Reddy for more challenges
E. Kumar Sharma April 13, 2011The name Gunapat I Venkata Krishna Reddy may not evoke instant recognition, but the acronym GVK certainly does. Ever since this group, which takes its name from that of its founder, bagged the project to modernise Mumbai airport in 2006, it has been marked as one of the stars among the infrastructure companies of the country.
It is also an example of a new kind of family business where, though key family members do hold key posts, they also have professionals working alongside at top levels who play equally vital roles. "The professionals are involved in day to day operations, the family members intervene only in strategy and growth issues, and all major decisions are usually taken by G.V.K. Reddy himself," says son G.V. Sanjay Reddy. Krishna Reddy's wife G. Indira Krishna, G.V. Sanjay, daughter Shalini Bhupal and grandson Krishna Ram Bhupal are all actively involved in the GVK Group, albeit in different areas.
It was pure chance that his company reached its first milestone just before the liberalisation of the Indian economy in 1991. GVK won the contract to build the Rs 817 crore Jegurupada power project in Andhra Pradesh in the latter half of 1990, its first move into the power sector.
Before Jegurupada, the biggest project the company had handled was a Rs 30 crore hotel project in Hyderabad. Jegurupada gave Reddy the confidence to dream and think big. And liberalisation opened up opportunities. Most important of these for GVK was the modernisation - and the subsequent running - of the Chhatrapati Shivaji airport in Mumbai. Among the bidders for the contract were leading lights of corporate India, including Reliance; GVK hardly seemed to stand a chance. The company had no experience in building airports - though that was not a disadvantage, since few of the other bidders had any either. Till liberalisation, all airports were built and run by the government.
All the bidders had roped in foreign collaborators for technical expertise. GVK did the same, tying up with, among others, a South African company, to form the consortium Mumbai International Airport Ltd, or MIAL.
Winning the Rs 10,000 crore contract immediately put GVK in the top league. "It brought us national recognition, showcasing our ability to execute mega projects," says Isaac George, Chief Financial Officer of GVK Power and Infrastructure. Since then the group has also acquired a 29 per cent stake in the newly built Bangalore airport.
Though infrastructure, especially power projects and the two airports, remains the GVK Group's core concern, it has its fingers now in many pies, from a road in Rajasthan to manufacturing, hospitality and even biotechnology.
"The biggest advantages of a family business are commitment, willingness to work hard and to take calculated risks," says G.V.K. Reddy. And the disadvantages? He is frank. "Infighting over silly things," he says. How can that be overcome? Counselling and regular meetings of family members help, he says, but the best way is to have one family member who is the undisputed leader. At GVK, this leader is G.V.K. Reddy himself.