A Blacksmiths dream.
India has been blessed with substantial numbers of extraordinary businessmen and business families. Starting from Mr. Jamshedji Tata to Mr. Mukesh Ambani and new-age businessmen like the Kamat brothers. All have served this country with dignity and a sheer nationalistic attitude. There are so many unheard heroes who have substantially contributed to making India what it is today. The history does a biased job of highlighting only a few of them. One such contributor was Mr. Om Prakash Jindal. Even though Mr. Jamshedji Tata is called the father of the Indian steel industry, this man and his family also played a significant role in making India the world's second-largest steel producer.
Short for OP Jindal, he was the founder and Chairman of the OP Jindal Group. The Jindal group stands as one of the top 10 largest conglomerates in India, having a significant presence in cement, steel, pipes and tubes, paints, energy, iron ore, and textiles. Out of $38 billion in revenues, 70% is contributed by operations in cement, steel, paint, and energy. It is hard to believe that a farmer's son has created such magic in the business world. Well, I guess perseverance can create anything.
Born to a farmer in Haryana, OP Jindal had a very normal, lower middle-class upbringing. He was the first person from his village to be crowned a millionaire and also appeared on the Forbes "World's Rich List." It is extremely satisfying when someone's years of hard work finally pay off with the most favorable outcome possible. OP Jindal opened a pipe unit in 1964 with an investment of Rs 42000.
From being valued at $12 million in 1993, the Jindal group now stands at a net worth of $23 billion. JSW Steel is the largest private steel producer in India, with a production facility of 28.5 MT. They have the single largest blast furnace capacity of 4.8 MT. JSW Energy has a power generation capacity of 6564 MW, out of which 3158 MW is thermal power, 1391 MW is hydro power, and 10 MW is solar power. The company plans to increase its production capacity from 6.3 GW to 20 GW by March 2030. JSW Cement has a capacity to produce 17 MT of cement, making it the 6th largest cement producer in India.
The Jindal empire was built from scratch. OP Jindal was the founder and chairman of the Jindal Group of Industries. From the beginning, OP had a keen interest in technology and engineering. Compelled by this natural instinct for machines, during his early days as a school student, OP Jindal visited automobile repair shops and volunteered to assist in repairing them. Understanding the working mechanisms of machines would always fascinate him. The fascination was such that when Jindal Steel was about to set up their first steel mill, Mr. Jindal voluntarily fixed and helped the workers set up those machines in the factory.
His mantra towards life's challenges was "where others saw walls, he saw doors". He is a symbol of hard work, dedication, and courage. It was a small incident that changed the course of OP Jindal's destiny when he came across a steel pipe that was "Made in England". Charlie Munger has rightly said that opportunity comes to a prepared mind. Being a true patriot, he thought How can we change this symbol from "Made in England" to "Made in India"?
This patriotism led him to venture into the steel-making business, eventually entering every other business that is required to make steel so as to decrease the cost of production. A classic vertical integration strategy. Mr. Jindal did not stop there. With the help of his vision and his workforce, Jindal thought about forward integration and, hence, ventured into the cement and paint business. As mentioned earlier, 70% of the group's revenue comes from steel, cement, energy, and paints. It was his vision to make India self-reliant in every sector of the steel industry that turned him into a steel tycoon in India. From starting out manufacturing buckets in 1952 to manufacturing 28 MT of steel, Jindal Group has been a blessing for this beautiful country.
Not all stories have a happy ending, and OP Jindal's story is one such. On March 31, 2005, he was traveling towards Saharanpur in UP when his helicopter crashed, and he died on the spot. It was a sudden shock to liberalized India and the entire steel industry. He was also appointed power minister. The crash was sudden and impactful. This resulted in JSW Steel's share colliding by 85%. In 2004, he was conferred the "Lifetime achievement award" by the Bengal Chamber of Commerce and Industry for his outstanding contribution to the development of the Indian steel industry.
He knew and had seen how business families in India behaved into their second or third generation. Few have been able to keep their flock together. The Birlas had split after the third generation, and the Ambani brothers separation was public, coming out long after their father, Mr. Dhirubhai Ambani, passed away. In the case of Bajaj's, simmering differences erupted with the third generation, and the family split in 2008. But Jindal made sure that his family was different. Even before he died in 2005, the patriarch had put in a unique structure. First, he divided his empire between his four sons. Then, in a move that was a masterstroke in many ways, Jindal ensured that each son had a shareholding in his brother's company.
This ensured that all four benefited from each other's growth, especially in good times. In 2010, Naveen's JSPL, which was riding the commodity boom, was ranked one of the top wealth creators in the world by BCG. Its market share had touched $14 billion. In bad times, too, brothers chipped in. In 2010, Sajjan purchased his elder brother Prithviraj's loss-making pipe milling company in the US for Rs 3400 crore. Analysts say that the younger brother made money out of the deal. Surely, it was not just business. Earlier this year, the sibling act was again on when Prithviraj, Sajjan, and Naveen chipped in with their personal money to save Ratan's JSL, which was in deep debt.
Secondly, Jindal had ensured that his sons never split. His wife, Savitri Jindal, chaired each of the companies and the OP Jindal group. For the past many years, she has been the richest woman in India. The Economic Times recently announced that the brothers are working on removing the cross-holding law. It was inevitable. When Jindal gave Sajjan the facility in Karnataka and Naveen the power and mine operations in Raipur, the tacit understanding had a geographical aspect. In the future, Sajjan will limit his expansion to the South and Naveen to the Northern part of the country.
Of all the 4 brothers, their 3rd one, Mr. Sajjan Jindal, who deserves an entire blog for himself, has been crushing the business world with boat loads of profits and revenues all around the world. A groom can take a horse to the lake, but it's up to the horse to either drink the water or take a dip. OP Jindla's business career is nothing short of a Dharma film. I always believe that there is one person who has the ability and the fire to take his family out of a mediocre lifestyle and into the arms of countless wealth. Mr. Om Prakash Jindal was that one person for the Jindal family. I hope you are that person as well.
HAPPY INVESTING.
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