By Kunal Bose
Every country with favourable environment for private entrepreneurship to flourish is replete with examples of rags to riches happenings. India is no exception to this phenomenon, where some with exceptional vision and courage to give shape to ideas in the face of all kinds of adversities have literally fought their way to find seats in the top tier of business houses. The late Dhirubhai Ambani, the founder of Reliance Industries, is uncontestedly remains the best example of creating immense wealth with almost nothing to start with but an idea and unwavering will. Licence Raj, whose dismantling started in 1991 under the stewardship of Narasimha Rao and Dr Manmohan Singh and sabotage attempts by business houses which prospered in a protective environment were the two main hurdles the likes of Ambani had to overcome.
No question that successes of Dhirubhai Ambani continue to inspire Indians, whatever be their economic standing to build businesses from scratch. In more recent times, Anil Agarwal, executive chairman of London based Vedanta Resources, which is the ultimate owner of all Vedanta group companies in India is a much discussed businessman among the masses for the wealth he has created here and also abroad from natural resources, primarily bauxite, zinc and iron ore and metals. Though the last among Indian groups to get into aluminium business by way of acquiring 51 per cent of Bharat Aluminium Co (Balco) in 2001 on disinvestment by the union government, it over the years overtook Hindalco, flagship company of Aditya Birla group and the government majority owned Nalco, Vedanta produced 2.46 million tonnes of primary aluminium in 2025-26. The company presently has capacity of 1.85m tonnes at Jharsuguda in Odisha and 1m tonnes at Balco’s Korba smelters in Madhya Pradesh.
While the ongoing investment will lift smelting capacity to 3.1 million tonnes by 2027-28, Agarwal has announced plans to build a greenfield smelter of 3 million tonne capacity to make Vedanta Aluminium the world’s largest. At the same time on sustainability, productivity and cost parameters, the company will remain in the top global producer quartile. A question that can be logically addressed to him is why his focus remains exclusively in the upstream of aluminium business – acquisition of bauxite resources, expansion of alumina refining capacity, pursuit of global ambition to become the largest producer of the white metal – and leaving the downstream, except for value addition where application of high technology is required to others.
Agarwal’s motivation in this respect can be well guessed. After all, he is somebody who has many a times recalled his journey from Patna to Bombay (since renamed Mumbai) with knowledge of English restricted to a few words, a single room shared with others and little money in pocket to back his ambition, which knew no bounds. What, however, he had in abundance was courage not to be overwhelmed by setbacks. The journey from shared living in Bombay to owning a residential property at Mayfair, among the toniest neighbourhoods in London, befitting his controlling one of the most diversified natural resources and metals groups in the world, through many ups and downs has only strengthened his resolve to create room for others, specially for the ones with small resources but a burning desire to build a business.
So instead of looking at opportunities in aluminium based units in the downstream Agarwal says: “I may have the money to be in the downstream. But my thinking is why instead of usurping that space, I should create condition for small entrepreneurs to occupy that downstream area.” In fact, the aluminium park that Vedanta Aluminium is building over 253 acres in close proximity to the smelters at Jharsuguda in Odisha will be a boon for investing units, small, medium or large as they will have the benefit of assured raw material (liquid metal, billet, wire rods, etcetera) supply and plug and play infrastructure. The cost saving as a result will be up to 20 per cent improving the competitiveness of downstream products to be made at the Park. Agarwal claims he is participating in the building of India and he will only do things that will enrich society.
There were times when Vedanta courted controversies such as the aborted Niyamgiri bauxite mining venture in Odisha, the Supreme Court ordered shutdown of the copper smelter at Thoothukudi in Tamil Nadu and iron ore mining in Karnataka and Goa. But all these are overshadowed by the creation of assets of size and class, in most cases matching the benchmark world standards, in the past two and a half decades. Only a very few can claim the distinction of Agarwal in having success in equal measure in lifting fortunes of acquired companies from the government stable – Hindustan Zinc and Balco – through reorganisation and building new capacity and building what is now the giant Vedanta Aluminium from the ground up.
Agarwal has got so much on the plate that he doesn’t any more have appetite for takeovers. But he may still make an exception if a running steel company comes his way. This correspondent has spoken to a number of stock brokers and analyst to understand what they think of the unique five-way demerger of the big banyan tree that Vedanta became over the years. Following the spinning off of several businesses, which all have become very large with potential to grow in size and profitability, Vedanta Limited will find favour with investors, for its businesses will include the money spinner zinc, silver and nickel.
India being highly import dependent on oil and gas, Vedanta Oil &Gas with ownership of 44 blocks and $5bn investment in the pipeline should have good times ahead. Agarwal wants to increase the electricity generation capacity of Vedanta Power to 20 GW (gigawatt) from the current 4.2 GW to make it become one of the top three power companies in India. While this be so, investors remain rather wistful about the prospects of Vedanta Iron & Steel even though Agarwal has proposed steel capacity expansion to 15 million tonnes from 4 million tonnes. The company also has the benefit of owning 4 billion tonnes of iron ore resources and metallurgical coke capacity of 800,000 tonnes.
Building a greenfield steel mill is highly challenging, not the least because of land acquisition and securing host of government clearances. The leaders in the steel industry, including Tata Steel JSW, SAIL and Jindal Steel do not sell steel as a commodity but under strong brands developed over the years. Vedanta will take time to build a brand for its steel. Is the company in search of technology partners (like ArcelorMittal has found in Nippon Steel or JSW Steel in JFE Steel of Japan) to be able to make electrical steel and speciality steel. The market will seek clarification on this. (IPA Service)
