In December, private security and facility management firm Tenon Group’s founder Manjit Rajain was speaking to Microsoft’s global head of security. Rajain figured out during the conversation that the biggest concern of large corporations was tracking health of employees outside office premises. “He said while he can secure people inside the complex, what happens when they go out? The employers are worried about how their employees are interacting outside office,” says Rajain, who is now trying to devise a solution that can track people outside office – only for health reasons. “We have gone to officials at Aarogya Setu. We are asking them to share data of people who have come closer to people I have been tracking,” he says.
Rajain is part of the economy that has, after hurting for some months after the pandemic, seen good growth of late – private security and facility management business. For instance, business research agency Freedonia has estimated that the private security industry is expected to grow at nearly 15 per cent CAGR (compounded annual growth rate) to touch ₹1.6 lakh crore by 2024, doubling from ₹80,000 crore in 2019. Facility management business is expected to grow from ₹1.1 lakh crore to ₹2.3 lakh crore during the period.
Experts say the private security industry felt the impact of the pandemic for the first two quarters. The growth rate picked up from third quarter onwards. It is likely to recover fully after March 2021. “The impact varies from one player to another. The unorganised segment has been hurt the most, and within the organised market, companies with large exposure to IT/ITeS sector, educational institutions, hotels, malls, etc, have been affected. Players with exposure to essential services such as manufacturing, healthcare and banking have been largely unaffected by the crisis. In general, security services were lesser impacted and were operating close to full capacity,” says Snigdha Sharma, Senior VP (Investment Banking) at DAM Capital Advisors (erstwhile IDFC Securities).
Rituraj Sinha, Managing Director of SIS Group, says the security industry has a low correlation with GDP. When economy grows at 5 per cent, the private security grows at 15 per cent, he says. That’s because when new things are being built (highways, hotels, car dealerships, et al), demand for guards and cleaners goes up. “But when economy shrinks 5 per cent, we still grow at 3-5 per cent. It’s a unique phenomenon that doesn’t apply to many businesses. It’s possible only in e-commerce — people buy goods online when they get more money in a good economy; but in recent lockdowns, too, demand for ecommerce didn’t go down. . We have multiplier effect on the upside and protection on the downside,” he says.
For instance, SIS reported consolidated revenues of ₹4,324.59 crore in first half of FY21, 5.5 per cent higher than in the corresponding period last year. “Security services were notified as essential services right at the beginning (of the lockdown), and therefore, we were least impacted, and also the first to report V-shape recovery,” he says.
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