Indian Private Security Sector

EUROPA SECURITY provide a comprehensive range of manned-guarding services 24 hours a day, 7 days a week, all year round. With Europa Security you will get a guard trained to the highest standard who has also been fully briefed on your specific requirements. All our guards are smartly dressed in our distinctive uniform and carry ID and are equipped with the latest technology and communications. We provide every category of professional security guard including:

 

  • Static and Retail Guards
  • Mobile Patrols and Rapid Response
  • VIP and Close Protection
  • Discreet and Undercover
  • Crowd Control and Event Management

The Indian security services industry has grown rapidly in the last decade due to the continuing threat perception from crime and terrorism. There is demand for security in new infrastructure projects such as airports, roads, telecom towers and the emergence of a modern retail culture along with a growing need for security for the movement of cash within the banking system. The industry appears to have been relatively less impacted by the current economic slowdown. It is expected to grow at 20% over the next few years.

The manned guarding industry is estimated to be INR340–360 billion currently and is expected to grow at a CAGR of 20% by FY18. Industry discussions suggest that the number of guards belonging to the top 10 players in the industry will be around five to six lakh guards and accounts for 40% of the organized market. The organized proportion of the market is at approximately 35%, which leads to a market size of INR 340–360 billion for the total manned guarding industry in India. The manned guarding market in India has witnessed robust growth over the last few years. Growing incidences of terrorist attacks, crime and the high pace of infrastructure development has led to significant demand for security service personnel. Furthermore, the availability of government employed security personnel is limited and costly to deploy.

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Personnel employed by Government at the periphery of airports, ports and other high consumption sites appear to be more expensive and scarce as a resource as compared to armed guards from the private sector. The demand for manned guarding is expected to increase rapidly in the future with the burgeoning of shopping malls, townships, IT campuses and other private infrastructure facilities. Industrial and manufacturing, Banking and Financial Services, retail and ITC segments currently form a significant proportion of revenue for most organized players in the market.Manufacturing and industrial units are the major user segment for most players. While penetration of organized players in the large-to medium-size units is high, small and medium-sized enterprises (SMEs) and small individual establishments continue to largely rely on unorganized players for manned guarding services. Similarly, while the penetration of organized players is high in the organized retail segment, most single shop/retail establishments depend on the unorganized security service providers. The user segments with relatively high penetration of organized play include – Banking and Financial Services, ITC, hospitality, retail and public infrastructure. Banking and Financial Services (primarily due to an increase in the number of bank branches and ATM installations and retail) on account of these increases in organized retail space is expected to further witness increased participation from organized players in the manned-guarding market in the coming years.

The imposition of stringent regulations and inspections carried out by the pension fund department has played a major role in the increase of organized penetration of security services in most industries.

Cash Services

The cash services segment is gradually evolving as a key and fast-growing service offering within the private security services industry. The key offerings within the cash services are:

  • ATM replenishment: Involves providing cash replenishment and first-line maintenance services for the ATM networks of banks.
  • Cash-In-Transit (CIT): Involves movement of cash and high value items within a bank’s branch network.
  • Cash Pickup and Delivery (CPD): Involves secure pickup and delivery of cash and cheques for large corporate houses and their business outlets

The Cash Logistics industry deals with the physical movement and storage of currency notes and other valuables on behalf of the banks. This sector employs about 40,000 individuals and caters to approximately 80,000 ATMs for cash replenishment services. There are about 6,000 cash vans that operate across the country and carry approximately INR 15,000 crores of cash every day. This industry also holds approximately 4,000 crores of cash overnight in their vaults on the behalf of the banks. Currently there are seven companies which account for a 95% share of the market in this industry.

Minimum standards for cash logistics/ Guidelines for Cash Logistics Companies in India.

It is pertinent to mention that 6000 – 7000 cash vans operate across the country each day to transport INR 15,000 crores of currency, store over INR 4,000 crores in private cash vaults, replenishing ATMs and facilitating door step banking. The need for such services shall only increase with expected expansion in banking operations in the country. In view of the increased incidents of attacks on cash vans and private cash vaults in recent months, there is a need for defined operating standards for cash logistics companies or for banks that outsource cash logistics operations to private service providers. Given the risks involved it is extremely important to establish benchmark standards and operating guidelines for cash logistics companies.

ATM replenishment is the largest segment of the cash services market. Replenishment of approximately 80,000-90,000 ATMs in India is estimated to be outsourced to cash services players. It is estimated that the average ATM uses in the range of INR7,000–9,000 per month. This leads to an estimated market size of INR7–10 billion. Industry discussions suggest that the other two segments in the cash services space – CPD and the CIT business – are estimated to be around INR3–4 billion each, currently. This estimates the current cash-services industry as INR14-17 billion.

Banks constitute one of the largest user segments of this industry as they need to secure the transport of cash for ATM replenishments as well as cash services for bank branches. Other user industries include modern retail and large corporate houses. ATM replenishment services are geared to ensure maximum uptime of ATMs along with the best utilization of cash. While cash replenishment in onsite ATMs (ATMs in bank premises) is sometimes done by the bank itself, offsite ATM servicing is often outsourced to cash services companies. Cash pick-up and delivery services include corporate and retail cash pickup and cheque collection services, cash, demand draft and traveller’s cheque delivery services at a client’s doorstep. Growth in the CPD market is expected to be driven by an increase in organized players as well as an increase in the branch network of large corporate players. The cash services market is largely organized as the transaction involves significant amounts of cash and other valuables. The top seven to eight players account for around 75%–80% of the market.

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