Spring Break
How to Make a Bundle in India
Shashank Singh (OG), Contributing Writer
Issue date: 2/2/04 Section: News
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The South Asia Business Association and the Entrepreneurship Club invited Sunil Bharti Mittal, Founder, Chairman and Group Managing Director of Bharti Enterprises, India's leading private sector telecom company, to give a talk at HBS on January 26th. Using his own story as an example, Mr. Mittal gave valuable insights into the nature of entrepreneurship and the increasingly positive outlook for entrepreneurs in India.
Mr. Mittal graduated from college in the Indian state of Punjab, in 1976, at the tender age of 18. But, like many of us, he couldn't figure out what to do. As he explained, "I became an entrepreneur by choice, but also because I did not have the chance to get a job that I liked after graduating." After some false starts, he started a company which became India's largest importer of electricity generators.
However, one fine day, in 1982, the government came out with a ruling in favor of domestic manufacturers which barred the import of generators. Overnight, Mr. Mittal's business disappeared.
In the process of deciding what to do next, Mr. Mittal happened to travel to Taiwan and chanced upon a Taiwanese manufacturer of push-button telephones. He entered into a joint venture with this company and started assembling and later also manufacturing push-button telephones, answering machines and faxes in India.
His telephone business was still going smoothly, when in 1993 Sunil Mittal competed for and won a license to provide mobile phone services in the city of Delhi. No one had thought that he stood a chance, because the cost of the license was over $100 million, and the entire turnover of his company at that time was only around $10 million! But he did win the license and Bharti Enterprises was thus born.
Fast forward from 1993 to today: Bharti has emerged both as India's largest mobile phone operator, with over six million subscribers, and as India's largest private sector telecom operator with services in fixed line, mobile, long-distance, data and Internet services. In between, Mr. Mittal managed to raise over $1.3 billion in funding from a variety of sources, including $292 million in private equity from Warburg Pincus, which represents the group's largest investment outside the U.S. A successful IPO followed and allowed his investors to all exit profitably. Mr. Mittal urged even Warburg Pincus to exit but the group has decided not to, as they foresee a bright future for their investment.
Mr. Mittal graduated from college in the Indian state of Punjab, in 1976, at the tender age of 18. But, like many of us, he couldn't figure out what to do. As he explained, "I became an entrepreneur by choice, but also because I did not have the chance to get a job that I liked after graduating." After some false starts, he started a company which became India's largest importer of electricity generators.
However, one fine day, in 1982, the government came out with a ruling in favor of domestic manufacturers which barred the import of generators. Overnight, Mr. Mittal's business disappeared.
In the process of deciding what to do next, Mr. Mittal happened to travel to Taiwan and chanced upon a Taiwanese manufacturer of push-button telephones. He entered into a joint venture with this company and started assembling and later also manufacturing push-button telephones, answering machines and faxes in India.
His telephone business was still going smoothly, when in 1993 Sunil Mittal competed for and won a license to provide mobile phone services in the city of Delhi. No one had thought that he stood a chance, because the cost of the license was over $100 million, and the entire turnover of his company at that time was only around $10 million! But he did win the license and Bharti Enterprises was thus born.
Fast forward from 1993 to today: Bharti has emerged both as India's largest mobile phone operator, with over six million subscribers, and as India's largest private sector telecom operator with services in fixed line, mobile, long-distance, data and Internet services. In between, Mr. Mittal managed to raise over $1.3 billion in funding from a variety of sources, including $292 million in private equity from Warburg Pincus, which represents the group's largest investment outside the U.S. A successful IPO followed and allowed his investors to all exit profitably. Mr. Mittal urged even Warburg Pincus to exit but the group has decided not to, as they foresee a bright future for their investment.
