Tata paid the money in an escrow account for the deal, with Usha Martin using it to clear the debt. SBI was the company’s largest lender. “Rs4,365 crore was received in the first tranche of the sale proceeds, with the balance Rs160 crore kept on hold by Tata, as a few parcels of land are yet to be transferred to it,” explains Anirban Sanyal, CFO & COO, UML.

Incidentally, the company is still fighting a legal battle with CBI, pertaining to the sale of iron ore (from its allotted captive mines in Jharkhand) in the open market. “This has been an ongoing case since 2006. We are defending our position legally against all law enforcement agencies and are confidant of being in a stronger position. This will not affect our business,” clarifies Rajeev. 

With the sale of the steel division, Usha Martin achieved a light balance sheet. Now, the company’s full focus is on consolidation of its wire rope division. “Our vision is for organic and inorganic growth in India and overseas and we are expected to become one of the top two wire rope players globally in the next five years,” asserts Rajeev, 56, speaking from Singapore. He would, however, prefer to grow the company conservatively through internal generation and avoid debt. 

Usha Martin is one of the largest manufacturers of wire ropes in the world and has the capacity to produce 300,050 tonnes of it per annum. The company has a global base of wire rope manufacturing, with facilities located in India, the UK, Dubai and Bangkok. For specific products, the company has collaborated with globally reputed companies like Gustav wolf of Germany, Joh. Pengg AG of Austria and Tesac wire ropes of Japan. Usha Martin is known for making a wide range of wire rope products, which have applications across the world. 

The ropes manufactured by Usha Martin serve in some of the most critical applications across diversified industrial segments, which include oil & offshore, cranes, mining, elevators, aerials, fishing, conveyor belts and general engineering. Reliance, Adani, Coal India, Tata Steel, JSW, Otis, Vedanta, Hindalco, NTPC, Shell, Schindler, Fujitec, Mitsubishi, ThyssenKrupp and Total are among its coveted customers in India and overseas. 

“Our first and foremost aim is to increase the value-added product-offering in our large basket; this will give us better profit margins,” says Sanyal. The influx of Covid had an adverse impact on the industry globally. But demand is still likely to remain strong, as massive infrastructure spending is projected, he adds.

 Product innovation

The company’s global R&D centre in Italy is actively engaged in the design of wire ropes and uses property design software to develop products. The company also has a comprehensive R&D facility in its manufacturing unit at Ranchi. “Product innovation that meets the customers’ needs is a continuous process for us. We are a major supplier of several OEMs,” explains Devadip Bhowmik, director, sales & marketing, UML.

The market leader in India in wire ropes, Usha Martin has the capacity to produce a wide range – from 4.8 mm to 130 mm in diameter – of wire ropes. “Our USP is diverse quality products that cater to large customers,” adds Bhowmik. “It is the concept of a ‘super market’, where one can pick up everything under one roof.”

Describing the advantages of the overseas operations, Rajeev affirms: “This provides significant synergy and support to the overall business performance. It also helps us to spread our offerings across the globe.” The Covid pandemic had adversely impacted UML’s demand but the international market is expected to open up, though slowly. “I think, in the next five years, the segment will see good demand,” he adds.

He has also cautioned all to remain agile and responsive to the changing market needs and focus on increasing market share in high contributory products. Rajeev is bullish about the segment and expects oil & gas, ports and shipping to be the growth drivers. On a consolidated basis, 35-40 per cent of Usha Martin’s revenue is from exports to Europe, South East Asia, the US and the Scandinavian countries.

“Usha Martin has been supplying us with wire ropes for heavy-duty cranes for ports over decades now,” says Harinder Singh, business head, coal import terminal, Adani Ports & SEZ. “Performance-wise, UML’s products are on par with the imported ropes. But, though their quality is good, they need to improve their services.” Usha Martin enjoys strong brand recall in the segment. “We are now in the process of strengthening our projects and services,” Bhowmik claims.

The adopted HR policy of the company identifies future leaders. “Our HR processes find high-potential performers. We nurture them internally through training and development, as part of a succession planning process, so that future leaders can be developed within the organisation,” says HR director DJ Basu. Usha Martin has a workforce of 2,300. The average age group of the company’s management is below 50.

The outbreak of the corona virus pandemic globally and in India has caused significant disturbance and slowdown of economic activities. The company’s operations and revenue during the period have also been impacted. Usha Martin’s revenues stood at Rs2,130.60 crore in 2020-21, as against Rs2,207.17 crore in 2019-20. The net profit for 2020-21 is Rs150 crore, compared to Rs418 crore in 2019-20.

After making losses for several years,  the sale of the steel division, the company is now in the black. “Our present performance is an indication of the company’s effort in building a resilient business, capable of performing even in the most adverse conditions,” says Sanyal. “Our share value during the last one year has gone up from Rs20 to Rs50.” Currently, it is hovering at Rs51-52, giving the company a market cap of Rs1,552 crore.

The promoters hold 50.87 per cent of UML, while FIIs have 8.18 per cent, DIIs, 0.05 per cent and others, 40.90 per cent. Rajeev and his family hold 30 per cent of the total promoters’ stake, while the balance is with Prashant and family. It is reported that Prashant has been selling his share-holding in the market during the last few quarters. Both Prashant and Rajeev have refused to make any comment on the family wrangle. “My focus is clearly on the company’s growth and nothing else,” Rajeev says. UML has established markets globally. But the future of the company lies in being able to take full advantage of this massive opportunity.

Genesis of the company

Usha Martin was founded by Basant Jhawar, a commerce graduate, in 1960, at Ranchi, in collaboration with Martin Black of the UK. He was later joined by his younger brother Brij K Jhawar, a mechanical engineer. The first wire rope reel rolled out of the company in 1962. Its public issue in 1961 was oversubscribed by more than 300 per cent.

In 1963, the company paid its maiden dividend and doubled the production from 3,600 tonnes to 7,200 tonnes in just two-and-a-half years. It soon became one of the largest manufacturers of wire ropes in the world and the leading specialty steel manufacturer in India. The steel division was recently sold to Tata Steel’s arm Tata Sponge, which was later renamed Tata Steel Long Products.

With a history of over 60 years, the company now has manufacturing bases of wire rope in India, the UK, Dubai and Bangkok. It is also tied up with globally reputed companies like Gustav Wolf of Germany, Joh. Pengg AG of Austria and Tesac Wire Rope of Japan. The ropes manufactured by Usha Martin serve some of the most critical applications across diversified industrial segments, such as oil & off-shore activities, crane operations, mining, elevators, aerial & fishing business, conveyor belts and general engineering. The group was also one of the pioneers in mobile telephony in the country through its brand Command, which was later sold to Hutch in 2000.

Both Basant and Brij have grown the business into a large wire rope conglomerate in the country. Later on, their sons Prashant and Rajeev joined the business. While Prashant was responsible for managing the day-to-day affairs of the company from the corporate office in Kolkata, Rajeev was involved in the manufacturing of products.

The working arrangement continued till 2000, when Prashant shifted base from India to the UK to grow its international business and start a software business. Rajeev then took charge of the company, which later acquired some wire rope companies in Europe and turned the business profitable.