T ill the year 2000, Amit Mittal was the regular middle-class guy you’d meet on the roads. He was safely ensconced at state-owned gasoline retailer Hindustan Petroleum. He had a comfortable job as a civil engineer, setting up projects all over the country. And to top it all, as a signal of his status as a high-performer, the company had allowed him a perk reserved only for its top officers: He was entitled to fly on official duty. Yet, one fine day, the 34-year-old Mittal did something that shocked his family: He put in his papers, without another job in hand. His father, a professor at a local college, was aghast. His mother was in tears. “There was a huge emotional drama playing all around me,” says Mittal.
The immediate provocation: His bosses at Hindustan Petroleum wanted him to move to a new assignment in Visakhapatnam in Andhra Pradesh. He had already gone through 15 transfers in 10 years. And he simply wasn’t ready to leave the Capital, just when the idea of starting his own enterprise had begun swirling in his head. After a few months in the wilderness, he finally chose an assignment at Sapient to set up operations in the country. But as Mittal scurried between different government offices to get the necessary permissions to start up Sapient’s business, his resolve increased. “I thought, if I could do it for someone else, I should be able to do it for myself too,” he says.
That’s when Mittal set up A2Z, initially as a facility management company. His team of men, whose salaries were his only liability, would do housekeeping and manage facilities for clients, especially the electric part including power usage, maintenance of air ducts and meters. The quest to seek larger clients in this business led them to mobile telephony companies, who needed assistance in managing their large network of towers. All this while, A2Z acted only like a labour contractor, taking on sub-contracting work from a clutch of larger firms.
Of course, the social stigma associated with low-end work didn’t go away. Every time he would meet acquaintances in firms like Fidelity and KPMG to pitch for business, they would give him unsolicited advice. As an engineer, why did he choose such an unglamorous business of housekeeping services?
Fortunately, Mittal wasn’t swayed by their advice. Today, he’s built a Rs. 1,200 crore enterprise. He has Big Bull Rakesh Jhunjhunwala on board as a strategic investor. The marquee investor, who has a knack of spotting promising startups early, bought a 22 percent stake for Rs. 30 crore four years ago, when A2Z had a mere Rs. 50 crore in turnover. That stake is now worth hundreds of crores. Merchant bankers peg A2Z’s enterprise value at about Rs. 4,000 crore. And Mittal and his family hold more than 50 percent in the firm.
In many ways, Mittal’s breakthrough is a clear signal of the emerging opportunities on the fringes of the huge infrastructure build up taking place all over the country. In October, Chennai-based VA Tech Wabag, a sewage treatment company, listed in the bourses and is valued at Rs. 1,750 crore. Hyderabad-based Ramky Infrastructure, which also does waste management among infrastructure projects, has a valuation of Rs. 2,150 crore. “These are the smaller stories of the infrastructure play, especially in areas where you don’t need a lot of capital,” says S. Venkatraghavan, director, IDFC, one of the lead managers to the initial public offering of A2Z.
Mittal is already relishing his new avatar as a serial entrepreneur. He sees a big future in generating power from agricultural waste across the country. He’s also planning how to create a new, private distribution network across India’s numerous cities and towns. There’s yet another plan to replicate a successful waste management model in Kanpur to other large cities like Mumbai.
All these ideas are, of course, far removed from the original facility management business he started with.
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