Bengaluru: Narayan G Sabhahit, Chairman and Managing Director of the Rs 200 crore turnover Techser Power Solutions Private Limited was recently felicitated by the Shri Akhila Havyaka Mahasabha for his contributions to the industry and society. A technocrat turned entrepreneur Narayan Sabhahit belongs to the illustrious Sabhahit family from Haldipur in Uttara Kannada district in Karnataka.
A family of legal luminaries: Late Justice G N Sabhahit, a high court judge was his father. Late Vishnu G Sabhahit, also a high court was his elder brother. He is also the President and Chairman of Justice G N Sabhahit Memorial Lecture Trust, which conducts the annual lecture series by eminent jurists to commemorate the death anniversary of late Justice G N Sabhahit. A first-generation businessman, Narayan G Sabhahit turned nostalgic to recall his arduous journey so far. Excerpts from the speech:
A company for technical services: Techser is an abbreviation for Technical Services. I was working with ABB company, and during this period, I developed the idea of starting my own company. Then, many multinational companies like Siemens, L&T, and NGEF, among many others, were offering services only to their own products. As power electronic Engineers, some of our colleagues pondered the idea of starting a new company to offer services to products of all companies.
Solving problems, servicing and installing heavy equipment: Once we started the company in 1988 it kickstarted very well while we were offering services to the paper industry, cement plants, and rolling mills which were all worth thousands of crores worth of projects. We not only solved their problems and did servicing but also helped them install heavy equipment, machinery, and other things like that. It went on this way for a year or two and we were also getting good money.
No takers for highly qualified new recruits: We also recruited highly qualified Engineers, trained them and assigned duties to the client companies. However, the owners of the companies refused to oblige them because they were juniors compared to us and weren't prepared to take risks with the new recruits. They commended our services but were not inclined to entertain our new employees. It was a really big question for all of us who came together to start the company.
From service, and consultancy to manufacturing inverters: It was a really big setback as when we started the company we had set a goal to take care of the employees and not only in making money. Hence, after offering services and consultancy for two years we got into the manufacture of inverters. Then making inverters was a big industry but, by and large, many people were not aware of what inverters meant. They even branded them as silent generators for generators made a noise while the inverters were more silent in comparison and functioned with the help of batteries. This way we got into the business of manufacturing inverters which is basically a service industry.
Never-ending service calls: However, these inverters also have their own limitations. Assuming that you had opted for an inverter capable of functioning for two hours in the absence of a power supply and the power cut extends beyond two hours, then the inverter will stop functioning. In the meantime, the battery would have been fully discharged and you would make us a service call. You wouldn't have poured distilled water into the battery, but you would prefer to give us a call. There would be power fluctuation and yet you opt to call us complaining that the inverter is not functional. As a result, we need many service personnel rather than for manufacturing. Since we have a service background we train the service people gradually to ensure that they become our effective service partners.
Expansion of the company in 1994: On the whole, the inverter sector is too small in terms of growth. About 30 years ago an inverter, including the battery used to cost around Rs 9,000/- which even now is around Rs 14,000/-. As a result, just to earn around Rs 10 lakhs we had to manufacture hundreds of inverters apart from any number of service calls. So we had to expand the company in 1994 to enable growth. Ganesh Sabhahit, my younger brother who did M Tech from IIT Kanpur and was working in the United States decided to come back to settle down in India.
Beginning of online UPS: We surged into the online Uninterrupted Power Supply (UPS) industry from 1994 onward. There are some differences between the online inverter and the UPS, as the inverter is a softline while the UPS is termed online. The inverter will be in offline mode when there is no power supply and online mode when the power resumes. On the other hand, online UPS means power conditioning as it controls voltage fluctuations and frequency variations. It also observes blackouts and brownouts and on top of it also gives backup and is clean power output. This type of power supply is helpful for computers, medical equipment, and data storage wherever it is required.
Ganapathi Sabhahit helps business development: In 1994, to expand the company and business we inducted two more Directors to set up the online UPS business. However, the online UPS business was small in the state at that time. In our industry, as it is sensitive equipment, you have the practice of empanelment. And to get into the list of empanelment, during 2002-03 they expected a turnover of Rs Five crores to a company. Ganapathi Sabhahit, our cousin brother who had joined us in 2001 aggressively promoted business development for the company. We went to different states and the turnover started doubling year on year and this enabled us to make our company Pan India.
Terrific competition in North India: However, when we started our company branches in Delhi and Punjab, we found out that there was tough competition in North India due to the Excise duty exemption in states like Himachal Pradesh, Jammu and Kashmir and Uttarakhand. The government of India had given the exemption of excise duty and income tax to generate employment for the local populace. So, we also thought of availing the facilities to boost the sales and passing on the benefits to the customers thereby facing the competition as well. Like this, we set up our Himachal Pradesh manufacturing unit in 2008 which continues to function to date.
Ganesh Sabhahit set up an IT Division in Mangaluru: Thus we went on to expand the business. Meanwhile, Ganesh Sabhahit, our brother suggested setting up an IT Division within the company as IT happens to be his passion. He had worked earlier with Wipro and has a thorough knowledge of the field and commissioned the IT Division from Mangaluru, which is another vertical of the company.
A Solar boom now: About eight years back we also entered the solar panel market keeping in mind the emerging trends in the ever-changing business trends. You all know that it is a solar boom now and if you ask anyone they will mention solar. Earlier we all believed solar means which gives us hot water through thermal power, which is a simple technology to get hot water. But, these days generating solar power with photovoltaic (PV) panels on rooftops or open land is in great demand throughout the globe. The state government has set up a solar project in Pavagada to generate 2,000 megawatts of power.
PM Suryagruha is in great demand now: The PM Suryagruha solar power project is in great demand these days and a sixty per cent subsidy is given up to a capacity of Three KV units. This scheme is very attractive and we have also introduced the same in our company. However, we have been in rooftop solutions for the last eight years and we are also one of the empanelled vendors for the PM Suryagruha project.
Ours is a first-generation business venture: Ours is the first generation venturing into business. Our father was a high court judge and so was our elder brother. Our elder sister is an advocate and so is our youngest brother. I felt like diversifying myself rather than becoming another lawyer of the legal family and chose to become an engineer. My younger brother Ganesh also followed suit and both of us have become technocrats.
A big challenge for first-generation entrepreneurs: Usually, there will be a big challenge for the first-generation to choose to be in business as there will be no guidance. On the other hand, Jains and Marwaris boast of a corpus fund through which they extend loans at a minimal interest like 0.5 or 01 per cent, but not for free. But nowhere else you find such a financial assistance facility though there are many small-scale industry associations and other such bodies. Although the small-scale industries association gives financial aid, they come up with some rigid conditions.
The first big challenge was working capital: So the first big challenge we encountered when we got into manufacturing was the working capital. When we approached the banks for working capital the first thing they demand is the collateral. We were the first generation entrepreneurs and our father was in judicial service and the family was dependent upon his salary. Our father had not even built a house and many of our partners also had no house of their own.
Rs Two lakhs after getting collateral from a relative: It was a really big problem and testing time for all of us. Somehow, a relative agreed to give collateral and with such generosity, we at last got Rs Two lakhs for the first year. By and large first-time industrialists opt to take it easy going after tasting success and go into buying a car, owning a house and making personal assets. I happened to be the President of the UPS Manufacturers Association and noticed that 80 per cent of the members were in the business for more than 25-30 years while their annual turnover never crossed Rs Five or Six crores. Their extracurricular activities will be any number but their turnover remains stagnant and they do nothing to expand the business. The reason for such a predicament is that their focus is more on personal requirements.
Our agenda was to build company assets: As ours is a partnership business, all partners resolved in the beginning that irrespective of whatever we accomplish the main priority should be to develop company assets. In 1994, we bought a small-scale industry unit at Ramachandrapura located on a quarter acre. Thanks to this deal we never came across any collateral problems later. From then on we set up our corporate office in Bengaluru manufacturing unit in Mysuru, office in Goa and around 8-10 company assets. Now it is the other way round and bankers are behind us offering huge loans as we already have enough assets to our credit. At the same time, we also know very well that they are tempting us for their own benefit while we are least interested in them. If we make 3-4 per cent net profit after deducting the salaries and expenditures the banks charge us 11 per cent which means they make more profit than us.
Company assets keep partners intact: By making company assets they not only helped the company prosper but also helped in keeping a long-lasting bond among the partners which otherwise would not have happened. The same would not have happened had it been individual assets as it is very easy to get detached. In a way, these company assets by themselves transformed into a great advantage for all of us.
Secret behind the success story: Well, many keep quizzing us on the success story and the reasons behind me smiling always. To them, we had to inform them that it is not that we don't have any tensions but no one else can resolve them but for ourselves. We have made it a practice to keep office tensions within the office premises and attend to domestic responsibilities while at home. Perhaps this clear-cut demarcation has helped us to keep our cool at both places. Of course, women will have the curiosity to know the happenings in the office; but we try to keep them in good humour to whatever extent possible. So having an imaginary wall between the home and office has helped us to a large extent.
Passion is vital to doing business: Many people are desirous of becoming businessmen, but to evolve into successful businessmen, having passion is the primary requirement. In the absence of the same, your priorities keep changing as and when you start making money...
...People with skill and attitude get into an illusion: Secondly, you should also have the ability to extract work from others. If you put a small triangle, then skill, knowledge and attitude constitute the three ends while any of these qualities growing will lead you to success. But, people with skill and attitude get into an illusion that no one else can surpass them. You might have observed that very few people have the skillsets, for instance, cricket. If someone has to play at the state level, only a few people can succeed...
...Only a few get ranks: Likewise is the case with knowledge; lakhs of people will be appearing for various types of examinations, but only a handful of them will bag the ranks. Hence with those having knowledge and skills, head weight will also be much. However, those with a positive attitude will be grounded to admit their ignorance and hire people with knowledge and skills to get things done. Hence, people with a positive attitude will have more chances to click in business. This is a simple yardstick to success. Generally backbenchers and Jack of all and Master of none type people develop into successful businessmen as they have a positive attitude.
Managers get more salary than the Directors: More than 50 per cent of our Managers get more salary than our Directors, which can also be attributed as a significant factor for our success story. All along we have not taken the profits and have invested the same in creating new assets for the company. Just like the employees we also make our own appraisals to have an understanding of our contribution to the company. If employees' contributions are more, naturally their emoluments will keep increasing. Among the 600 employees, more than 400 of them have been with us for more than 20-25 years. Another good thing is that most of them joined as Diploma engineers and were trained, infused with confidence, performed well, got married, bought cars, and had kids and their own houses.
-Manohar Yadavatti
Inspiring story!
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