From Scratch To Listing

For many startups, the potholed road to eventual listing is no easy task. Here are five entrepreneurs who started afresh, and went the distance the last year.

When Ajit Issac took the entrepreneurial plunge from a cozy corporate job 16 years ago, little did he imagine that one day he’d be running a billion-dollar enterprise. “We never thought that we would be $1 billion dollars,” says Issac. “Today, when bankers tell us that we have the potential to be a $2-billion enterprise, it surprises me, but doesn’t knock me.”

The chairman of Quess Corp, which garnered one of the highest oversubscriptions (145 times), was the first entrepreneur in his family starting an HR services company, People One Consulting, in 2004, later purchased by Adecco. In 2009, Issac invested in Ikya Global as a promoter, later renamed Quess Corp; then saw it grow at a 50 per cent rate in the last five years. Quess has acquired nine businesses in the last five years, all different lines, and now has a staff of 1.25 lakh from 25,000 five years ago.

Right from the start as an entrepreneur, Issac has been driven by cash flows. “I have a bias towards businesses that generate cash year on year.” He also says that one has to treat people well and build a team, since attrition hurts businesses badly, and that discipline in everything one does is vital to building an institution. Issac notes that one has to be accountable for all decisions one takes as an entrepreneur, and wants to return value to shareholders. “We are building an institution for the long term, and we want to build a profitable one.”

For Devendra Shah, the entrepreneurial calling came because of the need to ‘do something’ for farmers. Shah recalls that many farmers were throwing away excess milk. So he set up a factory to process 20,000 litres a day, and distribute it under the brand name Gowardhan. That passion has now turned into a near half-billion-dollar enterprise, selling many varieties of dairy products from fresh farm milk, through whiteners, to cheese.

In 1997, Shah ventured into value-added products and entered into skimmed milk powder and ghee. And added a small cheese plant in 2004 when he saw that many people were importing cheeses.

In 2008, Shah made his first investment in expanding his product range, and set up a 40-tonne cheese plant, one of the largest in the country, even though his company was still small. “It’s a call we took, because we saw demand in the market. Now we have a 33 per cent market share in cheese.”

Shah is now looking at making whey protein, largely imported. ParagMilk Foods has started distributing high quality milk directly from farms to select cities such as Mumbai and Pune via the Pride-of-Cow brand.

Shah believes that one has to note the shifting dynamics of the market, then deliver products it needs. Competition is changing things fast, and one has to keep innovating on delivery channels to bring new products to the market.

Dhirendra Singh, too, took the long road to entrepreneurship, He sat for hours at retailers and small stores, trying to gauge what they and their customers really wanted. He started marketing juices through tetrapaks when he was 35, after having left a cozy government job. Says Singh, “I did not know the ABCD of the business. Everybody gives you a general idea about business but the truth is nobody knows the practical problems. I dove into it and spent a long time understanding what sells, and why.”

Initially starting with a loan, Singh started distributing juices in tetrapaks. When the business grew, and demand was rising, he realised that he needed to start his own manufacturing unit. In 2005, he opened a juice-manufacturing plant (capacity: 5,000 boxes a day). Singh initially built his business on loans, then took to private equity in 2010. “When you take private equity, it is decided that you want to do an IPO,” says Singh. “My initial investors are still holding.”

Singh still sees huge demand for juices in the country. For young entrepreneurs, he believes that one should plan projects and understand the businesses and one’s competencies. “All businesses seem to be good an the start,” says Singh, “But nothing works better than hard work.”

If execution is key to a successful business, Dilip Suryavanshi is quite adept at it. As a child Suryavanshi didn’t quite pass with good grades as his father, a police officer in Madhya Pradesh, was often moving. Later, though, when Suryavanshi settled in Jabalpur, he cleared engineering with honours, and joined his brother-in-law’s construction firm.

Suryavanshi set up several projects and, after learning the ropes of construction, decided to branch out on his own. Dilip Builders, then, constructed several commercial and residential projects. Most of these projects in his home town, Bhopal, were small. But he had a penchant for thorough execution and bid, through a joint venture, for his first large road project (of Rs 80 crore) outside Bhopal. “We finished the project in record time, and received a bonus,” he says.

Soon Dilip Buildcon was taking up several road projects across the country. Over the years, it has completed several projects in record time. It now has projects in 16 states and is the largest road construction firm, with 22,000 workers and a vast range of equipment. Suryvanshi says that with the help of technology such as in-house built GPS systems, Dilip Buildcon is efficiently utilising its equipment. He keeps tabs on each project every day, and believes that good research, logistics and planning are key to building a full infrastructure company. He considers that no effort goes waste, and that all success is within, not outside.

Kailash Katkar’s success did indeed come from within. Initially, Katkar ran an electronics repair workshop. As computers were making their presence in the market, he branched out in 1991 to repairing them. He encouraged his brother to learn computer science because it was an upcoming field, and a costly programme those days.

When his customers started facing problems with computer viruses, Katkar reached out to his brother to write computer programmes and tools to clean up such viruses. Initially, he distributed these free to his customers. When demand grew, he asked his brother to write software for such a product. In a year, Sanjay, with a small computer at home, burnt the midnight oil and released the first version of Quick Heal.

For Katkar everything has since been a great learning experience. Initially, he couldn’t get developers but as soon as his product was accepted, he hired good ones. With funding from Sequoia, he struck out into various fields such as enterprise security, firewalls, and so on. “I had a dream to take the company public, but I focused on creating more customers and getting revenues.”

Quick Heal became a market leader by 2008. There was no looking back then. Katkar reckons that the first business mantra should always be in creating and keeping customers. Says he: “When you create good customers, you create a good business.”

clifford.alvares@gmail.com