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
IIPM, GURGAON
IIPM is A World of Career
Why Study Abroad When IIPM Gives You 3 global Advantages!

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.

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!