Home >Companies >News >G4S plans to target IT, infrastructure and hospitality sectors

New Delhi: The £10 billion global security company G4S Plc. plans to expand its 3,000 crore India business, targeting sectors such as information technology (IT), infrastructure and hospitality, as it prepares for another round of acquisitions in the country.

The company, which is growing at 14-15%, has a 15% share in the 18,000-20,000 crore domestic private security market, according to a report by the Federation of Indian Chambers of Commerce and Industry (Ficci).

The group operates through four companies in India, providing security guards, electronic security systems, facility services (cleaning, laundry, room service, etc.) and bullion and cash-moving services.

“India is a high growth market for us. The security market in India is growing at about 18% every year," said Neil Prasad, regional managing director, South Asia, G4S.

“We are in the market certainly for acquisitions. We have closed several in the last year. We are looking at acquisitions in most of the areas, including facility services, cash and" guarding people.

The company plans to announce an acquisition in the facilities area by the end of the year, Prasad said. “Our investments primarily will be through acquisitions in the country."

The company is also investing to upgrade facilities in the cash business, area offices and its 36 training schools.

“We are reinvesting 100 crore in our cash business by bringing cash vans to international standards," said Prasad. “Our investment depends on what government legislation allows us to do. There are several restrictions in the security area for FDI (foreign direct investment). It means that it is near impossible to repatriate the money, which makes it hard to invest in India."

Industrial and IT/ITeS (information technology enabled services) sectors are high growth areas for the company. Together they contribute around 40% of revenue. Infrastructure development, banking and real estate segments come next and contribute around 16%. Hospitality, which contributes only 5% of the total, is growing the fastest, according to the company.

Prasad said the company recently started recruiting from villages as it plans to increase training capabilities across the country.

“We recruit around 6,500 people per month. However, government policies like MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) have reduced the mobility of people," he said. “Villagers are getting paid to stay in the villages. So we have recently started recruiting at village levels. Instead of them coming to schools, we are doing first phase of induction training in villages."

The security industry estimates that it employs 7.5 million people, of which about 8% is with the organized sector, according to industry estimates.

Experts say the Indian private security sector has seen sustained foreign investor interest.

“Many foreign security companies are entering and expanding in India through acquisitions only since the security sector has seen rapid growth over the last few years due to increased security concerns," said Sudip Bandyopadhyay, managing director and chief executive, Destimoney Securities, a financial services firm.

“This sector has seen sustained growth even though economic growth slumped."

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