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There was a time when a contractor would give an arm and a leg to win a big government tender. Not anymore. According to ministry mandarins, many contractors who bagged major contracts are doing their utmost to get blacklisted to avoid executing the tenders, and escape severe penalties for failing to meet the project execution milestones. According to a highly placed PSU source, many of the contractors had bagged the contracts in 2020, when steel prices were in the range of Rs 37,000 per tonne. The contractors, as is the norm, would have factored in a 15-20% hike in steel prices. In reality steel prices doubled to Rs 72,500 in March 2022 before falling to around Rs 60,000 per tonne in April 2022 “There is no way the contractors can execute projects at these prices; it’s totally unviable. But given the stringent penalties for failing to meet tender conditions, the only hope for contractors to escape the penalties is to get blacklisted on some count or the other,’’ said a source. If a large number of contractors get blacklisted it will be a big setback for all public sector undertakings. With the government chalking up a CAPEX of Rs 7.5 lakh crore in 2022-23, it will be a lose-lose proposition for everybody. So, should public sector undertakings go in for re-tendering the contracts?
A new bee on the job horizon goes by the exotic name of Gig business. Many big companies including Tatas, Infosys, Britannia, Wipro, Ola, Fresh to Home etc are looking to the gig economy to cut costs and access talent across locations. There are now quite a few popular gig worker platforms like Awign and Taskmo. Gig is a slang term used for a single professional engagement usually for a short duration. Some of the examples are freelancers, independent contractors, project-based workers and temporary or part-time hires. The huge interest has seen Awign’s top line and bottomline grow 10- fold, according to Annanya Sarthak and Gurpreet Singh, the founders. In the last one and half years, the business profile of its customers changed to large enterprises — either Rs 1000 crore brick and mortar enterprises or scaled up growth companies like Swiggy, Ola, Byju’s etc which have grown into large enterprises. Another company, Taskmo, is also seeing its business grow. Taskmo has added 430-450 new task listings. At least 20% of them were as per specific customer requirements. This is a new trend with momentum picking up as companies look at flexi-hiring to rationalise talent acquisition, says Prashant Janadri, Taskmo promoter.
A huge amount outstanding in bad loans which they will have to write off because they can never recover the money is seeing Indian public-sector banks (PSBs) winding up their operations in Hong Kong. The city state, unlike back home in India, has strict laws about bad loans in bank’s books. Many of these PSBs, perhaps, were pressured to open branches for political and not commercial reasons. These allowed businessmen to get easy loans, allegedly for a fee, and these borrowers then declared huge losses and, eventually, bankruptcy – obviously leaving the lenders in the lurch. Says a local banker: “Even today, there are too many Indian banks here and none making money!” While there is an uproar in Parliament if banks write off loans, HK laws say that bad loans must be written off if they are not collectible. “Bahut chor hain – and banks are bakras!” he adds. “It is good that finally, this government is closing down banks which are not profitable.” The Union Bank of India has already transferred its client accounts to its Singapore and Australian branches and is on the threshold of winding up in HK totally. There are three more in the process of winding up in HK. Eventually, State Bank of India will probably be the only PSB left there.
The high attrition levels in the IT industry is turning into a big headache for corporates. Big IT companies like Cognizant, Infosys, TCS, Capgemini, Wipro are witnessing an exodus of employees with five years of experience or more. The reason is amply clear, as salaries have jumped up after the long Covid break. Cognizant saw attrition levels of 40%, Infosys @ 25% and TCS @ 15% to name just a few. Earlier, someone with five years of experience earned Rs 24-25 lakh per annum. Now the salaries for the same level and experience net an employee Rs 30-38 lakh per annum. It is not clear if the same is happening for higher level jobs in IT companies but, this is good news for engineering graduates. The IT sector has been a mass recruiter for some years now contributing to 5% of the Indian GDP. But it was saturating with only good skilled IT engineers in demand. All this was before the Covid-19 pandemic. The U.S. produces around one lakh engineers per year in a $ 16 trillion economy. And India produces 15 lakh engineers in a $ 2 trillion economy. With manufacturing, electrical and civil taking a back seat as employment generators, it was the IT sector that has been the saving grace for some time now.
CSK is Dhoni and Dhoni is CSK. This is often reiterated by N Srinivasan, the owner of the Chennai franchisee of the IPL team. To be sure, Dhoni and Chennai have become inseparable. Not surprisingly, Dhoni has often said his last game in the highly popular Indian Premier League would be in his adopted home city of Chennai. His affinity to Chennai is all too apparent. And, his propensity to think out-of-the-box is legendary. It is no wonder that people across the spectrum view him a strategist par excellence. How else could one decipher his investment in the Chennai-based Garuda Aerospace, which is a DaaS (drone-as-a-service) provider. If highly-placed sources are to go by, the former Indian cricket captain has invested close to Rs 10 crore into Garuda Aerospace. Garuda has also signed up the World Cup winning captain as its brand ambassador. This is expected to fetch MSD Rs 5 crore. Besides bringing in Rs 5 crore, captain cool will be investing this fee also into Garuda. This makes his total investment into the Chennai-based company at Rs 10 crore. The investment of Dhoni is part of the bridge round, ahead of Garuda’s $30 million Series A round. He may have quit international cricket. Yet, Captain Dhoni remains a formidable brand to reckon with.
Every region in the UK is actively pursuing collaborations and tie-ups with Indian organisations. Recently, the University College Birmingham (UCB) entered into a tie-up with a range of academic institutions and organisations in India as part of a continuing drive to boost skills development in India. Bharat Sakhuja, Associate Director of the University’s International department and Alice Wilby, Pro Vice-Chancellor (Access, Participation and Student Experience) at University College Birmingham from the University were in India recently to meet Dr Sangeet Jaura, Pro Vice-Chancellor of Chitkara University, Professor Tabrez Ahmad, Vice-Chancellor of GD Goenka University, Dr Manju Gupta, Dean Academics at IMS Noida, Ved Mani Tiwari, Chief Operating Officer of the NSDC. The duo told shortpost.in, “The new linkups will offer a wide range of potential benefits and opportunities covering key areas including student mobility and up-skilling, progression arrangements, teacher training and cooperation, as well as collaborating in joint conferences and seminars.” They also shared that discussions were held towards creating more opportunities for Indian students to attend short courses in the UK. Collaboration between these Indian institutions and UCB will allow effective mobility of students between the institutions and enable them to consider integrated pathways which would be beneficial not only for students but for the academics in raising the level of teaching.
For decades, Asian Paints has led the pack in the Rs 60,000-crore plus paint industry. But with Grasim Industries, part of the Aditya Birla Group setting its sights higher, the competition will intensify. Grasim has chalked up a Rs 5000-crore investment plan in the decorative segment which is growing at 11% per annum. This announcement by Grasim which has heft and gravitas to disrupt the market made competitors like Asian Paints, Berger Paints, Kansai Nerolac and Akzo Nobel sit up and take notice. Grasim’s foray into the segment will be backed by their existing leadership in cement, white cement and putty business. Paint is a high growth market and the pie is large enough for everyone to share, industry observers say. There is no denying that leaders like Asian Paints will not find the going easy anymore. Sajjan Jindal group’s JSW has also entered the space, so cut-throat competition is bound to see ad spends growing with margins coming under pressure. In fact, Asian Paints read the writing on the wall and made public that it was looking beyond paints. Recently, the company picked up 49% stake in White Teak Company selling lighting and fans and will increase its stake based on the response. Time will tell which company remains in the black and which moves into the red.
This IAS class of officials possesses the uncanny ability to stay relevant all the time. They don’t just disappear into the sunset after superannuation but, simply don a new avatar. Their utility never dissipates and, their experience in government simply can’t be brushed aside. Probably, they are capable of bringing to the table an entirely new perspective. It is no wonder then that two leading industrial groups of Chennai have drafted ex-IAS officers as chairmen for their enterprises. Sundaram-Clayton Limited (SCL) has appointed R Gopalan, a bureaucrat who served Tamil Nadu as well as the Centre, as its chairman and, another Chennai-based company Ramco Cements followed suit onboarding MF Farooqui, a retired IAS officer to the same post. Of course, both Gopalan and Farooqui have served on the boards of SCL and Ramco Cements respectively for a while now. But their elevation to the top slot in the organisations has forced many long-time watchers of these family enterprises to sit up and take notice. This is the first time that these industrial conglomerates in Chennai have adopted such a course. Larger benefit of having experienced bureaucrats as chairmen notwithstanding, the move is also seen as a step towards splitting the CMD post. At least in these two instances, it appears to be a case of striking two mangoes with one stone!
ICICI Bank’s blue-eyed boy Anup Ratnaparkhi, who currently heads Branch Banking and NRI operations in the UK, has put in his papers. Thirty-nine-year-old Anup, who had a 14-year long stint, is joining the London-based Ribbon Plc as Chief Commercial Officer. This venture has been promoted by his former ICICI boss Asesh Jani. It is an AI powered technology company that promises to offer a hyper-personalised digital experience to users. Ribbon is loaded with features including an embedded payments marketplace, access to deposits, FX, Crypto & Equity trading platforms. It was Asesh who had spotted Anup’s talent in ICICI and moved him up from Hyderabad to London. The scene at the State Bank of India, UK is no different. Most professionals posted here from India are currently in a flux. Most of the senior staffers who were transferred out of India have completed their term and will now return to India. This includes SBI UK head Sharad Chandak, ED Sanjay Pandey and COO Anurag Joshi. Elsewhere too, it seems to be the season of retirements or transfers. Gayatri Issar Kumar, the Indian High Commissioner in UK is into farewell party mode as she retires in September. Meanwhile, Rohit Vadhwana (IFS) who is First Secretary for Investment & Trade and also handles the Press portfolio, has been posted to Kenya.
A decade ago, he was told that he couldn’t head an incubator company being set up by Microsoft because he had no start-up experience. James Joseph, a 25-year tech veteran, took a year’s sabbatical to write a book – which was when he saw his future growing outside his study window in Kerala: a jackfruit tree. The idea that hit him fructified further when he met a diabetic parish priest, who told Joseph that raw jackfruit had brought his sugar down. He researched it, and came up with Jackfruit365, a flour made with green jackfruit. “This is a diet supplement for diabetics and has beneficial effects when used as a replacement for an equal volume of rice or atta,“ he says. “But it should not be compared with medicine.” Along the way, he won the 2020 National Start-up Award for Food Processing and found another supporter: Infosys co-founder and billionaire businessman Kris Gopalakrishnan, who has provided his start-up with the all-important corporate connect. “CII, especially Kris, wants more members to use Jackfruit365 as an example to foster more such partnerships,” he says. Why? “I am an admirer of James and his entrepreneurship,” Gopalakrishnan explains. “So I talk to my industry colleagues and government officials about the product and how James has established the benefits of using it. He alone is responsible for jackfruit becoming the state fruit of Kerala.”
The Multi Commodity Exchange of India (MCX) has signed an MoU, to provide technical support for Bangladesh’s first commodity exchange. The Chittagong Stock Exchange has decided to launch Bangladesh’s first commodities exchange, on futures markets next year and roped in MCX to draw up the regulations and bye-laws, the settlement methods, besides providing tech and infrastructure support for the new exchange. MCX which is working on a five-year plan is scouting for talent to manage and work on the project. The new exchange is expected to provide competitive pricing and rationalise price manipulations in the commodities sector in that country. The exchange is also expected to provide farmers with greater liquidity. The exchange is expected to trade in gold, tea, agricultural produce, iron ore etc. MCX, India’s first listed exchange, is a commodity derivatives exchange that facilitates online trading of commodity derivatives transactions, thereby providing a platform for price discovery and risk management. The Exchange, which started operations in November 2003, operates under the regulatory framework of the Securities and Exchange Board of India (SEBI). MCX offers trading in commodity derivative contracts across varied segments including bullion, industrial metals, energy and agricultural commodities, as also on indices constituted from these contracts. It is India’s first Exchange to offer commodity options contracts, bullion index futures and base metals index futures contracts.
Chennai is set to soar high. The old man on Mount Road, the 13-storey LIC Building, for long the only noticeably tall landmark in an otherwise vertically challenged city used to growing sideways rather than upwards, will soon get company. A 25-storey tower block of offices is coming up on the old TVS plot. Whether vertical growth is defined as progress would depend on the point of view. But, with a change in government, came a significant FSI change – from 3.5 to 5. You can think what you will of how such changes come about, the most obvious being the use of financial clout by the builders’ lobby. The fact is the Brigade group of Bangalore, with its political connections and heft, will be the first to take advantage of the higher FSI with a landmark building that will dwarf the nearby LIC structure, old Chennai citizens described using the Tamil phrase – Heightu da! A lot of changes are also on the cards for what used to be the centre of the city’s business district, with many old firms likely to sell out to builders in the CBD. TVS’ R Dinesh, who inherited the old HQ of the reputed TVS group on Mount Road along with the Honda dealership, was the first to cash in on the new FSI.
Chief Minister Naveen Patnaik’s new dream is to make Odisha India’s aluminium capital and the global aluminium hub. Not without reason too. The state enjoys the true boast of 54% of the aluminium smelting capacity through NALCO, Vedanta and Aditya Birla manufacturing units in India. Of course, this is backed by the state’s rich reserve of 2 billion tonnes of bauxite. NALCO has already chalked out an investment outlay of Rs 30,000 crore towards expansion and diversification to be completed by 2027-28. It has also entered into a JV with the state-owned Industrial Development Corporation to set up a state-of-the-art Aluminium Park in Anugul costing Rs 428.95 crore, estimated completion by 2023-24. The Aluminium Park located next to NALCO’s plant will promote downstream aluminium industries with common facilities including logistics, testing, simulation, prototype development and skill development facilities. Joining the chorus is Anil Agarwal of the Vedanta Group that is also planning a Rs 10,000 crore investment to set up an Aluminium Park at Jharsuguda in Odisha to bring in SMEs and MSMEs under one single roof so they can procure the hot metal from Vedanta. With Patnaik transforming the state, Odisha has emerged as the new investment destination of India.
The Rs 5,138-crore HLL Lifecare (formerly Hindustan Latex) headquartered in Thiruvananthapuram, Kerala is attracting many suitors. This follows the Government of India’s November 14, 2021 decision to hive off its entire stake in HLL Lifecare. Around seven suitors including the Adani Group, Piramal Healthcare, two Kerala based companies advised by two former CMDs of HLL Lifecare, a fund besides NRIs. HLL Lifecare, which started as a condom manufacturer sold under the brand name Moods, is today a health care company in the truest sense. It has a Pharma business, makes medical devices, runs diagnostic centres, manufactures sanitary napkins and blood bags etc. The company has seven factories, four in Kerala and one each in Belgaum, Manesar and Indore. Today the company operates 220 pathology labs, 47 imagery centres, six labs under the Hindlabs brand and 253 pharmacies across India. Both Adani and Piramal are keen to acquire it. The cash strapped Kerala government, however, could play spoilsport since it wants to take over the company although its offer was declined. The company’s turnover jumped three times from Rs 1739 crore in 2019-2020 to Rs 5138 crore, the profit marginally lower than the previous year. The jump in turnover was a result of enhanced non-core activities including huge purchases and supplies of Covid vaccines, surgical masks and gloves for various State Governments and hospitals.
Saraswat Brahmin entrepreneurs from across the globe will converge in Goa come September 10, for the first Annual Conclave. The Saraswat Brahmin community of business leaders from different parts of the world joined hands and formed the Global Saraswat Entrepreneurs Chamber (GSEC) in 2019, resurrecting the nearly 30-year-old Saraswat Chamber of Commerce set up by Suresh Prabhu, senior BJP leader and former chairman of the Saraswat Cooperative Bank. This one-day conference is expected to draw some of the biggest names from the community including, Bharat Ratna Sachin Tendulkar, singer activist Hemaa Sardesai, hoteliers Vithal Kamat (Kamat Hotels Group), Raghunandan Kamath (Natural Ice Creams) and Marathi actor Ashok Saraf to name just a few. The underlying objective of the conclave “to build a wise, vibrant and prosperous community ecosystem for Saraswats in business and profession,” says Siddharth Sinkar, founder director of GCSE. The Saraswat community is primarily known as an ethical and philanthropic segment of society that channelised and harnessed cumulative energies for collective excellence in society. In the fields of business and commerce the community has been a frontrunner in the banking and cooperatives sectors.
Looks like Tesla may not roll out its EV in India anytime soon. Sources say Tesla recently transferred some key officials out of India to alternate global markets in APEC, Middle East and the USA. This indicates that Elon Musk, who was keen on the Indian market, has decided to move on for the time being. Indianconsumers will buy what’s produced in India by Tata Motors, Mahindra, Morris Garage, Hyundai and Maruti presently. Primarily, Tesla chose not to enter the Indian market because of Indian government policies. Given our relationship with China and Modi’s push for Make in India, the BJP government was averse to allow made in China Tesla cars, boosting Chinese employment, but marketed in India without an immediate commitment to manufacture in India? There are several reasons Musk may have put India on the back burner. Firstly, current EV sales touch barely 1% of total auto sales in the country which does not make economic sense for Tesla to set up a unit in India. Secondly, with 100% import duty, Tesla will become over priced in the Indian market. Thirdly, India is not yet ready with its infrastructure, including road worthiness and charging stations. And, fourth reason is Indian insistence on a long term manufacturing commitment, distinct from being considered like a test pilot case.
It is no thanks to the National Green Tribunal’s (NGT’s) vigilance that both, the private sector and government-owned companies brazenly breach environmental laws and, very happily pay the prescribed fines. The reality is that the importance of environmental conservation is not given its due consideration with the NGT mandated penalty system not a functional and practical deterrent. Observers say, tougher measures are needed for the private sector and government-owned companies like NTPC, Indian Oil, BPCL, Singareni Collieries and others that boast of a track record of repeat environmental violations. Without the government’s continued commitment, NGT cannot deliver results by itself and, sadly, tough government intervention is only seen in the wake of intense public pressure. Take the case of the Vedanta Group which had to shut down its Thoothukudi plant, over Sterlite’s pollution issue. No lessons appear to have been learnt from it. Recently, NGT fined Vedanta Rs 25 crore for the expansion of the Lanjigarh factory in Odisha without due EC clearances and also levied a Rs 25 crore penalty upon Hindustan Zinc for violating environment norms in Rajasthan. Sometime in 2017, Vedanta was asked by the Chhatisgarh government to shut down its 1200 mw Balco power plant for violations of environmental norms. Harsh measures yielded results and today, Balco’s power plant is one of the best energy conservation units in the country.
Pankaj Munjal of Hero Cycle’s fame has ambitiously big plans to strengthen the company’s presence in overseas markets, particularly across Europe. His company Insync Bikes Ltd has geared up to manufacture top end e-bikes at Trafford in the United Kingdom. Munjal, who visited UK to unveil his plans, told shortpost.in, “Manchester has given us more than what we had expected or planned.’’ The immediate future plan involves development as part of the budgeted £150m group-wide investment. His Manchester-based Global Design Centre has innovated an e-bike with artificial Intelligence functions that will incorporate advanced technologies such as Google services integration and introduce anti-theft systems and advanced telematics. Approximately 300 e-bikes will be manufactured every month at Trafford and priced at £3000 per piece. These e-bikes are expected to hit the road by August-September of 2022. The company received an award for being a Fast Track Indian company in the UK from among 900 companies surveyed by Grant Thornton in its India Meets Britain tracker report. Despite difficult conditions in the UK and Europe, Insync Bikes ranked 7th on the growth rate parameter. If the Indian experience is an indication, it will be among the top four players, sooner than later
The South Side Story is always exciting. Family enterprises are a dime a dozen in this part of India. Some of them, especially in Tamil Nadu, are iconic names. These two industrial groups are definitely a name to reckon with, and they are trend setters in many ways. The TVS group, for instance. This venerable industrial house – comprising four families – has recently chosen to go their separate ways legally. With families expanding through fresh generational additions, the TVS group has done a remarkable job of succession planning. Now that they have separated legally, each family within the larger TVS tree has unhindered leeway to chart out their own individual paths. The Murugappa group, too, is another reputed name. It was the first to hit upon the idea of a group corporate board many summers ago, to delink the family from the management of their various enterprises. The Sanmar group under the late N Sankar took a cue from them. It was, however, a different matter that Murugappa junked the group corporate board a while ago. The Murugappa group, if grapevine is anything to go by, is now looking to emulate the TVS model of separation. Will the TVS model be the template for amicable resolution of succession planning in family businesses?
Is Elon Musk picking up a bias against Indians? It would appear so if emerging dramas follow an early trend in which the world’s richest man, out on a spree to buy his favourite toys, has had bones to pick with Vijaya Gadde, a lawyer of Indian origin, even as the status of Twitter’s CEO Parag Agrawal is under a cloud after the acquisition. Vijaya, top censorship advocate at Twitter had taken decisions to keep out contentious content in 2020 and she was fiercely defended by Twitterati after the Muck onslaught. As owner of the company, Musk will have the power to fire key individuals and Parag may be the a name on that purging list even if he had picked up a reputation as a top engineer who had helped transform Twitter’s developing projects, including letting algorithms guide moderation software. Musk’s ‘absolute free speech’ platform may be up for confrontations with India, which has been thin-skinned to the extent of being the country asking for the most tweets to be taken down. Musk’s ties to China with his Tesla electric cars, which are not being allowed free access if they are not made in India, might also put him on a collision course with India. His obsession with the number 420 places him in a piquant position with the number in India’s IPC that is to do with cheating and fraud.
The recent fire that destroyed 20 electric scooters manufactured by a firm in Nashik, Maharashtra, has set the cat among the pigeons in the electric vehicle (EV) industry, which has already got the jitters over several isolated instances of spontaneous combustion of EVs. Why and how does this happen, is the question in the minds of everybody? There’s a lot riding – literally – on electric two-wheelers, more than cars and three-wheelers even as sales in the segment have rocketed nearly 500% in just one year. According to the government’s VAHAN portal, 2021-22 saw the producers laughing all the way to the bank with well over a quarter million EVs sold, compared to mere 40,000 sales in 2020-21. Chetan Maini, Co-Founder & Vice Chairman at SUN Mobility, the pioneer in the EV world who created India’s first electric car REVA, gives a variety of possible reasons: “Such things can be caused by poor cell selection, defective cells, poor thermal management, manufacturing issues and poor charging management amongst others.” According to his fellow Bengalurite Amitabh Saran, Founder & CEO of Altigreen, which started off in 2013 creating EV technology and now manufactures electric three-wheelers, these products were “not engineered in or for India”. Whatever the cause, the hope that it can be controlled – and soon — is universal, with EV being widely seen as the future of mobility.
To make good the exit of South Korean steel major Posco, Odisha Chief Minister Naveen Patnaik has successfully roped in India’s leading integrated steel major JSW Steel, part of the $13 bn JSW Group headed by Sajjan Jindal. JSW’s wholly owned subsidiary JSW Utkal Steel is expected to set up 13.2 MTPA at an investment cost of Rs 65,000 crore in Jagatsinghpur district close to Paradeep port. The Odisha project dovetails with Jindal’s game plan of achieving 50 MT capacity. The JSW project has already received EC clearance and is getting ready to implement pre-project stage requirements including employment and livelihood creations. The Odisha government seems confident of handing over 2,950 acre land to JSW Steel this fiscal since most land parcels belong to the government anyway. Other small gap are being covered through collective persuasion, court support rejecting vested PILs and fair compensation for loss of betel-nut farm lands. Learning from the Posco experience, the Odisha government is not leaving any chances for slippages anywhere, by taking everyone on board through village meetings, addressing concerns with matched speed of action to deliver complete parcels of land to JSW this fiscal. If Naveen babu gets the project going Bhubaneswar could well emerge as the steel capital of India with other players like ArcelorMittal, JSPL and others also evincing interest.
One of Kerala’s iconic hotels, the Taj Malabar Resort & Spa in Kochi near Willingdon Island is up for grabs. Cochin Port owns the property built in 1936 and named after the first Viceroy of India, the 1st Earl of Willingdon and, has invited bids. The Taj group which has been managing the property since 1985, is now running it on extension after the expiry of its lease. Cochin Port has invited tenders for a pre-bid meeting for the Port-owned buildings (Malabar Hotel) for a period of 30 years. The last date for submitting the bid is May 6. The Taj group currently pays a lease rental of Rs 71 lakh per annum. Many contenders have lined up for this prestigious property including the likes of ITC Hotels, Oberoi Group and Kerala’s top business names like RP Group, Lulu Group etc. The Malabar Hotel offers stunning views of the Cochin Harbour and the Arabian Sea and can still remain with the Taj Group if they invoke the right of first refusal in the bidding process according to well-placed sources. The Tatas may still retain the property if they match the highest bidder. A spokesman for the Lulu Group denied being in the race and said that the Group was currently focused on only two properties: the Grand Hyatt at Bolgatthy and Marriott Hotel at Edapally.
Social media has become so powerful a communication tool these days and yet, not everybody understands the scale of its utility. None, however, can afford to ignore it. Not surprising, all and sundry have made it a point to be visible on the social media platform. Take the case of the Vedanta outfit. Mired in a local political slugfest and caught up in a legal bind, Thoothukudi-based Sterlite Copper, a unit of the Vedanta group, is stuck in a pincer-like situation, being hammered from all sides. How to fight this tricky situation? Well, a new Twitter handle was set up in January this year, created by Sterlite Support Federation, a non-government and non-profit organisation. The federation was formed ostensibly to bring all the pro-Sterlite people across the country to “fight for the cause, thereby giving jobs to thousands.” With over 400 followers, this appears to be a determined counter to the anti-Sterlite lobby that works relentlessly to derail any efforts to revive the Sterlite Copper plant in Tamil Nadu, ordered to close down by the previous AIADMK regime following police firing that resulted in 13 deaths. The firing was ordered to disperse the anti-Sterlite agitators in the vicinity of the plant a few years ago. Can the micro-blogging site help check-mate anti-Sterlite sentiment?
The Gujarat-based Adani group, with interests in every field that involves energy, has announced a massive expansion in its construction financing. So too the group company Adani Gas Ltd (AGL) with its city gas distribution and piped natural gas to the domestic, commercial, industrial and vehicle users in 15-plus distinct geographical areas. AGL, which is going great guns, also supplies compressed natural gas to the transport sector. Though a very small part of the Rs 20,000-crore group, the Ahmedabad-headquartered AGL is important to the business, thanks to its involvement in the daily lives of both employees and outside customers. The company changed its name to Adani Total Gas Ltd at the end of 2020, 15 years after it was incorporated, when French energy major Total took a stake of 37.4% – equal to its own, making it a joint-venture company. The remaining 25.2% is with public shareholders. “Passion, perseverance and self-belief enable you to overcome obstacles and deliver solutions that benefit the business and our consumers,” says Sandip Adani, Head, Techno Commercial, Adani Total Gas. Big brother Adani Green Energy is the world’s largest solar power developer and is in the process of completing the construction of its projects to meet its stated renewable energy capacity target of 45 GW in the next eight years.
The merger talk was in the air for years but, was put on the back burner over serious differences at the top. Finally, the merger between HDFC and HDFC Bank has happened. For the first time perhaps, a challenger of a fitting kind from the private sector appears to have arrived to counter the dominating State Bank of India. To that extent, the HDFC-HDFC Bank merger move is seen to herald a massive transformation in the Indian banking space. Will that edge the non-banking financial companies (NBFCs) out of the picture? Not really, say experts. For, there are plenty in India who are still either unserved or underserved. Why did it take a long while for the two to merge? People who matter know it but, none prefers to go on record for assorted reasons. Perhaps, the merger plan was waiting for the HDFC Bank’s founder-CEO Aditya Puri to serve out his term in October 2020. If sources are to go by, some 5-6 years back Deepak Parekh had mooted the idea of HDFC merging with HDFC Bank to create a big bank but Puri was disinclined. He wanted the two entities to operate separately. Perhaps, with his exit the whole plan was brought out from the cold storage. The merger has indeed reconfigured the banking turf in India.
The upcoming BMC elections will not be an ‘aam’ municipal referendum by any means. The BJP is determined to put all that it has at stake, to level scores with long-time friend-turned-foe, the Shiv Sena. The Sena is trying all the tricks of the trade to retain its Marathi Asmita and control over Aamchi Mumbai. The NCP is looking to expand its Mumbai base at the cost of senior partner Congress’ vote bank. The grand old party is also using all its might to stay relevant in the politics of the very city where it was born. Amidst all the scheming and planning that the city is silently witnessing, the AAP is using the grace period, by postponement of elections, to actively strengthen its organisation. AAP, the fourth largest party, has formed teams of devoted workers and volunteers in almost 100 wards. Its campaign will highlight the pathetic state of Mumbai’s roads, corruption in BMC and announce its plans for the health and education sectors. “We’ll fight to win and are getting tremendous support from Mumbaikars. People are really frustrated and fed up with these parties and their dirty politics. The only clean alternative they have is in AAP,” says Ruben Mascarenhas, the working president of AAP Mumbai. AAP is betting on youngsters and a majority of its candidates will be under 40 years old.
Is the new CEO of FedEx Raj Subramaniam just one more Indian CEO of an American corporation? This question elicited two divergent views, summed up aptly by Chidanand Rajghatta of Times Of India. One response is the blasé “Ho hum, another Indian”. The other: “What Indian? He is an American, who worked his way up.” Raj joins an exclusive club of over half a dozen PIOs who merited entry into the hall of fame thrown open by Google and Microsoft. Sundar Pichai and Satya Nadella are already part of the corporate power folklore. Other recent entrants include: IBM’s Arvind Krishna, Parag Agrawal of Twitter and Leela Nair of Chanel. Founder Fred Smith who spearheaded the FedEx operations for 50 years and saw its turnover touch $92 billion found that Raj, who has been with FedEx since 1991, was the ideal man to hand over the baton to. Thiruvananthapuram born Raj faces big challenges before him. E-Commerce has changed the whole ball game and, FedEx must enter this instant gratification, touch of a button business by changing its own avatar, from an Express Delivery Organization, hub & spoke, track & trace, but as part of that last mile delivery, the fulcrum of e-commerce. Clearly, Raj has to combine his experience at FedEx 1.0 and metamorphose into FedEx 2.0. Clearly Raj has a tall order to deliver.
A private-public partnership saw a plant come up at Thoothukudi in Tamil Nadu to produce ammonia and urea. In the 50 odd years of its existence, Southern Petrochemicals Industries Corporation (SPIC) has had a chequered history even as the A C Muthiah-piloted group became ambitious. Big investments in PFY and PTA (Spic Petro) and in a new fertilizer facility in Dubai saw money going down the sink. Things turned for the better post 2010 with a changeover at the helm. Now, Muthiah’s son Ashwin, who heads the company, has gone all out to ramp up capacity of ammonia and urea to almost global scales. To improve margins, it moved from naphtha to natural gas for its feedstock. For fund infusion, Ashwin roped in AM International of Singapore besides talking to lenders for debt restructuring. Result: Thoothukudi-based SPIC has turned around with its topline and bottom-line looking healthy. Unfortunately, another well run plant in Thoothukudi Sterlite Industries, part of the Vedanta Group had to shut shop over environmental issues. For the nine months ended December 2021, SPIC has turned in heart-warming results with a PAT of Rs 132 crore on the back of a topline of Rs 1,600 crore, both representing a big leap from the previous corresponding period. While things are certainly looking up for SPIC, the road ahead still sports many signs of caution!
Since winning the panchayat and urban body elections, Odisha Chief Minister Naveen Patnaik has been pulling out all the stops to kickstart Tata Steel’s Rs 5,000 crore Subarnarekha deep-sea all-weather port in Balasore district. He hopes to complete the project before the 2024 general election and, is moving quickly on the land acquisition front; with nearly 146 acres of land almost acquired. The state has already provided 700 acres of land for port construction near the Chaumukh seashore, Baliapal. However, for the construction of a new rail line from Amarda Road to the port at Chaumukh and widening of existing roads and creating new ones, it needs to acquire another 300 acres. According to Sudarshan Chakravarti, Collector & District Magistrate, Balasore “Of the 300 acres requirement of land 154 acres has already been acquired with the balance to be acquired soon.” Land acquisition may not be a problem as the government is paying a good compensation — three times more than the registered value. Tata’s project will have the first mover advantage over Adani Group which is setting up a green field port at Tajpur in West Bengal which is literally next door. When both ports become operational East India will emerge as the new regional maritime hub.
European hospitals say 80 % of Covid patients lose the sense of smell, not regaining that sensitivity even after recovery. When the sense of smell is gone, vital sensory cognition is lost too. The five crucial senses of cognition and life are now viewed in a new light, as marketers and manufacturers perceive newer horizons to tap, post pandemic. Aradhna Krishna, the Dwight F Benton Professor of Marketing at the Ross School of Business, University of Michigan cites the intricacies of our sensory reach that marketers are engaging with. Scents from the past and present possess a unique signature, sensory cues. “Smell is vital to our existence, essential for taste, even foretelling danger like smelling smoke or bad food.” The Harvard Business Review acknowledges her as “the foremost expert in the field of sensory marketing”. Her book, Customer Sense provides researched insight on how the five senses influence human buying behaviour. Her paper on Olfactory Imagery postulates that imagining/imaging odours affects human responses towards products. No wonder India with its cultural and gastronomic diversities is so amenable to marketing products that evoke a positive response. Now restaurants may simply market their signature Panneer Tikka or Kerala Chatti Meen Kuzhambu by opening a vent directly onto the streets and, the hungry will just follow the aroma trail for an actual taste of their drool worthy dish.
The Citi never sleeps. Citibank literally rode on this famous tag line for an increased mind share even as India was only just opening up to the world in the early 90s. The MNC bank left no stone unturned embarking on its aggressive business expansion. Somewhere along the line, however, the aggressive instinct for growth turned ugly and, Citibank went about issuing credit cards without any let or hindrance, to onboard lakhs of customers. Citibank had indeed re-laid the retail thrust in the Indian banking industry. Many in Indian industry did follow the Citi line but, somewhere along the way, Citi went overboard as an incident in the early 90s hit national headlines. In its zest to recover dues, its agents waylaid a top bureaucrat in the Central government on the Bombay-Pune Highway in a case of mistaken identity. The script went horribly wrong and Citi should have realised the `retail difficulty’ in India. It did slug it out for several seasons thereafter. Though it launched credit cards in India in 1987, Citi’s market share has slumped to 4% from 13% just a decade and, it has decided to sell its retail business to Axis Bank. After 119 years in India, Citi is restructuring and exiting the consumer banking business. Over the last few years was Citi out of sync in India?
Late DC Kothari was a tall name in the industrial landscape of Tamil Nadu. And, Kothari Industrial Corporation Ltd (KICL), the agro input (fertilisers and insecticides) company promoted by him, an iconic entity. After him, the onus fell upon son Pradip D Kothari but, it hasn’t been a smooth ride. He had to fend off incursions from cousin, the late Shyam Kothari (son-in-law of the late Dhirubhai Ambani). Pradip Kothari did succeed in barricading KICL. That legal battle in the 90s did make national headlines then. Much water has flown under the bridge since then. KICL now appears to have undergone a major overhaul and, sports new names on the management list. Of course, Pradip Kothari remains the Chairman. But it is driven by self-taught entrepreneur Jinnah Rafiq Ahmed, who is now the vice-chairman & MD of KICL. Parveen Roadways, his key venture, does quite a lot of work for the Southern Railways showing his experience with the contracts business model. Will this push the well-networked Ahmed to opt for contract manufacturing of fertilisers sold under the brand name Horse? This could see the company do well and get re-listed soon after internal issues saw its share trading being suspended many moons ago. Hopefully, investors holding KICL shares would soon find a window to cash out.
There are certain advantages in being an unlisted, closely-held company. Owners of such firms, however, may encounter irritants coming their way. A few shareholders, with marginal holdings could prove to be an avoidable hindrance. One such unlisted, closely-held company is attempting to implement share consolidation ostensibly to ease the cumbersome procedural formalities in administration. It is also touted as a goodwill exercise offering small shareholders an exit option. In some instances, small shareholders do not see any goodwill in such an exercise. Rather, the move is viewed as an ill-intentioned initiative to get them out cheaply. The city of Chennai has seen Chettinad Cement, a well-known player in the bulk commodity space, delist its shares a few summers ago. But that has put its industrialist-shareholder AC Muthiah in a spot. If sources are to be believed, Muthiah is unable to get rid of his shares in the company at a price he considers equitable. The owner of Chettinad Cement appears to be playing it cool for now. The business, it may be recalled, is run by MAM Ramaswamy’s adopted son MAMR Muthiah who has an old score to settle with AC Muthiah, whom he had accused of usurping the company assets while his father was ailing. Alternatively, he doesn’t feel the need to acquire more shares, sitting comfortably as he is with a majority holding.
The world has indeed termed this as an abrasive action by Russian President Vladimir Putin. The Russia-Ukraine military face-off has certainly thrown the nation states across the globe in a tailspin. The ongoing war between the two hostile neighbouring nations is bound to have far-reaching implications for the international community. Nearer home in Chennai, this business group is keeping its fingers crossed. The abrasive action of Putin has put this abrasive maker in a tight spot. Carborundum Universal (CUMI), a Murugappa Group company, it may be recalled, acquired 84% of the ordinary shares of Volzhsky Abrasive Works (VAW), located in the Volgograd Region of Russia, through its wholly-owned subsidiary, CUMI International Ltd., Cyprus, for a consideration of around $37 million sometime in 2007. The Russian venture fetched CUMI a PBT of Rs 1,350 million during 2020-21. The company expanded the capacity of the nitride bonded silicon carbide facility at VAW. This was ostensibly done to provide the company the capability to address the increasing global requirement of nitride bonded refractories for non-ferrous and waste-to-energy applications. Well, the dynamics have completely changed now. With the two countries at loggerheads, a sense of uncertainty has gripped Indian business in Russia. An abrasive action has put this abrasive maker in a bind, it appears.
Come April 1, 2022, the IPO market will witness three major changes that will immensely benefit retail investors. First, as per RBI stipulation, investors cannot borrow over Rs 1 crore from NBFCs to apply for an IPO. Second, SEBI has split the current HNI category into two. The first part, 1/3 of the bucket size of HNI portion, is for Rs 2-10 lakh and, the second bucket size of Rs 10 lakh and above is for HNI-Non-Institutional Investors. Third: change in lock-in period for anchor investors from current 30 days in two bucket groups: 50% shares will have 30-day lock-in and balance 50% for 90 days. Clearly, institutional investors are uncomfortable with the 90-day lock-in with good reason. The last three months saw all new age companies losing around 50% values since their listing. Allotment for HNI category, in case of oversubscription, would be similar to the retail category with one lot per applicant. For example, in the Rs 2 lakh plus category it would be just Rs 2 lakh. Similarly, it would be Rs 10 lakh in the Rs 10 lakh plus category. The new rules will see unrealistic over subscriptions by over 200-300 times disappear to more realistic levels in turn, making grey markets vanish. It will also force promoters to price IPOs more realistically.
A little-read news piece got buried in the avalanche of revelations on Chitra Ramkrishna, her shenanigans at the National Stock Exchange and more. The interesting news has lost relevance now thanks to the identity disclosure of Ramkrishna’s ‘Himalayan Guru’ – Anand Subramaniam — her right-hand man at the NSE. A couple of days before the bombshell caused a blast, the Maharashtra Andhashraddha Nirmoolan Samiti (superstition eradication committee), founded by the late rationalist Dr Narendra Dabholkar, had submitted a memorandum to the Central Bureau of Investigation (CBI), also Mumbai Police seeking the arrest of the NSE’s former CEO and MD under the Anti- Superstition and Black Magic Act. Pointing out that Subramanian’s appointment as the exchange’s COO in 2013 had cost the NSE Rs 5 crore, the Samiti said the entire case was an embarrassment for India, as a highly-educated person like Ramkrishna took advice from a self-proclaimed guru. “MANS has brought it to the notice of CBI and Police Commissioner Mumbai that according to the Act it is an offence to claim divine powers and deceive people on the basis of it,” the organisation had said. “The current case is a clear incidence of a person holding important public office working under the influence of superstitious beliefs and hence doing harm to the greater public good hence we have decided to take up this issue.”
The Odisha Electricity Regulatory Commission (OERC), currently hearing the annual revenue requirement to fix bulk supply price for 2022-23, was subtly asked by the state government to disallow tariff hikes sought by power utilities. The popular Naveen Patnaik government has told OERC to find a win-win solution for all stakeholders. “The balancing act of finding a solution without consumer tariff hikes is the prerogative of OERC, which is doable,” an industry expert says. The rationale for “no power tariff hikes”: The Four Tata Power DISCOMs in Odisha especially, TPWODL posted excellent results for the nine-month period in the current financial year. Their performances contributed to a total of Rs 600 crore regulatory surpluses. In the regulatory framework, DISCOMs are permitted pass through of reasonable expenses and only 16% return on equity (RoE) and hence, the possibility to adjust the Rs 600 crore revenue surplus of Tata DISCOMs suitably while accommodating pass through of genuine expenses of GRIDCO, OPTCL and other state generation companies (OHPC & OPGC) with no increase in retail tariffs for consumers in 2022-23. The quality of power supply and consumer services in the State are expected to improve with capital investment of Rs 2000 Cr by the Odisha Government over the next 2-3 years.
The fast unfolding drama around Chitra Ramkrishna, the erstwhile MD of NSE, has pushed the issue of Corporate Governance back into focus. Breached more than it is practiced, it is the most widely abused term in the corporate world. Instances are a dime a dozen of vociferous proponents of corporate governance gave it a go by to suit their own interests. A trip down memory lane reveals this hard truth. When co-founder NR Narayana Murthy returned to head Infosys again, he brought his son Rohan along with him! A revered personality in the corporate world, he subsequently turned activist of an unusual kind. He went ballistic in public against the Infosys board, triggering the ouster of chairman R Seshasayee. In like manner, it still remains a mystery how a member of the search panel for the appointment of a chairman for Tata Sons landed the coveted job for himself. The mystery deepened when Cyrus Mistry was unceremoniously thrown out subsequently. “How could I go against the Tatas?” an independent director put it succinctly. It is easy to preach but, difficult to practice. When it came to cutting his stake in his bank the banker, who headed the panel on corporate governance, prevaricated. Corporate governance appears to follow a “heads I win, tails you lose” maxim. NSE isn’t so unique experience after all.
Looks like there will be no let-up in the probe against the “mystery Yogi” who gave divine instructions to former MD & CEO of the National Stock Exchange, Chitra Ramkrishna. At an official weekend meeting, PM Narendra Modi made clear that investigations must be conducted thoroughly to delve into the depths (gehariyan) of the scam. This means Ramakrishna will not get away with pleading innocence for having taken instructions from a godman who resided in the Himalayas. The official keenness to get to the bottom of the story is also because Ramkrishna, a qualified CA, was connected with an influential political family, a father-son duo, from Tamil Nadu since 2012. It was this connection that helped her secure the coveted job in 2013. Sources close to Ramkrishna, keen to protect her, are peddling multiple theories including one, about the yogi being a finance ministry bureaucrat besides speculative assertions about him. He was probably a Karnataka cadre officer, once a close aide to the senior Tamil Nadu leader. Interestingly, the political class seems very keen to see a bureaucrat is made the fall guy in the Chitra Ramkrishna episode so it fails to impact their political space.
The Indian cricket field will soon witness a major turf war of a different kind, a battle for media and digital rights. Amazon and Reliance Industries, two corporate majors locked in a head-on battle for physical shopping space in Future Retail, will also flex their muscles to bid for the 2023-2027 IPL rights. Valuations have breached the stratosphere already with talk of bids reaching $7 billion dollars and, many other giants ready to do battle as well. The previous 5-year cycle that attracted a consolidated Rs 16,347.5 crore from Star-Disney ends with the 15th IPL featuring 10 teams and more matches than were on offer under the 8-team format. Disney-owned Star India may have to reach deep into its pockets to take on the global e-commerce giant Amazon with its Prime Video OTT pay channel, even as India’s industry and commerce behemoth Reliance, with a broadcasting arm in Viacom18, opens up its considerable war chest to bid for what is seen in broadcasting as an everyday Super Bowl with a 2.5 billion worldwide audience. The BCCI may unbundle the TV and digital rights. IPL has probably already factored in its Rs 7,000 crore a year rights earnings, which is believable as cricket is king in India and IPL dishes out magical live sport entertainment.
This news comes as a much needed relief for many family-run enterprises. In a sudden about-turn, SEBI decided to make splitting of the posts of chairperson and managing director (CMD) by listed entities voluntary and not mandatory. A dozen such enterprises thrive in the Dravidian land. With one too many family members within such enterprises, splitting the CMD could have triggered considerable tensions within such enterprises. The consequences for them would have been a lot severe if it was enforced with a stricter fiat from the market regulator? What made the regulator do a U-Turn? One can debate the volte-face endlessly. One thing is sure, however. Regulation by force has often proved ineffective, and hasn’t really delivered the intended result. We have seen this happening in the unfolding Chitra imbroglio in the NSE. The entire governance structure at NSE appears to have gone for a toss. Will more rules solve the problems? They won’t. Be it in the re-nomination of the Maran couple on the board of Sun TV Network or the infamous Tata-Mistry imbroglio, corporate governance has been a consistent casualty. It reflects the erosion in the value system of society. The Venu Srinivasan and R Dinesh-led wings in the now partitioned TVS group have gone for non-family members to chair some of their boards. That’s refreshing. Laws often don’t get the right result.
Tata Power operations in Odisha is firing on all cylinders for an uninterrupted quality power supply. According to Shenbagam Manthiram, CEO of Tata Power Central Odisha, by 2023, the twin cities of Cuttack and Bhubaneswar will have power quality on Mumbai city standards, thanks to its SCADA technology and LT protection system. This apart, Tata Discoms is putting in place a cyclone resilience disaster network spanning 60 km between the Puri and Konark shoreline to withstand cyclones which annually ravage Odisha, paralysing its power supply. Moreover, it is focusing on a single digit AT&C loss through Capex plans of Rs 1500 crore over the next three years. It will soon launch smart pre-paid self-reading certified HPL 3 phase meters on rental basis at Rs 150 per month and re-charge options. “From February/ March 2022 power purchase in Odisha will go hi-tech, enabling customers with pre-paid meters,” says Manthiram. Initially, covering only 3 phase consumers the scheme will scale up to include others subsequently. The aim is to cover 175,000 customers, improving progressively thereafter. To achieve this goal, Tata Discoms has automated 155 sub-stations linked to SCADA, another 300 will be added this year so that by 2023, 80% of its sub-stations will be unmanned. By 2024 it plans to eradicate low voltage power supply pockets in Odisha and, unveil roof top solar projects in Odisha.
In the corporate world, the phrase ‘All is fair in love and war’ has assumed a new meaning. Well, all is fair if rules are observed is now the touted line and reasoning given to explain away an ethically and morally unjustifiable action. Institutional shareholders voted against a resolution but found themselves unable to vote out the resolution in the face of a steamrolling majority held by the promoters. A classic case was when the resolution relating to the reappointment of the Maran couple — Kalanithi and Kavery — sailed through at the annual general body meeting of the Sun TV Network despite a majority of institutional shareholders voting against it. The Maran couple are the highest paid executives in India. They have taken home close to Rs 1,500 crore by way of managerial remunerations over the last decade. The promoter remuneration is now the subject of intense debate. Is it ethical for promoters to vote on a resolution pertaining to their own compensation? The whole issue has made a mockery of the so-called SEBI-ordained tight governance system. Like the RBI does, can’t corporations be told to make public disclosure of detailed minutes of meetings that clear the compensation paid to promoters? At least that will give the minority shareholders a clue about the logic for the high pay packets.
There is great news for coffee drinkers, bombarded for years by their brothers and sisters on the other side of the coffee-tea divide and, all they heard was about the health benefits of tea, the cup that cheers but not inebriate. The findings from a large research group of 4.70 lakh people over 11 years suggests that coffee could help you live longer. Scientists not only know how many cups per day of beans to cup coffee are best but have also found out that three cups of ground coffee a day is the best. The findings also suggest that decaffeinated coffee gives almost as much benefit while not so in the case of instant coffee. Moderate coffee drinkers who take up to three cups of ground coffee a day are 12% less likely to die too soon and, 17 to 21% less likely to die from heart disease or stroke, according to a study by the Semmelweis University in Budapest and Queen Mary University, London. The benefits are only partly due to caffeine containing antioxidants while other chemicals play a larger role. The focus of the study was on the effect of coffee on cardiovascular health. But higher coffee intake was also found linked to cause cardiovascular mortality. So, do drink up to three cups a day without guilt.
Chennai’s real estate market is abuzz over news that the TVS Group has put its landmark property on Chennai’s Mount Road on the block. This 2.14 lakh square feet property that houses Sundaram Honda Sales, Madras Auto Service and a clutch of family-run companies, is a bespoke landmark, along with Spencer’s, LIC and Higginbothams. Generations have gawked at these imposing car dealerships. It is learnt that real estate biggies from Bengaluru like Purvankara, Brigade, Prestige and Embassy have thrown their hats into the frenzied bidding ring. Sources say Brigade Group has pocketed the deal with a Rs 550 crore offer. Senior VP of Anarock Property Consultants, Sanjay Chugh, says the sale will set the trend for commercial and retail development on Chennai’s arterial Mount Road and its hinterland. The $ 8.5 billion TVS Group quietly restructured the family holdings while putting an end to the holding company practice. Hereon, each of the four families will completely own the businesses they have grown, following the mega sale monetization of the assets. Corporate analysts say the sale of the Mount Road property could be the starting point of many more future deals. It may be noted that TVS Group owns a big chunk of properties in Chennai’s Poonamallee, Tiruchirappalli and Madurai. Cashing in when the going is good seems to be the motto now.
Finance Minister Nirmala Sitharaman’s Budget announcement of 400 new Vande Bharat trains at a time when only two currently ply in India — Delhi-Varanasi and Delhi-Katra — has set the wheels in motion at high speed. Train 18, as it is called, is a semi-high-speed, intercity EMU train with airplane style rotatable seats designed and manufactured at the Integral Coach Factory at Perambur in Chennai. Railways Minister Ashwini Vaishwav says a new version series of these trains has been designed and serial production for the rakes is likely to commence by September. With the focus on safety and comfort, including reduced noise and vibration levels, the Indian Railways and its vendors are working hard to meet these new targets. “We have an order for the front end of 35 trains and are now building them,” says Shekhar Sardessai, Executive Vice Chairman & Managing Director of the Goa-based Kineco Ltd. A pioneer of composites for the manufacture of a wide range of products for rail, road, air and space transport vehicles, Kineco is also understood to have bid to create the complete interiors for the first rollout of the trains. The Railways is also considering the use of aluminium over steel for building the coaches, to make the trains lighter and faster, as well as, improving energy efficiency.
What holds a business family together? Just about everything. But, when it entails an extended family, then the task become more daunting. One Chennai-based conglomerate discovered the right formula many summers ago, to navigate the business cycles smoothly while also keeping the assorted wings of the larger family well and truly satisfied. The Murugappa group employs a house-keeping entity that has largely been instrumental in fairly compensating male members of the extended Murugappa family. They may all be differently talented but, when it comes to compensation, each of them (read every male heir) is treated on par. This entity came in handy especially when the group established a Murugappa corporate board and went in for a group branding in the ‘90s. The board members and others in the family were largely paid compensation through this unlisted house-keeping entity. A public limited outfit, this house-keeping firm doesn’t include any family members as directors. It was structured in such a way to avoid action under the MRTPC lens. A little birdie tells us that female heirs in the family aren’t fortunate enough to enjoy identical benefits. That may explain the cause for the open rebellion demonstrated by Valli Arunachalam, whose father MV Murugappan, former executive chairman of Murugappa group, expired a few years ago. This family enterprise makes for a fascinating story, all the same.
All of a sudden, the Chennai corporate landscape is buzzing with action. It is witnessing some significant transformation. Indeed, coming events are casting their shadows before them (read SEBI ruling on splitting the CMD post). For the first time perhaps in its annals, a TVS group company will have a non-family member as chairman. Come April 1, TVS Motor Company will see non-executive director Prof Sir Ralf Dieter Speth becoming its Chairman. Promoter Venu Srinivasan will then be designated as Chairman Emeritus. Several summers ago when the TVS group chose to dilute its majority holding in its then joint venture, TVS Whirlpool, Suresh Krishna voluntarily gave up his position as the Chairman of the joint venture. Well, much water has flown under the bridge since then. Venu Srinivasan’s son, Sudarshan, in the meanwhile, has been inducted into the board of Coromandel International, a Murugappa group company. Sudarshan has joined the board of Coromandel International as an Independent Director. In an equally significant development, Srinivas Acharya, former managing director of Sundaram Home Finance, a subsidiary of Sundaram Finance, is being roped in to join the board of Hindujas’ housing arm. An able hand with enormous experience in the field of housing finance, Acharya can provide the Hinduja housing arm with deeper insights. Indeed, the Chennai corporate world is undergoing a churn
Tata Power took over four Odisha government-owned power distribution companies in early 2021, confident of turning these around in three years despite pressure from media Moghul and, ruling party MLA Soumya Ranjan Patnaik over the sought tariff hikes. Patnaik filed objection with the Odisha Electricity Regulatory Commission (OERC) over the Tata Power Discoms and Odisha government-owned GRIDCO’s Aggregate Revenue Requirement recommendations to hike power tariffs from the current Rs 296.20 per unit to Rs 385.21, for the financial year 2022-23. The OERC is currently headless after its chairperson and former IAS officer, UN Behera’s tenure ended January 15, 2022. Unless his successor is appointed, the existing quasi-judicial two-member commission is expected to conduct public hearings and pass power tariff orders for the next fiscal. Sources suggest that the OERC members are not in favour of a tariff hike. However, Tata Power’s business plan has worked out a detailed mapping of the high technical loss areas along with the investment required to reduce the same. Sanjay Banga, President of Tata Power says “magic will happen within the three-year time-frame by when, Odisha will emerge as the best performing discom (towering) over rest of India.”
Currently, IPO subscription in India is skewed to favour the leveraged HNI and subject to a very high degree of money power. Come April 1, 2022, this is set to undergo a major change with the RBI directing that no individual can be lent more than Rs 1 crore to apply for shares in an IPO. The immediate ramifications will be huge. Firstly, the number of times the HNI portion is subscribed will fall sharply from the present 100-800 times to maybe 5-10 times. The present grey market premiums which decide the subscription level will no longer exist at these levels as the subscription will not match. The reverse math will not allow such premiums to remain. The pricing of issues will go through a downward pressure as merchant bankers, promoters and PE Investors will no longer have the luxury to depend on leveraged HNI to back them. The standard practice of every issue opening at a premium of 20-30% of the issue price will simply stop. What would the new scenario look like? Probably more subdued and balanced. IPO price band would be realistic and listing gains of 10% would be a great number. HNI subscription being in single digit would be the new norm as SEBI would also have notified the new norms of splitting the HNI bucket into two. For retail investors it is a welcome move.
TRENDS & VIEWS
Editor’s Note: Big Punch In Small Pack
It is the Third Anniversary of Short Post and as a news media startup launched during the Covid-19 pandemic it certainly feels better than good to find ourselves where we are today. Here, I must cite the unstinted support of our seasoned contributors, all senior editors in the country, who brought a great degree of maturity and sagacity to the Short Post newsroom. But for them, our tagline “Authentic Gossip”, an Oxymoron, would not have matured viably. Our user numbers may be small but our stories have created the desired impact among people who matter — decision makers and influencers. We offer a big punch in a small pack and Short Post with its 225-word stories has been punching above its weight category. Having posted close to 3,000 stories in the last 36 months, Short Post, I feel, is an idea whose time has come.
And this is vindicated by our two marquee advertisers – IDFC FIRST Bank and ICICI Lombard. Both believed in our story and have supported us from Day one. A big thank you to both.
If you look at the media landscape – print, TV and digital — it is a mixed bag. There are job losses as some outfits have closed down while a lucky few were bailed out by large corporate houses. Yes, there is a lot of action in the digital space. However, the entry of corporate houses has raised the question of independence of news media outfits. Sadly, there are just a handful of independent media outfits in the country that are highly respected for their neutrality. At Short Post, our credo is not to take sides, prejudge issues or be biased but, informing readers of behind-the-scenes happenings. In essence, Short Post strives to be a neutral editorial platform — neither anti-establishment nor pro-establishment.
As I said last year, disruptions in the media world are moving at a fast and furious pace. Technology is playing a very big role in how content is generated and consumed. But, we are neither alarmed nor perturbed as it is all a part of the evolution process. What gives us comfort is that AI is unable to create original gossipy content. And that is the news arena where we have achieved a distinction.