It’s been less than nine years since a Kolkata-based family of steel traders decided they couldn’t grow till they became manufacturers themselves. So they set up Adhunik Metaliks, a steel manufacturing company. In the short span since, Adhunik has grown into a roaring Rs 3,500-crore giant with interests in steel, mining and power. The excitement is only beginning, says Manoj Agarwal, the group’s managing director, and the architect of its recent strides, as he launches a plan to take his family firm global.

After I completed my schooling in Kolkata, I decided to test the notion that Indians in the northern and western parts of the country were smarter entrepreneurs. That is what I was often told. So I took admission in NIT Kurukshetra to study engineering. I subconsciously picked up the business acumen of north Indians. It was a good addition to my already born-for-business Marwari genes.

In 1993, I joined a family rolling mill business in Punjab to learn the ropes of the business. I worked there for six months before returning to Kolkata. I was immediately packed off to Jamshedpur where the family’s main trade was with the Tatas. I spent the next seven years setting up six service centres and improving trade relations with Tatas.

At that time, the Indian economy was opening up fast. Demand for steel was rising rapidly. I realised there was ample space for another mid-sized steel maker in the market. It was also a necessary business adaptation. By the end of the 1990s, most large and mid-sized Indian steel plants had modernised their production processes. Traders like us had no future in the new scheme of things. However, we did have an opportunity staring right at us if we dared to become manufacturers. It wouldn’t be easy but it could be rewarding.

We spent two years researching on how to build and operate a steel plant. We looked across India and abroad. Our extensive research did help. It’s what pushed us to grow faster. Another impetus was that government policies were beginning to change by then. Banks were becoming more open to lending and encouraging entrepreneurship.

A crucial decision that we took, based again on our research, was that we’d set up plants near existing and well-established steel plants. Our logic was simple. We’d automatically receive access to a running ecosystem and trained manpower base. We began with constructing plants in Rourkela (Orissa) and Jamshedpur (Jharkhand) in 2002-03. The decision stood us in good stead. We later acquired iron ore mines close by.

We formally launched Adhunik Metaliks Limited, our flagship company, in 2002. We signed an MoU with the Orissa government and invested around Rs 35 crore as seed capital. Luckily, the State Bank of India sanctioned our loan a month before the project. Their confidence in us, even when we were an unknown entity, was a huge morale boost for us.

I believe fortune favours the bold. But people who are both bold and wise are the real achievers."—Manoj Agarwal, Adhunik Metaliks

We started making profits from the first year itself. By 2004-05, we began working on phase II of our growth plan. We finally started producing quality alloy from the Rourkela plant. In 2005, we also inked an agreement with the Orissa Mining Corporation Limited for supply of iron ore. That was a critical partnership for our growth.

Things have moved briskly for us. We have signed on large clients. Today we are one of the biggest suppliers of steel alloy to the Indian Railways, the Indian Armed Forces, and to oil companies and auto manufacturers.

We went public in 2006. The listing was great for us. We were subscribed six times over. That was a good year actually. Celebrations continued right up to December when our Rourkela plant became operational. Incidentally, ours was the last steel company to go for an IPO. Since 2006, no other steel manufacturer has gone down the IPO route. We might be big today, but we’re still the youngest.

By 2007, we were growing rapidly. Our challenge was to break into the auto sector where established players such as Kalyani Steel and Usha Martin dominated. We marketed ourselves aggressively and offered lucrative discounts. Now, we’re one of the major players. Half of the steel we produce goes to auto manufacturers.

In the same year, we acquired the Orissa Manganese and Minerals Limited for a throwaway price of Rs 60 crore. Thus, we no longer need to depend on anybody for our raw material. But, my real “yahoo” moment was towards the end of that year when our stock crossed the Rs 250-mark for the first time. We all had tears of joy. The entire office was celebrating. We’d justified the faith that our shareholders had in us.

By mid-2008, we had not only grown the steel business manifold, but had diversified into mining. Adhunik started to plan a foray into the power sector. Over 67 per cent of India’s coal reserves are in the eastern part of the country. We had the three big prerequisites to get into this sector: we had land, raw material and water reserves. We founded our power company and acquired a forging company. Till then, we had depended on smaller forging firms. By doing away with this need to outsource, we rationalised costs, improved efficiency and, more importantly, had greater control over the product quality.

We were on a high when the global economic crisis hit. Life’s got this funny way of keeping you grounded. The first three months of 2009 were the toughest. Banks were reluctant to lend. To make matters worse, as an infrastructure conglomerate, we didn’t have cash surplus. We urgently needed cash to fund our growth. Finally, in mid-2009 there was a respite as a handful of banks agreed to lend to us again. We survived by slowing down our steel manufacturing. However, we ensured that we keep a huge stock of raw material ready so that we had the first mover advantage when markets returned to normality. We still suffered derivative and inventory losses though.

Today, we are a Rs 3,500-crore group, less than a decade after we started operations from scratch. We are proud of how we’ve grown. It’s not a small achievement.

In 2012, our youngest baby—Adhunik Power—will begin operations. In the next three years, we want Adhunik Group to be a global infrastructure giant. There’s no reason why we can’t be a Rs 10,000-crore firm by 2015. To get there, setting up operations in mining-rich countries (Canada, Australia and South Africa) is on our agenda. We’ll then list on the London Stock Exchange.

I am still 42 years old. But having spent close to two decades in this business, almost half of it running the Adhunik Group, I’ve picked up valuable lessons. I’ve taken calculated risks and gambled on key decisions. I allow myself to be driven by my gut instincts. I believe fortune favours the bold, but people who are both bold and wise are the real achievers.

There’s no substitute for hands-on experience. One may have an Ivy League degree, but the real world is different. The best entrepreneurs are those who have their ears to the ground. Take my word for it. The next phase of growth in India will come from the manufacturing sector in the developing states.