Seasonal Magazine Latest Issue by John Antony

Oman OR 1.50, Saudi Arabia SR 12.00

UAE DH 10.00 UK ÂŁ 3.00, US $ 3.00

KERENG/2002/6803

VOLUME 9 ISSUE 10 OCTOBER 2010

Bahrain BD 1.50 Kuwait KD 1.50

Rs. 50

copi Complim e to p s made entary a airli ssenge availabl rs o e Int nes 24X ernatio at Coch f all 7, 3 nal A in 65 d irpo ays r a ye t, ar.

EDITORIAL

www.seasonalmagazine.com

MAGAZINE

Seasonal Vol 9 Issue 10 Cotober 2010

Managing Editor Jason D Pavoratti Editor John Antony Director (Finance) Ceena Senior Editorial Coordinator Jacob Deva Senior Correspondent Bina Menon Creative Visualizer Bijohns Varghese Photographer Anish Aloysious Correspondents Bombay: Rashmi Prakash Hyderabad: Iqbal Siddiqui Delhi: Anurag Dixit Director (Technical) John Antony Publisher Jason D

an eye for IPOs The markets are continually breaching milestone highs in its effort to regain the past glory of 21,000+. In this Issue, we cover microfinancing major Spandana’s probable IPO plans. Among the hundreds of large microfinancing firms operating in this country, only around 50 are scalable, and only around 4 to 5 mature players among these 50 are expected to tap capital markets this year or the next.

Editorial & Business Office Cochin: 36/1924 E, Kaloor-Kadavanthra Road, Near IGNOU, Kaloor, Cochin-17. Ph:0484- 2345876, 2534377, 2340080 Mob. 09947141362, 09947258505 Mumbai: 202, Woodland Heights Building, St. Martins Road, Bandra West, Mumbai -400 050, Mobile: 9757076197 Ph: 022-26401362, 26401360, Bangalore: House No: 493, Block 3 3rd Main, HBR Layout, Bangalore-4209731984836, Email:skmagazine@gmail.com www.seasonalmagazine.com UK Office: “CRONAN”, Boundaries Road Feltham, Middlesex, UK TW13 5DR Ph: 020 8890 0045, Mob: 00447947181950 Email: petecarlsons@gmail.com

We zeroed in on Spandana not just because they were the first to announce tentative plans post SKS IPO. Many large players like Share Microfin and quality players like Equitas do exist. But Spandana does have some unique credentials to back it. While our research uncovered many of these USPs, our continuous dialogues with industry insiders as well as with Mrs. Padmaja Reddy did the rest.

Reg No: KERENG/2002/6803 Printed & Published by Jaison D on behalf of PeteCarlson Solutions Pvt. Ltd. at Cochin. Printed at Rathna Offset Printers, Chennai-14. All Rights Reserved by PeteCarlson Solutions Pvt. Ltd. No part of this publication may be reproduced by any means, including electronic, without the prior written permission of the publisher.

All India Distributor: India Book House, Mumbai UAE Distributor: Malik News Agency & Distributors Dubai All health related articles are for first information purposes only. Always consult your doctor before taking any decison affecting your health.

MEMBER

Now, one question is whether we endorse this IPO or other IPOs we cover. The quick answer is yes, but with one caveat. Please do have a look at that little ratio called P/E when considering IPOs. Many among us are adept at looking at this while buying shares from the secondary market, but miss this altogether when subscribing to IPOs. Can’t be blamed as P/E ratios are not reported at all for IPOs, at least in a readable size. But not looking at P/E is like not looking at MRP while buying durables or not verifying interest rates while placing an FD! John Antony

Contents

Be lucky - it’s an easy skill to learn Those who think they’re unlucky should change their outlook and discover how to generate good fortune, says psychologist Richard Wiseman.

“Manappuram is 5 Huge Trends in Social Media Right Now Redefining What’s the first thing young women do when they wake up? Check Facebook. How do enterprise employees pass the

Did the Answer of Miss Philippines 2010 Cost Her the Miss Universe Crown?

How Gold Loans Are Looked Upon”

Riding on the response from a mega campaign to promote the costeffectiveness, convenience, flexibility, & safety of gold loans, Manappuram Group is all set to double its loan book this... fiscal and again in next fiscal. Powering the rapid growth will be a Rs. 1200

World M&A Focus Turns to India as West Slows Down Standard Chartered Plc, ranked 14th among merger advisers in India last year, has climbed to number two by financing COAL INDIA PUBLIC ISSUE

The IPO the Nation Waits For

India’s largest and the world’s third largest IPO is coming, with some estimates putting the final size at Rs. 17,000 crore. With an operating margin of 30%, cash reserves of over Rs. 39,000 crore, quite reasonable offer valuations, and an ambition to grow quantitatively and qualitatively despite its already world-dominating production,

Once again a frontrunner in a pageant has presented an answer that some believe may have cost

One More Way to Avoid Diabetes: Breastfeed New moms know that breastfeeding can be good for babies, providing them with much-needed nutrition as well as a shot of antibodies and other cells that help build immune systems. Now,.. Manappuram Group as part of its CSR is sponsoring Kochi’s noted art commune, JT Pac, for this year

Contents Sobha to Raise a Jurong at Kochi, But from a Lake

Google, The Film: Internet Giant to Star in Hollywood Film The founding of Google, the internet giant, is to be the subject of a Hollywood film.

Prestige Redefines Luxury with Silver Oak SPANDANA SPHOORTY IPO

Can Spandana Deliver a MicroFin IPO You Shouldn’t Miss? At over 4 million customers, Rs. 15,000 crore total disbursements, annual growth rate of 100%, the highest employee productivity and lowest Opex in South Asia, an RoE running between 50 to 60%, and an unbelievably high pre-issue EPS of Rs. 152 on a Rs. 10 share, investors are sure to look twice at Spandana if it goes forward with its IPO plans. Seasonal Magazine interviews Mrs. Padmaja Reddy for this story:

MCA RECREATION CENTRE

More Than a Club

Mumbai Cricket Association’s Recreation Centre (MCA RC) is racing towards completing two years of existence. Even within this short span, the elite club has evolved into a lifestyle hub that enriches the life of all at home and office. No wonder then that MCA RC has received such a tremendous response to its membership drive from families and blue chip corporates. The credit for the success of this joint venture goes to the influential Mumbai Cricket Association and the visionary infrastructure player, the Shirke Group. Rajiv Wagh, Vice President of MCA RC, explains to Seasonal Magazine

Bangalore headquartered Prestige Estates Projects is continuing their efforts to differentiate themselves from competition by launching distinctly premium projects like Silver Oak, which is mainly a

Madonna schedules 15-minute appointments with kids

Madonna’s kids have appointments made to spend time with their superstar mum, according to reports. The Material Girl’s personal assistants are said to schedule time for her with Lourdes, Rocco, David..

Will History Haunt Future?

Dell launches $ 100 Aero smartphone Dell Inc on Tuesday released its first US smartphone, entering the increasingly crowded market with a 3.5-inch Android device called the Aero that costs about $ 100 on AT&T's network. The long-anticipated move by the computer manufacturer puts Dell in competition with Apple Inc, the market leader in smartphones, and with a clutch of other phones that use Google Inc's Android operating system.

Contents

COAL INDIA PUBLIC ISSUE

The IPO the Nation Waits For India’s largest and the world’s third largest IPO is coming, with some estimates putting the final size at Rs. 17,000 crore. With an operating margin of 30%, cash reserves of over Rs. 39,000 crore, quite reasonable offer valuations, and an ambition to grow quantitatively and qualitatively despite its already worlddominating production, nobody is doubting whether Coal India’s IPO would be a success. Already a feather in the cap for Sriprakash Jaiswal, Minister of State for Coal, and Partha S Bhattacharyya, Chairman of Coal India, the only thing investors are looking for from this IPO will be the kind of capital market stewardship Coal India will accord its scrip, post-listing. If CIL can achieve this investor confidence, this public issue can set records in subscription.

Contents

At over 4 million customers, Rs. 15,000 crore total disbursements, annual growth rate of 100%, the highest employee productivity and lowest Opex in South Asia, an RoE running between 50 to 60%, and an unbelievably high pre-issue EPS of Rs. 152 on a Rs. 10 share, investors are sure to look twice at Spandana if it goes forward with its IPO plans. Seasonal Magazine interviews Mrs. Padmaja Reddy for this story:

Enriching Lives Pursuing a structured CSR policy around our coal mining areas based on immediate and long term social and community development programmes Earmarked 5% of subsidiary profit of the previous fiscal subject to a minimum of Rs.5 per ton of raw coal production in the previous fiscal year for its CSR activities Providing medical services to employees, their families and local population by supporting 85 hospitals and 1565 doctors as of March 31, 2010 Providing water facilities to people living near our areas of operation by installing handpumps, tube-well, rain water, harvesting schemes, digging and renovating wells. Establishing educational institutions that offer courses in engineering, nursing, management studies, medicines and other technical courses. Providing skills development and capacity building programmes such as vocational training, programmes supporting technical and vocational educational institutions, provide assistance to primary middle and higher secondary schools, provide parental counseling, run awareness programmes and others.

Coal India Limited is proposing to make a public issue of securities and has filed a Draft Red Herring Prospectus (“DRHP”) with the Securities and Exchange Board of India (‘SEBI”). The DRHP is available on the SEBI website at www.sebi.gov.in as well as on the websites of the book running lead managers at http://www.online.citibank.co.in/rhtm/citigroupglobalscreen1.htm, www.db.com/India, www.dspml.com, www.enam.com, www.kmcc.co.in and www.morganstanley.com/indiaofferdocuments. Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, see the section titled “Risk Factors” of the DRHP”. “The announcement is not an offer for sale or solicitation of an offer to buy securities in any jurisdiction, including the United States. This announcement has been prepared for publication in India and may not be released in the United States, Australia, Canada or Japan. The securities of Coal India Limited have not been registered under the U.S Securities Act of 1933, as amended (“Securities Act”) and may not be offered or sold in the United States absent registration under the Securities Act or an exemption from registration under the Securities Act. There will be no public offering of securities in the United States.” “The Company has not been, and will not be, registered under the U.S Investment Company Act of 1940, as amended, and investors will not be entitled to the benefits of that Act.”

Contents

Even bigger players like EmaarMGF & Lodha are waiting on the sidelines unwilling to take the IPO plunge, learning from the recent lessons of Nitesh & Jaypee. But Oberoi Realty has identified that the market sentiment is better, which even while being true for the main indices, doesnâ&#x20AC;&#x2122;t apply to the realty index at all, which continues to be risky, having lost another 10% since the beginning of this year. However, Oberoi is banking on some differentiating strengths like its low debt levels and low land holdings, which has resulted in an above-average IPO rating. But according to some recent unconfirmed reports the Groupâ&#x20AC;&#x2122;s pre-IPO valuation has suffered since the original IPO announcement, having reportedly halved from Rs. 14,000 crore to Rs. 7000 crore. This may affect the book value of the share as well as force the promoters to part with a bigger stake to collect the Rs. 1000 to Rs. 1500 crore eyed. But all eyes will be on the offerâ&#x20AC;&#x2122;s price-to-earnings ratio. If Oberoi is willing to offer at a reasonable P/E between 15 to 20, there is a good chance of investors warming up to it. But P/E multiples in the 20s and 30s would be a tough call.

Kishore Biyani is a successful man. Now, even in capital markets. That is why the Pantaloon / Future conglomerate is tapping the markets for a third time. But prudent investors are sure to take a hard look at the Group’s capital markets history while assessing Future Ventures’ IPO. Since its IPO in 199192, Pantaloon has a history of losing money for investors, floating around as a pennystock in single digits for the better part of six long years from 92-93 to 98-99, trading even as low as Rs. 1.50. The Group’s second listed firm, Future Capital Holdings, has a shorter capital markets history of barely three years, but not much less of a

WORLD M&A FOCUS TURNS TO INDIA AS WEST SLOWS DOWN Standard Chartered Plc, ranked 14th among merger advisers in India last year, has climbed to number two by financing takeovers in the world’s second-fastest growing major market for acquisitions. he U.K. bank, the first foreign company to sell shares in India, has advised on $22 billion of deals, second only to Morgan Stanley, in the nation’s busiest year for takeovers since 2007, according to data compiled by

SEASONAL MAGAZINE

Bloomberg. Eight of the 10 largest acquisitions in India this year are cash transactions, compared with only one of the top 10 global deals, underscoring the need to provide financing to win clients. Standard Chartered funded the nation’s two biggest takeovers, by billionaires Anil Agarwal and Sunil Mittal, helping to cement India as the lender’s most profitable market. “In India, M&A is to a great extent dependant on balance sheet support,” Abizer Diwanji, head of

No. 10 in the Asian nation, while JPMorgan is 12th.

financial services at KPMG India, said in an interview from Mumbai. “You will see more and more banks putting their balance sheet to work.”

Global Slowdown

Indian companies led by Mittal’s Bharti Airtel Ltd. have announced $58.4 billion of transactions this year, on course to surpass 2007’s

India’s acquisition spree contrasts with a slowdown in global deals. Mergers worldwide are on course to decline for a third year, with $1.35

record $69.2 billion, driven by crossborder takeovers that are also set for an all-time high. The tripling in deal volume from last year makes India the fastest growing after Mexico among the Group of 20 nations, the data show. S t a n d a r d C h a r t e r e d ove r t o o k Goldman Sachs Group Inc. and JPMorgan Chase & Co., the two largest global takeover advisers, in India this year. New Yorkbased Goldman Sachs is ranked

Prahlad-Shantigram

Naina Lal Kidwai

trillion of transactions, down 56 percent from the first eight months of 2007. In the U.S., the world’s largest market, volumes dropped 63 percent to $577 billion, while Europe saw a 68 percent decline to $489 billion. “While the M&A activity in the U.S. and Europe has been weak, it’s been quite busy in this part of the world,” Prahlad Shantigram, global head for mergers and acquisitions at Standard Chartered, said in a telephone interview. “For strong stories, the bank will look at financing.” Standard Chartered may provide $4 billion to fund the acquisition of a controlling stake in Cairn India Ltd. by Agarwal’s Vedanta Resources Plc, two people with knowledge of the matter said on Aug. 16. Credit Suisse Group AG and Goldman Sachs are also financing the bid, according to a company statement. The London-based bank has focused on cross-border deals in oil and gas, metals and mining and telecom, Shantigram said. There may be “a couple more large deals” in those sectors this year, he said. “It’s been a good year for us so far.”

Cross-Border Deals Cross-border mergers in India have climbed to $50.7 billion this year, surpassing the combined takeover volumes for the previous two years, according to Bloomberg data. The deal flow has almost matched the $51.9 billion in the first eight months of 2007, which saw a record $58.9 billion of such deals. Standard Chartered raised $530.7

Jaspal Singh Bindra Anil Agarwal “We expect customers whom we fund to also reward us with the events-business, as in investment banking,” Kidwai said in an interview on Aug. 24. The lender plans to play a bigger role in providing advisory services and helping raise funds for acquisitions by clients, she said. “That would be a very important part of the way we work.”

Jamal Al-Jarwan million in May, becoming the first overseas bank to sell shares in the nation. The lender, which traces its history in India back to 1858, was the only one of the nation’s three biggest foreign commercial banks to expand credit in the year ended March 31. “We are trying to change the game, at least in our core markets like India,” Jaspal Singh Bindra, chief executive officer of Standard Chartered Asia, said by telephone from Hong Kong. “The days are gone when you can come into India just on the back of your big-bulge status.”

Expanding Credit Standard Chartered’s loan book expanded 11 percent to 415.5 billion rupees last fiscal year, while HSBC Holdings Plc’s advances shrank to 234.7 billion rupees and Citigroup Inc.’s loans decreased to 366.6 billion rupees, according to data compiled by Bloomberg. HSBC, ranked No. 6 in India M&A after part funding Bharti’s transaction, plans to offer financing to win more deals, said Naina Lal Kidwai, HSBC’s India country head.

May Rise Standard Chartered’s league table ranking may rise in India as the bank is advising Emirates Telecom Corp., the United Arab Emirates’ biggest phone company, according to two people with direct knowledge of the matter. Jamal Al-Jarwan, chief executive officer for international investments at the Abu Dhabi-based operator, on Sept. 6 said the company is considering investing in Idea Cellular Ltd. Rajat Mukarji, a spokesman at Mumbai-based Idea, declined to comment. Standard Chartered, India’s largest overseas bank by branches, earned almost twice as much in the nation as U.K. rival HSBC in the first half as India overtook Hong Kong to become its most profitable market. The lender has reported eight years of profit growth even as financial institutions worldwide racked up $1.8 trillion of losses and writedowns during the financial crisis. “We were around in the last two to three years when things were difficult,” Standard Chartered’s Bindra said. “People think you have done difficult markets, difficult structures in difficult periods, then you tick most of the boxes.”

SEASONAL MAGAZINE

Sunil Mital

COVER STORY

SEASONAL MAGAZINE

BE LUCKY IT’S AN EASY SKILL TO LEARN

Those who think they’re unlucky should change their outlook and discover how to generate good fortune, says psychologist Richard Wiseman.

decade ago, I set out to investigate luck. I wanted to examine the impact on people’s lives of chance opportunities, lucky breaks and being in the right place at the right time. After many experiments, I believe that I now understand why some people are luckier than others and that it is possible to become luckier. To launch my study, I placed advertisements in national newspapers and magazines, asking for people who felt consistently lucky or unlucky to contact me. Over the years, 400 extraordinary men and women volunteered for my research from all walks of life: the youngest is an 18-year-old student, the oldest an 84-year-old retired accountant. Jessica, a 42-year-old forensic scientist, is typical of the lucky

group. As she explained: “I have my dream job, two wonderful children and a great guy whom I love very much. It’s amazing; when I look back at my life, I realise I have been lucky in just about every area.” In contrast, Carolyn, a 34-year-old care assistant, is typical of the unlucky group. She is accidentprone. In one week, she twisted her ankle in a pothole, injured her back in another fall and reversed her car into a tree during a driving lesson. She was also unlucky in love and felt she was always in the wrong place at the wrong time. Over the years, I interviewed these volunteers, asked them to complete diaries, questionnaires and intelligence tests, and invited them to participate in experiments. The findings have revealed that although unlucky people have almost no insight into the real causes of their

Deepika comes from no Bollywood family. She is pretty, not exceptionally pretty. She is not very talented either. She is good though. That being said, just checking her track record in bollywood, how can anyone not say she is the luckiest bollywood actress? First Movie: Launch with Shahrukh Khan. Second Movie: Yash Raj banner. Third Movie: With Warner Brothers and Akshay Kumar. Fourth Movie: With Imtiaz Ali and Saif. Every top bolly actress, be it Madhuri, Kareena or Aishwarya had to struggle to get to work with Yash Raj or work with SRK. Is Deepika Padukone destiny’s favorite child?

SEASONAL MAGAZINE

The Luckiest Bollywood Actress?

good and bad luck, their thoughts and behaviour are responsible for much of their fortune. Take the case of chance opportunities. Lucky people consistently encounter such opportunities, whereas unlucky people do not. I carried out a simple experiment to discover whether this was due to differences in their ability to spot such opportunities. I gave both lucky and unlucky people a newspaper, and asked them to look through it and tell me how many photographs were inside. On average, the unlucky people took about two minutes to count the photographs, whereas the lucky people took just seconds. Why? Because the second page of the newspaper contained the message: “Stop counting. There are 43 photographs in this newspaper.” This message took up half of the page and was written in type that was more than 2in high. It was staring everyone straight in the face,

but the unlucky people tended to miss it and the lucky people tended to spot it. For fun, I placed a second large message halfway through the newspaper: “Stop counting. Tell the experimenter you have seen this and win £250.” Again, the unlucky people missed the opportunity because they were still too busy looking for photographs. Personality tests revealed that unlucky people are generally much more tense than lucky people, and research has shown that anxiety disrupts people’s ability to notice the unexpected. In one experiment, people were asked to watch a moving dot in the centre of a computer screen. Without warning, large dots would occasionally be flashed at the edges of the screen. Nearly all participants noticed these large dots. The experiment was then repeated with a second group of people, who were offered a large financial

SEASONAL MAGAZINE

The (Un)Lucky Appointment? Take the case of a very famous Hindi film actor. In a recent interview, Ameen Sayani, the host of yesteryear’s super hit show Binaca Geetmala recounted a very interesting story about him. “It was 1969. I was doing 20 shows a week, spending most of the day locked up in the studio in my office. A young man walked in without appointment for a voice audition. I had not a second to spare for this tall, thin young man. He waited and left and came back a few more times. He became instantly popular with my staff, but I could not see him,” said Sayani in the interview. Ameen Sayani had been too busy to meet the man now famous as Amitabh Bachchan. Then in 1971, Sayani happened to see Hrishikesh Mukherjee’s Anand and “was floored by the persona, voice and performance of the actor named Amitabh Bachchan.” What would have happened if the two had met in 1969? “Though I regret denying him an audition, I realise that what happened was for the best for both of us! His voice would have finished my career, and he would have got so much work on radio that Indian cinema would have lost its biggest star,” said Sayani in the interview.

reward for accurately watching the centre dot, creating more anxiety. They became focused on the centre dot and more than a third of them missed the large dots when they appeared on the screen. The harder they looked, the less they saw. And so it is with luck - unlucky people miss chance opportunities because they are too focused on looking for something else. They go to parties intent on finding their perfect partner and so miss opportunities to make good friends. They look through newspapers determined to find certain types of job advertisements and as a result miss other types of jobs. Lucky people are more relaxed and open, and therefore see what is there rather than just what they are looking for. My research revealed that lucky people generate good fortune via four basic principles. They are

As Sankarshan Thakur writes in Subaltern Sahib: Bihar and the Making of Lalu Yadav, “On the eve of elections of Patna University Students Union (PUSU) in 1973, non-Congress student bodies had again come together, if only for their limited purpose of ousting the Congress. But they needed a credible and energetic backward candidate to head the union. Lalu Yadav was sent for.” Lalu Yadav at that point of time was an employee of the Patna Veterinary College. He had quit student politics in 1970, after having lost the election for the presidentship of PUSU to a Congress candidate. Before this, Lalu had been the general secretary of PUSU for three consecutive years. “Assured that the caste arithmetic was loaded against the Congress union, Lalu readily agreed to contest. He quietly buried his job at the Patna Veterinary College and got a backdated admission into the Patna Law College. He stood for elections and won. The non-Congress coalition in fact swept the polls.” In 1974, the students’ agitation against then prime minister Indira Gandhi spread throughout the country. As Thakur writes, “An agitation committee was formed, the Bihar Chatra Sangharsh Samiti to co-ordinate the activities of various unions and Lalu Yadav as president of PUSU was chosen its chief. “These events catapulted Lalu Yadav into the big league, after he had quit student politics and taken up a government job. So, luck had a huge role to play in getting Lalu Yadav back into active politics. In the 1977 elections, Lalu was elected to the Lok Sabha as a Janata Party candidate at a young age of 29.

skilled at creating and noticing chance opportunities, make lucky decisions by listening to their intuition, create self-fulfilling prophesies via positive expectations, and adopt a resilient attitude that transforms bad luck into good. I wondered whether these four principles could be used to increase the amount of good luck that people encounter in their lives. To find out, I created a “luck school” - a simple experiment that examined whether people’s luck can be enhanced by getting them to think and behave like a lucky person. I asked a group of lucky and unlucky volunteers to spend a month carrying out exercises designed to help them think and behave like a lucky person. These exercises helped them spot chance opportunities, listen to their intuition, expect to be lucky, and be more resilient to bad luck. One month later, the volunteers returned and described what had

SEASONAL MAGAZINE

From Government Servant to Minister

The Accidental Billionaire?

SEASONAL MAGAZINE

Noted author Mlodinow feels that Bill Gates, the co-founder of Microsoft was also very lucky in his initial days. As the story goes, and as Mlodinow recounts in his book, in August 1990, IBM was looking for a programme called “operating system” for their “home computer.” A group of executives from IBM went to meet Gates, who at that point of time was running a small company. Gates told them that he couldn’t provide the operating system they wanted and directed them to a programmer called Gary Kildall at Digital Research Inc. The talks between Kildall and IBM did not work out primarily because Kildall’s wife and the company’s business manager refused to sign IBM’s nondisclosure agreement. Another story also goes that Kildall was so busy pursuing his first love of flying planes that he had no time for IBM execs. Anyway, around the same time Jack Sams, an IBM employee, saw Gates again. As Mlodinow writes, “They both knew of another operating system that was available, a system that was ready, a system that was, depending on whom you ask, based or inspired by Kildall’s. According to Sams, Gates said, “Do you want to get…[that operating system], or do you want me to?” Sams, apparently not appreciating the implications, said, “By all means, you get it.” Sams, of course, did not understand the mistake he had made. Gates got the operating system for around $50,000, “made a few changes, and renamed it DOS (disk operating system). IBM, apparently with little faith in the potential of its new idea, licensed DOS from Gates for a low per-copy royalty fee, letting Gates retain the rights.” And the rest as we have seen is history. Much of Microsoft’s success since then has been built on that sheer lucky break.

happened. The results were dramatic: 80 per cent of people were now happier, more satisfied with their lives and, perhaps most important of all, luckier. While lucky people became luckier, the unlucky had become lucky. Take Carolyn, whom I introduced at the start of this article. After graduating from “luck school”, she has passed her driving test after three years of trying, was no longer accident-prone and became more confident. In the wake of these studies, I think there are three easy techniques that can help to maximise good fortune: · Unlucky people often fail to follow their intuition when making a choice, whereas lucky people tend to respect hunches. Lucky people are interested in how they both think and feel about the various options, rather than simply looking at the rational side of the situation. I think this helps them because gut feelings act as an alarm bell - a reason to consider a decision carefully. · Unlucky people tend to be creatures of routine. They tend to take the same route to and from work and talk to the same types of people at parties. In contrast, many lucky people try to introduce variety into their lives. For example, one person described how he thought of a colour before arriving at a party and then introduced himself to people wearing that colour. This kind of behaviour boosts the likelihood of chance opportunities by introducing variety. · Lucky people tend to see the positive side of their ill fortune. They imagine how things could have been worse. In one interview, a lucky volunteer arrived with his leg in a plaster cast and described how he had fallen down a flight of stairs. I asked him whether he still felt lucky and he cheerfully explained that he felt luckier than before. As he pointed out, he could have broken his neck. Richard Wiseman is a psychologist at the University of Hertfordshire, and author of the noted work, ‘The Luck Factor’.

FUTURE VENTURES IPO

history of losing money for investors, floating around as a pennystock in single digits for the better part of six long years from 92-93 to 98-99, trading even as low as Rs. 1.50. The Group’s second listed firm, Future Capital Holdings, has a shorter capital markets history of barely three years, but not much less of a

If the earlier value proposition was “Invest in the Retail King”, the current will be “Invest with the Retail King”, as the now planned IPO is for a venture capital fund that will invest in other companies as well as Future Group companies.

Retail King”, as the now planned IPO is for a venture capital fund that will invest in other companies as well as Future Group companies. Thankfully, the Issue size has come down to Rs. 750 crore from Rs. 3730 crore, the amount Future Ventures unsuccessfully tried to raise in 2008 before the crash. Now all eyes will be on whether the Group will expect stratospheric valuations too like Pantaloon that trades at 57 P/E and FCH that trades at a priceearnings of 88, which makes them fit candidates for a significant correction if smart money again takes a sojourn from India as in 2008.

SEASONAL MAGAZINE

Will History Haunt Future?

rollercoaster ride for investors than Pantaloon. From highs of Rs. 1044 in FY’08, FCH had tumbled to Rs. 93 by the next fiscal. But isn’t all that history? We will have to ask investors who burnt their fingers this all-important question. There is also another difference. If the earlier value proposition was “Invest in the Retail King”, the current will be “Invest with the

Did the Answer of Miss. Philippines 2010 Cost Her the Miss. Universe Crown? Once again a frontrunner in a pageant has presented an answer that some believe may have cost her the crown. In Monday evening’s Miss Universe 2010 Pageant, Miss Philippines 2010 Maria Venus Raj, who seemed to be a crowd favorite, according to the San Francisco Chronicle, answered a question from actor/judge William Baldwin that didn’t seem to really be an answer. Although it wasn’t controversial,

what did you do to make it right?” The beauty queen would thank the judge for his question, then say “Good evening” to the Las Vegas crowd. She attempted to answer the question. “You know what, sir, in my 22 years of existence, I can say there is nothing major, major — I mean, problems — that I have done in my life, because I am very confident with my family with the

love that they are given to me. So… Thank you so much that I am here! Thank you, thank so much!” One thing was clear: Miss Philippines 2010 Maria Venus Raj was thankful to be in Las Vegas. William Baldwin, in a camera shot near the end of Miss Philippines’ answer, had a smirk on his face, as if he knew that Raj’s answer was just short of convoluted and meaningless.

The interview segment of the Miss Universe pageant can be a points killer, as Carrie Prejean and Morgan Elizabeth Woolard can attest. But with William Baldwin’s question, it seemed as if Miss Philippines 2010 was going to coast through and perhaps secure the Miss Universe crown. The crowd loved her and she was the talk of the Internet going into the final round of competition Monday. But what seems like a simple question can sometimes trip a person up. “What is one big mistake you made in your life,” Baldwin asked, “and

SEASONAL MAGAZINE

Miss Philippines 2010 left many wondering about her answer, her 22 years of mistake-less existence, and why she kept thanking everybody.

HEALTH

Diabetes:

Breastfeed New moms know that breastfeeding can be good for babies, providing them with much-needed nutrition as well as a shot of antibodies and other cells that help build immune systems. Now, evidence suggests that the practice may keep the mothers themselves healthier too. Researchers led by Dr. Eleanor Bimla Schwarz at University of Pittsburgh found that women who breastfeed are half as likely to de-

velop type 2 diabetes as women who do not. That's a big statistical difference, and although it's not clear what is behind the gap, scientists speculate that it has something to do with pregnancy pounds that expectant moms gain. Breastfeeding helps moms lose the abdominal fat they gain during pregnancy more efficiently. And while abdominal â&#x20AC;&#x201D; or visceral â&#x20AC;&#x201D; fat is important for the gestating baby's development, it can be detrimental to a mother's health if it continues to build after delivery, since it's been linked to greater risk of metabolic disorders such as insulin resistance and heart disease as well as diabetes.

Animal studies have helped reveal other reasons this is so. Breastfeeding, those studies found, can increase a mother's response to insulin, allowing her to break down glucose more effectively and keep sugar metabolism in check. Lactation also inhibits hormones that promote growth hormone activity, which can also affect insulin levels. In addition, studies have shown that when women do develop diabetes during pregnancy, known as gestational diabetes, breastfeeding the newborn can improve their glucose metabolism and help stabilize the condition. Despite the growing body of research establishing the health benefits of breastfeeding, moms in the U.S. remain resistant.The American Academy of Pediatrics recommends that new mothers breastfeed their infants for at least six months, yet only 14% of women do. For the 86% who don't, Schwarz says lifestyle interventions such as exercise and changes in the diet can go a long way toward lowering their diabetes risk â&#x20AC;&#x201D; even if it doesn't replace the health dividends the babies would be receiving if they were breastfed. "This [study] shows that perhaps counseling these women to try to reduce their personal risk of developing diabetes should be something that doctors should consider," says Schwarz. "And if you are pregnant or thinking about getting pregnant, or currently breastfeeding, then stick with it because it's important to both your baby's and your own health."

SEASONAL MAGAZINE

One More W ay tto oA Wa Avvoid

"When you look at mammals, you have to consider lactation as part of the pregnancy experience," says Schwarz. "When women don't breastfeed after pregnancy, or lactation is curtailed or prematurely discontinued, women end up retaining more fat than they would have if they breastfed. Then the mother's health can suffer."

SOCIAL SPACE

5 Huge Trends in Social Media Right Now

1 SEASONAL MAGAZINE

Social Scanning Smartphone owners have the world at their fingertips. As grandiose as that may sound, advances in mobile barcode scanning technology have given rise to applications that allow for comparison shopping, QR code place checkins and ultimately a social experience around product barcodes.

2 Q&A and Intelligent Information Discovery Web-based Q&A services have been around for years. Now the previously sleepy space is seeing renewed interest from some of the Internet’s biggest names. This second iteration of Q&A services will likely forever redefine the way we find information, because it re-imagines “search” as intelligent information discovery.

3 Group Buying Group buying is the deal-a-day group coupon trend made popular by Chicago-based startup Groupon. It’s also a slight variation on flash sale sites such as Woot, an Amazon property, which originated in the early 2000s.

hat’s the first thing young women do when they wake up? Check Facebook. How do enterprise employees pass the time at work? With social media. With so many studies highlighting ever-accelerating social media usage rates, the conclusion is obvious — social media is everywhere. What follows are five of the hottest social media trends right now. Each are influencing our social, online and mobile behaviors in significant ways. Entertainment checkin services are changing the way we watch television. Mobile loyalty applications are helping us connect the dots between our realworld shopping behaviors and digital rewards. A new breed of Q&A services are changing the way we search. Barcode scanning applications are making products social, and deal-ofthe-day sites are giving us ways to save by recruiting our friends to the party. Mobile Meets Loyalty As consumers purchase more and more smartphones and phone technology heads in the direction of the “super,” it’s only a matter of time before old-fashioned loyalty, rewards and club card programs head in the mobile direction. Two applications — Key Ring and CardStar give us a preview of what’s to come.

5 Checking-In to Entertainment

SEASONAL MAGAZINE

1 Social Scanning

SEASONAL MAGAZINE

Smartphone owners have the world at their fingertips. As grandiose as that may sound, advances in mobile barcode scanning technology have given rise to applications that allow for comparison shopping, QR code place checkins and ultimately a social experience around product barcodes. What this means is that at any given moment, any smartphone owner can pull out their device, fire up a barcode scanning application, scan a code and complete activities or gain access to a wealth of immediately relevant information. Really, what we’re seeing is the convergence of social media and barcode scanning to create “social scanning.”

SCVNGR, and the businesses they serve, it’s about access to measurable offline behavior.

The consumer’s scanning behavior is so significant that locationsharing checkin services such as SCVNGR are giving away QR code decals to retailers free of charge. Even Google is sending their own QR code decals out to small businesses with popular Place Pages. What makes the scan so significant? It is a tangible connection between the physical and digital world. For Google,

Services such as Stickybits and Bakodo are taking the social scanning experience beyond the checkin and creating productdriven communities around brands and items via barcodes.

These scans aren’t inherently social in nature, but because they can double as verifiable place checkins, they can also possess the social properties of a checkin: locationsharing with friends on the same service or via social network distribution.

Stickybits lets users add video, text, photos and audio to the barcodes they scan in the physical world via iPhone and Andriod apps. It’s a clever way to use barcodes to help people tag, share and connect

around items. It has also recently become more brand-friendly. “Official bits” are barcodes that brands can claim in order to highlight their own content. New social features allow for user response in the form of threaded conversations, and voting to ensure that the best content attached to the code rises to the top. Bakodo’s iPhone app began as a barcode scanner primarily for comparison shopping, but it’s evolving to add social scanning functions as well. App users can scan barcodes of all varieties to review items and check out recommendations from friends. The barcode intelligence search engine combines a wealth of product-related data and socializes the process for a comprehensive product-driven experience. As scanning becomes a more socially acceptable practice, the barcode scan will only become more social in nature. Expect future QR code marketing efforts to tap into the social opportunities, and for brands to explore ways to engage with consumers at the scan touch point.

There are few Q&A services that have received the same type of attention as Quora, but the justlaunched Facebook Questions project — which mirrors Quora in purpose and function — was released before Quora ever achieved mainstream recognition. Now the two products are essentially going head-to-head, competing for the same audience. Facebook has the clear edge when it comes to its built-in user base, but we’ve repeatedly seen bigger companies fail at side projects — just look at Google Wave — simply because smaller startups can innovate faster and have the benefit of progressively scaling over time. Quora’s opportunity lies in Facebook’s somewhat bungled launch of Questions, and its smart Another notable Q&A site that contributes to the intelligent information discovery trend is Google’s Aardvark. Aardvark approaches the space with a model that helps users surface answers through friends of friends. It’s an algorithmic social system that should help Google improve its search algorithms. In fact, Google should be able to use the technology to provide socially-relevant answers in search queries.

Google does have a reputation for letting purchased startups wilt after their pre-acquisition bloom, but given how closely aligned Aardvark is with Google’s core search product, that likely won’t be the case here. There’s also the freshly enhanced Ask.com, which is seeking to join the “people plus search results” party with its new beta Q&A offering. Most of the key players in the space believe in the power of intelligent information discovery and define it as the intersection of people and their social circles, with scientific methodologies for surfacing the best possible answers in the shortest amount of time. Apple-owned artificial intelligence app Siri, however, eliminates the social and instead focuses on the science of finding the right answer. Right now the overlap between services such as Aardvark and Siri is minimal, primarily because Siri focuses on solving immediate problems of convenience — finding food, calling a taxi or making a reservation — and not on long-term, more conceptual problems. Still, Siri is unquestionably a mobile search engine keen on intelligent information discovery, which means the technologies could become more competitive in the months ahead. Another startup to watch for in this space is Swingly. The private beta service describes itself as a “Webscale answer engine designed to find exact answers to factual questions.” Humans are largely eliminated in Swingly’s machine-driven Q&A formula, so it too challenges the notion that social integration enhances the Q&A experience.

SEASONAL MAGAZINE

The most buzzy of the bunch right now is Quora, an intuitive and relatively straightforward Q&A site whose co-founder, Adam D’Angelo, is most known for his past role as Facebook’s CTO. Quora was founded in June 2009, released into private beta in January 2010, and immediately became a hit Q&A site with the technorati crowd. In fact, web celebrities have been known to use the site to answer questions about themselves.

3 Group Buying Group buying is the deala-day group coupon trend made popular by Chicago-based startup Groupon. It’s also a slight variation on flash sale sites such as Woot, an Amazon property, which originated in the early 2000s. Groupon is the brain-child of CEO Andrew Mason, who came up with the group buying idea after founding the earlier group-focused site The Point in 2007. The Point is a campaign platform designed to support group action around causes. In 2008, nearly a year after launch, the platform was repurposed to bring Groupon’s deal-of-the-day vision to life in Chicago.

SEASONAL MAGAZINE

Today, Groupon deals are available in cities across the world, thanks in part to the acquisition of international clone Citydeal. The company has also managed to come by a $1 billion valuation, partner with Twitter to power @EarlyBird deals, find alternative distribution via newspapers, and start personalizing deals for subscribers in select cities. Just yesterday, Groupon introduced its first nationwide deal — a 50% discount at the Gap — to much fanfare, attracting roughly 10 Groupon purchases every 10 seconds. Over the years, Groupon’s successful model has been copied with ease. LivingSocial, 8coupons and a host of other clones have found their own way on the web. Recently, Yelp, Zagat and OpenTable have veered away from their core product strategy to bring group buying to their respective site audiences. The clones and copycats keep on

Andrew Mason, CEO, Groupon

coming, but what’s also interesting is that a host of group buying enterprise-targeted software-as-aservice products are also cropping up. Each hopes to attract brand clients interested in offering their own Groupon-style deals. Wildfire has a Facebook-friendly do-ityourself Group Deals product, Megachip Technologies just launched their own daily deal coupon software, and daily-deal site Adility launched a Groupon-like platform for small business earlier this summer. All signs indicate that the group buying trend will only increase in popularity over time. Local businesses are finding that they can successfully attract new and repeat business by introducing customers to their services with a deeplydiscounted group coupon. In fact, Groupon asserts that 97% of merchants featured on the site want to be featured again, which further demonstrates just how much demand they are dealing with. In the future, look for more brands to create their own Groupon-style deals and for Groupon and its larger competitors to snatch up smaller clones in order to expand and enhance their offerings. Also watch

for checkin and location-based services to intersect with group buying to create services similar to GroupTabs. The notion of having patrons check-in in masses to unlock deals is extremely business-friendly.

4 Mobile Meets Loyalty As consumers purchase more and more smartphones and phone technology heads in the direction of the “super,” it’s only a matter of time before old-fashioned loyalty, rewards and club card programs head in the mobile direction. Two applications — Key Ring and CardStar give us a preview of what’s to come.

Both applications are designed to eliminate plastic loyalty card buildup with a single digital repository. The apps leverage barcode scanning technology so users can save gym cards, grocery store cards, drug store cards and the like, right to their phone. This trend is just beginning to take shape as smartphones become more commonplace, scanners become more sophisticated and retailers become digitally savvy. In the future, we can expect integration with merchant loyalty programs, as well as integration with checkin services like Foursquare. The latter also demonstrates the inevitable convergence of social media with traditional loyalty programs, which

we’re already seeing from Tasti-dLite’s innovative approach to automatic, POS-integrated social media rewards system. Shopkick’s retailer-friendly automatic checkin service is currently being tested by Best Buy, Macy’s, Sports Authority and Simon Property Group. This early interest in Shopkick points to retailer interest in verifiable, checkin-driven rewards. There’s also private beta mobile app Pushpins, which seeks to leverage QR codes to further enmesh the instore shopping experience with digital retailer rewards, the likes of which resemble the sophistication of SCVNGR’s recently released rewards program.

Checking-In to Entertainment

What are you watching on television right now? Whether it’s the latest episode of Mad Men or the next installment of a reality dating show, chances are that you’re sharing the entertainment experience either through face-to-face interaction with friends and family, or by posting outrageous and shocking moments to your favorite social media channels. Consuming most entertainment media is an inherently social experience. A crop of services have popped up in recent months to refine that social experience through entertainment checkins — the act of checking into the television show or movie that you’re watching right now. We’ve already explored why entertainment will drive the next checkin craze, and three of the emerging startups — Philo, Miso, and GetGlue — propelling this

trend toward mainstream audiences. There are a few other services in the same mix that are certainly worth watching. CBS recently released their entertainment checkin service, TV.com Relay. It’s a browser-based mobile app for most smartphones that allows users to checkin to live television shows and follows the same TV guidestyle format that Philo employs. The CBS offering is nice to look at, and offers content-driven badges like the other guys. It also excels in the real-time comment department. In talking with the Senior Vice President and General Manager of CBS Interactive’s Entertainment and Lifestyle Division, Anthony Soohoo, it became clear that the vision behind TV.com Relay extends far beyond entertainment checkins. Soohoo also iterated that the application, which is just a few weeks old, already has 100,000 users thanks to TV.com’s

built-in audience. Tunerfish is another mobile and web television checkin service. It’s backed by Comcast and boasts partnerships with networks including HBO, Showtime and NBC. App users answer the question, “What are you watching?” by typing in the name of a show or movie and clicking the “I’m watching” button. The service also provides behavioral incentives in the form of awards, and has been actively working to bring networksponsored, show-themed awards into the mix. There’s also Clicker Social, a relatively new addition from Clicker that turns the television search engine and web TV guide into an entertainment checkin service as well. The re-purposed entertainment version of the checkin is a smart way to link entertainment consumers with content they love, enhance the social experiences around television, and potentially inspire new audiences to tune into trending or friend-approved television shows. The enormous amount of competition in such a brand new space means that things are just starting to get interesting. All of the services need to evolve to attach real value to the checkin. They each recognize that awards, badges and stickers are easy ways to encourage new user participation, but these existing game mechanics merely scratch the surface in terms of user engagement. In the coming months, look for constant iteration on this front. For example, we can expect Miso to introduce even more showspecific content exclusives via its show fan clubs and for GetGlue to experiment with offering discounts and coupons that users can redeem for their Glue points.

COAL INDIA PUBLIC ISSUE

10 REASONS Why

The Nation Waits for this IPO

Robust Business Model Coal India is the world’s largest producer of Coal, thanks to being born in Coal Country, India, and thanks to the head-start it enjoyed as the sole PSU in this sector. Despite being India’s largest employer, its operating costs are much lower than almost all coal majors, including those in China. At the same time, it services the second-largest coal demand in this whole world, India’s power sector. Together, this has resulted in a robust business model, seldom seen elsewhere in any sector or country.

Support of Wall Street & Dalal Street If Coal India created history, when international banking giants vied with each other to underwrite its IPO for next to nothing, it is again going to surprise by way of support from international institutional investors. The idea of having 30% reserved for anchor investors is already being scrapped, as the international road-shows progress, and the underwriting institutions are

themselves busy readying funds and formalities to subscribe to the issue. The IPO is supported by Wall Street majors like Citi, Deutsche Bank, BofA - Merrill Lynch, & Morgan Stanley, as well as Dalal Street biggies like Enam & Kotak.

Nil Competition Technically, Coal India is not a monopoly. Many private sector players today have captive coal fields for their own use. But Coal India and its myriad subsidiaries virtually control the bulk of this business, if not for anything else, for the simple reason that nobody else is equipped to cater to the huge Indian demand. For many many years, if not decades, Coal India is not expected to have any serious competition.

Best Rating Coal India has garnered an IPO rating of 5/5 from CRISIL, which goes even one step above the ‘above average fundamentals’, which in itself is rare in this country. In fact, the only challenges CRISIL found in Coal

India’s strategy are efficient use of their cash reserves and how the main promoter (who will hold 90% post-issue) will act by way of enacting new coal regulations. Those are the kind of drawbacks many PSUs would love to have! More solid ratings from more assessors are expected for this IPO in the coming days.

Size that accommodates all If Coal India IPO was just India’s biggest, many would have been happy. Because, all interested retail investors would be able to hold a pie of this. But Coal India is also reportedly world’s third largest

Despite being the largest miner, CIL has often won accolades for their green initiatives.

CIL’s International Edge Players / Metrics

Reserves (billion tons) Coal India 63 Peabody Energy 9 Yanzhou Coal 2 China Coal 5 China Shenhua Energy 7

Production (million tons) 431 201 36 104 186

IPO. That means all interested investors will be comfortably accommodated - FIIs, DIIs, retail investors, pension funds, everyone.

Honest valuations Being a public sector company, nobody expects Coal India to be exorbitantly priced like private sector IPOs, despite being in the

Market Cap (billion $) NA 12.58 10.54 46.66 96.40

P/E (multiple) NA 23.40 13.83 16.92 15.70

high-buzz energy sector. Whatever heavy pricing Government had resorted to earlier is likely to be missing as such IPOs like NHPC & SJVN had failed to appreciate much. More likely for Coal India will be how Engineers India FPO was finally priced, or even better. On reasonable P/E and P/BV, both the Government and potential

CIL’s Increasing Momentum

investors are all set to gain.

Efficient Management Chairman Partha S Bhattacharyya understands both the science and commerce of coal. A physics postgraduate and an ICWA Fellow, Bhattacharyya has clearly applied superb strategy over the years leading to this IPO, to convert this once loss-making complex of subsidiaries into a strong network of coal mining operations. His secrets include a concern for the labour force which can be seen from the largest ESOP, his concern for making Coal India a highlyprofitable organisation, and his concern for the environment.

International Potential Coal India’s story so far is Indian. But this is going to change soon as Coal India starts to get results from the next-gen washing process that will enable Coal India to deliver

Core Metrics / Years 2006

2007

2008

2009

2010

Total Income

34,009

35,005

38,617

46,064

52,592

PBT

8,754

8,586

8,190

5,739

13,965

PAT

5,891

5,709

5,243

2,079

9,622

Restated Profit

6,114

4,205

4,285

4,063

9,829

Share Capital

6,316

Net Worth

14,254

16,213

17,201

19,008

25,844

Dividend %

23.75

EPS (Rs)

9.62

6.63

5.95

6.43

15.56

international quality coal. Combine this with Coal India’s expertise in delivering the most competitive pricing, and you see the international story starting to appear in the horizon. Talks are already on to take stakes in international mines.

Fit for Invest n’ Forget There are chances that Coal India will be one of those issues fit for the invest n’ forget philosophy, much like Reliance Industries or Infosys. The demand story and the growth story of Coal India is akin to the best in Indian industry, with the demand insatiable and the growth relentless. Such factors

make Coal India one of those rare IPOs that can be massive wealth creators over two, five, ten, or fifteen years down the lane.

Potential for Listing Gains If you are looking for short-term gains too, Coal India comes across as a strong case. If not for anything else, the above nine factors will ensure that Coal India will set new records in over-subscription, paving the way for significant listing gains. But, more seriously speaking, Coal India’s attractive valuation will leave enough money on the table for many weeks, months, and quarters to come, and make it a heavily traded scrip fit for Nifty and Sensex.

CELEBRITIES

Karisma and

I can't marry the same man: Kareena

Bollyw ood star actress K areena K apoor ffeels eels she Bollywood Kareena Kapoor e the right balance be tw een has managed tto o strik tween strike betw commer cial and meaningful cinema. Hailing fr om commercial from an illustrious ffilm ilm ffamily amily ys she can't do amily,, she sa says o dance ar ound trees. films where she only has tto around

"I enjoy acting. Acting is in my blood, it is in my genes, it is in my DNA and you can see that on screen I like doing different roles. I can't do just those films where I am looking pretty and sing and dance around trees. I want to act, " Kareena told in an interview. The actress considers her debut film "Refugee" (2000) a special film. " 'Refugee' was a very special film because I always wanted to prove myself as an actress and not to be known just as a glam doll. There are films like 'Refugee', 'Chameli', 'Omkara', 'Jab We Met', '3 Idiots' and 'Kurbaan'; they all have been very different. "I don't think any other actress has been able to do such a variety of roles. So the journey, I think, has been colourful, " said Kareena, 29. Nine years after "Kabhi Khushi Kabhie Gham" (2001), where she played Kajol's younger sister, Kareena has teamed up with Kajol in Sidharth Malhotra's directorial debut "We Are Family". She is elated to share the same frame with the senior actress. "I think it's an exciting challenge to be working with Kajol. In 'Kabhi Khushi Kabhie Gaam' we didn't have too many scenes together, but in this film we are both in the same frame.

SEASONAL MAGAZINE

We both live in the same house, have equally powerful roles; in fact, mine is the most complex and complicated part. It's very easy to be emotional and gain sympathy but very difficult to win over the sympathy and I hope I

could achieve that, " she said. Releasing Sep 3, "We Are Family" is the Hindi adaptation of Hollywood hit "Stepmom" (1998). Arjun Rampal plays what Ed Harris did in the original, while Kajol steps into Susan Sarandon's shoes as as a divorced mother. Kareena plays the same role that Julia Roberts did, but in her own style. "I am absolutely honoured that Karan (producer Karan Johar) and Sidharth thought that I could do the Julia Roberts role because to me she is the finest actress, " said the actress who feels the adaptation could have been more contemporary. "It's a very desi film. I think it should have been made more contemporary. Indian audiences are ready for that. It's about the journey of two women. They start off with hating each other and due to unforeseen circumstances they end up loving each other."

"Kajol is a hands-on mother. I have seen Karisma. Both Kajol and Karisma, I don't know if it's the trait of that generation, are just there with their children, " said Kareena. Asked how it would have been if Karisma had played Kajol's role, she quipped, "Oh god! She can't do that because we can't marry the same man. No way." There are three child stars - Aanchal Munjal, Nominath Ginsburg and Diya Sonecha - in the film, but Kareena didn't have to handle them. She is all praise for their professional behaviour on the sets though. "In the film, I didn't have to be with the kids because they had their mother (Kajol). The children were really lovely, they didn't get impatient. They were acting like adults, not like children, " said Kareena.

Madonna schedules 15-minute appointments with kids Madonna’s kids have appointments made to spend time with their superstar mum, according to reports. The Material Girl’s personal assistants are said to schedule time for her with Lourdes, Rocco, David and Mercy in 15-minute increments. “The children are said to have appointments made to see their mother, who will help with homework, or sing, or even make food with them - but only if it has been planned in advance,” the Daily Mail reports. The youngsters are said to have three nannies, all of whom speak French as the kids are being raised to be bilingual. Two macrobiotic chefs whip up meals, and there is no red meat, pork or refined sugar on the menu, while dairy products are strictly limited.

SEASONAL MAGAZINE

While working with Kajol, Kareena observed that her co-star was quite similar to her sister Karisma when it comes to their child.

COAL INDIA PUBLIC ISSUE

The IPO the Nation Waits For India’s largest and the world’s third largest IPO is coming, with some estimates putting the final size at Rs. 17,000 crore. With an operating margin of 30%, cash reserves of over Rs. 39,000 crore, quite reasonable offer valuations, and an ambition to grow quantitatively and qualitatively despite its already world-dominating production, nobody is doubting whether Coal India’s IPO would be a success. Already a feather in the cap for Sriprakash Jaiswal, Minister of State for Coal, and Partha S Bhattacharyya, Chairman of Coal India, the only thing

SEASONAL MAGAZINE

investors are looking for from this IPO will be the kind of capital market stewardship Coal India will accord its scrip, post-listing. If CIL can achieve this investor confidence, this public issue can set records in subscription.

ver wonder why PSU banks are alltime favourites among discerning investors â&#x20AC;&#x201C; both retail & institutional investors despite most of them trading in the sub-100 and sub-500 price ranges? It is just because they were offered to the public at reasonable valuations, and from those levels, most of them have at least tripled in value within a few years time. And ever wonder why some of the big brand names of India Inc have failed to enthuse the investing public? Again, it was a case of valuation, with many private sector giants in power & real estate sector offering their shares at astronomical valuations, but with no follow-up by way of actual performance in income or profits.

Sriprakash Jaiswal, Minister of State for Coal Now, when Coal India Ltd goes for its IPO in the second-half of October, the good news is that it will be on reasonable valuations, probably on a price-earnings ratio of 17-18. CIL scripâ&#x20AC;&#x2122;s book value will also be high due to its capital intensive operations, and together, these valuations present a compelling case for the investing public as Coal India has some unique potential. Unlike the power sector, which has the growth potential but relatively low and steady margins, Coal India is an organization that has succeeded in creating an operating profit margin of 30%. The growth projections are massive with an aim to double its turnover within a timeframe of 3 to 5 years. Though technically not a monopoly, Coal India enjoys unbeatable head-start in this sector, as well as the

SEASONAL MAGAZINE

Partha S Bhattacharyya, Chairman, Coal India

patronage from Government due to its demonstrated growth curve. The strength of Coal India’s financial health will be clear from just one metric. Normally, companies go for their IPO to enter a higher orbit of capex and/or correct the debt-equity ratio. CIL doesn’t need an IPO for either of these objectives. Not that it is not having a mega capex plan. But it can fund the Rs. 10,000 crore plan very well on its own as it is sitting on cash reserves of over Rs. 39,000 crores.

come under the compulsory 25% public holding norm has also come as a blessing for CIL, as this will ensure that the public float will remain 10% for long, until the company plans for an FPO, that too with fresh equity. In fact, the company will have only 9% as free float for now effectively, as 1% of the issue will be reserved for Coal India employees as ESOP, which will obviously have a lock-in clause. Even more importantly, the low float, the huge reserves, & the

The strength of Coal India’s financial health will be clear from just one metric. Normally, companies go for their IPO to enter a higher orbit of capex and/or correct the debt-equity ratio. CIL doesn’t need an IPO for either of these objectives. Not that it is not having a mega capex plan. But it can fund the Rs. 10,000 crore plan very well on its own as it is sitting on cash reserves of over Rs. 39,000 crores.

SEASONAL MAGAZINE

Because of this vital difference, Coal India is not issuing any fresh equity on its part, and the whole of the issue – which can even be upwards of Rs. 17,000 crore - is just a divestment by the only promoter, Government of India. This prevents equity dilution, which is a big plus for the newly entering investors. Coal India will have only a 10% public float, which in itself can make the scrip dearer and enjoy progressively high valuation over time. The Government’s recent corrective stance that PSUs won’t

mega ESOP signal that Coal India will be free to deploy tools like a bonus issue in the coming quarters or years to compliment all stakeholders. With the IPO and listing, Coal India is also entering some of the most prestigious national and international ‘clubs’. Inclusion in Fortune 500 and Maharatnas are just two examples, where the listing clause was preventing CIL’s inclusion. The company will also be the largest publicly held employer in India after the IPO.

Internationally, Coal India has been gathering much attention as not only this globe’s third largest IPO after two Chinese banks, but for some exemplary performance in their core segment, as well as in managing human resources. Recently Coal India and its Chairman Partha S Bhattacharyya won a couple of Asian HR awards at Singapore. World’s largest coal producer is also planning for strategic tie-ups with American, Australian, & Chinese mines to better its output quality and increase its dominance. In India too, the company got a shot in its arm when the Cabinet decided in its favour on the go/no-go area debate proposed by the environmental ministry. In some ways the decision was ethically sound, as CIL has often demonstrated a rare concern for the environment, their massive afforestation program being one.

The only thing investors will watch out for is the kind of stewardship for the CIL scrip in the capital markets, post listing. If Coal India can excel on that front by meeting stringent analyst requirements, as well as ensure value multiplication for its investors quarter-to-quarter, fiscal-tofiscal, as much as it excels in ensuring its actual growth, there is no reason why this can’t be one of the most significant wealth creation stories that public can safely participate in. Indications of such stewardship are already coming in with plans on to have high-profile anchor investors for the IPO, a step that will be taken by a PSU for the first time.

SEASONAL MAGAZINE

The world is taking note of this IPO for one more reason. Coal India has been able to weave this magic despite suffering from geographically poorer quality coal, and the mandate to provide almost 50% subsidy compared with international coal prices. In a scenario where its coal quality improves due to international tie-ups and investment in a new washing facility, as well as more non-subsidized deliveries, Coal India stands to have a significantly better profit margin in the years to come.

IN-FOCUS

“Manappuram is Redefining How Gold Loans Are Looked Upon” immense possibilities as not only

SEASONAL MAGAZINE

are the risks negligibly small, but Riding on the response from a mega also the ticket-sizes and repayment campaign to promote the cost-effectiveness, periods are small, making them suitable for a wider customer base. convenience, flexibility, & safety of gold That is why you hear about so many loans, Manappuram Group is all set to double NBFCs / Banks planning to enter gold loans, even if they don’t its loan book this fiscal and again in next eventually due to a lack of core competency in this line. fiscal. Powering the rapid growth will be a What about NBFCs consid ering Rs. 1200 crore QIP that will be backed by conversion into banks? Citi, UBS, Enam, & Religare, and likely to Here the question is different as banks have a dynamics of their own witness US based PE funds who exited the which is not comparable with NBFCs. There are upsides like stock with 5X returns re-entering the access to low-cost funds, but what company as anchor investors. Manappuram I am wary about is losing one’s core competence. Today, if you look at Group Chairman VP Nandakumar in any successful NBFC, be it Shriram Transport or Manappuram, what conversation with Seasonal Magazine: f you look at the NBFC sector today, four businesses are booming viz. microfi nance, housing finance, gold loans, and of course, the fourth is the prospects in starting banking operations. Though Manappuram is only involved in goldloans, you have been involved with each of these sectors as a co-promoter in certain companies and as a former banker too. How do you asses the potentialities of each? As you have rightly pointed out, these are NBFC sectors that are booming, and I would also add auto

finance into it. If you assess each of them, there is no doubt microfinance is in momentum, and I would say it is fully deserved if you take into consideration the good work they do. Still, the risks are high and we should carefully watch how this pans out in the long run. Housing finance, again is booming, and for a housing finance company it is a good thing that each of their accounts will stay with them for 15 or 20 years. However, there is a flipside too in that profit generation is a long-drawn process. Gold loans on the other hand is a very dynamic business with

works is the sharp focus on a single business on which the organization has built up a formidable core competence. So, if there is a way to get converted into a bank without losing one’s core competence, that is well and good. In fact, an earlier proposal to encourage specialized banks like auto loan banks or housing loan banks or gold loan banks was a good proposal, we think. It is the norm in many countries.

Since the announcement of your preferential issue of Rs. 100 crore, the Manappuram scrip has zoomed. Now, going forward, do you subscribe to the view that for

Gold loan companies tend to perform well in downturns, and plateau during periods of economic growth. Now, as the country is in an economic recovery, do you foresee a

SEASONAL MAGAZINE

“

We have a Rs. 4000 crore loan book on 35 tons of gold, and so you can imagine the potential when we tap into this 1500 ton unorganized sector. That is the short-term potential we are aiming from this campaign. The long-term prospects are mind-boggling - the household gold reserves is 20,000 tons, that is ten times the currently pledged gold.

NBFCs, market cap can continue to move in tandem with assets under management? The preferential issue by promoters was taken well by the market as being done at almost all-time high levels, it conveyed the message that we were fully confident of our growth projections. When this happens to a currently underrated scrip, the prices can correct, and that is all that happened. Coming to your second question, well, this AUM / market cap co-relation has been exhibited in the past by some strong NBFCs including Manappuram. I shouldn’t say whether this will continue to be so in our case, but one thing is sure, we will be reaching our annual AUM target by the second quarter itself, and that means we will hopefully double our loan-book by the end of this fiscal. You have indicated plans for a QIP which we learn is going to be on a larger scale than you have attempted before. Can you provide more details, as also the dilution it will involve? We are planning for a Rs. 1000 1200 crore QIP so that our capital adequacy ratio will remain comfortable even if we double our loan book. It is planned on a larger scale, supported by Enam & Religare, as also international majors like Citi & UBS. You will be surprised to know that even some international PE funds who exited Manappuram with 5X profits have shown interest to come back through this QIP as anchor investors. The dilution won’t be much, likely to be around only 20%, and weighed against our growth it should be a non-issue.

“

SEASONAL MAGAZINE

That brings us to Manappuram’s new ad campaign with celebrity endorsements. How far is it delivering - quantitatively and qualitatively? It is delivering excellently, but that is not the crux of the issue. Our objective in that campaign is to educate the customer regarding the flexibility, convenience, & costeffectiveness of gold loans as against other kinds of personal and business loans. In other words, the stigma associated with gold loans should stop. As you can see, we are focussing on growing and professionalising the gold loan segment through this campaign, and not only looking at our own returns. I think we are all set to succeed in bringing respectability to this segment. When you say growing the gold loan segment, you know it is a long-drawn process. What about immediate returns? I would say you cannot segregate it as long-term and short-term objectives. But as you say, immediate gains are also quite there. The current gold loan segment is not small as such. Some 2000 tons of gold have been pledged in this country, of which

“

Many loans tend to do better in downturns and gold loans is no exception. But the reverse is not true for gold loans. This business thrives amidst economic recovery and amidst strong growth phases. The reason for this is simple. Today, if you look at Manappuram’s customer base, around 52% is made up of small & micro enterprises. They expand their businesses seasonally - one small example being the school reopening period - as also when there is strong economic growth.

“

slowdown for Manappuram? Not at all. In fact this idea that gold loans is a downturn business is a misnomer. Many loans tend to do better in downturns and gold loans is no exception. But the reverse is not true for gold loans. This business thrives amidst economic recovery and amidst strong growth phases. The reason for this is simple. Today, if you look at Manappuram’s customer base, around 52% is made up of small & micro enterprises. They expand their businesses seasonally - one small example being the school reopening period - as also when there is strong economic growth.

the unorganized sector. That is the short-term potential we are aiming from this campaign. The long-term prospects are mind-boggling - the household gold reserves is 20,000 tons, that is ten times the currently pledged gold.

On a personal capacity, you have also entered the gold retailing business. What are the strategies here? First and foremost, Manappuram is selling only 100% BIS Hallmarked gold. This is quite unlike other jewellers who advertise hallmarked gold, and push non-hallmarked 91.6 gold in the showrooms, ostensibly for offering better prices. On our side, we have taken up the challenge to offer hallmarked 91.6 gold at non-hallmarked price points from other jewellers. Secondly, we do fully transparent accounting, with payment of 100% applicable taxes. We also offer free insurance against theft for gold purchased from Manappuram.

Do you think you can storm the

banks account for only 400 tons, and the organized sector including us accounting for another 100 tons approximately. But what about the remaining 1500 tons? That lies with the unorganized sector where you can’t expect proper documentation or security, let alone reasonable interest rates. So, when you convey the message that here is a fully professional gold loan operation with safety and reliability, customers are likely to be converted. We have a Rs. 4000 crore loan book on 35 tons of gold, and so you can imagine the potential when we tap into this 1500 ton in

gold retailing bastions as much as you have been successful in outperforming family-run gold loan companies? I am more than confident, because we will not be targeting the customer segments of other branded jewellery chains, which is largely made up of HNIs. Our target population would be the volume segments for whom gold is also an investment or enabler, and as such, purity and price are of utmost importance. Our shops won’t be mega or large format ones, but more accessible to local communities. We have done an India-wide study on the subject and found out that the volume segment still buys from smaller shops, goldsmiths, and jeweller cum pawn shop setups. We are aiming to be the volume leader and will have to our credit redefining gold purity and price transparency standards.

Older Adults Nearly Double Their Social Media Presence Google, The Tilm: Internet Giant to Star in Hollywood Film he founding of Google, the internet giant, is to be the subject of a Hollywood film. It follows the soon-to-be-released The Social Network, directed by David Fincher, which chronicles the founding of Facebook, the social networking website. According to Deadline Hollywood, the entertainment industry blog, the film will be based on the Ken Auletta book "Googled: The End of the World As We Know It" and will tell the story of founders Sergey Brin and Larry Page. Michael London, the film's producer, told Deadline Hollywood: "It's about these two young guys who created a company that changed the world and how the world in turn changed them.

new study from Pew Internet found that between April 2009 and May 2010, social networking site usage grew 88% among Internet users aged 55-64, and the 65 and older group’s social networking presence grew 100% in the same time frame. Young people still dominate social networks like Facebook, but their usage only grew 13% during the year covered by Pew’s report. Older adults are catching up at an incredibly quick pace, though it remains to be seen whether they will pass the youth or hit a ceiling at or below the usage levels reported by young adults and teens. Older adults who use services like Twitter or Facebook are still in the minority amidst their peers. Pew reported about 10 months ago that 19% of all Internet users use status updates, but only one in ten Internet users aged 50 and older used status updates or read ones written by others. That’s a lot more than there used to be, but it’s still a small group — especially when you consider the fact that Pew’s numbers only cover people who are on the Internet at all. Many people in that age group aren’t going online to begin with. According to report author Mary Madden, e-mail still dominates interpersonal communication for the 50 and older set.

"The heart of the movie is their wonderful edict: don't be evil. "At a certain point in the evolution of a company so big and powerful, there are a million challenges to that mandate.

Page and Brin founded Google while they were PhD students at Stanford University in the 1990s. They are now billionaires. No actors have yet been cast to play them. The Social Network was adapted from Ben Mezrich's 2009 book "The Accidental Billionaires."

SEASONAL MAGAZINE

"Can you stay true to principles like that as you become as rich and powerful as that company has become?"

LUXE PROJECT

Prestige Redefines Luxury with Silver Oak

SEASONAL MAGAZINE

Bangalore headquartered Prestige Estates Projects is continuing their efforts to differentiate themselves from competition by launching distinctly premium projects like Silver Oak, which is mainly a villa project following Middle East architecture.

he Group continues to be in news and momentum with Irfan Razack recently being bestowed ‘Entrepreneur Extraordinaire 2010’ award by CREDAI & BAI. Prestige has to its credit impressive projects like UB City and Shantiniketan. The Group is very closely and equally held by three brothers including Irfan. Prestige has lined up Rs. 7000 crore of new launches in calendar year 2010, of which a few has already been launched. Prestige Silver Oak is one of a kind lifestyle residential community development from Prestige Group. Spread across 17 acres and located in Whitefield, IT’s newest hub in the city, Prestige Silver Oak is poised to become the next premium luxury destination in Bangalore city. Comprising of 146 independent Villas and 32 low-rise Apartments

V Shashikanth & Uzma Irfan at City Properties 3rd Anniversary event exclusive state-of-the-art clubhouse, which comes with every imaginable amenity that is a necessity for modern day premium lifestyle. One of the main features of this residential development is the centrally located spacious clubhouse. The clubhouse boasts of a full fledged swimming pool, multipurpose hall, coffee shop, spa, gym, atm, indoor sports area, supermarket ,mini theater and outdoor lounges aiming to provide a healthy community living.

SEASONAL MAGAZINE

and set amidst scenic landscapes; this project is all set to give a new meaning to luxurious living in the city. Prestige Silver Oak promises to be yet another milestone for the company in this segment. The development reflects an introduction to a popular Middle Eastern type architecture with spatial designs which combines fantasy with the practicality of modern day lifestyle.” The development has been designed to accommodate only 178 units in order to provide a sylvan haven to its residents. The land coverage is only 30% to provide extensive landscape areas. The Independent Bungalows, ranging across 3606 – 5091 Sft. are 2 storied edifices ensconced in their own private gardens. Eight different models of these elegant villas are available, each including 4 palatial bedrooms. The Apartments spread across 4 floors, with areas ranging between 1851 – 2411 Sft have been designed on an outward looking plan to maximize the views to the surrounding serene greenery. Keeping in mind the recreational needs of their residents, Prestige Silver Oak also provides an

SPANDANA SPHOORTY IPO

Can Spandana Deliver a MicroFin IPO You Shouldn’t Miss?

SEASONAL MAGAZINE

Padmaja Reddy Founder and Managing Director

he moment news came out that Spandana was considering IPO too as a fund raising strategy, the question on all investor minds was this – how does this fare vis-a-vis SKS? Days later, most retail investors know that Spandana is the second largest micro finance institution, but nothing much more than that. Comparisons with SKS, though unavoidable, is not the crux of the issue as discerning investors would opine. Because, nobody can predict whether it will be SKS, Spandana, or even any among the 20 odd scaleable MFIs which will be the one calling the shots a couple of years from now. But after a detailed look at Spandana’s history and performance, one can’t remain unimpressed at its leadership potential, that too of the absolute kind in the long-term. Because, Spandana seems to have that rare knack of being superbly tuned, in every sense of that word, and more importantly for all its stakeholders.

For starters, Spandana has one of the lowest lending rates among all MFIs operating in the country, which in itself is lower than other MFI strongholds like Bangladesh & Vietnam. For Founder and Managing Director Mrs. Padmaja Reddy, this is of core importance as unlike many later-day MFIs, Spandana has its origin in grassroots level NGO work among the poor.

Despite such transparency that favours loanees and the lowest possible interest rates, Spandana was the first MFI in India to cross the impressive milestone of Rs. 200 crore profit after tax! Against the average return-on-equity of 20% enjoyed by similar-sized MFIs, Spandana has an RoE running between 50 to 60%. Another distinction in Spandana’s operation is their reliance on domestic funding sources like banks and equity, which is quite unlike aggressive US based PE funds that are now making a beeline for MFIs, which unfortunately will result in adulterating the objectives. Instead, Spandana is backed by domestic financial powerhouses like IDFC, SIDBI, & ICICI Bank. Due to this, and her personal belief in this model, the promoter group led by Mrs. Reddy has an operating majority stake in Spandana which is likely to continue for a long time.

This factor in particular has been a cause of concern with investors in SKS, as the firm had to reassign pure PE funds as Sequoia into promoter roles. Spandana’s almost unbelievable match of service levels and profit levels is due to two factors that has been noted by various rating agencies. Even while enjoying 40% better productivity from its team than the industry average, Spandana’s operating costs are significantly lower. Mrs. Reddy has also steered this MFI into a solidly sustainable model with Spandana being the first MFI to achieve the highest possible credit rating of mfR1 from CRISIL, and benchmarked as one of the most cost-efficient MFIs in the world by the international body M-CRIL. At over 4 million customers, Rs. 15,000 crore total disbursements, annual growth rate of 100%, and an unbelievably high pre-issue EPS of Rs. 152 on a Rs. 10 share, investors are sure to look twice at this IPO. But, of course, much will depend upon how Spandana will price this issue. If it is better priced than SKS’ 35 P/E, there is no doubt why this shouldn’t be a good long-term bet.

Seasonal Magazine interviews Mrs. Padmaja Reddy for this story: Size-wise Spandana is the second largest microfinance company, which is well and good. But are there some domains in which Spandana is absolutely No.1 compared with SKS or other players comparable to you? In terms of size, the difference between SKS and Spandana is 5% on AUM. Spandana operates on the theme of process efficiencies that result in our operating expenses being the lowest – we have always maintained a sub 6% Opex ratio while the industry average is 12% plus. Operational efficiencies make us the most profitable MFI in India. In terms of operational efficiency we are the leader in the industry. Our employee productivity has also been the best in the industry which has been achieved through innovative practices and simplified solutions. Spandana also has a cautious growth strategy. We strongly believe that this customer segment needs efficient, high-quality services. In the last 12 years of our operations, we have disbursed over 15,000 crore and have over 99% recoveries. We have about 50 lac borrowers with an Asset Under Management of Rs. 4200 crore. Also, as part of our growth

SEASONAL MAGAZINE

She has also made sure that Spandana has one of the least complicated yet most diverse micro loan products that are readily understood by the loanees with no hidden costs in the name of valueadded services. Falling under six broad categories – general, micro enterprise, individual, income generating, agri-family, & farm equipment – her branded loan products, Abhilasha, Pragathi, Spoorthy, Samruddhi, & Dharani are already acknowledged as great enablers in the markets that Spandana operates in.

strategy, we grow gradually in contiguous states by building local knowledge instead of putting flags in all states. This has helped us become the most preferred service provider in most of the states where we go within 3-4 years of our entry. We have the market leadership in states of AP, Karnataka, Maharashtra and Madhya Pradesh and the journey continues.

credit products to low-income customers. We are focussed on our customer segment and we are always evaluating how we can improve our service provisions. Therefore we will be evaluating the Banking foray too. However, as of now, we see that a lot of strengthening needs to happen on the regulatory framework side so that MFIs can prepare themselves for becoming Banks.

You have indicated about Spandana planning to enter China and Nepal. What are the synergies you are eyeing there? And what about the greater risk management necessary in those countries?

Normally for NBFCs, the market cap moves only hand in hand with the assets under management. Will that eventually happen in the case of MFIs too, as they come down from being overvalued on this metric?

As of now, we do not have any plans for entering Nepal and China. We have a lot to do within our current geographical outreach. But as and when opportunity presents itself, we will certainly evaluate cross country expansion. Operating across linguistic barriers within India, we believe that Spandana has the capability to adapt to new geographies.

SEASONAL MAGAZINE

Banking licence is again in the spotlight due to RBI’s discussion paper and SKS has surpassed almost 25 public & private banks in market cap, post listing. What is your view on applying for a banking licence for Spandana? India still has lot of work to be done in the financial services space. As far as SKS market cap comparison with Banks is concerned, I think there is room for many different financial services companies operating at different scales – be it microfinance companies, asset financiers, insurance players, big/small banks etc. Also, MFIs are being increasingly acknowledged as engines of financial inclusion that can do sustainable service delivery at customer doorstep. However, the current legal structure of NBFC for MFIs restricts their ability to offer complete suite of savings and other

The current market cap of SKS is almost double of its AUM. Market cap is a function of many things – quality and size of assets, growth potential, profitability, and RoE. We need to take a holistic view. However, it is clear that the markets are acknowledging microfinance as a viable, scalable growth model where the working-poor have been proved to be bankable. Multiple micro loans to the same borrowers by different micro financiers is said to be the biggest risk to the microfinancing environment. How is Spandana managing the same? This is certainly an area that all MFIs need to dis-compassionately work on. MFIN has been set up as a self regulatory agency. We hope that as time progresses, all the MFIN member MFIs will be able to strengthen their systems to ensure that multiple lending is restricted. Besides supporting the credit bureau, at Spandana we are taking many initiatives – including diversifying our suite of products. Instead of reaching to the same customers with similar products, we are trying to increase the overall pie of the industry. At the same time, we are also evaluating technology solutions

such that the need of the customers to take multiple loans can be addressed. Political risk constitute another of the projected risks for micro financing. Do you anticipate for such a scenario where politicians interfere in the system of repayments, much like the agricultural loan waivers? Every business is fraught with different risks, and we need to ensure that we are able to manage our risks and build in sufficient mitigants in the business model. In many ways, microfinance has gained ground since many of the state-led interventions did not achieve sufficient financial inclusion. RRBs, DCCBs and many Banks have been trying to work in this field, but the gap continues to be large. There continues to be a large number of un-reached working-poor who are not able to participate in the

acknowledges MFIs as engines of financial inclusion. They can continue to play a supportive role in ensuring that as financial institutions, best-practices are followed such that the institutions become more robust. In terms of promoting transparency, good governance, operating efficiencies etc, MFIs are increasingly setting standards in the market. We should not look for subsidies. At the same time, if the govt brings down the cost of funds to MFIs, we can pass on the benefit to our borrowers. Is Spandana resorting to securitisation of its loans, and what would be the appropriate ratio of securitised loans? With stricter conditions coming in for securitisation, do you think the securitised portfolio increasing or decreasing in the coming years?

In 2007-08, there was a string of realty & power IPOs that finally resulted in the markets crumbling, due to money getting diverted from performing companies to planningto-perform companies. Do you think such a scenario can happen from, say, a dozen microfinanciers going in for their IPOs in 2010-11? I think there are only about 4-5 microfinance players who can access capital markets with a viable float. Rest of them need early stage investors. I am confident that even if many ‘planning-to-perform’ companies come to the market, the investors will eventually be able to figure out where they would like to put the money. Some of them might

decide to go for smaller players since on a small base, such companies can show faster growth in percentage terms or some of them might come with a differentiated service provision. IPO is just one of the fund raising events in the life of a finance company, and eventually the customers will dictate who grows and that would reflect in the stock price. Do you think the Governments are doing enough to promote microfinancing? Do you think lowcost funds can provide a further boost to companies like Spandana? Microfinance started as a marketlinked intervention since the subsidy based programmes could not grow fast enough. In fact most MFIs started as NGOs and had to convert to NBFCs after achieving scale such that we come under the regulatory framework. Government already

Going forward, how do you see Spandana’s USPs helping it to gain further ground in this industry? We handhold our customers through their economic growth and offer them products at different stages of their growth. We have customised microfinance loans with variable repayments to suit varying cash-flows of customers. Spandana strongly believes in transparency and we would continue to set benchmarks in the microfinance industry. I would certainly like to acknowledge the support from our Bankers through our journey. We have only touched the tip of the iceberg and a lot of work remains to be done.

SEASONAL MAGAZINE

economic growth since they do not have access to affordable financial services. We hope that the politicians would appreciate this fact and help us to help the working-poor.

Securitisation is a good enabler and currently around 40% of our loans are securitised. As with all other healthy regulations concerning MFIs, Spandana welcomes securitisation regulations too, and I don’t see our securitised loans increasing or decreasing in the coming years.

MCA RECREATION CENTRE

More Than a

Club

SEASONAL MAGAZINE

Mumbai Cricket Associationâ&#x20AC;&#x2122;s Recreation Centre (MCA RC) is racing towards completing two years of existence. Even within this short span, the elite club has evolved into a lifestyle hub that enriches the life of all at home and office. No wonder then that MCA RC has received such a tremendous response to its membership drive from families and blue chip corporates. The credit for the success of this joint venture goes to the influential Mumbai Cricket Association and the visionary infrastructure player, the Shirke Group. Rajiv Wagh, Vice President of MCA RC, explains to Seasonal Magazine why this 14-acre British Raj themed luxury club in BKC, Mumbai, is truly one of its kind in the country.

If you thought MCA RC is all play and no work, you got it wrong. Harvard Business Review is coming to MCA RC with an HR event. The Businessworld Leadership Series is also happening, thanks to the initiative of MCA RC. Bureaucrats and local businessmen will have many things to cheer when the exhibition ‘Maharashtra Marches Ahead’ is staged in BKC. In the past too, MCA RC has taken the leadership role in promoting business interactions with events like CNBC Storyboard and ET CEO Chair being hosted at the club. A two-day corporate rink soccer was also held among advertising and media industries with teams coming from NDTV, Ogilvy, BBH, FCB Ulka, Group M, and many more.

More Than a School Imagine getting to celebrate Harry Potter’s Birthday on July 31st. Other upcoming events at MCA RC - by the kids, for the kids, and of the kids include Friendship Day, Independence Day, Tourism Day, Teachers Day, Chess Championship, Squash Camp, and many more. The kind of variety and fun involved in these events is difficult to find in any school, as MCA RC members’ children and their guests from different schools across the city make these occasions memorable, thanks to the great infrastructure and the greater planning. Past events at MCA RC that thrilled children include Sachin Tendulkar’s Birthday, the Cyclothon on World No Tobacco Day, and planting saplings on World Environment Day. The summer camp for 4-14 year olds was memorable with children learning a host of arts, crafts, sports, grooming lessons, and martial arts.

SEASONAL MAGAZINE

More Than an Office

More Than a Club If a club is just about recreation, MCA RC is also about learning and self-development, even in sports. Major championships or training sessions are all set to happen in chess, snooker, & squash, not to mention the ongoing sessions at the MCA Indoor Cricket Academy. Ar t doesn’t take a backseat with all these sports however, with ‘Heartistic Expressions’ all set to highlight art based on festivities, in sync with the festival season that is about to kick off. Doctors’ Day celebrations will highlight the often overlooked medicine, a good laugh. MCA RC also distinguishes itself from other Mumbai clubs in its celebrity membership and celebrity participation with events from the recent past playing host to celebrities like Sachin Tendulkar, Shah Rukh Khan, Rahul Bose, Ritesh Deshmukh, Prahlad Kakkar, Gaurav Kapoor, Mahesh Manjrekar, Bharat Dabolkar, and not to mention the Miss India contestants and winners.

MCA RC Gymnasium

SEASONAL MAGAZINE

Celebration of Mothers Day

Celebration of Maharashtra Day

There is nothing like home-sweet-home, but it is ironic that some days of importance are better celebrated not in homes but in closeknit groups of friends and relatives. Take Mothers’ Day or Family Day, for instance. Both were celebrated with aplomb at MCA RC and it was no wonder that many emotions that are normally not shared in between our four walls were shared here to laughter and joyful tears. In the coming weeks too MCA RC will host many a thankful event like Friendship Day, Independence Day, and Teachers Day, not to mention festivals like Ganesh Chaturthi. In tune with Mumbai Cricket Association Recreation Centre’s commitment to social causes, a First Giver’s Club is also being organized for facilitating serious donations to NGOs.

SEASONAL MAGAZINE

More Than a Home

Rajagiri Reiterates its No. 1 Position

SEASONAL MAGAZINE

In the recent NITCAA Survey of Engineering Colleges in Kerala-2010, Rajagiri was rated as first among self-financing private engineering colleges. The study was reiterating a position, as when self-financing engineering colleges entered the professional education scene in Kerala, Rajagiri School of Engineering & Technology (RSET) was quick to occupy the top spot. But remaining at the top has been a tougher proposition given the nature of evolving competition. But under the guidance of Director Rev. Fr. Jose Alex, Rajagiri is maintaining its leadership by a continuous stream of initiatives and innovations.

All in all, RSET is working to match the special year it is now in, its decennial or tenth anniversary. companies, they are streamlining their courses to meet industry needs. Rajagiri is now organizing an inter college technical fest on starting from September 16th, to 18th. Titled Abhiyanthriki , it would be an ideal platform for engineering students from all over the country to interact as well as put their skills to test. Consistent with Rajagiriâ&#x20AC;&#x2122;s idea of holistic excellence an exciting array of events have been lined up each covering diverse domains. From technical events like robo-maze, selecting best hardware and software

engineer, Linux kernel debugging etc to non-technical events like best manager quiz and gaming is well laid out. For updating the faculty, regular workshops are held, the latest example being the Compiler Construction Workshop handled by National Institute of Technology, Kozhikode. For honing the skills of their students further, RSET is having short-term continuing education courses in high-technology specializations like Robotics, VLSI Design, Micro controller, PCB Design etc. A Process Control Training Programme is now being offered as a great opportunity for the job seeking graduate engineers to get placed in leading process control industries. The concise, but intensive training programme is being organized by the concerned departments at Rajagiri. No wonder then that the campus placement performance â&#x20AC;&#x201C; that first catapulted it to a celebrity college status â&#x20AC;&#x201C; continues to be outstanding at Rajagiri. While Infosys has taken in 139 Rajagiri students, TCS has

Director Rev. Fr. Jose Alex

taken in 98, apart from several others like Wipro BPO & Mphasis. IGNOU has tied up with Rajagiri to offer two specialized MTech programs in Embedded System Design and Information System Security, the admission to which is for working engineers and engineering faculty. These courses promise to be ultra-modern with syllabus updated each year by researchers at IITs & IISc. All in all, RSET is working to match the special year it is now in, its decennial or tenth anniversary.

SEASONAL MAGAZINE

Fr. Jose Alex said to Seasonal Magazine that along with sound knowledge in theory, they give extra training to students to build their professional as well as commu nicative skills. With help from the official accreditation agencies and feedback from the recruiting

SOBHA TO RAISE A

JURONG AT KOCHI, BUT FROM A LAKE

SEASONAL MAGAZINE

Singapore raised Jurong Island from sea in 2000. But 60 years before this, Kochi had raised Willingdon Island. But the same Kochi is raising a hue and cry over NRI billionaire from Kerala, PNC Menon’s plan to raise the 400 acres Sobha Hi-Tech City from Vembanad Lake. But now Menon is back, backed by a determined state government smarting from Smart City debacle, to clear the air with environmentalists by offering to satisfy all their scientifically backed demands, and get the Rs. 5000 crore ten-year project on track. India’s fourth largest listed real estate company, Sobha Developers, is back with its proposal to develop a mega city of 400 acres in a Kochi island – but with a difference, this time. With a potential for creating 75,000 jobs and at an investment of Rs. 5000 crore – incidentally Kerala’s biggest so far – it would have had a smooth sailing in any other Indian state. But in Kerala the proposal met with stiff resistance on environmental grounds. Now, buoyed with a government nod, Sobha Developers is back, and none other than industry veteran, NRI, and Group Founding Chairman PNC Menon is spearheading the new initiative. Instead of getting the project done somehow, Menon, who understands the Kerala psyche intimately, has embarked upon an open initiative explaining the environment-friendly aspects of the Hi-Tech City project. Going even one step ahead, PNC Menon is welcoming honest objections to the project with the only condition being that they should be

scientifically backed. The crux of the objection is the mangroves existing in the proposed Valanthakad region, which is an island in the sprawling Vembanad Lake. The Valanthakad mangroves are rich in biodiversity, being home to 77 plant

PNC Menon, Founding Chairman, Sobha Developers

species and 27 water organisms, and has been a declared Ramsar Site under the inter-governmental Ramsar Convention that protects wetlands of international importance. The project’s critics, led by Kerala State Biodiversity Board

Kareem, two ‘pragmatic’ voices in the not-so-investor-friendly but toomuch-common-man-friendly administration of Marxist stalwart VS Achuthanandan. Legal roundabouts in land acquisition like employing multiple companies to get around the Land Reform Act is another sore issue in the state, unlike many other investor-friendly states like Maharashtra, Gujarat, Tamilnadu, or Karnataka . Sobha is known to have acquired the Valanthakad land through 18 entities. Anyway, Menon is now also assuring that the Hi-Tech City project will be totally

Sobha Now Stronger in Home Turf, Starts Pan India Play NRI Billionaire PNC Menon led Sobha Developers is showing all signs of a breakout performance from the rest of the realty pack, after coming out of the downturn. The Bangalore headquartered and South based major is now upping the ante on competition by various strategic moves designed to enhance its stature in the industry. Sobha, which resorted to equity dilution, de-leveraging, and cost-efficient construction as core strategies to come out of the downturn, seems to have proven a point for the entire industry. While one of their largest planned projects - Sobha Hi-tech City - waits for the last regulatory hurdles in Menon’s home state of Kerala, the Group recently surprised the entire industry with their New Delhi foray, which is a 153 acre township of villas in Gurgaon, costing Rs. 500 crore. In their stronghold of Bangalore too,

Sobha is in quite a momentum, having launched their 17 th project on Sarjapur Road, an area that was pioneered by Sobha almost a decade back. The rationale for Sobha Classic is sound, as their last project on Sarjapur Road was launched just 9 months back, but already a full sell-out. The financial health of Sobha is also impressive as the debt which has come down to Rs. 1400 crore is all set to be lowered to Rs. 1000 crore by the

Sobha Classic Project Name : Sobha Classic Type of apartment : Super Luxury Location : Off Sarjapur Road Land Area / No. of Units : 6.9 acres – Classic 243 Units; Signature 32 Units No. of Blocks / Floors : 3 Blocks (B+G+13) Type of flats : 162 exclusively designed 3 BR Apartments, 81 Exclusively designed 3 BR Apartments with servant Room. 1752 – 1754 sq. ft.; 2060 - 2070 sq.ft. Sanctioning Authority : BBMP Launch Date : 03/09/2010 Completion Date : Dec-2013 Banks approved : Approved by all leading banks

end of this fiscal. Despite margins getting trimmed, Sobha enjoys 30+% margins for most of their projects. The Group now stands poised to expand panIndia, even though selectively and prudently, as it has solid land banks in 10 cities. Sobha’s performance in capital markets is industry leading with it displaying the best year-to-date price-performance, ahead of all players, including bigger panIndia players.

Sobha Classic

SEASONAL MAGAZINE

(KSBB) and the noted NGO Paristhithi Samrakshana Koottayma (Environmental Protection Group), also point to the fact that out of the 400 acres required for the project, only 250 acres are available now, and the rest has to be reclaimed from Vembanad Lake. But Sobha Chairman PNC Menon has countered all such allegations by stressing a vital fact – out of the 400 acre project site, only 5% has mangrove coverage. This is an argument that has found great support from State Finance Minister Thomas Issac and State Industries Minister Elamaram

environment-friendly with a proposal to protect sensitive mangroves, and even to grow further coverage. Menon’s vision for the city is that of a mini Singapore, not just in development, but in the way the tiny city-state continues to be top-ranked in environmental quality, despite numerous land reclamations that created wonders like Jurong Island. Kochi is also no stranger to land reclamation – though from the sea – that created its Willingdon Island and a wider Marine Drive. If Menon succeeds in winning the confidence of environmentalists, the next challenge will be the 50 odd families that have refused to sell and vacate even at high prices. But Menon, already noted for more-than-average CSR initiatives is now extending a scheme of free homes for 600 poor families, that can include the Valanthakad natives too. But seemingly unbelievable estimates like an annual livelihood loss of around Rs. 77 crore to the natives has been raised by KSBB. Maybe the way around such objections would be

Sobha Lifestyle Location : Sobha City Thrissur Type : Super Luxury Villas ( 4 BR) Total No. of Villas : 40 Super-Built up Area of Individual Units : Type A/B - 4227.87 sft Type C/D - 4774.76 sft Type E - 3363.76 sft Type F - 3038.28 sft

providing minority stakes in the project SPV or the parent Sobha Developers to affected families. This is very much possible as Sobha has less than 6% shares with retail shareholders, with the rest 94% split between promoters (60.59%), FIIs (23.19%), and DIIs (10.34). Despite a year of fast deleveraging of its balance sheet by massive selling of its unused land banks across the country, Sobha has kept Valanthakad close to its heart, which may be a reflection of Chairman Menon’s passion to create Sobha’s magnum opus in his home state itself. Is Kerala listening?

Sobha Topaz

SEASONAL MAGAZINE

Location : Sobha City Thrissur, Kerala Type : Super Luxury Apartments Total No. of Units/Apartments : 216 Super-Built Up Area of Individual Units : Type A - 3068.73 sft.Type B/C - 2186.51 sft.Type D/E - 1676.37 sft.

Jacko's kids (finally) go to school

soon be attending classes. The late singer's mother Katherine, 80 - who is caring for all three wants them to have a normal life. A family source said yesterday: "They are such bright kids. They

have adjusted very well to the loss of their father and are definitely ready for this step. Prince wants to be a movie director and Paris wants to be an actress."

Darwin May Have Been Wrong, New Study Argues

Using fossils to study evolutionary patterns over hundreds of millions of years of history, Sahney and team found that biodiversity, at least among the land animals that they decided to focus on, matched the availability of living space through time. Living space refers to the particular requirements of individual organisms to thrive and reproduce. It can include several components but primarily describes the availability of food and favorable habitat.

Steve Newton, Programs and Policy Director for the National Center for Science Education, has written an analysis of the study, titled "Darwin Was Not Wrong--New Study Being Distorted." A new study published in Biology Letters calls into question elements of Charles Darwin's theory of

evolution. While Darwin argued that competition was the key force driving evolution, a research team from the University of Bristol argues that "living space" is in fact the primary driver. Michael Benton, a coauthor of the study, said his team concluded that "competition did not play a big role in the overall pattern of evolution." "The new study proposes that really big evolutionary changes happen when animals move into empty areas of living space, not occupied by other animals," BBC News explains. "For example, when birds evolved the ability to fly, that opened up a vast range of new possibilities not available to other animals. Suddenly the skies were quite literally the limit, triggering a new evolutionary burst." Slate describes how PhD student Sarda Sahney conducted her research:

"Throughout geological time, patterns of global diversity of tetrapod families show 97 per cent correlation with ecological modes," Sahney writes in the Biology Letters article co-authored by Michael Benton and Paul Ferry. Not all have accepted the team's conclusions. According to BBC News, Yale University evolutionary biologist Stephen Stearns said the interpretation was "problematic." "What is the impetus to occupy new portions of ecological space if not to avoid competition with the species in the space already occupied?" Stearns asked.

SEASONAL MAGAZINE

MICHAEL JACKSON'S kids aged 13 and 12 have gone to school for the first time. Son Prince Michael and younger sister Paris were sent by their gran after she moaned: "They have no friends." The pair - kept hidden from the public while Jacko was alive - have been enrolled at a prestigious private day school that boasts PARIS HILTON and Friends actor MATTHEW PERRY as former pupils. Jacko's youngest lad Blanket, eight, is continuing to be taught at home while his siblings attend The Buckley School in California's San Fernando Valley. But friends predicted he too will

Musli Power X-Tra Eyes Overseas Markets, Ten Fold Growth

SEASONAL MAGAZINE

After bagging key Indian patent for Musli Power X-Tra, Kunnath Pharma is focussing on mega sports promotion initiatives at an investment of Rs. 100 crore plus, to power ten-fold growth this year and strengthening overseas sales. Patent No. 241602 is for an ayurvedic performance enhancing drug. Issued by Government of India’s Patent Office to KC Abraham, will it be enough to take his company to the next level, we asked him directly. “This is the first in a string of patents we would be aiming for Musli Power X-Tra in different countries. This is an important step for us, as we don’t want unhealthy competitors for this product which is an invention of mine,” says this patentee. Patents are, of course, for inventions, and the current patent to Abraham is for inventing this ‘herbal formulation used as a health restorative and to treat sexual dysfunction.’ The patent legally protects Musli Power X-Tra’s maker Kunnath Pharmaceuticals from anybody copying the formulation for 20 years. Kunnath Pharmaceuticals which already does brisk business is, however, aiming for a ten-fold jump to Rs. 400 to Rs. 500 crore, this year. Powering this growth is Abraham’s penchant for sports promotion, having come from a family that contributed an Olympian to the nation. (KC Abraham is the brother of India’s former Olympian

Rosakutty). Explaining the business logic behind, Abraham says, “Musli Power X-Tra is a performance enhancing drug. We started off with smaller sports sponsorships and endorsements, and are now entering the big league.” He surprised the nation’s football scene recently when he announced an investment of Rs. 100 crore to start a national football academy. This shot went a lot longer than the conventional volleys corporates do by way of sponsoring teams and stars. Says Abraham, “All the expenses

of the 60 selected boys will be taken care of and their only agenda will be to play football. We will reward them handsomely as they progress and they will be paid an unbelievable amount of money for just playing football. My aim is that my boys will win the World Cup in 2018 and it is for that I am spending Rs. 100 crore.” To give the initiative a jumpstart, Abraham is taking over Viva Kerala soccer club. Earlier, Kunnath had sponsored Goa’s Churchill Brothers. Abraham is not restricting his sports promotion to just soccer, and is sponsoring Sri Lanka’s Wayamba Elevens for the Champions League T20 Tournament in South Africa. And the diligent entrepreneur he is, Abraham will personally visit Johannesburg to oversee how the initiative pans out. Sri Lanka is an emerging market of importance for Musli Power X-Tra. Musli Power X-Tra is also a sponsor of the upcoming Commonwealth Games in New Delhi. “Both events would be fruitful for us, reflecting our emerging focus on international markets, concludes Abraham, standing up from a long chat in his corporate office in Kochi, and off to start his next meeting with another sporting event organizers who have come for discussions.

GADGETS

Verizon to Launch iPad Live TV App V erizon Communications plans to launch a software application for mobile devices that will enable the FiOS TV customers to watch live television shows and movies on Apple Inc.'s (AAPL) iPad. FiOS TV customers can watch one program through Verizon's set-top box on a traditional TV and another program on the iPad with an in-home Wi-Fi connection. Verizon expects the launch of iPad Live TV App in 2011. This new launch will minimize competition from cable rivals such as Comcast Corp. and Time Warner Cable. Verizon is in negotiation with content providers like Time Warner Inc. and Walt Disney Co. for the extension of live TV viewing to tablet computers and home appliances.

Dell launches $ 100 Aero smartphone D

ell Inc on Tuesday released its first US smartphone, entering the increasingly crowded market with a 3.5-inch Android device called the Aero that costs about $ 100 on AT&T's network. The long-anticipated move by the computer manufacturer puts Dell in competition with Apple Inc, the market leader in smartphones, and with a clutch of other phones that use Google Inc's Android operating system. Round Rock, Texas-based Dell said its new smartphone will sell for $ 99.99 with a 2-year contract from AT&T, or $ 299.99 without the contract.

SEASONAL MAGAZINE

Dell said the Aero will be one of the lightest Android smartphones in the United States, and will support Adobe Systems Inc's Flash software. That sets Dell apart from Apple, which has declined to use Flash on its mobile devices. The personal computer maker entered the smartphone market in late 2009 with the release of its Mini 3 in China. The company also released a 5-inch tablet called the Streak this month, which also runs on Android and and uses the AT&T network for phone calls. That will compete with Apple's iPad. The worldwide smartphone market is expected to grow 36 percent to 247 million units in 2010 from 182 million in 2009 according to IT research outfit iSuppli.

MAHINDRA LIFESPACE DEVELOPERS LTD

Industrial Acumen in Realty

Anand Mahindra, VC & MD, Mahindra & Mahindra

SEASONAL MAGAZINE

he debate whether Indian realty will be dominated by realty-only companies like DLF or Unitech, or by diversified conglomerates like Tatas, Mahindras, or the Godrejs would continue. The first round definitely belonged to the pure play realtors, thanks to their larger-than-life IPOs during the last real estate boom, that even while hurting retail investors, ended up elevating their promoters to world’s billionaire lists. At the same time, the realty forays of large industrial houses like the Tatas and the Godrejs haven’t been up to the mark. But all these while, a rather small realty firm from the top-ten business house of the Mahindras had been gaining significant ground. To start with, Mahindra Lifespace Developers was not a very inspiring player in the industry. But it got its opportunity in 2000-01 when noted real estate player Gesco Corporation, belonging to GE Shipping Group, turned to its help to ward off a hostile takeover bid by the Dalmias. Thus was born Mahindra Gesco, the forerunner of today’s Mahindra Lifespace Developers Ltd (MLDL). Great Eastern’s Sheths eventually sold off

their entire stake to M&M who proved their commitment to the business by assigning none other than Anand Mahindra as Chairman and M&M Executive Director Arun Nanda as Vice Chairman. Ever since 2003, the firm has not dipped in sales or profits, except for a brief dip in net during the last recession, but even then putting up an impressive sales growth. FY 2010 has been especially good with sales nearly doubling over the previous year and gross profit more than doubling. Confident that MLDL is now a credible growth story, Anand Mahindra has entrusted Chairmanship to Nanda and the safe hands of MD & CEO Anita Arjundas. But for Mahindra Lifespace it is still a long way to go before they can mount a threat to leading players like DLF or Unitech. However, they believe in playing the game smarter and neater. Apart from standalone projects, MLDL’s portfolio of Mahindra World Cities (MWC) – two of which are already operational in Chennai & Jaipur – is a definite edge over competition, as this is a model that can be replicated in many Indian states. No wonder MLDL is now recognized as the

Anita Arjundas, Managing Director & CEO, Mahindra Lifespace

fastest growing real estate developer. Coupled with a penchant for more transparent systems – for which it won a CRISIL award – and Arun Nanda’s contrarian vision of thinking also from the customers’ shoes is sure to take this Mahindra group company to greater heights. Market is already recognizing this potential and has effected a year-to-date price-performance of over 62%, a time frame in which both DLF & Unitech slipped by around 15%.

SEASONAL MAGAZINE

Arun Nanda, Chairman, Mahindra Lifespace

SEASONAL MAGAZINE

Will Puravankara Gather Steam Now or Lose Further?

Ravi Puravankara

hen the real estate bubble blew up in 2008, it didn’t spare anyone. Bangalore headquartered Puravankara Projects which got listed in 2007 was no exception. One of the leading developers of South India, then expanding from its home-base of Bangalore to other southern hubs like Chennai, Coimbatore, & Cochin, Purva was caught off-guard. Demand for luxury offerings like the ones from Puravankara dried up. While sales slipped by more than 20% in 200809, net profit declined by more than 35%. The same was reflected in capital markets – a bit too much, may be. From the highs of Rs. 535 the stock started a slide that didn’t stop until Rs. 25.60, dragged down by the Lehman crisis and its aftermath. Then came the months of consolidation not only for Puravankara, but for the entire industry. Everyone from DLF to Unitech to HDIL to Omaxe to

Puravankara were charting their future course. The Group’s billionaire promoter Ravi Puravankara decided to do a contrarian play. As someone who started in Mumbai real estate straight from college, at the age of 19, the now 56-year old developer knew that this round of bust was not like any of the previous ones he had gone through and survived. With help from long-term confidantes and Directors in Puravankara Board like Nani R Choksey and Ravi Ramu, not to mention US educated son Ashish Puravankara, he scripted a turnaround strategy that most of the developers would have shied away from. Under Chairman Ravi’s vision, the Group acknowledged the difficulty in the market, and bet on two emerging trends – one being the need to create a new brand for affordable housing, and the second to gradually adjust to the fact that home sales were moving from launch dates to ready-to-occupy

dates. Today, both strategies have paid off quite handsomely. While Puravankara’s affordable brand Provident Housing is one of a handful of successful experiments in this direction, their decision not to launch any new projects until the supply is more or less depleted has helped them turn around. The second strategy helped them focus their whole energy on executing already launched projects, and more than it drove sales of readyto-occupy apartments, it helped the firm regain the trust of its customers as a developer who didn’t let the downturn affect project completion. In February 2010, Chairman Ravi took a decisive step in further professionalizing the entire operation by inducting former Executive Director of Sobha Developers, Jackbastian K Nazareth as Puravankara’s Chief Operating Officer. Despite no new project launches under the Purva brand, the Group staged a growth of over 13% in sales and over 22% in gross profit for FY10. The Group has recently broken its self-imposed holidays for new projects and come up with an impressive project, Purva Skywood in Bangalore that has succeeded in creating a buzz around it. Learning from the market lows of 2008-09, Skywood is created as a need-based product and not an aspirational one. This is just the start as the Group has a target of 12 million sq ft for Puravankara and 6 million sq ft for Provident for the current year. Investors are also warming up again to the stock, which has witnessed a year-to-date price performance of 26.37% against peers like Omaxe’s 3.70%, HDIL’s 6.49%, and industry leader DLF’s -8.71%. Still, there is long room to appreciate as the Group which is the 7th largest in India by both sales and profits, is only 12th in market cap. The debt is now down to Rs. 800 crore and the firm enjoys a high promoter holding of 89.96%.

SEASONAL MAGAZINE

The Purva scrip which shot up post Q1 numbers has again slipped somewhat. The reason for the slip is not only Sensex and the Realty Index slipping, but the market waking up to Purva’s sequential dip in Q1, and the fact that the developer is yet to reach the income and profit levels of FY’08. The operating profit margin has also more than halved to 15% in 2010 from 38% in FY’08, partly due to lower realisations and partly due to the business from their affordable housing subsidiary, Provident Housing. But on the upside, the Group has managed the downturn without equity dilution and has turned cash-flow positive, which is something it couldn’t manage even in FY’08. However, due to exhibiting extreme price volatility within the last two years - high of Rs. 535 and low of Rs. 25.60 additional buying support is more likely to happen only at least 2 to 3 quarters of sustained turnaround.