Mumbai: In the late ’90s, Larsen and Toubro chairman Anil Manibhai Naik was faced with two consecutive hostile takeover bids for the company he headed, by two of the most influential businessmen in India Inc.: Dhirubhai Ambani of Reliance Industries and Aditya Birla Group chairman Kumar Mangalam Birla. Mr. Naik successfully fought off the bids for L&T, valued at ₹5,000 crore in 1999, and went on to build it into the latter-day engineering and projects giant with a market cap of ₹1,70,000 crore.
His tenacity in holding off the bids, and his tendency to extract positives from negative situations, made friends of Mr. Ambani and Mr. Birla and earned him their respect. Nearly 20 years later, on Saturday, Dhirubhai’s son Mukesh and Mr. Birla were present for the release of The Nationalist , a biography of Mr. Naik by Minhaz Merchant.
The takeover bids
Released by spiritual guru Rameshbhai Oza, The Nationalist delves deep into the life of the man who served L&T for 53 years, leading it for 18 of them. It talks about the son of a school teacher who overcame odds to transform L&T into a global powerhouse. The takeover bids are an important part of this biography.
After it failed to buy out L&T due to opposition from financial institutions, RIL sold its 10% stake to Aditya Birla Group company Grasim, L&T’s competitor in the cement business. Mr. Ambani said, “Both of us are from Gujarat and proud baniyas . I think I’m a better negotiator than him, and he thinks otherwise, so we figured out a good way to say who will win our negotiation and we shook hands. For over three decades, the architecture of the Reliance-L&T partnership is cost-plus. More importantly, we have been in tough situations together. So, we said we will be fair to each other; we will create win-win partnership and we shook hands on that and we moved on.”
Quickly correcting Mr. Ambani that he is a brahmin, and not a baniya , Mr. Naik said, “We greatly value our relationship with Reliance Industries, who have trusted L&T to be their partners in all their major projects, from Patalganga, Hazira, Jamnagar 1, Jamnagar 3 and others.”
The conflict with the Birlas, he said, ended in a win-win situation for both companies. “Grasim became the largest producer of top-quality cement, and L&T emerged as one of the best engineering, manufacturing and projects company in this part of the world.”
Chennai-based Chartered Accountant S. Gurumurthy, who is also the convenor of the Swadeshi Jagran Manch, played the crucial role of mediator in the settlement between L&T and Grasim, which resulted in L&T deciding to de-merge its cement business to be acquired by Grasim Industries. “I played the role of third-party mediator for L&T during the crisis. Restructuring was an original idea by Mr. Naik, who is outspoken, transparent, willing to take risk. Mr. Naik made the shareholders the real owners of L&T,” Mr. Gurumurthy said in a video massage.
Mr. Naik said, “A great moment of satisfaction came when, at the end, Mr. Birla extended his hand and said ‘history should never, never forget you. You know what you have achieved: employee ownership of the company’.”
The event was attended by Chief Minister Devendra Fadnavis, National Security Advisor Ajit Doval and industry captains including HDFC’s Deepak Parekh, Anil Agarwal of Vedanta Plc., the Hindujas, Chanda Kochhar and Naina Lal Kidwai.
