Hindujas get a 360-degree makeover but need to smoothen rough edges

During the 1990s, the then second-generation family business group operated primarily overseas, was closely held, controversial, secretive, had good political backing in India and shared strong ties among themselves in the family led by the eldest of the four brothers, S.P. Hinduja.

Since the time it was known for making high-decibel project announcements many of which did not fructify, much water has flown under the bridge. 

Earlier this week, the group said it hopes to triple the valuation of the IndusInd International Holdings to about $50 billion by 2030. Ashok Leyland, the group’s flagship company run for decades with strong professionals, also recently said it will launch six new LCV truck models in the next 12 months. Both the above are in the realm of possibilities and indicate potential growth trajectories for the group.

The contrast between the Hinduja Group’s past and its present form is striking and multi-faceted. 

Originally founded in 1919 by P.D. Hinduja in Tehran, the family later moved to London and Switzerland, focusing on trading and merchant banking. 

Today, the diversified group operates in around 40 countries across 10 sectors, with a significant share of its business in India. The investments are in areas of banking and finance, trading, mobility, media and entertainment, real estate, energy, lubricants and specialty chemicals, healthcare, project development and real estate.

While in the past, many of the companies were closely held with limited transparency, today there are at least six companies in India that are publicly traded, including Ashok Leyland, GOCL Corp, NXT Digital, Hinduja Global Solutions and IndusInd Bank. Almost all these companies are run by professionals with independent boards but with a lead family member. 

The third generation of the group, with many holding higher education degrees from some of the best universities in the world, are professionally active in their business groups.

Despite this progress, some rough edges remain. A feud between the eldest brother Srichand Hinduja’s daughters Vinoo and Shanu on one hand and the rest of the family on the other over the control of the mid-sized Hinduja Bank was in litigation for many years till it was settled about a year back. One of the key triggers for this family dispute was the ill health of the eldest brother Srichand.

This broke the long-standing reputation of cohesiveness among family members in the group. This rift also brought out the gender factor where women family members allegedly did not enjoy equal rights.

Further, the family business is now in its critical third generation with the fourth generation on the horizon to take responsibility. 

Also Read: The Godrej family saga: Business succession should be led by a common vision

There is enough data to show that a majority of family businesses worldwide do not last beyond the third generation. The Hindujas need to be mindful of this.

The Hinduja brothers were once the richest Indians in the world. They no longer hold that title and reputation, but the family has wisely traded it for a more stable and sustainable business model.