A most unusual and exciting entrepreneur story

Mamta Bharadwaj

Kalpana Subkaran Saroj was born in Repatkhed, a small village in the backward Vidarbh region of Maharashtra. When just 12, she was married to a laborer in Mumbai. Six months of sheer torture at her in-laws home led her father to bring her back home. However, society never accepted her back and the child decided to commit suicide. Fate intervened and she survived. But the incident left Kalpana a changed person – having faced death up close she was now fearless and ready to take on the world.

When her attempts to find employment with the police and armed forces failed, she returned to Mumbai and started working as a helper in a textile mill earning the grand sum of Rs.2 per day. A few months later, she had graduated to working on the hosiery machines and was earning Rs.50 per day.

At around this time, there was another twist in the tale. Her father who was a constable lost his job and Kalpana opted to bring her entire family of parents and three siblings to Mumbai. Together, she thought, they could figure out things better. There was a Government scheme that offered loans to unemployed youth under which Kalpana planned to take a loan of Rs.50,000/- (a princely amount in those days) to buy a few sewing machines to set up a boutique. She was told that the local karyakarta would help. That was easier said than done since she had to make numerous visits to the karyakarta’s house before she could even meet him. Finally, when she did meet him she was told that she would have to share Rs.10000 from the loan to pay bribes to people who were responsible for the loan. This was something she was not at all enthused about. She was firstly taking a loan to start a business which she was not sure would do well. How could she start by writing off one-fifth of it, was the logic.

A gentleman who she met at this time suggested they start an outfit where unemployed youth could get together and work to access loans under Government schemes. The Susikshit Berozgar Yog Sanghatna was formed and Kalpana who was 16 now, was made the leader. This was, perhaps, the most important milestone in her life for it launched her into a public life and put her in contact with bureaucrats and government officials who often came to address the members of the organization. Over the next few years, Kalpana not just worked to get her loan sanctioned but also helped many others get loans worth over Rs.1 crore. She set up a tailoring unit and a store to sell steel almirahs, which offered a good margin.

Her social work was building her reputation and credibility fast. In the eighties, a person approached her with a request for money to perform his daughter’s marriage. In return, he handed her the papers of a piece of land in Kurla that had been acquired. She approached numerous government officials and got the 2.5 acres of land not just in her name but also converted to commercial land. The property was now worth Rs.50 lac. She tied up with a developer for construction and became the cynosure of the real estate lobby in the area that tried to get some contractors to even kill her. “I had survived a suicide attempt and was no longer scared of death. But I did approach the DCP and got a license to carry a gun,” she recalls.

The next turning point came in the late nineties when workers of the once-prosperous Kamani Group approached her for help. The Kamani Group was set up in 1959-60 by a Gandhian Ramjibhai Kamani in post-independent India. The Group had three flagship companies – Kamani Engineering, Kamani Tubes and Kamani Metals – with 3500 workers. The companies were doing well not just in India but overseas as well and workers were getting 100 per cent bonus every year till 1974. Unfortunately, the next generation of Kamanis had a lot of infighting due to which the group fell into bad times and the companies faced closure. The workers approached the then Prime Minister Indira Gandhi to intervene and allow workers to manage the factories. This would save their livelihoods and the workers would work with greater enthusiasm if they owned the company, was their argument. This led to the Government enacting the most important legislation dealing with sick units - the Sick Industrial Companies Act, 1985 - which has a provision for sale or lease of the company to the cooperative society formed by its workers. The Board of Industrial and Financial Reconstruction (BIFR) was set up under this Act in January 1987. The workers got formal orders to take over the company only in September 1988 by the Supreme Court. This judgment was a major landmark in the history of industrial India since it marked the first ever take-over of a factory by workers. On March 18, 1989, production resumed at Kamani Tubes after nearly four years of closure.

The idealistic dream of workers’ capitalism did not last, unfortunately. By 1997, workers had again stopped getting wages. “When the company was handed over to the workers some of them were very enthused and worked hard. Another set of workers believed that they need not work any more since they were now owners,” says Kalpana. Trade unions had also made inroads into the company and there were two rival unions at work.

One of the internal unions which was interacting with BIFR contacted Kalpana with a request to takeover the company as a promoter. The company by then had Rs.116 crore as debt and 140 cases of litigation. It was a suicidal challenge but I thought I should try and give it a shot and try and help the workers, she says.

Between 2000 and 2006, Kalpana focused entirely on reviving the unit. Production would begin only once the liabilities were cleared. She hired basic staff to keep a watch on the factory and good lawyers who started handling the court cases. On closer examination of the debt, the team figured that much of the Rs.116 crore was due to interest and penalties on bank loans. Kalpana approached the then Finance Minister to intervene and request banks to waive the penalties and interest. The banks not only obliged but waived off 25 per cent from the principal amount as well in order to give the unit a chance at revival. The debt was now reduced to a manageable Rs.50 crore. She was paying the 500 odd workers a nominal Rs.1000 per month to keep their home fires burning. By 2006, she had cleared all workers’ dues and bank loans and even paid Rs.51 lac to Navin Kamani the original owner as PF dues! By 2006, she even paid off the Rs.1 crore owed to Mumbai Port Trust towards the office space in Ballard Estate in the heart of Mumbai. This was the year she was handed over Kamani Tubes and made President.

Today, Kamani Tubes is no longer a sick company and has a turnover of Rs.100 crore and a capacity to produce 7,000-10,000 metric tonnes of alloy annually. Kalpana has huge plans for Kamani. She has shifted the Kamani Tubes factory to Wada on the outskirts of Mumbai since workers had sold the Kurla property. She has set up Kamani Steels and Kamani Power for LED lamps on the same land. She dreams of a day when the group will reach the heights of success it enjoyed under Ramjibhai.

Kalpana also has a huge stake in an integrated sugar factory, Sai Krupa Sakhar Karkhana, in Ahmednagar where a distillery and power plant are also coming up. She also has a huge real estate portfolio. She is on the board of Directors of the Bharatiya Mahila Bank, India’s first all-woman bank. She was even awarded the prestigious Padmashree for enterprise in 2013 by the Government of India.

“The Government has a number of schemers to help unemployed youth. We should not wait for the benefits to reach us. Instead, we should reach out and get access to these benefits and not wait for Government help. Once you have got a Government loan, you should not relax thinking your job is over. Your responsibility has now actually increased since you have to repay back the loan and also access more loan in the future, she advices.

For the little girl who came to Mumbai as a child bride to today rubbing shoulders with leading industrialists of the country, the journey has been exhilarating. She is just over 50 years old and has a lot more to do, she says. The youth is where her focus is and she sees herself giving back to the country.