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Private security firms are beating the COVID-19 blues; here's how

As per analysts at Mumbai-based Axis Securities, COVID-19 outbreak has presented an unprecedented opportunity for security services companies in India

twitter-logoManu Kaushik | August 11, 2020 | Updated 15:05 IST
Private security firms are beating the COVID-19 blues; here's how
The security apparatus in the manufacturing sector and corporate offices went up as private security personnel became the first line of defence against COVID-19

The pandemic has ravaged sectors across the Indian economy. While some have been able to withstand the shock, a large number of sectors have seen a major disruption over the past five months. Even as healthcare, telecom, and insurance have done well in the COVID crisis, there's an unlikely gainer that has shown resilience to the challenging economic environment. The Rs 1-lakh crore private security industry seems to have grown during the pandemic.

How?

Firstly, it was declared essential service right from the beginning of the lockdown in March. The business was hit initially as some segments such as malls, restaurants, and cinema halls were shut down, and the companies engaged in these businesses trimmed their security requirements. On the other hand, the security apparatus in the manufacturing sector and corporate offices went up as private security personnel became the first line of defence against COVID-19. This trend continues to hold till today.

"Things like fever checks, masks distribution are being done by security guards. COVID has given a boost to our facility management segment as corporates see this as business continuity imperative. Companies are spending on hygiene, fumigation, safety, etc to thwart any potential risks to their businesses," says Rituraj Sinha, managing director, SIS.

As per analysts at Mumbai-based Axis Securities, COVID-19 outbreak has presented an unprecedented opportunity for security services companies in India. "Facility management vertical sees strong demand due to higher sanitation needs. Due to lockdown, medical emergencies cash logistics segment also witnessed healthy demand across cities," said a June note from Axis Securities.

In India, the private security industry is highly fragmented. The organised segment, which controls nearly 40 per cent of the market share, has about 250 players such as G4S India, Securitas, SIS, TOPSGRUP and ESMS India. Together, the industry employed over 9 million prior to the pandemic.

In fact, COVID-19 has enabled top private security operators to start investing into new tech solutions for their clients. New tech tools make it easier for corporates to ensure compliance to the MHA (ministry of home affairs) guidelines. For instance, SIS India introduced a virtual COVID Marshall which is essentially a AI- and ML-based software platform that uses the existing CCTV systems to deliver a slew of services such as face mask compliance, detection of crowding at workplace, monitoring cleaning service frequency, assuring vehicle disinfection compliance, temperature scanning and data recording, and regulating Aarogya Setu compliance via mobile app.

Experts say that the COVID period has also acted as a filter to differentiate serious players from fly-by-night operators in the industry. For instance, when the pandemic stuck, there was a huge labour migration across the country, including those of private security guards. Operators who were not complying by the minimum wages rules saw a large chunk of their workforce migrating to their hometowns.

Organised players, on the other hand, have fulfilled the three basic needs of their workforce: minimum wages (enough to sustain life), job continuity (through higher demand for their services) and social security cover (through Employee Health Scheme and providing preventive gears like PPE, etc). "There's a shift in the behaviour of customers which has led to higher demand for reliable security service providers," says an analyst.

Also read: Loan restructuring to prevent NPAs from rising to two-decade high: CRISIL

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