There were many suggestions for names of his new group, but
Sanjiv Goenka, chairman, RP-Sanjiv Goenka Group, and the top management veered around this name because a survey showed that people associated our companies more with Goenka rather than RPG, he said. With the RPG Group now splitting into two, one led by Sanjiv, and the other by brother Harsh, Sanjiv said his group will be active in five sectors: power and natural resources, retail, carbon black, media and entertainment and infrastructure. Please note that our logo, the dhanuchakra, conceptualised by Law & Kenneth and Suhel Seth, has different sized arrows, with power and retail standing for the biggest, added Goenka. In an interview with FE?s Sudipta Datta, he talks on why the split was the ?right decision?, his plans for retail and his son Shashwat who is slated to join the company next year.
Your father had announced last year that there would be a division of ownership of assets between your brother Harsh and you. Why was a split necessary?
It?s not a sudden decision, we had been thinking about it for a while. Now, the businesses have been divided but both of us have the right to use the RPG name. I had been wondering whether staying together could lead to a potential confusion between by son and my nephew and I didn’t want that to arise in future. Between my brother and me, probably we wouldn’t have any confusion, we share a warm, wholesome relationship, but I did this with an eye on the future. This is a right decision, our father wanted it this way.
RPG is an old company with a well-known brand name. What made you drop RPG from your new identity?s name?
We were surprised with the results of a survey conducted with 10,000 people across the country ? most people didn’t identify our companies, CESC, Spencer’s with the RPG Group. They either said it was a Goenka company, some said they were Sanjiv Goenka entities. So, we wanted to keep the Goenka name, and the rest followed after a lot of deliberations. It took us eight months to decide on the name and logo.
The new entity will focus on power, retail, carbon black, in that order?
Yes, and our logo also shows that, the three biggest arrows signify power, retail and carbon black. Power and natural resources contribute 61% to our revenues, carbon black 23% and retail 14%. But we are bullish about retail, with FDI limit set to go up.
Is that partly the reason why you decided not to offload 20% in Spencer?s?
There were other reasons, but yes, we have decided to withhold offloading of this minor stake for now.
What is your asset base now? What are your plans for the future?
Our new group has an asset base of R14,000 crore and revenues of over R9,000 crore. We plan to take our asset base to R50,000 crore over the next five-six years and our revenues to R25,000 crore.
We are going to spend R35,000 crore on capital expenditure in the next five-six years, and build on our power, retail and carbon black divisions.
Will the split make it easier to raise funds?
I don’t know whether it will be easier, but now there will be clarity in decision-making, instead of two chains of command, there?s one. We are going to go to the market from time to time. But we have decided that each company will fund its own expansion and that our debt ratio shouldn?t exceed 0.7:1.
Your son and daughter ? will they join the company?
My daughter Avarna already looks after Au Bon Pain Cafe, which has 12 operating cafes in Bangalore and there are plans to open 20 more in that city. We also plan to enter Hyderabad, Chennai and Pune. At this point, a study is also going on whether we should open a hub in Delhi. My son Shashwat, is doing a triple major at Wharton, and will join the company next year though we haven’t yet decided at what capacity and where.