“India is not a capitalist nation and should never be one” ….. Anil Agarwal
This brave journey for Anil Agarwal began when he was all of 19 years old. Born into a lower middle class Marwari family in Bihar with no silver spoon in his mouth, Anil Agarwal’s story today is that of a self-made multi-billionaire, settled in the United Kingdom. Dwarka Prasad, his sire, who ran a small business of making aluminium conductors, would never even once have thought in 1954 when this boy was born to him that their family fortunes would be reformed manifold by this scion of his, to make them the purveyors of one of the world’s largest business conglomerates.
Anil was brought up in state capital, Patna, where he attended the Miller High School. Disinterest in studies led to him quitting regular school at 15 to join his father’s business, which too he eventually left to start his own business. He did complete his matriculation though, from Sir Ganesh Dutt Patliputra High School (in Bihar, where Lalu Prasad Yadav was his classmate). In later years he also went on to get himself a professional degree, a BE from the Malaviya Regional Engineering College, Jaipur.
Coming back to his story, he reached Bombay (now Mumbai) – India’s city of opportunity – when he was all of 19 years old, to explore career opportunities and business prospects. To start with, he tried his hand at various viable businesses to earn his bread and butter and keep body and soul together. He however did not settle down into any one venture, as he was of the thought that no matter what one does, you should never give up – and was determined to make it really big. He sequentially sought financial help and support from numerous banks, but all of them turned him down, refusing to extend any kind of loan facility, primarily due to his young years and not-so-impressive family background.
Persisting with his efforts in this endeavour, he got into trading in scrap metal, collecting it from cable companies in other states and selling it in Mumbai by the mid-1970s, which turned out to be a money-spinner of sorts for him. And banks eventually did respond to his overtures, with one advancing him a loan – which he used in 1976 to acquire the ‘Shamsher Sterling Corporation,’ a manufacturer of enamelled copper. A decade on he ran both his scrap business and this company and prospered. It was in 1986 that Anil Agarwal set up a factory to manufacture jelly-filled cables, thereby creating ‘Sterlite Industries.’ Soon realising that the profitability of his business was volatile, fluctuating with the prices of raw materials copper and aluminium, he came to the conviction that he ought to be in full-control of his input costs – by captively manufacturing the metals himself rather than procuring them from the open market. It was this conviction that led to Sterlite Industries becoming the first private sector company in India to set up a copper smeltery and refinery By 1993. Two years later Sterlite went on to acquire ‘Madras Aluminium,’ a ‘sick’ company that had been shut down for 4 years, and held by the BIFR (Board for Industrial & Financial Reconstruction).
The next step of this ‘backward’ integration process seemed natural for Anil – to get into mining. His first opportunity presented itself when the Government of India got into a ‘disinvestment’ mode and decided to capitalise on latent state assets that have not been doing too well. Going with this tide, he managed to acquire a 51 percent stake in BALCO – the Bharat Aluminium Company, a public sector undertaking, in the year 2001. Next came a majority stake in another state-run mining company – nearly 65 percent – in HZL (Hindustan Zinc Limited), a year later. Both PSUs apropos were considered liabilities at that time – known for their slumbering attitude and utterly inefficient mining operations.
Anil Agarwal and his team then took the step of incorporating an enterprise called the ‘Vedanta Resources Plc.’ in 2003, to access international capital markets. At the time of its founding, Vedanta Resources Plc. was the first ever Indian firm to be listed on LSE – the London Stock Exchange. Eventually on December 10, 2003, Vedanta Resources became the parent umbrella company of the group, through a series of internal restructuring processes of the group companies that tweaked their shareholding patterns.
The year 2004 saw Vedanta Resources Plc. taking the bold step of announcing a global bond offering, and taking control of the ‘Konkola Copper Mines’ in Zambia, Africa. In 2007 Vedanta acquired a controlling stake in ‘Sesa Goa Limited’, India’s largest producer-exporter of iron ore, and in 2010 the company acquired South African miner Anglo American’s portfolio of zinc assets in Namibia, Ireland and South Africa. A year later came a controlling stake in Cairn India, India’s largest private sector oil-producing firm. Sesa Goa’s merger with Sterlite Industries was announced in 2012, as part of the Vedanta Group’s consolidation process.
Today Vedanta Resources, head-quartered in London, is a globally diversified natural resources conglomerate, with active interests in zinc, lead, silver, copper, iron ore, aluminium, power generation, and oil & gas. The greatest share of its assets, however, lies in India – Agarwal though resident in London, has assertively reiterated often that his heart and soul remain firmly on Indian soil.
Anil Agarwal and the Vedanta Group have not been devoid of controversies and criticism either, both of them accruing in bushelfuls and dogging the company’s heels across continents. It was in 2004 that a committee of the Indian Supreme Court advanced the charge on Vedanta that it had dumped thousands of tons of toxic arsenic-bearing slag near its factory in the Indian state of Tamilnadu, poisoning the environment and endangering neighbouring populations. Another committee of the same court in 2005 charged that Vedanta had forcibly ejected over one hundred indigenous families from their homes in Odisha, where it had sought to mine bauxite. According to the committee’s report: “… an atmosphere of fear … was created through hired goons,” residents were “beaten up … by employees of Vedanta.” The company’s actions in Odisha were rebuked by the British commerce agency, and the Church of England investment funds sold their shares in the company in protest.
In Zambia, Vedanta is alleged to have dumped hazardous waste into the Kafue River from its copper mine there resulting in widespread human illness and the death of fish, according to a lawsuit filed by 2,000 local residents. A local judge is said to have observed: “This was lack of corporate responsibility and is criminal … and a tipping point for corporate recklessness.” Zambian officials instituted an audit in 2014, spurred by suspicions that Vedanta has not been paying its proper fees to the government. In addition, hundreds of former mine workers fought Vedanta for severance or disability pay.
Controversies apart, the group is active in philanthropic activities as well, putting its best foot forward on the corporate social responsibility front. Since the year 1992, when Anil Agarwal created the ‘Vedanta Foundation’ as a vehicle through which group companies would carry out their philanthropic programs and activities, Vedanta has been involving itself in developmental activities in almost all the areas where group companies have their footprint, with social activities being carried out under the auspices of the Vedanta Foundation – which manages all philanthropic programs, activities and interventions of the group. To give some scale to this effort, during the financial year 2013-14 for example, Vedanta group companies and the Vedanta foundation together invested some US$ 49 million into building hospitals, schools and infrastructure, conserving the environment and funding community programs that improve health, education and livelihoods of over 4.1 million people in India alone. These initiatives were all undertaken in partnership with either the government and or through non-governmental organisations (NGOs).
Among people who inspire him to give back to society, Agarwal counts Andrew Carnegie and David Rockefeller, who are known for having built public works with their fortunes. Activities funded by Anil’s philanthropy are focused on child welfare, empowerment of women, and education. His philanthropy first came into focus in the media for his personal donation of INR 1,796 Crore (US$ 36 million), fetching him a second ranking in the Harun India Philanthropy List 2014. Anil Agarwal has also pledged to donate 75% of his family and personal wealth to charity, attributing his inspiration to do so by Bill Gates and His Holiness the Dalai Lama.
So much about Anil Agarwal the entrepreneur, business magnate and wealth-creator. Lets take a look at Anil Agarwal the man, He is one who has always enjoyed cycling, an activity he has been avidly pursuing since his childhood. Cycling has also played an important role in his life – so much so that he is married to his childhood friend and fellow cyclist Kiran Gupta. The couple, who have a son Agnivesh and a daughter Priya both living with them in London, still occasionally embark on a cycling do. Anil is a strict vegetarian and is a devotee of Lord Krishna.