The younger Miglani sibling’s Wall Street experience helped him understand the financials of a deal that gave ArcelorMittal its first firm foothold in India.
Ankit Miglani did what the Centre and states failed to do for the world’s largest steelmaker, ArcelorMittal. He paved the way for its entry into India four years after L N Mittal signed the first agreement with the government of Jharkhand to set up a 12 million tonne steel plant, which has been stalled by land acquisition issues ever since.
True, it was the 40-year association between Rajinder Miglani, founder-chairman of the Rs 4,500-crore Uttam Galva Steels, and M L Mittal, L N Mittal’s father, that laid the foundation for the co-promotion deal in Uttam Galva. But the cement for it was the immense business sense in the deal, in which Rajinder Miglani’s 30-year-old younger son Ankit had a major role to play.
Ankit Miglani, who is Director (Commercial) of Uttam Galva, said it took a five-minute conference call to decide on the valuation. “They advised us on the price and it was more than generous,” he said.
A share purchase agreement for ArcelorMittal to take a 5.6 per cent stake in Uttam Galva was signed on September 3 and the co-promotion agreement was passed by the board the following day.
Soon after clinching the deal with ArcelorMittal, Miglani said he is banking on the Midas touch of the Mittals. The reason is obvious: The Miglanis had pledged 67.12 per cent of 45.6 per cent in their company to raise debt from various financial institutions, a fact reflected on the balance sheet. Ankit said, however, that the company has already applied to the institutions for release of the pledge and has received in-principle approval.
That it took only five minutes to seal the deal is not surprising, given that Ankit is known as a quick number cruncher. A graduate from the Wharton school, University of Pennsylvania (in 2001), he started his career on Wall Street as a stock trader with a private boutique firm.
Ankit’s penchant for numbers was complemented by the fact that he has a close-knit family — father and elder brother Anuj Miglani — who worked to forge this deal, just as they did to create a plant to make one million tonne of cold rolled steel and 750,000 tonnes of galvanised steel out of an inherited trading business.
Ankit said he will continue to play the key role in the company, which is essentially dealing with the commercial decisions. “There will be no change in the day-to-day operations of the company. Changes will be at the board levels,” he explained.
His brother Anuj, who is deputy managing director, oversees plant operations, and Ankit is the face of the company dealing with corporate services, finances and sourcing. He joined the family business in 2003 and the company has been growing at 20 to 40 per cent every year. Suppliers say Ankit used to be under the shadow of his father till about two years ago but was now the hard negotiator behind the sourcing deals.
“His understanding of the product and the market is very good,” said people who deal with him on a regular basis.
Ankit is a voracious reader and his interests range from fiction to nuclear physics, but he catches up on his reading only when he travels. He is married to Priyanka, who, he says, understands his passion for the business, coming from a steel background herself. She is the daughter of Bhushan Power & Steel promoter Sanjay Singal’s.
The younger Miglani has been working on the global dream for a while now, an obvious step given that more than 70 per cent of the company’s products are exported. After Wall Street, Miglani joined Detroit Cold Rolling, a company it was negotiating to buy a couple of years back. That was an emotional decision and fell through. But the ArcelorMittal decision is a mix of both.
On the emotional front, it’s a natural extension for the two families that have known each other for so long. Business-wise it’s a deal that means raw material security in a volatile market for Uttam Galva, and access to the best of global technology.
For ArcelorMittal, the move is invaluable because it gives it a toehold in the only major economy in which steel consumption is expected to grow in 2009, bucking the global downtrend, according to World Steel Association.
