Anand Mahindra: Rebel, Leader and Master of Change | Jobs Vox

Anand Mahindra, Chairman, Mahindra Group Photo: Vikas Khot

Anand Mahindra has never been a fan of the status quo, almost all his life. Still in his teens, Mahindra almost joined the Communist Party of India when student protests broke out at the famous JJ School of Architecture where he studied architecture. Sporting long hair, a headband and his T-square, Mahindra would tour Mumbai’s Flora Fountain as part of JJ School’s protest to be placed under the accreditation system.

Then fate intervened, and soon Mahindra went to Harvard College to study liberal arts, where he graduated with a degree in filmmaking and photography, which was quite unusual at the time for the heir to a fledgling business empire.

“I guess when we all grow up, we have a rebellious person inside us,” Mahindra told the Ministry of Human Resource Development in 2019. “We have to nurture that. I didn’t want to end my life where no matter how successful I was in business, (it goes without saying) he inherited everything and his parents gave him everything on a silver spoon. I didn’t like that idea and that’s why I wanted to do something in such a different area where no one could say that my parents helped me, which is why I made films.” Mahindra then went on to make a film on the Kumbh Mela.

Mahindra, who was born to industrialists Harish Mahindra and Indira Mahindra, then went on to study at Harvard Business School before joining Mahindra Ugine Steel Company Ltd in 1981. Three decades later, Mahindra took over as chairman and CEO of the Mahindra Group, before becoming non-executive chairman in 2020, handing over the day-to-day management of the group to professional management led by Anish Shah, the current MD and CEO of the Mahindra Group.

“One of the reasons we’ve succeeded and thrived over the past 75 years has been because we’ve been good at making changes at the right scale at the right time,” Mahindra said in 2019 when it named Shah as director and CEO.

Today, that gamble to bring in professionals seems to have worked. As chairman, Mahindra oversees the $19 billion Mahindra Group, whose business spans around 22 industries and has seen a phenomenal transition to the next phase of growth.

Take, for example, the change underway at Mahindra & Mahindra, the group’s flagship automotive business. In just two years since the start of 2020, Mahindra & Mahindra has managed to reinvent itself and has seen its market capitalization double, thanks in large part to the company’s renewed focus on building true SUVs.

Today, in a sign of the company’s growing acceptance as India’s largest carmaker, Mahindra’s waiting period for some of its flagship SUVs is around 16 months, even as bookings continue to grow for India’s fourth-largest carmaker. It all started with the launch of the second-generation Mahindra Thar—the first was introduced in 2010—in October 2020. Thar, the iconic off-road SUV modeled after the Willy Jeep, was launched with a refreshed and rugged design, the latest infotainment options, an automatic transmission for city-targeted clientele and a refreshed engine, among a host of changes in Mahindra’s bid to regain its lost ground in the domestic car market.

Then, a year later, Mahindra launched its flagship model, the KSUV 700, among the best-selling cars in India today, recording bookings of over 10,000 units per month. The waiting period for a car now stretches to more than a year and a half. Then, earlier this year, the company launched the next-generation Mahindra Scorpio, with an all-new design, priced at almost half the price its competitors were charging for similar features.

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“By choosing on our capabilities and competencies, we want to attract consumers who are looking at multiple other segments,” Rajesh Jejurikar, executive director for automotive and agriculture sectors at Mahindra Group, told Forbes India in an earlier interview. “You can be a niche brand for a position and still get volumes. To win the SUV battle, you don’t need to make a product that’s similar to what someone else is making. Because it suits them. We must focus on our strengths. And that’s exactly the setup we did.”

The recent turnaround follows a rather torrid period when the company experimented with expanding its foothold in various segments of the Indian auto sector without much success over the past few years, before regrouping to focus on its core business.

All this meant that Mahindra was back in the fray and regaining lost ground. Today, the company is India’s fourth largest carmaker with a market share of 8.58 percent, up two percent from 6.3 percent a year ago. The group’s commercial vehicle division has seen market share grow by nearly five percent compared to the year-ago period and is currently the second largest commercial vehicle manufacturer in the country.

If not for its production constraints, mainly due to global semiconductor shortages, Mahindra would have sold more cars and improved its market share in the domestic auto market, which is currently pegged at around $105 billion. “We have delivered one blockbuster after another,” Anish Shah said on July 8 in Mumbai. The company is also the largest manufacturer of tractors in the country with a 40 percent market share and the largest manufacturer of electric three-wheelers with a 70 percent share.

Now that the company is on a firm footing, Mahindra is busy focusing on the Indian electric vehicle (EV) segment and has announced plans to set up a subsidiary that would focus entirely on manufacturing electric vehicles. The company was able to rope in British International Investment (BII), the UK’s development finance institution, to invest in the new subsidiary.

The new EV company will focus on passenger EVs with four wheels. “The total capital infusion for EV Co is projected to be approximately Rs 8,000 crore/$1 billion between FY24 and FY27 for the planned product portfolio,” Mahindra & Mahindra said at the time of the announcement. “M&M and BII will work together to bring other like-minded investors to EV Co to gradually meet the funding requirements.”

Earlier this year, the company launched the next-gen Mahindra Scorpio, priced at almost half the price its competitors were charging for similar features. Representative image Image: Adeel Halim / Reuters

BII will initially invest ₹ 1,200 crore and the balance of ₹ 725 crore in the electric vehicle company that achieves certain milestones. Mahindra reckons that by FY27, it could see electric vehicle penetration of between 20 and 30 percent in its portfolio. “Today, with government support, rapidly decreasing cost of ownership and increased consumer awareness of environmental issues, we believe the time is ripe and right to enter the four-wheeler markets with our range of battery electric vehicles,” Mahindra said during the launch of the five new electric SUVs vehicles for the domestic and international market in August. The first four vehicles are expected to hit the road between 2024 and 2026.

“This year has been the best year for Mahindra,” says Puneet Gupta, director of automotive forecasting at market research firm S&P Global Mobility. “They’ve grown phenomenally over the last few years, mostly because of some of the alliances they’ve made in the past.” This led to a drastic improvement in the product. They have now focused on restructuring the organization, and the new management has brought new thinking to the business consolidation process as well.”

Additionally, Mahindra’s agricultural equipment division, which manufactures tractors, has also witnessed stellar growth in recent times. In October of this year, the company recorded sales of 50,000 units of tractors for the first time in a month. Last year, the company produced 355,000 tractors, which is the highest production in a single year. Mahindra claims that its tractors are now present on all habitable continents of the world.

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I’m getting ready for more

While a significant focus will be on the electric transition at Mahindra & Mahindra, the group is also gearing up for more in a number of businesses where it currently has footprints.

This year, the group’s real estate arm, Mahindra Lifespace Developers, crossed the $1 billion market capitalization mark for the first time. Mahindra Lifespace is present in 15 countries and builds residential and integrated cities and industrial clusters. Ruka has completed, ongoing and upcoming residential projects worth nearly 30 million square feet across six Indian cities.

Then there is Tech Mahindra, with a market capitalization of more than ₹1.02 lakh crore, and among the largest IT services companies in the country. The company has over 1,500,000 employees spread across 90 countries worldwide with revenues of 34,000 crores and profits of £4,913 million as of FY22.

“Deal closings were soft due to select deal spillovers in Q3, but importantly the outlook of $700 million to $1 billion quarterly net new TCV (total contract value) was maintained,” HDFC Securities said in a November report. “Key positives for Tech Mahindra were sequential improvement in free cash flow generation, operating performance (mitigating impact of wage hike) and line of sight for further margin improvement, led by bill reduction (BFSI & RoV impact in Q2), pricing, utilization and optimization sub-con (lower in K2).”

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Then there is the logistics business, which has emerged as one of the largest in the country, the used car business and the hospitality business at Club Mahindra which is building a strong presence across the country. Overall, the group had a market capitalization of $31.63 billion in FY21, of which Mahindra & Mahindra contributed $13.52 billion, while Tech Mahindra accounted for $13.13 billion. Mahindra Finance added another $3.36 billion with others including logistics, lifestyle and leisure adding another $1.62 billion, according to a company presentation.

All this means that Mahindra’s growth story is just beginning. And Anand Mahindra, who didn’t want to be remembered as someone who got everything on a silver spoon, can certainly be proud of the legacy he built during his time with the company. If Mahindra is talked about, it will only grow in the billionaire club.