NEW BUSINESS FAMILIESNEW BUSINESS FAMILIES

Presented by: Fenella Andrade Masters in European Studies and Management (MESM) 2010-2012 Manipal Centre for European Studies Manipal University, Karnataka, India

Source: Business TodayApril 17,2011

GMR GroupGMR Group

• Founder: Grandhi Mallikarjuna Rao, Andhra Pradesh• Age: 60• Main Companies:

– GMR Infrastructure– GMR Industires

• Sons: – G.B.S Raju – Chairman, Corporate and International

Business– Kiran K. Grandhi – Chairman, Airports

• Son in law: – Srinivas Bommidala - Chairman Urban Infrastructure and

Highways • Total turnover: Rs 4,560 crore (Rs 25,000 crore assets)

• Grew up in Ranjam village, 120 km northeast of Vishakapatnam

• Graduate in Mechanical Engineering from Andhra University• Worked for a Public Works Department (PWD) executive

engineer• 1973 – worked for a brief period at a paper mill• “My life can be split into five parts: student, leader, trader,

manufacturer, banker and infrastructure developer,” says Rao• 1978 – set up his first manufacturing operation – a jute unit in

Ranjam, and over the Licence Raj years, he set up 28 units in steel rolling, ferro alloys, sugar and alcohol, among others

• Due to prohibition in AP under the N.T. Rama Rao government in 1983, he was forced to look outside the state

• Ended up family controlling a bank – ING Vysya, the country’s second private power generation company, several road projects and eventually airports

The ManagementThe Management

• Family council: Son-in-law Srinivas Bommidala and sons Kiran K. Grandhi and G.B.S. Raju as members

• Their motto: Run the family like a business and run the business like a family

• Family members are involved in the business • Some of their group’s highways and urban infrastructure

business, Grandhi airports, and Raju International business, won’t be in operations after Rao plans to retire in 10 yrs – after which they will either work as a three person unit or rotate chairmanship

• Regular meetings which include women too• The circle is not complete without family governance

ADANI GroupADANI Group

• Founder: Gautam Shantilal Adani, Ahmedabad• Age: 48• Main Companies:

– Adani Enterprises– Adani Power– Adani Wilmer– Mundra Port

• Wife: Priti manages Adani Foundation• Son: Karan handles ports business• Brother: Rajesh oversees the trading business• Nephew: Pranav looks after agri business• Total turnover: Rs 28,000 crore in 2009/10

• 1980 – teenaged Adani travelled from Ahmedabad to Mumbai to dabble in diamond business

• He initially honed his skills as a diamond sorter, observed how trade was being carried out and soon graduated to diamond trading

• 1988 – started Adani Exports, a partnership trading firm in Ahmadabad dealing in agricultural products, dye intermediates and plastic products with a seed capital of Rs 5 lakh

• His vision is to have an integrated operation for his group – from coal mining to power generation

• The group mines the coal, transports it by rail or water using its own tracks, jetty and vessels, and unloads it at its own port.

• “There is no other integrated power company in India,” says Ravi Sharma, CEO of Adani Power

• Apart from Mundra port, plans of expanding its port presence in Goa, Hazira and Dahej

• The group today chatters between 60 and 70 ships for its trading operations and they plan to buy 20 ships by 2020, two ships are already sailing

• The group is fast moving from being largely family run to being more professional driven

• All his businesses from power, port, oil and gas exploration to agriculture are manned by professionals

• He trusts and supports his core team and never bothers to intervene but is always kept in the loop

• Adani’s message to his team, “We should be the best in whatever we do.”

• He plans to expand his core team to implement his vision 2020 – achieving 200 million metric tonnes of cargo, 20,000 MW of power generation and 200 million metric tonnes of coal mining

DECCAN 360 / DECCAN CHARTERS LTDDECCAN 360 / DECCAN CHARTERS LTD

• Founder: Capt. G.R. Gopinath• Age: 59• Wife: Bhargavi runs a bakery venture, Bun World• Daughters:

– Pallavi works for Deccan 360– Krithika is with Deccan Charters

• Total turnover: Rs 375 crore in 2009/10

• The ex-Army officer’s entry into aviation came after he had tried at a series of business ventures in his native district – Hassan, Karnataka

• He reared cattle to sell milk, poultry farming, silkworm farming, motorcycle dealer, Udupi hotel owner, stockbroker, irrigation equipment dealer, agriculture consultant, politician and now finally an aviation entrepreneur

• His wife - equally successful entrepreneur - smaller scale, bakery in the upscale Malleshwaram neighbourhood of Bangalore – expanding

• 1997 – Capt. Gopinath and Capt. K.J. Samuel started with a single leased helicopter operating out of a small office on Bangalore’s Infantry road – grown into a mature business with a fleet of 13 choppers and 3 aircrafts

• Air Deccan would have passed into history but it did show how the low cost model was the way forward for the airline business

• New start up – Deccan 360 – is pinning similar hopes on the growth potential India holds in the express logistics space

• Roped in Mukesh Ambani as a strategic investor• He tweaked his management structure to demarcate the line

between the owners and the managers, CEO of Deccan 360 report to the company’s board and not to him

• “I have put in place a good corporate governance structure and have distanced myself from the management,’’ says Gopinath, who is its chairman

• Both his daughters have decided to join their father and Pallavi,29 who looks after Business Development at Air Deccan and Krithika,23 is employed at Deccan Charters Ltd

• Having placed his business in the hands of his trusted CEO’s, he uses his time to sew up big plans and give big surprises

• They also host Indian classical music concerts in their bungalow in Bangalore

MOSER BAER INDIAMOSER BAER INDIA

• Founder: Deepak Puri, New Delhi• Age: 70• Main Companies: Moser Baer India• Wife: Nita heads the Administrative wing• Son: Ratul, Executive Director• Total turnover: Rs 5,500 crore in 2010/11

• Hailing from a family of landlords• Junior executive – oil company ESSO (Kolkata)• Shalimar Paints – to master the art of management

techniques, marketing tricks and to receive a firsthand experience before venturing into his own business

• 1964 – Metal industries in Kolkata, trading in aluminum wires and furniture. Two yrs later he moved into manufacturing

• Frequent strikes and deteriorating business environment forced him to migrate to Delhi

• Started Moser Baer India at first as a 51:49 joint venture with Switzerland based co. Moser Baer (time machines)

• Technological changes: Death of cassette and video cassette – replaced by CD’s, floopy’s and Digital Versatile Discs (DVD’s)

• In three years the revenues shot up from Rs138.5 crore to Rs 1,585.6 crore. Net profits Rs 325.9 crore

• In 2003/04 Moser Baer India was the world’s second largest manufacturer

• By mid 2000’s, demand for CD’s and DVD’s too stopped rising

• Diversified into manufacturing solar panels• Moser Baer Solar, a fully owned subsidiary of Moser Baer India

– earned revenues of Rs 1,000 crore in 2009/10• Still has growth for flash storage but the big revenue growth

will be in solar

BALAJI GROUPBALAJI GROUP

• Founder: Jeetendra Kapoor, Punjab• Age: 68• Main Companies:

– Balaji Telefilms– Balaji Motion Pictures

• Wife: Shobha, Managing Director, Balaji Telefilms• Daughter: Ekta, Joint MD, Balaji Telefilms• Son: Tusshar, Executive Director, Balaji Motion Pictures• Total turnover: Rs 170 crore

• 1990 – asked to produce a programme for the channel TV Asia• Market research and family coaxing, took a plunge• “We were left with a lot of software but no slot to put it on

air,” says Jeetendra• Balaji Telefilms was born• Ekta took over as Creative Director at 19• First break on Zee TV on paranormal activity, Mano Ya Na

Mano• Bull’s eye with Hum Paanch• Then began the ‘K’ soaps that topped the charts for years –

Kyunki Saas Bhi Kabhi Bahu Thi and Kahaani Ghar Ghar Ki• Tie up with Star TV turned into a money spinner • 2008 – cracks appeared between the partners, trends changed

and ratings dipped• Star took the ‘K’ soaps off the air

• Revenues started crashing from Rs 95 crore in 2007/08 to Rs 4 lakh in 2008/09

• Family realized the need for professionalism• Appointed Puneet Kinara as CEO• Promptly rose to prominence again, pulling off the two

biggest sleeper hits of 2010 – Love, Sex and Dhoka and Once Upon a Time in Mumbai

• “We want to emerge as a leading content player in television and movies in the next five to 10 years,” says Kinara

• “The falling out with Star was a learning experience as it enables us to emerge as an entertainment powerhouse,” says MD Shobha

• Rapidly turning technology in every field have increased business risk and the mortality rate of business families too

• Succession challenge• Families today are aligned but the future

cannot be predicted