Surrounded by glitz, grounded in ‘realty’
Run into Sameer Gaur on the street and bet you won't figure that this unassuming man is the managing director of Jaypee Sports International. A fancy watch aside, there are hardly any swanky embellishments that scream: 'F1 circuit owner'.
Instead, he exudes a very rooted charm far removed from the badges that the rich seem to need to tell the world of their status in it.
Then, he has driven on India's claim to F1 fame about “two or three” times. The fastest car that he has steered is his Mercedes SUV and no matter how major a player the Jaypee Group is in this part of the country, this man still proudly states that, “hum pai, pai ka hisaab rakhte hain (we account for every single paise)”.
It’s the way Sameer says the last bit that gives a clear vision of the Group's philosophy: For them, this is not about the glamour; it's about simple economics.
"The economic model is pretty simple. We raise the profile of the property by having a world-class event, the eventual profits will come in the form of appreciation of the land value," say Sameer whose group owns huge swathes of real estate along the 165km Yamuna Expressway to Agra. The vision came from the man at the helm: Jaiprakash Gaur.
"Gaur sahab said, we need to get a huge event here. He said, just go and get it --- something that has never been seen in India. He narrowed down on F1. The rest of us just went and followed instructions," smiles the youngest son.
The rights fee is currently $40 million (Rs. 214cr) and is expected to go up 10% for every year of the five-year contract.
Didn't you guys pay too much given that F1 was super keen to get into India? "In hindsight, maybe. But, then, we had no choice. We were told to just get it to India. In such a situation, our bargaining powers were limited," he smiles again.
In the recent past, Singapore and Korea renegotiated their contracts with F1. Surely, the Gaurs aren't content with just doling out the money?
"Our negotiations are also on and I believe India is a big market for F1, and I see no reason why FOM (Formula One Management) will not sit and discuss the contract with us looking at the present economic situation," says Sameer with a glint that allows one a peek into the hard-nosed businessman behind the man-of-the-earth veneer.
The total cost of staging the F1 circus has worked up to quite a figure. "About Rs. 4000 crore if you include the land cost. The facility cost about Rs. 2200 crore and it's spread over 350 acres."
The group is quite clear that the race itself is not going to pull in the capacity crowds.
"We want to make it a carnival for families to come to. The race will be the main event but we want a spread of activities around it. The Santana concert this time is just the beginning. It is got to be a family outing."
Given the tardy ticket sales, perhaps staging it in a region more attuned to motorsport would have helped? Like down South?
"Granted that traditional racing hubs like Mumbai or Bangalore would have a greater niche crowd than Delhi, but the National Capital Region is the fastest growing metro region. The Yamuna Expressway and the proximity of Agra will lead to more hotels, amusement parks, etc being opened down the whole stretch and the circuit will be the nodal hub."
Quite a leap
So, did the Group ever look at F1 as an image-enhancement exercise? After all, it's quite a leap from being real estate developers and infrastructure enablers.
“Honestly, we only started figuring out what the whole deal was when I started visiting other circuits after we had got the rights. That's when I realised that this thing is huge. And, while we did not really plan for it, F1 has certainly changed the way people look at the Group.”
Sameer went on to talk about how, because of the circuit, automobile companies were looking to invest in the area as they have a world-class testing facility at hand.
He fantasised about how it was possible to seduce F1 teams from a frigid European winter to easier testing conditions at Buddh International Circuit.
He also hoped that automobile engineering courses, started recently in the Group's own institutes, would in future provide a pool of talent which would make the region attractive as an R&D base.
All in all, the Gaurs may have clutched on to this tiger in desperation of raising the value of their holdings, but they are fast figuring out just how to ride it to the next level.
Underpinning all the talk of money is the fact that the Gaurs are fierce nationalists. They actively want to be at the forefront of ushering in change to enable better Indian racers.
"We want an Indian on the podium. It'll take time. But we are not in this business for short-term gain. We do hope to break even in the next five years. In the meantime, we have given Indian talent a platform that was unimaginable in this country. Things will get better!”