6 Feb, 2012, 11.05AM IST,
Tarun Jain: The man who has been stoking Anil Agarwal's growth engine since 25 years
MUMBAI: In April 2007, Anil Agarwal, chairman of the London-listed Vedanta Resources, threw a private party in a south Mumbai hotel to celebrate the acquisition of Sesa Goa from Mitsui of Japan. Amidst a swarm of 200-odd people, a gentleman of middle age and medium height was seen taking Agarwal around and introducing him to guests, mostly pin-striped bankers. When not in Agarwal's company, the man would retreat to a corner, with a lime juice for company.
The bloke in the corner is at Agarwal's side not just at such glitzy shindigs but at virtually every step of Vedanta's growth path.
That's Tarun Jain, 51, who is never in the spotlight but almost always the reason for it. Jain hates crowds and speaks very little, but don't let that fool you. He's the finance whiz who has implemented Agarwal's growth ambitions for the past 25 years. He's the bean counter-turned-game changer who has been at the forefront of executing Agarwal's vision of transforming a small cable company into a global conglomerate worth $11 billion with interests in mining, metals and energy.
Ask Jain to list out his accomplishments and he's likely to dismiss it with a shrug. "Our chairman is a visionary. We are in charge of execution," is all that he would say when this writer met him with a request for an interview, which he turned down. Agarwal too did not participate in this story. Emails sent to his office and subsequent follow-ups failed to elicit a response. Indeed, both Agarwal and Jain are private people. Another similarity: they are humble yet aggressive. But that's where the likeness ends. If Agarwal sees the large canvas, Jain is the nuts and bolts man, fitting pieces big and small into the big picture - a perfect recipe for a high-octane growth formula.
"They complement each other," says a person who has worked closely with them for a few years at Sterlite Industries, Vedanta's flagship in India. "Jain's approach to work is commonsensical," says Vallabh Bhanshali, founder-chairman of Enam, a Mumbai-based financial services company. "He identifies himself with the cause of the organisation, uses his intelligence for the cause, and works for the company and its founder."
Jain's minimalist manners and garb - he's dressed in a regular full sleeves shirt on most days in office and puts on a jacket when he goes out for a meeting - are in stark contrast to his reservoir of experience. In nearly 30 years as a finance professional, he has risen from a company secretary and chief accountant to a finance director. Till March 31, 2011, he was director (finance) at Agarwal's Indian metals and mining flagship Sterlite Industries. He's now in the chairman's office in a more strategic role that goes beyond finance matters. But finance is the arena in which Jain has earned his biggest spurs over the past 25-odd years. He's helped raise money for new projects and to finance big-bang acquisitions inside and outside India with a slew of one-of-a-kind finance instruments.
These range from an initial share sale of Sterlite at a premium in 1988 to the listing of the company's shares on the New York Stock Exchange in 2007, to a $2-billion issue of American depository receipts in the same year. He was also at hand when Agarwal had to raise some $8 billion to finance the acquisitions of Sesa Goa and Cairn India. "His creativity does not allow him to accept anything only because it's popular or it's established," says Bhanshali about "kid brother" Jain, whom he knows since the latter's early days in Sterlite.
"Tarun may not have invented everything but he definitely has implemented everything in finance," adds the Enam chairman. Yet, at times, the group's financial ingenuity hasn't found all-round approval - not from small investors, for sure. In 2002, Sterlite earned the wrath of minority investors when it appeared to be forcing them to tender their shares by mailing cheques to them; the company had to withdraw the proposal because of the ensuing protests.
Six years later, investors were once again up in arms against Vedanta's proposal to restructure businesses of Sesa Goa, Sterlite and Madras Aluminium into three commodity-focused groups. Minority shareholders in Sterlite, in which Vedanta holds a little over 60%, felt they were being short-changed because the new structure would increase their exposure to seemingly riskier assets (such as mines in Zambia) and reduce their presence in the faster-growing domestic aluminium business. The company shelved the plan.
The flip side: Investors are richer for the efforts of the Agarwal-Jain duo. A 100 investment in Sterlite's initial offering in 1988 would have burgeoned to a little under 87,000 today. You could attribute some of Jain's acumen in creating wealth to his quest for academic excellence.
He regularly topped the class in school, was a gold medallist at the under-grad level and a ranker holder in the CA and CS programmes. The small-town boy from Rajasthan's Ajmer district moved to Mumbai along with three friends when he was a second-year student of BCom. From the refuge of hostels in the city, Jain would put 18 hours daily into his studies.
His first job was with Indian Rayon, a part of the Aditya Birla Group, as a management trainee. He lasted nine months there till he was asked to shift to an upcoming cement unit in Karnataka. He then moved to real estate firm Kalpataru; and then to
Sterlite in 1984 when Anil Agarwal and his brother Navin were running their cable firm out of a 2,500 sq feet office in Mumbai's commercial district of Nariman Point.
Anand Rathi, founder-chairman of the eponymous financial services firm, was a president at the Birla company when Jain left. Rathi says he was impressed with Jain's decision to leave a big group. "It showed that he was focused on what he wanted to achieve," says Rathi, who remembers him as "a man of numbers, with an eye for detail and a quiet risk-taker".
Risk-taking is also a passion for Jain when he is outside the Vedanta universe. A person close to him says Jain is an active investor in equities. Bhanshali points out that Jain's market-related activities are aimed at giving back to the society. "He once took me to the Andheri hostel where he once stayed and told me he wants to do something for the students at the hostel," Bhanshali adds.
Clearly, Jain is one of the increasing breed of investors who believe that greed and giving are both good and are two sides of the same coin.
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