Hinduja Group plans $30-bn India play

The diversified Hinduja Group is planning to use its Indian units for overseas acquisitions, besides lining up investments of around $30 billion (Rs 1,35,000 crore) in the country over the next five years.

Ashok P Hinduja, chairman of Hinduja Group India, said the investments would be across 10 verticals — oil and gas, power, realty, banking, healthcare, automotive, education, infrastructure, IT and media — which had been identified as the growth drivers.

The biggest chunk of the investments is expected to flow into the power sector, where the group intends to set up 10,000 Mw generation capacity, according to G P Hinduja, co-chairman of Hinduja.

"We are pursuing a number of other power projects in the country and would very soon have two more projects. We are looking at Gujarat, Maharashtra and Uttar Pradesh to set up these plants. These could be thermal power plants," added Ashok P Hinduja.

For over a decade, the group has been trying to set up a 1,000-Mw plant in Visakhapatnam, but has been caught in legal and bureaucratic wrangle.

The group wanted to increase India's share in global revenues from around five per cent to 25-30 per cent in the near future, G P Hinduja said, while discussing the strategy to include local companies in the global acquisitions. He said valuations, especially in Europe, were attractive and flagged foundries and special engineering as possible areas of interest.

The group, privately owned by the Hinduja family, is spread over 32 countries.

The Hindujas recently acquired KBL epb, the private banking arm of Belgian banking and insurance group KBC, for ¤1.35 billion (Rs 7,918 crore) in an all-cash deal and is finalising plans to grow the business in India and West Asia.

Ashok P Hinduja said the group intended to talk with Indian banks and financial institutions for alliances and was not going to limit a tie-up to IndusInd Bank.

The Hinduja family is the largest shareholder in IndusInd Bank, with a 22.17 per cent stake at the end of March 2010. The bank is looking to rope in a partner for private banking.

Ashok P Hinduja also indicated that the group did not intend to rope in a strategic investor to comply with the Reserve Bank of India norms for a maximum 10 per cent promoter holding in a bank. He said unless there were merger opportunities, the promoters planned to lower their stake through fresh issue of shares.

The group had earlier looked at M&As to strengthen its presence in India. For example, it bid for Wockhardt Hospitals and Bank of Rajasthan. But, in both cases they lost out. The Hindujas said they planned to set up hospitals in Mumbai (two more), Bangalore and Hyderabad as part of their strategy to scale up to 5,000 rooms.

The defence sector is also on the company's radar for investment. While Gulf Oil plans to enter into the explosives business, another group-promoted company, Ashok Leyland, is also in talks to participate in the business, but foreign investment rules are holding back its foray, according to the Hindujas.

The group is also looking at an aggressive real estate play. It has a land bank of 2,300 acres and has offered to develop a convention centre in Bangalore.

The Hinduja Group plans to sell 30 per cent stake of its Saudi Arabia unit, Petromin, to raise $800 million to $1 billion this year.

Petromin, the lubricants maker, is a joint undertaking between Gulf Oil International Group, part of Hinduja Group, and Dabbagh Group of Saudi Arabia.

The group had appointed Saudi British Bank for managing the IPO, said Sanjay Hinduja, chairman of Gulf Oil. "We would soon be finalising the timeline and the exact valuations for the IPO," he told reporters.

The lubricants maker owns a third of the downstream oil products business in Saudi Arabia and has an annual revenue of $500 million. "Petromin is looking for acquisitions in the Gulf region to boost its business," added Hinduja.