Anil Agarwal has become famous as an entrepreneur who can buy undervalued and underperforming businesses and turn them around. He went on Twitter recently to share the effort and financial risk it took to do it for the first time in 1976, when he struggled to raise Rs 16 lakh to buy the Shamsher Sterling Cable Company.
Agarwal, who moved to Bombay to pursue his entrepreneurial dreams in the 1970s, started a metal scrap sale business that collected metal from cable companies around the country and sold them in Mumbai. In 1976, he saw an opportunity to grow by acquiring the bankrupt Shamsher Sterling Cable Company.
The only problem was the Agarwal did not know how to get together the Rs 16 lakh needed to acquire the failing company. After many a sleepless night and help from mentors such as lawyer Nitin Kantawala and Syndicate Bank manager Dinkar Pai, Agarwal was finally able to scrape together the money through a series of familial and professional loans.
Agarwal’s purchase of Sterling turned out to be the first in a series of entrepreneurial masterstrokes. As his business grew, Agarwal soon diversified into mining and manufacturing of raw materials such as copper, aluminium, and zinc. Among the ailing companies that he has turned around include Madras Aluminium, the Bharat Aluminium Company, and Hindustan Zinc Limited.
Sterling was reinvented as Vedanta Resources in 2003 so that the company could become the first publicly listed Indian company on the London Stock Exchange. This move was initiated so that the company could access international capital.
Earlier this year, Agarwal also announced a $10 billion fund to acquire ownership stakes in underperforming government entities. The fund will operate in a similar manner to private equity, where it will look to buy into a company, boost their performance, and get a valuable exit within a span of ten-years.
Agarwal has come a long way since he struggled to put together Rs 16 lakh to buy the Shamsher Sterling Cable Company, but his motto stays the same. As he wrote on Twitter,
“when you move forward, new doors open and you meet new people who come to help you.”
“I discovered that when you try, really try to reach your dreams, then the universe works in mysterious ways to make it happen.”
