Perceived ‘governance paralysis', political corruption and uncertainties over environmental regulations do not seem to really worry the Hindujas, who are “very bullish” on the long-term India growth story.
“We expect India's growth rate to overtake China's in the next 10, if not five, years,” declares Mr Gopichand Hinduja.
“You can see this already happening in some sectors. Take commercial vehicle sales, where our growth has surged past them. Even in passenger cars, we are No. 2,” points out the London-based non-resident Indian businessman.
At present, India accounts for just 7-8 per cent of the Hinduja Group's $25-billion worldwide turnover. “We intend raising that to 15 per cent or more by 2015,” Mr Hinduja told Business Line on the sidelines of the World Economic Forum's Annual Meeting here.
The Hindujas, in fact, have quite a few investment plans — both ongoing as well as proposed — for India. Ashok Leyland Nissan Vehicles Pvt Ltd — a 51:49 joint venture in which the Japanese auto giant, Nissan, holds the minority stake — will start manufacturing light commercial vehicles (5 to 7.5 tonnes range) from June.
The group's Indian flagship, Ashok Leyland, also has a 50:50 joint venture with the US tractor-cum-construction equipment major, John Deere. This venture — to produce backhoes, four-wheel drive loaders and excavators — will also go on stream from mid-2011, said Mr Hinduja.
In addition, “we are planning an IPO for our cable TV business (IndusInd Media and Communications) in the next 3-4 months, for which a merchant banker has already been appointed”, he added.
Vizag power plant
But the group's biggest investment underway is a 1,040 MW coal-based power plant at Visakhapatnam (Andhra Pradesh). The project has been in hibernation for various reasons — including problems of land acquisition — since it was first mooted as a ‘fast-track' project in the early 90s.
“The financial closure is over and the EPC (engineering, procurement and construction) contract has been awarded to Bharat Heavy Electricals Ltd, which has already started work. Starting from a zero date of June 2010 and 38 months of construction, the project should achieve commissioning by mid-2013. It is a merchant power plant, where we are required to supply 25 per cent of the electricity generated to Andhra Pradesh. We are not averse to even supplying the entire 100 per cent to the State,” Mr Hinduja said.
The Group proposes creation of a total generation capacity of 10,000 MW through the Hinduja National Power Corporation by 2020. The new power plants will come up mainly in Gujarat and Madhya Pradesh.
When asked about the impact of recent political developments on investor confidence, Mr Hinduja claimed that these are not very serious concerns.
“All Governments in power from the 1990s have been pro-reforms and pro-growth. What is happening now is probably some kind of cleaning up. After all, nature has to play its role. But yes, it is not good if India is clubbed with corruption,” he added.