Live and let live…
Apart from the automotive sector, the company has also fortified its presence in real estate and financial services

The Mahindra group is on a true expansion binge. In yet another international collaboration doing the rounds, the Rs. 94.5 billion Mahindra & Mahindra has signed a memorandum of understanding with French car maker Renault. Under the agreement, the duo will set up a green field plant within five years. The plant will have an annual capacity of 500,000 units and will be primarily used for the Logan model range. The Scorpio as a product is the single largest contributor to the company’s fortunes today, the net income of the company last year stood at a whopping Rs. 83.2 billion. The subsequent updated version of Scorpio as well as some minor modifications in other model ranges including the Bolero and Marshall MUVs (Multi Utility Vehicles) have further added value. Last year the company produced 128,601 vehicles and this includes 2705 LCVs (Light Commercial Vehicles) as well. About 22,317 three wheelers were produced at the same time. The company has been present in almost every emerging sector.

Earlier this year, Mahindra’s systems and automotive technologies (MSAT) division acquired 98.6% stake in the $48 million Stokes Group UK for increasing its forging portfolio. Speaking on the occasion, Anand Mahindra, VC & MD said, “We believe the Stokes acquisition demonstrates our commitment to build a world class business that serves its global customers and enhances value for M&M’s stakeholders.” As far as farm equipment are concerned, the company has several joint ventures in European, American and Asian countries. M&M makes and sells tractors in Latin America and China. Apart from the automotive and related services, the company has also fortified its presence in real estate and financial services. But, such diversity in business has been more of a pain for Mahindra rather then a successful business strategy. The problem now faced by the company is that it is trying to change too fast in a very little time. This means that a company which is still recognized as an automotive driven group is not giving itself enough time for the transition. The information technology and the real estate are good sectors to enter at this moment in time, but core competency is also an important consideration.

Conservative is Cool
Commitment to ethics and adaptability are the key survival instincts of the group that have paved its journey

When Dewan Bahadur A M Murugappa Chettiar, founder of Murugappa Group started his business, little he would have imagined that when his fledging group moved to India in 1939, it would, a century later, be spoken in the same breath as the Tatas, Birlas and the Ambanis. The Murugappa Group is one of the few establishments in the country that have withstood the test of time by generating wealth and building trust for its shareholders. In fact, the legacy hasn’t dogged its flexibility at all. Aman Bajaj, analyst with IndusView Advisors points out “Commitment to ethics and adaptability are the key survival instincts possessed by the group that has paved its journey from being a traditional money lender to a $1.6 billion diversified conglomerate.”

One of the success mantras for this group according to A Vellayan, Senior Director, Murugappa Group is, “There is a climate which fosters professionalism and overall the Group’s management style is characterized by professional competence with a spirit of entrepreneurship.” This maverick group has been juggling brilliantly between 29 group companies! In fact, the juggernaut has decided in its most recent move this October to foray in the fitness arena. TI cycles, one of the renowned brands from the Murugappa stable is opening up BSA Workouts – an entire range of cardio and strength equipment. Truly, the adage ‘the only thing permanent in life is change’ seems to be what the Murugappa family firmly believes in. The parent company has over time changed and adapted its identity by partnering with internationally acclaimed companies such as China Engineering and Exploration Bureau (CEEB) of China, Borg Warner Morsetec of USA, Cargill International S.A. of Geneva, Foskor Ltd. of South Africa, ROCA of Spain, DBS Bank of Singapore, Chimique Tunisien of Tunisia, Morgan Crucible Company plc.of U.K, and Mitsui Tsumitomo Insurance Company Ltd. of Japan. A cornerstone of Murugappa Group’s philosophy has been its social commitment and the group has been at the vanguard of public health, education and eco-conservation amongst the communities where the companies of the group are operational. With a policy of corporate governance that encourages high level of accountability and transparency to each stakeholder, Murugappa Group relentlessly pursues a journey charting a path taken by lesser mortals.

The legend lives on...

Mukesh’s foray into retail –a befitting tribute to his father’s enterprising spirit and can have a transformational impact He was the Godfather of the ordinary investors who put in their hard-earned savings in Reliance Industries and got much more than their money’s worth. His bold move to raise capital for his gargantuan expansions. He was among the precious few Indian business tycoons who dared to dream big, had the courage to envision global capacities; in a country that was then famous for its risk averse entrepreneurs. When it comes to undertaking large scale, high risk investments, Mukesh’s foray into organized retail looks like a befitting tribute to his father’s enterprising spirit. It is a venture that he states, “Will have a transformational impact on the lives of our people”. After months of razzmatazz, which involved a succession of debates and discussions among industry experts, RIL opened eleven retail stores in Hyderabad by the name of ‘Reliance Fresh’, selling quality fresh fruits and vegetables at highly competitive prices.

Mukesh is set to expand the network to seventy cities by 2008 and his retail venture is set to have a turnover of $25 billion by 2011, which is anything but small! It is no wonder that Reliance is being regarded as India’s answer to American retailing giant Wal-Mart. Mukesh has been lauded for his near uncanny ability to get projects completed on time, but his ability to raise money for the proposed 27 million tonne RPL refinery was a surprise to many. Global oil exploration, refining and marketing giant Chevron invested $300 million for a 5% stake in the venture. And the IPO received an overwhelming response from retail investors, as it was oversubscribed by around 50 times reminding one of how Dhirubhai Ambani raised money from the equity markets in the 1980s. RPL has purchased 10000 acres of land in Jamnagar, Gujarat to set up a SEZ for the refinery. Another key area where Mukesh is focusing his mega investments is gas exploration. Truly, Reliance under Mukesh is taking off to new vistas with the same aplomb and dauntlessness that Dhirubhai Ambani was famous for. The Godfather of small investors is no more, but his legend lives on…