Vedanta Group, led by Anil Agrawal, wants to capitalize on the privatization drive of the Modi government. After almost four years when eco-fascists, churches, and China came together to shut down its Sterlite Copper Plant in Tamil Nadu, the group is bouncing back with the rise in prices of metals and raw material in the last two years.
The companies of Vedanta Group are posting record profits and buoyed by this success, Anil Agrawal led company has decided to create a fund of 10 billion dollars (75,000 crore rupees) to purchase the government assets.
The group wants to bid for Bharat Petroleum Corporation Limited (BPCL) and Shipping Corporation of India (SCI), the sale of which was announced after the Atma Nirbhar Bharat plan. Both assets of the government are estimated to be around 12 billion dollars and the Vedanta Group is assembling investors to bid for sale.
“We are creating a USD 10 billion fund,” Agarwal said in an interview.
The fund will be made of Vedanta’s resources and outside investment. He said, “We have a tremendous response for this, especially from the sovereign wealth funds.”
Vedanta has a history of turning loss-making government businesses into profitable entities. Anil Agrawal, who started as a scrap metal dealer, has built an empire worth billions of dollars through the acquisition of loss-making government entities like Hindustan Zinc and Bharat Aluminium Company Limited (BALCO) in the early 2000s when the Vajpayee government was on disinvestment drive.
The Vedanta Group specializes in the acquisition of loss-making entities and turning them into a profitable business, be it a public unit or a private unit. In 2007, it acquired a 51 per cent controlling stake in Sesa Goa Ltd from Mitsui & Co of Japan, and in 2018 Vedanta snapped up Electrosteel Steels Ltd (ESL), pipping suitors like Tata Steel.
The last big investment and wealth generation cycle for the company was the 2000s. The 2010s have not been very good for India or the company. But with the macroeconomic reforms in place, the investment cycle is picking up and the 2020s are expected to be the golden decade of the Indian economy.
Vedanta Group wants to capitalize on this and prepare for big asset purchases. The company is getting London-based firm Centricus on board to bid for government assets like BPCL and SCI. “As soon as the government starts coming out with a disinvestment programme, in no time we can raise. Nobody wants to put in money and pay fees and other costs. All is ready and as soon as the government activates the bidding process, we will move forward. Money will not be a problem,” said Anil Agrawal, patriarch of the Vedanta Group.
The Group is seeking to repeat the success of the 2000s as the Modi government kicks the next wave of privatization and industrialization. The entrepreneurial dynamism in India “can be harnessed to unlock incredible transformation in the public sector”, Agarwal said. “We believe that this strategy can, and will, play a crucial role in the country’s ongoing industrialisation.”
The Vedanta Group, which was delivered a deadly blow by the leftist, Christian missionaries, and foreign interests with the closure of the Sterlite Copper Plant, is rising its wings once again. The Metals and mining businesses of the Sterlite Group, which include copper, zinc, and Aluminium mining and processing, as well as oil and petrochemicals business that includes power plants and oil exploration, are showing record profits in the last two years with the rise in global energy and metal prices.
The company is ready to bounce back after the series of deadly blows through the market process (falling oil and metal prices in the 2010s) and anti-national elements (closure of Sterilite copper). Under the leadership of Anil Agrawal, the group is ready to support the next wave of industrialization in India.