It’s not surprising that Larsen & Toubro (L&T) is associated more with Anil Manibhai Naik or A M Naik rather than the two Danish founders – Henning Holck-Larsen and Soren Kristian Toubro. And, rightly so.
After all, today the conglomerate with business interests in engineering, construction, manufacturing, technology, information technology and financial services stands tall because of his sheer tenacity.
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Naik joined L&T as a junior engineer in the mid-1960s and went on to become its MD and CEO – the first professional – in 1999. Four years later, he became the chairman – a position he held till 2017.
The numbers speak for themselves. When Naik became the MD & CEO in 1999, the company’s revenues stood at Rs 7,666 crore and net profits were at Rs 369 crore. When he stepped down as executive chairman in 2017, the revenues had zoomed toRs 1.19 trillion and net profit at Rs 7,151 crore. Similarly, the share price has moved fromRs 48/share to Rs 1,310/share.
However, it wasn’t an easy ride. Naik was battle-scarred early in career as MD & CEO when he had to confront battle-hardened and politically well-connected Indian corporate giants such as the Birlas and Ambanis – ones that threatened to end the existence of L&T as a company.
After a failed attempt by Reliance Industries to take over the company due to government intervention, he received a call from Anil Ambani who said ‘Anilbhai (Naik) you never wanted us. So we are going. We have sold the entire shareholding of Reliance in L&T to Kumar Mangalam Birla’.
Soon after that, this time from Kumar Mangalam Birla, who said “you didn’t come to us Naikji. So we have come to you.” Incidentally, Birla and his father were trying to hire Naik for years.
“In the end, we kept L&T independent. We ringfenced it from future takeover attempts by setting up the L&T employees welfare foundation that eventually bought Birlas’ stake. And the Birlas got our demerged cement business that added to their cement production capacity,” Naik remembered at the launch of his book, “The Nationalist”.
The solution: An L&T employees’ welfare foundation that eventually bought Birlas’ stake. The foundation’s constitution does not allow it to sell the shares. So, as long as the company has the support of Indian financial institutions, it will always be controlled by the management. Naik created L&T’s own version of the ‘poison pill’ to safeguard the company from predators.
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Born on June 9, 1942 to a family of teachers in Gujarat, Naik’s father used to teach at a school in Mumbai but decided to head back to his village of Endhal in Gujarat, where he completed his schooling. He graduated with a bachelor’s degree in mechanical engineering from Birla Vishvakarma Mahavidyalaya Engineering college in Vallabh Vidyanagar in Gujarat.
Naik also served as the chairman of the National Skill Development Corporation from November 2018 to April 2022. He was awarded the Padma Vibhushan, one of the country’s highest civilian honours (honours list of January 26, 2019), Padma Bhushan (March 31, 2009), Gujarat Garima (Pride of Gujarat on January 13, 2009) and Danish Knighthood: Conferred rank of Knight of the Order of the Dannebrog (2008). In 2015, he was awarded the Order of the Dannebrog Knight First Class.
He is also known in the industry for his philanthropic activities, mostly conducted through two trusts set up in 2009 – the Nirali Memorial Medical Trust (in the memory of his two-year-old granddaughter who succumbed to cancer) and the Naik Charitable Trust. Later in 2016, he had pledged to devote 75% of his lifetime income to charity.
So, when he steps down as non-executive chairman in September 2023, he would have left a legacy which any professional would be immensely proud of, and of course, almost impossible to emulate, as admitted by L&T whole-time director & CFO R Shankar Raman. “These are very big shoes to fill in,” he said.
The company has re-designated SN Subrahmanyan, currently CEO & MD, as chairman and MD, effective October 1.
Replying to whether Naik will continue to be associated with the group, Raman added: “He is an eternal adviser and I don’t think he needs an official role for that. You cannot take Mr Naik out of L&T”.
