Hinduja Group | Global foundations
The Hinduja Group, founded by Parmanand Hinduja in Iran a hundred years ago, now has revenues of over $25 billion and a presence in 37 countries
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Mumbai: The seeds of the multinational Hinduja business empire were sown exactly a century ago in a small town called Shikarpur, now in Pakistan’s Sindh province, by a young man named Parmanand Hinduja, who was trying his hand at trading commodities.
The trade winds took him to Bombay, now Mumbai, and Persia, now Iran. Both were hubs of commerce in the days before India’s independence. Parmanand Hinduja imported carpets, dried fruits and saffron from Iran and exported textiles, tea and spices to Western countries. Eventually, Iran became the business hub for Hinduja.
Within five years of starting his trading business in 1914, Hinduja set up an office in Iran. Business flourished, and the Persian office would later become a major revenue-earner for the Hinduja Group. From trading, Hinduja ventured into merchant banking, widening the foundation of the group.
Twists & turns
After India’s independence, all four of Parmanand’s sons joined the family business. Srichand and Gopichand Hinduja entered in 1952 and 1959, respectively. Later, Ashok and Prakash Hinduja joined them.
The winds of change soon started blowing across Iran. The Islamic Revolution of 1979 swept out the ruling Shah, bringing Ayatollah Khomeini to power. Hindujas packed up and shifted base to London, which continues to be their headquarters even now.
Just a year earlier, in 1978, the group had established a finance company in Switzerland named the Hinduja Bank (originally Amas SA). In 1994, Hinduja Bank (Switzerland) Ltd was established as a Swiss banking institution.
The Hindujas began their India investments in earnest only after the shift to Europe. They were known for their joint ventures, mostly with international partners. The group acquired Gulf Oil International Ltd, in 1984, entering the oil and gas space.
In 1987, the group acquired Land Rover Leyland International Holdings (UK), or LRLIH, from Britain’s Rover Group. LRLIH held a 40% stake in Ashok Leyland then, which it increased to 51% in 1994.
The name of Hinduja brothers figured in one of India’s biggest defence scandals in 1986, when Bofors of Sweden was accused of bribing Indian politicians and defence officials to secure a contract to sell howitzer canons.
The scandal led to the defeat of Rajiv Gandhi’s Congress party in the 1989 elections. The Hinduja brothers were named as one of the parties to have received money from Bofors to convince the Indian government to engage in business with it.
In September 2000, the Hindujas issued a statement, saying the funds they received from Bofors were not linked to the gun deal. In 2002, the Central Bureau of Investigation charged the Hinduja brothers with cheating, criminal conspiracy and corruption. Three years later, the Delhi high court cleared them of any involvement.
In 1993, Hindujas established Ashok Leyland Information Technology as a provider of technology services. In 2000, it was merged with Hinduja Finance Corp. to form Hinduja Global Solutions, a business process outsourcing firm.
It turned around Ashok Leyland, and is today a $2.5 billion company (Rs.15,153 crore) and the group flagship. In 2007, Ashok Leyland and Nissan Motor Co. of Japan formed an equal joint venture to build light trucks.
However, the group’s efforts to enter the telecom sector have been largely unsuccessful. Hindujas, who held a 5.1% stake in Hutchison Essar, sold it to parent company Hutchison Whampoa in 2006. Within a year, it showed interest in buying a majority stake in Hutschison Essar, but the move did not go through, with Vodafone emerging the winner.
The Hindujas attempted to enter information technology services as a potential bidder for Satyam Computer Services Ltd, when it was put up for sale after a financial scandal in 2009.
The group later backed off, without giving specific reasons. The Hinduja Group also has interests in media, real estate, surgical healthcare solutions and power businesses.
Today, the second and third generation of the Hinduja family are involved in the group’s various businesses.
Ashok Hinduja looks after the group’s Indian operations while Prakash Hinduja is the chairman of Hinduja Group of Companies in Europe. Srichand Hinduja is chairman, Hinduja Group of Companies, Hinduja Bank of Switzerland and Hinduja Foundations and Gopichand Hinduja is co-chairman, Hinduja Group of Companies and chairman, Hinduja Automotive Ltd, UK.
The fourth generation, which includes Gopichand’s sons Sanjay and Dheeraj and Prakash’s sons Ajay and Ramkrishan (Remi), is also involved in the business.
Earning over $25 billion (Rs.1.51 trillion) revenue, the group employs around 70,000 in 37 countries.
In July, the group listed Gulf Oil Lubricants India Ltd, the demerged lubricants business of Gulf Oil Corp. as a separate entity on India’s stock exchanges.
Although the Hinduja Group has been rather subdued in the country and could not achieve as much as other Indian business families, it has been successful in keeping all the brothers together.
This article has been updated from its original version.