Rural liberator

He is from Rahimatpur village in Maharashtra’s Satara district. His family moved to Pune when he was 12. His mother was a municipal school teacher in Pune. He lost his father when he was 17. He grew up in a 10x10 room along with his younger brother, mother and his grandparents. He went on to get a degree in engineering from VIT (Vishwakarma Institute of Technology) Pune and paid his fees by tutoring diploma students, selling jams and pickles door-to-door and taking up painting contracts.

BVG Indias CMD Hanmant R. Gaikwad (sitting) and Vice Chairman Umesh Mane (standing to his right) along with workers from the mechanised cleaning and landscaping department.

Today, Hanmant R. Gaikwad, 37, is Chairman & Managing Director of a Rs 200-crore company. But wait, here’s where this rags-to-riches story takes a twist. Gaikwad didn’t make his crores by hitting the big-city trail and starting up some cutting edge venture. Rather, he dug his heels into his home turf—and even as he emerged as a messiah for the mass of rural unemployed, Gaikwad discovered a huge virtually untapped catchment area for a manpower-intensive business that neither calls for fancy degrees nor corpulent pay packets.

Gaikwad is the man who founded Bharat Vikas Group (BVG) India, one of the country’s largest facilities management companies based out of Chinchwad near Pune. BVG India provides non-core activities such as mechanised housekeeping, landscaping & gardening, and security services to private and government institutions with the help of a 16,000-strong ready-to-move and trained and pan-India workforce.

One of those employees is Bablukumar Pandey, a 22-year-old who came to Pune from a village in Uttar Pradesh in 2006. Pandey sold fruits for a living outside Pimpri-Chinchwad Municipal Corporation’s Yashwantrao Chavan Government Hospital. During this time, he would watch uniformed boys of his age group working in the hospital. He got curious one day and started enquiring about the kind of job they do. In six months, Pandey was one of the helpers doing mechanised cleaning work at the hospital.

For Gaikwad, youth like Pandey are the fuel that keeps the BVG engine humming. And that the promoter himself is no stranger to the hard life, perhaps, allows him to empathise with those who rush to him for work. They’ve been rushing to him ever since the mid ’90s—from his hometown— when Gaikwad landed a job at the Tata Motors’ Chinchwad plant as a graduate trainee. Before that, when in the third year of college, he started a foundation called Bharat Vikas Pratishthan (BVP) to help the youth from his hometown. BVP would accept donations, which would be used to educate the underprivileged in his hometown.

At Tata Motors, Gaikwad would on a regular—and informal—basis supply the company with youth from Satara whenever it was looking for people. The breakthrough came when Tata Motors was on the look out for a housekeeping contractor for its mintnew Indica plant. Gaikwad proposed that the contract be given to BVP. Tata Motors agreed. That’s when BVP began operations in 1997 as a housekeeping company with just eight employees.

In three years, BVP had grown into a 200-strong outfit, with Tata Motors as its only client. In 2000, Gaikwad called it a day at Tata Motors, converted the foundation into a deemed limited company, renamed it BVG India and extended its operations to include services such as landscaping & gardening, security services and transport & logistics.

More to follow
BVG’s first contract outside of Tata Motors was worth a princely sum of Rs 80,000, from a GE Power Controls India’s unit in Bangalore. “Ten people from Maharashtra left in a Tata Sumo to clean the plant site,” recollects Gaikwad. Soon after, more clients signed up, including the likes of Bharat Electricals and Parle Biscuits. In three years, BVG had set up outposts in Chennai and Hyderabad.

If getting the Indica contract got Gaikwad on his way, what enabled BVG to move into another league was the first contract it got from the Indian Parliament in 2003 to clean its 600,000 sq. ft library. “The contract was on a six months trial basis. They were happy with our work and thereafter, we got the contract to clean the whole Parliament House, barring the inner chambers. Gradually, we started cleaning the Prime Minister’s residence and office and now we manage the Rashtrapati Bhavan as well,” says Gaikwad.

Today, Tata Motors is still BVG’s largest client, but he has some 300 others in the bag, including the who’s who of India Inc.—Mahindra & Mahindra (M&M), Bajaj Auto, Hindustan Unilever Ltd (HUL), ITC, Accenture, Whirlpool and Wipro; as well as state-owned companies and institutions such as Oil and Natural Gas Corporation Ltd (ONGC), Indian Railways and the Indian Navy. All these contracts were bagged on the basis of tenders floated.

What essentially started as a means to keep sections of Maharashtra’s rural youth employed is now an all-India venture. But this also presents a challenge—of coming to grips with cultural and work ethic-related nuances of workers from different regions. That’s one reason Gaikwad prefers not to rely totally on locals at any given location (outside Maharashtra). He maintains a 30:70 ratio (with 30 being from ‘outside’).

Leadership position
BVG’s leadership position in a niche segment has got investors to sit up and take notice. In February 2008, Kotak Private Equity took a minority stake in the company by pumping in Rs 30 crore. “We were scouting for a good company in the facilities management space, which is an emerging sector and has huge potential in the long run,” says Nitin Deshmukh, CEO, Kotak Private Equity Group, adding: “We met Gaikwad and were impressed with his vision and the work done so far. After a complete due diligence, we were convinced that BVG had great potential to be among the top three players in facilities management.”

The economic downturn has put a spoke in BVG’s growth, what with companies quick to axe non-core staff as a knee-jerk cost-cutting move. At Tata Motors, for instance, BVG was told to cut its workforce from 800 to 450. “We did face a problem with some big clients cutting back on costs and asking us to reduce staff in their premises. But that has not forced us to retrench staff. We deployed them at other client locations,” says Gaikwad. BVG today is focussing sharply on government contracts, a sector that tends to be more resilient during a slowdown. Currently, the company’s business mix is 55:45 in favour of private enteprises. Gaikwad is keen on a 50:50 mix.

Despite a drop in profit margins early in the current fiscal, Gaikwad is confident of achieving his targets for the year—which includes a 50 per cent jump in turnover to Rs 300 crore. But even as Gaikwad gets more performance-focussed— thanks to an investor on board— he doesn’t seem to be forgetting his initial mission. Recently, BVG propagated a low-cost housing scheme for the low-income group, which has been implemented by the Pimpri-Chinchwad Municipal Corporation and funded by the central Government, in which about 500 BVG employees will get a 500 sq. ft house for Rs 1.5 lakh each. Shrugs Gaikwad: “Many people create wealth, but few think of sharing it.”