INDELIBLE INK MAKER SEEKS TO PAINT NEW FUTURE
MPVL, a tiny PSU, has made an outsized contribution to democracy. But it wants a future beyond the poll booth
Come election time, employees at Mysore Paints & Varnish Ltd (MPVL), a public sector undertaking owned by the Karnataka government, try to steer clear of their colleague K. Vishalakshi. With good reason, for the assistant works manager is always on the hunt for clean fingers to test the efficacy of the company’s flagship product: the ink used to mark voters in India’s elections. “My hand will almost be black during those times,” she tells Mint with a rueful smile.
She may be playing a huge role behind the scenes of India’s national election, the largest democratic exercise in the world, but for all that, 42-year-old Vishalakshi is a simple, unassuming person. The postgraduate in organic chemistry, who also heads the quality department of the company, is responsible for ensuring that the ink leaves an indelible mark on the voter, one that will remain for at least 72 hours.
A voter’s finger is marked with indelible ink in the polling booth to prevent bogus voting—the casting of multiple votes. It was introduced in 1962 after rising instances of voting fraud in the first two general elections (1951-52 and 1957). Back then, indelible ink was the single most important instrument to prevent the malaise—voter identity cards were introduced only in 1993. MPVL has been the sole supplier of the indelible ink to the Election Commission ever since it was first used. The company was founded in 1937 by Krishnaraja Wadiyar IV, maharaja of the kingdom of Mysore. The ink remains its flagship product and accounts for the bulk of its revenue even today.
It is not just the Indian elections that MPVL supplies and protects. The state public sector unit exports its indelible ink to over 30 democracies around the world, including Malaysia, Cambodia, Mongolia, South Africa, Nepal, Ghana and Denmark. It even supplied the ink to Pakistan and Afghanistan back in 2004-05.
But the winds of change are now blowing across the company. It is modernizing operations and entering newer product segments to reduce its lopsided dependence on indelible ink for revenue.
MODEST OPERATIONS
While it plays an outsized role in India’s national and state elections, MPVL is actually a small-scale operation comprising a few small buildings on a seven-acre property nestling among the large green trees in Mysuru’s Bannimantap locality. The first product it made was sealing wax, which is still used by India Post. It was also used by the Election Commission to seal ballot boxes.
The company became a Karnataka state public sector unit after Independence. Its chairman is generally the industry minister or industry secretary. Currently, M.B. Patil of the Congress party, who is Karnataka’s minister for commerce, industries and infrastructure, is the chairman of the board. Apart from indelible ink and sealing wax, MPVL, which has a workforce of 100 people, manufactures paints, enamels, primers, polyurethane paints, epoxy coatings, and anti-corrosive paints, which are predominantly meant for industrial use. But the ink accounts for three quarters of its revenue.
“We want to reduce our dependence on indelible ink and make our business more sustainable,” says K. Mohammed Irfan, managing director and board member of MPVL. Funding is not an issue. MPVL is sitting on reserves to the tune of ₹73.59 crore (2022-23). The challenge is to undertake this process without compromising its cherished record, and unbroken profitability.
MPVL has always been a profitable and dividend-paying company. Its annual revenue in a non-Lok Sabha election year is around ₹30 crore (see chart). This includes ₹10 crore from paints and related products and ₹20 crore from indelible ink sales, both domestic (for state assembly elections) and exports (which stood at ₹8.15 crore in 2022-23). MPVL’s profit after tax stood at ₹4 crore during the year. In years when Lok Sabha polls are held, its revenue and profit spikes. In 2019, MPVL’s revenue rose to ₹61 crore and profit touched ₹13.4 crore. In 2023-24, the revenue figure is estimated to surge to the ₹80 crore level. Revenue from supply to the 2024 Lok Sabha elections alone is projected to touch ₹55 crore.
PERIODIC FRENZY
The otherwise routine pace of work at MPVL gets disrupted every five years, when Lok Sabha polls are announced. The Election Commission gives an early indication of the quantity of indelible ink that will be needed months in advance, and the company accordingly plans production. “It typically takes about three months to manufacture the ink and that period is extremely busy as our resources are fully stretched,” says Vishalakshi. Leaves are cancelled and 50 more workers are hired.
For the 2024 Lok Sabha election, the Election Commission ordered 2.656 million phials or small cylindrical bottles. Production began on 25 December, with about 60,000 phials, each carrying 10 cc of ink. By 22 March, MPVL wrapped up production and delivery of all the phials.
“We shipped (batches of) the product as and when we completed production. The consignment is sent to the headquarters of the Election Commission in each state,” explains Ashwath Appanna, the marketing manager, a 26-year veteran of MPVL. The farthest places, such as the north-east, are serviced first as it takes more time for the consignment to reach them, he adds.
The formula for the indelible ink is the brainchild of three scientists at the National Physical Laboratory (NPL)—B.G. Mathur, V.D. Puri and M.L. Goel—who hold the patent for it along with NPL.
Vishalakshi is among the few people in the country privy to the formula. “It is a big responsibility,” she says, adding, “We take great care to ensure that the ink we manufacture works without fail for a free and fair election.”
Before they are shipped, the products go through multiple layers of quality checks. “Quality checks happen at the raw material stage itself,” explains Vishalakshi.
Each batch of silver nitrate, the main raw material and a host of solvents are checked before being used in production. The mixing of the ingredients, as per the formula, happens in a dark room as the process is photosensitive. “The final product is then tested thrice, as per NPL norms: after production, while filling in the phials, and before dispatch,” she explains.
Attempts are made to remove the applied ink using a variety of fluids such as lemon juice, papaya juice, shampoo, nail polish remover, dye remover or a combination of these. Newspaper reports and social media posts are scoured for details of indelible ink vanishing and the ink is tested under the same conditions.
“The ink, once exposed to sunlight, will leave an indelible mark that will remain for anywhere between 72 hours and three months. How long it stays depends on the nature of the skin. It cannot be removed without damaging the skin,” claims Irfan.
There are scattered reports about issues with the ink in every election, but the MPVL brass say no evidence has been presented of any defect. “We have not faced a single rejection since 1962 and no documented case of a quality issue has come up so far,” claims Irfan. Quality apart, quantity is also critical. Each phial contains 10 cc of ink, which is enough to mark 700 voters. Each booth gets two phials as the average voter count for each booth is roughly 1,400 voters. “We take abundant care to ensure phials have the right quantity of ink. Otherwise, the booth runs the risk of running out of ink midway during the polls,” says Vishalakshi. The quality check does not end at MPVL;
after the consignment is received at the state headquarters of the Election Commission, random samples are taken and sent to NPL for testing. Only after receipt of the results are the phials shipped to various polling booths.
LOPSIDED DEPENDENCE
Despite being in business for nearly nine decades MPVL has not really tried to venture beyond its core business. The revenue from paints and related products is just under 25% of its topline. Multiple factors have kept the paint business small. Firstly, the company is only in the industrial paints segment, which accounts for just 20% of India’s overall paint business. That apart, such is MPVL’s cost of operations that it is nowhere close to competing with the likes of Asian Paints, Berger Paints and other large private players. “The salary we pay to our workers is twice what a large paints company pays,” says Irfan.
The manufacturing plant is old and not as efficient as new ones. This is perhaps not surprising, considering that it still operates some machinery brought in from Bristol, England, way back in 1937. Finally, it does not have the scale to lower the cost of production. MPVL is pretty much a small-scale operation.
“Considering these factors we chose to focus on business-to-government (B2G) and business-to-business sales for select products,” explains Appanna.
Retail sales make up less than 5% of the total revenue. In other words, MPVL is playing in segments the private sector paint behemoths typically avoid. Its competitors are the 1,300–odd small-scale paint units around the country and its customers are state public sector transport undertakings, central public sector units, state power corporations and so on.
“We sell paints and other products for a marginal profit. They help cover our costs. The indelible ink business delivers the bulk of the profits,” explains Appanna.
EYE ON THE FUTURE
But the MPVL management has started to think of a future when the indelible ink business may drop sharply or completely disappear. “There is a talk of ‘one nation, one election’. If that is implemented, demand for indelible ink will drop by almost half,” says Irfan.
That apart, not all countries use indelible ink in elections. Many countries use biometric verification. It may be a challenge in India considering the huge voter base. “What if a new technology comes that makes it possible and ends the use of indelible ink? We have to be prepared for that and that is why we are trying to reduce our dependence on it,” he adds. Irfan, who was previously in charge of industrial development of Karnataka’s districts, understands the importance of evolving with time. “We have been in a status quo for far too long,” he says. “It is time to change.”
As part of its diversification plan, MPVL is entering the decorative paints business and Irfan plans to set up a separate plant. But the decorative paints segment has just become more competitive with the entry of Grasim Industries and JSW group. Fresh capacity to the tune of 25% of existing output is being added and this has put the margins of market leader Asian Paints and other major companies under pressure. The market is expecting a price war. Given this backdrop, can MPVL survive in the space?
“Here, too, we will play in the B2G space, where there is good demand for decorative paints,” says Irfan.
The company is also embarking on a modernization drive. Old machinery will be replaced with modern units and investments will be made in information technology lead process improvements. “The modernization will help us embrace lean manufacturing, improve efficiency, and reduce the cost of production, thereby improving margins,” says Appanna. It will help the company target a wider market.
In order to do all this, however, MPVL will need to become more agile. In the last six decades, not much has changed about the way MPVL goes about its business. It still operates out of the seven-acre property from which it started out. Its brands— Mylac, Brindavan and Mysolac, to name a few—have not been refurbished, and its formulations have not changed. No new products have been added and no major investment has been made in people.
The only change that the company has managed in recent times is the different packaging of the indelible ink. High-density polyethylene (HDPE) containers have replaced glass bottles. Some countries have sought larger containers, and a few have opted for marker pens. “For India, too, we have developed a marker pen and given it to the Election Commission to validate it,” says Irfan.
Is the slow pace of change tenable? Not really, says Harish Bijoor, business and brand strategy expert. “A company like MPVL, which is a monopoly (in the indelible ink business) tends to get lazy. They typically focus on the B2G business as it is less challenging compared to B2B or even B2C. To that extent it is in a trap,” he says.
According to Bijoor, the only way to escape this trap is to change its very DNA. It needs to think big and think differently to bring about a quantum change in approach. The MPVL management has belatedly understood the need for change and has taken the initial steps to modernize and de-risk its business. How it paces this transformation will determine whether the mark it has made on India will remain indelible.
For the 2024 Lok Sabha election, the Election Commission ordered 2.656 million phials or small cylindrical bottles. Production began on 25 December.