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interview
22 | ‘the idea that YoU have to saCrifiCe
YoUr well-Being to sUCCeed is delUsional’
Former media entrepreneur Arianna Huffington
is on a mission to upend the global stress
and burnout “epidemic”
ColUmn
26 | a relationshiP eConomY:
are we PrePared?
With the new economy, the survival of an organisation
will depend on its ability to foster relationships
featUres
interview
38 | ‘Us fda aPProval PUts india
on the gloBal maP of Biosimilars’
Kiran Mazumdar-Shaw’s Biocon is on course
to develop high-risk, high-reward original molecules kiran Mazumdar-Shaw, CMd of biocon limited
for multiple markets
64 | ‘i see a different 80
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ConfidenCe in lUxUrY’
Zegna CEO Ermenegildo Zegna has a patient and
long-term strategy for the Indian luxury market
BUdget 2018
42 | BUdget 2018: PrUdenCe or PoPUlism?
FM Arun Jaitley will have to ensure a fine balance
between politics and economics
52 | high on hoPe
From banking to aerospace, every sector is buoyant with
expectations from the upcoming Budget
Cross Border
58 | the world’s 100
most PowerfUl women
A cohort that governs or directly influences
more than 3 billion people and has a personal
net worth of over $97 billion
72 | BlaCkroCk’s edge
How do you stay on top when your core business 86
is a commodity and you measure profits in hundredths
of a percentage point?
reCliner
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The hearty Mallorcan cuisine is a celebration
of seafood, pork and vegetables made better with
people passionate about feeding
90 | dotCom: lUxUrY’s new address Pimientos de padron, Mallorca’s most popular vegetarian tapa
Luxury brands are looking beyond personalised service
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Superstar Rajinikanth is one in a long line of actors
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Readers Say
Degree to recruitment Star Quality
Refer to ‘Lessons To Be Learnt’ (Issue Refer to ‘Beyond Boundaries’ (Issue dated
dated January 19, 2018). An MBA degree January 5, 2018). Anushka Sharma’s
isn’t always a passport to a good job. frankness and forthrightness give a
Only a select few from the top MBA glimpse into the easy-going person that
institutes manage to get a good deal as she comes across, both on and off screen.
far as jobs are concerned. The time has It came as a breath of fresh air to know
come for the government to formulate a that she gives great importance to her
policy to have a common examination for growth as a human being despite being
all the recognised MBA colleges of the such a successful actor. Her take on
country. This is the only way to maintain dealing with criticism was interesting
consistency and also a high standard of too. She’s steered clear of taking the
twitter.com/Forbes_India examination and knowledge. There is comfortable path as far as her career
one institute for chartered accountants choices are concerned. It shows that she
facebook.com/ForbesIndia
which controls the examinations at an is not afraid of failure and is willing to
linkedin.com/company/forbes-india all-India level. No wonder, they score offer something new with every project
over MBAs when it comes to jobs. of hers. That’s a nice quality to possess.
www.google.com/+ForbesIndia Mahesh Kapasi, via email Rohan Paleja, via email
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LeaderBoard
energy producers in FY19, as
per the centre’s Renewable
Purchase Obligations (RPOs)
Winds of Change
India for 1 GW of projects
was just `2.64 per unit.
what next?
New auction-based regime for wind projects has led to lower tariffs There is still concern about
the lack of clarity regarding
the quantum of auctions.
“The pipeline visibility is
not there and this has led
to a build-up of inventory.
This can impact the level
of innovation in the wind
sector as companies
“Auctions
will weed out
inefficient players
and lower tariffs
will eventually
expand the size of
the market.”
—devansh Jain
Whole time director,
Inox Wind
the earlier situation why the sector auctions in the first half cut back on research,”
Wind power producers faces headwinds of the year resulting in a warns Vivek Sharma,
were always paid at a pre- Once the government large inventory build-up at senior director, CRISIL
determined rate for the announced its intent the manufacturers’ end. Infrastructure Advisory.
power they produced (feed- to move to reverse Several faced working However, the market
in tariff). But this allowed auctions, there was a huge capital issues while they expects it to be business
producers who could slowdown in orders. awaited clarity. When as usual once the auction
develop a site as a monopoly “The government’s auctions for wind power process settles down. “The
to pad costs and accrue intent to move away from were done in October, the reverse auction mechanism
returns far in excess of regulated tariffs to reverse bid received by the Solar has its issues. But these
what a utility could expect. auctions was reasonable, are temporary. As the
Producers argued that except that individual gradual ascent sector matures further, and
StePhane Mahe / ReuteRS; tOP: aMit Dave / ReuteRS
setting up a wind site was states leapt to abandon more capacity is offered
Grid-connected installed capacity (GW)
more complex than setting current policies based up through auctions, the
up a solar site. At the same on regulated tariffs even 35 process should become
32.3
time, state electricity boards before their sunset date,” 30 robust and bids should
26.8
were scrambling to procure says Kameswara Rao, 25
23.4 become more realistic,”
power from renewable leader, energy utilities 21 says Ravi Kailas, chairman,
20
producers. This allowed and mining, PWC India. Mytrah Energy (India).
15
producers to get away with States awaited clarity Lower margins also
10
quoting higher tariffs. on the reverse auction mean that players with
In late 2016, the guidelines and overnight 5
lower debt can bid
government said it intended stopped entering into any 0
FY FY FY FY aggressively, leading to
14 15 16 17
to move from feed-in tariffs power purchase agreement. Source: Ministry of New
consolidation in the sector.
to a reverse auction method. As a result, there were no and Renewable Energy —SaMaR SRivaStava
LeaderBoard
a Lunar XPrize finalist from Ja-
pan, for its lander and missions.
It was to use the same rocket
as TeamIndus for its lander
for an Indian startup that reasons for pulling out many levels in they need more backing.
dreamed of delivering full seems to be their inability India.” Hopefully, TeamIndus will
programmes—building to raise money to pay ISRO —Narayan Prasad find it, and keep going.
and launching a satellite, for the PSLV rocket they founder, Satsearch —HarIcHandan arakaLI
LeaderBoard
that could be up for grabs
through insolvency
procedures, according to
data from RBI
Insolvency in Motion
equity holders in Indian
companies could also see
their holdings diluted.
Market regulator Sebi
Private equity firms, asset reconstruction companies and the is yet to issue specific
promoters themselves are the ones likely to play a leading role rules in this regard and
in the insolvency resolution process it is likely that the rights
of small shareholders
in early january, news will be protected.
of Anil Agarwal-backed Second, private equity
Vedanta Resources funds put in bids for assets
emerging as a bidder for that are available at a
debt-laden Electrosteel discount. They typically
Steels sent the latter’s have a team that takes over
stock soaring. While management, turns the
Vedanta wasn’t the only asset around and preps it
bidder—Edelweiss Asset for an eventual sale. Again,
Reconstruction Company, in January, Brookfield Asset
Tata Steel and Abhishek Management entered the
Dalmia-promoted nuclear power sector with
Renaissance Steel were also its purchase of the bankrupt
in the fray—the process Westinghouse Electric
marked the beginning of Company for $4.6 billion.
proceedings under the The deal was Brookfield’s
Insolvency and Bankruptcy biggest ever. In addition to
Code (IBC). private equity funds there
If the Electrosteel bid are also vulture funds that
goes ahead (the insolvency take over companies at a
professional could still steep discount (at times
reject the bids) it would 80-90 percent) and then
be the first time an Indian strip assets and sell them
company is sold after on a piecemeal basis.
ousting the promoters Third, there are asset
and the lenders taking a reconstruction companies
significant haircut on the (ARCs), which in the
Indian context could have
`10,000 crore (`13,000 bid. This allows them to a significant role to play.
The case of crore with interest) restructure their dues They’d be particularly
sunedison loan due. The Economic to suppliers and emerge relevant for companies
In June 2016, sunedison, Times reported Vedanta’s with a leaner and fitter where the banks are
which once aimed to be the
world’s largest clean energy `4,500 crore bid as the balance sheet but with a sceptical about attracting
company filed for bankruptcy. highest. While the RBI shrunken business. Take quality bids. In such a
the process was slowed down has released two lists of for instance SunEdison, situation, banks could
sameeR pawaR; top: shutteRstock
LeaderBoard
growth in 2018-19, according
to the Global Economics
Prospect released by
the World Bank
The Indian
January 26, 1950, giving the country a document to govern
itself by. In the six decades since then, the country has
experienced defining economic periods, reforms and
GDP Turns 69
milestones. This January, as the GDP turns 69, we take
a look at its growth, the sectors that have contributed to this
growth, and some noteworthy moments.
GDP at 2004-05
IndIa grows up, along wIth Its gdp prices (` cr) 10-year caGr (%)
60,00,000 5.29
1966
1983 2008
Third Five-Year
Plan ends The first India
1951 with growth
at 2.4 percent,
Maruti 800
rolls off the
clocks four
successive 7.67
50,00,000 the lowest in production years of
The first a five-year line, in more than
Five-Year period Gurugram 8 percent
Plan is growth
implemented
40,00,000 1969
GDP at 2004-05 PrIcEs (` cr)
0
1950-51 1955-56 1960-61 1965-66 1970-71 1975-76 1980-81 1985-86 1990-91 1995-96 2000-01 2005-06 2010-11 2013-14
GDP data has not been considered for 2013-14 onwards as the methodology for calculating GDP changed, thus making the numbers incomparable with previous years
LeaderBoard
to meet in the centre and then swept
back and secured by a stiffening spray.”
—Ivanka Trump, on her father’s hair-do
book review
I know. Or most of what Donald Trump became entertaining read about of all that goes on within the
I know. They just aren’t a man who believed that a vast crew of supporting most famous government
writing it” writes as much he deserved to be and actors—billionaire office in the world.
about Trump himself, as was wholly capable of donors, media moguls, —JAsodhArA bAnerJee
arianna
huffington says
her Thrive global
is launching an
app that turns a
smartphone into
a dumb phone for
specified periods
since leaving the huffington India about transforming our culture Global… Tell us about your own
Post, a news and entertainment of overwork, the importance of transformation from a fast-
website she co-founded in 2005, sleep and redefining what it means lane addict to a proponent of
Arianna Huffington, 67, has turned to be successful. Edited excerpts: sleep and digital detoxing.
her attention to her wellness For me, it was a painful wake-up call
startup Thrive Global. Launched Q Your career has been marked when I collapsed from exhaustion
in late 2016 in the US, the company by multiple reinventions. in 2007. I hit my head on my desk,
recently marked its India entry in Starting off as an author to broke my cheek bone and was lying in
Mexy xavier
partnership with Times Bridge, part attempting a career as a politician a pool of blood. I was two years into
of Bennett, Coleman & Co Limited. to setting up The Huffington building The Huffington Post, working
In an interview, she speaks to Forbes Post and now launching Thrive 18 hours a day, seven days a week. I
DECIPHERING DIGITAL
TRANSFORMATION
T
here is a consensus in most circles that digital NEW PLAYER ADVANTAGE
transformation cuts across business boundaries. Leaning on his own experience, Shah highlighted another
Whether it is manufacturing or financial services, interesting trend, “Piramal Enterprises is big in financial
digital is omnipresent and immensely relevant. services, but we are among the latest entrants. So, we had
At the same time, a lot of businesses are still trying to the opportunity to tap into the latest in technology while
grapple with what digital can really do for them and how setting up the business.” He also pointed out that in the
technologies like Artificial Intelligence (AI) and Internet manufacturing sector most people still don’t even know
of Things (IoT) or cloud computing can benefit them and what digital is. “We have to start with educating people about
their customers. what digital means, with the help of consultants, who can
To discuss these issues through a candid conversation walk the organization through this revolution.” In his view,
with industry leaders, Forbes India hosted a panel the biggest challenge was getting the top management to
discussion, Forbes India #ideas2act: The Digital Edge Series, appreciate and understand what digital is, set a vision and
in partnership with IBM. The participants at this discussion then gradually overcome the hurdles during the transition.
included Vinay Agrawal, CEO, Angel Broking; Mrugank M.
Paranjpe, MD & CEO, MCX; Vijay Shah, Executive Director, OBSOLESCENCE AND ADAPTATION
Piramal Enterprises; RM Vishakha, MD & CEO, IndiaFirst Life Digitalisation has changed job profiles and their relative
Insurance; Anand Agarwal, CEO, Sterlite Technologies and importance too. Paranjape shared two interesting examples
Chetan Naik, Vice President, Enterprise and Mid-Market, IBM of this. “In 1994, the most empowered person in a stock
India and South Asia. broking firm was the person who went into the trading ring.
In about six months this role completely lost its relevance.
CHANGING EXPECTATIONS In 1997, back office functions changed considerably too as
The dialogue began with RM Vishakha observing that as the everything went paperless. More recently, in the commodities
priorities of a company keep changing, so do its expectations space, electronic warehouse receipts are expected to trigger
from digitalisation. “Initially it was all about eliminating a similar revolution for commodities as depositories did for
manual processes, enhancing efficiency and improving equities by digitizing assets.”
productivity. Now we are moving to the next level; we are Agrawal of Angel Broking underlined another aspect of
looking at how to increase customer satisfaction. As the third redundancy – resistance to change. “With digitalisation,
stage, I envisage that we will be using AI to do away with the work that people do for an organization often gets
training, which really never ensures uniformity of behaviour automated. It becomes a big challenge to encourage these
in the customer service or sales team.” people to reorient their approach to digital technology.
BRAND CONNECT
While they find it easy to adapt to using smart phones and – at one end digital marketing and training could be
digital apps, it is different when it comes to their work. They implemented and at the other, sensor-based readings and
do not like to feel that their contribution, which seemed predictive maintenance. One has to prioritise which of these
important until now, has suddenly lost all its relevance.” areas will have the greatest impact or be the best place to
Naik opined that at an aggregate level, it was unlikely that start,” Shah observed.
the sum total of job changes would remain the same during Anand Agarwal pointed out that since India is just getting
the transition to digital. “It will be hard on a set of people,” started on creating a data infrastructure, which is the core
he said. “For example, if a mid-career professional in the for digital, the industry cannot offer a preferred experience
technology industry today does not upgrade his or her skills yet. “We are working with telecom providers and the
and adapt, it could be difficult for them to survive changes.” defence sector to create a data network. We are also working
with smart cities, some of which are coming up with rural
ASYMMETRIC OPPORTUNITIES broadband. There are really neat technologies available,”
Digital technologies have their pitfalls as well, which Agarwal said.
industry leaders are mindful of. Paranjape raised a pertinent
issue when he pointed out that some of the questions that START-UP SUPPORT
the industry was grappling with included: With an army of start-ups mushrooming in
“Does technology create level access for the digital space, it has become imperative
everyone or do people with deep wallets, for larger companies to evauate how they
high computing capacities, high networks, can partner with younger companies and
gain unfair access?” He further added their innovative ideas. Anand Agarwal
that people trusted exchanges because shared that his company uses start-ups
they believe that there is no asymmetry to scale up a platform that it has created
in formation. But the concern is that and, at the same time, consciously and
sometimes asymmetry emerges due to continuously funds start-ups to undertake
some people being more digitally capable projects that it is not agile enough to
than others. conceive and implement. Vinay Agrawal
also stated that Angel Broking looks at
ENHANCED CUSTOMER these start-ups both as partners as well
EXPERIENCE as competition. He explained that due to
The next relevant issue to be discussed their brilliant ideas and customer-focused
was can digital be used to boost retail participation in the approach, there is scope for synergistic equations between
securities market? Digital has taken the securities market large corporates and start-ups towards creating quick and
to a level where information is real time, transparency is effective solutions. Vishakha shared that her company
assured and access to information is available on the go, via had a separate budget and team for experimenting with
mobile phones. Agrawal suggested that the focus would start-ups.
now shift to enhancing customer experiences - right from
sales and acquisition to fulfilment and after-services. “Earlier THINKING BEFORE ACTING
we used to have a software lifecycle of months and years, New digital technologies shouldn’t merely be adopted
now it has been reduced to weeks. The whole cognitive because it is fashionable to do so. Paranjape cautioned about
technology piece is playing a very big role. We are able rushing into adopting new technology as it could result in
to profile the customer much better without too many the adoption of unsuitable solutions. Another challenge was
questions being asked,” he said. Anand Agarwal of Sterlite ensuring that what is created complies with prevailing and
Technologies succinctly summed up by saying that all the anticipated regulation, especially while creating something
digital technologies were merely tools and it was up to the like a marketplace, which is meant for a wider spectrum
users to make them relevant to customers and employees. of users.
Vinay Agrawal offered a slightly different view, arguing
TRANSITION DILEMMAS that while there may be risks associated with adopting a
While he acknowledged that equity markets were making digital first approach, those risks are lesser compared to
the most of digital transformation, Chetan Naik observed the challenges faced in the earlier physical world, where
that companies in sectors like manufacturing and retail transactions were often manual and paper-based. “For
distribution often had good intent (vis-à-vis digital adoption) example, during the era of physical shares, clients and
but were struggled with where to begin. “Unfortunately, brokers faced losses that were far larger than those in these
there are so many aspects that could use digital intervention digital times,” Agrawal said.
Column
It’s possible that we keep returning to service providers because of the connections we’ve built with them
A Relationship Economy:
Are We Prepared?
It’s built on trust between service providers, their consumers and partners.
With the technological advancements we’re seeing, it’s a reality of tomorrow
By Giselle Harrison & sudHakar sampatH
2011 was the last time we recall organisations want to continue to remain relevant, building
having witnessed a heated discussion on the merits personalised experiences alone is not going to help.
of a ‘products versus services’ economy. The topic, Have you noticed how consumers have started to
at the time, seemed fresh and well researched. become increasingly focussed on the relationships
However, we soon started to hear about the they share with their service providers? Think: How
importance of building personalised experiences many times have you gone back to a particular place
to stay relevant in the new ‘experience’ economy— for the same service? Why do we keep going back?
or like its popular term, the digital economy. It is possible that we keep returning because of the
Come 2018, we’re bang in the middle of that predicted connections we have built with these service providers.
experience economy; watching businesses, large In fact, it is likely that we are on the brink of the next
and small, invest heathy sums into modelling unique big economic wave: The relationship economy.
experiences for their customers. This pace of change, A relationship economy is built on ‘trust’ between a
sameer pawar
a move through two different economies, in a span of service provider, its consumers and their partners. How
barely seven years, is shocking. In the near future, we is it going to come into existence? We believe that the
believe, that change may come at an even greater stride. If advancements we have made in certain technologies
SoftBank
Cheques
& Balances
By betting big money on big businesses, SoftBank is bringing its India
strategy in line with its founder Masayoshi Son’s global vision
BY SaYan ChakraBortY
A
fter a few initial hiccups, a for instance, trailed Flipkart when the kind of cushion they have.”
resurgent SoftBank, armed SoftBank first bought into the SoftBank has burnt its fingers
with a $100-billion Vision company in November 2014). earlier, trying to discover hidden gems
Fund, is wiping clean its “Earlier, SoftBank’s thought in India. It teamed up with News
chequered past in India by writing process was to get a foothold in the Corp-backed venture fund ePartners
big cheques to the biggest startups. market and see how quickly they and Ispat Industries promoter PK
This is not entirely unexpected, could learn. Now there is a more Mittal to float eVentures India
given that Masayoshi Son, the concerted strategy to dominate the Holdings in 1999. After investing in
maverick and sometimes impetuous market,” says Vinod Murali, managing about 13 startups over the next four
founder of SoftBank, has time partner at Alteria Capital. Murali, years, the fund shuttered in 2003.
and again professed his love for in his earlier job at Innoven Capital, It exited three investments, wrote
doing things big. “I don’t do things had invested in Snapdeal and Oyo. off six and sold the rest to Nexus
small,” Son, 61, had said in an “The number of companies that Venture Partners in a block sale.
interview in December 2016. can absorb the kind of capital that In 2001, it floated the SoftBank
SoftBank has seen a billion SoftBank will offer is limited, maybe Asia Infrastructure Fund, this time
dollars invested in online real in single digits. But, the next set of in collaboration with Cisco. This
estate startup Housing and online such companies is being nurtured and too collapsed after its executives
marketplace Snapdeal sink. But Softbank will have a bigger play then.” chose to form a new fund called
such setbacks haven’t stopped it Son not only has the appetite SAIF Partners in 2004.
from bankrolling another online and means to do things big, but also SoftBank jumped on to India’s
marketplace Flipkart with $2.5 billion the stomach to digest big losses. consumer internet bandwagon
and financial services company “For them, a couple of hundred late, in the second half of 2014, by
Paytm with $1.4 billion in 2017. million dollars is small change,” when American hedge fund Tiger
More big ticket investments by adds Murali. An executive at a Global Management had already
SoftBank are likely to follow, but, this venture capital (VC) firm that has established a firm grip over Flipkart,
time, it likely to go for market leaders. co-invested with SoftBank, and who India’s most valuable startup.
This is in sharp contrast to did not wish to be named, concurs. But once it entered, there was
its earlier ploy of cherry picking “They seemed to have moved on no stopping SoftBank. In fact, led
promising startups in emerging despite losing more than $900 million by Nikesh Arora, the former chief
sectors (Oyo in hotel aggregation, in Snapdeal. This is a very different business officer at Google who
Housing in real estate, Grofers DNA, which is very hard to replicate. joined SoftBank as vice chairman in
in hyperlocal delivery) or even To give you some perspective, they July 2014 and was widely viewed
businesses that were number two or weren’t hurt as much as we were as Son’s heir apparent, SoftBank
three in the pecking order (Snapdeal, after losing $25-30 million. That is sometimes gave Indian founders
more than they asked for. which was an early backer of Snapdeal
Take, for instance, Housing. In late and Housing, played a key role in
2014, Rahul Yadav, its 20-something introducing SoftBank to Indian
co-founder and CEO, was looking to startups. Nexus executives Sandeep
raise capital to fund his growth plans Singhal and Anup Gupta had earlier
when he met Arora. By then, Yadav worked at eVentures India Holdings.
had almost sealed a deal to raise $40 In the next one year, SoftBank,
million from investors including under Arora, invested further
Falcon Edge Capital, in a transaction in Ola and Snapdeal. This apart,
that would value Housing at roughly SoftBank led a $100-million Series
$150 million. Arora made an offer B investment in Oyo in April 2015
Yadav could not refuse: A $100-million and a $120-million Series C round in
cheque. Despite the euphoria among
investors, a Series C investment
that big was hard to find for a two-
year-old startup such as Housing.
“For them [SoftBank], a couple of
“SoftBank didn’t want other hundred million dollars is small change.”
investors. Since they were in advanced - Vinod Murali, managing partner, Alteria Capital
talks with Falcon Edge and others,
Housing could not have said no to
the other investors as well,” says a executive at another VC firm that Grofers in November, which were,
person privy to these discussions. had co-invested with SoftBank. again, investments disproportionate to
In December 2014, Housing raised “In a market like India where the scale and stage of the companies.
$90 million, of which $70 million there is a lot of competition, the The halcyon days didn’t last long. In
came from SoftBank and the rest from companies are loss-making and mid-2015, Housing imploded following
Falcon Edge Capital and existing you don’t know how long the battle a spat between Yadav and his investors.
investors Nexus Venture Partners lasts. We, as investors, were very The next June, Arora abruptly
and Helion Venture Partners, at a happy to have SoftBank, even at resigned. Meanwhile, Snapdeal was
valuation of $235 million. To sum it the expense of dilution. But, yes, losing ground to Amazon and Flipkart,
up, Housing got about $50 million SoftBank and Tiger Global were, to while Grofers struggled to scale up, as
more than it had asked for, with an some extent, responsible for the way its gap with market leader BigBasket
$85 million mark-up in valuation. valuations were perceived in India.” grew. Ola, which has since bounced
Well, Son is known for writing A questionnaire to SoftBank back, was battling Uber’s aggressive
eye-popping cheques. He has done so seeking comments on its India advances while Oyo was burning cash
in the US and China. But, borrowing investments did not elicit a response. to get hotels and customers onboard.
a page from his global playbook for In October 2014, a month before It seemed at one point that Son
India had its downsides. Unlike investing in Housing, SoftBank had had bet on the wrong horses.
mature markets such as the US bankrolled Snapdeal, which was
A
and China, Indian entrepreneurs then trailing market leader Flipkart fter the 2015 blitzkrieg,
were still coming to terms with (Amazon, which entered India the SoftBank spent a quiet 2016,
the flush of funds. Exuberance year before, was still a fledgling), cleaning up its act in India.
from the likes of SoftBank and with a $627-million cheque, valuing It refrained from expanding its
Tiger Global Management not only it at $1.8 billion. The same month, portfolio and only provided follow-on
sent valuations soaring, but also ride-hailing startup Ola entered the capital to Oyo ($62 million in August)
prompted them to start spending unicorn club—startups valued at $1 and Housing ($20 million in two
sprees to gain market share. billion or more—riding on a $210- tranches in January and December).
Essentially, they didn’t save million investment from SoftBank. In 2017, SoftBank returned much
enough for a rainy day, and when a “To begin with, they [SoftBank] stronger with the Vision Fund, the
funding downturn in mid-2015 hit, were basically trying to find a largest of its kind in the world, backed
most Indian startups floundered. marquee investor base and do a by the likes of Saudi Arabia’s sovereign
Joshua Navalkar
“Because of large pools of capital mark-up on their investments with wealth fund and conglomerates
that came to companies unduly, ahead a 30 percent ownership target,” says such as Apple, Foxconn and Sharp.
of time, many of them wired their the VC executive cited earlier. Armed with a mammoth corpus, of
business models wrongly,” says an Indeed, Nexus Venture Partners, which about $10 billion is expected to
be channeled to India, where SoftBank A Slice oF the BeSt pieS its early investors take massive
today finds itself in a unique position. haircuts on their investments, Ola
Company Investment shareholdIng
Tiger Global, one of the most prolific has curbed SoftBank’s rights, possibly
backers of homegrown startups, with Paytm `6,463 Cr 14.4% to avert boardroom hostilities. It
close to 40 investments, is looking `600 Cr
has restricted SoftBank from buying
Grofers 20-30%
for an exit. Some of the large funds, (aPProx) more shares without the approval
such as DST Global, Steadview Capital `5,500 Cr
of founders Bhavish Aggarwal and
snaPdeal 33%
and Falcon Edge Capital, have also (aPProx) Ankit Bhati, and the board. Also,
retreated from India. SoftBank is ola `6,487 Cr 26.4% SoftBank, which has one board seat,
possibly the only investor who can cannot get another if it acquires more
oyo `2,640 Cr 47.2%
cut multiple cheques of $100 million than 50 percent preference shares in
or more without batting an eyelid. fliPkart `16,200 Cr aPProx 20% Ola’s ongoing funding round (having
(aPProx)
The company made the most closed a $1-billion round, it is in
of this opportunity in 2017. Apart HousinG `600 Cr
(aPProx)
40-45% talks to raise another $1 billion).
from investing in Flipkart and “People are slightly wary of
Paytm, valued at $11 billion and $7 Source: Tracxn and Forbes India Softbank becoming the largest
billion respectively, SoftBank led a shareholder, but they don’t have much
$250-million funding round in Oyo rival Proptiger in January 2017. choice as SoftBank has the largest
and participated in Ola’s billion-dollar SoftBank also tried to orchestrate corpus. Most companies will find it
fundraise. All these firms are market Snapdeal’s sale to Flipkart, but failed. hard to deny them an entry,” says a
leaders in their respective categories. “Softbank takes a proactive senior executive at another VC firm.
It is also in talks to invest in approach to working with portfolio The message is loud and clear:
food delivery startup Swiggy companies. In Housing, they deployed Despite early setbacks, SoftBank will
and freight startup Rivigo. resources to help the company. From not balk at investing in India. In fact,
cash flow management to executive its India investments are now not just
N
ot only has SoftBank emerged hiring, Softbank’s operational staff whimsical bets. Instead, companies
as the go-to investor for big was involved in all aspects,” says like Flipkart, Ola and Paytm could be
startups, it is possibly one of Ritesh Banglani, a former Helion key pieces to its global machinations.
the few firms that can give VC funds in Venture Partners executive who co- For instance, Chinese ecommerce
India a much-needed exit, given that founded Stellaris Venture Partners. behemoth Alibaba, which has kept
public offerings are nowhere on the Sometimes, though, this approach Amazon at bay on its home turf, owns
horizon. It has made some progress on rattles investors and entrepreneurs. close to 40 percent in Paytm. Alibaba
that front already: SoftBank is slated Following its maneuvers in Snapdeal is arguably Son’s biggest success as
to buy a part of Accel Partners, IDG and Housing, which saw some of an investor. He had invested about
Ventures and Tiger Global’s stake $20 million in Alibaba at the dawn of
in Flipkart, increasing its holding the millennium. Its 25-percent stake
to about 20 percent, second only to in Alibaba is valued at about $140
Tiger Global’s about 23 percent. It billion. Consequently, SoftBank’s
also handed handsome returns to investments in Flipkart and Paytm can
SAIF Partners, which sold a part be construed as a move to strengthen
of its stake in Paytm to SoftBank the anti-Amazon alliance in India.
for about $300-400 million. In the years to come, a merger
Meanwhile, it tried to salvage some between Flipkart and Paytm to stave
of its investments, with moderate off Amazon cannot be ruled out.
success. After a futile move to merge Similarly, SoftBank has bought into
Housing with Snapdeal, the former all major ride-hailing startups across
was bought by its NewsCorp-backed the globe—Uber, Ola, Didi Chuxing
selvaPrakash lakshmaNaN
From drug
research and
biotech to
portable medical
devices and
environmentally-
sustainable
solutions,
innovation is
coming to the
Fore in multiple
areas oF deep
science. What
these ventures
need noW are
Funders to back
them all the Way
by HaricHandan arakali
New Lease
32 | forbes india february 2, 2018
A
t a recent competition organised by
India’s C-CAMP (Centre for Cellular
and Molecular Platforms), more than
1,500 entries vied for a shot at the
top few spots. C-CAMP, started in
2010, is a government-backed agency tasked with
promoting deep-science-based startups in India.
A four-month gruelling process threw up nine
finalists at the competition, called the National Bio
Entrepreneurship Competition, pitching before a
grand jury. Their ventures represented what can be
best described as India’s emerging ‘lifetech’ industry
—spanning biotech, drug discovery, agriculture,
medical devices and even environmentally-
sustainable alternatives to toilet soap.
At stake was a little bit of cash, including `1
million sponsored by Ankur Seeds, `300,000 from
Pfizer, and $15,000 in Amazon Web Services credits.
There was also the investment opportunity of up
to $100,000 from the Tata Trusts’ Foundation
for Innovation and Social Entrepreneurship.
The competition, as well as the large number and
quality of the entrants, was reflected in the innovative
ideas—a nanofibre membrane to carry bio-fertilisers, a
water-less cleanser for the soldiers of the Indian armed
forces, an automated neonatal early-warning system.
BY HaricHandan arakali
B
illionaire Kiran Mazumdar- Q Give us some context of that cost is the clinical development
Shaw’s Biocon Ltd recently India’s pharmaceuticals price. The rest of it is the pre-clinical
became the first company industry, leading to the development of the drug. The risk is
to have a biosimilar development of biosimilars… pretty high because you are spending
approved in the US for Roche’s drug India’s pharma sector has played a all this money and hoping that the data
Trastuzumab, which is marketed pretty important global leadership that comes out matches that from the
as Herceptin and used in treating role when it comes to generic drugs. tests conducted with the original drug.
certain breast and stomach cancers. This category is based on our huge This is an opportunity for us to
The biosimilar, to be sold under skill base in chemistry and synthetic be a differentiated pharmaceutical
the brand name Ogivri, brings chemistry. And we’ve leveraged that company because as an entrepreneur,
Biocon a step closer to building a to take us to where we are today. I’ve always believed that you should
truly original bio-drug, or ‘novel To put things in context, if you try and find a niche for yourself.
biologic’ as it’s called, for various want to develop a generic drug, it
markets. Biocon already has two takes about two years and about Q What’s the significance of
novel biologics—Nimotuzumab for $5 million. Basically, to show Biocon winning the US Food
treating head and neck cancer and equivalence to the drugs through Beba and Drug Administration’s
Itolizumab for treating psoriasis— (bioequivalence and bioavailability) (FDA) approval for
that it markets in India, says studies. This is the model that has Trastuzumab’s biosimilar?
Mazumdar-Shaw, 64, the company’s been successfully pursued by Indian It’s taken us almost a decade.
chairperson and managing director. pharma companies over the years. We started work on the biologic
From an earnings perspective, Then came the opportunity to [Roche’s Herceptin] in 2008 and
the bigger prize is to build biologics develop biosimilars, which are got the approval in 2017. We got
for America and Europe, and near-identical copies of biologics— the Indian approval in 2014, so
Biocon is working on a pipeline. large, complex molecules which are that was a six-year effort too.
It has also strengthened its impossible to identically copy. But a This was the first biosimilar
partnership with Mylan NV, biosimilar can do the same job as the for Herceptin approved by the US
which will market Ogivri in the US biologic drug. Therefore, the efficacy, FDA. It was a proud milestone for
starting 2019, when Roche’s patent safety and immunogenicity of such us because there are competitors,
on the original drug expires. drugs are important factors. They including Pfizer, Merck and Amgen,
Biocon will eventually rely require extensive clinical trials and with deeper pockets and more
on cutting-edge R&D to produce studies over hundreds of volunteer experience in developing and selling
high-risk, high-reward original patients, which is expensive. biologics, which says a lot about
molecules for multiple markets, Typically, a biosimilar drug can what our scientists have done.
Mazumdar-Shaw tells Forbes take upwards of $150 million to It’s recognition that India has
India in an interview. Excerpts: develop and about 80 percent of the skills to develop such complex
encouraged clinical
research and
only focussed on
clinical practice
kiran MazuMdar-SHaw
Interview
molecules. It puts India on the global combine two antibodies to make get early signals that tell us if a drug
map of biosimilars. And Biocon has a one, and the method of action is behaving the way it is supposed
pipeline of other biosimilars that are involves first attacking the tumour to. If predictive technologies can
nearing the finishing line. We are kind and then getting to the T-cells to say ‘yes the immunogenicity profile
of a lone ranger in India in this space. further attack and kill the tumour. of this drug is fine’, that shortens
Trastuzumab is a $6 billion So far, all the work has been done development time frames.
global opportunity; the US and in a pre-clinical environment and the
Europe between them are a $4 data looks promising. We’re going to Q In India, where are we in
billion opportunity. The World start human clinical trials next year. general in your industry,
Health Organization has now put including regulation?
this in its essential medicines lists. Q How’s Biocon changing and How many companies in India have
We also believe that we have a how do your products reflect that? developed novel small-molecule
development and manufacturing Biocon started with niche enzymes. drugs? None. So, unless Indian
advantage by developing the drug However, it was with the entry into companies start innovating novel
in India. The entry of generics leads biopharmaceuticals that we saw our drugs in the small molecules space,
to a discounting in the price, which revenues jump exponentially. In you aren’t going to see a huge
on the other hand expands the biopharmaceuticals, in the near-term, augmentation of regulatory skills.
market. Therefore, we are looking the big opportunity is going to be That said, it is improving, at least
at a large market opportunity. biosimilars. The biologics will take in the biopharma area; there are
We have [the biologics] some time to enter global markets. If decent skills but in small numbers.
pegfilgrastim, glargine and we’re going to start clinical trials for a What is happening in India is
bevacizumab in our pipeline. I biologic next year, it will take us three also because we haven’t encouraged
don’t think there’s a chance of years to complete those clinical trials. clinical research and only focussed
huge competition in the first four on clinical practice, there’s a dearth
to five years as there will be only of expert skills in evaluating new
a handful of players with the drugs—that’s the issue, it’s the
risk appetite and deep pockets to “In India, there’s whole clinical research ecosystem.
develop these kind of products.
a dearth of expert It’s all interconnected. Now
if you start having companies
Q Are you now better equipped skills in evaluating developing new drugs, you will
to push into original biologics? new drugs.” also start getting people.
The fact that we started our biologics Biocon is developing oral
business with novel biologics gave us insulin, for instance, which is
the confidence that we could address insulin administered as a tablet.
the biosimilars opportunity. We had Q How do you see the It will be the world’s first, if it
the capabilities and understanding interplay of biotechnology works. We have a large number of
of large molecules which made it with machine learning and diabetologists in India and diabetes
easier to make biosimilars. That quantum computing? is an area that is well understood.
said, Biocon’s business strategy There is a lot of overlap. Today, On the other hand, with cancer,
has always been about balancing drug research relies a lot more on where we don’t have adequate
biosimilars with novel biologics. information technology to accelerate. expertise to do some of the
We already had two novel Product characterisation, for instance, evaluations, we are likely to rely on
biologics in the Indian market, but is a long, cumbersome process and external advisors from the US and
didn’t have the deep pockets to needs highly skilled people. If one can Europe. Oncologists in India haven’t
take them overseas. Therefore, we tap AI and quantum computing, this really been involved in enough
almost confined ourselves to the can probably be done much faster. critical clinical research. We want
Indian market… but that’s helped Therefore, you are going to use Indian oncologists to become active
us to become big in biosimilars. the new technologies to shorten in this. For instance, in the novel
Now we have embarked on timelines. Even today, clinical trials biologics that Biocon developed,
developing a pipeline of interesting are done in a certain way, but there the doctors involved continue
novel biologics, which we will look might come a day when one might to be research oriented and take
at as a global opportunity. One is in have virtual models, and a lot of data an interest in the progress of the
the area of cancer again. These are points and findings can be acquired drug development. It’s an evolving
called ‘fusion antibodies’, which much faster. For instance, we can ecosystem, which needs to grow.
Budget 2018:
Prudence
or Populism?
Finance Minister Arun Jaitley will be walking a tightrope as the
government is expected to offer relief to the middle class and rural
economies, while managing fiscal deficit and boosting investments
P
olitics and economics are the two focus areas
that any government continuously juggles with,
especially since veering towards one often
means sidelining the other. Ensuring a fine balance
between the two isn’t the easiest job, even in the best
of times. And these definitely aren’t the best of times.
Recent political and economic that a sizeable chunk of the rural and be more nuanced in its populism
developments—including the election agrarian population voted against the when compared to the pre-election
results in Gujarat, and conflicting incumbent government. The reason, as budgets of the Congress-led United
macroeconomic indicators, such analysts later dissected, was attributed Progressive Alliance government.
as Gross Domestic Product and to distress in the farm economy. “UPA’s pre-election budgets were
manufacturing indices—highlight With elections in key BJP-ruled characterised by measures such as
the Herculean task ahead for states such as Rajasthan and Madhya hiking the minimum support price
Minister of Finance Arun Jaitley, Pradesh due in 2018, followed by the (MSP) for farmers’ produce, and other
as he gears up to present the Union next general elections in 2019, the subsidies,” he says. “But the present
Budget for 2018-19 on February 1. rural economy is widely expected to government is likely to be more subtle
The Gujarat election results be in focus in the Budget. It is almost in the manner in which it transfers
ensured that the Bharatiya Janata certain that Budget 2018, which could wealth and creates jobs in rural
Party (BJP) would form the well be the last full budget from the areas. This may be through increased
government for the sixth consecutive NDA-led government before the next allocation under the MGNREGA
term in the state. The victory, which general elections, will be a populist (Mahatma Gandhi National Rural
followed a pitched battle with a one. But the extent to which Jaitley Employment Guarantee Act) for
somewhat resurgent Opposition led can “balance populism with prudence” jobs involving the creation of rural
by the Congress, however, threw up will decide its success, says Harsh infrastructure, and budgetary support
crucial trends that could shape the Goenka, chairman, RPG Enterprises. for irrigation facilities, rural roads,
contours of Budget 2018. The BJP won Suvodeep Rakshit, senior bridges and housing.” The overall
the election by a narrower margin economist at Kotak Institutional allocation for rural development
than in 2012, and it became clear Equities, expects the Budget to could be 20-25 percent higher than
last year, adds Rakshit; in Budget schemes through which there will and stick to its articulated fiscal
2017, this figure was `1.87 lakh crore. be more income in the hands of deficit target has been commendable,
Harsh Mariwala, chairman of the farmers.” He didn’t rule out economists agree that there may
consumer goods maker Marico, is the possibility of the government still be a marginal slippage.
also hopeful that the government increasing MSP to help small farmers. Jaitley has previously articulated
will not use doles to stimulate the “I believe the Budget should focus the government’s commitment to
rural economy and create jobs. on attracting investments, greater reduce fiscal deficit to 3.24 percent
“They should boost the rural productivity and job creation,” says of GDP by the end of FY18, and to 3
Sonu MehtA / hinduStAn tiMeS viA getty iMAgeS
economy through investments in Kiran Mazumdar-Shaw, chairperson percent by the end of FY19. Ranade
improving productivity, supply and managing director of Biocon. and Rakshit expect the fiscal deficit
chain linkages, and irrigation; “Measures for the agricultural for FY18 to be around 3.5 percent,
not by hiking MSP,” he says. sector need to be balanced with given that the government’s revenue
“The Budget will also focus on incentives for corporate India.” (both tax and non-tax) has been
rural housing as this segment has a Industry leaders and analysts agree below expectations, owing to falling
multiplier effect. It spurs demand for that direct financial assistance (such tax collection under heads like GST,
housing material and construction, as increased MSP) to the farm sector, as well as lower-than-expected
and also boosts consumption,” says while politically enticing, may not be dividends from the Reserve Bank
Ajit Ranade, president and chief the best option, given India’s fiscal of India (RBI). All of this means the
economist at Aditya Birla Group. “I deficit. Although the government’s government has very little elbow
expect the government to announce efforts to maintain fiscal prudence room to dole out largesse to its
electoral constituents, mainly the led to estimates that India’s GDP jobs) only when existing capacity
farm sector and India’s middle class. will grow at its slowest pace in the utilisation inches above 75 percent (it
There are other factors to last four years, with the Central is around 71 percent at present). This
consider as well. The full impact of Statistics Office estimating GDP is one of the reasons that new capex
demonetisation, implemented in growth in 2017-18 to be 6.5 percent, announced by Indian companies in
November 2016, was felt in 2017. As down from 7.1 percent in 2016-17. December 2017, worth `77,000 crore
liquidity dried up in the system, it led One of the key economic was at its lowest level in 13 years.
to obvious challenges for individual statistics that the government Capacity utilisation will rise with
citizens, while trade channels will take heart from is the Nikkei increased demand and consumption.
found it difficult to continue normal India Manufacturing Purchasing The expectation is that to bring some
operations. However, as the BJP’s Managers’ Index (PMI), which relief to the middle class (which bore
victory in the March 2017 Uttar reached its highest level in five the brunt of demonetisation) and to
Pradesh elections demonstrated, years in December 2017, indicating raise their disposable income (to boost
demonetisation had its supporters. a revival in manufacturing activity consumption), the government could
Then there was the Goods and through new domestic and export increase tax exemption limits for
Services Tax (GST), implemented orders. But Goenka says the industry salaried individuals. To compensate
from July 1, which seeks to create a will plan new capital expenditure for the consequent revenue loss, the
seamless market in the country by projects (that will lead to new government is widely anticipated
making the flow of goods and services
easier and more transparent. But
Anindito MukherJee / reuterS
F
or a little over four months,
Suresh Prabhu has been
working round the clock,
meeting India’s corporate
doyen, to chart out a path for the
sinking manufacturing sector. The
commerce and industry minister,
who took charge last September,
has had an eventful few months:
India’s exports grew by a record
30 percent in November, he flew
to Buenos Aires and stood firm
by India’s demands at the inter-
ministerial talks of the World Trade
Organization. His ministry is now in
the process of identifying between
six and seven new sectors to boost
manufacturing over the next decade.
PM Narendra Modi had set out an
ambitious manufacturing programme
in 2015, looking to improve the share
of manufacturing in India’s GDP to
25 percent by 2025 from the current
17 percent. In an interview to Forbes
India, Prabhu spoke about what 2018
looks like for India and his attempt
at reviving the manufacturing and
export sectors. Edited excerpts:
Staying
the Distance
It is imperative for the finance minister to stick to
fiscal deficit targets, revive the rural economy and
fuel fast-paced growth with green energy sources BY sumant sinha
S
ince assuming office in for long-term economic growth and The finance minister should
2014, the Narendra Modi- improve investments. Solving the issue consider reducing the corporate tax
led government has been of stressed assets will revive bank to encourage investments by both
working hard to bring the lending, while facilitating job creation. domestic and international companies
economy on an even keel. Fiscal in India. In his 2015-16 Budget, the FM
deficit and inflation have been Reviving pRivate investment had promised to reduce the corporate
tamed, and the country’s foreign Industry expects the government tax rate to 25 percent in four years.
exchange reserves have swelled. to bring down corporate taxes to The rate must come down for India to
Further, the rollout of the Goods make India an even more attractive stay competitive in the global market.
and Services Tax (GST) promises destination for investment. Recently, There is an urgent need to push
to pave the way for an economy the US Congress approved an overhaul infrastructure development by
with fewer barriers for business. of the US tax code, slashing the boosting public expenditure and
The world has taken notice of corporate tax rate to 21 percent from encouraging private investment.
the efforts—India has climbed 30 35 percent. This is expected to make To get capital flowing into an ailing
places to rank 100 in the World investments in the US more attractive, manufacturing sector, the government
Bank’s Ease of Doing Business Index and have an impact on emerging must look at incentivising private
for 2018, FDI inflows have touched market economies like India. investors, especially in the Micro,
a record $118 billion in the period
from 2015-17 and Moody’s has
upgraded India’s investment rating.
Fiscal discipline
To continue in this growth lane, more
has to be done. We hope that in the
upcoming Budget, the government
will maintain the current fiscal
discipline and check borrowings.
The recently-announced additional
borrowing of `50,000 crore suggests
that fiscal deficit targets are likely
to be missed. Caution needs to
be maintained to ensure that
growth momentum is not lost and
inflation remains under control.
The GST regime has been in
place for around six months and
its contours should be finalised.
The GST refund backlog has the renewable energy
sector will hope for
touched an unhealthy `60,000- an impetus to achieve
70,000 crore, according to CII. the ambitious target
of generating 175 gW
Additionally, privatisation of the by 2022
banking sector could pave the way
T
he Union Budget 2018 will tax incentives and exemptions, and the recommendations of the
be presented at a time when dropping of surcharges and cesses. Kelkar Committee on revisiting
the economy is on the cusp Further, MAT should be abolished or and revitalising the PPP model
of a recovery. The focus will brought down to 10 percent. The DDT of infrastructure development.
be on how that can be strengthened rate too should be brought down to Further, the government should
so as to have an impact on the lives 10 percent. This will send a powerful award projects to the private
of people. Finance Minister Arun message to the Indian industry and sector only after securing key
Jaitley will likely pay attention to global investors that India is an sovereign clearances with proper
issues such as rejuvenation of the rural attractive investment destination. interventions to ease norms in land,
economy, acceleration in building In infrastructure, public spending labour and environment, especially
infrastructure and generation of needs to be stepped up in sectors for big infrastructure projects.
quality jobs in manufacturing. This is such as roads, rail, waterways. A Given the constraints on land
also the first budget to be presented critical push is also required in public availability, the CII has suggested
in the Goods and Services Tax (GST) housing projects in industrial clusters that a ‘Land Bank Corporation’ be
era, thus ruling out any changes in and agri-infrastructure areas such as set up to make available surplus
excise and service tax rates. Reforms
in direct tax laws, however, are
on the cards and those would give
further impetus to the economy. With MAT and dividend distribution tax (DDT),
The Indian corporate sector
needs to be globally competitive
the tax burden on the Indian corporate sector
for which tax rates need to be on a is one of the highest in the world
par with other countries. With the
minimum alternate tax (MAT) and
dividend distribution tax (DDT), the irrigation, cold storage, warehousing, land owned by the government.
tax burden on the Indian corporate rural roads, to raise farmers’ income. Multiple public entities like the
sector is one of the highest in the In order to raise funds, we have railways, army and airport authority,
world. The US has announced a suggested that the government hold vast parcels of public land
reduction of corporate tax rate to 20 speed up the formulation of its asset in prime urban spaces which are
percent with effect from 2019. The recycling policy and identify public often underutilised. There should
UK plans to reduce the current rate utilities and infra projects either be a publicly accessible inventory
of 20 percent to 17 percent from April for outright sale or for giving out of such land, which the industry
2020. Singapore applies a tax rate operation and maintenance contracts can access if it wishes to invest.
of 17 percent. Emerging economies to specialised private sector firms. The power sector is seeing a lot
too have lower tax incidence. There is an urgent need to renew of stress. While a lot of capacity has
The Confederation of Indian the focus on revitalising public private been created in generating power,
Industry (CII) has recommended a partnerships (PPPs). An effective some of these are stranded assets as
reduction in the corporate tax rate dispute resolution mechanism needs distribution companies are not buying
to 18 percent with withdrawal of to be put in place by implementing power from them. In this context, the
CII suggests the creation of a ‘National agriculture, much like the empowered be set for improving India’s rank in
Power Distribution Company’ which committee of state finance ministers, the human development index to
will buy power from the generating which made GST possible. within 50 from the current 131.
companies when the state utilities India needs to invest in human Creating quality jobs must be a
are not able to do so. This will create development to best leverage its near-term objective. The Budget
a unified market for power in much demographic dividend. Public could offer incentives for employment
the same way that GST has created a spending on education is currently generation and a pilot scheme for
single market for goods and services. 3.2 percent of GDP and needs to be universal basic income for poor
The rural sector needs to be gradually raised to 6 percent. In health households may be undertaken.
rejuvenated by injecting more care, the current spending is just 1.5 Employment generation would also
dynamism in both agricultural and percent of GDP; it should go up to flourish if coastal economic zones are
non-agricultural activity. A target the stated target of 2.5 percent by created with incentives to create jobs.
has been set for doubling farmers’ 2022. In education, we need to boost Although GST is no longer a budget
incomes. To achieve this, it is technology usage in schools and a fund issue, the CII hopes that the finance
from lefT: HarsHa VadlamanI; danIsH sIddIquI / reuTers
important to set up post-harvest could be allocated for teacher training. minister will highlight the need to
infrastructure, including warehousing Merit scholarships for secondary move to a simpler structure with
and cold storages at the district education would lower dropout rates. three rates and inclusion of more
level, and lease to the private sector, In health care, the private sector items to ensure free flow of credit
including food processors and large should be encouraged to partner for through the supply chain. Once there
buyers. Current contract farming universal health care and states must is stability in the tax rates and more
laws need to be amended to allow be allowed to go for PPP in district items are included, there should be
leasing of farm land on contracts to hospitals. Infrastructure status an increase in the tax-GDP ratio.
corporates and large growers without may be given to private hospitals. A Higher revenues should be used
transfer of titles to reap the benefits special fund can be created for remote judiciously on productivity-enhancing
of large-scale scientific farming. The and digital health care facilities in measures rather than subsidies and
CII has suggested the creation of an rural areas. Special attention must giveaways. The industry looks forward
empowered group of state agriculture be given to the development of 100 to another path-breaking budget.
ministers to implement reforms in backward districts. A target should The writer is president, CII
High on Hope
From banking to aerospace, every sector is buoyant with expectations from the
upcoming Budget. As February 1 looms, hope springs eternal
1. ECOMMERCE Challenges ecommerce transactions.
The size of the Indian ecommerce • Large number of consumers, • There is lack of clarity on tax
market is estimated to touch $40 especially in rural areas, cannot access treatment of cash-back schemes, gift
billion in 2018. Good policy and fiscal digital transactions. coupons and vouchers.
support, especially around GST, can • Logistics account for 2-10 percent of • While the law mandates passing
catalyse growth in the sector. the cost of ecommerce. on benefits that businesses accrue
• FDI policy for sector is still evolving. from GST to end-consumers (anti-
200
200 • There are grey areas around profiteering), there is no clarity on the
characterisation of ecommerce methodology to be followed.
EcommErcE transactions for tax treatment,
Market size ($ bln)
150
markEt
($ bln)
especially for foreign players. Expectations from Budget 2018
• GST has resulted in additional • Incentivise cashless transactions.
100
compliance requirements. • Reduce logistical costs by slashing
• Working capital has been choked GST on tyres.
64
due to additional GST on stock • Incentivise technology and sourcing
50 38.5
transfers. agreements between kirana stores
20
• The Composition Scheme—wherein and foreign ecommerce players.
0 taxpayers can get rid of tedious • Bring clarity on how ecommerce
2015 2017 2020P 2026P
formalities and pay GST at a fixed transactions should be treated
Source: IBEF, Deloitte rate of turnover—is not available for under GST.
10%
higher prices. measures for ease of doing business,
• There is a dearth of skilled including those related to return-
workers at the management and filing timelines, their revisions
operational levels. and relaxation of non-compliance
• Despite several relaxations in FDI penalties would be welcome.
policy, multiple regulatory bodies are • Technology and sourcing
ExpEctEd cAGR of thE
slowing decisions. collaboration agreements between REtAil sEctoR. in 2017,
• Kirana store owners perceive foreign small players and foreign investors consumER AppliAncEs
players as a threat to their livelihood. must be created to promote trust and
toppEd thE itEms tRAdEd
Deep discounting by e-tailers has bred avoid oligarchy.
on thE REtAil plAtfoRm.
insecurity among them. • Simplification of compliance
traffic is increasing the pressure on saturation. for technical and service staff so that
existing airports. • There is no roadmap for safety they can play their roles to perfection.
421 enhancement, airport capacity • Set up centres to develop
facilities is responsible for India’s spends, which will be phased out after
large defence imports. March 31, 2020, should be extended
• Offset credit can be claimed by by five years.
foreign defence companies only for • The 15 percent tax deduction for
43% And 2012-16. indiA’s dEfEncE budGEt bEcAmE thE fifth lARGEst
GlobAlly in 2016, movinG up fRom thE sEvEnth position in 2015;
it is ExpEctEd to bE thE thiRd lARGEst in 2018.
monitoring and various health care programmes feasible. under section 80D may be enhanced
to `40,000 for individuals and `50,000
Challenges •Penetration of health insurance for senior citizens.
• In 2017-18, government spending schemes remains low. • Tax exemption on preventive
on health care was a dismal 1 percent health checkup under section 80D
of GDP, compared with 7-12 percent Expectations from Budget 2018 should be raised to `20,000 from
in many developing countries. • Health care services should continue the current `5,000.
• Malnutrition, air pollution, to be exempt from taxes under GST. • Weighted deduction available under
contaminated water and lack of • High taxes (12-18 percent) levied section 35AD to a taxpayer engaged in
sanitation remain some of the on inputs such as consumables and building and operating a hospital must
leading risk factors. medical equipment must be reduced. be restored to 150 percent (currently
• The National Nutrition Mission • The government must enhance 100 percent) to reduce cost burden on
needs more funds. the limit of non-taxable medical patients.
• Health care has to be made more reimbursement to at least `50,000. • Liberalise provisions of section
affordable and equitable with price • For taxation, pro-rata deduction of 35AD to include new hospitals with
controls on medical devices. single premium paid in a year should less than 100 beds.
critical partners for providing safe and low-cost medications. payment to doctors should be
available for tax deduction.
Challenges manufacture of active pharmaceutical
• Local innovation is discouraged. ingredients.
Indian pharmaceuticals market is
• There must be more government
expected to grow at 18% up to
focus on chronic diseases such as Expectations from Budget 2018
fy21, driven by both domestic
diabetes and cardiovascular ailments, • Concessional tax rates for patent
and export growth
including tax incentives for patients. royalties received from overseas.
• Promote cutting edge R&D to help • Concessional tax rate on royalty
By 2021, the domestic mar-
Indian players transition from pure- must be extended to include know-
ket will cross `1.8 lakh crore,
play generic companies to branded how, copyrights and trademarks.
growing at over 21%. The export
pharma firms. • Tax deductions for expenditures
market will grow at a slower
• Financial and non-financial incurred on marketing and
pace of 15% to reach
incentives are needed to increase protection of patents.
`2.2 lakh crore
Indian companies’ presence in the • Concessional tax for successors of
• The central government plans to • Scale-up high-speed train network. meet target of 100 percent vehicle
build 83,677 kilometres of roads over • A large commitment by Indian electrification by 2030.
five years by spending `7 lakh crore, Railways for development of stations.
the bulk of which will have to be • Public listing of Ircon, IRFC and
ratE of road
borne by the government. IRCTC to unlock value for Indian construction
• Most Indian cities are not equipped Railways.
to provide sustainable transportation • Measures to develop a seamless
and the second largest refiner in Asia. The fortunes of this sector are strongly for infrastructure and energy
linked to the development of infrastructure. companies.
5
Challenges Expectations from Budget 2018
4
• Mining sector carries the risk of • The promised reduction of corporate
non-productive mines where tax rate from 30 percent to 25 percent
(mln bpod)
• Given the PM’s vision of reducing Tax (MAT): While the I-T Act has 0
fY fY fY fY fY fY fY fY fY fY
import dependence for energy needs, moved from profit-linked incentives 08 09 10 11 12 13 14 15 16 17
there must be more private players in to investment-linked incentives, its crude Production crude import
oil and gas exploration. benefits can be enjoyed only if MAT Source: PPAC & DGH
profit for exploration and production brought under GST to enable free
(E&P) is a significant deterrent for flow of credit and avoid cascading
overall investment. of taxes.
Financial Service Centres (IFSC) are • Provide blanket TDS exemption for
provided with a MAT rate of 9 percent; Expectation from Budget 2018 payments to banks.
this is not globally competitive (Dubai •NBFCs must be treated at a par with • Abolish MAT for units in IFSCs and
0 percent, Malaysia 3 percent). banks for tax provisions. increase tax holidays.
52.6
50.9
50.3
51.5
51.2
51.2
50.7
50.4
about 25-30 percent of the GDP, providing 90 million jobs. With its geographic
47.9
50 advantage and huge labour pool, India can be a global manufacturing hub.
40
Challenges Expectations from Budget 2018
30
• Stronger consumerism in the • Relaxation in tax compliance and
domestic market and sustained fast track settlement of long-pending
20 availability of high-skilled, low-cost tax cases.
manpower is needed. • Matters decided by courts or
Meg WhiTMAn
CEO • HP • US
no 1: angela merkel
13
AngelA AhrendTs
who’s in charge? fourteen years ago, we defined what it means to be a power Senior VP, retail • Apple • US
woman: Economic might, a wide sphere of influence and high-octane impact. This year’s 14
lineup includes the icons you know on a first-name basis: Angela, Melinda, Oprah, Beyonce. lAurene PoWell jobs
Founder • Emerson Collective
But we’re introducing a brand-new generation of heads of state, CEOs, founders, visionaries • US
and leaders. A full quarter are newcomers to the global stage—women who are building
15
billion-dollar brands, moving markets and criss-crossing the globe on humanitarian missions. TsAi ing-Wen
Together they govern or directly influence more than 3 billion people and $51 trillion in President • Taiwan
GDP and revenue, and have a personal net worth of over $97 billion 16
Michelle bAcheleT
President • Chile
EditEd by dorothy PomErantz & Samantha Shaddock with carolinE howard
h new to the list
22 28
MArillyn heWson ho ching
CEO • Lockheed Martin • US CEO • Temasek • Singapore
OprAh Winfrey: geTTy iMAges; indrA nOOyi: MOnicA schipper / geTTy iMAges; chAndA kOchhAr: VikAs khOT
29 38
eMMA WAlMsley h jAcindA Ardern h
CEO • GlaxoSmithKline • UK Prime minister • New Zealand
30 39
sheikh hAsinA WAjed kolindA grAbAr-kiTAroviĆ
Prime minister • Bangladesh President • Croatia
31
beATA MAriA szydlo h
Prime minister • Poland
32
chAndA kochhAr
CEO • ICICI Bank • India
33
Aung sAn suu kyi
State counsellor • Myanmar
34
lucy Peng
Executive chair • Ant Financial
Services • China
35
PollyAnnA chu
CEO • Kingston Financial Group
• Hong Kong no 32: chanda kochhar
36
sheikhA lubnA Al QAsiMi
Minister of state for tolerance
• UAE
37
AMy hood
CFO • Microsoft • US
h new to the list
Peng liyuAn
First lady • China
52
MArgAriTA siMonyAn h
Editor-in-chief • Rt • Russia
53
MAry cAllAhAn erdoes
CEO, asset management
• JPMorgan • US
54
zhou QunFei
Founder • Lens Technology
no 65: hillary clinton
• Hong Kong
55
nguyen Thi Phuong ThAo
Co-founder • Sovico Holdings
• Vietnam
56
lisA dAvis h
CEO • Siemens USA • US
57
roshni nAdAr MAlhoTrA h
CEO • HCL Technologies • India
58
no 57: roshni nadar malhotra güler sAbAnci
Chair • Sabanci Holding • Turkey
40
jeAn liu h 59
President • Didi Chuxing • China lubnA olAyAn
CEO • Olayan Financing • Saudi
41 Arabia
bonnie hAMMer
Chair • NBCUniversal Cable 60
Entertainment • US dAnA WAlden
CEO • Fox Television Group • US
42
nicolA sTurgeon 61
First minister, Scotland • UK kAThArine viner
Editor-in-chief • Guardian • UK
h new to the list
62 70 78 83
WAng Feng ying gWynne shoTWell kersTi kAljulAid h geishA WilliAMs h
CEO • Great Wall Motor Co COO • SpaceX • US President • Estonia CEO • PG&E • US
• China
71 79 84
63 kirAn MAzuMdAr-shAW AriAnnA huFFingTon MAry Meeker
donnA lAngley Founder • Biocon • India Founder • Huffington Post • US General partner • Kleiner Perkins
Chair • Universal Pictures • UK Caufield & Byers • US
72 80
64 zAnny MinTon beddoes judy FAulkner 85
MAriAnne lAke h Editor-in-chief • the economist Founder • Epic Systems • US TAylor sWiFT
CFO • JPMorgan Chase • UK • UK Musician • US
81
65 73 FAbiolA giAnoTTi 86
hillAry clinTon MiucciA PrAdA Director-general • CERN • Italy
PATriciA hArris
Former presidential candidate Co-CEO • Prada • Italy CEO • Bloomberg Philanthropies
• US 82
lynn good • US
74
66 CEO • Duke Energy • US
isAbel dos sAnTos h 87
Mingzhu dong Business tycoon • Angola
Chair • Gree Electric Appliances dreW gilPin FAusT
• China President • Harvard University
75 • US
solinA chAu
67
MelAnie kreis h Co-founder • Horizons Ventures 88
CFO • Deutsche Post • Germany • Hong Kong jk roWling
Author • UK
68 76
dAliA grybAuskAiTe lAM WAi ying h 89
President • Lithuania Chair • Biel Crystal Manufactory elizA MAnninghAM-buller
• Hong Kong Chair • Wellcome Trust • UK
69
PriscillA chAn h 77 90
Co-founder • Chan Zuckerberg kAThleen kennedy h rAjA eAsA Al gurg
Initiative • US President • Lucasfilm • US Managing director • Easa Saleh
Al Gurg Group • UAE
91
no 92: Shobhana bhartia
debrA cAFAro
shObhAnA bhArTiA: AMiT VerMA; kirAn MAzuMdAr-shAW: bMAxiMAge; priyAnkA chOprA: MAriO AnzuOni / reuTers
CEO • Ventas • US
92
no 71: kiran mazumdar-Shaw
shobhAnA bhArTiA
Chair • HT Media • India
93
lee boo-jin
CEO • Hotel Shilla • South Korea
94
jenny lee
Managing partner • GGV Capital
• Singapore
95
kirsTen green h
Founder • Forerunner Ventures
• US
96
belindA johnson h
Chief business affairs and legal
officer • Airbnb • US
97
PriyAnkA choPrA h
no 97: Priyanka chopra Actor • India
98
kAThryn PeTrAliA h
Co-founder • Kabbage • US
99
Anne FinucAne h
Vice chair • Bank of America
• US
100
beTh brooke-MArciniAk
Global vice chair • EY • US
h new to the list
moovit
By alan ohnsman
L
ike most suburbanites, the world’s most downloaded transit includes more than 500 million
Janice Monkowski, a app. In just five years, it has racked data points generated daily.
piano teacher who lives up 100 million users—roughly the Now Moovit must prove it can
in Danville, California, same number as Waze, which Google convert that data into cash. The
some 30 miles east of San Francisco, bought for $1.1 billion in 2013. company says it is just now turning
gets around mainly by car. For Moovit is available in 44 languages to monetisation and won’t disclose
much of her life, public transit and 78 countries, and commuters revenue, which remains negligible,
was not even an afterthought. in 1,500 cities, from Lexington, according to Forbes estimates.
That changed recently when Mon Kentucky, to London, Moscow and But Erez and his investors say it
kowski, a selfdescribed technophobe, Hanoi, rely on it to get to and from won’t be hard to ramp up sales, and
discovered Moovit. When she goes to work. In Los Angeles, 40 percent of they believe the company is in the
San Francisco to meet friends or catch its users access it in Spanish. In 2016, right place at the right time. Cities
the symphony with her husband, the Moovit became the official transit everywhere are battling congestion
smartphone app lets her plan bus app for the Summer Olympics in Rio and pollution. This has fuelled a
and train trips down to the minute. de Janeiro, beating out Apple and frenzy around the concept of “smart
“Moovit tells me where to walk and Google, according to the company. cities”, a somewhat amorphous idea
how long it might take to catch a bus When public transit doesn’t get a that data from all forms of sensors,
to get to the train station,” Monkowski user all the way to her destination, along with Artificial Intelligence and
says. “It had probably been 10 or 15 Moovit may connect her to bikeshare cloudconnected technologies, will
years since I’d ridden a transit bus.” programmes or services like Uber. help manage increasingly complex
In exchange for the free service, Moovit’s popularity has helped it urban systems. Moovit’s plan is
Monkowski lets Moovit track her attract a string of marquee investors. to feed cities’ appetite for transit
trips. Much like the navigation app The company, which launched with data. “Urban mobility is a global
Waze, which follows its users on the $500,000 from Erez, has raised concern,” says Sequoia partner Gili
road to determine optimal driving nearly $84 million from the likes of Raanan, adding that Moovit’s transit
routes, Moovit aggregates Monkow Sequoia Capital, Ashton Kutcher’s data could “dramatically improve
ski’s location data with that of other Sound Ventures and BMW i the quality of life of our cities.”
nearby users to predict the most Ventures. Its valuation reached $450 Buenos Aires and Madrid have
efficient publictransit trip between million, according to PitchBook. signed up to be early customers
two locations. “Transit users have an The investors have been lured by of Moovit’s Smart Transit Suite,
even bigger problem than drivers,” the potential to monetise Moovit’s a data portal with precise, real
says Nir Erez, a 52yearold Israeli realtime transit information, which time information on bus and train
serial entrepreneur who cofounded locations and usage, passenger wait
Moovit in 2012. Most commuters times, optimal routes and more.
don’t know when a bus might arrive— “They have very granular data as
let alone how it might connect with Moovit is the world’s to how people move around cities,”
another transit service—or when most downloaded says Andreas Mai, an executive
walking or bicycling might be faster, vice president for Keolis, a French
Erez says, speaking from his home in transit app; it has transportationmanagement company
Tel Aviv: “Information is usually bad.” 100 million users that works with transit services
So bad that Moovit has become around the world. Keolis has invested
in Moovit and will incorporate its stops into a database he had built. as San Francisco, Athens and Rio,
data in pilot programmes in certain He also tapped into transitbus GPS Erez and Bick are convinced they
cities that Mai wouldn’t identify. information to turn his database into can help cities be more efficient in
Moovit began taking shape in 2011, a realtime routeplanning website. myriad ways. If demand surges on
when Erez had just left a startup Bick’s work clearly had the a specific route, for example, Moo
he’d cofounded and was training potential to be useful well beyond vit could suggest deploying more
for a marathon. He had planned Tel Aviv. And Erez, who had buses to serve it. “We look at the
on a leisurely semiretirement of considered investing in Waze—also demand and the actual movement
investing a bit in earlystage startups founded in Israel—understood information, then look at the system
and competing in triathlons. But on that crowdsourced location data infrastructure, all the routes and the
long training runs around Tel Aviv, flowing from users’ smartphones timetables to understand whether
his friend Yaron Evron kept talking could provide the basis for creating it’s optimised or not,” says Bick,
about a website he’d made for the comprehensive transittrip planners 37. Cities spend millions of dollars
local transit authority with a young everywhere. Erez, Bick and Evron to survey residents about their use
computer scientist named Roy Bick. founded Moovit the following of public transit, and Moovit can
An avowed transit nerd, Bick year, with Erez becoming CEO and provide better, more uptodate
had taken it upon himself to help Bick overseeing operations. Evron information at a lower cost, he adds.
Ronen Goldman foR foRbes
local commuters. Tel Aviv had never took a formal role. “I had Best of all: It’s all built one data point
recently reconfigured its bus system a nice sevenmonth retirement, at a time by people like Monkowski.
to accommodate a new rail line, and then it was back to work in “When I go to San Francisco, I don’t
changing routes and stops to feed another startup,” Erez says. want to drive,” she says, noting the
more riders onto trains. Public As Moovit has grown to 100 city’s “terrible” parking and traffic.
information about new locations was employees, with headquarters near Moovit has given her another
poor. So Bick walked the city to log Tel Aviv and offices in cities such option: “It’s very simple.”
ErMEnEgildo ZEgna
‘I See a Different
Confidence In Luxury’
Zegna CEO Ermenegildo Zegna on the Indian market, personalisation
in the age of casualisation, and balancing luxury and digital
BY Monica Bathija
L
uxury brand Ermenegildo couple of years to make it happen,
Zegna, which began as a and to turn back to growth.
small woolen mill in Trivero, We recently changed our artistic
Italy, in 1910, is today director (and brought in Alessandro
probably the biggest luxury menswear Sartori). I think with him I brought
brand with 500-odd stores across the a kind of rejuvenation, which
world. After a year of falling sales in goes exactly in this direction of
2016, the company has been getting casualisation, which can be intriguing,
back to growth. In 1991, it became also for a millennial. There is a lot of
the first luxury goods company to talk about millennials, there are some
expand into China and, 10 years ago, luxury brands that have declared
it entered the Indian market, long that 50 percent of business will be
before other luxury brands. CEO [accounted for by] millennials, which
Ermenegildo Zegna, 62—grandson of is huge, not necessarily in our case, but
the original Ermenegildo—who was in we cannot disregard this phenomenon.
the country recently, spoke to Forbes One of our biggest markets is
India about how the brand has been China and I think the Chinese and
transforming itself in the age of digital millennials, and digital, are three
and of millennials, how the lessons important ingredients that have to be
he learnt when he worked in retail at taken seriously and our new brand
Bloomingdale’s in New York in the strategy looks in that direction as well.
’70s still hold true and how they are And you have to cater to your loyal
in for the long haul in India. Edited customer, because a few percentage
excerpts from the conversation: points of clients make a big chunk
of our turnover, so you have to keep
Q How did Zegna succeed in those loyal customers happy.
arresting 2016’s trend of falling Travel today is becoming an
sales? What are the recent extremely important part of the
changes at the company? equation so you have to create a
I think we were known as a clothing travel wardrobe—items that are good
company; today we are called a for travel at the same time keeping
lifestyle brand where, with a the high quality associated with our
change of lifestyle, men’s fashion brand. On the other side, you also
is becoming more casual, more need to do more fashion items. Sartori
accessories driven, more digital. All has created this collection, part of our
these important features have to be couture collection, which is millennial,
met by any brand, including ours. celebrity-driven, which is more than
So I’ve been working in the last casual wear… very, very stylish. So
Vikas khot
Interview
Air DeccAn
Back in
the Skies
With smaller aircraft and strategic tie-ups,
Air Deccan’s Captain GR Gopinath
is having another go at commercial
aviation. Will he be second time lucky?
BY Anshul DhAmijA
Bandeep Singh / The india Today group / geTTy imageS
Gopinath, however, managed concessions on electricity, water and a twin-engine fixed-wing turboprop
to retain the name Air Deccan by other utilities at regional airports. aircraft. By 2007, the airline was
registering for it soon after Mallya Designated RCS routes are offered flying to 70 destinations in India
rebranded it as Kingfisher Red. to airlines through a formal bidding and operated a dual fleet of over 45
Even though he had no intention of process, whereby the airline that aircraft consisting of the 180-seater
relaunching the airline at the time shows the lowest cost of operating a jetliner Airbus 320 and the smaller
considering he had signed a six-year flight on a particular route wins the ATR, which flew on regional routes.
non-compete agreement with Mallya, bid. The airline gets exclusivity on Says Gopinath, “Between 2003 and
he wanted the brand back. “It [Air the route for three years and is given 2007, almost all the routes that
Deccan] was a brand he [Mallya] a government subsidy as well. The have now come under Udan were
had abandoned and which he did first round of bidding for 128 RCS flown by Air Deccan. For example,
not renew. He had no interest in it,” routes took place in March last year, we had flights to Bellary, Mysore,
says Gopinath. “He felt Kingfisher and Air Deccan won 34 of the routes. Vijaywada, Belgaum, Kolhapur,
was a brand that was powerful “I as an entrepreneur am an Gwalior, Kanpur, Rajahmundry, and
[given its dominance in the beer optimist. Optimism is the essence of Kullu, among other destinations.”
market]. So by changing Air Deccan entrepreneurship,” Gopinath tells Gopinath’s model back then was
to Kingfisher he imagined he could Forbes India in a telephonic interview that Air Deccan’s ATRs would act as
get a better price per seat. That was of his re-entry into commercial feeders—bringing people from tier
his notion without realising that Air aviation. At 66, Gopinath says he is 2 cities to the metros—to its larger
Deccan stood for something else. making one final attempt to make it A320s which flew on the major
When he abandoned it, I registered big in India’s aviation market, which trunk routes. And, of course, the
for it [with Office of the Registrar has been growing between 15 and LCC concept of low airfares. His aim
of Trade Marks] some time back.” 20 percent in terms of passenger was to fill every seat in an aircraft.
The Deccan brand, meanwhile, traffic over the last three years. “When I started Air Deccan, the
continued to exist through Deccan average occupancy of airlines was
Charters, Gopinath’s air-charter only 55 percent,” says Gopinath.
and aircraft maintenance company,
which he started in 1997 and which
Air Deccan has won Reason: Prohibitively high ticket
prices. Gopinath recalls that in
Air Deccan is now part of. In 2009, the bids for 34 routes 2002, a Bengaluru to Delhi one-
he started a cargo airline Deccan under the Regional way ticket sold for `12,500. “If the
360, which wound up in two years. A seat was empty, the airline would
graduate from the National Defence Connectivity Scheme let it be empty because there was
Academy at Pune and from the Indian a class barrier there.” That class
Military Academy in Dehradun, barrier is what Air Deccan broke.
Gopinath also unsuccessfully “Gopinath’s return to regional Today, the landscape has changed
contested the 2009 general election operations should be welcomed as with several other LCCs like SpiceJet
as an independent candidate from he comes with the experience of and IndiGo. And now, the cheapest
the South Bengaluru constituency. having run an airline,” says Jitender one-way Bengaluru-Delhi air ticket
Until regional air connectivity to Bhargava, former executive director, costs between `4,300 and `5,800.
India’s tier 2 and 3 cities driven by Air India. “His [Gopinath’s] earlier In its second outing, Air Deccan
the Union government’s Regional stint is bound to have taught him continues to be an LCC and
Connectivity Scheme (RCS) once what not to do, and also to not be Gopinath’s penchant for offering
again brought him back into the over-ambitious,” he adds. Gopinath `1 fares to entice travellers, also
country’s commercial aviation arena. clearly knows his mistakes as he continues. However, considering the
Through RCS, more commonly says, “I scaled up very fast and that airline is only serving RCS routes—
known as Udan (Ude Desh ka Aam had its own kind of pressures like flights to tier 2 and 3 cities where
Naagrik), the government is seeking to cash burn.” This time, he adds, “We airport infrastructure is not great—and
make flying affordable for the masses. will grow in a steady manner.” not trunk routes like a Mumbai-Delhi
Under the scheme, the government or Delhi-Bengaluru, he’s operating
has capped airfares (that are indexed A new strAtegY with a twin-engine fixed-wing
to inflation) at `2,500 for a one-hour Air Deccan’s first commercial turboprop Beechcraft 1900, a 19-seater
flight or for a distance of 500 to flight, in August 2003, was from aircraft that is widely used for regional
600 kilometres, provided huge tax Bengaluru to Hubballi, a tier 2 city air connectivity in America and Africa.
benefits on fuel and given airlines in Karnataka, with a 48-seater ATR, “It can land at airports where
the runway length is not sufficient separate entities. Air Odisha has there were zero concessions on fuel.
[for even an ATR to land],” says won 50 RCS routes, so that gives Now, there are zero taxes on fuel,
Gopinath. He adds that at airports the airlines a combined network of there is a three-year exclusivity of
like Mysuru and Ballari, ATRs cannot 84 RCS routes. Air Odisha is still routes and a 50 percent government
land if they are carrying a full load awaiting its flying permit from the subsidy. These combinations would
of 72 passengers. A short runway Directorate General of Civil Aviation. make it viable,” he asserts.
length means there are restrictions Gopinath thinks the collaboration
on the landing and take-off weight will ensure economies of scale, is rcs viABle?
of an aircraft. Similarly, as the especially in key areas such as The airline business works on high
Shimla airport is at an altitude of flight operations and training of volumes and low margins. Hence,
over 7,000 feet above sea level, the personnel. Bhargava, though, is of an RCS airline operator needs to
ATR cannot land with a full load. the opinion that established airlines have a robust scale-up plan in place
“Keeping all this in mind, we went like IndiGo, SpiceJet and Alliance before the government’s three-year
with a 19-seater aircraft,” he says. Air will “undoubtedly enjoy an financial subsidy period under Udan
However, the Beechcraft 1900 is an edge” over standalone operators like runs out. But considering regional
old generation of aircraft that was in Gopinath. “Due to their elaborate airlines like Air Costa and Air
production between 1982 and 2002. network, they will appeal more Pegasus ceased operations since July
Over 600 such aircraft were produced to passengers, resulting in higher 2016 due to financial troubles, the
question arises about whether there
is a viable regional air connectivity
model that can be tapped into.
So, besides the question of whether
Gopinath can achieve success, the
question is also whether Udan itself
makes great business sense. KPMG’s
Dubey believes it does. “Else a leading
player like IndiGo would not disrupt
its single-aircraft fleet strategy [of
A320s] and go for turboprops [ATRs].
And SpiceJet would not order another
50 turboprops [Bombardier Q-400s]
and talk of 100 seaplanes on top
of that,” says Dubey. According to
him, Delhi and Mumbai have less
Air Deccan used a 48-seater Atr for its first commercial flight in August 2003 than 5 percent of India’s population,
but nearly 40 percent of India’s air
and continue to be in service. load factors and thereby enhanced traffic. “There are dozens of places of
At present, Air Deccan has two revenues,” says Bhargava. significant importance in the interiors
Beechcraft 1900 with plans to add Kapil Kaul, CEO, CAPA South Asia, of India from a population, tourism
close to 12 aircraft over the next six an independent aviation consulting, and industry perspective, but they
months which would allow the airline research and knowledge practice firm, lack air connectivity since there was
to connect to 62 regional airports. is also sceptical of whether standalone no fiscal or monetary support.”
The expansion will also be aided by regional operators can succeed. “I Earlier, from a politician’s point of
Air Deccan’s recent partnership with don’t see regional operators making view, supporting the aviation sector
another regional airline Air Odisha, it work with sub-scale operations, was risky as it was a rich man’s mode
based out of Bhubaneswar. According significant under capitalisation and of transport. That seems to have
to Gopinath, it is a ‘strategic tie-up’ operating a very old fleet [of aircraft]. changed. Udan’s success, according
whereby Air Deccan will manage a This, coupled with slot challenges to Dubey, now depends on factors
JagadeeSh n.V / reuTerS
host of functions for Air Odisha such at metros [airports] and a resultant such as the robustness of an airline’s
as aircraft procurement, leases, and dispersed network, will make it very strategy, business plan, operations
maintenance, IT systems, pilot and difficult [for them] to achieve viability.” and human resources. Says CAPA’s
engineer training, flight operations, But Gopinath is optimistic that Kaul, “Making it work will be very
and inventory management, while his second innings will be successful. challenging but I sincerely hope
both airlines will operate as two “When I first started Air Deccan, that Captain makes it big.”
O
n a large flat-screen
monitor perched in front
of a framed orange-and-
blue Warhol print of
Teddy Roosevelt as a Rough Rider,
BlackRock’s chief operating officer,
Rob Goldstein, is looking over the
entirety of the financial firm’s $6
trillion in global assets—135 teams
with positions in hundreds of
markets in 30 countries. He is using
software that he’s been perfecting
for the 23 years he has spent at the
company. A simple grey column on
the left reveals BlackRock’s activity
on this quiet pre-Thanksgiving
day: There are some 25,000 trade
orders in the market, 77,000 trades
and thousands of collateral calls. A
wider view colourfully identifies
the specific portfolio managers
and traders initiating the moves.
The program is called Aladdin,
shortened from the wonky Asset
Liability and Debt and Derivative
Investment Network, and it can
expand and contract like an accordion,
from a holistic view of firm-wide
risk down to a single trade in a split
second. It is the reason Goldstein, 45,
is a favourite to run BlackRock one
Jamel Toppin for forbes
BlackRock’s
for running a firm like BlackRock
that’s as simple as the dashboard
in a car is a remarkable feat,”
Edge
Goldstein confidently states. “One
system, one database, one set of
models. I know the vast majority
of people don’t have this.”
How do you stay on top when your core business is But what’s on the screen in
Goldstein’s office is only a glimpse
a commodity and you measure profits in hundredths of what Aladdin can do. Rick Rieder,
of a percentage point? You build the best CIO of BlackRock’s $1.7 trillion
fixed-income business, uses it to track
risk-management software on Wall Street
and analyse the risks embedded in
By antoine garaw his thousands of complex holdings.
The
Last Coal
Tycoon
Dark days ahead for coal? Don’t tell that to
billionaire Chris Cline, who’s convinced the
dirtiest fuel still has a bright future and is
building what he believes will be the last
mine standing
BY Christopher helman
T
he masseuse felt the broken bones and the scars
Jamel Toppin; GroominG: Suzana Hallili uSinG zirH & SiSley, pariS
I
train, hang on for a few miles, then grab one coming back.” n 1980, when Cline was 22, his father had a bypass
Cline has since upgraded his transportation. He spends surgery, and his partner offered $50,000 to buy him
400 hours a year in the air—most of it on his $50 million out. “My dad was going to do it.” But Cline had no
Embraer Lineage 1000—shuttling between his homes, doubt he could work harder and smarter than anyone else.
making due-diligence tours of mines in Australia and “I said, ‘Why don’t we buy him out?’” And so they did,
Colombia, or hauling a Forbes camera crew to Nova Scotia, borrowing every penny. The first two weeks he worked
where he has been operating the Donkin mine since April. 16-hour days and never saw sunlight—whatever it took
He applies the same philosophy to his planes as he does to to make his payments. With every success he doubled
his capital equipment: “We buy the best and run it hard.” down. His first big success came with Pioneer Fuel, a mine
Underground, 1,000-horsepower mining machines rip he acquired for $1 million and flipped for $17 million.
the coal face with rotating claws; roof bolters hammer He bought a Lamborghini and a 200-foot yacht called
steel rods into the ceiling to hold the rock in place. Cline Mine Games, but most of the money went back into the
saw early on how much more coal he could produce with Appalachian ground. He implemented worker-friendly
reliable equipment. If a vital machine breaks down and innovations like air-conditioned cockpits for mining
needs parts, Cline thinks nothing of sending one of his machines. And he began handing out daily bonuses in
jets to fetch spares from anywhere on the continent. The the form of dollar coins, based on how many feet of coal
math is easy: Every minute his crews are not ripping coal a team had mined that day. At year’s end, he’d hand out
out of the earth equates to hundreds of dollars in lost cheques to cover taxes due. “Those guys would run through
revenue. And, yes, it’s dangerous. “It used to be brutal,” a wall for him,” says Andy Fox, an independent mining
he says. “We’re trying to get all the hard work out of it.” engineer who first met Cline when Cline pulled up to his
2017
Opens Donkin
2008–2012 mine in Nova
Invests $1.5 Scotia
billion in 4 Illinois
mine complexes
2002
Acquires
mining rights
in Illinois
2015
Sources: US Federal Reserve.
I
Through a new company, Foresight Energy, Cline n 2010, as Foresight was hitting its stride, Cline was
started accumulating 3 billion tonnes of high-sulphur hungry for something new. He formed a company
reserves in Illinois for less than 30 cents a tonne, some of it called Gogebic Taconite that tried to get permits for a
from the likes of Exxon Mobil. What did Cline know that Wisconsin iron ore mine on the shores of Lake Superior.
they didn’t? He believed in technology and was encouraged But in 2013 the plan ran afoul of the Bad River Band of
by power-plant innovations like scrubber systems that the Lake Superior Tribe of Chippewa Indians, who farm
capture toxins before they go up the smokestack, enabling wild rice in the area. Cline cancelled the plans, he says,
them to keep right on burning high-sulphur coal. Plus, because of low iron prices. “It will be mined someday.”
he was used to making money on mines with seams just Canada was more hospitable. On the day of Foresight’s
3 feet thick. Those Illinois seams were 6 feet or thicker. IPO in 2014, Cline rang the bell on the floor of the New
“I didn’t see it as a huge risk,” Cline says. He took York Stock Exchange, then hopped on his plane and
on private-equity capital on one condition: No second- three hours later landed in Nova Scotia to go down into a
guessing. “He didn’t want to be tinkered with,” says mothballed mine shaft on the eastern tip of Cape Breton,
Bartow Jones, a partner at Riverstone Holdings, which in a town called Donkin. He was drawn to the huge
invested $600 million between 2007 and 2008. Not 12-foot-thick seam and the coal’s high energy content,
which at 14,000 British thermal units per tonne can be friend. There are other risks. The Illinois attorney general
readily turned into high-value coke for steelmaking. sued and settled with Foresight for just $300,000 (plus
The Donkin Project was a Hail Mary by the Canadian $6.9 million in mine “retirement obligations”) over the
government to prop up a dying industry; it spent $50 pollution of groundwater with toxic coal slurry. Lisa
million in the 1980s to bore twin tunnels 2 miles out under Salinas, a critic of Cline who owns a farm 100 yards from
the Atlantic Ocean to tap a massive 500 million tonne an unlined slurry pond in Carlinville, thinks the settlement
coal bed. By the time the shafts were cut in the late 1980s, is a joke because it “calls for little to no valid mitigation of
benchmark coal prices had dropped. When 26 miners the existing pollution and, in fact, only encourages more
died in a 1992 explosion at Nova Scotia’s Westray mine, damage”. A Foresight mine near Hillsboro, Illinois, has
it seemed like the end of the industry. But time—and been shut since 2015 because of a dwindling coal fire.
higher commodity prices—heals all wounds. And Donkin Cline is amused by the popular misconception that coal
was the perfect size for Cline, who bought 75 percent is on its deathbed. Yes, coal-fired power plants do continue
of it in late 2014 for an estimated $20 million (he’d snap to close, and US coal output, currently 700 million tonnes
up the remaining 25 percent the following year). a year, is down by 30 percent from its peak. And yet, the
Since then, ten of Cline’s old Foresight lieutenants have US still relies on coal for 30 percent of its electric power,
jumped to Donkin, where they’ve overseen $150 million compared with just 7 percent for wind and solar combined.
of investments. Legendary coal trader Ernie Thrasher Worldwide demand for coal continues to grow. Policy and
is Cline’s partner on the logistics side. He says Donkin’s technology are the wild cards; Paul McConnell at energy
location, nearly halfway across the Atlantic, makes consultancy Wood Mackenzie figures that advances in solar
shipping costs to Rotterdam at least 30 percent ($5 per and battery technology plus worldwide carbon taxes have
tonne) less than they would be from central Appalachia. the potential to erode coal demand by 8 percent a year.
The best coking coal fetches more than $200 a tonne But the death of coal—if it comes at all—will be long
today. The simplest way to sum up Cline, according to and slow. Cline aims for his next project, in Alberta, to be
Thrasher: “He sees value in assets others overlook.”
Environmental opposition in economically depressed
Nova Scotia is restrained. “Even those protesting the
trucks know the coal is a good thing for the community,”
“Even those protesting know
says Paul Carrigan of the Port of Sydney Development that coal is a good thing for
Corp. European settlers mined the first coal here 300
years ago. Through the 1970s mining and steelmaking
the community.”
thrived, employing 20,000 before competition from
the likes of China wiped it all out. There’s talk of using
some of Donkin’s output to fuel Nova Scotia’s remaining a survivor. He acquired the Vista project via his takeover
coal plants. With plentiful wind and hydropower, Nova of the Toronto-listed company Coalspur in 2015 for an
Scotia is well within Canada’s emissions standards. estimated $75 million. The seam is 70 feet thick on the
Even First Nations peoples, like the Mi’kmaq, have been surface, so Cline will build Vista as a pit mine, then go
placated with jobs and a royalty on every tonne. The mining underground to tap 1.7 billion tonnes. By 2022, it could
jobs, paying $100,000 a year, are “an economic lifeline”, be doing 10 million tonnes per year. Cline’s Illinois mines
says Geoff MacLellan, a rep in the Nova Scotia legislature. took business away from Appalachia. His Canadian
But how many jobs will there be? At first, Cline had said projects will take business away from Illinois. “I think
200. But in early November, the mine laid off 49 of 130 [Vista] could be the last mine operating after they’ve shut
workers. Just a bump at the start of a long road, Cline says. down all the rest of the coal in the world,” he says.
He has no equity partners or outside financing on Donkin. Cline plans to enjoy the rising sea levels in
Once the mine is rocking and rolling, within ten years splendour. He recently acquired Big Grand Cay, a
it could be generating $500 million in annual revenues 280-acre archipelago in the Bahamas that used to be
and putting $100 million in cash into Cline’s pocket. owned by Bob Abplanalp, inventor of the aerosol
Is there anything that keeps Chris Cline up at night? spray can. On his iPad, Cline scrolls through plans
“Sago,” he says, the name of a West Virginia mine then for a serene resort amid azure waters and non-
owned by International Coal Group where in 2006 a judgemental massage therapists. It’s too expensive
methane explosion killed a dozen miners. Then in 2010 even for this billionaire to haul in enough diesel
came the disaster at Massey Energy’s Upper Big Branch to keep the generators running, so he’s installing
Mine, also in West Virginia, where 29 died. Cline had solar panels and researching Tesla batteries, and
nothing to do with either incident, though over the years has three wind turbines on order. “Where it makes
four workers have died in his mines, including his best sense,” Cline says, “I’m absolutely for it.”
Titan’s
Wedding
Party
Riding on Tanishq, Titan is today the third most valuable
jewel in the Tata crown. Can it get better from here?
By Samar SrivaSTava
Corporate Account
A
little before Forbes India’s tata’s best performing companies
interview with Bhaskar Market Cap (` cr) 5 year stock price CaGr (%)
Bhat, I make the mistake 0 100K 200K 300K 400K 500K 600K
of mentioning that TCS 530,812 17
Avenue Supermarts, which runs the
supermarket chain DMart, is India’s TaTa MoTorS 125,931 7.6
most profitable retail company. Only TiTan 80,282 21.4
to be swiftly corrected. “People
TaTa STeel 74,885 12.3
tend to forget that Titan is also a
retail company,” he explains with TaTa Power 26,804 -2.79
absolutely no hint of annoyance. TaTa CheMiCalS 19,472 16.15
“More profitable and more valuable!”
Source: BSE Data as on January 12, 2018
Bhat’s rejoinder sets the tone for
the quiet self-assurance with which categories even as Titan looks for
titan’s world Jewellery
he fields questions. And why not? (SaleS Fy17, ` Cr) 10,237
the next big idea. For now, having
The 63-year-old’s 15-year helm at shrugged off the demonetisation hit,
Titan has been his most fruitful. In Bhat has committed to take Tanishq
November, powered by a 92 percent to $2.5 billion (`16,250 crore) in sales
rise in its stock price in the last year, from the present `10,237 crore. Bhat
the company wrested the third slot eyewear also plans to position the company
for the most valuable Tata company 406 to compound at 14 percent and clock
from Tata Steel—Tata Consultancy $5 billion in top line in 2025. With
waTCheS
Services or TCS and Tata Motors are those numbers, Titan could have a
2,028
first and second, respectively (See fighting chance at becoming the No
‘Tata’s Best Performing Companies’). 2 Tata company in market cap.
It also has the best return on
equity in the group after TCS. SegmenTing TaniShq
Source: Company’s annual reports
Titan’s burgeoning market value Titan’s biggest achievement in the last
also marks an important psychological decade was the turnaround at Tanishq
victory for Bhat, who has come a board, comprising representatives and it achieving scale from 2010
long way from seeing the company of Tata Sons and Tidco, were wary onwards. With customers latching on
board almost shut down Tanishq in of infusing additional capital. to its promise of purity, the business
2002. Through his tenure, Bhat has Bhat acknowledges that present began contributing to a larger share
never let the focus on bottom line cash flows give him all the leeway he of growth. Still, it couldn’t get away
slip despite the anaemic margins needs and some more. Old company from the fact that gold is a commodity
of its mainstay, Tanishq. At a price hands would like him to be a little and making charges or designs would
to earnings multiple of 90, its stock more ambitious with that headroom. only allow the company to charge
trades at the highest multiple of They point to the fact that the a small premium. Profit before tax
all group companies. That’s partly company doesn’t seem to be in the margins at Tanishq are 10 percent. CK
because Titan is a consumer business mood to incubate the Tanishqs of the Venkataraman, chief executive of the
but, more importantly, the market is future. “They’ve built a wonderful jewellery business, charted a multi-
discounting a long period of consistent garden, now all they are doing is pronged plan to increase margins.
growth—the building blocks of tending to it,” says a former employee. Initially, the plan involved
which have been painstakingly put Bhat disagrees. He sees huge increasing its focus on diamond
in place by Bhat and his team. growth coming from their present jewellery, which brings in twice the
Soon after he took over as margins of gold. Diamonds now make
managing director in 2002, Bhat up 30 percent of sales and Tanishq
recalls taking classes with managers plans to keep it at this level. “We’ve
where, “I would explain to them Bhat has committed also been able to push the envelope on
what Ebidta was and why it was so to take Tanishq to gold-making charges so the pressure
important as a driver of market cap. to do more on the diamond front
They’d all wonder why this (former)
$2.5 billion (`16,250 is less now,” says Venkataraman.
marketing guy was explaining this,” crore) in sales While diamond sales increased,
he says. Gone are the days when the Venkataraman took a bolder bet
with the size of stores. Titan had so titan lags in topline watch business, Titan plans to have
far been “the masters of 2,000 sq reVenUe (` cr) fY15 fY16 fY17
several products in the smart watch
ft retail”, as one analyst explains. category in the next 18 months.
TCS 94648 108646 117966
“There is no better company International Data Corporation
than Titan when it comes to TaTa MoTorS 264058 278546 275247 projects that India will account for
understanding where to place its TiTan 11974 11383 13170 0.6 percent of the 200 million units
stores, how much rental to agree to, TaTa STeel 139503 106339 117419 of smartwatch sales by 2020.
how to staff its stores and so on.” As it pivots the watch business,
In April 2011, Titan got superstar Titan hasn’t dropped the ball on
Amitabh Bachchan to launch a ...and in profits its bread and butter sales across a
massive 25,000 sq ft Tanishq store pat fY15 fY16 fY17 network of 8,000 dealers pan-India.
in the western suburb of Andheri In fiscal year 2017, this brought in
TCS 25424 28790 30324
in Mumbai. Such stores were `2,028 crore in revenue with its own
TaTa MoTorS 13986 11678 7557
meant to showcase the brand and brands as well as licenced brands like
get consumers to up their spends. TiTan 823 674 697 FCUK, Tommy Hilfiger and Police.
Titan declined to reveal the increase TaTa STeel -3955 -4168 -497 The business grew by 9 percent in
per bill values in these stores, but the second quarter, which is the best
Venkataraman believes that they bUt is no 2 in roe performance in the last few quarters.
had a positive impact on showcasing retUrn on eQUitY (%) fY15 fY16 fY17
In addition to watches, the Fastrack
the brand. Customers spent more TCS 50 44 35
accessories business has been a bright
although on a per sq ft revenue basis, spot for Titan. The portfolio has been
TaTa MoTorS 25 14 13
the stores were not as efficient as rationalised—helmets are out and
their smaller counterparts. Titan has TiTan 27 19 16 women’s bags are in—and stores have
since launched large stores across TaTa STeel NA NA NA been spruced up. The brand has found
all large metropolitan cities that traction online with a chunk of orders
Source: Company’s annual report
it is present in. (While launching coming from smaller cities. According
larger stores, it has also rebranded to Kant, it is the fastest growing brand
GoldPlus, a label it had launched sub-brand Rivaah to cater to the at Titan with a growth rate of 23
for small towns in South India.) wedding market. Ambit estimates percent in the first quarter of 2017-18.
With margins up and a strong that the focus on the wedding market Titan’s eyewear business is its
brand recall, Tanishq is now working would allow Titan to clock an earnings most promising. It is the highest
on targeting the wedding market. growth of 33 percent till 2020. margin business and has a long growth
The inherent advantage here is runway. The company has spent the
that bill sizes are much larger, at an eye on Time last decade getting the model right and
`1.5 lakh as against `30,000, which While Tanishq has pulled in the now has 472 stores across the country.
is the average spend at Tanishq. numbers for Titan over the past four In a sign that the management has
“Titan realised that with smaller bill years, the company has continued confidence that it has figured out the
sizes, it was competing with a host to grow its other two divisions— model, nearly a fifth or 95 stores of
of other discretionary purchases watches and eyewear. Both present the 472 were added in the last year.
like holidays and iPhones,” says separate sets of challenges. While At the core of Titan’s proposition in
an industry watcher. On the other watches are a better margin business this category is the promise to provide
hand, wedding jewellery also than gold, the company is up against error-free prescription glasses in a
accounts for half of the `250,000 a declining category—watches for fragmented market. It is a business
crore jewellery market in India. both utility and gifting have seen that it has experimented with. “For
At `1,842 crore or 18 percent of diminishing sales. Titan is working us, it is a question of time and some
Titan’s jewellery business, weddings on repositioning part of that business courage on our part,” says Bhat.
constitute a small portion of overall as a wearable device business. Ronnie Talati, chief executive of the
iNfogRaphics: sameeR pawaR
revenue but equity analysts at Ambit In November, it invested `3.2 eyewear business, sees a significant
Capital estimate wedding jewellery crore in a CoveIoT, a Singapore- expansion into small towns as well
sales grew at 43 percent in the fiscal based wearable technology startup. as a push towards sunglasses, which
year ended March 2017. Getting it It recently launched the Fastrack would increase the addressable
right in this category could have a Reflex band and sold 200,000 opportunity for Titan. Add to that
disproportionate impact on the bottom units in 45 days. According to Ravi lens manufacturing (lenses regularly
line. Tanishq has now launched a Kant, chief executive officer of the sell for upwards of `10,000) and
Corporate Account
two pilot stores in Bengaluru and path for the next five years. He’s $10 billion (market cap) wasn’t a
plans to open stores in Delhi. completed 30 years at Titan and his goal we had,” Bhat says. “It was an
Titan’s earlier franchise was more stewardship has earned him a place on outcome of the process we followed.”
on a lower ticket size and adornment the Tata Sons’ board. Who succeeds Focusing on execution should
jewellery, which it is now changing him in two years is an open question. keep the juggernaut rolling.
recliner 1 Discovering how Mallorca’s food differs from its mainland cousins
Olives soaking
in different
marinades at a
street market in
Mallorca; they are
an integral part
of the Spanish
region’s cuisine
Recliner 1 food
Second
The gambas al
ajillo, a Mallorcan
Eating our way speciality, is a
dish of prawns
through Mallorca’s done with a
generous dose of
hearty island cuisine
Helpings
garlic and olive oil
By Vaishali Dinakaran
T
he proprietor of the myself reaching for another pepper. lighter on the palette and the
establishment in which And another after that, until the plate stomach. Tombet, also spelled tumbet,
we were dining that was empty. And after I had bestowed is Mallorca’s answer to ratatouille.
evening spoke no English. appropriate amounts of attention on The dish, which is often served as a
I had jabbed my finger at a couple of those heavenly garlicky prawns, and side (although in my opinion it makes
dishes on the illustrated menu, and then the bite-sized choricitos, I could a pretty good main), consists of fried
he’d violently shaken his head, his see quite clearly that Mallorca and slices of potato, aubergines, red bell
lower lip sticking out firmly, as if to I were going to get along just fine. peppers, and zucchini, all layered
say, “No, that will not be served at my It was my quest for traditional food in an earthenware dish, slathered
shutterstock
restaurant today!” But when my finger of the island that led me to the Celler with tomato sauce and baked. That
settled on the image of a dish of shiny Sa Premsa in Palma, an establishment tumbet, I was told later, relies heavily
green peppers, slick with oil, adorned housed in an old wine cellar, complete on the local produce of the island,
sausages, tombet: shutterstock; celler sa Premsa in Palma, cheese, Pimientos de Padron: vaishali dinakaran
However, as I was to discover a Tapas Tuesday, it seemed, was more wonderful meals that I enjoyed
few days later, Palma truly came alive than just about grabbing a tapa and in Mallorca over the course of a
at night. The old town, with its tiny a drink at a bar at a nominal price. It month, it was the people that truly
cobblestone lanes, quaint cafes, and was, instead, about people. People made the island special, and the
little boutiques at every corner, looks having a good time on an island that, food taste better. Whether it was
particularly lovely under the cover of it seems, is all about celebration. the gentleman I introduced you to
the yellow glow of streetlamps. And Susana Bonet, a Mallorcan food at the beginning of the story, or the
it was on a slightly chilly evening that enthusiast whom I met on my last waiters at the Bar Andaluz who, after
I discovered that Palma’s biggest gift day in Palma, can trace her family having plied us with lovely stuffed
to its inhabitants and tourists alike is tree on the island all the way back to mussels, would not let us leave the bar
Tapas Tuesday. Once a week in the the 13th century. According to her, without some Herbs de Majorca (a
centre of the old town, an assorted a number of Mallorca’s traditional Mallorcan herb liqueur) and coca de
collection of little bars end up hosting dishes stem from the concept of cuerto (Mallorcan sponge cake often
an evening dedicated entirely to tapas, eating as a community—a tradition flavoured with orange). Or the waiter
and the drinks they are served with. It that has been kept alive on the island who insisted on piling my plate with
takes a little while to locate these bars till today. She spoke to me of how the far more paella than my stomach could
though, and I found myself hurrying island relies, in addition to olive oil, hold, or the chef who bustled out of
from one tiny little street to the next seafood and local vegetables, heavily his kitchen to tell me that he could
through the winding labyrinth that on pork. And that when it’s time to add some chicken to the arroz brut
is old town Palma. Eventually, I slaughter an animal, there’s plenty of (a soupy rice dish cooked with game
chanced upon the series of little tapas work to be done. Not only are there meat, rabbit, pork or seafood) that I’d
bars, and, since I was so hungry, I pork shoulders and legs of ham to be ordered, to give it a little extra flavour.
stopped at the first one. Here, I was cured, but there are a host of other But most of all, I will remember a lady
introduced to the tiny fried sardines activities carried out as a community. passionate enough about Mallorcan
that nearly every Spanish menu offers, And that she herself is involved in food to take time out from a busy day
and albondigas (Spanish meatballs in the family tradition of preparing of work to talk to me. I certainly will
tomato sauce). Once suitably fortified, sobrassada. She spoke of how the have to go back to sample more of it.
I continued to wander through the meat is mixed with fat and paprika, Yes, even the frito mallorquin.
a Hermès store
in Delhi. in-store
ambience has been
a defining feature
of luxury retail
D o t c om :
Luxury’s New Address
Long having shunned online sales, luxury brands are now finding their way
around digitally engaging tech-savvy, ethics-conscious customers
By Namita JaiN
than half of all buying decisions are online and working with influencers
influenced by online engagement. expect luxury labels or social media leaders who carry
It has, however, taken luxe to show commitment enough authenticity to guide
brands quite a while to start thinking and validate purchase behaviour
strategically about how to mingle to human rights and among their online followers.
with the masses while retaining the environment Social media influencers can
their premium persona. In 2015, include the likes of Traackr, a
management platform that could leaving a sustainable planet for the brands can help their clients relate
just as well have luxury clients as next generation. At the same time, better to them by talking of how
an Amazon.com, or Zoella, a British millennials are seeking to make a they still employ local craftspeople
beauty vlogger who reportedly has 10 personal statement through luxury for manufacturing. In Trivero, near
million subscribers for her video blog, casual wear items like T-shirts, Milan, 150 artisans work at a Zegna
earns up to £50,000 per month, and denims, jackets and sneakers. factory. If Zegna were to talk about
has launched her own range of beauty Both categories of consumers this story and have an online contest
products. Or, there is the example of are consuming luxury in keeping where winners were taken to this
Amanda Steele, a 17-year-old beauty with the shared values of factory, what a terrific way it would
vlogger, who shared pictures of sustainability, and expect brands be of aligning the brand values
herself with Hollywood celebrities at to align with their interests. with those of today’s consumers.
Cannes this year with her 2.8 million Some key first movers that When the Hermès website
followers, with the caption, ‘Thank understood this are Burberry, which describes the process of stitching or
you sooooo much @diormakeup for has, over the years, collaborated with sewing, illustrating or imagining the
treating me like a princess!!’. Steele Snapchat and Google, and various Hermès silk that goes into the scarves,
was flown down to the event, dressed musicians, all of which have helped it is a revival of traditional skills.
and made up by Christian Dior. rejuvenate the brand. Chanel has When a Stella McCartney uses her
These examples underline the been creating great video content sustainable luxury line of clothing—
fact that having an online presence on YouTube with Karl Lagerfeld, animal leather-free—to partner with
demands authenticity from luxury which has helped the brand stay mass merchandiser, Target, she’s
brands. Antoine Arnault, CEO relevant. Hermès has an amazing addressing consumer concerns of
of LVMH-owned Berluti, says site that has quirky features with affordable luxury that also does not
the industry’s competitive edge ties, scarves and jewellery playing use animal skins. That means, apart
is now won by “transparency in at puppet theatre and wordplay; from developing online strategies
communicating”. The generation for instance, they create words that help them retain their luxury
of customers that demand this like ‘meandmyselfomania’, which image, brands have started fashioning
transparency is important, since is defined as a noun describing their marketing strategy with the
more than 85 percent of the self-love to the point of idolising expectations of new customers.
FRanCois DURanD / GettY iMaGes
luxury growth in 2017 was fuelled one’s double. All of this seeks Meanwhile, Prada rolled out
by millenials and Generation Z to engage with consumers and its first online store in China in
(generally those born in 1995 or later). carry them along the journey of December-end and LVMH, in June
In the past, luxury was a way of life discovering their brands online. last year, launched a new website
for the royals of India and Europe. Engagement can take other 24sevres.com—named after the well-
Today, wealthy older customers forms too. For example, robots known address of its department
are cutting down on conspicuous taking away jobs from people is store at 24 rue de Sèvres in Paris.
consumption as they work towards perceived to be a threat. Luxury Namita Jain is a strategy consultant
Recliner 3 RestauRant
F
lourishing partnerships of a colossal 624 runs in a 2006 Test Top 50 Restaurants. Now, they are
aren’t new to Kumar against South Africa in Colombo? No walking the franchise route to take
Sangakkara and Mahela surprises then that they have carried Ministry of Crab beyond Sri Lanka.
Jayawardene. With close to their mojo off the cricket field as well. Jayawardene and Munidasa were
54,000 international runs between In December 2011, Sangakkara and recently in Mumbai to announce their
them, the duo has arguably been Jayawardene, with chef Dharshan first outpost in the city in association
Mexy xavieR
Sri Lanka’s most pre-eminent Munidasa, launched a restaurant, with Gourmet Investments, which
cricketers in the last decade and a Ministry of Crab, which, in six years, represents UK-chain Pizza Express
half. Remember their partnership has featured thrice on the list of Asia’s in India. While the location and the
The
Second
Act
Superstar Rajinikanth is
one in a long line of actors
to join the electoral fray.
We glean some patterns
By kathakali Chanda dharmendra and amitabh Bachchan, Sholay’s Veeru and Jay, had varying political allegiances
1
South Side Story Rawal, who’ve only managed to score and grew close to then Samajwadi
Some of Tamil Nadu’s tallest a few headlines with controversial Party’s (SP) Amar Singh. His wife
political leaders have also been statements. Their senior colleagues, Jaya, the reticent Radha, earned an
matinee idols. About four decades like Vinod Khanna and Shatrughan SP ticket to the Rajya Sabha, which
ago, MG Ramachandran (MGR) and Sinha, fared better: Both served as she retained even after the party and
Sivaji Ganesan took their on-screen cabinet ministers. But the late Sunil the Bachchans fell out with Singh.
rivalry off the screen as well. The Dutt, a five-time MP and a minister, Dharmendra became a BJP MP in
former was a runaway hit, with a was perhaps the most respected. 2004 while wife Hema Malini, the
decade-long reign as the CM, while babbling Basanti, is a current MP.
3
Ganesan floundered. MGR’s legacy the Sholay SCript (not)
4
was furthered by mentee and late CM The lead cast of Sholay California Calling
J Jayalalithaa, herself a veteran of failed to make much impact America’s Golden State
over 125 movies. Rajinikanth’s foray in in politics as it did with the iconic is home to some of its
politics, preceded by Kamal Haasan a film. The inseparable Jai and Veeru, most prominent cinestar-turned-
few months ago, has evoked memories portrayed by Amitabh Bachchan politicos, the most famous being its
of the MGR-Ganesan saga and, with and Dharmendra, had divergent 40th president Ronald Reagan. He
both looking to fill in the political allegiances, contrary to the promise appeared in over 50 films before being
vacuum created by Jaya’s death, a they made in the melodious ‘Yeh elected the California governor in
battle of charisma is on our hands. Dosti’. Bachchan, a childhood friend 1966, and then a two-term president.
of Rajiv Gandhi, won an election for In 2003, Arnold Schwarzenegger
2
the Bollywood CaSt the Congress on the late PM’s request, took over Reagan’s gubernatorial seat,
Unlike their Southern but distanced himself post-Bofors beating the likes of porn star Mary
counterparts, Bollywood Carey and media entrepreneur
stars in politics have mostly Arianna Huffington. Elsewhere
been confined to supporting in California, Oscar-winning
roles. Sure, there have been director and Dirty Harry
surprises, like Rajesh Khanna star Clint Eastwood won the
nearly spoiling the party for mayor’s office in his hometown
LK Advani in 1991 or Govinda’s of Carmel in 1986 following a
Clint Eastwood: REutERs
Home
Seat of Rest
The expanded range of Gora-V armchair from Vector Projects is made of a
sturdy metal base and wooden legs, and a highlighted stacked-up seat and
anti-slip rubber feet. Suitable for both indoors and outdoors, Gora-V is a fully
customisable chair. The patchwork fabric is available in various patterns.
vectorprojectsindia.com
tecH
Earbuds of Babel
Forget merely following you around the web or
restocking your fridge: Google now wants to put
its leading-edge Artificial Intelligence (AI) right
into your ear canal. Its new, oddly unhyped Pixel
Buds wireless headphones let you chat directly
with its virtual butler, Google Assistant, to get
directions, play music or place a call. So far,
so meh—but its AI, Google says, can do things
others can’t, such as real-time translation of
some 40 languages—as long as your buds are
paired with Google’s Pixel phones, at any rate.
store.google.com
Style
If we can’t find
cuts in the defence
budget, we’re not
clockwise from top: Huntsman: larry frencH / Getty imaGes; BusH: James lawler DuGGan / reuters; lew: Beck DiefenBacH / reuters;
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