"Manufacturing is our tradition, but services is the future"

Yashovardhan Birla or Yash Birla is one of the easily recognisable faces in India today, thanks to coverage by the page three media. His hairstyle and choice of clothes have often defined his public persona. Much less discussed are his business philosophy and his leadership style which, contrary to perception, do exist. BT met Birla to discuss his business moves and the future for his business inheritance. Excerpts from the interview:

What's the thinking behind your group taking up new businesses over the last one year?
We have been a diversified group through the ‘80s and ‘90s. We had paper and steel and pipes and cotton ginning. Diversification was a way to hedge risks but globalisation changed all that and narrowed the concept of diversification.

We are still much diversified and our businesses are divided into six different sectors. One is power—solar, thermal and gensets. Then there is health and wellness, education, textiles (cotton ginning to retail), auto-engineering, and infrastructure.

How much will you invest and how will you finance your new ventures?
We have earmarked Rs 5,500 crore for power. The other areas are seeing smaller investments, like Rs 500 crore each, in education and health. A lot of this will be funded through internal accruals, through debt as well as my personal funds. We will go public with some companies or raise money through follow-on public issues. We might even do GDR issues for some.

For instance, for Birla Lifesciences (which manufactures ayurvedic products), I would like to see an IPO next year. There has been a lot of interest from private equity funds in our group—in solar power, health and education—but I am waiting for the right value.

You are moving a lot towards services like education, wellness and retail. Is that the direction you want to take?
Manufacturing is the tradition, but services will be the future. But tradition also has to be tied in with the future. So we are looking very closely at (manufacturing) businesses. I had a proposal for a cement plant but we did not go into it.

How do you define your role in the business now?
My role is to create a vision and my contribution is more on strategy. While I am more hands-on in the newer businesses, like education and wellness, I allow professionals to handle the execution, especially in the older businesses that have matured.

Does your page three image distract from your business objectives?
I am not worried about the image. It's just that I am at some events that I am invited to and then the photographs keep appearing for over a month in the media. I do not smoke or drink, I hate eating out and my only indulgence may be clothes. I believe that I was born in a business family for a reason and it is my duty to excel in this role.