Mumbai: G.M. Rao, chairman of GMR Group, has pledged his entire stake in the infrastructure-to-airports business to create a Rs 1,540 crore endowment that will fund activities of the charitable foundation run by his firm.
The endowment is equivalent to the entire portion of Rao’s personal share in the business, the group said in a statement on Tuesday. Rao owns a 12.5% stake in GMR Holdings Pvt. Ltd, said a spokesperson for GMR Group. The holding firm, in turn, owns 71% in the group’s listed entity, GMR Infrastructure Ltd. As a result, Rao’s holding in GMR Infra translates to 8.87%, he said.
On Tuesday, GMR Infra shares ended nearly flat at Rs 37.05 apiece on the Bombay Stock Exchange. GMR’s announcement, after the exchange closed, came on the first day of billionaire Warren Buffett’s visit to India to inspire rich businessmen to commit to philanthropy.
Rao is the second head of a large Indian business to commit personal wealth to social causes. In December, Wipro Ltd’s chairman Azim Premji transferred 213 million shares valued at Rs 8,846 crore to an eponymous trust as an endowment to fund the development activities of the Azim Premji Foundation.
“What we are seeing now is a different phase of philanthropy where giving has accelerated,” said Arpan Sheth, partner at Bain and Co., and author of Bain’s India philanthropy report. “This generation of entrepreneurs has reached such enormous levels of success, which has given them the confidence to make these gestures of giving.”
The GMR Varalakshmi Foundation is present in 22 locations in India and overseas. The GMR statement cites Rao as saying that he hopes the foundation will continue its focus on education.