The Hindu Business Line : Riding high

Thanks to their boss’s penchant for fancy cars, at least 10 chief executives of the Hyderabad-based Lanco Group enjoy the luxury of driving Mercedes-Benz cars. As for the boss himself — L. Madhusudhana Rao, Chairman of the fast-growing Lanco Group — a Rolls-Royce Phantom is the latest jewel in his collection of fancy cars.

Formula 1 racing and the latest cars are a major draw, but cricket is a strict no-no, except for keeping abreast of the latest developments in the game, says Rao, 42, who steers the fortunes of the diversified infrastructure group with a turnover of over Rs 1,600 crore (FY 2007).

A film a day keeps a lot of tension away, could well describe Rao’s self-prescription, going by the appetite he has exhibited for the celluloid world. “Initially, I would watch about 250 films a year as a student of engineering. They were mostly Telugu and a few from Bollywood and Hollywood,” he says. His favourite stars are Krishna and NTR. Incidentally, his brother L. Sridhar is a film producer.

He travels eight months in a year, overseeing the group’s business in the power, realty and large infrastructure projects sectors. But there is no cutting back on his zest for movie watching. “I watch an English film every day I am abroad,” he says.

Apart from business meetings during overseas trips, Rao takes time off to visit furniture shops, art galleries and antiques shops, hotels, malls and offices to get a glimpse of the different architecture styles and interiors. Collecting clocks is another hobby.

Family holidays are a must on his list and the family has visited some of the most exotic locales and resorts around the world. Terming himself a ‘family man’, he says, “Even when in Hyderabad and engaged in handling the tough challenges of running a large corporate, I reach office at 10 a.m. and manage to go back to the family by 7 p.m.”

When Rao, who holds an M.Tech from the PSG College, Coimbatore, and an MS in Industrial Engineering from Wayne State University, US, teamed up with his brother Lagadapati Rajagopal (now a Congress MP from Vijayawada) in 1991, the enterprise was called SV Contractors and operated from a two-room office in Hyderabad.

Housing an ambition

Later that year, Lanco was born, and riding on the platform of economic reforms, the company’s turnover galloped from a mere Rs 3 crore in 1992 to a robust Rs 1,600 crore in just over 10 years. The mantle of leadership fell on Rao when Rajagopal took to full-time politics in 2002. The prime focus of the company was power at that time, he recalls.

“In 2012, when I complete a decade at the helm, I would like to see the Lanco Group (which aims to reach the Rs 3,000 crore mark in FY 2008) as a Rs 40,000-crore asset base company, which is among the top-three companies in power generation. The group will emerge from being a family-run company of the 1980s and 1990s into a professionally-run enterprise,” he says.

The company’s big-dream initiative is in realty — the Lanco Hills project, a 100-storey residential complex near Hyderabad.

Touted as the tallest residential structure, the project has drawn varied responses — right from sheer disbelief to a frenzied rush for bookings.

Commenting on the doubts expressed by sceptics he says, “I am convinced that Lanco will execute the project. We are waiting for the last aviation clearance and we will do it. We have the technology, the people and market credibility of executing projects on time.”

Pointing out that a good number of people working on the 180-storey Burj Dubai structure (one of the tallest in the world) are Indians, he says, “We are going to use a similar technology and concrete to build the tower. We are strong in the use of concrete for structures and the labour and expertise exists.”

Incidentally, Lanco is the first in South India to get permission in recent times to build structures higher than 20 floors, either for commercial or residential use. Most of the structures at Lanco Hills would feature more than 25 floors. “We have MNC architects and the residential tower would have only 275 high-end, exclusive houses,” he says.

Having faced several controversies over ultra mega power projects (Sasan, for instance) and independent power projects (Lanco Kondapalli being among the first to go on stream), and after experiencing the up and down cycles in business, Rao now wants to usher in a few changes to help Lanco carve a unique identity for itself.

The business ahead

He says, “While most businesses in India are still run on the family model, we want to run our business very futuristically, though we also started on the traditional family model. We will put the family culture behind. People should forget Lanco as a family-run company.”

This would be done through a Constitution for the Lanco Group, which will lay down clear guidelines for both professionals and family members. “This should be ready by 2009. We want to emerge as a highly strategy-driven company as we move forward. To bring in a greater management bandwidth, Ernst & Young has been engaged to advise us.”

He says that through better leadership and delegation of responsibility at different levels, various business units of the Group are being better managed. “This way I get the luxury of being physically away from the corporate for long periods and not get bogged down with day-to-day affairs, and hence can spend time in strategy meetings. However, I am still not happy with the opportunities and management bandwidth. We have quite a distance to go.”

Having been groomed in the Lanco Group, which grew from transport service to contracts executed for large irrigation projects, with its big break coming with the Visakhapatnam Steel Plant, Rao feels the time is right for entrepreneurs to get into sectors ranging from retail to infrastructure. Funds are easy with many private equity and venture groups having entered the scene, he says.

What is required, he adds, are good ideas, commitment and passion for entrepreneurs to turn into successful industrialists.

More Stories on : People | Human Resources | Power

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Eye for the tiger

Decoding her secret mission