Wednesday, August 10, 2011

Anil Agarwal : Wheels of fortune

From the Patna lad who left school at 15 to founder, chairman and majority stakeholder of the $10 billion conglomerate Vedanta Resources, Agarwal has travelled a long way

One of the most thrilling moments of my life was the day I got my first cycle,” reminisces Anil Agarwal, founder, chairman and, with his family, majority stakeholder of Vedanta Resources Plc., the London Stock Exchange-listed mining and metals conglomerate with a market cap of $10 billion (Rs39,400 crore).

The cycle was a gift from his father, a fabricator of grills and gates in small-town Patna in the 1960s. It meant the youngster could ride to his municipal school in style, instead of making the daily 10km hike on foot. Much later, Agarwal graduated to a Vespa scooter, but never made it to college.
His friend, Shishir Kumar and he often caught the overnight train from Patna to Varanasi, where they would take in two shows, back-to-back, of the latest Bollywood releases. Sipping hot milk from a matka at the station, they would then catch the train home.
A fellow cyclist and family friend, Kiran Gupta, became Agarwal’s bride when she was just 16 and he, 21. The couple still occasionally cycle in the summer sun in Hyde Park, just across from their London Mayfair residence.
Kumar went on to become chief diabetologist at Bombay Hospital, Mumbai. And Agarwal came to Mumbai as a scrap-metal dealer in 1976, going on to build an empire in copper, zinc, aluminium and iron ore, recently venturing into power generation.
These days, Agarwal travels by private plane, hopping from his mines in Zambia and Tasmania to Agra and Mathura. There he slips back with ease into a rickshaw with his old buddy Dr Kumar, for a darshan at the Krishna temple, riding through crowded lanes, savouring their favourite hot milk drink.
Anil Agarwal. (Abhijit Bhatlekar/Mint)
Anil Agarwal. (Abhijit Bhatlekar/Mint)
While Agarwal’s earlier cycling routine has morphed largely into a stationary cycle workout at the gym, holidays are different. Four winters ago, a group of old friends and the Agarwal clan cycled and camped outdoors over four days from Jodhpur to Jaisalmer, with a replay in Bhutan the following year. Ajay Anand, managing director, Faze Three, who was part of the group, says: “It’s such fun to get away together. The landscape may have changed, but at heart Anil is just the same.”
From the Patna lad who left school at 15 without knowing a word of English, to founder, Vedanta Resources, Agarwal has travelled a long way. Vedanta Resources was the only Indian group to go for a primary listing on the London Stock Exchange in 2003 and its subsidiary, Sterlite Industries, was listed on NYSE in 2007 in the largest IPO in the US by an Indian company.
The tipping point came in 2003. Frustrated with the licence raj regime and the constraints of raising capital in India, Agarwal had earlier moved to London, where the world’s largest mining and metals companies were headquartered. From a British newspaper he learnt that Brian Gilbertson, the South African dealmaker who engineered the $57 billion takeover of BHP by Billiton in 2001 to create the world’s largest mining group, had fallen out with themerged leadership.
So Agarwal made a cold call, just like that: “I always take a chance. I told Gilbertson that I would like him to help me list my company.” In turn, Gilbertson asked about his hobbies, and Agarwal recollects, “I told him that my hobbies are whatever the other man wants! Gilbertson said, ‘I do cycling.’ I replied, ‘I do cycling too’.”
The pair biked 60km from Oxford to London, with Agarwal trailing. Agarwal reflects, “Some strength helped me cover that distance. Gilbertson came to India, checked out all our assets and was impressed. I offered him a good package and he became chairman.” Vedanta subsequently attracted others on the board—P. Chidambaram, the late Sir David Gore-Booth and Michael Fowle, chairman, KPMG—and the company successfully listed on the London Stock Exchange. With this, Agarwal became a global player in mining and metals in less than a decade.
Although the two men soon parted ways, the interaction with Gilbertson is characteristic of Agarwal’s style. He says, “When I see people who appeal to me, I want to become like them and I am never ashamed to ask.” In fact, people are Agarwal’s pursuit; as others amass artefacts, he has carefully ‘collected’ people from all walks of life, with one interesting commonality: they are dissimilar from him.
When Agarwal came to Mumbai for the first time as a 20-year-old, he was fascinated by Narendra Desai, chairman, Apar Group, the doyen of the aluminum industry at that time. Thirty years later, the two still meet over a cup of tea every week and share a bond that transcends business. Agarwal says, “He is a follower of the Hare Krishna movement. From him I learnt that you can be an industrialist and also be a bhakt.” Desai says: “Anil is unafraid of risk; once he’s defined his goal, he will go do it. That’s how he’s turned around his Tasmanian acquisition, Balco and Hindustan Zinc. More important, his attitude is to plough back what he has earned.”
When I see people who appeal to me, I want to become like them and I am never ashamed to ask.
In 1993, Ranjit Pandit, now managing director, General Atlantic, had just moved back to Mumbai from New York, to open McKinsey and Co.’s India practice, which he chaired. In inimitable Agarwal style, Pandit got a call out of the blue, with Agarwal describing Sterlite as a small company which had a lot to learn. From then on, Pandit has been a regular sounding board. He says: “Anil thought in terms of scale at a time when he had none. He’s the creative, new Indian entrepreneur, generating development and jobs. Look at the power generation company he’s going to list. It has just 1,000MW, but he’s growing it to 10,000MW, and his valuation is based on that.”
The person who has perhaps most influenced Agarwal’s recent thinking is an American, Steve Elbaum, chairman, Superior Cables, a $1.5 billion company. Elbaum was born to Holocaust survivor parents in a displaced persons’ camp. His idea of business as a clearing house to distribute earnings back to society probably inspired Agarwal’s 2006 $1 billion pledge to set up the Vedanta University, a world-class university, on a 3,200ha site in Orissa. Says Agarwal: “I want to spend 20% of my time on philanthropy, building lasting institutions the way American industrialists have done. That’s my passion now.” His critics say the real motivation is Vedanta’s interests in Orissa, which holds the world’s fourth largest bauxite deposits—the mining of these has been opposed by some environmentalists and tribals, resulting in Norway’s Government Pension Fund divesting its small holding in Vedanta.
Walking around the Nariman Point business district, Agarwal stops to talk to a sandwichwalla in a Bihari dialect, asking about his family in the village; the street vendor in turn asks him about the Sterlite stock price. In this corner of urban India, both migrants from Bihar have, in Bollywood parlance, made the long journey from zero to hero.
Name: Anil Agarwal
Title: Chairman, Vedanta Resources Plc.
Age: 54
Education: High school
Pursuits: Cycling, meeting and learning from people, spirituality, music.
Claim to fame: A pioneer who set India on the global metals and mining map. Led the Vedanta group’s primary listing on the London Stock Exchange in 2003, a ‘first’ for an Indian business house. Vedanta’s subsidiary, Sterlite Industries, listed on the New York Stock Exchange in 2007.


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