`50RNI No.35850/80; Reg. No. MCS-123/2015-17; Published on: Every alternate Monday; Posted at Patrika Channel Sorting office, Mumbai-400001 on every alternate Wednesday-Thursday

May 22-June 4, 2017

n ONE BELT ONE ROAD

n MODI’S THREE YEARS

n BANKING: PERFECT STORM

n AYURVEDA VERSION 2

Cairn’s merger into Vedanta creates India’s No 1 natural resources company

AnIndian Giant

Anil AgarwalFounder-ChairmanVedanta Plc

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there are stories told of the 65-year-old anil agarwal, group chairman, Vedanta resources plc (listed in london) & chairman

emeritus of its indian arm, Vedanta ltd. they say, in his early 20s, when he first came to mumbai from patna, he barely understood english. the only two words he knew were ‘yes’ and ‘no’. however, agarwal relocated abroad in 2003 and, as an nri living in london (as he does these days), he has picked up a lot more of the lan-guage, and can speak with passion on the subjects closest to his heart – natural resources and the building of the nation, india.

But, one word he hasn’t added to his vocabulary is ‘maybe’. this anec-dote exemplifies his steely vision and determination. nowhere has this been more in evidence than in his takeover and turning around of a slew of companies, including the latest, cairn india. a strong believer in the india growth story, agarwal’s mantra is to use every opportunity that has potential to create employment and eradicate poverty. he envisions an india self-reliant on its energy needs, export-oriented, sustainable and a socially responsible country.

and he has done it, leading from the front, creating a R71,721 crore (post merger) conglomerate, which is one of the fastest-growing diversi-fied global metal and mining majors, with interests in aluminium, zinc, copper, lead, silver, iron ore, oil & gas and energy. the group has opera-tions in india, zambia, ireland, aus-tralia, south africa, liberia, the uae and namibia.

“Vedanta, i believe from my heart, is a company with a ‘purpose’; it’s

not for satisfying personal needs,” says agarwal, who has a passion for mother earth. “if you look at how america was built, and i got this from the discovery channel, it doesn’t show any politicians, scientists or inventors, but they talk about the industrialists, who have built amer-ica – the likes of john d. rockefeller, j.p. morgan, henry ford, cornelius Vanderbilt and andrew carnegie. they speak about how their indus-trial innovations and business empires revolutionised modern soci-ety. these are the people, discovery channel says, who have built amer-ica, which was nothing. india has a huge culture and history of centu-ries. america had nothing and they built the foundation on these five people. so, i find india is probably in the very same situation – you need a political leader; you need a leader who can take the country’s trade, industry and infrastructure forward. now is the time for india”.

“earth is important; its contribu-tions are above the ground, as also below the ground. above the ground is agriculture. i have undertaken this mission to explore natural resources, which are below the ground. they are also important and they help to eradicate poverty and build the

nation,” says agarwal candidly. “don’t we have the right to use our own oil, gold, copper, fertilizer, etc?” he asks. “we have to look at these in the swadeshi perspective. so, this is the genesis of my dream, to become a natural resource player. and, trust me, whatever i do, i do with a ‘pur-pose’. i tell all my executives: you must have a feeling about what Vedanta is doing, it is for a specific purpose, it is for our society. if there is anything in what we are doing, you feel, will not be good for soci-ety, please pause to rethink,” exhorts agarwal, while elaborating on the philosophy that has guided him.

Dream into realityagarwal’s dream from the very begin-ning was to become a global natural resource player. “you know we are the only mining and natural resource company in india. everybody feels proud to have a world-level natural resource company originating from his country. bhp Billiton says ‘i am from australia’, axon says ‘i am from america’, Vale says ‘i am from Bra-zil’, anglo american says, ‘i am from south africa’. now, indians can say, here is Vedanta, which is from india. we want to have our dna tested to prove that we are an indian com-pany and are proud to be an indian company,” he adds. agarwal has now completed the merger of Vedanta with cairn, a company he bought in 2012, which was a major step in the direction of becoming a full fledged natural resource player.

on 15 may 2017, the merged entity has come out with its cor-porate scorecard for the year ended march 2017. while the revenues are up from R63,920 crore to R71,721

Anil Agarwal puts India on the global natural resources

map, with Vedanta among the top 10

producers

The natural resources billionaire

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crore, the profit after tax has soared by three times to R10,022 crore, as against the previous year’s R3,553 crore. the other key financials show progress too – ebidta (R21,437 crore), cash (R63,471 crore) and net debt (R8,099 crore). today, with a market cap of R1,14.308 crore, it is the eighth largest private sector industrial unit in india (excluding banks and tech companies) and the first to publish a tax transparency report.

“the merger with cairn india transforms Vedanta ltd into a diver-sified natural resources powerhouse, anchored in india. the combined entity truly reflects our strong, diver-sified, low-cost portfolio with indus-try-leading volume growth from our well-invested assets. we are looking forward to an exciting 2017-18 and future years, with all our businesses operating at full capacities and cost efficiencies,” explains navin agar-wal, chairman, Vedanta limited, who is the younger brother of anil.

“our strategic focus, to ramp up production across the portfolio in zinc, aluminium, power and iron ore businesses throughout the year,

has supplemented revenue growth. in particular, record production lev-els at zinc and aluminium were well-timed in an environment of strong supply side pressures on both com-modities. our cost management ini-tiatives have helped us deliver strong

returns for all our shareholders,” adds thomas albanese, ceo, Vedanta ltd. albanese hails from rio tinto, where he was ceo from march 2007 to jan-uary 2013.

“in less than three decades, agar-wal has managed to build a diversified

In one of the biggest buy-outs for a domestic com-

pany, Vedanta acquired Cairn India in 2012. The UK Cairn Plc had a business model of dis-covering oil, putting the fields in production and then hav-ing captured the growth, sell-ing to focus on new areas for exploration

At the time of the acquisi-tion, Cairn was at a nascent stage of growth. One of the key projects Vedanta initiated was the commencement of the enhanced oil recovery (eor) project for the most prolific Mangala field. This project was planned ahead of schedule, with the management team identifying the potential for chemical eor at an early stage of development. The Man-gala eor project is the largest polymer programme in the

world. The first polymer injec-tion at the Mangala field was achieved ahead of schedule in October 2014. Today, over 400,000 barrels of polymerised liquid are injected in the field and the Mangala eor produces about 56 kboepd (8 per cent of domestic production). Buoyed by the success of the Mangala eor project, the management team is pursuing polymer flood execution in the Bhagyam and Aishwariya fields.

Over the course of the six years since acquisition, the gross production volume from the Rajasthan field has increased from 100,000 bar-rels of oil or oil equivalent per day to 160,000 per day in 2016-17.

Focussing on rapid growth is in Vedanta’s dna. The group was keen to unlock the vast

hydrocarbon potential of the Rajasthan block. For this, one of the key hurdles was the non-clarity on exploration, and rev-enue share, in a development phase of the block. The gov-ernment, in 2013, clarified the exploration policy, paving the way for Cairn’s expansion. In order to establish the full potential of the block, Vedanta invested a capex of over $600 million for exploratory and appraisal wells and seismic data acquisition. The success-ful exploration programme added 1.7 billion barrels of oil or oil equivalent of hydro-carbon potential with 13 new discoveries.

These new discoveries posed a fresh set of challenges for the management team to monetise. However, for Vedanta, this only opened up a window of opportunity – to replicate the success of drilling

technologies in North Amer-ica. The management team acted swiftly to initiate a two-pronged strategy to develop the tight oil & gas formations.

The Vedanta group initi-ated an ambitious appraisal programme for the tight oil discoveries focussing on Barmer Hill. The group invested more than $100 mil-lion in order to test new frack-ing technology and assess the hydrocarbon potential. At Barmer Hill, eight horizontal wells were drilled. Every well had about 10 fracs and, on an average, 2,00,000 pounds of proppants were infused for these fracs. The ‘limited entry technique’ of fracturing using multiple perforations in sin-gle stage and precise reservoir targeting has increased res-ervoir coverage by almost 30 per cent. Vedanta pioneered in introducing such fracking

Exploration

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Navin: the operations man

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metal, mining, and oil & gas explo-ration group of global scale, com-peting with global mining giants. his success in the cyclicality-prone commodity business can be attrib-uted to his risk-taking abilities, quick decision-making process, successful acquisition strategies and the ability to transform loss-making units into highly profitable ventures, through enhancing scale by investing large amount of capital into the businesses he believes in,” explains nimesh Kampani, chairman, jm financial group. he adds that the most signif-icant point to be noted is that, over the years, anil has worked towards the simplification of his group’s cor-porate structure and created a truly diversified company, with a strong balance sheet and cash-flow generat-ing businesses. “the merger of cairn india and Vedanta ltd is one of the largest fusions involving indian cor-porate entities, which took almost 18 months to close. the merged entity has strong growth outlook, diver-sified businesses and the necessary financial flexibility to pursue further growth through both organic and

inorganic routes,” adds Kampani. “anil’s story is one of sheer pos-

itivity, focus, fearlessness, innova-tive business approach all adding up to his reputed risk taking ability. he doesn’t always articulate his rare gift of sighting opportunities and

focus on a field (metals, for exam-ple) with crazy positivity, driving costs down in operations to achieve global scale. he values vantage view like few others. his coming to mum-bai or moving later to london indi-cates his keenness to open up greater vistas and his readiness to suffer the complexities of the process. coming from patna with only a school certif-icate, he has proven that lack of for-mal education does not stand in the way of a man to build an empire,” says Vallabh Bhansali of enam.

“anil agarwal is a turnaround man. from mining to metals, from crude to power, from fibre to network integration – he has always focussed on expanding the size of businesses, after acquiring them. as a result, hzl’s capacity has grown more than 20 times to 6.15 million tpa, Balco’s 13 times to 1.32 million tpa and sesa goa’s 10 times to 2.30 million tpa. in fibre-optics and cables too, he has scored, sterlite being among the top 5-6 players of the world,” explains deven r. choksey, md, K.r. choksey investment managers, who has been following agarwal since his early days

technology in India and this technology can open up dif-ficult geologies and maximise India’s resource potential. Over the course of the last few years, when oil prices receded, Vedanta’s oil & gas business displayed the agility to focus on reducing development costs in line with the reduction in prices. On the back of these efforts, across various facets of drilling and surface facility costs, the Aishwariya Barmer Hill Field development plan is viable at $40/bbl oil price, with expected ultimate recov-ery of 30 million barrels.

At the time of acquisition, Cairn India was primarily an oil company. However, Vedanta looked at the opportunities for developing the gas business. Along with the management team a focussed effort was put to monetise the tight gas fields. The efforts bore fruit

and a field development plan for Raageshwari Deep Gas was approved with a capex invest-ment of over $400 million and gas production of over 100 mmscfd. The fracking tech-nology was again replicated in 15 gas wells with success. The expected ultimate recov-ery has increased by over 26 per cent and the management team is now focussing on increasing further production volume and has tapped other gas opportunities in the field.

Vedanta has been quite aggressive in testing out new exploration plays to derive large value. This led to the foray in the Mannar Basin in Sri Lanka, where the group has invested more than $250 mil-lion and has had two explora-tion successes out of four wells. The group also has a vast acre-age of more than 20,000 sq km in the Orange Basin in

South Africa, where a seismic survey has been undertaken and prospects are being iden-tified for drilling. In the Ravva block, the group has invested heavily in testing a high pres-sure, high temperature explo-ration prospect based on 4D seismic technology.

Planning ahead of time and continuously identify-ing opportunities for growth has been the key mantra of success for the management team with full support from the promoters to charter unconquered territories. After the success of the eor polymer at Mangala, the management team is now working on the next level of higher crude oil recovery through the imple-mentation of an asp (alkanline surfactant polymer) project. The pilot has been successful and the team is working on its implementation. The asp

project, like the polymer proj-ect, is one of the largest of its kind in the world.

Vedanta, over the course of the last few years, has been transforming the oil & gas landscape of India. The pro-moter group’s risk appetite, along with the execution skills of the management, has pio-neered some world-scale proj-ects in India. These efforts by Vedanta are yielding high divi-dends to the Central as well as state exchequer in the form of various levies with an annual gross contribution in excess of $1.7 billion, in addition to the reduction in imports. The zeal to adopt new technology and invest in India’s oil & gas sector has triggered Vedan-ta’s ambition to contribute to domestic production, to take its share from ~ 27 per cent to more than 50 per in the near future. u

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Jain: the finance guy

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when he started his jelly-filled cable business from an imported second hand plant in the late 1980s.

“since then, he has developed a knack of picking up ailing businesses, turning them around profitably, mak-ing them global-sized entities. he con-tinues to run them with an expansive mindset. in the last decade or so, he has trained his focus on backward integrations, by acquiring mines in australia, africa, latin american etc, and making the group an integrated player in the global commodity busi-ness. probably, they are among the fast-est growing metal and mining majors in the world in the last decade, with their market capitalization having grown at a cagr of 16.6 per cent (from

R6,694 crore in 2006-07 to R26,652 crore in 2015-16),” adds choksey. “it is interesting to observe that the mar-ket cap of Vedanta ltd has increased from R7,000 crore to R27,000 crore in the last 10 years, at 16 per cent cagr, whereas the cash flows from opera-tions have grown at cagr of 47 per cent, which is three times the market cap growth. the ev too has grown at a cagr of 35 per cent, which is more than double the market cap. with the turnaround in the metals cycle in the economy, Vedanta could produce profits of R15,000-18,000 crore in the coming 4-6 quarters.”

agarwal’s trusted vetern tarun jain, who joined the group in 1984,

takes care of the over all finance. jain is also responsible for business development, as also the mergers & acquisitions in the group. cur-rently, as director and member of the group executive committee, he says, “Vedanta has contributed nearly R40,000 crore to the exche-quer in the form of taxes and divi-dends this year, making us the likely number one corporate group here. we feel humbled by this enhance-ment in status and look at it as an

opportunity to contribute to nation building. our investors have been well rewarded with a total return of about 200 per cent this year, tri-pling market cap while, overall, roce has hit a run rate of over 20 per cent in the quarter. the combined group balance sheet, with strong diversi-fied operations and solid liquidity, is all set for the new phase of growth.” jain took Vedanta into a primary list-ing on the london stock exchange – the second largest listing on the lse – in 2003. “we have raised almost $33 billion in the last 12 years and invested 95 per cent of it in india”.

“Vedanta has a best-in-class bal-ance sheet, with nearly $7.5 billion of liquidity, a net gearing of over 12 per cent and a net debt to ebidta ratio of 0.4 times, making it the best amongst indian peers and compara-ble to global peers. with the merger in place, the combined entity (with an earnings capacity of $1.1 billion plus ebidta in a quarter), is widely held as a nifty top 50 listing, and is a fit investment case, given the back-drop of a vibrant ‘make in india’ focus for the country’s gdp growth,” adds arun Kumar, group vfo, Vedanta.

PsU divestment agarwal has come a long way from his early days in mumbai in the 1970s. he started in goria toli in patna, where his father dwarka prasad was

In 2016-17:l Number of beneficiaries: 2.18 millionl Amount spent on csr: R110.04 crorel The 2017-18 csr budget: R300 croreSignature ProjectNand GharMission: committed to the Prime Minister’s national vision of eradicating child malnutrition, providing

education, healthcare and empowering women with skill development.l National development agenda of Start-up India, Swachh Bharat, Beti Bachao – Beti Padhao; MoU with mcd ministry; construction of 4,000 Nand Ghars in 11 states in 36 months. l To reach out to 2.5 million community membersl State-of-the-art facility,

providing renewable energy, clean water, hygienic toilets in an earthquake-resistant pre-fab structurel e-learning through televisionl Skill development and entrepreneurship of women through seed fundingl Health – 1 mobile van per cluster, 1 medical clinic per 25 clusters of Nand Gharl Nutrition – To provide pre-packed ready-to-eat food, as per government guidelines.

Vedanta post-graduate girls’ college – established in 1995 for the underprivileged

women in Ringus, Rajasthan, offers graduate and pg courses in arts, science and com-merce. It has more than 2500 students. Across locations, Vedanta has almost 3,216 self-help groups, which sup-ports 38,765 women. Vedanta Gurukul Public School, at Rin-gus, Rajasthan, undertakes to conducts classes up to XIIth standard and has 1,600 stu-dents. Vedanta Charitable Hospital and Research Cen-tre, in Ringus, Rajasthan, pro-vides free medical services to the under-privileged, treat-ing almost 20,000 patients. Vedanta Hospital, Lanjigarh, Odisha has catered to over

Vedanta’s csr activities are centred on education, childcare, health and hygiene, women empowerment and skill development

Aligning with the community

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Albanese: ramping up production

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a dealer in aluminium conductors. after studying at miller high school in Bihar, in his early 20s, he moved to Kalbadevi, mumbai, close to the met-als market. there, he took the plunge into the scrap business, trading in alu-minium and other metal alloys.

at the age of 27, he acquired shamsher sterling corporation, a ghatkopar (mumbai)-based cable manufacturer, for R60 lakh in 1976, which he renamed sterlite indus-tries. this was a small company and owned the sterlite brand. it was actu-ally taken over by agarwal’s calcutta-based rainbow investments, which was later renamed sterlite cables and finally sterlite industries, to reflect its changing business portfolio. in ster-lite, he strengthened the making of jelly-filled cables, by buying a plant in illinois and shipping it to india. the company went public in 1988, when his plant was set up at the low-est capital cost, as against the likes of Birla ericsson, Vindhya telelinks and a host of others, which had also made a beeline to the capital market, then.

the 1990s saw agarwal emerge as a turnaround artiste. he acquired madras aluminium co (malco), a bifr case, in the mid-1990s. while every-one had given malco up as a lost case, agarwal and his team, backed by his brother navin and his financial right hand man jain, thought differently. agarwal brothers anil and navin

work complementarily to each other. navin is the ‘operations’ man, while anil is the ‘visionary’. and, jain steps in with the financial discipline. this is how the trio has always worked on a ‘turnaround’.

sterlite managed to turn around. though the high cost of power was a major issue, a power subsidy for three years, which had come as part of the bifr package, helped. also, a 75 mw power plant was imported from china during that period. thus,

when the subsidy period expired, malco did not have to depend on expensive and erratic power supplies. “malco was reopened within seven days of the takeover and had soon started making profits,” recalls jain.

then followed the big moves. the government was keen to priva-tise psus. the big breakthrough came when the government, as part of its liberalisation drive, put up 51 per cent equity stake of Balco on block to the highest bidder. agarwal’s

250,000 patients since 2010. In 2016-17, the total foot-fall of the hospital was about 60,000 patients. The hospi-tal has a laboratory, which

specialises in testing sickle cell anaemia. Yuvantaran (Min-ing Academy of hzl) provides training for underground mining and is implemented in

partnership with Skill Council of Mining Sector (scms) and Indian Institute of Skill Devel-opment (iisd). It is currently conducting intense residen-tial training programmes for about 160 rural youth.

Vedanta’s Cairn oil & gas business established an ro plant in Barmer, Rajasthan, which is one of the largest community drinking water plants in India, running on solar power. Vedanta Hin-dustan Zinc Heart Hospital, upgraded in 2012, is a 150-bed hospital, with about 3,000 patients treated every month. It cost about R20 crore. There is also a cancer

hospital & research centre, a 170-bed tertiary care oncol-ogy facility, being developed in Naya Raipur, Chhatisgarh, in ppp with the government of Chhatisgarh.

Vedanta has partnered with the state government of Odisha, to set up a govern-ment medical college at Bha-vanipatna, Kalahandi district, Odisha, with an estimated investment of R100 crore. It is expected to be completed by 2018. A state-of-the-art hospital is also being built as part of the college to provide easy access of medical serv-ices to the communities in the surrounding areas. u

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Mathur: disruptive returns to shareholders

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aggressive bidding at R500 crore was nearly twice the next highest bid. the bid evoked protests from politi-cians and trade unions, who accused the government of selling off the assets too cheaply. the Balco labour union complained it had not been consulted. a strike, lasting 67 days, caused molten aluminium to cool and harden in the pots — a night-mare in the metals business. it took several months to get the operation going again.

in late 2001, the supreme court ratified the sale. and, after years of complacency in the company, agar-wal eliminated bottlenecks and inef-ficiencies, hiking production by a third to shed off the flab. “in his drive to lower production costs, anil has always looked at backward inte-gration as a key driver. also timely completion of greenfield and brown-field projects has been his forte,” observes jain.

“Vedanta aluminium and power businesses play a critical part in india’s growth story. we are currently in an exciting phase. we are ramp-ing up production, reducing costs, doing more value-added sales and accelerating focus on safety and sus-tainability. we still see imports con-stitute about 50 per cent of indian aluminium consumption, while we have adequate capacity to serve

the nation,” says samir cairae, ceo, diversified metals (india), Vedanta ltd, since january 2016. he provides operational and strategic leadership for Vedanta ltd’s aluminium, copper india, power and iron ore divisions. prior to joining Vedanta, cairae held various senior leadership positions in global operations at lafarge and schlumberger. in his last role, he was heading the global industrial func-tion for lafarge’s 150 cement oper-ations in over 45 countries and was based in paris.

The zing thingagarwal and his team then made a pitch for the government-owned hin-dustan zinc ltd (hzl) and also picked up a 51 per cent stake in the zam-bia Konkola copper mines. hzl was acquired in 2002, which enabled him to enter the zinc-lead business. hindu-stan zinc, the world’s largest integrated zinc producer today, is also Vedanta’s cash cow. agarwal was always looking out to further enhance the zinc busi-ness. the opportunity came in 2010, when he acquired the zinc assets of anglo zinc in namibia, ireland and south africa.

“hzl fully aligns with prime minister modi’s vision of develop-ing natural resources to strengthen infrastructure and create millions of employment opportunities in india. on the same lines, we have also set up hindustan zinc mining academy that will provide trained jumbo drill operators and winding engine opera-tors to the mining industry in india,” observes sunil duggal, ceo, hzl, who joined the company in august 2010 and has been driving hzl’s growth over the years.

in 2011, agarwal bought assets from anglo american’s zinc opera-tion for $1.3 billion, which gave him a head-start in operations in zinc in the international scene. since then, Vedanta aluminium has increased drilling across the portfolio, closed lisheen in december 2015 (three years after anglo envisaged the clo-sure) and started the gamsberg greenfield project (40-plus year proj-ect) in july 2015, having promised to do so within five years of acquisi-tion. gamsberg is one of the largest

undeveloped zinc projects globally. it will produce 250 mt annually from 2018.

“we have made huge strides in diversity transformation over the past two years. the commitment from the top is clear and well communi-cated. it is now one of the top prior-ities of everyone else too to enable 20 per cent diversity across the busi-nesses and ensure women are better supported to take on larger roles and be further developed,” says deshnee naidoo, ceo, zinc international, mov-ing on with a dream to become one of the largest, socially responsible inte-grated zinc producers in the first cost quartile and merge the south african and namibian operations, currently 420 km away into the southern afri-can zinc cluster. “the cluster has the potential to unleash further down-stream beneficiation opportunities. our zinc business in africa is well set for growth. our project pipeline development will also lead to exten-sive socio-economic growth in the geographies we operate, which is what really drives us.”

in his quest for backward inte-gration, non-ferrous metals became agarwal’s passion. sterlite itself set up in-house facilities to make contin-uous-cast copper rods from scrap in lonavla, near mumbai, and alumin-ium sheets and foils at sanaswadi in

Naidoo: diversity transformation Duggal: focus on training

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maharashtra. once he started making copper in tamil nadu, he acquired an australian copper mine in 2000. in 2004, he consolidated the copper business by acquiring Konkola cop-per mine (kcm) in zambia.

meanwhile, to get more focussed and unlock value, the group decided to separate its metals and telecom-munications businesses in july 2000. the telecom business was demerged into a new company called sterlite optical technologies, now run by his youngest brother.

Move to diversifyin 2007, in a move to diversify from non-ferrous metals Vedanta entered into the iron ore business with the acquisition of sesa goa. it is the larg-est producer and exporter of iron ore in india. then again, looking for con-solidation of the iron ore business, in 2009, he acquired dempo, a leading iron ore company in goa. in 2011, sesa acquired a controlling stake in western cluster, another iron ore company in liberia. with reserves and resources of over 1 billion tonnes and an expected saleable product of about 330 million tonnes, western cluster’s acquisition has given a strong boost to the group’s iron ore business.

“the government has come up with transparent policies and using the best technology to keep track of

the mining industry. thrust must be given to the iron ore sector to meet the steel vision of india to pro-duce 300 million tonnes of steel that will generate more revenue and cre-ate more employment,” says Kishore Kumar, ceo, Vedanta, iron ore busi-ness. Kumar joined the group in april 2003 and has held various executive roles in sterlite copper, kcm, etc, including international operations in zinc. he was appointed ceo of the group’s iron ore businesses in febru-ary 2015 and is leading the revival of profitable, low-cost iron ore mining operations in goa and Karnataka, as well as developing the liberian project. prior to joining the group, Kumar had worked for hindustan lever for 12 years.

in 2011, in one of the biggest buy-outs of a domestic company, Vedanta acquired cairn india. this acquisi-tion has proved to be a game changer for Vedanta. at the core of agarw-al’s strategy was the plan to deliver growth and long-term value, while upholding sustainable development through a diversified portfolio of large, long-life and low-cost assets.

“while Vedanta and cairn had been working towards creating a shared future, the rude shock of the oil price crash accelerated the pro-cess. the encouragement provided by Vedanta to pursue growth at such

a time took the cairn senior lead-ership by surprise. cairn manage-ment responded by re-engineering the five projects that collectively cre-ated reserves of about 100 million barrels and production of 80,000-100,000 barrels. i believe the insatia-ble growth appetite of Vedanta and the relentless pursuit of technologi-cal excellence of the oil & gas team will provide disruptive returns to shareholders in the near future,” says sudhir mathur, ceo, cairn oil & gas, who has been with Vedanta limited since june 2016. earlier, mathur had been cfo, cairn india, since septem-ber 2012. he began his career with pricewaterhousecoopers in 1986.

since then, there has been no look-ing back. agarwal is a deal maker – always with an ace up his sleeve. this has come in handy as he has adopted both the organic and inorganic routes to the top and has been consolidating his metals and mining business.

scanning for ‘targets’But agarwal has not been sitting quiet. he has an eye on the govern-ment of india’s divestment plans and is busy scanning the government’s list of disinvestments. “anything can come up anytime,” reasons agarwal, looking forward to maximum action in the auction of bauxite mines and not ruling out entry into the steel and

Kishore: employment creation Kumar: ‘Make in India’ focus Cairae: growth story

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may 22 - ju n e 4, 2017

Busi n e ss i n di a u the m aga zi n e of the cor por ate wor ldCover Feature

infrastructure sectors. “the govern-ment may disinvest hindustan cop-per, or it may bring in a partner for ongc, whenever things are not work-ing. at least, a 51 per cent partner would increase the production of oil and it would be a good move – one, which people will appreciate. ongc fields, which are not working, should be either sold or put under partner-ship. ditto for coal india too, which has tremendous assets. and, if they are planning to invite partners, they should look at a big one. you have to give the partner power and a product that can change the whole scenario, when the production is doubled. we have given R55,000 crore royalty, which was not budgeted by the gov-ernment, it has come without a bud-get. so, you can imagine the power of the natural resources. i agree, tech-nology is important, but the kind of revenue you will get through the resources, which you can use for the country’s infrastructure, is huge”.

Government action“india has the best bauxite in the world. the government should put bauxite mines for auction. i also urge the government to take a deci-sion on 20-28 per cent residual hold-ing it has in hzl. it should sell the balance either to the public or to a private investor. this will be benefi-cial for the government, which has to be business friendly to progress,” says agarwal, urging the government

to sell the residual stakes in Balco and hzl, either to the public or to Vedanta and move on.

currently sitting in london, he has a core executive committee style management team in place on the ground at each of the business ver-ticals, which consists of a blend of

talent drawn from international and mnc companies, benchmarking with international peers. this exec-utive team of top 50 leaders comes with vast experience from mncs. the group has the empowered cor-porate executive committee, which include the group ceo, business ceos and heads of enabling businesses, such as hr, legal, finance and com-pliance. Business ceos have their independent empowered executive committees that drive their opera-tions under empowered ceos. “so,

our decisions come from the bottom and the biggest thing is that we are up on transparency and governance too,” says agarwal. he is looking to invest a further $8-10 billion in three years, mostly in india and also in africa. “such an action will increase our capacity by 75 per cent,” he says, studying the new indian bankruptcy laws that open up an avenue for peo-ple like him to step in and takeover assets in a transparent manner.

agarwal says he has taken up a non-executive role and, unlike most patriarchs of business families, his vision was to build the institution and “i am in the process of building the institution, if my children are competent they can come and join. But that’s not the point, Vedanta is the indian institution and i am an absolute trustee looking to develop it. i am in my 60s and driving the company and can still drive for some time to come but, going forward, this can be run by a ceo. we can just be shareholders. axon is run like that. nobody can give up my name because this is going to be here for-ever,” he sums up.

agarwal, a hardcore indian, loves to listen to indian songs and watch Bolly-wood movies. “i am still a Bihari bhai, who has spent 20 years of my life in Bihar. for me, habits don’t change. i am a foodie; so, i eat all the time and i explore as much as possi-ble to find different kinds

of food. i do a bit of a cycling too when in rajasthan”.

some call him the ‘metal king’ and others refer to him as a ‘billion-aire philanthropist’, but those who know him well call him the man with a ‘golden heart’ – a person deter-mined to strike a balance between business and service to the commu-nity. “whatever you have earned, a portion of it should go back to soci-ety,” he says. on a personal level, he has taken a pledge to donate 75 per cent of his wealth to philanthropy – a decision inspired by Bill gates and the dalai lama.

u l a n c e l o t j o s e p h

lancelot.joseph@businessindiagroup.com

‘Vedanta’s performance in the critical aspects of health, safety, environment and engagement with communities and stakeholders is of paramount importance to Vedanta and to our short- and long-term growth. Our sustainable development practices go beyond the regulatory requirements’

- Phillip Turnerhead – health, safety & environment

Hindustan Zinc’s Rampura Agucha Mine