Best CFO Awards 2016-17 | The Reorg Expert
Rajesh Agrawal, the veteran finance expert, knows how to keep his finger on the pulse
Rajesh Agrawal, a Chartered Accountant and a Company Secretary has been heading finance for Indraprastha Gas (IGL) for more than a decade. Before joining the company, he spent 22 years working with IBP, an oil marketing company, which was merged with Indian Oil Corporation.
Agrawal has played a major role in restructuring the organisation over the years. He has also closely monitored M&As along with finance for the last 11 years in the organisation. Over the years, IGL has built a strong and debt-free balance sheet. Agrawal played a vital role in making the company profitable and cash generating. IGL’s current market capitalisation is around Rs 14,000 crore, which has shown a growth of around 80 per cent in the past one year. This is because of sustained growth in terms of both volumes and profitability.
IGL operates in Delhi and NCR as a gas distribution company. In the last few years, it has acquired 50 per cent equity stake in Maharashtra Natural Gas, operating in Pune and adjoining areas, and Central U.P. Gas, operating in Kanpur and Bareilly. Agrawal played a significant role in executing these acquisitions at a very competitive rate. Both acquisitions were funded through internal resources.
When asked what challenges a CFO like him faces, he says, “A CFO always faces the challenge of making a right balance between risk and return to protect and grow the margins, which is important to ensure value creation for all stakeholders.”
For IGL, volume growth has been more than 10 per cent in the first nine months of the financial year 2016-17 against the CAGR growth of 7 per cent in last five years. IGL has added 81 new stations in the past one year increasing the number from 340 as on March 2016 to 420 on March 2017. Total revenue and net profit of the company for the first nine months of the financial year 2016-17 has been Rs 3,110 crore and Rs 437 crore, respectively.
On 1 May, the natural gas company announced its acquisition of two major steel pipelines of state-owned utility GAIL of 58.5 km. IGL plans to streamline the operations and maintenance of gas pipeline infrastructure in the national capital.
On this development, E.S. Ranganathan, MD of IGL said that this transfer will help in increasing the efficiency in operation and maintenance of city gas distribution network in the national capital.
The key focus area for IGL in the next few years would be to continue the expansion of infrastructure. IGL plans to increase its capital expenditure substantially in coming years to further expand pipeline infrastructure and CNG stations in existing areas of operation to provide more piped natural gas (PNG) connections and to ensure queue less CNG operations. In addition, the company also plans to lay pipeline infrastructure aggressively in the newly allotted geographical area of Rewari.
IGL is also trying to leverage the technology to improve the operational efficiency and cost reduction across the company. The target revenue for the next financial year is Rs 4,800 crore.
“Sustaining the culture of compliance in the organisation and meeting expectations of the customers on time in a rapidly changing technological environment are important to this role,” says Agrawal. He feels that competence, integrity and professional behaviour are few mantras to succeed in life and work. He loves watching cricket and listening to old Hindi songs.