2 COMPANIES MUMBAI | MONDAY, 10 JUNE 2013 1 > > IN BRIEF Jet Airways raises pilots’ salaries Private carrier Jet Airways has raised the salaries of its pilots, acceding to their long- pending demand, even as its 24 per cent stake-sale deal with Etihad Airways awaits regulatory approvals. “The airline has hiked its pilots’ wages by up to 18 per cent in a staggered manner with retrospective effect from 2010-11,” sources told PTI in Mumbai. The highest rise is six per cent a year, based on the pay scales. PTI < >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SAIL consortium prunes Afghan plan Scaling down their original plan by around 75 per cent, members of a Steel Authority of India Ltd-led consortium, Afghan Iron and Steel Consortium, have decided to set up a mini-steel plant of 1.25 million tonnes in Hajigak in Afghanistan with a $2.9-billion investment. The decision to cut the original project from $10.8 billion was taken at a meeting on May 23-24 between the members and the project consultants, a source said. PTI < >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Additional role for Johri at Discovery Discovery Networks International, on Thursday, said Rahul Johri, senior vice-president and general manager (South Asia), will now also be the head of revenue, pan-regional ad sales and Southeast Asia. The company has also named Arjan Hoekstra as the new head of Asia-Pacific, effective September 1. BS REPORTER< >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> ICVL hopes for coal block deal by FY14 International Coal Ventures, a consortium of public sector units for coal block acquisition, is aiming to set up its first coking coal block acquisition in the current financial year. “We have shortlisted four to five assets from Australia to Mozambique,” Chairman C S Verma said. PTI< >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Tata Motors’ trademark copied Tata Motors has filed a complaint before a Delhi court, alleging infringement of its trademark and copyright by unknown persons. The complaint sought direction to DCP (District Investigation Unit) Central District to take in custody and produce any person privy to production, storage or sale of any such objectionable articles. PTI< Y ou don’t always need an original idea for a start-up. Canadian residents Rahul Simha and Vishnu Chapalamadugu, along with California-based Mohit Aggarwal, spotted a wheel and concluded they didn’t need to reinvent it; all they needed to do was modify it to fit their vehicle. Last year, the three friends started iDreamBooks. The website, www.idreambooks.com, aggregates book reviews from major publica- tions such as The New York Times, the Wall Street Journal and a num- ber of other media platforms around the world, and assigns rat- ings to books based on the reviews. The service is modelled on www.rottentomatoes.com, a well known website that provides a sim- ilar service to moviegoers, aggre- gating film reviews. The founders of iDreamBooks are open about their source of inspiration, even billing their website as a “Rotten Tomatoes for books”. In fact, one of the founders of Rotten Tomatoes is an investor in iDreamBooks. The idea In an interview, Simha recalled the three founders were big fans of Rotten Tomatoes. Being avid read- ers, they sought a similar website for books. When they couldn’t find one, they decided it was a good service to offer. iDreamBooks, with its casually chatty slogan — “Never read a crappy book again!” — features between half a dozen and three dozen, sometimes more, critics’ reviews for a book, along with read- ers’ comments. The website also assigns a rating for each book. A rating of 70 per cent or more means the book is recommended, and the score is accompanied by a smiling face within a blue cloud, the website’s logo. Lower scores are given a sulky-face-within-a-grey- cloud treatment. Simha says the rating is derived through a combination of automat- ed sentiment analysis and manual curation of professional critics’ reviews. He adds the software used for sentiment analysis was partly developed by an in-house team; some of it was secured from avail- able Open Source software and tweaked to the website’s needs. The project started with a cou- ple of thousand titles; now, it cov- ers about 100,000 titles. While crit- ics’ reviews are displayed for most books, ratings are available only for about 2,000. A search for Dan Brown’s long-awaited thriller Inferno, for instance, reveals only one review and no critic rating, though it was widely reviewed and one of the biggest publications this year. “Scaling up data is our main challenge, ever since we launched. On the business side, we see it as a function of data. So, as we generate more data and it is cleaner and of better quality, everything on the business side becomes easier,” Simha says. Shot in the arm The initial investment for the ven- ture came from family and friends. Soon, they attracted funding from 500 Startups, a Silicon Valley incu- bator that invests in early-stage start-ups, providing up to $250,000. iDreamBooks is head- quartered on its investor’s campus in Mountain View, California. Simha declines to specify the fund- ing his venture has secured so far. He says the company is in talks with other investors for more financing. Currently, the start-up has a staff of five, including the three founders. In April, the company received a shot in the arm through a deal with Sony ReaderStore. Through an iDreamBooks icon on the Sony e-bookstore page, users can now access critics’ reviews and the iDreamBooks rating for the book of their choice. “Sony approached us because they liked what we were doing. It’s unique,” says Simha. He adds the partnership would provide the start-up with a revenue stream in the form of an annual fee. It also introduces iDreamBooks to a much larger audience — the uni- verse of Sony e-bookstore users. While this would increase visibility for iDreamBooks, experts caution Sony Reader isn’t as popular as the market leader Amazon’s Kindle. “The device is quite good, but they keep a low profile and don’t seem to innovate anymore. They seem to update long after everyone,” says Calvin Reid, senior news editor at Publishers Weekly, a leading trade magazine for the US book publish- ing industry. Simha admits Sony’s market share is smaller than Amazon’s. He, however, points out his company’s partnership with Sony isn’t an exclusive deal. He says iDreamBooks is also in talks with other book-related sites that could use its service, pointing to Amazon as a potential partner. The start-up sees licensing its data as a major part of its revenue stream, with publishers, retailers, libraries and others into book discovery or book selling as potential clients. “On the consumer side, once we get to scale and have a lot of traffic, we can monetise it through book sales and, maybe, through ads,” Simha says. For now, the founders want to focus on scaling up content and building traffic on their site. “Ten to fifteen thousand books are reviewed by major publications every year. Our goal is to be current with those. Right now, we’re cur- rent with the best sellers from May 2011 and the Big Six publishing books,” says Simha. Challenges Building up content is the biggest challenge, as the company can’t rely solely on automation for sen- timent analysis; the need for man- ual curation makes the process slow. For instance, the presence of a word such as ‘disappointed’ in a review may push the book towards a negative rating, which would be misleading if the critic had actual- ly written the reader would not be disappointed. “We’ve done some work on it, come up with some algorithms to separate that and to come up with accurate sentiment. But we’re not satisfied with what we have right now,” admits Simha. To aggregate reviews from vari- ous publications more efficiently, the company also wants to build its own crawler. “Right now, we have to query a site with a certain book and if it exists, it gives us a ‘yes’ or ‘no’. But if we have a crawler, it informs us of all the books being talked about on that site. So, that would solve all our problems,” he says. Opportunities The book market in the US, includ- ing educational and professional publications, is estimated at $27 billion; e-books account for a fifth of this. “There’s a lot of shift and turmoil in publishing, but there’s a big move to e-books from physical books. It’s actually good for us, because everything is moving to digital and there are more e-books being downloaded,” Simha says. Amazon’s recent acquisition of Goodreads, a site that allows book lovers to share opinions and rat- ings of various titles, has provided a boost to Simha’s morale. Amazon was reported to have paid about $120 million for Goodreads. Publishers Weekly’s Reid believes demand could grow for sites such as iDreamBooks, which aid discoverability. “This is the holy grail of bookselling in the digital era. How, in this sea of content, do you come up with something you’d be interested in reading or, on the busi- ness side, how do you make your book stand out from somebody else’s? These kinds of entities would be valuable to both consumers and the publishing side,” he says. iDreamBooks’s traffic isn’t any- where close to that of Goodreads. But if it succeeds in making itself valuable to book readers, it may be equally valuable to booksellers, too. iDreamBooks: Reading between the lines The Silicon Valley start-up spotted an opportunity in aggregating book reviews, but accurate sentiment analysis remains a challenge, writes Indira Kannan It’s a good idea because they are following the trend of consumption of books in a digital format. Other types of media are well reviewed by different types of sources, whether it’s Netflix or Rotten Tomatoes for movies or iTunes for music downloads. For e-books, there really wasn’t a similar way to judge a book. Being part of 500 Startups, they have access to all the mentors. They also have the profile that comes from being part of that programme. They have a big market that doesn’t really have many competitors; there aren’t a lot of rating services for books that have received any sort of widespread adoption. But they need to have partnerships with books, digital publishers or platforms. It’s a bit of a fragmented market. There are different types of e-book readers — there’s Kindle, there’s Kobo, there’s Nook from Barnes & Noble. So, it might be a good idea to work with one of the big e-book publishers or with traditional retailers still focusing on in-store experience. Another idea is they could start working with a very large platform for people to read the writings of unpublished authors. It’s called Wattpad, a Toronto-based company that has several million users around the world. This is where people can discover the writing of other people who aren’t published, mostly fiction. I recommend they try to work with a company such as Wattpad as a way to build awareness. Their business model can be applied in many countries; the focus is to build the world’s leading review brand for published work. They’re not trying to dilute it by focusing on other areas. The model of books is a steadily growing and truly international business one. Sunil Sharma , Managing Director, Extreme Startups, Toronto > EXPERT TAKE START-UP CORNER Vishnu Chapalamadugu ( foreground, in white shirt) and Rahul Simha, co-founders of idreambooks Product: Aggregate book reviews from major publications; assign book ratings based on reviews; ready reference guide for readers and book buyers. Investors: Dave McClure, Paul Singh – Partners at 500 Startups; Daniel Hoffer – Mentor at 500 Startups; Patrick Lee – Founder, Rotten Tomatoes; Joshua Greenough. Revenue strategy: Annual fee from partnership deal with SonyReader e-bookstore; similar deals with other e-booksellers; licensing data to publishers, retailers, libraries, and others with book discovery or book selling functions; monetise user traffic through book sales and advertisements. Challenges: Visibility and user traffic are still low; scaling up data proving slow because manual curation of reviews is needed alongside automated sentiment analysis; team still working on building a crawler to aggregate reviews more efficiently; need partnerships with services more popular than SonyReader; two founders have to travel frequently to Silicon Valley from Canada as they don’t have suitable work visas for the US. www.idreambooks.com: RATING BOOKS WITH REVIEWS The firm’s homepage & logo (bottom) Nod unlikely for stake increase in HZL, Balco INDIVJAL DHASMANA & SURAJEET DAS GUPTA New Delhi, 9 June A nil Agarwal’s Sterlite Industries might not gain in the dispute with the government over its exercise of a call option in Bharat Aluminium Company (Balco) and Hindustan Zinc (HZL) in the light of the pro- posed move to allow call and put options in listed companies out- side the stock exchanges. Attorney-General G E Vahanvati has told the finance ministry the move should come with a clause that it would be prospective and wouldn’t affect ongoing court dis- putes, said those in the know of the development. The government has decided to allow put and call options in share purchase agreements to permit listed companies to buy or sell equity at a predetermined price in future. The proposal was cleared by Telecom Minister Kapil Sibal within a day of his assuming additional charge of the law ministry. It will come into force after approval by the finance ministry and the Securities and Exchange Board of India (Sebi). It will be imple- mented through a Sebi notifica- tion. Under the Securities Contracts (Regulations) Act, put and call options are treated as derivatives and are not permit- ted in listed companies outside stock exchanges. Unlisted com- panies, however, can go for put and call options. When the finance ministry sought the attorney general’s opinion on the proposal, he said a notification allowing the option could be issued by invoking the powers conferred under section 16 and 28 (2) of the Securities Contracts (Regulation) Act, 1956. He also said the notification didn’t suffer from any infirmity under the Companies Act, 1956, and the Indian Contract Act, 1872. However, he said a suitable provision might be inserted in the notification that it wouldn’t affect or validate past contracts or those which were in courts due to dis- putes. This specific opinion was to address the concerns of the min- istry of mines about the litigation pending with regard to Balco and HZL. Call and put options were one of the major clauses in the agreement with Sterlite Industries, an arm of London- based Vedanta Resources, when it bought majority stakes in HZL and Balco. Sterlite had bought 51 per cent stake in Balco for ~551.50 crore in 2000-01 and 26 per cent in HZL for ~445 crore in 2002-03, when the Bharatiya Janata Party- led National Democratic Alliance was in power at the Centre. Sterlite later invoked the call option to acquire another 18.92 per cent in HZL for ~323.8 crore. Subsequently, it increased its stake to 64.92 per cent. However, the government held Sterlite’s call option was invalid and could not be used to acquire further stake in HZL. Then Attorney General Milon Banerji had said the country’s laws didn’t allow for call and put options to be included in share- holders’ agreements. When Sterlite chose to exercise this option in the case of HZL in 2004, the Congress-led United Progressive Alliance government didn’t reciprocate with a put option. The company moved court against the government’s decision in 2007; the court held since the dispute arose out of the shareholder agreement, it should be resolved through arbitration prescribed in the agreement. While rejecting Sterlite’s plea in early 2011, the arbitration panel said the law of the land should be considered first, followed by the articles of association of a com- pany and then the mutual con- tract between two partners. Later, the government and Sterlite decided to approach the Delhi High Court. Subsequently, Vedanta Resources offered to the government to buy the residual stakes in HZL and Balco for about ~17,000 crore. Jet-Etihad decision on Tuesday The finance ministry will on Tuesday take a call on the ~2,000-crore Jet-Etihad deal and the FDI proposal of Norway’s Telenor. The Foreign Investment Promotion Board, headed by Economic Affairs Secretary Arvind Mayaram, will also take up the foreign direct investment proposal of Multi Commodity Exchange. While Jet Airways plans to sell 24 per cent stake to Abu Dhabi-based Etihad for about ~2,058 crore, Telenor is seeking to raise stake by 25 per cent in its domestic subsidiary Telewings to 74 per cent. PTI < How is the discovery of Lipaglyn a breakthrough for Cadila Healthcare? This is a unique achievement by any Indian pharmaceutical company. For the first time, a lot of firsts have happened. It is a first Indian NCE (new chemical entity), it is also the first drug to treat dia- betic dyslipidemia and this is the first drug which has appeared in the glitazar class across the world. It gives us the confidence India and Indian sci- entists can do it. Our basic objec- tive is once we launch in India, we will take it to global markets. So, we will launch in India in the third quarter of this year and then take this to the global market. We are registering into some emerging markets. Which are the markets? About 15 emerging markets and, among developed markets, we are taking it to the US, Europe and Japan. What will be your strategy? The first approved indication for this drug is diabetic dyslipidemia but we also have plans and studies undergoing, which have completed phase-II and are moving to phase-III, for some additional indications. Some of these indications are unique. Then, we want to take this drug to devel- oped markets with additional indications, which can hasten the process of approval. This is a patented product. How many patents do you have for it and in which countries? Our chemical structure is patented. Once this is patent- ed, you do clinical studies. Based on that, we have received approval for one indication and then we might get approval for additional indications. So, we will get multiple use patents for different indications. Currently, we have one product patent. We have patents in the world wherever we have approval. For additional indi- cations, we have filed additional patent applications. What are the additional indications under evaluation? We would not like to disclose these now. We would do that at an appropriate time. What is unique about this drug? We have done studies of this drug with pioglitazone, fenofibrate and atorvastatin and we have seen it is comparable to piogli- tazone with its anti-diabetic effect without the usual side- effect of pioglitazone such as weight gain. Similarly, it does not have the side-effect of fenofi- brate. Third, when it is adminis- tered along with atorvas- tatin, additional reduction in choles- terol level happens to the extent of around 20 per cent. All these things make the drug differ- ent. When other companies shy away from research due to financial risk and regulatory hurdles, how did you manage such a discovery? I want to go back to my strategy. When we decided we wanted to be a research-based pharmaceutical com- pany, we evaluated how we can do research within our resources. What you read and hear is that one requires a billion dollar-plus to discover a molecule. The obvious question to my mind was, where do we get a billion dollars to do so? We decided we do not want to get disheartened by this number. So, we decided to do it in a cost-optimised way. We focused our energy in developing inhouse capability. We are the only company with a dedicated research centre only focused on doing discovery research. We are the only company with capacity to do large animal stud- ies, including on pri- mates. From concept to pre-clinical stud- ies, we have complete capacity to do it. What are the investments made by Cadila on this drug? This drug discov- ery took us a total of 12 years, commis- sioned in 2000-01. The first five years were spent on discovery and pre-clinical studies and the next seven years on clin- ical studies. Our strategy was very clear that we want to discover and own the drug and not license out. Till now, we have spent around $250 million. We plan to spend another $150-200 million for addi- tional indications and also approvals in other markets. Do you plan to market the drug on your own or join hands with other players? We have no marketing capabilities in some developed markets. So, ultimately, we will need marketing partners in those countries. (We have) not yet started talk- ing to prospective partners as we are wa- iting for the launch in India. We are exp- ecting approvals in various countries in three to five years. In India and some em- erging markets, we will market on our own. Are you looking for multinationals to partner in developed markets? We will be looking for somebody who has the capability to market this product. None of the Indian companies has the capability to market products in the US or Europe. For full interview, visit www.business-standard.com ‘Our strategy was to discover and own the drug and not license out’ While most domestic as well as multinational companies shy away from making investments in drug discovery because of high financial risks and regulatory hurdles, Cadila Healthcare says it is the first Indian pharmaceutical company to develop a drug from its own discovery pipeline. The research-based firm now plans to partner MNCs for marketing its new drug, Lipaglyn, in developed markets such as the US, Europe and Japan, Cadila Healthcare’s Chairman and Managing Director PANKAJ R PATEL told Sushmi Dey. Patel also said that current challenges will help Indian pharma industry evolve to become better. Excerpts: PANKAJ R PATEL Chairman and Managing Director, Cadila Health Attorney-General Vahanvati has advised govt to only prospectively allow listed firms to buy or sell stake through contracts, say sources NO OPTION FOR STERLITE | The government might not allow listed companies to buy or sell equity through options; past contracts or those in courts might also not be allowed | Options were one of the major clauses in the agreement with Sterlite Industries, an arm of London-based Vedanta Resources, when it bought majority stakes in Hindustan Zinc (HZL) and Balco | The government had held Sterlite’s move in 2004 to increase its stake in the companies through options invalid STERLITE’S SHARE PURCHASE THROUGH DERIVATIVES
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Dec 27, 2015
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2 COMPANIES MUMBAI | MONDAY, 10 JUNE 2013 1>
> IN BRIEF
Jet Airways raises pilots’ salariesPrivate carrier Jet Airways has raised thesalaries of its pilots, acceding to their long-pending demand, even as its 24 per centstake-sale deal with Etihad Airways awaitsregulatory approvals. “The airline has hikedits pilots’ wages by up to 18 per cent in astaggered manner with retrospective effectfrom 2010-11,” sources told PTI in Mumbai.The highest rise is six per cent a year, basedon the pay scales. PTI <
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SAIL consortium prunes Afghan planScaling down their original plan by around 75per cent, members of a Steel Authority of IndiaLtd-led consortium, Afghan Iron and SteelConsortium, have decided to set up a mini-steelplant of 1.25 million tonnes in Hajigak inAfghanistan with a $2.9-billion investment. Thedecision to cut the original project from $10.8billion was taken at a meeting on May 23-24between the members and the projectconsultants, a source said. PTI <
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Additional role for Johri at Discovery Discovery Networks International, on Thursday,said Rahul Johri, senior vice-president andgeneral manager (South Asia), will now also bethe head of revenue, pan-regional ad sales andSoutheast Asia. The company has also namedArjan Hoekstra as the new head of Asia-Pacific,effective September 1. BS REPORTER<
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ICVL hopes for coal block deal by FY14International Coal Ventures, a consortium ofpublic sector units for coal block acquisition, isaiming to set up its first coking coal blockacquisition in the current financial year. “Wehave shortlisted four to five assets from Australiato Mozambique,” Chairman C S Verma said. PTI<
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Tata Motors’ trademark copiedTata Motors has filed a complaint before a Delhicourt, alleging infringement of its trademarkand copyright by unknown persons. Thecomplaint sought direction to DCP (DistrictInvestigation Unit) Central District to take incustody and produce any person privy toproduction, storage or sale of any suchobjectionable articles. PTI<
You don’t always need anoriginal idea for a start-up.Canadian residents Rahul
Simha and VishnuChapalamadugu, along withCalifornia-based Mohit Aggarwal,spotted a wheel and concludedthey didn’t need to reinvent it; allthey needed to do was modify it tofit their vehicle.
Last year, the three friendsstarted iDreamBooks. The website,www.idreambooks.com, aggregatesbook reviews from major publica-tions such as The New York Times,the Wall Street Journal and a num-ber of other media platformsaround the world, and assigns rat-ings to books based on the reviews.
The service is modelled onwww.rottentomatoes.com, a wellknown website that provides a sim-ilar service to moviegoers, aggre-gating film reviews. The foundersof iDreamBooks are open abouttheir source of inspiration, evenbilling their website as a “RottenTomatoes for books”. In fact, one ofthe founders of Rotten Tomatoes isan investor in iDreamBooks.
The ideaIn an interview, Simha recalled thethree founders were big fans ofRotten Tomatoes. Being avid read-ers, they sought a similar websitefor books. When they couldn’t findone, they decided it was a goodservice to offer.
iDreamBooks, with its casuallychatty slogan — “Never read acrappy book again!” — featuresbetween half a dozen and threedozen, sometimes more, critics’reviews for a book, along with read-ers’ comments. The website alsoassigns a rating for each book. Arating of 70 per cent or moremeans the book is recommended,and the score is accompanied by asmiling face within a blue cloud,the website’s logo. Lower scores aregiven a sulky-face-within-a-grey-cloud treatment.
Simha says the rating is derivedthrough a combination of automat-ed sentiment analysis and manualcuration of professional critics’reviews. He adds the software usedfor sentiment analysis was partly
developed by an in-house team;some of it was secured from avail-able Open Source software andtweaked to the website’s needs.
The project started with a cou-ple of thousand titles; now, it cov-ers about 100,000 titles. While crit-ics’ reviews are displayed for mostbooks, ratings are available onlyfor about 2,000. A search for DanBrown’s long-awaited thrillerInferno, for instance, reveals onlyone review and no critic rating,though it was widely reviewed andone of the biggest publications thisyear. “Scaling up data is our mainchallenge, ever since we launched.On the business side, we see it as afunction of data. So, as we generatemore data and it is cleaner and ofbetter quality, everything on thebusiness side becomes easier,”Simha says.
Shot in the armThe initial investment for the ven-ture came from family and friends.Soon, they attracted funding from
500 Startups, a Silicon Valley incu-bator that invests in early-stagestart-ups, providing up to$250,000. iDreamBooks is head-quartered on its investor’s campusin Mountain View, California.Simha declines to specify the fund-ing his venture has secured so far.
He says the company is in talkswith other investors for morefinancing. Currently, the start-uphas a staff of five, including thethree founders.
In April, the company receiveda shot in the arm through a dealwith Sony ReaderStore. Through
an iDreamBooks icon on the Sonye-bookstore page, users can nowaccess critics’ reviews and theiDreamBooks rating for the book oftheir choice. “Sony approached usbecause they liked what we weredoing. It’s unique,” says Simha.
He adds the partnership wouldprovide the start-up with a revenuestream in the form of an annual fee.It also introduces iDreamBooks to amuch larger audience — the uni-verse of Sony e-bookstore users.While this would increase visibilityfor iDreamBooks, experts cautionSony Reader isn’t as popular as themarket leader Amazon’s Kindle.“The device is quite good, but theykeep a low profile and don’t seem toinnovate anymore. They seem toupdate long after everyone,” saysCalvin Reid, senior news editor atPublishers Weekly, a leading trademagazine for the US book publish-ing industry.
Simha admits Sony’s marketshare is smaller than Amazon’s. He,however, points out his company’spartnership with Sony isn’t anexclusive deal. He saysiDreamBooks is also in talks withother book-related sites that coulduse its service, pointing to Amazonas a potential partner. The start-upsees licensing its data as a majorpart of its revenue stream, withpublishers, retailers, libraries andothers into book discovery or bookselling as potential clients. “On theconsumer side, once we get to scaleand have a lot of traffic, we canmonetise it through book sales and,maybe, through ads,” Simha says.
For now, the founders want tofocus on scaling up content andbuilding traffic on their site. “Tento fifteen thousand books arereviewed by major publicationsevery year. Our goal is to be currentwith those. Right now, we’re cur-rent with the best sellers from May2011 and the Big Six publishingbooks,” says Simha.
ChallengesBuilding up content is the biggestchallenge, as the company can’trely solely on automation for sen-timent analysis; the need for man-ual curation makes the process
slow. For instance, the presence ofa word such as ‘disappointed’ in areview may push the book towardsa negative rating, which would bemisleading if the critic had actual-ly written the reader would not bedisappointed. “We’ve done somework on it, come up with somealgorithms to separate that and tocome up with accurate sentiment.But we’re not satisfied with whatwe have right now,” admits Simha.
To aggregate reviews from vari-ous publications more efficiently,the company also wants to build itsown crawler. “Right now, we have toquery a site with a certain book andif it exists, it gives us a ‘yes’ or ‘no’.But if we have a crawler, it informsus of all the books being talkedabout on that site. So, that wouldsolve all our problems,” he says.
OpportunitiesThe book market in the US, includ-ing educational and professionalpublications, is estimated at $27 billion; e-books account for afifth of this. “There’s a lot of shiftand turmoil in publishing, butthere’s a big move to e-books fromphysical books. It’s actually good forus, because everything is moving todigital and there are more e-booksbeing downloaded,” Simha says.
Amazon’s recent acquisition ofGoodreads, a site that allows booklovers to share opinions and rat-ings of various titles, has provideda boost to Simha’s morale. Amazonwas reported to have paid about$120 million for Goodreads.
Publishers Weekly’s Reidbelieves demand could grow forsites such as iDreamBooks, whichaid discoverability. “This is the holygrail of bookselling in the digital era.How, in this sea of content, do youcome up with something you’d beinterested in reading or, on the busi-ness side, how do you make yourbook stand out from somebodyelse’s? These kinds of entities wouldbe valuable to both consumers andthe publishing side,” he says.
iDreamBooks’s traffic isn’t any-where close to that of Goodreads.But if it succeeds in making itselfvaluable to book readers, it may beequally valuable to booksellers, too.
iDreamBooks: Reading between the linesThe Silicon Valley start-up spotted an opportunity in aggregating book reviews, but accurate sentiment analysis remains a challenge, writes IInnddiirraa KKaannnnaann
It’s a good idea because they are followingthe trend of consumption of books in adigital format. Other types of media arewell reviewed by different types ofsources, whether it’s Netflix or RottenTomatoes for movies or iTunes for musicdownloads. For e-books, there reallywasn’t a similar way to judge a book.Being part of 500 Startups, they haveaccess to all the mentors. They also havethe profile that comes from being part ofthat programme. They have a big marketthat doesn’t really have manycompetitors; there aren’t a lot of ratingservices for books that have received anysort of widespread adoption.But they need to have partnerships withbooks, digital publishers or platforms.It’s a bit of a fragmented market. Thereare different types of e-book readers —there’s Kindle, there’s Kobo, there’sNook from Barnes & Noble. So, it mightbe a good idea to work with one of thebig e-book publishers or with traditionalretailers still focusing on in-storeexperience. Another idea is they couldstart working with a very large platformfor people to read the writings ofunpublished authors. It’s called Wattpad,a Toronto-based company that hasseveral million users around the world.This is where people can discover thewriting of other people who aren’tpublished, mostly fiction. I recommendthey try to work with a company such asWattpad as a way to build awareness.Their business model can be applied inmany countries; the focus is to build theworld’s leading review brand forpublished work. They’re not trying todilute it by focusing on other areas. Themodel of books is a steadily growing andtruly international business one.
Sunil Sharma , Managing Director,Extreme Startups, Toronto
> EXPERT TAKE
START-UP CORNER
Vishnu Chapalamadugu(foreground, in white shirt) andRahul Simha, co-founders ofidreambooks
PPrroodduucctt:: Aggregate book reviews frommajor publications; assign bookratings based on reviews; readyreference guide for readers and book buyers.IInnvveessttoorrss:: Dave McClure, Paul Singh –Partners at 500 Startups; Daniel Hoffer –Mentor at 500 Startups; Patrick Lee – Founder, Rotten Tomatoes; JoshuaGreenough.
RReevveennuuee ssttrraatteeggyy:: Annual fee from partnershipdeal with SonyReader e-bookstore; similar dealswith other e-booksellers; licensing data topublishers, retailers, libraries, and others withbook discovery or book selling functions; monetiseuser traffic through book sales and advertisements.
CChhaalllleennggeess:: Visibility and user traffic are still low; scaling up data provingslow because manual curation of reviews is needed alongsideautomated sentiment analysis; team still working on building a crawlerto aggregate reviews more efficiently; need partnerships with servicesmore popular than SonyReader; two founders have to travel frequently toSilicon Valley from Canada as they don’t have suitable work visas for the US.
www.idreambooks.com:RATING BOOKS WITH REVIEWS
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Nod unlikely for stake increase in HZL, BalcoINDIVJAL DHASMANA &
SURAJEET DAS GUPTA
New Delhi, 9 June
Anil Agarwal’s SterliteIndustries might not gainin the dispute with the
government over its exercise of acall option in Bharat AluminiumCompany (Balco) and HindustanZinc (HZL) in the light of the pro-posed move to allow call and putoptions in listed companies out-side the stock exchanges.Attorney-General G E Vahanvatihas told the finance ministry themove should come with a clausethat it would be prospective andwouldn’t affect ongoing court dis-putes, said those in the know ofthe development.
The government has decidedto allow put and call options inshare purchase agreements to
permit listed companies to buyor sell equity at a predeterminedprice in future. The proposal wascleared by Telecom MinisterKapil Sibal within a day of hisassuming additional charge ofthe law ministry. It will come intoforce after approval by thefinance ministry and theSecurities and Exchange Boardof India (Sebi). It will be imple-
mented through a Sebi notifica-tion. Under the SecuritiesContracts (Regulations) Act, putand call options are treated asderivatives and are not permit-ted in listed companies outsidestock exchanges. Unlisted com-panies, however, can go for putand call options. When thefinance ministry sought theattorney general’s opinion on the
proposal, he said a notificationallowing the option could beissued by invoking the powersconferred under section 16 and28 (2) of the Securities Contracts(Regulation) Act, 1956. He alsosaid the notification didn’t sufferfrom any infirmity under theCompanies Act, 1956, and theIndian Contract Act, 1872.
However, he said a suitableprovision might be inserted in thenotification that it wouldn’t affector validate past contracts or thosewhich were in courts due to dis-putes. This specific opinion was toaddress the concerns of the min-istry of mines about the litigationpending with regard to Balco andHZL. Call and put options wereone of the major clauses in theagreement with SterliteIndustries, an arm of London-based Vedanta Resources, when it
bought majority stakes in HZLand Balco. Sterlite had bought 51per cent stake in Balco for ~551.50crore in 2000-01 and 26 per centin HZL for ~445 crore in 2002-03,when the Bharatiya Janata Party-led National Democratic Alliancewas in power at the Centre.
Sterlite later invoked the calloption to acquire another 18.92per cent in HZL for ~323.8 crore.Subsequently, it increased itsstake to 64.92 per cent.
However, the governmentheld Sterlite’s call option wasinvalid and could not be used toacquire further stake in HZL.Then Attorney General MilonBanerji had said the country’slaws didn’t allow for call and putoptions to be included in share-holders’ agreements.
When Sterlite chose to exercisethis option in the case of HZL in
2004, the Congress-led UnitedProgressive Alliance governmentdidn’t reciprocate with a putoption. The company movedcourt against the government’sdecision in 2007; the court heldsince the dispute arose out of theshareholder agreement, it shouldbe resolved through arbitrationprescribed in the agreement.While rejecting Sterlite’s plea inearly 2011, the arbitration panelsaid the law of the land should beconsidered first, followed by thearticles of association of a com-pany and then the mutual con-tract between two partners.
Later, the government andSterlite decided to approach theDelhi High Court. Subsequently,Vedanta Resources offered to thegovernment to buy the residualstakes in HZL and Balco for about~17,000 crore.
Jet-Etihad decision on TuesdayThe finance ministry will on Tuesday take acall on the ~2,000-crore Jet-Etihad deal andthe FDI proposal of Norway’s Telenor. TheForeign Investment Promotion Board,headed by Economic Affairs Secretary ArvindMayaram, will also take up the foreign directinvestment proposal of Multi CommodityExchange. While Jet Airways plans to sell 24per cent stake to Abu Dhabi-based Etihadfor about ~2,058 crore, Telenor is seeking toraise stake by 25 per cent in its domesticsubsidiary Telewings to 74 per cent. PTI <
How is the discovery of Lipaglyn abreakthrough for Cadila Healthcare?This is a unique achievement by any Indianpharmaceutical company. For the firsttime, a lot of firsts have happened. It is afirst Indian NCE (new chemical entity), it isalso the first drug to treat dia-betic dyslipidemia and this isthe first drug which hasappeared in the glitazar classacross the world. It gives us theconfidence India and Indian sci-entists can do it. Our basic objec-tive is once we launch in India,we will take it to global markets.So, we will launch in India in thethird quarter of this year andthen take this to the global market. We areregistering into some emerging markets.
Which are the markets?About 15 emerging markets and, amongdeveloped markets, we are taking it to theUS, Europe and Japan.
What will be your strategy?The first approved indication for this drug
is diabetic dyslipidemia but we also haveplans and studies undergoing, which havecompleted phase-II and are moving tophase-III, for some additional indications.Some of these indications are unique.Then, we want to take this drug to devel-
oped markets with additionalindications, which can hastenthe process of approval. This isa patented product.
How many patents do youhave for it and in whichcountries?Our chemical structure ispatented. Once this is patent-ed, you do clinical studies.
Based on that, we have receivedapproval for one indication and thenwe might get approval for additionalindications. So, we will get multiple usepatents for different indications.Currently, we have one product patent.We have patents in the world whereverwe have approval. For additional indi-cations, we have filed additional patentapplications.
What are the additional indicationsunder evaluation?We would not like to disclose these now.We would do that at an appropriate time.
What is unique about this drug?We have done studies of this drugwith pioglitazone, fenofibrateand atorvastatin and we haveseen it is comparable to piogli-tazone with its anti-diabeticeffect without the usual side-effect of pioglitazone such asweight gain. Similarly, it does nothave the side-effect of fenofi-brate. Third, when it is adminis-tered along with atorvas-tatin, additionalreduction in choles-terol level happens tothe extent of around20 per cent. Allthese things makethe drug differ-ent.
When othercompanies shyaway fromresearch due tofinancial risk andregulatory hurdles, howdid you manage such adiscovery?I want to go back to my
strategy. When we decided we wanted tobe a research-based pharmaceutical com-pany, we evaluated how we can doresearch within our resources.
What you read and hear is that onerequires a billion dollar-plus to discover a
molecule. The obvious question tomy mind was, where do we get abillion dollars to do so? Wedecided we do not want to getdisheartened by this number.
So, we decided to do it in acost-optimised way. We focusedour energy in developing
inhouse capability. We are theonly company with a
dedicated researchcentre onlyfocused on doingdiscoveryresearch. We arethe only company
with capacity to dolarge animal stud-
ies, including on pri-mates. From conceptto pre-clinical stud-ies, we have completecapacity to do it.
What are theinvestments madeby Cadila on this drug?This drug discov-
ery took us a total of 12 years, commis-sioned in 2000-01. The first five yearswere spent on discovery and pre-clinicalstudies and the next seven years on clin-ical studies. Our strategy was very clearthat we want to discover and own the drugand not license out. Till now, we havespent around $250 million. We plan tospend another $150-200 million for addi-tional indications and also approvals inother markets.
Do you plan to market the drug on yourown or join hands with other players?We have no marketing capabilities insome developed markets. So, ultimately,we will need marketing partners in thosecountries. (We have) not yet started talk-ing to prospective partners as we are wa-iting for the launch in India. We are exp-ecting approvals in various countries inthree to five years. In India and some em-erging markets, we will market on ourown.
Are you looking for multinationals topartner in developed markets?We will be looking for somebody who hasthe capability to market this product.None of the Indian companies has thecapability to market products in the US orEurope.
For full interview, visit www.business-standard.com
‘Our strategy was to discover and own the drug and not license out’While most domestic as well as multinational companies shy away from making investmentsin drug discovery because of high financial risks and regulatory hurdles, Cadila Healthcaresays it is the first Indian pharmaceutical company to develop a drug from its own discoverypipeline. The research-based firm now plans to partner MNCs for marketing its new drug,Lipaglyn, in developed markets such as the US, Europe and Japan, Cadila Healthcare’sChairman and Managing Director PANKAJ R PATEL told Sushmi Dey. Patel also said that currentchallenges will help Indian pharma industry evolve to become better. Excerpts:
PANKAJ R PATELChairman andManaging Director,Cadila Health
Attorney-General Vahanvati has advised govt to only prospectively allow listed firms to buy or sell stake through contracts, say sources
NO OPTION FOR STERLITE| The government might not allow listed companies to buy or sell equity
through options; past contracts or those in courts might also not beallowed
| Options were one of the major clauses in the agreement with SterliteIndustries, an arm of London-based Vedanta Resources, when itbought majority stakes in Hindustan Zinc (HZL) and Balco
| The government had held Sterlite’s move in 2004 to increase its stakein the companies through options invalid
STERLITE’S SHARE PURCHASE THROUGH DERIVATIVES
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