UB Group’s chairman has always lived on the edge. From new forays to bankruptcy, he has seen them all. By steve warner
‘Never mix drinking (liquor) and driving’ is a cliché harped over
by many, time and time again. But what if someone actually mixed liquor and flying (let alone driving), and attained glory in the process? Now, that’s Vijay Mallya for you. He’s been an obsessive entrepreneurial risk-taker, if there’s been one in India. He has invariably lived by the sword’s edge; in fact, he’s a mercurial businessman who has constantly lived on the edge. With due apologies to Aerosmith, these words suit Mallya perfectly:
There’s something right with the world today/And everybody know it’s wrong/But we can tell ’em no or we could let it go/But I would rather be going on.
So, at every stage in his business career, he has taken his chances. And how? “Since his childhood days, he has been a determined boy. He loves taking chances and even if he makes (or has made) mistakes, he actually picks up lessons from them. He firmly believes that his future is in his own hands and even if things go wrong, he never puts the blame on anyone else and always takes on the onus,” is how a source close to his childhood friend, Kiran Mazumdar Shaw, puts it.
Consider what happened on January 25, 2008, when two foreign majors, Carlsberg & Heineken, made a $15.9 billion bid for Scottish & Newcastle’s 37.49% stake in UB Ltd. As per the deal, Mallya’s status in UB holding firm, through which he controls his entire liquor and airlines empire, may be reduced to that of a minority shareholder. The reason: Indian regulator, SEBI, maintains that a buyer who purchases an over 10% stake in a publicly-listed firm has to give an open offer for another 20%. If that happens, and if the Indian public agrees to sell to Heineken, which is likely to be involved with domestic assets, Mallya may become a minority partner in his parent firm.
Now, who would encourage a deal that is likely to undermine his own position as a prime promoter in a group build by his father? Well, Mallya would. But he would also manage to ride out the crisis created by him. Paresh Nautiyal, Analyst, Arihant Capital Markets, explains, “If the acquisition happens, I don’t see it undermining the role of Mallya because he is in a neutral position. But whatever happens, it will bring more synergies in to the organisation and will be beneficial for both parties.” Adds another liquor analyst, “There are long-term benefits for Mallya.”
What’s important is that Mallya may have convinced Heiniken not to opt for an open offer. Mallya could also use his political and business clout to convince SEBI that an open offer is not required in this case. In addition, the liquor baron could use the creeping acquisition route, or the buyback option, to silently increase his stake and retain his majority shareholder’s position. Whatever might happen, the situation would call for more funds; something which is risky as the UB Group is already over-leveraged.
When asked about similar challenges he has faced in the past, and the manner in which he handles them, Mallya responds, “Challenges are always there, and I think challenges help you grow. In case of UB Group, we have a core focused team that helps in estimating the future challenges and take action. A crisis situation always helps you to grow and I personally don’t know what kind of a specialist I am when it comes to being a specialist, but I always resort to my team to manage any sort of crisis situation.”
However, this seems to be an understatement. Mallya has dealt with every crises – and he has faced many – with aplomb. Binit Somaia, Regional Director, Centre for Asia Pacific Aviation, while talking about his encounters with Mallya, describes, “Following any encounter with Vijay Mallya, I think people always go away struck by the genuine passion and zeal with which he pursues his businesses, though dangerously, at times, which is undoubtedly one of the key drivers of his success. I think he would be better described with four words: passionate, charismatic, confident & shrewd.”
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
‘Never mix drinking (liquor) and driving’ is a cliché harped over
by many, time and time again. But what if someone actually mixed liquor and flying (let alone driving), and attained glory in the process? Now, that’s Vijay Mallya for you. He’s been an obsessive entrepreneurial risk-taker, if there’s been one in India. He has invariably lived by the sword’s edge; in fact, he’s a mercurial businessman who has constantly lived on the edge. With due apologies to Aerosmith, these words suit Mallya perfectly:There’s something right with the world today/And everybody know it’s wrong/But we can tell ’em no or we could let it go/But I would rather be going on.
So, at every stage in his business career, he has taken his chances. And how? “Since his childhood days, he has been a determined boy. He loves taking chances and even if he makes (or has made) mistakes, he actually picks up lessons from them. He firmly believes that his future is in his own hands and even if things go wrong, he never puts the blame on anyone else and always takes on the onus,” is how a source close to his childhood friend, Kiran Mazumdar Shaw, puts it.
Consider what happened on January 25, 2008, when two foreign majors, Carlsberg & Heineken, made a $15.9 billion bid for Scottish & Newcastle’s 37.49% stake in UB Ltd. As per the deal, Mallya’s status in UB holding firm, through which he controls his entire liquor and airlines empire, may be reduced to that of a minority shareholder. The reason: Indian regulator, SEBI, maintains that a buyer who purchases an over 10% stake in a publicly-listed firm has to give an open offer for another 20%. If that happens, and if the Indian public agrees to sell to Heineken, which is likely to be involved with domestic assets, Mallya may become a minority partner in his parent firm.
Now, who would encourage a deal that is likely to undermine his own position as a prime promoter in a group build by his father? Well, Mallya would. But he would also manage to ride out the crisis created by him. Paresh Nautiyal, Analyst, Arihant Capital Markets, explains, “If the acquisition happens, I don’t see it undermining the role of Mallya because he is in a neutral position. But whatever happens, it will bring more synergies in to the organisation and will be beneficial for both parties.” Adds another liquor analyst, “There are long-term benefits for Mallya.”
What’s important is that Mallya may have convinced Heiniken not to opt for an open offer. Mallya could also use his political and business clout to convince SEBI that an open offer is not required in this case. In addition, the liquor baron could use the creeping acquisition route, or the buyback option, to silently increase his stake and retain his majority shareholder’s position. Whatever might happen, the situation would call for more funds; something which is risky as the UB Group is already over-leveraged.
When asked about similar challenges he has faced in the past, and the manner in which he handles them, Mallya responds, “Challenges are always there, and I think challenges help you grow. In case of UB Group, we have a core focused team that helps in estimating the future challenges and take action. A crisis situation always helps you to grow and I personally don’t know what kind of a specialist I am when it comes to being a specialist, but I always resort to my team to manage any sort of crisis situation.”
However, this seems to be an understatement. Mallya has dealt with every crises – and he has faced many – with aplomb. Binit Somaia, Regional Director, Centre for Asia Pacific Aviation, while talking about his encounters with Mallya, describes, “Following any encounter with Vijay Mallya, I think people always go away struck by the genuine passion and zeal with which he pursues his businesses, though dangerously, at times, which is undoubtedly one of the key drivers of his success. I think he would be better described with four words: passionate, charismatic, confident & shrewd.”
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
Top Articles on IIPM:-
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...domain-b.com : IIPM ranked ahead of IIMs
Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
Top Articles on IIPM:-
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...domain-b.com : IIPM ranked ahead of IIMs
No comments:
Post a Comment