Turmoil in Bengal: vandalised Tata Motors' showroom

It's a wintry December morning in Kolkata, and shops and offices are readying to open their shutters after a weekend of violent protests against Tata Motors' proposed land acquisitions in Singur, an agricultural belt, 60 km off the West Bengal capital. Suddenly four-five young men walk into Lexux Motors, one of the Tata Motors' largest showrooms in the central business district of the city, initially masquerading as customers. One of them moves towards the front desk and asks if it is a Tata Motors' showroom. Hell breaks loose soon after, as telephone instruments are flung out of windows, and iron rods emerge out of nowhere, which come handy in shattering window panes. Slogans of "Tata go back" and "Long live the farmers of Singur," fill the air, even as posters saying as much are slapped across the showroom. The entire operation takes just 4-5 minutes.

The 1,000-acre land over which Tata Motors wants to build its factory to produce its Rs 1 lakh car has become a hot-bed of controversy. The state claims that the process of acquisition of land, and its fencing, is complete and it will hand over the land to the Tatas, come hell or high water or Mamata Banerjee, who is on an indefinite hunger strike. Banerjee's party, the Trinamul Congress, had called for a 12-hour Bangla bandh and party activists have been putting up unscheduled road and rail blockades every now and then across the state. SUCI (Socialist Unity Centre of India) and other naxalite outfits have also sponsored a 24-hour Bangla bandh on a separate day and are getting into violent clashes with armed forces. Social activist Medha Patkar, writers Arundhati Roy, Mahasweta Devi and a few groups of intelligentsia have also joined the bandwagon. Support from less predictable quarters comes courtesy B. Ramalinga Raju, Chairman, Satyam Computers, who is opposing "any forceful grabbing of farmers' land". As many as eight chambers of commerce have issued a joint press statement urging all concerned parties to stop politicising the issue.

If there is any silent stakeholder in this whole episode, it is Tata Motors, whose officials are tightlipped. "We are extremely happy over the way the state is handling the whole issue and is cooperating with us," is all Ravi Kant, Tata Motors MD, said in a press conference in Kolkata recently. And sources say with a land price of Rs 2 lakh per acre, which has to be paid after five years with an annual interest rate of 0.1 per cent and an electricity cost of less than Rs 3 per KWH (including demand charges, fuel cost adjustment, electricity duty and variability of peaks) and proposed tax exemptions, the Tatas have reasons to be happy. But Singur, unfortunately for Tata Motors, is one of the Trinamul Congress' few strongholds, with the local MLA belonging to the party.

In the meanwhile, Uttar Pradesh Chief Minister Mulayam Singh Yadav and Orissa Chief Minister Navin Patnaik have reportedly sensed an opportunity and are attempting to woo the Tatas to their respective states. At Gopalpur in Orissa, the Tatas had acquired 3,400 acres of land for a steel plant in the mid-90s, although the project is still in cold storage. Plans for a special economic zone on this land have also been hanging fire for some time now. Besides, the state government is developing a hub for auto component manufacturers over a 500 acre land at Choudwar in Cuttack district, which is not too far off from the Tatas' land. West Bengal CM Buddhadeb Bhattacharjee crossed the first hurdle when he got Ratan Tata to agree to put up the first automobile unit in the state in independent India. A bigger challenge now is to hold him back.

-Ritwik Mukherjee

Hot Flicks and Food
Pack in a meal after catching the latest hit (or a flop show).

Growing appetite: It's F&B now

Ticket sales would naturally contribute the most to multiplex revenues-63 per cent as per industry estimates-but food and beverages (F&B) also play their part, with roughly a quarter of sales. The Delhi-based PVR Cinema is looking to increase the F&B portion by foraying into food courts, for which 'PVR Food Union' will be formally launched in June. "PVR Priya and Anupam in Delhi don't need a food outlet as there are enough options in the area, but Sahara Mall and Ambience Mall in Gurgaon still need them and this is where we would do our first opening," says Pramod Arora, President-Corporate Strategy and Business Development, PVR Cinema. At Sahara Mall, PVR Food Union will occupy 14,000 square feet and will have 16 different outlets while the one at Ambience Mall will be spread over 30,000 square feet with 22 kiosks.

PVR plans to do a pan-India launch of it new business for which the company has identified Dhanbad, Ahmedabad and Baroda for the June launch. The company plans to launch the newer PVR Cinemas and PVR Talkies along with PVR Food Union. PVR plans to operate 25 such food courts by 2008-end and each would be covering between 10,000 and 30,000 square feet with total investment for the entire project ranging between $1-1.5 million (4.5-6.75 crore).

-Pallavi Srivastava

Very Crowded Skies!
Airbus predicts the need for 1,100 more planes by 2025.

Airbus' Leahy: Sees soaring demand for aircraft

If you're hoping that with all the modernisation plans of Indian airports the air traffic congestion situation will improve, you probably should not read on. John Leahy, Chief Operating Officer, Airbus N.A, predicts the Indian market will see demand for over 1,100 aircraft of over 100 seat capacity in the coming 20 years. Currently there are close to 250 aircraft in India today.

"We are on average delivering one plane a week to India right now," Leahy says triumphantly. "And thanks to our customers we have a clear lead over our rivals in the market. In 2005, out of the 327 orders placed for aircraft, 229 aircraft were from Airbus. This year, Airbus claims to have a 75 per cent share of orders and right now 53 per cent of the almost 250 aircraft in service are Airbus aircraft." However, Airbus has used some innovative math here, since Boeing actually booked the 68 aircraft Air India order this year (Airbus' calculations categorise that order in 2005), which would give Boeing a majority of sales this year.

Despite most carriers being hemmed in by huge losses-including key Airbus customers such as Kingfisher and Air Deccan-Leahy still feels the Indian market is viable. "The airline industry is never an instant money maker, I believe there will be some growth pains but sooner or later the market will stabilise and we have complete faith in the viability of all our customer airlines."

The reason Leahy is so confident is because he believes that due to the lack of capacity and regulations there is still a massive gap between actual capacity and future requirements. "There is a latent 'frustrated demand' in India and that demand is only getting filled now. Also, there is a tremendous modal imbalance between rail and air traffic in India which will drive demand further."

And Leahy is not too concerned about the infrastructure gap. "There are new, modern airports coming up in India right now. In fact, your Civil Aviation Minister (Praful Patel) believes our projections are too conservative, and told us that he expects over 2,000 aircraft will be acquired by Indian carriers in the coming 20 years," Leahy chuckles.

Airbus also sees an opportunity to sell A380 and A350xwb aircraft in India (Kingfisher has already ordered five of each). "I feel Indian carriers will also increase their share of international traffic to and from India from 35 per cent to at least 50 per cent. In fact, when I look at the global aviation market I think India and China are going to play an increasingly important role." In fact, if Airbus is ramping up its production capacity, it's largely to meet anticipated demand from India and China. "Our A320 family, which is the aircraft of choice for many Indian carriers, has seen production boosted from 32 aircraft a month to 36 aircraft a month and we are thinking of increasing capacity on the A330/340 line as well to meet demand."

Times are good for the manufacturers, but you don't see too many passengers who will be jumping for joy at the news and with the fog season expected to roll into Delhi now, things are unlikely to improve!

-Kushan Mitra

VCs Go to School
Manipal Group gets $70m for its education initiatives.

MU's Sudarshan: New growth chapter

With nearly half of India's 100 crore-plus population under 25, one sector poised for exponential growth is education. While the education sector itself holds lot of potential, governmental regulations have hamstrung and impeded the full participation of private sector players in a major way, leading to little venture capital funding coming in. The Manipal group is looking to change things. A pioneer in private education-having set up India's first private medical college, the Kasturba Medical College in Manipal, Karnataka way back in 1953-the southern group is looking at expanding its already substantial presence in the sector. Manipal Universal (MU), a part of the Dr Ramdas Pai-owned Manipal Education and Medical Group (MEMG), has received $70 million (Rs 312 crore) in venture funding from Capital International and IDFC Private Equity. Currently MU has annual revenues of nearly Rs 470 crore. Says Anand Sudarshan, Group President, MU: "We will use these funds mainly to expand our operations in distance learning, industry-focussed vocational training programmes and for expansion overseas."

Pointing out that because of an industry-academia disconnect, vocational training in India has not taken off in a major way, Sudarshan says MU will aim to bridge the gap. "If you take the retail sector alone investments announced by the likes of Reliance Retail, Bharati, AV Birla Group and Future Group run into several thousand crores. But today there are not sufficiently trained people to man, say, the retail counters or look after back-end logistics. Our aim would be to train people to fill these gaps not just in retail but in other areas like banking, telecom, media and infrastructure services."

Manipal Education and Medical Group, begins with nursery schools, runs medical, engineering, management, law, pharmacy and even journalism colleges. It is also one of the largest healthcare service providers with more than 7,000 hospital beds under operation. The group also has an international footprint with overseas campuses in Dubai, Nepal, Malaysia and Antigua. Nearly 5,000 international students get trained at its overseas campuses. Says Sudarshan: "With two universities, nine campuses, 24 professional colleges and 96,000 students, we are already an international player. The investment which has come in is a vindication of our strengths and allows us to scale our model. I do not see any reason why India should not become an education powerhouse similar to, say, what we are in it." Other VC firms will be tracking closely this first investment in India's education sector.

-Venkatesha Babu