Out Look Business magazin

INSIDEwww.outlookbusiness.com

December 13, 2008

volume 3 > issue 25

COVER PACKAGE

COLD FEETPrivate equity is facing its worst crisis ever. Whats causing it, whats the outlook? Stories, columns, data, gossip...

36 In The BlizzardEntrepreneurs will also hurt in private equitys biggest struggle yet

38 Ice AgeEvery tap through which money owed into PE is freezing over

50 InterviewFund of funds may replace public pension funds as a stable source of capital for private equity, says Steven J Cowan, Managing Director, PCGI, a fund of funds

54 Frozen ValleyThe fountain for start-ups and venture capital is choking

61 Special Columns 62 Akhil GuptaDont mind the turbulenceILLUSTRATION BY ARINDAM; PHOTOGRAPH BY SAPTARSHI BISWAS

66 Ashish DhawanWeak promoters should sell out

24FEATURE

72 Luis MirandaExits are in trouble

76 Nitin DeshmukhWe want a big stake and a board seat

24 Pay The PriceThe government did not save enough in good times

80 PR SrinivasanOnly the very best in the sector will get fundedSHOME BASU

30 Walk In The CloudsMicrosoft wants to move stuff from your desktop onto the clouds

114 DiaryHeard it on the grapevine

OutlookBusiness > December 13, 2008

3

INSIDETAKE ONE

10 Japan CallingThe Tatas rediscover telecom

11 Single And LookingWho wants to marry Reliance Communication?

12 Fiats JinxThere is a slowdown before a big launch...again

14 Hope In The CrevicePE funds take shelter in niches

22 Bollywood BluesLights, camera, slowdown

STRATEGYSOUMIK KAR

90 Way To GoWoo women in the workforce. Saundarya Rajesh

HOT 86 Second Show SEAT Our leadership is history. We have to be bolder andtry harder, says Uday Shankar, CEO, Star India

92 Galileo CallingDoing business in a world that is not at. Thomas Stewart

11

LIFE

98 Visa ExpiredThe US recession is bad news for the NRI groom

102 Hey!Former Maruti Suzuki MD Jagdish Khattar on how he ran the company successfully despite not liking cars

REGULARS

NILOTPAL BARUAH

6 Letters 94 Data Pages 100 Adi SaysA farewell and a new beginning

8 Re-enter The DragonThe fear of China dumping goods in India is back

106 RewindWhen the CEO writes

110 BooksCrash course in Harvard business

112 DiversionsCOVER DESIGN: ARINDAM COVER PHOTOGRAPH: SAPTARSHI BISWAS

4


MAILwww.outlookbusiness.com

I enjoyed reading the story on the beauty business. Its interesting to note that in some countries, if your body is integral to your work, you can even claim tax deductions on expenses incurred on itfor example, breast implants by a cabaret dancer or model.M Kumar|email< Yes, We Can Barack Obama winning the elections is a revolution in the US (All The Presidents Men). His victory shows Americans are changing the way they used to think. Improved relations between whites and blacks will lead to development. Indian politicians, especially those that divide India on regional or caste lines, can learn lessons from this. It is our voters who must throw out such people by not voting for them in the forthcoming elections.Mahesh Kumar email

Editor-in-Chief: Vinod Mehta Publisher: Maheshwer Peri Editor: M Anand Deputy Editor: Ashish Gupta FEATURES Associate Editors: Nandita Datta, Snigdha Sengupta Senior Assistant Editor: Sudipto Dey Assistant Editors: Anurag Prasad, Sebastian PT, Supriya Kurane Senior Special Correspondent: Dhruv Rathi Special Correspondents: Ajita Shashidhar, Kunal N Talgeri, Sriram Srinivasan Principal Correspondent: Sharada Balasubramanian Correspondent: Rajiv Bhuva COPY DESK Senior Editor: Avinash Singh Associate Copy Editor: Allan Lasrado Senior Sub-Editors: Irene OBrien, Navan Ignatius, Jinoy Jose P ART Chief Designer: Sumeet Gupta Senior Designer: Manish Marwah Illustrator: Arindam Chakraborty Graphics: Kishore Das PHOTO Photo Editor: Vivan Mehra Senior Photographers: Bhupinder Singh, R A Chandroo Saptarshi Biswas, Soumik Kar Photographers: Nilotpal Baruah, Priyam Dhar, Srikanth Kolari, Vishal Koul SPECIAL PROJECTS Editor: Naren Karunakaran ONLINE Editor: Vijay Srinivas BUSINESS OFFICE President: Indranil Roy ADVERTISEMENT National Manager: Pankaj Jayaswal Assistant General Manager: Moushumi Banerjee Ghosh, Kabir Khattar Regional Managers: Amit Vaz, Sushil Menon Manager: Praveen Kumar CIRCULATION Vice President: Niraj Rawlley National Heads: Himanshu Pandey (Business Development), Alex Joseph (Retail) Regional Managers: Anand Shirali (West), Arokia Raj (South), Yogesh Mohan (North) Senior Manager: B S Johar Managers: Anindya Banerjee (West), Indranil Ganguly (East), Mukesh Lakhanpal, Ramesh, Vinod Joshi Deputy Manager: Shekhar Suvarna MARKETING Head: Roopam Singh PRODUCTION & SYSTEMS Assistant General Manager: Rakesh Mishra Managers: Deshraj Jaswal, Shekhar Pandey, Sanjay Narang Deputy Manager: Trilok Singh Rawat ACCOUNTS Managers: Chetan Budhiraja, Kuldeep Kothari ADMINISTRATION Senior Manager: Rajendra Kurup Manager: DR Wadhwa Associate Manager: Bobby Mathews HEAD OFFICE AB-10, Safdarjung Enclave, New Delhi 110 029; Tel: (011) 26191421; Fax: (011) 43552287; Customer Care: (011) 26191091; Other Ofces: Mumbai: (022) 30612222, Fax: (022) 30612233; Kolkata: (033) 40085012; Chennai: (044) 28582250, 28582251, Telefax: 28582250; Bangalore: (080) 25582806/7, Fax: (080) 25582810; Hyderabad: (040) 23375776, Fax: (040) 23375676; Printed and published by Maheshwer Peri on behalf of Outlook Publishing (India) Pvt. Ltd. Editor: M Anand. Printed at Infomedia India Limited, A Wing, Ruby House, J.K. Sawant Marg, Dadar (West), Mumbai 400028, and published from AB-10 Safdarjung Enclave, New Delhi 110029 Published for the fortnight of Nov 30-Dec 13, 2008

< Get Real The story Managing Layoffs said: If the CEO takes the rst pay cut, he sets an example that would be less painful for others to follow. Good, but impractical. Anyone heard of any real life examples?Anurag email

< Clean Up Apropos the column (Share Your Billions With Our Billion, November 1), I must ask the writer this pertinent question: why have you made no mention of the overwhelming corruption thats despoiling whatever money the government spends on people? Neither companies nor individuals will be happy paying higher taxes, as they would feel it is not going towards alleviating poverty or building infrastructure. There will be more people making a beeline for the I-T ofce if the government brought down corruption and plugged the loopholes that swallow the money before it reaches the needy.S Kumar email

< Air Pocket The story on the Jet-Kingsher alliance was comprehensive and interesting (The Shot Gun Wedding). Life has come full circle for both Kingsher and Jet. There seems to be no scope for optimism as the sector is facing a lot of challenges. Corporate travellers are reducing business trips because of their companies stringent travel policies. Also, the soaring fares are driving rst-time travellers away. Only careful restructuring and a change in business model will help carriers minimise losses.R Sriram email

< Good Show Taming Of The Show (November 15) was a good read. The article spoke of some novel marketing methods that can help the theatre industry earn revenues. Ashwin Gidwanis strategy can be a good model for many of his ilk in the industry. His success proves that those who think and act differently have a bright future.Abhilash T Delhi

< Egypt, Ahoy! The story on Indian rms rushing to Egypt was quite interesting (Gateway To The World). But one must not forget that West Asia is one of the most politically volatile regions in the world.SP Singh Mumbai

TALK BACK Email [email protected] Mail Editor, Outlook Business, Nafed House [8th oor], Ashram Chowk, New Delhi 110 014, NCR, INDIA

CorrectionIn Gateway To The World, the photographs of Mohammad Embaby, Country Head, Satyam Computer, Egypt, and Anand Sankaran, Chief Executive, Wipro Infotech, were interchanged. The error is regretted.

6


TAKE 1FIRST

RED FLAGThe dragons back: with the US slipping, Chinese producers are eyeing India againFOR A while, India had a relatively lower exposure to the global economy, even as many countries were slipping into recession. Only 13.6% of its GDP came from exports. China, on the other hand, earns 60% of its GDP from exports, that too primarily to recession-ravaged economies like the US, European Union and Japan. India, most argued, was better insulated. But that comfort is fast fading now. China may be more vulnerable to the global slowdown, but its humongous production capacities across many sectors are now turning their attention to India as offtake from other regions is slowing down. That could open the gates for a flood of cheap imports into India. This is, again, turning out to be a major worry for India Inc. The China fear, which had receded a few years ago, is back. Since 2004-05, China has been the largest trade supplier to India. Non-POL (petroleum oil and lubricant) imports from China have grown at 50% levels year-on-year, grossing $27 billion in 2007-08about 17% of Indias total imports. In the last fiscal, for instance, electronic goods accounted for almost a quarter of Chinese imports, with electrical machinery and transport equipment totalling a further $1.8 billion. The government should have a special duty on Chinese imports for the next two years to protect Indian manufacturing, asserts L Ganesh, Chairman of the Chennai-based Rane Group, a long-standing player in the auto component business. The Auto Component Manufacturers Association has already had a couple of emergency meetings to discuss the China factor. The threat is for real, and Indian industry is quite To boost exports, China will scrap export taxes and vulnerable, adds Rajiv Kumar, CEO, Indian Council cut duties on 3,500 items from December 1. It has for Research on International Economic Relations. Especially in mass-produced goods like chemicals, also raised export rebates on textile products engineering goods and even in textiles, he adds. The government has taken some steps. Duties on certain steel as it did when the dollar was worth Rs 39 in January. Now, it products have already been raised. But trade experts like B Bhatwill be difficult for China to dump goods in India as the rupee tacharyya, former Dean, Indian Institute of Foreign Trade, behas depreciated against the dollar, says SP Oswal, Chairman of lieve that raising duties is not really the answer, as it will result Vardhman Group. Udit Sheth, Executive Director (Strategy and Business Development) of auto supplier Setco Automotive, agrees: in other countries raising their tariff barriers too, and then the whole game of beggar thy neighbour will begin. That could Logistics cost and duty structures here discourage exports be an unhealthy practice in such recessionary conditions. The from China for proprietary products. answer, therefore, is to levy anti-dumping duties, which we are Sheth, however, sees the China factor somewhat eating away already doing. But this fear is overstated, feels Manoj Pant of at the after-sales segment of the auto components market for the Jawaharlal Nehru Universitys Centre for International Trade non-proprietary orders. Truck drivers and car owners dont and Development. There will be a push from China in plasworry about the quality of the after-sales components after their vehicles are more than five years. So, expect Chinese products tics and chemicals, he says. Still, manufacturers would have there for vehicles that are old, and products that are not of a approached the government by now to initiate anti-dumping sensitive design done in platform engineering. To boost exports, duties, if it was a serious issue, he explains. China will scrap export taxes and cut duties on more than 3,500 The Currency Shield items (including electronics and chemical products) from DeIndia is somewhat naturally protected on the foreign exchange cember 1. It has raised export rebates on textile products to 17% turf, with the yuan renminbi (Rs 7.32) about Rs 2 dearer as against to give the sector, replete with excess manufacturing units, a last year (Rs 5.36). Also, with the rupee depreciating against the boostreason enough for the China fear here. < dollar, China doesnt have as much to gain by exporting to India Kunal N Talgeri and Sriram Srinivasan

8


STEERING BUSINESS WHILE SERVING COMMUNITIES

STR I K I N G T H E R I G H T B A L A N C E F O R O V E R 15 0 Y E A R SP E R S O N A L B A N K I N G | S M E | P R I VAT E B A N K I N G | W H O L E S A L E B A N K I N G | W W W. STA N D A R D C H A R T E R E D . C O . I N

TAKE 1SOUMIK KAR

SHOW OF HANDS: Anil Sardana and Ratan Tata with DoCoMo ofcials

TATA TELESERVICES

THE RIGHT CALLNTT DoCoMos stake buy will inject fresh life into the Tatas telecom agshipJUST WHEN Tata Teleservices Limited (TTSL) was being written off by analysts and competitors for being a dormant player in a booming telecom market, it has bounced back into the reckoning with the NTT DoCoMo deal. The Japanese telecom major has agreed to infuse $2.7 billion into TTSL for a 26% stake. In addition, DoCoMo is likely to acquire around 20% in TTSLs listed subsidiary Tata Teleservices Maharashtra through an open offer, at Rs 24.70 per share. TTSL was the best bet for DoCoMo, though Idea Cellular would also have been a good choice given its growth plans. DoCoMo gets a presence in CDMA and GSM networks, with the Tata brand name being a bonus, says Rahul Gupta, an emerging markets analyst at Strategy Analytics, a US-based telecom consultancy firm. DoCoMo comes at the right time for TTSL, as it needs cash for its GSM rollout, says Nishna Biyani, a telecom analyst at brokerage firm Prabhudas Lilladher. A pan-India GSM network rollout would mean a capital expenditure of $5 billion in just infrastructure and equipment, though TTSL can leverage its CDMA infrastructure (13,700 tower sites across 7,500 towns and Things started looking up for TTSL last 57,000 km fibre-optic backbone) for the GSM rollout. To start with, TTSL has an- year after Anil Sardana took over as Managnounced a $2 billion outlay for fresh GSM ing Director. Initially, the telecom industry and CDMA rollouts over the next few years. viewed the appointment with scepticism. And thats where DoCoMo will help. Sardana, a power sector veteran, was seen Sources say the process of finding a buyer as a novice in the telecom market. But he started in June, and potential proved himself soon enough. suitors included Japans KDDI A pan-India Sardana knew that setting amand South Korea Telecom, but bitious targets was the only DoCoMos technology exper- GSM rollout way TTSL could catch up with tise won the day. DoCoMo was means a capex the big boysAirtel, Vodaeyeing the growing Indian fone, BSNL, Reliance Commarket since its home base, of about $5 bn. munication and Idea. TTSL is with 53 million subscribers (al- DoCoMo will now aiming to be among the most 85% of whom use its 3G top four telecom operators in be of help here the country, with a 35 million services), was stagnating. The NTT DoCoMo deal will subscriber base by the end of infuse some fresh life into TTSL, long ig- this financial year. By 2011, the company nored by the Tatas, who were busy closing expects to have 100 million subscribers the multi-billion-dollar Corus and Jaguar- on its CDMA/GSM networks. An ideal Land Rover buyouts. Further, by divesting spilt would be 55 million-to-45 million its stake in Idea Cellular, the Tatas were in favour of CDMA, Sardana had said in perceived as being disinterested in retain- August this year. ing its retail telecom business. Sources say Targets are not the only things being set Chairman Ratan Tata was unhappy with higher at TTSL. The company is also underhow TTSL was being managed and had going a restructuring process to streamline asked key executives to pull up their socks. business, cut costs and make the organisaTTSL had also reported mounting losses; tion leaner and more competitive. < Anurag Prasad Rs 9,177 crore came in fiscal 2008 alone.

10


TAKE 1RELIANCE COMMUNICATIONS

Last Man StandingEvery Indian telecom player has a foreign partner. RCom is still lookingthrough, the combined entity would have been among the top 10 telecom companies globally. But that alliance failed to materialise. Since then, valuations have dropped substantially across the board. But there is still hope, sources say. Even in difficult times, TTSL has managed good valuations. It shouldnt be different for RCom, says a telecom analyst with a leading equity research firm. In the past, poor acceptability of the CDMA network with the low average revenue per user went against both RCom and the Tatas. But with dual technology, and subscribers getting to choose between CDMA and GSM services from the same operator, the proposition has become attractive enough. While GSM can get the subscribers, CDMA can still deliver data and eventually smoothen the transition process to 3G. The tower business is added value. DoCoMo, with its strong financial muscle and expertise in 3G technology, would have been an ideal partner for RCom. But there are still some attractive partners left for RCom to choose from: Verizon, AT&T, Turkcell, Telefonica, France Telecom, Sprint, to name a few. After all, with eight to nine million mobile subscriber additions per month, India is still one of the hottest markets around. < Anurag PrasadLONE RANGER: A tie-up will give Anil Ambani some much needed funds

AP

WITH TATA Teleservices and NTT DoCoMo tying the knot recently, there is only one Indian telecom company thats still single and looking: Reliance Communications (RCom). Airtel initially had British Telecom and later Vodafone as investors, and is now left with SingTel. Idea added Telekom Malaysia as a shareholder when it acquired Spice Telecom. Aircel has Maxis controlling a 74% stake. Russian giant Sistema group has a majority stake in Shyam Telelink. And among the new players, Unitech has gone with Telenor and Swan with Etisalat. And there are many good reasons why RCom will be better off if it finds a partner soon. Given the tight credit and liquidity conditions in the market, and the network rollout roadmap that RCom has committed to, cash will certainly be welcome. The company has spread its services to almost every segment possible, including direct-to-home and Internet protocol TV (IPTV), apart

from wireless, wireline, broadband and international connectivity services. It claims to have spent most of the $11 billion that it had budgeted as capex between April 2007 and March 2009. RCom officials say these funds have already been tied-up, and neither high interest rates nor the liquidity crisis is hurting them. But the company is experiencing a squeeze on margins. Its debt is also growingup from Rs 9,970 crore in March 2008 to Rs 15,225 crore in September 2008. The debt-equity ratio has gone up from 0.39 to 0.54 in the same period, but is still quite comfortable. But RCom will need more money beyond March 2009, and so will most other telecom firms. With 3G auctions around the corner, funds will be needed for the licence bids and for the implementation after that. RCom singlehood is not for want of trying. In May 2008, it came close to having a foreign partner in South African mobile operator MTN. If the deal had gone


11

TAKE 1FIAT INDIA

Old Road, New Journey

Superb engineering, bad timingthat was the story of Palio in 1998. Linea too will roll out in a bad market, but its fate might be differentwhich also includes Dzire (for the mid-sized segment)clocks about 16,000 units per month. It is virtually playing around with the segment. Fiat is not losing heart. Its partner Tata Motors Indigo and Marina enjoy a healthy 22% market share in the segment. With shared dealerships across 64 centres, Fiat has the dealership and after-sales muscle, which has long determined the fate of a C-segment vehicle. While a Tata Motors dealership sells its own car, the premises also sell Fiat cars; each players space has a different feel to it in keeping with the positioning of the PRIYAM DHAR Tata Motors and Fiat brands. VROOM: Fiats Ranjangaon plant will roll Achieving higher levels of localisation out 2,000 units of the Linea each month and optimal cost structures is critical in the C-segment, notes Kapil Arora, Partner at means a 15-20% reduction over the import Ernst & Young. With the Tata leverage, Fiat strategy. The Linea and Grande Punto dealerships will effectively go up to 100. The will have 90% local content within a year. joint after-sales structure (traditionally, a Most high-end components will be local, Fiat weakness) will give Linea the requisite to keep costs down, says Kapoor. Start- infrastructure. We have a strategy in place, ing January, Fiats Ranjangaon and even a common platform plant will roll out 2,000 Linea to discuss product strategy, Now, the Tatas says Kapoor. units every month. A marketing blitz notwith- help Fiat with Also, Tata Motors Finance standing, the Linea faces high will manage vehicle financing, odds. It will compete with distribution, freeing up Kapoor and team market leader Maruti Suzuki, after-sales to focus on Lineas marketing. The Lineas plight in a slowing which dominates the 140,000 vehicles-strong mid-sized seg- and nancing market will almost certainly ment, with a 30% share. Even be determined by marketing Maruti recently reduced production of its and price. A success against the odds in a bestseller SX4 to make way for the Swift Maruti-dominated segment will salvage platform, in response to the market. While Fiats situation, given there is a slowdown Maruti currently manufactures about 500 to beat in the Indian auto milieu.< SX4s each month, the Swift platform Kunal N Talgeri

NEXT MONTH, when Fiat India rolls out Linea, its first made-in-India car, it will be the second time in a decade that it will launch a car in a bad market. The Italian carmaker did the same in 1998, with Palio, which is regarded by many in the industry even today as the best-engineered vehicle of its class; however, its launch timing cut into its commercial fate. A lot has changed in the Fiat management in India since the Palios launch. Most notably, it has a joint venture with Tata Motors now. We had decided for a last-quarter (of 2008-09) launch for the Linea, and didnt want to do it in a hurry, says Rajeev Kapoor, President and CEO, Fiat. Typically, development cycles range up to three years. Even in a slowing market, there are opportunities for the right product. It only makes players more focussed about costs and achieving targets, he says. Lineas local manufacturing and component sourcing will optimise costs. ThisEXECUTIVE DIARY > > WORLD >

month drop in 61 years, according to the US Labor Department.

of England. Analysts say the stage is set for more interest rate cuts.

offer from Microsoft, is stepping down as CEO.

< Consumer prices in the US fell 1% in October, the biggest one-

< The UK economy will < Yahoo co-founder contract 2% in Jerry Yang, who 2009 and inaearned the ire tion will fall to of many share1% in 2010, holders for according to a rejecting a $47 forecast by Bank billion takeover

< Toyota will further cut production in North America, while Nissan < Aircraft engine-maker has forecast a zero second-half prot, as its Rolls-Royce may cut annual vehicle sales has 1,500-2,000 jobs worldhit lowest annual tally in wide, or 5% of its work force, in 2009. 15 years in the US.

12


WWW. JAQUET- DROZ .COM

BANGALORE ETHOS LUXURY BOUTIQUE, NO.1, THE TOUCHSTONE ANNEXE, SHIVAJI NAGAR, TEL. (080) 4113 0611, 4113 0612 CHENNAI THE HELVETICA, TAJ COROMANDEL, MAHATMA GANDHI ROAD, TEL. ( 044 ) 4231 7502 / 03 KOLKATA PRIME WATCH WORLD, FORUM MALL, ELGIN ROAD, TEL. ( 033 ) 2283 7185 NEW DELHI JOHNSON WATCH CO, C-16, CONNAUGHT PLACE, TEL. (011) 4151 3110 JOHNSON WATCH CO, E71, SOUTH EXTENSION PART-1, TEL. (011) 4164 6766

TAKE 1PE INVESTING

From Mainstream To FringesFood and agri, cleantech, art and lms are emerging as new targets for PE fundsNICHES COULD emerge as an alternative investment strategy for private equity (PE) in India as growth in mainstream sectors slows down. New Delhi-based Rabo Equity Advisors has just raised a $100 million India Agri Business Fund, which focusses on food and agriculture, and will invest in 13 sub-sectors. The fund, for which Rabobank has committed 25% of the capital, has International Finance Corporation, FMO (the international development bank of the Netherlands) and DEG KfW Bankengruppe of Germany, as co-investors. It is looking at deals worth $3-10 million and is targeting 30% returns. We have over 45 deals at various stages of evaluation with our investment committee, says Rajesh Srivastava, Chairman and Managing Director, Rabo Equity Advisors. The fund will draw on the expertise of Rabo India Finance, a subsidiary of Rabobank, which has been working in the sector. We understand the nittygritty of the sector better, and that gives us an edge, says Srivastava. ported that Phillip Hoffman, founder of Rabo is not the only investor to be a UK-based art fund management firm, looking at the food and agri business in the Fine Art Fund Group, would be raisIndia. Earlier, in September 2007, Yes ing a $25 million India Fine Art Fund. In Bank launched a $100 million YES Food 2006, Mumbai-based Osian had set up a & Agribusiness India Fund. Rs 102 crore art fund. Emerging niches such as It is planning to follow it up A $100 mn with a $300 million Clean industrial design and cleantech have also been on the PE Technology Fund in part- Rabobank radar. Being niche-focussed nership with Washington- food and agri based Global Environment has its advantages. We have Fund. Some others like Mor- fund is eyeing more bandwidth to focus on gan Stanley Private Equity, deals of $3deals and to scrutinise them, which launched operations in and can therefore make better India this May, do not have a 10 mn and is investments, says Alok Gupta, dedicated fund for food and targeting MD and CEO, Axis Private agriculture, but are looking at Equity, which has raised 30% returns individual opportunities. $150 million to invest in inIn early-September, Cinema frastructure and infrastrucCapital Venture Fund reportedly launched ture-enabler companies. It has invested in an entertainment fund aimed at invest- a company in water treatment and sewage ing in films. The $100 million fund aims projects, and another related to oil and to give annual returns of 35% over three gas transportation. < Rajiv Bhuva to five years. Earlier this year, it was re-

AMIT KUMAR

EXECUTIVE DIARY > > INDIA >

gas exploration blocks, with ONGC, along with its partners, bagging the maximum (20 blocks), followed by rst-timers BHP Billiton-GVK Power combine (seven).

Bank shares between September 8 and October 10 this year, when the banks stock collapsed 50%.

< According to research rm AdEx, the advertising budgets of the banking, nancial services and insurance segment (BFSI) fell by 40% in June-October. < The Reserve Bank of India (RBI) has allowed up to 49% foreign directinvestment by a single entity in credit information companies.

< The Cabinet Committee on Economic Affairs has awarded 44 oil and

< SEBI has found no evidence of manipulative trading in ICICI

14


TAKE 1 ROBERT B MILLER > Co-founder, Miller Heiman

Partnering in a downturn fosters trustThe sales guru tells Kunal N Talgeri why its vital to retain the sales force during a crisisHow will the crisis affect US companies focus on global markets? Companies should not lose track of the global markets. All of them, especially India, will be important. You have opposed cutting the sales force during a downturn. Can you cite an example when you did that? We told the logistics division of a large global transportation rm that their key customers are corporate assets and need more attention in a slowing economy. We said these accounts be managed by the C-suite, not just the executives who report to them. We outlined criteria to select key accounts. The COO and chiefs of sales, marketing and nance are responsible for working with the sales teams. This meant sitting in on planning sessions and talking to clients. So, there was a team in the company and a client team. When people partner during a downturn, it fosters trust. Things became efcient as senior people were involved. The sales team is often thrust not into a partnership role, but into an adversarial role. Part of what we do is to smoothen that out. So, cutting back is not the solution.BHUPINDER SINGH

ARVIND THAKUR > CEO, NIIT Technologies

IT will help companies cut costs in this crisisThe head honcho of the software arm of NIIT feels the future of IT services companies is safe. Sudipto Dey and Anurag Prasad nd out why hes still bullishAlmost 70% of your revenues come from the transport, banking and insurance sectors, which have been hit hard by the economic crisis. Thats bad news for you... Even during the dotcom bust, IT did well. During a crisis, companies look for ways to lower costs, and IT and outsourcing helps them. This time, the pressure may be higher, but the impact will be short-term. Companies will still look to cut costs through IT. So, for example, airlines will turn to IT to lower sales and services costs by taking things online. How will you lower your costs? Were not laying off people. But there is a hiring freeze, and we are leaving vacancies from natural attrition unlled. Our attrition has dropped from 18% to 14% in the past year. Were cutting costs wherever possible and are improving employee utilisation. Why are you so condent of maintaining your growth? After our de-merger from NIIT in 2004, we decided not to spread ourselves thin across sectors. Instead, we targeted four verticals insurance, banking and nance, transport and retailwhere we would develop our expertise. The ethos was to be the best and be big enough, rather than be the biggest and just good enough. In these four sectors, we have developed skill sets that are difcult to replicate. Our understanding of travelrelated services, beyond airlines, has helped. Some of our railway and surface-transport customers have reported better results than ever. In fact, we are not looking to add new verticals, but are deepening our presence in the transport vertical. But how will the company evolve? This is the second phase of our transformation. The current situation has accelerated the pace of this transformation. From linear, headcount-based growth, we are changing to a non-linear business model. With the changing business environment, the linear model is not the best way to deliver an attractive value proposition when it comes to services. We expect our non linear revenues to grow from 20% of total revenues last year to 25% in 2008-09, and to 40% over the next three years. Are Internet-based solutions the future of the IT sector? The Web is a good medium to offer services and solutions in countries with high Internet penetration. For India, we might skip the Web and move to mobile directly. Many applications are at the pilot stage or in the labs, and we expect them to be commercialised by 2009. MARK ROBINSON

CRISIS AT HOME

From Moscow To Mumbai, With HopeMark Robinsons success as Citi helmsman in Russia makes him an ideal candidate to succeed Sanjay Nayar in IndiaAS MARK Robinson prepares to leave from $281 million in 2005 to $589 million Moscow after a four-year stint as CEO of in 2007. Employee count grew from 2,000 Citigroup in Russia, he will have one eye in December 2005 to 3,500 in December on Mumbai, his new job location, and the 2007, following consistent expansion of Citi other eye on Citigroups Park Avenue head- into Russia, in terms of branches and new quarters in New York. Even as Citigroup business verticals. In the last four years, received a $40 billion capital infusion from we saw rapid development of retail bankthe US government, media reports suggest ing at Citibank in Russia, says Vladislav that the Citigroup Vo i t s e k h o v i c h , board is considering President and CEO, several key decisions ICICI Bank Eurasia. in response to the Citi has been openglobal financial criing branches rapidly across the country, sis. A complete selloff or an exit from with credit cards and personal loans certain businesses, being the two strong a possible merger and major changes at retail drivers. the top, including a Before his Rusnew CEO to replace sia stint, Robinson Vikram Pandit, are worked as Citis all reportedly becountry corporate ing considered. Alhead in Hungary, ready, 50,000 jobs between 1997 and 2002. He managed have been slashed. The Citi stock, which the integration of lost 60% in the week two acquisitions that to November 22 to expanded the banks below $4, reflects local consumer and SME distribution these grim uncertainties. By the time During his Russia stint, Citis network. He brings Robinson moves to unique emerging India, Citi may have gross income grew 110%, markets expertise undergone a major knowledge from $281 million in 2005 to androle, as well to transformation. the as Back in India, Citi $589 million in 2007 broad experience CEO for South Asia, gained from workSanjay Nayar, has stepped down to join ing across our universal banking model, private equity firm KKR (Kohlberg Kravis Ajay Banga, Asia-Pacific CEO, Citi said in Roberts & Co) as CEO and Country Head the release announcing his appointment. in India. This is the second high-profile Despite the crisis, Robinson will be on Citi exit. In early-October, Citis head of the look out for growth opportunities in retail banking in India, TR Ramachandran, India, which has emerged relatively unmoved out to join Aviva Life Insurance. scathed. The 2009 roadmap for foreign Robinson comes to India after a success- banks (if implemented) would bring about ful stint in Russia. He took charge as Citis a sea change in how foreign banks do busiCountry Officer for Russia and President ness here. And his success in Russia as a of Citibank ZAO in September 2004. Since manager who goes after growth should then, Citi has seen growth in Russia in all hold him in good stead here.< business aspects. Gross income grew 110%, Rajiv Bhuva

The global crisis is deepening, with a larger than originally expected impact on the domestic economyD SUBBARAOReserve Bank of India Governor

THE REALISATION >

That (a global plan) will only happen if Asia, especially its big emerging economies like India and China, are involved ANGELA MERKELGerman Chancellor saying China and India must be consulted in forging a solution to the world economic crisisYOU SAID IT >

When the entire world is in crisis, we cannot expect to be safe KC CHAKRABARTYChairman, Punjab National Bank, saying the global meltdown will hit banking in India tooWORDS WORTH >

The art of investment banking consists of taking a button and making a suit out of it ANDRE MEYERUS nancier

18

OutlookBusiness > Decermber 13, 2008

TAKE 1 DAVID HAIGH > Founder and CEO, Brand Finance

Q&A

Dont cut brand spends, cut product pricesThe head of the UK-based brand valuation firm says cutting down on ad and marketing spends just because the market is slowing down can be counterproductive. The author of Strategic Control of Marketing Finance tells Ajita Shashidhar that companies must focus on offering value to customersHow difcult it is to keep the value of a brand intact in a sluggish economy?

and spends during downturns.However, in times of recession, consumers also tend to be careful about spends. Doesnt that affect brands?

If you are in a business that is not really affected by a recession, you shouldnt panic just because your share prices are fluctuating. If brand managers recognise that these fluctuations are short-term, the last thing they should do is cut marketing spends. But the hardest bit is to maintain the relationship with the board and finance managers, who would want to reduce spends acrossthe-board. Brand managers have to convince finance managers that investing on marketing is not a frivolous expenditure. To maintain their relative market shares, brands have to invest in marketing, even during difficult times. Companies that cut spends during a slowdown may boost profits in the short-term, but will end up damaging their long-term equity for not having been seen for a long time. A few classic examples of brands that have emerged stronger after each recession are Cadbury, LOreal, Unilever and Diageo. Most of these have actually increased their range of offerings

Brand managers have to go back to fundamentals. In order to maximise gains, they have to understand their customers needs. In good times, consumer spends are largely driven by the image of the brand, and consumers are willing to pay a premium for it. But in bad times, all that consumers are interested in is a good product at a good price. They are not interested in the image of a product. For instance, in times of a recession, a car manufacturer should

look at offering a smart fuel-efficient car, rather than a fancy high-end model. Brand managers have to be intelligent, and adapt their offers to consumer needs. They have to keep reinventing. Most of them tend to become lazy during a downturn, and later pay the price for not being visible.So, does slashing of prices help?

In the last recession, cigarette brand Cobra cut prices by 25%. It lost money in the short-run, but won the condence of customers

Definitely. A classic example is the cigarette brand, Cobra. During the last recession, it dropped prices by 25%. Thats the best thing they did. They lost money in the short-run, but won the confidence of their customers forever. The UK-based supermarket company Sainsbury has also slashed prices, and so has Wal-Mart in the US. Not only have they dropped prices, they have also increased the quantity of their private label offering across categories. By doing so, they have been able to offer high quality products at value prices. In fact, Wal-Marts market capitalisation has increased in a falling market. They have got the pulse of what the American customer wanted. December 13, 2008

PRIYAM DHAR

TAKE 1BOLLYWOOD

REEL IMPACTThe slowdown and liquidity crunch is changing the production script. Movie budgets are being cut and all cost heads are coming under the scannerTHE LIQUIDITY crunch has made an more carefully. Cost overruns, which add unceremonious appearance in Bollywood 20-25% to the total cost of the movie, will as well, forcing cash-strapped producers now be curbed, says Balsara. to cut back on lavish production costs and Production houses will be forced to huge salaries of stars. rationalise their spending and tighten the The global financial meltdown has afloose ends of their budget. Tight shooting fected the industry, and we are looking at schedules and price reviews will make the our budgets carefully. Big budget films will industry more organised. not be feasible during this time, says Ram Saya Balsara: Producers will also look Mirchandani, Chief Operating Officer, at special effects and computer graphics to UTV. He adds that the industry has already cut down costs. Spends will be reviewed seen a price correction of 20-25%. carefully, which will bring discipline and lead to an improvement in the quality Top Bollywood actors, whose price tag has gone into several crores, are now facof production. ing massive pay cuts. UTV, for instance, is Will this imply that the volume of slashing payouts to actors, technicians and films churned out of the worlds biggest directors by 40%. A movie with a budgmovie factory will go down and that proet of Rs 30 crore will now be produced ducers will back more small budget movfor about Rs 23 crore, says Mirchandaies? Balsara disagrees. Big budget films ni. Actors, as well as directors, are acwill be made, but the costs will be analysed along with the risk factors in cepting the pay cuts, as stuthe pre-production stage, dios and production houses renegotiate big-budget deals. Studios and production houses are reviewing he says. The trickle-down effect of the Mirchandani is confident big-budget deals. UTV will cut payouts to meltdown on Bollywood is, that the good days will be however, goodnews for the inback soon. This trend will actors, technicians and directors by 40% dustry, says Farokh Balsara, Nacontinue for the next 15 tional Sector Leader, Media & Entertainment of Bollywood. Moreover, cost overruns months, after which, things will be norIndustry Program, Ernst & Young. are huge. Producers will now have effi- mal, he says. For now, the script reads like Typically, runaway production costs and cient pre-planning strategies put in place a tragedy.< un-itemised budgets are the hallmarks to cut costs and will analyse risk factors Sharada BalasubramanianDEEP POCKET

GO FIGUREPay hike for PSU ofcers and nonunionised supervisors. The chairmen of top-ranked PSUs will now earn between Rs 80,000-1,25,000 a month.

100% $200 $30

BN Estimated burden the US government will have to bear if it allows cash-strapped auto giant General Motors to liquidate.

MNThe collection by Somali pirates as ransom so far this year, according to the UN. The buccaneers seized 65 merchant ships during this period.

VIVEK THAKKAR

00 22


FEATURE ECONOMY

For once, there is now a strong case backing the governments propensity to spend. But its past splurge has left no money in the piggybankAshish Gupta

THE PRICE OF PROFLIGACYNo, MinisterThe economy needs a stimulus10 9 8 7 6 7.5 Real GDP growth (%) 04-0517.4

S

CHADENFREUDE, loosely defined as the unanticipated delight in the suffering of another, is not a nice emotion. But policymakers in New Delhi, including the likes of ShubhashisGangopadhyay, advisor to the Finance Minister, are experiencing at least traces of it. They point to the relative stability of the Indian financial system, even as global giants have tumbled. They take a dig at the votaries of free-market economics and the International Monetary Fund (IMF) for their sudden change of heart. These same people and institutions had, during the Asian currency crisis of 1997-98, insisted that banks be allowed to fail, markets to crash and currencies to fall. Today, they are talking about the importance of government-led rescue packages. This has allowed policymakers here to gleefully defend the governments much-criticised Rs 60,000 crore farm-loan waiver and conclude that the Rs 50,000 crore fiscal stimulus package now being worked on to boost core sector projects is the best solution. And, perhaps, it is. But the problemand policymakers skirt this issueis that despite five years of high GDP growth, India today has little fiscal headroom to tackle the ongoing slowdown. Spending all that money may be the best way to kick-start the sputtering economy, but the government doesnt have the money, even though it is emerging from a golden growth era. In these five good years, since no effort was made to rein in government

6.6 09-10*

Consumption (% of GDP)18.9 15.1 13.8 7 4.3

04-05 05-06 06-07 07-08 08-09 09-10*

but theres little room to spendDomestic liabilities (% of GDP)81.8 80.3 77 77 73.4 70.4

04-05 05-06 06-07 07-08 08-09 09-10* Trade deficit ($ bn) 04-05 05-06 06-07 07-08 08-09 09-10*-33.7 -51.9 -63.2 -90.1 -117.1 -122.6

Current account deficit (% of GDP) 4 3 2 1 0.4 0 04-052.5

09-10*Source: CSO, RBI, Citibank

* Projected

24


SHOME BASU

FEATURE ECONOMYVIVAN MEHRA

expenditure, flush out exemptions for companies, or find a solution to rising crude, food and fertiliser subsidies, India has been caught napping, and is well and truly feeling the pain of the global financial turmoil. Slowing growth, high single-digit inflation, falling exports, lower tax collections, crumbling stock markets, falling corporate profits and a tight liquidity situation have made the country a fit case for a large fiscal booster-shot. Only robust government spending can save the day. But the governments deteriorating balance sheet hardly gives it enough headroom to make large doses of investment, says Anindya Mitra, a Senior Analyst with Moodys Investor Services. The fiscal deficit is touching 6% (See table: Beyond Its Means), if one takes into account off-balance sheet items in the Budget, such as fertiliser, food and oil subsidies; by some estimates, its 7-8%. The current account deficit is at 3.4% of GDP in 2008-09. Any major borrowing programme that will help meet new investment needs is likely to push the fiscal deficit even higher, carrying with it the threat of a downgrade by credit rating agencies. That could put off foreign lenders. The government could have easily bettered the Fiscal Responsibility and Budget Management Act targets, says Mitra. It has, however, failed to do so. The problems of a high fiscal deficita balance of payments crisis, high interest rates and higher rates of inflationhad hitherto been kept at bay through Indias growing trade in invisibles. Money flowing in from software exports, foreign institutional investments in the stock market and remittances from foreign countries had helped finance the trade deficit. Today, that cushion too is slipping. Not only is there a widening trade deficitfrom a negative $90 billion in 2007-08 to around minus $117 billion in 2008-09but the balance of payments position is also turning negative. It is expected to turn negative (minus $11 billion versus a record surplus of $92 billion in the previous year), a recent Standard Chartered report points out. FII outflowssome $12 billion since April this yearhave meant that India faces a high current account deficit scenario as well. And, if one considers Indias high debt-to-GDP rationearly 77%the crisis to the domestic economy from higher borrowing becomes very clear. The im-

It is not the time to worry about decits, but to push ahead with all projects cleared in the last BudgetShubhashis Gangopadhyay,Advisor to the Finance Minister

pact of an adverse balance of payments position on the rupee too is quite evident. The rupee has slipped below the 50-mark against the dollar, and is likely to continue its downward spiral for some more time, say foreign exchange analysts. Even so, these factors have not deterred the government from going ahead with a Rs 50,000 crore fiscal stimulus package. It is not the time to worry about deficits. It is time to push ahead with projects, especially those cleared in the last Budget, but which have been stalled for one reason or another, says Gangopadhyay. Banks and financial institutions have been provided with a refinance window to lend to credit-starved infrastructure companies, small and medium enterprises, and housing projects. They will now have access to funds from the India Infrastructure Finance Company, Small Industries Development Bank of India and the National Housing Bank for onward lending. Sanctioning millions for infrastructure projects, however, is only likely to result in time and cost overruns. In fact, a host of projects in the power, steel, rail, road and petroleum sectors have been delayed. A recent study shows that of the 515 central projects cleared by the government, 234 have been delayed since the date of commissioning. A mere 2% of all projects were ahead of schedule. Overall, there were cost overruns of 10.6%.

Beyond Its MeansOverspending will send scal decit out of whack, from 4.4% to 5.9% (maybe even 7%), cramping the governments ability to kick-start the economy.Fiscal decit for 2008-09 (Rs cr) Budgeted Revised 1,33,300 1,33,300 38,800 25,900 15,000 10,500 4,300 4,100 2,900 1,000 1,300 0 2,37,100 4.4% 52,900 25,900 15,000 10,500 4,300 4,100 2,900 1,000 1,300 65,900 3,17,100 5.9%

Bailout PleaToday, even pure-bred capitalists are pleading for government-led bailouts. Governments are also planning to invest billions to ride out the current recessionary trough. Fiscal stimulus packages have turned into a necessity after attempts to revive economies through monetary rate cuts failed miserably. For instance, bringing down interest rates to the bare minimum has not prevented Japan, the US and the EU from slipping into a recession. The Keynesian argument of governments pump-priming the economy during bad years to create additional demand has suddenly acquired new currency. The argument remains valid even for those countries that are expected to clock higher growth rates than the developed West, reeling from recessionary conditions. China, for instance, is expected to register single-digit growth

Budgeted estimate Extra spends Fertiliser subsidy Sixth Pay Commission Farm loan waiver NREGS Additional assistance Food subsidy IMF loan return Edible oil subsidy Others Oil bonds * Total As % of GDP

Source: IDFC-SSKI Research

26


FEATURE ECONOMY

CHINA PACKAGE

The Luxury To SpendChina squirrelled away money. That helped it ready a stimulus package 60 times of what India is planning

this fiscal year after many years of doubledigit growth. But it, too, has announced a $587 billion bailout package for its economy. (See box: The Luxury To Spend) In the current economic environment, no one is questioning the need for bailouts. But the issue (especially in the light of past profligacy) is this: does India have room for any other fiscal measures to prop up demand? A reduction in income tax is unlikely to have much of a multiplier effect because the marginal propensity to consume in India is quite low, says Satya Poddar, Partner, Ernst and Young. Any tax cuts will only lead to greater savings, he says. What could possibly do the trick is an across-the-board reduction in excise duty of consumer durables, rather than selective duty cuts, which could distort the system. Indians, Poddar says, are very price-sensitive, and any reduction in prices can actually spur demand for automobiles, housing, et ala proposal that has found many takers in North Block. Again, some of the decisions taken

LOADED: China has the worlds largest forex reservesnearly $2 trillionAP

THE MASSIVE 4 trillion yuan ($ 587 billion) stimulus package unveiled by China on November 4 is to be spent over the next two years. The earmarked sum amounts to 14% of the countrys estimated GDP this year, and, in dollar terms, is four times as big as Americas scal stimulus plan unveiled earlier this year. The total increase in spending would surely represent the biggest twoyear stimulus (outside wartime) package injected by any government in history. How can China afford to put aside such a large sum? In two words, scal prudence. The country built up massive nancial reserves during its boom years, including the worlds largest foreign exchange reserves pool (nearly $2 trillion) and savings kitty. And after a major cleanup in the past three years, the Chinese banking system now has a lower baddebt ratio than the US. The package has earmarked money for many sectorspublic works, social welfare, even tax reformsto spur domestic consumption. However, the main investment will be on public housing for poor; infrastructure projects such as railways, roads, airports and the power grid; reconstruction after the May

earthquake; and increased spends on health and education. A reform of the VAT system will allow companies to deduct purchases of xed assets, reducing their tax bills by an estimated 120 billion yuan (4% of 2007 industrial prots). It should also encourage rms to upgrade their capital equipment. The government also plans to boost rural incomes by raising the minimum purchase price of grains and by increasing farm subsidies. In addition, it has promised higher social-security benets for low-income groups. Growth and prudence of past years has played a huge part in enabling a stimulus package. Chinas budget surplus stands at nearly 2% of GDP It also enjoys a . positive balance of payments position and runs a current account surplus. The countrys total public sector debt too is only around 17% of GDP All this could . help restore business and household condence, and encourage rms to keep investing. Last, but not the least, the increased spending on health and education should help reduce household worries about how to pay for these services, and encourage them to save less and spend more.

In the growth era, no effort was made to rein in government spending, ush out corporate exemptions or x subsidiesby the government way before the onset of the crisis such as higher wages for public sector enterprises, the National Rural Employment Guarantee Scheme, the farm loan-waiver scheme too could boost consumer demand. Thankfully, there is still some scope for monetary easing to perk up demand in the country, given the fact that inflation rates are dropping and crude prices are down to $50. Lowering the repo rate and the statutory liquidity ratio (SLR) could inject liquidity into the economy. It could also help usher in a reduction in interest rates, and thereby stimulate demand in the country. But nothing can help more than government spending. In todays world, where banks are unwilling to lend, confidencebuilding measures can only come through a fiscal package, especially infrastructure spending, Gangopadhyay says. Its impact, however, will take some time coming. Until then, India will have to learn to live with a slowdown. December 13, 2008

Room scene by Hickory Chair

AMERICAN INTERIORS BY

FEATURE COMPUTINGTHREE-HORSE RACE: (left to right) Jeff Bezos of Amazon, Steve Ballmer of Microsoft and Eric Schmidt of Google

A Window Through The CloudsThree online giants want to shift operating systems and applications from your desktop to the Web. Right now, Microsoft is a cut aboveNandita Dattaing services. In fact, it is considered the pioneer in this field and is its current market leader. All online retailers, and Amazon is no exception, need to have a back-end of large server farms in order to enable buyers to conduct monetary transactions (e-commerce) on their websites. After spending millions of dollars setting up a multitude of servers to handle e-commerce transactions on its website, the company came up with the novel idea of renting spare server capacity. Although the bulk of Amazons revenues come from online retail transactions, it allowed developers to host their custombuilt software applications on its proprietary cloud of servers for a rental fee. Soon, online behemoth Google followed. For Google, a leader in Web-based applications like Gmail, GoogleTalk, Google Docs, etc, cloud computing was also a logical transition. But Microsofts entry into this rarefied club has raised eyebrows. The company

L30

AST MONTH, MICROSOFT SHOWCASED ITS cloud computing platform at a developers conference in Los Angeles, marking, perhaps, the beginning of the end for desktop computing as we know it today. For the uninitiated, cloud computing refers to a technology platform where an operating system and the software that runs on top of it are not on your desktop or your office server, but in the cloudsthat is, the Internet.So, for example, a Word document or spreadsheet application need not reside inside your desktop, but would be available on the Web for all to use. Christened Azure, Microsofts platform is the latest entrant in the IT industrys bid to free itself of cumbersome dependence on desktop-based operating systems andOutlookBusiness > December 13, 2008

applications that were just not locationagnostic. Thanks to plummeting costs of hardware, storage and bandwidth, it has now become possible to use applications such as Word in the cloudsthat is, accessible from anywhere in the world. It was online retailer Amazon that first saw the potential opportunity in cloud comput-

FEATURE COMPUTING

Thanks to plummeting costs of hardware, storage and bandwidth, it has now become possible to use software applications such as Word and spreadsheets on the Webearns huge profits from its desktop products such as its operating system Windows and word processing suite Office. A shift to the online world implies a major break in its corporate strategy. Consider this: Microsofts revenues in FY2008 were $60.4 billion, and 80% of that came from the sale of desktop software. Moving away from such a money spinner to the unknown charms of cloud computing is no weak effort. In fact, Microsofts initial bits and pieces foray (with a few online applications and some underlying software) had led analysts to judge the shift as a knee-jerk reaction to arch-rival Google. But with a more complete cloud portfolio now (thanks to Azure), the company seems to be making the right moves in this multi-billion dollar market. cally, I write the application, and once Im done, I hand it over to the company. It is up to them to figure out how to deploy it and scale it up. Think of it in terms of a caryou are not only getting the frame of a car, but also key stuff like the engine and tyres. You only have to design the interiors as per your needs and specifications. Azures technology previewthe commercial launch is at least a year away was received favourably by the analyst and developer community. Gartners Yefim V Natis says Azure adds a new continent to Microsofts world map of business application platforms. Developers attending the Los Angeles

Superior Cloud?On its part, Microsoft believes that with Azure it can steal a march over competition. Microsofts cloud story is a lot more complete than any other firm in this space, says Srikant Karnakota, an expert on cloud computing working in Microsoft. Our platform (Azure) and our ready-to-use applications (like OfficeLive, Exchange Online, Dynamics CRM Online, etc.) form the most comprehensive set of offerings for the cloud environment. Amazon is mostly at the hardware level and Google is not even there from the enterprise standpoint. According to Karnakota, the beauty of the Microsoft platform is that developers can use the same tool (Microsoft Visual Studio) and language (.NET) thay are currently familiar with to build cloud applications. There is no need to re-skill or go through a learning curve, he says. But Microsoft has yet to convince everyone of its cloud superiority. Gartner, for example, says Microsoft is years away from delivering an industry state-of-the-art platform as a

The Cloud CoversAmazon Google Google App Engine Cloud offering EC2 Target user Individual users, companies Mostly individual users, small and medium businesses Services Only provides infrastructure Has a cloud platform, but it lacks enservices (largely storage) terprise capabilities to write complex applications Language Not applicable Python Tools offered Not applicable Basic Status Commercially available Open for public use (beta stage) Microsoft Azure Large companies Most complete offering that has all the piecesoperating system, services and applications .NET Basic and advanced Open only to developer community; commercial launch likely in 2009Source: Companies, industry reports

Money AzuredIn the words of Microsofts Chief Software Architect Ray Ozzie: Azure represents a significant extension to our family of Windows computing platforms from Windows Vista and Windows Mobile at the experience tier, Windows Server at the enterprise tier, and now Azure being our Web tier offering. Think of it as Windows in the clouds. Azure is aimed at the developer community, which can use this platform to build Web-based applications without having to invest large sums of money setting up big server farms or spending precious time writing thousands of lines of code from the ground up. Instead, it is aimed at giving developers more reasons to focus on their area of expertise, which is solving a business problem and writing a software application around it. Techie Jonathan Kupferman explains in his blog, Assorted Conundrum: Lets say I want to create a Web application that will allow users to input their contacts and access them from anywhere. After writing the application, I would normally have to set up a database which would be used by the application to store data, like user login information and the actual contacts themselves. Now, instead of running a database myself, Microsoft runs it for me; I just access it though the provided interface. Similarly, I dont have to set up the platform and the underlying operating system, as this is handled by Microsoft. So basi-

conference said they were now convinced that Microsoft had a vision around its cloud computing strategy and it wasnt going to be an also-ran. But, at the same time, they believe Azure is a make-or-break move for Microsoft. With Amazon and Google also in the fray, Microsoft has no choice but to succeed. Microsoft cannot afford to see its developer community move on to a platform that it has not built and, therefore, has no control over, said one attendee who did not wish to be named.

Microsofts entry into cloud computing raised eyebrows, as 80% of its $60 bn revenues come from desktop software

service. It also criticised the absence of a multi-tenant application in its Azure platform. A multi-tenant application allows you to have as many users as you wantthough behind the scenes there is a lot of sophisticated software that keeps things separate, its all invisible to the user. In the client-server environment (the era prior to the Web), software applications were single-tenant or enterprise-specific. Two organisations couldnt run the same application without customising it to suit their specific needs. However, Salesforce. com changed all that when it launched its online sales-related application. This ran in the Web browser instead of in an onpremise server. Since then, multi-tenancy has become a pet topic with developers and analysts alike. Meanwhile, competition says these are very early days for Microsofts Azure because the company has not even set a timeline for commercial launch. It is only a technology preview. By the time they

32


FEATURE COMPUTING

We will neither be software-centric nor go browser-centric. We will blend the best of both worldsRay OzzieChief Software Architect, Microsoft

actually do a commercial launch, we would have launched two or three very exciting cloud platform products, says Peter Coffee of Salesforce.com. Incidentally, Salesforce. com has also developed a cloud platform (like Microsoft), but most of the applications that run on it are sales-related. The biggest problem that cloud computing faces today is getting large companies to migrate their desktop applications to the cloud. Startups, however, have flocked to cloud computing due to lower costs and faster time-to-market. Large enterprises have been very reluctant to take the plunge because, for one, there has been a huge concern about data safety. They fear that the data, which is sitting on the hosting companys servers, may be open to misuse. Outages have been another concern. It may not be a big issue today because mission-critical applications are still not being hosted outside the company premises. But when businesses begin to host missioncritical applications like email and customer data on the cloud, they expect perfect service levels. Recent outages in many hosting companies, including Google and Amazon, have not helped matters.

Twin TrackThis is where Microsoft is hoping its software-plus-service strategy would help. Unlike most of its competitors who are entirely Web-centric, Microsoft does not plan to transition completely to a Webbased model from its current desktop-based model. Ozzie, believed to be the architect of Microsoft software-plus-services strategy, never tires of explaining why he thinks this is a pragmatic approach. Says Ozzie: I have been fortunate to survive major technology shifts (like mainframe to client server in the 1990s, and now to the Web). In each case, somebody took an extreme position. But it never worked out that way. The pendulum did swing and disruption did occur...but the best solutions were integrated ones that brought together the best of one world with the best of the other. And this is why, he says, Microsoft will neither remain software-centric nor go browser-centric, but will blend the best of both worlds. By combining the best aspects of software with the best aspects of cloud-based services, we can deliver more compelling solutions, he says. Customers can opt for on-premise Microsoft servers in case they want lots of customisation, control and compliance. Or, they could use hosted services directly from Microsoft or even hire a third-party with a unique expertise in a particular area to host a service for them. This choice is essential, says Karnakota, because these enterprises are unlikely to move all their business applications to the cloud. Applications that are core to a business will continue to remain on-premise. However, non-core applications like travel, HR, email, tax processing can migrate to the cloud, he says. If anyone can bring large enterprises on to the cloud, it has got to be Microsoft. After all, it boasts of a large pool of Fortune 500 customers for its desktop software. Even if it can convert half of these enterprises, Microsoft is sure to dominate the cloud segment just like it has done with the desktop segment for many years now. < Microsoft hosted the writer in Los Angeles for its developers conference

Getting large companies to migrate their desktop applications to the cloud is the biggest challenge. Their concern is data safety and outage interruptions in the cloud34OutlookBusiness > December 13, 2008

PE FOREWORD

Entrepreneurs beneted from PEs excesses. Now they wont escape the painSnigdha Sengupta

PROSPERITY FROZENt is easy to be blinded by ambition. Both entrepreneurs and private equity (PE) managers forgot one thing over the past few years, and they are being painfully remindedof it now: respect for capital. That one fatal error in judgement now threatens to freeze all their growth plans. In some ways, businessmen can be excused for this dangerous oversight. After all, their core competence is managing the business; not managing money. But one cant say the same of PE managers. Money, and its multiplication, is at the very soul of PE. True, the industry has done a commendable job of investing over $40 billion in India since 2002. But they forgot the golden rule: cherish capital, buy cheap, build value. Instead, PE went on a frenzied shopping spree, fuelling valuation inflation across the board. And the more they spent, the more the money poured in. Even seasoned fund managers, who survived the bitter 2001-03 spell, when global money all but deserted India, jumped in to keep up with the young turks high on hot money. Perhaps, PE fund managers shifted their sights away from the returns they were supposed to earn over 8-10 years, and started chasing the 2% fee they earn on the funds they manage. Funds were raised and deployed faster than one could blink, and it was already time to raise a new fund all over again. Entrepreneurs were happy to ride along under the delusion that the party would last forever. Somewhere along the way, PE forgot to do its job: build long-term value for the entrepreneur and its own benefactors, limited partners (the institutions that give the PE industry almost all the money it invests). Today, PEs daredevils are nursing a hangover that threatens to be more painful than the one that followed the dotcom bust. Limited partners, themselves caught in a downward spiral in the aftermath of Wall Streets collapse, are developing a hitherto unknown scepticism about Indias ability to deliver supernormal returns. If youre an entrepreneur wondering where your next round of cash is going to come from, turn to page 61. Five top-notch PE fund managers reveal their minds, their fund availability and their investment strategies. You could also pick some clues from the India Confidence Poll that Outlook Business conducted with 20 of the countrys leading PE funds, which together control $12 billion (page 40). Now is also a good time to learn from past excesses. The Outlook BusinessErnst & Young Private Equity Handbook that accompanies this issue is a good place to start. It will give you a lowdown on PE, deal by deal; dollar by dollar. But there is one stirring message in this package. It can be found in the story on venture capital that was written from Silicon Valley (page 54)this is one of the greatest times in human history to start a business. December 13, 2008

ILLUSTRATION BY ARINDAM; PHOTOGRAPHS BY SAPTARSHI BISWAS

PE IN CRISIS

Every Link In The PE Chain Is Pulling Back Banks, insurers and AMCs have been hit the hardest by the credit crisis. Fresh fund allocations will freeze. Draw-downs on existing commitments could be delayed by 12-18 months. Endowments have taken a hit on public market investments, reducing the value of their overall asset base by an estimated 20-30%. Subsequently, their exposures to PE have crossed permissible limits (usually, 10% of the overall asset base). They are now in the market to sell excess PE holdings to secondary buyers. This will delay the release of existing commitments to India by 12-18 months. Pension trustsglobally, the largest and most stable pool of capital available to PEinvest here sporadically via global funds. They too face asset value erosions. Fresh allocations, even in the US, look doubtful for 12-18 months. Over 350 hedge funds have gone bust. Hedge funds have pumped in $2 billion since 2005 in direct investments in companies and much more as investors in local PE funds. Most of these funds may not be able to raise their balance commitments.

ENTREPRENEURS

BANKS, INSURERS, AMCS

INDIVIDUALS

PENSION TRUSTS

FUND OF FUNDS

HIGH NET WORTH INDIVIDUALS

ENDOWMENTS

HEDGE FUNDS

38


THE FREEZING POINTIndia is still hot. But PE funds may no longer have money to invest here or anywhere elsePRIVATE EQUITY COMPANIES

OGRAPHIC BY SUMEET GUPTA

Snigdha Sengupta & Rajiv Bhuva

N OCTOBER 15, EXACTLY one month after Wall Streets iconic investment bank Lehman Brothers filed for bankruptcy, David M Rubenstein, CoFounder and Managing Director of global private equity (PE) giant The Carlyle Group, told a room-full of PE fund managers in Dubai: This could well turn out to be private equitys finest hour... And perhaps it could, especially for funds that are sitting on plenty of cash. But it could also just as easily turn out to be the $3 trillion private equity industrys gravest crisis ever.OutlookBusiness > December 13, 2008

39

PE IN CRISISINDIA CONFIDENCE POLL

Dark Clouds And A Silver LiningAn Outlook Business poll of 20 top PE funds, which control $12 bn in PE money in India, confirms the grim outlook for the industry. The only upside is that they still rate India as the number one BRIC destinationOn a scale of 1 to 10, what is your outlook on investment activity? 25%Above 6 months6.25 Jan-Sep 2008 5.30 Oct 08-Mar 09

15%1-3 months

What is the average time to close a deal?

60%3-6 months

How do you see fund-raising prospects?

5.55 Jan-Sep 2008

3.75 Oct 08-Mar 09

Which are your top ve sectors to invest in during the next six months?

Sector 1 Sector 2 Sector 3 Sector 4 Sector 5

Infrastructure Consumer FMCG Healthcare Financial services

North America

What are your three non-negotiable pre-requisites to close a deal?

Pre-requisite 1 Board seat Pre-requisite 2 Good team Pre-requisite 3 Corporate governance

How do you rate investor interest in fund-raising across regions?

2008

4.95 Jan-Sep 2008

3.55 Oct 08-Mar 09 Others

On a scale of 1 to 10, rank the BRIC countries as investment destinations5.70 Brazil 2007 5.30 Russia 2009 6.80 India 6.30 China

Europe

4.75 Jan-Sep 2008

3.60 Oct 08-Mar 09

4.75 Jan-Sep 2008

4.40 Oct 08-Mar 095.30 Brazil 4.80 Russia 6.80 India 6.80 China 5.60 Brazil 5.00 Russia 7.20 India 6.10 China

All bar graphs in the poll show rating on a scale of 1 to 10

How do you rate opportunity for control deals (buyouts, carve-outs, spin-offs)?

GRAPHICS BY KISHORE DAS

4.15

4.90 Oct 08-Mar 09

Jan-Sep 2008

What is your average expected exit returns till March 2009?

30-35%

Up to 20%

58%

42%

Up to 20 exits

No exits

How many exits do you expect till March 2009?

58%

42%

The catastrophe on Wall Street has hammered valuations across world stock markets to unimaginable lows. This is a time when PE fund managers would have loved to stroll through the ruins, picking up many gems at throwaway prices. But they cant. PEs benefactorscommonly known as limited partners, or the guys who supply PE funds with almost all the money the latter investare pulling out. Limited partners come in all formshedge funds, pension funds, Ivy League university endowments, banks, insurance and asset management companies, enormously wealthy families, and even Saudi princes, Greek shipping tycoons and the like. Until recently, limited partners have been only too happy to pump in billions of dollars ($356 billion was raised in 2007) into PE funds worldwide. The actual network of pipelines through which the money flows into PE is intricate, multi-layered and almost always shrouded in secrecy. Only pension funds and endowments selectively disclose information about investments and returns; the vast majority of other limited partners remain, by design, in the shadows (PE funds are not legally required to publicly disclose their sources of capital).

40


PE IN CRISIS

Of the $8.8 bn raised for India between January 2007 and June 2008, 60-70% is merely on paperthe hard cash is yet to come inBut now, in the aftermath of the global liquidity crunch, almost Then, there is talk that a Delhi-based PE firm that raised a mega all limited partners are freezing fresh money flow into PE funds, fund last summer and was in the market to raise a new fund just even going back on already committed cash supplies (See graphic: three months ago has now shelved its plans. First-time fund manEvery Link In The PE Chain Is Pulling Back). They are also forcing agement teams, specifically those that are yet to complete their PE funds into distress sales so that they can get their money back. second or third round of fund-raising, are feeling the squeeze. The In fact, the PE industry is living in fear that much of the $210 billion global pool of money available to general partners (industry lingo raised in the first six months of 2008 (according to the Emerging for PE fund managers) is contracting significantly. That contracMarkets Private Equity Association, or EMPEA)of which, $26.3 tion is going to hurt inflows into India, says Vikram Utamsingh, billion was raised by emerging Asia, including Indiamay never Executive Director and Head of Private Equity Group, KPMG. materialise. This threatens to push the once glamorous industry Things could start looking much worse from early next year. into a perilous, survival-threatening ice age. Every source that sup- Limited partners, especially those with a sizeable exposure to plies money to PE funds is freezing over, and fast. Fund managers the US market, will take stock of the full extent of losses incurred might as well trade their laptops in the last quarter of 2008, the for a hardy pickaxe. worst period in the US credThe cold wave is sending shivit crisis. Since US limited parters up the spines of PE fund manners account for about 70% of agers in India. An exclusive poll Indias PE money inflows, the US administered by Outlook Business collapse could bring the great Inof 20 top PE funds that together dian PE party, on for the past four control about $12 billion in Inyears, to a grinding halt. dia-dedicated capital threw up gloomy results (See box: Dark Anatomy Of A Party Clouds And A Silver Lining). The party was wild while it lastOn a scale of 1 to 10, these fund ed. Between 2005 and June 2008, managers rated their fund-raisIndia-dedicated funds raised ing prospects in the second half commitments worth $16.3 bilthis year at 3.75. Much more came diIt took us three months to close our rst lion.investments. In the in via peIndustry sources concede that rect same out of the $8.8 billion raised for investment after opening our Indian ofces riod, $34.2 billion was invested, India between January 2007 in May. However, in the current scenario, it $17.1 billion in 2007 alone. and June 2008, 60-70% is mere Four kinds of PE funds had a may take longer to close transactions commitment on paperthe hard rollicking time at the party. First, cash is yet to come in. Limited large and small India-dedicated Aluri Rao, MD, Morgan Stanley Private Equity Asia partners, typically, release capital funds raised both by homegrown to funds on a deal-by-deal basis. funds such as ChrysCapital and In the aftermath of the global crisis, the commitments may not ICICI Venture, and global funds such as 3i Group and Actis. be honoured. Further, according to London-based alternative Second, global funds such as Temasek Holdings, Citi Venture investments research firm Preqin, 1,601 funds are in the market International, Warburg Pincus and Blackstone Group, which globally to raise $934 billion. Of those, 84 are Indian funds look- invest from global corpuses, but have local investing teams. Third, ing to raise $27 billion. PE fund managers here fret, though in offshore investors such as Kohlberg Kravis Roberts, who operate private, that most of this money may never get raised. on a deal-by-deal basis (it has just decided to set up office here Rumours are rife of on-road fund sizes being cut or postponed, with former Citigroup India CEO Sanjay Nayar at the helm). and draw-downs (actual release of committed capital) on existing Fourth, there are hedge funds such as DE Shaw, Och-Ziff and commitments being delayed. Proposed deals are coming in for New Vernon, who made fairly deep inroads into the Indian PE greater scrutiny. These days, limited partners have more granu- market in the last couple of years. lar questions than before, says Alok Gupta, Managing Director Much of the party was funded by four kinds of limited partners. and CEO, Axis Private Equity, which is raising an infrastructure- Banks, insurance companies and asset management firms were focused fund (it shored up $150 million in the first round). the first lot. University endowments were the second. Together, The year 2007 also saw a sizeable number of small- and mid- they accounted for the bulk of the limited partner institutions sized funds like Axis raise commitments from limited partners; that invested in Indian PE. Then, there were the hedge funds, but that now looks shaky. There may be funds where 20% of the perhaps the wildest characters of them all. Hedge funds source limited partner base will not be able to make their payments, hot money and use aggressive investment strategies like leveragsays the head of a pan-Asia PE fund headquartered in Mumbai ing, speculative derivative positions and algorithm-driven tradwho did not want to be quoted. So if you have commitments ing in their quest for high returns. They can vanish as quickly as for a $500 million fund, it may become $400 million. And thats they appear. Finally, there were also the pension funds, a sober the best-case scenario. lot that still couldnt resist joining in. Now, PE fund managers are

42


PE IN CRISIS

desperately hoping the party will go on. You can hear their shrill voice touting the now is the best time to invest line over and over again. But limited partners, the guys who had always funded the bash, want no more of it. Here is why and how every one of them is pulling back investments in the PE industry: HEDGE FUNDS: Since 2005, unconfirmed industry estimates suggest that hedge funds have pumped in over $2 billion here in direct investments alone. Some of these deals are well known for example, Och-Ziff s $51 million investment in real estate developer, Nitesh Estates. In fact, the likes of DE Shaw and New Vernon have also set up teams and offices in India to make PE investments. DE Shaw, which manages $35 billion, has invested $500 million in PE deals here since its entry in 2006. However, there is little information on the quantum of hedge fund dollars that have gone into new PE funds in India. Some raised money directly from hedge funds or from fund of funds, who, in turn,

Scaling Back ExpectationsSince January 2007, about $6 bn was raised by six India-dedicated funds, but now some of it may not flow in. Similarly, the $6 bn target of five funds that are currently raising funds will see a sizeable cut back.Already raised PE rm New Silk Route ChrysCapital Investment Advisors 3i Sequoia Capital IDFC PE IL&FS Investment Managers Ongoing PE rm ICICI Venture SBI, Macquarie Group, IFC Actis IL&FS Investment Managers, Standard Chartered Bank CX Partners (Ajay Relan) Fund New Silk Route PE Asia Fund ChrysCap Fund V India Infrastructure Fund Sequoia Capital India Growth Fund II IDFC PE Fund III IL&FS India Realty Fund II Fund Indian Advantage Fund III Infrastructure Fund Actis India Fund III SCI Asia Fund NA Corpus ($ mn) 1,340 1,250 1,200 750 700 678

Our data people will have to show more information than before, as limited partners are seeking greater details on potential investments Alok Gupta, MD and CEO, Axis Private Equityfirst half of 2008 and a further 700 may call it a day before the year ends, say various news reports quoting Chicago-based alternative assets investment research firm Hedge Fund Research. In India, companies backed by hedge fund money that came in the guise of PE investments could also see such distress sales. The industry fears that the global hedge funds implosion could cut down the size of the Indian PE industry by half, if not more. A lot of money that came during the last couple of years into India is hot money, and that is why there is the worry, says the head of a Zurich-based fund of funds that has a local office in Mumbai. Money that comes in suddenly will go out suddenly. UNIVERSITY ENDOWMENTS: These endowments have been aggressive in venturing into emerging markets like India. New Delhi-based ChrysCapital Investment Advisors, for instance, counts Harvard University, which manages over $43 billion in endowment and pension assets through its subsidiary, Harvard Management Company, as one of its key limited partners. Typically, these endowments invest 10% of their portfolio in PE funds and much of the rest directly in publicly listed companies. As world stock markets plummeted, university endowments saw substantial erosion in their public holdings. This has caused a peculiar problem for PE. University endowment exposure to PE (as a percentage of total portfolio value) has shot up. This is because their investment in PE is illiquid and cannot be marked to market as these investments are usually in unlisted companies. But the value of public holdings shows huge losses. This has skewed the portfolio allocation guidelines these endowments strictly follow. To get back to the prescribed balance, they have to liquidate some PE investments and also stop further investments. A number of institutions I have spoken to in the last several weeks have lost 20-30% of their overall value, says Steven J Cowan, Managing Director, PCGI, a Washington DC-based fund of funds that invests in PE funds globally and in India on behalf of pension fund CalPERS (California Public Employees Retirement System),

Corpus Status ($ mn) 1,500 Fund-raising 1,000-1,500 Fund-raising 1,000 Fund-raising 800 $150 mn raised 750-1,000 Fund-raisingSource: Industry reports, PE funds

had raised a portion of their corpuses from hedge funds. Hedge funds, typically, leverage themselves several times over, raising credit from banks and other lending institutions to invest in capital markets. They could, typically, leverage a $15 corpus to raise $85 of debt and invest $100 in high-risk avenues hoping for big returns. But last quarter, as portfolio values fell, this leverage was further stretched. Lenders demanded hedge fund managers bring in more capital to re-balance the debt-equity ratio, failing which they wanted their money back. The ensuing distress sales by hedge funds is further pulling stock markets down across the world, worsening the situation for everyone else. Not surprisingly, hedge funds were among the first big casualties in the US sub-prime crisis. The $2 trillion hedge fund industry, made up of 8,000-odd funds at the time, may soon become less than half its original size. Some 350 hedge funds shut shop in the

The $2 trillion US hedge fund industry, made up of 8,000-odd funds, may soon contract to less than half its original size44OutlookBusiness > December 13, 2008

PE IN CRISIS

The Pipes Are LeakingOf the 73 PIPE deals signed since January 1, 2007, only four are in the money; worse, the loss in 53 deals is more than 50%Investee Investors Share price (Rs) Change (%) Cost Nov. 17 85 300 105 225 163 48 310 100 300 19 1,730 26 17 100 92 118 109 106 605 292 245 240 225 860 203 220 57 165 275 10 47 24 71 63 21 140 51 204 16 1,498 23 16 126 196 36 36 36 403 251 51 60 58 245 58 73 30 100 170 -87.8 -84.4 -77.0 -68.4 -61.6 -56.5 -54.9 -48.6 -32.1 -16.1 -13.4 -11.7 -5.6 25.8 113.0 -69.4 -66.7 -65.7 -33.4 -14.2 -79.2 -74.9 -74.3 -71.5 -71.5 -66.8 -48.1 -39.7 -38.1 Investee Infotech Hexaware ICSA ICSA Manufacturing Nitco Tiles Euro Ceramics Sangam Amtek Auto Electrotherm Jai Balaji Group Amtek Auto Ess Dee Alu. Havells IMP Powers Ltd Man Industries Ahmednagar Forgings S Kumar Nation. Rane Holdings Gokaldas Exports Steel Strips Amtek India Kanoria Chem. Amtek India Andhra Cements Evererest Kanto IOL Chemical Real estate Vipul GL Hotels Anant Raj Ind. Phoenix Mills Investors American funds Chrys Capital MS, ML,UBS Goldman Sachs ML, Citi, Deutsche Bank, Lehman Brothers, Reliance Capital Wassertein Fund USB Sec Asia-Swiss Finance Corp Chrys Capital IFC, ICICI Ventures Citi Chrys Capital Morgan Stanley Warburg Pincus Motilal Oswal PE Goldman Sachs Chrys Capital Mauritius Debt Management Blue River Capital Blackstone Kalimati Investments (Tata Steel arm) Chrys Capital IFC Chrys Capital IDFC TVG Capital Partners Indiastar Mauritius Wachovia Temasek Holdings MS, GIC, Quantum Fund Yatra Capital, HSBC, Barclays, DWS, T Rowe Price, Trinity Capital, Americorp Subhkam Ventures Share price (Rs) Change (%) Cost Nov. 17 325 116 -64.3 50 20 -60.2 317 186 -41.3 227 186 -18.0 270 250 54 260 600 327 220 575 625 161 112 87 82 192 275 170 83 40 75 29 250 75 261 283 246 320 84 230 450 435 160 60 357 565 40 40 10 51 120 68 51 144 157 45 33 26 25 69 105 70 35 17 35 15 148 104 34 47 46 62 43 16 40 63 54 14 99 665 -85.2 -84.0 -82.3 -80.3 -79.9 -79.2 -76.7 -75.0 -74.9 -71.9 -71.0 -70.2 -70.1 -64.1 -62.0 -59.0 -58.3 -57.3 -53.8 -47.9 -40.8 38.5 -87.1 -83.6 -81.3 -80.7 -48.8 -92.9 -91.2 -85.6 -66.5 -77.3 -72.4 17.7 Banking and nancial services Almondz Al Anwar Holdings IndiaInfoline Oreint Global Development Credit Bank Yes Bank South Indian Bank JRG Securities ING Vysya Fortune Financial Services Shriram Transport Finance City Union Bank HDFC Limited Geojit Securities City Union Bank Manappuram Magma Healthcare Granules India Granules India Granules India Apollo Hospitals Cadila Health. Infrastructure Subhash Projects GMR India Capital Fund, Tata, DCB, Al Bateen Inv Co., GRA Fin Corp Orient Global IFC, Uti Ventures, Fidelity Baring India IFC Lytton Grove Corp, Bomin Finance Tiger Capital Partners, Blue Ridge Capital, JM Financial FMO, Blue River Cap., Argonaut Partners Carlyle Group, Citi BNP Paribas LIC Sequoia Capital, Hudson Ventures FMO IFC Citi ISP Investco/Reidgeback Capital Apax Partners Chrys Capital

Citi Canara Bank, UBS, Citi, SBI, Deutsche Bank, T Rowe Price, Kotak, Eton Fund + 1 Nagarjuna Const Blackstone Great Offshore Carlyle Group Nagarjuna Const Blackstone Gammon India Chrys Capital Gujarat State IFC Petronet Sanghvi Movers CLSA Punj Lloyd Warburg Pincus, Blackstone, Avenue Cap, Oasis, Kingdom Cap, Moore Cap Mgmt IT/ITES Hexaware Chrys Capital Spanco Cyrys Cap, UTI Ventures Firstsourc

Out Look Business magazin

Documents

kohlberg kravis

scrap export

draper fischer

biggest stumbling

raised export

private equity

private equity

current account