Anil Agarwal set to be richest Indian; pips Ambanis

The proposed takeover of Cairn Energy's India business could see Non-Resident Indian billionaire Anil Agarwal emerging as the richest promoter of a corporate house in India ahead of Mukesh Ambani, who has ruled the list for long.

After the acquisition of Cairn India and a proposed IPO of group firm Sterlite Energy, Anil Agarwal, as head of the promoter family, would command an estimated net worth of close to Rs 167,000 crore (Rs 1,670 billion), ahead of Mukesh Ambani at Rs 145,275 crore (Rs 1,452.75 billion), a comparison of promoter family holding valuations for leading groups reveals.

However, Mukesh-led RIL is a wealthier group than Agarwal's Vedanta, although both are behind the Tatas, whose market capitalisation in terms of listed entities is over Rs 370,000 crore (Rs 3,700 billion).

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However, in terms of promoters' wealth, Tata group chief Ratan Tata hardly compares to either Mukesh Ambani or Anil Agarwal.

In their own respective fields of business, Agarwal is a global leader in the metals and mining, while Mukesh's Reliance Industries Ltd is the largest private sector oil group in India and among the top-ranked international players in the field of petrochemical.

Agarwal is now entering the oil business through the Cairn India acquisition and his capacity to play to the size could now make the competition intense in the oil sector.

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At the same time, the acquisition would make the Agarwal family double the size of the Anil Ambani group whose promoter wealth currently stands at less than Rs 80,000 crore (Rs 800 billion).

The $9.6-billion takeover of Cairn India has already pushed Vedanta group head Anil Agarwal to the second position after Mukesh Ambani in terms of family net worth, measured in terms of value of shares held as promoters in five listed group companies.

Add to this, the value of shares he holds in aluminium major Balco and IPO-bound group firm Sterlite Energy, the promoter family wealth of Anil Agarwal group could rise to nearly Rs 166,938 crore (Rs 1,669.38 billion).

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In comparison, the promoter family wealth of Mukesh Ambani group currently stands at Rs 145,276 crore (Rs 1,452.76 billion), based on the value of promoter holdings in two listed group firms Reliance Industries and Reliance Industrial Infrastructure.

Without Sterlite Energy, which has proposed an initial public offer of Rs 5,100 crore (Rs 51 billion), and Balco, where Vedanta group has 51 per cent stake, the total promoter family net worth of the Vedanta group currently stands at Rs 1,38,465 crore (Rs 1,384.65 billion).

This includes the value of promoter shares in Sterlite, Hindustan Zinc, Sesa Goa (all listed in India) and that in the United Kingdom-listed Vedanta Resources, as also the worth of proposed 60 per cent stake in Cairn India proposed to be purchased from Scotland-based Cairn Energy.

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The total net worth would rise by over Rs 28,000 crore (Rs 280 billion) if Balco is taken at par with its peer group company Nalco, which has a market cap of Rs 25,830 crore (Rs 258.30 billion), and the group offloads 25 per cent stake in Sterlite Energy to raise Rs 5,100 crore.

The 51 per cent equity in Balco was sold by the government for Rs 551 crore (Rs 5.51 billion) in 2001, valuing it at nearly Rs 1,080 crore (Rs 10.80 billion) at that time.

For Sterlite Energy, the Vedanta group has proposed an IPO to raise Rs 5,100 crore, but has said that the equity to be sold to the public would be less than 25 per cent. This would mean that the company would command a minimum market cap of Rs 20,400 crore (Rs 204 billion) and the promoters' equity would be worth at least Rs 15,300 crore (Rs 153 billion).

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Even after considering the value of Balco shares at the valuation reached at the time of purchase in 2001, the Sterlite Energy IPO would take the Anil Agarwal promoter family net worth to Rs 154,315 crore (Rs 1,543.15 billion) -- making it the wealthiest in the country.

Incidentally, another IPO a few years ago, that of real estate giant DLF, was widely expected to make the promoter K P Singh the richest man in the country -- ahead of the two Ambani brothers, NRI billionaire and steel baron Lakshmi Mittal, telecom czar Sunil Mittal and IT tycoon Azim Premji.

However, a delayed IPO and later a meltdown in realty sector pulled the market value of DLF and its promoter net worth to less than one-third of that of Mukesh Ambani group.

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Currently, the net worth of K P Singh family's promoter holding in DLF stands at Rs 44,409 crore (Rs 444.09 billion).

As per promoter stake valuation of already listed group companies of various business families, Mukesh Ambani group stands at the top with Rs 145,276 crore (Rs 1,452.76 billion), followed by Anil Agarwal group with Rs 1,38,465 crore (Rs 1,384.65 billion), Lakshmi Mittal group with Rs 88,670 crore (Rs 886.70 billion), Azim Premji with Rs 80,109 crore (Rs 801.09 billion), Anil Ambani group with Rs 79,801 crore (Rs 798.01 billion), Sunil Mittal with Rs 61,245 crore (Rs 612.45 billion) and K P Singh with Rs 44,409 crore (Rs 444.09 billion).

This does not include the PSUs, as the promoter shares are held by the government, corporate houses like the Tata Group where promoters are not a business family, as also companies like Infosys, ICICI Bank and HDFC that may have high overall market valuation but have no promoters as their shareholders.

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In terms of entire group valuation, or combined market cap of all the listed companies, Anil Agarwal group ranks third after Tata and Mukesh Ambani groups.

Based on this parameter, Anil Agarwal group has a combined market cap of Rs 233,713 crore (Rs 2,337.13 billion), which is way below that of Mukesh Ambani group at Rs 3,24,546 crore (Rs 3,245.46 billion), but still higher than Rs 2,10,119 crore (Rs 2,101.19 billion) of Lakshmi Mittal-led ArcelorMittal and Anil Ambani group with Rs 1,23,391 crore (Rs 1,233.91 billion).

In a rich list published by Forbes magazine in March this year, Anil Agarwal was ranked the 10th richest Indian, while Mukesh Ambani was ranked the wealthiest from India.