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Subrahmanyan will run L&T after Naik hangs up his boots
NEW DELHI: It’s official. L&T chairman AM Naik, who retires in October 2017, will be succeeded by SN Subrahmanyan.
NEW DELHI: It’s official. L&T chairman AM Naik, who retires in October 2017, will be succeeded by SN Subrahmanyan.
Naik, who has been at the helm of the engineering, construction and technology conglomerate for 17 years, told HT he had spotted Subrahmanyan’s talent a decade back.
Subrahmanyan, who has been on L&T’s Board for the last four years, has got six promotions in the period.
L& T currently has no CEO and managing director, and Subrahmanyan is likely to be named to one of the posts. Naik will likely remain in a non-executive capacity for sometime.
Letting go of control at L&T, which has a market value of ₹1.5 lakh crore, will not be easy for Naik, who has spent 51 years in the company .“How difficult is it for you to let goof your son or daughter? But it is an essential part of life, so the only thing you should be associated with, is the progress of your child,” Naik said.
But running L& T will be more difficult than training an elephant. And is likely to make it worse was that Naik was looking for a mirror-image. He once said his successor, like him, should be able to kill himself four times a day, work for more than a hundred years, start more than 60% of L&T’s new businesses, and not bother about his own family.
He may have settled for a lot less, but not without ensuring that Subrahmanyan had to go through Naik’s decade-long rigorous training.
Naik had to hit the ground running with no formal grooming .“I got 15 days to take over L&T. I have given him six years,” he said.
But, L&T has changed a lot. It has expanded 20 times since Naik became the CEO in 1999. The group currently has 82 firms ,65 of them started by Naik.
“Everything in life has its challenges. Fortunately, the one I chose is the smartest of the lot. He (Subrahmanyan) ran 45% of L & T…the remaining 5 5%— technology services, ship-building, hydrocarbons are very tough, but he is getting into it,” Naik said.
Since 2010, Naik has tried to simplify the structure — sold many companies, and will sell, re structure or list a few more. On the plate is L& T Info tech, which is expected to fetch ₹1,243 crore when it hits the markets next week. This is the second time Naikisloo king at listing a subsidiary. In 2011, L&T Finance Holdings got listed.
Naik hopes to use the engineering and construction depth of L&T to grow the Infotech business, for example, in building smart cities. “We are the only company which can build a smart city, and also make it smart with technology.”
He has set a target of doubling Infotech’s revenue to $2 billion in three years. With a revenue of $887 million, Infotech is India’s sixth-largest IT services firm.
Taking the burden of running L& T Info tech from his successor is a step towards passing on a much leaner organisation to Subrahmanyan. And what about L& T’ s complexities ?“Some of it is inherited, some got created due to structural reasons, some due to personality reasons, and I made a few mistakes I made,” Naik said.
