The CMD of GTL Infrastructure hasn’t forgotten the old days when GTL (now the holding company) share price plunged from great heights to scrape the bottom.
Wants GTL Infra to become the global leader in network solutions
MUMBAI: The CMD of GTL Infrastructure hasn’t forgotten the old days when GTL (now the holding company) share price plunged from great heights to scrape the bottom as the dotcom bubble burst and the share prices and the business models of GTL along with its peers crashed.
“When a crisis hits you, the biggest worry for institutional investors is whether the management can withstand it,” Manoj Tirodkar told DNA Money.
Many investors perceived that GTL was ‘buckling’ under the crisis. Reminiscing of the painful days, Tirodkar admitted that GTL then was focused on too many businesses.
“I think we paid for it.” The stock which commanded a market cap of $2 billion was floored and had the ignominy to scrape the bottom with a valuation of $50 million.
Investors, primarily foreign, have now pulled up the group valuations to $1.7 billion. IDFC is a shareholder with 5% stake in GTL Infrastructure and KFW, the German financial powerhouse, has an indirect stake in the company.
GTL holds about 40% of the equity in the network solutions and tower business company.
When quizzed about the painful period, he is prepared for the question. Looking back on those precarious days, he recounted:
“As the largest shareholder, I stepped in. We acted on their (investors) suggestions and took all their criticism and categorised it.”
The foremost complaint was that his business consisted of many segments. GTL was then into IT, software, BPO and KPO. So investors did not understand the business model.
Tirodkar began to simplify the business model by exiting non-core areas.
We are now based only in processes, systems and knowledge management. The painful restructuring saw the company get rid of 75-80 managers. The focus to change came about after investors dumped the company during the dotcom bust.
GTL is a ‘virtually rebuilt company’ in the last five years. It is in India, Middle East, and Africa and he admits that he can no longer enjoy 25% margins as in the IT industry.
For the next 5-7 years, Tirodkar expects five or six players in the telecom services field alongwith GTL Infra.
Tirodkar is ambitious, and the only promoter on the board. “We’ll grow in the telecom services space the way L&T is growing in the construction space,” the young CMD in his forties said.
GTL Infra will work in unison with telecom service providers. The restructuring was very painful, as 5,000 employees were “placed out” and 85 managers got the pink slip.
He realised, “that when the markets did well, conglomerates fly, when the markets are soft, investors want companies to be focused.”
While the telecom sector commanded $100 billion, the revenue is pegged at $15 billion. It will however grow 40% annually.
He still retains the bravado of a young entrepreneur. He wants GTL Infra to become the global leader in network solutions. He talks of leaders in the space as his rivals- “Nokia, Motorola, Ericsson not a single global player can dominate the market.”
The company also did a buyback, in addition to an annual dividend of Rs 30-40 crore, he pointed out. To top it, he made an open offer, which he touted as the ‘single largest open offer’ by any promoter in India.
He talks about the potential. “I think you have not even seen 1/10th of our potential. The sector is hot.”
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