"No investor even asked me that J&K is a disturbed place and how can they invest": Atul Modi

Jammu-based businessman Atul Modi (above) and his wife Namrata launched Prevest DenPro in 1999.

Jammu: In the autumn of 1999, the gypsum mines of Jammu & Kashmir (J&K) tempted a Jammu-based mechanical engineer Atul Modi and his wife Namrata, an MBA, to start a business. Twenty-one years on, the company they founded, Prevest DenPro Ltd, is one of India's leading dental materials manufacturers.

On September 27, Prevest DenPro made a stellar debut on the BSE SME platform - it opened at Rs 180.55, a 115 percent premium over the issue price of Rs 84. The initial public offering (IPO) of the company drew bids worth more than Rs 730 crore, which is unprecedented in the history of BSE SME IPOs.

Modi’s Prevest DenPro became the first company from J&K to be listed on the BSE SME platform. Other listed companies from the Union Territory are J&K Bank, which is listed on both the exchanges while Sarveshwar Foods is listed on the National Stock Exchange (NSE).

J&K is mostly in the news for political conflict and insurgency - it is rare for news about successful industrialists like Modi to trickle out of the union territory.

Also read: Interview | CMD of first J&K company to list on BSE SME talks about listing gains, ease of doing business, expansion and more

The beginning

The journey of Prevest Denpro started in 1998. Seeing the large quantities of gypsum available in the Ramban area of Jammu, the Modis thought about manufacturing a special type of plaster of Paris which has applications in dentistry. The technology for making this special type of dental plaster with locally available gypsum was developed by the Indian Institute of Integrative Medicine, formerly known as Regional Research Laboratory.

“A small unit was set up in May 1999 in the Digiana Industrial Estate of Jammu with a small investment of Rs5 lakh, and dental plaster was the first product manufactured in the year 2000,” recalled Modi.

There was positive market feedback for the gypsum-based dental plaster, and the Modis decided to develop more products for dental applications. “I found (out) that all dental products and dental material were coming from Europe, US and other developed countries and nothing was made in India. I visualized that dentistry has a very good future in India and started one such unit,” Modi said.

In 2003, the duo decided to explore markets outside India, too. They started travelling abroad to attend dental exhibitions and conferences, to develop contacts with international buyers. Soon, the company started exporting products to various countries in small quantities.

“Till 2010-11, we did not have a good domestic market but our exports were growing at a faster rate. Our domestic market share was 30 percent and foreign market was 70 percent but now the domestic market is 40 percent and foreign market is 60 percent,” said Modi.

Headquartered in Jammu, Prevest DenPro now makes 100-plus dental products and has more than 80 international dealers across Europe, Africa, Middle East, South America and Asia. Recently, it obtained USFDA approval for five products which will open doors for Prevest to enter the markets of USA and Canada by next year.

Prevest DenPro are certified with ISO 13485:2016 and EU CE mark, which makes the company eligible to market its products in the European Union and in countries which have adopted EU medical devices directives.

The businessman engineer

Before he started Prevest DenPro, Modi had established JK Alums & Chemicals Private Ltd in 1983. He ran it successfully for 15 years. “The industry was manufacturing Aluminium sulfate, a chemical which is used in water purification. We were supplying this product to the state government and Hindustan Unilever Limited (HUL). However, in 1995, our major buyer, HUL wound up their business in Jammu."

In the months that followed, Modi and Namrata explored different options. The biggest challenge in the dental materials business, he said, was the technology - these products are highly technical and very specialized technology is involved in the manufacture of such products.

“Having an engineering background, I took up the challenge of developing technology in India with assistance from scientists from the Regional Research Laboratory,” Modi claimed.

As Indian dental professionals began adopting the products, Modi's confidence grew. Namrata took over the administrative management responsibilities, building a management team for sales and marketing, and production.

Going public

Modi and his team have embarked on an aggressive 10-year growth plan. “In the first phase, we have chalked out a plan for expansion of existing factories and to set up a new manufacturing facility at the existing site for oral hygiene, oral care, biomaterials with an investment of Rs35 crore. We are also looking to invest a considerable amount on R&D facilities and augmentation of marketing infrastructure,” Modi said.

In the second phase, Modi said, a new state-of-the-art manufacturing facility is proposed to be set up at a strategic location to manufacture new products and also to build additional capacity for existing products to meet the growing demand worldwide.

“Our company is debt-free because our credit policy has remained very strict. We manage the business with our internal resources and work on strict payment terms. We do not rely on any bank loans. Now, since we have decided to expand, we need to have new capacity,” Modi said. Funds from listing the company will finance the expansion and diversification activities, Modi explained.

The Prevest DenPro IPO was subscribed over 38 times. “I had a dream to list my company on the stock exchange as it increases the customer's confidence in the professional business management. The response of my company on BSE has made it clear that J&K is feasible for any business. No investor even asked me that J&K is a disturbed place and how can they invest,” said Modi.

"I wanted Rs26.5 crore and I got the bids for Rs730 crore,” Modi said. “Wherever there is opportunity for business growth, people are ready to invest.”