Risk taker

Cricket has always been his passion. Though N. Srinivasan has been involved with the sport for many years in various administrative capacities, he had kept it away from his business. But this year, he decided to bid for, and bagged, the Indian Premier League’s Chennai franchise for $91 million (Rs 391 crore). Many people, especially analysts, wondered aloud as to why a cement company should invest in a cricket team.

Name: N. Srinivasan Age: 63 Designation: Vice Chairman & MD Company: India Cements

What will be the return on investment? they asked. But by end-May, when IPL came to an end, the answer became clear. Though his team, Chennai Super Kings, led by Mahendra Singh Dhoni, lost in the finals, it had become a household name, not only in south India but also across the entire country. The timing was significant. India Cements, after dominating the market in south India, is all set to foray into the north by setting up plants in Rajasthan and Himachal Pradesh. “Super” and “King” happen to be two major cement brands owned by India Cements.

This is not the first time that Srinivasan has showcased his ability to spot opportunities early and go after them aggressively. He did so in the late 1990s when he set out on an acquisition blitzkrieg. In three years, by 2000-01, India Cements’ capacity had jumped to 8 million tonne from just 2.6 million tonne in 1997-98. The expansion cost Rs 1,500 crore and was almost fully funded by debt. Here again, many questioned his wisdom. To make matters worse, the following three years were horrible for him and India Cements, as cement prices crashed. Faced with huge interest costs and lower cash flows, India Cements slipped into the red. But Srinivasan was soon proved right when demand picked up in 2003-04 and India Cements began to rake in profits. It wiped out its accumulated loss of Rs 300 crore in little over a year. Ask him about his team’s chances next season, and he says: “We will win.” That’s not good news for his competitors both in IPL and the cement industry.

—_{N. Madhavan}