty much the same level of access that you may get?
12:52I think unless a next-gen or a family actually wants to physically live in the United States
12:56and do business over there, if you are just an Indian businessman having a foreign passport,
13:01it doesn't make any economic sense to have a golden card over there.
13:04So I don't see it taking off too much, but yes, some families will look at that.
13:09What would you say to those who may choose to call this unpatriotic kind of view, you
13:15know, taking your money and your citizenship out of India?
13:19No, I think these guys still very much live here.
13:22Like you said, this is more of a global diversification.
13:26Many of my clients who have this passport still very much active in India, they live
13:29in Bombay, Delhi, Bangalore, wherever, run Indian businesses, pay Indian taxes, file
13:33Indian returns, do whatever they need to.
13:35So it's not the unpatriotic, it's an India head.
13:38Suppose something goes horribly wrong one day, you have a little bit of thing on the
13:41side in case you need to leave India to take care of it.
13:45Dil Hindustani hai, but passport kahin ka bhi ho sakta hai.
13:50I thought the Gift City, and you know, we're on our last minute now for this session, but
13:56I thought the Gift City was something that was supposed to fix this, to reverse this
14:02to some extent.
14:04What is the on-ground status?
14:06Sure, so maybe just 30 seconds on what is Gift City.
14:11It's kind of modeled as an offshore financial center physically based in India.
14:15Like those of you who've been to Dubai have seen the DIFC where the restaurants and the
14:19hotels usually are.
14:20So it's a place where Indian laws and regulations don't apply.
14:24In 2023, government or the IFSC, the regulatory body, they launched a scheme to allow individuals
14:30to take out up to 10 million US dollars in personal capital through the structure.
14:35The problem is the intention was there, the law was there, but it's not being followed
14:39at all actually.
14:41So it's an approval-based process.
14:42No approval has come for any family office whatsoever in the last one and a half years.
14:46So it's a bit of dichotomy between what the law says and what actually is happening in
14:50practice.
14:51So a lot of families are very upset with this.
14:53This is why, like you mentioned earlier, the whole family office route for other countries
14:57has taken off, but Gift City has not taken off because of this.
15:00Well, you know, as I end this session, there are so many problems in the world, in India,
15:06but it's clear that even rich people have significant problems and Rishabh just gave
15:11us a small glimpse of that.
15:12Thank you very much for your time with us today.
15:14With that, it's a wrap.