MEG’s Sudarshan: Vocational courses show the way to a growing economy

Ial-Mart is the world's largest employer in the private sector, with a global workforce of 14 lakh. The US retailing behemoth's entry into India will conservatively call for an addition of at least 2-3 lakh in the next few years. That's the kind of addition its competitors in the organised retailing space in the country, namely Reliance Retail and the Future Group, are expected to make. The industry as a whole will need, according to estimates, 15-20 lakh people in the next two years.

Where will they come from?

In that question lies an opportunity for educational institutes-to train a sea of people for employment at the entry level across industry. That's what the Manipal Education Group (MEG) plans to do. It will impart vocational education to students in sunrise sectors such as telecom, media, banking and retail, after which they can be picked up by India Inc. Says K. Sudarshan, Managing Partner, EMA Partners International, an executive search firm: "Sooner than later this had to happen. When you have a demand for 1,000 CEOs in the next 24 months, just imagine the amount of employees you require at the entry as well as middle and senior management levels."

It's against such a backdrop that meg plans to offer certificate and diploma courses in banking, retail, telecom, IT, BPO, media and infrastructure. Says Anand Sudarshan, Group President, MEG: "Supply and time constraints have seen organisations like ICICI Bank taking initiatives with educational institutions for creating tailor-made courses that fit their requirement." Indeed, ICICI Bank has tied up with MEG to offer certificate courses in phone banking operations. The three-month course deals with all aspects of banking operations and products, including training on Finacle-a banking software-and credit card technology. Says K. Ramkumar, Chief Human Resources Officer, ICICI Bank: "Trained manpower gives us the freedom to focus on our core business as against opening a training institute in my office. I have a requirement of 2,000 people every month and can't afford to waste time training them from scratch in a competitive environment." The banking sector currently employs 9 lakh people and the number is expected to double in the next few years. As per industry observers, ICICI Bank has a similar tie-up with NIIT for teaching tailor-made courses, and is also talking to second-tier B-schools to bring changes in their curriculum that will suit the banking industry. Says Sudarshan: "These courses are skilled-based training that will capture the needs of the industry." To start with, the course will be offered in six metros, including Pune and Hyderabad. "Within a year we plan to expand the vocational courses to 20 cities across India." The course duration varies from 45 days to one year, with fees ranging from Rs 10,000 to Rs 1 lakh. Apart from ICICI Bank, MEG has also tied up with IBM, Bharti Comtel, Shoppers' Stop, Wipro BPO, Quipo and Apple.

Luis Miranda, President & CEO, IDFC Private Equity, which has invested 10 per cent stake in Manipal Universal Learning, parent of Manipal Education, for a sum of Rs 135 crore, says: "This is just a drop in the ocean. We require more such institutions that aim to address this shortfall and create a vast trained talent pool through courses that are designed in conjunction with industry, and which are internationally benchmarked." However, he is quick to add that "till the society doesn't change and parents aren't ready to accept vocational courses, it will be difficult to attract more students." Compared to China, which has 5 lakh senior-secondary vocational schools, India has only 7,000 such schools. And only 3 per cent of students learn through vocational education, as against 85 per cent of the youth in developed and developing countries.

-Mahesh Nayak

When Gold Becomes Rust
Pepsi repositions its gold-coloured drink after the World Cup fiasco.

After the early exit of India's flannelled fools from the ICC World Cup 2007, most marketers were quick to pull the plug on commercials that had anything to do with cricket or cricketers. One of the biggest casualties has been PepsiCo's Rs 370-crore Blue Billion campaign. Another victim of the disaster in the Caribbean appeared to be Pepsi Gold, the limited edition gold-coloured cola launched to coincide with the cricket fiesta. The drink is ostensibly Pepsi's tribute to the gold-coloured World Cup trophy and to the spirit of winning and going for gold; it is also supposed to embody the never-say-die spirit of the Indian cricket fan. However, with the World Cup trophy not headed home, with the team not quite attuned to the spirit of winning, and with the Indian cricket fan an oxymoron these days, what does Pepsi do with its gold-coloured fizzy drink? Simple, it rustles up a new commercial that attempts to portray the optimism that characterises today's youth. Needless to say, it does not have any celebrities (not cricketers for sure). Instead it features a group of youngsters announcing that they will get the Cup, next time around ('Agla World Cup Hum Layenge')! The company hopes to bring in a wave of optimism amongst all those who have been disappointed with the Indian cricket team at the World Cup. "The campaign also showcases Pepsi Gold as a symbol of ambition and self-confidence of a young India-an India that may be down, but is not out," is how Vipul Prakash, Executive Vice President (Marketing), Cola, PepsiCo India, puts it. Pepsi has also pulled out its commercial 'Ladega to Jeetega', which featured Virender Sehwag, Rahul Dravid, Sachin Tendulkar, Yuvraj Singh and Mahendra Singh Dhoni and replaced it with a new campaign featuring Shah Rukh Khan. That should make the billion less blue.

-Pallavi Srivastava

Taking Stock
Brokerages are leaning on private equity for growth.

The stock markets may have cooled off a bit, but the same can hardly be said for the burst of consolidation amongst stock broking firms. Recently, in a span of under 10 days, three domestic broking outfits-Anand Rathi Securities, Fortune Financial Services and Geojit Financial Services-offloaded stakes to international private equity (PE) firms. For good measure, too, ask (a domestic securities firm formed by brothers Asit and Sameer Koticha) bought out the 50 per cent stake of Raymond James in their 13-year-old joint venture, ask Raymond James.

The interest is intense on the buyer's side as well as the seller's. Whilst for the former, it means getting a piece of the action at a relatively early stage (if the long-term India story holds good), for the brokers a stake sale is necessary to fuel growth. As Amit Rathi, Director, Anand Rathi Securities, which has offloaded nearly 20 per cent of its equity to Citigroup Venture Capital, points out: "The business has become more capital-intensive. With competition increasing, you have to be well-equipped to offer a complete bouquet of financial services to your clients." For instance, the Citigroup infusion will allow Anand Rathi Securities to intensify its focus on retail broking, wealth management and institutional broking. Rathi adds that the plan is to expand-not just in India but internationally too-to 350 branches from 150 currently in the next two years.

Edelweiss Securities is another brokerage that's roped in partners-the Government of Singapore and Galleon Partner-by offloading 15 per cent, and pocketing Rs 450-500 crore in the bargain. "Partnering with PE firms has its advantages as well as disadvantages," says Rashesh Shah, CEO & MD, Edelweiss. Apart from the money, the benefits are product knowledge and global distribution. The downside comes into play when the partners are unequal. "We ended the JV with Raymond James as they were passive partners and were not bringing any value to the table," says Asit Koticha, MD, ask Group, who has now divided his business into four verticals-broking, wealth management, portfolio management services and investment banking.
The good news, however, is that the brokerages who've offloaded a portion of their equity to the PE tribe are now well placed to step on the gas. Edelweiss, for instance, will venture into the credit market by getting into mortgages. Asset management is also on the cards. Meantime, to increase its focus on institutional broking business and access more NRI clients for distribution of third party products, Geojit Financial Services offloaded a 34.35 per cent stake to BNP Paribas. Says C.J. George, Managing Director, Geojit Financial Services: "Apart from the broking business being capital intensive, the need for a wider distribution network was the reason for selling a stake."

-Mahesh Nayak