The Invincible Investor

India's growth potential

2007-04-26T01:56:00.000-07:00

In the recent few days, I'm pretty much disappointed with what economists forecast for India. I'm not disappointed at Indian growth, rather, I'm disappointed at the skills of the economists : P. I don't know whether they understand the whole picture and take all the information into account of what is happening to India. The other day, I found an economist's article totally questioning the India's growth statistics just on the premise that the growth of services is unusual for a growing economy, and he just had the East Asian economies in mind, when saying that. I also read a gazillion articles of why people should invest in China, and why India is overheating, India will be affected by slowdowns, India is just IT & outsourcing centric, blah blah blah. Let me get around to my own understanding of what is happening.
First, the obvious. India's IT & BPO are having extraordinary growth. At this rate, the IT exports alone would cross $60billion in 2010 and the overall revenues might get closer to $100b. A lot of people are worrying about the rise of China and other players, lack of quality engineers in India and rising pays and these are all honest fears. But, these fears are not all big enough to rock Indian boat, and Indian entrepreneurs are smart to see through innovative solutions. They plan to buy out a number of foreign operators in the competing countries, giving them both expanding market & foreclosing competition, and their greater clout could lead to more technology exchange and capital for investing. By aggressively entering cheap Tier-II & III cities, having dedicated massive training programs to train cheaper non-engineering workforce, they can effectively blunt many of the cost-based fears, and by better market diversification and innovation they have also broadened their approach.
For most Indian economic focusers, their prediction ends here and they are myopic enough not to look ahead. The following ones are going to be the trailblazers that are going to outsmart the Indian IT growth and overshadow them in the next decade.
1. Telecom - By far this is going to be the strongest sector for India in the next decade. In the last three years, our teledensity tripled and now we add 7 million mobile phones a month. At this rate we would move from our current presence of 180 million phones to over 250 million by 2007 and over 500 million by the end of this decade. This would place us head-head with China, and overtake US. Already, VSNL & Reliance's FLAG Telecom's hold the world's largest backbone telecom networks, (undersea cables & fiber optics handling most of Pacific & Atlantic lines) and this greater domestic clout will lead to greater buy outs in the saturated markets & bring more technology to India.
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Increasing Telecom clout would also lead to two major developments. First, is the growth of India as a major electronics player. To produce 500 million phones and for peculiar needs, major telecom companies are already increasing their massive presence in India in production, and such stellar demand for these devices would place us closer to China & Taiwan on electronics industry, using the same strengths in IT growth - good design knowledge, better English understanding & now backed by world's one of the largest markets. Second, the greater teledensity would enable better information exchange and ease of trade and commerce, and would lead to a stellar growth in a lot of sectors, particularly in rural areas that are the focus of cellular expansion from now.
2. Metals & Infrastructure - While analysts always crib about the India's faltering infrastructure, not much of a note is taken when a single state (one of the poorest) secured over 40 deals for investments in this core sectors worth a whopping $100b in a year. Given cheap labor, low cost of procurement and abundance of resources, 100 billion might be worth half a trillion in this state of Orissa. And, with that Reliance is planning to build a 12GW plant (world's largest single power plant), POSCO, Mittal & Tata for massive steel capacity expansion, stunning Aluminum expansion by Vedanta industries et al. and port and road/rail link expansion by a combination of players. Since, this is a poor state such developments can lead to stunning growth and these players are already building a city focused on health care & IT.
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Similar to Delhi Metro, a lot of other expansion is expected to happen in city metro systems for almost all major cities including Pune & Bangalore, and this would pump billions of dollars in a decade & growth activities. Indian Railways has also emerged a strong company in the last couple of years and eyes on a massive expansion, including modernization of Railway stations with Private participation, Container privatization, electrification etc. A number of road ways projects are moving at a breakneck pace, and in aviation India became the largest customer for planes in the last couple of years, and dozens of new airlines have started or staring by 2010 and airports like Delhi's & Mumbai's are going to get agreat facelift. All these might get in over $300 billion in the next couple of years, and if government plays right it would push India's manufacturing, construction sectors to new heights.
3. Banking & Finance- Though often ridiculed, the government owned banks have moved a great deal in the last decade. From being indifferent and lethargic, their employees have increased their zeal in expanding further. Indian banks are among the healthiest in Asia with the lowest Non Performing Assets, and greater branch coverage. With the sector opening up due for 2009, a huge growth is waiting to happen when new foreign banks will emerge and modernize the practices and the Indian banks would have a great footprint abroad. Public banks like Canara Bank, State Bank & Bank of India are aggressive on a massive expansion both in India and abroad along with private guys like ICICI & YES bank. With greater diversification into equity trading, investment banking, Indian banking sector is expected to grow leaps and bounds with their current strength and with that India's core sector will be pushed up, as they are the largest lenders & employers. Also, innovations like Microcredit are earnestly explored causing a potentially great rural expansion. India's strength with a huge number of finance & commerce students will not just lead Finance BPO expansion, but also massive stock & financial sector in India.
4. Organized Retail - This is one sector that would be a killer application in the future, as they start from almost nil, and would soon have over $50 billion investment in the next couple of years. Reliance has setup a highly ambition project of over few thousand outlets & Malls, Bharti with its Wal-Mart tie-up is looking to do big, and other smaller players will try to out beat them by going early. The prospective opening up of FDI along with a greater middle class will let this sector grow by 100% in the next few years, as all these ambitious projects get along, and dozens of international bigwigs enter it. This would greatly increase the Indian revenue generation (current retail industry hardly contributes to revenue due to massive tax evasion), bring greater employment, and reduce the prices & consumer inflation (ha! We have Wal-Mart). But, to me the greatest development will be for Indian agriculture. Indian farmers hardly get a 5% of what they produce, while even with Wal-Mart squeezing American farmers get many times more than that. This is due to lowering wastage (this could be as much as 90% in India vegetables & fruits), increase farming productivity with greater technology interchange & cutting down the middleman. Thus, we might finally have our Green Revolution - II, finally.
5. Hotel & Real Estate - Enough has been said about the fact that India has just as many hotel rooms as the New York City. While this is a disgrace, see it as a potential. As 99% of the market seems to be unutilized, with proper planning the hotel industry can easily grow at 100% without reaching saturation for a long time. At least 75 International brands are eyeing India, and with proper real estate growth and better technology/infrastructure and greater tourism/business growth, this sector will add 100's of thousands of new hotel rooms in the budget and the luxury sector. Organized Real Estate will piggyback the growth of these & the retail industry. While the prime lands are at huge prices, still we have millions of hectares of lands at low prices of less than $2/sq ft, around the cities and these have huge potential for growth. For e.g. a lot of hotel industry is eyeing for the smaller city of Noida that has land at a fraction of price compared to the prime lands of Delhi. Indian Railways is also planning to share thousands of hectares of its land around the big railway stations for building hotels. A great hotel expansion would in turn strengthen the tourism industry.
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6. Healthcare & Pharma- By now you should have heard that medical costs in India are among the lowest in the world. Thus, we have a huge potential for expanding this booming industry as more and more people can now afford medical facilities leading to a huge domestic expansion, and a lot of countries are thinking about formally sending their patients to India for treatment. And, Indian pharma companies are leading a great expansion, and busy buying assets abroad and expanding R&D facilities. Thus, with greater middle class clout and prosperity, these two industries will have a massive growth as more people can get medical care, and more drug development will be done in India.
7. Auto - There was a time when blindly took outdated European car designs and manufactured small amounts of car for domestic use. The times are changing. In Chennai alone four major manufacturers are setting up huge factories, Tata Motors is world's one of the largest medium & heavy commercial vehicle producer & also eyeing for a $2000 car. In auto components, India is slowly becoming the world's largest manufacturer. With great domestic market growth & a potential for cost cutting using cheap labor & facilities, a lot of foreign majors like BMW, Nissan, Fiat are entering India, big time.
8. Agriculture - Indian agricultural productivity lags behind world standards by a factor of few times though it has some of the best climatic and land advantage than all the other major nations. If the production is too low, then the wastage (which goes as high as 90% for some products) kills whatever remaining and due to inefficient practices we are not growing more lucrative crops. As technology, infrastructure & organized retail growth are looming, this sector could close in on the international productivity standards, and this means we can have over 300% growth in the end value of what we produce, given our potential. This might take over a decade, but still if we have a potential for 300%+ growth in India's core sector in the long term, its effect on industrial consumption and Indian growth rate will grow exponentially.
As the article gets long & winding, I had to cut a lot of material and you could search online for each of the individual developments. The outcome it seems that, in spite of global slowdown India could maintain and increase growth, as the Indian core sector is starting from a very low base, and most of these developments can continue in spite of weak world consumption, as they are based on domestic consumption that is again growing from world's lowest per-capita. Though, India could possibly slow in the medium term, in the long term, it could easily maintain a 10%+ growth, as all these segments above can maintain a double to triple digit growth in the near future.
A world recession can also indirectly benefit India, when its hungry entrepreneurs can get value buy outs at cheaper prices (like how VSNL & Reliance bought out world's major telecom backbones like Tyco & FLAG). It would also hit upon the margins of international producers who might eye India for greater cost cutting, and Indian government would be more amenable to opening up to overcome the world recession. It would also make companies to look for the bigger & fast moving Indian market than the saturated world markets (like how Vodafone & Oracle are doing) and bring more investments. We benefited from the American recession of 2001-02 (it increased outsourcing and cheapened telecom assets) and I guess we could now repeat the performance.
The writing on the wall is clear: India can grow in spite of what happens in the rest of the world - receding or prospering.

Courtesy Bala

Bangalore is becoming India's capital for venture capital.

2006-11-07T11:41:00.000-08:00

Norwest Venture Partners is planning an office in India, and that's likely to be in Bangalore. By the way, It's already HQ for Sequoia India, IDG Ventures, Peacock Partners, Mentor Partners, Erasmic Capital, UTI Venture Funds and so on.

The complete ecosystem for an entrepreneurial setup is emerging in Bangalore on the lines of Silicon Valley with the entry of global VC firms. Bangalore is already resplendent with techies, academicians, institutions and former success stories!!!!

Way to go Bangalore...

Rural India a potential $500-bn market: McKinsey Survey

2006-04-20T04:16:00.000-07:00

According to a McKinsey survey, the RURAL INDIA would provide a market worth $500-600 billion by 2020.

At a CII annual session, Bharat Nirman, the government’s design for rural infrastructure development, was the subject of a presentation by McKinsey CEO Adil Zainulbhai, who made a strong case for increased investment in rural areas.

Zainulbhai said homogenisation of rural and urban elite was incorrect and provided a four-fold classification for rural areas. Of the 593 rural districts that the McKinsey survey looked at, 67 were classified as urban cousins, 118 as those close to rural economic centres, around 160 as able districts with a basic minimum infrastructure and 248 districts as deprived.

“We have been able to establish a direct correlation between basic infrastructure and growth drivers; areas which have minimum infrastructure have up to 30 per cent more per capita income than deprived districts,” said Zainulbhai. “Bharat Nirman is on the right track,” he added.

KKR Acquires 85% In Flextronics Software For $900 Million In India's Largest Leveraged Buyout Deal

2006-04-17T09:17:00.000-07:00

The world's leading buyout fund Kohlberg Kravis Roberts & Co (KKR) has acquired India's Flextronics Software Systems (formerly Hughes Software) for $900 million. Flextronics International, which owns FSS will retain a 15 per cent equity stake in the company, while the rest 85 per cent will be acquired by KKR in a leveraged buyout. Following completion of the transaction, CEO Ash Bhardwaj, FSS President Arun Kumar, and the existing management team will continue to lead the software business. It will operate under a new name, which has yet to be decided. The acquisition is KKR's first investment in India and second investment in Asia, following its 2005 investment in Avago Technologies, the former Semiconductor Products Group of Agilent Technologies. It is also believed to be the largest leveraged buyout and technology investment in India to date.

The deal is also significant as KKR hired Michael Marks, the CEO of chip maker Flextronics, to advise on Asia and technology investments. Flextronics had acquired 55 per cent in Hughes Software (now known as FSS) in June 2004 for $226 million. After that, it delisted Hughes from the stock market.

Air Deccan IPO in mid-May likely

2006-04-17T09:15:00.000-07:00

Deccan Aviation has decided not to rope in any private equity investors for the present and plans to hit the market to raise approximately Rs 500-550 crore, sometime in the second week of May.

The initial public offering (IPO) for 2.45 crore shares is likely to be priced in a band of Rs 200-250. Two of the merchant bankers associated with the IPO, ABN Amro Rothschild and JP Morgan, may however, withdraw from it. The issue will now be lead managed by ICICI Securities, Enam and SBI Caps.

The reason for this, according to a senior company executive is that JP Morgan and ABN Amro have other commitments in May. However, should the IPO be delayed for any reason and hit the market only in June or July, these investment bankers may once again be part of the team.

While Deccan has been toying with the idea of a preferential allotment to private equity investors, even before the IPO, it was apparently taking too much time. The company needs to bring out the public issue before May 20; otherwise it will have to file a fresh prospectus with Sebi.

In fact Deccan was to bring the IPO in February, which got delayed because of a deal that the company was negotiating with Airbus. While ABN Amro and JP Morgan were comfortable with the public issue coming up in February-March, they now have other assignments.

However, sources say, the investment bankers were also not too comfortable with the pricing as indicated during the road shows overseas; they found it aggressive. At that time, the price being talked about was between Rs 300-325 per share.

The overseas investors have been a little wary of the aviation stocks because Jet Airways, which came out with its IPO in February last year, is currently trading below Rs 1,100.

However, the shortage of aviation stocks and the lower pricing should generate interest from both foreign and local investors, say merchant bankers.

Deccan Aviation incurred a net loss of Rs 19.5 crore for the year-ended March 2005, on a net income of Rs 305.5 crore. The loss for the six months ended September 2005, was Rs 72.5 crore, on a net income of Rs 328.86 crore.

The issue will result in a dilution of 25 per cent of the post-issue equity of Rs 98.18 crore and the price band of Rs 250-250 would mean a market capitalisation of Rs 2,000-2,500 crore. Jet, which trades at Rs 970 has a market capitalisation of Rs 8,378 crore.

India needs $550 bn in 5 yrs: Investment panel

2006-04-16T01:45:00.000-07:00

Ratan Tata presents report to PM who has asked nine ministries for inputs within a month.

The high-profile Investment Commission, headed by Ratan Tata, has said that India needs to attract investments of up to $550 billion in the next five years if it wants to become an economic powerhouse.

Tata had presented the report to Prime Minister Manmohan Singh last month. The prime minister has now asked nine central ministries, including petroleum, power, civil aviation, telecommunications, textiles, tourism and food processing, for inputs within a month on what they intend to do about this.

A government official told Business Standard that the ministries would have to suggest measures to overcome impediments like poor infrastructure and labour inflexibility among others. Once this exercise is over, the Prime Minister’s Office will finalise the investment road map.

The commission has identified sectors like roads and highways, energy, civil aviation, textiles and garments, automobile components, real estate, construction, tourism and food processing as high priority areas.

In its report, the commission pointed out that the roads sector alone required investments of $30 billion by 2010. Given that road projects in the country are too small to attract big international players, the report has recommended that contracts be awarded on a build-own-transfer basis for projects of 300-500 km in length to attract international firms. The commission has also mooted the idea of private maintenance of highways.

Similarly, the report says that the power sector needs investments of $140 billion in five years to generate 90,000 Mw of electricity. At present, investment in this sector stands at $54 billion.

Highlighting the importance of the coal sector, the commission has said the sector needs investments of around $30-40 billion over the next decade to double production from 240 million tonnes at present.

Until now, the sector has attracted investments worth only $2.5 billion. The report also calls for major policy measures like doing away with Coal India’s monopoly on mining and sales.

The telecommunications sector needs investments of around $22 billion by 2010. For this, the report calls for putting the 74 per cent foreign direct investment norm on the automatic route.

Indian Pharma Cos are on a M&A spree..

2006-04-03T21:41:00.000-07:00

Ranbaxy Closes Three Acquisitions In One Week

Ranbaxy Laboratories, India's largest pharma company, had last year announced raising of $1.5 billion in the form of GDR/FCCB/ADRs etc. The idea was to make some big ticket acquisition in the US or Europe. In February it lost out to Dr Reddy's Labs in acquiring Germany's Betapharm from UK private equity fund 3i for $570 million. But it seems Ranbaxy had an alternative plan. In the last one week, it made three foreign acquisitions. What are they? On March 27, Ranbaxy acquired the unbranded generic business of Allen S.p.A, a division of GlaxoSmithKline, in Italy, for an undisclosed amount. On March 29, it acquired the Romanian generic company Terapia for $324 million. On March 30, it announced the acquisition of a Belgian generic drugmaker, Ethimed NV, for an undisclosed amount. That's three acquisitions in one week. But there is more to come I am sure. And we are waiting for that big ticket acquisition of Ranbaxy

What makes Suzlon's Tanti tick?

2006-04-03T03:35:00.000-07:00

Several Indian entrepreneurs have tried and failed to make money from the winds. Not so Tulsi Tanti, Founder & CMD of Pune-based wind energy turbine maker Suzlon Energy. Tanti (Age 47) is now #8 on the Forbes list of richest Indias with a personal net worth of $3.7 billion. His net worth is clearly a reflection of the phenomenally successful IPO of Suzlon in 2005 (which was preceeded by two rounds of private equity funding in 2004).

Says Forbes:
Faced with escalating power costs, this former textile producer moved into wind energy a decade ago, eventually building Asia's largest wind farm. In October listed his Suzlon Energy, in which he and 3 siblings own 70%. Expanding into the U.S., China and Australia.
Businessworld and Economic Times have published detailed profiles of Tanti and Suzlon's recent breathtaking $565 million acqusition of Belgian wind turbine gearbox manufacturer Hansen Transmissions.Says Businessworld:
This deal — the second largest ever by an Indian company — is Tanti’s biggest breakthrough ever. In the early 1990s, he was a passable entrepreneur with a Rs 40-crore textile business. But the textile mills’ power consumption was greater than the profits that they generated. So Tanti decided to set up windmills to cut power bills and discovered the wind power business. But he had no access to the technology needed to manufacture wind turbines.In 1994, Tanti acquired Sudwind, a bankrupt wind turbine company. That provided the technology base. Then, in 2000, he purchased part of the assets and technology of Airpack, a bankrupt company that made turbine rotor blades. The technology and demand for wind turbines in India (thanks to the tax incentives) helped him build a company. He ploughed on even as others like TTG Industries and NEPC fell by the wayside. In a few years, he became the market leader in India.

Some Indian Online Businesses You Can Bet Money On

2006-03-31T23:34:00.000-08:00

Online businesses should be making a comeback in India. Currently the Internet subscriber base stays at 38.5 million (according to IAMAI), although this number is contested by one of the brightest and young researchers in India like Laveesh Bhandari (he runs a research and analytics firm called indicus) . In my opinion, internet has to grow whatever is the current base. Five years down the line, India should have a net base which can be monetised in a big way. I am sure about it. I want to take your attention to Alok Mittal's post (in VentureWoods.org) on the opportunities in Internet. Alok has built a successful Web 1.0 company, JobsAhead.com, in India and sold it to Monster.com last year. I am reproducing it below:
One thing that I have been thinking about is the set of online businesses that are ripe for indian market. In 1999-2000 the dotcom boom lasted only 3 months in India, and as such, some ideas and teams that might have had merit could not get funded. Five years later, a lot of interest is coming back. One set of ideas are clearly around “concept arbitrage” — bring and localize ideas that have been successful elsewhere. JobsAhead was an example of this, so was Baazee. Some examples of obvious holes: 1. Online consumer travel. Makemytrip got funded few months back, and I hear some others have funding too. This space is getting competitive. Are there models which people are not looking at but are valuable? A travelog site for example (check out my Leh travelog). 2. Ecommerce — there is still no amazon.com equivalent in India. I still buy most books I need from amazon, and pay $7-8 per book for shipping. And I spend around $500 per year doing this. Firstandsecond and Fabmall started with promise but (imho) succumbed to low funding and premature entry (though I believe, both sites are still there and may make a comeback). Horizontal portals are taking some of this action away, in travel, in ecommerce and so on. But, focussed brands will have potential. Would love to hear about big ideas waiting to happen in India (either concept arbitrage, or otherwise)… Any thoughts?

Five Great Internet Businesses In India One of my readers has some interesting insights into the online businesses in India. It came in as a comment but is worthy of going as a a main blogpost (I like doing that since they get a good display and get widely read). So here goes some valuable thoughts from an anonymous reader:
Too much attention has been given to IT start ups and software companies. Businesses outside of software domain, but with an online model for transacting hold the key to INDIA all round success. Sucess is bound to follow in some non IT ventures with an online model where there is: 1) Scalability 2) Faster, efficient, customer-delight service 3) The same similar offline business model sucks and customers are looking for an alternative mode of doing the transaction Five businesses growing at a fast pace in India that come to my mind are:
1) Online Trading
2) Online Recruitment Services
3) Online Ticketing Services
4) Online Realestate/Wine Websites
5) Expatriate/NRI Centric models

1. Online Trading Websites You might have seen the frenzy created by indiabulls.com and their successful IPO and the spectacular results as people embraced online investing faster rather than the offline broker relationship as it bypasses all the hassels Hdfcsec.com, Icicidirect.com, Paisabuilder.in (IDBI's new venture), Kotakstreet.com, Sharekhan.com (SSKI group) are some of the equity trading portals doing good business as equities both - primary + secondary market, options, NEW IPOs, commodity trading etccan all be done direct from ur online account. So the loop among YOU, YOUR bank account, YOUR online broker is complete. Here in US similar models like E*Trade, Ameritrade, Scottsdirect, TAIB have similar models

2. Online Recruitment BOOM or BUST, there is always demand for recruitment/job websites and niche domains to co-exist. www.dice.com is a complete IT focused job portal in US which does not have a similar player in Indian space. Naukri.com and monster.com were doing brisk business post 2001 when almost most of the sectors were in a slump following dot com bust and 9/ 11. Leading Newspapers are slowly moving into this space, like the Times of India's timesjobs.com portal

3. Online ticketing services Just imagine the pain, time involved in buying a train ticket and movie tickets for a new movie. The thought itself kills the idea of planning such an event. Now online ticketing portal by Indian railways is doing good business and quarterly sales are shooting up by more than 100%. (IRCTC) Same is the case where Movies/multiplexes are moving towards online ticket services and some players are even delivering them personally through couriers to the customers residence when they book their movie tickets online PVR Cinemas -http://www.pvrcinemas.com/pvr/index.asp

4. Wine/Real estate Our own Mahesh Murthy (Passionfund) funded an idea which was ahead of its time for the Indian markets in 2000. Wine.com does lucrative online business in US and a country like India which has taboo attached to drinking is changing fast with the Gen X taking over. Wine companies are seeing their reveneus climb northwards as evident by the results, expansion plans of Chamagne Indage, Grover Wineyards, Sular vineyards, but a good Inda centric brewery site with buy/sell/faqs/online social networking for drinkers is missing. Mahesh Murthy-funded Tulleeho is trying to fill this gap. Real estate Realestate has been liberalized and the industry is expected to be $100 bilion by 2010. The offline market is fraught with brokers, dalals, with dubious track records, unclear titles, no transparency in the entire process and real estate is branded as not a liqufiable asset like cash or shares as the entire transcation to buy or sell would take months. If this entire process is made easy and transparent, then people would flok to online space. US has some good models like zipRealty Inc., which is using the Internet in a futuristic way to buy and sell homes, cutting costs in the process >> http://www.ziprealty.com India has woken up to this potential and we see a new wave of portals from the early movers like Indiaproperties.com 99acres.com ( NAUKRI.com's realty venture) Indiaproperty.com (SIFY's new Realty venture)

5. Expatriate/NRI Centric models Hassle free Remittance services for NRIs like WesternUnion, Times of Money hold potential keeping the umbilical cord active for expatriate remittances to anywhere, anytime, anyamount (as long as it is less than $2k) in India witin 24 hours Sulekha.com >> which provides many services for Indians who entered US for the first time or for job/accomodation searches for NRIs in US Your Man In India >>> TTK group's portal which provides various services for NRIs outside INDIA, who want small things still done in India but can't ask their parents to take care of these activities as the parents may not be aware, illeterate, old, disabled etc. provide good market.

NASSCOM- McKinsey's report on Indian IT industry

2006-03-31T02:43:00.000-08:00

NASSCOM and McKinsey's detailed analysis indicate that the addressable market for global
offshoring exceeds US$300 billion. They believe that India can sustain its global
leadership position, grow its offshore IT and BPO industries at an annual rate
greater than 25 per cent, and generate export revenues of about US$60* billion by
2010. Additionally, export growth can be further accelerated through deep and
enduring innovation by industry participants. Such extensive innovation could
generate an additional US$15-20 billion in export revenue over the next five to ten years.

Band of Angel Investors launched in India..

2006-03-31T01:09:00.000-08:00

India's Band Of Angels Launched; Invests In A Delhi Software Product Startup Knowcross

BoA is now officially launched and has already invested in a venture - Knowcross - a hotel guest management software company in Delhi. If you want to know more about BoA and how they pick companies etc, I have written a four page feature on Band of Angels in the latest issue of Business Today magazine, which is available on stands. Venturewoods.org has given a link to the pdf copy if you are interested in reading the plain sheets. BoA, modeled on the Silicon Valley's Band of Angels, is a growing organisation in Delhi. It's already 20-member strong and has experienced entrepreneurs like Saurabh Srivastava and Mohit Goel of Xansa, Alok Mittal of Baring Private Equity, and Raman Roy (ex-Spectramind) as backers, besides accomplished pros like Arun Kumar of Flextronics Software and Jerry Rao of Mphasis. It's an interesting group to watch

Microfinance is getting attention of private equity players

2006-03-30T22:50:00.000-08:00

SKS Microfinance Receives $2.5 Million Investment From Vinod Khosla, Others

This is the biggest ever investment in an Indian microfinance institution. Top Silicon Valley venture capitalist Vinod Khosla, Small Industries Development Bank of India (Sidbi) and others have invested Rs 11 crore ($2.5 million) in SKS Microfinance. Khosla has contributed Rs 2.1 crore (for 12.83 per cent stake). Khosla, one of the founders of Sun Microsystems and a VC with Kleiner Perkins, is these days focusing on microfinance and other ventures like ethanol. Hyderabad-based SKS will use the money to access commercial debt and increase operations from its current base of 2,00,000 clients to 7,00,000 in 2006-07. SKS serves over 3,000 villages spread across five states - Andhra Pradesh, Maharashtra, Karnataka, Madhya Pradesh and Orissa. It has a portfolio of $18 million and has achieved an annual growth rate of 250 per cent. Tech entrepreneurs Ravi Reddy and Sandeep Tungare, co-founders of Vistaar Technologies, have contributed a total of Rs 2.1 crore (12.83 per cent). Unitus Equity Fund (UEF) has also invested Rs 2.1 crore (12.83 per cent). UEF is managed by a subsidiary of Unitus, a Washington-based global microfinance institution. In addition, SKS borrowers have increased their investment from Rs 2 crore ($450,000) to Rs 6.5 crore ($1.5 million) and Sidbi has raised its contribution from Rs 50 lakh ($112,000) to Rs 1 crore ($225,000). SKS borrowers now have a stake of around 40 per cent in the institution and Sidbi has 6.11 per cent stake. SKS employees have approximately 15 per cent stake.

Hindi media is becoming a HOT sector for private equity investors

2006-03-30T22:46:00.000-08:00

Warburg Pincus Invests $33.33 Million For 7% In Media House Dainik Bhaskar

Hindi media had arrived when TV networks like Aaj Tak became a phenomenon and when Star News stopped their English language service and launched a Hindi channel. Now every media group worth its name has a Hindi channel or product. There is serious money to be made So small wonder Warburg Pincus has picked up 7 per cent stake in Dainik Bhaskar, a regional language newspaper group which has significant presence in central India, for Rs 150 crore ($33.33 million).This values the company at Rs 2143 crore ($476 million). Warburg's deal is expected to be sealed next week. Ambit PTE is one of the advisors of the deal. In 2004, UK's Independent News & Media had acquired 26 per cent in India's largest Hindi newspaper group, Kanpur-based Jagran Prakashan Ltd (Dainik Jagran), for Rs 150 crore (€25.5 million).

Micropayments via Credit Cards

2006-03-30T05:21:00.000-08:00

A decade after they began encouraging spenders to put everyday purchases on plastic, financial institutions now want people to use them for even smaller transactions. Known as "micropayments," these transactions typically are less than $2 and can ring up sizable industry profits even when they are less than a dollar.
After making a big appearance in online transactions a few years ago with the ability to charge a 99-cent song downloaded from Apple Computer Inc.'s iTunes, tiny payments now are showing up more often in the physical world.
The push toward smaller transactions is part of the credit-card industry's continuing strategy of getting consumers to use plastic instead of more traditional forms of payment. Consumers already are moving in that direction: The number of U.S. electronic payments topped the number of cash and check payments in 2003 for the first time, according to a study conducted by the American Bankers Association and Dove Consulting, a Boston consulting firm. Cash and checks now account for 45% of consumers' monthly payments, down from 57% in 2001 and 49% in 2003, according to the latest version of the study, issued last week.

Real Estate Sector in India && China are getting enormous FDIs

2006-03-30T05:10:00.000-08:00

The biggest US pension fund, California Public Employees’ Retirement System (CalPERS), is on the verge of making its first investments in home building in India and China, as it looks overseas to spend a growing allocation for property, an executive said on Tuesday.
CalPERS wants about half of its property investment to be abroad within five years, against the present level of about one-tenth. At the same time, the money it devotes to property is set to rise to around 9-10% of the $183 billion fund by the end of this year from 6.8% now, according to CalPERS’ senior real estate investment officer Michael McCook. “Asia is going to be a major player in the long term,” Mr McCook told Reuters on the sidelines of a property conference in Shanghai. “But we don’t go for speculative returns, we’re not swinging for home runs in international markets.”
CalPERS will seal a deal with private US developer Hines Interests LP next month to create a joint fund of around $400 million for developing residential and retail property in Beijing and Shanghai, Mr McCook said. “We’ll probably wind up funding $250 million to $300 million over three years,” he said, adding the fund’s spending power would be boosted by borrowing to around 65% of the assets.
Mr McCook said he expected an annual internal rates of return (IRR) after tax of around 15%. Its own rules prevent CalPERS from investing in Chinese stocks as China fails to satisfy the fund’s investment criteria on issues such as human rights, market transparency and freedom of labour unions. But Mr McCook persuaded CalPERS investment committee that its standards on criteria such as pay and conditions of workers were met by the proposed property trust partnership with Hines.
“Three members of the board came in November to look at equities and alternative investments,” he said. “They liked real estate.”
In India, which does meet CalPERS stock investment criteria, the fund will contribute around $100-400 million for building housing in New Delhi, Mumbai and Bangalore.
Mr McCook said the fund’s developer partner was a subsidiary of a publicly listed Indian firm.
Economic growth rates of 8-9% are encouraging mass urbanisation in India and China. An estimated 8.5 million people are teeming into Chinese cities every year, while India faces a shortfall of around 20 million homes, according to the government.
But, while most new urban dwellers are poor, foreign investors are keen to tap the very top-end of the market where profit margins are widest.
US investment bank Morgan Stanley, for example, has teamed up with Chinese and Indian developers, while private equity firms Warburg Pincus and JP Morgan Partners have also been circling Indian companies.
Developers in both countries are keen to expand their regional bases to become national players. In China, developers face a clampdown on bank lending, so foreign capital is even more valued. Mr McCook said CalPERS would also start funnelling funds into Chinese property through its $200 million share of a $350 million fund managed by Japan’s Secured Capital Group and its $400 million investment in a $1 billion fund managed by AETOS Capital.

Kingfisher Airlines giving a tough fight to Jet Airways.

2006-03-30T01:01:00.000-08:00

Vijay Mallaya, a name that evokes image of a business tycoon who is unlike his Indian contemporaries. Whatever he does he does them in elegance and finesse. Kingfisher Airlines his latest venture is another example of his flamboyant business success.

Today KingFisher is giving Jet a tough fight in the luxury brand of air travel.Though KF has a market share of just 7% today, it is bound to grow thru organic and inorganic ways.They are coming out with their IPOs soon.

Wait n watch KF in action.

makemyTrip presents nice concept

2006-03-30T00:51:00.000-08:00

makemytrip has embarked on the Indian online market at the right time. Today if we see the Indian online market's revenue it is close to $200 million and 70 % of it is owned by airlines and railways bookings. The actual internet shopping trend is yet to catch up.
Meanwhile encashing the growing penchant of net savvy Indians towards travel related booking makemytrip provides a holistic soluntion to the traveller. Recently they got a funding of $ 10million from none other than Pramod Haque of KPCB stature.

U should have a look at makemytrip 's ad, they are really hilarious and creative.I m giving link for two of them. Check them out here.. http://india.makemytrip.com/masti/fungama.html#

Why Vinod Khosla, Richard Branson,Bill Gates are betting heavily on ETHANOL

2006-03-28T03:58:00.000-08:00

VINOD KHOSLA was a founder of Sun Microsystems and then, as a partner at Kleiner Perkins Caufield & Byers, the Silicon Valley venture capital firm, he helped a host of technology companies get off the ground.
These days, Mr. Khosla, 51, is still investing in technology, but much of it has nothing to do with the world of network computing in which he made his name. He is particularly excited about new ways of producing ethanol — the plant-derived fuel that, he says, could rapidly displace gasoline. "I am convinced we can replace a majority of petroleum used for cars and light trucks with ethanol within 25 years," he said. He has already invested "tens of millions of dollars," he said, in private companies that are developing methods to produce ethanol using plant sources other than corn.
Mr. Khosla isn't the only big-name entrepreneur to embrace ethanol. Sir Richard Branson, chairman of the Virgin Group, plans to invest $300 million to $400 million to produce and market ethanol made from corn and other sources, said Will Whitehorn, a director of the company. Virgin expects to announce soon the site of its first production facility, probably in the eastern United States, with a second one likely to follow in the West, Mr. Whitehorn said.
Bill Gates has also made a move into the ethanol market. Cascade Investment, Mr. Gates's private investment firm, has declared its intention to buy $84 million in newly issued preferred convertible securities in Pacific Ethanol, according to William Langley, its chief financial officer. The company, which is based in Fresno, Calif., and is publicly traded, says it hopes to become the leader in the production and distribution of ethanol in the Western states.
Ethanol derived from corn now accounts for 3 percent of the American automotive fuel market. Most cars in the United States can already handle fuel that is up to 10 percent ethanol, and as many as five million are so-called flex-fuel vehicles that can use a fuel called E85, which is 85 percent ethanol and 15 percent gasoline.
The current excitement over ethanol derives from research that has cut the cost of converting nonfood plant matter like grasses and wood chips into alcohol. Mr. Khosla says he believes that such ethanol, called cellulosic ethanol, will eventually be cheaper to produce than both gasoline and corn-derived ethanol.
Can investors whose pockets are not as deep jump into the ethanol market? Yes, but they are taking a big risk. Picking long-term winners among the companies that make ethanol — or, for that matter, develop other alternative energy technologies — is a very uncertain business. The few public companies that focus on ethanol are typically unprofitable. Pacific Ethanol, for example, has not yet had a profitable quarter and will not until at least the fourth quarter, when its first plant is scheduled to begin production, Mr. Langley said.
Few mutual funds focus on alternative energy companies. "We are not going to start a dedicated alternative energy fund, period," said Wenhua Zhang, a technology analyst at T. Rowe Price. The company is avoiding the sector "for the same reason we didn't start an Internet fund in 2000: a dedicated very narrow sector fund with a single focus typically has a much higher risk."
Some publicly traded companies with operations linked to ethanol include Novozymes and Danisco, both based in Denmark, and Diversa of San Diego; all three have said they have made major gains in reducing the cost of the enzymes needed to produce ethanol from cellulose. Bigger, more diversified companies like Archer Daniels Midland and Monsanto have ethanol operations, too, though ethanol is but one of many businesses for these giants.
Two mutual funds that focus on alternative energy include some ethanol companies among their holdings. The New Alternatives fund holds shares of Abengoa and Acciona Energía, two Spanish companies investing in ethanol production. Another option is the PowerShares WilderHill Clean Energy Portfolio, an exchange-traded fund that tracks a basket of 40 alternative energy companies. Robert Wilder, who created the index on which the fund is based, said that it currently includes just two companies with significant ethanol interests: Pacific Ethanol and MGP Ingredients, an ethanol producer in Atchison, Kan.
Mr. Wilder said he expects to add other companies involved with ethanol. "It's very elegant," he said. "We can take an agricultural waste product we currently pay to get rid of and convert it into fuel."
But many ethanol companies are privately held, making them inaccessible to most investors. And there is certainly room for skepticism about ethanol's future. After all, corn ethanol has been around for years, and even with a current spike in demand, the industry commands only a 3 percent share of the market. Mr. Khosla counters that soaring energy prices have made corn-based ethanol more competitive, while research advances in breaking down cellulose into simple sugars have cut the cost of making ethanol from other sources.
"Ethanol is cheaper to produce, unsubsidized, than gasoline today," he said. "As these technologies ramp up, they will be cheaper — unsubsidized — than gasoline even if petroleum drops to $35 a barrel."
Brazil has proved that ethanol can be made competitively from sugar, said Daniel M. Kammen, a professor in the energy and resources group at the University of California, Berkeley. He estimates the cost of producing ethanol from sugar — including raw materials and processing — at $6 to $7 per gigajoule (a unit of energy) versus $14 a gigajoule for gasoline. In Brazil, roughly 70 percent of new vehicles are equipped to handle ethanol, and the country has been able to curb its dependence on foreign oil and turn ethanol into a growing export industry.
But cellulosic ethanol, the kind produced from nonfood plant matter, has some advantages over food-based ethanol. Because cellulosic ethanol is derived from plant waste, wood chips or wild grasses like miscanthus and switchgrass, it would not require costly cultivation; that would mean savings on labor, pesticides, fertilizers and irrigation.
And it is superior to corn-derived ethanol in reducing greenhouse gas emissions, Professor Kammen said. He expects cellulosic ethanol to catch on quickly. "I think you can really see ethanol comprising 25 to 30 percent of gasoline consumption within 10 years," he said.
FOR that to happen, automakers would need to build more flex-fuel cars. The cost of adding this capability to new cars has been estimated at roughly $100 a vehicle. And ethanol would need to be much more readily available at gas stations. Mr. Khosla has been lobbying in Washington for government help in both areas.
Smaller investors may be advised to just sit back and study developing opportunities. "This is an area where investors have to be patient and build up slowly," Mr. Khosla said.
But he said the potential payoff justifies his own aggressive bets. And ethanol's success, he said, would mean that more energy spending would flow to rural America. "You get a fuel that's cheaper and greener than gasoline," he said. "It gives us energy security."

VCs going to China & India at unprecedented rate

2006-03-27T00:14:00.000-08:00

Wilson Sonsini: VCs going to China & India at unprecedented rate
Jonathan Axelrad

Jonathan Axelrad is a lawyer at Silicon Valley's elite law firm, Wilson Sonsini. He helps some of the area's best venture capital firms put their funds together.
What he told us the other day stuck with us -- perhaps because of the mix of both excitement and alarm we detected in his voice. His desk is piled with papers he is preparing for new venture capital firms focused on investing into China and India, he said. "In the 1990s, money was coming from all over the world to be invested here," he said. "Now investors are using us to raise funds to spend abroad. It's the exporting of U.S capital to those countries." Over the past several weeks, he's wrapped up four venture firms focused on India, and two focused on China.
"Whether it's a bubble or not, that's another question," he says.
In related news, here's the recent NYT story quoting executives at Silicon Valley Bank, which is based in Santa Clara, and which provides consulting services to venture capital firms. They said they are they are seeing twice as many Indian start-ups looking for capital investment than even a few months ago. "Our technology and private equity clients are leveraging India at an unprecedented rate," said Kenneth P. Wilcox, chief executive of SVB.

Some recent HOT VC deals in India

2006-03-22T04:35:00.000-08:00

a) Office Tiger, a BPO based in Chennai headquatered in NY got acquired for $250mn recently.
For the complete story Click here

b) Barclays Capital to invest close to $300mn in India this year.
For the complete story Click here

c) Mobile Content space is abuzz with a lot of acquistions and VC activity.

d) Travel websites are another hot area for the VC activity.

Why Indian companies are not leveraging their core competencies in China unlike a very few?

2006-03-21T08:11:00.000-08:00

Aptech's amazing China story

The taxi, a Volkswagen Santana, weaves in and out of thick traffic, switching between the main throughfares and bylanes of Beijing. The driver is concentrating on the road, but only somewhat. From the backseat, Laxman C Hemnani is issuing a stream of instructions. And directions. We arrive at our destination. Prakash hands out the fare and thanks the driver. The entire conversation was in fluent Chinese.
Hemnani is the China head of IT training company Aptech, known locally as Aptech Baida Jade Bird Company. Sitting in his offices in the Haidian District in north-west Beijing, Hemnani explains how the IT training industry works in China.
First, a comparison. In India, Aptech, like NIIT and others, function on the fringe of the state-run education sector. In China, Aptech has a 50:50 joint venture with a Chinese company (Jade Bird). Moreover, Beijing University (called Baida) has a stake in Jade Bird. So, unlike India, where IT education and by extension firms like Aptech operate from the periphery, in China, the government seeks them out and embraces them totally. A Beijing University tag is precious to most Chinese students.
Then promoter of Aptech, Atul Nishar (he sold it to IT-training firm SSI), recalls how, after some correspondence, the China minister for science & technology visited India and his office. This was Mumbai and the year 1999.
On most days, the area around Nishar's office in Andheri (E) in north Mumbai is jammed with a constant cacophony of traffic. The air is dusty and thick with diesel smoke. This part of Mumbai is also host to hundreds of engineering workshops. And increasingly some IT companies.
Nishar says he walked into his boardroom expecting to meet with the minister and a few aides. "I was shocked. There were 20 Chinese sitting there," he recalls. Nishar says his shock turned into amazement when the minister said he would visit a few IT training centres himself. Which he did subsequently. "I didn't expect him to actually visit a centre," admits Nishar.
The minister began by saying they wanted Aptech to come to China and "help with development". The deal was signed only later. Nishar says options were a 100 per cent subsidiary or partnering with the government. "We chose the latter. We signed a joint venture with the ministry of science & technology, which in turn assigned the venture to a company called Jade Bird."
In five years, Aptech has set up over 200 training schools in 57 different Chinese cities. The joint venture, according to the China Centre for Information Industry Development had 19 per cent of China's IT training market in 2005, up from around 15 per cent in 2004. The business itself is growing close to 20 per cent annually with total billings at $40 million. Pramod Khera, CEO, Aptech, says they now want to build an education content development "factory" in China. "We are thinking of taking the JV public in a year's time," he says.
At the Haidian centre, close to Hemnani's office in Beijing, some 2,000 students have enrolled for either a two-year degree or a one-year network administrator's course. Hemnani explains they also work with individual colleges and universities directly.
"When it comes to English and IT, they are empowered to tie up with companies like us," he adds. Not quite the case in India. I ask Hemnani about this apparent contradiction in approach. He thinks about it but refuses to be drawn in. "It's a little different here, I guess," he says.
Little is an understatement. Aptech is not just running IT-training classes through franchisees, it is also re-designing curriculum for several universities. In India, Aptech would possibly be shooed away from the gates of Delhi or Mumbai University for even suggesting something like this.
The curriculum replacement model is fascinating. Aptech plugs its two-year course into a three-year university degree in computer science. At the end, students sit for Aptech and University exams and get twin degrees. Some 50 colleges have opted for this model. The teachers are trained by Aptech. And it's the University, not the students, that pays Aptech.
What are the lessons here? Before that, there may be many reasons why Indian universities are not joining hands with private education firms, Indian or overseas. Most may be legitimate. But the Chinese do hold their universities close to their heart. And nowhere is there talk of a foreign hand destabilising the education system.
To use Nishar's words, the Chinese are a determined bunch. In information technology in specific and lots of other areas in general. As the Chinese minister's visit demonstrated. Nishar says he still can't imagine collaborating with government-owned universities in India in this manner. "Government bodies are wary. Maybe in airports or some companies, but not quite education," he says.
Nishar says the other lesson is that in China, the government is a good partner. "They enable you and enhance your presence; they are not a hindrance." But the important thing is this. "They begin by asking whether it will help China as a country. Will it help meet with objectives? Is it in their interest?" And then they work from there.Nishar today marvels about a new road out of Shanghai, which will cut travelling time to Hangzhou. This is one of the places he is considering taking his IT services company Hexaware. But as he also realises, his former company's success in China had very little to do with roads and airports. Or the China infrastructure story.

Consulting Parlour: Monthly Rankings, January2005-Vault

2006-03-20T06:01:00.000-08:00

Consulting Parlour: Monthly Rankings, January2005-Vault

A legend called Warren Buffet...

2006-03-20T04:25:00.000-08:00

Warren Buffet, a name that evokes the image of a billionaire who has made his fortune without creating the hype associated with it. Currently he is the second richest man on this planet. What is does, he does not make software n does he sales Pepsi- Cola, but he has a sizeable stake in these companies. When the dot com was booming like anything in the late 90's he didnt even touch any of the software companies. The reason being he didnt understand software. He has this astute vision since his childhood.
More details on Warren Buffet

A JLL survey of India's Tier-II cities of future

2006-03-20T02:13:00.000-08:00

There was a survey done by Jones Lasalle Lang about India's Tier-II cities of future. Chandigarh, Kolkatta, Indore, Ahmedabad and Nagpur has been shortlisted as the cities of importance. Mangalore, Cochin and Trivandrum has been kept for future times .Chandigarh and Ahmedabad has been given credits for offering low costs. Kolkatta and Nagpur has been credited with supply of manpower in a good number and obviously cheap.I m not sure how can I upload any *.doc or *.pdf file in any of my blogs.

Isnt India vs China debate futile by now?

2006-03-20T02:11:00.000-08:00

These days India vs China debate is the prime focus of all the TV channels.I would like to say we should get over this debate which has become futile by now.Everyone who is bothered knows what is India and what is China. I need not mention again what Goldman Sachs and recently PriceWaterCoopers have predicted in their reports. China becoming the top economy and India the third largest economy. We are wasting our time by going overboard on getting the world's limelight. The need of the hour is India should understand that the dynamics of today have changed and India has to behave as per its grown status.We should be debating on how to synergise with China and more importantly to tackle our infrastructure and other perennial problems.

L N Mittal quotes what Corporate Social Responsibility is.

2006-03-20T02:09:00.000-08:00

Lakshmi Nivas Mittal's views on visit to Jharkhand...Jamshedpur

I visited Jamshedpur over the weekend to see for myself an India that is fast disappearing despite all the wolf-cries of people like Narayanamurthy and his ilk. It is one thing to talk and quite another to do and I am delighted to tell you that Ratan Tata has akept alive the legacy of perhaps Indias finest industrialist J.N. Tata. Something that some people doubted when Ratan took over the House of the Tatas but in hindsight, the best thing to have happened to the Tatas is unquestionably Ratan. I was amazed to see the extent of corporate philanthropy and this is no exaggeration. For the breed that talks about corporate social responsibility and talks about the role of corporate India, a visit to Jamshedpur is a must. Go there and see the amount of money they pump into keeping the town going; see the smiling faces of workers in a region known for industrial unrest; see the standard of living in a city that is almost isolated from the mess in the rest of the country. This is not meant to be a puff piece. I have nothing to do with Tata Steel, but I strongly believe the message of hope and the message of goodness that they are spreading is worth sharing. The fact that you do have companies in India which look at workers as human beings and who do not blow their software trumpet of having changed lives . In fact, I asked Mr Muthurman, the managing director, as to why he was so quiet about all they had done and all he could offer in return was a smile wrapped in humility, which said it all. They have done so much more since I last visited Jamshedpur, which was in 1992. The town has obviously got busier but the values thankfully haven't changed. The food is still as amazing as it always was and I gorged, as I would normally do. I visited the plant and the last time I did that was with Russi Mody. But the plant this time was gleaming and far from what it used to be. Greener and cleaner and a tribute to environment management. You could have been in the mountains . Such was the quality of air I inhaled! There was no belching smoke; no tired faces and so many more women workers, even on the shop floor. This is true gender equality and not the kind that is often espoused at seminars organised by angry activists. I met so many old friends. Most of them have aged but not grown old . There was a spring in the air which came from a certain calmness which has always been the hallmark of Jamshedpur and something I savoured for a full two days in between receiving messages of how boring and decrepit the Lacklustre Fashion Weak was. It is at times such as this that our city lives seem so meaningless. Jamsetji Nusserwanji Tata had created an edifice that is today a robust company and it is not about profits and about valuation. It is not about who becomes a millionaire and who doesnt'. It is about getting the job done with dignity and respect keeping the age-old values intact and this is what I learnt. I jokingly asked someone as to whether they ever thought of joining an Infosys or a Wipro and pat came the reply: "We are not interested in becoming crorepatis but in making others crorepatis." Which is exactly what the Tatas have done for years in and around Jamshedpur. Very few people know that Jamshedpur has been selected as a UN Global Compact City, edging out the other nominee from India, Bangalore. Selected because of the quality of life, because of the conditions of sanitation and roads and welfare. If this is not a tribute to industrial India, then what is? Today, Indian needs several Jamshedpurs but it also needs this Jamshedpur to be given its fair due, its recognition. I am tired of campus visits being publicised to the Infosys and the Wipros of the world. Modern India is being built in Jamshedpur as we speak. An India built on the strength of core convictions and nothing was more apparent about that than the experiment with truth and reality that Tata Steel is conducting at Pipla. Forty-eight tribal girls (yes, tribal girls who these corrupt and evil politicians only talk about but do nothing for) are being educated through a residential program over nine months. I went to visit them and I spoke to them in a language that they have just learnt: Bengali. Eight weeks ago, they could only speak in Sainthali, their local dialect. But today, they are brimming with a confidence that will bring tears to your eyes. It did to mine. One of them has just been selected to represent Jharkand in the state archery competition. They have their own womens football team and whats more they are now fond of education. It is a passion and not a burden. This was possible because I guess people like Ratan Tata and Muthurman havent sold their souls to some business management drivel, which tells us that we must only do business and nothing else. The Tatas do not need this piece to be praised and lauded. My intent is to share the larger picture that we so often miss in the haze of the slime and sleaze that politics imparts. My submission to those who use phrases such as "feel-good" and "India Shining" is first visit Jamshedpur to understand what it all means. See Tata Steel in action to know what companies can do if they wish to. And what corporate India needs to do. Murli Manohar Joshi would be better off seeing what Tata Steel has done by creating the Xavier Institute of Tribal Education rather than by proffering excuses for the imbroglio in the IIMs. This is where the Advanis and Vajpayees need to pay homage. Not to all the Sai Babas and the Hugging saints that they are so busy with. India is changing inspite of them and they need to realise that . I couldn't have spent a more humane and wonderful weekend. Jamshedpur is an eye-opener and a role model, which should be made mandatory for replication. I saw corporate India actually participate in basic nation-building, for when these tribal girls go back to their villages, they will return with knowledge that will truly be life-altering. Corporate India can do it but most of the time is willing to shy away. For those corporate leaders who are happier winning awards and being interviewed on their choice of clothes, my advise is visit Tata Steel, spend some days at Jamshedpur and see a nation's transformation. That is true service and true nationalism .Tata Steel will celebrate 100 years of existence in 2007. It won't be just a milestone in this company's history. It will be a milestone, to my mind of corporate transparency and generosity in this country. It is indeed fitting that Ratan Tata today heads a group which has people who are committed to nation-building than just building inflluence and power . JRD must be smiling wherever he is. And so must Jamsetji Nusserwanji. These people today, have literally climbed every last blue mountain. And continue to do so with vigour and passion. Thank god for the Tatas!