Innholdsfortegnelse for July 2016 i Business Today

Henning Holck-Larsen and Soren Kristian Toubro set up Larsen & Toubro (L&T) in Mumbai in 1938, initially as a representative of some Danish dairy equipment companies. In 1940, it got into construction and execution of big projects. By the 1950s, it had already made a name for itself for its ability to take charge of complex construction and engineering projects. In the 1960s and 1970s, it diversified into a number of areas, mostly businesses where some degree of engineering expertise would come into play, even though construction and engineering projects brought in the bulk of the sales and profits. In 1965, Anil Manibhai Naik joined L&T as a junior engineer. He rose through the ranks and became CEO and MD of the company in 1999. In 2003, he became the…

23 BRIDGING THE GAP WHAT: Financial Clinic for MSMEs: Facilitating Businesses for Sustainability WHEN: June 23 (Mumbai); July 13 (Bengaluru); August 10 (Kolkata); August 30 (Hyderabad) WHAT TO LOOK FOR: The events will be held to provide assistance to regional MSMEs in getting the right fund provider as per their specific financial needs. Senior government officials and industry stalwarts will participate in panel discussions at the summit. 30 - 01 WORLD AFFAIRS WHAT: 8th Annual Session of the UN Governing Bodies Secretariat WHEN: June 30-July 1, 2016, Washington D.C. WHAT TO LOOK FOR: The group comprising 25 UN agencies and the IMF will engage in discussions related to corporate governance, meeting structures, gender inclusivity, inter-agency staff exchanges and sustainable development goals. 01 TACKLING NPAs WHAT: ARCON-2016: Second Summit on ARCs…

Birds of a feather flock together... even in the virtual world. The number of niche social media networking platforms being launched is testimony to that. According to analytics firm Tracxn, there are over 252 social media start-ups in India, many of them dedicated to areas of fashion, food, real estate, pets, sports and professions. Of these, around 133 are more than two years old. Built on structures quite similar to established networking sites such as Facebook, Twitter and LinkedIn, these platforms cater to a very specific group, providing an ideal platform for brands to reach select audiences. Tripoto is one such niche social networking site dedicated to travel and has tie-ups with companies such as V Resorts, Wildcraft, Booking.com, Expedia and Airbnb. Its partnership with V Resorts, for instance, mostly…

THE PROCESS HAS TO BE COMPLETED IN 180-270 DAYS This is ambitious as resolution professionals also have to run the business; similar limits under laws such as SARFAESI have not worked DRT, NCLT TO BE ADJUDICATING AGENCIES Given the stretched infrastructure and the number of pending cases, DRTs will not be very effective SCOPE FOR APPEALS AND JUDICIAL DELAYS There is no time limit for the liquidation process; though there is limited scope for judicial review, one can still go to appellate tribunals and the Supreme Court if one is not happy with the decision of NCLT/DRT RESOLUTION PROFESSIONALS These new professionals may require the skills of a lawyer, a chartered accountant, a management professional, a company secretary and a cost accountant — not an easy task by any yardstick…

It is a one-stop solution the government seems to have found to preclude allegations of corruption in the allocation of natural resources – hold an auction. From oil and gas blocks to coal blocks to spectrum bandwidth, auctions have become the preferred mode of sale to both ensure transparency and generate substantial revenue. The civil aviation ministry even considered auctioning unused and future bilateral rights (rights to fly to foreign destinations negotiated with destination countries), though the proposal was eventually stalled due to internal differences over its advisability. The reverse auction, where the government is the buyer of goods or services, has also become an effective means of driving down prices, especially in the case of solar tariffs. Last year alone, a total of 55 coal mines were auctioned over…

Cargill Inc, the US-based agricultural trading behemoth, has had a presence in India since 1987. It owns leading consumer brands such as NatureFresh (edible oil, wheat flour) and Sunflower (Vanaspati) and is expanding its operations in the country. The company’s Chairman and Chief Executive Officer David MacLennan was in India recently to inaugurate a $100-million corn wet milling plant in Davangere, Karnataka. He spoke to Business Today’s Joe C. Mathew and Rajeev Dubey about Cargill in India and the emerging trends in global commodity markets. Edited excerpts: The global economic forecasts seem to be suggesting subdued commodity prices for some time now. How do you rate the situation? Yes, low prices will be here for a while. You have got a strong US dollar and weak currencies in some…

Avoid overdependence on external capital Launch products which address a problem, rather than those which would be ‘nice to have’ Try to have more than one founder, who will dilute risk. Presence of a number of co-founders ensures each idea gets challenged and refined At the same time, equal infusion of equity by founders gives them equal rights and may delay decision-making in case of differences of opinion. Look for a golden mean, perhaps just one majority shareholder To avoid conflict, ensure founders are on the same page as to the fundamentals of the business model and revenue growth Ensure a strong network of mentors to provide guidance in difficult situations Keep an eagle eye on cash flow Put in place a clear-cut organisational structure with established processes in place.…

This is not just a typical ‘rags to riches’ tale of an immigrant Binod Chaudhary must have more than his share of detractors like any “made in one generation” tycoon, as the book will indeed reveal. However, none can deny he is a phenomenon in Nepal. Many may not endorse his ways of getting ahead in life or even differ on the details of these accounts. But this is a story of a man who transcended many boundaries – his own conservative community, hostile peers and, finally, the geographic borders of his homeland to where he has reached today. For this aspect alone, Making it Big: The Inspiring Story of Nepal's First Billionaire in His Own Words should be a recommended read for aspiring young entrepreneurs – not only in…

Amazon’s $3-billion Bet Chief Executive Officer Jeff Bezos announced that Amazon will invest another $3 billion (about `20,000 crore) in its Indian operations to take its overall investment in the country to over $5 billion (around 33,500 crore). “We have already created some 45,000 jobs in India and continue to see huge potential in the Indian economy... I am pleased to announce that Amazon will invest an additional $3 billion on top of the $2 billion investment we announced in 2014 to bring our total committed investment in India to over $5 billion,” Bezos said in an event in Washington attended by Prime Minister Narendra Modi. The Seattle-based online retail giant has also completed three years in India, and has now set its sights on the country to drive its…

Some of the rampant types of card frauds in India originate in the form of an innocuous phone call from a fraudster claiming to be a bank representative. The individual who makes the call is, typically, armed with some basic details such as your first and last name, and the bank with which you have an active account. In the pretext of discussing some exotic offers or attractive cash-back schemes, the caller engages the gullible consumer in a chat. After the initial description, the caller, in the pretext of a verification, asks the details of your credit or debit card, such as your full name, card number and expiry date. Once you divulge the details, the caller engages in some small talk and, finally, as the last leg of authentication,…

How big is the threat of financial frauds in the insurance industry? We have noticed that fraudsters generally contact the policy holders to pursue them for surrendering the policy. To some extent we are slightly insulated from these kinds of fake calls as we follow a pure bank assurance model, but still we are trying to create more awareness against it. But, there is another problem from the customers’ end as well – customers also sometimes get swayed away with the fraudulent promises and eventually surrender the policy. I think to avoid all this, awareness is the key and we are trying to create more awareness against such frauds. How are such frauds conducted? Fake callers are not the employees of any company. They operate underground and change their phone…

Sanjay Kumar, 47, from New Delhi aspires to secure the future of his children – daughter Jayshree, 14, and son Gaurav, 12. He wants best-in-class education for both and save enough for his daughter’s wedding. To achieve his goals he, however, needs do a few things right. Kumar is a government employee, and his wife, Mitali, 46, is a teacher. So far, they have been investing regularly in the stock market. Kumar’s monthly take-home salary is 64,000, while Mitali earns 20,000 per month. This may be adequate for the Kumar family, but they need help in managing their investible surplus in a better way. The fact that they are investing directly in the stock market can land them in trouble and, therefore, is not advisable. They should also reduce their…

Industries Buried Under a Mountain of Debt This refers to your cover story on debt (Shedding Debt, June 19). It is a well analysed piece by the author about the mounting bad loans of Indian businesses. The demon of debt has left none – not even the big industrial houses like Tata Steel, Vedanta, and Bharti Airtel – outside its clutches. And the real estate industry is the worst affected. Since time immemorial, debt has always played a negative role. So, both for an individual or a firm, one has to be very, very realistic while dealing with unwanted debt. Definitely, it will take time to trim it but with a right plan, one can achieve the goal of becoming debt-free. B.S. Acharya, Berhampur Recognising Truckers’ Contribution This refers…

Design Revamp Snapchat has redesigned its stories page to enhance Discover channels, which is a primary source of revenue for the image messaging app. The two rows of Discover and Live Stories on the stories page have been merged. Instead of round logos of Discover channels or publishers, now the section shows a preview of the content with a headline and the channel name in rectangular tiles. Users can now also directly subscribe to a channel by tapping and holding them for a while. After users have subscribed, the latest updates from the channel will show on the stories page along with the posts from their friends. With this redesign, Snapchat hopes to bring in more viewers for publishers on its platform. Tumbled Micro-blogging site Tumblr, just like social networking…

The Insolvency And Bankruptcy Act is the latest attempt by the government to make the bankruptcy and liquidation process faster and more effective. The existing laws — SICA (Sick Industrial Companies Act) and the SARFAESI Act (Securitisation And Reconstruction of Financial Assets and Enforcement Of Security Interest Act) — are tilted in favour of debtors and have failed to increase the pace of resolution of default/insolvency cases. The aim of SICA, enacted in 1985, was to identify industrial sickness and its reasons, expedite the revival process and close units beyond revival. The government had set up the Board for Industrial and Financial Reconstruction (BIFR) to accomplish these goals. However, debtors have been using the loopholes in the Act, particularly Section 22, which prohibits any legal action against companies referred to…

Larsen & Toubro Chairman A.M. Naik first noticed S.N. Subrahmanyan, an enthusiastic civil engineer then heading the construction of the Bangalore airport, about 12 years ago. Until then Subrahmanyan had played key roles in marquee L&T projects such as the Lotus Temple in Delhi, Abu Dhabi airport, police headquarters in Iraq, and Hyderabad HITEC City. Naik’s first impression was that he was ‘arrogant’. He must have flashed back 40 years, when Naik himself appeared for an interview for a job at L&T, he was considered ‘overconfident'. Naik got the job, though at a lower pay, but went on to become the company’s Chairman. Subrahmanyan is set to get the job too. tFor, Subrahmanyan took the criticism of the super boss to his heart and initiated a correction phase. “I became…

AM. Naik grew up in a family of teachers in a village in south Gujarat. After studying mechanical engineering at Birla Vishvakarma Mahavidyalaya Engineering College in the state, he applied for a job in L&T. His application was rejected. So, he came to Mumbai and joined Nestler Boilers. He became workshop supervisor in a short span, after which he again applied for a job with L&T. During the interview, he was perceived as “overconfident” and offered a position lower than what he had applied for. In the following years, he impressed the management with his commitment, which led to his mercurial rise. In 1986, he was made general manager. Around this time, L&T faced a takeover threat from Dubai-based Manu Chhabria. To counter him, the then Reliance Chairman, Dhirubhai Ambani,…

In a meeting last September, Arvind Bali, CEO of telecom operator Videocon Telecom, told Business Today: “We have to run this business for the long term.” His confidence was understandable, given that the government was about to announce trading and sharing norms for telecom spectrum. Such norms would allow telecom players – not just Videocon, but others as well – to transfer their idle spectrum to other service providers who are facing a spectrum crunch, or pool spectrum to bring together their fragmented spectrum holdings, resulting in better spectral efficiency. It was something Videocon Telecom was looking forward to. In October, the government announced the guidelines. In the November 2012 spectrum auction, the company had regained spectrum in six circles – after losing most of the 18 circles it held…

1. Ascending Auction ENGLISH: Price is successively raised until only bidder remains. This bidder wins at the price at which the second highest bidder dropped out SECOND-PRICE SEALED-BID: The highest bidder wins the auction, paying a price equal to the second-highest bid 2. Descending Auction SWISS CHALLENGE: Auction begins at a high price, which is then lowered repeatedly. The first bidder to accept the price wins (at that price) FIRST-PRICE SEALED-BID: Each bidder independently and privately submits a single bid. The highest bidder wins…

Imagine a life where you don’t have to move an inch to operate devices; when home appliances can read your mind and the smartphone becomes the remote control for your home. The Internet of Things (IoT) is making this possible by allowing objects to be sensed and controlled remotely across an existing network infrastructure. Connected devices can be accessed using a smartphone or a PC app. IoT is not just restricted to Internet and Wi-Fi; there are around 11 IoT protocols such as Bluetooth and Near Field Communication (NFC) that have been identified. Although still ahead of its time, IoT-enabled products are making a splash in the following categories. LIGHTING: This is one of the earliest markets to have ushered in IoT. The Phillips Hue exemplifies IoT perfectly. Its starter…

Alibaba By Duncan Clark Price: 599 This is the story of Jack Ma, who rose from humble beginnings and built Alibaba into the second largest Internet company in the world. Its $25-billion IPO in 2014 was the world’s largest. BUSINESS BESTSELLERS* Thinking, Fast and Slow By Daniel Kahneman Penguin Price: 499 ELON MUSK By Ashlee Vance Virgin Books Price: 699 Super 30 By Biju Mathew Penguin Books Ltd Price: 199 Triggers By Marshall Goldsmith Hachette Book Publishing Price: 399 How to Avoid Loss and Earn Consistently in the Stock Market By Prasenjit Paul Partridge India Price: 399 *Top books by sales for May 16 - May 31, 2016; Includes only books released after Jan 1, 2015; Information provided by amazon.in…

The competition in the digital payments space is intensifying. Is there space for all? There is enough space for multiple players along with other emerging payments and banking technologies to co-exist. Each player will bring its own strengths, ultimately benefiting the customer and helping the market evolve. Emerging technologies and business models have been driving the payments space. What are the best lessons you have learnt from some of the new entrants? Innovation, agility and new thinking! Innovation in the payments space has picked up in the past few years, thanks to the emerging digital ecosystem. We introduced biometric smart card solutions in enabling financial inclusion, and empowered our BC network with technical knowledge to conduct banking transactions. We will continue to innovate. RBI regulations ensure that fintech companies cannot…

Customer ID Net banking password One-time password, or OTP Card number and expiry date ATM PIN Verified by Visa code MasterCard secure code SAFE ONLINE BANKING TIPS REFRAIN from answering to emails asking for your password or PIN Manually type the URL of your bank’s website. This ensures that you do not land on a spoof website Avoid using cyber cafes for Internet banking After logging off, ensure you shut the browser Do not save or use the remember option for logging in on mobile phone or laptop Try and change passwords at least once in 3-4 months Use virtual keyboard while entering your password and OTPs while using a laptop or dektop at work WAYS IN WHICH YOU ARE HELPING FRAUDSTERS If your password is ‘password’ or ‘password123’ Perennially…

After languishing at the level of $1,200 an ounce for the majority of 2015, gold zoomed past the psychological barrier of $1,300 an ounce on May 8, 2016, pleasantly surprising investors. In rupee terms, it rose to 30,000 per 10 gm on May 6, 2016, from 26,000 in May 2015, translating into a return of over 10 per cent. Although prices fell to around $1,200 on May 30, gold still remains one of the better performing assets in the past one year in comparison to other investments. FACTORS BEHIND PRICE SWING If we take a closer look at the trend in gold prices in the current calendar year (up to April 2016), the yellow metal has risen 19 per cent in international and 20.5 per cent in domestic markets, clearly…

98,000CRORE bullet train project was stopped government telling the Indian Railways that the huge revenue losses from land allocation cannot be justified, given only a small portion of the corridor falls in the state. QUOTE “You will know when there is news. It would be cruel of me to spoil the fun the press is having” Raghuram Rajan, Reserve Bank of India Governor, in response to speculations over whether he would get a second term in office. TRYST WITH HISTORY Prime Minister Narendra Modi got his history wrong yet again when he told a gathering in Washington D.C. that the Sun Temple in Konark, Odisha, was built 2,000 years ago. According to the Archaeological Survey of India, the temple was built in AD 1255, or around 750 years ago. GRAVE…

THE STUDY NOTED THAT WITH MORE FUNDS IN THEIR COFFERS, THE STATES MUST BE MADE MORE TRANSPARENT AND ACCOUNTABLE Not every state was happy when the Union government implemented the 14th Finance Commission recommendation to raise the share of devolution of Central funds to states from 32 per cent to 42 per cent in February 2015. In fact, some even felt that the Centre was only compensating them on what was being taken away from them elsewhere. Their apprehension stemmed from the Centre’s decision to cut the quantum of funds it used to earmark for key centrally sponsored schemes (CSS) following the implementation of the commission’s recommendations. The question was whether the flagship social sector schemes, including ones that guaranteed minimum workdays, health and education for rural areas, would suffer…

President Pranab Mukherjee went to Beijing and spoke to Chinese President Xi Jingping Foreign Secretary S. Jaishankar was in touch with Chinese Foreign Minister Wang Yi In November 2015, Foreign Minister Sushma Swaraj and S. Jaishankar hosted NSG chair Rafael Grossi in New Delhi PM Modi travelled to more than 17 member countries in the past two years and is personally taking up this issue at the highest levels; on the recently concluded five nation tour, won support of Mexico, Switzerland and the US Pakistani PM’s advisor on Foreign Affairs, Sartaj Aziz, is talking to foreign ministers of Russia, New Zeland and South Korea to garner support for NSG membership. Its track record might spoil Indian chances as well…

1938 Danish engineers Henning Holck-Larsen and Søren Kristian Toubro establish L&T 1944 ECC, the construction division, incorporates 1950 L&T becomes a public company with a paid-up capital of Rs 20 lakh. Sales hit 1.09 crore 1987 Dubai-based Manu Chhabria attempts to take over L&T. Dhirubhai Ambani counters him with share purchase from open market 1988 Ambani increases his stake to around 20 per cent and becomes chairman of L&T 1989 V. P. Singh government comes to power. Ambani forced to resign from the board and former SBI chairman D.N. Ghosh replaces him 1990 D. N. Ghosh resigns 2001 Ambanis exit L&T by selling their stake to Kumar Mangalam Birla's Grasim 2003 A. M. Naik appointed as Chairman and MD Jul 2004 L&T sells UltraTech cement to Grasim Industries. Birla sells…

What will 74-year-old A.M. Naik do after his retirement in September 2017? (That is, if L&T’s board decides to relieve him from active roles.) “One will have to hang up boots someday in life,” says Naik. “I will work for nobody, since my life's mission was L&T and I worked here for 51 years.” So, first off, he will stay with the families of his son and daughter in the US. Naik’s son Jignesh works with Google in California and his wife Rucha is CIO of retailer Safeway. Naik’s daughter Pratiksha and her husband Mukul are both doctors in Kentucky. Every year, Naik travels to the US for business as chairman of L&T Infotech, but he rarely stays with his children. “They have given up on me because ‘you come…

Kaizad Heerjee, CEO, Aircel • Sold its 2,300-MHz spectrum in eight circles for `3,500 crore in April • Going for three-way merger with Reliance Communications’ wireless business and MTS • Will have around 50 per cent stake in the new entity Sergey Savchenko, CEO, MTS India • Will be merged with Reliance Communications’ wireless business Sharad Mehrotra, CEO, Telenor • Company says that India is a focus market but reports suggest that it might be exiting India Arvind Bali, CEO, Videocon Telecom • Recently sold spectrum in six circles to Airtel for 4,428 crore • Still has spectrum in Punjab • Plans to exit the telecom business by next year Srinath Narasimhan, MD, TTL • Lack of clarity on its future…

It was a problem of plenty. Of too much, too soon. In December 2014, a dozen 25-year-olds raised $90 million from SoftBank. “Within 10 minutes,” Advitiya Sharma, a co-founder of Housing.com, recollects. In those heady days of India’s consumer Internet boom, venture firms competed with each other to write fat cheques very fast, lest they lose out on the next billion-dollar companies. However, Housing.com, a start-up that had started with the “idealism to fix the real estate market in India”, didn’t know how to handle all this cash. They threw money at everything, expanded into ancillary businesses such as luxury, commercials, movers and packers, acquired companies without any due diligence. Around `160 crore went up in smoke after a marketing blitz, in just two months. The money also pumped up…

The author describes QRG as someone who had the spirit of adventure Havells, the Untold Story of Qimat Rai Gupta (QRG) is the biography of the man who pursued his passion and, despite modest means, founded and grew Havells to become India’s most valuable electrical goods company. Written by his son Anil Rai Gupta, the book deals with critical events and challenges that QRG faced in his life as an entrepreneur. Call it destiny but while visiting Delhi on a holiday, QRG got a chance to manage his uncle’s electrical goods shop in Bhagirath Palace. Impressed by QRG’s enthusiasm, his uncle made him an equal partner in his trading business. QRG’s aspirations soon overtook his uncle’s appetite for risk, and he bought out his uncle’s interest in the business to…

Masking Most of us believe that whenever any cash is withdrawn from a bank account, it would definitely reflect in your account statement. And, these days checking the account statement means logging into Internet banking to get a real-time feedback. But what if the money is wiped clean from your account, but still your account does not show it? And, your money seems to be perfectly safe with the account statement showing the right amount balance? Welcome to the new-age technique called ‘masking’. In order to stay ahead of the curve, technology-savvy cyber criminals are making do with every trick on their books to dupe you. When it comes to masking, all that fraudsters do is to freeze your account balance and all related pages to make them look normal.…

Gone are the days when you needed your identity proof documents on just a few occasions. Today, you might be asked for your Aadhaar card or PAN card while paying hotel bills or for purchasing a car or jewellery. The financial consequences of not having these documents could be significant. For instance, apart from being an identity proof, several benefits have been linked to Aadhaar card, such as getting online appointment for marriage/birth certificate. So, don’t think that just because you are not a beneficiary of direct benefit transfer, you do not need to have one. Hitesh Singla, Principal Partner, Square Yards, says: “Registration of sale deeds is being withheld in some state registrar offices without Aadhaar cards despite the Supreme Court ruling that the card cannot be linked with…