The split of the Rs 19,000-crore RPG empire is now complete, with Rama Prasad Goenka’s younger son, Sanjiv Goenka, on Wednesday stepping out of the shadow of the umbrella brand that traces its history to 1820.
The move to carve out a corporate identity — the RP-Sanjiv Goenka Group — independent of elder brother Harsh Goenka’s RPG — is the first public demonstration of a demarcation in ownership of businesses chalked out last year by Rama Prasad Goenka himself.
“The idea is to have an independent corporate identity with a clearer focus so that there is lack of confusion. My brother runs one group, I run another, so it is better to have a distinct identity. That does not mean I do not have the right. I still have the ownership and the right to use RPG,” said Sanjiv Goenka.
Asked whether this makes Harsh Goenka the true inheritor of RPG, the younger brother said, “How does it matter? At the end of the day, it’s one family, same inheritance and same legacy.”
The separate corporate identity ostensibly has the family patriarch’s blessings. “My father has been involved with the process for the last six months, at different stages of evolution,” Sanjiv said. “I did not discuss it with my brother because there was no need to,” he added.
“We (brothers) are in touch, though not as often as we used to be in the past … but we are in touch,” he said.
The split has been smooth compared to the some of the acrimonious settlements in the past few years. Unlike the Reliance group split, where Anil Ambani has no role in his brother’s businesses, Sanjiv Goenka will continue to be the vice-chairman of RPG Enterprises, whose chairman is Harsh Goenka. The father will continue as Chairman Emeritus of RPG Enterprises and the new group. He will also remain as the chairman of CESC and Saregama India.
Unlike in the case of Ambani brothers, there is a no no-compete agreement here. “We can enter each other’s businesses, though we may not like to do it, given the emotional bonding,” said Sanjiv.
Harsh’s group includes tyremaker Ceat, power engineering company KEC International, software company Zensar Technologies and RPG Lifesciences, an engineering consultancy. RPG Raychem and Spencer’s Travel would continue under RPG Enterprises, said officials close to the development.
The cross-holdings have already been untangled. In case of mutual business interests such as CESC, the power utility in Sanjiv’s portfolio, and KEC International, the transmission company in Harsh’s portfolio, transactions will be on commercial terms.
With businesses clearly carved out, major growth plans have been made keeping in mind the newly discovered motto — Growing Legacies — which appears beneath the new corporate logo designed by Suhel Seth and Law & Kenneth.
The RP-Sanjiv Goenka Group is present in five sectors through its 10 companies that have a revenue in excess of Rs 9,000 crore and a market capitalisation of Rs 4,500 crore.
The companies in the RP-Sanjiv Goenka Group are: CESC, Noida Power and Integrated Coal Mining, Phillips Carbon Black, Spencer’s Retail, MusicWorld Retail, Au Bon Pain Cafe India, Saregama India, Open Media Network and CESC Properties.
In the next five years, the group aims to have assets of Rs 50,000 crore and a revenue of Rs 25,000 crore.
“We will invest Rs 35,000 crore during this period, more than Rs 31,000 crore in power, Rs 2,500 crore in carbon black and the rest across sectors,” Sanjiv said.
Power is a business that Sanjiv brought to the RPG fold with the acquisition of CESC in 1989, five years after he joined the family business. Back then, the RPG group comprised Phillips Carbon Black, Asian Cables, Agarpara Jute and Murphy India, with a combined turnover of just about Rs 80 crore.
