An amazing story from rs 60000 to rs 435 crore!!

Vinodrai Engineers Pvt. Ltd.,
12 Km. Stone, Jalna-Aurangabad Road,
Village Dawalwadi, District : Jalna
Jalna – 431 203 ( India )
Ph: +91-2482-221061 Fax: +91-2482-221448
Web: vinodrai.com , E-Mail : vinodraieng@rediffmail.com

An amazing story: From Rs 60,000 to Rs 435 crore!
April 16, 2008

Today Ma Foi
Management Consultants
is the largest HR services
provider and staffing
company in India, with a
turnover of Rs 435 crore
(Rs 4.35 billion).
Ma Foi has so far helped
generate career
opportunities for more
than 169,000 people in
35 countries.
K Pandia Rajan started it in 1992 with a capital of just Rs 60,000. Ably assisting him in
his long journey has been his wife, Hemalatha Rajan, who is also the director of the
company.

Childhood in Sivakasi
Pandia Rajan was born in
Vilampatti village in
Sivakasi district. His
father who was a worker
at a match factory died
when Pandia Rajan was
just three months old. He
was brought up by his
grandparents in a joint
family of about 40 to 50
people.
Later his grandparents
started their own match factory.
After studying in the village school, the hard-working boy went to Coimbatore to study
engineering at the PSG College of Technology.

Pursuing excellence in rotational moulding.

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Having stood first in the university, he joined XLRI, Jamshedpur for his MBA. That, he
says, was where the seeds of entrepreneurship in the HR arena were sown in his mind.
"At that time, HR guys never became entrepreneurs, but I wanted to study HR and then
be an entrepreneur. In my village too almost everybody is an entrepreneur. Unless you
are on your own, you are a nobody there. So, you can say the entrepreneurial spirit is
deeply ingrained in all of us."
But he had to wait for some time. After working for six years, and getting married to a
chartered accountant (Hemalatha) in 1989, he and his wife decided to put all their dreams
together in their own enterprise."

Starting Ma Foi

On August 15, 1992,
the couple decided to
launch Ma Foi
Management
Consultants ?to market
expertise as a product.'
But why a French
name? "We were
targetting the
international market.
So, Ma Foi -- or My
Word -- is a name that
meant something to all
European countries. It
gave us an occasion to
speak about our value
Image: Students at a laboratory in a school run by a to the clients. ?Ma Foi'
trust set up by Ma Foi Consultants. symbolized what we
wanted to say and do."
With an investment of Rs 60,000, they started Ma Foi in "a small shack of a place." But
by the end of the year, four of their friends put in Rs 10,000 each and upped the
investment to Rs 1 lakh (Rs 100,000).
They started primarily by placing engineers overseas. The Chennai office, which opened
at 6 a.m., remained open till midnight so that candidates could walk in and register any
time. "Although it was a struggle initially, we wanted to position ourselves as a
candidate-centric organisation. About 30 to 40 people visited us every day. It was 1992-


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93 and the Gulf region was booming. We sent dozens of middle-level and managerial
people at that time to countries like Oman, Saudi Arabia, Kuwait, Malaysia, Brunei, etc. .
."
Even as visa processing began, the Babri Masjid was felled. All Gulf nations put a ban on
issuing visas to Indians. And Ma Foi's losses ran into lakh (hundreds of thousands). "It
was a tough phase and we had to pledge even our jewellery. But when we came out of the
struggle, we expanded into all kinds of things."
By 1994, a lot of multinational companies made their entry into India. By the end of
1994, Ma Foi got a huge offer from Apple Computers to recruit all their heads of
departments. "That was also the time the salaries in the Gulf region started falling. Till
then we had not done any such huge recruitment in India. Whatever we had done was
only on the secretarial side. With that one assignment from Apple Computers, we moved
ahead in India."
Ma Foi also set up offices in all the big cities in India and seriously started looking at
domestic recruitment and sectors like IT, finance and banking.
By then, Ma Foi became a closely held public limited company. "We gave equities to our
friends, relatives with the promise that we would return at least 20% dividend every
year."
During the dot-com boom in 2000, Ma Foi also had a dot-com plan and got a lot of
venture capitalists investing in it. But then came the dot-com bust. "Thankfully we were
affected only slightly by the dot-com bust. We pulled back the dot-com model very soon
and convinced our VCs to use what we got -- around Rs 8.5 crore (Rs 85 million) -- in the
brick-and-mortar model. With that money, we could spruce up our offices and add more
people."

Part of the Vedior Group

In 2002, Ma Foi set up
their first overseas office
in Dubai. "In terms of
turnover, we were number
one in India then, with 600
people working for us.
Whenever we travelled
abroad we noticed that the
staffing industry over there
was quite evolved. It also
Ma Foi has been giving back to the society through made business sense to
its corporate social responsibility intiatives.


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have offices abroad. Deputing 10 people in the United Kingdom is equivalent to deputing
100 people in India!"
After understanding how the overseas market worked, they had two choices: either to go
for an initial public offering, or to look for a global, strategic partnership. "The IPO
market was down and volatile then. So, we decided to go for a strategic partnership with
global majors. Giants like Manpower, Adecor and Vedior were also looking at the Indian
market."
"Vedior (the world's leading specialist staffing company from the Netherlands) was much
below the two in terms of turnover, but it allowed us much more flexibility. It was a
multi-brand company and called itself a federation and corporation. Because it is a
federation, a lot of entrepreneurs become a part of it. We run the show and they support
us. We had 270 shareholders, plus the VCs, then. It was a majority partnership with 76
per cent held by Vedior and 24 per cent by us. Today, we hold 18 per cent.
With Vedior's support, Ma Foi set up offices in the United Arab Emirates, the UK,
Singapore, Sri Lanka, Oman, the United States, Bahrain, Kuwait, Qatar, Thailand, Hong
Kong, China, and Malaysia.

The Indian market and the world market
"India is still an evolving market; it is still not a mature market though a lot more clarity
has emerged in the last five years. In terms of legality, it is clearer too. On the other hand,
the European and the US markets are quite mature. It will take another decade or so for
the Indian market to evolve fully."
"People are slowly getting comfortable with temporary staffing in India too. In a country
like France, almost 80 per cent of the staffing is on temporary basis. People mostly work
on contract. But in India, there is a stigma attached to temporary jobs."

Impact of the US recession
"Definitely the slowing down of the US economy will have an impact on the Indian
economy too, but not too much. It may take another six months for the IT and BPO sector
to feel the pinch. Sometimes, the impact could be positive; there may be more
outsourcing too as they have a problem there."

Making profits
Ma Foi broke even in their first year itself. From placing 30 to 35 people in the first year,
now they find jobs for around 5,500 people every month.


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If the turnover of the first year was Rs 520,000, today, it is Rs 435 crore. In the initial
years, Ma Foi grew at more than 100 per cent. The company's compounded annual
growth rate has been 70 per cent.

Social responsibility

"Though both of us
were fairly well
employed, our dream
was to build an
institution, do
something meaningful
and give something
back to society in
whatever way we
could," the Rajans say.
The company made a
profit of Rs 5,000 in the
In 1997, they started a Trust called Sornammal first year. Vandana
Educational Trust (SET) in the name of Pandia Rajan's Gopikumar and
grandmother. The first effort was to help the students Vaishnavi Jayakumar,
of his village. two college students
had just started Banyan,
a Trust that helps rehabilitate mentally challenged destitute women at that time. "We sent
the entire money to help them set up Banyan. From that year onwards, we keep aside a
part of our profits for charity."
As they doubled their profits every year, their contribution to charity too increased. In
1997, they started a Trust called Sornammal Educational Trust (SET) in the name of
Pandia Rajan's grandmother. The first effort was to help the students of his village.
In 2000, when a school with 100 very poor children run by Hemalatha's grandmother was
to be closed down after she passed away, the educational trust decided to run it. "When
we saw the poor children, we felt like helping them. We bought a piece of land and built
a school. We called it Sornammal Matriculation School. Now we have 650 children, of
whom 350 study free of charge."

It was when Hemalatha met the mothers of the poor children that the idea to start self-
help groups (SHGs) originated. These women are clustered into groups and are given
vocational training so that they could start their own ventures. Training is provided to


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women to become nurses, DTP operators, housekeepers and even auto drivers. They are
also taught tailoring, bag making, handicrafts, embroidery, et cetera.
"Till today, we have given
Rs 3 crore (Rs 30 million)
as loans to these women
to start their own
businesses. I must say the
repayment of loans has
been 100 per cent," a
satisfied Hemalatha said.
The trust has 816 SHGs
for 13,128 women in
Chennai.

CIOSA
In 2004, after working
with many NGOs,
Hemalatha felt the need to
bring all the NGOs under one umbrella, and that was how the Confederation of Indian
Organisations for Service and Advocacy (CIOSA) was born. It acts as a good platform
for corporates and NGOs to work together.
In 2007, the Ma Foi Foundation was formed so that all the corporate social responsibility
activities are taken care of by one body. Under the Disha Scholarship Scheme, 1,300
children from corporation school -- 150 are from the Rajans' native town Sivakasi -- get
scholarship to study. The foundation also runs career guidance programmes for the 8th,
9th and 10th standard students.
"Ma Foi Foundation promises a better society as we believe in giving back what we take
out and changing the world for the better," the Rajans said.


An amazing story from rs 60000 to rs 435 crore!!

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