IIPM News Broadcast: January 2013

Tuesday, January 22, 2013

‘‘We are the largest private sector ‘EPC’ player in India...’’

Lalit Jalan, CEO, R-Infra, discusses the company’s aggressive plans in this exclusive with B&E

B&E: How does the company view its role in India’s development vis-à-vis the ongoing oil, energy and power crisis?
LJ: As far as India’s growth is concerned, the biggest hurdle is infrastructure. If India wants to continue growing at 9% it needs the requisite infrastructure in roads, power, ports etc. Earlier, the government controlled infrastructure development. But it failed because it lacked the funds, the technical and marketing expertise and was plagued with corruption. Then it roped in the private sector. So now public-private partnership is becoming a reality in infrastructure. The private partner builds the road without charging anything from the government. They maintain the road, again without charging anything from the government. In return, the government and the private player share the revenue generated from the users of the road. The same also applies to other types of infrastructure projects like airports.

B&E: There is news that R-Infra’s EPC business is being diversified. Please elaborate on that.
LJ: We started the EPC division in 2004. Prior to that it was a very small division known as the Contracts division. It dealt with small projects in the range of Rs.5 million to Rs.10 million. When we came in we focused on large projects, say projects worth Rs.2 billion .The management time required to do a Rs.10 million project is the same as the management time required to do a Rs.1 billion project. Our earlier skills, as you know, were in power generation and power transmission and power distribution. These were the three main businesses that we were focusing on. Then as we built our procurement expertise, our construction expertise, and our engineering expertise we watched our infrastructure team doing late night projects like Metro Rail. And so we decided to bring in that expertise within the company to chart that value-chain also.

Read more.......

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)

Saturday, January 19, 2013

VISHAL RETAIL: QUESTIONING SUSTAINABILITY

B&E ‘s savreen gadhoke writes on why Subhiksha and Vishal Retail may not meet the same finality, although their operational and financial fallibility is eerily similar...

“Speaking of Vishal Retail in the same plane as Subhiksha will not be correct. The fact is that while Subhiksha’s plea for a Corporate Debt Restructuring (CDR) programme was rejected by the authorities, Vishal Retail has been granted CDR approval will reinstate investor confidence,” says Rajesh Tanwar, Director, Integrated Retail Solutions. But still, despite the fact that Vishal Retail has gotten the CDR approval, it does need funds for the running expenses to ensure the smooth functioning of its stores. And that’s where the promoters might find their hands totally tied. “Absolutely not. We are a running company with Rs.100 crore turnover month-on-month. All our statutory dues have been taken care off and we have no pending dues being carried forward to the next month. The only pressure on us is the high finance cost and that too we’re addressing through the CDR route. Otherwise also, we are taking all the requisite measures to bring down our expenses,” says Khemka. Vishal Retail also communicates to us that the demand of the EPFO notice is completely not justified – one reason they’re contesting the same in the courts – as “everywhere in the world, PF is a percentage of employee’s basic pay only; it is not that they’ll demand Rs.11 crores and we’ll pay to them.”

To be fair, to say that Vishal Retail is lost in the woods would be close to an exaggeration. In fact, they are trying hard on many fronts. Amongst the various steps taken to repay debt, one that is currently being contemplated by Vishal Retail is the merger of Vishal Water World with Vishal Retail. Vishal Water World is a profit-making company with Rs.40 crores in reserve surplus and additional land assets of Rs.60 crore. The merger will benefit Vishal Retail in two ways.

Firstly, by the sale of the land, the debt of Vishal Retail can be brought down. Secondly, there would be considerable group tax benefits by merging a profit-making entity with a loss making one. It will take a minimum of six months for the merger to be completed as the process has to be validated by the court and stakeholders.

Read more.....

Friday, January 18, 2013

All Hail India’s Great Banana Democracy!

Some recent developments have now led me to wonder about the state of Indian democracy. A school student is taught that a functional and successful democracy rests on four pillars – executive, legislature, judiciary and the fourth estate (media). Each one of the pillars now seems to be infested with termites, threatening their very foundations. Just consider the following:

• The Income Tax Department and the Enforcement Directorate insist that former Jharkhand Chief Minister Madhu Koda and his associates have squirrelled away close to Rs.4,000 crores.

• The CBI insists that the Minister of Telecommunications A. Raja could be involved in defrauding the exchequer to the tune of thousands of crores by doling out telecom licenses in gross violation of all norms. Telecom is one sector that has been bedevilled by corruption and scams ever since mobile phone licenses were first auctioned in 1995.

• A couple of mine owners of Karnataka shepherd dozens of MLAs like ‘cattle’ and declare war on the elected Chief Minister of Karnataka who seems to be trying hard to curb brazen corruption and patronage politics. The central leadership of the BJP caves in cravenly to this blackmail and forces ‘their own Chief Minister’ to weep in front of TV cameras.

• The electorate gives a mandate to the Congress-NCP alliance to rule Maharashtra by almost giving it a majority. It takes the MLAs and leaders of Congress and the NCP two full weeks to squabble and haggle over ministerial berths before a government can be sworn in. R. R. Patil, the man who was Home Minister of the state during 26/11 is back as the Home Minister.

• MLAs of the Raj Thackeray party Maharashtra Navnirman Sena heckle, abuse, jostle and assault another MLA Abu Azmi because he wants to take an oath in Hindi instead of Marathi. The MNS MLAS are far from remorseful; they have declared the assault as a kind of V-Day and have threatened worse.

• A Collegium approves the appointment of Justice P. D. Dinakaran as a Supreme Court judge. There are protests everywhere and accusations that Justice Dinakaran has misused his judicial authority. Things come to such a pass that lawyers in Karnataka paralyse the functioning of the High Court there; even locking up two judges who refused to heed their boycott call.

Read more....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)

Thursday, January 17, 2013

Smell the coffee

Corruption needs the killer dose

The reputation of Indian politicians and bureaucrats on corruption is truly impeccable. In fact, Indian citizens have reason enough to assume that there are hidden skeletons in every cupboard and dark corners in every lair.

And if a person like Meera Shankar, India’s ambassador to US, attempts to speak up and throw some light, what else can we say other than “Welcome”! Meera Shankar’s diligent complaint to the PMO about huge sums of bribe paid to officials in Indian government establishments by US companies is creditworthy. The same cannot obviously be said of the silence over the letter from the PMO for eight months (curiously broken after the assembly election results came in).

Meera Shankar has cited the report filed by the US Foreign Corrupt Practices Act, which names companies that have allegedly made illegal payments to Indian officials over the years. Most shockingly, it pulls the Indian defence forces into the scrutiny as well. York International Corporation, with their products of heating, air-conditioning, and refrigeration, had paid-off $1,32,500 to Indian Navy between 2000 and 2006 to secure 215 orders. A US industrial valve manufacturing company Mario Cavino of Control Company’s Inc., has pleaded guilty of paying $1 million to electricity boards of four countries, including the Maharashtra State Electricity Board. Dow Chemicals has paid $200,000 to Nocil Crop Protection Ltd., including an illegal payment of $39,700 to the officials of Central Insecticides Board. Other cases of bribery include $11,800 to Sales Tax Officials, $3,700 to Excise officials and $1,500 to Customs officials.

Read more.....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)

Wednesday, January 16, 2013

Let’s skip a generation!

While auctioning of 3G licensing has been announced, there are still doubts on its successful launch

After much hype, debate and even delay (seems like a part of the protocol), it looks like the 3G spectrum mobile telephony would finally find its way into India. The Empowered Group of Ministers has put an end to all the deliberation by announcing that the auctioning of 3G licensing would start from Rs.35 billion, while the price for the WiMax has been kept at Rs.17.5 billion. There has already been a considerable delay in rolling out 3G services and many of our neighbouring countries such as Pakistan and Sri Lanka have already been offering these services for about a year now.

While it is a step in the positive direction, it does not guarantee when these services will be available.

According to the current agenda, the auctioning process would be completed in 90 days, post which, three to four companies would be allowed to offer next generation services. Then the telecom companies would have to, on their part, do an overhaul of the current equipments (especially established companies like Airtel, Vodafone, Idea, et al), and this process may take anything between 4 months to a year to be completed. Indian consumers would be able to use the services only after that happens.

Another major debate that has now surfaced is in regards to the pricing. Most of the Indians would be introduced to the world of the internet through this screen. And current pricing would be a major barrier for usage.

Read more.....

Monday, January 14, 2013

The doctor checks in at #44!

low-priced buyouts, cost control & ensuring sustainable revenues, did the trick for sun pharma. what next? STEVEN PHILIP WARNER answers…

At a time when the Indian pharmaceutical sector, once considered immune to downturns, lies battered, Sun Pharma, during FY2008-09, grew its topline by a remarkable 27.3% y-o-y to clock Rs.42.72 billion, and its bottomlines rose by 22.2% y-o-y to touch Rs.18.17 billion. All this catapulted this pharma giant to the 44th spot on the 2009 B&E Power 100 List, making it the only pharma name to feature in the rankings.

Uday Baldota, VP – Investor Relations, Sun Pharma, tells us, “We created sustainable revenues streams, with greater speed to market. A focus on cost leadership and making acquisitions which yielded high ROI proved to be the right strategies…” Although the strategic combo he gives seems straight out of the consultant’s rule book, critics claim the fact is that Sun Pharma has often appeared to be making seat-of-the-pants decisions in the most critical area of inorganic growth, namely M&As – over the past 14 years, Sun has acquired 14 distressed assets. But there is another side to the story as many of these buyouts have come at “low prices” – as Uday defends – therefore renovating them into profit-churning assets proved less challenging. And if fortune has to favour the brave – at a time when other Indian generic giants are facing the heat and are selling-off their crown jewels – Sun’s acquisitions have actually started bearing fruits, key elements powering its financial vehicle even during a downturn!

At the same time, Sun has always been open to diversifications into the right business lanes. When it laid hands on Dadha Pharma & Milmet Labs, it entered the oncological & opthalmological spaces respectively. And if its $454 million Taro deal comes through (“The deal is still on, with some court decisions awaited,” – Uday), it will get an entry into the dermatological market. Thanks to those cheap buyouts, it’s 2009 now, and Sun’s gross profit margins, which for FY2008-09 stood at an extremely high of 79.9%, have never ever looked better!

Read more......

Friday, January 11, 2013

dos & don’ts: before attack

1 The families should not take fixed routes at fixed timing, all the time, even while travelling to a particular destination. They should also not flock a particular area, club, restaurant, etc.

2 Take professional help whenever needed, as this will greatly improve the chances of your family remaining safe from such attacks. Learn the Dos and Don’ts to ensure a safer tomorrow.

3 Stop displaying your riches to the public, unless you can provide security for yourself and your family members. Also be careful that all your transactions are not visible to your servants!

4 Take care of your servants, drivers, guards, etc, and keep them satisfied; changing servants frequently will only increase proportionally the chance of such attacks on your family.

Read more.....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Monday, January 07, 2013

Saam, Daam... a little more Daam

The legal environment reflects the larger shame of Indian venality

Were you feeling proud lately on how India’s banking system could teach US banks a thing or two about asset management? Well, the India growth story now also has lessons for the World Bank, but not in the manner you would be imagining. The World Bank initiated India Detailed Implementation Review (DIR) has exposed corruption in Indian health projects and has learned how to better tackle corruption in public procurement. Five out of five projects it studied in India (2006) were deemed to be extremely vulnerable to fraud. No wonder then that India ranks 103 out of 201 countries in the World Bank’s ‘control of corruption’ indicator for 2008.

Quite unfortunately, the malaise has spread wide and deep. Take, for instance, the entire arena of law enforcement. The country’s domestic investigating and law enforcing agencies are often accused of being sleazy, negligent, and flat inefficient.

Read more....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.