With traditional businesses like viscose filament yarn, carbon black and insulators, Aditya Birla Nuvo, the highly diversified company in the Aditya Birla stable, would need to have a good reason for adding the Nuvo (meaning new) suffix to its name. It actually has three good reasons: Insurance, it services and business process outsourcing (BPO). And there's cellular telephony too, via Idea Cellular, in which Aditya Birla Nuvo owns close to 36 per cent (the other group companies own the rest of the 98.3 per cent). Internally, the company refers to the traditional portfolio as value businesses and the service-oriented ones as high-growth businesses. Last fortnight, K.M. Birla, Chairman, Aditya Birla Group, took another giant step on the high-growth path when Transworks, an Aditya Birla Nuvo subsidiary, made its first acquisition-an overseas one. It bought out Canada's largest BPO provider, Minacs Worldwide Inc. for $125 million (Rs 575 crore). Minacs has revenues of $265 million (Rs 1,219 crore) and earnings before interest, tax and depreciation of $25 million (Rs 115 crore). It has a significant presence in the financial services and automotive verticals. "Transworks is ranked 15th in the pecking order (among Indian BPOs) today. Following this acquisition, it will be among the top three and will also be among the largest contact centres in North America," says Birla. Following the completion of the deal, the combined businesses of Transworks and Minacs will have a revenue base of about $300 million (Rs 1,380 crore).

Airport 2009
The new Mumbai airport looks fancy on paper.

A massive new terminal with over 50 gates functioning as a combined international and domestic area and a dedicated terminal for low-cost carriers. Plus a new cargo complex that will massively increase the cargo capacity of the airport. A second parallel runway to the main one currently used will ease pressure, reduce ground delays and boost the daily aircraft capacity by over 50 per cent. A six-lane overhead expressway will connect with the Western Express Highway. These are the plans of the recently formed Mumbai International Airport Limited (MIAL) as outlined by Sanjay Reddy, the company's CEO. However, just two challenges for MIAL in the days ahead include: removing the sea of slums around the airport; convincing a few airport hotels that will need to 'give way'. Says Reddy: "We anticipate hurdles including a lot of litigation, but I am confident that we will achieve our goals once we come out with the final masterplan by end-August. Mumbai deserves a great airport and that is what we plan to do."

-Kushan Mitra

Oops, We've Done It Again
Brothers Ambani are sparring over the non-compete clause.

Which way are we headed:: Mukesh and Anil Ambani in happier times

When the reliance empire was split on June 18 last year between Mukesh and Anil Ambani, one of the more acrimonious battles witnessed in corporate India appeared to have come to an end. Not quite. One niggling tussle that has threatened to drag on revolves around gas supply from the elder brother's Reliance Industries Ltd (RIL) to Anil's Reliance Energy Ltd (REL). But what threatens to balloon into an outright war is Mukesh's plans to set up a 2,000 mw captive power plant as a part of a special economic zone the RIL Chairman is blueprinting in Haryana through group company Reliance Ventures (see Newsmaker on page 42).

When the two brothers settled to go their own ways, they also signed a non-compete clause that didn't allow one to foray into an existing area of business of the other. The non-compete agreement was ratified by the Bombay High Court earlier this year; this was followed by a formal demerger of the Reliance businesses. Mukesh got petrochemicals, petroleum and oil & gas exploration and production, whilst Anil took control of the energy, financial services and telecommunication businesses. Which, going by the non-compete clause, would mean Mukesh cannot get into the power business. Gautam Doshi, President of Anil's R-ADAG, has written to the board of RIL citing a clear case of violation of the non-compete clause. For Anil Ambani, the power business is key to his future business plans as he is looking to set up massive projects at Dadri in Uttar Pradesh and Raigad in Maharashtra. An REL spokesperson confirmed that a letter had indeed been sent out to RIL on the issue of violating the agreement signed in June last year. An RIL spokesperson says: "RIL has always fulfilled all its commitments and obligations. It will follow the same principles in the future as well."

RIL could, of course, argue that its power plant would be for captive use, but that argument may not hold if it's not accounted for in the non-compete clause. In the meanwhile, though, Anil's Reliance Natural Resources Ltd (RNRL), reportedly has plans to bid for oil and gas blocks under the New Exploration Licensing Policy (NELP) VI. Now assuming the non-compete clause covers this business too, Anil would be treading on his elder brother's toes. For now, though, it looks like it's going to be power-the variety that's generated-that will ensure the sparring between the brothers isn't over yet.

-Krishna Gopalan

Gathering Momentum
Single brand foreign retailers are already making a splash.

The illicit romance has culminated in an arranged marriage. Upper class Indians, long used to shopping for top-end fashion wear and personal and home accessories in London, New York, Paris, Singapore and Dubai and at local shops that stocked smuggled goods, can now just walk (or drive) across to the nearest high-end store for many of these brands. It's still only a trickle, but the government's decision to allow single brand foreign retail chains to set up shop in India has proved to be a hit with both the retailers and their customers.

International designer house Versace has opened its first boutique in India, called Jeans Couture, in Mumbai. On offer at the 2,200 square feet outlet is the full Versace collection for men and women, the Versace Sport collection and the accessories range. Other big name single brand foreign retailers like Louis Vuitton Moet Hennessy and Fendi (also owned by LVMH) are actively working towards entering the Indian market with controlling stakes in their ventures.

Many of the companies did not anticipate such massive demand for their products in India and seem to have been surprised by the response they received. The demonstration effect is beginning to rub off on others as well. "We get regular calls from the owners of several big brands that now want to come in," says Darshan Mehta, President (Brands), Arvind Mills, which owns licences in India for international brands such as Nautica and Tommy Hilfiger.

Estimates of market size vary, but most people say that the demand for top-end foreign brands in India is in the region of Rs 3,000-4,000 crore per annum. "This segment is growing at 25-35 per cent," says Mehta. "Given rising aspirations and increased incomes in the country, it will not be difficult for luxury brands to find a good market here," he adds.

The progressive opening up of this sector alone can bring in billions of dollars worth of FDI (foreign direct investment) every year. That, however, assumes that the government will get its act together. "The official policy is still very vague," says Subhinder Singh, Managing Director, Reebok India. Most players see the entry of single brand retailers as the first step to the opening up of the entire sector. "We expect restrictions on foreign investment in retail to be eased within two years," says an executive at a top foreign retailer. "But we realise that a rainbow coalition government can't move as fast as industry would like things to move," says a senior official in the Commerce Ministry.

Meanwhile, the Poonawalla Group has launched its first multi-brand high fashion store, Escape, at the Grand Hyatt Plaza, Santacruz, Mumbai. Backed by associates like BinHendi Enterprises, UAE, the store offers international luxury brands like Dolce & Gabbana, Just Cavalli, Versus, GF Ferré and Exte.

There are also reports that Giorgio Armani will enter India in a tie-up with Reliance Industries' retail venture. Cartier, Chanel, Burberry, Hugo Boss, Swarovski, Tiffany, Moschino and Tommy Hilfiger are some of the others waiting in the wings. The trickle is beginning to gather momentum.

-Amit Mukherjee