Elgi Equipments MD Jairam Varadaraj told MSMEs to shift from profit-only to purpose-driven growth, warning that staying small is a trap. He urged innovation over cheap labor.
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Jairam Varadaraj, managing director of Elgi Equipments, told an MSME conference in Coimbatore that small businesses should not aim to stay small forever. Speaking at the MSME Growth Conclave organized by businessline, he said remaining an MSME should be a starting point, not a destination.
Varadaraj said entrepreneurs often fear losing control or hesitate to dilute ownership as their companies expand. He argued those concerns should not block growth.
"I would rather own 5 per cent of a company worth billions of dollars than 100 per cent of a company worth a few million dollars," he remarked.
He also challenged the idea that government support is essential for business growth. Companies should develop the capability to succeed despite policy hurdles rather than depend on incentives, he said.
Varadaraj urged MSMEs to move from producing "me too" products to creating "I first" innovations. He cited Apple's touchscreen smartphone and the introduction of shampoo sachets in India as examples of solving unstated customer needs.
Once a business reaches stable profitability, it must scale with a broader purpose that balances the interests of employees, suppliers, investors and society, Varadaraj said. "If profit remains the only driver, you will not scale."
He called strong governance and regulatory compliance investments rather than costs. He pointed to Elgi Equipments' own share price trading at around 45 times earnings as evidence of investor trust in published numbers.
India's ambition to become a developed nation depends on building innovative, globally competitive businesses that create value for all stakeholders, he added.
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