It was around this time that the unravelling of the Escorts telecom story – which would end up severely wounding the main tractor business ...
It was around this time that the unravelling of the Escorts telecom story – which would end up severely wounding the main tractor business – started.
In his Chairman’s Message in the annual report of 2001-02, Rajan Nanda proudly declared that Escotel was all set to “become our strongest retail chain with the largest numbers of channel partners, customer base and third most popular brand recall”. The company had an operating profit of 40 per cent of revenues.
But when the time for bidding for more circles came, Escorts decided to go it alone. A wholly owned subsidiary, Escorts Telecommunications Ltd (ETL), was incorporated in 2001. Though First Pacific believed in the enormous potential of the Indian market, it was facing financial stress back home. Bringing in a third partner would have helped.
Nikhil Nanda also believed Escorts should limit its own exposure and bring in other investors. He, however, was unable to convince his father that 40 per cent of, say, a Rs 10,000 crore business was much better than 51 per cent of a Rs 1,000 crore one.
ETL bagged four circles – Punjab, Himachal Pradesh, Rajasthan and East Uttar Pradesh (UP-East). It had signed the licence agreement in October 2001 and...
