Organisational realignment and healthy margins see Anil Agarwal’s net worth grow
Anil Agarwal, India’s third wealthiest person and a metals and mining magnate, started his journey with a tiny scrap metal business in 1970. Agarwal, who turned this small scrap unit into London-listed Vedanta Resources with huge mining assets spread across the world, saw his wealth grow by as much as 39 per cent in 2017. While this wealth gain was the result of a significant turnaround in the market that he is in, some organisational realignment, both organic and inorganic, also helped his companies make a big jump in their market valuation.
In January, Agarwal bought a 12 per cent stake in London-based mining company Anglo American for $2.4 billion through his family trust. He merged Vedanta’s debt-laden Indian unit and cash-rich oil and gas firm Cairn India after sweetening the terms for minority investors. Agarwal’s listed group company Sterlite Technologies hived off its power transmission business into a separate unit and listed an infrastructure investment trust.
Agarwal attributes his gain in 2017 to the group’s commitment in maintaining healthy margins.“Vedanta’s business model is unique as it relies on optimisation of its tier-1 assets through low-cost production. A few months ago, commodity prices hit rockbottom and the entire sector was in pain globally. While, we went through pain, like every other company in the sector globally, our commitment to maintaining healthy margins, cash on books and deleveraging our balance sheets kept us in good stead,” says Agarwal. “Today, as commodities are regaining confidence, Vedanta is in a stronger position than most other companies globally. Recently our market cap hit $45 billion,” he adds.
A sports enthusiast, Agarwal says that sports teaches you one of the most important lessons of business: that no loss is final, nor is any victory. While these very principles govern Vedanta’s business ethos, the company recognises that it is essential to promote these values through its community engagement.