ACME TLELPOWER

Manufactures "passive" infrastructure products like enclosures, air conditioners and power management units for telecom companies. Founded by Upadhyay, 39.
Secret Sauce Materials that cool electronic equipment using very little electricity
Financial Dashboard Net sales (for the 14 months to May 2009) was Rs.2,130 crore; Net profit was Rs.505 crore; five year CAGR of 128 percent for sales and 122 percent for profit; Rs.300 crore cash flow generated from operating activities in a 14 month period; raised Rs.197 crore from DB International, Earthstone Holdings and Kotak Mahindra Capital in 2007 by selling 1.66 percent in 2007 and another Rs.400 crore from Monsoon India Inflection Fund and Jackson Heights Investments in 2008 by selling 3.35 percent. Acme's valuation in both cases was around $3 billion. But when market conditions delayed Acme's planned 2007 IPO, the company was forced to buy back most of the shares held by these investors.
What the Smart Set Saw A great inventor who understands energy applications inside out and has been able to build a business of Rs. 2,000 crore in just six years.

It is not often that a fast-growing company with revenues in hundreds of crores is able to expand without having to dilute the capital or borrow heavily. One could argue that when a company reaches revenues of Rs. 100 crore, its need for capital balloons and the entrepreneur must necessarily resort to external financing.

Manoj Upadhyay was able to reach Rs 1,500 crore without diluting any stake and needed to take just Rs. 100 crore as debt. Considering that his clients were huge companies like Airtel, Vodafone and such like his products must have enjoyed a huge advantage to command the premium that they did. His internal accruals were huge enough to fund the growth.

And he has done this through fulfilling a very simple need of mobile companies. He reduced costs of operating shelters that house mobile companies' base-stations. Almost 35-40 percent of costs of running these shelters can be attributed to electricity costs in cooling electronic equipment inside a base station. Upadhyay's company makes materials that maintain AC-like temperatures without electricity and even air conditioners without any compressors.

 

But with the telecom sector bleeding from falling tariffs and intense competition, Acme is trying a new tack to keep growing. It is setting up towers of its own. The maximum number of telecom towers that are economically feasible for operators is around 350,000, says Upadhyay. That number could be 450,000 if operators could get "Delhi prices in Mizoram" from their towers.

 

Enter "Ultra Low Cost Solution" (ULCS), Acme's most complete and power-efficient solution for telecom sites, which it claims consumes 40 to 60 percent less energy than existing solutions. "A typical multi-site tower uses 25-30 KW of energy, we can now do it in 5 KW," he says.

 

Upadhyay is now setting up his own towers using his ULCS solution, in remote and hitherto unviable locations, to offer them on a rental basis to telecom operators. The only other way his customers can buy ULCS is if they buy a ten-year service agreement from Acme.

 

As the telecom sector keeps attracting more and more entrants and they launch more services, expect Acme to retain its top slot.