Shareholders give emotional farewell to 'Man of Stainless Steel' AM Naik

Handing over the baton: L&T Group Chairman AM Naik unveiled the first L&T flag in ‘caterpillar yellow’ at the 25th AGM in Mumbai. He handed the symbolic flag to SN Subrahmanyan who will take over as the chairman and managing director. Image: Swapnil Sakhare for Forbes India
 
Farewells are bittersweet, as what appeared to be permanent long ago, is seemingly bound to change. But one has to let go. Raging emotions, a sense of pride and belongingness engulfed shareholders as they gathered at the Birla Matushri Hall in Marine Lines Mumbai, one last time, to meet AM Naik chair the annual general meeting (AGM) of Larsen & Toubro (L&T).
 
Paying homage to Naik, shareholders greeted him with raging emotions, flowers and some poetry in English, Hindi and Gujarati. Some got humour—filling the hall with laughter and applause—while some shareholders still asked for a bonus. One shareholder went to the extent of calling Naik as a man of ‘stainless steel’. Naik, donning a red tie, navy-blue Nehru jacket and a white shirt with L&T embroidered on it, looked visibly proud and accomplished. The octogenarian was helming the AGM of L&T for the 25th time, a journey he began as a junior engineer in the company, years ago. In 1999, Naik was appointed CEO of L&T.
 

“Money and position did not mean much to me then—and they still don’t. But my work was being recognised and I rose rapidly up the career path,” Naik said in his address to the shareholders.
 
Between 1999 and 2023, the group’s revenues ballooned from Rs5,000 crore to nearly Rs183,000 crore on a like-to-like basis. In the same period, its market capitalisation climbed from around Rs4,000 crore to around Rs374,000 crore at a compound annual growth rate (CAGR) of nearly 20 percent. So, one share of L&T 20 years ago is equivalent to nine shares as of today.
 
“This surge, achieved largely through organic growth, has few parallels in corporate India,” Naik said.
 
Early this year, Naik announced that he will step down as non-executive chairman of L&T from September. SN Subrahmanyan, fondly addressed as SNS, will take over as chairman and managing director. “This is the culmination of the succession plan drawn up by me,” Naik added. Naik had identified Subrahmanyan nearly 10 years ago, and has mentored members of the current executive board.
 
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Flowers, poetry and troubled road   

What do you gift a person who has built a conglomerate and swelled shareholders’ wealth over a long period of time? Perhaps, nothing works wonder then kind words. Few long-term shareholders who were unable to even walk without support stood up to pay respect to Naik, expressing their gratitude for the empire he has built.
 
A feeble voice spoke loud in the microphones of Birla Matushri Hall, “I have been a shareholder for more than 35 years and with AM Naik at the top. It was a good dividend of Rs30 and an additional Rs6 to mark the six decades of AM Naik. Instead of the buyback of Rs3,000 per share, my suggestion is to give a bonus. This would add to my kitty and my grandchildren would be happy as we would have created wealth for them.”
 
For the first time since 2019, L&T announced a buyback of Rs10,000 crore by selling 2.3 percent of equity at Rs3,000 apiece.
 
Naik is leaving shareholders happy and satisfied with the company’s widespread business. “I first visited the L&T office in 1962, when it was manufacturing Coca-Cola bottles—which was considered big as it was not easily available—and from there, the company has branched out to this place. This is a result of your and L&T’s efforts,” said a shareholder.
 
But the journey hasn’t been rosy. “In the latter part of 2001, the unique professional character of your company was threatened as it faced the imminent possibility of being taken over by a conglomerate. The prospects were bleak: L&T, as you know it today, would have ceased to exist. It took astute leadership to turn conflict into a win-win solution,” an emotional Naik told shareholders.
 
It took a lot of effort for the management to bring the L&T group company to where it is now. The L&T Employee Trust now owns 14 percent of the company, and “to that extent, we have ringfenced L&T against takeover attempts”, Naik explained.
 
Between questions on capex and other projects, shareholders continued to interact with Naik for a nearly-three-hour AGM.
 
A pleased Naik said that the group’s association with infrastructure goes back over seven decades. But it was only after 2006, when construction began to be more closely integrated with the rest of the company, that it could scale up. “In just 11 years, the infrastructure business grew approximately 20 times and profits went up 45 times,” he said.
 
L&T has been associated in building Statue of Unity, Chandrayaan, bullet train, Mumbai’s Coastal Road project, and the Trans-Harbour project connecting Mumbai and Navi Mumbai, among others.
 
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The ‘caterpillar yellow’ and other half   

Naik’s announcement that his son had returned to India from the US met with thunderous applause. “He has not taken US citizenship and will continue his work in India, as we are Indians by heart,” Naik said.
 
A proud Naik said throughout this long journey, his family has been an immense source of support and encouragement. “My wife has been my pillar of strength. Without her, without the sacrifices that she made, I could not have achieved whatever I did,” Naik said.
 
He mentioned it was his wife Geeta Naik’s idea to introduce the L&T flag in ‘caterpillar yellow’ with bright L&T written in bold black. On stage, in the presence of other shareholders and board members, Naik made a symbolic ceremony of 'handing over’ the L&T flag to his successor, Subrahmanyan.
 
“You see when I was holding the flag, it was at mid-level, now in Subrahmanyan’s able hands, it will fly higher,” Naik joked. “My life and legacy are L&T, and I am happy and content that I will be leaving it in very capable hands to continue its exemplary record of service to the nation and society,” he continued.
 
In an orange-zari-bordered saree, wife Geeta Naik looked proud of the L&T group’s achievements. Smilingly, she greeted other shareholders, with a twinkle in her eyes reflecting the fulfilment of dreams and accomplishments of the company.
 
“As I look back now from the vantage point of history, I must say that I consider myself uniquely privileged to have had the opportunity to serve, lead and transform this great company,” Naik signed off one last time as chairman of L&T group.
 
Subrahmanyan rightly summed up, “You may take AM Naik out of L&T, but L&T won’t move out of AM Naik.”