Best friends, Anindya Mandal and Sumanta Chakraborty, the founders of Ruby Financial Services talk to Pallabika Ganguly about their journey.
The duo Anindya Mandal and
Sumanta Chakraborty have a lot in common – they lived in the same
neighbourhood, went to the same school and wanted to be entrepreneurs from
their early childhood. They started young – in their 10th standard,
they initiated a small office automation business – xerox, stationary, courier
service. The business did well and gave a good cash flow. Both were happy
because their first venture was all set.
Their interest in stock market was ignited when they went to procure stationary material from Dalhousie in Kolkata where Calcutta Stock Exchange was located. After a few visits, they became aware about the operations in the market. As their office automation business was doing well, they were scouting for other ventures.
Stock market interested them, so after completing their graduation in 1993, they started selling shares to their family members. Soon they started bonds, IPOs, UTI MIPs too.
“During those days, investors were crazy for IPOs, FDs, shares, MF and secondary market and we earned good commissions by selling these products. The tech euphoria was at its high and most of the mutual fund companies were launching IT related products. So it was not difficult to convince investors to invest in such products,” said Anindya.
But Anindya accepts the fact that mutual fund were sold in a wrong way during those days. “The agents were uninformed and told investors that it is like a share which invest in 20 different listed companies.”
Tech bubble busted in 2000 and mutual fund houses were unable to generate any returns for investors. This surprised the investors and even agents. Ruby Financial also stopped aggressively selling mutual fund. They started concentrating on insurance policies, bonds and shares.
After sometime, when the scenario settled down, mutual fund houses started giving training to agents. Such training enlightened the agents about different types of mutual funds – equity, debt and liquid products. They were advised by the MF houses to sell debt product during volatile market. And slowly the agents turned into informed advisors who could do better needs assessment of clients and recommend appropriate products.
“It was very difficult to gain back the confidence of investors. But through several meeting and support of our business associates, we slowly started gaining back the confidence of the investors,” recalls Anindya.
Business Model
The duo had realised the potential of the financial market and the appetite for the product among investors. They joined hands with business associates like LIC agents, postal agents and working ladies to spread their business in different corners of Kolkata.
In the first year they had 50 associates and by 2007 they had 742. The count of associates has declined after the ban of entry load in the mutual fund industry. Ruby Financials currently has 200 associates and manages an AUM of Rs 80 crore.
Over the last few years, the firm has been promoting SIP and it won the UTI MF & CNBC-TV 18 Financial Advisor Awards two years in a row for generating 2000 SIPs.