New Delhi: The Bharti group of companies has recast its top management in an attempt to redefine the roles of the promoting family and key senior executives even as the conglomerate ventures into several new businesses.
One of the changes increases the executive powers of Manoj Kohli, the man who runs Bharti Airtel Ltd, the group’s flagship, and India’s largest mobile phone firm by revenues. Kohli, president and chief executive of Bharti Airtel, has been elevated as the CEO and joint managing director of the company.
The group, promoted by the Mittal family, and even now largely managed by the three Mittal brothers, is led by chairman Sunil Mittal and is pursuing opportunities in retail, financial services, software and agriculture on the back of a successful telecom business that has a market capitalization of around Rs1.59 trillion, and is expected to generate free cash flows of up to $1 billion, or Rs4,230 crore, in the next two years.
Reshuffling exercise: Bharti chairman Sunil Mittal. Photo: Harikrishna Katragadda
In a statement issued on Tuesday, Bharti Enterprises Ltd, the group’s holding company, said Sunil Mittal will now be the chairman and group chief executive officer. His elder brother Rakesh Mittal and Rajan Mittal, the youngest of the three brothers, have been elevated as vice-chairmen of the group.
Akhil Gupta, previously joint managing director of Bharti Airtel, has been elevated as the deputy group CEO and managing director of Bharti Enterprises. He will be in charge of the group’s telecom towers business as vice-chairman and managing director of Bharti Infratel Ltd, and also lead the financial services and software business. Gupta will continue to remain on the board of Bharti Airtel, the statement added.
Mint, in a February 2007 interview with Sunil Mittal, had first reported the plan to give more executive powers to Kohli. “The only CEO role I have today is that of (Bharti) Airtel; that has to be given up now in a formal way,” Mittal had said then. “Manoj Kohli is the de facto CEO; he’s not been formally appointed that yet but now will be.”
The recast seems to have been motivated in part by a desire to give non-promoter executives more power, and focus resources on new businesses.
Gupta, who played a key role in raising money for Bharti Airtel during its early years, has been put in charge of the financial services businesses (apart from software and towers). And Rajan Mittal, who has been associated with the marketing function at Bharti Airtel will look after the retail, wholesale, and real estate businesses of the group.
Kohli said the recast indicated three things. “One, the group wants to become a conglomerate by focusing on new emerging businesses...; the second is the evolution of Bharti Airtel... (which) is on a self-sustenance mode and not person-dependent; (and the third) is the evolution in terms of functional alignment to bring in consistency across all the businesses for both organic and inorganic growth.”
The Mittals own 46% in Bharti Airtel through Bharti Enterprises, which they control.
Bharti Enterprises has a joint venture—Bharti Del Monte India Pvt. Ltd (formerly FieldFresh Foods)—with Del Monte Foods India Pvt. Ltd, to sell fresh and processed fruits and vegetables in the domestic as well as international markets. It also has joint ventures with AXA Group, a firm with interests in financial protection and wealth management, for life and general insurance and asset management. Bharti has also entered the retail business through Bharti Retail Pvt. Ltd and the wholesale or so-called cash and carry business through Bharti Wal-Mart Pvt. Ltd, a 50:50 joint venture with Wal-Mart Stores Inc.
Shares of Bharti Airtel closed up 2.87% at Rs839.60 each on the Bombay Stock Exchange on a day when the exchange’s benchmark Sensex index closed up 2.6% at 14,961.07.