Business   

Amara Raja to set up holding company

Jay Galla

CHENNAI: In what is seen as a significant move to facilitate transparency in the induction of GenNext into the family business, the Hyderabad-based Amara Raja group of Gallas is embarking on a host of initiatives that will include, among others, the setting up of a holding company and creation of a business code for family members.

The group has just breached the Rs. 1,400-crore turnover mark and is hoping to scale the $2-billion mark in five years. The flagship company of the group, Amara Raja Batteries Ltd. (ABL), a leading maker of industrial and automotive batteries, alone has crossed the Rs. 1,000-crore turnover mark during 2007-08. ABL has set a turnover target of $1 billion, to be hit in five years.

Jay Galla, Managing Director of ABL, said that the Group was in the process of transferring all the family holdings in various outfits into a yet-to-be-formed holding company. “The consolidation of holdings can happen in a year” he said. In ABL, the Gallas have Johnson Controls of the U.S. as equal equity partner. Mr. Galla said the promoters would take the foreign partner into confidence while transferring the family holding into the proposed holding or investment company of the group.

Besides ABL, the group has Galla Foods, a 100 per cent export-oriented unit; Amara Raja Power Systems Private Ltd., which is engaged in the design and development of power electronic products; Amara Raja Electronics Ltd., makers of battery chargers, digital inverter and trickle chargers; and Mangal Precision Products Private Ltd., which is engaged in the fabrication of advanced sheet metal products and fasteners, plastic component and compounds. Mr. Galla also hinted at the possibility of a corporate board for the Amra Raja Group as a whole. On family business and consolidation exercise, he said as the family expanded and GenNext waited in the wings, there was a definite need for a codified rule book for members to get in and get out of the family business.

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