Connecting the country through traditional values

GR Infra was started by Vinod Kumar Agarwal’s father in 1965. The family came from a very small village, Sahawa in Churu District of Rajasthan, and his father was engaged in the trading of foodgrains. However, there was no road connectivity to transport his products and seeing the lack of infrastructure, Agarwal’s father set up a sole proprietorship and started his first road-building assignment. Initially, it was a big struggle and at times work was just enough to make ends meet.

The next few assignments came in Jodhpur, Jaisalmer and Barmer. As Agarwal puts it, “At that time my father could not afford to spend on our higher education. My five brothers and I moved ahead with the limited education we received in the village and three of us were able to complete our graduation. In 1979, my elder brother and I quit studying and joined the family business to help our father. We were followed by the rest.”

When Agarwal and his brothers joined the business, their father inculcated in them some fundamental values that the family swears by even today. One of them was around commitment. Agarwal explains this value as follows: “My father told us no matter what the project is, at whatever rate you have taken it, be it good or bad, easy or tough, with low margins or high – the focus should always be on completing the project. If the project is stalled by a dispute, nobody will sympathise with us.” Quality is equally important. This focus on project delivery combined with adherence to quality has been key to GR Infra’s success and has helped the company complete various projects over time, starting from building roads in villages to building highways, thereby cementing its reputation.

Another core value that Agarwal inherited from his father is around balancing risk with growth: “My father always said, ‘Don’t ever let debt get the better of you. Your growth may take a hit but don’t take on too much debt to achieve high growth – take only what you can repay in a year or two. Grow as much as you can control and manage; the project margin is limited but the loss isn’t.’ So, we followed our father’s principles and kept the debt levels in the company low. This benefited us as even when we didn’t have a lot of work, we weren’t under pressure.” Today, GR Infra has infused more equity into its business and measures debt as a percentage of its profits as opposed to a ratio to equity.

A new wave of growth came in post 1996 with new policies focusing on rural roads and the establishment of the National Highways Authority of India (NHAI). Initially, GR Infra focused on rural roads and gradually gained eligibility to bid for NHAI projects. Today, the business is looking to grow by strengthening its operations in this sector. Backward integration is allowing a number of activities to be developed in-house. Moreover, setting up an advanced lab with new technology has allowed the company to maintain its costs and generate higher value.

While the handling of a single business by six brothers brings in different perspectives, it can also open up scope for disagreements. But for the Agarwal brothers, their proximity and accord are a mechanism for them to reduce stress and make sound business decisions. Agarwal states that his mother played an integral part in keeping the brothers together: “Our mother always told us to stay together and helped us value love and mutual understanding. She would say that money should never be a reason for dispute and she promoted self-control.” The family continues to cherish this value and has created a common pool for earnings and savings that is accessible to all family members.

In a novel way, these traditional attributes are providing the business the edge it needs. The company understands the need for professionalisation and at the same time acknowledges that their industry is one which requires a high degree of personalisation in overseeing projects. In Agarwal’s words, “The professionals in the business are treated as our family. Which is why we haven’t seen any exit at the top level in the last 10 years.”

The company has grown significantly over the years. The current generation expects that a majority of the next gen will join the business; however, those who wish to pursue their own passion can continue to be shareholders in the family business. Agarwal says that mutual understanding between the six brothers has until now precluded the necessity of documenting the role and responsibilities of family members in the business or the need for establishing a family governance structure. However, with the business growing and the third generation getting engaged in the business, he now feels the need to do so.

Like most family businesses, Agarwal is aware of the positive impact GR Infra can have on its communities. The primary focus of GR Infra welfare projects is education and health. Wherever projects are being executed, a study is undertaken to find out basic necessities which are lacking – be they schools or hospitals – and efforts are made to put these in place. The company also wants to set up an institute for skill development.