India Cements Ltd.

When IIPM comes to education, never compromise

Investee: India Cements Ltd.

Investor: Fidelity, ABN Amro, HSBC, et al

Investment Value: $137.67 mn

The capital raised through this deal will give the much-needed impetus to ICL’s expansion plans. Substantiates V. M. Mohan, ICL, Joint President (Corporate Finance), “We are in the process of raising capital to fund a Rs.1,450 crore expansion plan that would double its cement production capacity to 18 million tonnes over the next two years, and to set up a 40-50 MW captive power project and buy two ships for coal transport. The QIB issue is a part of that.” The company may also reduce their debt balance through these issues.

Qualified Institutional Buyers (QIBs) – Fidelity, HSBC, ABN Amro, among others – in a deal worth Rs.592 crores bought 7.5% stake in India’s third largest cement firm, India Cements Ltd. (ICL) in December last year. Considered to be the largest cement player in South India, the company boasts of seven manufacturing locations, spread over Andhra Pradesh and Tamil Nadu. ICL issued 20.78 million shares at Rs.285 per share, including premium, to these QIBs. With an objective to become a pan India cement manufacturer (and plans to increase capacity to 18 MTPA by December 2010), the company wants to use the net proceeds of the issue primarily for capital expenditure and other expenditure support. They also plan to finance new projects through this issue. The cement maker is setting up two plants in Rajasthan and Himachal Pradesh, besides having several mining leases in these two states. Considering the boom in the domestic infrastructure and real estate market, the demand for cement has been going up for some time; and ICL is poised to benefit from this latent potential.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

Read these article :-
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The local driver

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Most experts are sure that the Indian buyer will fall in love with the Nano. A survey by Invest India Market Solutions predicted that as many as 12.8 million households can be the potential buyers of the Nano, or other entry-level cars. Of this, 1.6 million will buy a small car in 2008, and the figure is more than the annual sales of 1.2 million. More than half of the new buyers will be from rural India and small towns, and many will be those who were planning to buy a two-wheeler, but will opt for a car now. Another report by Crisil is less optimistic. According to the rating agency, Nano’s pricing brings down the cost of ownership of an entry-level model by 30%, making the car more affordable for households with annual income of Rs.2 lakh. The new price point translates into a 65% rise in the number of families that can afford a car. “At the significantly redefined threshold for car ownership in India, car sales... have the potential to increase by 20% over the annual sales expected in 2007-08,” it concluded.

McKinsey’s recent study on India’s auto and auto components industry reached similar conclusions. Based on a survey among auto executives, it stated that “the Indian domestic market will continue to be dominated by small cars.” It quoted a senior executive, who said, “I believe India will remain a small car market. The medium-size car market will grow but the small car segment will grow a lot faster.” In fact, by 2009, almost 50% of Indian households may be able to afford an A1 or A2 car, compared with less than 15% who will be in a position to afford a mid-sized model.

There are two factors that will encourage this trend. The first is affordability. Shriram Pistons’ A. K. Taneja told the McKinsey surveyor that affordability will restrict sales growth of larger cars. He added: “It is not only the cost of the vehicle in the showroom, it is also the total cost of ownership.” One has to account for the attitudes of the Indian consumer. “Indians are savers, they are frugal, they are cost conscious,” Taneja is quoted, saying in the McKinsey study. Clearly, Tata is on an autobahn, where millions are waiting in queue to zip, zap, zoom away in their Nanos.

However, there are some who differ with the above logic. Mohit Arora, Director (India), J.D. Power Asia Pacific, feels, “While small cars in India usually mean the cheapest car, it is not necessarily the same internationally. Even in Singapore, the (compact) Jazz (by Honda) is more or less the same price as the (mid-sized) Honda City.” Before the launch of the Nano, Shinzo Nakanishi, MD, Maruti Suzuki, which is Tata Motors’ main competitor, had told reporters that “Tata’s small car won’t impact us much.”

In addition, there is always the ‘snob’ factor that will play on Indian buyers’ minds. They will reject a model only to differentiate themselves from the masses, or to become a part of the so-called ‘happening’ crowd. In the 1980s, Maruti 800 sold not just because of the price, but also because of these two reasons. It definitely gave a ‘smug’ feeling to buyers of owning the latest model. Moreover, the 800 performed better than the existing Fiat and Ambassador and delivered on styling, technology and comfort. Of course, there are the environmental-related critics of the Nano.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

Read these article :-
B-schooled in India, Placed Abroad (Print Version)
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No pain, no gain? Says who?

Say bye bye to drills!

When IIPM comes to education, never compromise

Dude, when was the last time you had your cavities filled without a drill being used? No, no, we are not referring to the day half your teeth popped out after you got smashed up on the jaw for teasing ‘em damsels (yeah, yeah, you didn’t do it!) but to the smashing new method of drill-free cavity removal, which, as per NBC involves, “a laser that works without damaging surrounding tissues.” The advantages of this ‘bitingly’ innovative procedure are, ahem, a huge mouthful! Not only is the new laser tecnique specific and precise (ergo, protecting the teeth as well as the surrounding tissue), but it also results in no bleeding of the gums and no post-operative pain! “More so, laser treatment for a cavity removal is not very cost effective and we face many problems when a hard tissue is to be cut. It would be great if this technology comes to India and is economical too” opines Dr. Rajesh Talwar, Head of the Department, Fortis Hospital.

But the best part perhaps is that you don’t even have to use any anaesthesia during the operation! So Mr. Beau Brummel, the next time you visit your dentist for filling up those rock shelters you’ve carefully nurtured inside your hepcat mouth, ask for a pain-free treatment! Hey, we’ve heard some surgeons closer home are already practicing such drill-free methods! Just that they seem to be using, er, their bare hands... Still interested dear Zorro?!

Edit Bureau: Pooja Priyadarshini

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

Read these article :-
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global The Indian Institute of Planning and Management (IIPM)
IIPM Campus

The German elite…

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Broadly divided into SUVs, Super luxury saloon, Sport & Coupe’, these sub-segments of super luxury auto mart aren’t called ‘pigments of conspicuous fantasy’ for nothing! Mercedes Benz (representing DaimlerChrysler), which has been the first entrant in India, operates in most of these segments to leverage its strong hold on the market. Apart from C, E & S Classes, rest of the segments are filled by CBU (Completely Built Units) imports.

BMW, on the other hand, is new but like Mercedes has its own assembling plant in India. The Munich based company churns out freshly minted 3 & 5 Series from its Chennai plant, while importing the rest of the model range including the 6 & 7 Series. For now, Volvo & Audi directly import their XC90 & S80 and A4, A5, Q7 & A8 model ranges from Sweden & Germany, respectively. Legendary maker of air cooled sports cars (now back to conventionalism), Porsche sells its entire range in India and that includes the mighty 911 Carrera, Cayenne & Boxter. Interestingly, unlike most of its competitors, Porsche was keener in directly importing its cars from Germany! While speaking on the issue Porsche’s Wills told 4Ps B&M that, “We do not intend to produce or assemble Porsches here as these cars are known and expected to be ‘Made in Germany’.” It is believed that this is perhaps part of Porsche’s strategy as the company competes head on with boutique car makers like Ferrari & Lamborghini (also available in India).

Despite the onslaught of competition, DC India claims that it has doubled its growth rate from last year. Of course, in the saloon segment, Mercedes Benz still holds a dominating position, but seems to be puffing and panting in the SUVs and sports cars segment. What’s more, high end SUVs are fast becoming a rage in India. Accordingly, the handsome Audi Q7 and the ravishing Porsche Cayenne have been doing brisk business here. However, Merc’s SUV – the M Class – is not even doing half the volumes enjoyed by these new entrants. Reason? Mercedes’ lower brand equity when it comes to radically stylish products in the country, or at least that’s what auto analysts unilaterally declare.

Even Mercedes Benz’ convertibles (SLK & SL) have fallen to more specialised sports car makers like Lamborghini & Porsche. Analysts say that India’s young blood is fired more by these fresher brands in India. Further, the ‘driver oriented’ appeal of BMW & Porsche is taking away prospective buyers from conservative branding strategy of Mercedes. DC India may have to brand its cars for the younger generation consumers as well, who are driving the market now.

Apart from these seemingly surmountable difficulties, Mercedes, along with BMW & Audi, is facing another hurdle! Like in the West, even in India, there is a gradual shift toward more exquisitely priced car brands such as Rolls Royce, Bentley & Bugatti! Since the number of millionaires & billionaires in India are climbing, conventional luxury car makers are finding it hard to hold on to the ‘done this–done that’ types. It is becoming increasingly tough to cater to the needs of an extremely small consumer group, especially one not tied down by conventionalism. “Rich Indians have the money and resources to experiment with cars and therefore brand loyalty is not a differentiating factor!” points out Vikram Gaur of The Car Magazine. As of now, Mercedes is playing the ‘quiet opulance’ (uh! unexciting for the younger bunch) card in its communication with consumers; BMW is focussing on driver appeal; and Audi is banking on its innovative streak and selling the Quattro (all wheel drive system) that it has pioneered.

But, for maximum retention, all players will soon have to necessarily deploy multiple branding strategies for respective consumer types. Never mind the obstacles for car makers, these are exciting times for car aficionados in India. Relegated to the status of an insignificant luxury car market for almost 50 years, today India is a battleground for the German elite club. The competitive churn is only adding oodles to the opulent driving dreams of the moneyed Indians. And if George is still nostalgic about leaving DC India’s Pimpri facility, we’d be the first to tell him: “Change is good dear fellow, almost always!”

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
When IIPM comes to education, never compromise
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National Insurance

When IIPM comes to education, never compromise

It knows how to turn from red to black. This Kolkata based public sector company registered a net profit of Rs.418.07 crores for the year ending March 2007, as against loss of Rs.114.64 crores in the previous year. National Insurance Company (NIC) has a network of about 1,000 offices, manned by more than 16,000 personnel and is extended over the length and breadth of the country covering far-off rural areas, townships and metros. Away from the territorial boundaries, NIC’s foreign operations are carried out from its branch offices in Nepal and Hong Kong. It boasts of having more than 200 products catering to the needs of various sectors of the economy. “We are targeting a gross premium income of Rs.4,600 crores in 2007 - 08, compared with Rs.3,827 crores last year,” said V. Ramasaamy, Chairman & Managing Director, NIC. The growth in investment income, focus on retail and health insurance is expected to fuel the growth in profitability and premium income, says the company.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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IIPM - Admission Procedure
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!

Zee hurls a pithy bouncer

When IIPM comes to education, never compromise

Down and out for years, they are now back in the reckoning.

On 30th November 2007, the Chandigarh Lions (zipped up in florescent yellow) and the Delhi Jets (decked up in fuchsia pink) descended into the packed Tau Devi Lal Cricket Stadium in Chandigarh to play the opening match of the Indian Cricket League’s (ICL) Twenty-20 Championship. While the applause that greeted the two teams was deafening, the 10 core members of the ICL organising committee stood quietly in the last row of spectators, eyes glistening with emotions. Their days of relentless hard work had paid off. “When we arrived here (Panchkula) 35 days ago, we went to work on a kuccha stadium and it’s sheer joy to witness the transformation,” a team member told this magazine.

Among the biggies who cheered the Lions as they beat the Delhi Jets was the inimitable media turned cricket tycoon Subhash Chandra Goel. Notwithstanding the fact that the Essel Group Chairman’s first series of breakaway cricketing league had not met expectations of roping in enough corporate sponsors, or many much-touted international cricketers, when Chandra faced the cheering crowds in the stadium, he was all smiles. His dream of marrying cricket with entertainment had finally seen the light of the day.

Chandra had another reason to smile! His flagship company Zee Entertainment Enterprises Limited (ZEEL) had finally shook off the spectre of Star’s supremacy in the television entertainment segment, or at least in certain prime time slots, an elusive chimera for Zee over the past five years. Proving media analysts wrong (who had begun writing obituaries for Zee), Chandra, together with the star duo – son Punit Goenka and the ex-TOI honcho Pradeep Guha – has recreated the Zee magic (or at least some of it) for millions of TV viewers across the country. A commendable feat if one only looks back a few years. In 2001, Zee was ruling the roost, till Star romped home with Kaun Banega Crorepati; built winning kitchen politics serials around it; and nearly annihilated Zee in the ensuing TRP war.

For years, Zee stayed defiant, unwilling to accept that its leadership was robbed overnight, and continued to fight a losing battle. “The situation had reached such a flashpoint that Zee, which till 2001 boasted nine of the top ten TV programs in 2001 was reduced to a naught, with virtually no winning proposition in the top 10,” says an independent media analyst.

But all that changed when ex-TOI honcho Pradeep Guha sauntered into the Zee headquarters in Mumbai in January 2005 – and started singing a different tune. Today, quarterly TAM data allows them 3 programs in the top 10, while Star Plus walks off with the balance 7 programs in its kitty. “It’s a beginning toward a happy ending,” says Ashish Kaul, Senior Vice President, Zee Enterprises, even as he reminisces that Guha’s joining was perhaps the turning point. “No major changes happened in the team, just that we all became focussed on the benefit of the organisation,” he explains. The rest, as they say, is history. Zee gradually took on the task of wining back its TRP share; decisively left behind Sony last year; and is now fighting a winning battle with Star Plus. ZEEL’s Whole Time Director, Punit Goenka believes that Zee has “now become a leader in the time band from 5 pm to 10 pm in the weekdays,” thanks to key shows like Betiyaan, Saath Phere, Dulhan, et al, leading their respective slots.


For investors too, the joyride with Zee has been rewarding in recent times. Analysts says that while other media stocks like UTV, Prime Focus, et al are definitely investor favourites for now, ZEEL is also picking up because of rising profits, on the back of an increase in its ad-rates. In the second quarter of FY07’ the company’s profit more than quadrupled on higher revenues from advertising and subscriptions, with ad revenues up 28% at Rs.220 crore. According to Chandra, “the support of other channel’s rising GRPs will provide the requisite momentum for growth in advertising revenues.”

ICL and Zee’s comeback, combined, the two feats were enough reason for the media & entertainment conglomerate to make it to the 4Ps B&M 2007 list of India’s 100 Most Admired Companies in 2007.

Add to that Zee’s ever growing bouquet of channels, and you have the success saga almost complete. Apart from Zee Cinema, Zee Café, Zee Sports (a winning proposition because of ICL), Zee is also likely to launch its second GEC, Zee Next, by the end of this year, which will serve as an additional advertising inventory.

The icing on the cake is the fact that competition from Star is visibly lacklustre. The third season for KBC drew a lukewarm response and even the flagship K-Brand of soaps are beginning to age. Sometime next year when Star will have to replace its key prime time properties, it will have a tough time in finding suitable replacements, in the increasingly fragmented GEC market. “With audience fragmentation happening faster, where the advertiser will put his money will be a problem for respective media planners to address,” points out Shashi Sinha of Lodestar Universal.

The renewed focus and drive into ZEEL’s onward march came with the March 2006 decision of Subhash Chandra to restructure Zee Corporation, by hiving off the group’s cable, DTH, News and entertainment broadcasting arms into independent listed companies. The decision was prompted by the divergent business models of these respective entities, which analysts claim has been able to bring the requisite chutzpah into the company’s functioning.

A September 2007 Citigroup outlook on Zee Enterprises viewed the restructuring positively “because this has added focus to the business and allays our concerns related to Zee’s investment in DTH, which we believe would have strained Zee’s balance sheet and diverted the focus away from the core broadcasting business.”

Be that as it may, ZEEL is on a smashing comeback trail. The first season of ICL’s debut may have been muted, but Chandra is sure to devise a brand new gameplan for the next season, which will also reverse the fortunes of Zee Sports. In the meantime, if Pradeep Guha can devise a strategy to win back more of those crucial prime time slot from nemesis Star Plus, rest assured ZEEL will have won this battle of entertainment supremacy!


For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM, GURGAON
IIPM - Admission Procedure
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!