Vedanta chief Anil Agarwal, Centricus team up for setting up turnaround fund

Bloomberg | | Updated on: Dec 06, 2021

Anil Agarwal, founder of Vedanta Resources Plc | Photo Credit: Halden Krog

Fund plans to aggressively bid for stake in PSU firms put on the block by the government

Commodities tycoon Anil Agarwal, who made a fortune buying public sector companies and fixing them up, is preparing to raise an investment fund targeting turnaround opportunities in the country, people with knowledge of the matter said.

Vedanta Resources Ltd’s billionaire founder is working with Centricus Asset Management Ltd on the plans, according to the people, who asked not to be identified discussing private information. They have started approaching potential investors for the proposed India Direct Investment fund, which will buy stakes in government companies being sold as part of the country’s ₹2.1 trillion ($29 billion) divestment programme, the people said.

The fund will also target companies restructuring under India’s bankruptcy regime, the people said. It will look at both private and public firms, they said. Agarwal and London-based Centricus plan to contribute as much as 10 per cent of the capital, according to the people.

Prime Minister Narendra Modi is putting some of India’s corporate icons on the block in a bid to plug budget holes and fund infrastructure spending. Agarwal is seeking to find the gems among the dozens of companies being sold and tap his industry connections to turn them around, as he tries to repeat his success in building up a metals and mining powerhouse.


Deal spree

Deliberations are at an early stage, and details of the fund could change, the people said. A representative for Agarwal couldn’t immediately comment, while a representative for Centricus declined to comment.

Agarwal has a net worth of about $2.5 billion, according to the Bloomberg Billionaires Index. The former metal trader built his business through a series of ambitious acquisitions over the past few decades, including a 2001 deal to take control of government-owned Bharat Aluminium Co in one of the first tests of India’s efforts to offload state holdings.

He followed that up with the purchase of another government entity, Hindustan Zinc Ltd, and in 2007 successfully bid for what was India’s largest iron ore producer, Sesa Goa Ltd. In recent years, his commodities company acquired control of insolvent Electrosteel Steels Ltd from its lenders.

The self-made billionaire also went abroad for investment. Until last year, he was the largest shareholder of Anglo American Plc, triggering speculation that Agarwal was planning to push for a major change, such as a takeover or breakup. In the end, the tycoon decided to exit his investment as he said his returns were achieved even sooner than expected.

Agarwal’s Volcan Investments Ltd took his London-listed Vedanta Resources private in 2018 as the entrepreneur sought to simplify the corporate structure of his resources group. This year, he proposed to buy the 49.9 per cent stake in India-traded Vedanta Ltd that he doesn’t own and delist the commodities giant.


Centricus profile

Centricus oversees $27 billion in assets, according to its website. The firm was founded in 2016 by Nizar Al-Bassam, a former investment banker at Deutsche Bank AG, and ex-Goldman Sachs Group Inc partner Dalinc Ariburnu.

Centricus advised SoftBank Group Corp on the creation of its $100-billion Vision Fund and also worked on its $3.3-billion takeover of Fortress Investment Group LLC.

Published on September 18, 2020
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