How Shyam Sunder Mundra turned Ujaas Energy into a Rs 500 crore business
After completing my graduation in electrical engineering in 1967, I landed a job with the inspection department of the Madhya Pradesh State Electricity Board in Indore. It was here that I first thought of doing something on my own in the energy sector because I took a liking to it. However, the journey to build the Rs. 500 crore Ujaas Energy was laborious and I had to ensure that I didn't lose focus on my other goals.
However, several years passed before a senior colleague helped me revive my dream. While I was working for the electricity board, I completed my masters in electronics and servomechanism (ME), in 1973, from the Indore University and then got an MBA degree in 1976. On clearing the latter, when I approached my senior to share the news, he told me that he had always wanted to start his own venture but couldn't, and that since I had shown enough promise to make it big, I should follow my dreams.
This interaction changed my life for the better. I had saved Rs. 20,000 and, with this money, I started Vimal & Co, a consulting business where I would inspect electrical installations for private players and suggest changes for better infrastructure. I also hired 2-3 people to assist me. I signed the first deal for Rs. 8,000 in May 1976. The client was extremely happy with our report and suggestions. Soon, more such orders followed. Our turnover in the first year was Rs. 40,000.
In those days, the state government had a scheme for unemployed engineers, wherein a project proposal meant that the government would help you procure a place and incentivise it in the form of subsidies. In 1979, we got a 15,000 sq ft space in Indore to open a manufacturing unit for control panel switches. I invested Rs. 1.5 lakh to start M&B Switchgears. The business was good, but we had to depend only on small contracts. The biggest challenge was paucity of funds for expanding operations as banks were not ready to give us a loan without a collateral.
In spite of the odds, by 1991-92, our business had grown to around Rs. 40 lakh. However, I was not happy with this progress. Two years later, my older son joined me and we decided to convert our business into a partnership firm. The move helped us get a bank loan of Rs. 4 crore and, within a year, we started producing all types of transformers, including distribution, power, furnace or rectifier and special purpose transformers. By 2010, our transformer business was generating Rs. 18-20 crore.
Meanwhile, in 2009, we carved out a separate company from M&B Switchgears and sold it off for Rs. 30 lakh. We also started planning the expansion of our business to other verticals and realised that solar power had huge potential. So, in 2010, we acquired 2.5 acre of land in Indore for Rs. 6 crore to set up a 2 MW solar power unit. We funded this project after getting a bank loan of Rs. 32 crore. In 2011, we decided to come out with our first public issue to raise around Rs. 93 crore from the market, which received a very good response.
The money we raised helped us to set up a 4 MW solar photovoltaic power generation plant at Rajgarh in Madhya Pradesh. We also started helping companies to set up their own power plants. In 2012, we signed an agreement with the state government to set up 99.25 MW solar power plants at various locations across Madhya Pradesh.
Source : By Amit Shanbaug, ET Bureau