Navigating through a heavily regulated sector like oil & gas with domestic heavyweight players is no mean feat in India. Even more so for an investment banker who was entrusted with such a job around the same time he turned 40. So for Rahul Dhir, leading a mid size company to one which ended last year with topline of over $2 billion, net profit of round $1.4 billion (making it one of the most profit generating companies in the country) and a market cap of $11 billion, it was a big deal.
So the exit (effective August 31) of the man who successfully saw through the IPO of Cairn India over five years ago, has seen the company’s stock price drop over 3 per cent compared to the last traded price a day before Dhir resigned (roughly shrinking notional wealth of its shareholders by around Rs 2,000 crore).
Dhir, who joined Cairn India in May 2006, came with 19 years of experience in the oil & gas industry covering areas such as technology, finance and business leadership. Prior to joining Cairn India, he was the co-head of energy and power investment banking at Merrill Lynch (London), where he provided strategic and financing advice to energy clients in Europe, Middle East and Africa.
He joined Merrill Lynch from Morgan Stanley in London where he focused on providing M&A and financing advice to energy clients in Europe. The IIT Delhi grad who went on to grab an MBA degree from Wharton in 1994, he has also worked at M&A team at SBC Warburg (in New York and London).
Indeed, for many analysts tracking the oil & gas sector it was a question of how soon rather than if Dhir would quit after Anil Agarwal-led Vedanta Group completed the deal to buy majority stake in the Indian arm of UK’s Cairn Energy through a string of transactions in a multi-billion dollar deal.
The deal faced several regulatory hurdles related to royalty payments to the Indian government due to Cairn India’s partnership with the state-controlled ONGC in its key assets in India. Moreover, the environmental issues related to the mining operations of the Vedanta Group and its lack of business expertise in the oil & gas sector also came under fire. But the deal went through.
As someone who holds Cairn India shares worth Rs 112 crore ($20 million, based on shareholding as of March 31), for Dhir, it was an opportune time to look for a new challenge.
“We have achieved all major milestones set out at the time of the IPO. With the completion of Vedanta’s acquisition, Cairn India’s exceptional organisation and unique asset base are well placed to continue to deliver sustainable growth and value for our nation and all our stakeholders. This is the right transition point for me to pursue my entrepreneurial interests,†Dhir said on his decision.
Given his background, one would have expected him to join in a key role in a private equity fund with big plans in the oil & gas field. But an entrepreneurial stint would be interesting to watch.
(Edited by Prem Udayabhanu)