Sehgal, talking from his office in Noida, just outside New Delhi, dismisses suggestions that it's mainly about bargain hunting or overnight growth, though. He emphasizes that what looks like sudden growth was actually the result of years of work.
It started with building a track record for global automakers and passing tests with much smaller acquisitions and projects, he said.
“They started with a small one, testing us out, and then bigger and bigger,” Sehgal said. “Obviously the size attracts you to the big two [Visiocorp and Peguform], but it's a process that started somewhere around 2001, and now it's 2015 and tomorrow if we get a big one, we're always ready.”
The Peguform purchase added $1.9 billion in sales, with Motherson paying about $200 million for an operation that had 7,000 employees globally but less than $10 million in profit the previous year.
“We recognized very early that we were very good in turning around companies,” Sehgal said. “We look at over 100 companies and probably we buy five. We know what is coming on our plate, we know if we can handle it, then we will take it over.”
At times it involves moving quickly, such as when global automakers invited it to look at buying Visiocorp, he said. The car companies were worried about assembly lines stopping without mirrors.
“Can you imagine if this company had gone in bankruptcy? You have a situation where cars cannot roll out of the line because there's no mirror,” he said.
The company gambled but the timing worked, he said.
“We bought [Visiocorp] on the 6th of March 2009, the markets revived on the 9th of March,” he said. “Nobody knew three days later the market was going to revive.”
The stretched out supply chains of the car companies create more chances for good, globally minded suppliers, he said.
“The dynamics of the car makers has changed,” Sehgal said. “Eighty to 85 percent of their components are made outside the car makers' premises, and hence even if a small company has a particular patent or process which is very vital, if they go into trouble, the car maker needs an immediate solution.”
Now, Motherson is boosting its R&D in the hopes that can drive growth. Early this year, it set up a unit to focus on innovations like camera-based driver assistant systems and cross-pollinating technology from one division into another.
In 2020, the company wants to have $18 billion in annual sales. If that sounds overly ambitious, Sehgal argues the company has consistently telegraphed its plans in annual reports — and achieved them.
In 2010, it said it would be $5 billion by 2015, and it hit $5.5 billion. Since 1995, the company said, each of its five year plans have seen it grow between three and nine times larger.
An investment of 2,500 rupees ($40) at its 1993 initial public offering would be worth 5.5 million rupees ($86,000) today, the company said.
“In the last 20 years, the vision's been the same,” he said. “I give you a heads up, you open the right page [of the annual report]. There we set five year targets.
“We tell you five years from now ‘This is where we're going to be,'” he said. “Hey, you believe me, you'll enjoy the ride. If you don't believe me, then you will come up with this thing of ‘How could you have grown so much?'
“It's all planned, it's thought out,” he said. “We are ready for it.”
The company, formed in 1975 as a trading firm by Sehgal and his mother (hence the name Motherson), started in the auto industry in 1983 making t-couplers for the Indian made Maruti SS80 car.
Today, Japan's Sumitomo Wiring Systems owns 25 percent of MSSL and another Japanese firm, Sojitz Corp., own a small stake in a related company, Samvardhana Motherson International Ltd. SMIL in turn owns part of MSSL and the former Visiocorp and Peguform businesses.
The group's corporate structure is complex: Under the umbrella of the Samvardhana Motherson Group, MSSL accounts for the bulk of group sales and is traded on the Bombay Stock Exchange. But parts of the conglomerate remain under the control of the Sehgal family.
Sehgal, who's estimated net worth of $3 billion and ranked 1,565th on Forbes magazine's global list of billionaires in 2014, is self-effacing and frequently joked during an interview.
If the group's corporate structure is complex, the work flow at the top is intentionally very simple, he said.
It's something of a family business, mirroring its 1975 start. Sehgal and his son, Laksh Vaaman Sehgal, handle big picture growth and teams of professional managers are responsible for operations.
“If I'm going to be only signing checks and looking at the operational parameters and all that, who the hell is going to look at the growth of the company?” he asked. “It's good that my son also believes in that. We are the entrepreneur side.
“There's a management side, management side is 100 percent focused on running,” he said. “We don't confuse the two. If you're related to me by blood, you're not on the management side.”
It carries over into MSSL's 38 joint venture companies worldwide, he said.
“That's the reason the joint ventures do very well,” he said. “They don't have a fear of the family sitting on top of it.”
Sehgal said a key strategic goal is to diversify the customer and product base, what it refers to in shorthand as 3CX15: no company, country or component should be more than 15 percent of its business.
It doesn't always meet that — Audi was 21 percent of its business in its last fiscal year — but it's a target.
It's also grown internationally. In 2005, 29 percent of sales came outside India, but today more than 80 percent of sales come outside its home country. Its customers increasingly want the company to set up factories worldwide, he said.
Sehgal said he travels 300 days a year, keeping tabs on the far-flung organization, its 170 facilities on five continents, and charting its direction.
“When Ford was wanting to look for good suppliers in South Africa, they called Motherson in to go to South Africa,” he said. “They liked it so much that Toyota, when they saw the plant, they said can you also come to Durban. It's more these kind of matters that keep me busy.
“The real success of Motherson is gaining the confidence of the car maker,” he said. “When your companies are focused on that and they are delivering based on value to the car maker, that's the reason he will keep calling on you to give you more and more opportunities.”
