To market, to market, to buy - a strategic fit. That is what the Mahindra Group has been doing as it strives to grow. And Uday Phadke is the man who ensures that there is enough cash to do this, and that the deals are feasible.
In the past three years, the group has acquired 27 assets in India and abroad. These include information technology major Satyam Computer Services (now Mahindra Satyam), automotive companies Ssangyong of South Korea and Kinetic Motors, and two aviation companies in Australia. Mahindra saw all these acquisitions as strategic fits.
"We buy only if the products of the company that's being acquired fit into the group's growth strategy," says V.S. Parthasarathy, Group CIO and Executive Vice President for Finance and M&A.
60, President, Finance, Legal & Financial Services Sector
My best practice: Document every decision exhaustively, with details for references in docket form
What gets my goat: Unpunctuality and unpreparedness
How I unwind: Listening to old Hindi film songs and Indian classical music
Global CFO/CEO I admire: There is so much talent within the company. Why look outside?
It helped that Mahindra went hunting during the global slowdown, when valuations were low. The group was also prudent enough to pass up big-ticket deals such as the Jaguar Land Rover sale.
Perhaps it is moves such as these that helped M&M maintain a debt-equity ratio of 0.23:1 as of March this year, despite the acquisitions. "One of the enablers for this healthy ratio was the successful call that we made on our $200 million FCCB issue," says Phadke, referring to its decision to redeem the foreign currency convertible bonds in November 2010, ahead of schedule.
"We were successful in converting all except $1 million worth of bonds, and we could do this without a sweetener," says Phadke, who has been with the company for 38 years now (it was his first job). As CFO, he has been adept at playing the toughest of balancing acts - balancing growth and profitability.