Chini to Code, Vanaspati to Virtual - A short history of North Indian entrepreneurship

Author : Sunny Narang

Source : From LinkedIn Archives

Date first published : September 8th , 2014

Chini, Tel, Vanaspati, Atta , Sabun .

This is how industrialisation begins in North India .

Then comes Kapda , Sharab , Loha , Cement .

Modi, Thapar, DCM , Dalmia are the names we grew up with in the 60’s and 70’s. The words we heard of pow er and wealth were “Lala” or “Seth” . It was only in the late 70’s and early 80’s we started hearing the names of Ambanis who also took the Kapda route of Only Vimal

Or like Karam Chand Thapar the grandfather of now Avantha , Crompton Greaves was a Coal Trader in Calcutta then into textiles as well as molasses and alcohol.The famous DCM group was DCM Textiles by Ram Kishen Das Gurwale, in 1889 in Delhi, India.

Unlike in the west, most Indian business families have no archival tradition. Few corporate houses preserve recorded history that can be passed on from one generation to another. Instead, the news of the day, whether good or bad, is dealt with as a passing reference that is either praised or virulently denied in public. Public announcements are made as fast as they are forgotten. I would love a material history of entrepreneurship and innovation of India ,looking at how Indian entrepreneurs raised capital and built businesses in each era . And what kind of sectors boomed and why, and where did the entrepreneurs come from .

Ramkrishna Dalmia , born in 1893 in the small village of Chirawa in Rajasthan was a pioneer industrialist and founder of the Dalmia-Jain group or Dalmia Group and The Times Group. Dalmia started a trading business in 1930s at Dinapore near Patna in the State of Bihar.During the time when he was staying in Dinapore, he mooted the idea of establishing a sugar factory at Bihta in Patna District. This was done under the joint management of himself and Nirmal Kumar Jain of Arrah, a well-known local Zamindar. Simultaneously he set up another sugar factory at Dehri-on-Sone, Bihar. This place became known as Dalmianagar. At the time of India’s independence, he was among the wealthiest and most powerful men in India and maintained good relations with most political leaders.

It is doubtless true that Nehru and Dalmia disliked each other intensely. It is equally true that, in response to Dalmia’s vicious attacks on him, Nehru did call him an “ugly man with an ugly face and an ugly mind and a ugly heart”.

Born on August 9, 1902, in Mahendragarh, Gujar Mal Modi , in 1932 with a meagre amount of Rs. 400 he left for Delhi on the lookout for viable ventures. The village of Begumabad was finally selected as the site of his first independent venture — a sugar mill.After initial difficulties in managing the sugar mill, Gujarmal successfully managed to turn things around to make his debut venture into a profitable entity. One of Gujarmal’s major successes was the toilet soap factory, which began operations in 1941.

Gujarmal with the help of a Bengali gentleman figured out a way to produce toilet soap without the use of tallow — the substance used to make the soap cake dry and hard. Instead, his toilet soap factory used vanaspati, from his vanaspati manufacturing unit, which proved to be a huge success.

Begumabad village, which contributed about 571 acres (2.31 km2) of its area to the making of this city, is a much older place and is said to have been founded by Nawab Zafar Ali and to have been named Begumabad by a lady of the royal family of Mughals in Delhi when this place passed into her hands.

The present city of Modinagar was established in 1933, by Rai Bahadur Gujarmal Modi, with the establishment of a sugar factory in 1933.

The end of World War II in the year 1945, allowed the British Government to look back at the service provided by Modi’s organisations. To show their appreciation to Modi, the British Government decided to confer knighthood on Gujarmal Modi. But Modi earnestly urged the British to confer on him the Indian title of Raja Bahadur, instead. However, that title was generally reserved for big landlords or those who owned a large proportion of village property. Since Modi did not satisfy either criteria, the British Government decided to name the colony set-up by Modi as Modinagar to pave the way for him to be conferred the title of Raja Bahadur. Hence, in 1945, Begumabad was officially renamed Modinagar, in honour of Gujarmal Modi and his contribution to the township over the years.

After the first flush of Chini, Atta , Kapda, Cement , Tor Steel industrialisation in North India by the Lala-Seth , then came the Punjabi refugee NSIC supported engineering and manufacturing innovation in Jalandhar, Ludhiana , Faridabad , Rohtak, Yamuna Nagar , Ghaziabad and Moradabad .

It included garment exports , sports goods, decorative items, cycles , tractors , then motorcycles and Maruti . North became a small and mid industrial hub till Maruti and Hero Honda began their ascent .

So a combination of MNC-Public and MNC-Private soared . This was from the 60’s to 90’s , then comes the mobile revolution . Hero was co-funded by the Punjabi refugee families from Ludhiana to Delhi to Moradabad .

The third flush was when entrepreneurs like Shiv Nadar ex DCM and friends in 1976 jointly started a company named Microcomp Limited.The focus of the company was design and manufacturing of scientific calculators which later became HCL .

Sunil Bharti Mittal founded the Bharti Group. In 1983, Mittal was in an agreement with Germany’s Siemens to manufacture push-button telephone models for the Indian market. In 1986. Sunil Mittal had also launched the country’s first fax machines and its first cordless telephones. In 1992, Mittal won a bid to build a cellular phone network in Delhi. In 1995.

Then starts the outsourcing hub in Gurgaon. Pramod Bhasin started GE Capital International Services (GECIS) in 1997 as the in-house BPO division of General Electric (GE) when K.P. Singh convinced Jack Welch, the former CEO of GE, to outsource certain services to India at Gurgaon. It was under Pramod that GE hired Raman Roy, pioneered business process outsourcing in India, and expanded its operations from India to countries like China, Hungary, Guatemala,Poland, Mexico, Morocco, the Philippines, Romania, South Africa and the United States.

And then soon after the E-Commerce revolution begins from NCR .

MakeMyTrip was founded by Deep Kalra, an alumnus of Indian Institute of Management, Ahmedabad in 2000 to cater to the overseas Indian community for their US-to-India travel needs. With the success of IRCTC (Indian Railways Catering and Tourism Corporation)’s online business model which enabled the Indian traveller to purchase railway tickets on the Internet, things started to look brighter for the travel market in India. This was also the time when Low-Cost Carriers entered the Indian Aviation space. MakeMyTrip started its Indian operations in September 2005.
On August 13, 2010, MakeMyTrip was listed on the NASDAQ and went public, making a debut in the US market.

The company had raised $70 million by selling 5 million shares to US investors. At an offer price of $14 per share, the company was valued at close to $480 million, prior to the listing, but after the surge in stock price, the valuation has jumped to around $800 million.

Yatra.com in 2006 followed in Gurgaon . Then Delhi boys started Flipkart founded in 2007 , Snapdeal February 2010 (Almost all Delhi IIT boys !)

And the new buzz is all apps and gaming start-ups .

It is such a long journey from Chini to Code , Vanaspati to Virtual .