Succession at Torrent Group: Varun Mehta inducted into Torrent Power Board

The Rs 23,500-crore Torrent Group has set the ball in motion for the third generation of the Mehtas to take over the group’s power and pharma businesses. On Monday, Torrent Power announced the appointment of Varun Mehta as a director on its board. About a week back, the group’s pharmaceutical arm had appointed Aman Mehta as a director on its board.

Group insiders say with the new generation slowly taking charge, the Group plans to diversify into various sectors.

Varun, the son of Sudhir Mehta (68), has worked across different business segments of the company — renewables, thermal generation and distribution. A graduate from the University of Warwick, UK, and an MBA from INSEAD, France, Varun started his career in the renewables business, where he formulated the entry strategy of the Group into the sector. He even set up the initial set of renewable energy projects, and eventually moved on to the thermal generation business. Here he spearheaded the strategic initiative of importing LNG directly from overseas, and Torrent Power was the first Indian power company to do so.

Varun is the executive director at Torrent Power and heads the distribution licence, transmission and cables business. Torrent Group said under his leadership, Torrent’s distribution business has widened its lead over competition.

Torrent Power accounts for 60 per cent of Torrent Group’s turnover.

Succession planning started a few years back at the Ahmedabad-based group which was led by brothers Sudhir Mehta and Samir Mehta, sons of the founder UN Mehta.

In 2014, Sudhir stepped down as the chairman of Torrent Pharma, and his brother Samir took over. Both Sudhir’s sons — Jinal and Varun — have been associated with the Group’s power business for years. Four years later, Samir became Torrent Power chairman and Jinal Mehta was made the MD of Torrent Power. Samir Mehta’s son Aman Mehta has been inducted into the board of Torrent Pharma recently.

Sudhir and Samir started working actively in their father’s pharmaceutical business in the early 1980s. In 1983, Torrent Pharma got their first export order to then Soviet Russia, a “key milestone for the group”, according to an insider. This led to the eventual diversification into the power sector in the 1990s. “The brothers are thick, and even the first cousins bond very well. They are all based in Ahmedabad, and decisions are always taken together,” the veteran executive says.

He adds that the son’s rise in both Torrent Pharma and Torrent Power have been seamless processes, and not knee-jerk. “They have all joined as management trainees and they have learnt the ropes of the business slowly. In his times, Sudhir Mehta would make doctor visits to understand the market dynamics,” he says. More diversification into newer lines of business are expected with the next generation taking charge.

Plans are afloat to enter the diagnostics business. “Torrent also tried its hands at winning an IPL franchise. These are all new ideas that the younger generation brings,” a senior executive says, adding that the working styles are largely similar among the senior Mehtas and the juniors.

UN Mehta, an erstwhile medical representative with Sandoz, had started Torrent Pharma in the 1970s with his life’s savings. He was smart to choose a psychotropic drug and target a small niche of doctors, psychiatrists to avoid stiff competition from MNCs. Torrent Pharma went on to make some major acquisitions – Unichem and Elder – under his sons.

Shy and reticent Mehtas have been calculated risk takers.

Sudhir Mehta, an astute businessman, was quick to foresee the emerging opportunities in the power sector. In 1991, when the Union government allowed private sector participation in the power sector, Sudhir started buying Ahmedabad Electricity Company Ltd and Surat Electricity Company Ltd shares, finally acquiring majority stakes in these by the late 90s. Simultaneously, he announced plans to set up a 655-MW dual-fuel combined cycle power project in Gujarat and also proposed the 1,147.5-MW Sugen gas-fired power station, the largest gas-based power project of an independent power producer.