When a platoon of US marines track insurgents in war-torn Iraq at night, it has a Bangalore company to thank for its safety. Because the night vision goggles and binoculars the soldiers use come from a small company in the Indian tech capital.
Alpha Design Technologies, a three-year-old start-up, makes these devices—which help soldiers track movements in darkness—for its joint venture partner International Technologies (Laser) Ltd, an Israeli company that in turn sells it to the US Army. About 10,000 goggles, costing around Rs1,25,000 a piece, have been supplied to date.
But the big story at Alpha is not of the mounds of cash that it is making. The company—founded by H.S. Shankar, a former research head of the state-run defence electronics company Bharat Electronics Ltd (Bel)—is just one among several such firms spawned by research professionals from India’s defence development establishment.
Shankar, who was a colonel in the Indian Army before he joined Bel, started Alpha in 2004 with a seed capital of Rs25 crore from an unnamed private investor.The stakes were much smaller for Iwave Systems, also Bangalore-based, founded by scientist Mohammed Saliya, formerly with Indian Space Research Organization (Isro).
Saliya, who wrote software for satellites while with Isro, left the space agency in 1996 to join Philips Semiconductors. But soon the entrepreneurial bug hit him and he joined his friend Abdullah Khan, a hardware engineer, to set up Iwave in 1999 with their savings of just Rs15,000.
“We had no reference to talk about. It was like a fresher looking out for a job,” says the 50-year-old Saliya. With a revenue of Rs6.3 crore in fiscal 2006, Iwave today employs about 100 people and has worked on projects that include a design for US chipmaker Xilinx.
Its biggest project is Rainbow, a global positioning system-enabled hand-held computer for soldiers, works in conditions from -30 degree Celsius in the Himalayas to the dusty and flaring heat of the Rajasthan desert.
Iwave and other start-ups primed by former defence scientists have Plexion Technologies to look up to. Founded by two Isro scientists, M.K. Padmanabhan and D.H. Bonde, the seven-year-old engineering services company with backing from private equity company JP Morgan Partners, counts Daimler-Chrysler, Ford, Volvo and Mercedes- Benz among its customers.
Bangalore-based Plexion focuses on design services for the auto and aerospace sector. In 2005, auto major Mahindra and Mahindra acquired Plexion, retaining the management team of Padmanabhan.
Elsewhere in the tech capital, a group of former employees of National Aerospace Laboratories (Nal) have founded Abstract Algorithms, a company that uses pattern recognition to detect cancer, and Bangalore Integrated System Solutions (Biss), a company manufacturing instruments to test equipment from automobile components to toys.
Sudarsh V. Kailas, who worked on reducing turbulence during flight of planes by studying wind patterns and how an aircraft behaves in different wind conditions at Nal, had a stint in Siemens, before he launched Abstract in 2004.
“The urge was to do something exciting,” says Kailas, who has built algorithms that include helping stockbrokers in Japan predict the volatility of markets by analysing trade patterns. “It is marginally incremental but the benefits are big,” he says.
Biss’s chief executive R. Sunder, an expert on improving the life of airframes in fighters such as the Russian-built MiG,leads development of equipment used to test a wide range of devices from automobile components to medical electronics, and also exports the equipment to the US.
Ironically, the US prohibits sale of such “dual use” equipment built by American companies to Indian research labs on the pretext that they can be used for both civil and defence purposes.
In Hyderabad, Ananth Technologies, a company founded by former Isro scientist Subba Rao Pavuluri, started with building commercial applications of satellite data beamed by Indian remote sensing satellites. Pavuluri, who worked with the National Remote Sensing Agency (NRSA), slowly graduated to building systems for satellites and software that guides Isro rockets while placing a satellite in orbit.
“Developing technologies for Indian programmes is not as glamorous as writing software codes,” says Pavuluri, 53, wryly. “With India set to launch more satellites for multipurpose users, the future is bright.” Ananth expects his Rs100 crore company to bag more orders from the Indian space programme.
Analysts believe that a new defence offset policy that mandates foreign contractors to source components and systems from local vendors for 30% of the orders they sell to India augurs well for these companies.
“We will see more engineers with expertise launching their own enterprises in future,” predicts C.G. Krishnadas Nair, president of the Society of Indian Aerospace Technologies and Industries, an organization that promotes home-grown enterprises in the aerospace and defence sectors.
Adds N.R. Mohanty, a former head of Hindustan Aeronautics Ltd who is currently managing director of a unit of US’ Bell Helicopters: “Foreign companies are looking to tie up with Indian vendors and their comfort level would be to work with people in the industry (largely from the public sector).”