In this episode, Mr. Aggarwal highlights how reinvested profits, quality-driven German technology, and robust after-sales support have helped the company stay competitive against Chinese counterparts. With 70% of its business driven by exports, Nirmal Overseas continues to lead in steel machinery innovation—while staying open to future possibilities, including going public. Tune in to the entire conversation to learn more.
Mubina Kapasi: Hello everyone and welcome to Small Cap Spotlight. Today we have the privilege of hosting a company that has held the mantle of being the top exporter in India in the 90s and has received accolades for that. I have with me Mr. R.K. Agarwal, he is the founder and CEO of Nirmal Overseas Private Limited.
Mr. Agarwal, an absolute pleasure, thank you so much for joining us today.
RK Aggarwal: Thank you for your coming here also and give an opportunity to us to speak something about you. Our company, it is the first Indian company who started to manufacture high-frequency welder in this country.
Everybody was importing this machine for UK, USA and West Germany. Even then people are not having the facility to repair these machines and I, it is the first company in India who started to manufacture in this country. I have experience, I was chief engineer electrical in and I worked there from 1973 to 1980 and I started myself after leaving the company, I started myself to manufacture this welder and this is the 100% import substitute award, number one and we get from Venkatramanji this 100% import substitute award also.
After that, even then not stop the import, we had started to export this machine in different countries. Already, we had exported nearby 25 countries to export this and we are also supplying complete country projects, nationally and internationally also. We had exported our major customers, Middle East and Africa, like that we have supplied in Saudi Arabia, Oman, UAE, Angola, Gunni Konarki, Uyghur, Iraq, Bangladesh, Nepal, so many countries we started our projects.
Every year, we export project also and this is the only company in India who make complete country project to pipes made from half inch to 20 inch pipe up to make API line, API line for use for oil and gas sector. We had supplied the complete country project in Sudan government also, in Sudan where we supply machines to make pipe up to 14 inch pipe to make API pipe. This is the background of the company.
In India also, we have major customers like Tata Steel vendors in Jamshedpur, in different area of the country also, Jindal we have supplied, JSW is my customer, GSL is my customer, even then Bushel Steel was also my customer, now they have some problems, but they are my customers also. This is our background and for the company.
Mubina Kapasi: So, first you are into welding machinery and now you are doing full turnkey.
RK Aggarwal: First, we make high frequency welder which is used for continuous welding of pipes, that is the main technological item which was not available in this country and everybody was importing it. And now you are into full turnkey for steel industry.
Mubina Kapasi: So, it is particularly for I think two steel products or two end steel products. So, is there any plan to expand?
RK Aggarwal: Yeah, we are planning to increase our activity in Saudi Arabia. Before that we were having office and our outlet in Dubai also, but now we are Dubai we had closed, now the activity we are going to start in Saudi Arabia. Saudi Arabia in the Middle East market is a very big market for that.
Nowadays, it is coming up, very big coming up. So, we plan to open our company in Jeddah also.
Mubina Kapasi: How are you funding? I mean, what is your source of capital? I mean, you are of course not a public limited company.
So, if you could tell us a bit about because all of these are very heavy capex projects.
RK Aggarwal: You see in the funding, actually we are dealing with this time in Canara Bank, but other things like that whatever profit we are getting every year, we are putting in our company now. So, that our main interest do not need to take much funding, so that we should be very competitive.
Because our competition with China, we are having Chinese competition, but we are better than China, our price is very good than China and quality is we are opting German quality.
Mubina Kapasi: So, how much was China’s before and now how much do you think? I mean, how do you think this dynamic has changed?
RK Aggarwal: I can explain about it, about in Middle East, in Africa, we cover nearby 25% market of Chinese like this. Because in India what we are giving to the customer, we give very good customer service, sales service is there, we do up to erection and commissioning of the project.
So, that there should be no problem to the customer, that is like that. And our price is, our machine is very quality, very good. We follow German designs like this.
Because before that, I have technology from management, they make Germany also, so that we follow that design also. So, that German machine is very strong and very rugged machines and maintenance is very less.
Mubina Kapasi: So, this is a technology that you have learned from Germany and implementing in your designs.
So, tell me in terms of expansion only, I know Middle East is a big market for you, but now that you are, I mean, you know now tariffs have been imposed on China from the United States, any plan to go there?
RK Aggarwal: No, United States, we are not planning to do it. Our basic idea first travel to Middle East, Africa, then go to Europe.
Mubina Kapasi: But you don’t see any opportunity there now that there is a tariff on China?
RK Aggarwal: But if tariff on China, we are getting advantage in Middle East, Africa very well.
And now people, the Saudi people are very much interested to work with Indian companies. They are very much, before that they are not interested. Now, our country has good development in the machinery side.
It is a good development.
Mubina Kapasi: So, you think the Middle East is now looking at India in a big way?
Yeah, yeah, very big way, like that.
Mubina Kapasi: So, what’s your, if you could tell us a bit about your order book, roughly how is it right now and how do you see it growing?
RK Aggarwal: The orders, normally we have 70 to 30 percent.
70 percent we are doing export and 30 percent we are doing Indian market. And we have good business now. Very good business.
Mubina Kapasi: Any plans to go to public market for an IPO?
RK Aggarwal: Still not decided. One of my friend came today. He told me, why not going to public? I told him that we will see.
Mubina Kapasi: No, but it’s, I mean, it’s a positive sign. The fact that you are churning out profits on your own to reinvest, you don’t necessarily.
RK Aggarwal: Because due to that, the cost of machine is less.
We are very competitive because we are not paying so much interest and overhead for that. That is a very good thing for us.
Mubina Kapasi: Okay. Well, thank you so much for all those insights. All the very best into your, for your expansion to the Middle Eastern markets as well.
RK Aggarwal: I’m very thankful to you come here and given an opportunity to discuss with you.
Absolutely. Very nice. So much, so much thanks for it.
Thank you for that.