After Several Failed Attempts, This Is How This Entrepreneur Built A Profitable NSE Listed Business
Hritesh Lohiya’s journey is an inspiration to anyone struggling to find a successful business.
In the early 2000s, Hritesh was failing in entrepreneurship. From manufacturing chemicals to cutting stone, he was unable to maintain a business for long. When his brokerage business failed between 2004 and 2005, Hritesh felt it was time to pause and reflect.
“I lost almost everything in this case,” he says. SMBStory.
Financially it was a difficult time but he persevered. 2005 was the year when things started to change. Residing in Jodhpur, a few hundred kilometers from the Indo-Pakistan border, Hritesh says he encountered people hoarding military waste like clothes and scrap metal.
A new start
He says he bought a few scraps and started making decorative items such as cushions and bags at a chemical manufacturing plant. He marketed the products through emails to different buyers.
Asked about the initial investment, Hritesh says he had no money for his buyers to fund it. They would give him the money to manufacture the products, source the raw materials, etc.
The response was mixed at first. From 2005 to 2007, they mainly developed the products and made negligible sales. However, in 2009, when he traveled to Delhi to display these items at an exhibition, his products caught the eye of a Danish buyer who placed him with a trial order worth $10,000.
This gave Hritesh, supported by his wife Priti Lohiya, the confidence to explore this business opportunity more seriously. This is how Priti International, based in Jodhpur, came into being.
Over the next few years, the husband-wife duo continued to market and sell these products. They gradually added a category of furniture to the business after being able to source scrap wood and iron directly from military suppliers. Constantly presenting the objects at exhibitions has worked for the company. Hritesh says that apart from India, he was also setting up booths at events taking place overseas, such as in China and Germany.
And soon a breakthrough came.
In 2011, the company was able to do business of over Rs 1 crore at an exhibition in China. From there, orders from international buyers only increased.
Today, the Jodhpur-based company is not only profitable, it is also listed on the National Stock Exchange.
There has been no turning back since then.
It currently offers 250 references of which coffee tables, dining tables and side tables are its main revenue contributors (around 60%). Other categories that are part of Priti’s business include tables, chairs, beds, cabinets, lamps, etc.
The company employs 400 people, with Priti serving as Chief Executive Officer and Hritesh as Chief Financial Officer (CFO).
While Priti’s founders diversified their offerings early on, it was the furniture category that became a focal point for the company.
This category contributed approximately 70% of overall revenue.
“We realized that we needed to focus on one category and then continue to grow within it.” He also said managing so many SKUs was becoming “too much to handle.”
“We felt it was more important for us to focus on one thing rather than many,” he says.
This also gave rise to the need to create Priti’s own manufacturing unit. Until then, Priti obtained all the products produced under contract from units located in and around Rajasthan.
Hritesh says the business was hovering around Rs 20 crore around 2015 when the founders decided to focus on furniture manufacturing.
And that’s when the question of fundraising arose. He also says they had conversations with some venture capitalists to fund the business, but the investors were “not interested” in funding a business venture that was operating offline and had no no online presence.
In 2018, Priti International was listed on the National Stock Exchange’s SME platform.
The company raised Rs 10 crore from its IPO in 2018 and brought in machinery from China and Taiwan with the money it raised.
The remaining capital was used to build the factory. A total of Rs 6 crore was used and the rest was used for ‘corporate purposes’.
The Lohiya family now owns approximately 74.59% of the company. The rest is held by the public. The company migrated to the main NSE platform in March 2022.
According to a report by Mordor Intelligence, the Indian furniture market is well known both in the domestic market and in the global market due to its unique furniture designs.
According to another report by ResearchandMarkets, Indian furniture market was $17.77 billion in 2020 and will reach $37.72 billion by the end of 2026, growing at a CAGR (Compound Annual Growth Rate ) in double digits of 13.37% in 2020-2026.
After running the business purely as an export business for many years, Hritesh now sees immense potential in the Indian market.
In fact, the COVID-19 pandemic has pushed the company out of its comfort zone. Until 2020, Priti International was primarily an offline export business. His focus never changed and he never explored the domestic market. “Our export business was doing so well that we never felt the need for it,” he explains.
This changed when the pandemic disrupted daily life in March 2020. Hritesh says they launched their D2C (PritiHome) website and were listed on e-commerce platforms during the pandemic.
Priti now competes with startups like Pepperfry and Urban Ladder, aside from the biggest offline brands.
The company recorded revenue of Rs 38.8 crore in FY21 and increased to Rs 60 crore in FY22. Hritesh says that while 90% of revenue came from export market (mainly Europe and the United States), about 10 crores of rupees came from online channels. Additionally, the company reported after-tax profit of Rs 3.09 crore and Rs 4.37 crore for fiscal 21 and 22 respectively.
“The online market has become very important and will become so in the future.” It also introduced a growing category of modular kitchens.
Seventeen years later, it looks like Hritesh is just getting started.
“The stock market is just getting started,” he says, adding that the larger plan is to grow further in India. The coming year will see the company set up its branded stores in Jodhpur, Mumbai, Pune and Bengaluru. He is also set to strike a deal with American clothing and home fashion brand, TJ-Maxx.
The deal is expected to boost the company’s revenue by Rs 45 crore this financial year, Hritesh claims.