Shashi and Ravi Ruia co-founded Essar Group in 1969, starting with a port construction project in Chennai, a Rs 2.5 crore order from the Madras Port Trust. It has become one of India's largest multinational conglomerates.
Business Evolution:
- Started in construction and engineering
- Diversified into energy, steel, telecommunications. Was India's second largest telecom operator with Hutchison.
- Its exit from telecom, steel and oil reduced the group’s business footprint substantially. ArcelorMittal Nippon Steel India bought Essar Steel while Russia’s Rosneft picked up Essar Oil
- Became debt-free after selling assets and repaying about $25bn
- Currently operates in energy, metals, infrastructure, technology, and renewables
Family Business Characteristics:
- Three generations live and work together
- Maintain strong family bonds and unity
- Share family homes in Mumbai, Delhi and London
- Rare example of a harmonious Indian family business without public disputes
Current Business Status:
- Annual revenues around USD 15 billion
- Group EBITDA of about USD 1 billion
- Assets valued at approximately USD 8 billion
- 14 portfolio companies globally
Next Generation Leadership:
- Prashant Ruia (Shashi's son) is a key leader, directing Essar Capital
- Started working with the family business from age 12
- Chose to work in the family business instead of studying abroad
Asset Portfolio:
- Oil refinery in UK
- Hydrocarbon reserves in India and Vietnam
- Power plant in India
- Infrastructure assets
- Global IT and EPC services
- Renewables
Liquidated:
EPC Constructions India Ltd. (formerly known as Essar Projects India Ltd.) was the engineering think tank of the Essar group and carried out most of the design and fabrication work for its steel and power plants. The Ruia group company went into liquidation after IDBI filed for resolution under IBC and is one of the high profiler borrowers that have willfully defaulted.
Fun Facts:
- The name Essar originated from the initial two letters of the first names of the founding brothers.
- Even after moving their business operations from Chennai to Mumbai, the brothers often spoke with each other in Tamil.