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If you drive through Faridabad on the highway from Delhi to Agra, you will find it hard to miss the showrooms and glitzy shopping malls on either side. Not so long ago, these were factories, owned and run by businessmen displaced at the time of Partition. Many of them, clearly, could not keep pace with the rapid industrial growth of the last few years and opted out of manufacturing. Amid these ruins of the old economy stands the corporate headquarters of Escorts — a sprawling complex of red brick buildings with ample greenery, writes Bhupesh Bhandari. | |||
A tractor is mounted on top of the main gate. A full floor in the main building houses the office of Chairman Rajan Nanda. The waiting area outside his office is as big as a tennis court. A huge portrait of his father and Escorts founder, Har Prasad Nanda, hangs on the wall. His own room is no smaller. Nanda sits behind a big U-shaped wood table. There are paintings from various artists in the room, along with assorted books, family photographs and two televisions.
It is the day after Bhupendra Kumar Modi sold Spice Telecom to Kumar Mangalam Birla's Idea Cellular. Dressed in a green half-sleeve shirt and a tie to match, Nanda looks in a hurry to tell me how telecom set him back by a few years and how his business is on a roll once again.
Nanda used to run cellular services in west Uttar Pradesh, Haryana and Kerala under the Escotel brand. Like Modi, Nanda too had sold out to Birla who took the customers and the network and quickly killed the brand. Nanda says he had plans to expand in telecom, but these went phut after the 9/11 terrorist attacks and the introduction of the unified licence policy for mobile services. To make matters worse, the overseas investors deserted him at the eleventh hour.
The loans taken for the proposed expansion were guaranteed by Nanda's flagship, Escorts. To save it from bankruptcy, Nanda had to sell off Escotel. "The Tatas kept me waiting for 10 months. Birla expedited it once he got control, though he did not give me the money I wanted," Nanda says.
Since then, Nanda says he has put his tractor business back on track. Market share may be down to 15 per cent, but he wants to raise it to 20 per cent in two years. The construction equipment division of Escorts is growing at a brisk pace. And he has put in place a brand new team of executives to run the company. Some old Escorts hands I mention, Nanda says have been replaced by more capable men.
As Nanda sips nimbu-pani, it strikes me that there would be very few industrialists in the country who have had to let go of so many businesses as him: motorcycles, construction equipment, automobile components, telecom and healthcare. The list looks never-ending.
"Aren't you bitter, having sold well-entrenched businesses like Rajdoot motorcycles, Escotel and Escorts Heart Institute," I ask. "Not at all," he replies, "You can't fight destiny."
But Nanda doesn't believe in joint ventures with foreign companies anymore. JCB, he recounts, dumped him as a joint venture partner the moment it was allowed to set up shop on its own. Nanda says he has developed a new range of construction equipment to take JCB head-on in India.
Nanda appears in the mood to talk. This is just the right time to pin him on the worst battle of his life — the takeover bid mounted on Escorts by London-based Swaraj Paul in the mid-1980s.
Nanda had gone to school with Rajiv Gandhi, yet the government-owned financial institutions supported the aggressor. The grapevine had it that Nanda had rubbed a powerful politician the wrong way, who instigated Paul to take over Escorts. Nanda admits Paul was backed by two powerful politicians, one of who is a minister now, though he makes me swear I won't name them in this piece. It was only after many an anxious month that Nanda was able to get Paul off his back.
We move to the adjoining dining room for lunch. There is asparagus soup to begin with, followed by baked mushrooms, fried fish and lasagna. It tastes good. And Nanda, like most good Punjabi hosts, talks with a renewed vigour during lunch.
In a few short years after the row with Paul was settled, there was another setback for Nanda. Escorts had a joint venture with Ford to make Ford tractors in India. Then, Ford sold the business to New Holland which decided to set out on its own in India. All of a sudden, it dawned on Escorts that the brand it had made popular over the years now belonged to somebody else.
Nanda discloses that Ford had offered him the option to buy the tractor business. But the severe restrictions on overseas investments, thanks to the precarious foreign exchange reserves of the country, made it a tough proposition. Escorts reacted by launching, almost overnight, new brands like Framtrac.
That was not the last of his boardroom battles. Nanda had, some years ago, broken off with his younger brother, Anil. While he got full control of Escorts, Anil walked away with components firm Goetze. "Why did you split?" I ask. "Well, you are supposed to live together. But if you are not happy, it is best to separate and go your own way," he says. But it looks far from an amicable separation. "I haven't had any social interaction with him since then," says Nanda.
Anil had also protested the conversion of the famous Escorts Heart Institute in New Delhi from a charitable trust to a company. Not only was it illegal, his older brother had done it surreptitiously behind his back, Anil had alleged. When I broach the subject, Nanda says nobody was kept in the dark when it was done, including Anil and heart surgeon Naresh Trehan who ran the hospital at that time.
"But where was the need to do it," I ask. "It was done for succession," says Nanda, "Escorts had invested quite a lot in the hospital but was not getting any benefits out of it." Shortly after it became a company, Nanda sold it to Fortis Healthcare. The money he has used, says Nanda, to wipe out the debt from Escorts' books.
Here, Nanda makes an astute observation. "We ran a very profitable hospital. How many of your hospital companies can claim that today?" says he. I find it difficult to contest.
Nanda's wife, Ritu, is the daughter of Raj Kapoor, the legendary film maker. Kapoor's blockbuster of the early-1970s, Bobby, had perhaps one of the first instances of in-film product placement when the hero rode around on a Rajdoot GTS. Kapoor and Har Prasad Nanda were said to be thick friends. "Contrary to popular belief," Nanda says, "It was I who introduced the two."
Nanda's filmy connection got stronger when his son, Nikhil, married Amitabh Bachchan's daughter, Shweta. "We are all one family," says Nanda looking every inch the patriarch, "Though we are closer to the Kapoor family."
After over and hour-and-a-half with Nanda, I take the road back to Delhi. Faridabad, I realise, has been left way behind in development by Delhi's other suburbs, Gurgaon and Noida. In a way, it resembles Nanda — once the cream of Delhi's corporate royalty, now trying to find his feet once again.
