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Hindustan Zinc is in a sweet spot
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RNI No.35850/80; Reg. No. MCS-123/2018-20; Published on: Every alternate Monday
May 30-June 12, 2022
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EVEREADY INDUSTRIES
Arun Misra CEO, Hindustan Zinc
Commodity Boom Hindustan Zinc is in a sweet spot
From the Publisher
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
Publisher Ashok H. Advani Executive Editors Lancelot Joseph, Daksesh Parikh, Sarosh Bana Deputy Editors Shonali Shivdasani (Mumbai), Sajal Bose (Kolkata) Consulting Editor Sunil Damania (Mumbai) Assistant Editors Arbind Gupta, Ryan Rodrigues, Kayus Wadia (Mumbai), Yeshi Seli (Delhi) Principal Correspondent Krishna Kumar C.N. (Mumbai) Photo Editor Palashranjan Bhaumick Photographer Sanjay Borade Design Trilokesh Mukherjee Art Director Mukesh Pandya Cartoonist Panju Ganguli Manager – Design Cell Mathew Thomas Production Team Balachandran, Kisan Kumbhar, Najeeb Fatehi, Sudhir Khaladkar, Vasant Dhasade Sr. Vice President – Advertising Sales Naresh Purohit (Delhi), Mira Lawrence (Mumbai) Asst. Vice President – Advertising Sales B. Anand (Hyderabad) General Managers – Advertising Sales Deepak S. Ahire, Pankaj Bhasin (Delhi) Salman Khalil (Lucknow) Asst. General Manager Advertising Sales Aasif Iqubal (Delhi) Sr. Manager-Sales & Distribution S.S. Kannan (Chennai) 28353964 Editorial & Administration Office: Nirmal, 14th floor, Nariman Point, Mumbai 400021. Tel: 22852943 Fax: 22883940 Email: [email protected] Marketing and Advertising: Nirmal, 14th floor, Nariman Point, Mumbai 400021. Tel: 22883938-46 Fax: 22883940 Email: [email protected]. Circulation/ Subscription: Nirmal, 14th floor, Nariman Point, Mumbai 400021. Tel: 9930711569 E-mail: [email protected] Bangalore: 27 Wellington Street, Richmond Town, Bangalore 560 025, Tel: 080-22102444 Kolkata: Krishna Villa, 100 Park Street, Kolkata 700017. Tel: 22893359 Delhi: 268 Masjid Moth, Uday Park, New Delhi 110049, Tel: 011-41643052 / 41643050 / 41640109 / 41086415 Hyderabad: Pent House II, Usha Deluxe Apartments, Motilal Nehru Nagar, Begumpet, Hyderabad 500016 Chennai: Prasad Chambers, III Floor, Flat No. 14, Door No. 97A, Peters Road, Gopalapuram , Chennai 600 086. Tel: 044 28351703 / 28353964 / 28353394 Kochi: DRA-6, Mahila Samajam Nursery Road, Chaliakkavattom, Dhanya Junction, Vennala P.O. Kochi 682028. M: 9846091797 Lucknow: Sunshine House, 9/11 (M.N.H.S), Sector 9, Vikas Nagar, Lucknow-226022 Tel : 0522-6565222/ M: 09415180290. Registered Office: Nirmal, 14th Floor, Nariman Point, Mumbai 400 021. Tel: 22883938/47 Fax: 22883940 Annual Subscription Rates India R2,210 Students (India only) R1,300 for 1 year on submission of current year’s ID card. Overseas (One year only) Airmail to Pakistan R9,400 or US$142. To all other countries R13,200 or US$240 Rates include airmail charges. Please add R20 for cheques not drawn on a Mumbai bank. Cheques to be drawn in favour of “Business India Publications Ltd”. Unsolicited manuscripts will not be returned. Distribution India Book House Ltd Newsstand R100 This issue consists of total 68 pages including cover
After the government sold 100 per cent of Air india, it has recently decided to sell its remaining 29.5 per cent of its holding in Hindustan Zinc Ltd (HZL) which has been pending for over 12 years. Hindustan Zinc was one of the earliest and most successful disinvestments of the Vajpayee government which inivited bids of 26 per cent of HZL 20 years ago, in 2002. The winning bidder was Anil Agarwal, through Sesa Sterlite, now Vedanta. The government stuck to its commitment to sell another 18.9 per cent in 2003. Agarwal made an open offer, and took his holding up to 69.4 per cent, with the government still holding 29.5 per cent, and the public holding the balance. Regrettably, the Manmohan Singh government, without assigning any reason, in 2009, rejected Agarwal’s second call option to acquire the balance government holding. The matter then went into litigation since then. Earlier this year, Agarwal, withdrew the litigation, providing the government a face saving way out, to let them take the decision to sell. At the current market price, the government stake is worth about R37,000 crore, down almost 20 per cent since the Ukraine war. HZL has amongst the most productive zinc mines in the world, near Udaipur, Rajasthan. Not surprisingly Agarwal was able to quickly turn around the PSU
to achieve higher production, which in turn increased profits. This meant that the government could sell the second tranche of 18.9 per cent at a higher price. Since then zinc prices rose significantly too, so that the third call option was to be at a much higher price. But as is common with commodities, they go through cycles of boom and bust. The price of zinc went up, and production too jumped from the very rich mines, that the bureaucracy and the politicians turned fearful of being accused of selling too cheap! But to Agarwal’s great credit, he faced these political setbacks with a smile, and just carried on improving and developing HZL without missing a heartbeat. With HZL continuing as a listed company, the results are there for all to see. HZL has emerged as a leading zinc producer, being the second largest in the world, and the ninth largest silver producer – some silver being found alongside with zinc during mining . Hindustan Zinc is a very important jewel in the Vedanta group, with spectacular growth since Agarwal took over. One of the main uses of zinc is for galvanising steel, to prevent corrosion. With India’s infrastructure building spree, the demand for steel is set to grow even more rapidly. Along with that the demand for zinc will accelerate, assuring a very bright future for Hindustan Zinc. Of course there is the caveat, that commodity prices can fall as fast as they rise, but with its efficiency of operations, and conservative financing the future of the company is very bright. But while Agarwal has welcomed the government’s decision to sell its stake, he has made it clear that he is not a buyer, at this stage at any rate. Agarwal has always been a shrewd judge of value, and has timed his moves very well. Much as he might, in the past, have wanted to buy the government stake and merge HZL with Vedanta, thus getting direct access to HZL’s cash reserves, this is less important given Vedanta’s own growth. Recently, Agarwal has been advocating the government to “corporatise” PSUs, by which he means selling the government shares in the market, to unlock the true value of PSUs. This was successfully done by Mrs Thatcher’s UK government in the 1980s. If government does now follow through in the case of Hindustan Zinc, Anil Agarwal will be truly vindicated.
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
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No. 1127
COVER FEATURE 20
Disinvestment blues Hindustan Zinc is still awaiting the government’s decision to announce disinvestment while it expands and has committed itself to Net Zero by 2050
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F O C U S
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CO R P O R AT E
R E P O R T S
L&T TECHNOLOGY services
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L&T Technology Services has rolled out a plan to take it to the big league Eveready Industries 42 The Burmans of Dabur will take control of Kolkatabased Eveready Industries
Storm that wasn’t 36 But will SC ruling trigger GST reforms? And will the Centre foster genuine federalism? u4u
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Jaipur Rugs 46 Jaipur Rugs has revolutionised the carpet industry with its unique business model
No. 1127
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Contents
B u s i n e s s In 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
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R E P O R T
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A knee-jerk reaction? 32 The government may have acted in haste to initiate certain measures
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I N T H I S I SS U E u
Business Notes
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Businessmen in the News
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Columns 17,19,28 Corporate Reports
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Cover Feature
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Editorials 6 Entertainment 62 F&B 54 Fintech 52 Focus 36
Government & Politics u
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F&B
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Travel
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• Will states follow through centre’s move? • Textile hubs taking a hit • Bankers raise red flag on UIDAI order u
Fintech
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Retailing
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C hufang plans to expand to Singapore and Dubai u
Health
Arunachal Pradesh is all set to become an amazing tourist destination
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A leading ayurvedic solutions provider reopens its unique hospital and resort u
Start-Up
Craft Coffee aims to make coffee-making and consumption a new experience
Editorials
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• States, Centre join hands to pitch Brand India at Davos • For wealth creation over a long period, these funds are ideal for investors • Modi’s failures are overshadowed by his achievements
Business Notes
Workspace
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Coworking player 315 Work Avenue ramps up portfolio in a big way u
V ictorinox, maker of the iconic Swiss army knife, plans to appear in other cities of India
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Government & Politics
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Guest Column
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Health 55
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IndiaP2P plans to become an investment product that enables wealth creation
From the Publisher
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• T he pandemic transforms the role of HR function with focus on employees • Indian luxury carmakers get into electric cars
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Entertainment
Listening Post
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Market News
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Panju’s Page
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The journey continues for discovering original English music talent
People 64 Retailing 53 Selections 63
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Special Report
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Start-Up 56
Market News
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• One Point One Solutions regains its position u
Interview 66
Interview
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Workspace 60
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Pema Khandu, Chief Minister of Arunachal Pradesh is doing everything possible for the growth of the state.
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Travel 58
Issue No. 1127 for the fortnight May 30-June 12, 2022. Released on May 30, 2022
Printed and published by Ashok H. Advani for Business India. Printed at Usha Offset Printers (P) Ltd., 125, Govt. Indl. Estates, Kandivili (W), Mumbai. Published at Business India, Wadia Building, 17/19 Dalal Street, Mumbai-400 001. No reproduction is permitted in whole or part without the express consent of Business India To order reprints contact: Business India Production Cell, 14th floor, Nirmal Building, Nariman Point, Mumbai-400 021. Tel: 2288 3942/43, 2204 5446
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
Passive ELSS funds For wealth creation over a long period, these funds are ideal for investors
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EBI recently issued guidelines, permitting mutual funds to launch open-ended passive funds. This is indeed a laudable step. It opens another avenue for investors. The guidelines allow the funds to base their performance against any indices amongst the specified 250 shares based on the highest market capitalisation. Passive funds are good as the true passive fund mimics the index in every respect including the weightage of the shares of the index on which it is linked. The fund manager does not have to do much except rebalance the fund’s portfolio in case of any change in index shares and weightage. Since it involves almost negligible inputs from managers fund management fees are low with a high degree of transparency inbuilt in its performance. SEBI’s moves fulfil a longstanding demand of investors, some of whom have not been too happy with the absolute returns generated by mutual funds. During a bull run, investors, often unreasonably, expect fund managers to generate alpha from actively managed funds. Fund managers are not allowed to take unwarranted risks in a bid to generate alpha. Each scheme has its own standards and sharp variation of returns as compared to their respective benchmark indices is generally frowned upon by sophisticated investors. This is because higher than warranted returns imply unwarranted risks. Passive funds are popular with investors unwilling to take undue risks but would still like to share in the wealth creation opportunities in a growing economy. Had passive funds been allowed earlier there would have been immense wealth created by this time. Passive funds over the last 10, 20, 30 years would have seen immense growth in one’s wealth. For example, over the last 10 years, investments in May 2002 would have gone up by 3.4 times and in 20 years this would have been nearly 18x. In the 90s the BSE index was just 1,000. Irrespective of all the swings and cycles seen over the last 20-30 years the wealth in passive funds would have grown steadily with returns comparable or even better than most actively managed funds. It is thought many investor mood swings are in consonance with the swings witnessed in the mainline index, be it the BSE 30 or Nifty
50. This is indeed a fallacy because most investors do not have their investments mimicking these indices. Most investments are in midcaps and small caps with a very small portion in large caps. One has to compare the movement of one’s portfolio and mood swings should be in consonance with the same and not the index. S&P BSE 30 may touch 60,000 or 100,000 as it is bound to in a few years, but only if one has invested in the right stocks. Investors pride themselves on being ace stock pickers as the sheer excitement of picking the right stocks, once in a pretty long while, gives them an unimaginable thrill. However, investment is a serious activity not prone to giving thrills, and a patient investor in the long-term often scores over an active trader pursuing the thrill of buying in a bull market. Passive funds are meant for these types of investors who are serious about growing their investment steadily over decades. Passive funds are bound to go down well with new investors who are smart and techsavvy. They will be able to commit at least a small portion of their investments regularly to these funds, through SIPs. SEBI has presently allowed funds to have either active ELSS schemes or passive ELSS schemes. In other words, a fund house which already has active ELSS schemes (like most old fund houses) may not be eligible to offer the passive ELSS schemes to investors. Unless of course they choose to wind up their active ELSS schemes and open passive ELSS ones. SEBI should rethink this. Otherwise, only new fund houses which have recently set up shop will be able to offer passive funds as a product to their investors. It is true, however, that there are biosimilars type of passive funds insofar as index-linked funds are already in existence. While they have undoubtedly been giving good returns, the main difference between these funds is that in an index-linked fund, the fund manager has the option to vary the weightage enjoyed by the select set of shares forming the index. This may or may not generate the elusive alpha on a sustainable basis. Passive funds may score over actively managed index funds with their low costs and total mimicking of the index. If found successful, SEBI should allow more passive funds to be offered by all funds irrespective of them having active ELSS or not. 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
Back to Davos States, Centre join hands to pitch Brand India this time
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ith issues like the Ukraine war, climate change, and rising inflation across the world at the back of everyone’s mind, the mood at the springtime World Economic Forum summit in Davos could have been as dreary as an alpine winter. Yet hope crackled in the air for India at this annual gabfest, being held after a two-year pandemic-led hiatus. The event elicited the participation of over 100 Indian business leaders and several union ministers. The atmosphere was reminiscent of the $5-million India Everywhere campaign that the UPA government ran in 2006. But is the effort worth it? As the world was emerging from the pandemic and prepping itself for the next stage of economic growth, Russia’s invasion of Ukraine has thrown a spanner in most calculations. Still, there is awareness that tomorrow’s businesses will be built on new technologies like blockchain, metaverse, etc. Nations that are agile, move early and build today, will reap the benefits. Technology, not guns, will decide who will lead the world. Unlike Europe, where energy shortages and the spectre of recession have created a sense of gloom among many business leaders, India by virtue of being somewhat geographically insulated from the theatre of conflict, could emerge as a region of both economic dynamism and political stability. The Modi government needs to now capitalise upon its Davos pitch and draw the attention of global leaders to its reformist decisions and the fast pace at which new unicorns are being minted in the country. Reports from Davos suggest that global investors were keenly assessing what the Indian delegation is bringing to the table. Two years ago, Chinese President Xi Jinping was the focus of Davos, as he presented China as a champion of free trade. The US, under Donald Trump, was then seen to be on the other side of the fence. But China stayed aloof from the recent Davos summit and is on the back foot. The focus has thus shifted to India, which enjoys potential interest as an alternate investment destination. For India, the interesting thing at Davos this year was the participation of some of its topranking states. Prominent among these were Telangana, Andhra Pradesh, Karnataka, Tamil Nadu and Maharashtra. The states, led by their leaders, made their respective pitches for investments and global collaborations. While the spirit of competition remained healthy, the states un-
derlined the recent steps taken by them as well as the Centre to promote investments at a national as well as regional level. For once state governments and the Centre were aligned in their goal to present ‘Brand India’ assertively. BS Bommai, chief minister of Karnataka, used the event as a launch pad for the Invest Karnataka summit due in November. The involvement of states is a good thing because it shows that, contrary to the perception about the Modi government riding roughshod over the states, some sort of federalism is at work. Also, foreign direct investment goes to the states and investors want to know where and why they are investing. The strategy adopted by the commerce and industry ministry this time was also different. India showcased the growth of its legacy companies and the continuous profits earned by global companies manufacturing in India, simultaneously advertising the rise of unicorns in the country. Our legacy business leaders had no qualms in projecting India shoulder to shoulder with young unicorn founders like Nikhil Kamath of Zerodha, Prashant Pitti of EaseMyTrip; Ashish Singhal of CoinSwitch and Vidit Atrey of Meesho. This was the first Davos outing for many young entrepreneurs. Delegates were briefed on what line to take on hot-button issues like the wheat export ban, oil purchases from Russia and the neutral posture that India has struck on the Ukraine crisis. So, with China no longer the flavour of the season, India could find itself in a sweet spot. But, could something possibly go wrong? Well, the challenge that India could face while pursuing global investors is the perception, both at home and abroad, that sectarian tensions are once again on the rise. Reports from the past few months of frequent communal clashes across India could dampen investor enthusiasm. All of this flies in the face of our central claims that we are a politically stable investment destination. It can put the political stability and coherence of India in doubt. The government needs to put across the message that it remains committed to the Indian constitution and secularism. Surely, a frenzied national discourse on some medieval issues is unlikely to enhance India’s attractiveness as an investment destination. There will be those who disagree with this prescription. But global investors, who are already facing turmoil on many fronts, might prove to be more risk-averse than before. u
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Editorials
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
Modi’s real challenge Modi’s failures are overshadowed by his achievements
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he day 30 June is promising to be a little more than regular or ordinary. With the Modi government completing eight years in power at the Centre, there would be celebrations in Delhi and elsewhere in the country. The prime minister himself is going to address a massive rally in Shimla to mark the occasion. For the media, print and other wings, this would be the occasion to indulge in examining the successes and failures of his regime. Particularly in the context of structural changes his regime has ushered in, which have been quite disruptive in their own way. For any critic of Narendra Modi, it is not difficult to classify him as representative of a divisive ideology, more than anything else. However, even these staunch opponents would concede that he has been a man of action. In fact, now over 20 years in power (prior to becoming the prime minister in 2014, he was chief minister of Gujarat for 12 years), being in an action mode on a 24x7 basis has been his hallmark. And that is a trait which has unofficially becomes mandatory for those who are closely associated with him in the task of nation building. The man in action has also delivered results on several fronts – your liking or disliking of them is the sole function of your own ideological affiliations. And some of those initiatives have been quite tough. For instance, the abrogation of Article 370, which gave Jammu & Kashmir the special status. Not too long ago, it was difficult to imagine that something of this nature would happen. You can always side with different judgmental assumptions as to whether it was right or wrong. But the fact of the matter is: for the current government and its supporters, it was a momentous achievement. His list of achievements is quite long even as the list of misses is not blank either. Among the hits, adopting GST, despite several hurdles, is considered to be a major structural change this government has managed to set afoot. When it comes to giving a fresh push to business and economy, new initiatives like ‘Make in India’, Start-up India, digital India, big ticket promotion of green energy sector, large-scale infrastructure building, etc, have clearly been visible action points. There are noted failures too. There are many bright minds, which are still struggling to figure out what precisely demonetisation added to the national economy. The decision to
repeal the farm reforms bill last year, following agitation by the farmers’ lobby in north India, are counted among the major misses of the Modi government. However, the failures are overshadowed by achievements on the social sector front. Critics may ask for authentic impact analysis but the fact of the matter is: the current government has initiated a series of epic-scale programmes on housing, health, education, sanitation, etc, with time-bound commitments. Intelligentsia in Delhi or Mumbai may not realise the effect of these programmes at the grassroots level but, even if they are delivering 50 per cent of the targeted result, it is mammoth. There are a bunch of analysts now, who have begun crediting these programmes as the reason behind Modi’s 300 plus victory trajectory, expansion to over 12 states and electorally making a mark in the North-east. India’s growing chip in the global market as a happening economy (despite Covid shocks) and a potential strategic partner for all major players has further added to Modi’s persona. That India could not be arm-twisted by NATO in delinking its ties with Russia early this year is cited as the emergence of new assertive India. No doubt, when it comes to popularity among the masses, nobody from the current crop of politicians comes anywhere close to him. As a prime minister, he is considered more of the mould of late Indira Gandhi, who was capable of taking hard decisions. And even as the next general elections are two years away, he is expected to be voted again in power which would be unprecedented. In all fairness, Modi seems to have seized the opportunity or at least sincerely trying to create a more formidable identity for India. However, some of the components of this new emerging identity are clearly not progressive in nature. For instance, the growing might of forces which oppose the basic plural DNA of this country, is a cause of concern. Never in his speech has he advocated that India’s secular fibre, as we have known it, needs to be replaced. Inclusive social growth as reflected by his ‘sabka saath, sabka vikas’ slogan is believed to be the key mantra of this government. However, he also seems to turn a blind eye to many instances which are meant to just do this. And this is something which may keep him away from the point of historical greatness he can well reach with a clear inclusive stance in words and action. u
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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
Enhancing presence The Pune-based Cummins India Ltd, part of the Cummins group and the country’s leading manufacturer of diesel and natural gas engines for power generation, industrial and automotive markets, has launched 2,500-2,750 kVA diesel generators (DG) to meet the increasing demands of power in the data centre and large-scale infrastructure segments, such as airports and commercial realty in India. DG sets greater than 2,250 kVA were hitherto imported. In the recently concluded CII Excon 2022, the company showcased its latest state-of-the-art range of products, B4.5 (121 to 173hp) and B6.7 (173 to 260 hp), which are compliant with CEV BSIV regulations. These products are capable and scalable to next emission levels of CEV BS V and CEMM BS IV/V. The launch of these products would enhance their presence in the construction segment, while meeting stringent emissions standards and providing value to its customers. Cummins, part of the $19.8 billion Cummins Inc of the US, continues to leverage its globally integrated supply chain to mitigate the impact of input cost and supply chain issue on its business and profitability. The company expects to benefit from the government’s push on infra (rail, road, and infrastructure construction), improvement in funding for the MSME sector, opening up of economies across the globe and a somewhat stabilised supply chain. The strong demand from the end user customer like data centres, as also healthcare, infra, commercial real estate and manufacturing sectors, continue to drive future growth of the company.
Spreading wings
Century Plyboards India makes plywood, veneer, laminates, medium density fibre (MDF), particle board and allied products. The company’s geographical segments are demarcated into ‘India’ and ‘overseas’. It is also engaged in the logistics business through the management of a container freight station. Its units are spread across India -- in Joka (West
Bengal), Guwahati (Assam), Kandla (Gujarat), Chennai (Tamil Nadu), Karnal (Haryana) and Hoshiarpur (Punjab). On the development front, MDF’s brownfield expansion at Hoshiarpur is as per schedule and is expected to come on stream by end Q2 or beginning of Q3 2022-23. Moreover, its South MDF capex has received all requisite approvals and the facility will probably be commissioned in H2 2023-24. In addition, it is setting up a greenfield laminate manufacturing facility in two phases with an overall installed capacity to make four million sheets, at a capex of R200 crore.
in the tea tourism and allied business policies of the government. Their proposal was forwarded to the tourism department, with an assertion that the small tea growers can be treated as village eco-tourism as their plantations are mostly in rural areas. As per the present policy, tea estates can set up tourism infrastructure in the gardens using 15 per cent of their total land for this purpose. There are over 50,000 small tea growers that contribute about 62 per cent of the total tea that is produced in the region.
Ever since US private equity firm KKR acquired a controlling stake in 2020, J B Chemicals & Pharmaceuticals, under its new management and leadership, has shown aggressive intent. The company specialises in branded formulations, with its brands like Cilacar, Rantac and Metrogyl among the top 300 brands in the Indian formulation market and has clocked a market-beating performance, improving its IPM ranking to 25th from 32nd in the last two years. Having grown by 15 per cent in the previous year, the company, which has recently unveiled a new logo and identity for itself, has recorded a growth of 19 per cent to its revenues of R2,424 crore in 202122. Backed by its new ‘go-to-market’, the pharma maker, also among the top five manufacturers of medicated and non-medicated lozenges in the world, launched over 15 new products last year, as against its average new launches of 1-2 products in the past. The company, exporting over 50 per cent of its production to over 30 countries, has recently expanded its portfolio foraying into the new therapeutic categories of diabetes, nephrology, respiratory, paediatrics and virology. In the last six months or so, it has made two significant acquisitions – Sanzyme Pvt Ltd’s brands in the probiotics and reproductive health segment for R628 crore, followed by Azmarda from Novartis India for R246 crore. Azmarda is one of the fastest-growing molecules in the cardiology segment and, with this, JB will have six brands in top 300 IPM brands now. u
Sleep is big business Centuary Mattresses, one of the largest makers of mattresses has recently repositioned itself in the market, where consumers are focussing more on their home and health. Having grown at 40 per cent CAGR, the company, also one of the largest exporters of mattresses and mattress components from the country, has come up with a range of innovative products. Backed by 1,200 employees across four manufacturing facilities in Hyderabad and Bhubaneshwar, the company is also now looking at setting up a facility in the western India, to cater to the growing demand in the region. In the last four years, it has expanded its capacity (currently 7.5 lakh per annum) 20 per cent every year as the market is gradually shifting towards branded products. It has created strong presence across 18 states with 4,500+ dealers and 450+ exclusive brand stores. This is well-supported by company-operated sales depots in Pune, Bengaluru, Ahmedabad, Coimbatore, Visakhapatnam, Vijayawada, Kurnool, as also sales offices across South, East and West India.
Tea tourism
The Bengal government, which has been encouraging tourism in tea estates of north Bengal, is now studying a proposal from small tea growers -- Confederation of Indian Small Tea Growers’ Associations, a national outfit -- to allow them to participate u9u
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Aggressive intent
Businessmen in the News
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ungarian marque Keeway (owned by the Q J group, which is also the parent company for the centenary marque, Benelli) has debuted in India and has announced its intentions with the launch of three new products. In addition, the manufacturer plans
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tarted in 2015 by Mihir Mohan, Pitstop aims to address the massive gap in the four-wheel service industry where only 8,500 branded and authorised service centres exist to cater to over 32 million cars. Car repair and service provider works with existing local multi-brand workshops
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
to launch another five products before the end of the year. The eight products Keeway plans to bring to India in tandem with Benelli India include scooters, cruisers, sports motorcycles and retro street motorcycles. “We are excited to introduce the Hungarian marque ‘Keeway’ to the Indian Market,” announced Vikas Jhabakh, MD, Keeway India, speaking at the launch. “We at Benelli India have operated in the Indian mobility market for years. In our tenure of catering to the needs of the Indian motoring enthusiasts, we have identified a requirement for mobility products that are attuned to the price- and quality-conscious Indian buyer. That’s why we identified Benelli’s Hungarian sibling Keeway as the right partner for us.” by reskilling, training and giving access to modern equipment and OEM spares. With its unique home service offering, Pitstop services are now available in 15 Indian cities, including Bengaluru, Hyderabad, Mumbai, NCR, Pune, Kolkata, Agra and Patna. The start-up has raised $10 million, including $3.5 million as a part of its pre-series-B last year. The company has been growing briskly, almost three times y-o-y in the last few years. “Our goal has always been to provide a hassle-free and seamless doorstep car servicing experience. And, the Pitstop app provides a one stop solution for customers looking to get their car serviced, repaired, and maintained,” says Mohan, founder, Pitstop. u
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he Pune-based agritech start-up AgroStar, founded in 2013 by Sitanshu Sheth and Shardul Sheth, has emerged as India’s largest digital farmer network and agri inputs platform serving over 5 million farmers across Gujarat, Rajasthan, Maharashtra, MP and UP. The company, which leverages data and technology to solve farmers’ problems of access to good quality agriinputs and bridge the knowledge gap in traditional farming practices, plans to engage with over 25 million farmers in the next 3-5 years. The start-up has recently raised $70 million as a part of its Series D funding round. It plans to use the fresh capital to strengthen its technology platform, hire senior talent and further scale its omni-channel strategy. It has also ramped up its
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aaS-platform Treflo is India’s first automated e-way bill generation and GST filing solutions catering to small and medium businesses. Being a mobile-first application, the platform covers every entrepreneur who is a part of the digital ecosystem in India. Its products give them
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xpanding its product range, tyre major, JK Tyre has launched four new offerings in its off-the-road tyre segment at South Asia’s largest construction equipment event Excon 2021 in Bengaluru. “We at JK Tyre are excited to showcase the technical breakthroughs at Excon 2021,” says V.K. Misra, technical director, JK Tyre. “Our OTR tyre collection is particularly designed to deliver increased mileage and exceptional traction in demanding situations. The new tyres feature a longer tread life and wear- and cut-resistant tread compounds, to provide extended service life. The Indian tyre industry has offered us opportunities to demonstrate our knowledge and create solutions that meet our clients’ expectations”. u u 10 u
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brand stores from 50 to over 1,000 in the last few months. “We have created an ecosystem that provides end-to-end solutions to farmers,” says Shardul Sheth, co-founder & CEO, AgroStar. “We have built an omnichannel capability and its solutions are powered by an extensive amount of data, technology and agronomy knowledge”. u an advantage of being faster, smoother and more accurate in comparison to its competitors. With the accrued experience of 10-15 years of expertise the anchor team of Treflo has been able to work with some of the biggest players in the market, like Samsung, Amazon, Gozefo and Udaan, among others. The company envisions acquiring about one million businesses this year. “Treflo can potentially help save uncountable hours by automating tedious compliance tasks for the 80 per cent of sole proprietors among the 64 million MSMEs,” says Rahul Meena, CEO & founder, Treflo. “The platform’s tech prowess serves family-run enterprises or small business teams in effectively managing their compliance”. u
Businessmen in the 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
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utrify Today, a global name in the nutrition ecosystem, has played a huge role in fulfilling the sudden surge in demand for health additives and nutraceuticals by building strategic relationships with pharmaceutical and nutraceutical industry association bodies of multiple countries. It has thus made a rich network of curated market access available for everyone. Nutrify Today is the organiser of many
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ndian automotive systems supplier Aditya Auto Products & Engineering has signed a JV with an international automotive supplier, Edscha. Headquartered in Bengaluru, its 10
sought-after programmes like investor pitch, Nutra bazaar, science workshops and other business events across the globe. The company had recently collaborated with the MADSA (Malaysian Dietary Supplements Association) – a nutraceuticals body in Malaysia. The key objectives of this collaboration are to improve public health by providing quality products, services and factual information to people, developing awareness of the safety and benefits of complementary healthcare products and ensuring a suitable regulatory regime for the health supplement industry worldwide. “We are in a constant pursuit of enabling and empowering responsible nutrition businesses by making available the infrastructure, curated market access and knowledge required for new nutraceuticals to thrive,” says Amit Srivasatava, founder, Nutrify Today. u
ounded in 2015, the Mumbai-based Contentstack is the leading content experience platform with an APIfirst approach to optimise content creation and management. With a vision to be the de-facto platform for `managing content for the world’ and be a dominant digital experience platform for global enterprises, Contentstack has endeavoured to redefine
content creation, management and publication. Its projects encompass a variety of channels, audiences, brands, and regions, such as Chase, Express, Mattel, McDonald’s, Mitsubishi, Holiday Inn, Icelandair, Riot Games, Sephora and Shell. The firm, raised two rounds of funding totalling $89 million, has grown into a 150+ client family that is expected to expand further this year. Already with a team of over 200 engineers in India, it is looking to add another 100 engineers by the end of this year. “Contentstack has emerged as the leading content management system and digital experience platform in a relatively short time,” says Nishant Patel, founder, Contentstack. “Our job is to offer support and digital-first strategies to its clients with dynamic digital experiences across channels, audiences, brands, and regions”. u
manufacturing units are spread across key automotive hubs in India. The collaboration encompasses developing, manufacturing, and distributing door checks, hinge systems, parking
brakes, and latches. In addition to strengthening their competitive position, both companies expect new growth opportunities from the 50:50 joint venture ‘Edscha Aditya Automotive Systems’. The JV lays the groundwork for both customer-focussed and direct supply to makers of Indian cars. “Aditya Auto’s goal is to advance mobility by enhancing automotive safety, efficiency and comfort,” says C. Jayaraman, founder & vicechairman, Aditya Auto. “This JV will enable us to successfully bring new technologies to our customers in India. Edscha is an experienced and strong partner and this partnership will
produce quality in high volumes. Together with our capabilities, the new joint venture has all the prerequisites to operate successfully in the Indian market”. Adds César Pontvianne de la Maza, CEO, Edscha: “We are closing a white spot in our global production network with its entry into the Indian subcontinent and will now work on this important growth market. This includes not only driving forward the development of product applications that are specifically tailored to the needs of this market, but also being able to make them at market-driven prices through our local production facilities”. u
on consumer behaviour, the company is working with businesses to attract mobile customers. The company has been successful in bridging the consumer experience by seamlessly integrating the physical and digital worlds of leading brands. Headquartered in Bengaluru and with an office in Pune, Sekel Tech is growing its overseas presence with a fully-owned
subsidiary servicing the UK and the EMEA regions. Its US foray includes plans for a New York office by the end of JuneJuly 2022. “At Sekel Tech, our objective has been to provide a unique and leading dynamic engagement commerce platform that will uplift customer centricity and improve B2C operational efficiency,” says Rakesh Raghuvanshi, founder & CEO, Sekel Tech. u
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eading the way in the digital transformation of key industry sector like retail, Sekel Tech offers a pathbreaking platform that is unique and leading in dynamic engagement commerce. Sekel Tech, which offers its SaaS solutions and analytics, has designed a simple-to-use suite that offers rich content generation and distribution automation tools. With hyperlocal playing out
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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
A paradigm shift The pandemic transforms the role of HR function with focus on employees
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he pandemic has redefined the role of HR in an organisation, by not only expanding HR’s corporate influence, but also leading to a renewed focus on employees. In many ways, the pandemic has renewed the emphasis on the people part of HR’s job. Experts believe that, although the HR department is still responsible for the performance, productivity and efficiency of the workforce, its bigger job now is to understand the challenges the employees face, what they are struggling with inside and outside of work. When employees sense that support, they report a positive impact on their well-being. A SHRM (Society for Human Resource Management) and Oracle study says that, while the world was already talking about personalising employee experience and exploring the use of technology to augment it, personalisation has assumed greater and wider connotation. Today, employees seek ‘hyper personalisation’, which will need fundamental changes in the way organisations and leaders perceive individual needs, preferences and choices. Companies, which want to thrive, will now need to embrace agility in almost all aspects of their being -- be it structures, job roles, hierarchies, benefits, compensation models, work timings, devices, deliverables, success measures, etc. The above change will need a complete relook at the policy framework. Perhaps, it is relevant to mention here that the only viable policy of the future will be the policy of ‘no policy’ -- meaning that there cannot be a policy framework (statutory compliances excluded) that is rigid and cannot be adapted to suit the requirements of one or many employees. “Hyper personalisation strategy should come from a core of empathy towards employees and focus on their total wellbeing,” argues the report. “That will be a big shift from today, when personalisation is largely
Khanna: happy to see the response
aimed at driving productivity and engagement”. Amidst these debates and deliberations, SHRM India held its Eighth edition of HR Tech Conference 2022 in Hyderabad, the theme of which was `Game On!’. The two-day conference had over 4,300 attendees, more than 500 CXOs, and 134 speakers from around the world, engaging and discussing path-breaking innovations, evolving workplace practices and cutting-edge technologies that shape work, the worker, and workplaces. Creating better workplaces SHRM creates better workplaces where employers and employees thrive together. As the voice of all things work, workers and the workplace, SHRM is the foremost expert, convener and thought leader on issues impacting today’s evolving workplaces. With 300,000+ HR and business executive members in 165 countries, It impacts the lives of more than 115 million workers and families globally. Organisations across the world u 12 u
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had to struggle to cope with the pandemic. Regardless of the difficult circumstances, they all contributed to smooth sailing. The proper guidance and effective leadership provided helped companies evade disastrous situations and instilled a sense of responsibility in their team members, making each one a ‘change maker’ in their own right. The goal of SHRM TECH 22 was to motivate every team member to ‘Cause The Effect’ and be the change they want to see in the workplace Day one of the conference began with the welcome address by Johnny C Taylor, Jr, SCP, president & CEO, SHRM, and Achal Khanna, CEO, SHRM India, APAC and MENA . In the opening keynote address on ‘Keeping calm in the digital world: The art of bitfulness’, Nandan Nilekani, co-founder and chairman, Infosys Technologies and Tanuj Bhojwani, fellow, iSPIRT Foundation, discussed the art of being effortlessly mindful of technology, peacefully co-existing with various devices, with the help of a framework, to tune out the overwhelming noise of the internet. In a special address, ‘Digital culture driving digital transformation’, Seema Nair, senior EVP and member, chairman’s office, Reliance Industries, discussed the actionable insights for leaders to improve digital leadership and culture in their organisations. Talking about ‘Building smart managers for smarter workforce’, Alexander Alonso, chief knowledge officer, SHRM, emphasised how, in the future of work, it’s no longer going to be managers managing tasks of their teams – instead, the focus will be on managers who can work with their teams to help create a balance between work and life. In a session, ‘Hallmark of future organisations; prioritising people, profit & the planet’, Prasad Rajappan, founder & CEO, ZingHR, and Leena Sahijwani, HR leader & change enabler, Tata group, discussed how to enable people to bring their best versions to work and ensure profitability of businesses, while keeping the sustainability in focus. “We are elated to be associated with SHRM as ‘co-powered by’ partners for the SHRM Tech Conference 2022,” said Rajappan. “While sharing a common vision towards this
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
year’s theme – Future-ready work-tech -- we have been successfully combining aspects of people, profit and planet to build organisations of the future, while also extending efforts towards ESG,” informed Rajappan. “We are happy to see the overwhelming response we have received for the conference,” announced Achal Khanna, CEO, SHRM India, APAC & MENA , addressing the gathering. “I am confident the attendees have gained from the insightful sessions, panel discussions and keynote addresses delivered at SHRM TECH 22 by the top HR and tech minds in the world. I would like to thank all of the participants who contributed to the dynamic atmosphere and made the conference successful.” During the conference, SHRM unveiled the SHRM HR Excellence Awards Winners’ Practices Playbook. The playbook features the best in class case-studies of organisations that are leading the charge in HR best practices. It also launched SHRM Capability in Behavioural Assessments in partnership with Salto Dee Fe and the Talent Enterprise. Through this partnership, SHRM will provide, contemporary psychometric tools and assessment solutions to its clients. u Arbi n d G u pt a [email protected]
ELECTRIC CARS
All charged up T
he four luxury car makers in India – Mercedes Benz, BMW, Audi and Volvo – have their presence in electric cars now. BMW leads the charge with the iX Mini electric, its latest addition to mid-size sedan being the i4. Priced Rs69.99 lakh, the delivery of the vehicle will start from July. The other players in the segment include Mercedes EQC, Audi’s Etron and Volvo’s XC40 recharge. “We have been pioneering EVs for the past 10 years and continue to lead with endless possibilities of shaping the future. In December, we promised that we would launch three electric products in 180 days. That’s exactly what we have delivered. First BMW iX, then the Mini and now i4. These are
Pawa: We want electric mobility to grow in India
the icons of BMW group’s next chapter of transformation”, says Vikram Pawah, president, BMW Group India. The carmaker recently achieved its milestone of producing 100,000 cars in 15 years, which is the fastest time by any luxury car maker. BMW wants to play a major role in electric mobility in India. The company claims that i4 is first ever electric mid-size sedan with the slim high-voltage lithium-ion battery integrated in the floor and has a capacity of 80.7 kWh, providing a range of up to 590 km. The i4 has the longest range than any other electric vehicle in India. Bouncing back According to Pawah, the luxury car market is bouncing back and getting strong. Last year, it grew by 34 per cent. From January 2022 till now, it has grown by 36 per cent. This segment is still a small part of the Indian car industry but has the potential to grow further. The demand is encouraging for products including EVs and BMW continues to invest in new products, while also investing in the charging infrastructure. Currently, 50 DC fast charging stations have been set up by the company in 34 cities across India. The charging facility is also available to other manufacturers with a nominal fee. “We want electric mobility to grow in India,” adds Pawah. “The customers also want EV with latest technologies. There is a great future for EVs in India in the long term. We support the government’s intention of achieving 30 per cent of electric mobility by 2030. We can do a few things from our side to support this mission; we will continue to introduce new products to excite customers and making more charging stations, joining hands with private players and participate in government EV policies”. u 13 u
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BMW has till now offered 25 products, both four and two wheelers including electric cars. The i4 comes with a standard twoyear warranty for unlimited distance. Repair inclusion can extend warranty benefits from the third year of operation to maximum fifth year, without any mileage limitation. The batteries are covered by a warranty valid for eight years or up to 160,000 km. BMW India Financial Services is offering a complete package for loan, insurance and vehicle services especially designed for the i4. The i4 ensures fast and hassle-free charging. Charging time is: • 205 kW DC Charger: 10-80 per cent in 31 min/164 km added range in 10 min • 50 kW DC Charger:10-80 per cent in 83 min/100 km added range in 18 min • 11 kW AC Charger: 0-100 per cent in about 8.25 hours. A host of BMW Connected Drive technologies continue to break the innovation barrier. BMW Live Cockpit Professional includes the freestanding BMW Curved Display with its connection between a 12.3-inch digital information display behind the steering wheel and a 14.9-inch Control Display with Navigation. The new generation drive display and control/operation system with new BMW Operating System 8 extends the interaction between driver and vehicle. Occupants can operate a number of functions simply by speaking to their BMW Virtual Assistant. With the arrival of the mid-size sedan i4 from BMW, there is expected to be a lot of action from other luxury car makers as well, including Jaguar Land Rover to introduce new products. u S . M . B O O T H EM [email protected]
Government & Politics
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
Finally, the cut Will states follow through centre’s move?
Will the fuel cut cool down inflation?
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he Centre’s excise duty cut on petrol and diesel, by R8/litre and R6/litre, respectively, has come in the wake of a rapidly climbing inflation, both wholesale and retail (15.08 per cent and 7.79 per cent for April). Clearly, the political feedback on rising prices that the Bharatiya Janata Party is getting is not good. Petrol has been retailing at over R100 a litre in most parts of the country. The last time the government cut Central excise was in November 2021, just before the crucial assembly election in Uttar Pradesh. A cut of R5 on petrol and R10 on diesel was announced. The Centre has now quickly made amends by cutting excise duty, foregoing revenue of R1-lakh crore. Simultaneously, the Modi government announced that it will give R200 per cylinder subsidy to Ujjwala Yojana beneficiaries for 12 cylinders a year, to help ease some of the burden arising from cooking gas rates rising to record levels. “This will help our mothers and sisters,” tweeted Nirmala Sitharaman, Union finance minister, targeting another favoured vote bank of the BJP. The gas cylinder subsidy will have a revenue implication of
about R6,100 crore. However, the salutary impact on prices of the Centre’s duty cut on fuels can be amplified, if states follow through. The share of states is still about R20/ litre on an average. Lower prices will, at the outset, boost kharif operations, often hampered by unreliable electricity supply. A boost to output will lower inflationary expectations. Slanging match Only a month back, the issue of cutting fuel levies had needlessly turned into a slanging match between the Centre and the states. As of now, just three non-BJP states – Kerala, Rajasthan and Chhattisgarh – have cut their levies. Almost all other states charge a hefty VAT (generally upwards of 25 per cent) – be it Maharashtra, Gujarat, Karnataka, West Bengal, Telangana or Andhra Pradesh. Since state levies are largely ad valorem-based, they increase with prices; therefore, having a bigger inflationary impact. A reduction by states could bring down prices by more than R15/ litre for both fuels – reducing costs for producers and lifting consumer sentiment. u 14 u
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The Centre has displayed a spirit of ‘co-operative federalism’ by reducing the cess component (not shareable with states) rather than the basic excise duty. The Centre, with its latest cut, has brought down its share in petrol and diesel levies from R27.90/ litre to R19.90/ litre and R21.80/ litre to R15.80/ litre, respectively. Faced with imported inflation and its crimping effects on growth, the options being exercised by the Modi government are to reduce import tariffs and domestic levies, while ensuring that the exchange rate does not fall to neutralise this impact. The Centre has already lowered the duty on crude palm, sunflower, and soyabean oil. The latest move to reduce both steel and cement costs seems calculated to keep capex going despite adverse conditions. However, the key is to ensure that the benefits of duty cuts are passed on. After a sharp bout of IBC-driven consolidation in the industry, the top five primary steel producers in India have cornered about 55 per cent of aggregate capacity and 58 per cent of sales volumes. With leading players also deferring their capex plans during the pandemic, the domestic supply situation is quite tight, giving major steel producers considerable pricing power. Some quarters have called for vigilance on the part of Competition Commission of India in the case of steel and cement. The Centre’s estimate is that the move can have revenue implications of R1 lakh crore. But it has calculated that the positive growth and price scenarios in the medium term will defray the impact. However, that is not the end of the story. Apart from the fuel price hit, lower surplus transfer from the Reserve Bank of India this fiscal year at R30,307 crore is also going to hurt the fisc. The Union Budget had estimated receipt of R73,948 crore as dividends from the RBI and other public sector banks for 2022-23. The disinvestment target of R65,000 crore looks hard to get in view of prevailing market conditions. All this may lead to a mid-term re-examination of budgetary projections. But these are extraordinary times which call for extraordinary decisions. u R a k e sh Joshi [email protected]
Government & Politics
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
Cotton crisis Textile hubs taking a hit
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he districts of Tirupur, Coimbatore, Karur, Erode, Salem and Namakkal, constitute a major textile hub of Tamil Nadu. But the Manchester of South India is in serious trouble and the entrepreneurs in the textile sector have been on a 15-day strike since 22 May. It is rare for entrepreneurs to strike work but the spiralling cost of cotton and yarn has intensified the problems faced by the micro, medium and small enterprises (MSME), forcing them to take this step. With the price of cotton more than doubling, the small-scale spinners and power loom owners who normally stock raw materials for about six months are unable to bear the steep hike in prices. “About 10 per cent in the spinning industry is constituted by corporate companies, which have the capacity to stock raw materials for about two years and above,” says M.P. Muthurathinam, president, Tirupur Exporters and Manufacturers Association (TEAMA). “The small spinners and power loom owners cannot follow suit due to their limitations. This is severely affecting and threatening the very survival of the industry”. The situation is no better in Gujarat. The cascading effects of inflated prices of cotton and other inputs have forced textile processing units in the state to cut dyeing and printing activities by nearly 40 per cent. Many of the nearly 3,000 processing units in Surat, Ahmedabad and Jetpur have told their employees to work just thrice a week. That all this is happening in India, which is the world’s largest producer of cotton, is a matter of shame. Who is responsible for the crisis affecting the entire textile and garment value chain in the country? Senior industry executives have already blamed the misleading cotton production estimates firmed up by the agriculture ministry for their plight. The domestic cotton output is now estimated to be just about 31.4 million bales, of 170 kg each, in the current marketing year through September, way below
fibre and its by-products. However, the government has ruled out a ban at this juncture on the ground that such a step is unlikely to serve any purpose. “Outbound shipments of cotton are unviable now, as domestic prices of the fibre have exceeded the global levels. On top of the high domestic prices, there are logistics costs for exports. So, exports in any case are not happening now,” says Upendra Prasad Singh, Union textiles secretary. The government maintains that, unlike cotton, there is adequate availability of cotton yarn in the domestic market. However, yarn prices too have sky-rocketed, reflecting the jump in the primary raw material (cotton) prices. Garment companies, especially exporters who had firmed up contracts well in advance when yarn prices were somewhat cheaper, are finding it difficult now to renegotiate the deal and pass on the rise in input costs to the buyers. the agriculture ministry’s Acknowledging the initial projection of 36.2 crisis the entire textile million bales. Domestic conand garment value sumption, meanwhile, Singh: exports are not happening chain is facing, has been estimated to be about 34 million bales. A more realis- Singh informs that the government is tic projection in the beginning of the working with industry players to find year would have prepared them better out ways to improve domestic supfor any potential shortage, the indus- plies in the short term. Some cotton import deals have been firmed up after try believes. an effective duty of 11 per cent was scrapped recently. However, even supPrice speculations Experts believe that another reason is ply from overseas against these conIndia may be facing the ‘great Indian tracts will reach only by July-August, cotton drain’ – the unconstrained while the new crop will start hitexport of cotton. A third reason for ting the market from mid-September, the skyrocketing domestic prices he said, adding that there is a shortcould be price speculations. Rikhab age now. The government is also counting Jain, chairman, TT group, is on record that speculators might be driving up on arrivals of a variety of cotton that cotton prices, alleging irregularities is harvested in summer. But the supply in domestic cotton futures and hedg- from this harvest is limited – 500,000-1 million bales. The government’s ing in New York. Cotton prices have more than dou- response has been tepid: An informal bled in the past one year to breach the cotton advisory group, led by industry R100,000-mark for a candy (equal to veteran Suresh Kotak, has been set up 356 kg). This has prompted the tex- to discuss how to deal with the current tile and garment industry to seek an situation and how to draw a long-term immediate ban on cotton exports strategy to improve cotton output and on the assumption that such a move productivity in the country. u would shore up domestic supplies and R a k e sh Joshi curb the exorbitant rise in prices of the [email protected] u 15 u
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Government & Politics
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
Misinterpretation or confusion? Bankers raise red flag on UIDAI order
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few years ago, R.S. Sarma, when he was chairman, Telecom Regulatory Authority of India (TRAI), vociferously explained to users how safe Aadhaar was and how nobody could hack into an account. Sarma had worked with Nandan Nilekeni in UIDAI and his word was then taken seriously. However, the manner in which the Modi government has withdrawn a statement issued by the Bengaluru Regional Office of UIDAI, advising people not to share photocopy of their Aadhaar card with any organization, as it could be misused, adds grist to the charge of lack of co-ordination among various arms of the government. This follows complaints from various quarters on its ‘possible misinterpretation’ and the confusion the UIDAI statement could cause. In a press release, UIDAI had said, “Do not share photocopy of your Aadhaar with any organisation as it can be misused. Alternatively, please use a masked Aadhaar, which displays only the last four digits of your Aadhaar number.” Bankers, for instance, had raised concerns on the notification. “The safety of Aadhaar has never been doubted by a common bank customer so far and it has been the fulcrum of
all Know Your Customer (KYC) norms. It’s a concern for banks that any misgivings on sharing of Aadhaar can create unnecessary panic and can cause issues in day-to-day operations,” a senior PSU bank official said. Several banks are believed to have communicated their concern to the government. Bank customers were also worried over the issue as, in these days of online frauds in banking transactions, the possibility of misuse of Aadhaar is worrisome as it is a freely used and shared number. Exercise prudence The Ministry of Electronics & IT’s (MeitY) subsequent statement that ‘UIDAI-issued Aadhaar card holders are only advised to exercise normal prudence in using and sharing their UIDAI Aadhaar numbers’ was meant just to paper over the embarrassment. In the absence of Aaadhar authentication, which is now being seen as the default identity and address proof across the country, people would have to run from pillar to post. MeitY has pointed out that the release issued by the Bengaluru Regional Office of UIDAI was in the context of an attempt to misuse a photo-shopped Aadhaar card. “In u 16 u
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view of the possibility of the misinterpretation of the press release, the same stands withdrawn with immediate effect,” it said. Officials in MeitY confessed that the withdrawal of the statement is more of a knee-jerk reaction due to strong resistance from bankers. “As Aadhaar is now being seen as the default address proof, making any major changes without any back-up prescription and just come up with general recommendations, which would be difficult to explain in detail since this is not industry specific,” they said. Meanwhile, the government is trying to ensure that data is not getting shared and misused as time and again there have been instances where data has been breached and have fell into wrong hands. A lot of times this data has been procured by companies for their marketing initiatives. MeitY and related ministries have been told to get their act together so that whatever happens should come to their notice. That is why this sixhour window for disclosure under the new cybersecurity directives came in, which still stands. A lot of enterprises like banks and CIOs it is speaking to are very particular about following these rules. Meanwhile, the Indian Computer Emergency Response Team (Cert-In), which provides intelligence in matters of data theft and leakage, will come up with a slew of measures over the next four-five months. Apart from the idea of masked Aadhaar, the government has also time and again said that it is safe to use Aadhaar, as UIDAI database gives only minimal information at the time of enrolment or update. This includes the name, address, gender, date of birth, 10 finger prints, two iris scans, facial photograph, mobile number (optional) and email ID (optional). Apart from masking the Aadhaar number, individuals can also generate 16-digit virtual ID (VID) linked to the Aadhaar and also lock/unlock the Aadhaar for a few days through UIDAI’s website. u R a k e sh Joshi [email protected]
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
‘Let Pak overcome its fear of India’ Delhi should use its Western friends to save Pakistan from becoming a failed state
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remarkable set of opportunities are opening up for Delhi to push Islamabad towards realisation that its obsessive enmity with India is counter-productive and will accelerate the country’s down-slide into a failed state, despite the protection it receives from Beijing. These opportunities have arisen from President Vladimir Putin’s laborious invasion of Ukraine, Joe Biden’s ignominious exit from Afghanistan, and Xi Jinping’s stumbles over Covid-19 and an impending economic downturn. A result, among others, is that Pakistan is crumbling from the inside because its autocratic military no longer has foreign friends upon whom it can rely for support to keep Pakistan’s government and people under its thumb. In these conditions, it may be time for Delhi to seriously examine how to influence Pakistan to be a more peaceful state that is less aggressive towards India. Delhi has extraordinary, but short-lived, opportunities provided by the geopolitical power that comes from the friendly handshakes that Biden, the European Union (EU) and Gulf Arabs are extending to Prime Minister Narendra Modi. They seem to be convinced that, with him at the helm, India will remain a stable and reliable friend more valuable to them than Pakistan. The US, the Pakistani military’s long-time provider of weapons and money, is disgusted by what it now perceives as the brazen duplicity that kept the military’s Taliban proteges in Afghanistan alive for 20 years and facilitated the American defeat. To counter-balance, former Prime Minister Imran Khan had tried to turn to Putin but, with him sinking into the quagmire in Ukraine, he has neither the weapons nor the money Pakistan’s military now needs to keep its grip over Pakistan at a time when the economy is almost in ruins and fundamental Islamic terrorism is on the rise inside the country. Beijing is also less capable of carrying the millstone of a rudderless Pakistan and its bloated military, at a time when Putin may need enormous financial and military help. Especially as Xi is anxious not to rock the boat this year, because he wants to be reconfirmed as China’s supreme leader, which could keep him in that job for life. The Pakistani military’s growing isolation is reflected in its slipping grip over the country’s politics. Its former protégé Imran Khan is now shouting from the rooftops his rebellion against the military’s political clout. He is rallying his Tehreek-e-Insaaf party and some Islamic groups for massive street protests and can cause much trouble in the more than 100 by-elections before the likely national elections
BRIJ KHINDARIA
in May 2023. Meanwhile, the Afghan Taliban is reverting to its harsh Islamic system and oppression of women. But it is also under threat because even harsher Sunni Islamists like the Islamic State Khorasan and Al Qaeda are multiplying terrorist attacks to destabilise its hold on power. In effect, Pakistan’s military and its ISI intelligence services, which mentored the Taliban and double-crossed the Americans, seem to be adrift. They no longer have American dollars to rain upon their covert militias and are learning that spreading their usual misinformation about Modi’s policies in Kashmir does not get them mileage even among Gulf Arabs. Saudi Arabia and the United Arab Emirates (UAE) seem to have realised that India is a forward-looking and stable friend while Pakistan is a
Pakistan is a broken country heading towards more poverty and disorder. Its military may be disciplined but it has no powerful foreign friends who would stand with it
The author is an international affairs columnist for Business India. He can be contacted at [email protected]
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flaky and unreliable dependency. “There is so much that our countries can and will do together,” Biden told Modi at their summit in Tokyo on 24 May. “I’m committed to making the US-India partnership among the closest we have on earth”. Coming from Biden, these are not idle words. He has shown his mettle in the Ukraine crisis by turning both NATO and EU into a united front that will change geopolitics if the unity holds. NATO was floundering and aimless before Biden flexed muscle after the Russian invasion, and the EU, which is continuously quarrelling, has now turned into an economic sledgehammer to strike down Putin. For the moment, Pakistan is a broken country heading towards more poverty and disorder. Its military may be disciplined but it has no powerful foreign friends who would stand with it. Pakistani civilian politicians are like scorpions fighting in a bowl, while Islamists wait at the gates to capture Islamabad at the first opportunity. So, Delhi should use its new Western friends to save Pakistan from becoming a failed state and, hopefully, overcome its existential fear of India. This will require innovative thinking and deft handling, but it is possible. u
Panju’s Page By Panju Ganguli
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OUR MOVE INTO THE CEMENT BUSINESS IS YET ANOTHER VALIDATION FOR OUR BELIEF IN OUR GROWTH STORY. WE WILL BE ABLE TO ESTABLISH THE CLEANEST AND MOST SUSTAINABLE CEMENT MANUFACTURING PROCESS THAT WILL MEET OR EXCEED GLOBAL BENCHMARK.
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DEEPAK PAREKH Chairman, Hdfc
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Oh! Oh! The ‘O’ brands! The wOnderful grOwth of the ‘O’ brands
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ecently, we have seen the emergence of the ‘O’ brands, whose names end with the letter ‘O’. All of a sudden, there has been a plethora of such brands and they are across categories. Whether it is Zomato, Dunzo or Zepto, or the earlier ones, Jio or Indigo, or even Meesho, they all contain an ‘O’, pronounced ‘Oh’ and used to express the emotions of surprise, desire or a response to a physical stimuli. It is a positive expression and is used as an interjection. The first use of Oh was in the 13th century and later on it was defined in 1936 as a noun. Its history and etymology indicate that it is from the Middle English ‘Oh’. As a figure of speech, onomatopoeia, it is the process of creating a word that phonetically imitates, resembles or suggests the sound it describes. Although, in English, the term onomatopoeia means the imitation of a sound, the compound Greek word, onomatopoeia, means, ‘making or creating names’. This is what we at Samsika Marketing call brand naamkaran.® And, it is interesting to note that, nowadays, it’s the ‘O’ (Oh) brands that are creating waves in the marketplace. Let us analyse some of them. Let us look at Dunzo – an Indian company, which delivers groceries and essentials, fruits and vegetables, meat, pet supplies, food, paan shop items and medicines in major cities. Dunzo Daily claims to deliver the freshest and the best quality fruits and vegetables in just 19 minutes. There is no minimum order. The first three deliveries are free. The brand is running a multi-media campaign, pronouncing the death of refrigerators because, with a 19 minute delivery of the freshest fruits, vegetables and food items, you don’t need to have a fridge. Dunzo is an active ‘O’ brand. Let us now look at another ‘O’ brand – Zomato. It is an Indian multinational restaurant aggregator and food delivery company and provides information, menus and user reviews of restaurants as well as food delivery options from partner restaurants in select cities. Zomato service is widely available in thousands of cities. It is a public limited company, which earned revenues of almost R2,000 crore last year. This year, it has doubled the earnings to more than R4,000 crore. Zomato, which has acquired 12 start-ups globally, claims to be India’s largest food delivery, dining and restaurant discovery service. It claims to provide better food for more people. The next brand to be looked at in the ‘O’brands family, is Zepto. What is it up to? Zepto, named
j a gd e e p k a p oor
The author is cmd, Samsika Marketing Consultants. He can be reached at [email protected]
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after the minuscule unit of time, is an instant grocery start-up, founded by two teenagers, who reached a valuation of $900 million within nine months of beginning 10 minute deliveries in India’s fast-growing quick commerce segment. Another earlier brand in the ‘O’ category is Jio. Jio is an Indian tele-com company and a part of the Reliance Industries, which has recorded a turnover of over R90,000 crore in 2020-21. Its products include fixed line telephone, mobile phones, wireless broadband, internet and OTT services. Jio has a number of sub-brands, some of which are JioSaavn, JioTV, Jio Cinema, etc; it also has the huge Jio World Centre. Jio in Hindi also means to live well; it can also be interpreted as a blessing from an elder.
From the ground, let us now move up to the air. The market leader in airlines is also from the ‘O’ family – Indigo. InterglobeAviation Ltd is the owner of the brand Indigo. It is the largest airline in India by fleet size, as also passengers carried – with a 54 per cent domestic market share. It is also the largest individual Asian low-cost carrier in terms of fleet size and passengers carried. In 2021, its revenue exceeded R15,000 crore. Another brand that ends with the letter ‘O’ is Meesho – an Indian e-commerce company. It provides an online platform for small businesses to sell their products to consumers as well as re-sellers, who can re-sell the product via social channels. A few years ago, they named it Meesho, short for ‘meri e shop’, an app that enabled physical stores to take their inventory online and sell through social channels. It is interesting to note that, in the recent past, many brands, many successful growing brands have got their names ending in ‘O’. Oh! Oh! The ‘O’ brands are really rOcking! u
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Disinvestment blues
Hindustan Zinc is still awaiting the government’s decision to announce disinvestment while it expands and has committed itself to Net Zero by 2050
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n the last three years, the government of India has set up ambitious divestment targets. However, it has failed to achieve and the target for FY23 has been slashed by over 55 per cent to R78,000 crore. So far, it has achieved the listing of Life Insurance Corporation of India (LIC) to meet the target and is mulling the divestment of R39,000 crore of Hindustan Zinc Ltd (HZL). “We welcome the government’s decision to offload its residual stake in HZL.
In the last two decades, HZL under Vedanta has emerged as a major player in zinc, lead and silver. We are confident that the government will be able to derive significant value from this stake sale. We are comfortable with our current holding in HZL and will wait for the government to come up with its offer for sale and then decide to participate, as per our capital allocation policy”, explains Anil Agarwal, chairman, Vedanta group, which holds 64.9 per cent, and the government 29.5 per u 20 u
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Misra: We are committed to decarbonise our mining operations
cent in HZL. However, whether the stakes will be released in one go or in tranches will be the government’s call. The government has filed applications separately for ending the arbitration. A senior official from the government said it would sell the balance stake in the company “at an opportune time”. The Supreme Court (SC) had on 18 November, 2021 allowed the Centre to disinvest its residual stake in HZL in the open market, citing that HZL had long ceased to be a government company. In 2002, Vedanta (earlier known as Sesa Sterlite) had bought a 26 per cent stake in HZL; it exercised the first call option in 2003 and acquired an 18.9 per
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cent additional stake in the company. Vedanta later acquired another 20 per cent stake in HZL through an open offer, increasing its shareholding to 64.92 per cent. To acquire the government’s remaining 29.5 per cent share in HZL, it had exercised the second call option in 2009, but this was rejected by the government. Following this, Vedanta initiated arbitration proceedings against the government.
Agarwal: we will wait for the government to come up with its offer for sale
natural gas have gained, coking coal has dropped, after having topped $500 a tonne at one point in time. Zinc is used in numerous common products, including mobile phones. The cost of renewable energy projects and some electronic products may increase as key metal prices go up. The metal – used in die-casting alloys, castings, chemicals, medicine, fertiliser, paints, batteries and other products such as brass – has gained since the beginning of the year. “The upward price drivers for zinc are as follows: disruption of zinc concentrate supplies due to the suspension of large zinc mines as a result of the Covid-19 pandemic. Persistent environmental restrictions in China and mine closures and disruptions in other countries,” explains Arun Misra, CEO, Hindustan Zinc Limited (HZL), headquartered at Udaipur in Rajasthan. It is a Vedanta group company, which is one
FINANCIALS
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7,96
6,80
5
0
6 7,95
6 6 8,31
9,27
89 11,7
9 8,84
10,7
47
39
73 12,3
4 9,73
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PAT
16,2
39 29,4
22,6
29 18,5
61
18
22,0
EBITDA 21,1
17,2
73
82
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to reaching its all-time high of $4,442/ tonne reached in 2006. Our 2022 price forecasts imply that we expect prices to stabilise and weaken from here on in the coming months, despite remaining elevated compared to historical standards.” In October last year, the World Bank, in its commodity forecast, said the average price of zinc will fall to $2,400 in 2022 against $2,700 at the end of 2021. But the Russia-Ukraine conflict has changed market fundamentals. According to Fitch Solutions, the global refined zinc output continues to be pressured, as major producers Nyrstar and Glencore have announced a cut in production on the back of the energy crisis in Europe. Energy costs have soared since February this year, when Russian troops entered eastern Ukraine. Prices of energy commodities such as crude oil, natural gas and coal have been swinging wildly over the past month. Though crude oil and
9,62
North bound prices Right now, HZL is in a sweet spot. Globally, the price of zinc has been on an upward trend. Soaring crude oil, natural gas and coal rates have forced major European producers to cut output. Currently, the price of zinc is ruling at $3,540 per tonne, up 19 per cent year-on-year (Y-o-Y) from $2,965 in May 2021. In the previous year it had grown by 50 per cent from $1,975 in May 2020. The increase followed a two-year decline of 45 per cent from the ten-year high of $3,500 in 2018. Zinc prices are likely to rule at multiyear highs in 2022 in view of high energy costs due to the Russia-Ukraine conflict that continues to affect crude oil, natural gas and coal supplies. According to Dr Heinz-Jürgen Büchner, Director of Industrials and Automotive, IKB Deutsche Industriebank AG, zinc prices will rule at around $3,500 a tonne by the middle of this year, with a fluctuation band of $500 either way. Research agency Fitch Solutions Country Risk and Industry Research (FSCRIR), a Fitch Unit, stated it had raised the 2022 price forecast to $3,500 from $2,900 a tonne. In its report, Fitch Solutions states that the metal has averaged $3,688 yearto-date. “At these levels, zinc is close
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a deep understanding of the industry and will accelerate IZA’s efforts towards increasing consumption of zinc globally and making India a self-reliant market for commodities, specifically zinc. He, along with other members will strive towards addressing the concerns of the industry and underline the significance of zinc in crop nutrition, infrastructure, and human health,” emphasises Rahul Sharma, director-India, IZA.
Modi: creating long lasting value
of the world’s largest and India’s only integrated producers of zinc-lead and silver and enjoys a 78 per cent market share in India. The company is self-sufficient in power with captive thermal power plants and has ventured into green energy by setting upwind power plants. HZL is an industry leader with over five decades of mining and smelting expertise. The company is a fully integrated player that emphasises providing holistic value to its stakeholders. In January 2022, Misra was elected as the new acting chairman of the International Zinc Association (IZA). He is the first Indian and Asian to hold the position of acting chairman of the IZA, a non-profit organisation that represents the global zinc industry. IZA members produce 60 per cent of global zinc and 80 per cent in the Western Hemisphere. “Being the industry leader, Misra has
Stellar performance In April, HZL announced its full year ended March 2022 results. For the full year, HZL had the best ever mined metal production of 1,017 kt, up 4.6 per cent Y-o-Y. The one million mark was crossed for the first time owing to higher ore production across all the company’s locations. For the full year, overall refined metal production was 967 kt, up 4 per cent Y-o-Y on account of better plant and concentrate availability. Silver production was 8.3 per cent lower Y-o-Y and dropped to 647 mt in line with the lower lead metal production and reduction of silver WIP. For the full year, revenue from operations was R29,440 crore, an increase of 30 per cent, led by higher zinc volumes and LME prices while being partially offset by lower lead and silver volumes. The cost of production of zinc before royalty (COP) was $1,122 (R83,511) per tonne, up 17.6 per cent. The COP was affected largely by higher coal prices and input commodity inflation and partially offset by higher volumes, better sulphuric acid realisations and improved recoveries. The operating profit (EBITDA) for the full year was R16,289 crore, up 38.8 per cent. The rise was primarily due to
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isra was appointed Deputy CEO, HZL in November 2019 and was elevated to CEO & WTD from August, 2020. He received his bachelor’s degree in electrical engineering from IIT, Kharagpur, and has a diploma in mining and beneficiation from the University of New South Wales, Sydney. He started his career with Tata Steel as maintenance head (electrical), West Bokaro Coal Washery in July 1988. He brings 32 years of diverse experience in leading various strategic positions within Tata Steel. In his last assignment at Tata Steel, he was working as VP in the raw materials division. In addition, he is the VP of the Indian Institute of Mineral Engineers. Misra was awarded ‘CEO of the Year’ and HZL ‘Most Innovative Company of the Year’ by Business Leader of the Year awards. In 2022, he was elected as the new acting chairman of the International Zinc Association (IZA). He shares his views on Atmanirbhar, zinc and China. Making India a self-reliant nation by boosting the domestic steel and manufacturing sectors – possible policy reforms that will make it truly Atmanirbhar. What is your view?
In the past few years, the government has taken a lot of measures to support a self-reliant India, especially around schemes for the MSME sector, start-up India and the spate of infrastructure projects announced. Going forward the liquidity to the MSME sector will certainly aid the programme for a self-reliant India. On zinc especially, India is self-reliant and we are fully capable of meeting our requirements. We produced 770 KT Zinc in FY22 with a domestic demand of 630 KT. What is the impact of China on the global business and commodities market?
LME cash price ($ mt)
4000
Favourable time
3,975
The recent economic numbers published for the Chinese economy are not very
3,609
3500
3,370
2,971
3000
2,951
2,828
2,943
3,317
3,407
3,644
2,989 3,042
2500 April ‘21 May ‘21 Jun ‘21
Jul ‘21 Aug ‘21 Sept ‘21 Oct ‘21 Nov ‘21 Dec ‘21 Jan ‘22 Feb ‘22 Mar ‘22
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higher zinc and lead LME prices, higher premiums as well as higher silver prices. Finally, the bottom-line net profit for the full year was R9,629 crore, up 20.7 per cent. The company paid a total of R7,606 crore in dividends and repaid debt amounting to R4,355 crore. “We have a strong balance sheet and remain a cash rich company with net investments of R17,966 crore. HZL delivered its best-ever annual mined metal
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encouraging and clearly show the impact of Covid-related restrictions. Demand is certainly sluggish at the moment. However, we believe that this is only a temporary phase as fundamentals for most major commodities are very strong as global stockpiles are quite low. Hence, we are keeping ourselves prepared for a surge in demand once lockdown conditions are eased in China
The government of India recently announced a PLI scheme for battery manufacturers. How does the zinc industry find itself in the scheme of things when it comes to battery energy storage systems?
Certainly, post Covid times have been favourable times for us. We are running at the highest ever primary market share of 83 per cent. The global supply chain disruption has definitely aided this feat. But, apart from the same, we have also elevated our customer service levels through supply reliability. Covid also made us realise the importance of going digital and we launched our e-commerce portal ‘Vedanta Metal Bazaar’ last year with the vision to be 100 per cent online. We have found exceptional adoption
Several clinical nutritionists have highlighted that zinc plays a pertinent role in treating severe pneumonia and improving antiviral immunity in addition to vitamins C and D. During the second wave HZL had clearly set a priority to first supply chemical/pharma companies which are suppliers for zinc supplements. Raw materials like zinc oxide and zinc sulphate are key to producing these supplements and HZL took all possible actions so that the supply of zinc was streamlined to the pharma companies even with the constraints of logistics and lockdown restrictions. Moreover, Maharana Pratap University of Agriculture and Technology, (MPUAT) Udaipur and HZL and BAIF Institute of Sustainable Livelihood and Development (BAIF LIVELIHOODS) signed an MoU to study the effect of zinc application on crop productivity and soil health, which will further help to tackle the zinc deficiency in humans and soil in India.
India has the perfect opportunity to establish a battery manufacturing ecosystem on the foundation of new technologies that leverage abundantly available indigenous materials like zinc. The Government of India initiative to develop greenfield giga-scale advance cell manufacturing under the PLI (production linked incentive) scheme was released on 22 October, 2021. Under the scheme, 5GWh of cumulative capacity would be offered to niche ACC technologies of higher performance with a minimum threshold capacity of 500 MWh. The minimum mandatory investment (R225 crore/year) outlined in the scheme is for mainstream chemistry. It may be notified separately for niche chemistries; zinc-based batteries have the potential to reach around 18-22 per cent of the overall energy storage capacity expected by 2040 owing to the lower lifecycle cost of these batteries, specifically zinc-bromine (ZnBr) and zinc-air batteries. Institutions such as the Indian Institute of Science (IISc), National Chemical Laboratory (NCL), Centre for Materials for Electronics Technology (C-MET), Jawaharlal Nehru Centre for Advanced Scientific Research ( JNCASR), CSIR-Central Electro Chemical Research Institute (CSIRCECRI), Indian Institute of Science Education and Research (IISER), Indian Institute of Technology (IITs) and National Institute of Technology (NITs) have all been involved in key initiatives for energy storage solutions. CSIR-CECRI has been involved in the development of Zn-Br (zinc bromine) redox flow batteries, while many institutes have undertaken the development of lithium-ion and other chemistries as well.u
production; it touched the record one million tonne mark this year. Our production of refined metal was also the highest ever. With the exit run-rate for refined metal at 1.2 mtpa, we are fully geared for another stellar performance this year. Our focus is to produce more and more of world-class value-added zinc alloy products with the use of the latest technology and equipment. We are committed to decarbonise our
mining operations and deliver on our ESG road map to achieve Net Zero by 2050,” says Misra. “With stringent cost and cash conversion discipline, we continue to deliver industry leading returns, while investing towards a sustainable business. With ongoing asset optimisation, integration initiatives as well as proactive measures towards combating input commodity inflation, we will continue
to produce essential resources for the world, thereby create long lasting value for all stakeholders,” adds Sandeep Modi, Interim CFO at HZL. “In the total cost bucket, coal used to be 25 per cent to 28 per cent historically but this has risen to 35 per cent today. During the quarter, the domestic coal situation related to domestic linkage coal materialisation did not improve, and HZL received around a mere 3 per
What does the government need to do to stem imports? The CEPA with Japan and Korea is for other products too, so should zinc be excluded?
India has invested very heavily in building a huge capacity for mining and smelting and it is today fully capable of meeting 100 per cent of the domestic demand of 630 KT. However, despite the available capacity, India imports around 150 KT on an average from nations with free trade agreements with it. These are nations with no captive mines or raw material and work on conversion from concentrate to zinc metal with very little value addition. We really need to look into our FTA framework and include the right value addition norms for such imports. How has Covid-19 changed the supplydemand dynamics for the Indian zinc market? With global trade coming to a near standstill, and rupee depreciation, do you think this would also be a great opportunity to grab market share back from imports?
of this new digital platform by our customers and we hope to continue this journey to a greater ease of doing business with us. During the Covid pandemic, zinc supplements were the highest OTC brands sold during the second wave. How is HZL supporting pharma companies to adequately supply raw materials for these supplements?
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Going green: HZL uses solar energy to minimise carbon footprint
cent of coal from Coal India. Despite the pressure, the cost of production was delivered by keeping costs under control on account of the higher volumes, operational efficiencies and other key operating parameters such as recovery,” adds Modi. “We have embarked on strategic hedging via zinc forwards for approximately 15 per cent of our volumes. As the situation with coal and LME is fast evolving, we continue to monitor the same. So, we are flexible on this account and play a balancing act and use this as a protection mechanism. We will continue to evaluate the situation for the benefit of stakeholders. In terms
ESG as a goal
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ZL is built on principles that are inherently sustainable. “We believe in driving long-term sustainable economic development and value creation for our stakeholders by protecting the health and safety of our people and community, minimising the environmental impact of our operations, respecting human rights, and sharing benefits with the community,” says Misra whose endeavour for environment-friendly production begin with HZL’s vision for Zero Harm, Zero Waste and Zero Discharge. To integrate the ESG vision into business decisions and long-term planning HZL has taken a holistic view in setting the eight Sustainability Goals 2025 which are aligned to the UN Sustainability Global Goals. HZL has a well-defined water management system in place which leads it to continuously identify opportunities for water
of coal security which is essentially availability of coal in total to run our operations smoothly, we have taken a proactive approach and secured supply from a mix of imported coal and linkage coal, which is domestic supply, and are overall at close to two months inventory. Coal is largely sourced from South Africa, Indonesia, and Australia. We have more than 1 million tonne backlog of linkage rakes from Coal India. Once it gets materialised it will not only help coal security but also cost,” explains Misra. “We remain positive on HZL given its presence at the lower end of the global cost curve facilitated by high
grade captive mines sufficient to meet requirements for decades, 100 per cent captive power plants, sizeable scale, diversified revenue stream with increasing contribution from silver sales and a strong balance sheet and high dividend pay-out,” says Ashutosh Somani, analyst at JM Financial, adding that, “consent to establish a 30 kt plant has been obtained by Hindustan Zinc Alloys, while revamping of Rajpura Dariba Mill for 1.1 mn tonne is underway – commissioning is expected by 3QFY23. The company ranked in the top 100 global companies by Global Sustainability Magazine and has received board approval to undertake a longterm captive renewable power development plan up to a capacity of 200 MW. Net cash as of 4Q stood at R17,000 crore – R40 per share and the company declared a dividend of R18 per share during FY22.” “HZL managed costs well, as COP of zinc ex-royalty declined 1 per cent q-o-q to $1,136/tonne despite increase in coal cost. Approximate 1 mt linkage (coal) volume is in backlog which will be received in the future, helping to reduce power cost,” points out Ashish Kejriwal of Centrum Broking. “The company operated pyro smelter in both Zn-Pb mode to take advantage of higher LME zinc prices. It expects to sustain above 1 mt of refined
HZL’s Sustainability Goals 2025 • 0.5MN tCO2e GHG emission savings in our operations from base year 2017 • 3x Increase in gainful utilisation of smelting process waste • 5x Water-positive company and achieve 25% reduction in freshwater consumption • Protect and enhance biodiversity throughout the life cycle • ZERO Work-related fatalities and 50% reduction in TRIFR • Positively impacting 1 million lives through social, economic and environmental outcomes • 30% Diversity in an Inclusive and diverse workplace • 100% Responsible sourcing in the supply chain access, reuse, efficient use and responsible wastewater management. The company has undertaken several water conservation and harvesting initiatives for reduction in freshwater intake. Establishment of 60 million litre per day (MLD) Udaipur STP, integrated effluent treatment plant, air cooled condensers, dry tailing plant and rainwater harvesting structures are some of the key initiatives towards managing water resources. Due to continued efforts the
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company is certified as a 2.41 times water positive company and there is continual reduction in specific water consumption. “All our operating units are maintaining zero liquid discharge across locations. Sourcing renewable power internally has enabled us to set up 40 MW of solar power in our wastelands which has enabled resource utilisation and helped us to avoid carbon emissions. Taking a step closer to achieving carbon neutrality, HZL signed
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metal production and ramp up the 30 kt zinc alloy plant,” suggests Amit Dixit of Edelweiss. According to Vikash Singh of Phillip Capital: “HZL has impressed us with cost management as COP was 1 per cent lower despite low linkage coal availability (3-4 per cent), aided by volumes and by-products realisations. HZL has hedged 15 per cent of FY23 zinc delivery at S$4,000 plus. They reduced gross debt by R4,350 crore during FY22. Net cash stands at R17,870 crore.” “HZL expects costs to remain on an uptrend q-o-q given the higher cost of imported coal. However, HZL expects to partially offset this increase from internal efficiencies and higher volumes in FY23. Management expects power costs to moderate on higher linkage coal supplies in the coming quarters and has foreseen the zinc cost of production to be in the range of $1,125-1,175/tonne for FY23E,” estimates Sumangal Nevatia of Kotak.
Empowering women: women miners get ready for work
A disinvestment story Clearly, HZL is a success story of a mining company from disinvestment till now. It has grown from about 0.20 million tonne per annum (mtpa) in 2002, at the time of disinvestment, to 1 million tonnes and is now moving ahead to produce 1.5 million tonnes of metal in the coming years. It produced just about
45 tonnes of silver at the time of disinvestment and now produces 570 tonnes of silver and is moving ahead to produce 1,500 tonnes of silver in the coming years. “We expect to achieve that goal in about two to three years. To accomplish this goal, HZL has taken up a two-pronged strategy: the first step is to optimise production from existing operations. To that end, we are already working with global consultants to
help expand Zawar and Rajpura-Dariba mines’ capacities to 8 and 4 mtpa respectively. Along with production capacity optimisation, the company is also focused on the greenfield strategy, ie acquire new mining leases,” says Misra. Technology and innovation are the key propellers of unprecedented growth at HZL. The increased use of cuttingedge technology and digitalisation, coupled with continuous adoption of best practices from across the globe has
an MoU with global manufacturers for ‘Zero Emission and Sustainable Mining’ by introducing Battery Electric Vehicles (BEV) in underground mining”, identifies Misra. This will help HZL explore the possibility of introducing battery operated vehicles in underground mines which will help reduce carbon emissions, enabling the mine operations to become more environment friendly. HZL has committed to invest $1 billion towards electrification of vehicle over the next five years. Recently, the board has also approved the proposal for entering a long-term group captive renewable power development plan for up to 200 MW of capacity which will lead its pathway to Net Zero. Owing to such efforts, HZL was ranked fifth globally in the mining and metal sector, in the Dow Jones Sustainability Index (DJSI) 2021. These rankings are an affirmation of HZL’s conscious efforts towards achieving all-encompassing sustainability
across its operations and practices. ‘However, HZL realises that this is only the beginning and vows to continue its ESG journey with more vigour and to set new benchmarks in sustainable operations.’ The rainwater harvesting structures at the company’s Rampura Agucha Mine (RAM) are another noteworthy water conservation effort initiated by Hindustan Zinc. These structures enable rainwater harvesting and help replenish water within local watersheds to help HZL further reduce freshwater consumption. Furthermore, the fumer plant will help eliminate Jarosite generation from one of the Hydro Zinc smelters and ensure that all the slag generated is used in cement industries. To ensure zero waste, the fly ash generated in power plants is sold to the cement industry. One result of the technological advancements in energy conservation is that the zinc smelter Debari has revamped
the cell house and eliminated current losses through electrolytic cells by successfully replacing 600-plus concrete cells with poly concrete cells. As a result, the power rating has improved. Additionally, the turbine revamping project is certified as a carbon reduction project by VERRA (the world’s most widely used voluntary GHG program) resulting in a decrease of 270,000 tCO2e per year. HZL has also built India’s first ‘dry tailing plant’ at its Zawar mines in Rajasthan. The dry tailing system enables recirculation of over 80 per cent of the process water in tailings, quicker rehabilitation, and restoration of the storage site after mine closure, and guaranteed water re-availability for future usage. All this is in line with Prime Minister Narendra Modi’s vision of making India a ‘Net Zero emissions’ country and HZL has set an ambitious target to achieve a 40 per cent reduction in its carbon footprint by 2030 and to achieve carbon neutrality by 2050. u
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The company is at the forefront of using cutting edge technologies
helped in delivering target run rates, while also staying at the lower end of the global cost curve. “We take pride in being a techfriendly organisation and achieve this by way of proactively exploring and implementing the relevant technology. This involves sending executives to visit benchmark operations, conferences to widen their exposure and bringing in experts in the domain to guide them from time to time,” adds Misra, pointing out that the company has partnerships with reputable international institutes and global technology companies complementing their efforts as they augment their future-readiness to harness the opportunities of tomorrow. Drone technology Currently, HZL uses drone technology, mostly for reconciliation and physical verification purposes. Another area where the company has plans to use drones is for capturing digital imagery required to meet statutory obligations. Based on requirements, drone technology is used in underground (UG) mines for the scanning of stopes, drives and ore passes. This gives HZL an insight in a short time, something not possible to get with manual intervention which would take much longer. The digitisation of mines is another element and remains a key goal for HZL, especially since the process offers the scope to achieve a 10 per cent reduction in the cost of production, as well
as enhanced productivity by 10 per cent and increased metal in concentrate (MIC) by enabling the company to take timely and data driven decisions. “This has enabled us to track underground assets, monitor the performance of heavy earth moving machinery (HEMM) for the UG mining fleet, enable tele-remote operations of drills and automated drilling during shift changeovers. It also enables online health monitoring of critical assets, the integration of various control system data to get online overall equipment effectiveness (OEE), process score cards, AI/ML based process predictions, advanced process control at mills to get 1 per cent additional metal recovery, centralised monitoring of ESG parameters, etc,” says Modi. So far, HZL has invested $12-15 million for highend digitalisation of its mines, setting a Wi-Fi network at two of its mines – Sindesar Khurd and Rampura Agucha – and roughly 70-80 per cent of the work has already been completed. “The collaboration centre has given us greater visibility and intelligence about operations and processes for making informed decisions. A team of data scientists keeps developing various analytical dashboards, reports and condition-based maintenance (CBM) modules to help the operations team improve performance by taking the right decision at the right time. I personally think there is a huge scope to identify hidden potentials by advanced analytics, and this year we are working on it,” observes u 26 u
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Misra talking about ‘Drishti’ that digitalises HZL’s mines to provide greater visibility and intelligence in order to make informed decisions. “With its objective to increase the operational equipment effectiveness by 20 per cent and ore-to-metal index by 2 per cent, Drishti will lead us to achieve global mine productivity benchmarks. So far, we have implemented this programme at Rampura Agucha and Sindesar Khurd mines. This year, we have added many modules to it which include integrations of different systems, advanced process controls, AI/ML based data analytics, use of Internet of Things (IoT) technologies, remote monitoring and control,” says Misra talking about investing in technology infrastructure, including high-bandwidth underground wireless network, IoT and advanced analytics to monitor, control and operate their mines in real time from a central control room. With their North Star project, a data mining, visualisation and analytics tool, HZL is looking at unlocking the potential of big data analytics using 10,000-plus hours of mining as well as smelting operational performance parameters. “This platform, developed in-house, offers an intuitive user interface as well as smart mobility features to put business information at the fingertips of those who need it. HZL’s business managers now have access to real-time insights to a variety of factors, such as production, procurement contracts, consumption, inventory, and spending and an array of historical analyses, benchmarking, HZL is one of the world’s largest and India’s only integrated producers of zinc-lead and silver
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and visualisation options,” discloses Misra. HZL is one of the first mining companies to use battery electric vehicles (BEV) in UG mining. The company has signed an MoU with Epiroc Rock Drills for battery electric vehicles, which shows HZL’s dedication to ensuring smart, safe and sustainable operations and its belief that the onus to push for sustainability-driven business solutions is on the company. Battery electric vehicles “As part of this belief, the company sought to introduce battery electric vehicles in underground mining via the MoU with Epiroc. This strengthens its commitment to environmentfriendly and responsible mining as well as efforts to reduce carbon emissions and achieve carbon neutrality as set out in the Sustainable Development Goal for Emission Reductions for 2025. The partnership will enable HZL to introduce a fleet of highly efficient battery-powered equipment in the place of diesel-powered equipment,” says Misra talking about HZL which has also signed an MoU with the Normet Group for SmartDrive vehicles that will help to significantly reduce carbon emissions and save a huge amount in HSD (HighSpeed Diesel) and its maintenance. “We believe that safety, sustainability, innovation, and technology are an integral part of business operations in the new age. This conviction doubles up as a robust foundation for the pursuit of sustainable industrial partnerships to help us improve individual
The company produced 770 KT Zinc in FY22
efficiencies and expertise. This transition will help in terms of HSD (roughly three lakh litres of HSD savings per vehicle) and vehicle maintenancerelated costs,” says Modi. HZL is revamping the RD mill to match beneficiation to production capacity and to improve metal recoveries which will be completed in the current financial year. The company is also working to commission a new beneficiation plant in an 18-month timeline at Zawar in line with the expansion plan to bring the location’s total beneficiation capacity to 8 mtpa. “The capex for expansion is estimated at $125-150 million and will be deployed at the alloy facility, for mill revamping and at the solar renewable energy power project,” sums up Misra. “For us, 1.35 million tonnes are the next stepping-stone for the onward journey to 1.5. And 1.5 would require a few more new mining blocks. We are fully prepared to acquire new mining blocks and developing them whenever the same are offered to us. Also, globally, we would like to have some acquisition or some merger somewhere to get 0.5 to 1 million-tonne additional capacity so that together in the world, we should be at least a 2.2 to 2.5-million-tonne kind of producing company globally. Based on various studies, the company is considering capacity expansion in two stages: in the first stage, capacity will be increased by 1.35 million tonnes of metal per year. In the second stage, we plan to further increase u 27 u
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it by 1.5 million tonnes of metal per year,” adds Misra. Lastly on the outlook for FY23, both mined metal and refined metal production at HZL in FY23 is expected to be higher than last year. Mined metal is expected to be between 1050-1075 kt; refined metal production in the range of 1000-1025 kt. Saleable silver production is projected to be between 700725 tonnes and the cost of production of zinc in FY23 is expected to be in between $1,125-1,175 per tonne. Industry experts say it’s likely that the price of zinc will continue to rise amid a supply crisis in Europe. The research agency expects a strong growth in zinc mine supply resulting from expansions and restarts in key producers, including Peru, Australia and Canada. This will eventually boost downstream refined zinc production later in the year. ‘Indeed, this has already started to play out with an increase in zinc treatment and refining charges in China, as a result of better ore availability,’ says an FSCRIR report. Meanwhile, in the long term, zinc prices are likely to head south as production is projected to outstrip consumption growth, which could be subdued. And HZL, because of its keen strategic approach of constant evolution in an ever-changing business environment, has a powerful advantage that drives its growth and expansion. u L AN C E L O T JO SE PH [email protected]
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Getting the COO-board chemistry Board members should balance the need for COO communication with the role of the CEO
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he role of a COO (Chief Operating Officer) may be clear for the CEO, but is it really understood by the board of directors? Well, they all think a COO has a different kind of role to play than the CEO but exactly what is that difference? Ideally, the COO should work closely with CEO and must be ready to wear the CEO’s shoe whenever warranted. But there have been many instances where these two roles don’t get aligned well, leading to disruptions in the strategic execution. Is the COO really a No: 2 in the enterprise? When is his or her role critical? Is it like that of the vice-president of the US? The board of directors must have a clear understanding of how the No: 2 executive plays an important role in the functioning of the enterprise they are serving. Unfortunately, there is no single job description available for the COO, if you compare the same across organisations. And COOs come from all functions including sales, marketing, production and finance. Whatever that may be, it is a crucial role in any corporate structure. A Chief Operating Officer can be the Mister Inside to the CEO’s Mister Outside. A COO can complement the chief with expertise in operations (hence the ‘O’ in the title), finance, technology, or a particular division of the company. Some say the COO role is declining as organisations flatten, but global turmoil since 2020 has made immediate operations expertise more vital. That brings us to the question of what about the COO’s relationship with the board. How do directors shape the proper balance between their role, that of the CEO and the operations chief? CEO taps the COO for board effective operations. A few COOs we spoke to remembered their stint as the chief operating officer helping the CEO with the board reporting. They wrote their board meeting agenda and used to ensure that the board prep package wasn’t a dissertation thesis or journal. In between the CEO’s top-level strategic goals for board meetings, and the company secretary’s administrative tasks, the COO can fill a crucial role in shaping the agenda to support top priorities, assure information is board-usable and informative, and acting as a conduit for board feedback. The COO is an important ‘make it happen’ player in the organisational talent planning and development (including the COO role itself). The board and chief executive should have a solid plan for succession and how to make it work – startingwith all-around agreement on where the COO’s path is aiming. Most COOs do not want to be a
Dr M. Muneer
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CEO, as per a research amongst top COOs in the US. For instance, Sheryl Sandberg, whose skill as COO at Meta/Facebook has made her more famous than most chief executives. A sound top succession plan lets the board know whether to aid in grooming the COO for the chief executive job, or to tap the role’s operational skills in other ways. The COO can also support talent development by acting as an intermediary in exposing hi-pots to the board. He or she can bring Vice Presidents into board meetings to do presentations and groom their skills and showcase the talent within the organisation. This really can help raise their game. That ‘O’ in the middle of the COO title has proven more crucial in recent years, as the global Covid trauma, and now war in central Europe, show just how easily functional issues can cripple businesses. The board should reach out to the COO on operational effectiveness. Lockdowns, supply chain disruptions, logistical nightmares, and most of all, talent shortages and churn have gone from being tactical headaches to life and
One of the core jobs of the COO is to make the CEO look good. They need to deliver the whole picture to the board while not throwing the CEO under the bus
M. Muneer is MD, CustomerLab and co-founder, Medici Institute, a non-profit organisation. Ralph Ward is a global authority on boards; both of them drive board alignment for corporations. Contact: Muneer@ mediciinstitute.org
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death matters that every board must monitor. The COO needs to be briefing directors on the nuts and bolts of production, people, suppliers and customers. Wrestling with these demands is in their daily portfolio, and smart CEOs let them take the boardroom lead on them. Finally, smart board members use discretion in balancing their growing need for COO communication with the role of their chief executive. We believe most board members would not go to the COO to work around the CEO. One of the core jobs of the COO is to make the CEO look good. They need to deliver the whole picture to the board while not throwing the CEO under the bus. Effective CEOs don’t begrudge their COO a board role, and respect their value as a governance aid. Effective boards tap this resource as a complement to the CEO role, and as someone who can help them to be better fiduciaries. u
Racing ahead Maharashtra has created conducive business landscape for investors IT Cluster Park, midc, Hinjawadi, Pune
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aharashtra continues to be a preferred destination for the investors, both domestic and overseas across all segments. Every business house wishes to have their presence in Mumbai, the financial capital of India. The state of Maharashtra is blessed with abundant resources in terms of land, power, water, natural gas, connectivity and skilled manpower which are backed by several geographical advantages, superior industrial infrastructure and effective governance; this makes it an ideal destination for investors from diverse business segments. Ten chapters of Magnetic Maharashtra initiative were held over the last two years. 122 MOU’s worth over Rs.2.7 lac crore were signed with companies from around the world. The state has been able to mobilise more than Rs.5 lakh crore investments in the last 2.5 years. This is likely to create lakhs of jobs for the state. Magnetic Maharashtra (MM) 2.0 is the state’s economic recovery plan unveiled by Hon’ble Chief Minister Uddhav Thackeray, to overcome the challenges posed by Covid-19 pandemic. Under the MM 2.0 program, the government implemented schemes
such as Maha Parwana – a digitally integrated portal for faster regulatory clearances; Maha Jobs- for providing skill linkages for industries; Country Desks & Relationship Managers – to handhold and provide facilitation to the investors; among others. Maharashtra has always stayed ahead of the changing business landscape. Industrial development and inflow of investment have gained momentum in Maharashtra. “Apart from industry friendly policies, our prime focus is to create a world-class future ready industrial infrastructure in the state. Today the state has 14 per cent contribution to India’s GDP, 20 per cent of country’s exports and attracts close to 30 per cent of the FDI flow,” says Dr. P. Anbalagan, CEO, MIDC, Maharashtra Industrial Development Corporation (MIDC). MIDC is the nodal investment promotion agency under the government of Maharashtra. The state government has been rapidly transforming the industrial scenario of Maharashtra with pro-business policy interventions to improve investment eco-system. The state’s ecosystem inspires innovation and entrepreneurship. Today Maharashtra houses over 20 unicorn start-ups
and the numbers are still growing. MIDC was set up in 1962 by an Act of the state legislature with a mandate to achieve balanced industrial development in Maharashtra. This special planning body operates through a vast network of local offices and has 289 industrial parks built over 2.25 lakh acres of land across the state. MIDC has been cultivating business relationships with nearly all major trade partners across the world. Its role ensures right infrastructure such as land, water, road, etc. It also acts as an important link between investors and the government. A single point contact for all investor relations. “Today, MIDC is developing smart industrial cities and plug-and-play infrastructure and has established online mechanisms that have drastically reduced the turnaround time for an industrialist to establish and run the business,” explains Dr. Anbalagan. Single Window Clearance System is a facility provided by MIDC to industries and entrepreneurs with a commitment to promote ‘Ease of Doing Business’ in Maharashtra by streamlining different processes and quick approvals required to establish and operate a business.
Dr. P. Anbalagan, Chief Executive Officer, MIDC sharing his views on why Maharashtra is the first choice for investors with its progressive policy
Maharashtra government presents an admirable report card, which is drawing the attention of the investors.
What are the key factors? Maharashtra is the 3rd largest state in India by size and 2nd largest by population. Since decades, Maharashtra state government has focused on - Rule of Law, Progressive Policies and Future Readiness of our Infrastructure, which has made the state one of the most industrious in India. Also the policy continuity and seamless co-ordination with the national government, is to ease any impediments that the investors may face. The state is committed to support the $100 billion Gatishakti program by Government of India, which focuses on taking India’s
logistical and manufacturing infrastructure to the next level. The Samrudhi Mahamarg is one such example. The entire manufacturing industry is going though what we call a supply chain revolution and the speed and ease with which we can integrate supply chain in the domestic and international markets will define our success. Sustainable development is the future. What are the efforts MIDC rolling out in respect to sustainable development? MIDC is moving towards using renewable energy for utilities such as streetlights, water treatment plant, water works, pumping stations and its offices. Installation of Solar PV systems
Auto Cluster, MIDC Chakan, Pune
It possess the largest industrial land bank in the country, MIDC autonomously has the largest supply network of industrial water. Moreover, MIDC is a special provisioning authority for electricity, which enables an investor to acquire power connections seamlessly. It’s also much faster to get environmental clearances through MIDC, thanks to its special cell that helps investors navigate regulatory challenges. The corporation is not only the country’s largest industrial development authority but one of South Asia’s most competent investment promotion authorities. Last five decades or so, MIDC has enabled the state to achieve an
undisputed leadership position with regards to investments and industries. “MIDC is constantly working to connect to prospective investors as well as global trade federations and communicate to them Maharashtra’s ecosystem for industries,” asserts Dr. Anbalagan. It also provides handholding to investors via dedicated relationship managers and country desks to ensure a seamless experience for those investing in Maharashtra. The focus sectors for the state includes aerospace and defence, automobiles, chemicals, electronics, food processing gems & jewellery, IT, Leather & footwear, oil &gas, pharmacuticals,
at 800 locations will help reduce 30% conventional electricity consumption. We are also developing our new industrial areas with CETPs and STPs. We already have an established e-waste system in Pune and will be extending these to other areas across the state. We have prepared a comprehensive plan for the Greening of MIDC. MIDC has always focused on being sustainable and having a conscious impact on our environment. Taking a step in this direction MIDC has planned on developing Miyawaki theme biodiversity in Butibori, Taloja and Talegaon. MIDC is also planning on steadily greening open spaces in all industrial parks across Maharashtra and we are ensuring that
textile and toys. To reinforce industrial capabilities across various sectors and regions, the state government has allotted 40,000 acres of land parcel across several regions for developing industrial clusters with sector specific focus. Some of the prominent clusters in the pipeline include Electronic Manufacturing Cluster 2.0 in Ranjangaon, Bulk Drug Park in Raigad, Medical Devices Park in Bidkin, Food Processing Cluster in Additional Dindori, Plastic Park in Malegaon, Aerospace & Defence Cluster in Nagpur. Maharashtra has deeprooted tradition for automotive sector, produces 20 per cent of India’s motor vehicle, 21 per cent of automotive car and accessories and 24 per cent of o ther transport equipment. Pune is the largest automobile hub in India with more than 4000 manufacturing and ancillary units in Pimpri-Chinchwad region alone. Also there are 3 major institutes-Automotive Research Institute of India, Pune, Auto Cluster Development and Research Institute, Pune and Horiba India Technical Centre, Pune. Some of the automobile majors are Mercedes Benz, Tata Motors, Audi, Skoda, Bajaj, Ashok Leyland, Mahindra, Jeep and Jaguar Growing concerns on eco friendly mobility, Maharashtra adopted sustainable and clean mobility solution and make the state leading investment & manufacturing destination for Electric
land for plantation purposes are granted on a fast-track basis. Additionally, AURIC (Aurangabad Industrial City) is amongst the first in India to develop underground power network systems for industrial use. In AURIC, 42% of water is recycled and reused. In addition to the physical infrastructure development, how is the state is gearing up towards strengthening the digital infrastructure? Maharashtra is a leader in data and technology industrialization, and is on a new growth curve of rapid industrialization, driven by technological prowess and innovative disruptions. People will be happy to know that over 30% of the total investments in the State come from the
IT sector, creating about 8 lakh new jobs and exports accounting to USD 100 Bn. In addition to Maharashtra’s traditional emphasis on emerging technologies like offshoots of Industry. 4.0, the state’s Industrial Policy identifies Internet of Things (IoT), IOT based Kiosks, Embedded Technologies, 3D Printing, Artificial Intelligence, Robotics, Nanotechnology Cloud Computing, Electric Vehicle, Electronics, FinTech, IT/ITeS, Innovative Start-up as focus sectors for investment. A new IT/ITeS and Emerging Technologies Policy is being formulated to boost technological growth. Creation of an enabling environment for data centers is expected to be an important part of
Vehicles ecosystem. The key objectives are to accelerate adoption of Battery Electric Vehicles, increase public charging stations, electrification of public transport and last-mile delivery vehicles, to establish at least one gigafactory for manufacturing of ACC (advanced chemistry cell) batteries. Some drivers of the policy are fiscal support for buyers, fiscal incentives for vehicle scrappage, support to development of charging infrastructure, linkages to PLI Scheme, Zero Emission Vehicle Credit Program, State Electric Vehicles Fund and more. Maharashtra has advantages of qualified manpower with state being home for reputed institutions. It is one of the leading states with 991 Engineering and
the upcoming policy. The state has signed MoUs worth INR 28,500 Crores with Data Centres in 2020-21. The policy is currently being drafted by the IT department, in consultation with NASSCOM and IT industry association, to attract IT and ITeS companies in cities like Nagpur, Latur, Nashik and Aurangabad. EV is the future, how is the state marching towards green mobility?. We are happy to share that Maharashtra has the highest number of EV registrations in the country. Having said that, we have been able to attract tremendous investment in the EV sector due to visionary policy implemented in the state, thanks to our Hon’ble
Minister of Environment, Shri Aadtiya Thackeray and his department. MIDC has geared up to provide the right support to this sustainable mobility push and made this an integral part of the Magnetic Maharashtra 2.0 programs. You will be surprised to know that our automobile ecosystem already manufactures more than 50% of the components required by any EV car assembly unit. We are providing priority land allotment to EV manufacturers, taking into account the importance of EV ecosystem in the future. There are many EV sector investments in the pipeline and we are surely looking forward to Maharashtra leading the sustainable mobility charge in India.
Textile Cluster, MIDC Amravati
Management colleges and 958 ITIs. The state has the highest employable talent in India at 68 per cent. The state has 27 IT parks and 9 SEZs. There are 2 major ports and 53 minor ports. 92.2 per cent villages are connected. The state is well linked with 6 neighbouring states. Chief Minister, Uddhav Thackeray and his team have taken a special cognizance of investment attraction and facilitation; they are making sure that the investments are grounded and generate quality employment in Maharashtra. Given the progressive outlook and investor friendly approach, Maharashtra today is the top destination for investors. Maharashtra Swagatahe.
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A knee-jerk reaction?
The government may have acted in haste to initiate certain measures
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ecently, at FIEO’s (Federation of Indian Export Organisations) headquarters in Delhi, the ministry of commerce unveiled a new initiative to promote exports, especially of medium and smaller businesses. In the presence of leading stakeholders of exporting fraternity, Anupriya Patel, Union minister of state for commerce & industry, launched the Indian Business Portal – a digital platform, which will act as an international trade hub for Indian exporters and foreign buyers. “The Indian Business Portal will be an encouragement to Indian start-ups, SMEs, artisans and farmers (GI products) and service providers to take their first step toward the exports,” the minister said on the occasion. “I hope more exporters will engage on the Indian Business Portal”. Fresh from the good performance of last fiscal, wherein Indian exports crossed $400 billion benchmark for the
first time ($417 billion of merchandise only), such initiatives prima facie are meant to bolster the fortunes of Indian ex-im trade in the years ahead. But, ironically, the Indian exporting fraternity is today more concerned about the near-run possibilities, considering government’s recent announcements of ban or restrictions in exports of specific commodities. The obvious intention is to contain inflation, which seems to have taken a run-away course since the beginning of the year. In general terms, it is a serious challenge that has emerged after the fiscal adjustments made across the world after Corona challenge and further aggravated by the Russian invasion of Ukraine since the beginning of the year. The war, which is in a prolonging mode, has affected the supply lines of essential items like edible oil and wheat and it has begun pinching the global economy. Adjustments in ex-im trade equations u 32 u
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(restrictions or duty cuts or increase on imports) is increasingly becoming the norm all across the globe. But, in the case of India, a critical point being asked is: has the country resorted to too convenient an option when it should rather have taken a contrarian route to cement its position of a global supplier? In the post-Corona phase, there have been clear indications that a China plus one strategy for sourcing of products has come into the play and India had begun reaping some advantage out of it. The sudden spurt last year in exports value is a point in the case even as nobody can deny the incremental support from surge in commodities price. The Indian decision to impose restrictions, meanwhile, is also believed to be detrimental to its own producers including farmers and will have wider economic implications affecting other businesses both in terms of their linkage to the world and domestic market performance. “The ban on agricultural commodities is too disappointing a move. It’s simply anti-farmer,” says Anil Ghanwat, who was in the three-member
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Swift moves It has been a short spell of swift moves by the government in the little over one month. With retail inflation rate surging to eight-year high level of 7.79 per cent in April (wholesale inflation has been in double-digit for more than a year now), the government has set afoot a series of measures starting with ban on wheat exports. On 13 May, the government announced a ban on wheat exports, effective immediately, citing a sudden surge in global wheat prices and the resulting food security risks to India. India’s wheat exports stood at an alltime high of 7 million tonnes, amounting to $2.05 billion in 2021-22 on better demand from overseas. The world’s second-biggest wheat producer is likely to harvest 106.41 million tonnes in 2022, nearly 4.4 per cent lower than the previous estimate, the agriculture ministry had announced, which is believed to have become the trigger for the ban. Days after putting a ban on wheat exports, the government announced curbs on export of sugar which has been placed under ‘restricted’ category with effect from 1 June 2022. The second largest exporter of sugar in the world will now be sending sugar shipments worth 10 million tonnes till the end of the season on 31 October this year. The government notification announcing export curb maintained sugar mills and traders who have specific permissions from the government will only be able
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committee appointed by the Supreme Court to judge agri reforms measures earlier and is a strong votary of open market rules for agriculture.
Goyal: export ban is in public interest
to export sugar (including raw, refined and white sugar) till 31 October. The restriction, however, is not applicable for exports to the European Union (EU) and the US under CXL and TRQ (TariffRate Quota). On the metal side, the government’s fire-fighting strategy to cool inflation has seen the inclusion of steel, with decks cleared for export restriction visà-vis duty adjustments. On 22 May, India announced an increase in duty on exports of iron ore, up to 50 per cent from 30 per cent, and imposed an export duty of up to 15 percent on some steel intermediaries. Steel prices in last two years have touched the roof globally rising to almost double since their March 2020 level. Furthermore, the government has
also made excise duty cuts on petrol, diesel, and coking coal in the recent past. Another critical decision pertains to edible oil wherein duty-free import of 2 million tonnes each of crude soyabean oil and crude sunflower oil per year for two financial years (2022-23 and 202324) has been allowed. The change in tariff rate quota became effective on 25 May and they will remain valid till 31 March 2024. In terms of inflation management, the other oil is an equally major pain point for India, as 60 per cent of its demand is met through imports. Like several other commodities, the price of edible oil has significantly surged internationally and domestically over the last one year. Russia’s invasion of Ukraine has further aggravated the price trends as it has choked the supply of sunflower oil from the region. The recent ban (now revoked) by Indonesia to curb palm oil exports had also created unprecedented nervousness in the market. Good news for consumers With the prime objective of cooling down the mounting inflation, some of the steps taken in the recent past are expected to show results in the immediate term. For instance, going by an estimate of a research agency, the reduction in fuel taxes could help reduce inflation directly by around 20 basis points in the coming months. Similarly, the announcement of new measures on edible oils and Indonesian decision to lift ban on palm oil export has already led to downward revision in oil prices in the domestic market. In the past week, the price of mustard oil in the domestic market has declined by
TRADE DURING APRIL-MARCH 2021-22* April-March 2021-22 ($ Billion)
Merchandise
Services*
Overall trade (Merchandise+Services)*
April-March 2020-21 ($ Billion)
April-March 2019-20 ($ Billion)
Growth vis-àvis April-March 2020-21 (%)
Growth vis-àvis April-March 2019-20 (%)
Exports
419.65
291.81
313.36
43.81
33.92
Imports
611.89
394.44
474.71
55.13
28.90
Trade Balance
-192.24
-102.63
-161.35
-87.32
-19.15
Exports
250.00
206.09
213.19
21.31
17.27
Imports
144.79
117.52
128.27
23.20
12.88
Net of Services
105.21
88.57
84.92
18.80
23.89
Exports
669.65
497.90
526.55
34.50
27.18
Imports
756.68
511.96
602.98
47.80
25.49
-87.03
-14.06
-76.43
-518.87
-13.87
Trade Balance
* Note: The latest data for services sector released by RBI is for February 2022. The data for March 2022 is an estimation, which will be revised based on RBI’s subsequent release. (ii) Data for 2019, 2020 and April to December 2021 are revised on pro-rata basis using quarterly balance of payments data.
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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
Khushwaha: some relief, at last
Gulati: restrictions are shocking
Mallick: seeing a correction in edible oil prices
R40 per container (15 kg) and similar trends have been visible across several other categories of edible oil. Groundnut (solvent refined) has slipped by R25 per tin (in the R2,600-(es)2,800 per tin trajectory last week). In a recent interaction with a national daily, Angshu Mallick, CEO, Adani Wilmar, projected a 10-15 per cent fall in edible oil prices coming into the effect before this quarter end. “By the end of the June quarter, we should see a correction in edible oil prices,” said Mallick during the interaction. “Prices should surely correct by 10-15 per cent. We have seen the peak, and by June, we will see the market getting corrected”. However, as per signals from the industry circles, Indonesia’s lift on exports ban has not fully come into the effect and it continues to remain a cause of concern. On 26 May, the apex body of edible oil industry, The Solvent Extractors’ Association of India, shot off a note to the Indonesian government urging it to clear the supply line urgently. “Indonesia is heading to a calamitous situation, as palm exports are still not fully operational, despite President Jokowi announcing that they will be released as of 23 May. We estimate stocks have already reached historical highs, surpassing 7 million mt. If unrestricted exports do not start before the end of May, we foresee a situation where all storage tanks will be full and the industry will grind to a halt,” the SEAI note said. It further pointed out that the export ban has also forced countries to look at their reliance on Indonesian palm and find ways of making soft oils available
at a cheaper price. “India has removed the cess on soft oils for domestic refiners such that palm oil is now more expensive than soybean oil in both China and India thereby hurting demand for palm oil,” the association note further added. “The extent of pricing relief to consumers on edible oil will become clear in a few weeks,” says Ghanshyam Khandelwal, chairman, BL Agro, a leading domestic mustard oil player. The criticality of steel in manufacturing and construction is no secret to anyone and, therefore, the recently announced export curbs is expected to gradually reduce the prices of many items across the value chain. “Soaring prices of construction raw materials have been a pain point for the industry,” says Aditya Kushawaha, CEO & director, Axis Ecorp, an emerging name in the premium realty segment. “Recently, the government has announced measures like levying export duty on steel and reducing import duty on raw materials used in steel manufacturing, which has brought some relief. These measures are likely to soften the steel prices by 15-20 per cent”. Kushawaha, however, also emphasises that the government should ensure that there would be no hoarding of raw materials and regular supply line should be maintained in the market. Incidentally, just before the export curbs on steel was announced, CRISIL in a report had projected modest decline in domestic steel prices during the course of this fiscal. “The onset of the weak demand season because of monsoon and less lucrative exports mean domestic steel prices should begin easing and ultimately
move towards R60,000 per tonne by the end of this fiscal,” comments Koustav Mazumdar, associate director, CRISIL Research. In April, domestic steel prices had touched an all-time high level of over R76,000, which is 95 per cent over the March levels.
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Other side of the story India is not alone in setting afoot a slew of anti-inflationary measures. However, the representatives of the sectors affected by the recent restrictive moves are obviously calling the curbs and adjustments as unwarranted growth impediments. “The government is encouraging the steel industry to expand capacities and declared a PLI scheme,” rues V.R. Sharma, MD, Jindal Steel & Power, while urging the government to withdraw the decision at the earliest. “But the recent move discourages exports. There must be 2 million tonnes of steel orders in the pipeline where either LCs are established or the sales contracts are signed. Most of the decisions are creating confusion”. In the last fiscal, Indian producers are estimated to have exported various categories of steel products worth $17 billion. According to an analysis paper released by Credit rating agency ICRA, steel exports curb will have a bearing on 95 percent of India’s finished steel basket. “With domestic mills opportunistically tapping export markets, finished steel exports have so far accounted for 10-11 per cent of India’s finished steel production in the last two fiscals. However, the imposition of the 15 per cent export duty would make exports less attractive going forward, which in turn could exert pressure on domestic steel
Special Report
B u s i n e s s I n d i a 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
Khandelwal: clear picture in a few weeks
Sharma: recent move discourages exports
Nayar: India has gained market share
prices and industry capacity utilisation levels,” the report underlines. Stakeholders from the agriculture sector seem to be more peeved calling the restriction on commodities like wheat and sugar as anti-farmers. The significant jump in the agri-exports crossing $50 billion mark for the first time last fiscal was seen as the major sign of India’s growing strength in the global agri market. However, the move now has left many disheartened. “It only shows that nothing has changed in the government’s attitude,” says Ghanwat. “It has again failed to provide farmers benefit of linkage with trends in the international market. Last year, the US and Japan had complained against India for its frequent bans on onion exports”. Pushpendra Singh, a farmer leader, who had opposed farm bills tooth and nail remarks no differently. “You are not allowing wheat and sugar farmers to derive benefit of opportunities in the international market,” argues Singh. “Will you care to compensate them in some way? Say by increasing MSP or handing over some bonus. This sugar export ban will give the mill owners an opportunity to delay the payment of sugarcane farmers,” he contends. Noted agri economist Ashok Gulati has called the restrictions shocking and a complete knee-jerk reaction. “Only a month back, Prime Minister Narendra Modi had told President Joe Biden in his inaugural address at the 2+2 ministerial meeting on 11 April that, if the WTO allows India to export grains, it will start exporting from the next day to feed the world! This step hits adversely not only the credibility of the Prime Minister
but also of India as a reliable supplier in global markets. It conveys that India does not have any credible export policy as it can change its stance at the drop of a hat,” he wrote in a recent article published in a national daily.
imports of commodities for the benefit of their citizens and consumers ignoring the interest of producers and other stakeholders. At a time when the country’s chip has gone up in the recent past in the ex-im trade, they should have shown some more guts,” says a senior representative of exports fraternity. But then are also those who strongly believe that the time had come to strike a balance. “India has gained market share in merchandise and services exports over the last two years,” explains Aditi Nayar, Chief Economist, ICRA. “In the current challenging scenario, potential gains in trade need to be counterbalanced with inflationary concerns. This balance needs to be cautiously tread going ahead”. Ajay Sahai, CEO & Director General, FIEO, also counters the point that India’s image as an emerging international trade partner would take a beating because of recent moves. “It is true that India has fared well when the countries across the world are now favourably looking at India as part of their China plus one strategy,” says Sahai. “But for them, India is attractive for value added products. Recent restrictions will not make much of difference and we expect Indian exports reaching in the vicinity of $470-480 billion at the end of the fiscal”. Sahai may have emphasised a valid point here, as last year’s top exports from India include engineering goods, petroleum products, gems and jewellery, chemicals and ready-made garments. u
IMF’s plea Incidentally, at the recently held Davos Summit, India’s new export stance surfaced prominently, when International Monetary Fund (IMF) chief Kristalina Georgieva urged India to reconsider its ban on wheat exports. “I do have an appreciation for the fact that India needs to feed nearly 1.35 billion people and I do have appreciation for the heatwave that has reduced agricultural productivity, but I would beg India to reconsider as soon as possible because the more countries step into export restrictions, the more others would be tempted to do so and we would end up as a global community less equipped to deal with the crisis,” she said in a conversation to a news channel. Indian commerce minister Piyush Goyal, however, maintained that India’s stance is not unique. “Today, 22 countries of Europe have regulations on exports to protect their food security,” said Goyal. “Different countries in different points in time had to take extraordinary measures in public interest”. His officials, however, clarified that the country is open to consider the demand of countries which are in distress. “Buffeted by inflationary pressures, the government may have acted in a haste to quickly initiate such measures. While, like other countries, they are well entitled to control the exports and u 35 u
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ritwik si n h a [email protected]
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
Storm that wasn’t But will SC ruling trigger GST reforms? And will the Centre foster genuine federalism?
A
t a time when inflation is rising and the markets are in turmoil, the last thing the Modi government would want is for some states to legislate their own tax laws that run counter to the Goods & Services Tax (GST) and lead to its erosion. There has been a remarkable upswing in GST collections in recent months, with the total amount touching a record high of R1.67 lakh crore in April. In terms of revenue generation, GST is now a success story. That is why the government has lost no time in playing down the excitement and anxiety that followed the ruling of the Supreme Court in the case of the Union of India vs Mohit Minerals Pvt Ltd, delivered last fortnight. The top court ruled that that GST on ocean freight paid in case of import of goods is unconstitutional. The upshot of the ruling is that Indian importers who had paid such tax will be eligible for refunds. Further, those importers who had not paid the tax on import of services will now not be required to pay tax. Thus, the ruling in the case of
decisions went against their interests. This is because of the widely accepted view that benefits of a common national market for goods and services and profiting from the systemic efficiencies that this confers will be lost, if check-posts re-emerge at state borders. Investors, for instance, would migrate out of such states due to complexities in doing business. However, some legal experts were quick to jump the gun, saying it could also change the way the GST framework operates in the counBajaj: The SC try. This is because the Court ruling will not also said that recommendamaterially impact tions by the GST Council the one-nation are not binding on either the one-tax regime Union or the state and it has only persuasive value. “This judgment may change the landscape of those provisions under GST, which are subject to judicial review,” observed Abhishek A. Rastogi, Partner, Khaitan & Co, who argued for the petitioners before Gujarat High Court, Supreme Court and ocean freight is set to give relief to sev- several other courts. “As the court has gone ahead to categorically hold that eral Indian companies and importers. While sitting in judgment on the the GST Council recommendations limited question of whether GST can have only persuasive value, there will be levied on ocean freight paid by a be pragmatic approach to the proviforeign seller to a foreign shipping line sions, which are subject to judicial on reverse charge basis, the SC bench review by way of challenge to the condwelt at length on the constitutional stitutionality of such provisions based framework of GST law and concepts on GST Council recommendations”. such as co-operative federalism, un-cooperative federalism and fiscal federal- Preemptive move ism and came to the conclusion that Before such a view could gain ground, recommendations of the GST Coun- the government moved in to pre-empt cil are not binding on the Centre or the development. ‘The SC ruling will the states. It is not evident if the schol- not materially impact the one-nationarly exposition by the bench compris- one-tax regime, as it is only a reiteraing Justices D.Y. Chandrachud, Surya tion of the existing law that gives states Kant and Vikram Nath was warranted, the right to accept or reject the panwhile deciding the limited question el’s recommendation on taxation -- a pertaining to the case. But the fact is power that none has exercised in the that the Court has only spelt out what last five years,” remarks Tarun Bajaj, is clearly evident from reading Articles Union revenue secretary. The Consti246A and 279A of the Constitution: tutional amendment that brought the Parliament and state legislatures have GST regime in July 2017 by subsuming simultaneous powers to legislate under nearly one-and-a-half-dozen Central the GST. So far, individual states have and state levies, provided for a Counalways complied with decisions made cil of Centre and states for decisionin the GST Council even when such making. The recommendations of the u 36 u
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Focus
B u s i n e s s I n d i a 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
GST Council, as per the Constitutional amendment, were always guidance and never mandatory compliance. The Centre believes that, while it may be tempting for some states to break out and legislate on their own, in the long run, such an act will only work against their own interests, besides causing avoidable chaos for tax-payers. Bajaj points out that states, though differing on tax rates on a particular good or service in the Council, never went back and framed legislation that was not in line with the panel’s recommendations. And this practice is likely to continue unhindered. The view is endorsed by other experts, including Haseeb Drabu, former finance minister of Jammu & Kashmir. The notion that the SC ruling alters the nature of fiscal federalism is misplaced, he points out. That said, though only five years have lapsed since its introduction, it may be time already for reform of the GST. A number of outstanding issues need to be resolved in the spirit of statesmanship at the GST Council. For instance, the GST rate rationalisation exercise, which has been put on hold because of inflationary pressure and geopolitical tensions, has to be finalised. Fewer slabs would mean that GST on some items could go up, which could make goods expensive at a time when consumer inflation has touched an eight-year high of 7.79 per cent. The GST Council is likely to meet in June. It’s expected to take up the report of a group, headed by Conrad Sangma, CM, Meghalaya, which is reported to favour the highest 28 per cent rate on online gaming, racing and casinos. The Council is also expected to discuss integrated GST on ocean freight, now struck down by the Supreme Court. The Council had set up another group last year headed by Basavaraj Bommai, CM, Karnataka, to suggest changes to the GST rate structure. It was tasked with suggesting rate changes to correct inverted duty structures and also to reduce the number of GST slabs from the existing 5 per cent, 12 per cent, 18 per cent and 28 per cent to just three. But there are larger issues at stake, which can be dealt with immediately. Drabu feels that dispute resolution tribunals should be set up by the Council.
The SC verdict on the powers of the GST Council is a landmark. It correctly interprets the 101st Constitutional amendment, which ushered in the era of a nationwide GST, as not explicitly prohibiting states from legislating on those very taxes. Specifically, the amended clause (a) of Article 279 does not override other Constitutional provisions, such as article 246, that empower states to legislate taxes. Ajit Ranade
Perhaps, if such a mechanism has existed, the present controversy would not have arisen in the first place. Persuasive powers Then there is the issue of genuine federalism thrown up by the ruling. Ajit Ranade, economist, feels that the apex court has rightly observed that the GST Council has persuasive powers, not coercive ones. The verdict is a reminder, if any was needed, that co-operative federalism calls for more and frequent dialogue at the highest level of the Inter-State Council, and not merely at the GST Council level. The Council is still an inadequate mechanism to balance sensitivities over the taxation rights of the Centre and states. But there are also various other issues involving federalism that can turn into fault lines. For instance, the exercise of constituency delimitation and a proposed increase in parliamentary seats in the light of India’s changing demographic profile both call for urgent attention. Another issue is the need to put a legislative cap on the Union government’s tendency to resort to using cess revenues that are kept outsidethe divisible pool of taxes. A third issue could be of the expanding use of Central agencies in police matters, often leading to jurisdictional overlaps, and worse, contradictions. Finally, a fourth smaller but equally u 37 u
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urgent issue is whether the Centre will extend the compensation formula for states to fill gaps in GST revenues, Ranade points out. The states were assured a generous formula, guaranteeing 14 per cent revenue growth so as to get them all to sign up for the new tax regime, but that assurance runs out in June 2022. “What next, especially with signs of a slowing economy? Of course, the original formula was too generous to begin with and states bore little risk. The revised formula should phase out compensation from 100 to zero in, say, three or four years. Co-operative federalism, thus, is still a work-in-progress. Dialogue and trust building are imperative,” Ranade adds. The emerging view is that, while the states should have the right to dissent in the Council and their voice should not be drowned in the pursuit of unanimity in decision-making, the Centre can set an example by accommodating the demands of the states in the Council, even if it means some sacrifice on its part. After all, the onus is on it to run the Council harmoniously. Also, if the GST has made the tax-payer’s life better, then the responsibility is on the Centre and the states to make it work. The Council should transcend political rivalries of the day. u R a k e sh Joshi [email protected]
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
Holistic growth L&T Technology Services has rolled out a plan to take it to the big league
P
eople at L&T Technology Services (LTTS) have been thrilled by a significant recognition, which was announced recently. The Airbus group, the European multinational aerospace conglomerate, selected LTTS as a global preferred engineering supplier under its strategic supplier program. LTTS also won a major multi-year contract with Airbus to provide best-in-class technology and engineering capabilities to the Airbus group.
and digital expertise. Large deal momentum has become a regular feature at LTTS. The Airbus win came due to the fact that LTTS is one of the best engineering and research development firms in the Indian subcontinent. These days the company receives such accolades because LTTS has developed strong domain knowledge in engineering research and development (ER&D). For the pure play engineering services company from India, LTTS’s holistic growth has only just begun, as the company’s scrip on the bourse has been galloping. In terms of market cap, it has risen by six times or a growth of 496 per cent from R8,800 crore (2016) to R52,600 crore currently. “Indian engineering R&D services firms are seeing the strongest demand environment ever led by the pivot towards digital engineering. We see three main growth drivers emerging: a shift towards digital, driving introduction of newer products and platforms leading to multi-year deal wins; an increasing number of companies moving up the maturity curve on offshoring thereby increasing the total addressable market, and talent scarcity globally of niche digital skills driving increased offshoring to India,” states JP Morgan in its equity report expecting India’s share in offshoring to increase to Chadha: setting a 34 per cent by FY31E from 26 high standard and per cent (FY21) and the share growth bar of service providers within that to rise to 50 per cent from 45 per cent (FY21). JP Morgan expects the combination of these The company scaled up operations to benefit LTTS, which should drive across Airbus’ key geographic loca- strong revenue and earnings growth tions including France and Germany, over the next three years. by way of setting up a centre of excelSays Aditi Patil, research associate lence. Not only that, LTTS is also sup- at Prabhudas Lilladher. “FY23 dollar porting Airbus’ global customer airline revenue growth guidance of 13.5-15.5 base through its Skywise platform. per cent Y-o-Y appears to be conserDeals such as this are collectively vative given the pickup in large deal being served by LTTS’ strong talent wins especially in EACV segment in pool of over 20,800 employees spread FY22 and an all-time large deal pipeacross 17 global design centres, 28 line. However, given the possibility global sales offices and 89 innovation of moderation in ER&D spends due to labs levering both its conventional macro uncertainties, guidance may u 38 u
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B u s i n e s s I n d i a 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
not be upgraded by the same level as was done in FY22 (upgraded from 13-15 per cent to 19-20 per cent). Management targets to maintain an 18 per cent-plus EBIT margin factoring in headwinds from intermittent wage hikes, travel costs, high administration expenses are partially offset by tailwinds of growth leverage, better quality of revenues, pyramid optimisation and operational efficiencies.” High gear Actually, the LTTS shift into higher gear was kick-started a year ago when Amit Chadha took the helm as MD and CEO. Right from the outset, Chadha changed the work culture and atmosphere from within to bring about more inclusive and sustainable growth by initiating five-year plans. While setting a high standard and growth bar, Chadha is upbeat about the future of LTTS. “We are the largest pureplay engineering services firm from India, and I do believe that we have it in us to make it to the top five global engineering and research & development technology companies. While today we are in the top 10 firms, we have set a plan to get to the global top five firms,” says Chadha. Chadha has not only outlined the internal strategy and focus areas for the company, but has also laid much emphasis and study on future verticals where LTTS can grow into a dominant position and command a formidable space. Besides, engineering and research & development are fields with enormous growth prospects. The innovations in ER&D can be
Sinha: TECHgium is a huge hit
enormous. In home automation technology, most houses will be fully connected by 2030 with 75 per cent using remotely monitored devices and voiceactivated appliances. Houses will evolve as energy efficient, secure, sustainable homes. Second, in transportation and telecoms there have been rapid changes too. More than 71 per cent expect to use electric vehicles, while the shifts from 4G to 5G to 6G will accelerate. About 51 per cent of people feel they will travel by hyperloops. In medical technologies, by 2030 again, 83 per cent believe in personalised preventive plans, while 80 per cent will use diagnostic at-home applications.
Not only that, with factories automating rapidly, more than 20 million robots will be working in factories by 2030. In shops, some of the changes on the anvil could see the adoption of 81 per cent of digital technologies such as virtual and other realities. LTTS is proving itself to be one of the shining stars in this field. With a strong engineering DNA stemming from the L&T group, LTTS was conceived as an extension of Larsen and Toubro in the field of engineering back in 2009. Some of the innovations the firm has built is an autonomous welding robot solar connectivity drone and the smartest campus in Israel. The firm has filed 868 patents and works closely with 57 of the global Top 100 ER&D spenders and engineering conglomerates such as Airbus above. LTTS, in fact, is a specialist in disruptive technology such as 5G, artificial intelligence, collaborative robots, digital factory and autonomous robots. With more than 70 labs across the world, very few companies can match the scale of innovation possible from LTTS. Strategic shift LTTS is now building on its strong foundations, with Chadha introducing a new six-dimension approach to take the company forward. One of the first points of the glide path ahead recognises the need for industry-leading growth. Second, the firm will focus on customer-centricity, keeping in mind the next-generation technological needs of clients. Another glide path will be employee and people engagement. The fourth
HIGH ON GROWTH
LTTS has been consistently performing over the past few years in growth and profitability EBIT margin (%)
Revenue (R crore)
ROE (%)
Net profit (R crore)
6,570 5,619 5,078
16
16.5
767
14.5
5,450
31
30
819
25
663
13.1
21 512
3,747
FY18
35
957
18.3
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
FY18
FY19
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FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
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
With more than 70 labs across the world, very few companies can match LTTS’ scale of innovation
aspect that LTTS has introduced in its roadmap is the technology quotient factor that will look at enabling technologies. Besides, another strategy that LTTS has adopted is looking at a sustainable operating model, while the sixth dimension will focus on environmental and sustainable governance. “Our mission is to be the engineering partner of choice by enabling innovation with world class technology, processes and people, delivering inclusive growth for all stakeholders. We have defined our values. And our values being purposeful ethics and integrity, caring or culture of learning and results with accountability. This becomes a common language for the company as we move forward,” says Chadha. That is not all. On the technology side, LTTS has also identified six strategic bets and high growth verticals for investment and growth: EACV (Electric, Connected, Autonomous Vehicles); MedTech, 5G and telecom, AI & Digital Products, Digital Manufacturing and Sustainability. All these verticals have a high-growth outlook. “While these sectors contributed less than 35 per cent of our revenues, we believe in the next five years, these sectors will contribute to more than 75 per cent of our revenues,” says Chadha. No doubt, with all the focus on growth and new verticals, LTTS is also aiming at a higher annual revenue run-rate. Its management said that it aims to reach a $1 billion annual runrate by Q2/Q3 FY23, which means that it should be able to show good growth
rates in the next few quarters. But, given that demand for ER&D services globally is rising phenomenally, LTTS is confident of sustaining the strong growth rate beyond FY23 too. In fact, it aims to reach an annual $1.5 billion run-rate by FY25, which is a phenomenal growth run-rate. That means that LTTS will add about $600 million in revenues over the next three years, from the present $900 million. In the coming years, it will focus on margin improvement as well. Given the improvement in scale and higher-margin deals, its EBIT (earnings before interest and tax) margins have expanded, from about 11 per cent a few years ago to around 18 per cent currently. LTTS aims to hold to this margin in the coming years. “We are on course on the profitability path with a focus on margins. You have seen our margins improved and now we are at an 18 per cent-plus margin rate. We will continue to work on that,” says Chadha. Lab push The firm spends a lot of money on technology, training, and in building platforms to stay ahead of the curve. One of the core operating requirements for ER&D companies is the extensive use of laboratories to conduct various types of research. LTTS has constantly built and upgraded new labs. The firm has 89 innovation labs across the world in India, Europe and US. Some of the investments LTTS has made include an electric vehicle lab u 40 u
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and that’s paying off well; it has been expanded to test more products. LTTS has also developed a new lab on harness and electric in the US, and these investments are working well for the firm. The firm has also created an EV charging infrastructure in Baroda that actually charges the golf carts in the campus. On the 5G front, LTTS has established three labs in Bengaluru, Mysuru and Dallas, US. LTTS is also looking to set up another 5G lab in Munich. The company is also thinking of manufacturing digital products. On that front, the firm has invested heavily and is tying up with companies like Bentley, and Microsoft to establish augmented reality/virtual reality solutions that can help on the shop floor and improve reliability, predictability, and productivity. It has also recently set up its Metaverse practice in Chennai, bringing together its expertise in 5G, digital products & AI, and digital manufacturing. In MedTech, LTTS will launch its own AI platform for chest X rays called chest rAi and that essentially helps one to define the number of diseases and identify them. Second, LTTS is also working with IIT Madras on sepsis detection. Besides, the firm is working on a ventilator design and also an ambulatory ventilator. LTTS is also involved in multiple areas of research for future use and to get a grip on underlying technologies in emerging fields. “We are investing nearly 2.5-3 per cent in technology, training and tech platforms. Often, we invest in new products and user cases to understand the space and the technology required. The EV lab we set up in Baroda is a step in that direction. It builds our domain knowledge,” says Chadha. Deal winner LTTS is also focusing on large deals.
Lately, it secured several, including a $100 million deal from Jaunt Air Mobility, for a new-age vertical takeoff-and-landing program. In fact, the latest quarter has seen strong deal bookings continue, with the company bagging nine $10 million deals, and one of $25 million. This is one focus area for LTTS, given that deals in new verticals
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would reinforce management emphasis on future goals, and are an important aspect of growth ahead. “We are creating a rhythm out of the number of deals that we are closing,” says Chadha. Due to its focus on winning deals, analysts continue to see LTTS as a beneficiary of the growing penetration of ER&D services, seeing it a top Tier II technology play within the IT fold. People focus Another big area for LTTS has been people management and inclusive growth employees. The company is ensuring that it provides opportunities for people to grow internally and, in the last few months, it has been running various mentoring and management programs which also train people to take up leadership roles in the organisation. One such program is CEO Club, a unique industry-level leadership development initiative it has undertaken. Employees can apply to be a part of the process where they undergo a five-stage selection process. LTTS partners with external jury members to shortlist a handful of candidates who undergo a one-year intensive training program along with the CEO. Over the years, there have been many successful transitions of winners of the CEO Club to leadership roles. One of the CEO winners has taken up a leadership role in cybersecurity practice; another is heading the transportation vertical on the West Coast. “The objective is to create a new class of high potential leaders across LTTS to drive transformational and sustainable growth. The platform also provides these budding leaders a fast-track career progression path by placing them at the helm of the strategic initiatives and mobilising leaders within the organisation,” says Chadha. The winners of the last edition of CEO Club included LTTSites from the transportation, plant engineering, medical and digital products & services segments. To boost talent in the country, LTTS is also running a ‘TECHgium’ program, one of India’s largest open innovation initiatives held in partnership with academic institutions. This initiative collaborates with academic and research institutions to
Electric Vehicle Lab: paying off well
develop innovative solutions to customer challenges. Not only are successful students rewarded with job offers, but the developed solutions to problems are also being offered to customers. LTTS invites students to register and helps them incubate their projects, and secure recognition as TECHgium innovators. “Students consider this an open innovation platform to address industry challenges to work with our solutions-development team to develop and present technical papers,” says the chief operating officer, Abhishek Sinha. Since inception in 2017, TECHgium has seen an exponential increase in student participation from reputed institutes across the country. To encourage innovation and transformation within, LTTS has focused on developing the technology quotient of the organisation by introducing a Global Engineering Academy (GEA) in April 2020. The purpose of GEA is to impart technology training with the support of the in-house technologists and the CTO Team. The program provides employees with a platform to reskill and reorient themselves to keep up with rapid technology changes and advances in their careers. GEA directly works with business groups and stake-holders to design, develop and deliver technology-competent development initiatives to meet one of its biggest business challenges on reskilling and cross-skilling of resources. u 41 u
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In FY21, GEA provided technical training for over 5.35 lakh man hours. The New Avatar LTTS continues to innovate on the busi-
ness front as well and build an emotional connect with its people and customers. After months of discussions, group sessions and leadership gatherings, it recently unveiled its Culture Manifesto, ie its vision, mission and values statement. In the manifesto, it highlighted its core values, namely, Being Purposeful, Ethics & Integrity, Caring, Culture of Learning, and Result with Accountability, which form the cornerstone of its new avatar. In the next phase of this journey, LTTS plans to organise over 700 workshops across all its global locations, thus training LTTSites and creating an emotional connect with these values. LTTS employees have created ‘Value Walls’ in some of the India centres, a mural expression of the core values intrinsic to LTTS. While it will add wings to LTTS growth strategy, the emphasis on sustained growth will sweeten the goal. No doubt, analysts expect LTTS to easily achieve its ambition of $1.5 billion in revenues by FY25. Chadha sums it all up succinctly. “The mantra that we want for all of us including partners, customers, stakeholders and, most importantly, employees, is profitable, sustainable, inclusive growth,” he says. u L AN C E L O T J O S E P H [email protected]
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On a recharging mode He initiated the family’s move in Eveready. The Burmans are today the largest shareholder of Eveready, at over 23.36 per cent, whereas the shareholding of the Khaitans (the original promoter shareholders) was down from 44.20 per cent in FY2019 to 4.90 per cent at present. The steady decline of the Khaitan’s holding is due to their shares being pledged to the bank to borrow funds for the group’s engineering company McNally Bharat Engineering, a pure misadventure now costing the Khaitans their Eveready ownership. SEBI nod The Burmans have moved closer to becoming the sole promoters of Eveready. On 24 May, they received regulatory approval from SEBI for the open offer to public shareholders of Eveready for an additional 26 per cent stake of the company for R604.75 crore. The offer will open on 3 June and close on 16 June Mohit Burman: at a price of R320 per equity Eveready needs share of Eveready. The Bursome push and mans have appointed JM direction Financial to manage the issue. The current share price of the company is R315. Five Burman family-run investment firms came out with the open offer. JM Financial submitted the offer letter to stock exchanges on behalf of Puran Associates Pvt Ltd (‘Acquirer 1’), VIC Enterprises Pvt Ltd (‘Acquirer 2’), MB Finmart Pvt Ltd (‘Acquirer 3’), together with Gyan Enterprises Private Limited (‘PAC 1’) and Chowdry Associates (‘PAC 2’) – to acquire shares. The open offer document filed by JM Financial stated that the prime objecThe Burmans of Dabur will take control of Kolkatative was to have a substantial holdbased Eveready Industries ing of equity shares, voting rights and acquisition of control of the tarfter keeping everyone guessing the brand Eveready has great poten- get company. Pursuant to the offer over last two years, the Burman tial and all it needs is some push and and the purchase order, the acquirfamily of Dabur India is set to direction. As the largest shareholder, ers and PACs will acquire control over take management control of the coun- we hope to provide that fresh impe- the target company and the acquirers try’s largest dry cell battery maker, the tus and direction to the company, and PACs shall become the promotBM Khaitan family-owned Eveready going forward,” says Mohit Burman, ers of the target company, including Industries Limited. “We believe that vice chairman, Dabur India Limited. in accordance with the provisions of
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SEBI (LODR) regulations. The letter also mentioned, ‘currently the acquirers do not have any intention to dispose of or otherwise encumber any assets or investments of the target company or any of its subsidiaries, through sale, lease, encumbrance, reconstruction, restructuring or otherwise, other than in the ordinary course of business.’ A company insider speaking on condition of anonymity, says: “The Burmans will successfully pick up an additional 26 per cent stake from the market. They will put Eveready back on the right track. With the Burmans having stepped in, the mood of employees has turned upbeat now.” The company presently employs 2,300 people. The Burmans have made a smart move. Ever since the Khaitans pledged their share for funds, Burman group companies have been scooping up Eveready shares from the market. Earlier in February, JM Financial was mandated by the Burmans to buy more shares from the market. It then announced its intention for an open offer. It also asked for a three-board position post the open offer in Eveready. The Burman family currently holds 23.36 per cent share in Eveready. “We like our companies to be run professionally. The Burman family is not going to be in any executive capacity. We generally run our businesses professionally and our intent is to run Eveready too in a similar fashion,” says Burman. Burman-owned Dabur India started its journey from Calcutta. The family later shifted to Delhi. The 137-yearold Dabur is one of the leading FMCG
Aditya and Amritanshu Khaitan tenderd their resignation from Eveready board
companies in the country. The Burmans have successfully transformed themselves from being a family-run business to become a professionally managed enterprise. New leadership On receipt of the public announcement at the end of February, in relation to the open offer by the Burmans, Aditya Khaitan and his nephew Amritanshu Khaitan tendered their resignation from the board as non-executive chairman and managing director of the company on 3 March, 2022. In a touching letter to board members Amritanshu Khaitan mentioned: “As the largest shareholder of the company, the Burman family have
expressed their interest to take management control of your company and give new leadership and direction to the company. It would be appropriate for me to step down from the board. I will continue to be a long-term stakeholder in the company and participate in the future growth plans of the company.” He also thanked the entire Eveready family for enriching his career with many unforgettable experience and moments. Later, on 8 March, the Eveready board appointed Suvamoy Saha, 63, as the new managing director of the company with the consensus of the Burman family. With 37 years of experience in corporate management in diverse fields, both in India
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Corporate Reports and abroad, Saha became joint managing director of Eveready in August 2021. This is the first time the Khaitans are not present on the board after they acquired Eveready (the erstwhile Union Carbide India Ltd). The Eveready promoter Khaitan family had borrowed heavily by pledging their shares in Eveready and their tea company McLeod Russel, to save the group’s ailing engineering company McNally Bharat, engaged in turnkey solutions for infrastructure projects. An industry insider thinks some key senior management people who had been running the day-to-day affairs of McNally Bharat misguided Aditya Khaitan. They painted a rosy picture of the EPC industry and the overambitious Khaitan trusted them and felt that infra could be the next business and growth for the group, and started funding. It finally turned out to be bad business judgment and dragged down the entire BM Khaitan group. “It was the wrong decision to fund McNally and their unviable projects and this landed the Khaitans in big trouble. It was stupidity,” recalls
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former chairman and managing director of Eveready, his son Amritanshu, became the managing director of Eveready. According to sources, Amritanshu told his uncle Aditya to take a one-time hit and put McNally Bharat up for sale. But Aditya disagreed and kept pumping money into it. And in 2016-17 Eveready’s shares were pledged to raise R600 crore. Sources say Amritanshu still repents not being able to block the decision, which was taken when the founding patriarch BM Khaitan was still alive.
Saha: the new MD, Eveready
a senior person in Eveready. McNally has been now admitted into the corporate insolvency process. The lead creditor, Bank of India, moved the petition to start the insolvency process against the company. After Deepak Khaitan died, the
Family dispute and a shelved deal Also, a few years ago, the Khaitan family had taken a call that they would sell Eveready and retain MRIL. Several MNC battery manufacturers including Duracell showed interest. The Group had shortlisted Duracell Inc, owned by Warren Buffett’s Berkshire Hathaway. A person who had knowledge about the deal said that it was fixed at around R1,700 crore. Duracell had started due diligence of Eveready’s battery and flashlight business including the manufacturing plants and distribution network. Unfortunately, s a j a l bos e
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year ended March 2022 as against R1,248.98 crore the previous year. The net profit recorded was R47.84 crore in FY22 against a loss of R307.45 in FY21. The current debt of the company is R350 crore. The Indian dry cell battery market is now estimated at R1,500 crore and growing at 5-6 per cent. The battery category benefitted from a generation of healthy demand coupled with a decline in the import of poor-quality products from China post the implementation of BIS standards. The market segment pattern underwent changes during the past several years as consumers shifted from the more expensive ‘D’ size batteries to ‘AA’ sized ones. The consumption of batteries is driven by growth in the offtake of its applications. A growing need for portable power and the advent of a numBatteries have enjoyed a non-cyclical demand ber of battery-operated gadgets like remotes, toys, clocks, and torches have and flashlights – they have a market catalysed consumption. Since these share of over 50 per cent in both cat- gadgets are used on an everyday basis, egories. The company has six man- batteries have enjoyed a non-cyclical ufacturing units across India which demand. Also, the rural segment is a produce 1.3 billion batteries. All the high growth one for the industry. units are backed by integrated manThe Burmans have appointed Bain agement systems with the latest ver- & Company to advise on the future sions of ISO accreditations. The plants road map for Eveready. “We plan to maintain the highest level of environ- focus on its existing businesses in the mental standards. immediate future and then look at new businesses in the medium to long Market leader term, both in batteries and in some Eveready has a strong brand value with new categories too,” says Burman. “We a robust distribution network. Out of are expecting their reports in the next the total FMCG universe of about 8.5 2-3 months.” million outlets, battery stocking comThe Burmans think whatever happrises around 53 per cent. Eveready pened earlier in Eveready is past hisbatteries were stocked in 70 per cent of tory. Now they want to start afresh. such outlets – higher than any other Can one safely say this is a cat with battery brand by a wide margin. nine lives? u Eveready achieved annual sales s a j a l bos e of R1,206.75 crore in the financial [email protected] s a j a l bos e
during the process, BM Khaitan died. The deal was shelved because a family dispute surfaced. The dispute continues and sources say relations between uncle and nephew are strained. People blame the Khaitans for the company’s downfall. However, nobody ever questions their intention and integrity. It was just a bad decision which caused a decline in the Group’s fortunes. The family is well known for their culture, inherited from BM Khaitan. They are considered good employers, generous and have tremendous respect for people. “I have not seen a better person than BM Khaitan in my life. He was a true visionary. It is good that BM Khaitan did not live to see the empire he had created collapse due to mismanagement and family feuds. The Burman group is a professionally managed company. They will run it well,” says a well-known person in the city’s corporate circles. “Promoters cannot flow funds and give guarantees between group companies in isolation. Inevitably the downfall of one will have repercussions on the other. Emami, Zee, Britannia are some examples. Some have navigated well and some have seen promoter stake sale, dilution, etc when the tide turned. But appropriate action against any irregularities is must.” says Pankaj Singhania, founder, Lake Water Advisors, an equity research firm. “Taking charge of Eveready is a shot in the arm for Burman. Dabur’s large distribution network could be leveraged. The battery business is a very competitive segment, though, so we have to wait and see how the Burmans handle the situation,” adds Singhania. Eveready is the largest player in India with regard to dry cell batteries
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Setting a precedence contributes around 7 per cent to its turnover. What makes Jaipur Rugs an interesting case study is how its promoters have approached the whole business of carpets, making underprivileged rural artisans an integral component of its whole supply chain and thus empowering them to become not only self-reliant but also creating an ecosystem where these rural folks feel proud to exhibit their entrepreneur skills. These rural artisans come from communities which often face discrimination and this is where Jaipur Rugs has been on a mission to help rural and tribal women Chaudhary: become independent and man with a get recognised for their talmission ent. Importantly, the company has not only impacted the lives of these artisans but also built a profitable business for itself by connecting rural craftsmanship with global markets.
Jaipur Rugs has revolutionised the carpet industry with its unique business model
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ounded in 1978 with just two looms and nine artisans, Jaipur Rugs is today not just an entity that makes handwoven carpets which are exported to over 75 countries, but it has become an institution of its kind that has revolutionised the carpet industry by creating an entirely new business model – working directly with marginalised artisans/ weavers in remote villages and empowering them and their communities with a sustainable livelihood. The company currently works with over 40,000 small artisans/weavers (out of which 85 per cent are women) across 600 villages in five states of Rajasthan, Gujarat, Uttar Pradesh, Bihar and Jharkhand. It boasts of having over 7,000 looms in its network and has successfully empowered rural and tribal women by seamlessly weaving them into the fabric of the profitable business of handwoven carpets. The company is today one of the market leaders in designing, manufacturing and delivering the finest handwoven rugs, which
command huge demand in the US and European markets. Jaipur Rugs, which started as Jaipur Carpets, operates five retail showrooms in India – one each in Mumbai, Bengaluru and Delhi and two in Jaipur. Besides, it also has franchise stores and store-in-stores in Ahmedabad and Kanpur and Hyderabad. Expanding its retail presence and moving in the direction of its vision to be a global brand in the segment, the company, one of the largest exporters of handmade carpets in the country, recently opened its flagship store in Milan, Italy. Besides, it has a store each in Russia and USA as also three store-in-stores in China which work on the franchise model. The company has a separate subsidiary, Jaipur Living, in the US which is the largest market for the company. The carpet maker is now also evaluating South East Asian markets closely as part of its geographical diversification. Besides, it is also planning to expand its presence in the domestic market, which currently u 46 u
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Helping rural artisans Over the years, Jaipur Rugs has built a powerful story for its brand which has created a distinct niche for itself in the global market. The company provides looms as well as the raw material at the doorsteps of these artisans and get the hand-knotted carpets done as per its own designs and specifications. These rural artisans are given remuneration ranging from R9,000 to as high as R18,000 per month depending upon the output and time they spent on the looms. These carpets are then processed at the company’s finishing units to get the final products. The company often helps these artisans in upgrading their skills, even as unskilled rural folk are made rug artisans through community mobilisation and skill training. Most importantly, the entire effort is moving not only in a sustainable manner but has also turned out to be a profitable business proposition. Last year (FY22), the company, on the group level, clocked a revenue of around R1,000 crore, up from around R776 crore in FY21 and R747 crore in FY20. Despite Covid-related challenges, the company
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has pulled off a commendable performance as buyers increasingly shift their attention to their home and family. “Today, I am more than happy to see the way our business has shaped up over the years. Ours is a perfect example of a business which besides being profitable, has gone on to create massive disruption on the social front. I feel so satisfied to see these women and their families today living in a dignified manner. I wish our business model could be replicated by many more so that we all help build a more equitable and prosperous social structure,” says Nand Kishore Chaudhary, 69, chairman & managing director, Jaipur Rugs, who despite coming from a very conservative Marwari family, decided to do business differently. His upbringing in the small town of Churu in Rajasthan, where he came across prevailing societal discrimination, also played a role as he took the less traversed path of founding a business. Today, a globally acclaimed social entrepreneur, Chaudhary is the founder of Jaipur Rugs, which is one of India’s largest manufacturers of hand-knotted rugs. He initiated his carpet business operations with just two looms and nine artisans, which today, has grown into a network of 40,000 artisans spread across 600 villages of India. Starting with a belief in the enormous potential of Indian artisans, he decided to form a company that would showcase this potential to the world, while also upgrading the weaving techniques and lives of the artisans. He is often referred to as ‘Gandhi of
depressed parts of India, can connect the rural poor with the markets of the rich, such as the United States,” says Pra halad in his book.
Yogesh: on an expansion mode
the carpet industry’. Four decades later Jaipur Rugs has become a global social enterprise exporting to multiple countries while providing sustainable livelihood to artisans (out of which 80 per cent are women) in remote villages. Management guru, CK Prahalad featured his revolutionary business philosophy in his globally acclaimed book ‘The Fortune at the Bottom of the Pyramid’. “Jaipur Rugs provides a unique example of how a global supply chain, built around developing human capability and skills at the grassroots level and finding steady and well-paying jobs for rural men and women in the most
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Connecting artists with consumers “Most of its energy goes in supporting its weaver communities, providing them with orders, supplying them with the necessary yarn and helping them with designs. Moreover, they help in the local communities and work hard to preserve the art form in India. The company works with some of the leading designers around the world to cocreate new designs with the local artists. And the company tries to connect the artists with the consumer that purchases their carpet, so the end consumer understands his or her role in helping the artisan communities,” states James Allen, senior partner, Bain & Company. Chaudhary has also been called the ‘father of modern social enterprises’ by Prof Jagdish N Sheth from Emory University, USA. Sheth says: “Jaipur Rugs has become a role model, that business can serve society and at the same time can be a capitalistic institution.” In 2019, Raj Sisodia featured Jaipur Rugs and Chaudhary in his book ‘The Healing Organization’. Chaudhary has won many awards, including E&Y Entrepreneur of the Year Award, CNBC TV18 Emerging India Award, and the Social Impact Award conferred by former president Pranab Mukherjee. As a simple man, he is devoted to the Indian hand-knotted rug industry with an aim to position it rightly in the world and to empower its real owner and creator – the Indian weaver. His philosophy of totality and inclusion solutions for society are widely discussed. In the last few years, the company has been putting in extra efforts to build its presence in the domestic market which currently contributes 7 per cent to its total revenue. The company is building its retail presence in a big way. Having put up its first retail store in Delhi in 2015, it has now put up a total of five mono brand stores in India. It is looking to increase its domestic share to around 10-12 per cent in the next couple of years. Over the years, the domestic market has evolved and an increasing number of buyers here are also looking out for these handwoven carpets
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A journey that continues
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aving completed his BCom from Lohia College in Churu in 1977, Chaudhary joined his father’s business of a branded shoe shop in the town. His father’s shop was not doing that good business. What added to his frustration was that he did not enjoy being a sheer salesman. He decided to move out of the family business and got a job as a cashier at United Bank of India. But he didn’t join the bank either as he didn’t like a 9-5 job. In his mission to find a job that would give him the chance to work with people, he researched extensively and chanced upon the carpet business. There was a good export market, but the sector was highly unorganised and involved a lot of middlemen and that is what wooed
Chaudhary to this sector as he could see a huge scope for improvement. Having made up his mind, he took a loan of R5,000 from his father to set up his business in Churu. He spent the money in procuring two looms on which nine weavers worked on. In the next decade or so, through his effortless connection with the rural communities, he quickly gained trust and began bringing livelihood opportunities to more and more underprivileged households. He built a sizeable network of artisans and in partnership with his younger brother MK Choudhary started an export business: Saraswati Exports. But the journey had its own share of challenges. His family and community were against this business as most
which command much higher premiums over machine-made ones. In fact, these handwoven carpets are almost six times costlier. “Now as this market in India is also growing, we are all geared up to cater to this segment of the business. In fact, we are already receiving very encouraging results,” says Yogesh Chaudhary, 36, director Jaipur Rugs, who is the older son of Chaudhary. He joined his father’s business in 2006 and played a crucial role in shaping up the business as a strong organisation. Looking after the sale, marketing and brand vertical of the company, he is working towards making Jaipur Rugs a global brand. In his leadership, the company has grown significantly in the last decades as it exports to over 75 countries. The company has recently opened its first store in Milan Italy as it is looking to increase its presence in the EU market. “For us both domestic and overseas markets are important. In the overseas market, we are now looking to diversify into other geographies. We are also closely evaluating South East Asian markets. All this will help us double our business in the next few years,”
of these artisans belonged to untouchable community and he was spending lot of time with these artisans. Finally he decided to leave Churu, even as his brother remained there to handle the exports business. In 1989, he moved to Pardi, Gujarat where he started training the tribals in the region about carpeting making. He spent over a decade there and trained more than 2500 people from the tribal community. The next decade saw business growing and taking good shape. But in 1999 Chaudhary had a fallout with his brother. He relocated his entire family (wife, three daughters and two sons) back to Rajasthan in 2003, but this time to Jaipur. He started his business from the scratch as Jaipur Carpets which was later rechristened to Jaipur Rugs in 2006.
adds Yogesh. As the company looks to expand its overseas market, the company is evaluating newer markets in different geographies. Towards this end, Jaipur Rugs has recently collaborated with Bangladesh’s number one furniture brand ISHO to bring out an
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The last two decades have been quite eventful for Chaudhary and his business as it saw all his three daughters and two sons joining the business and helping him built a much stronger organisation. All his children went overseas for higher education. His daughters Asha, 43 and Archana 39 are settled in the US and looks after the US operation (Jaipur Living, contributes almost 60 per cent to the company’s revenue) as CEO and head of quality assurance, USA, respectively. Kavita, 38 is the design director and she along with her younger brother Yogesh 36, director (looks after sales and marketing) works out of the company’s headquarters in Jaipur. The youngest of all, Nitesh, 31 who joined the company around four years ago, is based out of the US and oversees the company’s logistics and supply chain.
exclusive handmade carpet celebrating the shared Mughal heritage of the two countries. In a world first for the design community, ISHO along with Jaipur Rugs has developed an artistic representation of Bangladesh and India’s shared Mughal culture and architecture, depicting this in a unique design that is woven by Jaipur Rugs’ expert artisans in rural Rajasthan. The rug, launched during Ramadan, serves as perennial piece designed to suit the dimensions of a modern home and executed using timeless craftsmanship of Jaipur Rugs. The rug was displayed at ISHO’s curated exhibition space in Dhaka. “Through our collaboration with ISHO we got an opportunity to express our shared heritage through design and propagate our rich crafts and traditions to a newer audience. At Jaipur Rugs we like to give our artisans global platforms to take their craft and their stories to the world. It is always a delight to find new partners like ISHO and be able to tell the stories of the unique and simple lives of our artisan and their ancestral know-how through them,” states Yogesh.
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A social entrepreneur at heart, he initiated two globally awarded initiatives – `Manchaha’ and `Freedom Manchaha’ to move the organization towards a more sustainable future. Manchaha collection The rug industry world over is losing billions of dollars in wasted yarn. Surplus yarn is either incinerated or goes straight to landfill. The Manchaha initiative started almost a decade ago, is a step towards reusing the millions of sq meters of waste into a fun product. Rugs in the one-of-a-kind Manchaha collection are made using hand-spun leftover yarn batches that cannot be reused as part of another regular rug. These small unusable batches of yarn are packed in sacks and sent to weavers for them to pick whatever they like for their Manchaha rugs. This helps reduce wastage that had no solution and makes the colour palette of these rugs as unique as their design. It is a remarkable example of sustainable production – reusing and revival from waste, the problem becoming its own solution. In fact, these Manchaha rugs have generated huge demand as each of them is woven around a story of its own. As an extension, the Freedom Manchaha initiative launched in January, 2021 explores, for the first time, a livelihood opportunity for inmates in prisons of Rajasthan, enabling creative expression and healing. Turning
Creating exclusive designs
disengaged inmates who were counting down days into a creative powerhouse making handmade rugs using leftover yarn from commercial carpet production. Inmates get trained in the art of carpet weaving and express themselves creatively on the loom weaving their dreams and hopes knot by knot. The last two decades have been quite eventful for the company as along with Yogesh, his other siblings: three sisters and a brother, have also joined the business and are steering the business at different capacity. Asha Chaudhary, 43 and Archana Chaudhary 39
are settled in the US and look after the US operation (Jaipur Living which contributes almost 60 per cent to the company’s revenue) as CEO and head of quality assurance, USA, respectively. Kavita Chaudhary, 38, based out of Jaipur, is the design director of the company, while the youngest of all, Nitesh Chaudhary, 31, who joined the company around four years ago, is based out of the US and oversees company’s logistics and supply chain. “I am quite happy that all my children are part of my business which I have built with lot of hard work. Good to see all of them are playing their role and all are committed to carry out my vision to the next level. As a business, we are expanding and that will help build much stronger network of artisans,” says Chaudhary. In fact, Jaipur Rugs has emerged as a true social venture which has positively impacted a large pool of rural artisans, who are primarily women. Its supply chain has also been a matter of discourse at Harvard and many other institutions, even as many management gurus have endorsed it whole heartedly. Most importantly, the promoter had thought of doing so at a time when not many would have dared to do so. Today, it is a precedence which could be replicated across multiple industries. What makes the whole journey of Jaipur Rugs quite interesting is it’s grit and determination to pursue its vision despite facing multiple challenges. Having built this proven model, the company is now trying to take its business to the next level. Along with export markets, the company is also expanding its business in the domestic market which has seen definite traction in the last few years. In the export market also, the company is looking at other geographies, which will not only help scale up the business but also help de-risk the business during market uncertainties. As the business expands, the company will also expand its network of artisans and thus help more rural folks to live a better life. With all this, the company is all geared up to commence its next growth phase and looks to set up many more milestones going forward. u Arbi n d G u pt a
A rural artisan making her own design
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Guest Column
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Watershed development… … is the answer to sustainability in rural India
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e live in an increasingly fragile world, where the delicate balance between people, livelihoods and the environment is being threatened – so much so, that the ongoing sustainability of communities, and the lives of people within them, is at risk. Nowhere greater is this seen than in the rainfed areas of rural India, where the rural poor, often unknowingly, degrade the natural resources around them – living from hand to mouth, trying to meet the needs of the present at the cost of the future. Much of the world’s poor are highly dependent on the natural resources and ‘ecosystems’ in which they live. A healthy ecosystem provides multiple services and goods that underpin life and livelihoods – supplies of food and freshwater, soil fertility for agriculture, pollination, nutrient cycling, biodiversity, flood control and drought mitigation, the list goes on. Thus, the vibrancy and health of an ecosystem, determines the quality of life and wellbeing of the rural communities that live within it. Sadly, ecosystems in much of rural India are being degraded day by day – inhibiting development and exacerbating rural poverty, with the very resources that communities depend upon to survive, becoming sparse. Fortunately, a solution exists in the form of participatory watershed development in varied geographies, based on topography, where the power of local people is harnessed to transform the diminishing watershed basin, and ecosystem, in which they live and earn a livelihood. From poverty to prosperity In the early 2000s, the people living in the Daseran watershed area of Solan District in Himachal Pradesh were facing a domestic water crisis. Deforestation, indiscriminate exploitation of forest resources, overgrazing, improper agricultural practices and a lack of rainwater harvesting efforts were wreaking havoc on water availability, the environment, and local incomes. And with limited income, people were struggling to survive. To avoid an uncertain and unsustainable future, 18 village development committees and 3,718 people were brought together to tackle the root causes of this complex problem. A watershed project was planned in collaboration with NABARD in 2010, taking a ‘ridge to valley’ approach to address the many issues. This involved soil and moisture conservation, harvesting rainwater for groundwater recharge, and to protect from soil erosion,
P EA R L T I W A R I
The author is Director & CEO, Ambuja Cement Foundation
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afforestation – with the active participation of the local community and through its locally formed people’s institutions. Some 925 hectares area of land was treated with different measures, with full participation of the community. A variety of treatment measures were implemented to prevent soil erosion, conserve soil moisture conversation and to harvest rainwater to replenish groundwater levels. A variety of social activities also ensued, including mobilising women to participate in local decision making and income generation and organising farmers into groups to tackle problems and collectively market their produce. As a result, over the course of seven years, the situation in Daseran was completely turned around. There was a 102 per cent increase in green cover, with 21 per cent rise in spring discharge and water spread increased in soil (water body), based on satellite analysis. As a result, 80 per cent of households experienced an increase in income – while the cropping area increased by 87 per cent, there was a 93.33 per cent increase in the number of milch animals. Also, 18 SHGs and one farmer producer organisation were formed, while access to institution credit doubled; there was significant increase in individual household toilet use too. In short, communities here, along with the ecosystem within which they live, were on their way to sustainability. A holistic approach The overall attributes of the watershed development approach, by and large, are three fold – promoting economic development of the rural area, employment generation and restoring ecological balance (DoLR, 2006). Initially designed as a measure for poverty alleviation and improving livelihoods, watershed development has gained even greater traction due to its effectiveness in addressing climate change. It has been an essential strategy in a country like India, where the majority of the population depends on agriculture and about 60 per cent of total arable land (142 million ha) in the country is rain-fed. Designed to balance the conservation, regeneration and use by humans of land and water resources within a watershed, the scheme of watershed development delivers a variety of environmental and social benefits – from increased availability of water and reduced soil degradation to improved agricultural yields and increased access to drinking water. That is why watershed development adopts a holistic approach depending
Guest Column
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on the geography – addressing economic, environmental and social issues within the chosen watershed area.
Designed to balance the conservation, regeneration and use by humans of land and water resources within a watershed, the scheme of watershed development delivers a variety of environmental and social benefits
Participation is the key Watershed development aims for the sustainable use of natural resources (land and water); therefore, it is imperative to have the people’s participation, along with gender equity, to ensure sustainability and success. Regular maintenance and upkeep of structures created during the treatment phase is essential to ensure that the ongoing, fine balance of both environment and livelihood activity, is maintained in watersheds like Daseran. A key mechanism to foster and formalise participation is to establish and harness institutions at both village level (village development committees or VDCs) and watershed level (village watershed development committees). By institutionalising groups, ownership is inculcated among
beneficiaries – and it is this sense of ownership that will drive the ongoing monitoring and management of community assets, going forward. As World Environment Day advances, it is important to remember that, whilst the environmental challenges in rural India may sometimes seem insurmountable, effective solutions do exist, which, if scaled, can restore the delicate balance of community sustainability with environmental sustainability in rainfed rural India. u
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The peer-to-peer approach IndiaP2P plans to become an investment product that enables wealth creation
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eer-to-peer lending has been around since 2012, but it came under RBI’s regulation in 2017. “In growing economies like India, there are always pools of high-quality, high-yield (high-returns) debt available, which makes for a great investment opportunity,” explains Neha Juneja, CEO & cofounder, IndiaP2P. “However, these pools are not available to retail investors and, when they are, much of the yield or returns go to institutional intermediaries. The ‘India’ in our company’s name signifies our vision of making India prosper! IndiaP2P removes this intermediation and delivers all of the yield to retail investors, by taking a peer-to-peer approach; hence, the P2P.” Based in Mumbai, Juneja founded IndiaP2P in 2021, in tandem with investment and fintech specialists Ravinder Voomidi Singh and Mohit Gupta. Juneja had previously built and scaled Greenway, India’s largest clean cook stoves enterprise, with operations across rural India and sub-Saharan Africa. For a decade, Juneja worked on the ground with microfinance operators and rural self-help groups, who were distribution channels for Greenway, as well as international asset managers, who offset carbon emissions through Greenway stoves projects. While on the field, Juneja discovered that loans given to semi-urban and rural women business owners in the country were growing strong and had the lowest defaults; yet, there were limited avenues to source capital for these loans, with much of this capital going through multiple intermediaries or hoops, before it reached borrowers. So, she launched IndiaP2P that makes high-yield debt investment products for retail investors. The company’s first investment product bundles high-quality loans from women business owners that yields up to 18 per cent per annum. “We started operations earlier this year after a fund raise from Antler VC,” observes Juneja. “As a fintech, we want to be the most efficient operator in this
Juneja wants to be the most efficient operator
space, where fees charged to investors is typically high. We intend to continue being the lowest fee platform by being tech-first and low on overheads. In this short span, we have already delivered three cycles of projected returns to investors”. With IndiaP2P, while lenders are onboarded online, the company meets with and physically verify all borrowers, whose loans become a part of its investments. Good returns “We see immense potential for IndiaP2P to become the default platform in this space for retail and sophisticated investors,” discloses a fund manager at Antler India. “Its first flagship product has yielded a return of 18 per cent per annum, by disintermediating access to a bundle of diverse, risk-managed MFI loans – an over $30 billion space in India”. “Our borrower engagement and sourcing are done through on-ground personnel across multiple states in the country, who serve cachements of over 100,000 borrowers,” adds Juneja. “Our lenders or investors come from a variety of backgrounds and professions u 52 u
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from youngsters savvy about investments to retirees. On the borrower side, our focus is indeed on women borrowers of India, who have higher credit scores than men and are known for superior repayment behaviours. With focussed sourcing of loans from women business owners, we are able to build a lower risk product for investors”. She aims to be at the vanguard of high-yield debt products in India by removing intermediation and also by being the lowest cost operator in the space. IndiaP2P generates revenues by charging borrowers and investors a nominal fee. Globally, there is an increasing interest from retail investors in passive investments and IndiaP2P investments fit into this trend. Another tailwind factor supporting this segment is the fact that these investments are productive – leading to real economic activity – and not speculative, which is why there is also clear regulatory support behind this investment segment. “During this fiscal, our priority is to expand upon our field network for borrower sourcing, ensuring that loans from high-quality borrowers from across the country are available to service demand from investors,” Juneja explains. “We are consistently delivering more than 17 per cent in annualised returns to investors. Our immediate next milestone is to reach a R2,000 crore as our AUM. Retail investors have put more money in the stock markets than institutional investors (domestic plus foreign) for the second year in a row in 2021. However not all have been as lucky with the returns, given the market volatility and ensuing corrections. What sets IndiaP2P apart is its focus on the most reliable category of borrowers in India – women. “They make the best borrowers, because they have been found by research, time and again, to be conscientious, on-time, and disciplined re-payers. Yet, the bulwark of the financial system in India, including people’s mindset, is geared to neglect their borrowing habits and favour male borrowers, despite higher chances of their default”, observes Juneja, while expecting to grow at more than 31 per cent between 2022 and 2026. u L AN C E L O T J O S E P H [email protected]
Retailing
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s a n j a y bo r a d e
famous sights, is captured in the Cadet Swiss Spirit Limited Edition 2022,” says Chandhoke. “Presenting an outstanding design with fine black haptic (3D) lines, this exceptional pocket knife is available in a limited quantity of 12,000 pieces only. It makes a great souvenir, collector’s item or gift”. With the Cadet Swiss Spirit 2022, it is possible to visit the most famous sights of Switzerland without even leaving the house. When taking a closer look at the design, one discovers the famous Chapel Bridge in Lucerne, Zurich’s Grossmünster, the federal parliament building Chandhoke: our products are in Bern and much more. “It’s time to explore Switzerland made for life and its world-renowned attractions!” says Debraj Sengupta, CMO & country head, watches, Victorinox. “The Cadet Swiss Spirit 2022 is the ideal partner for those who like to carry a little piece of Switzerland in their pockets every day and appreciate the functionality and the iconic design of Victorinox Swiss army knives. This year’s special edition offers a total of eleven practical functions, which are useful in just about any situation, even on city trips. As an ideal souvenir, gift Victorinox, maker of the iconic Swiss army knife, plans to appear in or collector’s item, this special edition other cities of India is launched worldwide and can be purchased in specialty, souvenir and gift ast month, the traditional Swiss the heart of Switzerland. “This is where shops, Victorinox stores and online”. company, Victorinox AG opened the founder of the company Karl Elsener The item comes with a certificate and its doors with the opening of a I set up his cutlery business back in 1884 is encased in a silver slip-lid gift box, new brand store at Palladium Mall, High and, a few years later, designed the leg- with a design-matching sleeve. CelStreet Phoenix, Mumbai. “This is our endary ‘original Swiss army knife’. ebrating the spirit of Switzerland, it first store in India,” says Colonel Chand- Meanwhile, the company produces not also testifies to the high levels of funchoke, MD, Victorinox India. “We had only the world-famous pocket knives, tionality, quality and innovation that planned the entry in 2020, but the pan- but also high-quality household and characterise the brand. Victorinox demic had ruined our launch. India is a professional knives, watches, travel gear guarantees all knives and tools to be matured market. About 12 per cent of and fragrances. In 2005, the company of first-class stainless steel. “Since environmental protection our products are sold to the defence and took over Wenger SA in Delémont. The the army”. Victorinox India has already Wenger pocket knives were integrated and sustainability are part of the crossed R100 crore in 2019 from its 300- into the Victorinox range in 2013, so Victorinox’s DNA, our products are odd point of sales and projects a 40 per that the Wenger product portfolio today made for life,” sums up Chandhoke. cent growth in 2022. The company has consists of watches and travel gear,” adds “Each item has a lifetime guarantee Chandhoke, a CA who sells the prod- against any defects in material and an assembly line in Bhiwandi, Mumbai. Victorinox has been in India for the ucts online, in own stores as well as via workmanship. Victorinox prides itself last 15 years, as a joint venture with a widespread network of subsidiaries and on more than 130 years of experience Aneesh Goel – a 90:10 JV. Then, in 2016, distributors in more than 120 countries. in the manufacturing of high-qualthe Swiss company bought out Goel and In 2019, the company, with its more ity knives in Switzerland”. Meanwhile, now it is a 100 per cent subsidiary. As one than 2,100 employees, had generated the company plans to set up more brand shops in the coming years and knows, Victorinox is a worldwide operat- sales of CHF480 million. is looking at Delhi and Bengaluru to ing family business, which today is run start with. by the fourth generation of manage- Outstanding design u ment. The headquarters of the company “A wonderful tour around Switzerland, L AN C E L O T J O S E P H is located in Ibach, Canton Schwyz, in inspired by beautiful places and their [email protected]
Presenting an iconic product
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F&B
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Creating pan-Asian culinary delights Chufang plans to expand to Singapore and Dubai
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f you are in Mumbai, then you must stop over at Chufang Asian Kitchen & Bar restaurant, located in Bandra Kurla Complex (BKC), a business and residential zone in Mumbai. Launched last month, Chufang (‘kitchen’ in Chinese) is one of the prominent upscale commercial hubs in the country. The location attracts a huge footfall of corporate workers from diverse companies that come to BKC. The restaurant has gained popularity within a short time. It is a oneof-a-kind restaurant, inspired by the travel experiences of its proprietor Arvin Tucker, 46, and forms part of his company, Tucker Food & Hospitality. He started his first outlet in 2022, reaching out to many pan Asian cuisine fans in Mumbai. The restaurant is distinctive in its quality and uniqueness of food, Asian cultural ambience, unpretentious hospitality, and Buddhist decor with a sense of peace. “The idea behind Chúfáng is quite literal – it is intended to bring delectable, choicest dishes from different Asian countries under one roof, in one kitchen,” explains Tucker. “People the world over are fond of Asian cuisine, though it is all essentially categorised as Chinese food – in fact, many countries outside Asia have their own versions and fusions of what our rich continent has to offer. The menu offers something for everyone with plates serving dumplings, a warm embracing spoon full of ramen, or age-old favourite hot garlic sauce. Chufang’s chefs are well-versed in pan-Asian cuisine and specialise in making delicacies from all around Asia. They believe in creating and delivering these delectable culinary delights to guests’ tables with the utmost care and exquisite presentation”. Tucker had featured in a 1990s’ Cadbury Dairy Milk
Tucker: bringing Asia under one roof
advertisement, which was set on a cricket ground. A one-liner story “I have food for the Jain and vegetarian community as well, targeting the Diamond Bourse in BKC,” adds the actor & model turned entrepreneur. His is a one-liner story. He has appeared in more than 300 television commercials for brands, such as Edelweiss, Raymond, Cadbury, ICI Dulux, ITC, Goldflake, Tata Tea, Britannia, Palms Hotel, Honda Cars, VLCC, Airtel, Colgate, Mastercard and more. Not only this, but he was also seen in music videos and a few Bollywood movies as well. He had also run his own talent management company, providing opportunities to new talents u 54 u
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in the industry. His work in the entertainment industry included producing videos, songs, and music. Apart from presenting different cuisines from one kitchen for their customers, the restaurant also offers a variety of meals to choose from, ensuring the use of high quality and premium ingredients, mastery of flavour and cooking techniques, the experience of the chefs as is reflected in the cuisine. “The consistency, overall ambience, experience and value for money is the major focal point for the restaurant,” adds Tucker. “Java fish in banana leaf, Sushis, Blue Rice, Dimsums, Prawns Hargow, Spicy cheddar Broccoli, Crispy Prawns, Cheung fun, Pad Thai, and Kung Pao Chicken are just a few of the menu options that will enhance your dining experience. Along with these exquisite treats, the restaurant also serves a selection of cocktails, mocktails, and fusion drinks created by experienced mixologists”. Tucker has travelled to Hong Kong, Japan, Thailand, Australia, to name a few. Though he has travelled all over the world, he has shown a penchant for visiting Asian countries. Chufang is a oneof-its-kind lounge, which can give you the experience of the popular dishes that have unique flavors and techniques offered by countries even other than China. “Mixologist Ninad Raul’s spectacular cocktail romp will whisk you away on an exciting journey,” informs Tucker. “While most of the design elements were contemporary finds, the Buddha antique is especially customdesigned by hiring artists from Hubli. The restaurant strives to make you fall in love not just with the cuisine but also with the establishment.” “My next destination is Dubai and Singapore,” informs Tucker. “And we plan to accomplish it in the next nine months.” u L AN C E L O T J O S E P H [email protected]
Health
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Ayurveda to the rescue A leading ayurvedic solutions provider reopens its unique hospital and resort
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airali, the ayurvedic healing village, amongst the best known ayurveda centres in the country, if not the world, where a hospital doubles as a resort, has reopened after a gap of two years. Closing as the first lockdown started, the centre, located near Palakkad in Kerala, has since been renovated and upgraded. The 65-acre property now has upgraded rooms/cottages, nearly doubled the ayurvedic centre, added a new yoga centre overlooking paddy fields and an upgraded kitchen. As many as 35 plant species, fruits and vegetables have been added (over the already existing 108). The entire travel and hospitality sector, including the US, was badly hit by the Covid-19 pandemic, points out Abhilash K. Ramesh, executive director, Kairali Ayurvedic group. And, the recovery is an ongoing process, with considerable challenges, he admits. “Our customers are trying to save more money, so that they don’t face such black swans,” says Ramesh. Therefore, the industry has had to offer discounts to recover the losses and restart their businesses. Also, the increased prices of travel have dampened the recovery.” Other challenges he mentions include the high loan interest rates by the banks to the companies, changing consumer demands from luxury travel to economic travel, so that they can spend more time and merge
leisure with work and the slow recovery of business to cover the losses in the last 18 months. The group, established in 1989 by K.V. Ramesh and Gita Ramesh for ayurveda research, started the centre in 1999. A number of changes have come in with the reopening. “We are following all the Covid safety protocols like sanitisation, vaccinated staffs, social distancing, frequent cleaning of retreat, food sanitization and rigorous audits,” says Ramesh. “During Covid, we had upgraded our technology for smoother operations and have automated our systems for a hasslefree booking. We have now introduced an automated feedback system, where the clients are required to provide immediate feedback so that steps are taken to cover any gaps. We have seen more than 97 per cent satisfaction rate in our clients during the stay, while 83 per cent bookings now come from our website.” Ayurveda and Covid Covid brought ayurveda into a new limelight, Ramesh says. “People realised the importance of improving their immunity and living a healthy lifestyle and all this is what Ayurveda is all about – prevention. We saw an immense surge in the orders of our products like chyawanprash, anu thailam, ashwagandha capsules, turmeric with black pepper capsules, herbal teas u 55 u
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Ramesh: surge in orders
and many more.” Kairali’s product range consists of ayurvedic medicines, ayurvedic cosmetics, herbal teas, herbal cosmetics and sanitisers. Of course, ever since Covid began, the demand for sanitisers has shot up and supplying these was crucial to keeping the group afloat. “We had been making sanitisers for five years before the pandemic started; therefore, we were ready to take some benefits from the orders of sanitisers and ayurvedic products,” says Ramesh. “Our herbal sanitisers, which are safe and 99.9 per cent germ-free, became an overnight success. Kairali also does contract manufacturing of ayurvedic products and sanitisers for various companies, such as Godrej, Diversey, Burger King, Haldirams, IRCTC and many more. Pre-pandemic, we were making 359 SKUs, but today we are coming up with more than 823 SKUs.” While ayurveda has not claimed to cure Covid, it has played an important role in strengthening immunity and work as a preventive aspect – something Kairali has been able to leverage, both at its ‘village’ and product lines. u S UMAN T A R A F D A R [email protected]
Start-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
Brewing up
blending per individual palate and preference. According to the founders, the brand focuses on coffee and food pairing. Hence work on handcrafted Craft Coffee aims to make coffee-making and consumption a artisanal cheese and chocolates (in collaboration with Kolkata and Chennai new experience based artisans respectively) has started with the subsequent launch of an inhouse bakery and bottling unit. Future plans Craft Coffee’s next plan is to spread across Kolkata with its hub and spoke model by opening two more experience centres, 12 to 15 boutique cafes and 10 to 12 kiosks by 2022-2023. The brand has also set a target to have its footprint across India – Delhi-NCR, Bangalore, Pune, Jaipur, Mumbai, Guwahati, Hyderabad and Siliguri, between 2023-2026. “We, at Craft Coffee are committed to establish a concept which is anchored to the ecosystem around speciality coffee, continuous innovaKumar and tions in recipes and products Das: scripting a and an omni-channel strategy 360 degree coffee and sustainability that comstory pletes the 360-degree coffee story that we always aspire to bhinav Kumar and Dipraj Das, story from coffee bean to cup craft,” says Das, co-founder. “The founders of Craft Coffee left their journey. “Consumers are quite inquisiethical sourcing, the self-roasting, the lucrative jobs to chase their dream in speciality coffee. They started the tive about the source, blend and other recycled products from coffee grounds, venture with their personal savings. The processes involved in brewing and distributing the used grounds as fertilismajority of the initial investment was hence brands have to continuously ers, making bottled coffee without prein the infrastructure and supply chain innovate and build an emotional con- servatives, getting single estate beans where they are committed to using the nect with guests. Our baristas are basi- in a customised format, all contribute best machines like the Giesen roaster for cally trained as tour guides to build together to our mission of sustainabilcurating the best roast profiles, Sanremo a conversation with guests and share ity. We are already in an active mode brewing machines for perfection in taste the journey of coffee. Artisanal cof- of expansion through self-investment and Fiorenzato grinders for extreme pre- fee is all about discovering and appre- and the franchisee model. We are conficision grinding. Here, a total investment ciating newer flavours, aromas, textures dent we will be able to penetrate into all of R25 million was made (including R15 and roast profiles and hence the finer the other major cities in India by 2025,” adds Das. million raised through a group of angel nuances of coffee,” says Kumar. Craft Coffee thrives on ethically Kumar and Das are also very bullinvestors and HNIs). The brand aims to make the coffee- sourcing its green beans and the brand ish about their online coffee model making and consumption experience ensures Indian coffee farmers’ traceabil- where they intend to make speciality effortless and affordable. The artisan ity by mentioning the farm-to-cup sto- coffee beans, brewing tools and handprocess of making coffee today depends ries for respective coffee beans. It also crafted bottled brews and other 50 plus on many variables: coffee origin, quality promotes local artisans and women SKUs (stock-keeping units under develof the roast, humidity, temperature, and entrepreneurs by collaborating with opment) available to everyone through talent of the barista. The brand aspira- them for various products that com- their websites, app and e-com platform. tion – making the speciality coffee expe- plement coffee and complete the The founders firmly believe that cofrience seamlessly accessible through a 360-degree coffee journey. fee making can be an art but also an With the mission of making spe- undeniable science. It is in this marnetwork of experience centres, boutique cafes and specialty coffee kiosks. The ciality coffee a part of one’s daily life- riage between technology and artisanduo opened their first experience centre style, Craft Coffee has introduced its ship that the coffee-loving duo thrive in December 2021 at Ballygunge, Kolk- first-in-class subscription model, Cof- and intend to work passionately. u ata. Spread across 7,000 sq ft it aimed to fee Box, where the brand promotes S M B O O T H EM showcase the entire 360-degree coffee personalised coffee roasting and [email protected]
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Dark horses. We spot them for you. Way before the others…
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ph o t o s : K rish a n k u B id y a rth y
Rise and Shine Arunachal Pradesh is all set to become an amazing tourist destination
Hanging bridge with mountain view
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ravel and drive stories are not new to Business India. In 2013, for the first time in India Auto India, part of the Business India Group of publications successfully completed a road trip to the Seven States (popularly known as the Seven Sisters – Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura) followed by driving to the 12 Jyotirlinga in 12 days in 2014. In the span of eight years, infrastructure in Arunachal has been completely transformed. After the successful first edition of the Trans Arunachal Drive (TAD) in 2021, the second edition of the TAD under Dekho Apna Desh, Dekho Apna Pradesh – Arunachal Pradesh organised by the Department of Tourism and Government of Arunachal Pradesh concluded recently on 16 May 2022. The TAD is the brainchild of Abu Tayeng, Director, Arunachal Tourism and supported by the chief minister whose vision is to showcase Arunachal as a driving destination for India and the world. Mahindra & Mahindra provided their vehicles – Scorpios, Thars and the new XUV700s for this drive. The amazing 2400 km TAD was envisioned and started for the state by the late Dorjee Khandu HCM. The drive also helps identify the development work taking place across state roads. The issues faced by the participants in the first edition in terms of accommodation were been sorted out in the second edition with
proper planning by arranging homestays and village houses for them while promoting rural tourism. Cultural and economic bonds The TAD 12-day drive, divided into three legs covering 2,400km was flagged off from Namsai, known for its famed Golden Pagoda and traversed through Pangsau, a mountain pass perched atop the Patkai Hills on the India-Myanmar border; Rima Village in Changlang district with a total population of approximately 73 people; Namdhapa, a biodiversity hotspot in the Eastern Himalayas which is home to over 1,000 flora and about 1,400 fauna species; Bomjir, the oldest village in the Lower Dibang Valley district; Kambu Village, one of the oldest villages with a population of slightly more than 600 people; Mechuka, a land that’s blessed with medicinal snow-fed river and streams; Pasighat, a historic town founded by the British back in 1911; Pakke-Kessang, home to the Pakke Tiger Reserve; Dirang, a quaint town known for its hot springs, apple and kiwi orchards, and, after touching Zemithang, the remotest north-western corner of Arunachal Pradesh, culminated at Tawang on 13 May. The successful TAD will further strengthen AP’s cultural and economic bonds with the rest of the country. With its dense evergreen forests, mountains, rivers and streams, this northeast state offers so much to u 58 u
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tourists: a variety of activities including motorsports, cycling, trekking and river rafting. Its five river valleys – Kameng, the Lohit, the Subansiri, the Siang, and the Tirap – all fed by the snow from the Himalayas contribute to its unique geographical diversity. This largely agricultural economy holds enormous potential for hydroelectric power, and will soon have the country’s largest hydropower project. The first edition of TAD extended across 2,500km from Namsai in the East to Tawang in the West. It was covered by more than 72 media personnel who drove through the state in specially built Mahindra Adventure vehicles. The event led to a spurt in road trips along the Trans Arunachal Highway, most notably by members of the Super Car
Menchuka town
Travel
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
Club that saw the likes of McLarens, Ferraris and Lamborghinis being driven through the state. The Trans-Arunachal Highway, also called NH13, is an under-construction two-lane highway project in Arunachal Pradesh. The highway extends from Tawang in the western part of the state to Kanubari in the east, covering 1,559 km. The Arunachal Frontier Highway along the Chinese border, the TransArunachal Highway through the centre and the Arunachal East-West Corridor in the foothills along the Assam border are the three major highways spanning the entire state. Within Arunachal Pradesh, the highway will connect the district headquarters and other important places like Tawang, Bomdila, Nechipu, Seppa, Sagalee, Yupia, Yazali, Ziro, Daporijo, Along, Pasighat, Roing, Tezu, Mahadevpur, Bordumsa, Namchik, Changlang, Khonsa, Longding and Kanubari to name a few, and help in integrating the state. On our recent TAD, along different parts of Arunachal Pradesh, there were workers rebuilding and repairing many roads and bridges, with the support of the Border Roads Organisation (BRO). Exhilarating journey The second edition of the Trans Arunachal Drive was flagged into Tawang on 15th May by Chief Minister, Pema Khandu to mark the end of an exhilarating 2,500 km journey that saw a convoy of 30-plus vehicles weave its way through dense evergreen forests, river valleys and mountainous and glacial terrain – all of which form part of this world biodiversity heritage site. Commencing from the historically
Mahindra vehicles on the river bed
significant Pangsau Pass, which during the Second World War played a crucial role in the allied forces’ fight against the advancing Japanese army. The guests were treated to the village’s unique cuisine, even as they immersed themselves in the local culture. The warm hospitality from the locals was felt by offering the guests to stay at their homes. “I must congratulate the organisers and the entire team, including the Director of Tourism. The model you all adopted this time – of promoting homestays – is a model that you should all continue with. Promoting homestays is of utmost importance – it is what will lead to positive changes in rural tourism”, said Pema Khandu. Abu Tayeng, Director, Tourism Department added, “We started our first edition in April 2021 and have learnt to do better in this edition. Focused on exploring ways in which we could let participants visit homes in places like Mechuka, Rima and Bomjir, we started with homestays. This process enabled us to help the local economy, which is what our intent is – to boost the local economy”.
The 12-day journey was an eyeopener to the enormous challenges and efforts that go into linking many of the state’s isolated villages and tribes, like the Yobin and Lisu tribes that live off the Namdapha National Park, to the rest of the country through road links. It is the belief of the government that the establishment of such road links will act as a catalyst for Arunachal Pradesh’s tourism economy. Considered to be one of the eighteen ‘biodiversity hotspots’ in the world, Arunachal Pradesh is home to over 5000 species of flowering plants, including an astounding 500 varieties of orchids. With its extraordinary variety of bird species, it also shelters tigers, leopards, the clouded leopard, snow leopard as also the rare Golden Cat and Marbled Cat. “I cannot think of a better way than a drive through our state,” said Lhakpa Tsering, one of the main organisers of the event, expressing confidence that the participants had had a ‘very holistic experience’ of Arunachal Pradesh, given that every detail of the drive had been carefully planned. With the picturesque mountains, tranquil lakes, rivers, streams, waterfalls and famous monasteries, Arunachal Pradesh is a must-visit for adventure, nature and wildlife lovers. It is also a beautiful driving destination for a holiday with the family to relax and recharge, away from the hustle-bustle city life. The state government’s number of initiatives with the tourism department and other organisations to promote tourism will make Arunachal one of the best tourist spots in the country. u S M B OO T H EM [email protected]
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Workspace
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
Managing work space
Work Avenue. “Large companies are also increasing, adding this space to their overall office portfolio and this has thrown a huge opportunity for us Coworking player 315 Work Avenue ramps up portfolio in a big way as a committed player in this space. As an organisation, we are ramping up our portfolio of offering our capabilities in a big way to meet this growing demand”. Work Avenue has already signed up about 4,000 seats in the last two months of the current year. In one of the deals, the company has signed up 800 seats with Square Yards, India’s largest integrated platform for real estate & mortgages. This office space is located at a prominent business hub in Pune. “It is essential that we provide a workspace to our employees that is in tune with our focus on poselying all initial doubts, Cowork- workflow and a proMehrotra: rapid surge in demand itive work culture ing companies continue to wit- ductive work ambiness rise in demand in recent ence, manages about 30,000 seats and innovation,” says Anand Moorthy, times as businesses, particularly large across multiple prime locations (some CBO & principal partner, Asset Manones, are increasingly looking to bring 25 locations) in Bengaluru, Mum- agement Services & Data Intelligence, in flexible component into their office bai and Pune. The coworking player, Square Yards. “And 315 Work Avenue space portfolio. The latest Anarock which has been providing enterprise meets all our requirements. We wanted Research reveals that, out of a total net office solutions, serves names such to ensure a modern, tech-enabled, office absorption of 34.1 million sq as Tata Technologies, Hero FinCorp, flexible workspace, with a convenient ft across the top seven cities in 2021- Hafele, Astra Zeneca, Square Yards, commute to meet the demands of our 22, coworking comprised a 13 per Firstsource, Operative and MyGate. As exponentially growing workforce. The cent share – about 4.43 million sq ft. part of its expansion, the company is space radiates high productivity, work As against this, the share of cowork- also looking to foray into newer geog- efficiency and intense collaboration. ing in the previous year was just 5 per raphies like Hyderabad and Tier II cities This arrangement offers convenience cent of the net absorption of 21.32 mil- like Indore, Ahmedabad, Lucknow and and flexibility for the company’s lion sq ft. As per one estimate, in the Jaipur. It enjoys an average occupancy employees in a contemporary and safe environment”. next couple of years, the share of flexi of over 95 per cent at present. “The deal with Square Yards reafspace may double, while another estifirms the potential created by the conmate indicates that coworking opera- Best brand tors sold over 55,000 seats in 2021, up The coworking space is ISO certified sistently rising demand of flexible with international standards of hos- workspaces amongst companies – startfrom 36,000 seats in 2020, Amidst this bullish trend, the Beng- pitality, health, and safety benefits. ups, SMEs and mid- and large-sized aluru-headquartered 315 Work Avenue, 315Work Avenue was recently awarded enterprises, which are looking to adopt one of the fastest growing coworking the ‘best emerging coworking enter- hybrid workplace models, amidst the space providers, has decided to more prise office brand’. The company was new normal,” informs Mehrotra. “Companies are increasingly seekthan double its portfolio from the cur- also recognised as the ‘best coworkrent 1.5 million sq ft to about 4 mil- ing brand for design and client satisfac- ing solutions that reduces their capilion sq ft by the end of this year and 10 tion’ by Times Business Award, 2021. tal expenditure, enhances agility and million sq ft by the end of 2023. Inter- It has also received certification from productivity. Corporates are gradually estingly, 30-40 per cent of this incre- British Safety Council for following adopting a ‘core+flex’ strategy, as the mental space will come from inorganic policies, procedures and arrangements concept of work from anywhere is far expansion, as the company is looking relating to control of Covid-19 within more prevalent and widespread today and flexible workspaces offer a great and for partnerships and acquisitions of workplace. “The market for coworking/ man- refreshing office experience to clients,” smaller operations, since the industry aged space has seen a rapid surge adds the 315 Work Avenue founder. u is undergoing consolidation. 315 Work Avenue, known for its in demand,” says Manas Mehrotra, Arbi n d G u pt a technology-driven hubs, customised founder & managing director of 315 [email protected]
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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
Turning around One Point One Solutions regains its position s a n j a y bor a d e
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n 29 May 2022, One Point One Solutions, a listed entity on the NSE, announced its working results. While the company’s revenue from operations was at R131.69 crore, as compared to R101.60 crore in 202021 (up by 29.62 per cent), its operating profit (EBIDTA) was at R28.25 crore, as against R8.30 crore in 2020-21 (having grown by 2.42 times). The EBIDTA margin shows an improvement of 21.45 per cent over the 8.12 per cent recorded in Q4 2020-21. And the net profit, at R3.66 crore, compared favourably to the loss of R20.19 crore in 2020-21, registering a growth of 1.18 times. This is a substantial turnaround this business process management (BPM) player has displayed. “The strong growth was driven by the new client additions, along with expansion in business from existing customers,” explains Akshay Chhabra, MD, One Point One Solutions. “We have been able to improve margins by increasing efficiency and adding seat occupancy across locations. The demand for BPM services is increasing, as the economy has opened up, and every sector is focussing on winning new customers and making their existing customers’ experience delightful. We would be the biggest beneficiaries of the fastest growing Indian economy, as the demand for our services is directly proportionate to growth in the service sector”. Chhabra, founder, One Point One Solutions, has been focussing on technology-driven innovations to build efficiencies and surge ahead in the BPM space. The company was incorporated in 2006 to offer technology, accounting, skill-development and analytical solutions that help businesses build better capabilities and enable them to achieve seamless growth. It serves a broad spectrum of industries like telecom & broadcasting, retail and e-commerce, consumer durables, FMCG, banking and finance, besides travel, hospitality and Insurance. The company has five service centres located across Navi Mumbai, Gurgaon, Chennai, Bengaluru
Chhabra: improved margins
and Indore, with 5,500 plus seats on per shift basis. “We offer services like customer care, lead generation, content management, voice analytics, accounts payable and receivable, SME management, predictive analytics, chat bots, IVR, voice analytics and e-mail management,” says Chhabra. Listed in 2017, the company now boasts of leading a clientele spread across sectors. Some of its leading service receivers are SBI Cards, Godrej Appliance, Kotak Securities, ICICI Bank, Tata Motors Finance, Airtel, Adani, Go Air and Mahanagar Gas, to name a few. “We are experiencing a flow of new clientele from mid-February,” adds Chhabra. “The company has signed three new and marquee clients in the last two-three months and is in the final stage of discussion to add up more clients during the year. Its current capacity utilisation stands at 64 per cent, which is 3,500 seats on one shift basis, moving upwards of 100 per cent utilisation of capacity of 5,500 seats on one shift basis by the end of the current financial year. u 61 u
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We have enough room for expansion on a two-shift basis to double the current capacity to 11,000 seats, based on the demand scenario”. He had taken a hard call of letting off customers like DTH and telecom clients over the last two years, as they were occupying capacities but were not able to give the margins, as the industry was bleeding. As of today, there’s a shift in the client profile, with contributions from BFSI, new age Tech businesses, etc, increasing to almost 75 per cent. The average realisation per seat has increased from R29,000 to R37,000 and is now inching towards R40,000. Way ahead The company is primarily aiming at filling up vacant capacities in the current year. This would mean, on optimal capacity the company can do a turnover of about R225 crore, with 10 per cent net margin, with all the infrastructure cost, rentals, etc, already built in the cost. It is also working on the government vertical. There are various government tenders, like labour helpline, which the Supreme Court has mandated that the states implement. The mandate has to be put to effect in over 22 states, with each tender being worth R100-120 crore. Even one such tender would mean doubling the present topline with a net margin of about 20 per cent. The company is also working on large tenders from public sector banks, which could potentially be a game changer for it. So, it has appointed a team to specifically work on these projects and feels confident of closing at least couple of them this year. A big shift in numbers is expected from international businesses too, which the company is working on. A sales team, already appointed, is based in the UAE is under process. The average realisation per seat in the international process is in the range of R1.60-1.75 lakh (minimum wage $80/ day). The net margin is expected to be about 25 per cent. At a conservative utilisation estimate of only 500 seats (10 per cent of total night capacity) in 2023-24, the company could still record a turnover of about R100 crore and a net gain of R25 crore. u L AN C E L O T J O S E P H [email protected]
Entertainment
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
‘Music elevates’ The journey continues for discovering original English music talent
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fter the success of Nexa Music Season 1, Maruti Suzuki India Limited (MSIL) has now announced the launch of the Nexa Music Season 2. “A first-of-its-kind initiative, Nexa Music is a platform curated to promote aspiring Indian musicians to showcase their talent and create original international global standard English music,” says Shashank Srivastava, Senior ED (marketing & sales), MSIL. “The Nexa Music Season 1 saw an overwhelming response of over 1,000 entries globally, out of which 24 musicians were selected and mentored by the global music icon A.R. Rahman, supported by Clinton Cerejo. A total of 34 new English songs with music videos were released in season 1, which garnered more than 75 million views on the Nexa Music YouTube channel. Furthermore, two dedicated playlists were also created, one with the 10 marquee songs from headline artists and super winners and the other with 24 Songs from Lab artists on leading audio streaming sites like Spotify, Amazon Music and Apple Music”. Season 1 of Nexa Music also provided an on-ground music event experience with four live gigs, featuring artists from Nexa Music across Mumbai, Gurugram, Chennai and Bengaluru. Launched in 2015, Nexa is designed to offer a global car-buying experience to customers. With over 407 showrooms across 250 plus cities, It is the third largest retail automobile brand (in terms of volume). “Nexa persistently stays true to its philosophy of ‘creating the new to inspire the next’ by providing a premium experience to everyone, who enters the world of Nexa. We introduced three experiential pillars, which catered to the expectations of the discerning customers -- Nexa Music (creation of new English music that is original and inspiring); Nexa Lifestyle (creation of new lifestyle experiences that are avant-garde and aspirational; and Nexa Journeys (creation of exclusive journeys that are unique)”, explains Srivastava. Nexa product line-up includes a complete
range of premium best-sellers – Ignis, Baleno, Ciaz, S-Cross and XL6. “Nexa Music holds a special place in our hearts,” he adds. “We are thrilled to announce the Second Season of Nexa Music and excited to begin our country-wide search for fresh, emerging talent. Nexa Music is a one-of-a-kind platform that encourages music enthu-
in a music video featuring the artists. Out of the 24 artists, the top four will be shortlisted and declared the Super Winners of Season 2. These artists will get to compose an additional new original English song under the mentorship of the music producers and will be featured in their respective music videos. Selected artists will be mentored by Rahman and supported by music composer Mikey McCleary and celebrity artists duo Clinton Cerejo and Bianca Gomes, Uday Benegal and Monica Dogra. The Season 2 of Nexa Music will centre round the pillars of Nexa Music
India is buzzing with youth, energy and undiscovered raw talent
A.R. R ahman Global Music Icon siasts and artists to channel their love for self-composed English music”. Global standards In the second season, under the mentorship of musicians like A.R. Rahman, the shortlisted artists will get the opportunity to create original English compositions of global standards and be able to share them internationally. “India is buzzing with youth, energy and undiscovered raw talent,” says A.R. Rahman. “Looking forward to finding unique voices and brilliant talent across the country. Qyuki and Nexa are building a much-needed tradition by fostering the next generation of Indian musicians.” A jury comprising A.R. Rahman, Nexa and Qyuki will shortlist 24 contestants from all the entries received, who will undergo mentorship programme at the ‘Nexa Music Lab’ to further brush up their singing talent. The original tracks of the shortlisted 24 artists will be professionally reproduced u 62 u
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Lounge and Nexa Music Lab to discover and celebrate upcoming artists. The lounge is headlined by top Indian artists in the English music space. The super winners of Season 1 headlining Season 2 are Nisa Shetty, Simetri and Heat Sink. “The album of these marquee songs will be titled ‘Elevate’, which signifies the journey an artist goes through on Nexa Music, which elevates them to the next level both creatively as well as literally. Nexa Music Lab will play a key role in Season 2 in attracting and recruiting new emerging talent across the country to participate in this musical journey. The lab process, from hunt to selection, will also form an episodic show, with the 24 shortlisted participants being mentored by music composers from international music publishers like Fairwood Music and Konic Records, Turnkey Music & Publishing and Rahman. u L AN C E L O T J O S E P H [email protected]
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
P o l o F l o at e l e n s u r e s t r a n q u i l e x p e r i e n c e o n t h e r i v e r i n K o l k ata
C o u rt e s y : P olo F lo a t e l
A date with maritime world
The reception: giving a feel of the maritime world
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een there, done that! Here is an experience for the jaded palate. A unique reminiscence of maritime legacy, the iconic Polo Floatel offers inspired hospitality on the bank of Hooghly River in the City of Joy. Anchored next to Millennium Park on the Strand Road, this riverfront property, flanked by heritage Howrah Bridge and the Vidyasagar Setu (second Hooghly bridge), this truly boutique hotel on Ganges in Kolkata offers unparalleled city views including sunrise and sunset. It also offers boat rides, guided city heritage tours showcasing the rich history and culture of Kolkata and romantic candle light dinners with panoramic views of the cityscape on demand. Lucky ones can also see river dolphins. Owned by Hotel Polo Tower group, The Polo Floatel, stresses on de-stressing and exclusive privacy. “This is the only floating hotel in the country,” claims Deval Tibrewalla, CEO of the group. “It is designed to give more than just a vacation. We have all types of guests coming to our property like business executives, leisure travellers, foreign tourists, weddings and MICE,” Tibrewalla adds. Floatel was built on a barge in Singapore and brought to Kolkata by the city-based Manor Floatel. The company managed the property till 2018, before it was referred to NCLT as it failed to pay back the loan. Hotel Polo Towers group,
one of the largest hotel chains in Northeast India, with more than 11 hotels and cafes, bought the Floatel through the NCLT bidding process in 2018. It refurbished the massive structure and reopened its doors as Polo Floatel. Today, Tibrewalla and his wife Srishti are running the property successfully. After two years of lull due to Covid, it has now achieved a high average occupancy rate of 85-90 per cent. Making meaningful connection Polo Floatel has not scrimped on the modcons and yet carries a strong traditional line, with its antique furniture, bric-abrac and paintings. The eco-friendly boutique hotel showcases re-imagined design elements to provide meaningful connection to local culture, while enhancing the facilities for an elevated guest experience. “We have restored several priceless antiques like artefacts and paintings,” says Srishti, a designer who oversees the decoration of the property. “And, we have also added many collected by us across the world.” It has a large car parking area. The reception is quite amusing, painted with marine blue with several shipping paraphernalia including a giant ship steering wheel hanging from the ceiling. The reception area and the hotel are connected with a jetty. The Polo Floatel emphasises on discreet understated service, the property manager u 63 u
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De-stressing and exclusive privacy
personally greets each guest. The hotel has 58 cabins, with beautiful interiors that reflect its maritime style. It offers six categories of cabins – Strand View Cabins, River View Cabins, River View Suite with Balcony, Strand view Suite with Balcony, Strand View Heritage Suite with Deck and River View Heritage Suite with Deck. The cabins are crafted to perfection and guests can wake up to serene views of the river Ganges and the city beyond. Plastic is not encouraged in the cabins, which feature eclectic decor elements. There are also specially sourced map designs in the cabins, reflecting the old Calcutta of the erstwhile Raj, which serve as a perfect way to contrast the changed riverside of today with those of the old. The rack rate for the cabins varies from R4,500 to R7,500. Interestingly, the city doesn’t have any luxury hotel situated on the bank of the river. Bridge Bistro Bar is the multi-cuisine restaurant on board. The chef is completely versatile and can dish up anything the guest wants on a one-onone basis. There is a well-stocked wine cellar to accompany the tasty dishes. The adventure of staying on the Ganges in a pollution-free environment with warm hospitality is making all the difference. u S AJA L B O S E [email protected]
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
Power, poignancy and playfulness
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ast fortnight, Hindi writer Geetanjali Shree’s novel Ret Samadhi (Tomb of Sand) won the 2022 International Man Booker Prize – the first book written in an Indian language to have won the honour. It is also the first novel translated from Hindi to be recognised by the award. Translated by Daisy Rockwell, a painter, writer and translator, Tomb of Sand is a story that examines boundaries – between nations, religions and genders – even as it follows the story of Ma ji, its octogenarian protagonist, whose husband’s death pushes her to assess her choices. Announcing the win, Frank Wynne, Irish translator and jury chair,
said: “…We were captivated by the power, the poignancy and the playfulness of Tomb of Sand, Geetanjali Shree’s polyphonic novel of identity and belonging, in Daisy Rockwell’s exuberant, coruscating translation. This is a luminous novel of India and Partition, but one whose spellbinding brio and fierce compassion weaves youth and age, male and female, family and nation into a kaleidoscopic whole.” During her acceptance speech at the Booker ceremony in London, the 64-year-old Shree spoke of the ‘melancholy satisfaction’ in the award going to a work like Tomb of Sand. “Ret Samadhi/ Tomb of Sand is an elegy for the world
we inhabit, a lasting energy that retains hope in the face of impending doom,” she said. “The Booker will surely
take it to many more people than it would have reached otherwise, that should do the book no harm.” u
Lending a helping hand
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s her Youth4Jobs completes its 10th year, the Hyderabad-headquartered founder Meera Shenoy has one more occasion to celebrate: she was invited to participate in prime minister Narendra Modi’s Mann ke Baat programme. Describing her as an example of somebody doing exemplary work in the field of market-linked skilled training for the rural, tribal and disabled youth of the country, he says in the 89th edition of the programme that she is one of many much-needed mentors for such youngsters. Shenoy, a former business journalist who launched her initiative in a small way in 2012, has spread her operations across more than 12,000 villages in 579 districts of 28 states and Union Territories in India, touching 9.33 million households. Working with youngsters afflicted by 18 disabilities she and her team have trained 32,000 such people, of whom they have placed 24,000 in jobs in the organised or local organisations and helped 1,600 set up their own enterprises, while the rest are pursuing higher education. “I am grateful to our partners,” she says, adding that these comprise more than 1,300 companies, nearly 2,900 colleges and 400-plus NGOs. u
New beginning
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apan and India’s relations are 70 years old; these relations would grow stronger and both Haryana and Japan would keep moving forward,” said Manohar Lal, chief minister, Haryana at the Agreement Signing Programme held for the allotment of land for the plants of Maruti Suzuki India and Suzuki Motorcycle India to be set up at Industrial Model Township (IMT) at Kharkhoda in Sonipat. (On the completion of 40 years of Maruti Suzuki’s journey,) The agreements were signed between Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) and Maruti Suzuki India / Suzuki Motorcycle India. Maruti’s new plants are to be set up in Kharkhoda on 800 acres and 100 acres of land respectively. With the establishment of the plant, 13,000 people would get employment opportunities. R.C Bhargava, chairman, Maruti Suzuki India; Kenichi Ayukawa, executive vice-chairman, Maruti Suzuki India; Hisashi Takeuchi, the company’s managing director & CEO also were present at the event. u u 64 u
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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
Taking culture to the youth
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he renowned restaurateur and scriptwriter turned author Akshat Gupta has launched his first book in the mythology fiction trilogy, The Hidden Hindu. The book was first published in Urdu and launched by Michelin Star Chef Vikas Khanna. Published by Penguin India, it is already a best seller on Amazon. The screen adaptation rights for the book has been acquired by Dhoni Entertainment. The author presented the book to M. Venkaiah Naidu, Vice-President of India. “The Hidden Hindu educates today’s youth about our culture in an interesting way through a medium which they enjoy,” said Naidu. “It’s an honour to have the opportunity of presenting
my very first book to the Vice-President of India. This moment is overwhelming as, a few years back, when I had lost everything and writing was my only hope, I didn’t know my book would gain this popularity. I am thankful to the VicePresident for giving me this platform and for his kind and motivating words”, added Akshat Gupta. Based in contemporary India, The Hidden Hindu is a brilliant work of fiction that interlinks sci-fi technology and Hindu mythology. The story proceeds to disclose the incredible revelations of the mystical Aghori that could shake up the ancient beliefs of the present and alter the course of the future. u
Jungle Jane
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he fell in love with forests when she first visited the Tadoba wildlife sanctuary in Maharashtra nearly a decade ago, says Varsha Seshan. The Pune-based author of children’s fiction – who is also a creative writing teacher and Bharathanatyam dancer – has built on that early romance to create the backdrop for her book Red Eyes, which was the first runner-up for the Scholastic Asian Book Award 2018. The book, which has just been officially released in Singapore at an online function, marks her second to be shortlisted for the awards. “Visiting a forest is not just about sightings – of tigers, leopards or even the wide variety of birds,” says Seshan, 35. “But there is always a u 65 u
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quickening of the heart when I hear a rustling in the trees or the bushes, and I wonder what caused it.” In her book, she relies on her imagination to tell her readers about Veer, a city boy who suddenly sees a pair of red eyes looking at him through his window. He chases the owner of these mysterious eyes into the deep forest and finds Medha, who could be human, animal, or something else and has an intelligence that is beyond that of the people and creatures he knows. He makes friends with her and protects her from men who want to capture her and put her into a cage. Who wins – humanity or greed? “Read the book!” she grins. u
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
On the path to progress Pema Khandu, Chief Minister of Arunachal Pradesh is doing everything possible for the growth of the state. In his second term as CM, his top priority is to put forth the state as a tourist destination. To this end, he is working on a number of issues – good roads, bridges, easy connectivity and communications. He is easily accessible and connects instantly with people. SM Boothem recently spoke to him and the young chief minister shared his plans, challenges and opportunities Do you think motorsports and other adventure activities will attract tourists to Arunachal Pradesh?
Arunachal Pradesh is positioned such that it is suitable for motorsports and other adventure sports. We started a festival back in 2015, known as the Orange 4x4 Fury powered by JK Tyre. JK Tyre has supported the festival which has provided amazing promotion not only to Dambuk but also to the whole of Arunachal Pradesh. Initially, when we started the programme in 2015, people did not have much of an idea about the tourism here and perhaps thought that the festival might cause disruptions in the environment. We have been organising the festival for six years now. Many young talented groups from Arunachal Pradesh have also associated themselves with this event. Please tell us about the tourism village
Arunachal Pradesh is a big state and is home to more than 26 major tribes and 100 sub-tribes. The dynamics for the tribes are different. As I mentioned initially, the tourism industry in Arunachal Pradesh is flourishing, so the concept of a tourism village is to encourage rural tourism. Initially, we had allotted an amount of R5 crore and we are going to enhance this budget. What are the plans to promote your events?
Marketing is very important these days. We have multiple tourism festivals in Arunachal Pradesh. We often showcase our tribal culture. An
example is the Tawang festival where we highlight the essence of tribal culture. The Ziro festival of music promotes individual bands. We also have international bands who visit and perform. We have the Orange Festival and the Mechuka festival, among others. In the coming days, we plan to organise campaigns in the metro cities for the upcoming festivals so that people are aware of the festivals that take place in AP. What are the other plans to promote tourism in the region?
AP is geographically the biggest state in North East India and from the plains to the mountains, the Government is planning to organise multiple events and reach out to a large number of people to promote the place. We also aim to improve the connectivity of the region. We have six operational airports and two have already started service. This year, we will complete the biggest airport, which is in Itanagar. As you can see, we also focus on connectivity so that tourists don’t face any problems in commuting. The Orange festival in Dambuk is very famous and multiple companies are capitalising on this; recently, however, production has been low. Any plans for improvement?
Oranges are very popular here and we export them as well. With the help of the government, we plan to open research centres for both oranges and kiwis. The research centre for kiwis will be in Ziro. Research u 66 u
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is very important to educate the farmers as well. What is the progress of the infrastructure in the state?
When we started this festival in 2015 the main road here was in poor condition. People used to travel by boat, which was extremely difficult at times. On the infrastructure front, there has been slow and partial progress. Similarly, when it comes to tourism, you should be aware of the Ziro Festival of Music ZFM, which began in Ziro in 2012 when I was the tourism minister. There was a lot of resistance at the time but the Ziro Music Festival and the entire Ziro plateau eventually achieved great heights in tourism. We didn’t even have a hotel at the time although now we have hundreds of hotels and homestays. Similarly, Dambuk is gradually gaining popularity, with a strong emphasis on homestays. Tourism will play a significant role in AP’s economy. Tawang state has seen a significant increase in tourism. In the last seven years, we have seen a massive transformation happening around AP, especially in the connectivity sector, with support from the central government under the leadership of Prime Minister Narendra Modi. The word about Arunachal has spread across the country through a variety of media – electronic and digital. The best thing about all these efforts is that every year there is a ‘quantum increase’ in tourism in our state. This is a great step forward and will enable us to achieve our goals. u