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Momentous changes are happening in the Chennai-based Shriram group.
A recent reorganisation of stakes saw the creation of a new holding entity, a Trust, adding to the one that existed earlier.
Today, the group stakes in all the financial services businesses are held by Shriram Ownership Trust and the stakes in all the non-financial services business – such as Shriram EPC, Shriram Properties, Take Solutions – are held by , Shriram Enterprise Trust.
But a more subtle change that is happening in the group is the conscious and gradual disengagement of the group’s founder, mentor and Chairman for many years, 76-year-old R Thyagarajan, from the day-to-day activities.
His role will be taken over by Arun Duggal, the group’s Chairman, a former CEO of Bank of America in India.
While Duggal has been the Chairman of the Board of Directors of many Shriram group companies, Thyagarajan has continued to guide the group, at least at the business philosophy level.
Now that is about to change.
“The Shriram group’s approach to business will change when I go,” Thyagarajan told Business Line in an interview.
supporting entrepreneurs
What it means is this: right from the birth of the group in the 1970s and till now its mindset has been like that of a venture capitalist. The group began its life in financial services (today, it manages assets worth Rs 60,000 crore) but outside of these businesses, the group has supported many entrepreneurial ideas.
Companies that came into being in this fashion include Take Solutions and Shriram Properties.
However, the group also has stakes in varied businesses — Rambal Ltd (machinery components), Harmony (guitars exports), Victory Laminations (packaging material), Medispan (pharma). The group has had some profitable exits too — Hi Tech Arai and Medicorp Technologies are good examples. This mindset, from that of a venture capitalist, will change to a manager. Now, says Thyagarajan, is the time to consolidate.
The group will exit a number of businesses and focus on the major ones. However, 25 per cent of Shriram Ownership Trust will be earmarked for supporting entrepreneurship, he says.
As for Thyagarajan, well, he may step back from taking an active role in group affairs, but he will nevertheless continue to drive his pet business — insurance — where he started his career.
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