Midnight's companies

INDEPENDENCE SPECIAL/ BUSINESS BARONS

1947 was a watershed year for the clutch of businesses launched then.

Andhra Sugars was born less than 100 hours before independent India. The Congress had said that it would abolish the zamindari system as soon as the British left India and it came to power.

So Mullapudi Harishchandra Prasad, the scion of a zamindar family from the West Godavari delta, floated Andhra Sugars four days before Independence "" he had seen farmers in the region cultivate sugarcane to make jaggery, though there was no sugar mill in the whole of south India. The company is now a Rs 632-crore concern, making chemicals and fertilisers in addition to sugar.

India Cements floated the first initial public offering (of Rs 1 crore) of independent India in 1947 to build its plant in Tamil Nadu. The company was set up the previous year after S N N Sankaralinga Iyer, a banker from Thanjavur, had stumbled across limestone deposits on agricultural land he had bought in the Tirunelveli district.

Iyer made up his mind after the government said there was going to be a shortage of one million tonnes of cement in the country. After surviving a raid from ITC in the early 1980s, the company did a string of acquisitions in the 1990s to become the leader in the southern cement market.

If India Cements was born out of cement scarcity, Ghanshyam Das Birla set up Gwalior Rayon Silk Manufacturing (Weaving) Co Ltd, now known as just Grasim, in August 1947 after large parts of cotton-growing fields went to Pakistan after Partition.

Birla marshalled his best executives to set up a rayon plant at Nagda near Ujjain. It turned out to be the most successful of all "midnight's companies" with interests in viscose staple fibre, cement, sponge iron, chemicals and textiles.

While Birla was busy putting up the Nagda facility, Gujar Mal Modi started Modi Spinning & Weaving Mills Ltd at Modinagar in Uttar Pradesh. All was going well till the mid-1970s when labour trouble disrupted operations.

After belligerent clashes, where several people died, the factory had to be shut for a long period, resulting in the company ending up in Board for Industrial and Financial Reconstruction.

A somewhat similar fate was awaiting Indian Telephone Industries, set up by the government in 1948. Set up to assemble phones and make telecommunication equipment near Bangalore, the company made money till the mid-1990s, when the sector was thrown open to the private sector.

Forced to open factories in Uttar Pradesh and Kerala in the 1970s for purely electoral reasons, the company reported a loss of Rs 412 crore in 2006-07.