Sabre's Talwar: Eyeing emerging markets

Gurvinder Singh Rana Talwar is smooth, suave, and definitely graying around the edges in a most distinguished fashion. For want of a better descriptor, the 55-year-old looks every inch a banker. Only, he doesn't have a bank yet, although that could soon change. Six months ago, a London-based fund, Sabre Capital Worldwide (Talwar is its managing partner) signaled its intent to acquire control of Centurion Bank, an ailing Indian private bank.

Talwar is a Citibank fast tracker who moved to stodgy Standard Chartered as its Group CEO in 1998-he rapidly acquired five banks, including the South and West Asia business of Grindlays-and quit abruptly in November 2001. Since then, he has been in the news momentarily over speculation concerning the reason for his exit. UK's Telegraph newspaper suggested that Talwar's ''brash American characteristics...upset the delicate sensibilities of his colleagues''. The man himself maintains that he quit after reflecting on his options. ''I was thinking...I have 10 more years to look forward to. Do I really want to be a high powered CEO or do I take a chance and do something on my own?''

Talwar has also been in the news, even more fleetingly, over details of his severance package, which were released by Standard Chartered in April 2002. ''Were Mr Talwar not to find alternative employment (till August 2003), the maximum compensation payable would be £3.2 million'', says a April 16, 2002, release from the bank. And so, says Talwar, ''I stayed off headhunters and used the time to reflect on the opportunities.'' One opportunity was to focus on institutions that required new management, new strategy, and perhaps most significantly, new capital. With former Standard Chartered stablemates Nigel Kenny (Group Finance Director at the bank) and Rajiv Malewal (Global Head of private equity at the bank), Talwar founded Sabre. He is at pains to explain that the company isn't in the private equity business. The emphasis, he adds, is to manage financial services businesses in emerging markets to create value. For those who came in late, Talwar is still viewed as an emerging markets whiz in banking circles.

Centurion, clearly, is an opportunity. This writer met with him in Mumbai on April 22, a day before the board of the bank was scheduled to meet, and found him fancying his chances. ''Now, I am more hopeful of closing the deal than I was anytime in the past six months.'' If Sabre manages to acquire control of the bank it will invest about $70 million (Rs 332.4 crore). ''The thing,'' says Talwar, ''is to work with the bank, identify the right strategy, and get top-notch professionals to work as managers.'' ''Once you do that, there is plenty of money around.''

Talwar's choice of a comeback vehicle-for it is clearly that-may surprise some people. Still, Centurion does present him with the rare opportunity to acquire management control and build an institution. Seven years hence, claims Sabre's managing partner, ''Centurion will be among the top three-to-five players in the retail financial market.'' The company is also exploring opportunities in Eastern Europe, West Asia, West Africa, and Indonesia, and hopes to have two-to-three active deals in the next year. That's going to take a lot of work. At a recent meeting with the board of directors of Centurion, Talwar joked that this deal was taking him four times as much time to close as the Grindlays one did. But if it goes through, people will remember him as much for Centurion as for Grindlays.

-Roshni Jayakar

Fu Manchu? Naah
There's nothing sinister about Huawei's Indian ops.

Huawei's James Yuan Ziwen: All above board

In the three years plus it has been in India, Huawei has been the target of several wild allegations. The first concerned its presence in India's Silicon Alley, Bangalore. The networking company's Indian arm, the paranoid screamed, was actually a front to learn all about the Indian software industry. ''Soon, they will be competing with Infosys and Wipro,'' went this hypothesis. The second-and this one was pretty wild even by Indian standards-raised its ugly head post 9-11. Huawei, the buzz said, had supplied weapons guidance software to the Taliban. The third and most recent allegation has a leading Indian daily claiming that some of Huawei's employees have been afflicted by SARS. None of the allegations stuck. It doesn't require a sting operation to discover the Indian software industry's recipe for success, cost-arbitrage. And Huawei, despite Cisco's accusation that it stole IP (the case is being fought in an American court) isn't a corporate Fu Manchu. It is a respectable company that has invested $60 million (Rs 288 crore) in India.

In its fourth floor office in the seven star Leela Palace hotel on Bangalore's bustling airport road, Huawei's 35-year-old Chief Operating Officer, James Yuan Ziwen, rattles off the company's achievements in India. ''Indian partners like Infosys, Wipro, and Mphasis, to whom we have outsourced work worth $15 million.'' ''We have sold telecom equipment to BSNL.'' And, ''we are committed to expanding our Indian R&D centre, which will bring in significant investment and generate employment''. Much of that investment- the ever-smiling Yuan declines to put a number to it-will go into a campus in Bangalore. By 2005, the Huawei centre in Bangalore will employ 1,500 and serve as a global R&D hub. Already, the India centre is working on next gen network solutions, 3G solutions, and data-communication products. And a telecom switch developed completely in India is being sold internationally.

It is nothing but good business sense that brought the company to India. Indians are good at crunching code and developing software, explains Yuan. And the Chinese, at systems design and architecture. ''These skills are complementary in nature; our intent is to combine them to produce world-class solutions in a shorter span of time.'' That's the kind of logic that even the a-cerebral Nayland-Smith will understand.

-Venkatesha Babu

Very Much Bankable
How ICICI Bank managed its Black Friday on April 11.

K.V. Kamath: The Gujarat damage is definitely under control now

Kundapur Vaman Kamath was in Bangalore on April 11, when around noon his mobile phone rang. It was Chanda Kochhar, ICICI Bank's Executive Director, on the line, telling the CEO that there was a problem. A mischievous rumour about the bank's liquidity, first spread by a Valsad (Gujarat)-based daily the previous day, had created panic among customers in the small town. They had begun queuing up at the bank's ATMs, and by late evening, Rs 59 crore had been withdrawn-20 per cent more than usual. Kamath was desperately needed back at ICICI Towers.

Reaching the headquarters at 6:00 pm, Kamath and his A-team swung into action. ''It was a two-part challenge,'' recalls Kalpana Morparia, Executive Director, ICICI Bank. ''One, to counter the rumours and two, stock our ATMs adequately to reassure our customers.'' Losing no time, Morparia got on to TV channels, reassuring customers. Simultaneously, the RBI governor, Bimal Jalan, who was in Washington, D.C., was informed of the development, and a communication line to bank employees, and corporate and overseas customers was opened.

A staggering logistical challenge was ahead: transporting huge volumes of cash in a matter of hours. About 100 security vans, some even loaned from the RBI, logged 8,000 kms in replenishing not just the 115 ATMs in Gujarat and 15-odd in Mumbai suburbs, which witnessed the maximum withdrawals, but also ATMs in other cities. One of the ATMs in a Mumbai suburb, for instance, had to be refilled an incredible 150 times on April 12.

That day, at 11:00 am, the RBI issued a press release saying that all was well with ICICI Bank. Slowly, the communication had its effect. By 4:00 pm, even the worst-affected branches in Gujarat had less than 40 customers queuing up to withdraw money. Two hours later, the numbers were negligible. By the end of the business hours, some Rs 550 crore had been withdrawn from ATMs and branches all over India. But not one ATM had run short of money.

-Roshni Jayakar

REALITY CHECK
BPO & SAPS

Call centres: Try smiling now

Thank god, there aren't too many listed BPO companies (currently, there's only one, e-Serve International). Otherwise, Dalal Street may have choked. Why? The Severe Acute (Pricing) Pressure Syndrome, or saps, first discovered among Indian it-services companies, has infected it-enabled services too. While actual industry numbers are hard to come by, market sources say that there's immense price pressure. Top BPO firm Wipro Spectramind's FY03 revenue at $35 million is $10 million short of its target. Says the company's CMD, Raman Roy. ''There's a large amount of business coming to India, but the prices are unviable.'' In fact, large clients such as Amex and AOL have employed mechanisms like reverse auction to identify the lowest-price supplier. The bottomline: Well, the industry may have to reconcile to a much smaller one.

-Priya Srinivasan