See hope in Vi, says Kumar Mangalam Birla after rejoining telco’s board

Industrialist Kumar Mangalam Birla said on Wednesday he chose to rejoin the board of struggling telco Vi because he sees “hope” in the business.

Birla, who as a promoter has been appointed as a non-independent director on the board of heavily indebted Vodafone Idea or Vi, said he wanted to signal his “willingness” to move the business forward.

“I think we see hope again in the company,” Birla said after receiving the 2023 Lokmat Maharashtrian Award.

He added “As a promoter I thought it was right to also indicate my desire to take the business forward which is why the decision was made to return to the board”.

Birla said the government – which recently became the largest shareholder in sixth via a receivables transfer – is “very firm” about the presence of three private players in the strategically important telecom sector and has given a boost to the industry.

He also acknowledged that rivals Bharti Airtel and Reliance Jio are “doing very well”.

Notably, many industry watchers, including analysts at brokerage firms, have been speculating about the fate of Vi, which was created through Idea’s merger with Vodafone and the Aditya Birla Group prior to the launch of Jio. The company is rapidly losing market share, and as debts and losses mount, it is unable to make the necessary investments in the business to deliver the quality of services as expected by subscribers.

Meanwhile, Birla said a family member will succeed him as chairman of the $60 billion Aditya Birla Group, adding that his son Aryaman and daughter Ananya are “still learning things” since they joined the company a few years ago.

Ananya, a successful musician, has set up a micro-lending company which is the fourth largest in the country while Aryaman dabbled in cricket before entering business, he said.

“They’ve made a name for themselves, they have a great work ethic which is very important to us as a family,” he said, adding that sports also teach discipline which is a great virtue when running a business.

“They are willing to work hard and learn. I think they will win over Tottenham with time,” he said.

He said that members of the promoters family get “longevity and longevity” which can be difficult for a professional to get to a table.

When asked to choose between music and cricket, Birla said he liked music the most.

He said that the Indian economy offers exciting opportunities and will see a growth rate of 6-8 percent over the next decade.

He said the Aditya Birla Group is seeking to become more of a consumer-facing company, and is targeting to get a fifth of its total revenue from new consumer businesses such as retail.

Noting that he is very excited to get into the paints business, Birla said the contribution in terms of value from the consumer business will be more than 20 per cent as the consumer business commands higher valuations.

Of the new sectors of the economy, Birla said, he feels fintech offers the best promise given the large number of people who are not served. It also made clear its bias towards the bottom line (earnings) over the baseline (revenue), adding that cash flow is very important.

Birla said the financial capital, where the group is headquartered and also home to the family, is a favorite because it is the most cosmopolitan city with a great work ethic.