BVG INDIA LTD

COMPANY NAME BVG INDIA LTD
NATURE OF BUSINESS SECURITY SERVICES
ISIN NO INE:257H01013
FACE VALUE Rs.10/-
PROMOTERS H R GAIKWAD
COMPANY WEBSITE www.bvgindia.com
bvg

In 1997 while working at Tata Motors, Gaikwad earned recognition from company management for his efforts in saving huge costs for the company by making productive use of cables otherwise marked as scrap. This recognition helped Gaikwad become known among the workers, and youth from his village started approaching him for jobs. He used the opportunity to request the management for some jobs for these youth. The plant management agreed to hire eight of them, but could not employ them on the company rolls. Gaikwad suggested that he could employ the people in a trust he had registered and Tata Motors could pay the trust. Given their confidence in him, Tata Motors not only accepted his suggestion but also helped him get Rs. 60 lakh in loan from Tata Finance to buy cleaning equipment. In 2000 Gaikwad formally resigned from Tata Motors and decided to name his organization as Bharat Vikas Group which was focused on a social approach to employment and skill development.

Bharat Vikas Group soon emerged as the leader in integrated service operations expanded into related facilities management operations and skill development in association with the Government of India. BVG’s other notable clients include the residence and office of the Prime Minister of India and the Rashtrapati Bhavan which is the residence of the President of India. As of 2012, the company is valued at Rs 1,000 crore and provides non-core activities such as mechanized housekeeping, hospital maintenance, landscaping & gardening, logistics, transportation, civil and electrical work, ambulance services, industrial and urban waste management etc. to private and government institutions. BVG is also expanding its operations into overseas territories.

n 2003, there was an unforeseen change at Parliament House: Members of Parliament noticed that the insides of the building, cleaned by the Central Public Works Department (CPWD), looked like they could do with some more scrubbing, while the areas around the library and the annex had taken on a brand new squeaky clean finish.

The CPWD, which had been cleaning government buildings in Lutyens Delhi since Independence, had outsourced part of their job to a little known company from Pune, Bharat Vikas India. Armed with high-pressure water jets and industrial vacuum cleaners, instead of the usual brooms and mops, Bharat Vikas managed to make such an impression on the MPs that they asked the firm to bid for contracts for the main Parliament building, Rashtrapati Bhavan and the Prime Minister’s residence.It has been eight years, and two governments, since then. But no matter who has held the purse strings, Bharat Vikas has bagged the contract each time. “Given that the Parliament is a very sensitive location to operate in, I would say their performance has been good,” says Neeraj Dasandani, executive engineer, CPWD.

Winning the bid to clean India’s highest corridors of power helped Bharat Vikas Group (BVG), the holding company, write its own success story and become the largest housekeeping company in India. But, in 2003, winning the bid to clean the Parliament House brought its own problem. It was a small company, with revenue of less than Rs. 10 crore, and bidding for the six-month contract would need an upfront investment of Rs. 50 lakh in equipment.

With 25,000 employees, BVG is not a large company. But India’s facilities management services (FMS) industry — estimated to be worth $2.85 billion by 2012, according to a Grant and Thornton report — is highly fragmented. It has just about 15 organised players (who have less than 10 percent of the market share) and 500 small operators, among whom many have struggled to grow.

Gaikwad and a colleague, Ganesh Limaye, saved the Tata Motors management Rs. 2 crore by suggesting ways to use old electric cables worth Rs. 2-3 crore that were simply going to waste at the plant. “At that time, no one would bother with old cables,” says Limaye, now in charge of BVG’s purchases. Gaikwad and Limaye studied the cables and realised they could be used for new car models after some modifications. This won Gaikwad instant recognition from his employers and this would help him in future deals and projects.

BVG got its first big break in 2001, when GE Power outsourced its cleaning. Gaikwad and eight workers drove overnight to Bangalore, arrived on a Saturday morning, and cleaned up the factory by Monday. Eight other contracts came in from Bangalore over the next few months, as did enquiries from Chennai and Hyderabad. It was his work at the Mumbai Fiat plant in 2005, however, which showed that cleaning was not his only forte.
The Fiat plant was located in the flood-prone Mumbai suburb of Kurla and the company wanted to shift it to Ranjangaon near Pune. This was a new job for BVG. Gaikwad remembered that in 1998, Tata Motors had imported an old Nissan plant from Australia for manufacturing the Indica. He tracked down former Tata Motors employees, many of whom had retired, and put them to the task of dismantling the Fiat plant. Fixtures were neatly labelled and trucked to Ranjangaon, where they were reassembled.

Gaikwad believes that BVG should not reject any job simply because it is something they have not done before. Last year, a small Maharashtra State Electricity Board contract came up, looking for a sub-contractor to lay cables in Satara. Realising that being the main contractor would be far more profitable, Gaikwad decided to take on the entire project, which included installing transformers, cables and sub-stations. He made a profit of 25 percent on the job. This year, the business of laying cables is expected to contribute 30 percent of BVG’s revenues.

To increase revenue, Gaikwad is aiming to get existing clients to increase the size of their contracts. So, if a customer has got BVG to clean its offices, why not let it handle their plumbing as well? Maintaining air-conditioning systems is another lucrative segment that the company is gunning for.

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