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If
the name of a company can offer some insight into the psyche of
its promoter, then Prasoon Mukherjee should be a self-made man
with a variety of interests and not entirely immune to a dash
of hubris. After all, the Jakarta-based Non Resident Indian's
company is named Universal Success. It isn't so much the name
of his company that has propelled Mukherjee into the news back
home in India, as his connections. In Indonesia, as in some other
countries in the region, who you know is often an indication of
who you are. By that measure, Mukherjee is a very big man; he
knows Anthony Salim who, according to an old joke that is still
heard in Indonesia, owns the country. The reticent and reclusive
Salim runs the Salim Group (Salim is an adopted name Anthony Salim's
father, a Chinese-Indonesian, took when he converted from Buddhism
to Islam; Anthony has kept it even though the family has now converted
to Christianity), one of the biggest in the region with estimated
revenues of around $25 billion (Rs 1,10,000 crore). Mukherjee,
who once worked for the group and now partners it in some of its
ventures, appears to have not just learned how to work the system
from Salim, but built on that.
Along the way, the 44-year-old has also replaced
Purnendu Chatterjee as Bengal's favourite industrialist son. Already,
Universal Success is the single largest investor in the state
by way of pledged investments in a satellite township, an it park
and a two-wheeler manufacturing unit, most of which are joint
ventures with the Salim Group. Mukherjee's Bengal connection was
the original reason for the Salim Group's desire to partner Universal
and invest around Rs 44,000 crore in the state. And, in one of
those moments that lend credence to such a thing as poetic justice,
Mukherjee, who started his career as a waiter at Kolkata's Great
Eastern Hotel, may be successful in his bid to buy it with the
government readying to divest its stake.
With a diploma in hotel management, Mukherjee signed on with Indian
Tourism Development Corporation as a trainee after his apprenticeship
with Great Eastern. He spent a decade in the company, but left
when a promised promotion didn't come his way and moved to Malaysia,
where he landed a job overseeing the operations of TGI Friday
restaurants in the country (there were 11). In 1994, he left as
Director (South East Asia), TGI Friday and moved to Jakarta, and
a new job with the Salim Group. A stock option programme made
him rich and in 2000, he bagged a franchise for Outback Steakhouse
in Singapore. "I was always haunted by the dream of doing
something on my own and that is what probably prompted me to sell
half my shares and leave for Los Angeles where I met the top brass
of Outback Steakhouse," says Mukherjee. Today, the man runs
25 Outback restaurants in Malaysia, Thailand, the Philippines
and Jakarta (apart from Singapore) and plans to take the number
to 100 soon (he has plans for India as well, which he'd rather
not speak about). All through, Mukherjee remained in touch with
the Salim Group, something that is now paying rich dividends not
just for him but for the state of his origin as well. "In
my heart, I am a Kolkata boy who grew up in the bylanes of a central
Kolkata neighbourhood," says Mukherjee downplaying his position
of power. That may be the case, but no one can fault him for behaving
like an arriviste should he bag Great Eastern. You see, Mukherjee
actually arrived almost a decade ago.
-Ritwik Mukherjee
Why
Ratings Lie...
... And why they don't. An insight into how
the world sees India.
If
the world economic forum sticks to its deadline, the World Competitiveness
Report, 2005 should be out shortly after this magazine hits the
stands. It is likely India will improve on its 2004 rank of 55;
one reason for that is because the WCR's methodology includes
micro-economic measures (read: corporate performance and the like)
and India Inc., by any measure, and compared to industry in any
other country in the world, has been an outperformer for the past
couple of years. That, though, is the only ranking that shows
India in relatively good light. In most others, like Doing Business
in 2006, and the World Development Report, India is an under-performer,
and, if the reports are read the way they are meant to be, no
investor would invest in India and no company, want to do business
in it. So, what explains the $8-billion (Rs 35,200-crore) in investments
by foreign institutional investors (FIIs) India has attracted
till September 17, 2005? What explains the estimated $9.2 billion
(Rs 40,480 crore) it will attract in all of 2005-06? And what
is behind the common refrain of visiting CEOs that this is the
second most attractive market (after China) to be in?
Fact is, there are two Indias (much like
there are two USAS as everyone has realised after Katrina), and
some of the reports concern the India that most people living
in large cities and working in a company whose stock is soaring
on d-street have not experienced. Some of India's development
indicators are abysmal (think infant mortality and enrolment of
girls in primary education), and it wouldn't do to forget such
statistics in the euphoria of the Sensex breaching the 8,400-mark.
From that perspective, the reports perform a critical role; they
serve as our conscience and encourage us to do better.
However, by focussing exclusively on the
letter of laws and regulations, and on numbers, some of the reports,
such as the Doing Business one, do India a dis-service. Pakistan's
economy may be booming and it may actually be easier to do business
there (the report says so), but would anyone overlook India's
huge market, its pool of talent that can be tapped to work anywhere
in the world, and its democratic regime? The good news is, few
companies and CEOs are likely to be swayed by such reports. What
should our response be: trash the reports in public, and in private,
quietly work on addressing the inadequacies pointed out in them.
-Ashish Gupta
Shifting Gears
Landmark embarks on a major expansion.
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| Landmark Group's Jagtiani: Widening
his India focus |
In
six years, the Dubai-based landmark group opened a mere seven
Lifestyle stores in India. In the next two-and-a-half, though,
it plans to ramp up the count to more than 30. Why is the $600-million
(Rs 2,640-crore) retail major, owned by low-profile Micky Jagtiani,
suddenly stepping on the gas? Because a host of factors is coming
together that could accelerate growth in the Indian retail industry,
leading the 53-year-old Jagtiani, who's so far been more focussed
on other parts of his sprawling retail empire, to speed up his
India plans. "We expect to invest Rs 5 crore in each store
and will primarily focus on malls, although we also continue to
look at viable stand-alone locations," says Sankar G., Managing
Director of Lifestyle International in India. This time around,
Landmark isn't just looking at metros, but tier-II towns such
as Pune, Cochin, Nagpur and Coimbatore.
Besides expanding Lifestyle's nationwide
presence, Sankar says the group is considering setting up more
specialty stores to add to the first Home Centre opened by Lifestyle
at Gurgaon's MGF Plaza. "The idea is to expand each of our
categories (Lifestyle offers apparel, footwear, children's wear,
furniture, health and beauty) and offer customers a one-stop-shop
for their requirements," says Sankar. The stand-alone stores
are expected to be spread across 50,000 square feet, while store-in-store
categories may get around 10,000 sq. ft of space in a single store.
With scale becoming decisive in the retail business, Sankar says
Landmark is open to "synergistic" acquisitions to grow
its business. The retailer recently moved its India headquarters
from Chennai to Bangalore to not only tap the larger pool of talent
in the software capital, but also to be close to suppliers. Finally,
Pantaloon's Kishore Biyani may have some serious competition.
-Rahul Sachitanand
JUMPING OFF THE VICTORY PODIUM
The
exit of Salil Kapoor in September marks the fifth time in the
past eight years that the marketing chief of LG India, the country's
largest consumer durables company (revenues: Rs 6,500 crore),
has quit. The buzz in industry is that the job is a high-pressure
one. The company itself would like to think otherwise. "I
feel that an LG experience opens doors to great offers for these
people," says Y.V. Verma, Head (Human Resources), LG India.
For the record, four of the five people listed here are still
'deciding' on their next move.
 Rajeev
Karwal, 1997-1999
Ex-CEO, Electrolux Kelvinator India
Currently deciding on next move
He is credited with having invented the fifth 'P' in consumer
durables marketing, pace. The company went national within seven
months of launch. He later put in a stint with Philips India and
then served as CEO of Electrolux Kelvinator India.
 Ajay
Kapila, 1999-2001
Ex-Head, Marketing, Electrolux Kelvinator India
Currently deciding on next move
Kapila was built along the same lines as Karwal. He left LG
for Kinetic and then moved to Electrolux. Speculation is rife
that he may join the Dubai-based Jumbo Electronics.
 Pradeep
Tognatta, 2001-2002
Senior Vice President (Home Appliances), Samsung India
After Kapila's exit, the mantle fell on Tognatta, who was
out of LG within a year, citing health reasons.
Ganesh Mahalingam, 2002-2003
Head (Marketing), LG India
Currently deciding on next move
He is credited with the company's decision to sponsor the
2003 cricket World Cup.
 Salil
Kapoor, 2003-2005
Head (Marketing Services), LG India
Currently deciding on next move
Kapoor joined LG after graduating from Delhi's Faculty of
Management Studies (FMS) in 1998. Thrust into the role after Mahalingam's
exit, his wings were recently clipped following the entry of Girish
Bapat, who joined from M&M as Head (Marketing).
-Shailesh Dobhal
Hedge Edge
Watch out FIIs, here come the DIIs.
| TAKE IT TO THE LIMIT |
 »
MFs to be considered trading members like FIIs
in respect of position limits
» Schemes
of MFs to be treated as clients like sub-accounts of FIIs
» Revised
policy shall be applicable to all new schemes that are yet
to be launched, or for which offer documents have been submitted
to Sebi
» Total
portfolio exposure in the derivatives market increased to
100 per cent from the earlier 50 per cent
»
MFs will be able to
increase their exposure to the F&O segment backed by liquid
securities or cash; earlier it was cash alone |
You
could now call them the DIIs, or the domestic (or desi, take your
pick) institutional investors. No, it's not a newly created class
of stock traders, but our very own mutual funds (MFs) we're talking
about. With the Securities and Exchange Board of India (SEBI)
enhancing the scope of domestic fund participation in the derivatives
market-prior to this move there were several restrictions-they
have now been bumped up on a par with those pinstriped idols of
liquidity, the foreign institutional investors (FIIs). Like the
FIIs, domestic funds will now be considered active trading members,
in respect of their position limits in index futures and options,
stock options and stock futures contracts. Also, the funds' schemes
will be treated as sub-accounts of FIIs. "This will create
a level playing field, which will help investors invest in a new
class of instruments," points out Paras Adenwala, CIO (Equity),
ING Vysya Mutual Fund.
Once MFs throw their hats into the derivative
ring, liquidity in the overall market is expected to increase.
That's because, as Krishnamurthy Vijayan, CEO, JM Financial AMC,
explains: "With margin amounts getting reduced, more cash
is left in the hands of the funds." Earlier if an mf sold
shares of Tata Steel worth Rs 500 in the derivates segment, it
would also need to hold shares worth Rs 500 of Tata Steel in cash
as well as Rs 500 in cash as margin money. Once the new norms
come into play, the fund will have to hold only Rs 100 as the
margin amount. Adds Rajan Mehta, Executive Director, Benchmark
AMC: "The long-term breadth and depth of the market will
increase, once funds get in sophisticated products." Mehta
is optimistic this will happen because of the removal of limits
of exposure-earlier funds could only take a 50 per cent total
portfolio exposure in derivatives. Now they can take a 100 per
cent long position in derivatives, even if they have just 30 per
cent in equities (and the rest in debt). However, don't expect
the action to begin tomorrow itself: Products have to be designed,
investors educated... but the wait should be worth it.
-Mahesh Nayak
THE RETURN
OF EXCHANGE OFFERS
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| Trade-ins: Sponsored by dealers now |
Back
in the early 90s, baron International's Kabir Mulchandani rocked
the consumer durables world with his cut-rate TVs and music systems.
One of his strategies: Exchange offers, which encouraged buyers
to trade in their old TVs for new ones. Baron went bust and so
did such trade-ins. But suddenly, they seem to have made a comeback
in the Rs 20,000-crore consumer durables industry. Only this time
around, it is not the marketers, but their 28,000-odd dealers
who are driving the trade-ins. "Dealers see the marketer's
festival push as an opportunity to make the consumer upgrade,
and many have decided to adopt the exchange offer route,"
points out Ravinder Zutshi, Managing Director, Samsung India.
The exchange offer fever has swept across
the board. "Some big dealers in the South, such as Viveks,
may also start it soon," says Zutshi. But does this mean
there is no marketer support for the exchange offers? Not really.
For, most marketers do foot the local promotion bill if the dealer
is pushing the exchange on its brand. And a few marketers, such
as Videocon, are tactically pushing their low-end colour television
range-yes, Akai again-through company-led exchange offers. Expect
more of such offers. Printers, copiers and, in some cases, two-wheelers
are starting to jump on to the trade-in bandwagon.
-Shailesh Dobhal
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