Essar Black Box IT Firm Sees AI-Driven Growth Opportunities

Prashant Ruia, director of Essar Capital, which oversees the group’s investment portfolio, expressed confidence in the industry in a PTI exclusive interview.

Essar Black Box IT Firm Sees AI-Driven Growth Opportunities

According to a top official of the international conglomerate, Essar Group sees enormous development potential in its IT company Black Box, with the explosion in artificial intelligence (AI) technologies driving demand for new data centers and managed services worldwide.

Prashant Ruia, director of Essar Capital, which oversees the group’s investment portfolio, expressed confidence in the industry in a PTI exclusive interview.

This business has the potential to grow significantly due to the global expansion of managed services and data centers is enormous,” he remarked.

Although Black Box is a global company with operations in 35 countries and is listed on the Indian stock exchanges, the US accounts for the majority of its revenue.

“It is listed in India, of course, but its main operations and headquarters are in the United States.” At the moment, Black Box generates over 800 million USD in revenue. The US accounts for almost three quarters of our market. We employ around 3,000 individuals in our massive operation, which has its headquarters in Dallas,” he remarked.

According to him, data centers worth more than USD 200 billion are being constructed in America alone each year.

He blamed this on the development of artificial intelligence, saying that the need for processing capacity has “dramatically” increased.

To meet this demand, enormous data centers are being constructed in the US. And there’s a sizable market for that. I believe that a significant number of data centers are being built, even in India,” he remarked.

However, Ruia pointed out that the corporation assists in the construction and management of data centers rather than investing in them.

While company revenue stayed constant at Rs 6,282 crore, Black Box reported a multifold increase in profits to Rs 138 crore for FY24.

The Essar group, which was founded in 1969 by brothers Shashi and Ravi Ruia and once owned Hutchison Essar (now Vodafone-Idea), has no ambitions to reenter the telecom sector because there isn’t much room for expansion, Ruia stated.

With Essar Cellphone, the business entered the telecommunications industry in 1995. That same year, GSM (Global System for Mobile Communications) operations were launched from Delhi. It began collecting telecom circles in India through the Hutchison Essar partnership, and by 2006, Hutchison Essar Limited owned all of the circles.

It was a fantastic time to work in the telecom industry from 1995 to 2010. We have undoubtedly profited from both the investment and the expansion. It was not a two- or three-player market back then; there were ten or twelve telecom businesses,” he said, describing the era as ideal for investment in the industry.

Hutchison, a company located in Hong Kong, left India in 2006 after selling Vodafone roughly 67% of its ownership for USD 13.1 billion.

Even though it still owned a 33% share in Vodafone-Essar, Essar sold its portion and left the telecom industry.

“No one owned a cell phone when we first started. Next, we construct the enterprise. We had 90 million customers by the time we sold it to Vodafone,” Ruia reflected.

According to Ruia, the market used to be fertile for expansion and presented special chances for investment and scaling. He notes the dearth of chances for growth and investment as the reason he does not believe there is as much promise now.

“We were entering an open market where the clients lacked phones, so we introduced phones to them. However, today’s population already has a phone and a service.

Therefore, he said, it’s very difficult for anybody to enter the telecom industry at this time unless there’s a distinct proposition.

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