The Art of ‘Cementing’ an Empire

It is difficult not to be powerful when you have an almost 100-year-old corporate legacy to flaunt across the world. An empire that nurtured icons like Ghanshyam Das Birla, Aditya Vikram Birla and Kumar Mangalam Birla, a kingdom that has a century old history dating back to the pre-independence period, and a mission that withstood every odd. The Aditya Vikram Birla group undoubtedly, is India’s premier multinational diversified corporation and has a dominant presence across value chains in key sectors. Yet, it has not been a hunky-dory ride for this proud and powerful business house; it has been a long and arduous journey in many aspects. As a young boy, Kumar Mangalam Birla saw the passing away of the legendary G.D Birla and the fragmentation of the Birla Empire during the 1980s. Then came tragedy and trauma when his father Aditya Birla died an untimely death in 1995 when Kumar Mangalam was barely 29 years old.

Yet, the graduate of London School of Business has done a remarkable job. From an orthodox organization steeped in babudom, the group is today an aggressively modern transnational organisation with more than 82,000 people drawn from 20 different nations. It is the other segments of the Birla Empire that have seen better days. After long standing tussle with corporate bigwigs like A.M Naik of L&T for UltraTech and Ratan Tata for Idea, Kumar Mangalam Birla now has dominating presence in cement, metals and the fabric businesses. Grasim Industries Ltd. happens to be the second largest company of the Birla Group. It is a conglomerate and its key businesses comprise fibres, cement and sponge iron. By virtue of its aggressive focus on both organic and acquisitive growth, Grasim has now emerged as the second largest cement producer in India with a market share of 22%. The company has an mcap of $5.5 billion and net sales of Rs.66 billion in FY06.

The largest company in AV Birla group is Hindalco, largest aluminium and copper producer in India. By virtue of its captive access to raw materials and importantly power, the company is among the world’s lowest cost producers of aluminium. The most recent venture of AV Birla group happens to be Idea cellular, which has India’s fifth largest subscriber’s base of 10 million and a presence in 11 circles. Idea cellular is now all set to tap capital markets for funds after recently off-loading 33% stake to FIs. The company has chalked aggressive plans for future once it is listed in the bourses in early 2007. The company in June this year purchased Tata’s stake in Idea for Rs. 44.60 billion. The strength of AV Birla Group lies in having clear and aggressive plans for all his businesses, despite being a conglomerate. While sustaining top-line and bottom-line, the company has also sustained and nurtured, the one above, ‘human values’.

Sustaining the pedigree…

‘The art of living is more like wrestling than dancing” was once pronounced by Marcus Aurelius, and it holds true for this flagship. Riding high on its robust belief – ‘traditions of trust’, one of the world’s largest two-wheeler manufactures Bajaj Group has always given its best shot to probably everything. Flagship that has the onus of 27 companies, which started as a mere sugar mill some eight decades ago by the dynamic philanthropist Jamnalal Bajaj, it today marks its presence in an array of businesses. From food to electricals, steel to consumer care, auto and Insurance, the entire gamut of companies generate billions. Had it been acquisition in Brazil and setting up of ‘Bajaj Internacional Participators Ltd.’ or tying up with National Insurance Company to offer health plans for diseases like diabetes and hypertension. Venturing into the international market by launching the DTSi version in the Indonesian home turf or providing the assurance through insurance to the lives of hundreds of thousands, the company has done it all. From the slogan of ‘Buland bharat ki buland tasvir’ to the times of ‘definitely male’, the transformation of family scooter to dominant rode rider bikes, had it been Kamalnayan Bajaj or the recent young turks – Rajiv, Sanjiv, or Anant Bajaj, this golden legacy has always preserved its dignity and integrity because of the sincerity.

For instance, when the industry growth rate for motorcycles in October was about 15% in India, the company managed to hit a remarkable 22% target with a net profit after tax for the second quarter counting Rs. 3.2 billion. Another subsidiary that has highly contributed to the pedigree is Bajaj Electricals Limited (BEL). Bajaj Allianz, a joint venture between Bajaj Auto Ltd. and Allianz AG, the world’s largest general Insurance company with over 115 years of experience is flourishing under the aegis of this mammoth corporation. Bajaj-Allianz offers life & general insurance trying to assure a tension free life for its investors. Nonetheless, the input has not been merely on the revenue generation part, but Bajaj group has benevolently shoved the onus of giving top class higher education and producing eminent managers too. Jamnalal Bajaj Institute of management studies (JBIMS) has been one such brand producing pioneers to manage the industry for more than four decades now. Time to truly go global?

The winning streak of ‘Bharti’ Mittal group

Under the leadership of Sunil Bharti, Airtel has become the fifth most valuable brand of India (4Ps Survey of Top 100 Brands in India). There is promise of much more! In a ruthless battleground of telecom wars, this player has still held the leadership position, and it is no coincidence but the true leader's spirit of Sunil Bharti Mittal. Given the series of innovations that this company has brought forth in the telecom sector, every other company and brand stands just as a me-too in front of this leader. He's the path breaking pioneer in the mobile services industry in India, and also trying as many ways to lure the customers and attract as many as possible. Not feeling content with the current levels of achievement, Mittal is also forging alliances and making plans to foray into new sectors. Building its ramparts tall, Bharti Televentures has successfully roped in the European telecom giant Vodafone to bring in an investment of $1.5 billion so as to secure a 10% economic stake Bharti Televentures.

The humongous investment is claimed to be the largest single foreign investment to be ever made in the history of India. The strategic intent here? Answers the chairman “The tie-up is to take the company to the next level, as it stands on the threshold of being an Asian telecom powerhouse.” The group also flaunts its social interests pretty well – Sunil had announced a donation of Rs. 200 crores to support primary education system in the country. Says Sunil, “We have picked primary education as a mission under the banner of ‘Bharti Foundation.’ ” Not limiting his plans to the telecom business alone, he has also forayed into the financial services by tying up with Axa Life Insurance. The chief entrepreneur is also in talks with retail giants like Tesco, Walmart to foray into the retail industry with a big bang. These apart, the group plans to foray into food processing, infrastructure and retail. Given the business acumen displayed in carving a world-class brand out of Airtel and even Bharti group as a whole, it'll be no surprise to see him as an the future iconic wealth creator of the country.