Vedanta Resources (VED.L) plans to spend up to $9.6 billion (6.1 billion pounds) clinching control of Cairn India (CAIL.BO),giving billionaire mining magnate Anil Agarwal a slice of India’s oil reserves and exposure to surging demand.
Clearly, the chairman and founder of Vedanta has no desire to build a global oil and gas company. But he does want to run an even bigger conglomerate in his home country,rivalling the mighty industrial empire of a billionaire like Lakshmi Mittal.
A bird is flying near Vedanta Office in Mumbai
One of the most thrilling moments of my life was the day I got my first cycle,” reminisces Anil Agarwal, founder, chairman and, with his family, majority stakeholder of Vedanta Resources Plc., the London Stock Exchange-listed mining and metals conglomerate with a market cap of $10 billion (Rs39,400 crore). The cycle was a gift from his father, a fabricator of grills and gates in small-town Patna in the 1960s. It meant the youngster could ride to his municipal school in style, instead of making the daily 10km hike on foot. Much later, Agarwal graduated to a Vespa scooter,but never made it to college.
From the Patna lad who left school at 15 without knowing a word of English, to founder, Vedanta Resources, Agarwal has travelled a long way. Vedanta Resources was the only Indian group to go for a primary listing on the London Stock Exchange in 2003 and its subsidiary, Sterlite Industries, was listed on NYSE in 2007 in the largest IPO in the US by an Indian company.
According to Forbes, Anil Agarwal is on the verging of breaking into the world?s 100 richest men with a fortune of $6.4b
The person who has perhaps most influenced Agarwal’s recent thinking is an American, Steve Elbaum, chairman, Superior Cables, a $1.5 billion company. Elbaum was born to Holocaust survivor parents in a displaced persons’ camp. His idea of business as a clearing house to distribute earnings back to society probably inspired Agarwal’s 2006 $1 billion pledge to set up the Vedanta University, a world-class university, on a 3,200ha site in Orissa. Says Agarwal: “I want to spend 20% of my time on philanthropy, building lasting institutions the way American industrialists have done. That’s my passion now.” His critics say the real motivation is Vedanta’s interests in Orissa, which holds the world’s fourth largest bauxite deposits—the mining of these has been opposed by some environmentalists and tribals, resulting in Norway’s Government Pension Fund divesting its small holding in Vedanta. Agarwal has faced criticism from activists who oppose Vedanta’s plan to extract bauxite from what tribes-people say is a sacred mountain in India’s impoverished but mineral-rich state of Orissa.
Vedanta says the mine in the Niyamgiri mountain forests, beneath which lie 78 million tonnes of bauxite, will not violate the rights of local tribes. The company is also funding schools, clinics and is engaged in income-generation projects in the area.
Walking around the Nariman Point business district, Agarwal stops to talk to a sandwichwalla in a Bihari dialect, asking about his family in the village; the street vendor in turn asks him about the Sterlite stock price. In this corner of urban India, both migrants from Bihar have, in Bollywood parlance, made the long journey from zero to hero.
