One year after the death of BG Raghupathy, the business he created seems to stand firm-footed, belying doomsayers’ predictions of its collapse and whispers of an imminent takeover. If anything, the demise of the founder of the ₹3,300-crore BGR Energy Systems has forced the company to be run by professionals, which many see as a turn for the better.

It was Raghupathy’s biggest legacy that enabled BGR to live on – a healthy order book – which gave room to the professional managers to focus their energies on pressing issues such as restoring the confidence of vendors, customers and banks.

BGR makes or supplies everything a thermal power project would need other than boilers and turbines. Today, its order book stands at ₹11,600 crore, of which orders worth ₹3,300 crore were secured in the last one year, enough to keep the company’s factories busy for the next 30 months.

Professionals were there earlier with the company, but Raghupathy was the key-man. The immediate fallout of the key-man’s exit was doubt. Customers such as NTPC, the country’s biggest power utility, began to wonder what will happen to their projects, and hesitated to release dues. Vendors worried about their own dues and hesitated to supply. Banks closed their fists in their pockets and watched. Analysts wrote off the company, also because the sector it operated in was bad.

Professional management

In a way, the company was lucky to have three long-time professionals at the top who knew the business well and in whom the promoter-family had faith—Joint Managing Directors A Swaminathan and VR Mahadevan and President and Company Secretary Ramesh Kumar.

Raghupathy’s wife, his two daughters—, Swarnamukhi and Priyadarshini— and son Arjun sit in board meetings and in interactions with vendors, customers and financiers. (The third daughter, Vani, is expected to join them soon.)

Observers point to one crucial change in the management of the company. Raghupathy’s aggressive, top-line chasing style has yielded place to a more sober approach to business.

Meetings are more structured. An old-timer recalls that meetings with Raghupathy could be any-timers, at the whim of the man. Now, the top management (including the family) meets necessarily on the second Friday of every month. Decisions are slower than before, but based more on deliberations.

Now, as the company executes the orders on hand, it awaits the industry to look up. BGR does have a few other lines of business, mainly providing services to the oil and gas industry, but they contribute very little to the turnover. An analyst who tracks the company said BGR’s fortunes would continue to be stressed because the orders on hand were won on aggressive bidding.

Having stayed put and won back confidence, the best the management can do is do a good job of executing orders, collect the receivables worth ₹2,200 crore and gain credibility by paying off its dues—and wait for better days for the power sector.

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