Nimesh Desai is the director of Techcellency Engineering, Pune. A mechanical engineer, Nimesh set up his company in 1998 which is reckoned as a noted manufacturer and exporter of Automation Systems, Pallets For Engine Assembly, BIW Welding Fixtures, Sub Assembly Fixtures & Tables, Machining Fixtures, etc. A young and dynamic visionary, Nimesh is keen to take his company to global scale. Last year Jendamark, the South African company brought majority stakes into his company. Talking to SME Post, he outlines his plans.
Q : What prompted Jendamark , the South African firm to take a majority stake in your company.?
A : We have been the vendors of Volkswagen since almost a decade. We had helped them in setting up the plant at Chakan in Pune. Jendamark wanted to set up a unit in Pune that will provide automobile components to Volkswagen. Since they were looking for vendors who could provide the components and services to Volkswagen, the company (VW) suggested our name to them. This is how we came into contact with Jendamark and I became their vendor. This association proved to be a turning point for us as we did a lot of business together. Jendamark liked the quality of our work and we became a sort of sub-contractor for them. The South African company found that there was much more opportunities in India waiting to be tapped as India was not only fastest growing country but also most economical in terms of product and services. To scale up the operations in India they felt it would be better to do a joint venture with an Indian company. Given the good experience they had working with us they felt that we would be the best choice.
Q : What pre-deal evaluation did they make before buying your companies majority stakes?
A : They performed due diligence through KPMG which is is one of the largest professional services companies in the world and one of the big auditors. Once Jendamark was satisfied about the credentials of Techcellency we agreed to sign on the dotted lines in 2013.
Q : What is the stake ratio in this merger and acquisition?
A : It is 74:26. The majority stake is with Jendamark.
Q : Every merger and takeover involves some kind of business integration. Often this is not a smooth affair because of differences in work culture. How has been the experience in the case of your company?
A : Depends upon how one looks at it. There is some dilution of power and authority which is not easy to digest. Looking at it purely from a business point of view it made good business sense because on my own it would take me a long time to take the company to the next orbit. But with the backing of Jendamark, it becomes easy. But from the emotional angle it was a gut-wrenching decision as Techcellency has been my baby whom I had nurtured and brought it to this level as a first generation entrepreneur. Handing over the majority shares of my baby was not easy. But I took this decision in the larger interest as I wanted to bring this company to global level.
Q : In what way is this association going to add value to Techcellency Engineering and other stake holders?
A : Running a one man company is a herculean task. It has its limitations in terms of finance, manpower, infrastructure and reach. When I was running the show single handedly I hardly had any time for myself and my family. This is not the case now as there is no dearth of manpower and revenue is not a constraint. I am also keen to contribute something back to the society and country, but I hardly had any time. Now after this merger I am able to return something back to the society. It also gives us global identity. It will also help in increasing my company’s turnover.
By Chandran Iyer
