FDI in Indian Retail, Louis Vuitton & Russell Peter

I don't know what is the connection among above three; but Indian govt.'s delayed decision on allowing FDI in retail sector was in news again in the last week & then there was a news about Louis Vuitton (that it is eyeing Indian market as it is planning to reap huge profits with 100% FDI in Single Brand Retail Outlet).


Today in India, Foreign Direct Investment (FDI) is allowed up to 51% in Single Brand Retail (you see those show rooms of Zara, Adidas, Mango, etc) and 100% in wholesale (pat of what Wall-mart is doing with Bharti or Carrefour).


After extensive deliberations and withstanding pressure from various executive management representatives of MNCs & foreign governments' commerce ministers - Indian govt's departments - DIPP, RBI, MofCom are not in hurry to change swimming lane. And in last week, Industry Secy said, Govt is *thinking* about opening up to 100% of Single Brand Retail to FDI.

These are indications! companies like Louis Vuitton, Canali, Jimmy Choo who have been waiting to tap this market for obvious reasons. There has been significant lobbying going-on for it, for quite some time. I think it's about time before it gets opened up for Multi Brand Retail Outlets (MBRO) too.

Now this fellow Russell Peter: he is a Canadian comedian of Indian Origin. He makes fun of Indian, Chinese people in conventional and unconventional style. Quite often, I like his observations. So one of his shows in NY, he made fun of Indian people about being Cheap - that Indian & Chinese don't spend on such luxurious items. (now things have changed with the new 'generation' grown up in real estate, IT boom). In  the same show he mentioned brand - Louis Vuitton -  much like this way 'Indian & Chinese can't even pronounce Louis Vuitton & at another place - he himself thought twice before buying Armani goods (Made in India: whether he should ask his uncle in India, if he can buy these Armanis made in India)

Though some of us might have become rich and have been spending lavishly, significant percentage of Indian folks are still struggling with basic needs of life, Sad but true.

On other note, this cheapness (I would rather call conservativeness) of Indian banking system saved Indian economy from Recession 2008-09. The cheapness of Infosys, TCS, Wipro,  etc got them cross the billion dollar mark. & yes, RussellP acknowledge that there is nothing wrong about being cheap. It was an Indian who introduced ZERO to the world :-)

Monetory review by RBI

Dr. Subbarao (RBI Governor) and Mr. Pranav Mukharjee (Fin Min) have been worried about it for quite some time. The extent of worry has amplified now.

1. The inflation which has remained above comfort level of RBI and has refused to come down since last two years; is still hovering above 9%
2. The India Growth Story seems to be have got brakes. The IIP numbers out in last few week for last quarter are to be worried out. The Industrial Production number has grown significantly lower.

Really a tough job for Mr. RBI Governor. He has been indicating increase in policy rates.

There is another angle to it now.  Despite, RBI has been selling US Dollars for last few days, the INR, Indian Rupee has depreciated significantly against US Dollar ($). 1$ ~ INR 48. I believe, if Mr. Subbarao has to increase key policy rates (against the lobbying done by finance/banking community and business world); the depreciation of Rupee will act as an supportive case for him.

Increased prices of crude oil is surely a worry for India. Depreciated INR is even more worrisome.

Interference of Constitutional Pillars of India

Looking at the comments and objections raised by court, there definitive appearance of interference of Judiciary into Executive's (Government's) activities.

1. The CVC appointment being invalidated
2. Handling of The 2G Spectrum by CBI being questioned & the Supreme Court declared that it would be closely watching investigation progress made by CBI
3. As SC commented on the Government's inability/unwillingness to put Pune based Hassan, behind bars. 'Black Money Matter'S'
   
4. Adarsh Scam, ULC Scam
5. Statements leaked by Wikileaks: Statements made by Mr. P Chidambarm to FBI about inquiring David Hadley.
   

So looking at number of Public Interest Litigation (PILs) upheld by Judiciary (specifically Supreme Court), one may wonder if there is uproar of Judicial Activism.

But to me, this is inevitable. The inability of government to act against social wrong doing (Isn't it a broader term to corruption?) put a question on the credibility of the government & opposition as well (elected by common man) in common man's mind. The judiciary is now keeping up the hope that there is some element which can be looked up to and which is concerned about all these wrong doings of executives & Administration.

There are lot many aspects over which the government has failed to take necessary actions: be it
1. Inflation - hoarding of essential commodities
2. Illegal land acquisitions by Builder Lobbies
3. Telangana Issue
4. Jammu-Kashmir unrest, Ulfa, Naxalist, Bodo attacks.

Though there are some good things happened.

Mr. Prime Minister & Sonia Gandhi,
Failures of the Executive is definitely not acceptable.

Though the comparisons are also inevitable: I feel, India needs Golda Meir.

Online Search Quality- Changes in google web ranking algorithm

A step to correct Google search result, bits further has been taken. For some time, there have been criticism on the way Google search engine has been providing search result. Still, some set of Google users think that search result provided by Google Search Engine is biased to certain extent; attributed to the market maker i.e. the advertisers.

Last week Google fellow - Amit Singhal & Matt Cutts announced changes in its ranking algorithm which provides web search result & that it has impact on 11.8% of queries. The changes in consideration have been done to rectify those website which do not bring value to user.

Now these low-value-websites are loosely defined. Google considers them based on the extent of copying of content done from from other websites & few other things. The real valued/good quality sites are those which holds original contents, research materials, in-depth & thorough analysis, etc.

But isn't it something, which was expected in default from search engine?

Let's say there is a pharma company which has published research papers, in depth analysis, etc share on its websites. But the normal users of search engine may not want to see these complex or complicated research. Rather they would look for somebody's website (Say JeeV), who in turn would have inherited contents from this pharma company website (of course, I expect it to be done with proper references) but he would have published the same data but in a easy-to-understand way. I wouldn't wonder if JeeV's website gets higher ranks through search algorithm.

In such case, (given search keyword match) I would expect that the pharma company to get listed at the top of the search result but next ranked result would be by those who would have made it simpler & appealing.

Reading further in the google announcement, I sensed google has done 'pat self on the back' with the concurrence of results obtained from Personal Blocklist Chrome extension.

The Mask of Zoho

Last week, one of my friends told me about Zoho.com. Apparently he informed me that Zoho is Chennai (India) based company; which is partly untrue as Zoho is Peasanton, CA based company & probably, Zoho would have been carrying out significant delivery work from Chennai office; he had got such impression.

So, my impression after trying out few of Zoho's offerings - This company is going to change the way incumbents have been doing business for years. It has got so many products, solutions to offer and all of those are SaaS (available in cloud). As the statistics are gathered about zoho.com, it has touched multi million users base & growing.

I am sure, guys at Microsoft, Google, Salesforce.com have well taken note of things happening at Zoho.com.

Google Public Data Explorer

Recently I came across another significant feature made available by Google. Google Public Data Explorer. Apparently, as per googleblog, this feature has been made available or googleblog has been making public data available to user since last couple of years :-) Nevertheless, now researchers, students even naive users will have one single place where data like...
1. Country-wise GDP
2. Statewise Unemployment rate in US
3. Various data released by autonomous bodies, international bodies like IMF, etc
etc

• Even more to feature is; These data can be visualized in various forms like charts, etc
• One can add his own data conforming to open standard like Dataset Publishing Language (DSPL) which is in a xml form (I guess, publishing of such submitted data would ultimately subject to satisfaction/approval of google team)

I am yet to explore it further. But somehow I feel, though with this feature google has made available users; an utility to access publicly avaiable data; to me, it can also be seen as an encirculment attempt

where, the facilitator will store data & will get it growing over the period. And once data grows over the period, it becomes an asset to organization on which it can easily capitalize. And Google is well known for this :-)

Government has no Magical Lamp

It happened one more time.

Yesterday, Finance Minister Pranab Mukharjee said, government has taken necessary steps to tame inflation, but it does not have Aladdin's Magical lamp to resolve things immediately.

• I remember him saying the same thing in early January 2011
• Last time, he indicated, the future course of action would be taken Reserve Bank
• RBI in line with general perception & growth pressure raised benchmark rates to moderate 25 basis points. And this moderate hike has not helped so far to bring down the inflation (read WPI and specifically essential commodity)
• Somehow, I think, RBI should take a preemptive steps in near future & tweak benchmark policy rates
• Hoarding of food commodity is raging off-and-on with different items, it started with 'daal', onion, now edible oils.
• The Indian Economy at large will have implied effect of radical changes happening in political sphere of Egypt

SEBI Fines Anil Ambani & Other ADAG company Director Rs. 50 Crore

For this news, I would really like to congratulate Mr. CB Bhave, the SEBI Chairman. Congratulations for the tough stand he (representing SEBI) has taken against the owners of business conglomerate like ADAG for their wrong doing.

And this massive amount of fine (Rs. 500 million or 11.11 million USD) will serve as an example to all market participants and remind everybody that there exits a watchdog!!

It was taken for granted by many big business houses (in conjunction with political members) that they can bend the rules as and when they want & get away with it. SEBI has ignored the size & reach of the company and showed that Rules are rules & they apply to all.

The securities market regulator of India, SEBI has initiated & carried out a thorough interrogation of Anil Ambani & group companies' actions since 2007. As these investigations revealed, Anil Ambani along with others raised money through foreign markets as debt for RNRL (in the name of corporation), instead, used this money to invest into stock market in India (for personal gains).

The story does not end here. In the financial reports of ADAG companies specifically Reliance Infrastructure & Reliance Natural Resource Ltd (RNRL) had misrepresented financial information (specifically: the number & nature of investments declared in Financial Statements) since 2007.

SEBI has also directed
- these companies to debar PwC from carrying out Audits of these companies & keep rotating the auditors
- Anil Ambani & other directors refrain from participating in securities market
- Allowed these 'companies' to carry out normal activities related to securities market (tried protecting investors....)

What is even worse,

• Mr. Anil Ambani calls for a press conference & declares that this amount Rs. 50 Crore i.e. approx 11.12 million USD is voluntary & will not have any additional burden on respective companies! Boss, pls stop fooling around!
• And that he claimed that such irregularities happens in almost all big business & gave example of Goldman Sachs. Mr. A Ambani, it's not any good way of defending your wrongdoing.
  
• And that Nira Radia tapes, if you have got to read the conversation between Mr. Tata & Ms. Radia: who talks about Mr. Anil Ambani, the very next moment you will realize why & 'what about' Mr. Anil Ambani had to call for a press conference.

I posted a blog entry (in Marathi) in July 2008, where it was highlighted how, Customs Department of India fined Mr. Anil Ambani for misrepresenting facts of chartering airplanes & tried to evade tax against the equivalent amount of approx Rs. 1000 Cr.

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Btw off-context: I got an opportunity to meet Mr. CB Bhave in my college when he visited IIMB to deliver a lecture. It was just couple of weeks before, he was appointed as a SEBI Chairman. He appeared to be cool headed and composed.

-:Dhan

Inflation & RBI's quarterly review

The inflation numbers (CPI) touching record 18.3% in last week and the news that has come out today that petrol (i.e Motor Spirit MS) prices would be increased by approximately Rs. 2.50. SENSEX showing anxiety or discernment of trading market::

All eyes are on the RBI's Quarterly review scheduled on 25th Jan 2011.

And that recently all Indian big bankers visited RBI officials with an urge to reduce the CRR, SLR!!

And that the Finance Ministry going public and stated on record "we don't understand how inflation is moving now!!" It's the same ministry which has largely backed out 'from supporting' OMCs which running into RED. Who has also refused the Oil Ministry's request to increase HSD prices. There will not be any major surprise if the big-ticket/Mega IPO of IOCL gets postponed till next notice.

And that Agriculture minister Mr. Sharad Pawar accusing 'media' for baseless-ly increasing non-existent inflation (??)

What would happen to HSD prices? What . Duvvuri Subbarao would do?



-:Dhan

Maruti Suzuki- Kizashi: Attempt to recover cost?

Suzuki Kizashi has been launched in developed world somewhere in July 2010. It did not receive good response as yet. Now the news are to be believed, Kizashi is scheduled to be launched in India this year.



Loaded with good number of accessories and plush interiors; the Kizashi is slated to be priced anywhere between Rs. 18-20 Lacs INR.

I am wondering about the decision to launch Suzuki's Kizashi in India is

• Maruti Suzuki's 'own' strategic move to peek/entry into the premium sedan segment like Honda (Civic) , Toyota (Corolla), etc rather than just being a manufacturer of small cars.

or

• Suzuki's decision to recover the cost of the amount of money it would have spent on R&D, designing this particular vehicle; which it has failed to recover from developed market?

Questions are still in my mind, we will get answers as we will see the after-market response to Kizashi.

Btw, how has been Mahindra Thar doing?

-:Dhan

Shahid Kapoor - The winner doesn't come with an expiry date!

So this is what the roadside hoarding saying :-)
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Some questions that came to my mind:

• How has Shahid Kapoor been perceived as a winner of life?
  

Shahid kapoor though has the image of macho man, he has never projected as biker/driver, etc. Alternatively John Abraham who has been endorsing Castrol Products, is not just a macho man, but his passion for bikes is widely (and occasionally badly ;-)) known.

"And as Castrol contracted Rahul Dravid (in past), Sachin Tendulkar (contemporary), David Beckham (in past) or Bharat Petroleum's MAK was endorsed by MS Dhoni (in past)"; so such endorsement by sports personalities to me, are somewhat logical because, the consumers can related their performance in 'sports' with such products.

• While advertising any product, deciding 'who is the hero of the advertisement' is crucial. For non-technical products or products in daily use like biscuits, detergent powder, cold drink; the product are not the projected as hero but the celebrity endorsing these products are. Simply because, the idea that "THE CELEBRITY is using so-and-so product why not me" .... expected to be imbibed in consumers mind & products in their category are difficult to differentiate.

Whereas in case of highly technological products such as Digital Camera, Utility Vehicles, etc, the product needs to be projected as a Hero rather than other entities involved in the advertisement. Simply because, the product has utmost importance and it can be differentiated from other products in a given category

But you will see the advertisement swaying between the continuum of the two ends mentioned above. That's why you would see, Karin Kapoor endorsing Laptop, Deepika Padukone clicking Sony cameras, Shahrukh Khan driving Hyundai Cars, etc.

• If you observe the advt closely - you can notice that the background somewhat indicates not a mechanic (work)shop but some tyre (repair?) shop

• I feel, for ELF MOTO 4 GOLD 20W40, Total Oil India is making overreaching claim. The product description claims to give longer life for engine, clutch, gear, etc parts of a bike but the positioning as 'The winner doesn't come with an expiry date' is far more to claim than reality. Probably, the positioning was meant to highlight the performance relativity among competing products, but again I doubt such positioning, how long be retained !

• What I liked about the positioning of ELF MOTO 4 GOLD 20W40:: is that it has been projected as a Bike oil & not just an Engine oil. Since nowadays, automotive engine oil products are not serving as a oil for engine alone rather it is running in broader structure of bike (except where break oil, fork oil, grease, etc are applied).

• The marketers emphasize on the importance of Integrated Marketing but may be because of resource constraints or lack of drive to make it happen; Lubricant marketing companies mentioned above are not displaying celebrities in their websites, though companies are officially contracting them. Only Castrol & MAK oil would fare better among their competitors because they have a section to download pictures of John Abraham, Rahul Dravid (in Indian website of Castrol) and MS Dhoni in case of MAK.
  

• Probably, it has been a high time for Indian Oil to launch separate website for its Servo Lubricant products. Since Indian Oil has so many products (Base Oil, black oil-Furnace Oil, MS, HSD, LPG, Marine, Kerosene, Industrial products, Special products to name few) & Lubricant oil needs a separate presence to break itself from the clutter.
  

Reference: Official Websites of Elf India, Castrol India, IOCL, MAK
Note: Views expressed are personal & do not represent my current or previous employers.

Carrefour in India (Again?)

It has been more than three years that Carrefour has been entering into Indian retail market. And finally, it has declared opening of its first operational Cash&Carry outlet in Delhi. Yes, that's true. How can we forget the time taken to 'announce the policy' on 'FDI in Retail' by Indian government?

The discussion paper on 'FDI in multi-brand retail' was made available on 7th July 2010. I also remember, some similar exercise was carried out in 2006 as well where 'Department of Industrial Policy and Promotion' (DIPP) put across a discussion paper.

So far the status quo remains, at least 'the discussions' are leaning toward having FDI in retail are appears to be positive. It will take some time for government to have a clear policy on FDI in retail.

One should be able to notice that this delay in making a policy on retail has proved to be far more beneficial for home grown retailers like '(Big Bazaar, Pantaloon, Food Bazaar), Spencers Retail, More, Shoppers Stop, Life style, Home, etc'. How would have opposed FDI in Multi-Brand Retail (MBR) with the justification of 'level playing field for domestic players' Definitely Mr. Kishor Biyani leading the pack among these major retailers. Since he-Future Group has been been very aggressive in increasing the presence across cities not just in terms of numbers but also in terms of offerings, i.e. different formats. Though he has focused direction of his group to Modern retail.

The new entrants like Carrefour, even Walmart through Bharti will find difficult to catch up with these home grown players in terms of 'marking cost effective presence' across major cities. The reason is, the higher & still increasing prices of real estate. And I am wondering if Wal-Mart would take the same strategy that it applied in US i.e. go to smaller cities .... in India as well. Since the consumer psychologies differ drastically from major cities to smaller cities in India.

But just for note: The Carrefour has grown very aggressively in China since 2007. It has 163 hypermarts in China, highest in any other country apart from home country 'France'. Going by this statistics, I wouldn't wonder if it has similar plans for India and it's just preparing on its own & waiting for Indian government to declare appropriate policy !!
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Carrefour is International chain of hypermart headquartered in France. It's Largest hypermart by size and second largest retail group in terms of revenue & third largest in therms of profit !

[Source- Wiki, Carrefour, WSJ.]

Garnier Fructis Ads

Couple of days back I watched a Garnier Fructis Kid TV commercial. It lasted for some 30+ second. As the commercial got over, I realized that there appears to be a common theme in Garnier Fructis commercials be it hair oil, shampoo, hair conditioner, shampoo+oil, etc. So I looked for some more Garnier Fructis commercials on web and here is the observation: Commonly, in Garnier Fructis advertisement (selectively discounting Kid one) shows

1. A lead character is a female, surrounded by her group of friends/boyfriends.
2. A male character slithering his palm over long hairs of the lead female; (in one commercial, other females were also seen playing gently with lead female's hairs)
3. As the commercial is about to conclude, the lead(er) female walks confidently towards the camera with a lulu attitude, leaving behind her group of friends (seen in background)
4. Even in commercials aired in India are seen with one or more non-Indian chaps (white guys: just to make a guess- may be US, EU fellows)
   

Looks like, Garnier Frcutis commercials revolves around the fantasy a young girl would have that she is being admired in her group of friends and carries herself confidently with them. And it is attributed to her beautiful/long/shiny/etc hairs.

By the way, the theme what Garnier Fructis is using definitely different than what Pantene (P&G), Head&Shoulder (P&G), Clinic All Clear (HUL), etc are using. I am not sure the Clinic All Clear commercials with Shahid kapoor & Asin T are going in which direction (they tend to portray that having dandruff is a shame when you are considering yourself as representative of mod-young generation or something like that)

Of course Dove (HUL), Olay (P&G) the premium hair care products are positioned as above the class products and are having different theme in positioning their products.














(Video Source: Youtube)

Delicious Pizza & Pricing part-I

In India, the market size for organized Pizza sales is guesstimated to be at Rs 1500 Cr and rapidly growing (as usual because of rising income level & growing affluent higher middle, middle class). Dominos Pizza and Pizza Hut are the dominant players in Indian market.

The Pizza retail chain majors, I have been visiting for last 7-8 years are

1. Dominos Pizza (Link)
2. Pizza Hut (Link)
3. Smoking Joes (Link)

I was thinking of looking at the Pizza prices for quite some time, So I collected the pricing for of their OOTB offering for Pune location. (The data collected is taken from respective company websites & pamphlets )

Here is some data compilation, basic number computation I have done. There are interesting pricing strategies applied by market leaders and as you can see, there are market followers as well




Though, this presentation is partly done, I wanted to publish it anyway; for the very reason that after seeing it half-done I will work on it to complete it :-)

:Dhan

Facebook to launch messaging service

The Facebook co-founder & CEO, Mark Zuckerberg has announced that Facebook would launch messaging services for internet users in an event organized in SF, CA.



Apparently, I came across some news, blog posts, twitter updates where people claimed that facebook messaging service is an alternative to gmail. But as clarified by Mark Z, such is not the case:: "Facebook messaging service is not gmail killer". He has proposed a different propositions for users. For Facebook, the target user group is the one who want to use email for personal, informal, seamless access. It has a concept of Social Inbox Prima facie, it looks similar to Google Buzz integrated with gmail but of course with Facebook touch.

No sooner did Mark Z, announced about Facebook messaging service than people started posting messages like "Can't wait for facebook email", "I want it first", etc in literally hundreds, thousands in nubmers. It gives the kind of craze users of facebook have, about the facebook products.

Going beyond the announcement and if I can read between the lines (:-)) I feel, this is an attempt to get into the online advertisement business in aggressive manner.

• Looking at the trend in last few years, the extent of User Generated Content (UGC) made available online has multi-fold (e.g. videos uploaded in youtube, photos on Facebook, picasa, etc)
  
• Such user generated content and people accessing these UGC are going to be the huge, huge market for electronic publisher, online advertisers to help companies reach to their target customers (and good part of online publishing is it's relatively more & reasonably measurable than prevailing mainstream media)
  
• Now with the messaging services in its kitty, Facebook will have even more user data with it to make it a revenue generating proposition in longer run
• Recently, I came across a study where it claimed that in North America, the average time spend by a user is as good as spent on Facebook, as it is on google search. Earlier, google search used to have more share of average time spent by user in online surfing
• Look at it this way, even google is aware of the fact that out of the online traffic hitting youtube has single largest source originating from facebook
• This make a good reason for Facebook to unlock avenues to generate revenue through its online product offerings to user

I think, Facebook Management is well aware about their user groups/customers. Facebook user wants to have communication which is informal, easy, quick and a fun experience. If this is true then which all corporations can think of using Facebook as a medium | as a serious medium | to promote their products, services:: value propositions to user is reasonably understood. Can every other corporation, company expect to get similar outcome on money spent on online advertisement: specifically on Facebook? I guess, not!

:Dhan

Product Launch of Creo - PTC Product

It was a Tech product launch event of PTC’s new product concept: Creo®. It was hybrid product launch event. Hybrid because the physical event was taking place in Boston, whereas PTC has facilitated viewers like me sitting in India through a virtual web event i.e. the live video streaming or a webcast. I can say that there were hitches in viewing the web event. Later on PTC admitted that there was heavy traffic hitting this virtual event which led to section of online viewers the event inaccessible.

The launch of the product Creo® which was earlier touted in a name of Project Lightening®; kicked off with a typical catchy head start. Only in the beginning the head start drama of event was able to generate curiosity among the participants and viewers. The head start drama portrayed four prisoners being brought behind bars (jail). The quick replay of the event is available here. The idea was about to imbibe in viewers’, users’ mind that with this product customers’ CReativity, EffiCiency, ValuE, teamwOrk (CREO) will be unlocked.

To me, the drama where prisoners represented Creativity, Efficiency, Value and Teamwork being constrained in a jail and projecting the analogy of this design software to unlock these propositions to customers' gain by releasing the prisoners, did not click well, rather it was a kiddish attempt.

But I must say, after this planned drama, with the entry of Mr. Jim Heppelmann, CEO of PTC the event was set to rock the viewers. He every aptly described the background of how the current CAD market stagnated & product interoperability, varied user expectations (simple vs. sophisticated users) etc are bigger issues in product design space. The solution to these design issues by PTC is projected as Creo®. It Mr. Jim shared the deep thoughts given in

(a) identifying problem areas & solutions to those,

(b) selecting the product name as Creo® which as he said means I Create in Latin, and in some European language it also means I saw, I create. The product design process is about creating new product so this name seems very appropriate.

Later on the other presentation covered the demonstrations of the product concept. It was amazing to see how different breed of product user can use it in different ways. The 3-D modeling, Direct Modeling, etc will touted to become so much adaptive and easy to use with this solutions.

There are four technologies as a part of Creo® product are unveiled, these are include:

• AnyRole Apps^TM – different set of apps for different set of people/roles.
• AnyMode Modeling^TM – to help users do designing in modeling mode such as 2D, 3D direct, or 3D parametric
• AnyData Adoption^TM – Interoperability by allowing data generated from different CAD tools
• AnyBOM Assembly^TM – This is to integrate with PLM software addressing serial number generation issues.

With Creo® PTC is trying to rebrand its existing products such as Pro/ENGINEER^®, CoCreate^® and ProductView^® as

• Pro/ENGINEER as Creo Elements/Pro
• CoCreate as Creo Elements/Direct
• ProductView as Creo Elements/View

This new product containing new architecture based on Common Data Model, various Apps, modeling tools is scheduled to be made available in Mid-2011.

To me, things which had a great appeal in this event were

1. The live demos, showing gamut of Direct Modeling, 3D Modeling were eye catching

2. The problem areas discussed by customers, users themselves were highlighted through videos (which even criticized Pro/E® for being not-so-easy-to-use, etc and these customers were present in the event made it realistic) and the it has been a good attempt to project how Creo® is being developed after understanding customer, consulting them to solve their problem and it will add Value to their system.

3. A vision: PTC created 3D modeling software twenty years ago. Pro/E® was pioneer in this space and is a leader as well till today. With Creo®, PTC wants to introduce a product which will share similar vision of serving customers with a product which will change market dynamics henceforth and will give PTC a leading edge for years to come

Who drives the capital market ? (?)

There are active Capital Equities Markets, Bond Markets, Commodities Markets and such similar financial instruments' markets present in almost all developed & developing countries. And if you are watching TV and screening through channels, you would have come across a set of channels that are dedicated to news, discussion related to these markets.

- Do you ever wonder how these markets actually function and behave (sentimental vs. fundamental) ?
- Do you keep hearing words like 'market fundamental' or 'fundamentals of the company' or 'fundamentals of economy' over and again and especially when equities market tumbles down.

Some 4-5 years ago, I heard a story about a man-from-city (MFC) who goes to village-close-to-jungle and offer them to buy monkeys caught from jungle from them and to sell those to foreign circus owner in city. Then how he (MFC) was able to fool the poor-village-people with rising prices for monkey, then poor-village-people starts fighting among themselves to grab more monkeys and how MFC takes away most of the money from them.

Why I am talking all these?
I came across this ET article FII biggies cashing out on listing gains. It claims that the FIIs like CityGroup, Morgan Stanley, Goldman Sachs, etc aggressively bid for share allotment for initial public offering (IPO) and book the profit by selling those shares on the listing day itself.

Entity	Company IPO	No. of share sold
Citigroup	Indosolar	22.2 million
Goldman	Orient Green	3.4 million
Merrill	Microsec Financial	Exact Number not available
Morgan Stanley	Prestige Estates Projects	Exact Number not available

Generally, if you look at holding pattern of the listed company, apart from promoters, it's major financial institutes who hold 10-20% of the holding and retail investors hold somewhere around 10-15% of the stake in the company. It is a very obvious characteristic of Retail investor: that they are dispersed and not united whereas the not many FIs hold stake in a company and 'can' form 'cartel' and from above example, I keep guessing if this is the case.

Even if you are tracking the statements by regulator (in this case Securities Exchange Board of India i.e. SEBI), SEBI in last month has criticized the Investment Bankers for placing higher premium for companies going public. The investment Bankers are those people, who help companies/government in underwriting, issuing securities i.e. making a company - public listed. So coming back to SEBI's discomfort with Investment Banker: SEBI Chairman - CV Bhave pointed out that since Investment Banker sets higher rather unreasonable premium at the time of listing and or last couple of years (with some exceptions) the listing of companies has dismayed the investor because on the day of listing, the opening price of share of companies have been much lower than the list/bid-band price. Thus investment bankers are not keeping in mind the interest of investors while deciding on price-band.

I will just say that, when regulator says that interest of investor are compromised ; it means the fundamental of the company becomes questionable and retail investor will turn its back at IPOs (Can I say, CIL is exception? ).

There is a famous term in investment banking:: 'Chinese Wall'. It refers to information barrier/ firewall maintained to isolate the investment related decision makers /centers from others who can influence them.

With above examples in mind, and recent incidents in US capital markets; sometimes the the way such market function; fundamental of market become questionable and it's the responsibility of prime stakeholders i.e. FIs, regulators, corporations to make sure, market fundamentals to be highlighted as prime factor of putting money into it.

Zandu Baam hui, Darling tere liye

These days it's common to see as 'something' gets popularity, it is dragged into some or other controversy. It's not so difficult to guess what I want to say. The producer of this year's so called biggest block buster movie of Bollywood - Dabangg received a legal notice from Emami Ltd.


Zandu Balm now owned by Emami is a /has been a flagship product for Emami. As Emami claimed, the producer of this movie has used their brand name in an Item Song without company's consent. It's true that it takes years for a company to build a brand which has high 'brand recognition & Brand Recollect' values. Zandu Balm definitely has such higher brand recollect characteristic. Moreover Zandu Balm & Tiger Balm enjoyed the position of brand synonymous to Balm category. (Apart from Vicks Vaporub - which was considered as a part of subcategory) .

Cutting the whole story short, Emami claimed that the brand equity for Zandu Balm has been devastated(?)/ impacted because of the way Zendu Baam word has been used in the Item Song starring Malaika Aurora. Arbaaz Khan - the producer of the movie was in fix because of the issue.

Mr. Pralhad Kakkad, a well known media personality; brilliantly mediated between Arbaaz Khan & the company by suggesting that Malaika Aurora to promote Zandu Balm product for the company and company will take back the legal proceedings against the movie producer.

Now I am wondering how the advt. would look like, Malaika Aurora Khan wearing a typical saari costume (a simple dimple, gharwali style) and coming out of kitchen in-all-tired-mood and complaining Arbaaz khan about the Peeth-Kamar Dard (Back pain) :p Then Arbaaz Khan jumps off the sofa (keeping his cap intact, which he has used in the Videocon DTH Advt) and grab the bottle of Zandu Balm (as quickly as he has been delivering stuffs each time Abhishek orders for) and starts applying balm (only a portion of back is seen) and immediately after this shot, Malaika jumps off the bed & start dancing to the tune of 'Munni Badnaam Hui,.... ,... Zendu Baam Hui, Darling tere liye".

But what will happen to Bipasha Basu who has been signed up by Emami to endorse its products. (Zandu Baam hui, Darling tere liye - Part 2 ??)

-Dhan

Corporate Microfinance in India

In last six months, the micro-finance sector in India has been seen in news headlines. It is primarily attributed to SKS Microfinance. SKS Microfinance, the firm which went public successfully in Aug 2010.

In October 2010, The board of director , SKS Microfinance sacked its CEO Mr. Gurnani and appointed Mr. Vikram Akula in his place. The public news claimed that has been a result of power struggle. Many new articles speculated that Mr. Vikram Akula, a founder of SKS Microfinance used Mr. Gurnani until the company got listed successfully. To add this list of speculation, it was Ms. Malini Byanna (ex-wife, co-founder of SKS M) has accused Mr. Vikram Akula in many ways. (Ref: ET news). The bad part of this interview for SKS Microfinance was that she allegedly claimed lack of governance & malpractices followed at SKS Mifcrofinance.

Now there is one more blower for SKS Microfinance. The agents of SKS Microfinance were found illegally pressurizing borrowers. If proved, police can arrest the CEO Mr. Vikram Akula.
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They say, now putting money in micro-lending is the way to earn higher return. So the high networth individuals are also seen pouring money into this business. To my knowledge micro-lending existed in earlier days also. This business (on its bad part) has taken lives of many poor people in villages-the rural India. It's just the 'corporatization' of such business is seen in the form of SKS Mircofinance.

But on the good side of it, it does help the self help group/small group of women- small businesses by making easy finance availability. It's a good step taken by Mr. Manmohan Singh govt. by bringing in the regulator in the business of micro-financing in the form of NABARD.

Monetory Policy Dilemma

Out of prominent securities market in the world, the Indian stock market is definitely unique market, as India is an developing country and growth of Indian economy has been significantly characterized by to domestically consumption (rather than export as in case of China). And if you look at the capital market indicators (Indices) across globe; Indian Sensex & Nifty are certainly has shown significant growth.

Now !!

Coal India Limited (CIL) set to rock Indian Stock Market with its big ticket IPO worth Rs. $3.9 billion or close to Rs. 13,000+ crore.

• Qualified Institutional Buyer (QIB) are eligible for more than 50% of the subscription available

• It means Foreign Institutional Investors (FIIs) have an attractive proposition to buy
• It means in this quarter significant amount of Forex inflow is likely to infuse liquidity in Indian economy
• It means, already alarming inflation is likely to see newer heights
• It also means that our own currency the Rupee will appreciate ($1= Rs.39; Rupee appreciate means its equivalent value against US dollar increases i.e. the Rupee movement from $1=Rs. 40 is an appreciation of Rupee & depreciation of dollar against each other)
  
• The appreciation of Rupee means import (Oil in particular) will be relatively cheaper and exports (software/services) will be costlier
  
• It means Reserve Bank of India (RBI) is likely to either curtail Forex Inflow or Raise key monetory policy indicators (most likely interest rates)
• If interest rates are to increase, it will in turn again attract more Forex money inflow
• So it will be interesting to see what would happen to Forex money inflow

* Short term prediction
** Implication of curtailing Forex Inflow has not been predicted here.