Brands Go For Course Correction New M&A Opportunities businesstoday.in `100 August 9, 2020 WHY kisHore biYani's FUTUre Looks bLeak INDIA’S BEST KNOWN RETAILER IS DROWNING IN DEBT. WHAT OPTIONS DOES THE CHAIRMAN OF THE FUTURE GROUP HAVE? From the Editor http://www.businesstoday.in Editor-in-Chief: aroon purie A Felled Retailer Group Editorial Director: Raj Chengappa Editor: Rajeev Dubey Group Creative Editor: Nilanjan Das Group Photo Editor: Bandeep Singh Executive Editor: anand adhikari ishore Biyani, India’s best-known retailer, is in trouble. Deep, Deputy Editors: ajita Shashidhar, Naveen Kumar (Money Today) deep trouble. Already drowning in `13,000 crore of debt, Biyani’s Future Group was dealt a deathly blow by the coronavirus lock- special projects and events K Senior Editor: anup Jayaram down, bringing revenues to nil, and crippling its finances. The prolonged correspondents slowdown and lockdown double whammy has by now made the business en- Senior Editors: p.B. Jayakumar, Nevin John, Joe C. Mathew, E. Kumar Sharma, tirely unsustainable. Future Group is struggling to even service debt. On the Dipak Mondal, Manu Kaushik, Sumant Banerji verge of bankruptcy, Biyani got a lease of life when Centre first allowed EMI Associate Editor: Nidhi Singal, Senior Assistant Editor: Sonal Khetarpal moratorium on loans and then deferred the insolvency and bankruptcy code research by a year. But with uncertainty staring in the face, Biyani has been forced Principal Research Analysts: Niti Kiran, Shivani Sharma to get to the negotiating table to attempt a sell-off. A deal is as close as the copy desk end of the month. Potential suitors: Rival Reliance Retail and two Amazon- Senior Editor: Mahesh Jagota Associate Editor: Samali Basu Guha backed consortia of Premji Invest and Samara Capital. Copy Editor: aprajita Sharma When historians chronicle India’s coronavirus-induced business col- photography lapses, Biyani’s Future Group is unlikely to go unnoticed. An instinctive, Deputy Chief Photographers: Rachit Goswami, Yasir Iqbal intrepid entrepreneur, Biyani has tried his hands at every possible business, Principal Photographer: Rajwant Singh Rawat besides retail. From restaurants to gyms to beauty salons and consumer fi- art nance. He even dabbled in film production. Deputy Art Director: amit Sharma Assistant Art Director: Raj Verma But eventually, it was the dramatic collapse in share prices of group com- production panies between mid-February and April first week that forced Biyani to Chief of Production: Harish aggarwal pledge almost his entire stake in group companies. With stock prices at the Senior Production Coordinator: Narendra Singh Associate Chief Coordinator: Rajesh Verma bottom, he has little option to raise more resources through pledges, even library as the business empire is crumbling. Biyani went through a similar crisis a Assistant Librarian: Satbir Singh decade back but emerged stronger. This time, though, even his staunchest Publishing Director: Manoj Sharma supporters admit that he has given in. In fact, he’ll be lucky if the sale pro- Associate Publisher (Impact): anil Fernandes ceeds are enough to square off all the loans. So, what next for the fearless en- impact team Senior General Manager: Jitendra Lad (West) trepreneur? “He’s never without a plan,” a close associate tells me. “In fact, General Managers: Upendra Singh (Bangalore) he has too many.” Ajita Shashidhar and Nevin John take you through Kishore Kaushiky Gangulie (East) Biyani’s roller-coaster ride. Marketing: Vivek Malhotra, Group Chief Marketing Officer Biyani’s plight is symptomatic of what ails India Inc.—as reflected in the Newsstand Sales: Deepak Bhatt, Senior General Manager latest Business Today-C Fore Business Confidence Index that surveyed 500 (National Sales); Vipin Bagga, General Manager (Operations); Rajeev Gandhi, Deputy General Manager (North), CEOs and CFOs across the country. Though business confidence has shown Syed asif Saleem, Regional Sales Manager (West), S. paramasivam, Deputy Regional Sales Manager (South), marginal improvement from 46.3 in the January-March quarter to 47 in the piyush Ranjan Das, Senior Sales Manager (East) April-June quarter, the index has stayed below the 50 mark for six quarters in a row now. No wonder, 82 per cent of the respondents surveyed said the gov- Vol. 29, No. 16, for the fortnight July 27 to August 9, 2020. ernment hasn’t done enough to revive the economy; 84 per cent believe in- Released on July 27, 2020. Editorial Office: India Today Mediaplex, FC 8, Sector 16/A, Film City, Noida-201301; Tel: terventions like direct cash transfers, interest rate reduction, higher public 0120-4807100; Fax: 0120-4807150 Advertising Office (Gurgaon): A1-A2, Enkay Centre, Ground Floor, V.N. Commercial Complex, Udyog Vihar, Phase 5, Gurgaon-122001; Tel: 0124- expenditure and capital injection in businesses can boost economic growth 4948400; Fax: 0124-4030919; Mumbai: 1201, 12th Floor, Tower 2 A, One Indiabulls Centre (Jupiter Mills), S.B. Marg, Lower Parel (West), Mumbai-400013; Tel: 022-66063355; Fax: 022- in FY21. 66063226; Chennai: 5th Floor, Main Building No. 443, Guna Complex, Anna Salai, But look at the flip side. Downturns bring opportunities for mergers and Teynampet, Chennai-600018; Tel: 044-28478525; Fax: 044-24361942; Bangalore: 202-204 Richmond Towers, 2nd Floor, 12, Richmond Road, Bangalore-560025; Tel: 080-22212448, acquisitions(M&As). Sectors such as airports, hospitality, tourism, NBFCs, 080-30374106; Fax: 080-22218335; Kolkata: 52, J.L. Road, 4th floor, Kolkata-700071; Tel: 033-22825398, 033-22827726, 033-22821922; Fax: 033-22827254; Hyderabad: 6-3-885/7/B, malls and multiplexes, fashion, affordable housing, auto components are Raj Bhawan Road, Somajiguda, Hyderabad-500082; Tel: 040-23401657, 040-23400479; Ahmedabad: 2nd Floor, 2C, Surya Rath Building, Behind White House, Panchwati, Off: C.G. facing severe cash and liquidity issues. Many firms will require ‘rescue capi- Road, Ahmedabad-380006; Tel: 079-6560393, 079-6560929; Fax: 079-6565293; Kochi: Karakkatt Road, Kochi-682016; Tel: 0484-2377057, 0484-2377058; Fax: 0484-370962 tal’. For entrepreneurs with war chest, new opportunities are opening up Subscriptions: For assistance contact Customer Care, India Today Group, C-9, Sector 10, Noida (U.P.) - 201301; Tel: 0120-2479900 from Delhi & Faridabad; 0120-2479900 (Monday- faster than ever before. Investment bankers are rightfully salivating at the Friday, 10 am-6 pm) from Rest of India; Toll free no: 1800 1800 100 (from BSNL/ MTNL lines); Fax: 0120-4078080; E-mail: [email protected] prospects ahead as M&A outlook looks robust for the next 12 to 36 months. Sales: General Manager Sales, Living Media India Ltd, C-9, Sector 10, Noida (U.P.) - 201301; Anand Adhikari takes you through that journey. Tel: 0120-4019500; Fax: 0120-4019664 © 1998 Living Media India Ltd. All rights reserved throughout the world. Reproduction in any manner is prohibited. Printed & published by Manoj Sharma on behalf of Living Media India Limited. Printed at Thomson Press India Limited, 18-35, Milestone, Delhi-Mathura Road, Faridabad-121007, (Haryana). Published at K-9, Connaught Circus, New Delhi-110 001. Editor: Rajeev Dubey Business Today does not take responsibility for returning unsolicited publication material. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Delhi/New Delhi only. For reprint rights and syndication enquiries, contact [email protected] [email protected] or call +91-120-4078000 www.syndicationstoday.in @rajeevdubey 37 54 Market Surviving The Pandemic Decoding The Recovery Evolving regulations and poor large, mid and small-cap stocks infrastructure are turning have all taken part in the recent out to be pain points for the rally. is this sustainable? private healthcare sector, August 9, 2020 Cover by already struggling to manage Volume 29, Number 16 NilANjAN dAs the virus outbreak 72 6 40 Interview The Point Finance “A mechanism that expects NPAs to find their Paying Through own solutions is useless” Their Nose Deals in Distress shardul shroff Crude oil is down nearly 33 per A slowing economy and wide- cent from january. But indian spread stress in india inc. are cre- consumers continue to pay a ating opportunities for promoters bomb for petrol and diesel and strategic investors to ink 60 M&As, buy back shares and delist 76 Desi Vs. Videshi A campaign for boycott of Chinese products is opening Money Today up opportunities for local brands in smartphones and Stay Put in MFs TVs. But do they have the do not get overwhelmed by the scale to upstage the Chinese? smart market recovery and book profits. The uptrend is likely to continue 68 14 46 Management BCI Industry Bucking The Trend Hoping Brand: The X-factor in a season of layoffs and pay Against Hope Branding goes for course cuts, select companies are not Business confidence bounces a correction to reach consumers just hiring, but also compensating bit in the first quarter as corpo- stuck at home better. Here's why rate leaders remain hopeful of 80 bigger government intervention to revive the economy, finds the latest Business Today-C fore Network Business Confidence survey The Occasional Flier 18 businesstoday.in jaideep devare of Mahindra insurance Brokers has made flying his passion. it has taught him how 30 cover story to take calculated risks MI Policy A sTAy CoNNECTEd wiTH Us oN FUTUre 82 Digital Tax: www.facebook.com/BusinessToday@BT_india The Road Ahead UnCerTain Even as india increases the CHIT GOSW Best Advice I Ever Got A Kishore Biyani scope of the Equalisation levy, is sTarinG aT a MaJor DeBT An Feature the Us has initiated a probe PH R Crisis. here is Why The “Choose your battles against 10 countries for impos- A From time to time, you will see pages titled “An Impact oPTions For The FUTUre Feature” or “Advertorial” in Business Today. This is no wisely, fight the most ing taxes on digital services.