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A large Ganesha idol still in its polythene wrap is the lone fixture in an otherwise Spartan boardroom at the Bangalore headquarters of Milltec Machinery. It is an appreciation award from the Rice Millers Association of Tumkur, a neighbouring district of Bangalore. Certificates for quality excellence and achievements occupy most of the wall behind the idol. Milltec deserves the accolades: For 16 years it has been making rice-milling machines, used by a third of mid-market rice millers across India.
The milling process involves removing husk, polishing and grinding grains. When R Ravindranath and J Rajendran—two of the four original founders—started the company in 1998, they made only rice milling equipment. Over the years, they broadened the range of machines in the agri-processing industry and now manufacture roller flour and maize mills and plants to process pulses. Today, it dominates a segment that once relied solely on less organised and hyper-local suppliers with no guarantee of after-sales support.
Milltec caught the attention of private equity investor Multiples Alternate Asset Management only last year when the founders were unable to agree on the company’s growth plans. With Multiples investing Rs 180 crore, Ravindranath and Rajendran bought out their partners for Rs 250 crore. (They took a Rs 35 crore loan from L&T Finance.) Multiples—founded by Renuka Ramnath—has a 49 percent holding. The deal left the duo with a 51 percent stake.
The men behind it
Milltec was born out of water-cooler chats and tea-break conversations between Ravindranath and Rajendran, engineers and colleagues at Bühler Holding AG’s India unit in Bangalore. Their conversations became more specific, and the idea of Milltec was born: It would steer clear of large millers that companies like Bühler cater to, and small home-grown millers. Instead, it identified the untapped Rs 600 crore mid-segment market, which it now dominates. Colleagues and industry experts were sceptical, which made the founders all the more determined.
Milltec started at a time when the technology that the founders had seen at Bühler—sheet-metal technology and laser cutting tools—was hard to come by. “It’s not like we built a machine and installed it and everything was fine. Things went wrong, we had to tweak the design, even take back the machines sometimes, until we finally got them working,” the founders said.
Rajendran, 48, drives operations while his fellow MD, Ravindranath, 51, is responsible for galvanising millers to buy their machinery. “I didn’t want to work for other people. I wanted to be my own boss,” says Ravindranath, who can look back at the 15 years of toil with justifiable pride. Milltec made revenues of Rs 190 crore in FY2014, and targets Rs 275 crore for FY2015.