Dubai: When Parmanand Deepchand Hinduja moved to Mumbai from his birthplace Shikarpur in Sindh province in 1914 at the age of 14 to start a family business, he did not know what was in store, or where it would lead his family.
Today, Hinduja’s business is still growing and going places. The group’s annual turnover is in excess of $25 billion (Dh91 billion) with an enterprise value exceeding $35 billion (Dh128 billion) that is spread across 35 countries with 72,000 employees on payroll. Its businesses, run through ten verticals including oil and gas, downstream energy, power, automotive, trading, infrastructure, banking and financial services, real estate, healthcare, media and information technology. The group’s products and services are spread across 100 countries.
His eldest living son Srichand P. Hinduja, Chairman of Hinduja Group of Companies, has just outranked world’s richest steel tycoon Lakhsmi Mittal as the wealthiest Asian businessman in the UK, according to the Financial Times.
The Forbes List 2013 ranked Srichand P. Hinduja as the third richest person in the UK, with a wealth tag of $8.3 billion. In the global wealth list, Forbes ranks Hinduja as the 126th richest billionaire among the world’s 1,342 billionaires.
The combined wealth of the four Hinduja brothers is estimated at $19 billion, based on the rich list compiled by Asian Media and Marketing Group.
What did not change, however, is the deep-rooted bond within the family members. Till date, the closely-knit family remains devoted to their religion, culture, This probably explains why such a huge business did not split and remained united under a single command - even as the fourth generation enters business. Despite the family’s exposure to different environment and cultures, it remains integrated. Its members are strict vegetarian and do not marry outside their cast.
As a ‘refugee’ from Sindh, P.D. Hinduja did very well in textile and trading. However, as his business grew, the group moved its base from Mumbai to Iran where it was headquartered in Tehran till the revolution took place in 1979.
When he died in 1971, his business had grown manifolds with his four sons steering it for the next level of growth. By then, P.D. Hinduja had instilled a strong legacy and culture in the business combining his religious faith, values and lifestyle – that was enough to keep the family and business united till now - the 99th year of its founding.
“Our business runs on five strict guiding principles firmly laid down by my father – the founder of the group,” Gopichand P. Hinduja, Co-Chairman of the Hinduja Group, says, as he adjusts his seat at the Club Lounge of the Royal Mirage Hotel for the interview.
He is P.D. Hinduja’s third son and the second among the living ones.
“First, work to give. Nothing belongs to us. Use the money for good causes. So, we all work for a cause – for others,” he explains. “Herein lies the foundation of philanthropic culture of the business. For example, my father established a hospital in Mumbai – one of the finest in India – where the poor are treated for free while the rich are billed. So, the rich pay for the poor’s treatment.
“Second, world is a bond – do not break away from your word, come what may. Till we moved to the West, we did not deal with any lawyer. Business was done on words and that was the commitment. In those days, business used to be done with both parties putting their initials on the goods, quantity, delivery and price. That’s all.
“These days, you need two lawyers – at your right and left – to decide if you should do business with someone.”
From Iran, his sons shifted the group’s base to the United Kingdom - just before the overthrow of the Shah - and spread across Europe and other continents. Later, both S.P. and G.P. Hindujas became British citizens while their younger siblings settled in Switzerland and India.
“Act local, think global – is the third principle – that has helped us to become a global conglomerate, while we remain local in our dealings,” he quips. “Wherever we have gone, we have adopted to local cultures, while mixing it with our own.”
In 1984, the group acquired Gulf Oil, closely followed by the acquisition of the then struggling Indian automotive manufacturer Ashok Leyland in 1987, which was the first major NRI investment in India. Hindujas turned around Ashok Leyland to a $2 billion company. With 150,000 units manufactured annually, today, it is the world’s fourth largest commercial vehicle brand, No. 2 in India. It has 72 per cent market share in the UAE’s school bus market.
His father had also advocated fearless advancement of the business. “However, he believed in partnership. Growth in partnership has been one of the five pillars of our success. It helps us to benefit from local expertise while our global resources help the business to flourish,” he says.
Hinduja Group today continues to grow both organically and through acquisitions – in different verticals and across five continents.
However, despite the deep-rooted values, the group could not keep itself out of controversies. Srichand, Gopichand and Prakash Hinduja have been connected with the investigation into the long-running Bofors scandal, in which Swedish firm Bofors was alleged to have paid bribes to Government officials and politicians in connection with the $1.3 billion sale of 400 howitzers to the Indian Government in 1986. Charges against them were trhown out of High Court in Delhi, citing a lack of evidence. A British cabinet member had to resign on allegation that he helped SP Hinduja in getting British citizenship.
In business expansion, however, the brothers remain very careful. They can smell trouble much before it occurs.
“From the day one, we have been ‘refugees’ and carried out businesses in different conditions. We had left Iran just before the revolution started and a few days before the Shah had left the country,” he recalls.
“Because we are careful, we weren’t much affected by the financial crisis of 2008. While all major businesses suffered, we continued to grow and prosper.”
While other organisations have been cutting costs during recession, the Hindujas last year invested $1.1 billion in acquiring Houghton, the US lubricant and specialised chemicals group that has been a market leader in its field.
However, after shifting bases from the East to the West, the Hinduja brothers are shifting their focus back on the East, especially in India - their home turf and the Gulf - due to growing opportunities. They had earlier pledged to pump in $50 billion (Dh183 billion) into India’s power, energy, infrastructure and real estate sectors, to tap into these opportunities.
“As much as $1 trillion spending in infrastructure development has been planned in India over the next few years,” GP Hinduja says. “We would like the major Gulf investors, including the sovereign wealth funds to invest with us in large projects where return on investment will very high. India is a major growth story and we want to participate in this in a much bigger way.”
The governments of India and the UAE are currently getting ready to sign Bilateral Investment Protection Agreement (BIPA) which will encourage greater investment from the UAE into India and create a win-win situation for both, Hinduja says.
Box 1
Gopichand P Hinduja joined the family business in Mumbai in 1959. He was one of the architects of the transformation of the Group from an Indo-Middle East trading operation into a multi-billion dollar transnational conglomerate.
GP is also the visionary behind the group’s forays into Power and Infrastructure sectors, spearheading the task of shaping the group’s plan for building 10 GW of power generation capacity in India.
GP studied at Jai Hind College, Mumbai, in 1959. He holds an Honorary Doctorate of Law from the University of Westminster, and Honorary Doctorate of Economics from Richmond College, London.
He is married to Sunita, and has two sons, Sanjay and Dheeraj, both actively involved in the Hinduja Group businesses, and a daughter, Rita. GP’s personal interests are trekking, music and swimming.
Box 2
The Hinduja Brothers
1. Srichand P Hinduja
Chairman, Hinduja Group of Companies
Chairman, Hinduja Foundations
2. Gopichand P Hinduja
Co-Chairman, Hinduja Group of Companies
Chairman, Hinduja Automotive Limited, UK
3. Prakash P Hinduja
Chairman, Hinduja Group of Companies (Europe)
4. Ashok P Hinduja
Chairman, Hinduja Group of Companies (India)
Sidebar
Hinduja Group plans to sell stake in power and cable TV networks to UAE funds
Global company to double investment in the UAE
By Saifur Rahman
Associate Editor
Dubai
Hinduja Group, a $25 billion annual turnover diversified global conglomerate, is in talks with the UAE’s sovereign wealth funds (SWFs) for partnership as it plans to sell stake in its power and cable TV network businesses, a top official said.
The group also plans to double its $100 million (Dh367 million) investment in the UAE, Gopichand P. Hinduja, Co-Chairman of Hinduja Group of Companies, told Gulf News.
“We have a plan to develop 10,000 megawatts of power in India for which we are ready to forge partnership with the Gulf’s sovereign wealth funds, especially those of the UAE,” he said
During his recent visit to the UAE, he held talks with at least three SWFs for possible equity partnership.
The group’s first greenfield Hinduja National Power Plant – a 1,040 MW thermal power plant – is being set up in India’s Andhra Pradesh at a cost of nearly $ 1.65 billion (Dh6 billion).
Without giving details, Hinduja said, his company is ready to partly divest from its power and cable TV business to accommodate UAE’s SWFs as equity investors.
Earlier, the company had built a bus assembly plant for its flagship automobile division Ashok Leyland in Ras Al Khaimah with an installed capacity of 2,000 buses annually.
