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| Emerging gainers from the slowdown: Pssst,
she has an MBA |
Circa
2002, nine out of 10 ads in the thinning 'wanted'
supplement of mainstream national dailies are from call centres.
Or contact centres. Or Business Process Outsourcing companies. Read
one of these carefully, even if you aren't in the market for a job,
and you'd be surprised at the qualifications they demand. A degree
in engineering, maybe a MBA, and a few years experience in consumer
products marketing for mid-level positions. It wasn't always this
way. Not too long ago, all one required to work in a call centre
was a sound knowledge of the English language, a pleasing personality,
and the ability to pick up accents.
One reason for the change is the sheer economics
of the business, explains Vikram Talwar, the CEO of Exl Service,
the BPO-centre of top US insurer Conseco. ''In the US, people who
do high-end (call centre) jobs are becoming very expensive.'' Hence,
the shift to India. Another reason is the slowdown. With the Indian
software industry not so hot on recruitments any more, says S. 'Raja'
Varadarajan, the head of hr at Spectramind, ''software engineers
are queueing up for jobs as supervisors and managers''.
What's better, they are willing to take a cut
in pay. Thus, the sight of an IIT-IIM alumni performing the duties
of a supervisor or manager at a call centre (fine, high-end call
centre or BPO-centre) isn't as rare as it used to be. Need we say
more
-Moinak Mitra
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| JESWANT NAIR: Will Pepsi prove to be
the right choice? |
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| K.K. KAURA: To take charge of Sterlite's
copper business |
Executive Tracking
Finally, Pepsi seems to have found a replacement
for hr head Mahendra Swarup (he's now head of Times Internet) after
what must surely be one of the most speculative searches in a long
time. Names came and went, but it mow looks like the post will go
to Jeswant Nair the head of hr at the Indian ops of Standard-CharteredGrindlays.
Nair leaves the bank even as integration issues resulting from the
merger of Standard Chartered and Grindlays are being worked out.
Another high-profile move is that of K.K. Kaura, the former CEO
of abb. Headhunters made a rush for the man after Ravi Uppal took
over as CEO of abb. After much deliberation, we hear, Kaura has
decided on the post of CEO of Sterlite's copper business.
Meanwhile, Dabur's professionalisation-drive
has suffered a serious set-back with CEO Ninoo Khanna quitting.
The company is yet to find a replacement. Khanna, readers may remember,
was a former P&G man hired by the late G.C. Burman as part of
a core team of professionals who would manage Dabur. He's gone.
MIDAS TOUCH
Titan Goes Down
The youth market attracts another giant.
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| Tanishq--now targetting the attractive youth
market |
Here's more proof
of the lure of the youth market: a brand of jewellery exclusively
for the youth. And that too from the country's foremost watch and
jewellery marketer, the Rs 709-crore Titan Industries. Tanishq,
Titan's jewellery division, recently launched its FQ (Fashion Quotient)
collection, a brand that will be retailed at Shoppers' Stop and
other showrooms.
With prices starting at Rs 199, the collection,
the company claims, is a ''young, trendy, and effervescent line
of jewellery, mirroring the growing global trend of the 'white look'
amongst the young''. FQ comprises over 90 designs in chains, pendants,
rings, and earrings, with the use of silver and stones in young
vibrant colours.
The company is betting on FQ to fill the gap
between haute couture and junk jewellery, and open up a huge youth
market. Titan has even moved away from its traditional retail model
while selling FQ, patronising youth-frequented outlets and abandoning
up-market Tanishq boutiques.
For a company that took a while to break into
the jewellery market, FQ is a bold step. But at the price-points
mentioned, Titan is going to have to sell a tanker-full of FQ items
for there to be any significant impact on its financials.
-Shailesh Dobhal
BARTER IS ALIVE AND KICKING
This one is right
out of the stone age. When, The Hindustan Times bought some Inalsa
and Philips products (valued at Rs 20 lakh) for a promotional exercise
in Patna, it didn't pay for them in cash; instead, it debited advertising
space for the same amount to Net 4barter, a new economy exchange,
which facilitated the deal. Another Net4barter member, Timex, bought
some of that space (Rs 16 lakh worth to be precise), against some
watches it had debited the exchange.
Welcome to the world of barter. Net4barter
and Intrex India are two cash-less exchanges that facilitate the
barter of goods and services. Here's how it works: Company A has
something to sell which it lists on the exchange (the price is always
lower than the market price as channel margins go out of the window),
where enrollment is either free (Net4barter) or nominal (Rs 15,000
at Intrex). Once the deal is struck, say with B, the exchange charges
a small fee, in cash, from the buyer. B debits its own products
of equivalent value to the exchange and Company A earns an equivalent
amount of credit on the exchange.
''The main advantage of the system is that
it not only saves cash, but also increases efficiency,'' says Naveen
Surya, Executive Director, Intrex India. He rattles off the benefits:
an improved cash flow, lower costs of funds, and higher working
capital efficiency. Not for nothing is the corporate barter industry
in North America worth $11 billion a year. Predictably, the exchanges
themselves are on a song. Intrex has has done Rs 20 crore of business
over the last six months. And Net4barter, with 700 members does
Rs 2.5 crore worth of transactions every month.
-Vinod Mahanta
TELECOM
Take It Easy, Televentures
Bharti Televentures IPO-gambit is way too elaborate.
The grapevine
has it that the offer document filed by telecom conglomerate Bharti
Enterprises for the forthcoming initial public offering of its services
holding company, Bharti Televentures, was so comprehensive that
it flummoxed the Securities and Exchange Board of India.
While one cannot find fault with Bharti's intent
to leave nothing to chance in the run-up to the issue, there is
perhaps a lesson in it for the company: relax! While we are in the
gratuitous advice business, it may also make sense for Televentures.
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M&A BUZZ
Growing City
Is Citi acquiring StanChart's India business?
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| Nanoo Pamnani: denial mode |
Although both banks
vehemently deny buzz in the markets about Citibank acquiring
Standard Chartered's India portfolio, the one thing lending
credence to the rumours is Rana Talwar's exit. It is public
knowledge that the bank's board didn't agree with Talwar's
acquisition-led growth strategy. This is the second time since
Talwar's departure that StanChart has had to deny sell-off
rumours; the first was in December.
StanChart insiders
say the company is committed to becoming one of the world's
leading emerging-market banks. If that is indeed true there
is obviously no question of selling of the Indian operation
which, with pre-tax profits of Rs 625 crore in 2001, was the
third largest contributor, in terms of profits, to the company.
Still, one never knows...
-Abir Pal
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There is everything going for the issue, which
seeks to offload 10 per cent of promoters' equity. The company is
a player in the telecom sector, in which the benefits of reforms
are more visible than any other. Within the sector, it is the only
one with positive EBITDA (earnings before interest tax depreciation
and amortisation) in all current operating wireline and wireless
circles, and the lowest licence fee per licensed pop (point of presence).
It has posted a profit before tax of Rs 18 crore in first half of
2001-02 against a loss of Rs 110 crore last fiscal.
The market, starved of blue chip issues, has
already reacted positively during the premarketing and indications
are that the issue may attract a price of Rs 55-70 per share. Even
if the price paid by an investor is at the higher end of the band,
she still gets each share for Rs 30 less than the value attached
to it by investment bank Merrill Lynch, which has valued the company
at $3.6 billion (Rs 17,280 crore).
The only thing Bharti needs to worry about
is how to keep domestic institutions happy. The foreign holding
in it is now a shade over 47 per cent, which will come down to around
43 per cent after the IPO. In view of the 49 per cent cap on foreign
equity in telecom, a major part of the portion meant for institutional
investors (75 per cent of the issue) has to be picked up by domestic
institutions. Will they bite?
-Suveen K. Sinha
MODICORP
Survivor: The Indian Outback
Despite his run of lucky JVs, B.K. Modi can't
get a partner for the company that needs it most.
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| B.K. Modi: one less than enough |
Ask Modicorp ex-chairman
B.K. Modi how many joint ventures he has forged so far and you are
unlikely to get a number. ''Many,'' is all he will say. Now, it
is one more than ''many'' with Singapore Telecom & Telegraph
joining hands with Modi in the latter's bid for VSNL, in which the
government is divesting 25 per cent equity (The GoI has yet to allow
Modi's bid, since it came well after the bidding closed).
Old time Modi watchers aren't surprised. The
man has followed an aggressive strategy of growing through joint
ventures with overseas companies-Modi Xerox, Modi GBC, Modi Telstra,
and Modi Olivetti. Some of the partners are no more with him; and
some partings were not all that sweet.
So what is it about Modi that keeps drawing
overseas companies into JVS with him? ''Partners find us attractive
because we follow corporate governance,'' says Modi.
But the cg-bit hasn't endowed Modi with enough
confidence to seek a larger number of investors. Ever since he formed
ModiCorp as the holding company of his empire in the second half
of the 1990s, Modi has been talking about a possible listing. The
options have ranged from the Indian stockmarket to Singapore, but
a listing still seems an uncertain time away.
Perhaps what would rankle Modi the most is
that he hasn't been able to get the one joint venture partner he
desires the most: with Continental AG of Germany for tyres. Continental
has technical tieups with Modi Rubber, which also uses the brand
name Modi Continental, as well as with Apollo Tyres and jk Tyres.
But it has kept all three hanging on the issue of which company
it will form an equity joint venture with.
Modi seems to be losing heart. ''They are not
interested and we also have some problems inhouse,'' says Modi.
So, many it may have been, but looks like Modi is destined to end
up with one less than enough.
-Vinod Mahanta
MAMMON
Wealth Is Health
Only 71 companies have been able to add Rs 100
crore+ to their market cap since 1996.
A company is known
by the products and services it turns out, but ultimately the best
indicator of its performance is the wealth it creates for its shareholders.
And that's all about the company's ability to enhance the market
value of the capital entrusted by the shareholders. If you go by
broking firm Motilal Oswal Securities' sixth annual study on wealth
creation-for the 1996-2001 period-that endeavour isn't proving the
easiest of tasks for India Inc.
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| Motilal Oswal: chronicling wealth creation
in corporate India |
For the study, Inquire Indian Equity Research
(the research arm of Motilal Oswal) has identified companies that
have added at least Rs 100 crore to their market captitalisation,
after adjusting for dilution, in the 1996-2001 period. Only 71 companies
have been able to fulfil that criterion. ''For investors, our study
of the past serves as a guide to the future, which investors can
use to pick out opportunities to put their money in,'' explains
Motilal Oswal, Chairman of the firm. Put otherwise, that means those
companies that have added to shareholders' wealth in this period,
will likely do so in the future too-as rational an assumption as
you can make on stockmarket dynamics.
Two sets of lists have been put out by the
firm, one on the basis of companies that have created the most wealth
and those whose market capitalisation has grown the fastest. The
winner, on the basis of speed, is Infosys (why aren't we surprised),
whilst Hindustan Lever comes in as the biggest wealth creator.
According to the study, the 71 wealth creators'
market cap increased by Rs 2.17 lakh crore in the 1996-2001 period,
even as the rest of the market destroyed Rs 2.03 lakh crore. Not
surprisingly, the it, FMCG, and pharma sectors-all three responsible
for bulk of the action in the bourses between 1996 and 2001-contributed
70 per cent to the wealth created, with the petrochem sector accounting
for 22 per cent (up from 8 per cent in the previous study).
The most interesting trend, points out Oswal,
is the reduction in contribution from the MNCs, which accounted
form between 35 per cent and 50 per cent of the wealth created in
the first four wealth creation studies. In the last two years, that
figure has gone down below 30 per cent. Is anybody out there still
worried about foreign competition?
-Brian Carvalho
JOCKEYING
Purnendu Wrests Control
After some tense moments, TCG manages to script
a happy ending.
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| Purnendu Chatterjee: in the driver's
seat |
As a son of the
soil, with links to billionaire financier George Soros, and a desire
to invest in a state that everyone else was giving the go-by to,
McKinsey alum Purnendu Chatterjee, 53, was West Bengal's knight
in shining armour. With the issue of the control of Haldia Petrochemical
hanging fire that armour looked set to lose its sheen some. But
a new-year visit to Kolkata by Chatterjee, saw his company finally
wrest control of the Rs 5,300 crore project, bringing the curtains
down on a protracted series of arguments between the two major partners,
The Chatterjee Group (TCG) and the West Bengal Government. The deal
as it stands now is that the Chatterjee Group will control 51 per
cent of the Rs 1,010 crore equity while the state will have 49 per
cent. The Tatas are finally out and will sell their 14 per cent
to the state and the Chatterjee group. ''It's a happy solution and
we will now work towards ensuring that the project starts functioning
to its full potential,'' said Chatterjee before flying off to New
York.
Interestingly, the new deal has also opened
up possibilities for roping in a third partner for the project.
Names like petromajor Totalfina and Reliance Industries are already
doing the rounds. It may be a while before the the third partner
comes on board. In the meantime, Chatterjee is going to have his
hands full managing Haldia's debt of Rs 4,268 crore. The fact that
TCG is now firmly in control could help: over the past few years
the state government had resisted TCG from assuming management control
as it wanted an active role in the management of this showcase project.
The Haldia deal, then, could well be a new direction in the way
the Communist-governed state conducts business.
-Debojyoti Chatterjee
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