‘IBC is a deep reform, much more than GST and demonetization’

MUMBAI: Kumar Mangalam Birla, the 51-year-old chairman of Aditya Birla Group, expects the Indian economy to grow between 7% and 8% over the next few years, because of a slew of reforms such as implementation of goods and services tax, demonetization and the Insolvency and Bankruptcy Code (IBC).

“I think we’re seeing improved levels of governance in corporate India and the government. We’re truly integrating with the world economy. I think there’s a definite deep cut that’s happened and IBC is a deep reform...,” Birla said in an interview with Tanya Thomas, Deborshi Chaki and Amrit Raj.

Such reforms and their effects have given Birla confidence to pursue aggressive growth for his group, as witnessed in his aggressive pursuits in the cement business and the latest acquisition of Aleris, which will make Hindalco Industries Ltd the world’s second-largest aluminium producer. Edited excerpts from an interview:

It’s been 89 months since talks started. But there was a lull in between... What happened?

You broke the story even before talks had started. That was crystal-gazing by you. You had the numbers down very accurately, almost to the last decimals (when you broke the story), it’s surprising you got that. It creates problems for us when you break the story, especially since we are a listed company. It affects the deal-making process, it raises the price. Sometimes other listed companies back off for a while also.

Can you give the rationale behind this acquisition?

It’s basically about size and scale and it’s been Hindalco’s intent for a long time to move towards higher value-added product mix. This is in keeping with that. It gives us new customers in auto, in aerospace—a marque segment, strong presence in US, Europe and China, which is very important for us. It takes forward the agenda that has been articulated for Hindalco.

In the last few years, businesses have been disrupted, cleanup of banks have happened, firms are forced to become financially prudent. In this backdrop, how do you look at the Indian economy?

We’re expecting the economy to grow at 7-8% in the next few years. That’s why we’re bullish on metals and cement. I think we’re seeing improved levels of governance in corporate India and the government. We’re truly integrating with the world economy. I think there’s a definite deep cut that’s happened and IBC is a deep reform, much more than GST and demonetization. No government will reverse it.