The business community from Rajasthan has traversed the country and even spread its wings overseas—all in the quest for enterprise
Jahan na jaaye bail-gaadi, wahan jaaye Marwaadi. (A Marwari [businessman] reaches even where a bullock-cart cannot) This phrase, or versions of it, has been a part of folklore in many Indian towns. Its essence—that the Marwari will find opportunity even in the most seemingly unreachable places—effectively highlights the ubiquity of the trader community from Rajasthan that has dominated India’s trade and commerce over centuries.
Anurang Jain / 51
Founder and managing director,
Endurance Technologies,
Aurangabad
Why He Matters
Starting from scratch in 1985, Jain has grown the company into one of the largest component suppliers to two- and three-wheeler makers in India. He also exports components for commercial and passenger vehicles to premier car marques Daimler, Audi, Fiat and Porsche.
The Endurance group now has 19 manufacturing facilities in the major auto hubs in India and subsidiaries in Germany and Italy.
Turnover
Rs 3,853 crore in FY13 with margins of 4.5 to 5 percent. Top line grew by 10 percent in the last year, despite the downturn in the auto industry.
Starting Up
Inspired by maternal uncle Rahul Bajaj, Jain set up an auto components company, Anurang Engineering, with twin brother Tarang in Aurangabad in 1986. They started in the aluminium die-casting business, supplying mostly to Bajaj Auto. Aurangabad was a notified backward area at the time; consequently, it had great incentives including a 10-year sales tax break for industry. By the mid-’90s, the brothers decided to chart their separate course and Tarang split to form Varroc Engineering. Anurang changed track, moving to proprietary products in four main areas—suspension, transmission, braking and aluminium casting. He also began building his own tools and tied up with European companies for research.
Turning Points
Till 2004-05, Bajaj Auto was Anurang Jain’s company’s foremost customer, dominant by far. Moving to a more diverse clientele—thereby de-risking the business—became critical for Anurang. He did this by expanding—building new units at Manesar and Chennai to serve customers like HMSI (Honda Motorcycles), Bosch and Hyundai.
This was a period of rapid growth at the end of which Anurang Engineering was merged into the new Endurance Technologies, in 2006. Business also moved overseas with two European acquisitions. And there was venture capital interest with Stanchart PE taking a 13 percent stake in 2006 (Actis picked this up in 2011).
Turnover had scaled up to Rs 2,400 crore by 2009.
Hairy Moments
The slowdown of 2008-09 hit Endurance pretty hard. Business from global manufacturers such as Daimler and Audi reduced as luxury car sales dropped. A tough period was to follow. Jain had gone the whole nine yards in the previous few years, acquiring debt of close to Rs 900 crore. The aggressive growth had come at a very high cost. “Despite a decent turnover, the company made a book loss in 2008-09; the only way out was drastic financial control and discipline,” he says.
The next few years were marked by a painful scale back. The company’s net worth was wiped out and it had revalue its assets. Jain stopped all new investments, let go of loss-making businesses and re-aligned his company. For example, the plant at Chakan was shut down and all production was brought to a single location at Aurangabad. “Customer demand would keep growing and the only way to service it was to relentlessly improve quality through R&D,” Jain says. Through cut-backs and consolidation, he was able to bring Endurance back to black in 2009-10. Non-critical operations have been outsourced to third-party vendors. Endurance today does about Rs 150 crore of exports. “The mantra is to only take on business that brings in cash,” says Jain who is far more cautious now. An outcome of this prudence is that manufacturing activity is concentrated in fewer plants, and there is economy of scale in each unit. The strategy is to stay focussed on the two- and three-wheeler business which he says has fewer players and is more stable. About 80 percent of the group’s activity is in this segment. The European subsidiaries, on the other hand, cater exclusively to passenger car-makers. Bajaj Auto remains the anchor customer and accounts for about 60 percent of Endurance’s business in India. “I would like to diversify further but I also don’t want to lose out on any growth coming from Bajaj,” he says.
Being Marwari
Jain says that he has inherited his Marwari acumen—particularly, risk-taking—from his mother, who takes a keen interest in his enterprise. His father, a Jain businessman, has played a key role in helping him navigate the often cunning landscape. As young men, both brothers apprenticed with uncle Rahul Bajaj for 18 months at his Pune plant and were inspired by him too. “Ups and downs of the past decade have also taught me a few hard truths,” he says.
JP Taparia / 69 and Sons
BR Barwale / 82
Dilip Surana / 48
Kanhailal Lohiya / 66
(This story appears in the 21 March, 2014 issue of Forbes India. To visit our Archives, click here.)