When green technology mints greenbacks

Written by fe Bureau | Updated: Jan 31 2008, 07:23am hrs
The back of the beyond lanes of Shajahanpur in Uttar Pradesh remind you of the Bunty and Babli world. Success stories are pretty much scarce in this environment. So in the span of a month, if an entrepreneur from the soil bags the double of E&Y award for the emerging entrepreneur of the year and a five upon five rating from rating agencies, incidentally the first such grade in India, for the companys maiden public issue, it is something to really dig into.

Acme Tele Powers is a Rs 6.4-billion company today. But in every respect the company revolves around its managing director and founder, Manoj Upadhyay. In his foray from the polytechnic with a diploma in electronics, he went on to become a research engineer at Benning Gmbh of Germany, going on to become the technical head of Benning's joint venture in the country, before he chucked all that to set up Acme.

He is of course happy, with the attention that has come his way. The E&Y trophy sits proudly in one corner of the room. And he is delighted with the rating. I am especially proud of the fact that this is perhaps the first time that Crisil has given such a high IPO grading to any Indian company. Crisil, which is Indias largest independent research and rating agency, makes a very comprehensive assessment indeed of the fundamentals of a company and the high grade that we have received speaks volumes for our management quality, prospects, performance and corporate governance.

There is no doubt that the business model that he has pioneered is out of the box. The companys business plan centres around energy efficiency. Over the years the company has forayed into high-energy usage segment, using its products to cut down on costs.

For example, the company has provided green energy shelters for telecom towers. Each such tower requires an air-conditioned capsule to control the heat build up in the shelters from the equipments that transmit billions of data packets that make our mobile world come alive.

Upadhyay says his company provides an end-to-end solution that retains cooling, including inside the shelter for a prolonged period often running an air-conditioner that just barely touches 24 centigrade. On sites in far-flung corners of remote districts the savings in diesel and the hassles for the operators can be really impressive.

How much does this translate into as savings Ballpark figures show that energy consumption is about 60% of the total running costs of these silos. Upadhyay calls this Greenovation. He could say that the reduction in greenhouse gases and the accumulation of carbon credit is a by-product. Small wonder then that the companys revenue is growing at a CAGR of 100%.

Technology has to have a socially beneficial spin off. It must replicate the energy usage of devices at a lower cost, he says. This means making the green approach financially rewarding, he adds.

Coming back to the green shelters, Upadhyay says that each of them houses the BTS and electronic equipment and comes fitted with a PIU, PCM and the air-conditioner that stretches the life of cooling by at least 24 hours. But he is already moving on to the next generation shelters that will use nano-cooled panels. They use a micro thin coating, hence the word nano, over the standard insulation coat on the surface of the shelters.

He is brimming with ideas. Take the case of power distribution. Delhi has a tremendous shortage of power. But another problem is the capacity of the distribution network to evacuate power. This requires a radical solution. His pet project is basic research. Even now the company spends over 5% of its turnover on research, but Upadhyay says it is basic research that India needs. Those laboratories may produce results once in a generation, but I am convinced that industry has to finance them. He has financed one and chuckles about a grant made by the company to a Portuguese university. They were so surprised. They were not accustomed to getting a developing country entrepreneur talk of grants instead of asking for those.

Incorporated in January 2003, the proposed IPO will offer 17.3 million shares by the promoters. Subsequent to the IPO, the promoters stake in the company will reduce to 84.6% from 94.7%.

The company has now diversified into power regulation equipment too. It has manufacturing facilities at Pantnagar in Uttaranchal and Parawanoo in Himachal Pradesh. Until March 2005, the company had an exclusive agreement with Bharti Airtel, the market leader in mobile telephony, under which it could not sell its products to other operators until it had satisfied Bharti Airtels requirements, but Upadhyay says the business relationship between the two companies continues to be strong, long after the agreement has expired. For the year ended March 31, 2007, Acme Tele Powers has reported a net profit of Rs 2.30 billion on a turnover of Rs 6.43 billion, as compared with a net profit of Rs 1.16 billion and revenues of Rs 3.85 billion in the previous year.