If there is one person who might have a good insight into the instincts and aims of Indian mining tycoon Anil Agarwal it’s Brian Gilbertson, who helped list Vedanta Resources on the London Stock Exchange in 2003, a process he had himself gone through in 1998 with the listing of Billiton.
Gilbertson hasn’t had any close dealings with Agarwal or Vedanta for years, but his perspective remains valuable both as an old associate of Agarwal and also as a veteran strategist in the mining industry.
Gilbertson says: "In my experience, Anil was never a man to beat his chest. He was softly spoken, a man of great hospitality and very active in social upliftment projects."
Agarwal, he says, really is a self-made man in the fullest sense, and built three significant businesses. "It was only when we put them together for the listing that one came to appreciate the scale of his achievements."
Having said that, Gilbertson is not effusive about the listing he helped create, and it is easy to see why. Vedanta listed in London in 2003 at £3.70 and is trading at around £7.50 — it did, at one stage, hit £26.
Still, that is pretty pedestrian growth over 15 years — about half the performance of the two giants, BHP Billiton and Rio Tinto.
It is a better performance than Anglo American over that period.
However, from its low points in 2016 when the industry as a whole started turning around, Anglo has left the others in the dust.
What the listing did do, says Gilbertson, was to position Agarwal’s assets in the global markets and make public and visible his substantial wealth and achievements.
Gilbertson’s most interesting perspective is on Agarwal’s decision to use a bond issue to effectively rent 21% of Anglo’s shares last year.
He says he has no knowledge of a deal outside of what he has read, but thinks the strategy was devised by some all-too-smart bankers rather than something Agarwal himself dreamt up. "I simply don’t understand it. It just doesn’t sound like Anil to me," he says.
Apart from anything else, the investment was made six months too late, after the industry had already turned around, which will limit Agarwal’s upside.
A point not made by Gilbertson but by investment analysts, about the controversial bond, is that the only buyers were hedge funds, who might well have balanced this bullish investment by shorting Anglo’s stock. If that’s the case, it hasn’t had any negative effect.
Agarwal made his investment in two stages, in March and September last year. Anglo’s stock is up around 22% since March and 24% since September. This is markedly better than Vedanta, which is down 17% since September, while the big guns, BHP Billiton and Rio Tinto, are flat.
There is one contribution Gilbertson did make to Agarwal: "I taught him the joys of cycling. He wasn’t a natural. I don’t think it stuck."
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