Hemant Mirkhelkar, Chairman and Managing Director of Bolzen & Mutter India Pvt. Ltd., discusses the company’s journey from its inception in 2011 to its current operations. Despite challenges such as fluctuating raw material costs and the impact of COVID-19, the company has experienced rapid growth, particularly in the renewable energy sector, and expects to continue expanding. Mirkhelkar shares plans for an upcoming IPO, with a goal to significantly increase revenue and production capacity over the next few years, focusing on solar fasteners and local manufacturing.
Rumela Banerjee: Hi, this is Rumela Banerjee. I will be speaking to Hemant Mirkhelkar, Chairman and Managing Director at Bolzen & Mutter India Pvt. Ltd. on the company’s journey and plans ahead. Many thanks for joining.
Seven years in operation, talk to us about the journey that has been so far. In such little time there has been so much turbulence, down cycles, commodities rally, COVID, geopolitical concerns, etc. So, how has it been for you?
Hemant Mirkhelkar: We have started our journey not in 2017, actually in 2017 we have established Bolzen & Mutter, that is our major manufacturing activity.
However, in 2011 with a small investment, we started Chaitanya Industries for manufacturing small screws for various industries. Right from day one, we got the pulse of this business. Getting a pulse of any business is most important.
And you should have a good relationship in the industry to get appropriate opportunities. And we were lucky, we can say, with our relations of long standing in Aurangabad around industries, we got good opportunities in 2-3 automobile companies and electronics companies like D2H business and all that. So, right from day one, we started making good profit as well.
And orders are flowing with our quality and delivery was most important, crucial and we got success in that. So, believe me, for five years, almost five to six years, we were making good profit and business was doubling every year. So, but we were having limitations as we do not have major masteries or we do not have proper backup of tool rooms and accessories, support which is required and orders were flowing or we got the pulse, we know how to get more business.
So, we decided to expand. Considering the local benefits of various government schemes, we decided to float a new company, a private limited company, Bolzen and Mutter India Private Limited, which was established in 2017. We took the unique name, people will not be aware in German, generally, people call for bolt, it is a Bolzen and for nut, it is a Mutter.
So, German is always famous for precise manufacturing in engineering industries. So, we took that name to make a name, it was there our intention to make our fame with the name to make a precise manufacturing product so that the industry which is growing and which is expected to grow everywhere, we decided to have the Bolzen and Mutter, we imported some machinery and we have established 30,000 square foot area operation in Waluj industrial area near to Aurangabad city or now today Chhatrapati Sambhajinagar city. So, with the expansion and with this two, three years we were struggling and people were suffering during COVID and all that, but believe me COVID has turned to be a positive for us as during COVID as we started supplying to Airtel and Tata, the dish activity, dish parts of fasteners, we were supplying only fasteners for dish TVs like Airtel and Tata.
So, in COVID, the government wanted to promote dish TVs because the government wants the people to sit in the home and enjoy the entertainment because everybody was locked in the home. So, we got an opportunity and we got the special permission to continue our production. So, except in March when the COVID lockdown was started for four, five days, we were closed.
After that, we were working tirelessly in the COVID to support Airtel and Tata to get more business and our fortune turned around because then we got the major click and business and whatever loss we were making for two, three years, it turned into a good business opportunity. So, we did the footing and firm footing has got it right track and we are now growing with a speed of 20 to 25% per annum.
Rumela Banerjee: So, can you share with us some key learnings and challenges so far in this business?
Hemant Mirkhelkar: Yeah, there’s always challenges and every business has challenges and opportunities and always challenges vis-a-vis.
You have to overcome the challenges and grab the opportunity. So, yes, every now and then the fluctuation of raw metal was there. Anything if you are always considering a problem, sometimes you won’t get the correct technical person to run the machine also.
Though you are giving all benefits or something like that, you need to catch hold of the correct person to run the machines. And secondly, the product for costing of the metal which we are using was also fluctuating during COVID and after COVID as well. So, overcome that and simultaneously we have a good opportunity for the automobile industries.
We got a good opportunity for electronic industries and we started picking up our business and overcame that with the help of our good team. A clean management system and participative management system has helped us to tide over these or come over the problems of these to substitute them.
Rumela Banerjee: All right, give us some color on the segment you operate in – its size, growth forecast, opportunity.
Hemant Mirkhelkar: Yeah, we have good forecasts and good opportunities. See, it is a good sign. You see, what we did in 2019 and 20, we shifted our focus to green energy, solar energy, renewable energy.
And you will believe me, this sector is growing like a brain more than atoms or more than electronic industries. In COVID of the solar, in solar, the government is setting up a target. In the world also, it is considering the change of environment and all that the world is facing today.
And everybody is renewable, going for renewable energy. So, with that renewable energy, there is a huge potential for fastness in the growth of renewable energy, solar energy, renewable energy. And we have got good contracts, contracts from the solar industry, which is making, we are growing sometimes 100% of the growth rate.
Suppose in 2022-23, we did for whatever turnover we did, we did almost double in 2023-24. And now this year also, we are looking for at least 30% growth rate, because considering the next 5-10 years, the major sector in India is going to grow with renewable energy. And there’s a tremendous opportunity and tremendous scope as well.
Rumela Banerjee: Your location is Aurangabad. It is in the heart of all the action with respect to manufacturing, automobiles, etc. So, give us a glimpse of the business landscape there in Aurangabad, and how has it been working with or around so many legacy brands, companies around you?
Hemant Mirkhelkar: Yeah, in Aurangabad, see automobile is a major, Aurangabad has become a major automobile hub.
After Bajaj came in 1982, people developed industrial culture for the automobile industry. Initially, people were all secondary, the prior two people were supporting Bajaj. But eventually, they got good hands on the automobile industry.
And everybody, every industry here is getting business from other automobile products like Maruti, Honda, Hyundai, everybody is attached to Aurangabad city. Everybody, and with this growth, and with this opportunity for everybody to explore the market, all over India, even sometimes they are exporting to various countries in the automobile. We got a good opportunity to support them as well.
So, we are not directly sometimes supplying to OEMs, but we are definitely supplying to Tier 2, which has a huge business potential in the automobile industry, because they have got good pastoral skills over the various products. In Aurangabad, we have the third largest automobile of the pastoral industry, out of which two people are majorly focusing on one major party, one major OEM. But what we are doing, we are not focusing on one major OEM, we are focusing on the other nearby like Pune, Nashik, or even Bangalore, we are focusing on this Tier 2 sector, where we got good insight and good support from the people and we took care of these people, second to tyre people, and we have got good attachment to supply and demand, we have adjusted to their demand.
So, we are getting better business than the two people which are located in Aurangabad, and we are sure we will, in the next three years, we will surpass them.
Rumela Banerjee: What’s the targeted pie in this segment over the next few years?
Hemant Mirkhelkar: See, we are, as I mentioned, we are on third number, we are supplying Tier 2, but now, with the experience, we are now getting into OEM business as well. You know that we are almost in the final stage of signing a contract or getting a vendor code from Volkswagen and Skoda business, which is very good, they are going very well.
So, we will be the sole supplier in India, and they are shifting their buying from Europe and China to India, we got a good opportunity. And the second company which is coming in, Foxconn, everybody knows Foxconn is a big way in India, and we are selected only one supplier for them to support their new forthcoming, their electric vehicle, Kugra, then the battery business, and all business, we will be supplying them to the Foxconn as well. So, these two major industries will give us and overall about, last month only, the Toyota is establishing in Aurangabad, near to our 25 kilometer away from our factory, a big industrial setup in manufacturing car, almost 200 acres land they have procured, the agreement has been signed with the government, and expected within one and a half years, they would like to start the production in Aurangabad.
So, with this growth rate, and the people are in industry also, those who are manufacturing automobiles are shifting their 20% focus on renewable energy as well. So, where we will supply to the automobile industry, they have also got some business from renewable energy, that is solar business. And we also got one of the few contracts they have diverted to us.
So, automobile, solar, and electronic industry, sometimes electronic industry, these are nowadays pitching, because of OTT market and all that, is facing little tough challenges. But immediately when we shifted to solar, we got a bigger opportunity. Let me tell you the figure, in the coming four to five years, India wants to produce 500 gigawatts of solar energy production in the coming five years.
And just to show a chair, for one gigawatt, 28 crores rupees fastener is required. So, at least 14,000 to 15,000 crores fastener are required in the solar sector where the government is investing, a government target. Apart from that, private people are coming, the big major industrial houses are also now investing in renewable energy.
So, we cannot count the opportunities that much we are getting. And on top of it, government of India has, making compulsory from 1st November, BSI, Bureau of Indian Standard Certification is required for the hexagonal fasteners. In solar, most of the time, hexagonal fastener is a major requirement.
And since this BSI is implemented by the government, indirectly they are stopping the import from China, which will give tremendous boost and growth to the Indian fastener industries.
Rumela Banerjee: To what extent do commodity prices impact you? How do you deal with volatility?
Hemant Mirkhelkar: See, commodities were volatile after COVID for 2-3 years because some export markets were impacted. A major we deal in steel.
So, we need steel rods or wires to manufacture the fasteners. Yes, but for the last one and a half years, fortunately, it is completely stable. Only prices are fluctuated by rupees 1 or 1 rupees or 2 rupees or reduced by 1 or 2 rupees.
So, more or less it is stable. And with this stable growth, we are a little bit comfortable to deal with the market or give competitive prices or compete with China even after these prices are stabilized, we can compete China or can give better delivery or better product or better price than China in some sector of the fasteners, which is helping us to grow and face the challenges by the metal market or the fluctuation in the raw metal prices.
Rumela Banerjee: So, your plans are going public, why and by when? What should investors expect?
Hemant Mirkhelkar: See, our company offers a unique value proposition with our specialized focus on fasteners for the renewable energy sector, which I mentioned earlier in my interview, particularly the industries on the cusp of significant growth and being relatively new players, we are agile and adaptive.
Additionally, our strategic location in Aurangabad coupled with experience and strong operational foundation positions us well to capture market opportunities. And as I mentioned earlier, the growth is more than expected or more than what we are anticipating. So, we are sure with the way we are growing or the focus or the contracts which are in the pipeline, we are 100% sure we can give better value to our investors as well.
And the government has also opened a good opportunity to listed MSME companies on the NSE or BSE, BSE particularly. So, with this, our footprint, we want to go globally, we want to add our footprint to not only India, but globally for solar particularly and fastener as well. So, I believe we can give better value, better additions and better propositions to our investors.
And with the fair and clean management systems and growth oriented opportunities and our focus on the product, we can give better yield to their investment in our company.
Rumela Banerjee: Okay, so by when are you going public?
Hemant Mirkhelkar: Now, our DRHP is in process. I believe by 15th of September, we should be able to submit it to SEBI for approval.
And if they approve, because I understand, otherwise SEBI’s load is very high. But for MSME, the government has set up, SEBI has also set up a special sale to approve as early as possible. Whatever norms, I think recently, last week only they have changed the about cash flow and all that.
So, within the last three years, they should have at least two years profit, cash flow will be positive. And fortunately, we are positive in cash flow as well. So, we are meeting our criteria of the SEBI.
So, I believe we should be able to come to the market by December. If everything goes, SEBI supports us, SEBI gives us clearance, we are planning to go for an IPO by December.
Rumela Banerjee: All right, that’s great to know. Could you share your vision for the size of the company with respect to volume, revenue over the next three to five years?
Hemant Mirkhelkar: Yeah, in the next three to five years, I would like to achieve this. At present, we are around 50 crores. I would like to achieve at least 200 to 250 crores and with the two to three multi-locational manufacturing facilities.
We are using all proceeds, whatever proceeds come from the IPO, 100% will be used to grow or to focus on adding the productivity facility because the growth and the demand is much more and we are becoming a specialized solar fasteners manufacturer. We have changed our focus and if you see our new tagline, which we are coming up with, fastening a renewable future. So, we are concentrating 70-80% on the renewable energy which is growing more than expected pace and the automobile also being government has also asked everybody, the government is pushing for the local OEM or automobile manufacturer to buy locally.
So, we are sure we are passing their test and we will achieve five times growth in three to five years.
Rumela Banerjee: With that, we will wrap up this conversation. Many thanks for speaking to us.