17 November 2007
Outlook Business

Kumar Mangalam Birla was thrust onto the hot seat in his 20s, when his father Aditya Birla passed away at the age of 52. When found himself at the helm of the Rs. 16,500 crore empire, Kumar did not flinch. "He is too young to manage all this," many of his critics said. They pointed to the many challenges, including a downturn in the commodity cycle and several unfinished projects in group companies. Well, at 40, you could say that Kumar Mangalam is still young. But the Aditya Birla Group is now worth about Rs. 100,000 crore in sales. With a market capitalisation that has just crossed $34 billion, Birla has piloted the group into the Fortune 500 league.

Criticism is nothing new to Kumar. He came under flak for Hindalco Industries' $6-billion acquisition of the $9.8-billion Canadian aluminium rolled product manufacturer, Novelis. Kumar, who stayed up till the wee hours of the morning of 11 February 2007 to wrap up the deal, backs himself to make a success of it. "I do realise that in the short-term it does cause a strain on your company's balance sheet...over the long-term it will undeniably create enormous shareholder value," he told Hindalco shareholders at its recent annual general meeting.

Like his father, Kumar believes that Indian business has to go global. "You will see much more of that global character of the group coming forth in the next few years," he told Outlook Business in an interview. "We are not going global for the sake of going global. We are going global because that is imperative for our business."

So far, most of Kumar's bets have paid off. The Group was seen as a laggard in the telecom sector but now Idea Cellular, with a market capitalisation of almost Rs. 33,000 crore, accounts for almost a fourth of the Group's market value. With age on his side, Kumar is far from completing the empire that he set out to build about a decade ago. In the coming years, expect more action in the Group's new businesses like IT & ITES, financial services and retail.