HEADLINER
B.M. Khaitan

IN A MOVE Aimed at securing its leadership in the batteries business, Eveready Industries has acquired a competing business from BPL for Rs 67 crore. The B.M. Khaitan-owned Eveready already has a dominant 46 per cent share of the market, and BPL Soft Energy Systems fetches another 9 per cent. Says Deepak Khaitan, Vice Chairman and Managing Director of Eveready, and a scion of the Kolkata-based group: "The acquisition made a lot of sense for us. It was becoming increasingly difficult to gain market share, which this acquisition affords. Besides, it would give the Eveready brand the much-needed shelter. After all, you need to protect your 46 per cent market share also."

Following the acquisition, where rights to the BPL brand name expire after 30 days, Eveready will have only one competing group, Panasonic, and two competing brands, Novino and Nippo. Khaitan's next move may well be global. "You need to have a global brand if you want to have a respectable slice of the export pie," he says. Clearly, the Khaitans are far from done.

-Ritwik Mukherjee

Logging Out Of GSM?

ADAE's Ambani: CDMA all the way

ADAE group's Anil Ambani seems to be putting all his telecom eggs in the CDMA basket. If industry sources are to be believed, Ambani's Reliance Telecom, which offers GSM-based cellular services in about half-a-dozen circles in the North-East and the North, including West Bengal and Himachal Pradesh, is said to be considering a purchase offer from China Mobile (Hong Kong). Earlier, AFK Sistema of Russia, which has been scouting India for deals for sometime now, was said to be in talks with Reliance Telecom.

Flying Against The Wind

Indian aviation may be flying low-cost, but Coimbatore-based Paramount Airways has decided to go business class. Promoted by the Thiagarajans, Madurai-based textile magnets, Paramount is the first carrier to fly Brazilian Embraer E-Jet in India. It has signed up for two Embraer 170s and three 175s for its operations connecting not just small towns such as Madurai and Coimbatore, but tier-II towns directly to major metros (say, Coimbatore-Delhi). But it remains to be seen if Paramount's low-cost full-service model proves viable.

Tata Steel's Muthuraman: Insatiable

Tata Steel On The Prowl Again

Tata Steel's B. Muthuraman is in a tearing hurry to meet his 15-million-tonne deadline of 2010. A year after he acquired Singapore-based NatSteel's steel business, he's said to be on the prowl for another acquisition or greenfield investment in Vietnam. It's globalisation, the Tata Steel way.

NEWSMAKERS
RANBAXY'S HUNTERS

This fortnight's heroes: Ranbaxy's Singh and CEO BrianTempest

What do you do if you are the head of a company whose prospects in the long term are great, but has hit a temporary trough, including all the accompanying ills, a decline in revenues, operating margins, even profits? Well, if you are Malvinder Mohan Singh, President, and Brian Tempest, CEO, Ranbaxy Laboratories, you go out and raise $1.5 billion (Rs 6,600 crore) through a mix of ADRs, GDRs and FCCBs, and announce that this money will be used to acquire a pharma firm, either in the US or Europe. "We are witnessing interesting times in the global pharmaceuticals arena, which is poised for consolidation," says Singh. "This is the big opportunity that could well change the pecking order and determine who will dominate the generics (read: drugs that go off patent) business in the next decade."

Today, Ranbaxy is the world's eighth-largest generics firm. Going by the price Teva, the world's largest generics firm (revenues of $4.8 billion or Rs 21,120 crore), paid for US generics major Ivax ($7.4 billion or Rs 32,560 crore for a company with sales of $1.8 billion or Rs 7,920 crore), Ranbaxy's acquisition, if it spends all of the $1.5 billion, should fetch it a company with sales of $400-450 million (Rs 1,760-1,980 crore). In turn, that would make it (2004-05 revenues: Rs 5,245 crore or $1.2 billion) a $1.6-billion or Rs 7,040-crore firm, and the world's fifth-largest generics one. Size definitely matters in the highly commoditised global generics business. It'll be purely incidental that any acquisition of this magnitude will be India Inc.'s largest ever.

- -Sahad P.V.

NUMBERS OF NOTE

$300 billion (Rs 13,20,000 crore): Estimate of hurricane Katrina's toll on the treasury, equal to what it cost the US to fight the wars in Afghanistan and Iraq

23 million sq.ft: New commercial space being developed in India this year. By 2009, the number will rise to 50 million sq. ft, says Global real estate services provider Cushman & Wakefield

Rs 13 lakh: Cost of a 2-Mbps (internet-access) line in India. A 45-Mbps line costs over a crore; it does Rs 44 lakh in South Korea

30 kg: Per capita steel consumption in India. This compares with an average of 200 kg in China and 900 kg in Korea

20 million barrels a day: us consumption of oil. If lined up in 1-gallon cans, this volume would encircle the earth at the equator almost six times (about 147,000 miles of cans)

90%: Proportion of children between 6 and 14 who enrol in schools in India. 75 per cent of those enrolled drop out by eighth grade, and 85 per cent quit by 12th grade

58%: Proportion of subsidised foodgrain issued from the central pool that does not reach poor families because of identification errors and unethical practices

100: Number of commands in the first version of MS Word. The 2003 version has more than 1,500 commands and 35 tool bars

27: The number of signatures needed by Indian companies seeking to export. It requires just five signatures in the US and three in Japan

3: The number of shopping malls in India three years ago. If that's low, some 250 are in the works and will be up by 2008

750 million: Number of cellphones expected to be sold worldwide this year; IDC says some 57 million digital music players will be sold too

NOTED

Decided: By the Wadia Group, the date of launch of Go Air, its low-cost airline. Go Air Managing Director Jeh Wadia (shown here) tells BT that the airline will, er, go on air on October 30. The domestic aviation market in India has exploded over the past year and Go's entry should intensify competition. "Our target will be those who travel by the AC compartments of trains, apart from those who travel by Volvo buses," says Wadia.

Planned: By Abdul Kalam, India's President, an 8-MW photovoltaic plant (read: solar energy plant) that will power his official residence, Rashtrapati Bhawan. The plant is expected to pay for itself in 20 years.

Acquired: By the Indian Farmers' Fertiliser Co-operative (IFFCO), the fertiliser unit of the Abhay Oswal-promoted Oswal Chemicals and Fertilisers. The co-operative recently announced that it would invest up to $1 billion (Rs 4,400 crore) in greenfield facilities in India and elsewhere.

Cleared: By the Tamil Nadu government, a proposal by the world's largest electronics manufacturing services firm Flextronics to invest Rs 450 crore in a manufacturing facility in the state. The company will start off by manufacturing cellular phones and set-top boxes. Flextronics already has a significant presence in India after its 2004 acquisition of Hughes Software Systems (since renamed Flextronics Software Systems).

Lost: By Indian Oil Corporation (CEO S. Behuria is shown here), a bid to acquire a 51 per cent stake in Turkey's Tupras to a consortium, Shell-Koch. The ONGC-(Lakshmi) Mittal combine recently lost a bid to acquire PetroKazakhstan to China's CNPC. IOC bid up to $4.12 billion (Rs 18,128 crore); the winning bid was $4.14 billion (Rs 18,216 crore).

Launched: By Bharti Tele-Ventures, VISA and ICICI Bank, a credit-card-on-SIM, mChq.

HBlockbuster Year
September, and already B'wood's best year.

Bollywood had only 10 hits of 177 releases to show for its performance in 2004. This year, it already has 15 of 87 (in the first eight months). With the festival season yet to come, and big releases such as Dil Jo Bhi Kahey and Mumbai Godfather lined up, 2005 could well end up being Bollywood's best showing in a long long time. "Business is very good this year and some good films have been made," says Yash Chopra, Chairman, Yash Raj Films, the company behind monster-hit-of-the-year Bunty Aur Babli (it made Rs 41.8 crore) and the just-released Salaam Namaste (in its first five days, it returned Rs 9.5 crore on a budget of Rs 12 crore and is well on its way to being a hit).

One reason for the improved performance of Bollywood is that producers have planned their releases. That may sound simple but it involves everything from marketing to promotional tie-ins to increasing the number of prints of a movie, thereby, making a killing in the first few weeks before piracy takes its toll. Apart from investing more in advertising, production houses also appear to be thinking in terms of target audiences and segmentation, even at the script-stage. "Movies are being aggressively (and differently) marketed," says Tushar Dhingra, Vice President, Sales & Marketing, PVR Cinemas. In this, Bollywood has been helped by the growth in the number of multiplexes in the country, some 73, with 276 screens across the country in March 2005, between 15 per cent and 20 per cent more than the corresponding numbers in 2004. Apart from drawing people back to cinemas, multiplexes (some of their halls are small) provide an ideal platform for indie films and the like. One of this year's blockbusters is one such, Page 3. With revenues of Rs 11 crore, no one dare call it a multiplex movie, though.

-Ahona Ghosh

Realty Bites
Urban land reforms are a must to attract FDI.

Stumbling blocks: Real estate laws need to be revamped

At last count, there were about a dozen foreign real estate developers and seven private equity investors waiting to sink their teeth into India's realty pie. They had better watch out, though. The real estate business is littered with legislative landmines, which not all of the foreign investors may know how to sidestep. Take the case of a mammoth us-based apartment management company that acquires, develops and manages rental properties internationally. While this company is understood to be surveying the Indian market closely, it is at a loss when it comes to doing business in a market like Mumbai, where rentals are frozen at 1940s levels, courtesy the Rent Control Act-a legislation introduced during World World II to protect citizens from soaring inflation. Says Pranay Vakil, Chairman, Knight Frank India: "At least two foreign firms meet us each week, but we recommend they tie up with a local partner since the legislations are too complex." In fact, there isn't even a law that reconciles the built-up area with the carpet area, i.e., what you build and what you sell, he says.

That's just one example. Did you know, for instance, that land titles are merely presumptive and not conclusive across the country? Says Swati Ramanathan, co-founder of Janaagraha, a Bangalore-based NGO that has studied the issue of land titling in-depth: "If you have registered a sale deed, that registration is merely fiscal in nature; it does not mean you own the land. By contrast, you have the Torrens system of real estate ownership followed in several countries, where the state guarantees ownership." No wonder, eight out of 10 cases at Indian courts pertain to land disputes.

-Priya Srinivasan

THE CHINA-EU SPAT IS OVER. SO, WHY ARE WE SMILING?

Because "large departmental stores in Europe are switching to Indian apparel exporters due to uncertainties of doing business with China", says Ajay Sahai, acting Director General of FIEO, an exporters' association. According to him, European departmental stores also expect the cost of procurement from China to increase by at least 10 per cent following the upward revaluation of the yuan. Result: "We are already witnessing a spurt in textile exports to Europe," says Rakesh Vaid, Chairman, Export Promotion Council. However, Indian and Chinese textiles are not substitutes, cautions Stefano Gatto, trade counsellor at European Commission. "Much depends on how the Indian textile industry positions itself," he says. Let's not forget that compared to China's, exporters in India are minnows.

-Swati Prasad

THE ADVENTURES OF MANI: BLACK (SEA) GOLD

By the end of this month, the first consignment of crude from Black Sea will hit the Indian shores. The modest shipment of 6 lakh barrels will be more expensive than the crude India buys from West Asia. So why is Petroleum Minister Mani Shankar Aiyar, and everybody else, cheering? For one, "it signifies the diversification of crude oil sources," says Deepak Mahurkar, Senior Consultant, PricewaterhouseCoopers. Today, India sources around 60-70 per cent of crude from West Asia. By adding another source, India's bargaining power with Middle East suppliers improves. Besides, crude from the Black Sea will come to India via the recently-inaugurated Baku-Tbilisi-Ceyhan (BKC) pipeline, which carries oil from the Caspian Sea to the Mediterranean, instead of using tanker transport along the Black Sea and the highly congested Bosporus. "Getting crude from the Black Sea is the beginning of an important phase," says Ajay Arora, Associate Director, Ernst & Young.

-Swati Prasad

THE NEW RED FM

Red FM 93.5, the country's fastest growing FM radio station (part of the India Today Group that publishes Business Today) according to the National Readership Survey, has gone in for a complete overhaul: a new look and feel, perky logo, new tag line (Bajate Raho), sharp content and an aggressive marketing campaign. "The idea is to differentiate ourselves from the competition," explains Abraham Thomas, Chief Operating Officer, Red FM. With similar music being the mainstay of most stations, "it's mainly through a different positioning, a change in tone and tenor of the RJs and new promos that we can stand above the crowd", he adds.

COSTA'S HERE, STARBUCK'S NEXT

Sytarbucks is still scouting for a partner in India-the buzz is that it is talking to the K. Raheja Group that owns Shoppers' Stop and is one of India's biggest real estate developers- but it has been pipped to the post by UK's Costa Coffee, which recently opened its first outlet outside West Asia and Europe in Delhi's Connaught Place. While the firm's 550 outlets worldwide and revenues of $270.4 million (Rs 1,189.76 crore) do not exactly compare favourably with Starbucks' 9,671 and $5.3 billion (Rs 23,320 crore), Costa is here, while Starbuck's isn't. "No company with a long term perspective can ignore the Indian market," says Nick Williams, Commercial & Franchise Director, Costa Coffee. "It is after all one of the top four growing economies in the world." In the next six months, Costa, in India, through a franchise arrangement with the Jaipuria Group that runs a large bottling operation for Pepsi, hopes to open 20 outlets in and around Delhi; by 2008, the group will invest Rs 150 crore in 300 stores across the country. Will being an early mover give Costa an edge? As R.K. Jaipuria will tell you, it gave Pepsi one.

-Supriya Shrinate