Modern Delhi: Essar Group sees huge growth potential in its IT company Black Box with the rise of artificial intelligence (AI) technology driving demand for recent data centers and managed services across the globe, a top official of the multinational conglomerate said. In an exclusive interview with PTI, Prashant Ruia, director of Essar Capital, which manages the group’s investment portfolio, expressed confidence in the industry. “This is a company that is seeing tremendous growth because the growth that is happening in data centers and managed services around the world is exponential,” he said.
Black Box, listed on Indian stock exchanges, operates in 35 countries, but its main business comes from the USA.
“Of course, it is listed on the stock exchange in India, but it is headquartered, its main operations are in the US. We’re currently doing about $800 million in revenue at Black Box… about 75 percent of our market is in the United States. We have a very enormous company based in Dallas, we employ nearly 3,000 people,” he said.
He said that more than $200 billion worth of data centers are being built annually in America alone.
He attributed this to the rise of artificial intelligence, which has “dramatically” increased computing power requirements.
“People are building huge data centers in the US to meet these demands. This is a huge market opportunity. I think even in India, a very enormous number of data centers are being built,” he said.
Ruia, however, noted that the company does not invest in data centers but helps build and manage them.
Black Box reported a multi-fold augment in FY24 profits to Rs 138 crore, while revenues remained flat at Rs 6,282 crore.
Founded by brothers Shashi Ruia and Ravi Ruia in 1969, the Essar group, which once owned Hutchison Essar (now Vodafone-Idea), has no plans to re-enter the telecommunications market due to lack of growth potential, Ruia said.
The group entered the telecom market in 1995 with Essar Cellphone and started its GSM (Global System for Mobile Communications) business from Delhi in the same year. Through the partnership, Hutchison Essar started taking over telecom circles in India and by 2006, all circles were under Hutchison Essar Constrained.
“The years 1995–2010 were an amazing time for activities in the telecommunications sector. And we certainly benefited from that investment, we benefited from that growth. In those days, there were 10-12 telecommunications companies, there were not two one- or three-person markets,” he noted, calling it a golden stage for investment in the industry.
In 2006, Hong Kong-based Hutchison sold 67 percent of its shares to Vodafone for about $13.1 billion and left India.
Essar, which still held 33% stake in Vodafone-Essar, also sold its shares and said goodbye to the telecom business.
“When we started, no one had a cell phone. Then we built the company. Before we sold it to Vodafone, we had 90 million customers,” Ruia recalls.
Ruia said he believed the market was once ripe for growth and offered unique opportunities to scale and invest. Today, however, he does not see such potential, citing the lack of development and investment opportunities.
“We dealt with a market that was open – customers didn’t have phones, we introduced phones… but today everyone has a phone, everyone has a service.
“So, unless there is a unique proposition, it is very hard for anyone at this stage to enter the telecom space,” he said.
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