• Son of M.V.Subbiah of Murugappa Group
• UG from IIT Madras
• MBA from the University of Michigan
• 2009 – DBS ends partnership with Cholamandalam Finance
• Aug 2010 – S Vellayan takes over as MD of Cholamandalam
• Till he stepped down in 2017 – Cholamandalam Income compounded at 25% and profits compounded at 42.87%.
• Today Cholamandalam trades at a premium to competition — 6.85x 12-month trailing price-to-book compared to 1.99x for Mahindra Financial and 2.99x for Sundaram Finance.
• 2018 to 2022 – MD of Tube Investments
• TI Industries –
o 2018 - Market Cap: Rs.4000 Cr.
o 2023 – Market Cap : Rs.64000 Cr.S
o The market cap has compounded at 72.74%
o Today’s PE: 66X
o FY 20-23 : Sales – Compounding at 47.25%, Profit after Tax – Compounding at 46.11%
o 3 Main Verticals – Engineering , Metal formed Products, Industrial Chains
o 70% revenue from automobile industry
o To derisk – 3 Pillar Strategy - diversifying into:
Organic Growth in Existing Business.
Venture Capital Style investing
• Optic Lens – for automotive industry
o Currently manufacturing 5 Lakh lenses a month
• 3 Wheeler Electric Vehicle Manufacturing
o TI Clean Mobility
o Acquired 2 companies:
Celestial eMobility – Mfr 55 HP e Tractor
IPL Tech Electric – Mfr Medium & Heavy duty commercial vehicles
o Current production Capacity per annum:
E 3 Wheelers – 19000 Units
E Tractors – 25000 Units
E Trucks – 2500 Units
o To rampup production: invested Rs. 1950 Cr along with Co investors. Additional Rs.1050 Cr mobilization is underway.
• Inorganic Growth
o Acquired CG Power for Rs.800 Cr in FY 21
o Turned it from loss to profit in just one year
o From loss of Rs.1323 Cr to profit of Rs. 1295 Cr
o Green pasture in Manufacturing space
Acquired Lotus Surgicals
To participate in infra growth – invested Rs.140 Crores into manufacturing of large diameter tubes
• Mr. Ashish Bharat Ram of SRF made S.Vellayan’s as the chairman of SRF, a multi speciality chemical company. He says “…What I admire about his leadership style is that he believes in hiring the right talent, empowering his team, and allowing them the freedom to execute and deliver successful outcomes. His ability to think creatively and critically to solve complex problems and make informed decisions has helped him stay ahead of the competition,”
• Vellayan strongly believe that: debt must be a manageable burden, ensuring that it never surpasses two times the annual free cash flow — a threshold designed to maintain financial stability. He has achieved that by equally mastering the art of strategic partnerships to mitigate the capital burden on his company.
• In a recent analyst call S. Vellayan says “Most of our businesses are focused on first getting an established position in the domestic market and following that up with export opportunities. We are very focused on both capital allocation and capital efficiency, which is why for the surgicals business we partnered with Premji Invest to reduce the capital outlay. For the EV business, we partnered with Multiples to reduce the potential capital burden,”
• He understands that nurturing growth requires patience — an antithesis to the marathon mindset on the Street fixated on quarterly sprints
Full article can be read at: https://www.fortuneindia.com/long-reads/the-thalaiva-at-murugappa-group/114344
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