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| Nand Khemka (sitting); Uday and
Shiv Vikram Khemka (standing left to right): still
in the game |
As
far as recall value goes, the Khemkas of the Sun Group will for
some time to come be known as the guys who didn't bag IBP. But if
Nand Khemka and his two sons, Shiv Vikram and Uday are to be believed,
the bid for the oil PSU (along with Russian firm Stroithgaz) was
only the beginning. ''The disinvestment process is what drew us
more to India,'' says Shiv Vikram Khemka, Executive Director. ''We
have a 20-30 year perspective for India.'' The Khemkas fancy their
chances because of the success they've met with in the disinvestment
process in Russia: Out of 35 bids, they succeeded in 27. The Khemkas
aren't revealing the PSUs they're targeting, preferring to only
identify the sector they've identified: oil and energy.
The Khemkas (no connection to the Khemkas of
the NEPC group) began operations in India more than 100 years ago.
By the 1940s they had become the largest exporters of iron ore from
India. Since then, the family has graduated from being a trading
house to a diversified conglomerate. It was Nand Khemka, who founded
the Sun group in the mid-50s when he sniffed business opportunities
in the erstwhile Soviet Union. Today, this private investment group
is present in the US, Europe, Russia, and India, and claims a turnover
of over $1 billion. The Khemkas' presence in India today spans industries:
a joint venture with Mahindra & Mahindra, a tie-up with NIIT,
a presence in an asset management company, Sun F&C, and a technology
firm, Westbridge Capital. Can they add a PSU to that list?
-Swati Prasad
EXECUTIVE
TRACKING
There's a churn on at BPL Mobile. And a poaching
war in the offing in software.
 |
| Girish Rangan: another departure from
BPL Mobile |
Rajeev chandrasekhar
is still losing them-his key employees, we mean. The latest to go
are the CEO of BPL Mobile, Girish Rangan, and the company's finance
advisor Anindo Mukherjee. Rangan moves to consumer payment solutions
company Venture Infotek and Mukherjee returns to former employer
ICICI as the CEO of ICICI Bank's BPO business. More churn, the buzz
goes, is in the offing. Sify, too, continues to lose people. Ramesh
Ramanthan, the head of the ISP business, seems to have had more
than his fill of the new economy and is going 'old economy' with
a vengeance: he is reported to be taking over as the CEO of Ceat's
Sri Lankan operation. And finally, there may be an Infosys-Wipro
face-off in the offing. In a first-of-its-kind move, Wipro has poached
a senior manager from rival Infosys. The person in question is Deepak
Rao, the head of consulting for Infosys in London. Will this trigger
a poaching spree among the IT majors?
RELIANCE
Victory in Defeat? It Maybe
Reliance loses out in its bid for IBP and VSNL.
Really?
 |
| RIL's Anil Ambani: not the end of the
road |
On
the surface, they appear outright losers. When their bids for acquiring
PSU majors IBP and VSNL were rejected last fortnight, the instant
market reaction was that the Ambanis' plans in the refining and
telecom sectors had received a huge jolt. After all, once the petroleum
sector is decontrolled in April, Reliance Petroleum Ltd (RPL) will
have to sell the produce from its 27 million tonne refinery at Jamnagar
through its own outlets; currently RPL doesn't have a single one.
If IBP was to come into the Ambani fold, RPL would have got 1,552
fuel stations at a stroke. As for VSNL, Reliance's opportunity to
gain an instant monopoly in international long distance (ILD) voice
services appeared to have flown out of the window.
But scratch the surface, and the situation
doesn't appear so glum. Even if the Ambanis did lose out, it isn't
the end of the road for their ambitions in these two sectors. Consider
the silver lining. A Mumbai-based oil and energy consultant points
out that there's no way Reliance would put on the table Rs 1,152
crore (which is what IOC paid) for IBP. ''It's not an economically-viable
proposition,'' he says. Anil Ambani, Managing Director, RIL has
made it clear that acquisitions will be made keeping shareholders'
interests in mind. ''Reliance is looking at a benchmark IRR of 20
per cent,'' he said recently when announcing RIL's third-quarter
results. Clearly, the bids for IBP and VSNL were made keeping that
rate of return in mind.
But, nevertheless, the fact remains that Reliance
has lost access to 1,500-odd retail outlets.
This may sound like sour grapes, but the Ambanis
apparently hold a view that you don't need those many pumps to capture
a large marketshare. Apparently, putting up 150 retail outlets at
the right place can help a company capture 80 per cent of the market.
Another option for Reliance, which it is reportedly considering
is to take the franchisee route, thereby significantly reducing
its costs. A combination of owned and franchised pumps could also
be an option.
Of course, don't forget that HPCL and BPCL
too will soon come under the hammer. Analysts point out that the
Ambanis would be more serious about buying out HPCL, as there is
a mismatch between its refining capacity and the quantity it sells.
HPCL refines 13 million tonnes annually, but sells 20 million tonnes,
so Reliance's refining capacity would take care of the mismatch.
In the case of BPCL, there is no such mismatch.
As far as VSNL goes, analysts point out that
there must be not much heartburn in the Ambani camp. VSNL might
have a monopoly in international long-distance (ILD) voice services,
but that comes to an end in April, and private players will soon
ensure that the monopoly is eroded. What's more, Reliance is building
its own telecom infrastructure, so it didn't need VSNL as badly
as the Tatas did. And since Reliance paid Rs 100 crore to the government
as fee for a NLD licence just three days before the final bid, analysts
feel that the country's premier group was sending signals that it
was not interested in VSNL anymore.
MTNL, on the other hand, should make more sense,
points out an analyst, primarily for its customer base, which as
an analyst points out, ''isn't easy to replicate, unlike in the
case of VSNL.'' However, it's precisely for this reason that the
Bharti group and the Tatas will be as keen, if not keener, to get
MTNL. The fireworks have only just begun.
-Swati Prasad
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