Nevin John: Anil Agarwal - Showing his mettle

The best of Anil Agarwal is yet to come. When the entrepreneur-turned-billionaire mopped up $1.5 billion (including $500 million from Vedanta) from a stagnant American financial market in just six hours, the experts and even his critics have changed their views on the Vedanta chief. Agarwal still has more weapons in his arsenal, they say.

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About 80 institutional investors have subscribed to the American Depository shares of Sterlite Industries — the flagship firm of the Vedanta group — to finance Agarwal’s plans in power generation.Given India’s huge, and growing, power deficit, Agarwal believes there is great scope for big businesses in the power sector.

Born in Patna to a fabricator of grills and gates, the metal czar has generally chosen to go against conventional wisdom. The listing of Vedanta Resources in London was one of the many unpredictable moves of Agarwal. In 2003, he raised $825 million from the London market. About two years ago, his firm Sterlite raised $1.75 billion from the US — again, a quick move.

In much the same way, Agarwal acquired bad assets across India and showed his skill in turning them around. He paid Rs 550 crore for Balco in 2006, when nobody would touch it. Later, he picked up Hindustan Zinc for Rs 600 crore.Given Agarwal’s ability to find value in seemingly bad assets, his bid for the bankrupt US copper miner Asarco is being keenly observed by his rivals.

Having burnt his fingers while planning to restructure his group, Agarwal was especially careful this time around, and spent many days and nights working on his strategy.

Though his recent turn to spirituality has mellowed his approach, the business decisions continue to be sharp and crisp — with the support of his executive army. Vedanta deputy executive chairman Navin Agarwal and chief executive officer M S Mehta are spearheading two separate teams for business activities in the eastern and western hemispheres. Vedanta chief financial officer DD Jalan and Sterlite finance director Tarun Jain are the financial brains behind Agarwal.

Agarwal plans to use the funds raised from the US for building about 9,000 Mw power capacity by 2012. His energy division is already generating about 2,000 Mw, making him the second-largest private-sector power generating company after Tata Power. For the power and metal business expansion, he is planning an investment of Rs 70,000 crore.

The size of the investment is not a big issue for Agarwal. In his words, “We have enough cash to move ahead.” Vedanta’s $6 billion cash reserve instils confidence in the business mogul. He has already indicated his willingness to buy the government’s residual stake in Balco and Hindustan Zinc — this will require an investment of around Rs 8,000 crore.

Agarwal, who made his own way from a room at Kalbadevi to a $20 million mansion at Mayfair in central London, is not looking back. People close to him say more daring moves are in the offing.