- Metal and mining magnate
Anil Agarwal has announced investments of ₹1.8 lakh crore in the past one week. - After building his fortune with metals,
Agarwal is now turning his gaze to semiconductor chips, a key to the modern world’s lifestyle. - Here’s the story of a boy from Bihar who made it, knowing only two English words – “yes” and “no”.
In the same breath, Agarwal also announced an investment of ₹25,000 crore in Odisha – a key investment for
Clearly, money’s not in short supply for Agarwal, but it wasn’t always the case for the man who hails from Bihar and knew only two English words – “yes” and “no” – when he came to Mumbai in the 1970s.
Over the past five decades and then some, Agarwal built a metal and mining empire and got the first Indian company listed on the London Stock Exchange – Vedanta.
So how did a boy from Bihar who knew the two most basic English words go onto list his company in the heart of the English world? Here’s a peek into how.
Agarwal was a teenager when he joined his father’s business of aluminum conductors and scrap metal trading. Born in a marwadi family, taking up his family business might seem like such an obvious – yet stereotypical – thing to do.
While his father’s business was not where he would make money, it would become a founding block of his future success.
At 19, Agarwal left the comfort of his family home and Patna, leaving for the hustle of Bombay. It would take two more decades for the city that made him rich to be renamed to Mumbai, and a lot would change in Agarwal’s life in this time.
Agarwal never went to a college, let alone a business school. But within a small time, he acquired his first company which was on the brink of bankruptcy. Unsurprisingly, it was a copper company named Shamsher Sterling Corporation.
He cobbled up ₹16 lakh – a handsome amount for the 1970s – from his own savings, friends and family.
Agarwal still ran his primary business of trading in scrap metal – for the next 10 years, he ran both side by side.
In 1986, he created Sterlite Industries which would go on to become the largest producer of copper in India, but its beginnings were earnest and small. The company launched an IPO in 1988 to finance its polythene-insulated jelly filled copper telephone cables plant.
Seven years later, Agarwal acquired an 83% stake in Madras Aluminium, a ‘sick’ company, for ₹55 crore. This would set the tone for Agarwal’s business strategies over the next few decades, wherein he would identify undervalued assets and turn them around into huge revenue streams.
For instance, Agarwal acquired a mine in Tasmania for a paltry sum of $2.5 million and turned it into a $100 million annual revenue stream.
He also acquired Hindustan Zinc, another PSU sold by the government as part of its divestment program, in 2002. At the time of acquisition, it was said that the company had a reserve for five years, and a manufacturing capacity of 1.5 lakh tonnes of zinc per annum.
However, now the company is still operational and has expanded its capacity to 1 million tonnes. Agarwal said in an interview that the company has reserves for another 40 years.
When Agarwal arrived in Mumbai, all he had was a tiffin box and bedding. He shared a room with seven other people for ₹21.
Agarwal rented out an 8x9 feet office to buy and sell scrap metal. Following decades of hard work, sharp business acumen and acquiring undervalued assets, it was time for Vedanta to go global.
But what triggered Vedanta’s listing at the London Stock Exchange was Agarwal’s involvement with Harshad Mehta – in a bid to make a comeback, Mehta drove up the prices of three stocks – Agarwal’s Sterlite, and Videocon and BPL.
“My wife, Kiran, thought I was crazy when I told her that we are moving to London overnight. She went to our daughter Priya’s school and asked them for a 6-month leave because she was sure we would be back by then,” Agarwal shared in a note.
Agarwal reached the English shores and got Vedanta Resources listed on the London Stock Exchange (LSE) in 2003, making him the first Indian to get a company listed on LSE.
Over the next decade, Vedanta acquired several mines across Africa, Australia and other regions.
After mining and metals, Agarwal turned his eye to oil and natural gas, announcing a $9 billion deal to acquire Cairn India, the country’s largest private sector oil producer.
In 2012, Vedanta Resources Plc announced a merger of its Indian firms – Sesa Goa, Sterlite, Vedanta Aluminium, and Madras Aluminium into a single entity named Sesa Sterlite.
The merged entity, Sesa Sterlite, was valued at over $20 billion, making it the seventh largest global diversified natural resources major. At the time, Agarwal said it would result in a savings of ₹1,000 crore every year.
Getting Vedanta listed on the LSE was one of Agarwal’s dreams, but 15 years later, in 2018, the mining magnate delisted the company and took it private.
The “why” of it is easy to understand – Vedanta was undervalued during the commodity slump of 2018, and a majority of the capital expenditure had already been made by then. Agarwal sensed an opportunity to take the company private at a lower price and reap the rewards during the next cyclical upswing of commodities.
With the semiconductor chipset shortage hurting the electronics and automobile industry globally, and countries trying to reduce their dependence on China for this crucial piece of tech, Agarwal has shifted his focus with the ₹1.54 lakh crore investment announcement in Gujarat.
Will it come to fruition or not is a story for another day, though.
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