MG George, Muthoot Finance
#55 in 2012
At one point, Muthoot Finance was India’s leading lender against gold. Revenues and profits had doubled last year, with the spurt in gold prices, taking their net worth to $1.14 billion. Then came the downer: The RBI ruled that the loan-to-value ratio had to be 60 percent, down from 80 percent. Muthoot’s assets under management came under severe pressure; they have been stagnant since and the stock price has fallen from Rs 184 to Rs 102 (October prices) over the last year.
Gautam Thapar, Avantha Group
#60 in 2012
Gautam Thapar is among the most high-profile drop-outs from the Forbes India Rich List. The much feted founder and chairman of the Avantha group has struggled as both his flagship companies, Crompton Greaves and Ballarpur Industries, have reported declining profits.
Crompton Greaves has been hit by the slowdown in the power business; acquisition-led growth plans also didn’t quite work. The company’s shares had tanked five times more than the benchmark indices. Thapar has been trying to restructure the group by selling some of the European acquisitions and bringing in private equity. Market participants, however, continue to stay away from the counter. The Crompton Greaves stock price fell to Rs 100 in October 2013 from Rs 121 in October 2012.
As for Ballarpur Industries, while it is India’s largest manufacturer of printing and writing paper, attempts to transform into a regional power have come to naught. Net profit for 2012-13 was Rs 6.57 crore on revenues of Rs 1,095 crore.
Jaiprakash Gaur, JP Associates
#70 in 2012
For two years now, the group’s high leverage has affected the performance of almost all its businesses. Its problems are compounded by the economic slowdown which has hit the group’s real estate, infrastructure and hospitality play. In October 2013, JP Associates had a total net debt of $10 billion (Rs 61,000 crore). Investors have since dumped shares, with the price dropping 68 percent from what it was during the same period last year, making it the worst performing stock on the CNX Nifty. In September, JP was able to sell its cement plant in Gujarat to UltraTech for Rs 3,800 crore. But that deal is a drop in the ocean at a time when interest costs per year are as high as Rs 5,000 crore. The one silver lining could be the 8,000-acre land bank, which the company claims is valued at Rs 70,000 crore.
Ramesh Chandra, Unitech
#82 in 2012
Worth over $11 billion at his peak in 2007, it has been a steady slide downward since for Ramesh Chandra who was valued at $695 million in 2012. The rough patch for the property developer began in 2011, after the telecom corruption scandal led to younger son Sanjay, the MD, being jailed for seven months. Trying to cut its $1 billion debt, Chandra is still in talks with private equity firms to sell its two special economic zones and an IT park.
Prathap C Reddy, Apollo Hospitals
#83 in 2012
The US-trained cardiologist has been going through a difficult time with stiff competition from national and regional players in the health care business. The Reddy family has pledged roughly half of the 34.35 percent stake it owns in the hospital company. However, liquidity is set to improve after a recently-concluded deal with PE firm KKR, to raise Rs 550 crore to help repay debt and stay on course for expansion.
Karsanbhai Patel, Nirma
(This story appears in the 28 November, 2013 issue of Forbes India. To visit our Archives, click here.)