IDFC's Ajay Mahajan, 46-year-old banker all set to start his second innings
Ajay Mahajan is drafting a business strategy that will shape IDFC's plan in diversifying beyond funding roads and power plants.
A hardcore markets person, who has spent years cutting money market deals, putting through bond syndications and dabbling in complex cross-currency derivatives, IDFC is Ajay's second innings in banking. After working for institutions like Bank of America, YesBank and UBS, he took a different path. During the two years between jobs at high-street banks and the new assignment at IDFC, Ajay traded in currency futures, advised corporates on managing risks and tried to set up a non-banking finance company.
The finance company venture, however, did not take off. His idea was to set up a shop to carry out wholesale lending largely through structured products. But a sluggish market and dismal macroeconomic environment made it difficult for him to mobilise funds. That was when he chose to puts his skills, experience and understanding of the markets into risk-management and risk-modelling for deals with unhedged forex exposure. Often the bane of corporate treasuries, uncovered forex risks have burnt a hole in many balance sheets. Mahajan teamed up with Nityanand Sharma, who had worked as a trader at the structured credit group at Goldman Sachs New York. The two set up R-square Advisers, which provided quant-oriented risk management, fixed income and credit modelling solutions for clients.
What possibly impressed some of his clients is Ajay's ability to cut through the maze of financial jargons in simplifying stuff for clients. IDFC was one such client. In one of the meetings, Rajiv Lal, executive chairman of IDFC, convinced Mahajan to be an advisor to the institution, which, like many other corporates, aspires to set up a bank. Ajay spearheaded UBS' banking foray into India, setting up shop for the Swiss bank; the learning may come in handy if IDFC finally bags a banking licence. In BankAm and Yes, he worked through the different phases of bull and bear markets, picking lessons from the ups and downs of the bond market, the volatility of the rupee, and the disputes with corporates when their derivatives bet backfired. During these stints, he sensed and spotted the changing nature of wholesale banking, the fascination for structured products and the multiple avenues for a bank to earn fees and carry out off-balance-sheet transactions in a growing economy.
"Markets are in my blood," says Mahajan who, unlike many bankers, keeps away from golf course, preferring instead to sweat it out in a badminton court and by simply running around. Even on holidays - and he escapes to Goa whenever he can - Ajay keeps track of the markets.
As a young man in the early '90s with BankAm, his first employer, Ajay experienced the new opportunities that crop up when an economy opens up. Like many campus recruits by MNC banks, he had an engineering degree from BITS - Pilani, and a management degree from FMS, Delhi. Ajay was moved to Mumbai (from Delhi) in 1991 when there were many senior-level exits at the BankAm treasury - a business he would head after nine years. While he had gathered experience in sales, running a treasury of a leading foreign bank was an opportunity to sharpen skills in managing asset-liability mismatches and covering interest rate risks. He had set up the debt and capital markets business for BoA and managed the first deal that BankAm underwrote. The team under Mahajan managed forex flows of $200 million a day for Enron when it was setting up Dabhol.
In 2004, he was roped in by Yes Bank. The four years at the private sector bank, where he was responsible for financial markets, financial institutions and investment management functions, helped Ajay pick up new skills. He led the new bank's maiden subordinate debt issue with Life Insurance Corporation.
In the cut-throat world of financial markets, Ajay has had to deal with aggressive clients and abrasive colleagues. Not all experiences have been pleasant, but each encounter has honed his skills as a professional. "Unjust behaviour makes me lose my cool. For the last four years, I'm working on regulating my temper... It's much better now," he smiles.
It would not only help him deal with irritants like bad motorists driving dangerously close to his Merc and unhelpful call centre executives, but also make it easier for him to negotiate in the search for new avenues of growth.