Behemoth PSU eyes glory days again
By Ramu Patil | Express News Service | Published: 18th July 2017 09:10 AM |
BENGALURU: After being in the red for over 15 years, India’s first Public Sector Undertaking (PSU), Indian Telephone Industries Ltd (ITI), is now on a revival mode. The company is latching on to the startup bandwagon and throwing open its facilities to companies with new ideas. It is also foraying into new domains like Internet of Things (IoT).
The state-owned firm that had over 35,000 employees -- 19,000 in Bengaluru alone -- on its rolls during its heydays in the 1980s became a sick PSU in 2004. It was unable to withstand competition from foreign firms post liberalisation. But now, the company is looking to turn the tide in its favour.
“We have signed teaming agreements with 22 startups that work in engineering, mechanical and software development domains and we are offering them our manufacturing hubs,” ITI CMD S Gopu told The New Indian Express. “We are ready to work with people who have good ideas and are in need of investment and manufacturing facilities.”
Working with start-ups will help ITI foray into newer areas and bring in revenues. Currently, the rate of utilisation of its manufacturing facilities is around 35 per cent. “The plan is to make use of their ideas and our experience and facilities to venture into newer technologies and products,’’ says Gopu.
The idea to rope in startups was mooted by Gopu and K Alagesan, Director-Production, ITI. Both started their careers with the PSU in 1982. “We have seen the company at its peak and also when it became sick. So we are able to identify the gaps and take steps to revive it,’’ Gopu says.
The company’s financials started sliding from 2002-03 and continued till 2014-15. After that, it was able to reduce it losses and even turned profitable (with government grants) in 2015-16. Next year, the company is confident of showing profit on its own.
The company’s total income for 2016-17, after taking into account government grants, was Rs 1,903 crore, up from Rs 1,674 crores from the previous year. As on date, it has an order book of Rs 1,600 crore.
“Our loses have drastically come down from Rs 247 crore in 2015-16 to Rs 56 crore in 2016-17, which is a big achievement. We are confident of showing profit on our own in 2017-18,’’ said Alagesan.
This is significant for the PSU that had last recorded profits in 2001-02. The company, which reduced its employee strength from 35,000 to 4000 and had almost decided to close some of its units in north India, is now hiring engineers to work in new domains and is working on establishing many new facilities including a data centre by investing around Rs 200 crore.
ITI holds a large chunk of land — 380 acres to be precise — on either side of Old Madras Road after KR Puram bridge. It is now monetising the land by giving it on short-term lease to government and private firms. Wary of legal complications, the management is not even considering the option of selling its land. “Sale of land is a taboo for any official, so we thought of giving it on short term lease. We do not want to start any impossible task,’’ the CMD said.
Gopu and his team are confident of reviving the lost glory of the PSU. “That gloomy feel is now changed to lively environment. We have put the rail on tracks and it will move forward in right direction,’’ he added.
Many firms like Vijayawada-based Efftronics Systems Pvt Ltd have shown interest in partnering with ITI. “We are in talks with ITI for providing complete solutions for the Smart City project and we are also working on Swachch Bharat mission by developing a feedback mechanism to get real-time information about utilisation of restrooms,’’ Executive Manger D Anvesh told Express. Efftronics is a 32-year-old company that provides various software solutions to Indian Railways. “We have designed the system that will be manufactured by ITI,” he added.
Bengaluru-based medical diagnostic equipment maker Cardiac Design Labs too has signed an agreement and is in talks with ITI to manufacture its devices at the PSU facility. “ITI has manufacturing facilities and is a government establishment. We do not have to prove our credentials (to market our product),’’ said the company founder Anand Madangopal.