RICHES BEYOND RESOURCES

Indian billionaire Anil Agarwal has a passion to make his resources company a global titan, but he’s equally driven to help uplift the lives of his countrymen.

‘Come, come, grab a seat. We’ve each been taking turns talking about what we’ve seen in Thailand over the past week, the lessons we’ve learned and how we can apply them in life or business.” Anil Agarwal beckons me into the executive suite of the Siam Kempinski in Bangkok, where he’s seated at the centre of a table along with nearly a dozen young members of his family.

It was not my first encounter with the Indian billionaire. That came 15 hours earlier during the countdown to New Year at a house party. Mr Agarwal was in Thailand for a vacation, travelling with his family in two private jets to visit Samui and Bangkok.

London-based but Indian-born, Mr Agarwal tells me he didn’t want those who came for the holiday to go back without having learned anything, so he set up an informal roundtable discussion that lasted nearly an hour. Each person was asked to tell the others what they’d learned or liked about their stay, and Mr Agarwal would then chime in with his own observations.

“Now I have time for you, but remember I have to fly out within the next hour or so,” he says. “I didn’t expect to give any interviews in Thailand — remember that I’m on vacation — but it seemed you were so persistent to get one, which I admire because I like people who are driven.”

This drive is what kept the 63-year-old former scrap collector from the impoverished Indian state of Bihar going in the face of adversity to build a business that now aspires to be in the same league as household names such as Exxon Mobil, Rio Tinto and BHP Billiton.

“I always dreamed and had a goal with a vision; that to me is the most important,” he says when asked about his journey from Patna to London.

“I always, when I was 13 or 14, wanted to be an entrepreneur, always wanted to set up an industry, always had fire in my belly,” he says while touching his stomach.

Starting off as a scrap collector and selling to bigger companies, in the 1970s Mr Agarwal finally set up his own company and made his first acquisition in 1979. He listed his firm, Sterlite Industries, on the Bombay Stock Exchange in 1988 before going on an acquisition spree of state assets that were being privatised.

Fast-forward to 2018 and the market capitalisation of Vedanta Limited, the Indian listed entity that has evolved from Sterlite, is close to US$20 billion. The family has a 65% holding in Vedanta Resources Plc, the first Indian company to list on the London Stock Exchange in 2003. The London entity in turn holds 50.23% in Vedanta Limited and 64.92% in Hindustan Zinc, one of the world’s largest producers of zinc with a market capitalisation of $21 billion.

That’s a far cry from the capitalisation of the 145year old Australian-British resources multinational Rio Tinto, at around $97 billion, or the $119 billion of 133-year old BHP Billiton or Australia, but Mr Agarwal says he’s just getting started.

“Yes, definitely we want it to be as big as Exxon and others as we have a big advantage,” he says when asked where he sees his company 10 or 15 years from today. Reminded that the market cap of Vedanta Ltd is just $20 billion, he quickly responds, “Don’t forget that we have Hindustan Zinc which is another $20 billion.”

That leads to a follow-up question about what his assets are worth, as Forbes magazine puts his net worth at just $3.7 billion whereas his various shareholdings in Vedanta, Hindustan Zinc, Bharat Aluminium and Anglo American would be worth $20 billion plus at current valuations, he says simply, “We are like a river that is flowing and not working for valuation only.”

But as a person who is highly competitive and driven, he says he wants his company to soon be in the big leagues.

“Sure, that is the aim. I want to be in competition with the likes or Rio Tinto and BHP,” Mr Agarwal admits when asked why he has been aggressively pursuing acquisitions, including the recent purchase of more shares in Johannesburg-based Anglo American Plc.

Using his family’s private trust, he increased his holding in the $27-billion company to 21% in late September from the 12.4% he had purchased in March 2017.

Speculation has been rife that Mr Agarwal would either break up Anglo American or merge it with another entity, but so far he shows no intention of doing either, saying the partnership between Anglo American and Vedanta would rival any other company in the world.

“Now that we have been in the process of acquiring a 21% stake in Anglo, it would mean that between Anglo and us there is nothing that we will not be producing below the ground,” he says with pride.

“Whether it’s gold, silver, copper, iron ore or coal, I can say that anything you mention, we produce.”

INDIA AND ASEAN ONLY

Although Vedanta Resources coupled with Vedanta Ltd, Hindustan Zinc, the unlisted Bharat Aluminium, and the Anglo American stake give Mr Agarwal access to ample mining resources, his focus remains only to cater to the Indian market, with future possibilities in Southeast Asian markets.

“If you look at most of these people (Rio Tinto, BHP and others) they are all selling to China, for them it is China, China, China,” he says, adding that very few companies are looking into India where the population is almost as large and consumption is growing.

“For us, whatever we sell, we sell into India, and for us our home market is so big. But another market we want to look into is Southeast Asia, and between these two markets we will grow and wherever the water flows we will flow accordingly,” he adds.

Vedanta Group and its subsidiaries in India, he notes, paid close to $6 billion in taxes and royalties last year and employ close to 100,000 people.

“We are proud of our achievements. Did you know that we produce about 30% of the oil in the country, about 50% of all copper, 50% of aluminium, 50% of the iron ore, and 100% of the zinc and silver?”

The road to this exalted market status has not always been smooth for Mr Agarwal. He even admitted in earlier media reports that he may have made some mistakes in his buying spree as the commodities market remained subdued amid declining demand from global consumers and mineral- and oil-guzzling China.

But 2017 turned out to be a good one for commodities. Zing doubled in price to $3,300-plus per tonne, while Vedanta’s production is a mere $800. Aluminium prices are hovering around $2,300 per tonne against the $1,400 it costs Vedanta to produce, while oil has started to pick up after more than two years of decline.

Mr Agarwal may call sophisticated London home these days but he still views himself as a “light-minded person” and “desi at heart”, using the Hindi term for a native of the subcontinent. He has a passion for Bollywood movies and music along with ghazals (old-fashioned Indian love songs), and he named the company after his mother, Ved. The name also reflects an interest in the Vedas, the Hindu scriptures.

When asked if there was any business that was his favourite, Mr Agarwal says he has a passion for business in general and views all his enterprises equally. His family’s job, he says, is to set the strategy, while the management of various companies does the execution. If some family members want to join in the future they could, but that is not in his plans at the moment.

Mr Agarwal says his aim is not to push his children into the business as they may have a different agenda, but instead to let the company be run by professionals like the big-league player he wants Vedanta to be.

‘CREATE A GOD’

An avid reader of the Bhagavatam Gita and a believer in Lord Krishna, Mr Agarwal says he follows the teachings of the holy book, which says that one should pursue one’s karma and not be concerned with the outcome, because one will learn every day that they work.

“Krishna was teaching how to live life not in a religious manner, and I am learning and applying that in my life,” he says, adding that he has given 75% of his wealth to charity.

“I gave away 75%, but if you think of it we don’t even need the 25% — that too is too much for us,” he says, noting that the company provides him with a salary, house, cars, travel and so on.

“We get a decent salary and I do not have any other accounts, but my passion is to eradicate poverty from my country and create jobs.”

He goes as far as to say that when he goes to lectures at various universities or Young Presidents’ Organisation gatherings, he tells his listeners that even if they do not believe in God, they should create one.

“I always tell them that if you do not have a God then make one, because that God will be your pillar of strength even if it is an illusion, but illusion is important.”

But the hardships he has seen in his home state of Bihar and neighbouring Uttar Pradesh are very real and he says he wants to use his money to pull these states out of the current mess they are in.

“I want to help states such as Bihar and Uttar Pradesh, which are called bimaru states,” he says. “I want to bring them into the mainstream so we have to transform them.

“This transformation cannot happen with just helping one or two schools, but instead it needs money and vision, and if my wealth and vision can be used for this, then I think that is what life is.”

In this regard he has started what he calls Nand Ghar a housing programme for the poor that offers the basic necessities to obtain an education, healthcare and food.

“For me personally, I may like good food and going to movies, but apart from that I want to take care of 50 million children up to the age of 7 and 20 million women who are underprivileged. I want them to earn, I want to take the Thailand model of self-reliance for them to be able to survive.”

Mr Agarwal’s desire to help fits with the guiding principles he applies in his life. “I am a disciple of the Dalai Lama and go to Dharamshala, and over the years I have picked up four things from him,” he says, and elaborates further:

“The number one priority is your health. The body is your temple so please look after it.

“The second priority is family but without attachment, because children come with their own karma. You cannot change their karma but you can give them a good education and all the other things.

“The third is your profession. Everybody comes with some skills so please explore and ‘explode’ that skill. Explode.

“The Dalai Lama says, ‘I may be a normal monk but I sell myself as the best monk’. If you are a journalist, then perceive and sell yourself as the best journalist because there is no difference as it all depends on one’s perception. I love my business and I have a passion and I am attached to that.

“The fourth — and this is very difficult for anyone to follow — is that if you keep anything beyond your needs then you are thief.”

For us, whatever we sell, we sell into India, and for us our home market is so big. But another market we want to look into is Southeast Asia, and between these two markets we will grow and wherever the water flows we will flow accordingly