Professional Documents
Culture Documents
MCS-123/2015-17; Published on: Every alternate Monday; Posted at Patrika Channel Sorting office, Mumbai-400001 on every alternate Wednesday-Thursday
`40
TELECOM WAR
A GROWING D-MART
SURVEY: WAREHOUSING
HUNGRY
for
GROWTH
Mergers & Acquisitions gain ground
with corporate Indias risk appetite
building up
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
we are on www.businessindiagroup.com
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Contents
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
no. 1002
COVER FEATURE
36
Back on the
growth trail
m& a s are back
in vogue as
corporate india
moves ahead
S U R V E Y-WA R E H O U S I N G
CO R P O R AT E
MEP INFRASTRUCTURE
R E P O R T S
72
Big boxes
46
the old timers in the industry will tell you that indian big boxes
(as warehouses are commonly referred) are in a transitional
phase from dark, dingy, closed spaces of yesteryears
where everything was manually conducted to modern and
scientifically built units. But this transitional journey is still far
off from reaching a stage of maturity
D-MART
78
d-mart has scored
well in net profit
margin terms, while
showing steady
growth in top line
and bottom line
GEMFIELDS
82
gemfields is geared up to replicate de Beers
success story in the coloured gemstone market
HUVEPHARMA
87
a poultry veteran has a joint venture to sell
and produce a Bulgarian majors products
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no. 1002
Contents
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
S P E C I A L
R E P O R T
Books
uGovernment
&
Politics
28
Stock-taking exercise
before the half-way mark of
modis term
Coordination is key to the
success of R6,000-crore
textiles package
Modi dumps nam to get
closer to the us
A&M
90
FOCUS
66
Owl on the lookout
the incoming
governor has a list of
unfinished business
to attend to
u
Talking to
88
sumit
sawhney,
country
Housing
Hospitality
93
Editorials
Business Notes
96
Niche Business
95
reddonatura helps
decentralise garbage
collection and convert it into
compost
92
CSR
98
saint-gobains lwe
programme can bridge
indias skill gap
10
24
Market News
99
Interview
90
104
Business notes
24
18
column
33
corporate reports
72
cover feature
36
csr
98
editorials
10
enterprise
96
executive track
101
focus
66
followup
16
28
guest columns
64,77,91
health
93
hospitality
94
housing
92
interview
108
Enterprise
94
affordable housing
finance market
ceo
and md,
renault
india,
shares
his success formula and the
future plans of
the company
Health
a dentist in Bengaluru
revives the practice of
doctors going to
patients homes
IN THIS ISSUE
Telecom war
68
reliance Jio and
coai go headto-head against
allegations
108
u7u
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listening post
13
market news
99
newscast
14
niche Business
95
panjus page
32
people
106
selections
102
special report
68
survey
46
talking to
88
Issue No. 1001 for the fortnight August 29-September 11, 2016.
Released on August 29, 2016
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Faridabad
u
Fine work
Nostalgic
a millennium of change
(18-31 august) presented a
monumental record of contemporary economic history
of india since 1978. the publishers note took me down
the memory lane and made
me feel as if i was reading
Business India from its first
issue onwards. and the lead
essay led the readers to think
on many a matter seriously.
the treatment of the issues
also drove home the points
succinctly.
poorly executed.
mohan nair
Chennai
u
Valuable
a millennium of change
(18-31 august), the 1,000th
issue of Business India, is a
valuable addition to any
comprehensive collection of
readable material.
u
u
At the top
congratulations
for
1,000th issue of Business India
presented as a millennium
of change (18-31 July). Business India continues to be one
of most readable business
magazines of today.
Delhi
Raipur
u
u
Impressive
Kochi
u
An asset
Pune
u
Disjointed
Whats in a name?
Mumbai
Mumbai
B. r aJaseKar an
m a h e s h K a pa s i
g.n. Bihani
s a r a s wat h Y m u da l i a r
m a n Jush a r aor a n e
JacoB a . sa h aYa m
Spare a thought
Bengaluru
Thiruvananthapuram
Unsaid
Mumbai
u
Vindicated
Kochi
u8u
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Editorials
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
rio imperative
Sports companies should move the Sensex
u 10 u
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B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
about time
The scope of pledged shares should be expanded
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Editorials
Editorials
B U SI N E S S I N D I A u T H E M AGA Z I N E O F T H E C O R P O R AT E WO R L D
Complementing SAARC
Pakistan plays hardball but others are welcome
AUGU S T 2 9 - S E P T E M B E R 1 1 , 2 0 16
Listening Post
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
exploring growth
Bse to list
energy saving
energy efficiency services ltd (eesl),
a mid-cap company promoted by various public sector undertakings (psus),
is to undertake the current energy
efficiency drive in the country by use
of led lighting. the company is now
actively looking at moving into other
products such as tube-lights, fans, and
pumps. through this initiative, eesl
intends to be a self-sustaining running concern while meeting the key
objective of energy saving by promoting usage of energy-efficient products. however, according to a source,
a major impediment in india is the
low awareness and high cost of such
products. to address these issues, eesl
plans to bring prices of such products
down to make them affordable and
a natural choice for the consumer.
once market prices reach parity with
eesl prices, eesl will exit the respective market place to extend the
programme to other products.
at the top
pressure by banks has given companies the opportunity to consolidate their strength in the markets.
after reports about jk paper eying
Ballarpur papers assets, the latter
is looking to pare assets with a view
to reducing debt. its focus is now on
century paper housed in century
textiles and industries. the pulp
and paper division has two facilities in Bharuch and uttrakhand and
contributes R2,000 crore, which is a
little under 13 per cent of its total
turnover. while there are not too
many big paper companies, tnpl
being a state government-promoted
company, investment bankers are
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de-risking
till
recently,
ahmedabad-based
astral pipes ltd (apl) was dependent on its tie-up with lubrizol for
its key raw material cpvc. according
to a source, to de-risk the business
and end its dependency on lubrizol, astral has backward integrated
to make its own cpvc compound by
using resin from sekisui, Japan. it is
now ready to launch its own cpvc
pipe brand astral cpvc pro. meanwhile, a new adhesive plant is getting
commissioned this year.
smart foray
after robotics, the indian market is now embracing its refined
and upgraded version i.e. cobotics, where innovative robot-human
collaboration takes place towards
augmenting overall productivity.
looking at the potential, danish
company universal robots, known
for manufacturing user-friendly
cobots (collaborative robots or compact table-top robotic arms) for
various applications, has recently
set up a marketing office in Bangalore, and is currently in the process
of building up a network of distributors and partners (currently, there
are around 10). the global major,
which has been in the business of
making these intelligent machines
since founded in 2005, has already
sold around 200 cobots in india to
clients including Bajaj auto, tvs,
m& m, siemens, renault, ge , tcs,
iit Kanpur and auro lab. this year
alone the company is looking at
selling 100 cobots (R10-25 lakh) in
india and the figure is expected to
touch 200 in 2017 and 400 in 2018.
last year per the international
federation
of
robotics
india
imported around 2,600 robots
which is likely to touch around
6,000 by 2018.
u
Newscast
G O V T. & P O L I C Y
a three-member committee
of the niti aayog has
finalised a report to replace
the medical council of
india (mci) with a threetiered regulatory apparatus
for medical education
to be appointed through
a transparent process by
a search-and-selection
committee.
E-tailers accused of
flouting FDI norms
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Panel to review
rules for
e-commerce
Tax collection up in
April-July
Spectrum auction
to start by end
September
Retail inflation
target fixed at 4 per
cent
Grain output to
touch 252.22
million tonnes
GST rates to be
below 20 per cent?
industry association
assocham has said the
standard goods & services
tax (gst) rate should be
well below 20 per cent,
with services of mass
consumption included in
the merit list, to ensure that
prices of critical services
like telecom, banking,
healthcare, railways, do not
lead to inflation.
Anti-dumping duty
on HR steel
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R E G U L ATO R S
No indemnity-based
health products
Newscast
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Remuneration
guidelines issued
Listing deadline
proposed for
insurers
NPPA to launch
app with key drug
prices
Portal launched
to curb pooling of
money
Panel to study
household finance
CO R P O R AT E S
Shareholders allege
violation by Cairn
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LANDMARKS u
APPoINTED Sriram
r ajamani, as managing
director, Microsofts India lab
SamSon Khaou, as
managing director, Dassault
Systemes, India
hiteSh Gupta, as managing
director, Iron Mountain India
pawan Kumar Bajaj, as
managing director, United
Bank of India
r avindra praBhaKar
marathe, as chief executive
officer, Bank of Maharashtra
dineSh Kumar Khara, as
managing director, State
Bank of India
r ajeev KriShnan, as
managing director, Max
Hypermarkets India, a
Landmark group company
v. SrinivaSan, as chief
operating officer, Cognizant
Technology Solutions
RESIGNED r. BalaKriShnan,
as group chairman, Mullen
Lowe Lintas
u
businesses being merged
with grasim.
Reliance Jio
demands action
Follow-up
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
dedicated performance
Sanghi: complete
control to customers
In August 2015,
Business india
wrote that Netmagic
would continue
to focus on valueadded services
in its portfolio.
The company has
recently launched
a private virtual
cloud service for
enterprises in
association with
Cisco and Microsoft
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u a r Bi n d gup ta
feedback@businessindiagroup.com
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
watting mosquitoes is
a chore for anyone, but
Apollo Munich Health
Insurance makes it fun,
with an interactive online
game Kill the Killer combined with a public interest message. gamification
has undoubtedly become a
strong communication tool.
through it, we are hoping
to raise awareness for dengue and educate consumers about the disease. at
apollo munich, we have
always focussed on innovation and this time around
we are moving innovation
from products to customer
engagement, says
Antony Jacob, chief executive officer, apollo munich.
the game can be played on
apollo munichs homepage anytime, anywhere. u
u 18 u
au g u s t 2 9 - s e p t e m b e r 11, 2 016
confident that under the successful and experienced management in titanX, it will be
a great asset and will contribute to the growth of tata
autocomp. Ajay Tandon,
md & ceo, tata autocomp
systems added, tata autocomp offers its customers in
india and china a wide portfolio of products and services
through its own capabilities
and jvs with global majors.
titanX has the latest technology in engine cooling solutions for commercial vehicles,
which will help enhance our
offering to our customers
in commercial vehicle segment outside india. titanX
was advised by bda partners and tata autocomp
was advised by tata capital investment banking. u
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
hennai-based
Equitas Holdings which
received rbis final approval
to launch a small finance
bank (sfb) recently, is all set
to start the sfb operations
in september. we currently
serve about 1 per cent of the
indian households. with the
conversion to a bank and
expansion in the product and
service offerings with inclusion of savings, deposits,
remittance and third party
products such as pension
and insurance, the company
expects to provide a more
comprehensive service to
the low income households,
says P.N. Vasudevan, managing director, equitas holdings. the company, having
presence in micro finance,
used commercial vehicle
finance, small enterprise
ur focus in india
currently is to get
more partners and hire the
best available talent, says
Martin Van Roekel, ceo,
BDO International on
his visit to india. attending
the asia-pacfic conference in
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Visiting
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
fantastic food and wine, travellers can get close to the real
australia in south australia,
claims urmonas. the core target segments include leisure
travellers, group travellers,
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Visiting
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
pick-up. people are burning garbage and then people ask for 4g. (in that case)
youre focussed on the wrong
g, until people are disposing their own garbage. Sree
Sreenivasan, the newly
appointed chief digital officer (cdo) of New York City,
said. he said india should
give priority to setting up and
smoothing out infrastructure
issues over the digital drive.
sreenivasan, who has been
the cdo at columbia university and the metropolitan
museum of art, is on an
india tour, talking about the
importance of using social
media and different online
platforms effectively. what
can india learn from the
experience of us cities going
digital? look at the new
York city digital playbook.
its our road map on how
new York city (will do digital) it doesnt mean thats
exactly how india needs to
be, but somewhere there is
the right way for india to be
as well, he said.
u
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Business Notes
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
au g u s t 2 9 - s e p t e m b e r 11, 2 016
sa n JaY bor a de
challenging times
going to be worse.
as npas are increasing, mills are
partially or fully closing down on the
one hand while, on the other hand,
new investments are coming up. old
and new mills have a cost differential
of 10 per cent in an industry, which
doesnt even have a consistent net
profit margin of 5 per cent.
cotton to yarn had a value addition of R125 per kg in march 2013 and
went up to R144 per cent kg in september 2014. for the last one year, it been
down to R115 per kg and now it has
come down to R100. hence, in the last
three years, contribution from yarn
manufacturing has reduced by 25 per
cent, while manufacturing costs have
gone up by about 10 per cent.
experts have attributed this plight
of the cotton yarn sector to the governments lopsided policy that only
helped in abnormal addition (mushrooming) of spinning capacities at the
cost of the other downstream links of
the textiles and clothing industry. it
is to be noted that over 70 per cent
of investments made under the tuf
have gone into the spinning sector,
while the weakest links like weaving,
processing and garmenting together
have received the rest.
on the micro level, tuf has failed
to deliver its main objectives. instead
of strengthening the weaker segments
of the industry, incentives have gone
into upgrading the already strong segment (i.e. spinning) of the industry.
this has created a massive imbalance
and distortion across the textile value
chain. while other weaker segments
have continued to suffer, spinning is
currently under huge stress as there is
not enough demand to consume the
production, says sanjay Jain, president, north india textile mills association (nitma).
our policy initiatives and their
implementation have gone haywire.
there is a lack of a holistic approach
and instead of putting in place an
organised supply chain, we have
ended up infusing anomalies and
thus distorting the production base.
You will be surprised to know that
these incentives have also created an
unhealthy competition within the
spinning sector. in other words, newly-built spinning units are not only
Business Notes
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
u a r bi n d gup ta
feedback@businessindiagroup.com
PHARMA BR ANDS
immense
value
a
pa l a s h r a n Ja n b h au m i c K
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Business Notes
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
in the view of the prescribing doctors, who are driving the sales, and
the investing community which
determines the share price movement, and market capitalisation, the
tra-bluebytes report may be wide off
the mark!
u sumit ghoshal
feedback@businessindiagroup.com
E N T E R TA I N M E N T
a bollywood
theme park
i
au g u s t 2 9 - s e p t e m b e r 11, 2 016
N o
P o P U l I S t
N o
S E N S A t I o N A l I S m .
D U m B I N G
D o w N
o f
c o N t E N t .
BUt,
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I N c I S I v E
c R E D I B l E
A U t h o R I t A t I v E
Newsstand You
price
Pay only
You
save Save %
26 (1 Year)
1,040
750
290
28
52 (2 Years)
2,080
1,250
830
40
78 (3 years)
3,120
1,900
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40
130 (5 years)
5,200
3,000
2,200
42
INSPIRING BUSINESS
INSPIRING INDIA
Name:
address:
City:
PiN:
state:
CouNtry
email:
Job title:
iNdustry:
ComPaNy:
tel:
mobile:
my Cheque/dd No.:
date
for `:
drawN oN
is eNClosed herewith.
visa
masterCard
amex for `.
Card Number:
Card members Name:
sigNature:
date of birth:
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
sa n JaY bor a de
final burial?
au g u s t 2 9 - s e p t e m b e r 11, 2 016
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
textiles trouble
Coordination is key to the success of a R6,000-crore package
au g u s t 2 9 - s e p t e m b e r 11, 2 016
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
under review
au g u s t 2 9 - s e p t e m b e r 11, 2 016
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
pawan munjal,
MD & CEO,
Hero MotoCorp
uday kotak
MD, Kotak Mahindra Bank
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Column
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Brij Khindaria
denies entry to potential sports prodigies seeking better training and facilities. all sports
authorities know that talented international
sportswomen and men can perform in foreign
teams while performing for their country of
origins teams in international competitions.
the main barriers for talented young
sportspersons in india are a lack of respect for
their capabilities and paucity of funding for
their training. this is where corporate sponsors
can and must help. the government, whether
national or at the state level, cannot be entrusted
with the precious tasks of talent development.
its officials and local politicians are too venal
and uncaring about young sportspersons, especially if they emerge, as most do, from poor and
less educated backgrounds.
The author is
an international
affairs columnist
for Business india.
He can be contacted
at brij.khindaria@
businessindiagroup.com
ports in india needs to be nurtured in a similar manner to the alluring new formats of
cricket that attract billions in revenues because
they are fast-paced and enjoyable to view on television. comparable popular interest will not be
easy to achieve for olympics sports but some of
them, like athletics, gymnastics, decathlon and
marathons, are heroic battles driven by gritty
personalities fighting off challenges by competitors, including new entrants.
once indian viewers realise this excitement,
they will flock to stadiums and tv sets. But the
government is much too turgid, backward-looking and encrusted in old ways to fill such tasks.
if they see earning potential, more parents will
let their talented daughters and sons seek discipline through sports rather than forcing them
to struggle at the bottom rung as junior doctors,
engineers and government babus. only corporate
sponsorships and endorsements can bring this
about especially if tv channels look outside the
box in their search for new revenue streams.
over time, nurturing sports need not be
mostly charitable or public image activities for
private sponsors. they are likely to become
money-spinners. evidence is easily visible in
the billions pocketed by the olympic and sports
federations, western tv channels and major
western city stadiums.
sports persons have natural talent, dedication, and drive. fostering them would make
india proud and could also generate the funds
necessary for nurturing future generations
of champions.
u
u 33 u
au g u s t 2 9 - s e p t e m B e r 11, 2 016
milestones
oVer the
Years
u Diversified
and implemented
a totally new
technology Air
Jet Spinning in
the year 1992
and became
the Worlds
Company to
multi product
multi location
Company. The
turnover of the
Company has
grown from Rs. 5
crores to close to
G. Vamsi
Wholetime Director
els) under the V-Next brand.
These are new age multipurpose cement flat sheets with
a wide range of applications.
They are fast and easy to install, with no maintenance required. These products can
be used for almost any application in a building whether
residential, industrial, hotel,
hospital, auditorium, college
and university.
Vamsi strongly believes
that the V-Next brand of products have a very bright future
over a very long period and
are currently in nascent stage.
He believes it will be the future
growth engine of the company. Our V-Next products will
revolutionise the construction
methods in the country over a
time, says Vamsi.
Visaka is the second larg-
uAs part
of its social
responsibility,
the company
established
Charitable Trust to
support initiatives
that benefit the
Society at large.
u Visaka now is
the second largest
player in the
Cement Roofing
Industry.
u Visaka is
the 2nd largest
player in the fiber
cement boards
industry and also
export to about 15
countries.
uHighest
productivity
award from the
Andhra Pradesh
Federation of
Chambers of
Commerce and
Industry in 1987.
uBest Management
award from the
Government of
Andhra Pradesh for
the year 1987.
uBest Entrepreneur
of the year award
from the Council for
year 1995.
uBest Industrialist
award from the
Government of
Tamil Nadu for the
year 2000.
uBest performance
competitive industry.
The company possessed
H54 crore in long-term debt
against a net worth of H347
crore as on March 31, 2016 indicating its low gearing. Vamsi asserts that the company is
conscious of the financial solvency and hence ensures that
debt is kept under control and
is used very judiciously.
In view of the companys
financial discipline, prompt
repayment of loan instalments
as well as interest thereon to
banks and other stakeholders, it enjoys good credit rating with them. While long term
bank facilities of the Company
are accredited with CARE A+
rating, other loan facilities are
accredited with CARE A1+.
The company holds significant commanding position
and stature in all the three
businesses in which it operates, both in terms of market
share and margins. In the Cement roofing and VNext products, the company is the second largest and in Twin Airjet
spinning the company is the
largest operation in the world.
It also earns one of the best
margins in the industry in each
of its business segments.
Vamsi credits the companys outstanding performance to the longevity of the
Senior Management, which is
the backbone of the compa-
in Large and
Medium Sector
for the year 2001
awarded by All India
Manufacturers
Organisation,
Andhra Pradesh
State Board.
u A.P.
Distinguished
Industrialist
Award for the year
2003 awarded by
Exhibition Society.
uBest Practices in
Investor Relations
in Fibre Cement
Sheets Industry
Category 2012 by
the IR Society
uFiber Cement Flat
sheets certified as
Green Pro products
(Vboard, Vdesigner,
Cover Feature
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
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Cover Feature
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Gaining momentum
Value ($ million)
Volume
36
Jan 16 Feb
Apr
May
44
1,831
36
42
2,429
42
3,646
46
4,083
5,232
55
1,827
827
Mar
Jun
Jul 16
u 37 u
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Cover Feature
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Volume
Domestic
Cross-border
Merger & Internal Restructuring
Total M&A
Cross-border includes
Inbound
Outbound
2014
2015
137
159
22
318
175
140
4
319
103
56
65
75
2016
2014
2015
2016
179
7,809
6,018 10273
111
9,457
8,882
9021
11
3,257
1,316
580
301 20,523 16,219 19,875
50
61
7,598
1,859
6,015
2,867
5,870
3,151
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Cover Feature
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Acquirer
China Consortium
JSW Energy
JSW Energy
Tata Power Renewables Energy
UltraTech
Nirma
Birla Corp
Yara Fertilisers
The Yokohama Rubber Co
Fosun Pharma ( China)
HDFC Life Insurance
Grasim
Target
M&E
Energy
energy
Amount
($mn)
900
420
606
1380
2373
1400
636
405
1200
1260
Media.net
JSPL-Chattisgarh Thermal Plant
Bina Power (Jaiprakash Power)
Welspun Renewable Energy
cement
Jaiprakash Associates
cement
Lafarge India
cement
Reliance Cement (Rel.Infra)
Urea Fert. Tata Chemicals
Tyres
Alliance Tyre Group
Pharma
Gland Pharma
MERGERS
Max Life Insurance
share swap
Aditya Birla Nuvo Ltd
Share swap
u 40 u
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Cover Feature
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Creation of a financial
behemoth
photos: sa n JaY bor a de
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Cover Feature
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Promoters
Public
31.3%
Promoters
68.7%
Grasim
100.0%
Divisions
Others
Aditya Birla
Fashion & Retail
2.3%
Hindalco
23.3%
Birla Sun
Life
Insurance
NBFC
2.6%
4.7%
2.6%
Asset management
General insurance
advisory
Broking
Wealth management
Private equity
Online money
management
Health insurance
u 42 u
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Idea
Cellular
49.0%
Housing finance
51.0%
Aditya Birla
Financial
Services
Chemicals
Textiles
41.6%
60.2%
UltraTech
Cement
Public
58.4%
51.0%
Payments
Bank
51.0%
Solar
power
Divisions
Textiles
Agri-inputs
Rayon
Others
9.1%
Aditya Birla
Fashion &
Retail
1.6%
Insulators
Financial
services
Hindalco
Cover Feature
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
market share of bharti airtel, Vodafone and idea also led to rumours
about idea being hived off or striking
deals with a competitor like Vodafone. like other fears, the rumour
was scoffed at by the management.
and in any case aditya birla group
as such has not been known to sell
assets in distress. even in the case of
fertilisers, where both tatas and birlas were rumoured to sell off their
low profit yielding fertiliser plants,
birla, according to one view, would
wait for the right time and opportunity if it ever was serious in divesting
its 1 mtpa fertiliser business. birlas,
in fact have over the last few years
been buying assets, distressed or otherwise in a bid to meet their stated
target of doubling the turnover to
$65 billion.
ashish adukia, head, group corporate finance, who has been with
the group since 2014 having been
an investment banker with citi
and morgan stanley earlier, points
out, investors have not yet understood the complexities of the transactions. a merger with a stronger
parent will be in the interests of the
Promoter
Public
38.8%
61.2%
Grasim + Aditya Birla Nuvo
16.6%
57.2%
Aditya Birla
Financial
Services
60.2%
UltraTech
Cement
28.0%
Idea Cellular
51.0%
Solar
Divisions
Textiles
All of financial
services
including life
insurance and
payments bank
Others
11.4%
Chemicals
Others
(Insulators)
4.3%
Aditya Birla
Fashion &
Retail
Hindalco
3 equity shares of Grasim for every 10 equity shares of Aditya Birla Nuvo
7 shares of Aditya Birla Financial Services for every 1 equity shares of Grasim (post merger)
resulting in a listed entity with minimum public shareholding of 25% to be held by public
shareholders of Grasim and Aditya Birla Nuvo
The Swap ratio and the Share exchange ratio will be adjusted to take into account sub-division of Grasims equity shares of Rs10 each into 5 equity shares of Rs2 each
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Cover Feature
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Surprising valuation
he closest comparison of
the business is with Bajaj
Finserv and Bajaj Finance.
Bajaj Finserv with a market
cap of H43,000 crore houses
the life insurance and general
insurance business besides
having a subsidiary, Bajaj
Finance which is an nbfc having a market cap of H54,000
crore. Bajaj Finance and Bajaj
Finserv also have a 100 per
regulatory
requirement
was
another factor which nudged birla
management to take the circuitous
route of merging nuvo in toto with
grasim. would the insurance regulator allow the insurance business to
be a part of a conglomerate?
Business Indias view is that shareholders are too focussed on the short
term benefits and are unable to come
to terms with the fact that they will
be moving in a larger conglomerate
and also have a chance to participate
in the growth of abfs. one share of
grasim will fetch them 7 shares
in abfl .
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s u r v e y
warehousing
big boxes
Bigger, yes!
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au g u s t 2 9 - s e p t e m b e r 11, 2 016
s u r v e y
warehousing
In the last
five years,
warehousing
business has
had a CAGR of
18-20 per cent,
VikRam
mansukhani,
DiEsl
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
s u r v e y
warehousing
The company
is presently
operating 15
million square
feet throughout
the country,
akash bansal
Om Logistics
significant case is that of central railside warehousing company (crwc), a fully-owned subsidiary of cwc, which was formed in 2007 to
make use of unused railway terminals as vibrant
cargo transit units. we were formed with the
mandate of creating 22 terminals. out of that,
18 are already in operations. we are covering
all metros plus locations like hyderabad, pune,
lucknow, ghaziabad, Kandla, Vadnera, nasik,
etc. our latest addition is Jogeshwari which was
opened last year. we have so far created a capacity of 3,29,000 metric tonnes primarily used as
a transit point for commodities like cement and
fertiliser which come in bags, explains K.u.
thankachen, md, crwc. the warehousing
units set up by crwc are typically 750 metres
along the railway track with a width of around
15 metres.
but most of the current action is visible in
the non-foodgrain, non-basic commodities section and here the driver is private. but this space
also needs massive scaling up, both quantitative
and qualitative, to ensure a strong supply chain
(with warehousing as a vital cog in the process)
in an economy still besieged by very high logistics costs. as much as 13 per cent to the gdp,
which in more matured economies like the us
and several countries in europe is in the single
digit range of 7-9 per cent.
And better
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b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
we got into it big time in the late 1990s and gradually we got into building our own state-of-theart logistics parks, he says. the company today
has 29 logistics parks in the country and is a front
league player in the space with a cumulative capacity of around 12 million square feet. the company
has invested R600 crore in building state-of-the-art
logistics parks in the last 10 years.
on the organised private side in the warehousing business, there are clearly three sets
of players. the first league is those of original
lsps, players like tci, safexpress, om logistics,
etc, who have existed for a long time with transportation expertise in their dna but later added
warehousing as an efficient value addition to
their services portfolio. om has been creating
a land bank since the 1980s and that has put it
in a strong position today. in the recent past, we
have been adding two to three large size units
every year, says akash bansal, head (logistics),
om logistics. he adds that the company is presently operating 15 million square feet throughout the country. om is particularly aligned to
the automotive and telecom businesses. much
diversified logistics players like allcargo and
global major dhl supply chain too belong to
this league with complete supply chain solutions. we have 700,000 of sq ft of logistics
parks operating out of panvel, mumbai, with all
u 49 u
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s u r v e y
warehousing
We have about
400,000 sq ft
warehousing
space across
India,
aDaRsh hEgDE
Allcargo
Logistics
can dilute multiple handling of consignments and this brings down the cost. The
multi-modal logistics hubs which we are
creating will be biggest this country has
seen so far. Normally, the best of logistics parks are laid out in 100-200 acre
land parcels but ours will be much larger
than that. Apart from these, we are also
mooting another logistics hub in sanad,
Gujarat.
will there be any alignment
between DMiC and Dedicated
Freight Corridor (DFC) projects.
DFC is again a very ambitious project with very similar objectives to
facilitate easy movement of goods
and bring down the logistics cost.
We will be complementing each other.
DFC will ensure dedicated freight movement which will bring down the transportation time significantly. For instance,
the journey time between Delhi and
Mumbai will come down to 18 hours.
Our industrial and logistics hubs on the
northern and western stretches will feed
consignments to DFC.
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
s u r v e y
warehousing
TCI today
has nearly
11 million
square feet of
warehousing
space spread
across the
country,
VinEEt
agaRwal ,TCI
required design and safety compliances. similarly for food, retail and e-comm storage where
hygiene and cleanliness is of paramount importance, we have about 400,000 sq ft warehousing space across india, informs adarsh hegde
joint managing director, allcargo logistics.
dhl supply chains md Vikas anand says: we
now have nine mcs (multi-client sites) completed and operational across india which have
been built to world class standards with stateof-the-art features customised to suit specific
requirements of customers. these mcs facilities can consolidate, store shipments and re-distribute them to several distribution channels in
the country. the dhl group had committed
an investment of 100 million four years ago to
scale up capacity in india.
the second set are players who have stemmed
as the branch of a large business conglomerate
(mostly in the last 10 years), firstly to support
the captive business of the group and then to
also generate business from outside. future supply chain, mahindra logistics, diesl (a tata
group company originally, it was bought over by
tVs logistics last year), etc, belong to this league.
mahindra logistics, for instance, has been very
closely aligned to the groups expansion in the
automobile space. says pirojshaw sarkari, ceo,
mahindra logistics: we have invested in big
box warehouses (ranging from 2-5 lakh sq ft)
and cross docks at strategic locations for our current customers and network business to transport products from a supplier or manufacturing
plant directly to the customer or retail chain
with marginal-to-no handling or storage time.
and then there are operators who do not have
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b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
s u r v e y
warehousing
a new vertical
The big changes
We now have
nine MCS
completed and
operational
across India,
Vikas ananD
DHL Supply
Chain
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b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
s u r v e y
warehousing
Most of
the large
warehouses
have come
up around
the metros,
jasminE singh
CBRE
days at the warehousing level. its like a buy-oneget-one-free kind of pattern. so you have kitting
activities, bar-coding of apparel and e-commerce
products, etc, being offered to the customers,
concurs agarwal of tci.
How modern are the new units?
the warehousing pie has undoubtedly got bigger but the moot question now is have they really
become better? equally important is to understand the attributes that define a quality, modern warehouse. responds Jain of safexpress: a
modern warehouse is a concrete brick and mortar structure designed and laid out in an efficient
way which allows easy movement of trucks with
vehicles being docked at the height of the platform and with engineered floors which should be
utilised without any issue for 25-30 years taking
the weight of 6-8 metric tonnes. furthermore,
it should have the ability to scale up vertically;
there should be proper handling of equipment
and sufficient space for them. that means creating warehouses without columns in the middle.
then, of course, you have to ensure right safety
standards, access to natural light, air circulation,
wi-fi, etc.
no doubt, such units are no longer a rarity in
the country, but they have also not become common in every demand zone. a report released by
an industry chamber early this year had pointed
out that about 80 per cent of handling and
warehousing facilities are not mechanised and
traditional manual methods are widely used.
furthermore, the warehouses which are mechanised have just forklifts or hydraulic hand pallet
trucks. according to singh of cbre, most developers are keen to build only the shells/pebs along
with common infrastructure as required by the
clients. automation, racking, material handling
equipments and inventory management systems
like wms/ims, etc, are client specific which the
tenants get on their own or ask their management partners like 3pls to invest in. warehouse
management system (wms) considered to be
the most vital piece while moving towards an
automated regime is not a regular feature with
indian warehousing units. automation of warehouses is yet to gain momentum in india. theoretically, the players are convinced that it is a
must but most of them are not ready to take the
plunge as yet, points out sunnil dabral, country head, schaffer the global giant in the automated solutions.
we have seen some improvement in the
quality of warehouses offered to us in recent
years. but the story hasnt even reached the half
way mark to full warehousing modernisation.
at best, we have semi-automated units, opines
Jagadeesh Kunchey, head supply chain of business conglomerate itc, which requires about 4.5
million square ft warehousing space for the storage and distribution of its products annually. i
dont think more than 8-10 per cent of warehousing units in the country deserve to be qualified as modern. it is a huge gap which needs to
be filled, adds Khanna of patanjali.
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s u r v e y
warehousing
gst
The real game changer
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s u r v e y
warehousing
We realised
there is a
serious gap
in quality
supply of
warehousing,
R ajEsh jaggi,
IndoSpace
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b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
s u r v e y
warehousing
GST would
allow
companies
to expand
their existing
warehouses,
balaji V.
aVVashya CCI
i n D u s T r i a l pa r k s
he growing demand for large scale warehouses in the country could well find a new
cushion apart from big ticket designs of
established logistics service providers (lsps). there
are trappings to suggest that industrial parks, the
dedicated manufacturing zones with adequate
provision for storage and other supply chain activities, will become a happening segment in the
coming years post gst. the lack of clarity on the
path-breaking law in the past is believed to have
forced developers to lie low. but now with gst
round the corner, their offerings are expected to
find more willing takers from the manufacturing
and distribution sides who know the pragmatism
of an integrated play, which is the usp of an industrial park.
considering the size of the indian economy,
the gap is glaring when it comes to industrial real
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b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
s u r v e y
warehousing
Patel: in
support of SMEs
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Suchak: wants
to do what
China has done
Guest Column
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
ashu suYash
The US
China
Japan
South Korea
Hong Kong
Singapore
Malaysia
India
penetration
(outstanding debt/
gdp) as on December
31, 2015 (%)
G-Secs
Corp bonds
81
39
199
53
39
46
53
40
123
20
16
77
29
32
44
17
ratio
(Bonds/G-Sec)
1.5
0.5
0.1
1.5
0.8
0.7
0.8
0.4
or private borrowers too, there is little inducement. But the good part is: that could change
soon, with the reserve Bank of india making
it costlier for banks to lend to specified large
borrowers beyond a defined limit. such a regulatory push in the current cycle of declining
interest rates will provide a much-needed structural impetus for the rebalancing.
systemically, it would serve stakeholders well,
if less money goes into fixed deposits and more
into mutual funds, pension funds and other
managed assets. the win-win is that, for savers, leveraging institutional expertise for investments is any day a better bet than going direct.
for issuers, as more savers shift away from fixed
deposits, borrowing cost will fall.
that would mean the traditional banking system can sharpen its focus on serving the credit
needs of the lower rungs of the pyramid. underpinning all this, of course, is continued macroeconomic stability and low interest rates.
as for regulatory focus, so far it has been on
safety and the banking sector; the time is nigh
to be proactive on the corporate bond market
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Guest Column
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
u 65 u
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Focus
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Focus
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
in 1997, to offer advice on development of debt markets, the banking sector and pension fund reforms,
real exchange rate targeting and
evolution of the foreign exchange
market.
when idfc was being formed as
a development finance institution
in 1997, patel, wanting to remain in
india, joined the company and rose
through the ranks from chief policy officer to executive director and
member of the management committee. responsible for idfcs policies
and regulatory framework around
infrastructure, he also managed the
proprietary equity group till 2006. in
2009 came a year-long stint at reliance industries as president (business development), to strategise a
commercial plan for the energy company within constraints on account
of climate change, and another stint
as advisor on energy to the boston
consulting group.
till 2013, patel served on various
government committees until his
appointment as deputy governor of
the rbi in charge of monetary policy.
there he produced the 2014 report
for which he is widely known for
a revised monetary policy framework
that recommended a shift to consumer price inflation targeting and
a joint committee decision to decide
the policy rate.
of the many targets that patel will
identify for himself for the next three
years, defending the rupee in the
short term will take topmost priority.
foreign currency deposits raised by
the rbi in 2013 are due till 30 november, and will see outflows upwards of
$20 billion starting around end-september. while these amounts have
been covered by the rbi through forward swaps, the market is bracing
for stray days when mismatches may
fuel currency volatility.
all formalities for a monetary
policy committee have been put in
place, and the government needs to
choose its men. the next interest rate
decision in october 2016 may not be
taken by patel alone, but for the first
time by a committee he will lead.
the governor will chair this committee and be assisted by a yet-to-be
appointed deputy governor in charge
Patel sPeak
Unless measures to reduce the primary
deficit are taken, a fiscal crisis is bound
to come. Where and when it will strike
cannot be predicted with certainty.
Debt, deficits and inflation, 1990
Inflation had not accelerated when
nominal devaluations are used as a
policy tool.
Implications of real exchange rate
targeting in India, 1997
The incentive structures under public
sector dominated intermediation are
simply incompatible with commercial
discipline.
The financial leverage co-efficient, 2002
In order to prevent connected lending
(one of the original motives of bank
nationalisation), private banks in India
cannot have corporate owners who
own more than 10 per cent of the
banks equity capital.
Reform strategies in the Indian
financial sector, 2003
With smaller fiscal deficits and
higher saving and investment, the
government could make a contribution
to faster growth.
Fiscal rules in India, are they effective?,
2010
The Central government needs to
ensure that its fiscal deficit as a ratio to
GDP is brought down to 3 per cent by
2016-17.
Revise and strengthen the monetary
policy framework, 2014
u 67 u
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Special Report
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Telecom war
Reliance Jio and COAI go head-to-head against
allegations
when, on 5 august trai issued a consultation paper requesting stakeholders to send their written comments
on a reduction of the existing iuc
by 5 september 2016 and counter
comments by 19 september. rajan
mathews, director general, coai says:
what was the hurry for trai to come
out with this consultation paper
now? the present iuc was introduced
10.1%
10.42 crore
Circle C
14.9%
15.42 crore
Circle A
Circle B
35%
36.2 crore
39.9%
41.27 crore
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Special Report
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
communications.
iuc rates were first revised in
2004 where trai recommended flat
charges of R0.30 per minute irrespective of distance. the same rates were
again revised in 2009, they were
pushed further down to R0.20 per
minute. but this was challenged by
some telecom players all the way to
the supreme court. later, the matter was settled and in 2015 iuc was
again revised to its current level of
R0.14 per minute.
the present consultation paper
floated by trai looks at the possibility of moving to a new regime called
bak (bill and Keep). in this method,
telecom service providers do not
have to pay any termination charges
to the interconnecting telecom service provider. hence there is no
share of revenue from the call originating company to the call destination company. trai argues in favour
of bak in its consultation paper, stating that fixing termination charges is
complex and hence debatable. it
adds that termination charges work
as a disincentive for telecom operators to deploy ip-based networks
which is the future of telecom. the
same consultation paper also gives
the counterargument against bak
which states that this will incentivise
telecom players to set low prices to
capture a larger market share (read
reliance Jio) which in turn will result
in inadequate network infrastructure
and consequently impact telecom
growth. but the tone of the trai consultation paper is in favour of bak.
b.K. syngal, former chairman of vsnl
and then president at the undivided
reliance telecom, believes that india
is not mature enough for the bak
regime. the bak regime will favour
new players and it would be disadvantageous to existing players.
Bone of contention
at present too we follow a bak regime,
but only to calls originating from
mobile to landline, from landline to
landline (the segment dominated by
psus) and from landline to mobile.
but this regime has been challenged
in the high court (delhi and gujarat). a decision is likely to be made
by september. the coai believes
23
3G/4G penetration
19
13
13
9
9
5
3
FY 2013
FY2014
FY2015
FY2016
Source: CLSA
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Special Report
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Wireless subscribers
(Nos. in crore)
25.43
Bharti
19.88
Vodafone
17.55
Idea
Reliance
Comm.
10.13
Aircel
8.82
BSNL
8.82
Tata
Telenor
5.95
5.3
Sistema
0.76
MTNL
0.36
Quadrant 0.29
Source: TRAI. Data as on May 2016
pa l a s h r a n Ja n b h au m i c K
au g u s t 2 9 - s e p t e m b e r 11, 2 016
2.49
Wireline
103.32
Wireless
2.07
58.42
0.42
44.89
Total
Telephone
subscribers
Urban
Telephone
Rural
Telephone
Special Report
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
has been cold on the two big players: bharti airtel and idea, as both
are finding it hard to maintain their
market cap. analysts believe that reliance Jios aggressive pricing would
cut into the business as well as margins of existing players. idea has lost
41 per cent of its market cap in the
last one year while bharti airtel suffered by 8 per cent. against this, the
sensex is marginally in the green,
suggesting that both companies have
underperformed significantly.
reliance Jio has gone on record
saying that its present ip network can
support over 20 crore subscribers.
it aims to have 10 crore subscribers
in the very first year of commercial operations of which 50 per cent
would come on board in the first
three months. this is a very ambitious and aggressive target by reliance Jio. as on march 2016 india
had 103.36 crore wireless subscribers. reliance has pumped R1.34 lakh
crore in the project and aims to
spend a total of R1.5 crore.
it looks like there will be stiff
843
Bharti
idea
653
1,148
UK
Germany
France
Italy
489
696
804
Spain
2,379
US
2,417
Japan
Australia
1,276
2,377
S Korea
players in the telecom space and reliance Jios entry is definitely going to
shake things up. but syngal feels reliance Jio is not going to have an easy
time. the situation is quite different
from the first time they launched in
2001. this time incumbent players
are geared for the competition. for
consumers there has to be a compelling reason to move to a new player,
such as a novelty factor, entertainment offerings or killer price points.
there is likely to be a consolidation in the telecom sector and it is
expected that only three players will
command 85 per cent of the revenue
share. it would be interesting to see
who these would be. consumers will
love this competition as they can
expect better schemes and excellent
service. but what is happening at
present is not a healthy sign for india
inc. it is much better that indian
companies fight in the marketplace
rather than through the media and
government offices.
au g u s t 2 9 - s e p t e m b e r 11, 2 016
u su n il da m a n i a
sunil.damania@businessindiagroup.com
the improvement.
Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Taking a U-turn
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
stronger revenue visibility and better margins. in addition, for the last
three years, we were engaged in tolling and operation-maintain-transfer (omtprojects, which involve
maintenance obligations in addition to toll collection on operational
roads) in the chennai bypass project.
during the operating period various
disputes arose on account of mainly
evasion of toll and fee rule notification. we exited this project freezing
the loss on our books, filed for claims
and we are optimistic that there
would be a positive resolution this
year. the cumulative result is that
our robust business potential, earlier camouflaged by a deficit, is now
beginning to reflect in our financials, adds mhaiskar.
the year 2015-16 has been a
landmark year for growth and development. within the first year of our
listing we were able to translate our
promise to performance. the promise that we will turn our performance
CHANGING FORTUNE
Revenue
2012
2013
2014
2015
2016
1080
280
1197
2008
2006
EBITDA
405
386
353
476
595
PAT (loss)
(47)
(93)
(129)
(115)
26
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Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
these 102 toll plazas which are operated and maintained by the government, only toll collection rests with
the company. the first year started
with 21 locations and year-on-year
there has been addition and deletion, which in various years are from
21 to 15 locations.
mepidl, over the last 13 years of
operation, has executed more than
110 projects and completed 96 projects including 183 toll plazas and
1,096 lanes. our operating platform
has strategically been developed to
have strong operating capabilities
on a pan india basis (across 10-plus
states), by successfully operating
concessions with both state authorities and central authorities. the
companys business model is also derisked through a prudent selection of
projects, focusing on the asset light
philosophy. our recent foray in the
hybrid annuity space is a logical
extension of the same strategy. we
have invested heavily into our capabilities to deliver with the potential growth opportunities in this
space. our business model is ready
to address the projected upturn in
the road infrastructure industry
whether it is in the form of road construction contracts or toll collection
contracts, explains manekshana.
today, in pure tolling, it has 5
long-term and 10 short-term projects at 27 toll plazas across 8 states.
under omt, there are four projects
across india covering 2,334 lane km
and 13 toll plazas. of the recently
awarded ham projects (see box) four
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Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
2014-15.
There is an inherent limitation in implementing projects
on epc mode it is restricted by
the financial resources available with the government.
An important feature of the
hybrid annuity model for
highways development is the
rational approach adopted
for allocation of risks between
the ppp partners the government and the private partner
i.e. the developer/investor.
While the private partner
continues to bear the construction and maintenance
risks as in bot (toll) projects,
it is required only to partly
bear financing risk. Further,
the developer is insulated
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Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Toll automation
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Guest Column
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
ninad Karpe
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Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Soaring high
D-Mart has scored well in net profit margin terms, while
showing steady growth in the top and bottom line
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Financials
Stores Total income
PAT
(No.)
(` crore)
(` crore)
NA
1,045.22
21.21
FY 2011
50
1,593.53
41.35
FY 2013
NA
3,350.00
92
FY 2014
75
4,697.51
159.63
FY 2015
89
6,450.37
211.29
FY 2010
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
(` crore)
Future Retail
12 m ending 12 m ending
Jun 2010
Jun 2011
Total income
PAT
18 m ending
Dec 2012
15 m ending
Mar 2014
6,019.00
4,117.82
7,015.43
11,605.18
179.56
76.66
273.26
2.81
Reliance Retail
FY 2013-14
FY 2014-15
Turnover
FY 2011-12 FY 2012-13
3,860.37
5,255.99
12,751.95
16,201.67
PAT
- 273.76
- 54.78
272.07
272.48
Source: Annual reports. Figures for FY 12-13 & 11-12 pertain to Reliance Fresh which was subsequently renamed Reliance Retail
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
coloured gemstones
in the world today,
claiming over 25 per
cent market share in
emeralds and almost
20 per cent in rubies
(value terms). it is currently
the worlds single largest organised
rough emerald producer from its
Kagem mine in zambia, and is looking to take its market share in both the
segments to about 40 per cent in the
next two to three years, with emerald production going up to some 45
million carats annually from 30 million at present and ruby production
to 20 million carats from the present
production of 8.4 million carats at its
montepuez mine in mozambique.
gemfields has taken up the challenge successfully to organise the
entire value chain of coloured gemstones, which has been historically
fragmented and undercapitalised.
due to lack of adequate supply and
the unorganised nature of the business, the coloured gemstone market
had failed to take off as a category,
even as diamonds, which would be at
par (in terms of prices) with coloured
gemstones until the mid 20th century, emerged as a major category
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Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
au g u s t 2 9 - s e p t e m b e r 11, 2 016
year ended June 2015 and is expecting around $195 million for the fiscal ended June 2016, has earmarked
around 10 per cent of its revenue for
activities related to market development. the primary motto is to create
much needed awareness about these
stones which despite being in existence for ages have failed to draw the
desired attention. having run successful campaigns for emeralds and creating the required traction, now it is
getting into the promotion of rubies.
the indian gems & jewellery market (in line with global trends) is
undergoing a transformation. after
enjoying the aura and sparkle of diamonds for many decades, the $40-billion gold-centric domestic market is
now looking to add a distinct element
of colour and vibrancy to its offering. coloured gemstones like rubies,
emeralds and sapphires are increasingly finding their way into jewellery
collections that traditionally confined themselves to the monochromic boundary of gold and diamonds.
the indian coloured gemstones
jewellery market (pegged at $1 billion
as against the total jewellery market
size of $40 billion) is likely to continue to enlarge its share going forward. the next decade will be one of
colours where these precious coloured
gemstones will make major inroads in
the market, which is expected to grow
in excess of a 15 per cent cagr in the
next decade or so. currently, gold,
with around 92 per cent share, is the
major category, while diamonds along
with other categories form the rest.
there is a distinct shift towards
coloured gemstones and this trend is
a global phenomenon where consumers are looking to add more colours
and vibrancy to their purchases.
the market is repositioning itself in
favour of this category and trying to
get adjusted as per the demand. most
of the stakeholders in the value chain
are gearing up towards this end, says
aruj ajmera, director, diacolor india,
Jaipur, which owns the famous jewellery retail chain diacolor, known for
its original and exquisite design collections of diamonds, rubies, emeralds, sapphires and pearls.
gemfields as a company is playing a big role in boosting the entire
Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Mining strength
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Corporate Reports
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au g u s t 2 9 - s e p t e m b e r 11, 2 016
Corporate Reports
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au g u s t 2 9 - s e p t e m b e r 11, 2 016
Corporate Reports
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Talking To
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Kwid storm
After the runaway success of its compact hatchback, Kwid,
Renault India recently launched a 1.0 litre variant. Sumit
Sawhney, country CEO and MD, Renault India, shares his success
formula and the future plans of the company with Daksesh
Parikh and S.M. Boothem
What was your rationale in
introducing a 1 litre Kwid?
i divide value into three parts. pricing is the first thing thats asked by
a buyer. so it was very important
for us to get the pricing of the car
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right. our plan of 98 per cent localisation helped us to cap prices. and
the second thing is that in this car,
everything is ground-up. Kwid is a
global car but it was first launched
in india. so the success of this car in
the country is extremely important.
besides localisation, we banked on
innovation with a focus on improving fuel efficiency. for the first time
we created a global engine for this
car, which gives a fuel efficiency of
25.17 kmpl. this still remains indias
most fuel-efficient petrol engine.
buying, driving and maintaining
a Kwid, all three of them are value
propositions. we also managed to
time it right. the timing was opportune because india was growing and
today it is the fifth largest car market
in the world; it will become the third
by 2019-20.
Talking To
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
the
sub-four-metre
market
size is roughly around 20,000,
all put together. but this market is
growing very strongly. it only had
ford ecosport one year back, which
was selling 5,000 units; now its four
times that. indians also have a liking for suvs. a sub-four metre may
not be a true suv. but these are suvstyled cars.
My mantra is
to have the right
product, right features,
right value, right timing
and the right strategy
lets. we will have around 270 by end
the of this year.
Where do you export?
we still have to see how the consumers take this. over 47 per cent of our
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Kwid customers are first time car buyers. plus, if i split the balance, then
there are people who are upgrading
or moving from secondhand cars to
new cars. then there is another set of
customers who are existing car buyers who are taking this as the second
or third car in the family.
What is the approximate cost of
developing a new product?
it
depends
on
which
category of product it is. for a minicompact suV, it could be anywhere
around $600 to $700 million. it also
depends on whether some company
is leveraging a platform, or another
is leveraging an X body style. but
the thumb rule is around R3,0004,000 crore to build one car from the
ground-up.
How do you plan to increase your
footprint?
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
marketing
blushing breakfast
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Guest Column
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
p r a s h a n t r a i z a da
The author is
national gst leader
& partner indirect
tax, BDO India
LLP
and services. this adds to the cost of administering and complying with the taxes and could
lead to potential classification challenges as
well. while the pressures to set reduced rates on
essential goods are well intentioned to lower the
tax burden on the underprivileged, a balanced
approach needs to be followed as to the extent
to which such lower rate benefits them as the
relative consumption of the said goods by the
rich may equally be high. the differentiated
rate regime ought to be structured in a manner
where the goods/services enjoying concessional
rates are the bare minimum with a coherent
plan to move the said goods/services to the standard rate in a longer period of 3-5 years.
one of the proposals in the model gst law is
to deny tax credits for gst to a customer if the
taxes are not discharged by the vendor/service
provider. there had been rounds of litigations
on the said issue in the european union with the
courts reaching a conclusion that, if reasonable
precautions were undertaken by the customer in
making the procurement and nothing unusual
could be signified in the transaction, vat credits
cannot be denied to a customer for lapses of the
vendor. the said provisions also ought to have
been followed under the model gst law.
one of the important pillars for an efficient
and seamless transition is the tax administration
part. implementation of gst would be a historic
reform for the industry and the consumers only
if it improves tax efficiencies and reduces the tax
compliance burden and the ensuing tax costs for
the industry. framing of a good law is a job half
done; it will be complete only when it is coupled
with efficient administrative machinery. considering the very fact that the gst model proposed
to be adopted by india is a unique one with multiple stakeholders, the government would need
to make considerable efforts on the tax administration front to avoid any backlash.
last but not least, various countries across the
globe had implemented gst during the course
of the financial year rather than waiting for the
next financial year. it is expected that the government would not shy away from implementing gst during 2017-18, in case there is a delay
in meeting the april 2017 deadline.
a mid-term implementation may mean some
additional efforts for the industry; but considering the benefits of this reform, the industry
would surely take it in their stride.
u
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Housing
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
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Health
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
say aaah!
A dentist in Bengaluru
revives the practice of
doctors going to patients
homes
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Hospitality
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Niche Business
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
giving back
These machines help
decentralise garbage collection
and convert it into compost
inputs that increase the cost operation drastically, aayush points out.
not to forget the odour and infestation of rats and flies around the facility, as well as high attrition of staff.
on top of all this is that a normal
plant has a large footprint, which
is prohibitively expensive with the
high real estate costs in urban areas.
reddonaturas r-nature, on the
other hand, boasts the most compact dimensions in the industry.
the waste of 600 houses or flats for
about 1,200 people every day needs
a machine that occupies just 28 sq ft
(3 sq m). the models range in capacity from 25 kg a day to 5,000 kg/day,
while customisation according to a
clients individual requirements is
also on offer. the price ranges
from R3 lakh for the smallest,
Aayush (in specs)
to R1.2 crore for a 10-tonne
and Abhishek
unit for use by a municipal
wet waste into manure
Gupta: turning
body.
within 24 hours. the
garbage to green
the aero india show
mixer in the main comin 2015 was a major motiposting tank ensures that
vator, on a totally different
the culture is evenly distributed, while a heater that is part of wavelength. we successfully demthe equipment ensures that it is at onstrated the possibilities of our prothe right temperature to convert cessor, abhishek recalls. some half
waste into compost. the air inlet a million people visited the fiveand exhaust system keeps the odour day event, during which our r-naat the minimum. working with the ture machine recycled 12 tonnes of
motto garbage to green which compost from the food waste genis the brand name for the rich com- erated from the five massive food
post it produces, for use by the cli- courts. decentralised waste manent for in-house gardening or sale by agement has never been done in
india for any event. reddonaturas
the company.
efforts at the event was not just to
process the organic food waste but
Zero discharge
while some responsible corporates also create awareness among people
and citizens have readily accepted on segregation and to showcase that
the need for waste management to waste is not a waste but a resource
ensure zero discharge from their if handled and processed properly,
premises to the landfill, others are he adds.
beginning on their home turf, the
reluctant to incorporate waste management in their premises. this, guptas have taken their machines to
abhishek says, is mainly due to a lack a dozen-plus cities, including chenof knowledge and awareness. we are nai, Kochi, mumbai, pune, panaji,
thankful to prime minister naren- ahmedabad, Jaipur, delhi & ncr,
dra modi for launching the swacch and Kolkata. with many municibharat project. this has increased pal corporations now insisting on
awareness, and more and more peo- garbage processing facilities to be
ple are ready to invest in small gar- installed before they issue no-obbage processors.
jection certificates to new buildings
but the conventional process of and apartment complexes, business
waste management is time-consum- is all set to boom.
ing, taking 12-15 days, and involves
u seKhar seshan
extensive labour and various material
sekhar.seshan@businessindiagroup.com
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Enterprise
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
au g u s t 2 9 - s e p t e m b e r 11, 2 016
saJal bose
mooing growth
Srikumar
and Rashima;
enjoying the
steady growth
Enterprise
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
with a capacity to process 75,000 coolers and 391 milk collection cenlitres of milk per day; and so the tres that collect 1 lakh litres of milk
every day. the number of farmers
journey began.
milk mantra has leading global has been growing by 15-20 per cent
food technology companies like tet- annually in the milk sourcing chain
rapak, de laval and multivic as tech- of the company.
by taking an everyday commodnology partners. it uses the tripak
technology that prevents light from ity product like milk, the company
damaging the milk and keeps it fresh has created an ecosystem for farmfor longer. our plant has a fully inte- ers for a better livelihood, and for
grated tetrapak milk processing line. the public to have quality nutrition
nobody in eastern india has such and enhanced health, said outgofacilities, claims misra. the capac- ing rbi governor raghuram rajan,
ity of the plant was later expanded to on his visit to the milk mantra plant
2.5 lakh litres per day.
where he interacted with the farmer
the other challenge for the com- community.
pany was to keep the middlemen
away from farmers by creating an
he company has introduced
organised supply channel. it is
direct-to-home delivery for its
important to win the trust of farmmilk brand milky moo. with
ers through awareness and setting the tagline no more boiling, the
up bulk milk coolers for storage and brand has created a significant buzz,
more collection centres closer to and enjoys word-of-mouth recomthem. milk mantra is amongst the mendations. with limited funds
very few companies that first estab- to spend on branding in the beginlished the infrastructure for raw milk ning, our marketing strategy was to
collection before the plant was com- reach the household directly to build
missioned. the company, therefore, a loyal brand following. the stratfrom the very beginning procures egy clicked for us, says rashima
pure milk through an ethical milk misra, wife of srikumar misra and
sourcing (ems) programme happy co-founder of the company. today
milky moo reaches 2.5
farmers, happy cows and
lakh consumers, covers
best milk. ems ensures that
Company
60 per cent of odisha and
not only are the farmers
Milk Mantra
employs 350 people. now
rightfully rewarded, but
EstablishEd
the company spends 2 per
also able to access a vari2009
cent of its revenue in marety of extension services
keting and advertising.
aimed at bringing in qualFoundErs:
ity and clean milk produc- Srikumar Misra and milk mantra gradually forayed into dairy products
tion. it includes training,
Rashima Misra
over the years. the prodlow cost loans from banks
turnovEr:
ucts include milk, paneer,
and microfinance instituR122 crore
probiotic dahi, lassi, buttions, and a 24-hour heltermilk and misthi dahi
pline, besides fair price
under the milky moo brand, and
mechanisms.
life has changed for 49-year-old ready-to-drink milk beverages called
prafulla moharana from goddhana- moo shake. the brands are available
para village in odisha in the last four in major retail chains like reliance
years since he has been associated fresh, spencers, big bazar as well as
with milk mantra. now i get a good in retail stores across odisha, bengal,
price for raw milk and the payment Jharkhand and chhattisgarh, says
is prompt. technical inputs from the rashima.
milk mantra has competition
company have helped my cows to
give more milk. my income has gone from omfed (orissa state cooperaup significantly, he says. from 7-8 tive milk producers federation). we
farmers in 2012, today milk mantra have strong brand equity and are the
has created a network of 40,000 farm- second largest player in the state,
ers across 480 villages in odisha. the says ceo amitava mukherjee. the
company has installed 28 bulk milk company has achieved phenomenal
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au g u s t 2 9 - s e p t e m b e r 11, 2 016
CSR
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
talent creation
programmes in diploma in manufacturing technology from saint-gobainnttf practice school. any student
from a financially weak background,
who has passed the 10th standard, is
eligible to join lwe.
apart from studies, the students
undergo a number of programmes,
including personality development
and memory improvement. each student gets a scholarship of R66,000 per
annum in the first year, R78,000 in
the second year, R96,000 in the third
year and R1,20,000 in the fourth year.
a company official says 50 per cent of
this scholarship will be sent to the students parents.
Everyone wins
the quality of students that graduated
this year stands testimony to a well-developed association with a committed
corporate partner like saint-gobain.
says n. raghuraj, md, nttf. none of
this would have been possible without support from raghu raj, md, nttf,
and his team, who transformed our
dream into reality, not just for our
company, but for many other companies, says b. santhanam, president &
md, saint gobain india.
in lwe, the true learning takes
place in the industry. in countries
like germany, this is a national programme supported by the government. they take in interns on a large
scale and train them. india has the
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Market News
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
OVERVIEW
listless market
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Market News
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
WELSPUN INDIA
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Executive Track
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
turnaround man
next phase
coming back
arunvir singh, currently posted as
additional ceo of noida authority,
has been made the yeida ceo. this is
the second time that singh has been
designated as the ceo of yeida. he
had been posted as the ceo of the
authority in october last year. Barely
nine months later in July this year,
singh was transferred to the noida
authority as additional ceo.
global experience
the landmark group has appointed
rajeev Krishnan as the managing
director of max hypermarkets in india.
Krishnan takes over from the outgoing
managing director, Viney singh, who
will continue to be on the board of the
company as a non-executive director.
with over 29 years of global experience, Krishnan will guide and direct
the strategy and execution of the
hypermarket and supermarket business of the spar brand in india, and
will report to the board of max hypermarket (a franchisee of spar india).
on board
the board of directors of reliance
capital has approved the induction
of anmol ambani, the 24-year-old
eldest son of reliance group chairman, anil dhirubhai ambani, on
the board of reliance capital as an
additional director. the induction
follows the recommendation by
the nomination and compensation
committee of the board of reliance
capital, comprising largely of independent directors. ambani has been
steering housing
indias online real estate platform, housing.com announced the
appointment of former google and
amazon executive Vivek Jain as
chief product and technology officer.
as part of his role, he will focus on
strengthening the product and engineering aspects of the business to
help steer housing.com towards its
goal of becoming a full-service transaction player. Jain is an industry
veteran with over 14 years of experience in the technology and digital
domains in india and the us.
moving up
md and chief executive officer of sbi
funds management pvt ltd, dinesh
Kumar Khara has been appointed md
of state Bank of india (sbi), for a period
of three years, extendable by two years
after a review of his performance. the
appointments committee of cabinet (acc), which approved Kharas
appointment, has also appointed
ashok Kumar garg and raj Kamal
Verma as executive directors of Bank
of Baroda and union Bank of india
respectively. gopal murli Bhagat and
himanshu Joshi have been appointed
as executive directors of corporation Bank and oriental Bank of commerce respectively.
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au g u s t 2 9 - s e p t e m B e r 11, 2 016
moving the
mountain
storage and information management services company iron mountain has appointed hitesh gupta as
its managing director for iron mountain india. gupta will be responsible
for steering the companys business in india during a period of fast
change and ongoing expansion to
help iron mountain deliver on its
global strategy for growth. gupta has
held senior roles in the finance and
information management sectors for
the last 20 years, he has had key roles
with icici Bank, centurion Bank of
punjab and Karvy finance.
on a mission
citrix announced that stanimira Koleva has been appointed group vicepresident (gvp) of sales and services
for the asia pacific and Japan (apj)
region, reporting to carlos sartorius,
executive vice-president worldwide
sales and services. as the new gvp,
Koleva will be responsible for leading and evolving the citrix sales and
services strategy to continue to drive
the companys vision of securely and
reliably delivering applications and
data and supporting the companys
customer success in the region. Koleva brings 25 years of industry experience managing sales and business
development for large multinationals across the globe and within the
apj region.
u
Selections
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
T h e C h e f s d e l i g h T s s Tay a m o m e n T o n T h e l i p s b u T f o r e v e r o n o n e s h i p s
southern comfort
au g u s t 2 9 - s e p t e m b e r 11, 2 016
Selections
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
d e a d l i n e : y e s T e r day
ending hunger
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Books
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
a sporting timeout
This is one of the most interesting management books written in
recent times
LESSONS
FROM THE
PLAYGROUND
Vinay Kanchan
Fortytwo bookz
Galaxy
`495; Pp 434
au g u s t 2 9 - s e p t e m B e r 11, 2 016
Books
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
defining greatness
The author helps us identify winning companies
THE UNUSUAL
BiLLiONAiRES
Saurabh Mukherjea
PenGuin
`499; Pp 445
au g u s t 2 9 - s e p t e m B e r 11, 2 016
People
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
silky success
i
Business to
business
e
tech savvy
au g u e s t 2 9 - s e p t e m b e r 11, 2 016
People
b u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
Heart art
s
decided to pursue her new found talent at the londons famed culinary school. on her return, older
brother pawan, who studied hospitality in switzerland and later worked at the burj al arab and grand
hyatt in dubai, pushed her to open a caf. its comfort food. and everyone loves comfort food, he says.
he looks after branding and the space itself, and says
that the response thus far has been overwhelming..u
u 107 u
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Interview
B u s i n e s s i n d i a u t h e m ag a z i n e o f t h e c o r p o r at e wo r l d
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Kejriwals rallies?