The Munjal-family promoted Hero Future Energies Pvt. Ltd is planning to put up one large grid connected solar plant of up to 100 megawatts capacity in Southeast Asia, apart from expanding in Africa and India, its founder and managing director Rahul Munjal said in an interview on 13 January.
Backing Munjal’s ambitious plan is around $125 million cash that International Finance Corp. (IFC), together with IFC Global Infrastructure Fund—a private equity fund managed by IFC Asset Management Co.—have invested.
By the end of January, the money will come into Hero Future Energies, and will provide the much- needed ammunition to Rahul Munjal, 40, who is the elder son of Hero MotoCorp Ltd founder late Raman Munjal, to be the first among third-generation Munjal family members to make his mark in the business landscape.
“The idea is to grow. Between me, Abhimanyu, Ujjwal and Akshay (family members), we are all in the prime of our careers. And by the end of the next decade, everybody will be in their 40s or 50s, and this is the time. So, everybody has been told that expand your wings as much as you can…create good solid value for the group,” Rahul Munjal said in an interview.
In 2013, Munjal’s younger brother Abhimanyu founded the Hero Group’s financial services business Hero FinCorp Ltd.
Akshay, Rahul’s cousin and son of Suman Kant Munjal, managing director of Rockman Industries Ltd, runs BML University in Dharuhera, Rajasthan. Akshay’s brother Ujjwal has founded Hero Electronix, which has made rapid strides in design and development of chips. He also assists his father at Rockman. Akshay and Ujjwal have a younger brother, Vidur, who has finished his studies and now works for KPMG in India.
The current chairman of Hero MotoCorp, Pawan Munjal has two daughters and a son. While his son, Anuvrata, is studying abroad, Vasudha, the elder daughter, runs a chocolate boutique under the brand Chokola. The younger one, Supriya, has her own clothing line. Sunil Munjal, the youngest son of Brijmohan Lall Munjal and joint managing director of Hero MotoCorp, has a daughter and she assists Sunil who has exited Hero Group.
“The idea is that the group has been reliant on a large company for a long time and, going forward, that should not be the case. There should be several large companies in different industries. We don’t need to have all our eggs in one basket. Vision is growth, expansion… have different risk profiles for the group. That is the whole point,” Rahul Munjal said.
At Hero Future Energies, he said, the company is funded till 1400 MW and it also has a separate pipeline of 1200 MW. Between now and September 2018, the firm plans to spend the money raised from IFC.
“So, for the next 16 to 18 months, we are completely funded. We will have 1400 MW by then, and on the other hand, we’ll have very healthy cash flow in this company itself, which should be able to give us 400-500 MW a year,” Munjal said.
Hero Future Energies has so far been funded by the promoter family of the automobiles-to-financial services Hero Group itself. Munjal stated that his family has invested around Rs 700 crore in the venture thus far.
India plans to achieve 175 GW of renewable energy capacity by 2022 as part of its climate commitments, wherein it has promised to achieve 40% of its electricity generation capacity from non-fossil fuel based energy resources by 2030. This includes 60 GW from wind power, 100 GW from solar power, 10 GW from biomass and 5 GW from small hydro projects.
“In India, there are not too many sectors which are booming. Fortunately, renewable is one of them where you see lots of growth. If you see the kind of growth solar has had, it is 100% YoY (year on year), so which of the industry is growing at 100%? If it is so, then it is about how good you and your team is? Are you able to keep up with the industry? Are you growing as much as an average player is growing in the industry? There are these three questions that we ask,” said Munjal, who has built a second office in New Delhi and is already scouting for another office space.