This article memorializes Professor Suresh Chandra Kuchhal. While teaching us nuances of Corporate Finance in 1976-77, he regaled us with pithy observations the import of which we only vaguely understood as students. It is only much later in life as we progressed in our careers, we started appreciating the wisdom the earthy aphorisms contained. Below is a sample of these as recalled by me and my friends from the doctoral programme at IIMA.
On financial statements of companies, Professor Kuchhal pointed out how these statements often attempted to hide unfavourable information about the company in the belief that, “Jungle mein Mor nacha, kisine na dekha!” [Nobody saw the peacock which danced in the forest.] However, such belief is misplaced as there is always someone who will say, “Maine dekha, maine dekha, maine dekha!” [I saw, I saw, I saw!]. Through the couplet he conveyed to us that there was little merit in the management of companies attempting to obfuscate information as the truth will out eventually. It was only decades later that full, true, and timely disclosure of information was enshrined as one of the fundamental tenets of good corporate governance.
On investments, Professor Kuchhal observed, “Khichdee tere char yaar; Ghee, papad, aur dahi – achar”. [The dish made from rice and lentils (Khichadee) is incomplete unless accompanied by clarified butter, cracker, curd, and pickle.] The couplet informed us that projects required co-ordination across multiple functions for successful completion. While appreciating the rhyming lines, the innocent us did not quite recognize their relevance. Only after witnessing project after project getting either delayed or poorly implemented, did we start appreciating the import of the two ‘entertaining’ lines.
In 1977, there was a large IPO by a textile company. The issue was heavily advertised. Several of us had started applying to these IPOs. Responding to a query from a student on the history creating issue, due to its large size, the venerable Professor observed, “The promoters have removed the butter, and are offering only butter milk to the investors.” The truth of his observation was borne out by several IPOs that hit the market in the last few years, where the founder promoters benefitted enormously through OFS (Offer for Sale) as well as raising fresh resources from new investors at exorbitant issue price. The shares of a company with one the largest IPOs in the recent past is quoting at 17% of the issue price. The promoters of the company made a fortune by selling at elevated issue price.
In Shakespeare’s play Macbeth, while imploring the witches to tell him about his future, Banquo cautions them, “If you can look into the seeds of time and say which grain will grow and which will not, speak then unto me.” Well, we know that unlike Banquo’s demand, in the world of finance and investments we cannot not decide waiting for resolution of the underlying uncertainties. Professor Kuchhal did not hesitate to opine on queries from students about incidents in the financial sector which required an assessment of the future. For the sake of full disclosure, I must reveal that his assessment about the IPO by the textile company proved incorrect. The successful allottees were handsomely rewarded. But then he was right on many other occasions! As he would say, “Too much analysis, leads to paralysis”. You must go with your gut!
Professor Kuchhal brought the real world of finance into the classroom, never hesitating to express his opinion despite knowing that on occasions he could be proved wrong by the events as they unfolded in the future. He was secure that his students will not hold that against him as a teacher. The emphasis was less on learning the esoteric derivation of the theory and concepts and more on developing a horse sense on finance. As I look back, I benefitted immensely from Professor Kuchhal’s pedagogical approach to teaching finance.