After several failed bids, Liberty House now eyes the Indian renewable space

Thomas K Thomas Suresh P Iyengar Mumbai | Updated on July 21, 2020

Sanjeev Gupta, Founder, Liberty House Group   -  REUTERS

Having failed to acquire Amtek Auto, ABG Shipyard and Bhushan Power through the Insolvency and Bankruptcy process, Steel tycoon Sanjeev Gupta is redrawing his India strategy. Gupta is now eyeing acquisitions in India’s renewable space in addition to opportunities in steel and aluminium industries.

“Given that India’s demand for energy is growing and Modi government’s drive for renewable energy we will be interested in investing in this space in India. We are keen on large scale renewable projects for producing hydrogen and then producing hydrogen steel,” Gupta told BusinessLine in an interview.

Cautious approach

Since 2018, Gupta’s Liberty House Group has been trying to acquire several Indian entities as part of its plans to expand through a string of acquisitions. However, the company has so far managed to get only Adhunik Metaliks and Zion Steel for ₹425 crore.

Gupta now wants to adopt a more cautious approach in India. “In 2018, we had made big plans to gain momentum. But it has not worked out as we had planned. We underestimated the competition. So we have learned from that experience that we should be patient and not be in a hurry in a place like India. So far we have managed to secure one good asset. So our journey in India continues though it would take longer than what we had thought earlier. We will do things cautiously going forward. But India will be in time one of our biggest hubs globally,” Gupta added.

Under the new plan, Liberty House will focus on opportunities in steel, aluminium and renewable energy. “Over the next 12 months, we would acquire one more asset at least. So instead of putting together a string of pearls in one go, we will do it slowly adding one pearl at a time,” Gupta explained.

“Going forward, we would focus on steel, aluminium, and renewable energy. That’s where you will see us participating in India. We are interested in mining, especially iron ore. Downstream is not our primary focus,” he said.

Amtek Auto fall-out

Liberty House’s bids for Indian entities, especially in the case of Amtek Auto, fell through due to complications in the IBC process.

“IBC is a great thing that’s happened to India. It’s what attracted us to India. But perhaps we underestimated the process and time it would take to stabilise the rules. We were perhaps naive to think that India will go through with this process smoothly and quickly when such laws take generations to take a final shape,” Gupta said.

Adhunik & Zion Steel

For now, Liberty is focussing on ensuring more investments into Adhunik Metaliks and Zion Steel.

“The Covid has disrupted the turnaround plan else we would have been operational already. But we plan to start operations by September. We also have plans to upgrade and expand Adhunik,” Gupta said.

When asked about policy support required from the government, Gupta said that the focus should only be on supporting industry on the supply side.

“There has been big clean up in corporate sector post-IBC (insolvency and bankruptcy code) which is good. Now is the time to invest again with the support of banks and financial institutions. The government role should be to boost investment rather than putting trade barriers,” he said.

Published on July 20, 2020

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