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Updated: 2 hours 37 min ago

With China beating India decisively in Nepal, there's now a brand new worry for Modi

11 hours 39 min ago
Dharchula in western Nepal is a Doklam doppelganger in that it is situated at the trijunction of Nepal, China and India. The town is bifurcated across India and Nepal by the river Kali; the terra firma underneath is the de facto border since the Treaty of Sugauli that ended the Anglo-Nepalese war of 1814-16. The suspension bridge over the river connects Nepal and the Kumaon region of Uttarakhand. Dharchula was an important town on the old Tibet-Nepal-India trade route. That was before China occupied Tibet in 1950. On the edges of the Chameliya tributary of the Kali in Nepali Dharchula is where Ajay Kumar Dahal lives alone. The family and life of the project chief of the state-owned Nepal Electricity Authority’s (NEA’s) 30 MW Chameliya Hydroelectric Project is as divided and fragmented as the land he operates on. Dahal’s family is in Kathmandu, nearly 1,000 km away. His sons are studying to be engineers: one in China and the other in India. He himself was one of the last Nepali engineers to have got his professional degree from Tashkent Poly Technical Institute in a now extinct country called the USSR, much like Tibet. In pic: Chinese businesses dominate Jyatha Street in Kathmandu’s tourist district Thamel. However, there is nobody fighting to reclaim the USSR. Dahal graduated in 1990, the year the USSR formally collapsed. That was the year Nepal’s Jan Andolan ended absolute monarchy; and Dahal joined NEA the next year. But in the chaos of the 1990s pro-democratic movement, a 17-year-old Tibetan freedom fighter called Tsering Choeden, son of a Tibetan freedom fighter who was part of the first Mustang uprising against Chinese rule, decided he could finally exhale. On March 10, 1990, the anniversary of the Tibetan uprising against Chinese occupation, he and a few friends in Kathmandu bought Tibetan flags, got about 100 people together and demonstrated against the Chinese occupation of Tibet at Boudhanath, a World Heritage Site surrounded by Tibetan gompas in Kathmandu. A surprised Nepali police officer told Choeden and his bunch of ardent protesters they were in the wrong place. “Take this short cut through the Ganesh Stal towards the Chinese embassy. You should protest outside the Chinese embassy to be heard by the people you want to hear your protest,” the now 44-year-old Choeden, who works with a hotel in Kathmandu’s tourist district of Thamel, told ET Magazine. Choeden’s gang that included two Tibetan monks were held in custody at Hanuman Dhokha for “two days and two nights,” and released. The Tibetan Youth Congress later took credit for what was essentially the first democratic protest in Nepal against the Chinese government, says Choeden. Another man released from jail when the monarchy fell in Nepal in 2006 was Kishor Shrestha, editor of Jana Aastha, a weekly he edits and owns. That was his second imprisonment; he was first put in the slammer in his school days when part of the anti-monarchy student protests. Shrestha now leads the Nepal China Media Forum founded in 2009. The forum sends out 15 Nepalese journalists to China every year for a 10-day exposure course and another 10 to a South Asian Expo along the Bangladesh border on Chinese soil. Given the shadow of the Indo-Chinese standoff at Doklam, these three men are easy to slot as friends or enemies of India. But, like the rest of Nepal’s mountain people, they are as Swiss as chocolate and as neutral, politically. The Indo-Chinese face-off is already threatening to grow into a trade war between the two huge, nuclear-armed Asian neighbours. Chinese companies dominate India’s burgeoning electronics market and are estimated to be worth $22 billion, by the Confederation of Indian Industry. Three’s a Crowd But, before that, China overtook India three years ago as the biggest foreign direct investor in Nepal. China has invested a lot to make a cultural impact in Nepal as a benign and easy partner (see box “The Investment Surge”). It has also scored heavily on the rather obsolete Nepali law about procurement that insists that the lowest bidder is the chosen one. That explains China’s bagging some of the biggest projects in Nepal, be it the Pokhara International Airport or several hydroelectricity projects. But many Chinese companies that were awarded these projects have since backed off — because project costs escalate from the ridiculously low bid, and Chinese construction companies are unable to fulfil their contractual obligations. The high-profile Melamchi Water Supply Project, a joint venture between China Railway 15th Bureau Group and China CMIIC Engineering and Construction Corp, is one such project that couldn’t be executed. Ashoke Rana, CEO of Himalayan Bank — one of the guarantors to the Melamchi project — points out that the Nepalese market is not mature and the government’s procurement law insists on accepting the lowest bid in any public auction. Chinese companies with a language problem depend on Nepalese middlemen who game the system to bag projects by bidding low. However, the costs escalate soon enough and these Chinese companies are unable to find redress in Nepal. They choose to jump ship. Northwest Civil Aviation Airport Construction Group, the Chinese contractor of the Gautam Buddha Airport near Lumbini, is in danger of getting its contract terminated for not delivering on time. In pic: 30 MW Chameliya Hydroelectric Project in Dharchula district Earlier, the company was blacklisted by the Asian Development Bank for submitting fake documents from Sudan to meet qualifying norms to bid for the Gautam Buddha Airport contract. After being reinstated, it is again at risk of falling woefully back on deadline. The $92 billion Tribhuvan International Airport project, which had Constructora Sanjose of Spain in charge, was terminated last December. After six years, the project had only completed 17% of the job. Unlike Chinese companies, Indian firms have no language barrier, just economic hurdles. The 4,800 MW Pancheshwar hydropower project to be built by WAPCOS Ltd, from the Indian public sector, was cleared nearly two decades ago, but is only about beginning. For their part, the Chinese are majorly investing in clearing the language barrier. Trade and investment consultant Sujeev Sankhya, who helps the Chinese government navigate in Nepal, is bullish on this front. “Real Chinese investors are professional, like they are in Cambodia or Rwanda, and they find it difficult to deal with the rent-seeking Nepalese entrepreneurs. In pic: Chinese construction work at the Pokhara airport Therefore, they are investing heavily in social assimilation and take that very seriously,” says Sankhya. Private Chinese businessmen have moved into Nepal, buying or leasing property in the tourist hubs of Pokhara and Kathmandu ostensibly to cater to the throng of Chinese tourists. Around 1 lakh Chinese vacationers visit Pokhara alone, and go up by 10% annually, according to the tourism office of Kaski district. The popular tourist hub has a “sistership relationship” with Lingzhi and Kunming cities in Tibet, says Bishwo Palikhe, president of the Pokhara Chamber of Commerce and Industry. Palikhe is an uninhibited lobbyist to increase Pokhara’s business profile. In 2012, he led a 500-car rally to the Nepalese capital to pressure politicians to get the Pokhara International Airport project underway. Chinese contractors are already working on the project very close to where India is building a cricket stadium. In Kathmandu’s Thamel, the popular Jyatha Street is practically taken over by Chinese establishments, eateries and clearing agents. So much so that the Chinese community there petitioned the municipal authorities to name the street China Town. The petition was rejected. “The Chinese are cash-rich. They walk into a shop, and pay double or triple the price and seek three- or five-year leases instead of one year. They are upsetting the real estate market and do not seem to be particularly interested in business. Once they get hold of a property, a Chinese embassy car would come and overnight the place would be reassembled into a slick shop with fancy fascia,” says a businessman with several hotels in Kathmandu This Chinese ingress is what might be rewiring Nepal’s demography and perhaps the one section that India needs to keep a wary eye on. The Economist reported recently that Chinese have infiltrated Tibetan groups in Nepal. Most are Tibetans with Chinese passports and Chinese embassy officials protect them in legal dealings with Nepalese authorities. “The American embassy was the strongest in Nepal. Now, it is the Chinese embassy,” says Choeden. To Nepal’s quarrelsome multiparty democracy, a new and febrile political instinct has been added. Activist Govinda KC has just withdrawn his fast unto death seeking reforms in the education sector, owing to floods and landslides in many parts of the landlocked Himalayan country. One of his demands is that engineering colleges be started outside Kathmandu to serve the provinces. Of Nepal’s 28 million population, 8 million are in school. This youth dividend is something the country’s remarkably anomalous economy is unprepared to harvest. A May 2017 report by the World Bank says: “The country has halved the poverty rate in just seven years and witnessed an equally significant decline in income inequality. Yet, Nepal remains one of the poorest and slowest growing economies in Asia, with its per capita income rapidly falling behind its regional peers and unable to achieve its longstanding ambition to graduate from low-income status.” One in every two Nepali family has a member working outside the country. And yet economic activity is rebounding strongly, following two challenging years. On the back of one of the best monsoons in recent years, rice production is estimated to have reached a record high at 5.2 million tonnes, up from 4.2 million tonnes a year ago. Post-earthquake reconstruction activities are picking up after a slow start. More than 100 MW of hydropower capacity, delayed by earthquakes and trade disruptions, have come on stream. There has been a revival of transport and full normalisation of wholesale and retail trade. Tourism is also recovering as arrivals reached pre-crisis levels during the September-December 2016 tourist season, the World Bank report said. Britain’s Department for International Development estimates Nepal’s four big hydropower projects could earn $17 billion in the next 30 years. All Nepali rivers, if tapped, could produce 40 GW of clean energy. And capital-intensive projects like a 30 MW unit in remote Chameliya area has spinoffs. The project helped build a road in the hills; and now three more private hydro projects are in the offing on the same river, most with higher installed capacities. Recently, the Chinese government moved in and built an impressive academy for Nepal’s paramilitary arm in Chandragiri in Kathmandu. Such initiatives could make it easy to skew perceptions in a country where an anti-India feeling is easy to fan. In August 2014, Indian Prime Minister Narendra Modi famously told the Nepalese Parliament: “Paani aur jawaani ek jagah nahi rukti.” Maybe India needs to remember that prophetic message.
Categories: Business News

Indian ecommerce turns into a two-horse race as smaller players face likely wipeout

11 hours 39 min ago
Nearly 16 hours or 740 km north of Delhi is the cold desert mountain valley of Spiti, nestled among the Trans-Himalayas. It is often cut off from the mainland by snow drifts from early October every year. But around Diwali last year, internet commerce giant Amazon, in its quest to dominate India’s ecommerce market, made its first delivery to this region of some 34,000 inhabitants in Himachal Pradesh. For the Seattle-based Amazon, which has bet $5 billion on its India operations, this exploration of the hinterland is just another of its moves to extend the seeming duopoly in the country’s internet commerce market where Amazon and arch-rival Flipkart (fresh from a $2.5 billion fund-raise, increasing its kitty to $6 billion) are distancing themselves from the competition. Big Two Battles With wary venture capitalists drastically cutting their investments in cash-burning startups and biggies like Amazon, Uber and Ikea splurging on their India operations, the top two players in many categories — from furniture to foodtech — are standing out from the herd. It is a battle of the big two, the two-horse race of these times. With consolidation sweeping across sectors, these companies, cherry-picked by marquee investors and corporations, are stretching their legs and increasing the gap between them and the rest. Says Amit Agarwal, senior vice-president and India head, Amazon: “We have managed to make Amazon the biggest store in India with over 100 million products, of which nearly 2.4 million are available for next-day delivery.” As it seeks to dominate the Indian market — online and increasingly offline — it has pushed the envelope on logistics and innovations. “We launched the concept of guaranteed one-day delivery within six months of our operations.” In the four years it has been in business in India, ecommerce has morphed from being a particularly urban phenomenon to branching deep into rural areas. If Amazon is focused on what consumers want — selection, value for money and convenience — it has invested in infrastructure, technology and India-specific innovations to drive this transformation. “It is still Day One for online shopping — and for us — in India, but we are excited to see ecommerce evolve into what it should be in a diverse country like this,” adds Agarwal. If the first one lakh sellers on Amazon India signed up over three years, the next one lakh were snapped up over the last 12 months. “With the launch of Prime last year, guaranteed one-day and two-day delivery became an everyday experience instead of an occasional indulgence,” claims Agarwal. “Prime membership has more than doubled since January 2017.” If Amazon is blazing a trail in the horizontal ecommerce market, specialists in several segments are looking to take a leaf out of its playbook and press home their dominance. Room at the Top “In the horizontal (travel) space, there is no room for Player No. 3 or 4,” says Ashish Kashyap, co-founder and president, MakeMyTrip, the country’s leading online travel portal. In October 2016, MakeMyTrip further strengthened its position when it merged with Naspers-funded Ibibo. “Given the network effects in the horizontal platforms (effect one user of a good or service has on the value of the product) and lower average selling price in the Indian market, it is likely that top two players will consolidate,” says Kashyap. Despite the urge to be among the top players, some entrepreneurs and investors have a different view of how the market will shape up. Ashish Goel, CEO and co-founder of online furniture brand Urban Ladder, reckons the narrow narrative needs to be reconsidered. “My race is with Ikea and Home Centre,” he says. “We are in the business of building a differentiated brand and my biggest challenge is consumer behaviour, not my closest online rival.” For entrepreneurs like Goel, staying on top is also about remaining relevant. In the US, a brand like Fab went from raising $336 million to insignificance in a matter of months. Closer home, Style Spa, which was known for its eye catching furniture design, has struggled to retain novelty. “In this market, timing is everything,” says Goel. Serial entrepreneur K Ganesh thinks there are plenty of opportunities beyond cluttered markets such as online grocery and furniture. “There are certain sectors like horizontal ecommerce where leaders have already emerged. Outside these, most areas are open for investors,” he says. “Sectors such as wellness, nutrition and health foods are almost unaddressed and need special sector and domain focus — unlikely to be effectively catered by horizontal players.” However, investors are voting with their wallets in this market, narrowing their choices. Consequently, smaller players are suffering. For example, in February 2017, Stayzilla, once backed by Matrix, Nexus and Sequoia Capital, ran aground, unable to raise fresh funds, and its CEO Yogendra Vasupal was arrested a month later for defaulting on payments. Kashyap thinks a clear-out is likely. “Players and platforms that are delivering real value will have an opportunity to consolidate with larger ones. Meanwhile, horizontal players that are diminishing or on a decline and bring nothing unique to the table… would be best left to die.” Sriharsha Majety, founder and CEO of Swiggy, a venture centred on food delivery, has seen many of his rivals flourish and flounder over the past 12-18 months. At its peak, there were 20-24 ventures in this space, raising millions of dollars in funding and promising the moon. However, as consumers started to pick favourites and investors started asking difficult questions, many faded away. “While there is a continuous focus on customer experience and retention by way of value added services and efficiencies in the supply chain, the brands that are innovating to solve real consumer problems are seeing rapid growth,” says Majety. “Swiggy has built superior technology that not just ensures a seamless ordering for consumers, but also enables features such as live order-tracking, and an industry-best delivery time that is made possible through complex routing algorithms,” he claims. While consumers benefit from this as these initiatives make food ordering more reliable and convenient, these also help delivery executives and restaurant partners optimise their time and efficiency. After emerging relatively unscathed from a foodtech meltdown, Swiggy and arch-rival Zomato have become the two dominant players in this market, leaving rivals far behind. “Food delivery apps like Swiggy are high-potential habit formers. Our focus, therefore, will always be on adding more variety and ensuring affordability of offerings over the next few years,” says Majety. “If we keep the consumer at the front and centre of the business and solve their problems, we shall continue to be their brand of choice.” Wave of Consolidation Despite lofty claims from the likes of Swiggy, investors are wary of over-committing even to seeming market leaders. “The winner-takes-all dynamic can work against an incumbent and quickly erode its relevance. The examples of Snapdeal (a one-time No. 2) FreeCharge and Foodpanda are ominous reminders of this,” says Shubhankar Bhattacharya, venture partner, Kae Capital, an early-stage investor. “The odds of success for a No. 3 or 4 are that much lower unless they have momentum and are gaining market share by their differentiation.” Many investors are less than enthusiastic about funding a No. 3 or 4, which could eventually be acquired by a market leader. “We see limited capital availability from the third player onwards in tech-led consumer segment,” says Sunil K Goyal, founder and CEO, YourNest, an early-stage fund. “Hyper-competition actually kills investor returns across the sector, making consolidation imperative. Sectors such telecom, ecommerce, food ordering, taxi booking, travel ticketing are poised for a two-horse race in the long term.” This wave of consolidation is affecting the choices of early-stage investors too. For example, YourNest’s partners agonised over an investment in a twowheeler taxi startup, but backed away due to fears of Uber and Ola foraying into it — which did happen a few months down the line. Vinay Sanghi, founder, CarTrade, which claims to be the largest player in the online auto classifieds space, is leveraging the lead and thinks there are few opportunities for others to scale. “Though there is space for multiple players, it won’t be easy for them to scale up. So investors might find it difficult to back smaller players,” he says. Investors have put their money to work with CarTrade, with investments of $230 million from the likes of Tiger Global, Temasek and Warburg Pincus. “We have over 22 million unique customers visiting our platform monthly. Over 7,000 new cars and used car dealers use these platforms. On Google Trends, CarWale (which was acquired by CarTrade in 2015) is around eight times its next vertical competitor,” says Sanghi. However, competition may be hot on its tail, with CarDekho, backed by Google Capital and Hillhouse Capital and which claims to have clocked over Rs 80 crore in revenue in 2015-16, acquiring Gaadi.com and ZigWheels to deepen its presence. “As you grow, your agility goes for a toss,” admits Sanghi, but adds, “We have made sure that despite growing and posting over `100 crore revenue, we do not slow down in terms of innovation.” Meanwhile, Anurag Jain, co-founder of GirnarSoft, which runs CarDekho, Gaadi and ZigWheels, wants to leverage on its size and show that elephants can indeed dance, with plans to turn a profit by March next year and revenue forecast to jump to Rs 170 crore from Rs 100 crore now. Leveraging Scale Other segment leaders are also leveraging scale to their benefit. In the online furniture market, Pepperfry hogs two-thirds of online traffic, according to one estimate, and has raised over $160 million since its founding. Pepperfry founder Ambareesh Murty, who previously headed eBay India, says it is gaining market share and traffic at the expense of smaller rivals. As consumers rationalise their online shopping choices, leaders benefit. “As we get control of more of the market, it is easier for us to plan strategy — from expanding into adjacent categories to fine-tuning our supply chain — even as discounts begin to disappear,” he says. On the ground, this means faster delivery — 12 hours from 36 earlier in the Mumbai suburb of Bandra, for instance — as business blooms in a borough with frequent deliveries. Keeping this momentum won’t be easy though, with Swedish furniture maker Ikea’s launch imminent in India. “Our customers will continue to get the best value in the industry and our prices will be unmatched,” says Murty. Claims apart, he will be acutely aware of the frailties of the market, which saw Future Group merge FabFurnish — once burnished by the deep pockets of Rocket Internet — with Home Town. A market leader doesn’t have to make a big splash to make an impact, says Deepinder Goyal, CEO and founder of Zomato. “We were among the last players to enter the food ordering market in June 2015. But the gap with the biggest competitor (in food delivery) has narrowed to a small difference.” Even though Zomato is valued north of a billion dollars and has raised over $223 million in funding, he’s ensured the firm sipped on its cash reserves, spending only $7 million to make these inroads. Zomato is on the move in a market that was once crowded, but has rapidly cleared out. “The average order value for India is Rs 420, while the average commission earned is 8% and our GMV exceeds that of our nearest competitor. We already have over 7,500 exclusive restaurants with us in India, and this number is growing, with 300 more added every day,” says Goyal. Some entrepreneurs, however, argue that as opportunities eventually arise outside of the initial 100-120 million adopters, the theory of just two companies dominating one sector may be half-baked. “We don’t believe that a single player can be everything to everyone… ShopClues is No. 1 in tier-3, -4 India which is Bharat,” claims Radhika Aggarwal, co-founder, ShopClues. “We target a very different market segment. Our most loyal buyers buy up to 25 times in a year.” Despite this grandstanding, Amazon’s Agarwal isn’t likely to be worried. “In our experience, the true potential of ecommerce is when anyone, anywhere has access to this choice and anyone with an intent to sell can participate in providing this choice,” he says. In the past 40 days alone, Amazon has ventured further to Mokokchung in Nagaland, Bakultala in Middle Andaman and Almiankande in Uttarakhand as it seeks to extend its presence — and dominance – in the Indian market. For those trying to keep up, forewarned is forearmed.
Categories: Business News

AM Naik: A look into the life of L&T's living legend

11 hours 39 min ago
Anil Manibhai Naik, chairman of Larsen & Toubro, walks in for lunch and looks at his watch. It is 1.33 pm, and his next meeting is at 1.38 pm. “I will have to finish in 10 minutes,” he says, sitting down at the table nearest to the vegetarian spread laid out in a buffet. He’s at the director’s lunch room on the third floor of L&T’s office in Chakala in the Mumbai suburb of Andheri. Luckily, the interview with ET Magazine has been done before lunch. A soup is served, and Naik asks what’s on offer. An unsure supervisor indicates it is either peas or broccoli soup. Naik looks up: “You have to tell me what it is... peas or broccoli?” With time not on his side, Naik largely nibbles, rejects a flatbread and goes for the vegetable. In a month and a half, he will be retiring from his executive chairman position in L&T. He has been with the company for 52 years. From October 1, he will be non-executive chairman, possibly cutting down his work hours by half. Naik actually sees himself as a “seminon-executive” chairman. He has identified the bits he still wants to do with the company, even incubate a new business that can turn out to be as large as L&T itself someday. And there are the bits he wants to do with his family — take vacations and stay a few days with his children, and spend time on philanthropy, walking in his father’s footsteps. “I am 75, it is not as if I have many years to go.” Does he recall his first day at L&T? “Of course, it was March 15, 1965. Baker used to sit in a glass office, and I joined as a planning engineer. We had our seats positioned at a right angle to his, right in front of him,” says Naik, referring to ET Baker, the then works manager who hired him, and gesturing with his hands to show how the seating was organised. Naik recalls how L&T was his dream job: “Growing up, we knew only two companies, L&T and Tata.” Make Room for the CEO While his first day 52 years ago is still vivid, Naik is far from finished at the company. The degree of planning that Naik is putting into his next 12 months does not make him look like a man ready to walk into the sunset; rather, he’s more like one walking into a new sunrise as he prepares to begin a three year stint as non-executive chairman. And to help the new managing director of the company SN Subrahmanyan take over the reins, Naik has a plan: make himself scarce — from India — for a while; come back in time for board meetings and get out again. “I have mentored him for 12 years, like my son. Now let the CEO run the company,” says Naik, conscious of corporate governance norms and keen to be seen as “noninterfering”. One of the criticisms of Naik in the recent past was his apparent inability to let go, groom or find a suitable successor. Today he carefully explains his stance: “I am calling it stepping aside or making room for the CEO to operate.” While today SNS, as Subrahmanyan is referred to in the company, sits in a room on the third floor with Naik, if he is in the same office, the entire second floor is now being refashioned as the new CEO’s office. At the end of September, Naik will travel to the US to meet clients of L&T’s information technology and engineering services businesses. That allows him to spend a week each with his son who stays in California and his daughter in Kentucky, something he says he has never done before. He will be back in Mumbai in early November as board meetings start from the sixth of that month. On November 30, he will travel to Perth in Western Australia to meet clients and officers of L&T’s hydrocarbon business. Naik will then take a seven-day break to see the part of Australia he has never seen before. Following the Australia sojourn, Naik will travel to Malaysia, meet the Petronas CEO, visit L&T’s factory in Kuala Lumpur and come back to India. “The central point of my calendar is which days I am needed in Mumbai. There will be days when I would not be in India at all,” says Naik, stressing on how serious he is about building a distance between him and the CEO’s role. Naik has carefully carved a slice of action for himself. The chairman is allowed an office. “So I can come anytime,” Naik says with veritable delight. He promises to be around for 35 hours a week (that’s five hours a day for seven days), but is way less than his usual 65 hours, which he says he used to clock. At least two hours a week Naik will be working on a project to incubate a new business that can be as big as L&T someday. He envisages two CEOs working with him on the project once the required licences have been granted, and says he will talk more about it only when they are in place. Naik will also guide L&T’s management on real estate business because he says “it is difficult, and you have to compete with Lodha”. The current board of directors of L&T, says Naik, has six members whom he formally mentored through a programme. As that batch has ended, Naik has taken up a new one and started mapping the key executives in the company, when they might retire and who might succeed them. The fourth thing on his agenda is an attempt to restructure L&T, delayer the company, make it an operation that is easier to run. It has been his pet project for many years now and is unfinished business for him. Six Shirts, Three Suits and… For AM Naik of 2017, however, there is life beyond L&T. He is on a giving mission, building schools and hospitals. “I still have only six shirts, three suits, eight sets of underwear, six neckties and two pairs of shoes. That is why I do not need any money. But I also have it because L&T’s stock options grew 11,000 times. It is a world record. Around 2,500 people became millionaires. I decided to give it all away.” “There was never a thought in my mind when I started that I will make money. I had thought I will retire and get pension. This is not something I expected,” he adds. Naik says he will continue to live in the company residence in Bandra for the time being, although he has bought a residence for himself in Powai’s Hiranandani. The act of giving started for Naik sometime in 1995, when he persuaded his father Manibhai Naik to come and live with him. Naik recounts how Manibhai was always ambivalent about his son’s achievements in life with L&T. Around this time, the senior Naik, who had quit his job in Mumbai to teach in the school at his village Kharel in Navsari district of Gujarat, asked his son to contribute towards the village hospital. Naik recalls that the hospital needed Rs 4 lakh at the time and he cleaned up his own savings of Rs 2.5 lakh and borrowed another Rs 1.5 lakh from his provident fund to finance the project. “My father called me and asked where I got all this money from,” Naik recounts. “He had expected me to give only Rs 25,000. So I had to give him detailed accounts of the money.” Naik says only after this act did his father acknowledge that he felt pride in his son’s achievements. Naik adds that while his grandfather and his father did more than 50 years of public service each, he himself is starting in right earnest only now; his father, he says, has been and will be his role model in life. Today Naik heads five philanthropic trusts. Two of these are his own creations, another two are trusts created by L&T employees and a fifth one is L&T’s own company trust. Apart from improving schools and hospitals in his village, Naik has also funded a new charitable hospital in Mumbai’s Powai area. He says: “I will pick up two projects every year; education, skill building, or health. Now I am looking at creating an old-age home. I hope I will continue to help society as long as I am alive. When I see how many poor people are benefitted, the satisfaction I get, I cannot get from anywhere else.” At the inauguration of the Powai hospital, built by one of Naik’s personal philanthropic trusts named after his granddaughter Nirali who had passed away at the age of two and a half, Naik had the pleasure of having both his children as well as the children of his two sisters attending. “All nine of them came. Now, all of them are asking me ‘What will you do with your time?’ All of them are asking me to come and stay a month with them.” Back at the lunch room, it is 1.40 pm. His next visitor is already seated in the conference room. Mangoes have been served as dessert for the chairman. Naik starts counting the hours he will spend on each of his five pursuits every week. They add up to 34. What will he do with the one hour left? “Oh, that one hour I will spend chatting with you,” he says, and slowly walks out for his meeting.
Categories: Business News

Bishangarh fort and its menu will remind you of old cooking techniques of Rajasthan

11 hours 39 min ago
It is mid-morning when we turn off the Delhi-Jaipur highway into the sleepy village of Bishangarh. A group of men is playing cards by the side of the narrow road that cuts through the village, a few veiled women tend to the goats. All of them look up curiously as we pass them by, leaving behind us a cloud of dust and traces of our city lives. Perched high above the village, on top of the only granite hill in this region of the Aravallis, the stark Alila Fort Bishangarh has seen a lot of change through its 230-year existence. The fort was built by members of the Shahpura-Shekhawat clan owing allegiance to the Amer ( Jaipur) royals. Fortunately, no bloody war was fought here though the fort fell into ruin over the centuries. Now, as we begin the steep ascent into its restored premises, recently turned into a luxury hotel, there’s a sense of tranquility in the air and glorious 360-degree views of a lush green countryside. For seven years, a family of Jaipur’s leading educationists kept busy trying to restore the crumbling fort, owned by Rao Rajendra Singh, MLA of Rajasthan and a member of the Shahpura clan, to an approximation of its past glory. It was an onerous task. “When we first visited the place, we had to clamber up a steep path, sometimes on all fours. It was so inaccessible that no vehicle could drive up. We had to buy 200 donkeys for two years to take all the material up before the ramp and road could be built for vehicles,” says author and literary agent Mita Kapur, part of the family. Last month, the fort, hailed as one of the “most anticipated” openings of 2017 globally by international luxury magazines finally opened as the second India property of Alila Hotels and Resorts, the Asia-focused chain of luxury boutique resorts. Breathing Life into Stone Think Rajasthan and you think palaces and forts. The two are of course not the same. A fort is not a palace though the latter could be present inside a fort. An example is Amer, which we often dub a fort though it is a palace where the royal family lived. In contrast, Jaigarh is a fort. While a palace is ornamental, a fort, built as a fortification, a defensive structure, is stark and rugged. In pic: Bajra roti & laal maas Bishangarh is a genuine fort and its restoration work has maintained that sanctity of starkness. The granite rock peeps up everywhere — in corridors and even in the spa located in erstwhile dungeons. It’s not as if just the façade has been restored, like at many heritage properties. Here, rooms and restaurants have been made to fit around the original walls — 8-10-ft-wide in many places. Turrets, cellars, secret passages have been turned into bars, tea lounges and cosy areas. Atul Kapur, the brain behind the restoration and one of the four directors of the company that now owns the hotel (Alila manages it), takes me through a guided tour. We go inside a turret to find cognac and cigars. The room still retains openings in its thick stone wall for muskets and for pouring out hot, boiling oil on intruding armies below. These have been kept open to promote a natural system of air conditioning. In pic: Inside the Alila Fort Walls have been finished not with paint but with traditional surkhi (brick dust) or araish, the dying Rajasthani plastering art that results in glistening surfaces. Then, there are the arches — wavy Tudor ones, “transverse” arches of the Mughal style, and also the wider curves of the “kaman”, the bow — apt for a warrior fort. Of the 1.5 lakh sq ft of the fort, only 60,000 sq ft is in marble. “We have records that at least two kings stayed in the residential portion of the fort. That is why only these places have a more decorative design,” says Atul. These royal quarters now have a restaurant Amarsar, named after the seat of the Shahpura royals. Hunting and Gathering Rajput recipes vary from the spartan to the luxurious, depending on how and when the meal was cooked. Though hunting is now illegal in India, game meats are part of the Rajput legacy. Many of these recipes are now cooked with mutton. Laal maans is an example. Initially, a way to cook meat with chillies to remove its gaminess, it is now a pop mutton curry. While all sorts of recipes float around, the dish has basic ingredients that could be carried by hunting parties — mathania chillies, onions, yoghurt and ghee. In the absence of complicated spicing, other methods to enhance flavours evolved as part of game recipes. The techniqu e of “dungar” or smoking infuses flavours of cloves or wood into meats. Pickling and drying of meats in spices came because hunting parties would be away for days and needed to preserve food. At the fort, chef Ranveer Brar is trying out older ways of cooking on open fire and in hot sand, both methods used by hunting parties in the desert. “A recipe like khad khargosh — whole rabbit rubbed with basic spices, wrapped in a leaf and left to cook under the hot sand — evolved like this,” he says. Brar has experimented with farmed quail, chicken, rice and vegetables in clay pots, sealed and put under a bed of heated sand. “This functions like an indigenous oven. Food gets slowcooked in its own juices,” he says. His other experiment involves spit-fire roasting. The Rajput equivalent of the Afghan tikkas is maans ke sooley, grilled in campfires. Brar plans to serve the meat skewered on swords, roasted on an open fire. “The starkness of the fort means that the food should also echo the no-frills approach.” Touche (The writer looks at restaurants, food trends and culinary concepts)
Categories: Business News

Turning tables: How Adeeb Ahamed of the LuLu Group is foraying further with food, toys and fashion

11 hours 39 min ago
By Aekta Kapoor Adeeb Ahamed, son-in-law of retail lord and LuLu Group chairman Yusuff Ali, one day looked farther than the supermalls of the business empire and found himself studying the nuances of lingerie retail — to make it appealing to both teenagers and their mothers. The 37-year-old, Abu Dhabi-based businessman, who is on the board of the $7.4 billion Lulu Group International that has over 130 hypermarkets in 21 countries, is nudging the group into new directions. Ahamed has been into serious number crunching since he became the MD of Lulu International Exchange in 2008. With 20 per cent year-on-year growth, the financial services firm has gone from 1 to 150 stores across nine countries under his watch and had a turnover of $4.7 billion last year. Then, he launched Twenty14 Holdings, which has invested in eight hotels across the world, including the Great Scotland Yard in London, the Steigenberger Hotel Business Bay in Dubai and the Sheraton Oman. Eventually, he joined wife Shafeena Yusuff Ali’s Tablez, a brand retailer under the group, and expanded it quickly by bringing in some of the world’s popular F&B chains to India and the Middle East. He’s now set to do the same in apparel and toys. Last month, Ahamed along with Eduardo Sanchez Moreno, deputy head of mission from the Embassy of Spain, and Antonis Kyprianou of Spanish fashion retailer Grupo Cortefiel, opened the first stores of fast casual brand Springfield and lingerie brand Women’secret in Bengaluru. Tablez will lead the foray of these Spanish apparel labels, with six more stores slated in India this year, and total of 75 by 2021. “What attracted us to Springfield was its youth appeal. Unlike other international high-street brands, there is a generous dose of colour, which fits Indian sensibilities.” His company had initially focused only on Springfield, which has a presence in 941 stores in 73 countries, but later decided to launch Women’Secret, which has a presence in 630 stores across 82 countries and also offers swimwear and sleepwear. “In India, mothers and adolescent daughters shop for lingerie together, and this store is not intimidating.Women’Secret, which has a presence in 630 stores across 82 countries and also offers swimwear and sleepwear. “In India, mothers and adolescent daughters shop for lingerie together, and this store is not intimidating. We thought we could align with those kind of values,” he says. Tablez has also signed a master franchise agreement with the US children’s brand Toys ‘R’ Us for India and Sri Lanka, and plans to open 65 Toys ‘R’ Us and Babies ‘R’ Us outlets in India in the next 8-10 years, starting with a 15,000 sq ft store in Phoenix MarketCity Mall in Bengaluru this year. “Toys play an important part in all our lives, not just children,” says Ahamed, who has four children in the age group of three to nine. He hopes the launch of Toys ‘R’ Us will change the toys sector in India, which — except for the more expensive brand Hamleys — has no toys chain in the affordable segment. Tablez has earmarked a minimum investment of Rs 300 crore over the next five years across its brands. Bridging the Gulf Ahamed’s family hails from Nattika in Thrissur, Kerala. Brought up between Kerala and Abu Dhabi, he did his MBA from Royal Holloway, University of London, and worked in the hospitality sector with international brands such as Grosvenor House, JW Marriott and Baglioni Hotel in London Around this time, he married Shafeena, daughter of Yusuff Ali, who founded the Kochi- and UAE-based LuLu Group. Ahamed returned to Abu Dhabi to raise his family and found himself “accidentally” holding the reins of LuLu International Exchange, which he proceeded to catapult to the second position in the financial services sector across the Gulf Cooperation Council (GCC). In 2013, he set his sight on expanding Tablez, which his wife had launched in 2010 for her homegrown brands Bloomsbury’s, an artisanal coffee shop, and Peppermill, a fine-dining restaurant. “I realised there was a huge scope in tying up with global players,” says Ahamed, who introduced F&B brands Cold Stone Creamery, Famous Dave’s, Galito’s, Sugar Factory, Genghis Grill and Pancake House to the Middle East and Indian markets, including outlets at the group’s malls in Kerala and UAE. Tablez has over 35 outlets globally and plans to expand to 250 by 2020, but Ahamed is firm that he’s looking at net profits over valuation or market cap:“We are thinking long-term, and for that one has to learn, adapt, reorganise and realign frequently.” Friendly and articulate, Ahamed applied business skills learnt in London to his growing Indian multinational company, tempering his ambition with pragmatism. “We’ve been expanding; now it’s time to consolidate.” He sees signs of progress in India. “The introduction of GST was a wonderful move.” While he rues the losses India faced during demonetisation, he says, “It has woken up the Indian economy.” He predicts it will work out in the long run and hopes the government will consider bringing down corporate taxation once more businesses fall in the tax ambit. However, he says it’s not easy for startups in India, as high-interest rates and taxes leave them crippled. “Larger companies can absorb such expenses, but it is punishing for SMEs.” The managing director of three companies, Tablez, LuLu Exchange Holdings and Twenty14 Holdings, Ahamed says he is unable to “take his eyes off” business at any time, but he is unperturbed by competition. “Two-three new store openings every month are good enough,” he says, citing Tablez’s growth trajectory. For the moment, Ahamed is content to sit back and watch how Indians take to Spanish-designed knit tops and striped jumpsuits.
Categories: Business News

Why Infosys’ next CEO will be more in the likeness of a backroom, nuts-and-bolts guy than a global poster boy

11 hours 39 min ago
Tomorrow, an expatriate managing director at a company of one of India’s most hallowed conglomerates will address the business press. He will talk about the progress made in turning around the beleaguered operation since he slipped into the hot seat in mid-February 2016. He may perhaps also unveil a new brand identity for the company. And there’s one more thing he will do: scotch speculation that he is leaving. Guenter Butschek, who will turn 57 in October, was appointed managing director & CEO of Tata Motors after a two-year search and rejection of numerous candidates at Bombay House, the headquarters of the Tata Group. An auto industry veteran, Butschek had spent 25 years at Daimler AG, and was Airbus CEO before joining Tata Motors. The trucks and car maker was in dire straits. Market share in both segments was falling, Tata Motors was in the red on a standalone basis (excluding Jaguar Land Rover) and, in the April-December 2015 period, it had been edged out of the top three — Maruti, Hyundai and Mahindra — which together controlled 70% of the market. One of Butschek’s mandates was to bring the company back into the top three with contemporary models, snazzier designs and an eagle eye on efficiency metrics. The other was to stop the erosion in market share in the bread and butter business of commercial vehicles (CVs) and make it a global player to reckon with. Tata Motors didn’t need just a turnaround. It called for a transformation. A little over two years before Butschek bid adieu to Toulouse (the Airbus HQ), one of India’s information technology (IT) bellwethers was seeking something similar. Not that transformations weren’t tried before at Infosys — from the traditional labour-arbitrage model to consulting, for instance, was one shift attempted in the previous decade. Results, though, were meagre and mixed. The Culture Quotient Vishal Sikka’s appointment as CEO in October 2014 indicated that Infosys was looking for change of the radical kind. For one, he was the first non-founder CEO. For another, it coincided with the exit of founder NR Narayana Murthy as executive chairman. KV Kamath, the lead independent director who would take over as non-executive chairman, summed up Sikka’s appointment well. “At this point, we need transformation. We basically had a bias for teem-— from performance than fancy and often meaningless designations: AGM, DGM, SVP, AVP, et al — on their calling cards. In India, a no-designations policy could well result in mini-revolutions at most workplaces; and at Tata Motors it evidently was leading to a loss in morale. “Indian culture is a complex culture. A small change in designation every year goes on to be a big motivator for a lot of people every year,” G Ramakrishnan, MD at Avanteum Advisors, told ET recently. “Money is not everything.” By end-July, the designations were back internally, and a key prong of Butschek’s transformational game plan had hit the brick wall of culture and tradition. “Western managers find it difficult to deal with the many problems of India and they don’t understand the values and culture. Even Indians who have been out of India for too long don’t understand the new India,” says Vivek Wadhwa, distinguished fellow, Carnegie Mellon University’s College of Engineering at Silicon Valley. It’s in this context that Wadhwa reckons that Indian companies don’t need to bring in outside management. “There is a deep and highly experienced pool of talent available in India which is better than what you find anywhere in the world. This is why Indians lead some of America’s top companies: if you can make it in India, you can make it anywhere. The reverse doesn’t apply.” To be sure, a clutch of Indian founders and owners has done wonders to build world-class businesses. In IT services, Murthy & cofounders, Wipro’s Azim Premji and HCL’s Shiv Nadar took India — and its workers — to the US; Ratan Tata gave his group’s beverages, steel, chemicals, automobiles and hospitality operations an international lustre. But in a world of rapid and radical change, homegrown solutions aren’t always enough. “Indian businesses have built an amazing industry with a very strong culture. This has served them well up until now when they need to change,” says Peter Bendor-Samuel, CEO, Everest Group, a Dallas, Texas headquartered outsourcing advisory. Bendor-Samuel, though, thinks that culture may have outlived its purpose, and may even be counterproductive in today’s climes. “This culture, like all strong cultures, fights outsiders and we can see this at work at Infosys . If Indian firms are going to successfully integrate western talent in mass and or bring in strong outside leaders they are going to have to work hard to change things such as their view on compensation, travel and benefit policy, as well as the kind of investment they are willing to make.” Bendor-Samuel is, of course, referring to the monetary packages and perks in the Sikka regime — a Rs 16.01 crore annual package for the CEO in 2016-17, a severance package of over Rs 17 crore to a former CFO, and a $200 million acquisition of a software firm in Israel called Panaya that was loss-making. It’s such apparent extravagance that’s at the core of Murthy’s gripe with Sikka’s management style, his evident lack of values, sensitivity to (local) culture and transparency in transactions. As one of the founders who collectively still own 12.75% of Infosys, Murthy may reckon he’s justified to air his concerns about the company that he built from scratch in the early ’80s. The question, then, though, is: why didn’t he stay back on the board? Indeed, after stepping down as executive chairman in 2006 at the age of 60, Murthy returned to the post in 2013. A year later, he stepped down — the same year Sikka came on board. The assumption then was that the new CEO would have a free hand, away from the long arm of the founder. The founder had walked away, but the oversight lingered. “Ideally the founder should have stayed on as a board member. This would have ensured the issues didn’t get escalated outside the boardroom,” says Pari Natarajan, CEO, Zinnov Consulting. In many ways, Murthy is more in the promoter mould, something unique to India in which family businesses own companies that are managed by professionals. Such promoter groups have evolved over time to create a distance between ownership and management. But, as happened in the past, the twain doesn’t always meet when West meets East. “The problem may lie more with Indian promoters than with expat CEOs. The Indian road is littered with examples of CEOs who were brought in to change things and then removed by the very person who hired them,” says Rama Bijapurkar, an independent director on several Nifty 50 company boards. “There is, of course, a cultural issue. Unlike Indians, western mindsets are less deferential to age, position and success. The same applied even on the Infosys board that I knew, which had a mix of foreign and Indian directors.” Sifting a CEO K Vaitheeswaran, who pioneered retail ecommerce in India with FabMart in 1999, cites Bill Gates as the classic founder to emulate. “When the Microsoft founder stepped down and handed over the reins to a CEO, he cut off all ties with the company. Getting rid of emotional attachment is the key. When a professional CEO is roped in to take the company to another stage of growth, the founder should move out completely, and must not be involved in any capacity, not even as a chairman emeritus or a sounding board or anything.” Yet, if culture is a key binding ingredient, and Murthy’s shadow is going to hover over Infosys for some time to come, perhaps a pragmatic solution may well be to find a CEO in the image and likeness of the founder. “What went wrong was that they (Infosys board and selection committee) looked only at the CV, not at a cultural fit. What Infosys needs is someone who is frugal and aligned to the strong values and culture of Infosys,” says Manish Sabharwal, chairman of TeamLease Services, a temp staffing company and also a non-official director on board of the Reserve Bank of India. Sabharwal cites the examples of Walmart, Ikea and Japanese companies that are frugal and don’t tolerate executives who deviate from the core values. “It’s a given that the CEO will be a top-notch techie,” adds Sabharwal. “But more importantly the next CEO should be put through the filters of cultural connect and whether he or she is aligned with the values of Infosys. Infosys’ culture is not toxic, but they don’t believe in private jets and so be it.” K Sudarshan, managing partner, India, at headhunters EMA Partners International, has a similar train of thought. “The CEO can’t wish away founders. The next CEO will have to be sensitive enough to take Murthy into confidence. After all, the founders grew Infosys into a `30,000 crore company before bringing in a professional CEO and you can’t suddenly wish away Murthy from the company.” Cultural alignment, he feels, is the way to go. “Murthy believes in simple living, clean your own toilet; fly, say, seat 24C with others. Sikka is a jetset executive. These are normal things but if founders have issues with it, so be it,” adds Sudarshan. “A rock star CEO from Silicon Valley will be a misfit at Infosys. The new CEO has to realise that any transformation at Infosys will need Murthy’s blessings,” adds Sudarshan. The counter view, of course, is that the culture spiel may only be a fig leaf for a founder who just can’t cut the umbilical cord. “If the founders are so obsessed with culture and want it their way, why don’t they take Infosys private, like Michael Dell and Ross Perot did with Dell Computers and Perot Systems, respectively?” asks a senior executive at a rival IT services firm. “The founders have made Infosys look like a Hindu Undivided Family and took turns to be CEO. Now, if they still want to run it their way, take it private.” Another irony is that SD Shibulal, who Sikka took over from, was considered a nuts-andbolts guy, unknown to clients and customers. Sikka, on the other hand, was a global IT poster boy. In hindsight, perhaps Infosys needs more of a Shibulal than a Sikka, points out an equity analyst on condition of anonymity, wryly. For a company that’s won virtually every award on offer — for investor relations, HR excellence and, yes, corporate governance and financial disclosures — the dirty linen that’s been washed liberally in the public domain over the past 30 months has made for painful watching. “Such open conflicts affect institutions, employee morale, create a leadership vacuum and discourage tentative clients. Both sides are equally to blame for this,” says veteran banker and HDFC chairman Deepak Parekh. Adds Kiran Mazumdar-Shaw, independent director on the Infosys board: “This public display of discord has caused serious collateral damage and must stop. The management must get back to business and the board must work expeditiously to appoint Vishal’s successor.” Expat or from inside? You can safely bet on the latter. (Additional reporting by Suman Layak, Kala Vijayraghavan & Rajiv Singh)
Categories: Business News

Here's why Modi may have to bring forward the next general elections by a year

August 19, 2017 - 10:59pm
By Amulya Ganguly The synchronisation of the next general election with the assembly polls of 2018 to set a pattern may not be the only reason why the Narendra Modi government is said to be considering bringing forward the 2019 general election by a year. While the need to evolve a system where the major elections are held simultaneously has been talked about for some time, the present conjecture relates mainly to the calculations about the prospects of the ruling party at the Centre. The belief seemingly is that it will be better for the Bharatiya Janata Party (BJP) to cash in on whatever gains it has made in the last three-and-a-half-years rather than wait for another 20 months or so when its inadequacies on the employment front and in relieving the distress of farmers may become more apparent. It will serve the party better, therefore, to advance the dates of the general election when the Modi magic hasn't quite faded as a recent opinion poll has shown and the opposition continues to be in disarray. Although the government cannot but derive considerable satisfaction from the opposition's discomfiture, it cannot be unaware of the fact that it still has pockets of influence as is evident from the marginal improvement in the Congress's position in the recent Madhya Pradesh local elections and the Trinamool Congress's sweeping victories in the West Bengal municipal polls. The BJP also knows that it has to guard against the anti-incumbency factor affecting the party's prospects in the assembly elections in Madhya Pradesh, Chhattisgarh, Rajasthan and Gujarat next year. Even if it wins, a loss of seats compared to the previous elections can be disheartening on the eve of the general election if it is held in 2019. It will also be demoralising for the BJP if the Congress wins in Karnataka and the CPI-M in Tripura. Holding the general election earlier will enable the BJP to avoid such uncomfortable possibilities. What the BJP will have to remember is that people often vote against the ruling party because of dissatisfaction with its performance even if the opponent is weak. This happened in Goa and Manipur, where the Congress was the first party before it lost this position because of the BJP's success in weaning away a number of legislators. However, such defections could not hide the fact that there was dissatisfaction with the BJP. The same disenchantment has also been voiced by a fairly wide section of the people in recent weeks as can be seen from the protest letters written to the Prime Minister by retired bureaucrats and army veterans and the processions taken out by scientists about the encouragement of obscurantist practices by the ruling dispensation. These grievances have nothing to do with unemployment and farmers' distress which are undoubtedly the two most serious problems faced by the government. Instead, these are the grouses of the average middle-class householders who have been feeling uneasy about the growing climate of intolerance although it probably does not affect them in a personal capacity. Even then, the depredations of the gau rakshaks, along with the possibility of the police entering private homes to check whether anyone is eating beef, as the Maharashtra government wants to do, the competitive jingoism in TV channels, the foul language used by the BJP's supporters against the party's opponents in the social media, the distortion of history, including the blanking out of Jawaharal Nehru's name from the speeches of high dignitaries, are some of the trends which can cause unease among the common people. No one can predict the cumulative effect of these feelings over the next two years, along with the slowing down of the economy which is a prime cause of the unemployment problem. Although early general elections can enable the government to make hay while the sun is still shining, albeit faintly, it is only a temporary palliative. As of now, a more longstanding solution of the current ills is not visible. As a result, the BJP has to continue to depend on the faith which the average person still places in the Prime Minister's ability to tide over the difficult situations through hard work. The government is also fortunate that it hasn't had to face the kind of corruption charges which brought down its predecessor and still hobbles many of the opposition parties. At the same time, it is obvious that the expectations of rapid economic advancement which are behind Modi's success have been largely belied. No wonder the "achhey din" phrase is not heard any more. The BJP's other problem is its total dependence on Modi, which is not unlike what it was in the Congress in Indira Gandhi's heyday. It is a scenario which is not politically healthy for a party, as can be seen from the Congress's present plight when it is pathetically dependent on the dynasty despite its fading charisma. The BJP, on its part, has to capitalise on Modi's popularity as long as it brings in the votes. Hence, the need for the general election next year. (Amulya Ganguli is a political analyst. The views expressed are personal. He can be reached at amulyaganguli@gmail.com)
Categories: Business News

Far-right politician wants to offer Indians money to leave UK

August 19, 2017 - 10:59pm
LONDON: A leadership candidate for the UK's anti-immigrant far-right party has come up with a radical plan to cut "unnecessary population" in the UK by "incentivising" some migrants, including from India, to return to the country of their origin. John Rees-Evans, a candidate to lead the UK Independence Party (UKIP), made a specific reference to Indians and Tanzanians in relation to a so-called "fast-track export- import scheme" of offering up to 9,000 pounds to certain Commonwealth migrants to leave the UK. "It's not going to be draconian. It's not going to be fascist. I'm not interested in using eugenics or any evil things like that, and yet I would be pushing for negative net migration towards one million a year," Rees-Evans is heard saying in a speech filmed during a meeting in Greater Manchester earlier this month and first published by the 'Daily Mirror'. He suggested that the UK government's foreign aid budget should be cut from more than 13 billion pounds a year to 1 billion pounds, with 12.3 billion pounds then spent on incentivising British citizens with dual citizenship to leave the country, citing British Indians and Tanzanians, whom he said could set up their own businesses. Curiously, while he referred to Indians as an example of migrants who can be offered such an option, India does not offer dual nationality to its citizens. Rees-Evans later defended the plan on his Facebook page, saying the fee would incentivise people to set up businesses overseas. He claimed: "I am being accused of wanting to send people of a particular country, or countries, abroad. This is absolutely not the case. "The net effect would be a reduction in Britain's population of up to several hundred thousands persons annually, as well as forging prolific and valuable import-free trading relationships that will create jobs in the exporting country, while reducing the cost of living to British residents." Under his scheme, the UK citizens who decided to move back to Britain within seven years would repay the "financial award". Rees-Evans' UKIP rivals have condemned the comments, made on August 2. Peter Whittle, a London Assembly member and frontrunner to lead the party, said the remarks were "utterly and entirely wrong". Rees-Evans is among 11 candidates trying to become UKIP's sixth leader in two years since Nigel Farage stepped down. The last UKIP leader, Paul Nuttall, resigned after winning just 1.8 per cent of the vote in the June General Election. Voting opens on September 1, with the results to be announced at UKIP's annual conference at the end of next month. Other controversial candidates in the fray include Anne Marie Waters, a vocal anti-Muslim campaigner.
Categories: Business News

MTNL increases 3G data limit up to 3 times in same price

August 19, 2017 - 10:59pm
NEW DELHI: State-run telecom firm MTNL said it has increased 3G mobile internet data limit by up to three times in the same price for its pre-paid customers. "Mahanagar Telephone Nigam Limited (MTNL) has decided to offer up to three times free data on existing prepaid 3G data coupons available in the market," the public sector firm said in a statement. The company announced that customers buying its Rs 99 data coupons will get 1.5 GB data with a validity of 30 days against 500 MB earlier. Similarly Rs 19 coupon will now provide triple data at 750 MB. The scheme has been in effect from August 7, the company said. MTNL customers recharging with Rs 319 will get 2 GB of 2G or 3G data everyday, unlimited free calls on MTNL network in Delhi and Mumbai and daily free 25 minutes on other networks, with a validity of 28 days, the statement said.
Categories: Business News

Govt extends last date for filing and payment of GST by 5 days

August 19, 2017 - 7:57pm
NEW DELHI: The government has extended the last date for payment of Goods and Services Tax and filing of the simplified return — Form 3B for the month of July to August 25 as technical glitch hit the GSTN portal making filing difficult on the last day. A finance ministry statement said the GST Implementation Committee, consisting of state and central government officers, has taken a decision to extend the last date for payment of the GST for the month of July 2017 to 25thAugust, 2017. For those tax payers, who do not want to avail of transitional credit in TRANS1 this month, the date for return filing will be 25th August 2017. And for those who want to fill up TRANS1 this month, the last date for filing of returns will be 28th August 2017, as announced earlier. Form 3B, a special summary return introduced for July and August months, was to be filed for the month of July by August 20, 2017. But, there were reports of the GSTN portal remaining down for most of the time on Saturday. Tax practioners and traders represented to the government seeking extension of the filing data. "Since it is the first Return to be filed under GST, the tax payers and the tax practitioners have requested for few more days to file their Return. Also, there have been requests from states which are hit with floods to extend the last date for filing of GST Returns. The State of Jammu & Kashmir has also requested for extension of time because of late passing of their GST Ordinance. Some technical glitches are also experienced by last minute return filers," the statement said.
Categories: Business News

Huge train accident near Muzaffarnagar; many coaches derail, 5 dead so far, dozens injured

August 19, 2017 - 7:57pm
NEW DELHI: In a major train accident, at least 5 passengers have been died and 34 injured after six coaches of 18477 Puri Haridwar Kalinga Utkal Express derailed today near Muzaffarnagar, Uttar Pradesh.The train runs between Haridwar and Puri. It was enroute to Haridwar when it derailed near Khatauli, Muzaffarnagar at around 5:50 pm. "The incident took place at 5:50 pm today. 5 coaches of the train have derailed, there could be injuries in this," Anil Saxena, spokesperson, Indian Railways said.Railways has released helpline numbers for getting information about the accident. The numbers are 9760534054 and 5101. Meerut district hospital has also set up a helpline number 94544 55183.Initial visuals of the incident suggests that the casualties may rise as several coaches appeared mangled over one another. The derailment is likely to affect movement of trains on the busy Northern Railway route.The reason behind the accident is still not clear. However, administration is looking into the terror angle. ATS team led by DSP Anup Singh has been dispatched to the accident spot. NDRF teams have also been mobilised for rescue operation. #WATCH: Visuals from the train derailment site in Muzaffarnagar's Khatauli; 6 coaches have derailed. More details a... https://t.co/UJ4StIemMp— ANI UP (@ANINewsUP) 1503147371000 Uttar Pradesh: Six coaches of Puri-Haridwar-Kalinga Utkal Express derail in Muzaffarnagar's Khatauli https://t.co/KBxd9NytBf— ANI UP (@ANINewsUP) 1503147166000 "I am personally monitoring situation.Hv instructed senior officers to reach site immediately and ensure speedy rescue and relief operations," Rail minister Suresh Prabhu said on Twitter."Medical vans have been rushed to the site.All efforts being taken to ensure speedy relief and rescue operations. Have instructed Chairman Rly Board,Member Traffic to oversee rescue and relief operations.I am personally monitoring situation," he said. Medical vans have been rushed to the site.All efforts being taken to ensure speedy relief and rescue operations— Suresh Prabhu (@sureshpprabhu) 1503148910000 Expressing grief over the incident, Uttar Pradesh Chief Minister has directed all possible help. रेल हादसे में घायल यात्रियों का समुचित इलाज होगा, हर संभव मदद पहुंचाने के निर्देश दे दिए गए है।— Yogi Adityanath (@myogiadityanath) 1503149578000
Categories: Business News

Donald Trump may have fired the first shot in trade war with China

August 19, 2017 - 4:57pm
WASHINGTON: US Trade Representative Robert Lighthizer has formally initiated an investigation of China's intellectual property practices under Section 301 of the Trade Act of 1974, which will seek to determine if America's largest trading partner has been engaging in unfair practices. "After consulting with stakeholders and other government agencies, I have determined that these critical issues merit a thorough investigation. I notified the President that today I am beginning an investigation under Section 301 of the Trade Act of 1974," Lighthizer said. China is America's largest trading partner, with annual trade in goods and services worth about USD 663 billion. In a memorandum on August 14, President Donald Trump had directed the USTR to do so. The memorandum had emphasised that "the US is a world leader in research-and-development-intensive, high-technology goods," and that "violations of intellectual property rights and other unfair technology transfers potentially threaten US firms by undermining their ability to compete fairly in the global market." It further noted that China's conduct "may inhibit US exports, deprive US citizens of fair remuneration for their innovations, divert American jobs to workers in China, contribute to our trade deficit with China, and otherwise undermine American manufacturing, services, and innovation." According to USTR, the Chinese government reportedly uses a variety of tools, including opaque and discretionary administrative approval processes, joint venture requirements, foreign equity limitations, procurements, and other mechanisms to regulate or intervene in US companies' operations in China, in order to require or pressure the transfer of technologies and intellectual property to Chinese companies. Moreover, many US companies report facing vague and unwritten rules, as well as local rules that diverge from national ones, which are applied in a selective and non- transparent manner by the Chinese government officials to pressure technology transfer, it said. Secondly, the Chinese government's acts, policies and practices reportedly deprive US companies of the ability to set market-based terms in licensing and other technology- related negotiations with Chinese companies and undermine US companies' control over their technology in China. For example, the Regulations on Technology Import and Export Administration mandate particular terms for indemnities and ownership of technology improvements for imported technology, and other measures also impose non-market terms in licensing and technology contracts. The Chinese government reportedly directs and/or unfairly facilitates the systematic investment in, and/or acquisition of, US companies and assets by Chinese companies to obtain cutting-edge technologies and intellectual property and generate large-scale technology transfer in industries deemed important by Chinese government industrial plans, it said. According to USTR, the investigation will consider whether the Chinese government is conducting or supporting unauthorized intrusions into US commercial computer networks or cyber-enabled theft of intellectual property, trade secrets, or confidential business information, and whether this conduct harms US companies or provides competitive advantages to Chinese companies or commercial sectors. In addition to these four types of conduct, interested parties may submit for consideration information on other acts, policies and practices of China relating to technology transfer, intellectual property, and innovation described in the President's Memorandum that might be included in this investigation, and/or might be addressed through other applicable mechanisms, Lighthizer said.
Categories: Business News

What if my boss doesn't like me? Lessons from Sikka for job seekers with experience

August 19, 2017 - 4:57pm
Infosys CEO Vishal Sikka's resignation throws up pertinent question for most of us: Can I afford to quit? Job searches get tougher with age, especially when hiring these days seems skewed towards younger folks or specifically those below 35. It is probably the reason why most of us stick to our current jobs despite the pressures they bring along. Experience sometimes fails to tilt the scales in a constantly changing work environment. However, there is hope. Devashish Chakravarty, director, executive search at QuezX.com, lists out few things you can do to optimise your job search, especially when you are older and experienced. If you are in your 30s The secret here is to plan not for the current job search but the one after that. You have tried different things, acquired a bunch of skills and a few lines on your resume. Now figure out how you will give direction to your career to position yourself well for the highest income earning decade ahead. While you seek professional and personal stability, you can still afford take a few calculated risks if you haven’t found your calling yet. Build a few months’ savings for a rainy day, invest 6-8 hours every week in search and enjoy and learn from each new interview and interaction. Seek opportunities where you can make an impact so that you can create expertise and reputation for future roles. Volunteer for leadership roles in your current firm and invest in relationships with your coworkers, clients, ex-bosses and industry professionals. They will be your professional network for future jobs and especially in the next job search. Seek mentors and approach your current employer for a change in role. If you are in your 40s For most professionals, this is the most productive decade of your career in both earnings and impact. The challenge during your job search is to convince your new employer that you are worth the cost. Identify opportunities based on the impact you want to make, the legacy you will build and the recognition and satisfaction you seek. Now build a story of progression in your career till date. Invest in crafting a resume that justifies your subject matter expertise, your brand and worth and highlights your recent achievements while compressing your past into a few lines. Make sure your LinkedIn profile is an abridged version of your resume. Now use all three modes of search— professional network, recruitment agencies and applying to openings advertised online. Make sure you look for a job while holding on to your current one. Do not rule out jobs based on description alone since that is rarely a true picture of what the hiring manager is looking for. In an interview, focus on the numerical impact you have made in the past. For example, decreased production cost by 12% and how you plan to make a similar difference for the new employer. If you are 50 or above Employers fear that candidates in their 50s or 60s will not have the required energy, motivation, intellectual responsiveness and ability to work with younger people. Additionally, they may be too expensive. Your aim, therefore, is to change the misconception so that you get a fair chance at finding a new job. Learn to make a serious LinkedIn profile as well as a professional error-free CV that is no more than a page and focused on the last 10 years of experience. Change your email id to a contemporary one. Stay physically fit and well-dressed to convey your energy and willingness to work. Work hard in practicing for the interview. Most senior professionals are sloppy in their approach to job search expecting opportunities to come to them and interviewers to respect their age. They thus convey laziness and lack of need for a job. While you search for an opportunity, keep yourself involved in volunteer/unpaid roles, invest in gaining familiarity with workplace technology and take online classes to stay on top of your game. Reach out to age-friendly companies and in interviews, share stories of how you successfully worked with younger colleagues and bosses. As you get older, be flexible about roles and compensation and demonstrate your wisdom, dependability and openness during interactions. Stay positive and do not display anxiety or desperation during a job search. Just follow these mantras when you feel age is not on your side Think mindfully Harvard psychology professor Ellen Langer’s experiments show mental agility and even physical health is a flexible number depending largely on how you chose to perceive the world. Think mindfully and notice daily changes and newness around you to improve your mental and psychological abilities. Think profits Figure out how you can create more cash for an entrepreneur or a business and seek a portion of the profits you generate. Any business will ignore your age if it can pay you from future cash you bring or free up. Both sales by commission and accounting by the hour are examples. Think expertise Age is not a handicap for a doctor or a lawyer. Expertise is highly valued and most expertise comes from experience. Identify your domain expertise that someone with lesser age or experience cannot provide. Crisis management and complex negotiations qualify here. Think mentoring When the job market focuses on hiring inexperienced youngsters, it creates opportunities for experienced people to train and bring teams up to speed. Even in your current job, a proactive teaching and mentoring role will make you more valuable for managerial and leadership positions. Think results Think and talk about outcomes instead of skills or experience. Can you turn around the sales performance of a region? Can you cut down procurement costs? When you offer yourself in the job market, discuss tangible results that you are willing to commit and link your compensation to.
Categories: Business News

IOC, Odisha strike deal on tax incentives for Paradip refinery

August 19, 2017 - 4:57pm
NEW DELHI: Odisha government, which had withdrawn tax incentives to the Rs 34,555-crore Paradip refinery of IOC, has agreed to restore some of the tax breaks including a Rs 700-crore per annum of interest-free loan, Oil Minister Dharmendra Pradhan said today. The breakthrough came after Pradhan met Odisha Chief Minister Naveen Patnaik here yesterday. "It is agreed that state government will give Rs 700 crore per annum interest-free loan for 15 years; earlier state head agreed to provide total deferment of VAT," Pradhan said in a twitter post. Indian Oil Corp (IOC) and the state government agreed to the revised terms at the meeting called at the behest of Pradhan. The Odisha government had on February 22 written to IOC, its single-biggest investor, saying it is withdrawing the promised 11-year deferment on payment of sales tax on Paradip refinery products sold in the state. The withdrawal was to cost Rs 2,000 crore to IOC this year and will progressively increase every year as more petrol, diesel and petrochemicals are sold within the state. The company dragged the state government to court for walking back on its commitment and has not paid VAT on products sold in the state since commissioning of the refinery last year. The agreement on interest-free loan for 15 years would give additional revenue to the state, Pradhan said. "This would give a substantial amount of additional #revenue (Around Rs 1,500 crore per year) to the state of #Odisha. #ParadipRefinery," he said in another tweet. "This is a historic day for people of #Odisha; dwellers of the state have got their dues without spoiling the industrial atmosphere of the state," he added. Sources said, in the latest agreement reached, the viability gap funding for Paradip refinery project will be revised to Rs 700 crore per annum payable in four equal instalments in each quarter in the form of interest-free loan for 15 years starting from financial year 2016-17. IOC will deposit applicable VAT or GST on products sold. Odisha government will pay the viability gap fund in the form of interest-free loan in each quarter. The repayment of the amount will start in 16th year for each instalment, they said. VAT collected and not paid in 2015-16, 2016-17 and 2017 -18 will be deposited by IOC immediately. Odisha government will provide interest-fee loan to IOC for 2016-17 and 3 quarters of current year by December 2017 or January 2018 and every quarter thereafter. Sources said the state government has also agreed to waive interest/penalty for the VAT withheld by IOC. A joint petition will be filed in the Orissa High Court, Cuttack informing about the agreement, they said.
Categories: Business News

After Vishal Sikka's dramatic exit, Infosys faces recruitment headache

August 19, 2017 - 4:57pm
MUMBAI | BENGALURU: The dramatic departure of Vishal Sikka as chief executive of Infosys, following a months-long public battle with the tech giant's founders, has left the company with another messy problem: how to find someone willing to replace him.With the boardroom row still simmering, the pressure will be on to do that fast.The company's last CEO hunt in 2014 was a major challenge. Sikka, the eventual choice who was plucked from a top job at SAP, was the first chief appointed from outside the group of founders. His brief was to turn around a faltering business.Three sources familiar with internal discussions three years ago said they expected an even tougher challenge now."It was extremely hard to find an external candidate last time, and the spat is going to make the job even more difficult now," said one of the sources."I think there is very little chance there will be an external candidate."The new boss will be taking on a company in better shape than it was in 2014: Sikka has led efforts to diversify Infosys away from basic IT outsourcing services into more lucrative new areas, like cloud, automation and artificial intelligence.Infosys' share price surged 22 percent between Aug. 1, 2014, when Sikka took office and Thursday, outperforming the broader Nifty IT index, which gained 6.3 percent in the period.But his successor will also join during one of the most turbulent patches ever for the $150 billion Indian IT services sector. The industry is facing squeezed margins, Brexit question marks over European businesses, and uncertainty in the United States, thanks to visa policy changes.Infosys' chairman, R Seshasayee, told reporters the company would not look for a major change in culture or strategy and was confident it could still attract talent."There may be some people who get excited by these kinds of challenging situations," said a senior Infosys source. "But anyone who is comfortable and doing well will think long and hard before taking this job."The company has not publicly identified potential successors, though the interim chief executive Pravin Rao, CFO Ranganath D Mavinakere, deputy COO Ravi Kumar S and Mohit Joshi, the head of banking, financial and insurance services, are among the top internal candidates, according to the company source.STAYING ONIn an unusual move, the board of India's No. 2 IT services company accepted Sikka's resignation, but named him executive vice chairman until a replacement was found. Rao reports to him.The board also blamed Narayana Murthy - one of the company's co-founders, a heavyweight in Indian business and one of the most vocal critics of the board - for the exit and for undermining his efforts to transform Infosys.That leaves any successor likely to continue to face a board at odds with powerful minority shareholders: the men who created the company and transformed outsourcing four decades ago.Infosys and its founder executives, led by Murthy, have been at odds since February. Sore points include increases in Sikka's salary, what they argue was the overpriced acquisition of the Israeli automation firm Panaya and severance packages offered to some executives.While the board has consistently backed Sikka publicly, some shareholders like Avinash Vazirani of Jupiter Asset Management say directors have not done enough to build investor confidence."I think the question is whether the board enjoys the support of the investors and shareholders," Vazirani said on an investor call on Friday."There has clearly been a failure on the part of the board to get the company in the situation where it is now."Infosys' co-chair, Ravi Venkatesan, told investors on Friday the board would seek to settle the dispute before making permanent changes at the top."We will have to find ways to put this decisively to bed, so that by the time we have a couple of viable candidates, there is more stability," he said.Yet the abrupt departure of the man seen as an innovator in the global software industry has raised fresh questions over Indian corporate governance practices.India will be the battleground for many such corporate tussles as companies transition from founder- and owner-led companies to entities run by professional CEOs and boards, said Shriram Subramanian of InGovern, a shareholder advocacy group.The public row at Infosys is reminiscent of Cyrus Mistry's unceremonious ouster in November as boss of Tata Group: another professional chief executive exiting over differences with a key shareholder - in that case, the Tata family patriarch, Ratan Tata."A belligerent attitude towards the founders of an iconic company will keep friction levels high and the search for an external CEO tough," Ankur Rudra, an analyst with CLSA, warned in a note.
Categories: Business News

LIC turns heat on Infy, says it’s unhappy with goings-on

August 19, 2017 - 4:57pm
NEW DELHI: India’s largest domestic institutional investor (DII) Life Insurance Corporation (LIC) on Saturday turned the heat on IT bellwether Infosys, saying it was not happy with the way the management episode in the company was handled. The public sector insurance behemoth, which holds 7.03 per cent stake in India’s second largest IT firm, however, said it might not tender all of its shares to the buyback offer. It is too early to decide on the Infosys’ buyback offer, said an LIC official. Even if it does tender its shares, it will be partial, ET Now reported. Also read: Buyback may cap downside for Infy, but near-term outlook poor Bogged down by a bitter tussle between the company management and co-founder NR Narayana Murthy, the IT major on Saturday tried to woo shareholders with a Rs 13,000 crore share buyback offer. The buyback price was fixed at Rs 1,150 a share, a 25 per cent premium to Friday’s closing price of Rs 923 a share. On Friday, the stock tumbled some 9 per cent after the company’s CEO and MD Vishal Sikka put in his papers, citing a continuous campaign against him by Murthy. Many analysts have advised investors to tender shares given the promoter-board battle, uncertainty over the new CEO and MD and reports of some US law firms investigating company directors on possible securities fraud, which may keep Infosys shares under pressure for some time. Three US law firms -- Bronstein, Gewirtz & Grossman, Pomerantz Law Firm and Rosen Law Firm – have initiated investigation against Infosys amid concerns over whether some of the company’s directors or officers have engaged in securities fraud or other unlawful business practices. “Tender shares”, said Sanjiv Bhasin, EVP-Markets & Corporate Affairs at India Infoline, who believes the company is past its prime and the stock is in for underperformance for a long time. He said the company, which had rewarded investors so well in the past, has got embroiled in dirty boardroom politics and corporate governance issues, and is fast losing credentials. “Besides, the macro environment is challenging. Investors holding Infosys shares should tender their entire holding at whatever premium they get,” Bhasin said. Market veteran Ambareesh Baliga said despite the big Rs 13,000 crore buyback, major upside for Infosys shares is unlikely in the near term. Baliga expects the buyback offer to cap the downside for the stock.
Categories: Business News

Need of the hour is to keep the core of Infosys intact

August 19, 2017 - 4:57pm
By Amit Kapoor Vishal Sikkas exit from Infosys seems to have been accentuated by the streak of comments made by co-founder N.R. Narayan Murthy. The comments bordered on complaints, raising issues of corporate governance and at time accusations. The episode, like a soap opera with significant twists and turns, has been played in public glare over the last few months. The resignation has had its first casualty by way of wiping off the value of Infosys stock on the bourses. The impact was close to Rs 22,000 for Infosys and Rs 700 crore of mark down for Murthy's stock. The episode rakes up significant issues about corporate governance and transparency, the agency problem (precisely the question of control between shareholders and professional management), important issues about the strategy of Infosys and the pressure to perform in a volatile global environment 1. VUCA Environment. The pressure seems to have been built on the enterprise while operating in a Volatile, Uncertain, Complex and Ambiguous (VUCA) environment. Today's business environment is bombarded with ideas countering the notion of globalisation and the negative impact of free trade. The benefits of globalization, driven by the free movement of goods, services, and information are countered by deeply seated myths and assumptions which smack right in the face of trade theorists. To top it all, the pressure has been further created by the current US administration's views on outsourcing and immigration. To bluntly put it, the world is in the throes of economic nationalism. 2. Business Model. The archaic business model of Infosys, driven by the idea of scale and labor arbitrage has come under severe strain. The debate for years has been the innovative potential of Infosys and the value the enterprise can create. To put this into perspective, we must look at the trajectories of growth, impact the firm has had on the global industry et al. The enterprises to compare here are Microsoft and Infosys who effectively started at the same time and have had trajectories of growth that are significantly different. I must as well admit that I have not been a great fan of Infosys of the past as it was built on the idea of exploitation of labor with abysmal levels of productivity numbers for its engineers. This is where the present team of Vishal Sikka, Ravi Venkatesan et al have been working quite hard and making admirable strides on redefining the business model. The effect of the new business model was as well visible through the rising productivity numbers of the enterprise and its talent. 3. Corporate Governance and Transparency. This issue needs to be assessed very carefully. It is clear that Murthy looks at Infosys having an impeccable record on governance and transparency. No one can find a reason to not follow the highest standards as espoused by Murthy. The practice needs to be followed to the hilt, though the issues need to be discussed within the confines of the boardroom. This discussion becomes important as Murthy cannot be seen as an activist shareholder who is at loggerheads with the management. The episode leads us to look deeply at the issues of corporate control in the country. It is not the first time that we have had battles fought between shareholders and professional managers. The Infosys saga can as well be seen through the lens of conflict of interest and control. To say the least, a conflict of this nature will not only undermine but has the potential to ruin the enterprise. It cannot be ignored that Murthy is the co-founder and has had a great stake in building the enterprise -- though the action of making the grievance public seems to have had a counterproductive effect. The situation at hand demands an immense level of maturity by all parties involved. This would require all parties concerned to tone down the rhetoric, stand down from their respective positions and sit across the table to discuss the issues. If this is not done on an immediate basis, the loss would entirely be felt by Infosys, the poster boy of Indian IT Industry, that I am sure wouldn't liked by Murhty, the board or Infosys stakeholders. We must keep in mind that all organisations need to change, evolve their business model and adapt to the new realities. This will certainly have to be done while keeping in mind that the core of Infosys is kept intact which in itself seems to be jeopardised at the moment. (Amit Kapoor is chair, Institute for Competitiveness, India. The views expressed are personal. He can be contacted at amit.kapoor@competitiveness.in and tweets @kautiliya.)
Categories: Business News

Infosys buyback: Should you tender shares?

August 19, 2017 - 1:56pm
The buyback offer of Infosys looks lucrative for retail investors on several counts. First, the offer price of Rs 1,150 is nearly 25 per cent higher than Friday’s closing stock price of Rs 923. This is a significant premium compared with the premium of 17-18 per cent at which peers including Tata Consultancy Services (TCS), Wipro and HCL Technologies had launched buyback offers recently. The higher premium of Infosys offer reflects the 9.6 per cent crash in its share price on Friday following the resignation of its CEO and MD Vishal Sikka. The second favourable factor is the acceptance ratio of close to 5 per cent compared with nearly 3 per cent for TCS and HCL Tech’s buyback offers. The acceptance ratio indicates how many shares the company will be able to accept in a buyback offer for every 100 shares tendered by shareholders. Higher the ratio, better it is. Wipro’s acceptance ratio was much higher at 7.2 per cent. The third and crucial factor for investors is the current turmoil regarding the leadership at Infosys. With Sikka’s exit, Infosys will take time to identify his successor. This raises near term uncertainty for the stock. Even though the generous buyback offer is likely to support the stock’s performance in days to come, it may continue to underperform the broader market and even the sector index in the near and medium term. This may prompt investors to tender shares in the buyback offer to secure decent return on a portion of their holdings in the company.
Categories: Business News

'CEOs must be able to manage ecosystem'

August 19, 2017 - 1:56pm
MUMBAI: Managing relations with founders and key stakeholders has emerged as a vital lesson for CEOs from the Infosys saga. Industry leaders and HR experts said transformation of an enterprise such as Infosys, which is steeped in legacy, especially with an outsider CEO, was not possible without a clear alignment with the company's founders. At the same time, experts said promoters, too, need to change their outlook and not confuse the values of an organisation with personal lifestyles. "To me, this is an organisation culture crisis," said Harsh Goenka, chairman of RPG Enterprises. "Mr Narayana Murthy, by far one of India Inc's most respected leaders, is known to lead a frugal life. Simplicity is in the DNA of many promoters who have built their organisations from scratch. On the other hand, Dr Vishal Sikka, an exemplary global CEO, is a professional who wanted to steer Infosys the way he deemed right and with the board's approval. What emerges from this as well as the Tata-Mistry episode, which is equally painful, is changing relationship dynamics between founders and key stakeholders in today's day and age." According to K Sudarshan, managing partner of EMA Partners India, there is a fundamental disconnect between the CEO and the key founder. "A transformation is not possible in this environment. How much ever Sikka can do, you cannot wish away the fact that the company was built the way it was. The founders have their eyes and ears in the organisation and any CEO would be under scrutiny till such time there is mutual trust. At the same time, it is critical for the business to set up a CEO for success, else even the best of them will fail," said Sudarshan. The lesson is critical as the next CEO, too, would require support from all key stakeholders to make an impact. Ronesh Puri, managing director of Executive Access, said, "One can draw a lot of parallels between what happened at the Tatas and now at Infosys. The promoters are highly accomplished people with a great track record and an awesome reputation, so there is bound to be a lot of emotion at play. Any CEO who tries to change the ecosystem and values of an organisation without proper buy-in from key promoters will not succeed. Nobody gets a blank cheque in today's world." Several promoter-driven companies today have professional CEOs and the reason they run like well-oiled machines has a lot to do with clarity on individual roles, mutual respect and a good rapport between the CEO and the founder as also the board and the founder. Infosys appears to have failed on many of these counts, except that Sikka had strong support from the board. Harsh Mariwala, chairman of Marico, said, "The issue is complicated due to strained relations between the board of directors and founders. There has to be total clarity and alignment on the role between the board and the founders. It's not the job of the CEO to manage relations with each founder." But never mind the relationship between the board and the founders, hiring experts said exceptional ecosystem management skills would be the main criteria of hiring CEOs going forward. "Organisations, when they look for a CEO, should first gauge the ability of a person to wield exceptional ecosystem management skills which can be challenging. The other aspects are not as important. Therefore, it is not merely business. High EQ and promoter/stakeholder management are very important. This criteria does not always get the attention it deserves as companies get too hallowed by a person's reputation and personal achievements," said Puri. A CEO, who did not wish to be quoted, said in today's networked world, managing relationships is critical for any leader and s/he needs to invest time for this. "A lot of senior managers today don't want to be a CEO," said Puri. "They believe it's a thankless job, with everything under a microscope and expectations too high and at times with too many pulls and pressures."
Categories: Business News

D-St week ahead: No runaway rise ahead nor a major breakdown

August 19, 2017 - 1:56pm
Friday’s session on Dalal Street was marred by developments at Infosys, which weighed heavy, but still, the benchmark Nifty50 index ended the week on a positive note, gaining 126 points or 1.30 per cent on a weekly basis. The coming week is once again going to be a short one, with Friday being a trading holiday on account of Ganesh Chaturthi. The outlook for the week is clear. Neither will the market see any runway rise, nor will it see any major breakdown. It will trade in a broad upward rising channel within a defined range. The 9,950 and 10,150 levels are likely to be immediate resistance for the Nifty50 while supports will come in at 9,685 and 9,580 levels. The Relative Strength Index or RSI on the weekly chart stood at 64.0066 and it remained neutral showing no divergence against the price. The weekly MACD just turned bearish and it traded below its signal line, reporting a negative crossover. Pattern analysis shows the market is trading in a long 18-month upward rising channel. The market tested the upper resistance line of this channel and has faced resistance around this. Even if we see some rangebound correction, the market should trade comfortably in this upward rising channel as evident on the weekly chart. Overall, we expect the market to trade rangebound. It is not likely to show any runaway resumption of the upward move. Action is likely to remain highly sector specific and select pockets will show outperformance. We recommend not getting carried away by any sharp rally and use all dips, if any, to make select purchases. Shorts should be avoided. A study of Relative Rotation Graphs, RRG, shows energy stocks will now start showing relative outperformance against the Nifty50. We will also see continued outperformance in metal stocks. IT and pharma sectors are likely to struggle to consolidate and are expected to remain rangebound in the coming week. Apart from this, we will see broader indices like Nifty Junior and CNX100 to improve as well. Not much is expected from the realty sector. Bank Nifty is likely to see loss of momentum, while media stocks are likely to continue their underperformance. Important Note: RRG™ charts show you the relative strength and momentum for a group of stocks. In the above Chart, they show relative performance as against NIFTY Index and should not be used directly as buy or sell signals. (Milan Vaishnav, CMT, is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia
Categories: Business News

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