Hindujas eyeing UAE for global headquarters
We are primarily concerned about the ease of doing business as well as a stable business environment. In those two areas, the UAE is quite unique. We feel quite at ease in the UAE
Gopichand P. Hinduja, Co-chairman of Hinduja Group
Our group is committed to the UAE when it comes to investments... the UAE is quite unparallelled in its cosmopolitan outlook and it has the best relations with India
Ashok P. Hinduja, Chairman of Hinduja Group (India)
dubai — Hinduja Group, a multinational Indian conglomerate headquartered in London, is in talks with two UAE banks to explore acquisition prospects.
Speaking to Khaleej Times, Gopichand P. Hinduja, co-chairman of the $37.1 billion turnover group, said the company is also seriously looking at the option of moving their headquarters either to the UAE or Singapore from London in the wake of uncertainties brought about by Brexit.
“We are primarily concerned about the ease of doing business as well as a stable business environment. In those two areas, the UAE is quite unique. We feel quite at ease in the UAE in particular,” said Gopichand, the second son of group founder Parmanand Hinduja.
In the UAE, the group has diversified business interests ranging from petrochemicals, and finance to bus/truck manufacturing. In Ras Al Khaimah, the group’s Ashok Leyland operates a commercial vehicle assembling facility.
Gopichand, who was accompanied by his younger brother Ashok, said the group, which is the promoter and the major shareholder of the world’s first NRI bank, IndusIndbank, has been offered several options in UAE financial services.
“We never know what will follow in your lap. You have to look for synergies, you have to do due diligence. It could be that some of the financial institutions that are not wellmanaged require strategic strong alliances from groups like ours,” said Gopichand, who along with his elder brother Srichand Hinduja was ranked as the wealthiest in Britain with a combined wealth of £16.2 billion in the Rich List 2017. The Hinduja Group, which is currently focusing on expanding its financial services operations, wants to do more than just run one bank in India.
“Within financial services, there are myriad opportunities to grow in India and elsewhere. In the UAE, we are just exploring such opportunities,” said Gopichand, who declined to reveal the names of the two UAE banks involved in the talks.
“Our group is committed to the UAE when it comes to investments. Despite the uncertainties in world politics, the UAE is quite unparallelled in its cosmopolitan outlook and it has the best relations with India. The world is going from globalisation to protectionism, and as well diversified group with worldwide presence, we believe globalisation is the only route that can keep society happy and the world economy interconnected,” said Ashok.
On the acquisition philosophy of the Hinduja family, Ashok, who heads the India operations for the group, said if the regulator allows it, the group would like to pick up a significant portion as “we don’t go much for minority stakes.”
He said the group’s global business expansion is driven by a steadfast pursuit for comfort and ease. “We will go wherever we feel comfortable to do business. It’s not about avoiding taxes — we need to spend our time in creating business and not spend all our time in reading about regulations and filling forms.”
The group entity that is in talks to acquire a stake in a local UAE bank is the Mauritius-headquartered IndusInd International Holdings Ltd (IIHL), which owns a major share of the IndusInd Bank in India. The bank, which came into being in 1994, has over 300 founding shareholders based in Dubai, including Ram Buxani, Chairman of the Cosmos-ITL Group. Last year, IndusInd became the sixth Indian bank to have a market cap of ₹1 trillion (Dh55 billion).
“The fact is that there is a lot we can do with IIHL,” said Ashok. “IIHL has a current valuation of $2.7 billion and by 2020, it is estimated to exceed $4 billion. We have not leveraged that enough,” he said.
Apart from the expansion of existing businesses, the group is building multiple new businesses in cyber security, renewable power and home broadband services to ride on the renewed India growth story, Ashok said.
Apart from IndusInd Bank and Ashok Leyland, the group companies include Hinduja Foundries, Hinduja Bank (Switzerland), Hinduja Leyland Finance, Hinduja Global Solutions, Hinduja Ventures, and Gulf Oil Corporation.
Ashok Leyland’s RAK factory, a joint venture with the Ras Al Khaimah Investment Authority and the only certified local bus factory in the UAE and GCC region, has an annual production capacity for 6,000 units of buses and trucks.