Industrialist Kumar Mangalam Birla on Wednesday said he chose to rejoin the board of the group’s struggling telco Vi because he sees “hope” in the business.
Birla, who was appointed as an non-independent director on the board of the debt-laden Vodafone Idea or Vi, said as a promoter, he wanted to indicate a “willingness” to take the business forward.
“I think we are seeing hope again in the company,” Birla said after receiving the Lokmat Maharashtrian of the Year 2023 award.
“I thought as a promoter it is only right that I also indicate my willingness to take the business forward which is why the decision to come back on the board (was taken),” he added.
Birla said the government — which recently became the largest shareholder in Vi by way of converting dues — is “pretty resolute” about having three private players in the strategically important telecom sector and has been giving impetus to the industry.
He also acknowledged that its rivals Bharti Airtel and Reliance Jio are “doing well”.
It can be noted that many industry watchers, including analysts at brokerages, have been speculating about the fate of Vi, which was created with the merger of Vodafone and Aditya Birla Group company Idea ahead of Jio’s launch. The company is fast losing market share, and as the debt and losses mount, it is unable to make necessary investments in the business to deliver services quality as expected by subscribers.
Meanwhile, Birla said that a family member will succeed him as the chairman of the USD 60 billion-Aditya Birla Group, adding that both his son Aryaman and daughter Ananya are “still learning the ropes” since joining the business a few years ago.
Ananya, a successful musician, founded a microlending business which is the fourth largest in the country while Aryaman has dabbled in cricket before coming into business, he said.
“They have made a name for themselves, they have great work ethic which is very important for us as a family,” he said, adding that sport also teaches discipline which is a big virtue when you run a business.
“… they are willing to work hard, willing to learn. I think they will earn their spurs as time goes on,” he said.
He said family members of the promoters get “longevity and long-termisim” which may be difficult for a professional to get to a table.
When asked to choose between music and cricket, Birla said he likes music more.
The Indian economy presents exciting opportunities and will witness a growth rate between 6-8 per cent over the next decade, he said.
The Aditya Birla Group is seeking to become more of a consumer facing company, and targeting to get a fifth of its overall revenues from the new consumer businesses like retail, he said.
Stating that he is very excited about the foray into the paints business, Birla said the contribution in terms of value from the consumer business will be more than the 20 per cent as consumer-facing business command higher valuations.
Birla said among the new economy sectors, he feels fintech presents best promise given the high amount of unserved people. He also made clear his bias towards bottomline (profits) over the topline (revenues), adding that cash flow is very important. The financial capital, in which the group is headquartered and which is also home to the family, is a favourite because of it is the most cosmopolitan city with a great work ethic, Birla said.