The first impression one gets as one enters Major Manjit Rajain’s stylish Corporate Office in Gurgaon is an aura of eagerness that emanates from his team that greets the visitors. The customary greeting is not Good Morning, but “Jai Hind”–a clear take away from Major Manjit Rajain’s army life that he is immensely proud of. He was commissioned into the Indian Army’s 11th Armoured Regiment in 1984 and saw active service in Rajasthan and Jammu & Kashmir. Son of a decorated Indian Police Services Officer Major Rajain, after his army career, also served as a police officer where he attained the rank of Assistant Commissioner stationed in the turmoiled Kashmir region. It was only after this stint with the government that he founded Peregrine Security, a star constituent company of the Tenon group, 22 years ago. For a man who almost sold off this company twice, once for just Rs 25 Lakh in 1996, the Tenon group now has a topline of Rs 1600 crores!
The stylish Major Rajain, who likes flying his airplane in U.K and collecting souvenirs and artefacts to adorn his office, was recently conferred with the prestigious Asia One Award for the “100 Greatest Brands of Asia” and “100 Greatest Leaders of Asia” respectively. The Tenon Chairman received the Award at the Asian Business and Social Forum Summit in Singapore.
A man with exceptional people’s skills, Major Rajain today has second generation staff members in his workforce, in fact, his own two sons have joined him in business. This speaks volumes of the work culture and comfort levels that exist within the Tenon Group – one of the few premier Indian guarding, facility management and monitoring organisations with a multinational footprint. The rapid pace at which he has acquired companies in UK, Singapore and other countries belies Major Rajain’s image of himself; as a man in no hurry!
In a rare honour, a couple of years ago, Major Rajain was invited to serve on the International Board of the School of Management at Yale University, a prestigious higher education institution in USA, where he joined the likes of Ms Indra Nooyi, Chairman and CEO of PepsiCo amongst others on the board. A proud moment for him, and a proud moment for India as well!
Way back in 2008, he had listed shares of his holding company on the AIM section of the London Stock Exchange. Today, he runs a thriving business in the United Kingdom, spanning facility management and more recently, security services, that employs over 7000 people in that country.
Using the security experience gained from his career in the military and the police force, Major Rajain has demonstrated his entrepreneurial capability by establishing Peregrine Guarding which he has developed over the last 18 years to become one of the top 4 security service providers across the subcontinent of India, Singapore and UK.
SECURITY TODAY interacted with Major Rajain to talk about his group’s history, his working style and his plans for the future and we came back with the impression that while he may not be a man in hurry, he also has no plans of slowing the pace of his blistering growth!
ST: Clearly, you are on a business acquisition overdrive. Are these businesses in the facility management space or security?
MR: We have done three acquisitions in the recent past. One is in the business of security services with Singapore’s Frontline Security, two are in the FM space in the UK. We have been looking to find and acquire a suitable security services company in the UK but that hasn’t worked out so far. I’m not sure whether we want to spend a large amount of money in this venture, as the operating margins are thin. The market there is structured in a way where there are 5 or 6 big security services players in UK, but in the bottom layer of the industry there are hundreds of small players. These range in the size of 3 million pounds to about 25 million pounds. The middle rung comprises of a limited set of players–maybe 5 of them with a size of 100 to 120 million pounds. Then there are the big ones that I mentioned. None of these have suited our requirements, so far.
So what we did was to go and acquire a Facilities Management company that had a turnover of 30-32 million pounds. Today we are hitting 70 million there and it’s just been 22 months, since we acquired this business. We are still looking for something in the vicinity of 60-70 million pounds but in that space nothing that we liked, existed. Then we started looking for companies in the vicinity of 20-30 million with the idea of ‘buying and bolting’. Meaning, buying multiple smaller companies and then bringing them together. But even that didn’t work. So we started a greenfield security services business in the UK about 5 months back under the Peregrine brand name. Wherever we operate our FM business we will operate as Tenon and the security business will operate as Peregrine.
We have now set up a training school near Manchester in the UK along with a Command Centre because in the UK a Command Centre is a necessity. The clients demand it and a lot of companies outsource their monitoring requirements to command centres.
ST: What kind of business are you targeting in UK, commercial or industrial?
MR: We started off in the commercial space where we have five major clients, with Amazon being one of them. We are currently in the process of bidding for the Mini Cooper car plant. We have already hit a turnover of a million pounds in the first five months, which is good going. Margins in the UK are typically single digit, whether it is security or FM. In fact, in security, the bigger the company, the lower is the margin in the UK. It’s a much more mature market there as it in its fourth generation. There the man-machine amalgamation is higher, and the credibility of the operators is constantly checked by the government. In fact from the time a contract is floated to the time it is won, time taken is a minimum 3 months, as all checks and balances have to be put in place.
ST: Wow, you’ve been doing well for yourself! However, we believe you almost sold off your company once?
MR: Actually my father wasn’t particularly impressed with the business. So he prompted me to sell it off assuming that if I got 6-7 Lakh that would be good enough. At that time my company’s turnover was under Rs 25 lakh and I was offered Rs 25 lakh by a foreign buyer. In fact, they wanted me to run the business for them as an employee, but my stand was to sell and move out which they were not agreeable to. So we dumped that proposal. Then there was a second time when I nearly sold my company.
This was as recently as the beginning of the year 2007. Then my turnover was Rs. 60 crores and in fact, that year we had actually grown from Rs. 32 crores to Rs. 64 crores in a span of a year, which was a massive growth. The CEO of a 100 year old multinational company said they wanted to buy my company and asked me to name my price. Out of the blue I had quoted figure of Rs. 50 crores, to which they agreed on, right away. The deal was signed and done with.
But it was my wife who was upset with this deal. She said, it was people like me who prompted the arrival of East India Company in India. I was chided back and forth by her. More official discussions revealed that I had to get out of this deal. So we contacted the company and told them that we wanted to come to Denmark and re-discuss the deal. Now I wanted to get out of the deal and since they were ready to negotiate again, I quoted a 50 per cent higher amount, assuming they would never pay so much. To my horror they agreed to even this! They said they would pay up 60 percent right away and the rest in ensuing three years during which I would work for them at a handsome salary. But we insisted on 90 percent up front and ten percent, later. Thankfully on that, the deal fell through and the rest is history! You see, it wasn’t as if I had nurtured my business only to sell it off, in fact, my salary drawn from the company at that time was a mere Rs 5200 per month! So you can imagine, an amount of Rs. 75 Crores was a lot of money, something I had never heard of. So it had clouded my vision. My dreams were small and that’s how my mindset worked back then.
ST: So, when did this mindset start to change?
MR: These two episodes opened up my eyes and then I really wanted to build a big business. Now when I go out to buy a company, I go as a friend, who knows, what the other guy (seller) is going through. I can sense his emotions, because I’ve been in that position. The second deal changed everything for me because I realised that I could be as big as the company who was trying to buy me out, one day. If these guys were trying to buy me at my price, then I must be worth it. Then I realised that I could go to levels I had never comprehended earlier. And there was also no one breathing down my neck.
ST: You weren’t hasty, but the time taken from when you started to where you are today is amazingly small.
MR: That’s because everything was planned and structured. Till two years back I was a zero debt company, I had never taken a loan. Simply because I was apprehensive about a bounced cheque. In the army, if your cheque bounces its a court martial offense. So that culture remained imbibed. It is believed that normally if you are a Rs. 10 crores turnover company, a Rs. 25 crore debt is a healthy situation. My debt ratio is 0.7 percent.
ST: So what are you doing differently?
MR: Well I may not be able to put a finger on it, but I think you need to have the right plan in mind and it should be covered from all sides considering all possibilities. I have never done more than one acquisition in a year even if there was a capacity and opportunity to do more. I normally acquire a business, settle it down, and then once everything is stable, move on. Till 2007 I had not made these plans. Till then I was not even aware as to what was happening, because back then, whatever was happening was bigger than my aspirations. Today my aspirations are bigger than what is happening.
ST: What does 2018 have in store for the group?
MR: We are going to remain very high on our inorganic growth for the next three years. In India, in UK, in Singapore and in parts of Asia. In Asia we have identified 3 or 4 countries such as the Philippines, Thailand, Malaysia and Indonesia. I had earlier tried Middle East but now I have decided to leave it for the time being. Two years back we did a JV there in the FM space but I pulled out after 6 months. Mainly because you and your company are treated as second grade and your local partner has so many privileges that if he wants he can throw you out of the country anytime. My current operations are in India, UK, Singapore and Zambia. We had operations in Sri lanka but then the government decided that foreign security companies will not be permitted to operate, so overnight there was no business. We even tried Saudi Arabia, but the local laws did not make a very comfortable scenario, so we never pursued this.
ST: Any plans of further diversifying in the security business?
MR: Technology is the next frontier for us. So our plan for every place where we work is that we will strive to keep growing organically. We want to sustain our 25+ percent growth which we have done in the last 6 years. We have always believed in keeping a low profile, we don’t believe in being flashy and attracting attention to ourselves. Though, personally I’m happy being loud and boisterous with a limited number of people only, who are in my immediate circle. Believe it or not, my friends circle is extremely compact even though my contacts list is huge. So my company takes my personality. We are a happy go lucky company that works hard and plays hard. Which is why our employee retention rate is very high. We have over a dozen employees who are second generation.
I started this company with 9 people. For a company that is into the 24th year of its existence, we have had only two CEOs, so far. There are people who had joined me as assistant managers and who are now MDs.
ST: Which is why I repeat the earlier question, what is it that you do “differently”?
MR: I think I can be called a people’s man. I can read a person. I may not be able to read a balance sheet but I can read a person and know what it will take to have him with me. And that’s a fact, I even today can’t read a balance sheet. (ST doesn’t believe this) I don’t like numbers, just come and tell me what is the profit and what are the expenses and I’m okay with it. Of course I have trained my children into knowing all that. Both my son’s are MBAs. Double majors in finance and accounting. I am also not a very good salesman. (ST doesn’t believe this either) I’m too blunt to be that, as I like talking straight to the face. If people like it, great! Otherwise, too bad. See, we have grown because of people and I know people. I’m simple, so my people are the same.
ST: What would be the top three values that you stand for?
MR: A great amount of honesty and integrity. Integrity even in a small issue like telling a guy that he can’t get leave, because it’s just not there. But if it has accrued, then give it. I always believe straight talk always works. It may have its ups and downs and repercussions but it will eventually work. Every once in a while my team gathers together for an ‘open house’. We talk straight to each other, it’s a session where anyone can say anything to each other and this rubs off on my teams everywhere. It goes down to the level where everyone emulates this and even employees at the bottom rung can freely voice out their concerns. Hundred percent of my supervisory strength is through internal promotions. So, a good process of identifying talent also helps. We are a very honest company. You’ll never hear anything negative about us. We have 36 nationalities working for us today in different parts of the world.
ST: How many people do you employ currently?
MR: In the UK we employ 7200 people, 70,000 here in India, 600 in Singapore and 18,000 in Zambia.
ST: On the technology side, apart from your company Soteria, which is into remote monitoring services, are you also going into the security equipment sale?
MR: I wish I understood electronic systems but sadly I don’t know. Soteria is something that is the technology for the future. I sell services. My whole business revolves around providing services. Soteria does not sell hardware or software. It sells a service.
ST: Who would you think are the top manned guarding companies in India?
MR: There are two kinds here. There are multinationals and non-multinationals. I can’t comment about the multinationals because their business model is different. The Indian ones at the top now, I must say, are run very professionally. Their leaders are level headed people who know what they are talking about. And they are even bringing their second generation into the business. Which means, they all see this business as long term. This is a very good time to do business in India. If the present government returns to power, and I see no reason why it wont, it will be a fantastic situation for the country. This government is delivering and trying its best to deliver more. But it cannot happen overnight. It needs another five years for that. India is already being noticed everywhere. The global perception about our country has changed. We are the 6th biggest economy in the world. Next year we will be number 4. I am a diehard nationalist.
ST: Your sons have now joined you in business. Was this your idea or theirs?
MR: I never pushed my boys into joining the business. It’s tough to do that with this generation. The elder one, Angad went to the US for his graduation and then studied further to become a banker. He did his MBA, with a double major. It was then that I realised that he wanted to join the company which was another reason for my changed mindset in 2007. Because then I decided, if I have to handover the business to my boys, it has to have depth and stability. A day after his Yale graduation he was back here, and in the business. We put him through a 20 month induction programme. He was brought in at the ground level. Night checker, night supervisor etc. And after 20 months we gave him a business to run. Today he is the head of our FM business in India and UK. The younger one, Anuj, graduated from Yale last year and joined the business. he is currently undergoing his 20 month induction programme. He will tread the same path as Angad did, but he will manage the security vertical as and when the time comes for him to play a definite role. The elder one is more of a planner, analytical while the younger one is more of a people’s person.
ST: Apart from business success, you have other high points like being appointed to the Yale University Board.
MR: I try to keep myself well informed. When I attend talks, I imbibe a lot, I remember sitting with the Dean of Yale where he told me that they were a global university. I disagreed and said they would have been global only if students graduating from there went on to become CEOs in their own country rather than in US alone. He agreed and after a week I got a letter inviting me to join their board. That was a great honour and it has also given me a huge amount of exposure. I really get to walk with the giants of the academic world.
ST: You have received a very prestigious award recently…
MR: Well, individual recognition for me is less important than the recognition of my company. This ‘Asia One award’ for being amongst the greatest brands and leaders in Asia is certainly an honour.
ST: Any plans of listing on the stock market, like SIS?
MR: Not for another 2 years. They were already big and could list easily, but we will have to wait a while. If Mr Modi comes back to power and the economy keeps developing, we may. We will stay prepared and wait for the right time. SIS prepared for it very well. One needs to list to raise money for business acquisitions, we have the money from our existing investors and will use it where it is needed till then.
ST: Thank you for your time. Also, congratulations, we learn that you’re now the Co-Chair at the Private Security Industry Committee of FICCI.
MR: Thank you. You are most welcome, anytime. it’s always a pleasure to interact with you.