The Khemkas of NEPC are unlikely to be bothered. Try out these simple figures to get a grip on the magnitude of the ambitions of this Marwari family, whose patriarch travelled from Punjab to Madras 30 years ago with Rs 450 in his pocket. In 1990, the group was worth Rs 25 crore. It intends to hit the Rs 2,500-crore mark in turnover by the end of 1995-96. A heartbeat away from a near-monopoly of the wind energy and private airline markets, the Khemkas may well be to the 1990s what the Ambanis were to the 1970s, and the Dhoots of Videocon to the 1980s. And so what if they have painted the rosewood panelling in their corporate office a strange shade of pink?
Any Indian business group that grows so fast gives rise to rumours about shadowy political connections, about it all being a money-laundering operation for corrupt politicos. It's the same for the Khemkas. "My books are open and anyone can see how we have raised funds. It is nothing but imaginative prudence," says Madhusudan, 32, nephew of group Chairman Ravi Prakash, and one of the three second-generation Khemkas who have powered the group's vertical blast-off.
It all began when Ravi Prakash's son Rajkumar, 31, and Madhusudan decided that non-conventional energy generation was a great diversification idea. Till then, the Khemkas had been the typical Marwari commodity trading family, with interests in steel fabrications for sugar and cement industry, and wheat flour mills.
Then, in 1986, was set up the Natural Energy Processing Company (NEPC). Identifying the potential of wind energy was fairly easy. Power was scarce, diesel prices were spiralling up, the Government offered—and still does—huge incentives in the area of non-conventional energy. The Khemkas knew that if they could get the business going, they would have a powerful cash generating machine on their hands.
The only problem was convincing people that the strange dragonfly-like windmills were an idea whose time had come. "Marketing the concept was very difficult," recalls Rajkumar. The first product to be manufactured by the company was a windmill capable of pumping water. "Our team would travel to every panchayat in the power-scarce states and explain the benefits of windmills. It was virtually a door-to-door campaign," says Madhusudan.
But that brazen hunger for growth that has since become the Khemkas' hallmark was apparent even in those early days. While NEPC was still finding its feet in harnessing wind power to pump water, the cousins were looking for the technology to use wind energy in the power sector. The tie-up with MICON of Denmark came in 1988. In September 1989, the company got its first order for six machines from Gujarat. "That was the turning point. MICON agreed to come in as collaborators after the Gujarat order," says Ravi Prakash Khemka. Today, the southern part of the Western Ghats is dotted with windmills erected by NEPC for over two score companies.
As the 1990s rolled in, it was clear to the Khemkas that their wind energy gamble had paid off. What next? The family already had an interest in the agro foods business, processed foods were suddenly a thrust area for the Government, and the age of branded commodities was slowly but surely dawning in India. NEPC Agro appeared in 1991; currently, its brand Trupthi has a range from atta, sooji to mineral water and iodised salt. Also in the pre-scam heydays of 1991, NEPC discovered the primary market as a cheap new avenue to raise funds. Since then, diversifications and new projects have come fast and furious: paper and paper boards, airlines, and now satellite TV. NEPC-MICON's equity rose from Rs 5.36 crore in 1991 to Rs 66.14 crore in 1995 and at the end of the current financial year it is expected to be Rs 100 crore.
But if explosive growth is the Khemka passion, and the primary market their happy hunting ground, then a keen understanding of the nature of government in India is their secret weapon. Early in their wind energy career, they managed to persuade the Tamil Nadu Electricity Board to buy power from them on a wheeling basis, that is, the producer feeds the grid at his generation base and he is, in turn, permitted to draw an equal quantity of power for his other industrial purposes elsewhere from the grid by paying a wheeling charge of 2 per cent of the cost price of per unit of power. While other private carriers projected themselves as rivals to Indian Airlines, NEPC Airlines quickly signed up as the national carrier's feeder airline and rescheduled timings to suit IA connecting flights. "That's how the Khemkas work. They are the private sector guys who understand that government is invincible even in an open economy," says a merchant banker.
It was, thus all the more surprising, when, last year, NEPC suddenly took over Damania Airlines and overnight gained control of a large chunk of the private carrier market. And the audacious attack on Modiluft, if it succeeds, will give them an extent of command of the Indian skies next only to Indian Airlines. Says Tirupatikumar Khemka, director, NEPC-MICON: "We want to be the number one in the airline business." Adds R. Sundaresh, CEO of the group: "Our track record will help us in buying these shares." From being a loss-making company, Damania under NEPC is now making a profit of Rs 5 lakh a day, claim the Khemkas.
Yet, many questions remain about the Khemkas' strategy. The one raised most often is about their unending spree of unrelated diversifications which seems to hint at the absence of a thought-through long-term vision. Not so, says Ravi Prakash: "Our corporate goal is to be a leader in the necessities segment—power, food, transport, communication and clothing. We may not follow the definitions of the others but we do have a definition for our group."
And the second generation has a tongue-in-cheek explanation. "Everything to do with air has worked well for us. Wind energy, airlines and satellite TV," says Madhusudan.