Davos WEF 2022 | Kumar Mangalam Birla Sees Headroom To Invest In New Businesses Alongside $10-Billion Plan

Kumar Mangalam Birla said his group has enough capital headroom to invest in new businesses.
<div class="paragraphs"><p>Kumar Mangalam Birla (Photographer: Vijay Sartape/BQ Prime)</p></div>
Kumar Mangalam Birla (Photographer: Vijay Sartape/BQ Prime)

Billionaire Kumar Mangalam Birla said his group has enough capital headroom to invest in new businesses and is exploring opportunities in new energy to fintech, alongside plans to spend $10 billion on existing verticals.

The Aditya Birla Group plans to invest $7 billion in India and $3 billion overseas on largely Novelis, Birla, chairman of the conglomerate, told BQ Prime’s Menaka Doshi on the sidelines of World Economic Forum in Davos on Wednesday.

The $7 billion in India would be spent across cement, aluminium, specialty chemicals, financial services, and other businesses including real estate and paints, he said.

“We're also looking at some new businesses, digital being an important one; still studying it trying to understand if we should go into it or not, if we will actually compete and win, [and] what's the best form to get into it for us,” he said. “There's lots in the pipeline.”

Birla’s plan coincides with an uncertain global environment when Russia’s war in Ukraine has intensified pandemic-induced supply-chain logjam. That’s triggered record commodity inflation and the worst energy crisis ever. And as central banks increase rates in tandem to contain rising prices, a global slowdown looms.

Aditya Birla Group’s confidence stems from its low debt. And, according to Birla, only a growth push will deliver returns.

“As of now, given the fact that we're in a position where we've gotten deleveraged faster than we anticipated, unless I grow, I'm not utilising my equity efficiently enough,” he said.

Part of this growth push is to look at new areas, apart from the sectors and segments related to existing verticals. “Adjacent businesses will always have the first priority,” he said. “Otherwise, we are always open to new businesses.”

Birla cited new energy as an example. “We have not found opportunity … but it’s a very interesting sector and we are looking at it.” And then there is “hydrogen, full play on environment, sustainability, ESG”.

Birla is open to considering fintech or digital lending, and digital health.

“Like I said, we have a huge headroom for growth. And, in a sense, we don't have an option but to look for new growth avenues.”

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Watch the full conversation below:

(Corrects an earlier version of the text that misstated investments in new businesses will be part of $10-billion plan)

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