Kumar Mangalam Birla was only 28 when his father, Aditya Vikram Birla, died in 1995, and he had to take on the responsibilities of his father’s business empire which he had inherited.
However, the responsibilities he had to take on at this young age proved to be the turning point in his life.
“It left me with no choice but to grow up fast,” India Today quoted Kumar Mangalam as saying. “That was a huge learning in itself,” he said.
On June 14, when he turns 55, here’s a look at some of the challenges Birla faces in his cement business and other ventures.
Birla is chairman of the $45 billion conglomerate Aditya Birla Group, which owns about a third of India’s largest cement maker Grasim Industries. The group also has stakes in aluminum company Hindalco Industries and financial services provider Aditya Birla Capital. Apart from that, the group has investments in iron ore miner Essel.
According to the Forbes Annual Billionaires ranking, Kumar Mangalam Birla’s net worth is $13.2 billion.
Challenges before the business tycoon
Kumar Birla inherited the commodity conglomerate that his great-grandfather, the revered GD Birla, globalized by expanding to Indonesia, Thailand and the Philippines. Kumar Birla was inspired by this and became the largest aluminum rolling company in the world after acquiring the American-Canadian company Novelis Inc in 2007.
However, since 2008 Birla has overcome a number of challenges, including the financial crisis, a slump in Chinese demand for raw materials and disruptions in the telecommunications industry following the arrival of Mukesh Ambani’s Reliance Jio in 2016.
In the telecommunications industry, Birla’s Vodafone Idea Ltd received a government package which prevented the telecommunications company from going bankrupt.
In January this year, struggling telecoms operator Vodafone Idea decided to convert spectrum interest and adjusted gross revenue (AGR) due to the government into equity. This decision is in line with the telecoms package approved by the government last year. Following the conversion, the government, with a 35.8% stake, became the largest shareholder in the country’s third largest telecommunications company.
This decision helped Vodafone Idea significantly reduce its payment burden and resolve short-term liquidity issues. It also eased some concerns about the debt burden, although the problem remains.
A new battle has begun in the cement sector after billionaire Gautam Adani recently made his mark in the sector after acquiring stakes in Swiss giant Holcim’s business in India, including Ambuja Cements and ACC. In India, Holcim has a combined production capacity of nearly 70 million tons.
Following Adani’s deal, Birla-controlled UltraTech Cement announced a capital outlay of $1.7 billion to increase the company’s cement capacity by 22.6 million tonnes per year.
Seeing robust long-term growth in the apparel industry, Kumar Birla’s Aditya Birla Fashion and Retail (ABFRL) recently raised Rs 2,198 crore from Singapore’s sovereign wealth fund GIC through a stake sale. GIC now holds 7.5% of the company’s capital. The Aditya Birla Fashion and Retail is home to a large number of Indian and international brands such as Ralph Lauren, Forever 21 and Sabyasachi.
The retailer will use the funds to drive the growth of current businesses and other emerging business models.
Kumar Birla is currently exploring new energy opportunities for fintech companies, even as the group plans to spend $10 billion in existing verticals, BQ Prime reported.
“We are also looking at new ventures, digital being important,” Birla said.
The plan follows Russia’s invasion of Ukraine that triggered record commodity inflation, the worst energy crisis ever and a supply chain lockdown.