RNI No.35850/80; Reg. No. MCS-123/2018-20; Published on: Every alternate Monday; Posted at Patrika Channel Sorting office, Mumbai-400001 on every alternate Wednesday-Thursday `100

n THE SOPS SAGA

n DOMESTIC REAL ESTATE

n THOMAS COOK INDIA

February 25-March 10, 2019 n THERMAX India Inc under a cloud

Corporate Governance issues

Business India u the magazine of the corporate world From the Publisher

Publisher Ashok H. Advani

Executive Editors Lancelot Joseph, Daksesh Parikh, Sarosh Bana, Deputy Editors Shonali Shivdasani (Mumbai), Sajal Bose (Kolkata) Consulting Editor Dr. Shashank Shah, Sunil Damania (Mumbai), Sekhar Seshan (Pune) Assistant Editors Arbind Gupta, Ryan Rodrigues, Kayus Wadia (Mumbai), Yeshi Seli (Delhi) Corporate India is going through major changes. First it was the entry of Principal Correspondent Krishna Kumar C.N. (Mumbai) large foreign players into almost every sector of the economy. And the Photo Editor Palashranjan Bhaumick bankruptcy code has shaken up large sections of the business community. Photographers Prakash Jadhav, Sanjay Borade Design Trilokesh Mukherjee Several industrialists have lost control of their companies often for a Group Art Director Bertie J. D’Souza pittance and, sometimes, even in cases when the sickness was induced Art Director Mukesh Pandya by government policies and actions over which they had no control. Graphics Prajakta Sawant Cartoonist Panju Ganguli And now, in the past weeks, particularly post the il&fs saga, corporate Manager – Design Cell Mathew Thomas governance has been pushed into the forefront. Production Team Balachandran, Kisan Kumbhar, Najeeb Fatehi, Sudhir Khaladkar, Vasant Dhasade Corporate governance, or should we say mis-governance, covers a wide Sr. Vice President – Advertising Sales Mira Lawrence (Mumbai) variety of acts of commission or omission. These range from plain simple Asst. Vice President – Advertising Sales B. Anand (Hyderabad) General Managers – Advertising Sales Deepak S. Ahire, Shahnoor fraud to diversion of funds, even when disclosed from one company to Mistry, Chaitanya Mahajan (Mumbai), Naresh Purohit, sister companies, to rash business and financial decisions – often taken Pankaj Bhasin (Delhi) Sumati Rekhi (Chennai), Salman Khalil (Lucknow) Asst. General Manager – Advertising Sales Support Bridget without board approval. And now the latest practice being frowned upon Mascarenhas is borrowing in excess by promoters by pledging their shares – even Asst. General Manager Advertising Sales Aasif Iqubal (Delhi) though the consequences hurt the promoters the most, who could, in Branch Manager P.L. Baluja (Kolkata) Sr. Manager-Sales & Distribution S.S. Kannan (Chennai) 28353964 the event of a severe downturn in the markets, even lose control of their companies! Editorial & Administration Office: Nirmal, 14th floor, Nariman Point, Mumbai 400021. Tel: 22852943 Fax: 22883940 Email: [email protected] Several of these issues have emerged over time, as our corporate sector Marketing and Advertising: Nirmal, 14th floor, Nariman Point, grew, acquired global ambitions and, most important, when markets Mumbai 400021. Tel: 22883938-46 Fax: 22883940 started giving almost mind-blowing valuations to many listed companies. Email: [email protected]. Circulation/ Subscription: Mittal Chambers, Office No.94, 9th Floor, New rules were gradually implemented and as markets became more Above Yes Bank, Nariman Point, Mumbai 400021. Tel: 22820619/22820348 transparent and competitive, they gave rise to greater expectations, E-mail: [email protected] particularly from the leaders. The rise of Indian financial institutions like Bangalore: 27 Wellington Street, Richmond Town, Bangalore 560 025, mutual funds, private sector banks and insurance companies saw Indian Tel: 080-22102444, Telefax: 080-22102446 Kolkata: Krishna Villa, 100 Park Street, Kolkata 700017. industry becoming more reliant on institutional money, domestic or from Tel: 22893359 Telefax: 22878455 overseas. Also, as India caught up with global markets, global practices Delhi: 268 Masjid Moth, Uday Park, New Delhi 110049, began to be adopted here. So, what might have been acceptable behaviour Tel: 011-41643052 / 41643050 / 41640109 / 41086415 in the past, or even in accordance with social norms then, many practices Hyderabad: Pent House II, Usha Deluxe Apartments, Motilal Nehru Nagar, Begumpet, Hyderabad 500016 Telefax: 040-66490099 are unacceptable today. Chennai: Prasad Chambers, III Floor, Flat No. 14, Door No. 97A, Peters Road, Gopalapuram ,Chennai 600 086. As problems have surfaced, we have seen the usual cry for tighter Tel: 044 28351703 / 28353964 / 28353394 regulation and controls by government and the regulators. And while Kochi: DRA-6, Mahila Samajam Nursery Road, Chaliakkavattom, several areas of our laws need to be modernised in accordance with Dhanya Junction, Vennala P.O. Kochi 682028. M: 9846091797 Lucknow: Sunshine House, 9/11 (M.N.H.S), Sector 9, Vikas Nagar, current needs, Business India has always argued that more regulation is not Lucknow-226022 Tel : 0522-6565222/ M: 09415180290. always the answer. Take, for example, th pledging of shares by promoters. Registered Office: Nirmal, 14th Floor, Nariman Point, Mumbai 400 021. sebi, a while ago, had insisted on disclosure by promoters. But despite Tel: 22883938/47 Fax: 22883940 disclosure, ambitious entrepreneurs still chose to pledge their shares often Annual Subscription Rates for diversification, but equally often to plough more funds back into India `2,210 Students (India only) `1,300 for 1 year on submission of their own companies for faster growth when few other sources of funds current year’s ID card. are available. Surely, when the market looks askance at, the biggest losers Overseas (One year only) Airmail to Pakistan `9,400 or US$142. are the promoters themselves! Extra regulation is hardly called for and To all other countries `13,200 or US$240 Rates include airmail charges. it certainly is not the way forward. The markets have their own way of Please add `20 for cheques not drawn on a Mumbai bank. enforcing discipline and good business practices. Cheques to be drawn in favour of “Business India Publications Ltd”. Unsolicited manuscripts will not be returned. Ultimately, in any open society, it is the social norms and self-control that Distribution India Book House Ltd are the right guides. And, as a business publication, we have always argued Newsstand `100 This issue consists of total 84 pages including cover that shining the light of openness is the best and most effective regulator.

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u 3 u february 25-march 10, 2019 Contents Business India u the magazine of the corporate world • No. 1060

COVER FEATURE 28 The Achilles’ heel Corporate governance issues plague Indian companies

u FOCUS u u CORPORATE REPORTS u

THOMAS COOK INDIA 48 Thomas Cook India readies itself for an explosive growth in tourism

THERMAX 52

The sops saga 36 Thermax consolidates operations, while also Pro-poor politics and socialist slogans are back, as the Congress ups underlining its status as a global operator the ante and the bjp showers sops on the electorate

u 4 u february 25-march 10, 2019 No. 1060 • Business India u the magazine of the corporate world Contents

u SPECIAL REPORT u u u IN THIS ISSUE Automobiles 58

Business Notes 20

Businessmen in the News 16

Columns 26,55

Corporate Reports 48

Corporate Strategy 56

Cover Feature 28

Editorials 7 Gaining momentum 42 The domestic realty market Environment 72 all set to consolidate further Executive Track 76 amidst reform impact Fashion 70 u Government & u Warehousing 64 Focus 36 Politics 23 • Modicare’s slashed outlay Follow Up 12 hits staff sentiment • Food inflation spans worries Government & Politics 23 • Saudi prince’s visit underlines challenges Guest Columns 62,68,69,71 u Corporate Strategy 56 Bosch India continues to Interview 82 strengthen its smart solutions portfolio beyond mobility slcm plans to consolidate the fragmented Letters to the Editor 6 agri-warehousing market u Automobiles 58 Listening Post 11 u Luxury 66 u Fashion 70 Luxury 66

Market News 74

Newscast 14

Can Tata Motors emerge Obituary 60 stronger from a storm the Lakme Fashion Show 2019 (Un)folded Panju’s Page 27 u Automobiles 61 Understated beauty brand u mahindra Electric launches Kama Ayurveda looks to scale Environment 72 People 80 two electric rickshaws up fast efforts towards conservation and community engagement Selections 77 make their mark Special Report 42

u Editorials 7 Warehousing 64 u Market News 74 • Isolate Pakistan but keep channels open • bjp should rein in Yeddyurappa Markets move in an indecisive manner • An opportunity for banks to recover debt Issue No. 1060 for the fortnight February 25-March 10, 2019. u Interview 82 Released on February 25, 2019 u Follow-up 12 Stand-in finance minister Printed and published by Ashok H. Advani for Business India. Saint-Gobain India inaugurates its third float Piyush Goyal allays Printed at Usha Offset Printers (P) Ltd., 125, Govt. Indl. Estates, glass plant concerns about numbers Kandivili (W), Mumbai. Published at Business India, Wadia Building, 17/19 Dalal Street, and offers clarity on u Mumbai-400 001. Business Notes 20 other issues No reproduction is permitted in whole or part without • With mining shut down, Goa now stands at the express consent of Business India crossroads To order reprints contact: Business India Production Cell, 14th floor, Nirmal Building, Nariman Point, • Is solar losing its momentum Mumbai-400 021. Tel: 2288 3942/43, 2204 5446

u 5 u february 25-march 10, 2019 Letters to the Editor Business India u the magazine of the corporate world

December) is to be seen as a could build the case for a hike gone wrong in the solar power, conciliatory move towards the in lending rates by r bi in the wind power and coal sectors, finance ministry, which was near future. crippling the Indian economy pressing the central bank to and industry as a whole. Also, part with more of r bi’s surplus M.R. JAYANTHI the write-ups on Blue Dart, reserves to boost the econ- Navi Mumbai Mirc Electronics and Thejo omy. And, if the new governor Engineering made this a won- uses his shakti to counte such u A fleece derful issue and will help you moves the way his predeces- With reference to ‘Honest to maintain your pole position in sors did, then the government God’ (Column, 19 Novem- your chosen field. is in for another skirmish. This ber-2 December), I feel the web time at least, the autonomy check-in at additional cost by RAMESH BHOJWANI and independence of the r bi private airlines is a new way to Mumbai has to be protected! Politicians loot the passengers. Even the and governments may come policy of surge pricing -- based u Best bet and go, but financial institu- on the demand-supply of tick- This refers to ‘Not so sunny’ tions go on forever. ets in trains, planes, taxis, etc (Cover Feature, 22 October-4 u Motivating -- must be done away with, as it November). Alternative energy ‘Super 100: India Inc’s brave- C.K. SUBRAMANIAM is against the travellers’ inter- cannot contribute substan- hearts’ (Cover Feature, 19 Navi Mumbai est and tantamount to exploit- tially to our growing energy November-2 December) was ing the common man. also, needs now, because it has a multi-coloured tassel of u In doldrums the fares displayed must be cost and capacity limitations. down-to-earth indices meant Please refer to ‘r bi vs finmin’ inclusive of all taxes and other Also, volatility in oil prices to motivate the Indian indus- (Editorials, 19 November-2 charges. and failure to enhance domes- try to make strides on the pos- December). Unfortunately, at tic oil production is killing us. itive dimensions. And, ‘r bi vs present, political factors over- MAHESH KAPASI So, we should seriously think finmin’ (Editorials, 19 Novem- shadow economic concerns. Delhi of putting up more nuclear ber-2 December) evoked The government has ignored power plants. Though chal- adumbrations on the respon- economic concerns for vote- u Hit back lenged in terms of cost, safety, sibilities of both the finance bank politics. The funds are Almost every day, our two locational issues, etc, it is still ministry and the r bi as badly needed for 2019 elec- national parties are trying our best bet, because it is the they are increasingly cross- tions and, almost every day, to get at each other’s throats cheapest and the cleanest ing swords with each other schemes are announced for the (Editorials, 19 November-2 energy. at the risk of hurting Indian so-called poor, which neces- December), while claiming financial systems. Also, ‘Not sitate good revenue with the that they are the pro-poor UMESH SHAH so sunny’ (Cover Feature, 22 government – which is why, party. They should realise Mumbai October-4 November) put the as the reports suggest, the gov- that throwing the past blun- facts in perspective about the ernment has an eye on Reserve ders and failures on each oth- u Come on! solar power target and the Bank of India’s reserves. And, er’s faces is not going to help The Cellular Operators Associ- tardy achievement towards its if the government succeeds matters. The country is watch- ation of India’s reaction to the utility in India. in putting its hands on it, the ing the travesty and mock- new movie, 2.0, was weird. The nation’s economy would soon ery of democracy and may association apparently wants B. RAJASEKARAN be in the doldrums. retaliate vehemently in the to go back to the days of Bengaluru elections. ‘monopoly’ and protection. If M. KUMAR anybody has apprehensions u Manipulative Delhi SHANMUGAM MUDALIAR about the unfettered advent ‘Set to race’ (Cover Feature, 19 Pune of technology, why can’t he/ November-2 December) reveals u Crisis over she communicate such fears that the government had re- The share of gross n pa s in total u At the top through an article, a story or a estimated the g d p linked to advances of banks, both in The text and layout of ‘Not film?A ll the association has to the 2011-12 prices, which low- the public and private sector, so sunny’ (Cover Feature, 22 do is to defend its case through ered the growth rates. The g d p which peaked in March 2018, October-4 November) was counter-expressions. being the barometer of over- has declined since then -- in truly impressive. The arti- all economic growth, these both the June and September cle was an incisive, in-depth, A.A. VARMA changes in methodology in quarter of the current fiscal intelligent account of what has Kochi calculating it are only manip- year (Editorials, 19 Novem- ulations to serve vote-bank ber-2 December). The n pa cri- politics, which ignore the wel- sis was more widespread in Please address your letters to: fare of people completely. the public sector banks. These developments, good news on The Managing Editor, Business India MAHESH KUMAR the macro front from a growth 14th floor, Nirmal, Nariman Point, Mumbai 400021. Delhi perspective, could also mean a Fax: (91-22) 2288 3940 tightening of the inflation sce- [email protected] u Good move nario. Given the fact that non- The announcement by the r bi food inflation in the economy Please mention your full name and address (Editorials, 19 November-2 has been consistently high, it

u 6 u february 25,2019-march 10,2019 Business India u the magazine of the corporate world Editorials Pulwama and after

Isolate Pakistan but keep channels open

t is obvious now that the terror strike on first of the government’s tentative steps was the c r pf personnel in Pulwama was meant to withdrawal of the most favoured nation status Iprovoke, perhaps even polarise. Possibly, in trade to Pakistan. Will this hurt Pakistan? it was also meant to put the ruling Bharatiya As it is, efforts to increase trade, right from the Janata Party in a bind on the eve of the gen- days of Manmohan Singh, had come a crop- eral election for it needs to now respond but per. Out of the $2.2 billion bilateral trade, Pak- can’t allow a full-blown conflict with a nucle- istan’s share (of exports) is a mere $400 million. ar-armed neighbour. Acting from an updated A lot of unofficial trade is happening viaD ubai playbook, the Jaish-e Mohammed (JeM) ter- which will continue. With friends like China rorists planned the incident to the smallest and Saudi Arabia, Pakistan does not need a detail – getting information on the movement helping economic hand from India. of the 78-bus convoy carrying about 2,500 sol- Coercive diplomacy is likely to continue but diers from Jammu to Kashmir, smuggling in a to be effective the effort needs a wider net. Is large quantity of r d x , using a suicide bomber that possible at a time when the U.S. is seek- to execute the task and getting him to time his ing Pakistan’s help in firming up a deal with attack. This has raised disturbing questions the Afghan Taliban? There is no question that on intelligence gathering, dissemination and while Pakistan bears the onus to explain why coordination in the Valley. Masood Azhar, the leader of JeM, enjoys such So far, New Delhi’s response has not played freedoms on its territory, if not outright sup- into the terrorists’ plans with reflexive and pre- port from the establishment. Then there is the cipitate official action.P ost-Uri, the air has been diplomatic backing by China has been crucial always thick with calls for retributive cross-bor- in defeating efforts at the United Nations to der strikes. The past history of limited, if any, put him on the list of banned terrorists. returns from such action must serve as a cau- Finally, in dealing with Pakistan, one needs tionary check. Instead, the effort must be to iso- to factor in the fact it is also a victim of terror- late Pakistan for its support to the JeM, which ism (though the counter-argument against this has orchestrated numerous strikes in the Kash- line goes that this is a problem that our neigh- mir Valley and has taken responsibility for the bour alone needs to fix). As per an Islamabad- incident. More importantly, we must take sub- based think tank, at least 595 people, including stantive action to effectively upgrade intelli- security officials, were killed and 1,030 others gence and plug security gaps, and to win the injured in 262 terror attacks in the country confidence of the local population in the Val- during 2018. The deadliest attacks took place ley. The last objective is critical. As the attack in the run-up to the July 25 general elections was meant to provoke and polarise the coun- which saw Imran’s party assume power. try, our response must be to isolate the perpe- Pakistan’s tryst with terror began with Zia- trators and keep the peace on Indian Territory. ul-Haq’s controversial “Islamisation” policies of It is Pakistan’s tragedy that no leadership the 1980s, which saw the country’s involvement worth its salt, whether civilian or military, has in the Soviet-Afghan war. With ideologically- been able to fully rise above the temptation of driven mujahideen heading to the tribal areas, using terror to keep parts of India unsettled. there was an increased availability of guns and Not much was expected from cricketer-turned- drugs from the Golden Crescent. The trend con- politician Imran Khan, despite his popular- tinued with the zamindaars (landlords) seizing ity in India, given the covert support that he power and business disputes/political rivalries got from the military during his campaign. exacerbating the gun culture. The arrival of Al- Hope lies in the younger, educated generation Qaeda members and the isis in the mountain- of Pakistan. This is a segment that India must ous area of wazirstan and the Afghan border target. It could be a long haul. That is why it made things worse. The use of terror groups by is important to keep channels of communica- the Deep State, namely the isi, to trouble India tion, including Track-II and sports, open. began after Indira Gandhi militarily prised But the problem for the ruling dispensation away East Pakistan from its western mass and in New Delhi is that Pulwama is no longer just liberated Bangladesh. Pakistan will have to get a national security or foreign policy issue. It is over this troubled history to turn a new leaf. u now a full-blown domestic political issue. The [email protected]

u 7 u february 25-march 10,2019 Editorials Business India u the magazine of the corporate world Topple, topple....

BJP should rein in Yeddyurappa

arnataka has for long taken pride in chance to form the government. The prospect being home to the Silicon Valley of of sitting out another five years in theO pposi- KIndia. The state’s economy has become tion has now prompted the use of underhand as big as oil-rich Qatar, riding on the growth methods to return to power. of software services. At 10 per cent, it’s the The H.D. Kumaraswamy government has third-highest contributor to India’s g d p after now announced the appointment of a Special Maharashtra and Gujarat. yet, the political Investigation Team (sit) to go into the verac- machinations that have recently gripped the ity of an audio clip in which someone is heard state would be making the average Kannadiga offering money and ministership to win the hang his head in shame. support of a Janata Dal (Secular) m l a . Yed- It is well-known now that all is not hun- dyurappa has admitted it is his voice in the ky-dory between the Congress and the Janata clip, but claims that it has been edited and Dal (Secular) in Karnataka. Their alliance doctored. Another bjp leader was allegedly formed with the sole intention of keeping the recorded as having said that the Speaker of the Bharatiya Janata Party out of power clearly House, K.R. Ramesh Kumar, had been ‘booked’ has more than its share of stress and strain. for R50 crore to rule favourably on dissident The pressures on the post-poll tie-up are from legislators of the ruling coalition. multiple points. The bjp believes it was robbed The bjp has opposed the constitution of the of its mandate, and has been looking to win sit; instead, it has called for a judicial inquiry over some of the m l a s of the alliance to topple or a probe by a House panel. Experts feel that the government. Congress m l a s, especially since the statements made in the audio record- those owing allegiance to former c m Siddara- ings allude to transactions that are criminal maiah, feel that the chief ministership should in nature, law enforcement agencies are bet- not have been handed over to the junior part- ter-equipped to uncover the truth. The Con- ner. The leadership of the jd (s) is trying to gress-jd (s) alliance will now use the report of assert itself within the alliance and expand the sit to justify accusations that the bjp was the party’s base at the Congress’s expense. trying to buy up dissidents in the Congress. With the Lok Sabha election approaching, the bjp leaders may end up being the victims of stakes are high for all. It is also a free for all. their own design, as points of contact have The jd (s) wants to ensure it gets a good share recorded conversations offering money and of the seats as part of the alliance; the Con- giving assurances for switching sides. gress realises it will have to concede ground the Congress-jd (s) government is by no to the jd (s) to keep the bjp out of the polit- means a cohesive unit, but the bjp ’s covert ical turf but is trying to resist it, and the bjp attempts to engineer defections have so far knows the importance of being in power at certainly backfired. The wiser course for the the time of polls. bjp would have been to politically capitalise In the past few months, one has witnessed on the internal contradictions of the coalition the bjp and the Congress herding their m l a s in government rather than resort to covert means resorts to protect them from poaching. Seven to destabilise it. Desperate measures are aimed Congress m l a s and one jd (s) m l a stayed away at immediate rewards, but these invariably from the assembly proceedings, raising the result in long-term damage. The Congress has suspicion that the bjp was actively wooing so far been outsmarting the bjp, which will be them to bring down the government. All these better served by time and patience, not money machinations have so far come to naught. power and corruption. Karnataka may be the The bjp ought to be worried over the man- gateway of the bjp to the south but the edu- ner in which its strongman B.S. Yeddyurappa cated voters of this southern state will surely has been behaving. After being forced to step not approve of such shenanigans. The bjp down in 2011 as c m in the wake of corrup- must also remember that Karnataka is one of tion charges, Yeddyurappa may have seen the the economically frontline states of India and 2018 Assembly election as his chance at polit- attempts at creating political instability there ical redemption. The bjp finished as the sin- do not bode well for its status as the hub of gle largest party, but a post-poll coalition of technological developments. u the Congress and the jd (s) robbed him of the [email protected]

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Additional Notes: Issue date: 2/11 Editorials Business India u the magazine of the corporate world Let Mallya pay up

An opportunity for banks to recover debt

ingfisher boss Vijay Mallya, who is cur- turning a blind eye to supposedly errant busi- rently contesting India’s successful nessmen like Nirav Modi, Mehul Choksi and Kextradition bid in British courts, has Mallya leaving the country. There is also a sent a message to prime minister Narendra view that the government wants to make an Modi on Twitter, offering to settle his dues to example of Mallya. banks. “I respectfully ask why the Prime Min- It is no one’s argument that a fugitive ister is not instructing his banks to take the economic offender be allowed to get away. money I have put on the table, so he can at But if one has defaulted on loans and now least claim credit for full recovery of public offered to settle (even under duress), the funds lent to Kingfisher,” he said in a series option should be examined. Otherwise, con- of tweets. This is not the first time that Mal- fiscating and auctioning Mallya’s properties lya has offered to pay back the money he owes would involve a lengthy procedure, includ- to a consortium of Indian banks, led by State ing another round of court hearings. The Bank of India. Specifically, Mallya claims court will have to consider the views of all he has offered to settle through a Recovery the parties and stakeholders involved in Tribunal has already attached assets of his, confiscating of the properties, as these par- worth R13,000 crore against the loans. This ties are likely to include joint-owners and wasn’t a ‘frivolous’ offer, he said of the lat- share-holders. est development, but an ‘honest’ and A host of entities have filed applications ‘tangible’ one. to intervene in the proceedings, before any Earlier too, Mallya had offered to pay back order is passed to confiscate properties worth ‘100 per cent of the principal loan amount’ almost R4,235 crore belonging to the belea- he owes to banks. Clearly, he doesn’t want to guered businessman. The entities include go down as the ‘poster boy of money-laun- his stepmother Ritu Mallya, Heineken n v dering’, as the enforcement agencies and a and the official liquidator appointed by the section of the media would like to paint him. Karnataka High Court (h c), among others. There is no harm in taking him up on the Mallya’s stepmother, through her lawyer offer. After all, it is the government’s duty Annapurna Bordoloi, has filed an interven- to ensure that the money he owes banks tion application, claiming the ed had falsely be recovered. As for the banks, the primary attached 17 per cent of shares of two compa- concern should be the bad loans on their nies that belonged to her. She has sought to be books, and if Mallya is offering to settle the heard before the ED confiscates it. full amount, they should grab the opportu- This is a long haul where the outcome is nity. The case of Kingfisher Airlines is a dif- not guaranteed. ferent one. It defaulted on loans worth about Besides, it is the government’s duty to R9,000 crore primarily because the losses for ensure that the money he owes banks be the company mounted due to rising avi- recovered expeditiously. If this is not the case, ation fuel prices after crude prices moved and there is no offer, or the value of assets north, touching the highest-ever level of attached isn’t enough to meet all of Mallya’s $140/ barrel. debts, the government should say so and let The purpose of that litigation was to the law take its own course. recover the money and Mallya, who report- Sure, Mallya has other cases against him edly seemed disinclined to pay up then, has related to his debts — by the Central Bureau since offered to pay the money back. If this of Investigation, which alleges he and some is the case (and the government has ways of bank officials conspired to get his company finding out the genuineness of the offer), the the loans; and another by the Enforcement banks (or since the biggest among them are Directorate, alleging money laundering. While state-owned, the government) would do well these cases originated from the defaults, they to think afresh about the offer. Of course, one have taken on a life of their own, and will reason the offer has not been taken seriously probably carry on. Of course, Mallya should so far is clearly political. With the elections be allowed to contest these, like any citizen of approaching, the Congress, among others, this country. u has been accusing Modi of being complicit in [email protected]

u 10 u february 25-march 10,2019 Business India u the magazine of the corporate world Listening Post

the state’s economy too”. The chief the company with a better Ramping up minister is unhappy over the delay risk-hedging capacity to face the presence incurred by the Union government vagaries of the market. in developing the port and expressed John Deere is betting big on the rap- her displeasure at a meeting of the idly growing Indian market. The cabinet sub-committee on industries Play safe US tractor & farm equipment major and infrastructure at the state sec- According to a source, the Nashik- has shown robust growth in the last retariat. In 2017, the state govern- based Cupid Ltd, a listed entity that 3-4 years, while expanding its prod- ment had given 74 per cent stake to makes condoms, has received the nod uct offering according to the Indian the Centre for the development of the for a big splash into the most highly need. Having grown by 34 per cent port at a project cost of R13,000 crore. regulated markets and is working in the last four years, the company, A feasibility study is awaited so that on a strategy to foray into the larg- which sold about 100,000 tractors in a detailed project report can be pre- est b2c segment in the world. The 2018, has been following a new strat- pared, but the state government feels grapevine has it that this Omprakash egy. Keeping in mind the Indian mar- that the Calcutta Port Trust is taking Garg-run company has received u s f d a ket, the company, which mostly had a long time to complete the study. approval. Besides, the company has its presence in the higher h p trac- It’s this dilly-dallying that has infu- bagged an all-time high order from tors in the past, is now enhancing riated the chief minister and forced a South American country, amount- its presence in the lower h p bracket. her to decide that the development of ing to R130 crore (roughly 18 months Besides, it is also increasing its geo- the port should be accomplished with- of its annualised sales) worth of graphical presence in the country out the Central government’s help. shipment. At present, the com- and now building its dealer network pany has been exporting and has in the northern states, such as Bihar entered new geographies like Central and UP. In the last couple of years, it Maintaining African Republic, Guatemala, Hon- has added over 125 dealers to its net- momentum duras, Jordan, Tajikistan, Morocco, work. Overall, the tractor major is Tanzania and Uzbekistan, to name looking to increase its market share Bharat Gears, one of the largest man- a few. Meanwhile, there are also in the domestic market, where it sup- ufacturers of gears and other compo- talks doing the rounds that the plies almost 70 per cent of its trac- nents for tractors, commercial vehicles promoters are scouting for a tor production. In the last four years, and off-road construction equipment, strategic investor. the company has ramped up its mar- is all set to maintain its growth trajec- ket share (domestic market) by about tory in the current fiscal as well, hav- 3.4 per cent. John Deere’s India oper- ing made a turnaround last fiscal after More gas ation is also exporting to 110 coun- over three years of a difficult phase. The demand for gas is expected to tries including North America and The company, clocking a turnover of grow at 3.5 per cent c ag r between Europe apart from South America, around R514 crore (FY18) has been on 2017-18 and 2022-23 to touch 191- South East Asia and Africa. The com- track in the first three quarters of the 193 m m s c m d. The main push for this pany’s technology centre in India is current fiscal and looks to achieve a incremental demand is expected to at present one of the largest in the growth of around 20 per cent for the come from the fertiliser and city gas world. In 2017, John Deere strength- fiscal in the backdrop of a continued distribution (c g d) sectors. According ened its presence in India with the revival in demand in the target sec- to a source, the conversion of naph- acquisition of the Wirtgen Group, the tors. While the chips were down, the tha-based urea plants, commissioning world’s largest road construction company, in the past took a conscious of new capacities under the New Urea company, which also has a factory decision to strengthen its production, Investment Policy, and the revival in Pune. product offering as also customer of urea plants are projected to drive base. The company invested around the demand for gas from the fertiliser R100 crore in the last two years in sector. Additionally, the reintroduc- Going it alone improving its production efficiency tion of regulatory reforms, along with The spat between the Modi govern- through retrofitting as also adopting improved domestic gas supply, is nec- ment and Mamata Banerjee is hotting newer technologies. The company, essary to revive gas demand from the up, even as the date of the national which caters to o e m s like John Deere, power sector. “It is noteworthy that, election is approaching. Recently, the Ashok Leyland, Force Motors, jc b although the demand for gas by the Bengal chief minister announced that and Man group, has also upgraded its power sector increased 3.5 per cent her government would develop the workforce (2,000 people) which can on-year to 32.9 m m s c m d in 2017-18, proposed deep-sea port at Tajpur in work in tandem with changing mar- from 31.8 m m s c m d in 2016-17 (despite East Midnapore on its own and will ket conditions. Besides, the company the absence of any government policy no longer involve the Central gov- is also expanding its exports busi- support for the sector), this was most ernment. “The Tajpur port will gen- ness which is currently 35 per cent of likely because of lower spot prices of erate employment opportunities in the total business. A better presence l n g”, states a crisil report. u the state,” Banerjee said. “It will boost in the exports market, will provide

u 11 u february 25-march 10, 2019 Follow-up Business India u the magazine of the corporate world

The next big step

o meet the demand and cater to its cus- India, Saint-Gobain group has made significant tomers – in both domestic and interna- investments in excess of R7,500 crore, and built Ttional markets – Saint-Gobain has set up a strong brand. Today, it is a leader in all its its third plant with world class manufacturing major businesses, with sales of over R7,000 crore facilities at Sriperumpudur in Chennai. The in 2018. Its other two manufacturing plants in plant was inaugurated by edappadi K. Pala- India are at Jhagadia in Gujarat and Bhiwadi niswami, chief minister, Tamil Nadu. With an in Rajasthan. “India is amongst the best per- investment of R1,200 crore for all these three forming regions for Saint-Gobain,” said Anand facilities (third float glass manufacturing plant, Y. Mahajan, chairman, Saint-Gobain India Pvt an advanced magnetron coater and glass solu- Ltd. “And, it has been in constant endeavour to tions line and a 72 million capacity rainwa- develop the markets by bringing the best tech- ter harvesting reservoir) taking the cumulative nologies. About 95 per cent of our local sales investment in the glass complex to more than are of products manufactured at our plants R3,000 crore. “I am happy that Saint-Gobain in India”. has made a major contribution to the state of Saint-Gobain is a leader in exports as major- Tamil Nadu among its global investments,” ity of its products are preferred in most of the Palaniswami said in his inaugural speech. At countries. In the automotive sector in India, the the recently concluded Global Investors Meet company is currently supplying products to all in Chennai, Saint-Gobain had also committed major players including new entrants i.e. Kia an investment of R750 crore. Motors and m g m . It started supplying its prod- “As one of the fastest growing economies in ucts only in 2005, but is slowly gaining ground In October 2015, the world, India is an important market and in this segment. This will help further increase Business India investment destination for Saint-Gobain,” said its market share in this segment from both new had written about Pierre-André de Chalender, chairman & c e o, and existing automotive players in India. Saint-Gobain India’s Compagnie de Saint-Gobain, France. “As a “We strongly believe in India’s future and global leader in the construction industry, we have consistently invested ahead of time in expansion plans, its see immense opportunities in India. Over the capacity, capability, technology and innova- range of products past two decades, we have consistently invested tion,” said B. Santhanam, m d, Saint Gobain and outlook on the in developing new markets, in building new India Pvt Ltd. “It has been an interesting jour- construction industry world-class manufacturing facilities, in tech- ney. With more than 20 years of operations and other sectors. nology and in human capital. The brand recall behind us and with 6,000 employees, we have The company has of Saint-Gobain in India is as good as that a strong brand in India. for us, everything in France”. begins with the customer”. now inaugurated its A Fortune 500 company, with global rev- The company has set its target to grow three third float glass plant enues of more than €40.8 billion in 2017, times by 2030. and other facilities Saint-Gobain operates in 67 countries, 945 pro- u S.M. BOOTHEM duction sites with over 179,000 employees. In [email protected]

u 12 u february 25-march 10,2019

Newscast Business India u the magazine of the corporate world

GOVT. & POLICY however, has consistently the central bank towards risks January 2017-18, registering maintained at the w t o that and reserves in the previous an increase of 9.52 per cent. RBI to pay interim eligible production for m s p years. The r bi had retained dividend must be that part of the total R13,190 crore towards risks IIP grows at 2.4 The Reserve Bank of India production of a crop that and reserves during 2016-17. per cent (r bi) has agreed to give is actually procured by the This allocation was increased The Index of Industrial R28,000 crore as interim agencies and nothing more as to R14,190 crore in 2017-18. Production (iip) rose by 2.4 dividend to the government. the support to farmers is only Together, the retained amount per cent in December 2018 as Last year, the central bank restricted to that amount. now comes to R27,380 crore. compared to December 2017. gave an interim dividend It is expected to continue In December 2017, iip rose by of R10,000 crore. The this line of argument at the No tax from buyers 7.3 per cent. The cumulative government has budgeted Committee on Agriculture of The revenue department growth for the period April- R74,140 crore in dividends the w t o. is planning to make it December 2018 over the from the r bi and public mandatory for composition corresponding period of the sector banks for the current Banks asked to dealers and service previous year stands at 4.6 per financial year ending in improve parameters providers to declare their cent. The growth during the March. The Finance Ministry has g s t registration status in corresponding period last year asked the six remaining invoices to ensure that they stood at 3.7 per cent. Finance Commission public sector banks, currently do not charge any tax from sticks to 2011 census under Prompt Corrective buyers. The measure, once Soyabean output The 15th Finance implemented, would check improves Commission will not alter its the widespread practice The Soyabean Processors approach on solely using the of composition dealers of Association of India (s o pa) 2011 Census for population charging g s t from purchasers has pegged the soyabean crop figures in its calculations and not depositing it with the output for the kharif 2018-19 for allocations to states, says exchequer, an official said. It at 11.48 million tonnes. Last its chairman N.K. Singh. is pertinent to mention here year, soyabean output was However, other measures that the dealers opting for at 8.36 million tonnes. s o pa would be included that would composition scheme are not officials attributed the rise in ensure that states that have required to charge g s t from output to both an increase in performed well by controlling purchasers. acreage and yield of the crop. population growth would not Madhya Pradesh, Maharashtra be penalised, he adds. and Rajasthan are major soyabean cultivating states. Venezuela courts India Cotton output falls Venezuela’s oil minister In its latest estimates, the Manuel Quevedo has offered Cotton Association of India India a barter deal to keep (c a i) has further trimmed its oil flowing as the country the crop size by 500,000 battles hyper-inflation caused bales to 33 million bales by collapsing crude prices of 170 kg each for the and US sanctions. The US, its season 2018-19, because of largest customer, has blocked Action (pc a), to improve Imports go higher major loss in output in the key imports of its crude. Quevedo on seven parameters to get Imports in January 2019 producing states of Gujarat, said his nation wants to sell the government’s support were $41.09 billion which Telangana and Karnataka. more crude to India, and that for coming out of the pc a was a tad higher over The association released its US measures have resulted framework. Out of a total of imports of $41.08 billion in monthly crop estimate for in a $20 billion loss to the 11 banks put under pc a last January 2018. Cumulative January 2019, where it lowered country’s economy. year, three (Bank of India, value of imports for the the crop estimate for the third Bank of Maharashtra and period April-January time in a row. The latest crop MSP under-reported? Oriental Bank of Commerce) 2018-19 was $427.73 billion estimate for the year 2018-19 Canada and the US have have already moved out, as against $384.42 billion sees output at the lowest level accused India at the World while the other two – Dena during the period April- since 2010-11, when India’s Trade Organization (w t o) of Bank and Vijaya Bank – will January 2017-18, registering cotton crop was 33.23 million under-reporting of market be merged with Bank of a growth of 11.27 per cent. bales. The association has support price (m s p) for pulses Baroda. This leaves six in the Exports in January 2019 estimated the cotton crop for (chickpeas, pigeon peas, black list of banks under pc a, which were $26.36 billion, as Gujarat (the largest grower in matpe, mung beans, and would face restrictions on compared to $25.41 billion the country) at 8.35 million lentils). India’s minimum lending. in January 2018, implying bales as against 10.5 million m s p for the five pulses is a growth of 3.74 per cent. bales reported last year. about 26 times higher at Funds sought Cumulative value of exports R69,923 crore instead of the from RBI for the period April-January Tea exports fall notified R2,667 crore, says The finance ministry has 2018-19 was $271.80 billion marginally a joint submission made by sought from the r bi R27,38 0 as against $248.18 billion Tea exports have come down Canada and the US. India, crore that was withheld by during the period April- to 249.11 million kg during

u 14 u february 25-march 10,2019 Business India u the magazine of the corporate world Newscast

January to December 2018, in a 4-2 vote. r bi has thus u u as against 251.91 million kg cut rate for the first time in LANDMARKS during the corresponding 17 months. The last rate cut Appointed Pr a m o d April 2019 period of the previous year, happened in August 2017. Ch a n d r a Mo d y, as chairman, says Tea Board of India. The c b d t Resigned Co r n e l is value of exports during 2018 Payment gateways Ashwani Lo h a n i, as c m d, Air Vrieswijk, as ceo, GoAir touched R5,132.37 crore, as split on regulation India Harshil Me h ta , as ceo, Dewan against R4,987.59 crore, the The r bi’s intention to regulate De v en d r a Ch a w l a , as m d & Housing Finance Corporation board adds. payment gateway service ceo, Spencer’s Retail Harish Krishnaswamy, providers has received a Chris topher O’Co n n o r , as as co o, Tata Trusts & A national minimum mixed response from industry ceo, Persistent Systems R. Venkataramanan, as wage suggested players, with some welcoming Ashutosh Raghuvanshi, as managing trustee of the Trusts A government appointed the move and others ceo, Fortis Healthcare, w.e.f. committee has proposed cautioning. The central bank mid March 2019 Anniversary The doubling the national-level had recently announced that Salil Gupte, as India head, Indian Cashew industry minimum wage for a worker it will release a white paper Boeing, effective 18 March commemorates the 100th year in the country to R9,750 for discussion and consult 2019 of Indian cashew export a month, up from a floor companies before introducing Brian Hu m p h r i e s , as ceo & of R4,576 at present. The regulations. board member, Cognizant, Terminated Services of committee has alternatively from April 2019 Ch a n d a Ko c h h a r , former proposed a national Norms issued on An a lj i t Si n g h, founder, Max ceo & m d, i ci ci Bank. She had minimum wage at various secretarial audit Group, as chairman, Max India resigned as ceo & m d of the regional levels in the range The se bi has issued new and Max Life Insurance from bank in October last of R8,892-11,622 a month norms on secretarial audit (depending on local factors) for listed companies. Every and suggested an additional listed entity and its material they want to pay for to 31 financial officer Rajiv house rent allowance for unlisted subsidiaries have to March. Consumers were Bansal by paying R34.35 urban workers. The labour undertake secretarial audit required to migrate to the lakh as consent fees to ministry has put up the and also submit a secretarial new tariff regime by 31 se bi. An investigation report, titled “Determining audit report along with its January after the earlier by the regulator prima the Methodology for Fixation annual report with effect deadline of 28 December 2018 facie found that Bansal’s of the National Minimum from the year ending 31 got extended by a month. severance payment was Wage”, on its website for March 2019. The secretarial “Out of the total 170 million not in accordance with the initiating stakeholder audit and the report has tv homes (which includes remuneration policy. Infosys consultations. to be done by a practising 70 million d t h homes and had filed a settlement company secretary. Currently, 100 million cable tv homes), application with se bi in REGULATORS secretarial audit is still done about 90 million homes have November 2017. Consent at companies, the report is already registered their choice order is a negotiated Independent body to submitted to a company’s with the operators,” says R.S. settlement between the vet economic data management is not in an Sharma, chairman, tr ai. market regulator and the The Centre for Advanced elaborate format. Under the authority’s new listed entity. It is similar to Financial Research and tariff order, consumers can out-of court-settlement. Learning (cafr al) a body Commodity indices select and pay only for the of the central bank, wants mooted channels they want to watch. NGT order to re-open the government to form an The se bi has proposed plant set aside independent body to vet creation of commodity Viewership data to The Supreme Court (sc) official data after questions exchanges to come out with be shared dismissed the National Green were raised about the indices on which futures Broadcast Audience Research Tribunal (n g t) judgment, credibility of the nation’s contracts can be introduced. Council (barc) India has which allowed reopening statistics. cafr al’s views comes Such indices can be based announced it will share the of Vedanta’s Sterlite Copper after the government pegged on the most liquid contracts weekly tv viewership data with in Thoothukudi, on budget deficit target at 3.4 traded on the bourses and those that have subscribed maintainability. The apex per cent of the gross domestic have to be diversified with to its service. The audience court observed that the product (g d p) for the current the weightage of a single measurement firm has taken tribunal did not have the fiscal year ending in March constituent capped at 20 this decision in light of the jurisdiction to entertain as well as the next. cafr al per cent according to a trai’s new tariff order, which Vedanta appeals against Tamil estimates the government’s consultation paper by kicked in on 1 February. Nadu government order and budget deficit to be closer to the se bi. asked Vedanta to approach 3.7 per cent of the g d p. COMPANIES Madras High Court for Consumers’ deadline interim relief. The Tamil Nadu Repo rate lowered extended Infosys pays consent government, in its petition The six-member monetary The Telecom Regulatory fees to settle Bansal challenging n g t judgment, policy committee (m p c) Authority of India (tr ai) case said that the main contention headed by the r bi governor has extended the deadline Infosys settled a case was the maintainability of lowered the repo rate by 25 by which consumers should pertaining to the severance Sterlite plea before n g t and its basis points to 6.25 per cent select the television channels package for former chief subsequent order. u

u 15 u february 25-march 10,2019 Businessmen in the News Business India u the magazine of the corporate world

R150 crore over the next 24 months. In fact, OpenTap aims to reach R100 crore and add 40,000 customers by March 2019. “The partnership with iti EdVest is a huge milestone for us,” said Senthil Natarajan, co-founder & c e o, OpenTap. “Our vision of financial inclu- sion begins with building a bet- ter tomorrow, together for our customers. And, we strongly believe that their tomor- penTap, the Chennai- row starts with a good educa- Obased alternate finance tional foundation. iti EdVest’s (AltFin) growth stage start-up, focus on delivering customised ahindra Truck & Bus m d, Mahindra & Mahindra. has announced its tie-up with financial solutions to catalyze M(m t b) division, a part “Today, we are probably the iti EdVest, the education-fo- growth for students and educa- of the Mahindra group, has first and possibly the only c v cussed initiative of the Invest- tional institutions will greatly launched Furio, its brand-new brand in the world to have ment Trust of India Limited help towards this. We’re excited range of intermediate com- an end-to-end presence from (iti). The partnership will con- about what we can achieve mercial vehicles (ic vs) with three-wheelers to 49 T truck. servatively add loans worth R25 together.” OpenTap is also talk- an unprecedented guarantee With Pininfarina design, crore over the next six months. ing to private banks and lead- of ‘more profit or truck back’. the Furio is set to be a game To begin with, the partnership ing n bfc s for further expansion Furio, with a starting price of changer for us”. Added Rajan will focus on lending to par- to reach more customers in the R17.45 lakh, marks the com- Wadhera, president, auto- ents for payment of their chil- areas of education, medical pany’s entry into the ic v seg- motive sector, Mahindra & dren’s education and related and personal loans. The Alt- ment. “The launch of the new Mahindra: “The ic v category fees. Open Tap and iti will Fin start-up currently focusses Furio range of ic v trucks, with is highly competitive, mak- then foray into other segments on providing short term credit an unprecedented customer ing the entry of a new player to infuse liquidity in the lives for the vastly underserved pop- value proposition of getting seem difficult. However, we of the blue-collared workforce. ulation of the blue-collar work- more profit or giving the truck are confident of making our The partnership is looking at force, whose monthly income back is a unique and pioneer- mark with an unprecedented building a portfolio of about is below R25,000. u ing effort, which reflects our customer value proposition, commitment to the segment focusing on maximising earn- and confidence in our prod- ings and ensuring the peace of product from our global port- uct,” said Pawan Goenka, mind of our customers.” u folio, the V-Class,” said Mar- tin Schwenk, managing director & c e o, Mercedes-Benz India, at the launch of V-Class in Mumbai. “The launch of the V-Class in India firmly underscores our pioneering spirit, as we introduce the ‘Luxury Multi-Purpose Vehi- cle’ segment for our discern- ing Indian customers. The V-Class combines exemplary functionality with luxury appeal, unsurpassed comfort, efficient driving dynamics and uncompromised safety, ndia’s largest luxury car all of which characterise a angana Ranaut and totally new experience for me.” Imaker Mercedes-Benz Mercedes-Benz. The versatile KAnkita Lokhande were Ashishkumar Chauhan, has launched V-Class in India V-Class is targeted at a wide surprise guests at the b se flanked by his wife and Malini catering to the ‘luxury multi- array of potential custom- recently. Coming mid-day dur- Sanghvi a bse broker, appre- purpose vehicle’ (m p v ) seg- ers comprising large families, ing the screening of the movie, ciated Ranaut’s commitment ment. With this launch, sports enthusiasts and busi- Manikarnika, a R100 crore-star- and told his staffers to emu- Mercedes-Benz now offers nesses. In 2019, Mercedes- rer based on freedom fighter late her. “After the movie, all of a world-class ‘luxury multi- Benz completes 25 years in Rani Laxmi bai of Jhanshi, you should go back to work,” he purpose vehicle’ that com- India and this milestone will Ranaut came straight from a jokingly said. Screening mov- bines the highest standards be marked with a wide range flight from Germany to be with ies at the rotunda off and on of a passenger car with the of product offensives start- the staffers. Candidly admit- for staffers, their families and functionality of an m p v. “We ing with the V-Class.” It will ting she did not follow any- well wishers is a new initiative are excited to kick-start 2019 create a new benchmark in thing about what goes on at the taken by Chauhan to keep his by introducing an exciting luxury travel in India. u exchange, she said, “This is a employees motivated. u

u 16 u february 25-march 10,2019 Business India u the magazine of the corporate world Businessmen in the News

ast fortnight, Tat a Moto r s mid-size su v segment. The Llaunched its much-awaited Harrier is a strong proof of our su v, the Harrier. With a start- Turnaround 2.0 strategy and ing price of R12.69 lakh, the it will be a game changer in Harrier is truly a global su v, the market.” Added Mayank offering a perfect combina- Pareek, president, passen- tion of design and excellence. ger vehicle business unit, Tata Engineered on Optimal Mod- Motors: “The all-new Harrier ular Efficient Global Advanced is our most premium offer- (o m e g a) Architecture, it ing yet and will attract aspir- promises to offer exemplary ing buyers with its stunning driving dynamics on varied design and exemplary perfor- ank of Baroda has been terrains. “We showcased the m d, Tata Motors, on the occa- mance. The passenger vehicle Bawarded the Finno- H5X Concept at the Delhi sion of the launch. “I am business is going from strength viti Award for ‘Fintech Ini- Auto Expo 2018, with a prom- elated to present to you the to strength on the back of tiatives’ at the Banking ise to bring it to the Indian Harrier today. With this prod- new products and the Harrier Frontiers’ Finnoviti Con- market in early 2019,” said uct, Tata Motors has right- promises to further strengthen ference 2019, held in Mum- Guenter Butschek, c e o & fully entered the premium our market presence.” u bai. The award was presented to Akhil Handa, head, Fin- tech & New Business Initia- of x l r i Amaravati is being set tives, Bank of Baroda, in the up in Inavolu Village in Thul- presence of esteemed jury lur Mandal in Guntur District, members Anuj Bhargava (con- Andhra Pradesh, covering a sultant, ifc) and M. Narendra sprawling area of 50 acres. “It (former c m d, Indian Overseas is our belief that in empha- Bank). “Digital Transformation sising value-based manage- has engulfed the entire bfsi ment education, we will be sector,” said Akhil Handa, grooming business leaders as he received the award. “We who will serve as catalysts of believe our partnerships with change and become responsi- Fintechs would provide a win- ble leaders of tomorrow that win for quick go-to-market. will carve the destiny of a Sure, harnessing the poten- new India,” said Fr. E Abra- tial of the digital kaleidoscope lri – Xavier School of ham, S. J., director, x l r i has been a challenge, but each xManagement – one of Jamshedpur, on the occasion. oshiba, a global leader of the innovations or transfor- India’s premier B-schools, has “As we recall x l r i’s historic Tin manufacturing elec- mations is aimed at enriching laid the foundation stone legacy of 70 years of shaping trical systems for water sup- customer experience and for x l r i Amaravati – its global business leaders, ply and sewerage facilities for en route provides scope for new campus in Andhra we need to look towards over 40 years, has announced monetisation.” u Pradesh. The new campus the future.” u the name change of its 100 per cent Indian subsidiary – Agarwal’s Group of Eye Hos- u e m India (u e m) to Toshiba pitals. Added Dr Adil Agar- Water Solutions. Toshiba wal, c e o: “We are looking acquired a 100 per cent stake at adding anywhere between in u e m in March 2018. “u e m is 50-75 hospitals to our net- already an international com- work over the next 3-5 years pany having executed over with a major focus on metro 400 projects in over 30 coun- cities as well as Tier II and III tries. With offices in five coun- towns. The expansion will be tries, u e m provides complete, done through a mix of strate- single-source services from gic partnerships, acquisitions design and engineering, to and greenfield hospitals.I nno- construction and installation r Agarwal’s Health- care. “The Agarwal group is vation and technology will of bespoke water, wastewa- Dcare Ltd (d a h c l ) has excited to welcome Temasek as continue to be at the forefront ter and municipal water and raised a R270 crore investment an investor. We believe their of our growth, and we will be waste-water treatment facil- from Temasek, a global invest- expertise and support will investing more in cutting edge ities across the world. Now ment company headquartered help our company expand our technology across our cen- with the formal adoption of in Singapore. The investment network of clinics and opera- tres. Our aim is to deliver high the Toshiba name, the com- will be used to expand the tions to better meet the grow- quality eye care at affordable pany will have access to a Indian geographical footprint ing demand for affordable prices at people’s doorsteps.” wider customer base in India of the international eye care and quality eye care across The Dr Agarwal Eye Hospi- and overseas, while reiterat- chain, along with significant India,” said Prof (Dr) Amar tal group has been at the fore- ing the Japanese quality and investments in the latest tech- Agarwal (right; m s , f rc s, front of innovation in the field commitment that the Toshiba nology for super specialty eye- f rc Ophth), chairman, Dr of ophthalmology. u name carries.” u

u 17 u february 25-march 10,2019 Visiting Business India u the magazine of the corporate world

it-Madras has joined hands industrial collaborators on core learning experience for the iwith Bosch to launch its challenges in Data Science and students, the new r bc-d sa i centre for data science & artifi- ai. Speaking at the inaugu- will undertake foundational cial intelligence in its campus. ral function, Michael Bolle, research in many areas of ai Further, the company would be member of Bosch’s board of and data science, namely deep investing R20 crore (€2.5 mil- management said, “Artificial learning, reinforcement learn- lion) over the next five years, Intelligence is a core technol- ing, network analytics, inter- to address core challenges in ogy for all areas of connected pretable machine learning, the field. The Robert Bosch life – from connected mobil- and domain aware ai. While Centre for Data Science & ity to buildings, factories, and the primary focus will be given Artificial Intelligence (r bc- cities. The expertise of our to activities such research proj- d sa i), inaugurated last fort- Indian engineers contributes ects, knowledge management night, aims to increase Bosch’s societal impact through multi- to expanding the ai skills set of and setting up collaborative ai skill set while creating disciplinary interactions and Bosch.” To promote a holistic facilities and laboratories. u

dexperience ’ Executive Cen- and the digital world can tre, in Chennai to showcase improve the real world. This software platforms and appli- experience centre will offer cations to its customers such Dassault’s expertise and solu- as Royal Enfield and Ashok tions to help customers digi- Leyland – with real-time visi- tally re-invent their approach bility throughout the product not only to advanced product development cycle, right from development and manufactur- the design to the end result. ing but also how the business Sylvain Laurent, executive is run as a whole, said Lau- vice-president and member rent. Samsonn Khaou, manag- of the executive committee, ing director, Dassault Systemes rench software company Dassault Systemes, said that India, said Chennai was the ake in India’ is not FDassault Systemes today it is not about ‘Make in fifth location to host the “Mabout protectionism has inaugurated a new ‘3 India’, but ‘Create in India’, experience centre. u but a programme that gives incentives to foreign compa- nies to easily invest in India anuel Quevedo, oil sa. His arrival in India coin- and makes greenfield projects Mminister, Venezuela, cides with speculation over the easier to establish and is prof- was in the country last fort- future of the Venezuelan oil itable,” said Francesco Pens- night at an energy event in industry. India is set to emerge abene, trade commissioner, India. He was seeking closer as Venezuela’s preferred cus- Italy, who was in the coun- ties with major crude custom- tomer due to the nation’s will- try to attend the India Interna- ers to tide over the crisis of US ingness to pay for crude in cash. tional Leather Fair 2019 (iilf). sanctions. Quevedo said his Quevedo, who met Union min- “While ‘Make in India’ does nation wants to sell more crude ister for petroleum, Dharmen- not represent protectionsim, to India, and that US measures dra Pradhan, said his country’s there are some duties and tar- have resulted in a $20 billion production is now at 1.57 mil- iff that do not incentivise other loss to the country’s economy. lion barrels per day. Venezu- sectors to better establish in the He’s also the head of state pro- ela, which currently holds the relationship with India, he said country. These penalise compa- ducer Petroleos de Venezuela o p e c presidency, has a healthy at the Petrotech conference. u nies that can do better in food, machinery and automotive,” he added. Industrial and com- at New Delhi as a “partner for ties between the two nations. mercial trade between Italy and the future.” Addressing a trade Macri said Argentina is fast India is performing well. Italy summit Macri said he has had integrating with the world and is attaching the greatest impor- five meetings with his counter- its attempts have been appre- tance to India because “we part Narendra Modi in a rela- ciated by the world at large are really working to become tively short time. “We see India which is embracing it. He much stronger partners. Part- as a partner for the future,” he asked businessmen on both nership is the key to strengthen said, stressing the relationship the sides to seize the oppor- our bilateral relationships,” he is based on complementar- tunities that exist, affirming said. “We will finish the year ity, where the Latin American all the support from the pol- with 13 per cent increase in nation can help with food and icy makers. He said companies bilateral trade,” he said. The energy resources for India’s should also look at opportuni- backbone of Italy’s exports to large population. He marked ties beyond their domestic bor- India is machinery, which con- auricio Macri, Pres- out services, information tech- ders while taking their calls on stitutes about 41 per cent of Mident of Argentina, nology, tourism, mining and investing, including address- exports, he said. He added that who was in the country last renewable energy as the poten- ing the broader opportunities Italy is the 17th larg- fortnight said his nation looks tial areas to deepen the trade in Asia and the Americas. u est investor in India u

u 18 u february 25-march 10,2019 Business India u the magazine of the corporate world Visiting

koda and Volkswagen group India have member, Board of Management for Technical Šinaugurated a new Technology Centre in Development, Škoda Auto, and Bohdan Woj- Pune. The opening ceremony was attended by nar, member, Board of Management for Human Andrej Babiš, Prime Minister, Czech Repub- Resources Management, as well as Gurpratap lic, and other government officials. On behalf Boparai, head, Volkswagen group India. “I am he Abu Dhabi National of the Volkswagen group, Škoda is leading the delighted that Škoda Auto is expanding its pres- TOil Co (a d n o c) is look- ‘India 2.0’ project, which sets out the Volkswa- ence and involvement in India with such signif- ing to expand its presence in gen group’s model campaign on the Indian mar- icant investments and promising projects. The India by investing in refining ket. At t he new Tech nolog y Center, 250 eng ineers fact that Škoda is creating great opportunities and petrochemicals and stra- will be developing vehicles tailored to the needs for the high potential market here in India dem- tegic petroleum reserves, said of customers in the subcontinent. Andrej Babiš onstrates the long-term strategy of the brand,” Sultan Ahmed Al Jaber, and other members of his government travelled Babiš said. “By opening the Technology Cen- minister of state, United Arab to Pune for the inauguration ceremony. The del- ter, we underline our determination to make Emirates (UAE), and c e o, egation was received by Christian Strube, the India 2.0 project a success,” added Strube. u a d n o c . Speaking to the media on the sidelines of Petrotech 2019, Al Jaber said, “India is wiss flavour and fragrance high on our strategic agenda Scompany, Givaudan and expanding our strategic inaugurated a flavours man- reserve in India will be an item ufacturing facility in Pune on the agenda to be discussed last fortnight. The c h f60- with our friends and coun- million (almost $60 million) terparts in India.” India, the plant is designed to deliver a world’s third largest energy superior level of flavours and consumer, has drawn the taste solutions. “After acquir- UAE’s attention. “We are look- ing nine companies in the ing at the expanding invest- last four years, we are looking ment portfolio in downstream to expand our base in India. sectors, refining and petro- Grow t h for t he flavou r a nd f ra - chemicals. We are only look- angladesh’s foreign minis- grance market in India is bal- he added. Givaudan’s a pac ing at strategic partnerships Bter Abdul Momen, who anced and growing,” Gilles commercial head, Flavours, given that we can also bring called on Prime Minister Nar- Andrier, c e o, Givaudan said. Monila Kothari, said, “Over our own crude. India is not just endra Modi last fortnight, “Our new plant will enable the last few years, there has an important market for us, it briefed the pm on recent devel- Givaudan to collaborate even been tremendous growth in is our strategic partner. And, opments in the bilateral rela- more closely with our custom- the food and beverage indus- we will continue to always tionship. “The prime minister ers to deliver differentiated try in India and we have seen look for ways to enhance our said India-Bangladesh rela- solutions and great taste expe- sustainable growth in avenues of co-operation,” Al tions have been on an upward riences to the Indian market,” this market. u Jaber said. u trajectory in the last few years. He reaffirmed India’s commit- ment to work with Bangladesh he three-day trade show have been visiting a number to build on this momentum Tof o t m 2019 was inaugu- of countries to attend fairs, during the new term in office rated by Anil Kumarsingh and am very impressed with of Prime Minister Sheikh Gayan, minister, tourism, the o t m show in India, and Hasina,” a press release stated. Mauritius, in the presence this is my first visit to India. Momen, who is on his first of dignitaries from India and The o t m is one of the impor- foreign visit following his abroad. Participants from tant platforms to showcase appointment as the foreign 55 countries and 29 Indian tourism to the world,” said minister last month, met his states exhibited their desti- Gayan. Talking about Mau- Indian counterpart Sushma nations at the Bombay Exhi- ritius tourism, the country is Swaraj and also attended the bition Centre during 23-25 known as a sea destination Fifth India-Bangladesh Joint January. The show was a gate- and he welcomed all Indians Consultative Commission way to India’s 22 million out- travel professionals to show- to visit the country without meeting. u bound travellers and allows case their business in India. “I a visa. u

u 19 u february 25-march 10,2019 Business Notes Business India u the magazine of the corporate world

(m c oc) kicks in preceding the general elections, then the only option left is Goa at crossroads the long and painful judicial route. Probably that is what the prime min- The mining industry dependents’ woes continue ister hinted on 20 January 2019, when

san he said that the Centre would not ‘lag

j behind in taking the judicial route’ to ay b restart mining operations in Goa. If orade that is the case, then the Goans can now only sit and pray that the Supreme Court takes up the case on the Aboli- tion Act, which is pending for two decades now.

Legal maze In this 20-year-old case, the crux of the problem lies with the Abolition Act. The contest under this act is about whether the mining con- cessions granted by the erstwhile Por- tuguese government can be considered as leases under the m m d r a , which was extended to Goa on 1 October 1963 after its liberation from Portuguese rule in December 1961. A part of the Abolition Act was s the Supreme Court order to and help more than 300,000 (25 per addressed by the Bombay high court shut mining in Goa completes cent of population) who are staring when it allowed the government to Aone year (7 February 2018) the at a hopeless future. If an ordinance collect levies retrospectively from Goans are at crossroads. Almost 25 per is brought in then the mining com- 1987. However, the issue of changing cent of Goan population has nowhere panies, truckers, barge owners and of the concessions to leases was unad- to go if something is not done soon. course the mining industry depen- dressed. In 1998, the Supreme Court The mining companies can sustain dents will get some breathing space. directed that these appeals would need the support system to certain extent If the ordinance is not brought to await the decision of another set of only. With no revenue forthcoming, in before the model code of conduct litigation, which is the Property Owners the mining firms cannot keep pay- Matter and referred it to a larger con- ing salaries and continue with the Legal maze, stitutional bench that remains pend- social investment (c sr) that includes ing till date. running school, supplying of drink- step by step The Supreme Court also passed an ing water, supporting sports and • Erstwhile Portuguese government gave order in civil appeal no. (1413/1998) much more. concessionaires – valid till perpetuity and connected matters, to await the In the last 10-12 months, the polit- • Goa liberated in 1961 – Concessionaires judgment in the Property Owners Asso- ical class promised a lot – including were brought under the earlier m m d r a ciation vs. State of Maharashtra (2013) 7 changes in the Mines & Minerals on 1 October 1963 SCC 522. The matter is since pending. (Development and Regulation) Act • Concessionaires challenged the gov- Unfortunately, in 2018, in a com- (m m d r a) so that the contentious ernent’s rent and royalty under m m d r a in pletely unrelated issue, because of no issue of extending the leases can be Bombay hc clarity on the issue of leases (or con- addressed (the point on which the • Bombay m c prohibited government of cessions) the Supreme Court shut all Supreme Court ordered the closure). India to levy royalty and rent mining operations (drawing the legal One other option promised was to • The government brought in Abolition aspect from the 2015 amendment of change the Goa, Daman & Diu Min- Act and again started levying rent and m m d r Act). ing Concession (Abolitions & Declara- royalty retrospectively Whilst the legal entanglement is tion of Mining Leases) Act – Abolition • Goans went to court and the courts bewildering on one hand, irreplace- Act. Either of the option would need a allowed the levies but but prospectively able damage is being caused to the stamp of Parliament. from 1987 mining industry dependents in Goa With the last session of Parliament • Issue of validity of mining leases for 50 on the other due to critical loss of live- before the general election is over, the years (till 2037 – starting from 1987) is lihood of masses wholly dependent on feasibility of bringing in the amend- still pending. mining for sustenance. ments either in m m d r Act or the Abo- • Concessionaries filed an appeal in In view of the urgent concerns lition Act looks dim, until unless there Supreme Court in May 1998 arising out of the plight of the min- is a political will to bring an ordinance ing dependents, Goa Mining People’s

u 20 u february 25-march 10,2019

Business Notes Business India u the magazine of the corporate world

Front (g m p f) has already approached The Supreme Court, seeking justice Utility scale solar capacity addition and protecting their right of life and 3,833 livelihood, which is enshrined in the 4000 (MW) Constitution of India. g m p f is plead- 3500 ing to the Court to urgently pick up 3000 and decide these 1998 appeals, which is possibly the last strand of hope if the 2500 2,082 2,054* Central government fails to bring an 1,856 2000 1,681* ordinance to amend the m m d r a or the 1,358 Abolition Act and give an interim relief 1500 1,178 990 before the Courts settles the issue. 1000 720 u LANCELOT JOSEPH 500 [email protected]

0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2017 2017 2018 2018 2018 2018 2019* 2019*

*Estimated; Source: BRIDGE TO INDIA research SOLAR ENERGY stood at 990 m w – almost half of 1,856 when it was happening, the dollar was Momentum m w added in the same quarter in 2017 cheaper (at R64) and there was no safe- (see graph). The day was somewhat guard duty on solar modules. Those saved by the rooftop segment, which supporting factors have gone. The gov- lost? registered a positive growth of 47 per ernment should not try to control the here is no denying the fact that dur- cent, with an addition of 456 m w. But tariff. Let the market forces decide”. Ting the initial years of the present it is no secret to that rooftop is a rel- He also points out that states, such n d a government, the aggressive push atively too small a piece of the pie in as MP, Rajasthan, Andhra Pradesh to the renewable energy sector was one the Indian solar business. and Telangana have gone slow in auc- of the key showcasing points reflecting tioning of new tenders. The report by its development agenda. The gigantic Tender blunder What is making Bridge to India confirms the absence target of 175 g w set-up to be achieved the players nervous is the continuing of price-linked cushions, when it says, by 2022 (solar in the forefront, with cancellation of tendering by the gov- “Module prices have fallen to $0.20/ w 100 g w target) had undoubtedly cre- ernment. The report points out that – down 44 per cent over the previous ated an unprecedented buzz mak- “tender design has not met market year. But most of this fall has been off- ing India the flag-bearer of the global expectations – 16,725 m w of tenders set by a 25 per cent safeguard duty and drive to align with the non-fossil were cancelled in 2018 and another 5 per cent g s t, as well as more than 10 sources of energy. And there were will- 9,238 m w of tenders were undersub- per cent rupee depreciation.” ing buyers of the government’s assur- scribed.” For instance, in July Solar The recently emerged irritants, as ance that India would eventually Energy Corporation of India (seci) can- Rustagi points out, have made players become a renewable and particularly celled 2.4 g w out of a 3 g w Interstate quite cautious now. “Two years back, solar energy powerhouse with private Transmission System (ists). Similarly, we used to notice 30-40 bidders for players, including the Chinese module the Uttar Pradesh New & Renew- any large-scale or even medium sized manufacturers, jumping on the band- able Energy Development Agency project. Now that number has come wagon. But, as the n d a government’s (u p n e d a ) cancelled the 1 g w auction down to 8-10. It is not that players tenure inches close to the finishing for grid-connected capacity building have run away. But most of them are line, the overwhelming enthusiasm across the state and a 500 m w proj- watching the unfolding scene from the of the recent past has been taken over ect auctioning was also put on hold by sideways,” says he, while adding that by some serious concerns. Momen- the Gujarat Urja Vikas Nigam Limited impending elections have added to tum lost is the defining sentiment pre- (g u v n l). “The government agencies, the uncertainty since not much action vailing amidst the stakeholders today. which are auctioning these projects, is expected in the first half of this year. “The way things have unfolded in are expecting tariffs to fall further,” Jain concurs that the sector will need 2018, I don’t think the country will be points out a senior executive of a lead- special attention from the new gov- able to achieve the ambitious target of ing firm. “But after the initial rush of ernment after the elections. “I won’t 175 g w by 2022,” says Vinay Rustagi, price-undercutting, the serious play- say that it would need a fresh push. c e o, Bridge to India, a Gurgaon-based ers have stopped using low pricing as a What will be needed is a more compre- solar energy think tank. tool to make their bids attractive. Their hensive ecosystem which should have The findings of a recent report quotes are now more pragmatic aligned the answers for the challenges ensur- by the agency lend credence to the to make their projects sustainable in ing long-term sustainability of the momentum lost theory. In the last the long run”. Reasons Sunil Jain, c e o, projects in a financial sense.” quarter of the previous calendar year, Hero Future Energies, “Further tariff u RITWIK SINHA the total utility capacity addition decline is not possible. Two years back, [email protected]

u 22 u february 25-march 10,2019 Business India u the magazine of the corporate world Government & Politics

said. “And, 60 per cent of it – R7,200 crore – is the Centre’s share. We need Struggle for funds these funds.” Incidentally, the scheme has been Modicare’s slashed outlay hits staff sentiment struggling for funds in the current financial year (2018-19) too. Ayush- san man Bharat was announced in last j ay b year’s Union Budget and the Cab-

orade inet had allocated R3,135 crore for 2018-19. The n h a planned to spend this amount but suddenly the alloca- tion was reduced to R2,400 crore. Of this reduced amount, R1,000 crore is yet to be received.

Financial strain How is this impacting the rollout of Modicare? Slow inflow of funds is delaying the Centre’s payments to the states. Up to 28 states and Union Ter- ritories are on board currently, and at least 14 states have sent s o s s to the n h a requesting release of funds due to them. Till last month, the Centre had released close to R766 crore to states, falling short of the current additional liability of over R1,700 crore. fund squeeze is reported to be schemes like immunisation, setting up This has put a financial strain on stalling the rollout of the Prad- health and wellness centres, manag- some of the states. Tamil Nadu had Ahan Mantri Jan Arogya Yojana ing communicable and non-commu- written to the Centre requesting reim- (pm-j ay ) popularly known as Ayush- nicable diseases and so on. Separately, bursement of close to R360 crore, man Bharat or Modicare. One of the the n h m had demanded R35,000 crore which it paid as premium, on behalf of n d a’s flagship schemes of the govern- in 2019-20, of which the Finance the Centre, to United India Insurance, ment, it is receiving a lesser slice of the Ministry has finally sanctioned earlier in January. “Till date, we have pie than it has demanded from the R26,945 crore. received only a tenth of the total funds Centre. The scheme aims to provide The moh f w has been kept on a demanded from the Centre. They have free health care to 500 million people tight leash by the Ministry of Finance, paid us R25 crore for premium amount encompassing different dimension of despite demanding more budget. Last and R11 crore for covering administra- family health care needs. year, the moh f w had demanded over tive costs, a total of R36 crore. We are According to officials, the scheme’s R70,000 crore to meet its expendi- operating the scheme on state funds,” budget has been slashed by at least ture, but was allocated R52,800 crore said P. Uma Maheshwari, tn Health R800 crore. While the National Health (a decrease of 24.57 per cent over Systems’ project director. Agency (n h a) – the implementation the previous year). This year, it In another instance, Madhya agency of pm-j ay – had demanded demanded R80,000 crore but was given Pradesh had demanded over R100 R7,400 crore to meet the expenditure R63,538 crore. crore but has been given R15 crore till for 2019-20, the Ministry of Finance Interim finance minister Piyush date. n h a officials fear that non-dis- initially agreed to allocate close to Goyal now says that the government bursement of Central funds in a timely R7,200 crore. But, a fortnight before may provide more funds next year for manner can have a domino effect, if the interim budget, the Ministry of what was being billed as the world’s states cease to co-operate. Health and Family Welfare (moh f w) biggest health care scheme. The gov- n h a officials admit that this may wrote to the Ministry of Finance ask- ernment has been claiming that in have a staggering effect on last-mile ing it to further cut down pm-j ay ’s the last four months of its launch, the delivery to the patient, if states, and budget, as it was eating into the funds scheme has already benefited over 1 then hospitals that provide services, meant for other schemes. The Finance million people. are not paid on time. Incidentally, this Ministry accepted moh f w ’s plea After the funds were slashed, the was the biggest grouse in the Rashtriya and further reduced pm-j ay ’s budget sentiment in the n h a office was sub- Swasthya Bima Yojana too, the scheme to R6,400 crore. dued. “Given the way we are ramp- that preceded pm-j ay. Some things While the n h a implements pm-j ay, ing up beneficiaries, and also as more never change. the National Health Mission (n h m) states join in, we expect to spend up to u RAKESH JOSHI implements a majority of health R12,000 crore in 2019-20,” an official [email protected]

u 23 u february 25,2019-march 10,2019 Government & Politics Business India u the magazine of the corporate world

dramatically wrong. Ruling low In FY17, c pi was 4.5 per cent versus the 5 per cent forecast while c pi rose 3.6 per cent in FY18 as compared to the Food inflation spans worries 4.5-5 per cent forecast. In H1FY19, c pi inflation rose 4.3 per cent versus the sumeet sawhney sumeet last projection of 4.7-5.1 cent; the first projection for H1, made in the 7 Febru- ary policy review, was an even higher 5.1-5.6 per cent. In which case, the real question is whether the r bi was hasty in chang- ing its stance from ‘neutral’ to ‘cali- brated tightening’ in the last policy. Apart from the high repo rate, by keep- ing liquidity too tight – for fear of infla- tion – the r bi ensured yields remained elevated. This time around, the r bi has changed its stance back to ‘neutral’ as it needs to ensure there is enough liquidity in the economy.

xxxxx For the r bi to get its inflation-fore- cast right, apart from re-calibrating its model, it needs to take a careful look at how it forecasts food inflation. Some ood inflation has been ruling witnessed since October 2018, which part of the contraction is due to global below general inflation for the led to the bjp tasting defeat in assem- commodity prices remaining subdued. Flast 29 months. This is an unprec- bly elections in Madhya Pradesh, Raj- But more than this is the skewed surge edented development in the country’s asthan and Chhattisgarh. This trend in domestic food basket production. history with both economic and polit- in food prices held lessons for the bjp Wheat and rice production has risen ical implications. in the coming months leading to the 6-7 per cent over that five years ago, Experts point out that the eco- Lok Sabha polls. but pulses rose 38 per cent, sugarcane nomic impact is reflected, among Some experts say that persistent low 29 per cent, vegetables 11 per cent and other things, in the r bi, not only soft- food inflation is also the reason for the fruits 19 per cent. ening its monetary policy stance from r bi getting its inflation forecasts wrong Combine this with the large stocks “calibrated tightening” to “neutral”, in the past. The latest c pi numbers for of 16 million tonnes for rice (that is 14 but even cutting benchmark interest January 2019 show the overall year-on- per cent of annual production), 33 mil- rates by 25bps on 7 February. This is year retail inflation rate at 2.05 per cent, lion for wheat (33 per cent of annual good for India Inc., among others. the lowest in 19 months. Even lower, production) and 3.7 million tonnes The political fallout of low or neg- though, has been the consumer food for pulses (15 per cent of production) ative inflation is agrarian unrest. This price index (c f pi) inflation, at minus – and the government’s willingness to is worrying for the ruling dispensa- 2.17 per cent. Indeed, if one were to use this to control prices, unlike in the tion which has sought to redress part exclude the c f pi, which has a 39.06 per past –and it looks as if India is looking of the farmers’ grievances though the cent weight in the c pi, the “core” non- at a secular dampening of food prices; interim budget. To woo farmers in the food inflation works out to roughly 4.8 more so since, despite all the prom- rice-growing states, the Centre via the per cent. That is more than the r bi’s ises, there is little procurement by Food Corporation of India has also own comfort level of 4 per cent. government agencies and, as a result, embarked on an aggressive procure- As the r bi’s latest monetary policy it doesn’t look as if the m s p plan is ment drive at a higher m s p. resolution statement has pointed out, going to work. The rural backlash against “food inflation has continued to sur- The r bi’s new food model, accord- the modi government began roughly prise on the downside with continuing ing to experts, will have to build in the after May 2017, when the rabi crop deflation across several items”. While impact of high stocks, look at ratios planted just after demonetisation was that has, of course, enabled the cen- like stocks-to-consumption, and so getting marketed. The three months tral bank to reduce its “repo” or over- on. Till the r bi gets its food inflation from May 2017 to July 2017 periods night lending rate, which wouldn’t forecasts right, it will continue to get that saw food inflation sliding into have been possible in the normal its c pi forecast wrong. negative territory. A similar episode course, the fact is that the central bank u RAKESH JOSHI of negative food inflation has been continues to get its inflation forecasts [email protected]

u 24 u february 25,2019-march 10,2019 Business India u the magazine of the corporate world Government & Politics

has got a waiver from the Trump administration – but this might turn Balancing act out to be only a reprieve. In any event, India can hardly afford to allow its ties Saudi prince’s visit underlines challenges with Iran to erode against the back- drop of the endgame in Afghanistan.

Not a big issue Though it is unclear what role the Sau- dis will play in the unfolding negotia- tions with the Taliban, India has vital stakes in Afghanistan. But the Paki- stanis are keen that the Saudis weigh in – not least because of Islamabad’s own travails with Washington. With the 2019 general elections looming, it is also not clear the Modi government has the time and atten- tion to make significant progress on any of these fronts. Also, India would not like to make a big issue of the Saudi prince’s visit, considering the differ- ent political agenda that the Bharatiya Janata Party’s cadres are espousing in states like Uttar Pradesh, where Mus- lim voters hold some sway. There is another challenge await- ing Modi. The centrepiece of the Saudi investment plan is the massive refinery complex – capable of pro- he visit of Saudi prince Moham- trip of Prime Minister Modi to Saudi cessing 1.2 million barrels of crude med bin Salman to India is Arabia in April 2016, during which oil daily – being planned in the Rat- Tseeing both countries do a bal- the two sides agreed to further ele- nagiri district of Maharashtra. Saudi ancing act, reflective of each other’s vate existing strategic partnerships. In oil giant a r a m c o and the Abu Dhabi geopolitical compulsions. recent years there has been significant National Oil Company have acquired M.B.S. came to India via Pakistan, progress in bilateral cooperation in a 50 per cent stake. But this win- a country that voiced support for the key areas of mutual interest, including win project has faced serious local prince during the international out- energy security, trade and investment, resistance. Farmers cultivating the cry after the killing of Washington Post infrastructure, defence and security. region’s famous Alphonso mangoes columnist Jamal Khashoggi by Saudi During 2017-18 bilateral trade stood have refused to give up their land for agents. The kingdom has long pro- at $27.48 billion, making Saudi Arabia this project. Besides, there are wider vided aid to Pakistan, and signed an India’s fourth largest trading partner. concerns about its impact on cashew agreement for a $6 billion assistance Saudi Arabia contributes signifi- plantations and fisheries. Not only package after Prime Minister Imran cantly to India’s energy security needs have opposition parties like the Con- Khan attended an investment con- by supplying about 20 per cent of crude gress and the n c p backed the protes- ference in October that saw a wave of requirements of the country. Recently, tors, but ruling coalition partner Shiv cancellations linked to the Khashoggi Saudi a r a m c o in partnership with Sena has also been vociferous in its killing. at a news conference on the a d n o c of the UAE entered into a joint criticism of the project. In Novem- eve of the visit, Pakistan Foreign Min- venture worth $44 billion for Rat- ber 2018 Maharashtra Chief Minister ister Shah Mahmood Qureshi said he nagiri Refinery and Petro-Chemical Devendra Fadnavis told the legisla- hoped Saudi Arabia will make “a huge Project Ltd. tive assembly that the process of land and extraordinary investment in Paki- Diplomatic sources point out that acquisition has been stayed. Now if stan as a result of this visit”. M.B.S.’s keenness on ties with India is the Modi government is unable to On his maiden trip to India, M.B.S. driven, at least in part, by his desire to press ahead with the project in a bjp- was accompanied by a high-level del- box Iran into a corner. With the Trump ruled state, its credibility in attracting egation comprising ministers, senior administration re-imposing sanctions further investments from the Sau- officials and leading Saudi business- on Iran, the Saudis want to prevail dis (or the UAE) will surely be called men. The visit by Prince Salman, who upon countries like India to minimise into question. is also the vice-president of Saudi Ara- their dependence on oil imports from u RAKESH JOSHI bia’s council of ministers, follows the Iran, and so squeeze the latter. india [email protected]

u 25 u february 25,2019-march 10,2019 Column Business India u the magazine of the corporate world On a dangerous short fuse

A military conflict may be around the corner between India and Pakistan

oreboding is rising in major Western capitals same time, Trump is downgrading military rela- because of the Indian public’s rage and Prime tions with Pakistan and may simply leave it to FMinister Narendra Modi’s tough reactions fester in its internal messes. It could limp along after the 14 February suicide bomber attack in as a failing state or fall into China’s hands as a Kashmir that killed and maimed dozens of police subservient satellite. personnel. Washington and West European gov- That would be negative for Delhi, but Trump is ernments immediately accepted that Pakistan’s fed up. “The US has foolishly given Pakistan more military and Inter-Services Intelligence (isi) had than $33 billion in aid over the last 15 years and a hand in the massacre conducted through their BRIJ KHINDARIA they have given us nothing but lies and deceit, proxy terrorist group Jaish-e-Mohammed (JeM). thinking of our leaders as fools. They give safe So, everyone roundly condemned the attack while haven to the terrorists we hunt in Afghanistan, pointing the finger at Pakistan (but they avoided with little help. No more!” he tweeted. directly placing full responsibility at official Against this incendiary backdrop, nobody wants Islamabad’s door). to see a new India-Pakistan war but much depends The growing fear now is that isi and its proxies on China’s actions. If Beijing tries to muscle into are becoming reckless. Despite the diplomatic lan- Pakistan as the US retreats, some strategists may guage of Western condemnations, isi can no lon- prefer to see more military skirmishes and bat- ger convince anyone that the attack was not its tles on the Kashmir border. They think that would work. It was too well planned, indirectly bleed China for a long complex and huge for home- time because it would then be grown Kashmiri terrorists. A The danger arises because, Islamabad’s chief financier and home-grown militant drove the supplier of weapons. truck but the logistics, explo- unlike in India, a Pakistani The role of Saudi Arabia, the sive materials and bomb carried decision to go to war lies with the other great supporter of Islam- the hallmarks of military plan- abad, is causing less concern in ning. a few days later, Indian military alone, since civilians Washington and European cap- forces killed the senior Jaish itals because Riyadh’s rulers are commander, who organised the have no say known to dangle grand carrots attack and recruited the bomber. – such as the $20 billion offered The evidence is clear and the to Islamabad this month – but Indian narrative of the entire episode is not being without following through. Riyadh is also deeply doubted by anyone. embroiled in a hopeless war in Yemen, trade war This is in itself a diplomatic victory for India with Qatar, defeat of its proxies in Syria and a high- because, in the past, Delhi has always had to risk Cold War with Iran. shout loudly to persuade Western powers to accept Unlike China, it does not have money and that Pakistan is the aggressor. President Donald weapons to spare for Pakistan’s hostilities with Trump’s reaction was immediate and strongly pro- India. In fact, Saudi Crown Prince Mohammed bin Indian. “The United States calls on Pakistan to end Salman is more interested in obtaining Pakistani immediately the support and safe haven provided soldiers for his Yemen war and obtaining missile to all terrorist groups operating on its soil, whose technology and, perhaps, nuclear weapons know- only goal is to sow chaos, violence and terror in how through the backdoor, in exchange for the the region,” the White House said. investments he has offered to Islamabad. He would A two-line Pakistani statement tried to reject the also have to compete with Beijing for influence. blame, saying Islamabad has ‘always condemned Still, a military conflict may be around the corner heightened acts of violence’ in Kashmir. But this between India and Pakistan because of a dangerous kind of shrug-off will not fly because even Britain, short fuse in Pakistan that can lead to devastation. France and Germany no longer believe Islamabad. The author is The danger arises because, unlike in India, a Pak- Western foreboding is heightened because of an international istani decision to go to war lies with the military growing expectations that Trump is preparing to affairs columnist alone, since civilians have no say. Faced by Indian withdraw US troops from Afghanistan in the com- for Business India. superiority in conventional weapons, a reckless mil- ing months, which Islamabad and the Taliban will He can be contacted itary might decide to ‘save its honour’ by using some interpret as defeat. That will clear pathways for a at brij.khindaria@ of its stockpiled tactical nuclear weapons. A tit-for- Taliban re-conquest of most of Afghanistan. At the businessindiagroup.com tat escalation would then be uncontrollable. u

u 26 u february 25-march 10, 2019 Business India u the magazine of the corporate world Panju’s Page By Panju Ganguli

THE SPENDING ON PRADHAN MANTRI KISAN WHEN WE LAUNCHED HDFC BANK, WE SAID WE WILL SAMMAN NIDHI YOJANA OR THE TAX REBATE GIVEN BRING THE BEST OF THE NATIONALISED BANKS AND TO THE MIDDLE CLASS IS NOT A BURDEN ON THE THE BEST OF FOREIGN BANKS TOGETHER...OURS IS A GOVERNMENT, IT SHOWS THE RESPECT THE COUNTRY COMPOUNDING STORY WHERE WE GREW IN GEOGRAPHY, HAS TOWARDS THEM ADDED PRODUCT AND MAINTAINED MARGINS...

ADITYA PURI PIYUSH GOYAL CEO Finance Minister HDFC BANK

u 27 u february 25-march 10, 2019 Cover Feature Business India u the magazine of the corporate world

The Achilles’ heel Corporate governance issues plague Indian companies

orporate governance the companies which have come under companies, went belly up due to a issues have become the the scanner of regulators and investors liquidity crisis triggered by the impru- bane of India Inc, with alike. The latter have become so jittery dent management policies of borrow- company after company at even a hint of mis-governance that ing short and lending long. Its myriad getting engulfed in the they dump the shares first and think layers of subsidiaries and associate Cvortex, especially over the last few about the rationale later. companies only helped in obfuscating weeks. il&fs, d h f l , Sun Pharma, Zee It started with the il&fs crisis, the real picture. And the rating compa- Enterprises, Raymond, Vedanta, ic ic i which erupted in September 2018. The nies too didn’t add up the total group Bank and Jubilant Food are amongst institution, rated triple A by rating debt. Its inability to meet the interest

u 28 u february 25-march 10,2019 Business India u the magazine of the corporate world Cover Feature

Dewan Housing Finance Corporation, the fourth largest housing finance company, has come under the inves- tors’ focus. This time around, the rushed sales pressed by d sp Blackrock Mutual Fund of d h f l’s debt paper, held by its various schemes, created scare amongst investors – especially, as the sales were effected at a discount over the prevailing yields. While the real reason for the sales being effected by the fund house is not clear, the ratio- nale put out by d sp m f was that liquid- ity was required to meet any possible redemption pressure emanating in the post il&fs crisis. There was no reason to believe otherwise, as the debt paper continued to have an aaa grade, given by c a r e in September.

DHFL’s decline The stock market, which has an Earlier, investors holding uncanny sense of smelling trouble 100-200 shares would just miles ahead, however, did not buy the sell in the market and get argument, leading to the d h f l share price dipping sharply by more than 42 out. Institutions cannot, per cent on 21 September. The shares, however, do that which had touched R667 on 31 August, Amit Tandon tumbled to R275 by 28 September. The iias management bravely assured investors of having sufficient funds to tide over immediate liquidity problems. d h f l allegations and termed it ‘mischie- raised over R16,000 crore from Sep- vous misadventure’, it also set up an tember till December. This included enquiry into the allegations made by R11,000 crore through securitisation of Cobra Post, an investigative, not-for- its receivables, with the balance com- profit, media venture. The enquiry is ing through fixed deposits, debentures expected to be conducted by an inde- and drawing down on bank lines. It pendent chartered accountant. There repaid liabilities, largely commercial were also reports that m c a would be paper worth R18,000 crore till Decem- looking into the complaint. ber, even as it raised money from alter- The jittery market, however, did nate sources and planned to reduce not wish to take any chance – so much borrowings was the immediate trig- more through divestment of its non- so that the share prices collapsed to ger, which put the institution’s oper- core assets like its mutual funds and a 52 week low of R97 on 4 February. ations under the scanner. (see Business insurance companies. Currently, it has recovered to R110. India, 24 September-7 October 2018). In a bid to conserve its resources, There were more jitters on reports of The subsequent dismissal of the board the company sacrificed growth, dis- a notice received from the investiga- of directors, replaced by a new board, bursing only R510 crore, a 96 per cent tive branch of the Income Tax depart- did not assuage the fears of the lend- drop over its earlier quarter. While ment on 7 February. While there is a ers (and the shareholders!). Even as the the stock ended at a little under R250 general level of discomfort amongst lenders to il&fs are ruing their bad on 31 December, the pace of decline investors about the operations of the luck, there has been a demand for a again gained momentum over the company, rating companies are appar- parliamentary probe. Many provident next few weeks on unsubstantiated ently unperturbed. In February, c r i- funds and risk-averse investors, who reports surfacing that the company sil rated the short-term borrowings had invested in il&fs are staring at has lent nearly R30,000 crore to its of the company a1+, with a negative huge losses in their investments. promoter entities through shell com- implication. In its note dated 2 Feb- The collapse of il&fs saw fear panies, without making adequate ruary, while rating its R8,000 crore spreading to other lending companies, disclosures. The funds, it alleged, commercial paper and R1,000 crore such as n bfc s, including specialised were used to acquire assets overseas. short-term deposit, crisil had stated ones like housing finance companies. While the management denied the that, amongst other factors,

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Independent directors personally into an unrelated leading law firm. “Independent area like infrastructure? Proba- auditors cannot be expected to o independent directors It is well to say that a board bly not. The role of the indepen- be detectives or ask for authenti- Dreally make a difference can be as effective as the quality dent director is certainly not to cation of information supplied.” to the corporate governance of of information being provided rein in the promoters from pur- While refusing to comment on companies? to them. But there is nothing to suing the growth opportunities. any particular case for want Satyam, which was a historic stop the luminaries from asking But when undue risks are taken of proper information, Pot- case in law, had a envious board for relevant information from by pledging promoters’ shares dar however says, “In general of high-profile people. They the ceo or m d s. As a promot- to take on additional risks, the any transactions benefitting or were still not able to sniff out the er-run company would; Sub- risk-reward opportunities have tilted or designed to benefit fraud taking place over the last ash Chandra has listened to the to be weighed by the board. promoters more than anyone 7-8 years. In some other recent board saying no to the proposal “We are trying to simplify it else, should be disclosed and as cases too, there was no dearth of taking over Videocon d t h too much,” says Nitin Potdar, a matter of good practice, con- of good independent directors. or for that matter diversifying Partner, m&a, J. Sagar & Co, a sent of shareholders should be

“d h f l has reported healthy asset for funding the purchase of shares of quality till date, as reflected in low Anglo-American from the unlisted reported gross n pa s of 1.12 per cent as company, Volcan Investments, belong- on 31 December 2018 (0.96 per cent ing to the promoter, without taking as on 30 September 2018). The com- the consent of the shareholders. pany’s g n pa s, on a two-year lag basis, In 2017, Volcan Investments, a pri- stood at about 1.6 per cent as on 31 vate holding entity through which he December 2018. Its asset quality in controls Vedanta, Anil Agarwal, using the housing loan segment is sup- a clever financial structure, invested ported by a relatively low-risk, granu- in 21 per cent stake in the blue chip lar loan book, supported by focus on Anglo-American plc, a mining com- low- and middle-income customers in pany, with a market cap of £27.28 Tier-II and Tier-III cities. The average billion, which had interests in gold, ticket size being ~R15 lakh, the loan diamonds, platinum, copper and coal. book is granular.” This was funded through an issue of notes (purchase of equity via manda- Related parties’ transactions tory exchangeable bonds), bearing an The stock market, however, acts on interest of 4 per cent, which would perceptions. And, amongst the many get converted into shares at the end hats it wears, one is that of a monitor, of three years – one due on 31 March which punishes on perceptions and Blaming independent 2020 and the other on 30 Septem- wears the hat of a fact-finder later. In ber 2020. The underlying securities case of Raymond, a report by a news- directors is easy whenever were Anglo-American plc shares and wire agency that the company was some issues surface. benchmarked to a price of Anglo- selling the fabric to a promoter group Everyone has to be made American, with an upside that if the company, jk Investors (Bombay) and price goes beyond the marked rate, accountable in the system taking it back at a substantially higher the investors of the bonds would get price, saw the share prices dip to a low Janmejaya Sinha the shares and a fixed interest on the of R693 on 2 February from R830 on Boston Consulting notes. The bonds (p o e m s) have been 23 January. The management of Ray- guaranteed by jp Morgan, which in mond gave out a two-page explanation generated. They, according to one t urn has secured their interest against to counter this allegation. “All related source, feel that shareholders are mere a pledge of one-third of the shares party transactions are transparently irritants and the less information the held by Anil Agarwal in Vedanta. disclosed and are at an arm’s length company gives to them, the better. Anil Agarwal’s Volcan used the to the ordinary course of business,” it Sometimes, they genuinely believe funds from these notes to buy 21 said (see box). and argue that their actions are in per cent stake, to become the single Related party transactions are prov- the best interests of the company and, largest shareholder in Anglo-Amer- ing to be a bone of contention between therefore, the shareholders. ican. At maturity, if the shares go the promoters’ actions and the inves- In the case of Vedanta, the issue above the reference price, Volcan tors at large. One major grouse is that revolved around the rationale under- would keep 10 per cent of the upside, the promoters, with less than 40 per lying the promoter using the funds of with the remaining going to p o e m s cent stake, continue to behave as if Cairn India Holdings, a publicly listed investors. they own 100 per cent of the cash company and a subsidiary of Vedanta, Cairn India Holdings, a subsidiary

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taken, whether mandated or to determine the tenure should “There are lapses globally, but with shareholders”. not by the regulators.” be institutionalised depending unless boards are made crim- In other countries, hostile “It is easy to blame indepen- on the stake held by promoters. inally liable, the board mem- funds play the role of watch- dent directors and rating agen- And exceptions can be made bers will not work diligently and dogs and pounce on boards cies,” says Janmeyjaya Sinha of only in case the promoters hold always side with the promot- where serious lapses occur. Boston Consulting. “Reacting is the majority.” ers,” is another view. Leverag- They come in and create value not the solution.” The regula- “Financial penalties must ing limits on pledging of shares for shareholders. India has yet to tory has to give rulings expedi- be levied quickly in case of should be introduced is another. see such funds making a mark. tiously and even judiciary should lapses. In other countries reg- “Independent directors need to Shareholders activism is still in move fast when any lapse of ulators are sharp on financial be adequately compensated a nascent stage and unless it fraud comes to light. “The top frauds. sebi has to beef up its for the time they are required picks up, corporate governance man has to be good and no one team to give undivided atten- to put in,” says Sekhar Puro- issues which crop up every now should be allowed to stay in the tion at all times,” comments hit, who feels that “the solution and then will not really help in position for too long. A method a leading corporate watcher. lies in having better alignment cleansing corporate India. u of Vedanta, invested $200 million Vedanta shareholders funding its par- in December 2018 in this structured ent and raises concerns of related par- transaction, with a commitment to ties’ transactions in the future. invest another $300 million later, even as the voting rights of Ang- Stricter enforcement lo-American plc would continue to There are lapses all across – in India rest with Volcan. “The investments as well as globally. “What has brought has full capital and downside pro- more lapses to the surface is the chang- tection to ensure that the interests ing shareholding pattern,” says Amit of Vedanta Limited shareholders are Tandon, co-founder & m d, Institu- protected.” Clarified Vedanta’s man- tional Investment Advisory Services. agement. Agarwal rationalised that, He explains that institutional hold- in the structured transaction, with ings in companies have gone up mark- the downside protected, Cairn would edly, in some cases, having as much as earn better returns – of 4 per cent – 50 per cent, with the promoters hold- on its cash surplus. And being a cash ing 35-40 per cent. “Earlier, investors management transaction, there was holding 100-200 shares would just sell no requirement to take the permis- in the market and get out. Institutions sion of the shareholders either, as the cannot, however, do that. Regulations investment was, in any case, below to check governance lapses are also the 10 per cent of the total net worth In general any transactions tightening up and issues of mis-gover- of the group. nance are quickly brought to the fore Markets did not buy this agree- benefitting or... promoters by advisory bodies like us.” ment. They reasoned that in effect, more than anyone else, “What happened in the US earlier is however, funds from a publicly listed should be disclosed... happening in India now,” says Sekhar company was used to fund invest- consent of shareholders Purhoit, m d, First Mumbai Consulting, ments of the promoter. Vedanta shares pointing out to the il&fs downfall. “In were sold in a big way soon. From a should be taken India, the problem goes deeper. What 52-week high of R344 on 27 February, Nitin Potdar we see is just the tip of the iceberg,” he 2018 the shares tumbled to a 52-week J Sagar & Co adds. An m b a from Chicago, Purohit low of R147 on 11 February. The fund has founded the consultancy, which managers’ grouse was that, with the offers advice to boards of directors on upside of 10 per cent already enjoyed, of misallocation of resources were compensation services and corporate Vedanta could only expect to get 4 per made, said one analyst, not wishing governance. The problem is not hav- cent returns on the huge investments, to be named. ing more laws; it’s in implementing while the shares would be in the pri- “We view it as an imprudent capital the existing laws effectively, he says. vate company of Agarwal. “While the allocation, as it neither confers voting Promoters frequently borrow short- promoters hold about 50 per cent of rights nor ownership of underlying term loans to create long-term assets, the stake, can they continue to think Anglo-American shares to Vedanta says one private equity partner. The that they have control of 100 per cent Resources,” says Edelweiss Securi- lack of funds for putting in more of the cash reserves?” they ask. The ties, in its report titled: Vedanta – capi- equity results in more borrowings, management should have passed a res- tal allocation concerns surface, dated 11 with them often resorting to inflating olution to ensure that no allegations February 2019. “And, that amounts to capital cost, raw material cost and debt

u 31 u february 25-march 10,2019 Cover Feature Business India u the magazine of the corporate world write offs to take money out of the blower’s complaint saw the company’s company – in effect, funding the pro- Pledging of shares share price dip sharply in December moter shareholding. “It is clearly a bal- and January (it was already declining, ance sheet mismanagement issue,” he ebi as yet does not have any provi- due to regulatory problems). The share points out. “Only in debt-ridden com- ssion for regulating mutual funds and prices touched a 52-week low of R375 panies do we see problems surfacing; n b fc ’s investments in unlisted compa- on 18 January from a 52-week high of there are no major lapses in debt-free nies. Most promoters have set up hold- R678, touched in September 2018. The companies.” ing companies in various tax jurisdictions main allegations against Sun Pharma While this can be true for most and exercise control through these enti- was that the audit firm of Valia and companies, even in a cash-rich com- ties. While a promoter’s right to pledge Tambadia, which was involved in the pany like Jubilant Foodworks, the shares is unfettered the impact in case of stock market rigging case 20 years ago, master franchisee of Domino’s Pizza, non-payment of interest or capital can still continue to audit the accounts the decision to hike royalty to pro- have a destabilising effect of the share of some of Sun Pharma’s subsidiaries. moters, including Bhartias (who hold prices. This was witnessed recently in case Sun Pharma had lent money without 45 per cent), by 0.25 per cent was not of Reliance a d a g group companies which security to units like Aditya Medisales, taken kindly by the investors. The pledged shares to various n b fc s. Mutual a related company, which was acting rationale of the promoters, that they funds also have a big exposure to il&fs, as a super stockist for distribution of use the royalty to protect and further an unlisted entity. In case of zee the pro- the company’s pharma products. the interests of Jubilant, was opposed moter has sought time to ensure pay- Dilip Shanghvi went on to clar- by proxy advisory firms, who said ment. The point, however, is should the ify several issues – both to the regula- that people were buying pizzas based mutual funds be taking such risks. The tor as to the investors. Claiming that on Domino’s brand and not Jubilant. continuation of this practice will only lead the minority shareholders were not And the share prices dropped by 6 per to investors becoming nervous and start disadvantaged by the arrangement cent to R1,293 on 6 February. Though monitoring investments of m f s. with Aditya Medisales, he said that the promoters decided to retract the the company was open to unwinding decision, the share prices have not this arrangement and look at direct climbed back to the pre-announce- its peak, was always trailing Tata Con- sales through Sun Pharma or buy out ment level. sultancy, Infosys and h c l . Aditya Medisales at a cost. The audit “Online transparency and the pro- firm has been changed; anyhow, they tection given to whistle-blowers is Old mindset only audited subsidiaries whose total also leading to more cases surfac- The problem in India is that many contribution was 0.6 per cent. Also, ing,” says H.V. Harish, former part- promoters of listed companies con- the loan of R2,238 crore given to one ner, Grant Thornton, who is now with tinue to think like the lalas of yester- Atlas Global Trading, where the pro- an ESG fund, partnering Quest in years and do not align their interest moters had significant influence at raising funds. “Markets goes by per- with the general shareholders at large. one time, has been called back. The ception and does not wait till prob- With markets taking a dim view of promoter also denied that Sun Pharma lems surface,” he adds, pointing out such companies, promoters are often had lent money or stood guarantee that many companies enjoy a lower forced to take remedial action and fur- for Suraksha Realty, a firm in which p/e when compared to the peers, when nish reports of such action taken to Sudhir Walia – Sanghvi’s brother-in- markets do not totally feel comfortable the shareholders. law who was on Sun Pharma’s board with the promoters. Satyam, even at In the case of Sun Pharma, a whistle was also a director on board. However,

such as any unpaid amounts, End of an icon unpaid bonuses or incre- n March 2018, a whistle- allegations after market regu- ments, unvested and vested Iblower’s letter resurfaced lator Sebi stepped into the pic- and unexercised stock options, against i ci ci Bank’s erstwhile ture, and Kochhar was asked and medical benefits), and ceo Chanda Kochhar alleg- to go on leave to facilitate require the clawback of all ing favours towards the Vid- the process. bonuses paid from April 2009 eocon group, a borrower of Explanation and answer: On until March 2018, and to take the bank, in return for private 30 January 2019, following the further actions as may be war- business dealings by the Koch- receipt of the enquiry report, ranted in the matter. har family. The board of i ci ci the board of directors of i ci ci Independent directors on Bank initially supported Koch- bank decided to treat the sepa- the bank are Rama Bijapurkar, har against whom the rbi as ration of Kochhar from the Bank Uday Chitale, Dileep Choksi, well as the bank did not find as a ‘Termination for Cause’ Neelam Dhawan, Hari L. Mun- any evidence of wrongdoing. under the bank’s internal pol- consequences (including dra, Radhakrishnan Nair, V.K. The Justice Srikrishna panel icies, schemes and the Code revocation of all her exist- Sharma and B. Sriram. It has was appointed to look into the of Conduct, with all attendant ing and future entitlements no promoter shareholding. u

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Regulatory requirements in place clearly states that, in case of any ambiguity or incongru- part from the Compa- per cent of the gross turn- his sanction taken, but the ity between the principles Any’s Act, se bi has put in over was not breached and, market feels that the man- and relevant regulations, place a framework for listed hence, neither shareholder a g e m e n t h a s c l e a r l y b r e a c h e d the principles specified in entities. Called the se bi List- needed to be informed nor se bi’s l o d r Regulations. It this Chapter shall prevail. ing (Obligation & Disclo- sure Requirement; l o d r) Regulations 2015, and amended from time to time, deals a lot with good corpo- rate governance practices. In chapter 2, on principles governing disclosures and obligations of listed entity, it clearly states that: The listed entity shall make the specified disclosures and follow its obligations in let- ter and spirit, taking into consideration the interest of all stakeholders. In the case of Vedanta while the pro- moters may not be techni- cally correct in explaining that the investment over 10

despite good performance and solu- has been taken by the markets as a sin- a d a g group is at risk, with the lenders tions provided to vexatious issues, in cere gesture on the part of the pro- selling shares in a fallen market, when January itself, the price of Sun Pharma moter to pay up his dues. The shares, the promoter failed to bring in more hovered around R430 levels. which had dipped to R289 on 26 Janu- margins to provide to the borrowers. Independent directors of Sun ary 2019 from a 52-week high of R610 Pharma included Kalyanasundaram in May 2018, have recovered. This Equity funding Subramanian, Vivek Chaan Sehgal, could be a rare case – of a promoter One of the issues that historically Rekha Sethi and Gautam Doshi. The selling his stake wholly or partially faced the promoters is equity fund- promoters hold 54 per cent. in his crown jewel to meet the pay- ing. Given the punitive tax structure Zee Entertainment, another blue- ment liabilities of his group company of the past, it was almost impossible chip company, was also mired in issues voluntarily. to get promoter equity. Historically, of its own. Having gone into an unre- What has been surprising many almost the whole post-independence lated area of infrastructure, the Essel corporate watchers is the fact that the Indian industry, as we know it today, group had accumulated huge debts for companies were getting into mess, was in reality built on over-invoicing. which servicing could become a prob- despite having good boards and celeb- Given that the promoters did not have lem in the near future. Subash Chan- rity independent directors. When total rights on the cash in the com- dra admitted that they had made promoters get into new businesses, pany, their only source of income is mistakes, leading to Essel Infra losing are the decisions discussed thread- dividend and directors’ fees. The only as much as R4,000-5,000 crore. bare in the company’s board meeting way in which they could legally raise The acquisition of d2h from Vid- and is an informed decision taken? capital is through reducing their own eocon was also a mistake. Admitting While promoters have full rights over stake. Tatas historically had low pro- his mistakes, he has put his jewel in their shares, the markets are ques- moters’ holding in the companies. As his crown, Zee Entertainment, up for tioning whether they can pledge J.R.D. Tata used to say, “Tatas enjoy partial or complete sale of his hold- the shares with banks and n bfc s to their presence due to their rapport ings. The jury is still out on whether get into unchartered businesses and with the shareholders. If we don’t per- entering into an unrelated business risk their entire capital. More impor- form they can well replace us.” was a governance lapse or merely a tant, does it put the companies at However, jrd was held in such bad business decision on the part of risk. The promoters’ holding is a little respect by shareholders that the leg- the promoter. under 42 per cent. endary industrialist could make such However Chandra’s admission and In another case of over-leveraging a statement, which none of today’s decision to bring in a partner in Zee promoters’ shares, the entire Reliance breed of promoters can even think of

u 33 u february 25-march 10,2019 Cover Feature Business India u the magazine of the corporate world

U.K. Sinha (former c m d, u t i and se bi) and Ravi Kant (former m d, Tata Motors) and Aman Mehta (former c o o, h sb c). d h f l had independent directors of the status of G.P. Kohli (former m d, lic), M. Venugopal (c m d, Bank of India) and Vijay Kumar Chopra (c a and earlier c m d, Corporation Bank). The board of Zee Entertainment has Adesh Kumar Gupta (a c a and c s, who was earlier with Birla) and Manish Chokhani (one of the most respected persons in stock market, who was ear- lier with Enam). Its other independent directors include Sunil Sharma and Nirharika Vora. The point is that, with such distinguished members on the board, people are today asking ‘why was not some restraint exercised on the promoters?’ It is a clearly a balance sheet Equity funding cannot come mismanagement issue, from borrowed funds. If Only in debt-ridden there is no fear of takeovers, companies do we see promoters would be happy problems surfacing; there to dilute their stakes are no major lapses in debt- A Balasubramaniam, free companies Aditya Birla Sunlife Mutual Fund Sekhar Purohit First Mumbai Consulting explains, pointing out that a lot of time is spent on selecting a board member, emulating. The fear of losing a com- focussing on the type of talent that is pany because of low stock is a seri- required and care given to compos- ous issue and borrowing funds to beef ing a board that has contemporary up equity is not the answer to the knowledge. While board meetings are problem. held quarterly, monthly performance “Equity funding cannot come from appraisals are given to each member, borrowed funds,” says A. Balasubra- which actually get discussed at the manian, c e o, Aditya Birla Sunlife boards’ meetings on strategy, all the Mutual Fund. “If there is no fear of time. The three heads of the sub-com- Many companies enjoy a takeovers, promoters would be happy mittees – on audit, compensation and to dilute their stakes”. The free pricing lower p/e when compared to general consul – are held separately of listed equities, finally allowed only the peers, when markets do and each head spends around 45 min- in the 1990s, alleviated the problem. not totally feel comfortable utes trying to explain the decisions The longer-term solution for this could taken. “A strong board ensures that be differential voting rights. But some- with the promoters there is no prima donna monopolising how this concept has not found favour H V Harish time at the board meets.” In the US, with investors in India and the ones Consultant there is “serious commitment by board floated by Tata Motors are trading at members, who are made accountable nearly 50 per cent discount. for lapses”. Giving a perspective on how boards Unlike in the US, the composition of Boards under fire are composed in the US and how com- boards here is made sometimes on the The boards’ decisions are invariably panies are run, Keshav Murugesh, basis of a past favour received by pro- intriguing, to say the least. Some of group c e o, w n s Holdings, an n yse moters or companies. Retired bureau- them have the best boards. In the case listed company, says that there is a crats often adorn the board. Celebrity of Vedanta, its independent directors well-articulated board charter there, board members, who have never read included K. Venkatraman (earlier m d, which each company has to follow. a profit & loss account end to end, also l&t), Lalita Gupte (earlier d m d, ic ic i), “The board charter is the Bible,” he find place on boards.

u 34 u february 25-march 10,2019 Business India u the magazine of the corporate world Cover Feature

The major problem in India is that blaming independent directors is easy boards are not made accountable to whenever some issues surface. Every- stakeholders, says a partner with a pri- one has to be made accountable in the vate equity firm. Till date, no crimi- system. Regulatory rulings should be nal action has been taken against any expeditious, judicial action has to be board. “Boards should be required to much faster. “About 80 per cent of the align their interest with all stakehold- business wants to do the right thing, ers, including shareholders,” says Ajay despite it being not so easy. We can- Garg, founder & m d, Equirus Capital, not blame every one”. The top man a full service providing investment has to be good, he adds and the term bank.” The market continues to give of the c e o s should have a specified better value to well-run boards, with tenure of, say, 8-10 years. In case pro- no whiff of governance issues, such as moters with majority stakes, this can Titan Industries. be relaxed; however, in many cases, It is not just the promoter-run com- problems occur, when the c e o s stay panies that are in the limelight. Even for too long.” in a professionally managed com- Are independent directors ade- pany like ic ic i Bank, with all non-ex- quately compensated for the time they ecs being independent directors, the are required to devote? In most cases, board’s actions are somewhat quix- the sitting fee for attending board otic. The earlier board of ic ic i gave meetings is not adequate and only a A strong board ensures a clean chit to its erstwhile chair- fraction of the market cap or turnover person Chanda Kochhar in a related that there is no prima or profit earned. But that is a subject party transaction, which was alleged donna monopolising time for discussion later. to be a quid-pro quo from the pro- – In the US, there is serious se bi as yet does not have any pro- moters of Videocon. In a filing to the vision for regulating mutual funds commitment by board bse, the board had then stated: “After and n bfc ’s investments in unlisted questions were raised on ic ic i Bank members, who are made companies. Most promoters have chief’s involvement in loans given accountable for lapses set up holding companies in vari-

s ous tax jurisdiction and exercise con- an Keshav Murugesh

j trol through these entities. While a ay borade wns Global promoter’s right to pledge shares is unfettered the impact in case of non- to Videocon group, the bank’s board payment of interest or capital can had reviewed the internal process, have a destabilising effect of the share finding that no individual employee, prices. This was witnessed recently in whatever may be his or her position, case of Reliance a d a g group compa- has the ability to influence the credit nies which pledged shares to vari- decision at the bank.” The clean chit ous n bfc s. mutual funds also have was given by the board a year back in a big exposure to il&fs, an unlisted March 2018. entity. In the case of zee the promot- In 31 January 2019, Chanda Koch- ers has sought time to ensure pay- har was dismissed by almost the same ment which the mutual funds have board in an ignominious manner. obliged. The point, however, is should Dubbing it as a termination for cause, the mutual funds be taking such risks over alleged links with borrower Vid- either by investing in non-listed eocon, the board asked her to return companies of promoters or the debt bonuses received from 2009 to instruments of these companies? The March 2018. continuation of this practice will only In the case of Satyam, one of the lead to investors becoming nervous Boards should be required most high-profile cases in recent years, and start monitoring investments to align their interest with the board was the envy of any other of m f s. companies, but proved to be ineffec- Currently, markets are the best col- all stakeholders, including tive in the face of outright fraud. lective monitors. Till such time as shareholders. The market shareholder activism picks up and continues to give better What is the solution? regulators get their act together, one “We are just reacting to a crisis, which can depend on markets to punish value to well-run boards is not the right way,” says Janmejaya errant companies. Ajay Garg Sinha, India chairman, and a member u DAKSESH PARIKH Equirus Capital of Boston Consulting Group. He feels [email protected]

u 35 u february 25-march 10,2019 Focus Business India u the magazine of the corporate world The sops saga

Pro-poor politics and socialist slogans are back, as the Congress ups ante and the BJP showers sops on the electorate

n the run-up to the 2014 elec- in the general category, Modi moved in tion, Narendra Modi and his aides with new tax provisions to allay their Ihad never thought of Rahul Gan- concerns. The budget fully rebates dhi as a serious political challenger. income tax on incomes up to R5 lakh In fact, Finance Minister Arun Jaitley a year and also increases the standard was, during this period, quoted by The deduction from R40,000 to R50,000. Economist magazine as describing the There are other tax cuts as well – on Gandhi scion as an ‘empty suit’. Later, capital gains on property sales, bank the Bharatiya Janata Party (bjp) rev- and post office deposits, and rent pay- elled in calling him ‘Pappu’ – one who ments – and all are again aimed at the is not smart enough. middle class. The finance ministry’s The ‘Pappu’ has now thrown down calculation is that 30 million tax pay- a fiscal gauntlet by promising, as the ers will benefit from the move. aggressive president of the Congress The second target is farmers. For party, a slew of expensive sops for the years now, India has been in the grips poor, if his coalition wins the upcom- of an obstinate agrarian crisis, brought ing general election in May. Cash- about by inclement weather, shoddy ing in on the success of the farm loan agri-infrastructure and by supply out- waiver card that it used in the assem- stripping demand, at a time when local bly elections in Madhya Pradesh, Raj- and global food prices are at record asthan and Chhattisgarh, the Congress lows. Food inflation at the wholesale is now wooing voters for the upcom- level in India, a good proxy for farm- ing general election with a minimum gate prices at which farm produce is income guarantee, a pan-India farm sold, has been negative for months loan waiver and an urban employment now. The direct income transfer dole, among other things. This is forc- scheme (pm-kisan) involves disbursal The pension scheme and the direct ing Modi and the bjp to fashion its eco- of R6,000 a year, in three installments, income transfer to farmers are effective nomic strategy on similar lines. to farmers with land holdings of less from this financial year itself (the sec- Normally, election-eve interim bud- than two hectares. It is expected to ond, in fact, from 1 December 2018). gets are meant to be a report card on benefit 120 million farm households. And the tax sops will kick in from 1 the income and expenses made dur- Assuming that each household has at April 2019 The parliamentary elec- ing the year gone by and the proposed least two votes, it will amount to 240 tion is likely to be held in the second expenses likely to be made in the next million votes. The scheme is to be half of April-May. While voters may few months until a new government entirely funded by the Central gov- have been the primary audience, the takes over. Till now, no interim bud- ernment – making it possible for the Interim Budget 2019-20 was targeted get has tinkered with income tax rates. bjp and its allies to exclusively derive at, there was a secondary audience as But the interim budget for 2019-20 political capital from it. well – the bjp ’s own cadre and its allies. goes well beyond the niceties of con- The third is workers in the informal Since last summer, things haven’t ventional restraint, with the bjp-led sector, those hit hardest by demoneti- gone the bjp ’s way – it just managed National Democratic Alliance (n d a ) sation and the implementation of the to retain Gujarat, saw the tables being unabashedly addressing key voter Goods & Services Tax. By announc- turned in Karnataka, despite trumping constituencies to shore up its ing a pension scheme for such workers the Congress in the number of seats electoral prospects. (including household help) – the Cen- won, and, finally, lost three key Hindi The first target, of course, was the tre will pitch in and match the contri- heartland states, and also some allies. middle class, which was beginning to butions of individuals – the n d a has The momentum seemed to be with the get restive over the last one year. This sought to address another important opposition. The bjp needed to change class had rooted for Modi in 2014. After constituency. In his budget speech, the narrative and instill a ‘feel-good’ the 10 per cent reservation in central stand-in fm Piyush Goyal estimated factor among its cadres and allies, as education and employment opportu- that 100 million informal sector work- they brace up for the coming battle. nities for economically weaker sections ers will benefit from this scheme. The shower of sops is not limited

u 36 u february 25-march 10, 2019 Business India u the magazine of the corporate world Focus

Minister Edappadi K. Palaniswami announced suo moto in the assembly that R2,000 will be given to each of the 6 million families living ‘below-the- poverty-line’ in the state. This would cost the state exchequer R1,200 crore. The new scheme came a month after the government had, in an unprece- dented measure costing R2,000 crore, distributed R1,000 cash to every ration card holders as Pongal festival gift.

Genesis of the crisis With the general election looming large, clearly no party is interested in reforming the structural aspects of government spending. Schemes such as n d a’s pension for unorganised sec- tor or West Bengal’s financial assistance for unemployed youth overestimate state capacity to deliver and provide opportunities for corruption at imple- mentation stage. It is also well established by now that farm loan waivers are the least Goyal: shoring up effective way of ameliorat- electoral prospects ing rural distress; that’s why ruling regional parties such as Telangana Rashtra Samiti (trs) and the Biju Janata Dal have switched to what are sup- posed to be cleaner income support package, which the n d a has replicated in the Union budget. But, “while the cash-transfer model to the Central budget alone. There is budget. The Jharkhand government may be popular and politically reward- an unseemly scramble among states to has already promised cash payments ing, it is unlikely to solve the crisis in beat the Election Commission’s code to farmers which, along with a simi- agriculture, primarily because the cri- of conduct, which will kick in soon, by lar amount from the pm-kisan scheme, sis is not just of low incomes in agricul- using their state budgets to announce would give each farmer about R12,000 ture,” points out Himanshu, associate more concessions to win over key con- a year. In its annual budget, Karna- professor, Jawaharlal Nehru Univer- stituencies. What’s striking about taka announced another farm loan sity, and an economics analyst. “The these state budgets is that most politi- waiver and simultaneously increased genesis of the current crisis lies in the cal parties believe the best way forward taxes on liquor. faulty and ad hoc export-import pol- is an expanding welfare state, accom- Tamil Nadu, once the pioneer of icy, lack of infrastructure and carteli- panied by the assumption that growth the welfare model, this time saw a sation and collusion in agricultural will take care of itself. This doesn’t budget relatively low-key on sops. A markets, which have prevented farm- bode well for the future, as the founda- highlight was the state government’s ers from realising the market prices for tions of our growth intent to lower reve- agricultural produce. It is the combi- remains fragile. nue deficit and bor- nation of these, along with the twin There are reports While the cash-transfer rowing in 2019-20. droughts of 2014 and 2015, which cre- that the relatively model may be popular and One thought that ated the crisis in the first place. It is prosperous bjp-ruled perhaps the state’s also true that the crisis worsened due politically rewarding, it is states such as Guja- modest economic to the sudden shocks of demonetisa- rat and Maharashtra unlikely to solve the crisis performance in tion and the hasty implementation of are set to ‘enhance’ in agriculture, primarily recent times had g s t, which affected the rural economy schemes for farmers served as a wake -up adversely. Cash transfers do nothing and their budgets because the crisis is not just call. But three days to resolve any of these, nor are they will reflect the spirit of low incomes in agriculture after the budget was any guarantee of protection against of the interim Union presented, Chief unforeseen events, whether natural or

u 37 u february 25-march 10, 2019 Focus Business India u the magazine of the corporate world

The challenge of Rahul-nomics f there is one politician out- Iside the Congress party who has the ear of Rahul Gandhi, it is Sitaram Yechury, the gen- eral secretary of the Commu- nist Party of India (Marxist). Though Yechury, like his pre- decessor Prakash Karat, was never a mass-based politician, Rahul for some strange rea- son is known to take his advice seriously. Some Congressmen have even heard him address Yechury informally as ‘chief’. So, has Yechury played a part in influencing Rahul’s eco- nomic thinking? Possibly, say these Congressmen. But then, say these folks, his pro-poor, socialist pitch is also reminis- cent of the halcyon days of the u pa , when entitlement-based welfare politics ruled the econ- omy. Rahul’s policy stance in Rahul’s policy stance in its fundamentals appears no different from his mother Sonia’s its fundamentals appears no different from the Congress of as a major accomplishment of an economic resolution that, taxmen in thrall- and lead his mother, Sonia, whose early the Congress! among other things, pledged to abuse. Also, the Congress upbringing in Europe gave her At the same time, Rahul to impose a 5 per cent cess on needs to remember that the the trappings of a social demo- is a great believer in the Chi- the incomes of the richest 1 peak income tax rate in India in crat, and famously the Congress nese development model. He is per cent of Indians. The move the 1970s was effectively 97.75 fashioned by his grandmother, fond of quoting figures related of ‘soaking the rich’ has never per cent, which took away any Indira, who coined slogans like to employment generated in worked anywhere. The idea incentive to earn beyond a garibi hatao. At an election China, compared to India (under that by imposing higher taxes threshold. The effort to boost campaign meeting in Guja- Modi). But China had junked (and cesses) on them, you’re overall revenues is advanced rat September 2017, Rahul socialism long ago to embark on seen to be doing your bit for better by expanding the direct actually listed Indira’s bank a market economy strategy. the poor is just the unimagi- tax base. And, in any case, nationalisation (along with the At a plenary session of the native manifestation of a ‘tax advancing equity through the green and white revolutions) Congress, the party adopted populism’ that will keep out tax structure addresses only

policy induced.” instrumental in the trs’s runaway vic- debt to GDP ratio currently stands at Analysts also feel that the cash tory in the recent assembly election in 48.9 per cent. New Delhi’s current fis- sops will blow a small hole in the Telangana. cal position is deceptively tight: off- finances of the world’s fastest-growing Of course, there is no question that balance sheet funding is not new but large economy. It is possible that had Modi needed to address distress in the has been steadily rising since 2016, say Rahul’s Congress party not upped the rural economy, where income growth Ritika Mankar Mukherjee and Sumit ante on populist measures, first in the has fallen sharply under his watch. Shekhar of local brokerage Ambit. recent assembly elections and now for Half of India’s workforce depends on They reckon that more than half of last the upcoming general election, the bjp agriculture and it is a key vote bank. year’s capital expenditure, or about 2.5 would perhaps not have gone for broke. Earlier, his government had ruled out per cent of g d p, was funded through Apart from the Congress-induced sops, a pan-India rural debt waiver, reveal- state-owned companies in everything there was trs’s Rythu Bandhu scheme, ing some keenness not to stray too far from power to railways and estimate which caught the attention of the Modi from a target to bring the deficit down that the true fiscal deficit in current dispensation. The scheme, which pro- to the planned 3 per cent by March financial year is closer to 4.2 per cent. vides a financial help ofR 4,000 each in 2020. However, the country will now Equity and debt market investors both kharif and rabi seasons to farmers have to stretch its public finances to had been betting on a return of the bjp for every acre they own, was said to be accommodate this generosity. India’s in some form. With new state-specific

u 38 u february 25-march 10, 2019 Business India u the magazine of the corporate world Focus

one half of the challenge: just Rahul has advocated state more money for healthcare as important as determining intervention in critical sec- and education in states ruled where the money comes from tors like healthcare and educa- by the Congress. is directing it productively. tion. In the past, he raised the Rahul is right in focussing Domestic manufacturing issue of privatisation of edu- on the need to give thrust has figured in Rahul’s speeches cation in Gujarat under Modi, to education and healthcare. but he seems to be subscribing followed by other bjp-ruled India’s key challenge in fight- to the theory that small is beau- states. Of late, he has emphat- ing poverty is to ensure sus- tiful. During his much-pub- ically argued that healthcare tained income growth for licised tour of the US in 2017, and education cannot be left majority of its workforce – organised by family friend and to the private sector because and that cannot happen until technocrat Sam Pitroda, Rahul the country cannot progress the human development indi- harped on the importance of without offering this basic sup- ces improve. This will require small business and criticised port to vulnerable sections of a significant hike in education the large scale manufacturing society. “This is a myth that the and health expenditure along firms as envisaged in the Modi private sector is better. This is with a drastic improvement in government’s ‘Make In India’ not true. Best institutions in delivery. This in turn requires scheme. In a recent interview India are set up by the gov- prolonged effort and resources to Hindustan Times also, he said ernment. Private sector can’t without a promise of political that India is not going to get match; public sector institu- benefits in the short-term. It jobs from 15-50 biggest indus- tions don’t run after profit,” also requires the involvement trialists alone: jobs will be gen- Rahul said in an interaction of the private sector. erated by ‘unleashing the huge with professionals in Udaipur, But all is not lost. To tackle potential’ of micro, small and in a clear signal that he did not the hot-button issue of unem- medium industries. plan to deviate drastically from ployment, Rahul is report- This fixation on small being Yechuri: influencing Rahul? the Nehruvian philosophy of a edly seeking ideas from several better, a legacy of the ‘poor mixed economy. experts on employment gen- economics’ of Mahatma Gan- produce. There is huge amount “Which superpower does eration and agriculture for his dhi, appears to be a retread of of skill in India – you go to not offer proper healthcare party’s election manifesto. failed socialist policies, unless Moradabad, Kanpur, Surat, and education to its people? According to Congress sources, the strategy is injected with Ludhiana, Sriperumbudur. Link The goal is that every citizen he has spoken with former rbi concrete steps to create large- these to the manufacturing should feel assured that they governor Raghuram Rajan scale meaningful employment structure. Give them access to will get proper treatment and twice in the recent past, one and get India back to a high banks, give them support, pro- good education. The problem of which was during his trip growth trajectory. However, in tect them and see what hap- with this government — and to the UAE. It is reported that the same interview, he spells pens.” He cited the example of schemes like Ayushman Bharat Rajan has sent a note to Rahul. out his vision for the same: China, which has taken its tra- — is that enough money is Many in the Congress, at least “Every single district in India ditional knowledge hubs and not given. For service delivery, those who have been in gov- has some special skill, capabil- connected them to the global infrastructure of public health ernment, will be hoping that ity and a unique product they value chain. is required.” He has promised he will make use of the note. u alliances of Opposition parties com- farm loan waivers. While the new MP capex is budgeted to be higher by 37.5 ing up and threatening to pose a stiff government announced loan waivers per cent. The upshot is that less money challenge to the bjp, such an eventual- worth R50,000 crore, in the neighbour- will be spent on creating fixed assets ity looks less certain. Either way, any ing Chhattisgarh it is about R14,000 like road, schools, infrastructure etc. largesse promised in the run up to the crore and, in Rajasthan, it’s about However, P.L. Punia, a retired ias polls will hamper the next administra- R18,000 crore. officer, who was Congress general tion’s ability to spend on productivi- secretary in charge of Chhattisgarh, ty-enhancing reforms that can make a Farm sops explains the rationale behind the positive long-term difference. That is The move has engendered fears that farm sops. “The situation is such that why Rahul’s economic philosophy and it will adversely impact the combined no political party can ignore genuine its counter-effects assumes an impor- capital spending of these states and demands of the farmers,” says Punia. tance that analysts are surprisingly raise their fiscal deficit. States’ capital “People used to consider farmers part not putting under the scanner. spending is a major driver of invest- of the unorganised sector and ignore In keeping with the poll promises, ment growth which drives the econ- them. A farmer is a producer of food the Congress governments in Madhya omy, and historically, it has been grains but the cost of their produce Pradesh, Rajasthan and Chhattisgarh higher than capex undertaken by the gets decided by someone else which did not blink an eyelid in announcing Centre. For the current fiscal, states’ is the government. Even if someone

u 39 u february 25-march 10, 2019 Focus Business India u the magazine of the corporate world

Half of India’s workforce depends on agriculture and it is a key vote bank makes a needle, they decide its cost economics behind this appears to be fragile economy. What is the Congress but a farmer cannot.” the newly-fangled version of Keynes- trying to say?” asks Piyush Goyal. “This (Union) government was not ianism. Congressmen say that deterio- But an m i g is not all. During a willing to listen to their genuine con- ration of terms of trade for agriculture, much-publicised public rally in Pat- cerns and so, uneconomical farm- liquidity shock due to demonetisa- na’s Gandhi Maidan last fortnight, ing is happening, which is leading to tion and squeeze on the informal sec- Rahul announced that, if the Con- loans spiralling and they are not able tor after the implementation of Goods gress comes to power, it will imple- to pay it,” Punia adds. “This, too, is and Services Tax have all contributed ment a nationwide waiver of farm the responsibility of the government to squeeze on the incomes of India’s loans which, according to Edelweiss, because they have failed to give them poorest people. All this justifies some could cost another R3 trillion crore. a fair m s p, which can support and sort of stimulus. “We think that giv- The pan-India loan waiver for farmers meet their expenditure. If farmers are ing assurance of a minimum income will be much bigger than the R60,000- not able to pay their loans because of for every poor family is a way to wipe crore (raised to R71,680 crore a few government’s policies, then it is our out poverty. It is after careful consider- months later) waiver announced by responsibility to waive off their loans ation that the Congress president has the u pa in the 2008-09 budget. Over and so we took that decision.” made the announcement,” says Chi- 30 million marginal and small farm- Congress leaders argue that this was dambaram. He adds that a growing ers were to benefit from the govern- one of the party’s key poll promises and economy like India can easily set aside ment’s amnesty. It is a different thing, therefore had to be fulfilled. They say 1.5 per cent of its g d p for the purpose. as Modi recently revealed, that just that one should wait for the unveiling However, the bjp and senior govern- R51,000 crore out of the promised sum of the party’s election manifesto. An ment functionaries have lost no time was disbursed. election manifesto committee, headed in debunking the plan, which could Critics point out that m i g pay- by former finance ministerP . Chidam- cost R3 lakh crore outs or loan waiv- baram, is to be compiling ideas which (1.4 per cent of g d p). ers could actually will go into the document. “It will be “If you add R3 lakh If farmers are not able to go against the long- a people-centric agenda,” says a senior crore to your expen- term income share Congressman in the loop. diture, you will once pay their loans because of of workers in the The Congress has now promised a again have double- government’s policies, then economy. For one minimum income guarantee (m i g), digit inflation, fis- it is our responsibility to thing, the outgo involving direct cash transfer to the cal deficit will hit won’t change with poor, if it comes to power after the the roof, the dollar waive off their loans and so a slump or boom in 2019 elections. While the political ben- will be worth R100 we took that decision the labour market at efits from such an announcement will and the country will least in the medium only be known after the results, the once again become a term. m g n r e g s , if

u 40 u february 25-march 10, 2019 Business India u the magazine of the corporate world Focus

Palaniswamy: will freebies work? Punia: can’t ignore genuine demands of the farmers implemented scientifically, has the his guns and won the battle after a bit- agreement, the goods & services tax, potential to augment asset creation in ter political and parliamentary fight. and the Insolvency & Bankruptcy India’s villages. This compensates for The strategy of allegations of Modi’s Code, it had some time back signalled the scheme’s inflationary impact on intimacy with top industrialists, the that the era of reforms on their watch wages. An m i g will increase the reser- suit-boot controversy, bank frauds, ris- has run its course. And the order of the vation wage for unskilled labour with- ing bad loans and the Rafale deal has day will be a push on social welfare. out any such positive externality. Poor been crafted to position the Congress Rahul could have easily reclaimed workers will get some money whether president as a pro-poor crusader. the mantle of economic reformer for or not they work. In an age where A senior Congress leader says: “Nei- his party. This could have been a nat- automation is already threatening the ther Sonia nor Rahul has ever spo- ural corollary to Rahul’s criticisms of growth of labour intensive industries, ken against economic reforms; in Modi’s handling of the economy, in this could be counter-productive. fact, both have acknowledged that particular his recent blistering attack high growth is a pre-requisite for a on demonetisation and his accusa- Pro-poor posturing sustained poverty alleviation pro- tions that the Modi government has Besides, there is the significant fiscal gramme. But please remember, both failed to create jobs and improve living cost of m i g, which will put pressure cut their political teeth in a climate standards for average Indians. It is one on other expenditure heads. Recall that did not allow them to dilute their thing to engage in negative messaging. the u pa years when the Congress-led pro-poor posturing. Rahul’s leadership It is another matter to convey a positive government was lauded for providing has evolved in difficult times, when message of what he would do better. some relief to the poorest sections of the Congress was at its nadir, and he The commitment to renewed economic the population? It also reaped polit- has adopted stridently pro-poor poli- reforms should blend with the commit- ical benefits from these policies. But tics to position himself as the antith- ment to social justice. His criticism of the party ended once global financial esis to Modi, whom we think is guilty Modi would then have carried more crisis created strong headwinds of crony capitalism.” credibility. But given the fact that this for economic growth, and hence, Some analysts have argued that the is the season of sops, it is unlikely that revenue generation. ruling bjp under Modi moving away he would don the role of moderniser. Public pronouncements by Rahul, from its putative centre-right posi- As for Modi, the bjp ’s renewed emphasis Chidambaram and other Congress tion and affirming a centre to centre- on antyodaya (empowering the under- leaders on the government’s handling left commitment to building a welfare powered) indicates that welfarism is of the economic situation have been state had actually opened up the polit- back with a bang. So, pro-poor politics mostly adversarial, aimed at picking ical space for Rahul to stake out a more alias socialism are back – at least till the holes in the Modi dispensation. Rahul’s reformist terrain. While Modi deserves elections are over! first big battle with Modi came on the credit for several major reforms, in par- u RAKESH JOSHI Land Acquisition Act when he stuck to ticular, the monetary policy framework [email protected]

u 41 u february 25-march 10, 2019 Special Report Business India u the magazine of the corporate world sanjay b sanjay Code 2018, setting up of a dedicated Affordable Housing Fund and the

Gaining momentum orade government’s nod to allow 100 per cent foreign direct investment in sin- gle brand retail under the automatic route have improved the market senti- ment further. The real estate market kept gaining depth and maturity, ushering in an improved sentiment for actual buyers, as also investors who had long been longed for an organised set-up for this imperative asset class. The market entered a consolidation phase and the pace of consolidation is likely to gain momentum further in the current year. Going forward, one can expect to see a more consolidated and organised market, with serious and reputed players delivering quality offerings. Established names are likely to fur- ther capitalise on their brand to strike joint development deals with smaller players. Backed by the impetus on afford- able housing, the residential market witnessed a distinct recovery, even as the overall situation remained range bound. The n bfc-crisis adversely impacted the overall sentiment and the overall demand-supply equation. While affordable housing took cen- tre stage in the residential sector, co- working emerged as the new poster boy of commercial real estate. Logis- tics and warehousing saw significant growth too. Despite minimal new sup- ply in 2018, the retail real estate sector held its own, on the back of favourable f d i norms. Besides conventional sec- tors, 2018 also saw the emergence of alternate asset beyond senior living. Student housing and co-living, barely mentioned or considered in previous years, drew considerable interest not only from industry watchdogs but also institutional funds.

Roller coaster ride “The year 2018 was a veritable roller- The domestic realty market is all set to consolidate further amidst coaster ride for the Indian real estate,” reform impact says Anuj Puri, chairman, Anarock Property Consultants. “Despite signs he year 2018 was a crucial period couple of years. Impacts and results of of recovery across segments, the liquid- for the domestic real estate sec- these reforms were gradually getting ity crunch – further exacerbated by Ttor, as the industry looked to set- felt, even as the industry stakehold- the n bfc crisis – put all industry stake- tle down after a series of reforms such ers adapted to the changing scenario, holders on tenterhooks. Consolidation as Real Estate (Regulation and Devel- where transparency and accountabil- through mergers and acquisitions was opment) Act, 2016 (rer a) and Goods & ity remained paramount. Reforms rife in all sectors, completely redefining Services Tax (g s t) initiated in the past such as the Insolvency & Bankruptcy the concept of ‘financial health’ among

u 42 u february 25-march 10, 2019 Business India u the magazine of the corporate world Special Report sanjay b sanjay players and drawing clear lines on who economic drivers and hence needs will survive the heat. This process will to be nurtured with a long term continue throughout 2019, as well”. orade policy framework. “The real estate industry experi- Niranjan Hiranandani, national enced the protracted impact of struc- president, n a r e d c o, feels that 2018 tural reforms undertaken over the had witnessed the sign of revival, last 24 months, such as rer a, g s t and with the disruptive impact of policy demonetisation, which collectively reforms fading away early. The indus- changed the way business is conducted try has evolved extremely, with an in the country,” explains Shishir Baijal, optimistic impact in terms of account- c m d, Knight Frank India. “The Indian ability, transparency and compliance real estate sector, while remaining mechanism balancing the scales with largely optimistic, had its sets of woes consumer becoming paramount. “The to deal with during the year, with vari- residential segment faces challenges ous asset classes reacting differently to to cope up from the rippling effect of the global and domestic stimuli”. liquidity crisis hit by n bfc blow. Lock- M. Murali, c m d, Shriram Properties ing up of 70 per cent funds in escrow (a part of the Chennai-based Shriram and postponement in logging sales to group, in which, pe players have save tax burden on under construc- shown significant interest), feels that tion property, has created urgency to 2018 was an important year for the source out alternative fund avenues real estate industry, after a series of sig- for the on-going projects and relieve nificant reforms. These reforms have liquidity-crunched sector on priority,” definitely put the industry on a con- he adds. solidation mode, which is seen in sev- The industry too looks eral takeovers, mergers, acquisitions of forward to having a Constantly evolving distressed assets and real estate proj- more positive liquidity According to Shailesh Puranik, c m d, ects. In 2018, mid-income and afford- Puranik Builders Ltd, a Mumbai-based able housing drew a lot of interest and situation during 2019 realtor, the realty market is constantly accounted for around 65-70 per cent – Babulal Varma, m d, evolving with consistent progressive of the demand. “Government schemes Omkar Realtors policy reforms, new emerging trends announced in 2017-18 such as ‘hous- and innovation. While most of the ing for all’ served as an accelerator to reforms were taken back in 2017, the the sector, particularly for mid-mar- “The real estate market has proved results of it have manifested in 2018. ket and affordable housing categories,” to be resilient in 2018,” observes “Overall, the residential market has adds the Bengaluru-based developer. Irfan Razack, c m d, Prestige group. seen an upward movement and an “However, the real estate industry had “Despite witnessing several major pol- enhanced investor sentiment. Home- its own share of turbulence in the form icy changes with the implementation buyers, who were earlier fence-sitters, of the n bfc crisis and the consequent of rer a and g s t, we have still man- are now actively looking for homes liquidity crunch faced by some of the aged to do well as an industry. There in cities, as they are sure about their marginal developers”. The developer is is stress in certain quarters, but the finances. Developers have also gone now putting up a mega township proj- developers who are established, show above and beyond to give a holistic liv- ect (saleable area: 33 million sq ft) at commitment to corporate governance ing experience to their valuable clien- Uttarpada near Kolkata. and transparency are succeeding. tele. We are optimistic about the future “The Mumbai realty market in 2018 With g s t and rer a stabilising, the real of the industry and look forward to reflected a bearish–to-steady trend, estate sector is on the cusp of a com- brighter days ahead,” adds Puranik. with the second half witnessing tighter plete makeover. The buyers and the Kamal Khetan, c m d Sunteck Realty, liquidity situation in general,” argues developers have reconciled themselves Mumbai, is of the view that 2018 was Babulal Varma, m d, Omkar Realtors to the additional costs, and the market a year of progression for real estate & Developers. “However, few proj- is all set to witness further growth”. towards revival, after facing reforms ect offerings with great value within Ashish R. Puravankara, m d, Pura- such as demonetisation, rer a and g s t city’s micro markets attracted encour- vankara Ltd, another south-based over the past couple of years. With rer a aging customer attention. I expect the realtor, is of the view that the recent gaining foothold, the sector’s identity demand for such value offerings, as governmental impetus for affordable got transformed as a more organised, awaited by homebuyers, will be pos- housing has started giving results but mature and professionally managed itive during 2019. The industry too continued policy stability is imperative sector. Within the housing segment, looks forward to having a more posi- in order to derive more pronounced affordable housing has gained the most tive liquidity situation during 2019, benefits for both home buyers and attention due to the government’s pro- considering its high relevance to coun- the economy in general. Real estate active policies. “We are hopeful to see try’s economic growth”. industry is one of the most important a turnaround in the real estate sector

u 43 u february 25-march 10, 2019 Special Report Business India u the magazine of the corporate world sanjay b sanjay picked up q-o-q across the top cities, the issue of stalled projects showed

few signs of resolution in 2018,” the orade consultant feels. “However, a number of landmark court judgments strongly indicated that the Indian legal system is awake and aware of the problem. 2018 was a year where consumers, pre- viously held hostage by lack of effi- cient regulation, finally felt that they are being heard and represented. As is always the case, the process of resolv- ing a problem starts with acknowledg- ing that a problem exists”. The average property prices remained largely static across the top seven cities in 2018, he adds. In fact, average property prices at the pan-India level saw only 1 per cent increase in 2018 to R5,545 per sq ft, from R5,491 per sq ft in 2017. At a city- level too, average property prices hov- ered mostly around the same levels in Government schemes served 2018, when compared against what Continued policy stability is as an accelerator to the was recorded last year. Q-o-q trends imperative in order to derive sector, particularly for mid- also suggest that there was no head- more pronounced benefits market and affordable wind change across cities – remaining for both home buyers and well within 3 per cent. housing categories the economy in general – M. Murali, c m d, Emerging areas – Ashish R. Puravankara, Shriram Properties According to the data by Anarock, the m d, Puravankara Ltd new launch supply across top seven cities is estimated to be over 193,000 in the medium-term, as new launches units by the end of 2018, as against segments such as student housing will only be seen from organised devel- over 146,000 units in 2017 – thus, and co-living are increasingly attract- opers with a strong balance sheet and there was an increase of 32 per cent, ing investors. With a millennial pop- execution track record,” adds Khetan. despite all headwinds. Affordable hous- ulation of over 40 crore these housing “This will positively impact the luxury ing accounted for a lion’s share of this models hold significant potential in residential market as well. Increased supply, with over 41 per cent of the the Indian market”. buyer confidence and stable prices will new supply coming into this category. The office market exhibited a ensure strong volume growth being Housing sales in 2018 are estimated to healthy growth of 16 per cent in 2018, witnessed by the housing market”. be about 245,000 units, as compared with net absorption estimated to cross Puri of Anarock Property Consul- to about 211,000 units in 2017 – an 33 million sq ft during the year. This tants informs that, though the fallout annual increase of 16 per cent. Unsold trend, according to Nair of jll India, is of rer a and g s t was still visible in 2018, housing stock saw a decline of a mod- likely to continue, with net absorption the dust had begun to settle. With est 8 per cent at 687,000 units in Q3 expected to surpass 37 million sq ft by developers and brokers accepting the 2018. Ready-to-move-in properties gar- the end of 2019. Signalling good news new market realities and beginning to nered maximum buyer interest, with for occupiers and investors, demand fall in line, the residential sector began Anarock’s Consumer Survey indicating for offices remained high across key to regain visibility and viability. Trans- that 49 per cent of the property seekers markets. The demand traction was parency and accountability – never the are intent on buying rt m homes. supported by a strong supply pipeline defining characteristics of Indian real “With the government’s recent pro- with new completions in 2018 esti- estate – became the ‘new normal’ dur- posal to rationalise g s t in residential mated to be at 38 million sq ft, result- ing the year, and the market reacted real estate, we believe the under-con- ing in stable vacancy levels. The new positively. Almost 81 per cent respon- struction segment is going to see fur- completions, the global property con- dents in Anarock’s Consumer Survey, ther traction in 2019,” remarks Ramesh sultant believes, are expected to fur- which covers both resident and non- Nair, c e o & country head, jll India. ther strengthen in 2019 and cross 43 resident Indians (n r is), believe that “However, housing prices are likely million sq ft. Indian real estate has become more to remain range-bound across most Bengaluru has dominated the net credible and efficient. key markets. Other than affordable take-up in office spaces, followed by “Though sales and new supply and mid-segment housing, evolving Mumbai and Delhi/n c r . These three

u 44 u february 25-march 10, 2019 Business India u the magazine of the corporate world Special Report markets accounted for 66 per cent of saw new highs and vacancy levels demand and sales velocity”. the demand in office spaces across the declined in prime locales. India’s first After a subdued 2016 and 2017, top seven cities in the country. reit listings, now expected to happen India’s retail market has seen a revival Structural reforms and a refined in early this year, will result in mas- in 2018. In the past, growth of the framework for establishing Real Estate sive liquidity infusion into commer- retail segment had slowed due to a Investment Trusts (reits) have pro- cial office spaces. This, in turn, will weak consumer and investment sen- pelled developers to build quality prompt commercial property devel- timent. However, favourable policies offices. Positive developments such as opers to focus more on this segment from the government, consolidation of the listing of reit by Blackstone-Em- to fulfil demand from occupiers across large as well as small e-commerce play- bassy jv, which is likely to happen in the it/ites, bfsi, manufacturing and ers, technology disruption and ease of early 2019, will open the market for co-working sectors”. shopping, increasing consumer base, similar reits by other players. “As the “The year 2018 has seen the real and the entry of foreign retailers have focus gradually shifts to the develop- estate sector finally on the road to recov- made the environment conducive for ment of modern offices that meet the ery with the effects of the progressive growth, says Nair of jll India. aspirations of new age occupiers, the policy reforms gradually manifesting,” market will see more such supply in the says Vinod Rohira, m d & c e o, commer- Reformative policies coming quarters,” says Nair. “Hence, cial real estate & reits, K Raheja Corp. As per the jll estimates, the retail seg- there will be a change in the propor- “The current market is more mature, ment has witnessed the completion tion of Grade A stock in the decentra- owing to the enhanced transparency of 3.1 million sq ft of new space dur- lised markets. This would result in the and accountability and the trust deficit ing 2018. Against this, almost 3.9 mil- emergence of alternate central business between home-buyers and developers lion sq ft of space was absorbed during districts (c bd s) in and around cities”. has been largely alleviated paving the the year. While the net absorption is “In terms of market traction, com- way for long-standing relationships. expected to almost double in 2019 as mercial real estate has retained its sta- The vast industry, which includes com- comparison to 2018, new completion tus as the most buoyant sector in 2018 mercial – office spaces, retail, logis- is likely to be over three times in the across major cities,” informs Anarock’s tics and warehousing – and residential coming year. This would significantly Puri. “Demand for Grade A office space spaces have seen improvement in the add to the existing supply.

u 45 u february 25-march 10, 2019 Special Report Business India u the magazine of the corporate world sanjay b sanjay substantial increase over the next two years owing to implementation of g s t,

orade the government’s determined infra- structure push and increased inter- est from national and international investors. Overall, strong economic fundamentals, proactive reforms and increasing use of technology will con- tinue to boost the sector. “While 2018 saw consolidation in the Indian real estate market, as the stakeholders adapted to some irre- versible paradigm shifts and initia- tives aimed at streamlining the sector, the new year will be much better year for business,” Bijay Agarwal, m d, Sala- rpuria Sattva group, Bengaluru. “The primary focus for developers in 2018 was to dispose existing inventory and launch few new projects, however in 2019 we are optimistic to launch more projects across metros”. Consolidation through Madhusudhan G., c m d, Sumadhura With g s t and rer a mergers and acquisitions group, another south-based realtor, stabilising, the real estate was rife in all sectors, says that the government has also taken sector is on the cusp of a completely redefining the steps by announcing certain amend- ments in the taxation and regulatory complete makever concept of financial health features which will definitely help the – Irfan Razak, c m d, – Anuj Puri, Chairman, Indian real estate grow. rer a is stream- Prestige Group Anarock Propertiy Consultants lining the real estate, ensuring that the buyer gets full value for the money spent in buying a home. The Central “Reformative policies such as clar- and various state governments are also has been a cause of worry for stake- ity in taxation through the introduc- announcing single window approv- holders in the sector. Despite the con- tion of g s t, easing of entry norms for als for real estate. If the same becomes cerns, the economic indicators have single-brand retail, rationalisation effective, it will contribute signifi- remained positive with India’s g d p and consolidation of mall space, and cantly to the growth of the industry. growth rate pegged at 7.3 per cent and omni-channelling by retailers have “Though the expectation of the real inflation been reined in at 4.8 per cent added to the overall growth of this estate industry was quite high, devel- in 2018. However, more efforts will segment,” says Nair. And, as per Ana- opers have been facing challenging have to be put in 2019 to maintain rock data, the top cities with signif- times due to g s t, extra surcharge and the existing momentum. To sum it up, icant retail growth in 2018 included non-availability of funding,” com- 2019 will start on a cautious note due m m r , n c r , Bengaluru and Hyderabad. ments Manju Yagnik, vice-chairper- to the upcoming elections, but will New retail supply in 2018 was limited son, Nahar group. “On the buyer pick up significant momentum there- to 5.1 million sq ft. Interestingly, Tier segment, the sentiment has been after, in all real estate segments.” 2 & 3 cities too have played a signifi- inclined towards compact and afford- All in all, the current year will be cant role in India’s retail growth story able housing projects. But, due to a lot range-bound, with liquidity crunch to in 2018. Saturation of the metros due of affordable housing projects being continue until H1 2019. Consolidation to limited space availability, mount- still under construction stages, the to gain momentum, even as new hous- ing rental values and escalating infra- buyers have been adopting a wait-and- ing project launches will be muted. structure issues fuelled retail growth in watch policy, due to high tax compo- Affordable housing will be the area smaller cities like Ahmedabad, Thiru- nents on under-construction homes.” of interest for most of the builders. vananthapuram, Bhubaneswar, Jaipur, “The year 2019 will be both chal- Ready-to-move-in housing will remain Lucknow, etc. lenging and opportunistic and the centre-stage, while the rental and The logistics & warehousing sec- ones likely to succeed are those who managed living model (such as co-liv- tor also has transformed rapidly in embrace the changing market dynam- ing) will gain traction. New sub asset 2018 after the government granted the ics,” forecasts Surendra Hiranandani, classes such as warehousing and logis- coveted infrastructure status to logis- founder & director, House of Hiranan- tics will gain further prominence. tics in November 2017. In fact, ware- dani. “The lack of credit off-take, com- u ARBIND GUPTA house stock supply is expected to see pounded by the current n bfc crisis, [email protected]

u 46 u february 25-march 10, 2019

Corporate Reports Business India u the magazine of the corporate world Scripting a new story photos: sanjay b sanjay photos: hough it did not lack positive indicators, the third quarter Tresults for the current fiscal did not bring comforting moments for the top brass at Thomas Cook India – orade the country’s leading firm in the inte- grated travel play. The deconsolidation of Quess, a group company, in the con- cluding quarters of the previous fis- cal had added substantial exceptional earning to its kitty last year. But with that piece missing this time, ques- tions were raised on its current perfor- mance. “The number which we have announced does not compare with the number we announced a year ear- lier for a variety of reasons,” Madha- van Menon, c m d, Thomas Cook India, had commented in a television inter- view. “In consolidated number a year ago, we had Quess being consolidated into its entirety in our numbers. But this time, we are not consolidating its entire number as they have become an associate partner”. Senior officials of the com- Menon: pany also strongly underline leadership that the number puzzle should position not be seen as a momentary irritant, as many analysts have resorted to while explaining its recent performance. “We are a debt- free company on a sound wicket in the midst of synergising our oper- ations, which have significantly expanded after 2012,” asserts Mahesh Iyer, c e o, Thomas Cook India. The year 2012 had indeed been critical for Thomas Cook India, as the Canadian firm Fairfax Financial Holdings, led by Prem Watsa, had stepped in dur- ing this period, buying the control- ling rights from the British parental firm Thomas Cook. And, since then, there have been a spate of mergers and acquisitions both within the country and outside which have significantly expanded the operational ambit of the company. “Both Thomas Cook and Cox & Kings, with the original strong- Thomas Cook India hold of foreign exchange services and decades of existence in India, have readies itself for an contributed immensely in the growing explosive growth travel and tourism business. Thomas Cook has grown significantly in recent

u 48 u february 25-march 10,2019 Business India u the magazine of the corporate world Corporate Reports years aggressively, taking the inorganic ground to its outbound customers. By route, while the latter has grown more end 2017, there was another signif- through organic means,” observes Sub- icant decision on acquisition made – has Goyal, former president, i at o, and the buyout of Tata Capital-owned Tata a travel industry veteran. “Thomas Capital Forex and tc Travel and Ser- Cook, though essentially a foreign vices. “Our acquisition of Tata Capi- exchange company, has invested heav- tal’s Forex and travel companies serves ily in technology and consolidation of to further strengthen the Thomas other verticals in recent years,” adds Cook India group’s leadership position Navin Berry, founder, s at t e , South in the travel & foreign exchange sector Asia’s biggest travel show. in the country. This also gives us the opportunity to continue to serve the Horizontal & vertical expansion strong corporate portfolio of both Tata “Today, you can call us an Indian m n c , Capital Forex and tc Travel Services with our footprint in 25 countries – covering large corporate houses, across four continents,” says Abraham including flagship Tata group compa- Alapatt, group president, marketing, nies, as also a set of new retail custom- Thomas Cook India. Talk to anybody ers,” Menon had commented then. in the travel business and he will tell On a cumulative basis, Thomas you that, prior to change in control- Cook India has spent about R1,500 ling hands, the company was broadly crore since 2012 in acquiring com- recognised as a subsidiary of global panies. And, according to Abraham travel giant Thomas Cook, with India- Iyer: we are on a sound wicket Alapatt, their approach in selecting a centric services in foreign exchange, company has been driven more by the outbound and inbound services. But, domestic, where it is seeking to make analysis of their management quality from being part of a larger global piece, larger penetration. The notable acqui- than financial numbers. “These deci- to changing into an evolving global sitions which it has made in the recent sions have been taken after the anal- player in its own rights and adding past include: Quess (now deconsoli- ysis of their management strength,” smaller pieces across several countries, dated but a strong player present in says Alapatt. “Earlier, we had to par- has resulted in a dramatic change in five verticals) in 2013; Sterling Resorts take a substantial part of the outbound terms of market positioning. in 2014; and Kuoni’s travel business deal margins with local partners in dif- If the topline numbers are to be in India and Hong Kong in 2015. The ferent countries. But after acquisition, considered as the basic parameter to deal brought two formidable names the margin is coming to our kitty”. In judge Thomas Cook India’s post-2012 into its fold – s i ta and s o t c , earlier most of the cases, the basic team or growth, the company would certainly held by Kuoni, the Swiss travel major, the original promoters of the acquired pass with flying colours. The consol- which had decided to exit tour operat- firms have been retained, he adds. idated revenue of the company has ing businesses globally. “Thomas Cook As it appears, Thomas Cook India shot up to C11,412 crore at the end and s o t c were legendary rivals in the today is a conglomeration in the travel of 2017-18, as against R1,305 crore in outbound space earlier,” recalls Berry. business, with several components 2013 (see graph: Consolidated financial In the same year, t c i had acquired being added from outside. “I think the highlights). Its bottomline level has also luxe Asia (Sri Lanka). The year 2017 basic challenge for them is to consoli- managed a similar kind of spike during saw another round of aggressive buy- date the mergers and acquisitions they the course of the last five-six years. ing – this time primarily of destina- have done in the recent past. But the The sudden growth in size for the tion management companies across two things that work for them are – one, enlisted firm was mainly the result Asia-Pacific, theM iddle East and Africa their parental firm is deep-pocketed of a spate of acquisitions it has made, (see chart: Brands under Thomas Cook and, two, they have good managers in almost across its verticals – forex, out- India). These companies have typi- their pool to run the show,” observes bound, inbound, destination man- cally been partners of Thomas Cook Goyal. And, according to Iyer, syner- agement services (d m c ) and also in the past, providing support on the gising all the collected components through the buyout route is the basic Financials (R in million) task before the management right now 2013 2014-15 2015-16 2016-17 2017-18 and it has considerable success on this Revenue 13,054 32,863 61,570 88,468 114,116 front. “Most of the companies which Expenditure 12,031 31,153 60,623 86,483 111,629 we have acquired for destination man- agement services abroad have begun Ratio (%) 92 95 98 98 98 doing well,” he points out. “Our rev- PBT 1,022.6 1,710 9.3 1,986 60,908 enue on this service has grown by 16 PAT 687 1,123 (585) 861 61,314 per cent in the recent year. Our Dubai, Equity shareholders’ funds 6,888 13,337 12,477 19,863 86,714 US and Hong Kong units are profit- EPS (Basic) 2.64 3.56 (1.60) 1.18 163 able. And we expect our units in Africa

u 49 u february 25-march 10,2019 Corporate Reports Business India u the magazine of the corporate world to become profitable by the end of the online base emerged after the Fairfax travel management tool called iBook current year”. entry. Alapatt, however, underlines for corporate clients; a new s o t c cus- In terms of customer base, the com- that the late moves vis-à-vis technol- tomer service app named Engage, pany claims to have served nearly 1.8 ogy adoption could well have been a which claims to provide person- million retail customers last year and blessing in disguise. “By then, we had alised service to travelers; etc. Earlier, has nearly 4,500 corporate clients. seen what had happened in the mar- the company had also taken a lead in “Our b2c to b2b business is currently ket,” he explains. “We realised focus- launching pre-paid multi-currency in the ratio of 60:40,” informs Iyer. sing on low-cost airlines ticket for the forex cards. On the back end technol- And verticals like m i c e are increas- domestic sector is a zero sum game. ogy side, the company has initiated ingly gaining in strength. “m i c e is a The players are buying in bulk and Tejas, a sales analytics programme, steadily growing business for us and then they are discounting it. And they in partnership with Accenture, and a we have become a dominant player in are spending tonnes of money in mar- c r m integrated app – iLead, for holiday the space. For leading Indian corpo- keting. We decided we will not go after sales agents. rates and m n c s, it has become an effec- selling airlines or hotels, we will sell “Our digital initiatives have begun tive tool to incentivise their employees the packages”. A customer still has the showing results,” informs Iyer. “Today, by taking them out and we are making option to buy an airline ticket on the 24 per cent of our short-haul packages the most of this trend,” points out Ala- Thomas Cook platform but the com- are sold online”. Adds Alapatt, “Online patt, while informing that the com- pany is not aggressively promoting it, is a new addition for us and we are pany had recently organised a large he adds. “While building a technolog- committed to harness it further. But trip for 2,800 employees of a client. ical base, the company has done well our strength lies in our omni-chan- to stick to its core of selling end-to- nel strategy, the facility for customers Blessing in disguise end holiday packages and not some to walk in our physical stores if they A popular perception in the travel & components of the travel value chain. have any issue. Visa and forex facilita- tourism circle is that, even with formi- Comparing them with m m t is unfair,” tion requirements can’t be completely dable presence for a long time, com- concurs Berry. fulfilled online. Even online players panies like Thomas Cook has been The company claims it has initi- are realising this and some of them are laggards in adopting technology and ated a host of technology driven func- talking of also going offline,” addsA la- efficiently integrating it in their inter- tionalities in the recent years. These patt. The company is at present operat- face with the customers. Coming from include an integrated customer self-ser- ing over 550 physical stores worldwide nowhere, a company like MakeMyTrip vice module for both the holidays and (inclusive of 13 airports) across its 25 (m m t) and others in the o ta (Online the forex apps (the customers can track countries footprint. In India, it is man- Travel Agencies) space have completely their booking status, visa applications, aging 432 stores (inclusive of 11 airport changed the dynamics for travel book- etc); a dynamic fit package building counters), 218 of which are operated ings for consumers in the last one- platform called Voyager; a web-based by its partners. and-a-half decades. It is no secret that self-booking tool Click2Book; a unique a player like m m t, which is The new frontier credited to have ushered Thomas Cook (India) group acquisitions Traditionally, players like in online retail sales in the Thomas Cook and its nearest country is more popular 2018 rival Cox & Kings have been today and also that o ta s 2017 believed to be travel firms have expanded their offer- 2013 averse to getting too aggres- ing portfolio significantly sive in the domestic tourism to include hotel, railways, business. Fragmented with and even complete holiday the overwhelming pres- package. ence of local players and 2014 Alapatt admits that the low margin business char- company was somewhat Acquisitions acter were cited as the key late in showing its techno- reasons for these firms play- logical inclinations. “Yes, ing the domestic game on a we were late,” he acknowl- 2015 low base. But not anymore. edges. “And there are two “Three-and-a-half years primary reasons for it – the ago, we decided to aggres- parental firm was not big in sively get onto the domes- technology even in its own tic tourism bandwagon and backyard before 2012; and, we have invested in creating secondly it did not have a momentum,” Iyer under- enough funds to give us to 25 countries lines. “We know this is a big- cover the huge marketing 4 continents ticket opportunity”. Reasons cost involved”. The oppor- 8000 + team members Total acquisition cost Goyal: “In terms of volume, R tunity to build a sound 59 nationalities 15 Billion our inbound arrivals have

u 50 u february 25-march 10,2019 Business India u the magazine of the corporate world Corporate Reports crossed 10 million, outbound is close solutions and internet business), how- to 25 million and domestic is over 200 ever, is likely to have some impact on million. It includes large pieces like Thomas Cook India’s balance sheet ‘religious’ and ‘budget’. Who would in the near to medium run. The step- like to miss this opportunity, even down subsidiary of Fairfax Financial if the margin is still low in the busi- Holdings, held through Thomas Cook ness?” According to an analyst one of India, had affected its numbers in Q3, the key reasons for inclination towards 2018. The company’s stake has come domestic is the not-so-encouraging down to 48 per cent from 72 per cent numbers on the inbound front, despite and in the 11 month period for the the India growth story finding buy- previous fiscal, Quess’ contribution ers in the international market. And to Thomas Cook India’s kitty (before that has compelled firms like Thomas deconsolidation came into the effect) Cook to toy with opportunities in the was as robust as R5,689 crore out of domestic circuit. its total income figure of R11,412 Integrated holiday packaging play- crore. With the stake now going ers are finding more customers opting below 50 per cent, a smaller portion for their domestic offerings, observes of Quess future earnings would be Pavethra Ponniah, vp & sector head, contributing to Thomas Cook India’s hospitality, ic r a . “The rise in dispos- topline. “It may have a bearing on able income is opening new opportu- our topline,” admits Alapatt. “But our nity for pure holiday players,” she says. bottomline would continue to grow “A recent study indicates that about Alapatt: online is a new addition robustly. Look at our Q3 numbers and 70 per cent occupants of 4-star and you will find our core verticals doing above category hotel rooms in India domestic travelers are moving from well in increasing profitability on sev- are now locals. So, there is an increas- sight-seeing to experience, consid- eral parameters,” he adds. The com- ing tribe of customers who are willing ering the growth in millennial vol- pany reported consolidated pbt for to shell out more for better experi- ume. And we are responding to that Q3 2018-19 (post deconsolidation of ence in the domestic circuit”. Alap- demand through our offerings in the Quess Corp) increasing by 42 per cent att says the company in the domestic domestic circuit”. The domestic busi- to R21.6 crore from R15.2 crore in the circuit is leveraging on its reputation ness for Thomas Cook India, how- corresponding quarter in the previous for delivering better quality services ever, is at present small. “ Right now, fiscal and by 16 per cent toR 71.4 crore on the outbound. “Our own analy- its contribution to our topline is in from R61.7 crore for the nine month sis says that the upper middle class or single digit but the segment is going period, on a comparable basis. While the affluent class is going out on two through the roof and we will further announcing its Q3 results recently, the vacations every year – one, a long-haul build momentum through more inno- company had also strongly empha- vacation to a foreign destination and, vative offerings,” adds Alapatt, exud- sised that its core businesses con- two, a short holiday to some domes- ing confidence. tinue to grow in a robust trajectory tic location,” he points out. “And those Along with making a larger pen- – holiday packages (29 per cent), m i c e who have experienced our services on etration into the domestic tourism (31 per cent) and Corporate an outbound trip are likely to avail our segment, Thomas Cook is eyeing break- Travel (31 per cent). domestic offerings too. We are target- even level for its e-commerce business. And, with its core businesses ing this class of travellers”. “We are likely to reach there by the end remaining intact, a much expansive “We have a host of products rang- of the next fiscal,” saysI yer. “About 26 structure and significantly expanded ing from Group Tours to fits,” says per cent of our holiday package sales footprint both within and outside the a senior functionary of Cox & Kings and 12 per cent of the overall retail country, thanks to a spate of acquisi- India. “We are in the education space, sales come through online. It will be tions, as also superior technological where we take school children for hol- further strengthened. We are looking support system, Thomas Cook India idays within India. In the last two at larger incubated online business”. is convinced of scripting a new chap- years, we have opened up new verti- And, as per an internal strategy drawn ter (its first shop in India was set up cals to tap into the domestic market”. by the company, the broader target is in 1881) with explosive growth prop- Thomas Cook on its part is seeking to double in size (topline) by the end ositions projected in the tourism busi- larger penetration in the domestic seg- of 2021-22, he adds. ness. According to a 2018 economic ment based on packages drawn around impact report by the World Travel & adventure destinations, festivals, reli- Quess impact Tourism Council (w t t c), India is likely gious and cultural events (it also offers The deconsolidation of the Bengaluru to become the third-largest tourism Kumbh Mela package), honeymoon, headquartered Quess, which is pres- economy in the next 10 years – becom- etc. “Today, we have the largest port- ent in five business verticals (industri- ing close to a $500 billion business. folio for domestic holiday packages,” als, integrated facility management, u RITWIK SINHA claims Iyer. “We understand that people services, global technology [email protected]

u 51 u february 25-march 10,2019 Corporate Reports Business India u the magazine of the corporate world

marginally up at R1,480 crore (R1,413 crore). This, Unnikrishnan explains, Building up steam was due to ongoing sluggishness in new investments in several sectors of the economy. Thermax consolidates operations, while also underlining Thermax’s order booking, however, its status as a global operator has hit an all-time high in 2018, mark- ing it as a turnaround year after a con- tinued period of challenges. While steel, cement, oil & gas, fertiliser and power have traditionally accounted for about two-thirds of the group’s revenues, these orders dried up because hardly any new capacities came up in these sectors – and even existing facilities saw their capacity utilisation drop by half. “This meant that the capital goods industry was in the doldrums. Capacity building everywhere had taken a back seat, as almost every equipment maker was going through bad times,” he says. “This obviously affected Pudumjee and everyone’s topline. But we at Unnikrishnan have Thermax managed to main- taken the company tain a good balance sheet by global increasing our efficiencies and tightening our belts. Our inter- nalisation, operational excellence and productivity improvement helped us to not just survive but even meet our he only red marks in the Ther- of the energy and environment solu- profit expectations.” max group’s third-quarter finan- tions major’s boiler and heater (b&h) On a standalone basis, Thermax Tcial statement are an ‘exceptional business to t b w e s , where it had ear- posted an operating revenue of R847 item’ of R88 crore for the ‘impairment lier held a 51 per cent stake and has crore for the quarter, compared to R658 of goodwill’ related to its step-down now acquired total ownership. This crore in the corresponding quarter of subsidiary Thermax Denmark ApS, has resulted in the b&h business being the previous year. Profit after tax for the which it had acquired in 2010, when classified as ‘discontinued operations’ quarter was R26 crore, down 43.5 per it began its drive to go global, and the in the standalone financial statements cent from last year’s R46 crore. The com- recognition of deferred tax assets of – which will not, however, impact the pany’s facility for making absorption R94 crore relating to brought-forward consolidated group accounts. chillers at Sri City, a special economic losses of another subsidiary, Thermax The group’s order balance of R6,475 zone near Chennai, was formally inau- Babcock & Wilcox Energy Solutions crore as on 31 December 2018 was gurated on 31 January 2019, and has Private Limited (t b w e s). Despite these, 16.5 per cent higher than the fig- commenced commercial production. the group’s consolidated operating ure of R5,556 crore a year earlier, revenues of R1,437 crore for the quar- with order booking for the quarter at Pioneeing service ter are 28.6 per cent higher than the the consolidated level having been What Meher Pudumjee, chairperson, R1,117 crore in the October-December 2017 quarter, thanks to a strong car- Timeline ry-forward of orders. Group profit after tax (pat ) was R75 crore, also 29 per cent Foray into the Entry into Air Thermax commences its Thermax enters Entry into the Solar Thermax higher than the R58 crore it recorded Chemical business Pollution & Water Cooling business into Power EPC business celebrates 50 in Q3 of the last financial year. business years The goodwill ‘impairment’ was a result of the reduction in valuation of the Danish subsidiary in Ther- 1966 1970 1980 1990 2000 2010 2018

max’s books, says M.S. Unnikrishnan, Established as Wanson Thermax Private Ltd Forms the joint Thermax becomes a TBW merged with An established global player with (India), for process formed and Wanson (India) venture – Thermax Public Limited Thermax Energy manufacturing facilities in India, China, m d & c e o, Thermax. Any company, heating business merged with Thermax in Babcock & Wilcox Ltd company in 1995 Systems to form the Germany, Denmark, Poland and 1980 in 1989 large Boiler & Heater Indonesia he explains, is valued on two major (B&H) division in 2003 counts – physical assets and good- will. Another item was the slump sale

u 52 u february 25-march 10,2019 Business India u the magazine of the corporate world Corporate Reports

Woman power vivec enrols the trainees from counselled to join the weld- and Divya, sisters who decided the tribal areas in Chhotana- ing course in its urja project for to join, had to work hard to per- aving been brought up in gpur and other places around training tribal girls in various suade their father to allow them Ha family where education Vadodara; Thermax gives them professions. There, she learned to qualify for what was seen as has been given the strongest actual working experience with not only techniques of weld- men’s work. Najera, who had value, Meher Pudumjee fol- handholding support during ing but also soft skills. “This seen her father working on old- lows her parents in the belief the training period itself, fol- has transformed my person- age welding machinery, says that education is the best gift lowed by a job in its plant. ality and equipped me to face she was surprised when she you can give anyone. Then she A classic case study is of life’s realities with great con- saw the modern welding lab found vivec (Vivekanand Insti- Ramila, the eldest of four fidence,” she says. Her father, at vivec. “Even when I finished tute of Vocational & Entrepre- children of a tribal family in thinking that she was study- the course and joined Thermax neurial Competence), being Gankhajuri village of Gujarat’s ing to become a nurse, was the male workers told me that I run by the Shroff Foundation Dahod district, who began upset when he learnt about this would not be able to work at the Trust (sft) in Vadodara. It was working on her father’s farm switch – but was convinced as machines. Perseverance paid off: a natural fit: both were work- because she couldn’t get admis- Thermax gave her a job. Ramila after three months’ training, she ing to provide equal opportu- sion in a nursing course she now aims to do another course was rated the best worker. nities to women and establish wanted to do. One of her cous- to qualify as a boiler attendant. And so a handholding exer- gender equality in traditionally ins had been trained at vivec, Both the company and the cise between a manufacturing male-dominated industries. so she too applied there for a n g o found it tough to enrol company and an n g o strike They worked together to course of bedside assistant. women trainees for the weld- another blow for the recogni- develop the course contents, She was, however, ing technician course. Priyanka tion of gender equality. u

Thermax, is particularly proud of, how- its other two groups – environment and also allows any manufacturer to move ever, is the recently-launched Thermax chemicals – contributing under 15 per goods without duty, allowing compa- Onsite Energy Solutions Ltd (t o e s l), cent and 8 per cent, respectively. nies to be competitive. Concentrating which offers a pioneering service to the Besides the Sri City facility, the year on its heating, cooling, water treatment R4,602-crore ($750 million) company’s also saw Thermax’s new manufacturing and air pollution control chemicals customers. “We install our own equip- plants at Dahej and Indonesia stabilise businesses in the region, Thermax has ment at the client’s premises, and bill their operations. All these investments bagged a market share of 25 per cent to them every month according to the were fairly large, but had to be made 30 per cent. The Indonesia plant, set up use,” she explains. “We recognised the because they had been committed to in 2017, was part of a move to localise fact that every industry wants to put prepare the organisation to capture a operations in and near the customers. its money into its own core business, good share of the global market. “Our Beginning with heating, then other not utilities. Such outsourcing allows strategy since 2010 has been to interna- areas, it is now ‘seeing traction’. them to focus on their core manufac- tionalise our global business selectively, Thermax, which now sells its absorp- turing processes.” to take advantage of the geopolitical tion cooling systems in 80 countries t o e s l is only one of the nearly 30 shifts that have been happening of late,” around the world, is also one of the group companies under the Thermax he explains – hence, the change in the few Indian companies that have over- group umbrella, offering energy and group’s website from www.thermaxin- taken China in the old pecking order environment equipment services to a dia.com to www.thermaxglobal.com. of Europe leading the world followed range of industries in India and glob- The company has zeroed in on the by China. “The business is only 8 per ally. This business accounts for more asean region because of its similar- cent of the company, but our brand than three-fourths of its business, with ity to India in size and growth rate; it equity and visibility are high,” says Unnikrishnan. It has also progressed Dahej in Gujarat also took off during the year well on its strategy of devolatilising its projects businesses and linearising its revenue spikes. ‘Thermax 3.0’ is lever- aging this reversal trend to launch the next phase of its growth.

Transformational journey The product businesses are also work- ing towards creating a new brand with differentiated offerings and superior services, targeting the commercial sec- tor. A major initiative in the offing is digitising its entire business processes, starting with customer acquisition

u 53 u february 25-march 10,2019 Corporate Reports Business India u the magazine of the corporate world

Youth to the fore flavour’ of five functions: man- ufacturing, globalisation, strat- he company has started experience, for whom there is egy, finance and people. This Tinternal training substan- ‘basic’ general management programme is spread over nine tially to tackle the problem programme on communica- days in three segments, to cre- of ‘too many engineers but tion, team handling, organising ate future executive council less skilled ones’, says Meher and planning. Among the mid- members, each now managing Pudumjee. This, according to dle-management cadre, who a business worth from R300 Sharad Gangal (executive vice- have put in about six years, crore to R1,300 crore. Groups president, people processes, those who show potential of 10 youngsters then work & member, executive coun- move on to working with oth- with Unnikrishnan and Gan- cil, human resources division, ers from different businesses gal, who give them projects at Thermax) consists of leader- and functions – ‘to develop Gangal: catching them young the organisational level. ship development programmes business acumen’, Gangal Apart from these, there are (ld ps) at various levels. First, explains. “This puts them on how much they have learnt. other generic training pro- there are the graduate engi- the cusp of becoming leaders.” At the next level, for strate- grammes, to which everyone neer trainees Thermax hires The managers who finish the gic business heads, Thermax has the right to nominate him- from the iits and n i t s. programme go back for differ- has tied up with isb, Hydera- self or herself. All these contrib- Then come the young man- ent projects and take up posi- bad, to run a programme ute to creating what Thermax agers with four-five years’ tions at business groups to test to get a ‘really international calls the ‘Voice of Youth’. u to lifecycle management and provid- well as renewable fuels like biomass. It is providing water at 34 degrees Cen- ing value-added services as well as It was Thermax which brought the tigrade during peak winter, when the upgrades. “This transformational jour- absorption cooling system to India more temperature goes down to minus 20. It ney should take us ahead of the compe- than 35 years ago, Unnikrishnan points draws water from two geothermal wells tition, bring us closer to our customers out. “This is one of the cleanest solu- and purifies it, then upgrades it to 90 and elevate us as a smarter Thermax,” tions possible for industrial cooling and degrees C and pumps it through the Unnikrishnan adds. chilling,” he says. “We also pioneered district heating systems. Yes, he admits, there are global chal- the concepts of zero liquid discharge She regrets, however, that Thermax lenges to meet. Climate change, of through total recycling of waste water.” missed the solar energy bus by bet- course, is visible; but there are pock- “And the company is looking at more ting on only thermal. Photovoltaics ets which continue to be dependent and more,” Pudumjee adds. “Techno- have taken over with massive capac- on fossil fuels. Hybrid solutions are the logical development is related to low- ities in the world, even though solar answer, adds Pudumjee. “We want to potency energy, which was not getting energy is inefficient – just about 10 per be first, ahead of the world, in mov- utilised otherwise. People don’t extract cent or less in the first-generation pan- ing away from coal much faster than heat through expensive recovery sys- els and 15 per cent in the second gen- anyone else,” she explains. As a com- tems; Thermax is creating solutions to eration, going up to a maximum of 25 pany, Thermax already had a vision of do this economically, recovering about per cent the third generation – all this, a clean and green path long before the 10 per cent, which is totally wasted against thermal power, which can give power generation industry using waste currently, by making absorption chill- 50-60 per cent for heating. “We are water energy pushing green solutions. ers that work on low load temperatures working on three areas: renewables, The company is into biomass conver- and using heat pumps to upgrade the waste to value and energy efficiency. sion, and has become a leader in cap- heat.” One such system is working in Our purpose, in the future, is to con- tive generation using waste energy as Copenhagen currently, she points out. serve resources and preserve the future,” she adds. The new plant in Indonesia With its eyes on achieving a possi- stabilised its operations in 2018 ble 75-80 per cent capacity utilisation in most commodity areas, Thermax aims to increase the number of its over- seas manufacturing facilities from two at present to a dozen plus, introducing a high level of automation and mod- ern platforms in its engineering activi- ties. “Growth will happen equally from outside India and within the country,” Unnikrishnan adds.

u SEKHAR SESHAN

[email protected]

u 54 u february 25-march 10,2019 Business India u the magazine of the corporate world Column Mission permission

Marketing with permission, should be your mission

n today’s world, we are flooded with pesky calls, organisation – both who has shared the information and sales and marketing messages which sell and the one who has misused the information. Ivarious products and services at odd times. Fourthly, these bad experiences, leave a bad Sometimes, you are in the middle of a meeting, taste in the mouth of the consumer. The consumer or in the middle of important work, or even on then is motivated to spread bad word of mouth Sunday evenings or early mornings, or late nights, against both – the one who has shared the infor- sales and marketing messages and calls keep com- mation and the one who misuses the information. ing and disturbing you at your work, or when you In simple terms, this kind of sale and marketing are with your family. All these sales and market- jagdeep kapoor tactic backfires. ing messages at odd times, disturb the peace of My recommendation is that in today’s world, the consumer and actually give a bad name to the where people value their privacy and are sen- brand that is being promoted. sitive to unwarranted solicitation, it may be My recommendation is to use better to take permission the ‘Mission Permission strategy’ before trying to market and – Marketing with permission, should sell things. be your mission. In one case, under the pretext Let us look at the facts and the of giving a reference to someone, bad experiences. a service provider of an existing Firstly, sensitive data and the customer to another service pro- mobile numbers and coordinates, vider. This is wrong. The other which consumers have shared service provider obviously asked confidentially are being misused for references, so that they could or sold without the consumers’ enhance their business. consent or permission. This is The current service provider wrong. Apart from it being irri- should not have divulged the tating and disturbing, it is truly sensitive contact details of his unethical. How can data of a con- customer. When a new service sumer, which is being shared in provider called up the customer, confidence by the consumer be the customer should ask how did sold, shared and then misused he get his number. When the without his permission? This is customer came to know that his truly wrong. It is the mistake of current service provider had dis- both – the organisation sharing My recommendation is to use closed his details, he was very and selling it and the organisation my ‘Mission Permission’ strategy. upset and pulled up the existing that is procuring and misusing it. service provider. Secondly, contacting and pre- Hence Marketing with permission, Either, he should have not senting and pitching your goods divulged the details or he should and services without your con- should be your mission have sought permission of the sent is blatantly a wrong mar- customer before giving the details. keting practice. Instead of This happens day in and day out. consumers liking your brand, consumers will This is wrong. In fact, one should not only seek detest it, because you are intruding in his or permission, but should also have the sensitivity to her privacy. know whether permission should be sought or not. Thirdly, there have been cases, where all types Many customers value their privacy and do not of agencies and organisations have access to your like it to be intruded. contacts, because of your vendor having shame- Whether you are selling products or market- lessly shared all information and even recom- ing your services, whether it is industrial products mended to contact you. All these are done without or consumer goods, whether you are a chartered checking up with you or taking your permission. The author is cmd, accountant, lawyer or a doctor, whether you are This is like trespassing. Samsika Marketing an Indian company or a multinational company, Will the consumer not get irritated and upset Consultants. He can be confidentiality is extremely important.C ustomers when such a thing happens? Obviously, the con- reached at do not like to have their confidential information sumer will start disliking the brand and the [email protected] broadcast without their permission. u

u 55 u february 25-march 10,2019 Corporate Strategy Business India u the magazine of the corporate world

and a localised strategy to meet con- sumer demand,” adds Bhattacharya. Transformative journey He was delivering his keynote address at the company’s Beyond Bosch India continues to strengthen its smart solutions portfolio Mobility 2.0 event (second edition) in beyond mobility Bengaluru, conducted in tandem with the core management team. The event showcased the company’s connected osch Ltd is strengthening solutions in verticals beyond the its smart solutions portfolio mobility space and highlighted how it Bbeyond mobility, in line with its was embracing digital solutions in sec- group strategy. Over the last few years, tors such as Industry 4.0, connected ‘beyond mobility’ solutions have transportation as also energy and gained over 35 per cent of the port- efficient solutions. folio and have contributed greatly to As a leading IoT company, Bosch the group’s overall turnover. The com- offers innovative solutions for smart pany, a leading supplier of technology homes, smart cities, connected mobil- and services in the areas of mobility ity, and connected manufacturing. It solutions, industrial technology, con- uses its expertise in sensor technol- sumer goods, and energy and build- ogy, software, and services, as well ing technology, is boosting its beyond as its own IoT cloud, to offer its cus- mobility business with smart solu- tomers connected, cross-domain tions, based on growing infrastructure solutions from a single source. “The and consumer demand in India. Bosch group’s strategic objective is to The Indian operation, led by its deliver innovations for a connected flagship Bosch Ltd, posted a turnover life,” explains Bhattacharya. “Bosch of R11,690 crore in 2017-18, registering improves quality of life worldwide, a growth of over 12 per cent. It clocked with products and services that are a pat of R1,464 crore (growth of 1.4 per innovative and spark enthusiasm. In cent ) during the period. On the global short, Bosch creates technology that is front, the group’s sales in 2017 rose to invented for life”. a new record of about €78 billion from €73.1 billion in 2016 – a growth of Boosting productivity 6.7 per cent. In India, a majority of A key component of Bosch’s beyond its revenue comes from the mobility mobility offerings is Industry 4.0 tech- solutions catering to the automotive Bhattacharya: improving quality of life nologies. Bosch is building smart fac- industry, even as, in the group’s over- tories with the focus on automation, all sales, mobility contributes about reforms, such as the Goods & Services digitalization, ai and IoT that are 65 per cent. Tax (g s t), the country is undergo- boosting productivity, quality and Over the last few years, Bosch has ing rapid transformation as well. safety. Bosch leverages a unique dual- been aggressively building up its capa- It is changing conventional busi- strategy of being a leading user and bility in Internet of Things (IoT) and ness areas to digital by transform- provider of Industry 4.0 solutions on Artificial Intelligence (ai) to trans- ing businesses beyond mobility and the market and is thus well-placed to form it into a technology-led entity. the company is all prepared to lever- build an ecosystem of business and For the company, Bengaluru has age these events by looking beyond technology partners to create afford- turned into one of the three major mobility solutions. able digital solutions for s m e s and locations for its Bosch Centre for Arti- Bosch’s initiatives in India are lead- customers. ficial Intelligence (bc a i) across three ing it into formations of new verticals “We are in the midst of a revolu- continents. with digital solutions in the core. The tion called connectivity, which is dis- “Our business is in a process of pro- company, be it in connected indus- ruptive and very fast,” says Andreas found transformation from a hardware try, energy efficiency, smart home Wolf, joint managing director, Bosch focus to models that concentrate more or other areas, is making big strides Ltd. “By 2020, about 90 per cent of the on services and data,” says Soumi- through successful collaboration of world’s population will be digitally tra Bhattacharya, managing director, its cross-divisional teams, engineer- linked with over 50 billion connected Bosch Ltd & president, Bosch Group, ing heritage and strong presence in devices”. India is creating an enabling India. “We have the capability to the Indian market. It is integrating ecosystem for smart manufacturing develop greenfield technology that can local talents into the development of fuelled by various government ini- power industries in a new-age man- solutions for the market. “The key to tiatives like ‘Make in India’, ‘Digital ner”. Fuelled by the impetus from the success will be partnership with local India’, ‘Start-up India’ and ‘Smart Cit- government of India amid structural players to drive connectivity forward ies’, among others, he adds.

u 56 u february 25-march 10,2019 Business India u the magazine of the corporate world Corporate Strategy

All this will boost manufacturing ‘Hardware Plus’ company and is reit- to be fit-for-the-future. Bosch India erating its commitment to India by has produced solutions Made in India offering personalised home appliances for India and the world – with 161 and digital services to suit the require- completed projects – and is a leading ments of every Indian household. provider as well as leading user. With Bosch Home Appliances will invest India’s strength in it – Bosch has the €100 million over the next 3-4 years largest development centre in India into personalised solutions, brand outside Germany and over 14,000 building, strengthening its technology r&d associates of the total 31,000 centre, and setting up a robust refrig- headcount in India – the country has erator factory to bring its best-in-class the right megatrends to support the German technology to India. With digital transformation of manufac- localised offerings in the household turing and the future is smart, con- appliances area, Bosch is transforming nected and exciting. itself into a Hardware Plus company, Bosch is gaining increased rele- says a company spokesperson. vance by implementing robotics and Bosch is also transforming the automation solutions that augment its face of the nation’s security systems smart manufacturing and connected by providing connected solutions. industry solutions in the country. The country’s population of more This is being achieved by developing than 1.3 billion people is constantly solutions that include collaborative on the move, metro stations and air- robots, IoT and machine learning. ports are crowded and require smart With its goal to make the “Factory security solutions with big data anal- of the future” a reality, Bosch India ysis to increase people’s safety. Bosch’s is partnering with o e m s across indus- security solutions, such as intelligent tries, and also implementing robot- cameras, public address systems and ics and automation solutions across Wolf: connectivity revolution other technologies, are helping cit- its manufacturing facilities, to deploy ies solve the urban transportation modern solutions that are improving Building Solutions (be b s) is offering and safety issue by providing seam- productivity and safety. services for commercial and indus- less digital platforms, says a company “We are constantly looking at trial facilities, with the objective of spokesperson. ways to link smart factories with vir- decreasing their energy consump- The company is accelerating the tual reality and digital solutions,” tion. The company also offers value digital transformation of enterprises says Hans Bangert, managing direc- added solutions for easy monitor- and developing solutions that are tor, Bosch Rexroth. “India is a great ing and controlling of energy con- designed for the usability and afford- market for these implementations as sumption. be b s is thus becoming the ability needs of Indian customers. Its we have the volumes and diversity of energy partner of choice as enterprises digital consultative arm is using the portfolios to achieve our vision of an are increasingly switching to more 3Ss – sensors, software and services automated future linked with IoT”. energy efficient methods of operating – to enhance existing products and Bosch Rexroth, a group company, their facilities. processes in all industry domains. is one of the world’s leading suppli- As the company operates under its ers of drive and control technologies, Commitment to India unique Lead User-Lead Provider strat- ensuring efficient, powerful and safe Bosch is providing affordable and loc- egy, the company perfects digital movement in machines and systems alised solutions for the Indian market solutions by first running them at its of any size. to improve working conditions, per- own plants and facilities, and then “Robotics and automation are formance and businesses of trades- partners with customers to enhance changing how we work and how we men, contractors, carpenters, artisans their products and processes with the live, and there is enormous poten- and other industrial and institutional help of digital technology and new- tial here to improve productivity, customers. Innovative cordless tech- age solutions. competitiveness, quality and safety,” nology, connected power tools and By collaborating and leveraging adds Bangert. “Bosch Rexroth India is connected work sites ultimately ben- synergies within and outside Bosch, excited to make a lasting impact here efit end customers. With other new combined with capabilities in inte- with its solutions that can be used business models, such as rental power grating hardware and software, the across Bosch facilities and in partner- tools and digital services for cus- company is well on its way on a trans- ship with external industry players”. tomer support, channel partners and formative journey to become a lead- Through its seven years of success- sales force, the company is boosting ing service provider in the age of fully enabling customers to achieve construction industry’s growth and digitalisation and automation. their sustainability goals and reduc- employment. u ARBIND GUPTA ing energy costs, Bosch Energy and The company is becoming a [email protected]

u 57 u february 25-march 10,2019 Automobiles Business India u the magazine of the corporate world Rough road rider

Tata Motors posts a R27,000 crore loss in a single quarter. Can it emerge stronger from the storm?

ast fortnight automobile and between Chery Automobile and Jag- truck manufacturer Tata Motors uar Land Rover. Lannounced its largest ever quar- Sales, however, have slowed down terly loss of R26,961 crore, impacted by in China, but partially offset by a a non-cash asset impairment at its sub- pickup in sales in North America and sidiary Jaguar amounting to R27,838 the UK. For the third quarter, world- crore. “We are announcing a non- wide retail sales stood at 144,602 vehi- cash exceptional charge to reduce the cles, down 6.4 per cent year-on-year. book value of our capitalised invest- The company’s sales in Europe were ments,” Said Ralph Speth, chief execu- up slightly, despite an 8 per cent drop tive officer, Jaguar Land Rover. in the overall market. Against uncer- Capitalisation, in accounting, is tainties regarding Britain’s exit from when the costs to acquire an asset the EU where Tata Motors’ subsidiary are expensed over the life of that Jaguar Land Rover is based, as well as a asset rather than in the period it was 4,500 employees reduction across the incurred. It is an accounting rule used global workforce of Jaguar Land Rover, by capital-intensive companies, such can Tata Motors get back on track? as manufacturing or construction, The global automobile industry is where depreciation can be a large por- undergoing a structural shift due to tion of total expenses. But given the technology-led business and mar- muted demand scenario and the asso- ket disruption, evolving consumer ciated impact on the financials, Tata preferences, market cyclicality, reg- Motors has said that the value of Jag- ulatory overhauls and geopolitical uar Land Rover’s capitalised invest- uncertainty. Moreover, substantial ments had to be adjusted down. doubt prevails over the political and Disruptions in the auto indus- economic future of the UK and the try have necessitated a review of Tata legal structure applicable to compa- for Jaguar Land Rover’s research and Motors’ product development cost nies that have a business presence in product development. capitalisation policy. Tata Motors the country. Tata Motors has said that Depending on the outcome of the had earlier reviewed its tangible and it on track to launch an electric vehicle negotiations, the UK could lose access intangible assets to ensure a “fit for that can travel up to 200-250 kms per to the single EU market and EU cus- future” strategy, and taken a charge of trip in less than two years. toms area and to the global trade deals R1,641.38 crore in fiscal year 2018. All negotiated by the European Union on of this has reflected in the share price Brexit bomb behalf of its members. A decline in that slid to R140 a share, with a mar- It is perhaps, the Brexit uncertainty trade could affect the attractiveness of ket capitalisation under R50,000 crore, that looms large over the company. the United Kingdom as a global invest- in spite of being one of India’s largest Jaguar Land Rover, which accounts for ment centre and, as a result, could companies that owns premium brands the majority of Tata Motors’ earnings, have a detrimental impact on the level overseas. The share price peaked has a production bias to the UK despite of investment in British companies. at R600 apiece in September 2016. a geographic diversification in its sales The uncertainty concerning the terms Jaguar Land Rover is Britain’s larg- mix. “Trade barriers and logistic issues of Brexit could also have a negative est automobile company engaged in arising upon a disorderly Brexit could impact on the growth of the UK econ- designing, manufacturing and sell- have an impact on Jaguar Land Rov- omy and cause greater volatility in the ing of premium cars. The two iconic er’s competitive positioning, and lead British pound against foreign curren- brands of the company are Jaguar, to significantly lower sales and prof- cies in which Jaguar Land Rover con- which includes a portfolio of sedans, itability and higher working-capital ducts business. Moreover, Jaguar Land sports cars and Sport-Utility Vehicles needs,” says an India Ratings report. Rover won’t be able to hire and fire (su vs), and Land Rover, with a range of Care Ratings too has downgraded the personnel from all over the EU like it all-terrain vehicles. Jaguar Land Rover company’s credit rating, citing deteri- could prior to Brexit. made its mark in the Chinese automo- oration in Jaguar Land Rover perfor- There also exists uncertainty with tive market with Chery Jaguar Land mance and increase in leverage due to respect to the laws and regulations Rover Automotive (c j l r), a 50:50 JV ongoing capital expenditure planned that will apply as the UK determines

u 58 u february 25-march 10,2019 Business India u the magazine of the corporate world Automobiles

which European Union-derived laws Aston Martin, which operates within independently with limited inputs to replace or replicate. In particular, similar segments, listed in October from India. So far the learnings of Jag- changes in taxes, tariffs and other fis- 2018 on the London Stock Exchange uar Land Rover had not transferred to cal policies could have an impact on at £19 a share, valuing the company at Tata Motors, except for the recently Jaguar Land Rover business; 22 per £4.33 billion. Aston Martin makes only launched Tata Harrier. Tata’s flagship cent of retail sales volume in fiscal year 5,000 sports cars a year. su v, the Harrier, is the brand’s firstsu v 2018 was to customers based in the in a while. It is based on o m e g a -a rc European Union (excluding the UK) Win some, lose some architecture, a derivative of the Land and a substantial portion of its suppli- In September 2018, Volvo Cars, owned Rover Discovery Sport’s D8 platform. ers are situated there. by China’s Geely, said it had no plans The company’s c e o and m d Guenter Tata Motors acquired Jaguar Land for a potential stock market listing. But Butschek has said that he is pleased Rover from Ford Motor Company for it had for sometime been working on with the turnaround exercise under- $2.3 billion in 2008. In that year, Jag- an initial public offering that valued way at the company over the past uar Land Rover produced 65,000 cars. the company at $16 billion to $30 bil- three years. Through quality and ser- In 10 years unit sales have increased lion. Volvo produced about 571,000 vice improvements and cost optimisa- threefold to over 600,000 units, and units in 2017. Both deals are indicative tions. Slowing sales in China coupled revenues have grown five-fold in as of what Jaguar Land Rover can be val- with a shift in mobility requires con- many years (the Tata Motors group ued at should it be listed in the future. tinuous investments which might or cumulatively sells over 100,000 units a For Tata Motors, up till now, Jag- might not pay off in the long run. And month). The manufacturing footprint uar Land Rover had defied the nor- trade disruptions due to Brexit will has expanded to UK, China, Brazil and mal pattern of the parent company continue to affect Jaguar Land Rover. Slovakia, and employment has trebled making money and the overseas com- But for the share price to rise again, to over 43,000. pany losing money. This is true in the investors will continue to keep an eye Jaguar Land Rover is a premium case of Indian Hotel’s overseas acqui- out on sales and profits. European brand that is a 100 per cent sitions or that of Tata Steel. Moreover, u RYAN MAXIM RODRIGUES owned subsidiary of Tata Motors. Rival Jaguar Land Rover seems to be run [email protected]

u 59 u february 25-march 10,2019 Obituary Business India u the magazine of the corporate world

existence at that time were not able to do full justice to the industry’s needs. Losing a founder All the while, he sharpened his knowledge in the area of ipr (Intel- n Friday morning, as the news lectual Property Rights) and acted as spread that Dilip Shah, 77, one a spokesperson of the pharmaceutical Oof the most towering figures of industry both in India and abroad. As the Indian drug industry had passed India grew in stature as a supplier of away, one of the first thoughts to cross good quality generic pharmaceuticals everyone’s mind was: what will hap- in different industrialised countries, pen to the 4th India Pharmaceutical i pa continued to gain prominence on Forum scheduled in Mumbai on 26-27 the global stage. As recently as 12 Feb- February? The Forum is being hosted ruary, Shah urged the US Trade Rep- by the Indian Pharmaceutical Alli- resentative (u s t r) to remove India ance (i pa), which Shah had founded in from their watch list for medicines 2000, and currently serves as its Sec- and drugs. retary General. However, at the time While ipr has always been an area of this writing, the word is that the of prime importance for Shah as a Forum may not actually be cancelled, person, the i pa under his guidance but the curtain raiser scheduled to be and direction has become a formida- held on 26 February is not going to ble voice in other prickly issues such take place. Dilip Shah as spurious drugs. In an interesting For the longest part of his career, (1942-2019) move, the i pa has joined hands with Shah worked with Pfizer India, where Julio Ribeiro, the former director-gen- he rose to become a member of the eral of Punjab Police to run a continu- Board. In the later years, he was ef ing campaign against spurious drugs. already becoming known within his him to the corner office. While Shah With his help and the cooperation of company and pharmaceutical indus- himself rarely spoke about this, he set drug control authorities in different try as a whole for his contribution to up Vision Consulting in 1997 to pro- states, the problem of spurious drugs policy making and his close relations vide strategic consulting services to has started coming under control. with the Union government. “He pro- the pharmaceutical industry. Likewise, Shah has time and again vided important inputs to the govern- He founded the Indian Pharma- prodded the Indian drug manufac- ment on issues of pricing policy, and ceutical Alliance just three years later turers to improve the quality of their other significant matters,” says Kewal with Cipla, Ranbaxy, Wockhardt, products, without which he would say, Handa, his colleague at Pfizer, who Lupin and Dr Reddy’s in the belief that it was difficult to maintain their posi- went on to become the m d. the pharmaceutical industry bodies in tion in the international marketplace. Those were turbulent times for One of the long standing objectives of the pharmaceutical industry with Over his career the i pa Quality Forum has been to “be the 1996 Pharmaceutical Policy and • Member of the Expert Review the conduit of change in the indus- resultant focus on drug price control, Committee of Access to Medicine (ATM) try, through leadership, knowledge as well as the numerous tussles over Index (www.atmindex.org) development and sharing of global intellectual property rights between • Member of the CPhI International best practices”. It is a tenet that Shah m n c s and Indian-origin drug man- Advisory Board has followed and prompted others to ufacturers. It was also a period when • Member of the Board of Advisors of follow throughout his five-decade old Indian companies began offering stiff Pharmabiz.com (Weekly) career in pharmaceuticals. competition with the generic (off-pat- • Member of Task Forces and Expert Most of all, Shah was always ent) medicines, not just in India, but Groups constituted by the Government approachable by media persons and in the developed markets as well. “He of India for accelerating growth of the others, always read with a quote was very knowledgeable about every- Indian pharmaceutical industry when an industry story was break- thing related to pharma and very • Chair of the International Generic ing and reporters were struggling to forthright in his very views. At times, Pharmaceutical Alliance (IGPA) for two meet their deadlines. “Most times, he he was quite fearless in his opinion terms (2005-07) and (2010-11) was the only one who would speak to about government intervention in cer- • Independent director on the Boards us,” said the editor of a pharmaceuti- tain issues,” says Daara Patel, secretary of Fresenius Kabi Oncology Ltd, Anuh cal industry journal in her WhatsApp general, Indian Drug Manufacturers Pharma Ltd, Shaily Engineering Plastics group. A colossus of the Indian indus- Association (i d m a). • CEO of Vision Consulting group try by any standards, he has ensured In fact, it is believed in some indus- • Member of the Board of Directors of a permanent place in the annals of try circles that Shah decided to quit Pfizer-India with whom he worked for pharmaceutical history. Pfizer in 1997 at the end of a three 30 years u SUMIT GHOSHAL decade-plus career when Handa beat [email protected]

u 60 u february 25-march 10,2019 Business India u the magazine of the corporate world Automobiles

present fabricated by local players with largely imported content like capacitor Alternate solutions and led acid batteries from China. For the first time, Mahindra Electric has Mahindra Electric launches two e-rickshaws introduced e-auto with lithium ion bat- teries and sees that it has an advantage, being a first mover in this segment. It is also believed that Bajaj Auto, the larg- est three-wheeler player in the passen- ger segment is also working on e-auto. “At Mahindra Electric, our aim is to bring about a monumental change in the way India moves by enabling more ev products on the road through our +m e technology solutions,” says Mahesh Babu, c e o, Mahindra Elec- tric. “Reiterating our strong faith in evs, we have now invested in technol- ogies that are core to evs and have set up manufacturing of battery packs, motors, power electronics, etc, in our new facility at Bengaluru.” The com- pany recently signed an MoU with Three Wheels United, under which, Mahindra Electric and t w u will work ith air pollution increasing there are 600 people working in the together to accelerate the adoption of uncontrollably in all metro plant and the new facility will create electric three-wheelers in India. This Wcities, major automotive additional employment for 200 people. will include the identification and manufacturers are working on alter- “evs will define the future of mobil- financing facility for auto drivers, so nate mobility solutions. One of the ity – shared, affordable and accessible,” that 2,000 Mahindra Treos are rolled best options currently available is to says Pawan Goenka, m d, Mahindra & out across the country, by next year. produce more Electric Vehicles (evs). Mahindra and chairman, Mahindra The new three-wheelers offer ‘best- The government of India is also push- Electric. “evs are well-poised to make in-class’ comfort for passengers, with ing hard and has set the target for this happen. India can be the hub for one of the most spacious interiors automakers to go electric by 2030. the world for manufacture and export in the segment and for the driver Mahindra Electric, a leader in evs of evs. And we have all necessary through its clutch-less, noiseless and has products already available in the technologies.” vibration free drive, thereby reducing market – e2oPlus hatch, the eVerito The Treo is a modest three-wheeler the overall fatigue of the journey. The sedan and the eSupro mini-van and with potential to redefine last mile con- other highlights of these two mod- panel vans. Two more evs joined in its nectivity in India. Currently, there are els are: low running cost of 50 paise portfolio recently, the Treo and Treo 4 million three-wheelers plying on the per km, zero maintenance of battery, Yari – the company’s first li-ion elec- roads, and 50,000 sold every month. quick charging and good support by tric three-wheelers developed in India. The company strongly believes that the Mahindra Electric service team. With an investment of R100 crore, the there is a potential in the segment, even The vehicles will be available at select company also launched its first electric if half of them convert into electric dealerships across Bengaluru and technology manufacturing hub in Ben- three-wheelers. Fully designed, devel- Hyderabad and later in other cities in galuru, to design, develop and man- oped and manufactured at the Benga- a phased manner. Treo Yari and Treo ufacture all types of evs in the new luru plant, Mahindra is committed to are priced R1.36 lakh and R2.22 lakh facility. Under the Mahindra Electric electric mobility and wants to touch (ex-showroom Bengaluru). brand, the new facility will manufac- every segment in evs and working on The success of e vs in India depends ture battery packs, power electronics mobility solutions for both commercial on the availability of proper infrastruc- and motor assembly which are inte- and personal use. ture to set up charging stations by gov- gral part of an electric power train. The ernment, which will boost sales and help plant uses global standards of manufac- Still evolving customers to go for e vs . Subsidies from turing processes and will increase the There are other players like Lohia Auto, the government and financing options manufacturing capacity to 25,000 units Okinawa and t vs Motors in this seg- from banks with zero-interest rate (cur- per annum. So far, the company has ment. however, the electric three- rently banks are reluctant to provide invested R500 crore in its evs business wheeler market is still evolving. Most of loans) will further fuel the growth. and is planning to invest another R500 them are used for last mile connectivity u S.M. BOOTHEM crore for future expansion. currently, and feeder routes. The vehicles are at [email protected]

u 61 u JANUARY 28-february 10, 2019 Guest Column Business India u the magazine of the corporate world Opening the private-finance gusher

With public funding of infrastructure about to hit natural limits, it’s time for private investment

he past couple of years have seen an unsus- is constrained. For example, development of high- tainable development in the India Build-Out ways, airports, ports and renewables under ppp has Tstory: the government doing the heavy lift- wrought a dimension change in citizen facilita- ing in terms of infrastructure investments. Those tion. In addition, there is increased accountability efforts aren’t enough, because the money required compared with the public sector, where band-aid to create essential infrastructure remains a gar- solutions are the idiom of problem-solving. ppps gantuan R55 lakh crore in the five fiscals through have done well to restore trust in public utilities by 2022, estimates crisil. ensuring both, service delivery of reasonable stan- This, even as the share of private investments VIVEK SHARMA dards, and sustainability. in infrastructure drops to a 10-year low of ~25 per India thus needs deployment of a wider range cent in 2017-18 – or down ~1200 basis points from of ppp models, including asset monetisation and the halcyon decade between fiscals 2008 and 2017. investment-light structures that reflect sector-spe- The goings-on are reflected well in the scores of crisil InfraInvex, India’s first investability index. Poor Weak Stable Mature The highways sector saw the biggest rise in c r i- Power 8.1 sil InfraInvex score – from 6.9 in 2017 to 7.4 in Transmission 7.9 2018 – because of revived private interest under the 6.9 Highways hybrid annuity model (h a m) and successful debut 7.4 of asset monetisation. The scores of power trans- 7 mission and renewables, last year’s top sectors, Renewables 6.8 declined, while ports and airports saw improve- 6.6 ment. They remain attractive, but were affected Ports 6.7 by high suo motu allocations to the public sector 6.1 in the former, and policy and pricing headwinds Airports in the latter. However, conventional generation, 6.4 power distribution and urban infrastructure con- Power 5.4 tinue to lag. distribution 5.6 5 Railways Infra Invex: 2018 vs 2017 5 Asset monetisation is a win-win: 4.9 Thermal A sustained push to monetisation of operational Generation 5.1 assets can augment resources for higher pub- 2017 4.5 Urban 2018 lic spending, given the continued reluctance of 4.6 the private sector to take on green-field risk. But this would require recalibration of public private partnership (ppp) models and it’s time to cific nuances, recalibrate risk-sharing, and redraw facilitate that. ppp contracts to broad-base them beyond the power Done effectively, asset monetisation can help and transport sectors. raise ~Rs3 lakh crore in just highways, power trans- mission and airports over three years, according to The concomitant criticality of capacity-building: a calculation by crisil. States, cumulatively, could Which brings us to another huge dearth – capac- have similar potential. ity, sans which, there is little execution. That’s Also, it’s time to move away from the conven- why equal focus must be on capacity building in tional build-operate-transfer models to annuity areas of lack. This can be done by creating a bank- and investment-light performance contracts. That able pipeline of strategic projects worth $100-150 will need reworking both the risk-sharing math billion annually in such areas. and contracts by including performance metrics That, in turn, will require developing special- and flexibility to handle changes and exits. ist capabilities, ring-fenced budgets, empanelment and hiring of experts as advisors, and best-in-class The importance of private investments: diligence ecosystem. Creating a 3P think-tank, as Anecdotal evidence says private sector participa- The author is senior recommended by the Vijay Kelkar Committee long tion in infrastructure delivery helps deliver tangi- director, cr i si l back, would be timely here. ble cascading benefits if government wherewithal Infrastructure Advisory Another way to release capacity is by reviving

u 62 u february 25-march 10,2019 Business India u the magazine of the corporate world Guest Column

stalled projects by nursing private developers and financial institutions back to health. Here, build- airports and reducing procedural delays. ing certainty and capacity to implement the Insol- Power distribution: Needs better governance and vency & Bankruptcy Code is crucial. stepping up on technology to improve the health of discoms. Also, it’s time for privatisation and Sector-wise facilitations new ppp models. While the drags are by now well-known, here’s a Thermal power generation: look at what can be done to improve investability Needs competitively bid p pa s, centralised power in some key infrastructure sectors: procurement and equitable distribution of fuel. Power transmission: Railways: Needs the creation of a pipeline of projects with Needs faster progress on ppps, along with an open bidding. improvement in operating ratio. Roads and highways: Urban: Needs regulatory separation and addressing of Needs institutional strengthening, revenue land acquisition issues. enhancement measures, and faster execution. Renewables: The spending boom of the early part of this Safeguard duty has last a long shadow. Work- decade was overdone and ricocheted on the pri- arounds are now necessary. vate sector such that they turned shy twice over Ports: and yet to dip toes again in a meaningful way. It’s Needs rehaul of the Tariff Authority for Major Ports a no-brainer that getting private monies interested, regime and implementation of the new Major Port to crowd-in, as it were, will require the establish- Authorities Bill. ment of win-win ecosystems where risk-taking has Airports: proportionate rewards. That can also change the Needs sharper focus on development of smaller jobless growth narrative. u

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Please mail thisu 63 coupon u to: Mittal Chambers,fe 9thbruary Floor, Nariman25-march Point, 10,2019 Mumbai-400 021. Telefax: 22820348 / 22820619. Email: [email protected] Warehousing Business India u the magazine of the corporate world

steel billets and ingots over the next 3-5 months. We have a database of 300 Making the right call odd customers, who are looking to uti- lise our services,” discloses Sabhar- SLCM plans to consolidate the fragmented agri-warehousing market wal. He does not think he has to make any changes to the existing infrastruc- ture to allow steel warehousing. “If I n a country like India, where over am handling wheat for a location and 58 per cent of the rural households in the same location there is demand Idepend on agriculture as a princi- for steel, the artificial intelligence ai ( ) pal means of livelihood, every farmer system can handle the steel without becomes a potential customer for agri- changing anything in the warehouse,” solutions. The challenge, however, is he adds. Sabharwal plans to consoli- to devise a business model that taps date the fragmented agri-warehousing into this potential. And that is what market and add about 2,000 new ware- Delhi-based agri-warehousing solu- houses to its fold to double its capacity, tions provider, Sohan Lal Commod- in next 18 months. ity Management (slc m), has managed to devise through an asset-light model Agri financing and its expertise in scientific man- Currently, most of the warehouses do agement of warehouses, wherein, not have scientific warehousing man- irrespective of warehouse condition, agement system and hence are unable it has resulted in the reduction of to scale up their operations. Some of post-harvest losses from 10 per cent to a the players want to quit the industry as mere 0.5 per cent. the demand for scientifically managed Today, slc m has handled a vari- Sabharwal: unique model warehouses is increasing. “We intend ety of 890 commodities globally. This to consolidate this market,” informs includes cotton, barley, bajra, castor agnostic to infrastructure. We have Sabharwal. “We are talking for several seeds, wheat, pulses, maize, spices and time and again proved that through a such players. These smaller warehouses aloe vera, to name a few. It manages a distinguished mindset, we can address include standalone facilities, as well as technology-enabled network of more the concerns of the sector.” In this, those aligned with the exchanges”. than 2,863 warehouses and 19 cold slc m has brought a positive and sci- slc m also sees collateral manage- storages pan India, with a total space of entific change in the agri-warehousing ment demand coming from financial 48.93 million sq ft and throughput of scenario of India. institutions like banks. Agri-financing more than 686.60 million tonnes. Put simply, slc m has cracked the banks usually outsource the manage- “Ours is a unique model, which code of warehousing management ment of their collateral to third-party works on quality warehousing man- through technology. After eight years managers. “In the past two months, agement, which uses our proprietary of research, slc m has ensured that it several banks have approached slc m ‘ag r i r e ac h ’ software, complemented takes merely 48 hours to step in and seeking collateral management services by services like farm credit undertaken commence warehousing operations, in over 100 locations,” says Namrata by Kissandhan, acquired to provide irrespective of infrastructure, location Suri, c fo, slc m. “We also expect to be agri- credit to farmers,” explains Sand- and commodity. “The company is con- managing as many as 500 locations in eep Sabharwal, c e o, slc m group. “ag r i stantly updating and evolving the ag r i the next one-and-a-half quarter. Each r e ac h combines a series of crucial pro- r e ac h software to make it more effi- location would have an average capac- cesses, audits and real-time tracking of cient,” informs Joydeep Saha, vice-pres- ity of 1,200 tonnes”. facilities to fetch error-free results and ident, risk & policy, slc m. “It has a l ready Agri-financing in India is still at a minimise risk of crop damage. It uses filed for a patent four years back and is nascent stage and has not yet evolved techniques like geo-fencing, real-time awaiting approval. With ag r i r e ac h we to cover small and marginal farmers. tracking and bar-coded storage receipts are all set to become the code running It does not give farmers and agri-in- to avoid thefts and also a 79 internal underneath multiple industries. We are termediaries the benefit of using crop audit along with a ‘Maker & Checker’ also getting request from other coun- as collateral delinked with their credit policy at each level,” Sabharwal adds. tries to license this software.” worthiness. Today, credit is abundantly “In short, it is the culmination of Encouraged by customer demand to available but the terms of lending do defined processes, deviation-free exe- manage their collateral in not just agri, not take the agriculture business into cution and comprehensive monitor- but also in other products like steel, consideration. Agri-intermediaries do ing,” explains Ankur Jaipuria, chief slc m is now diversifying beyond the not have a balance sheet but they do business officer, warehousing, slc m. management of agri goods to provide have standing crop and/or harvested “We use vacant infrastructure and warehousing services for steel ingots produce. even open spaces as warehouses as and billets end of this year. “We are To address this situation, in 2006, our proprietary technology operates hoping to handle 300,000 tonnes of slcm diversified from being an agri-

u 64 u february 25-march 10,2019 Business India u the magazine of the corporate world Warehousing warehousing company and acquired Kissandhan – India’s first agri-n bfc which, since commercialisation in March 2014, has played a critical role in providing an enabling ecosystem for farmers and making agriculture a safe and viable profession for them. “This move, apart from being the busi- ness model, has given slcm a signifi- cant edge over other firms to address the challenges of the farming com- munity but in a piecemeal manner,” says Sabharwal. Given slcm’s exper- tise in crop management, it expects to be able to provide loans purely on the basis of standing crops as collat- eral. In a short span of time the com- pany has disbursed R1,651.88 crore in exercise at the warehouses as per its rat- India and Myanmar”. loans through Kissandhan and ser- ing system and make arrangements for “Although servicing agriculture is viced over 40,733 storage receipts at the display of commodity balances and a difficult business, Creation invested 217 warehouses. price information necessary. The rating in slc m because of its high quality of slc m has also launched Kissandhan system will be recognised for borrow- operations, systems and intellectual App, which is the first mobile platform ing from the banks and other lending property. This is all well-documented in the agri-warehousing industry for institutions and it will act as a yardstick and replicated via ag r i r e ac h , which is farmers and commodity traders. The for the purposes of trading and delivery a real national treasure for India in my unique feature of this mobile applica- on commodity exchange. opinion”, discloses Ken Vander Weele, tion is that it enables distributors to do co-founder & partner, Creation Invest- e-k yc using Aadhar, thereby enabling Funding rounds ments Capital Management, llc. seamless end-to-end customer on- Financially speaking, slc m posted con- “slc m has built a unique busi- boarding. The app is currently available solidated revenues of R3,569.37 crore, ness proposition for agricultural value on Google Play. with a profit after tax of R19.72 crore chains, driving financial inclusion The objective of the mobile app is to in 2017-18. From 2012-13 to 2017-18, through its innovative technology enable farmers and commodity traders slc m has registered 151 per cent c ag r products, and we are convinced that to take informed decisions by accessing in operating profit e ( b i d ta) and a 253 slc m has the capability of not only customised agricultural information per cent c ag r in pat. serving the Indian agri-environment, related to their need. This applica- Sabharwal has had seven rounds but also other major emerging mar- tion provides access to information on of funding and raised R370 crore. The kets,” says Sarah Djari, investment latest mandi prices, weather forecast, sources include Nexus Venture Part- director, ResponsAbility Investments agricultural advisory, best practices tips ner (May 2010), Mayfield (March 2011), ag , which as a player in the impact related to agriculture, etc. It also acts Everstone Capital & Emerging India investment field for emerging econ- as a buyer and seller platform and pro- Fund (a fund under ic ic i Bank: Novem- omies, has for the past 15 years been vides all agriculture related news, gov- ber 2012) and Creation Investments investing in businesses across the globe ernment schemes, agriculture alerts Capital Management (September 2015). which combined market-based returns and agriculture advisories in English It also got a joint investment of $20 mil- with a clear development impact. and Hindi for the convenience of the lion from Incofin Investment Manage- “In the next 4-5 years, we do not farmers. “It’s a win-win, as farmers and ment of Belgium and ResponsAbility plan to expand to other geographies. traders get comprehensive information Investments ag of Switzerland in 2017. We would like to first stabilise our oper- through this app, which helps them get “slc m’s uniqueness lies in its inte- ations in one country and then only better price for their produce,” acknowl- grated approach towards agri value venture into another country,” informs edges Sabharwal. chain, top quality management team Sabharwal. slc m’s wholly-owned sub- He has entered into an agreement and best in class governance structure,” sidiary started operations in Myanmar with the bse for supporting its much- observes Adit ya Bhandari, partner & co- in April 2014 to engage in warehousing awaited launch of agri-commodities regional director, Asia, Incofin Invest- and other allied services. Sabharwal trading. Under the agreement, slc m ment Management. “We are excited now intends to replicate its business shall provide warehousing, assaying about the innovation that slc m is cre- model in other asean countries like services, crop management services to ating in the post-harvest agri space, Vietnam, Laos and Cambodia, as also bse for the purpose of storage of vari- especially with its patented technology African countries, where it is exploring ous food grains, pulses and other agro- and unique n bfc proposition. We hope opportunities currently. based commodities at various places in to assist the team in unlocking value u LANCELOT JOSEPH India. slc m will also carry out a rating from the financing verticals, both in [email protected]

u 65 u february 25-march 10,2019 Luxury Business India u the magazine of the corporate world

natural and 100 per cent vegetarian. A perfect beauty formula The brand claims to use no artificial colours, fragrance, petrochemicals, parabens, urea, propylene glycol or Understated beauty brand Kama Ayurveda looks to scale up fast other harmful additives. “Our products are our pride and joy and it is hearten- ing to find more and more consumers re you a carrier of Bringadi? Authentic ayurveda discovering that Ayurveda is not only Unusual as it may sound, many Kama Ayurveda plays strongly on natural, gentle and safe but also truly Aresidents of Delhi or Mum- its u s p – totally natural and tradi- works.” It associated with Arya Vaidya bai would testify that Bringadi hair tion-based. Authenticity has played a Pharmacy (av p ), Coimbatore, to source oil treatment is easily one of the major role in getting Kama Ayurveda ingredients for its products. most requested ‘gifts’, especially from to where it is today, with 27 own bou- Sahni, along with partners Rajshree India’s vast hinterlands! Word of the tiques in 10 cities across India, besides Pathy, Vikram Goyal and Dave Chang, efficacy of this Kama Ayurveda’s hair being stocked in some of India’s best- wanted to promote the message of oil has ‘gone viral’, with those in love known lifestyle stores such as Good true ayurveda, universally. “We built a with their tresses, or indeed, want to Earth and Taj Khazana among others. brand and a business around our con- see them regrow, rushing in to order. “We offer pure, holistic and effica- viction and faith in bringing ayurveda The brand unsurprisingly lists it as its cious treatments for beauty and well- to the world and the world in turn bestseller. ness based on authentic Ayurvedic Kama Ayurveda was launched in prescriptions,” says Sahni. “The key 2002, though co-founder Vivek Sahni here is ‘authentic’ – pure and classical still regards it as a bit of a start-up. Its ayurveda is at the heart of everything growth rate certainly puts it closer to we do. Our purpose is to bring authen- the start-up range. It has recorded 600 tic ayurveda to the world through per cent growth in the last four years, effective formulations as well as ele- says Sahni. Given its much gushed-af- gant and contemporary packaging. We ter products, it comes as a fair revela- focus on creating a complete solution tion that Kama Ayurveda is perhaps not that treats not just the symptoms but the best known in its set of wellness/ also the cause – this is in keeping with cosmetics brands. Kama Ayurveda is our deep roots in authentic ayurvedic now looking to correct that impres- prescriptions that are time-tested.” sion, and expand rapidly. This means the treatments are all

u 66 u february 25-march 10,2019 Business India u the magazine of the corporate world Luxury loved our products,” stresses Sahni. Reluctant to share turnover figures, To make any brand successful, it is Sahni says that due to increased aware- imperative to gather consumer insights ness about the category, the maximum to understand market trends, points sales come from the larger metros. “But out Sahni. “Our marketing and r&d the smaller Tier 2 cities too, have been teams continuously try to assess the picking pace and growing fast.” gaps in the market place and brain- storm on solutions that are inven- Not just skin deep tive and authentic at the same time.” Today, the product ranges across seven He cites the example of the brand’s major categories – skin, hair, bath & Natural Sunscreen, launched in June body, mother & child, men’s care, gift- 2017. “It took us five years of intensive ing & wellness and are priced between research to create this authentic prod- look into factors such as quality, effi- R225 and R2,295. top sellers such uct that combines all-mineral, broad cacy and purity. It is a good time to be as Bringadi Intensive Hair Treatment, spectrum spf 21 actives. We work in the business.” Kumkumadi Miraculous Beauty Fluid closely with ayurvedic doctors, which and Extra Virgin Organic Coconut Oil help in creating products which our BTL years form part of the flagship range. market research shows are missing.” Kama Ayurveda was launched with Kama’s stores are destinations in Competition is increasingly fierce a rather small line of nine products. themselves, perhaps not surprising in the herbal cosmetic industry as The idea of launching an authentic given that Sahni, an alumnus of Par- Indians seek more ‘natural’ cosmetics Ayurvedic beauty brand came to us sons School of Design, New York, options. Indeed, authenticity is what after I worked closely with natural per- started with a graphic design com- Sahni stresses is the differentiator for sonal care products while spearhead- pany! Design has played a crucial role the brand in an increasingly crowded ing a packaging project for the Khadi in the brand’s growth story. As the ayurveda-based (state-owned k vic) brand, recollects products were nicely designed, we were wellness market Sahni. “While working on this proj- able to put them up at the Park hotels, in India. “Though ect, we worked closely with Indian The Oberoi hotels and such places, many brands cooperatives and this project strength- says Sahni. “The more you see a prod- today draw on ened my belief that ayurveda and a uct present in such places, it comes ayurvedic ingre- return to traditional Indian values across as a luxury brand. We wanted dients, processes and crafts is something that held great to hammer this thought into and even take power for the modern-day the customers’ mind. inspiration from consumer.” Customer experi- ayurvedic philos- The first brand store ence theoretically ophy, we create came only a decade later, is to perceive and the complete nat- in Delhi’s tony Khan receive information ural remedy,” he Market. “As we developed through five senses, says. products over the years, at our stores we try and In a report published late in 2017, we had a large enough stimulate at least four of a s s o c h a m and research agency m r s s portfolio to open our these.” India estimated the herbal cosmetic first flagship store,” says The brand raised an industry to grow at a rate of 12 per Sahni, even as leading undisclosed amount from cent in India annually till 2035. Shri- lifestyle stores and spas Lighthouse Emerging India pad Naik, Union minister of state, stocked Kama ranges. Investors in 2014. The funds ay u s h , estimated a three-fold increase The stores are a haven are used for new stores, in market size of ayurvedic products for the typical Kama Ayurveda con- expansions and increasing our retail to $8 billion by 2022. While precise sumers, largely women. “The typi- footprint, which is the focus of expan- market shares are not available, lead- cal Kama consumer is a woman of sion in the short term, says Sahni. ing ayurveda based cosmetics brands 25 years of age and above, discerning Besides a growing domestic mar- include Himalaya Herbals, Forest about her lifestyle choices, well-ed- ket, Japan, the US and Europe are the Essentials, Ayur and Lotus Herbals ucated and well-travelled, who con- biggest international markets for the among others. sciously chooses holistic alternatives brand. “While looking to continue “Competition is always good, it is in her day to day life, looks for safe, increasing our retail footprint, our incredible and fascinating how fast gentle and highly effective remedies focus remains on listening closely to the category is growing,” says Sahni. for their beauty and wellness needs our consumers, finding new ways to “This shows the growing awareness who are also conscious about reducing delight them and continuing to be a of the consumers about using natural, chemical or non-natural elements in strong voice in taking pure and authen- ayurvedic products. More the choices, their lives,” reveals Sahni. The online tic ayurveda out into the world.” more informed they are, the increas- consumer is younger and diverse, from u SUMAN TARAFDAR ing awareness is thus urging them to the ages of 18-25. [email protected]

u 67 u february 25-march 10,2019 Guest Column Business India u the magazine of the corporate world High stakes

For everyone in the skilling ecosystem

ndia’s unique demographic reality – 62 per cent skilling and placement overall. Strategic placements of the population is in the working age group – closer to home, as far as possible, can be planned Iposes an unprecedented challenge: skilling the through accurate mapping of job placements along millions who are ready to join the workforce every with some forward thinking from industries to set year and providing them employment. Accord- up factories closer to the supply of their workforce. ing to the World Bank, India needs to create 8 mil- Third, it is imperative for the youth to ‘own’ their lion jobs every year just to keep employment rates skilling and job seeking journey. To achieve this, it constant. is essential to embed the concept of beneficiary co- Cognizant of this urgency, the government has SHAIFALIKA PANDA ownership in all ‘free’ training programmes. There set up several skilling programmes at national and is significant evidence from the development field state levels. Ironically, however, there is growing that shows community/beneficiary participation evidence that government Industrial Training Insti- leads to the success of programs which are sustain- tutes (itis) and skill schemes are undersubscribed able. These learnings should be adopted into the and mobilising youth in these schemes poses a skilling framework. Currently, none of the state- massive challenge. funded skill programmes allow for even a small par- This underutilisation is the first symptom that ticipation fee to be paid by the trainee or, for that the skilling ecosystem needs resetting in critical matter, a penalty if the trainee changes his or her areas. Furthermore, while the reasons behind the mind and opts out of the placement. A small, sym- lack of ‘pull’ need to be urgently investigated sys- bolic participation fee can go a long way in chang- tematically, for now, each stakeholder – govern- ing the perception of these schemes in the minds ment, skilling agencies, industry and the youth of young people, creating a sense of personal own- themselves – need to begin by changing the mind- ership and even evaluating, upfront, the long-term set towards skilling. commitment of participants. Take industry first. A skilled labour force is a pre- requisite for commercial viability. indian industry, ourth, state governments need to actively sup- therefore, needs to ‘own’ this manpower challenge Fport the incentivisation and communication and share responsibility with the government to efforts of skilling mobilisation. While certain sub- train employable high- qualit y talent. At the moment, sidies are imperative for some sections of the popu- only a few large companies follow the concept of in- lation, there is a growing trend of ad-hoc subsidies, house training. Industry should also consider pay- waivers, and freebies, especially during the election ing a placement fee for formally skilled employees cycle. This sends a mixed message to youth in that they hire from institutes and Project Implementa- it conveys there is no need to be self-sufficient and tion Agencies (pi a s), and also participate in offering strive for a sustainable livelihood which, in turn, high-quality training assistance, curriculum devel- impacts their appreciation of the importance of opment and placement opportunities to the relevant being skilled. It may be utopian to say so but the trained talent. Further, while dignity of labour can- state governments should be mindful of the coun- not be codified, creating a work environment where ter-productive impact of such subsidies and freebies youth, including those trained under short-term sec- which will affect skilling mobilisation efforts. tor skill council programmes, are compensated bet- finally, it is hard to distinguish a stakeholder ter than unskilled labour and treated as valuable from a beneficiary in the skilling ecosystem for assets is the need of the hour. the success of one depends on the other. A skilled Second, policymakers and skilling institutions youth is a potential employee of tomorrow and need to focus on both redesigning programmes trainer thereafter. Similarly, the quality of human that create industry-ready talent as well as address- resources will determine the growth of compa- ing the psychological impact of new placements on nies and thereby our nation. Over time, the gov- youth who leave home for the first time. Counsel- ernment’s finite resources will also have to balance ling and handholding are imperative at every stage the quality and volume of people it can train. We of the process from mobilisation to placements. Far- need to, now, collectively ensure that the skilling flung placements, especially in the big cities which framework and all related activities across the spec- have maximum demand for a skilled workforce, trum send an unambiguous message about the often come with a high cost of living and fewer sav- The author is Trustee importance of ownership and sustainability. Only ings to send home. This further adds to reducing and ce o, Bansidhar & then will India be able to benefit from our unique placement numbers and developing an aversion to Ila Panda Foundation demographic reality. u

u 68 u february 25-march 10,2019 Business India u the magazine of the corporate world Guest Column Team @Swamy39, naive or knave?

History is replete with numerous examples of many a do-gooder, either being thoroughly misled or turning rogue

r Subramaniam Swamy’s formidable team the Exchange in July 2013. Do you close down an has taken on many a powerful enemy, over exchange if there is a crisis, did the government Dthe years, with all guns blazing. They have close down pn b?” struck right chord amongst the befuddled public. “Then, n se was no match to n se l . But with his The list is too long and there is no point trying to interference, he ensured n se l started slipping. burnish their already stellar reputation as activists And then, in one shot, he killed what was consid- and crusaders; suffice to say that the statistics do ered among the finest examples ofM ake in India,” favour Swamy. said Swamy. The most recent one, where they have taken Chirag M. Shah “Jignesh Shah created great magic for India, on P. Chidambaram & Co, which has been aptly and created some of the finest exchanges across called C Company is a book recently authored by the world and what do we see, P.C. and his men Swamy’s acolyte one Sree Iyer, it deserves some hounded him out of those very exchanges. He was discussion. There can be no quarrel with Swamy’s thrice put in jail and yet, the judge said there was crusade against C Company and the recent suc- not a penny traced to him. How painful that can cesses have been widely and rightly cheered. But be for a creator of great exchanges, a creator of as a always happens, there will be some jobs,” said Swamy. unintended consequences. The recently Swamy is welcome to give a clean chit launched book C Company once again to Jignesh Shah. But had he paused to What is not makes a case as to how P. Chidambaram peruse the “Fit & Proper” order of the targeted Jignesh Shah of 63 Moons Tech- answered by either Forward Markets Commission, which nologies to favour the National Stock Swamy or Iyer: lists all the acts of Jignesh Shah and his Exchange. where did commodity lieutenants before the n se l scam sur- I was aghast to learn what Swamy and faced, he would not have rushed to Sree Iyer conveyed through their erudite stocks worth judgment. It would be worthwhile to comments. I must admit that I have some R6,000 crore highlight that two divisional benches of advantages while writing on this subject. disappear? the Hon’ble Bombay High Court as well I have been a markets professional for as a Bench of the Hon’ble Supreme Court nearly 25 years and have lost sizable per- did not grant an injunction on the “Fit sonal savings in the n se l scam. & Proper” order and actions initiated on “n se l was killed so that n se could survive, it the basis of the report. was one man operation,” Swamy, m p, told report- ers at a crowded press conference to launch a e are disappointed at the slow pace of prog- book, P Company: How Jignesh Shah became No1 Wress in the courts, however, we can say in Target of P Chidambaram, in the Indian capital on all humility that the courts have seen through the 5 March 2018. veil, which is likely to be lifted soon. “... so that n se could survive” is classic Swamy Swamy is being disingenuous when he hyperbole. Anyone interested in verifying the says that “... there was not a penny traced hollowness of this claim may check the daily to him”. Being such an accomplished lawyer him- turnover of the n se and all of Shah’s exchanges self, it confounds me that he’s quoting from a put together. Bail Order. “I have completed all my investigations into What is not answered by either Swamy or Iyer: the n se l payment crisis and seen all documents where did commodity stocks worth R6,000 crore related to the case and will file the case on the disappear? The c j of Bombay High Court had basis of the documents,” said the bjp m p, whose rightly quipped whilst hearing the writ petition, relentless campaign against corruption has caused “Did n se l keep the warehouse doors closed and discomfort to a host of politicians – mostly from the windows open?”, “Was there a tsunami that the Congress party – in India. Among his investi- made all stocks disappear?” gations were the 2G, National Herald case, Aircel- We wish Team Swamy all the very best in their Maxis and i n x . fight against P. Chidambaram. He has a quiver “The biggest mistake committed by the u pa The author is full of arrows to choose, but using Jignesh Shah government was to direct n se l to stop launching Advocate, Financial as a crutch, only exposes the sheer irony of any fresh contracts leading to an abrupt closure of Markets Veteran the matter. u

u 69 u february 25-march 10, 2019 Fashion Business India u the magazine of the corporate world

with a frothy splash of crystals. The The Lakme Fashion construction was extreme ‘with a scaf- Show 2019 fold-like inspiration’, while the Chikan- kari craft had long beloved and trusted pastels like yellow, ivory, rose and pow- der blue. The tucked, draped and folded skirts, asymmetric minis, embroidered yokes and sleeves for slinky gowns, the varia- tions on saris with beaded blouses and the floaty sari gowns were wonderful. The swirling cape over a pant suit and a pair of black and red gowns flashed by like flames of fire. Sleeves floated upward from shoulders, while jackets were worn with trousers. Bridal wear had heavy, embellished skirts with 3D appliqués with unusual blouses. At times, a discreet transparency added a cool mist. Menswear had glittering black tuxedos, with shimmering lapels, (Un)folding zip up tailcoats, a red biker’s jacket, bro- cade dinner jackets and pleated lapels grey study, with slashes of snow, brocades for lehengas. The show began and moulded shoulders. Then, there a feeling of silver rain. Towering with pale blue which darkened to a mys- was the beloved sherwani, sometimes Agirls dwarfed by a curly stairway terious black, then the dawn colours of de rigueur for weddings. to heaven. Twirls and yards of billow- pink followed by ecru, ivory and rich Helena Bajaj Larsen’s prints in swirl- ing curled fabric, silver glitter, cantile- brocades. The final unbelievably con- ing golds, reds, maroons were in beau- vered forms, long trains and the truly structed vibrant yellow, wired, curved tiful, (wearable!) creations. Her sense of gorgeous tent on top of which emerged gown was truly incredible. One won- style and colour is appealing, dramatic the poetry reader – a teller of tales, dered: how did he do this? Unfolding by and really gorgeous. a maker of magic and a creator of the Gaurav Gupta was a memorably grand Saris and dhotis, of course, never get unfolding drama. The stage was draped opening for the Lakmé Fashion Week wasted: they are handed down to daugh- in rivers of white and at the top stood Summer/Resort 2019. ters as heirlooms or to maids for rough this statuesque beauty reading words, A collection of dresses, pantsuits, use. Ultimately they are made into quilts, words and more words. She stood close ‘sari gowns’ and classical party wear pillow covers or curtains and finally to the high ceiling, while her huge were dappled with zardosi, Chikankari used as rough cloth or dusters. Waste is white gown, a tent really, covered most and hand-woven brocades. The embroi- not waste until you make it so. Several of the stage. Structure, greys, the ethe- dery, specially crafted as 3D flowers in designers had chosen to use waste mate- real city, a future built with whispers of delicate organza and soft georgette, rial and still give us wonderful fashion- silks and rain drips from the past. This blossomed all over the garments along able, wearable clothes and shoes. Cut could describe the ‘(Un)folding’: Gau- out pieces of cloth from designers were rav Gupta’s sensational show at The used by one, while another used wasted Royal Opera House which opened the but still good, old clothes. Lakmé Fashion Week Summer/Resort The Rig Veda-led ‘Aquesthetic’ by 2019. It had fantasy, exhilaration really, Ajay Kumar Singh offered silhou- along with drama, dance and design ettes that showed style, carefree flam- and the gorgeous Karan Johar and boyance with the colour of water and Tabu! Johar wore a rose coloured one- jewels: turquoise, emerald, coral, and button jacket with black lapels, corded white, with a hint of seashores. epaulets and black trousers. The spi- Yadvi Agarwal showed the designer ral staircase was like the beginning of a herself depicted in her inspiration: the grand ramp and it brimmed with poetry, parallel universe with who knows? words, dancers, and gowns that glittered Dark matter, anti-time? Her work was as Gaurav brought his expertise with about the upside down and the sur- origami folding and fluid cantilevered real, objects amalgamated into silhou- silhouettes. Amazing work! Far sim- ettes, using structured and moulding pler but somehow reassuring was Luc- eccentricity! knowi Chikankari for dresses in yellow, u SWAPNA VORA ‘Basanti’ for spring time and Banarasi [email protected]

u 70 u february 25-march 10,2019 Business India u the magazine of the corporate world Guest Column The golden key

Good governance based on law will open the door of opportunity for all citizens

ranchise does not guarantee good gover- Opposition. nance. The case of today’s government is an The magic lies in the constitutional spirit. Law Finstance in point. Modi had said during his will ensure prosperity and justice. Government will campaign in 2014 that he would give good gov- give the vision and remain humble. The judiciary ernance and got elected. Tragically, the recent and police will be 24 carat gold and keep all the bjp electoral reverse clearly shows that he has not flaws of business under check.I ndia will remain on given good governance. Nor, for that matter, did a par with China under a democratic label. even Nehru, Indira Gandhi and Vajpayee, during Law is the embodiment of democracy, not elec- their regimes. Franchise is political, good gover- g a n a p a t i tions. Capitalism will be fair exhibiting animal nance is evolutionary. This is universal law. Those RAMAKRISHNAN spirits for the enrichment of society. Law is the who pin their hopes on Rahul Gandhi are doomed magic wand that will unite capitalism and justice to frustration, because his party ruled for 10 years in a single social fabric. from 2004 to 2014 and did not do any good to India should be depoliticised and relegalised. voters either. Elections too will come under the constitution In clear contrast to India, Singapore did not boast and parties will see the light and behave hon- any claim to democracy, but had embraced capital- estly. Money will not be needed to get elected ism whole-heartedly since inception. Yet, it is a suc- only track record. Also, when people are rich, why cess story. So also is the case of Hong Kong. If only would they take money? Electoral victory will India had embraced capitalism, the country would depend on persuasive talent and administrative have been rich like Hong Kong or Singapore, with acumen. The politician will be a mentor to the zero corruption and zero poverty. Surging prosper- capitalist. His constituency will prosper by his ity would have given only minor rule to politics. extraordinary talent. No one knows who heads Singapore or Hong Kong, Capitalism will generate that kind of politics. but these countries are rich and clean. We have snuffed out honest and ideal politics. Franchise is an open invitation to corruption When law comes to the fore, capitalism and pol- and mediocrity. Recently Jack Ma said that he is a itics will become thick friends, reinforcing each member of the Communist party. Though China other to mutual benefit. has one party, it has built the nation on merit. India India has to get away from the tokenism of elec- bade good-bye to merit in 1947 and the results are tions and move to good governance. Modi has too obvious to see. Since 1991, India is doing well failed to give good governance. If Rahul sees the economically, but politically it remains stagnant. writing on the wall, he can rule the country all his There is a way to rejuvenate Indian politics to life without any elections. The money spent on make it corruption free, prosperous and just. And elections can be spent on education and health. that is to rejuvenate Indian politics to embrace Ernest Gellner’s conditions of liberty will be met capitalism wholeheartedly. As a first step, reduce and India will be the freest country in the world. public sector to zero level. Secondly, the Central The real path to freedom is law not electoral poli- government should not have more than six cab- tics. For India, election was a fatal illusion in 1947. inet ministers, as in the US and the UK. And the At least now, we should come out of it. total size of the Central bureaucracy should not If India attaches itself to the ideal of good gov- exceed 1,000 ias officers. This small government ernance, politics will become clean, with judi- can be run on 3 per cent g s t uniform. It will have ciary upholding the law. There will not be a single budget surplus. Economy will grow at 10 per cent case pending in the courts. Imagine how compa- at constant prices. Interest rates will come down nies and citizens can become productive and cre- to 3 per cent. ative, enjoying the freedom it will give. For this, At this tax and interest level and zero inflation, even the West is not the role model. India will every venture will be profitable, reducing non-per- be a role model for democracy and liberal order. forming assets to zero. Ease of doing business will Within a moral frame, India will flourish and will be pure heaven, leading to full, fuller and fullest show the path of political illumination and eco- employment. There will be no poverty at all. India nomic innovation. Politics will become a noble will look like Hong Kong and Singapore. There profession, providing good leadership, based on will be zero incentive for politics and parties will merit and nothing else. Good governance based merge into one or two. If the ruling party is abid- The author is director, on law is the golden key that will open the door to ing by the rule of law, there will be no need for an Governance Center opportunity for all citizens. u

u 71 u february 25-march 10,2019 Environment Business India u the magazine of the corporate world

The Wildlife Service awards were conferred on Rohit Choudhury, Imran Fighting a good war Siddiqui, Iho Mitapo, Govardhan Meena and Puja Mitra. Maitreya Suku- mar was bestowed the Young Natural- ist award and Nikita Pimple, the Green Teacher award. Described as a ‘determined cam- paigner, activist and committed envi- ronment protector’, Choudhury, who was born and bred in Bokakhat in Assam, has contributed hugely to his state’s rich and threatened biodiversity. The wildlife activist resorts to Right to Information Act (rt i) to protect the bio- diverse Kaziranga National Park, Manas National Park and many lesser-known protected areas. He wages his conser- vationist’s battle by gleaning informa- Isolated efforts towards conservation and community engagement tion through reams of case documents make their mark, slowly but surely and reports, and leverages it to buttress his case, as he did whilst working to put a halt to the unregulated dumping of n a country where its environment and associates from across India. The trash from Guwahati city at the peren- and wildlife are withering under a award categories were Lifetime Ser- nial freshwater lake of Deepor Beel. Irelentless onslaught, it is often left vice, Wildlife Service, Young Natural- to citizens to look beyond the govern- ist, and Green Teacher. Save tigers ment to try and pull the situation back The Lifetime award went to ‘bio-pi- Disregarding the threats he faces from from the brink. And, every year, the racy activist, food-sustainability advo- those he brings to task, Choudhury Sanctuary Wildlife Award, which was cate and change-maker’ Vandana Shiva, has countered the unlawful diver- constituted in 2000, recognises and who is ‘indisputably one of India’s most sion of the Beki river in the core of celebrates unsung heroes it calls the powerful voices for eco-feminism and the Manas National Park and similarly Earth Heroes, for their significant con- for the long overdue agri-environmen- opposed the destruction of prime ele- tribution to biodiversity conservation tal revolution’. Sixty-six-year-old Shiva phant habitats in the Kaziranga-Karbi- and community engagement. had in 1982 established the Research Anglong landscape by illegal mining. So it was this year, when an overtly Foundation for Science Technology He has besides petitioned the National supportive capacity audience at a Mum- and Ecology to reverse the ill-effects Green Tribunal (n g t) to address the bai venue cheered the eight awardees of India’s Green Revolution. A crusader issue of roadkills on n h37, where wild who were selected for making a differ- for sustainable agriculture and against animals frequently come under the ence through their committed activism the formidable purveyors of genetically wheels of speeding vehicles. and inspirational mission. “Each year, modified (g m) seeds, Shiva founded Siddiqui has devoted his life to tiger in the process of unearthing inspiring Navdanya in 1991 to work with farm- conservation, starting out by raising people who have been contributing to ers across the country to conserve the and selling poultry to fund his wild- protecting Planet Earth, our home, we diversity of native seeds and to pro- life obsession. He has served on the come across an incredibly diverse set of mote organic farming practices. Telangana State Board for Wildlife, and brave men and women who do not let According to Shiva, though the has been an external expert for tiger fear or uncertainty deter them,” men- Green Revolution has been widely monitoring in Andhra Pradesh (AP) tioned Bittu Sahgal, founder, Sanc- lauded, it has led to an over-depen- and Telangana, besides founding the tuary Nature Foundation, which has dence on fertilisers and pesticides, Hyderabad Tiger Conservation Society institutionalised these awards. The wide use of hybrid seed strains and (HyTiCoS). Wildlife isn’t intimidated awards event was sponsored by Mum- neglect of indigenous seed varieties. by human-drawn borders, and neither bai-based IndusInd Bank and financial Shiva’s efforts have led to the creation is Siddiqui. He collaborates with state services firm d sp Group, and sup- of 60 seed banks in 16 states. She has forest departments and with his sup- ported by Hyderabad-based indepen- served on such national and interna- port team of over 400 volunteers and dent power producer GreenKo. tional boards and committees as the 60 associates across 10,000 sq km of Sahgal is also the founder-editor National Board for Organic Standards non-contiguous wilderness in AP and of Sanctuary Asia, India’s first wild- in India, Prince Charles’ Expert Group Telangana. Siddiqui’s efforts have com- life magazine, and the awardees were on Sustainable Agriculture, Interna- pelled the implementation of compen- selected by way of nominations sent tional Forum on Globalisation, and sation schemes by the government and in by its readers, as also supporters Commission on the Future of Food. the initiation of a voluntary relocation

u 72 u february 25-march 10,2019 Business India u the magazine of the corporate world Environment project for landless tribals. He is also largely credited with the declaration of Kawal wildlife sanctuary as Kawal Tiger Reserve in north Telangana in 2012. Having spent his childhood swim- ming in the fast-flowing rivers and scal- ing the sylvan heights of lower Dibang Valley – Dibang Valley being the largest but least populated district of Arunachal Pradesh – Mitapo now strives to protect them. Born into an Idu Mishmi tribal household in this eastern Himalayan state, he dropped out of high school to partner anthropologist Sahil Nijha- wan by spending two years deploy- ing hundreds of camera traps through the remotest parts of the valley and stewarding explorations of its undoc- umented biocultural diversity. He sub- Shiva receiving Lifetime award sequently founded i-Clean Roing, an initiative by volunteers for door-to-door of conscious tourism. Through the fish- so taken up with this young prodigy refuse collection in collaboration with ing community of coastal Morjim, she that he named one of his characters local authorities in the town of Roing. is providing tourists a better under- Maitreya. A conservationist by convic- When the opening of a bridge over the standing of marine life by following tion, he has raised money for the Horn- Brahmaputra in 2017 led to a surge in international best practices for dolphin bill Nest Adoption Programme at Pakke unruly tourism and the resultant pol- watching, while ensuring boat opera- run by the Nature Conservation Foun- lution and degradation, 25-year-old tors a dignified living. Terra Conscious dation, mapped the birds of Jabarkhet, Mitapo and his friends convinced the also extends this experience to students in Uttarakhand, for WWF-India and district administration to prohibit the from schools in Goa and other states added four new birds to their list. use of rivers and forests by non-local and hosts field activities and aware- Green Teacher award winner Nikita tourists. He also founded the start-up, ness workshops on marine conserva- Pimple has expanded the scope of the Dibang Adventures, which provides sus- tion for them. Puja besides coordinates Rishi Valmiki Eco School (rv e s), which tainable income for community mem- and trains the members of OceanWatch she co-founded in 2010 and which is bers while safeguarding the culture and – a stranding, monitoring and response run from four classrooms rented from bio-diversity of the region. network established in collaboration a government school in the Mum- Thirty-eight-year-old Govardhan with the Goa Forest Department and bai suburb of Goregaon. Starting out Meena has, for years, single-mindedly i u c n , India. This collective of life-guards with just nine pupils, the school now averted man-animal conflict between works with Drishti Marine, which pro- has 525 children from financially- his fellow Meena tribal community and vides crucial data on marine mammal challenged families, learning in shifts wild animals like tigers in the vicinity and turtle deaths in the state. It also from nursery through grade nine. of their villages on the outskirts of Raj- responds to wildlife emergencies. rv e s has a holistic approach to learn- asthan’s Ranthambhore Tiger Reserve. ing, replete with story-based teaching A chance encounter with tiger conser- GenX green warrior modules and activity-based learning, vationists Valmik Thapar and Fateh The Young Naturalist awardee, Mai- and an imaginatively crafted wild- Singh Rathore changed the course of treya Sukumar, is a 15-year-old Class life syllabus, which adjuncts the man- his life, transforming him from a pas- X pupil at the Shri Ram School in dated state board curriculum. Pimple sive observer to one of India’s quietest Moulsari, New Delhi, but has already set up the Kids Green Klub in 2014 under-the-radar tiger defenders. Today, personally identified 850 of the over and in association with Sanjay Gandhi he is the ‘Pied Piper of Ranthambhore’, 2,000 bird species found on the Indian National Park, leads nature trails and hero-worshipped by over 15,000 chil- subcontinent. “We at Sanctuary believe workshops for the children of Mum- dren from 45 forest villages. He serves he is a generation-next green warrior, bai, and also conducts wildlife camps as a vital link between locals and park the kind that gives us hope for the in protected areas across the country. authorities, defusing tensions and future,” his citation reads. This young The life’s purpose and respect for communicating information, thereby naturalist’s love of birds began when nature of these ‘Earth Heroes’ stands narrowing what used to be a grim he was four, though his parents have out as an inspiration to others in a people-park divide. been non-birders and initially hesitant country where ecology and conserva- As the founder of conservation to support his passion. Over the years, tion have been lost sight of in the doc- enterprise Terra Conscious in Goa, he has astounded ornithologists and trines of governance. Oxford-educated Puja Mitra is leading naturalists alike, and celebrated chil- u SAROSH BANA ethical boat operators to a livelihood dren’s book author Deepak Dalal was [email protected]

u 73 u february 25-march 10,2019 Market News Business India u the magazine of the corporate world

O v e r v i e w Uncertain times, uncertain trends

Markets move in an other issues gripping investors. se bi may soon come out with guidelines, indecisive manner, limiting the pledging of shares of pro- with investors moters or their holding companies to unwilling to the extent that this does not desta- commit funds bilise the share prices. il&fs shock- waves have still not subsided and the banks are staring at a hit of R30,000 crore, says one report. It is in this con- text that the government’s initiative to recapitalise the banks has to be seen. All these concerns have pressured fiis’ net sales to R5,815 crore dur- ing the calendar year till 22 Febru- ary. Companies are also in the process of revisiting their growth plans. And the it companies are in the process of returning excess capital to their shareholders.

Buybacks: it companies to the fore In a bid to reward investors and also stabilise the share prices in a volatile he stock market continued to major partners with Congress and bjp markets, several companies have opted move in a narrow range. From respectively, the stage is now all set for to go in for buy-backs, as opposed to Ta level of 35600 on 30 January, a show-down. Maharashtra, the sec- giving hefty dividends to shareholders. the Sensex crawled to close at 35756 ond largest state, has also seen bjp seal- Dividend attracts tax at source, while on 20 February. The yo-yo movement ing its alliance with its long-standing buy-backs, if done through the plat- is restricted within a narrow range of ally, Shiv Sena. Before the first week form of stock exchanges, do not – and 2,000 points. Events on the domestic of March, all alliances are likely to front, politics and corporate cleans- fall in place and markets will again ing initiatives continued to weigh on focus its attention on elections. The the investors’ sentiment even after the nervousness is over the regional par- announcement of the interim budget. ties making a comeback and one can The biggest of these events was the expect the markets to go comatose, if country’s outrage over the killing of 45 a khichdi government is formed at the soldiers in Pulwama attack on 14 Feb- Centre. Investors do not get swayed ruary and the stern retribution prom- by poll forecasts but make their own ised by Prime Minister Narendra Modi assessment. As of now, the bjp-led n d a – ‘The sacrifices of the jawans will not is still the favoured one. While short- go waste’ – led to a considerable uncer- term issues may surface in the run-up tainty. ‘Will there be a swift surgical to the elections, investors are being strike on Pakistan-sponsored terror increasingly advised to take a long- camps?’ or ‘will the armed forces strike term view of the stock markets. when least expected?’, were some of the Another area of concern is the questions which were being debated. increasing reports of mutual funds While the country is baying for exposure to the vulnerable compa- revenge, poll alliances are being put nies and their promoters. Anil Amba- in place by various parties ahead of ni-led a d a g group companies’ pledge the elections. In Uttar Pradesh, the of shares with n bfc s and the m f expo- alliance inked by sp and bsp has vir- sure of Subhash Chandra’s ZEE are cre- tually kept the Congress out of UP, ating jitters amongst investors. which holds 80 seats. In Tamil Nadu, Pledging of shares of promoters and with d m k and aiadmk also becoming over-leveraging of companies are two

u 74 u february 25-march 10,2019 Business India u the magazine of the corporate world Market News are tax-free sales as far as the investors are concerned. Infosys plans to buy 103.2 million (2.36 per cent of its cap- ital) shares at R800 per share from the existing shareholders as on 25 January (record date). The company would be returning R8,260 crore to the share- holders. In 2017, it had undertaken its maiden buyback shares, returning R13,000 crore by purchasing shares at R1,150 per share. In less than a year- and-a-half, the company will thus be returning more than R25,000 crore (including special dividends) to its shareholders. This fortnight, Tech Mahindra also announced a similar buy-back and div- idend policy. It proposes to buy back 20.5 million shares at R950 a share for a total amount of R1,956 crore. The record date for determining the entitlement is 6 March. The aim is to provide tax efficient rewards to both without brokers on n se were not able at R616 on 18 February. The shares shareholders and companies. to tender shares, as shares had to be have been on a steady decline since it Persistent Systems (market cap: tendered through brokers to avoid tax touched a 52-week high of R992 on 30 R5,041 crore), another it company, payment. Maybe se bi needs to relook August 2018. Earlier, the shares were announced a buy-back in the last at this. buoyed up on the grounds that it is week of January, while t d s Power Sys- a great proxy play for the rural con- tems, Selan, Natcom Pharma, Cyient Telecom: Jio juggernaut on the sumption growth story. The coun- are other companies where buy-backs roll try’s largest tractor company would are still open. On the n se , n h p c , o n g c There is considerable action in the be a big beneficiary of the govern- and skf India have just completed buy- telecom sector, with Jio continuing ment’s largesse to the rural popula- back offers. Small shareholders are, its growth momentum. Like in an tion. And a good monsoon would see however, put to hardships because, in ahwamedha, the Reliance Jio stallion a rerating of the shares. The shares, certain cases like o n g c , shareholders continues to travel across territories. which were steady at about R800 lev- In December, it amassed 4.5 mil- els at the beginning of the year, have lion new subscribers, taking its over- been steadily losing ground and had all subscriber base to 280 million. Its dipped to R678 by end January. It is market share is now 23.2 per cent – now hovering around R630 levels. a within striking distance of Bharti Air- lower operating profit margin was one tel’s overall market share of 28.9 per of the reasons for the disappointment. cent. It has a total subscriber base of The growth in pat has also not grown 340 million. Vodafone-Idea, despite in line with the double digit growth being the number 1, with a subscriber in revenues in the third quarter ended base of 419 million, has been steadily December 2018. losing ground, having lost about 2.9 Even as the market is waiting for million subscribers in the last eight some news on the political front, it months. Jio’s growth has been at the makes sense for investors not to be cost of Vodafone-Idea and Bharti Air- swayed by day to day movements of tel to a large extent. What is however the markets and have a focussed strat- a point of concern is the low average egy to invest in shares with a long term revenue per user across the industry. perspective in mind. Chasing momen- Reliance Industries’ share prices have tum stocks or tipsters influenced stocks been a steady feature and have moved is unlikely to yield any relief. Holding in a narrow range, despite the volatil- on one’s portfolio makes more sense. ity seen across the market. Capital protection should be the Some companies are, however, fac- short-term strategy rather than being ing the ire of shareholders. Mahi- overtly adventurous. ndra & Mahindra (market cap: u DAKSESH PARIKH R77,873 crore) touched a 52-week low [email protected]

u 75 u february 25-march 10,2019 Executive Track Business India u the magazine of the corporate world

Dynamic outlook Wealth of Favre-Leuba has announced the experience appointment of Vijesh Rajan as busi- ness head and the new spokesperson Entrepreneur First (ef), a pioneering for the brand. After the successful ten- UK-based global talent investor, has ure of Thomas Morf, c e o & spokes- announced its launch in India; and the person of the brand, under whose appointment of Esha Tiwary as gen- leadership the brand was relaunched eral manager. ef has also announced with a modern dynamic outlook yet its first-ever cohort of 50 founders in retaining its rich legacy. Rajan has Bengaluru, its sixth global location. come onboard with a vision to posi- Tiwary has a spent several years in the tion Favre-Leuba as an iconic brand start-up ecosystem in India and has in the Swiss watch industry, a status a deep understanding of the space. that befits its rich and glorious history She brings a wealth of knowledge and legacy. He has previously been a and experience in building and scal- part of the parent company of Favre- ing start-ups, and will be an asset Leuba and has successfully worked for for ef. Titan in the watch industry for close to two decades. Having worked in several leadership positions he has handled Building teams multiple facets of the watch industry Vasudeva: creating an ecosystem Adding muscle to the Delhi office,fc b across all key global markets. Ulka has announced the appointment 20 per cent equity stake in Centum of Shreekant Srinivasan as senior vice- Learning. The existing shareholders of president & business director. In his Diverse experience Bharti Group will stay fully commit- role at fc b, he will be heading iconic Marico Limited has appointed Koshy ted to Centum for its future growth. brands like Horlicks, Hero MotoCorp, George as chief marketing officer, Given his vast global experience in Hamdard, along with Boeing. With a Marico India. In his new role, George unlocking the potential of human career spanning almost 20 years, Sr i n i- will be responsible for leading the capital, Rajeev will help Centum build vasan has worked across agencies like brand marketing initiatives of the and create an ecosystem that facil- bbh, Leo Burnett, McCann Worldwide company and will report to Saugata itates development of future-ready and Wieden and Kennedy in leader- Gupta, m d & c e o, and will also be a skills that are aligned with indus- ship roles. He has played a key role part of Marico’s executive commit- try needs and ensure a ready market in launching new offices, building tee. Koshy George brings with him place for these skills. As one of the cohesive teams and managing more than 17 years of sales and mar- promoters of Centum, he is expected some illustrious brands such as g m , keting experience across diverse cat- to chart the direction for aggregating Tinder and Royal Enfield, to name egories such as personal care, home the demand and supply of employable a few. care, and foods. He started his career skill by leveraging technology and with Marico India in 2001 as a man- expanding its partnership with the agement trainee and was an area sales corporate sector. Varied experience manager before moving to Hindustan The vip Industries Ltd’s board has Unilever. His most recent role was as approved the appointment of Sudip global marketing director, skin cleans- Veteran enters Ghose, currently c e o, vip Indus- ing. During his tenure with Unilever, Vinaya Varma, 50, will take over as tries, as the company’s new manag- George has worked across building managing director & c e o, mjunction ing director, with effect from 1 April and transforming various brands services limited, an equal joint venture 2019. Ghose, was also appointed as an and categories. of Tata Steel and sail, and India’s larg- additional director of the company est b2b e-commerce company. Varma with effect from 8 February 2019, will has served the company since incep- work as c e o till 31 March 2019, He Guiding future tion in 2001, his last held position in will assume charge of managing direc- Centum Learning Limited, a leading the company being its c e o. Varma has tor from 1 April 2019. Prior to join- player in the skill development and been elected co-chairman, c i i East- ing the company, Ghose had worked corporate & vocational training space, ern Region ic t e Sub-Committee, for with Samsonite South Asia, Onida, has announced the appointment of 2018-19. He has also been an elected Whirlpool India, Reliance and Bausch Rajeev Vasudeva, former global c e o, member of c i i Eastern Regional Coun- & Lomb. He has over two decades Egon Zehnder, as chairman. In addi- cil and c i i West Bengal State Council of experience in sales and market- tion to guiding Centum’s future direc- for 2018-19 and an elected member, ing, with expertise in strategic plan- tion, Vasudeva will also be a major Internet, Mobile & e-Commerce ning, integrated brand marketing, investor in the company, acquiring a Council, n a s s c o m , for 2017-19. consumer behaviour and insights. u

u 76 u february 25-march 10,2019 Business India u the magazine of the corporate world Selections

The Keneseth Eliyahoo Synagogue has been restored to its former glory Rejuvenating the Jewish community

managing trustee, Sir Jacob Sassoon & Allied Trust, said, “We are grateful to Mrs Sangita Jindal, Ms Abha Narain Lambah and others, who have worked tirelessly in restoring our beautiful synagogue.... We are confident that the restored synagogue will rejuvenate the Jewish community and serve as a source of blessing to all who visit it.”

Non-conformity Synagogues have never conformed to stylistic rules any- where and show considerable variations in many details, with no unique or rec- ognisable features. This synagogue, built in the Classical Revival style, has decorative Victorian interiors. It has a large pediment crowning the west- ern facade over the large semicircu- lar fenestration housing three unique ews have a long history in India this part of India’s culture – a signif- stained-glass panels flanked by fluted – the one place where, for thou- icant Jewish synagogue for the Bagh- Corinthian columns. The stained glass Jsands of years, they were wel- dadi and Bene Israelis. was painstakingly restored by Swati comed and given refuge. The earliest Solomon Sopher, with Sangita and Chandgadkar. The hall has an east- known record (on metal plates) in Sajjan Jindal, dedicated the lovely, west orientation, with entry doors on ancient Vatta Eratha (a mix of Tamil gleaming synagogue to the Jewish the east and the Bechal or Ark facing and Malayalam), shows the privileges community in the presence of Gover- west towards Jerusalem. granted to Joseph Rabban by Bhaskara nor Vidyasagar Rao. “We are extremely The sanctuary has a central podium Ravi Varma, the 4th century ruler of happy to have been entrusted the (a Sephardic tradition) for conduct- Malabar. Continuing this tradition, opportunity to restore one of the most ing services. The surrounding wooden Nehru (and separately the Jam Sahib), important temples of worship,” Mrs Jin- benches are set on Minton tiles from welcomed them during the Second dal, chairperson, jsw Foundation, said. Stoke-on-Trent, England, while women World War, although India was fight- “This synagogue has been a significant sit in the upstairs galleries. Interven- ing for independence against the Brit- part of Mumbai’s heritage and culture. tions ranged from roof repairs, terrace ish rule and faced a famine. The team working on the restoration of waterproofing, splice repair of damaged In 1948, when Israel was created as a the Keneseth Eliyahoo Synagogue was sections of timber rafters, etc. all while Jewish homeland, the Jews of India said handpicked from India and around the supporting the structure. The damaged they were already home…. Later, in an world. Over the last 20 months, this terracotta tiled roof was replaced with India completely impoverished by colo- team was dedicated to restoring every new tiles to match the original profile nial rule, some went to Israel seeking original aspect of the synagogue. I hope of timber boarding. The synagogue’s prosperity and a doorway to the west. it will provide visitors a visual celebra- original symbols: grape vines, citron Recently, the jsw group donated tion of the Jewish culture in India.” fruit, and the Star of David, were sten- Rs4 crore to renovate Mumbai’s Kene- Added architect Abha Narain Lam- ciled on the walls. The original colour, seth Eliyahoo Synagogue. Designed bah: “The Keneseth Eliyahoo Syna- earlier under years of blue washes, was by Gostling and Morris and protected gogue was an extremely challenging restored. under the Heritage Regulations for and fulfilling restoration project. The The major donor, the $13 billion Greater Bombay since 1995, its origi- entire structure, right from the exter- jsw group, has played a key role in nal grandeur is now restored by archi- nal architecture to the detailing of the India’s growth and culture. Ranked tect Abha Narain Lambah. This was religious symbols used in the interiors, among the top business houses, jsw funded mainly by the jsw group (along is enchanting and tells a story of the works with steel, energy, cement & with the Sir Jacob Sassoon & Allied years gone by. We are happy that we infrastructure, aiming at excellence, Trust, the Kala Ghoda Association and could restore this iconic monument of while focussed on sustainability. the World Monument Fund). Lambah Mumbai to its former glory.” u SWAPNA VORA has beautifully and carefully restored Solomon Sopher, chairman & [email protected]

u 77 u february 25-march 10,2019 Books Business India u the magazine of the corporate world

the mortgage market in the USA and the subsequent financial crisis, any- In-depth look one who had cash was no longer in the mood to lend it. With severe liquidity An excerpt from the book crisis, the demand for luxury cars in Europe and North America – jlr’s two Stanford University, Ratan Tata remem- biggest markets – hit its nadir. bered the fiery and vocal reactions Already burdened with a debt of from Brits expressing their displea- R21,900 crore, Tata Motors was forced sure. “When Ford had not been able to to put more money into jlr after it make a profit with jlr, what was Tata, failed to secure financial aid from Brit- with no experience in the premium ain in the crisis scenario. It spent an car segment going to do?” said some. additional R4500 crore to keep the Many others felt that the Tatas would struggling brands afloat. This was shut down the plants in Britain, move an awkward position for a company them to India, and convert the Bir- that had been virtually debt-free. ‘We mingham/Coventry plants into a real were bleeding. Banks were not giving estate project. Another spicy rumour any money. And we needed money,’ was that the Tatas were going to have recalled a senior Tata Group executive. Tandoori chicken restaurants all over For the year ending 31 March 2009, the Midlands! But the Tata approach Tata Motors posted an annual loss of was very different from what they had R2505 crore, compared to the profit expected. The Brits would soon realise of R2168 crore in the previous year. the Tata way. The jlr unit made a pre-tax loss of ...And the global financial gloom R1800 crore. descended. Tata Motors adopted a threefold On 15 Septem- strategy for deal- ber 2008, three ing with the cri- months after the “When Ford had not been sis and turning the tata group Tatas’ acquisi- around jlr: cash from torchbearers to trailblazers tion of jlr, Leh- able to make a profit with management, Shashank Shah man Brothers, a cost control, jlr, what was Tata, with no global financial and new prod- PENGUINRANDOM HOUSE services firm, and experience in the premium uct development. `699; Pp 393 the fourth-largest car segment going to do?” It was reminis- investment bank cent of the efforts in the USA, filed said some. Many others felt Tata Motors had fter over a decade of research, for bankruptcy. made between meetings and interviews, Dr Many others soon that the Tatas would shut 2000 and 2006 AShashank Shah, visiting scholar, followed. It was down the plants in Britain, to turn around Harvard Business School; fellow, Har- the beginning of the parent com- vard University; and consulting editor, a global finan- move them to India, and pany with great Business India Publications, recently cial crisis that convert the Birmingham/ success. It was launched his book The Tata group: from affected almost now replicating torchbearers to trailblazers. every continent. Coventry plants into a real the strategy at Following the acquisition, newspa- Decline in con- estate project” a global level. It pers ran headlines such as ‘The Empire sumer wealth was hired k p m g and Strikes Back’, ‘Jaguar Is Now an Indian estimated in tril- Munich-based Beast’ and ‘Tatas Rule Britannia’! Some lions of dollars. Roland Berger had more tongue-in-cheek comments The interconnectedness of nations in a Strategy Consultants to advise on cost- – ‘So what if the Queen of England globalised world, and its negative fall- cutting and cash-flow management at still has the Kohinoor, the diamond out were visible in full measure. jlr. Their mandate was to make jlr and most famous jewel taken from This indirectly contributed to the profitable.T he globally renowned con- India during colonial times? The Tatas European sovereign debt crisis that sulting companies suggested the for- now have Jaguar and Land Rover (jlr), began in the last quarter of 2009 and mation of cross-functional teams to the icons of British luxury. The Brit- affected most nations of the Euro- manage liquidity and contain costs ish citizenry felt discomforted that pean Union. It became apparent that at various levels within the business. India, a former colony, had acquired Tata Motors couldn’t have picked a The implementation efforts were suc- two of Britain’s most iconic brands. In worse time to make an acquisition of cessfully spearheaded by a young a conversation with m b a students at this magnitude. With the collapse of team, just as it was done in India in

u 78 u February 25-march 10, 2019 Business India u the magazine of the corporate world Books

‘I feel strongly that in later years we can look back on the jlr acquisition and say to ourselves that this was a very worthwhile strategic acquisition and one which has brought us considerable technology and global presence” – Ratan Tata

2001. The anticipated savings were an was making an expensive mistake by job of leading the team of people. In astoundingly high amount. acquiring jlr, which had little synergy the long term, jlr helped Tata Motors On the labour front, the company with Tata Motors’ mass-market image. improve its financial results when the undertook a multi-pronged strategy to Past examples of similar acquisitions company’s commercial vehicles busi- manage costs. One was to send several that weren’t successfully integrated ness was yet again going through a hundred employees on a sabbatical. prompted many of these doomsday cyclical downturn and some of its pas- Secondly, the permanent workforce scenarios for Tata Motors. The Daim- senger cars were underperforming in was rationalised by 32 per cent and ler-Chrysler merger that had happened Indian markets. the labour force was trimmed by 2000. a decade earlier in May 1998, where a ...The jlr acquisition portrayed the In February 2009, the company also high-end brand was combined with a Tata Group as an entity willing to take managed to negotiate with thousands set of more mass-market brands, was a tremendous risks. These were not blind of workers on a pay freeze (until 2010) case in point. risks, but calculated ones. The acqui- and a shorter four-day working week One of the reasons for failure was sition was for the long-term, inde- to avoid compulsory job losses during that US-based Chrysler’s employ- pendent of the financial crisis. It was the financial crisis. Salaried staff also ees always perceived it as a takeover executed with clear vision and convic- agreed to a three-hour extension of with major decisions taken by Daim- tion, immense courage and systematic the working week to 40 hours and a ler headquartered at Germany. Conse- implementation. It wasn’t a reckless pay freeze. The deal with its workforce quently, many employees left Chrysler approach to extract maximum value saved about L68 million for the com- in the initial days post-acquisition. from a venture. Attributing the long- pany. Several other cost-saving initia- Ultimately, Chrysler was sold to a PE term success of the jlr acquisition to tives were implemented with success. fund in 2007. the Tata culture, Gandhi said: ‘We have ...By 2017, Jaguar tripled its sales The Tatas handled the acquisition not had a single legal battle with Ford compared to 2009 and the jlr reve- very differently by granting autonomy under any of the original agreements. nue topped by $34 billion (R2.31 lakh to managers in England. Speth pointed It is the Tata code of ethics – keeping crore) within the consolidated Tata out that synergies between jlr and our word under all circumstances – Motors revenue of R2.74 lakh crore. Tata Motors were limited to processes. which has been the key to our success With 2600 dealerships in 170 coun- ‘The business and science of luxury in all transactions that I have done for tries, jlr employed 35,000 people glob- cars is completely different from that Tata Sons.’ ally of the 79,500 employees within of mass vehicles,’ he said. Though In a letter to shareholders in 2009, the Tata Motors group. Considered to jlr was a wholly owned subsidiary of Ratan Tata had written, ‘I feel strongly be the largest employer in the UK’s Tata Motors, it consistently kept the that in later years we can look back on automobile sector, jlr often ranked in brand identity of jlr distinct. It did the jlr acquisition and say to ourselves the top five ‘best employers to work not try to impose its culture on jlr that this was a very worthwhile stra- for’ list in the UK. Tata Motors’ suc- in any significant manner. The Tatas’ tegic acquisition and one which has cess in acquiring and eventually turn- hands-off policy of achieving integra- brought us considerable technology ing around jlr surprised analysts and tion was executed with great finesse and global presence.’ A decade later, investors alike. In 2008, many crit- and success. In later years, Ratan Tata his words proved to be prophetic. u ics had commented that Tata Motors remarked that Speth had done a terrific [email protected]

u 79 u February 25-march 10, 2019 People Business India u the magazine of the corporate world

Taking root ipro Limited, a lead- Wing global information technology, consulting and business process services com- pany, has organised the eighth edition of the Wipro earth- ian awards for the year 2018. The annual awards recogn- ise excellence in sustainability within the education pro- cess in schools and colleges in India. Wipro Earthian is one of India’s largest sustainabil- ity education programmes for schools and colleges. The 2018 edition of the Wipro earth- ian programme received 1,300 entries, out of which winning entries from 14 schools and 10 colleges were selected by an threefold increase in the num- has engaged with over 55,000 from across India. The awards independent jury. The Wipro ber of participants since incep- schools and colleges, 130,000 were given away by Azim earthian awards have seen a tion in 2011. The programme students and 13,000 teachers Premji, chairman, Wipro

Mitigating risk and felicitated the winners. “We are ecstatic to receive this ata Power, India’s larg- prestigious award and feel hon- Test integrated power util- oured to be felicitated for our ity, has constantly worked efforts by an esteemed Amer- Committed relations towards creating a robust reg- ican economist. This award ast month, Tata Steel won the prestigious Golden Pea- ulatory compliant business will encourage us to continue Lcock h r Excellence Award (g p h r e a) 2018 for its commit- by building a highly efficient managing risk and ensur- ment to healthy employee relations, growth and development, risk management team. Add- ing safety thereby creating a while ensuring work satisfaction. “As one of the leading produc- ing another feather to its cap, secure working environment,” ers of steel in the world, Tata Steel has over the years pioneered Tata Power was bestowed with said Praveer Sinha, c e o & initiatives in the context of employer-employee relationship that two awards – the ‘Best Risk m d. The c n bc tv18 India Risk have become industry standards. We are pleased to receive the Management Framework Management Award, organised ‘Golden Peacock h r Excellence Award 2018’ in acknowledge- & Systems, Power’ and by ic ic i Lombard and c n bc ment of our commitment towards employees’ well-being. This ‘Business Continuity’ – at tv18, is a grand event, which award will further motivate us to continue our journey of inno- the fifth Edition of The India witnesses the coming together vative h r and people management practices,” said Suresh Dutt Risk Management Awards. of the entire management Tripathi, vice-president, human resource management, Tata Kenneth Rogoff, an Ameri- whose prime focus is mitigat- Steel, on receiving the award. Over the last 100-plus years, Tata can economist, the Thomas ing risk. The awards provide a Steel has emerged as one of the most employee-friendly compa- D. Cabot Professor of Public unique platform that honours nies in the world, and is known for creating industry standards Policy and Professor of Eco- organisations and teams that in the field of human resources. The company has been a pio- nomics at Harvard University, have developed the best risk neer in employee welfare schemes and community initiatives, presided over the ic ic i Lom- management practices and even before legislation mandated them. A few of these include bard & c n bc-tv18 India Risk capabilities across business the 8-hour work day, Leave with Pay scheme, and the Workers’ Management awards function categories. u Provident Fund Scheme. u

u 80 u february 25-march 10,2019 Business India u the magazine of the corporate world People

Commemorating healthcare pollo Hospital Enterprise Ltd announced that Banwarilal Purohit, Hon’ble Governor of ATamil Nadu formally released a postal stamp on Preventive Healthcare. The commemorative stamp honours and acknowledges the Chairman of Apollo Hospitals, Dr Prathap C. Reddy’s (second from left) pioneering efforts in encouraging preventive healthcare in India. “Our Chair- man, Dr Prathap C. Reddy’s dream is to do all that is needed, to ensure that everyone has good health and happiness. His life’s objective has been to not just make advanced medical care accessi- ble to patients, but also, to prevent the onset of disease. Apollo’s Preventive Healthcare initiatives have been working tirelessly for almost four decades to ensure that his dream is realised. We take pride in having touched 20 million lives through our preventive healthcare endeavours. It is a very significant moment for the entire Apollo family as a special preventive healthcare commemora- Limited, as part of a day-long tive stamp is being released, in recognition of our efforts,” said Preetha Reddy, vice-chairperson. event at Wipro’s campus in In 1983 Dr Prathap C. Reddy made a pioneering endeavour by launching India’s first corporate Sarjapur, Bengaluru. u hospital – Apollo Hospitals in Chennai. u

Perfect ensemble

Determined have lost hope. The ‘accom- umbai witnessed the Rhea Parekh. The polo and modation project’ is another Mfirst ever Los Polis- sporty wear is in tandem with effort huge step forward in child tas International Wom- the athleisure trend which is a he Helping Hands Foun- care, considering the sober- en’s Polo Cup 2019, that global phenomenon. “I have Tdation (h h f), founded ing fact that many children introduced the first ever all- always been enamoured by with a vision to support kids used to be on the streets whilst women polo match at ARC, polo as a sport from a young who are cancer patients at the treatment was being adminis- Mahalaxmi. The tournament age as I started riding,” said Tata Memorial Hospital tered. I urge all of you to sup- also witnessed the launch of Parekh, who comes from a leg- (t m h), presented the open- port the upcoming fundraiser Rhea Parekh’s polo fash- acy of success and innovation. ing of the renovated Paediatric on the 13th of February at St ion brand – Los Polistas. On “My father is a polo aficionado o p d at Tata Memorial Hospital Regis and hope all of Mumbai the perfect winter evening, a and has great regard for the in Mumbai. “I am delighted to supports, attends and donates rarity in Mumbai, Shetal and players as well. While he ini- be present here at the inaugu- generously towards this fab- Chirag Parekh (c m d, Acry- tiated the polo league to cel- ration of Paediatric Oncology ulous cause by this deter- sil Group) with daughters Ash- ebrate the players, it was my Division at the Tata Memorial mined n g o”. Kapoor was the ley and Rhea Parekh, played sister and my responsibility to Hospital and to be associated guest of honour of the func- gracious hosts to Mumbai’s take this tradition forward. She with Helping Hands,” said Bol- tion. h h f works in conjunc- elite over Ciroc and canapes. is the youngest polo player in lywood actor Anil Kapoor, tion with t m h , primarily with Commissioner Subodh Jaiswal India. I decided to contribute on the occasion. “Their work the t m h Paediatrics, Impact and US Commissioner Jen- by looking for the perfect way over the past few years has Foundation, to garner funds nifer Larson flagged off the to bring the sport and my pas- directly impacted the lives towards the various projects chukkas with opening balls. sion for design together. That’s of thousands of children and supported by the n g o. Since There were three polo chuk- how Los Polistas was born, it their families, providing them their involvement, the num- kas interspersed with the fash- celebrates the sport and the with means to get treated in ber of donors has taken a ion show of the Los Polistas player, offering designs that fit situations where many would significant jump. u collection designed by young everyone’s personality.” u

u 81 u february 25-march 10,2019 Interview Business India u the magazine of the corporate world san j ay b ‘Budget an effort to help orade everybody’

Stand-in Finance Minister Piyush Goyal, who presented the last budget of the Narendra Modi-led government in the absence of Arun Jaitley, allays some concerns about the numbers and offers clarity on other issues

On concerns expressed by economists The emphasis of the budgetary have also announced the intention about possible fiscal slippage exercise is on maintaining the for a new regime of income tax I don’t think there is any concern. economic reforms road map set administration for which we have We have been the most honest over four-and-a-half years by Prime approved the funds. Tax assessment government in many years…whatever Minister Narendra Modi and Union will be it-driven and be completely you see is the real picture and we minister Arun Jaitley so that India anonymous. have stuck to it. could continue to be the world’s The number (fiscal deficit) is 3.36 fastest growing major economy. On jobs crisis and the National per cent of the g d p… anybody would The budget gives a better future to Sample Survey Office controversy have made it 3.3 per cent. My Prime every section of society – the poor, Had the crisis been of the magnitude Minister said whatever the number, middle class, the farmers, organised that some people are trying to you declare it. If 3.36 per cent labour, and unorganised labour. Also, project, then there would have been becomes 3.4 per cent, so be it. We sections previously not taken care of, unrest on the streets. The nature of have been honest in our budget, in like animal husbandry and fisheries thinking about jobs is changing, our reporting. workers, nomadic and semi-nomadic as job creation is a continuous The world is seeing consistency in tribes. This is one holistic effort to process. There are 60 million retail our numbers. The fact is that we have make a difference. traders in the country. Is that being stuck to fiscal prudence all our five captured in jobs or employment? years…some people were expecting On nda’s failure to reduce corporate Two hundred million toilets didn’t 3.9-4 per cent…We have actually gone tax rate to 25 per cent for all get built out of thin air, people through the numbers and the real companies worked to create them. led bulbs picture in great detail, and have stuck See, 99 per cent of the companies are are being made in India. All this is to the real picture. already covered under the 25 per cent not happening out of thin air. In my corporate tax rate. Small companies vision, I have crafted jobs in newer On how R6,000 annual payout can are eligible for presumptive taxation. areas. Artificial intelligence, modern help a farmer New manufacturing companies are technology, renewable energy, We don’t understand what the value also eligible for 25 per cent rate. For healthcare, exploration of oil and of R6,000 is to a farmer who has the present, we have achieved the gas will be the big areas. half acre or one acre. It is a valuable larger objective. After the elections, As for n s s o controversy, many additional support. You may have when the final budget will be things have changed, but data looked at it as R500 a month. We have presented, the finance minister will is being compiled by traditional not because we believe that belittles decide how to go forward. Besides, methods. The world is changing and the farmer. We have looked at it as the corporate tax cut is linked to the moving so fast, but data compilation an honorarium. We have also done it removal of tax exemptions. It is a has not kept pace with the evolving without touching any other subsidy. work in progress. nature of work. So, farmers will continue to get fertiliser subsidy, power subsidy, all of On doubling it exemption limit if On comparison with upa budget those other things. I have been told it nda comes back to power Our tax proposals are aimed at has been very well received across I cannot say right now what we will helping poor and middle class living the country. do if we are re-elected. But we hope on a tight budget. Unlike the previous that the task force’s recommendation u pa dispensation, the interim budget On the thrust behind the budgetary comes out quickly. We want the did not reduce levies on su vs, which exercise income tax law to be a lot simpler. I are used by rich persons. u

u 82 u february 25-march 10,2019