Carbon credits: Can you see the mills churning money?

For an industry that's usually associated with bleeding-heart activists, it's a remarkably clear-headed move: Allowing companies or countries to sell "carbon credits" to those whose emissions of greenhouse gases exceed globally-accepted limits under the Kyoto Protocol. This will not only encourage development of renewable energy sources, but in the long run make polluting units unviable-since having to buy credits will make their cost of operations that much more expensive. A clutch of Indian companies across states including Andhra Pradesh and Maharashtra has started trading carbon credits. Whether or not it reaches its promised potential of $100 million-the current deals will bring in about $5 million over a 10-year period-it has inspired a new fund: India Renewable Energy Enterprise Development Fund (IREED), which will be closed in September, 2003. Country advisory for the fund is Rabo India, while the investment advisor is the Mumbai-based BTs Investment Advisors. Moral of the story: Go green and get paid.

-Vandana Gombar

Glamourama
The LIFW is high on hype, low on business.

LIFW: Business is certainly not on her mind

Fifty-seven designers, 48 models, 35 shows, three teams of choreographers and make-up artists, eight major sponsors, 15,000 visitors, and a mere Rs 25 crore in sales. That was the fourth edition of the Lakme India Fashion Week, the second one to be held in Mumbai, and it will probably go down in the books-if anyone considers it worth their while to chronicle it, that is-for its campy kitsch than for anything else. The event's organiser, the Fashion Design Council of India (FDCI) claims there were 50 foreign buyers lapping it all up but designer Payal Jain says there were hardly 10 serious foreign buyers. And the UK's Selfridges and France's Celine and L'eclaireur were there more to familiarise themselves with the Indian market than to strike deals. "Fashion Week is a time when most deals are initiated rather than signed and sealed," defends FDCI's Executive Director, Vinod Kaul. What the event lacked in terms of the commercial element, it made up through hype and unparalleled media coverage: 400,000 words in print (excluding this piece), 1,200 minutes on the tube, and 360,000 photographs. And despite Kaul's brave words, FDCI seems to have realised the need to push the business of fashion: early next year, it proposes to host a market week, exclusively reserved for business. That's practical fashion for you.

-Dipayan Baishya

Wake Of The Flood
Talisma begins afresh under a new CEO.

Vetras: He runs a school, but it's got to make money

That was quick. In October last, Dan Vetras, an industry vet, signed on as President and COO of Talisma. No, nine months later, he is its CEO. Talisma may no longer be Bangalore's hottest company-it was a products company, not a bodyshop!-but Vetras, and the additional $5 million (Rs 23.08 crore) that Oak Ventures has put into it (money that has catalysed its recapitalisation to the tune of $25 million/Rs 115.42 crore) are its best bet yet of living up to its initial promise.

For those who came in late, in 1994, charismatic former Microsofter Pradeep Singh founded Talisma with a $1 million order from the Redmond giant to support its customers on Compuserve. The experience helped Talisma stumble on to a mail-management product that turned out to be hotter-than-hot in the internet era; it ended up with a full e-CRM package with features to manage all sales functions. That pitted the start-up against biggies such as Siebel, sap, and Oracle. Singh's differentiating strategy was to eventually bundle support services with the product and he was convincing enough to raise money from seasoned venture capitalists like Oak Ventures. Then came the downturn.

By then, Oak (IT funded Compaq), was convinced that basing the engineering team in India was the way of the future. The additional $5 million followed, as did its own choice of CEO and CFO (Mark Brent). "We are letting other Oak companies go to school on Talisma" says Vetras. The VC has even made Ranjan Chak (he headed the Oracle centre in Hyderabad), Talisma's Chairman and a partner in Oak.

Still, Vetras has to generate revenues from Talisma. The first step towards this, he says, is selling off Talisma's tech support services business. Then, the company plans to come up with features like customer support through corporate instant messaging. And Vetras hopes to sell a cost-effective platform to multi-nationals who are moving their customer management offshore. That's hot. Will it be second time lucky for the company?

-Vidya Viswanathan

Pharma Story Part III
Indian pharma's strengths run deep.

N. Prasad: No, the N doesn't stand for Neo

We've seen it before. In the second half of the 1990s, when the software boom was on, D-street couldn't have enough of software companies. Today, the flavour-of-the-season is pharma.

That could explain why analysts and brokers are focusing their energies on Hyderabad, where a clutch of small to mid-sized companies that have emerged market favourites are based. There is Matrix Laboratories, Granules India, Avon Organics, Natco Pharma, Neuland Labs and Vimta Labs. Three years ago, Matrix-then called Herren Drugs-was a company that was in the red; by March 2003, it was a Rs 400 crore star with net profits of Rs 90 crore. "Our exports to the regulated markets (including North America and Europe) is up from 10 per cent to 65 per cent of turnover in three years," says its Chairman and CEO N. Prasad. Not surprisingly, the Matrix stock is up from Rs 30 about 18 months ago to Rs 550 today. Granules India, listed on Bombay Stock Exchange in October last has seen its price increase from Rs 18 to Rs 74 in nine months. And Neuland Labs has seen its stock move from Rs 50 to Rs 125 in the past six months.

Still, analysts advise caution: "For every company that is seeing its stock soar on the basis of fundamentals, there are three weak companies whose stocks go up too," rues Rajendra Naniwadikar, a member of Hyderabad Stock Exchange. Watch this space, then, for the latest on the great pharma bust.

-E. Kumar Sharma