Sector set to grow 20-25% in next 5 years

Security issues

Swedish firm Securitas AB picked up 49 per cent stake in the Delhi-based Walson Services.

Indian cos are beginning to acquire companies abroad.

Tops Security has announced plans for IPO and the Chennai-based SDB-CISCO is likely to tap the market.

Manu P. Toms

Mumbai, Dec. 11

Private security business in India is all set to enter a high-growth trajectory. Analysts and industry watchers say that the business, estimated to be around Rs 22,000 crore currently, will grow at 20-25 per cent annually over the next few years.

While foreign investors have started looking at the sector, Indian players are also going for overseas acquisition.

The Swedish firm Securitas AB picked up 49 per cent stake in the Delhi-based Walson Services for Rs 67 crore last week. Walson mainly provides security to VIPs and celebrities. Tops Security, one of the leading players in the domestic market, is reportedly taking over a UK firm, though details are yet to be announced.

It is only recently that the Indian private security industry has started getting investors’ attention. At least two companies are planning to tap the capital market shortly. While Tops Security has already announced its plans, the Chennai based SDB-CISCO is understood to be going for an IPO.

“No one really knew the size and potential of the sector until recently. We have become one of the largest job providers in the country,” said Mr Kunwar Vikram Singh, Chairman of the Central Association of Private Security Industry (CAPSI). The booming construction sector, IT/BPO industry, private banks and financial institutions are driving the growth in private security industry, according to Brig. H.C.Chawla, Managing Director, SDB CISCO, and Member of Board of Governors, CAPSI.

For hundreds of thousands of job seekers, especially rural youths, private security service has thrown up a wide range of job opportunities. The number of people employed as securities guards is expected to double in the next five years to 10 million. The Indian arm of G4S, the renowned international security solutions providers, employs one-lakh men while Tops Security has 55,000 people on its rolls and Chennai-based SDB-CISCO has 20,000 guards.

“With the advent of Private Security Agencies Regulation Act 2005, certain standardisation has set in motion. Strict guidelines for licensing and training norms are in place. Most of the companies are now getting registered. About 3,000 security firms follow better management practices, of which close to 150 are ISO-certified,” says Mr Vikram Singh, who is also the Chairman of Lancers National Network.

“Earlier, only MNCs and big Indian companies were particular about the security needs. Now even smaller companies are looking for trained and verified security personnel and electronic security system,” says Brig Chawla. SDB CISCO, an Indo-Singapore joint venture, has an annual turnover of Rs 113 crore. The company has recently bagged a contract from Jordan for providing electronic security systems.

The major players are looking forward to the States to enact legislations in line with the Private Securities Agencies Regulation Act 2005 to wipe out spurious elements in the industry. Maharashtra is soon to come out with a legislation to regulate private security service providers while it is in different stages of progress in other States.

(This article was published in the Business Line print edition dated December 12, 2007)
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