Home / Companies / After four decades, the Thapars plan a return to coal mining

Kolkata: The Thapar family of Kolkata, which was Asia’s second biggest miner until the early 1970s, is looking to return to coal mining after almost four decades.

Karam Chand Thapar and Brothers (Coal Sales) Ltd, or KCT Coal Sales as it is popularly known, has formed a consortium with two businessmen of Indian origin from Indonesia and Thailand to pursue opportunities in coal mining in countries such as Indonesia and Mozambique.

After coal mines in India were seized by the government in 1973, KCT Coal Sales turned into a coal logistics company. Since then, it has worked closely with state-owned Coal India Ltd and coal consumers, mainly power plants. Its annual revenue is around 250 crore, and it has a cash reserve in excess of 1,000 crore.

“These people are close friends," said Vikram M. Thapar, 63, KCT Coal Sales vice-chairman and managing director, describing his partners in the consortium. “They have interest in coal either because they consume or because they do the same thing as our company."

The first acquisition could be completed in Indonesia “within months". Mozambique, too, is on the consortium’s radar, but it hasn’t identified a takeover target there.

“We had almost concluded a deal (in Indonesia), but the seller wasn’t comfortable with our partners," said Thapar. KCT Coal Sales could have closed the deal on its own, but decided against walking out of the two-month-old consortium.

KCT Coal Sales’ 93-year-old chairman Inder Mohan Thapar—once known as the “coal king"—was initially opposed to his son Vikram Thapar’s plan to acquire assets abroad.

“My father thinks there is so much coal available in India that we shouldn’t be importing," said Vikram Thapar. “So I asked my son Varun to persuade him to agree; he succeeded."

KCT Coal Sales used to be a major exporter of coal to neighbouring countries, said Varun Thapar, 26, executive director of the firm. “Grandfather doesn’t seem to have yet come to terms with the loss of our coal mines," he said. “But he is happy that we are returning to mining."

From its perch as India’s biggest coal logistics company, KCT Coal Sales aims to become a one-stop shop for all kinds of coal requirements. Until now, it has dealt with coal logistics in India only, but is looking overseas to secure assured supplies.

“So many power projects are being pursued without coal linkages. They are dependent on imported coal," said Vikram Thapar. “India imports (at least) 70 million tonnes of coal a year."

KCT Coal Sales had considered contract mining opportunities in India as well, of which at least one was in partnership with a US mining equipment maker. “In the end, we realized that mining in India is extremely complicated," said Varun Thapar, without elaborating.

“KCT Coal Sales was pretty much the lone player in its business," said the head of an audit and consulting firm. “It didn’t matter whether the company was passively or aggressively managed." But now it seems the group is aggressively pushing for growth for Vikram Thapar’s children, Varun and Ayesha, who returned from the US, and joined the family business two-and-a-half years ago, he added, speaking on condition that he would not be identified.

Expanding logistics

Building on their expertise in handling coal, the Thapars are looking to expand in the logistics business as well. They recently launched a company, Indicon Logistics Ltd, to manufacture containers.

“Not just shipping containers, we have capability to manufacture all kinds of containers," said Varun Thapar, who heads the venture. The focus is on manufacturing speciality containers, such as refrigerated ones used in transporting food, and large metallic boxes used as makeshift offices at construction sites.

Though it is a start-up, Varun Thapar managed to hire a large number of professionals from other container manufacturers. “They brought knowhow plus experience," he said.

Indicon already has an order book of 18 crore, and aims to close the first full year of operations with a revenue of 100 crore, according to Varun Thapar. “That’s not really ambitious—it’s a realistic target."

For Vikram Thapar, it is a return of sorts to manufacturing, his son said. For at least 12 years, Vikram Thapar headed the group’s paper business, now consolidated under Ballarpur Industries Ltd, before it went to another faction of the extended Thapar family following a separation of business interests.

Going forward, Indicon plans to set up freight terminals and integrated container depots, linking them with the group’s fledgling real estate business.

High-end real estate

Under the family separation concluded a decade ago, the Inder Mohan Thapar faction received 50-60 properties across India. These included orchards, plush mansions in commercial areas of Kolkata, Mumbai and Delhi as well as warehouses in the interiors of Uttar Pradesh.

By leveraging the legacy assets and acquiring new ones, Vikram Thapar’s daughter Ayesha Thapar, 33, is looking to re-launch Indian City Properties Ltd (ICPL)—a real estate company founded in 1939— that will only build high-end properties.

In its maiden venture, ICPL managed to restore a 200-year-old building into “a landmark in downtown Mumbai", Ayesha Thapar said. Called One Forbes, the 160,000 sq. ft building in Mumbai’s Fort area houses only three tenants—Tata Motors Ltd, Tata Capital Ltd and BNP Paribas.

But at least half the legacy assets are of little use to ICPL, according to Ayesha Thapar. “We have sold two and we are going to sell the rest one by one," she said.

Alongside, ICPL is buying new properties across India and is about to launch a number of new projects, including an upscale condominium on Carmichael Road in south Mumbai; a 200-acre township in Rishikesh, which would include a luxury hotel and golf course; five villas in Goa, and a commercial property in Kolkata. “We are going to decide on a new brand for our business— decide whether we want to use the Thapar family name— within a month after considering the views of some experts," said Ayesha Thapar.

Providing financial strength to these new ventures are KCT Coal Sales’ 1,000 crore cash reserve and its nearly 100 crore cash accrual every year. “We continue to be a privately-held company with almost no debt," said Vikram Thapar. “So we are free to infuse cash (from KCT Coal Sales) into all these new initiatives."

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