Havells by Anil Rai Gupta

Author:Anil Rai Gupta
Language: eng
Format: epub
ISBN: 9789385890475
Publisher: Penguin Books Ltd
Published: 2015-12-09T16:00:00+00:00

THIRTEEN

Jallandhar King

At the turn of the century, QRG was sixty-three. At that age, most people lose all appetite for work and begin to plan their retirement. Not QRG—he was as excited about business as a child. In spite of his severe health problems, most notably rheumatoid arthritis and dry eye syndrome, it seemed that nothing could slow him down. By 2000, our appetite for growth had increased manifold.

There was also the confidence that we could digest acquisitions. Apart from Towers & Transformers and Duke Arnics, in 1997 we acquired a Noida-based company called Electric Control & Switchboard that made panels to house MCBs and MCCBs from one K.C. Agarwal for Rs 3 crore. We bought it because even Larsen & Toubro had a similar business.

But we realized in no time that it was a low-technology product, which meant the profit margins were very slim. The payment cycle of up to 150 days was unusually long. Also, we could not sell it through our existing network of distributors. So, in a short span of time, we mothballed this business.

We were now on the lookout for a bigger acquisition—one that would help us leapfrog over rivals in the marketplace. Several names would get discussed in the morning meetings but nothing fruitful came up. Then, one day, somebody mentioned Standard Electricals.

This was a company that had been in operation since 1956. There were four founders—J.K. Gupta, J.M. Goyal, V.P. Mahendroo and Ajit Ranade. The company made switchgear for industrial as well as domestic use at its factory in Jallandhar in Punjab. Until the nineties, it was bigger than Havells and a very respected name in the business.

During the years of Punjab militancy, Mahendroo and Ranade had relocated to Delhi to look after market development. Eventually, in 1990, the two opted out and started their own company called Indo-Asian Fusegear. Standard Electricals was now owned by J.K. Gupta and J.M. Goyal.

Somebody pointed out to us that both the promoters had daughters, and would therefore not mind selling off the company. It was a sad commentary on gender inequality in the corporate world, but it was the bitter truth. Today, there are quite a few businessmen who have inducted their daughters into business—Adi Godrej, Prathap Reddy, Analjit Singh and Kishore Biyani, among others. At that time, especially in the extremely patriarchal northern India, businesses were passed on only to male heirs.

We were definitely interested in Standard Electricals. The company had a strong brand, Standard, which was once bigger and stronger than Havells. It was felt that a two-brand strategy would work well for us. Standard would give us new markets and distribution channels. For instance, it was strong in the south where we were weak. Its factory at Jallandhar was said to be better than the Havells switchgear factories at Kirti Nagar and Badli in Delhi.

In several ways, Standard Electricals was a good fit with Havells. Instinctively, QRG dialled J.K. Gupta in Jallandhar and said the two of them should meet whenever he was next in Delhi.

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