With the initial success of his energy generation company, Hindustan Powerprojects, the 42-year-old entrepreneur hopes the world will forget his not-so-stellar stint at Moser Baer
Ratul Puri is a man in a hurry. His single-point agenda: To exorcise the ghosts of past failures and salvage his credibility and business. And, so far, he has made some rapid strides. Within six years of entering the power generation business with Moser Baer Projects—it was renamed Hindustan Powerprojects Pvt Ltd (HPPPL) late last year—he has emerged as the man behind the largest solar power generator in the country. The entrepreneur has earned the grudging respect of his peers and competitors, many of whom expected him to fail in his latest venture. But not everyone is singing his accolades, not yet anyway. Investors have yet to forget Puri’s first business foray when, under the aegis of his father’s company, Moser Baer India Limited (MBIL), he started manufacturing solar panels only to see the venture flounder.
Puri, however, is confident that history will not repeat itself. In his latest endeavour, the 42-year-old Delhi-based HPPPL chairman is working at breakneck speed to cash in on the early-mover advantage in the renewable energy sector: He is among the first to set up solar plants across India, in Tamil Nadu, Gujarat, Rajasthan and West Bengal, among other states.
Since the launch of his company in 2008, Puri has commissioned 400MW-worth of solar power projects (250MW for India and the rest for overseas). The aim is to generate 5,000MW of energy by 2017.
HPPPL’s first thermal project will be operational later this year. He is also building hydropower assets and has taken the first steps in wind power. That’s not all: Puri wants to develop another 6,100MW of power generation capacity using conventional (thermal) and non-conventional (solar, wind, hydro) energy sources in the long term.
The company’s solar business alone generated Ebitda, or earnings before interest, tax, depreciation and amortisation, of Rs 500 crore in FY2014 on revenues of Rs 900 crore. When the first phase of the thermal asset becomes operational later this year, he expects HPPPL’s Ebidta to increase to nearly Rs 3,500 crore by FY2016.
Puri is investing Rs 35,000 crore towards all these projects by 2017: By the end of FY2014, HPPPL would have put in Rs 20,000 crore, and will raise the remaining Rs 15,000 crore over the next three years. If the company meets its deadlines, it will probably be the first private or government undertaking in India to generate more than 1GW of solar energy.
“By opting for solar power for short term, thermal for mid term and hydro power for long term, the company has aligned itself with India’s power generation strategy,” says Puri, who has set a brutal pace for himself and HPPPL.
Once Bitten, But Not Shy
The pace of work is similar to what Puri had followed in his first avatar as a second-generation entrepreneur when he entered Moser Baer India Ltd—the once-iconic media storage company founded by his father Deepak Puri. He joined MBIL in 1994 as general manager for business development, and was appointed executive director in 2001, by which time Moser Baer’s CDs and other optical media storage devices were a household name.
From 2000 to 2004, MBIL’s revenues jumped from Rs 154 crore to Rs 1,501 crore, and profits rose about eight times to Rs 323 crore. The company became the world’s second largest optical media manufacturer. But even at the height of its success, MBIL was aware of the Chinese threat. Deepak Puri saw his business impacted by the government-supported manufacturing prowess of Chinese companies. Technology, too, was changing at a speed that was impossible for MBIL to match.
The junior Puri then began his search for the next big thing. In 2005, he convinced MBIL’s board of directors that manufacturing solar panels was the future. Over the next three years, MBIL would invest over Rs 3,000 crore—a considerable amount given that the company’s revenues were Rs 1,343 crore in 2005— in setting up facilities to manufacture crystalline silicon and thin-film panels and buying the required technology.
On the family front, in 2010, the Puris divided their assets in a non-acrimonious settlement: While Deepak Puri, later aided by his daughter Sabena (who runs a restaurant called Junoon in California), would look after MBIL, Ratul got sole proprietorship of Moser Baer Projects (now HPPPL). In 2012, he resigned from MBIL and severed all ties with his father’s company. MBIL has no stake in HPPPL. The separation was complete, but MBIL’s lenders and investors felt they had been short-changed and saddled with a debt-ridden company especially because Ratul, who was one of the main promoters for the solar panel venture, was no longer a part of MBIL.
Puri is optimistic about his father’s business. These days, though, he’s immersed in HPPPL’s success. Rather than manufacturing solar panels, he’s setting up power plants, and is determined to prove his naysayers wrong.
At the time Puri constructed his first 5MW solar project in Tamil Nadu in 2010, it cost Rs 20 crore to produce one mega watt of energy. Today, it costs about Rs 7-8 crore per MW.
(This story appears in the 19 September, 2014 issue of Forbes India. To visit our Archives, click here.)