Category Archives: En-Business
The problem isn’t opportunity, he said. It’s India.
“Every large investment, there was no transparency,” Piramal said.
His dilemma is a worrying sign for India. With the country mired in corruption, bureaucratic red tape and unclear and changing government policies, many of the men who made their billions here are saying maybe it’s time to quit India. It’s got to be easier to do business elsewhere.
In May last year, Piramal’s healthcare business sold its generic drug operations to U.S. pharmaceutical giant Abbott Laboratories for $3.8 billion. Piramal, a tall big man in a country that still measures prosperity by girth, was eager to set that cash pile to work. He wanted to expand one of his chemical plants, but was told it would take five years.
“The same plant could be set up in China in two years,” he said. “I love India, but my customer is not going to wait.”
India, still a beacon of relatively fast growth despite a troubled world economy, should be a magnet for capital. Instead, since the beginning of 2010, the amount that Indians have invested in businesses overseas has exceeded the amount foreigners are investing in India, according to central bank figures.
In part this reflects the confidence and aptitude of India’s maturing companies and the current malaise in the global economy and financial markets. But it also reflects deep problems at home. India’s big coporations may be cash rich but the failure to invest that money domestically is bad news for a developing country that needs capital to build the roads, power plants and food warehouses that could help lift hundreds of millions out of dire poverty.
The frustration of India’s business elite with corruption, political paralysis, log-jammed approvals, regulatory flip-flops, lack of access to natural resources and land acquisition battles — to pick a few of the top complaints — has reached a pitch perhaps not heard since India began liberalizing its economy in the early 1990s.
“If you are an honest businessman in India, it’s very difficult to start up anything,” said Jamshyd Godrej, chairman of manufacturing giant Godrej & Boyce. “Companies are going to operate where they see the best opportunities and efficiency for their capital.”
Increasingly, that’s outside India.
In 2008, foreigners poured roughly twice as much direct investment into India — $33 billion — as Indians plowed into businesses overseas. By 2010, that had reversed: Indians invested $40 billion abroad — twice as much as foreigners invested in India — a trend that’s continued this year.
There is another, unspoken element to all the complaints. To the extent that business in India ran on corruption, some of the old, dirty ways of doing things are being disrupted, freezing India’s already glacial bureaucracy, business leaders say.
Scandals in the staging of the Commonwealth Games, the pilfering of homes meant for war widows and the irregular auction of cellphone spectrum that cost the country billions has sent parliamentarians and even a Cabinet minister to prison.
With Indians tiring of the incessant graft, tens of thousands of middle-class protesters poured into the streets and pushed an anti-corruption bill onto the floor of Parliament.
Steelmakers can’t get enough iron ore because a massive mining scandal in the southern state of Karnataka prompted a court to order the closure of illicit mines that account for a fifth of iron ore production in the country.
The bureaucrats — even the honest ones — are reportedly so scared of being punished they are refusing to make the decisions needed to make the country run.
Piramal is not unpatriotic. Each room in his executive suite is named after an Indian epic hero: Arjuna, the most pure; Dhananjay, acquirer and master of wealth. There’s a quote from the Upanishads scriptures on the wall.
His office sits in a one million square foot office park in Mumbai his family built. The buildings around him — white with blue glass that flashes back the unforgiving sun — bear his own name in large black letters: Piramal Towers.
Piramal had the will and the means to build power plants and roads.
Instead, his Piramal Group’s largest investment to date has been in one of the office park’s tenants: the Indian subsidiary of the British telecom giant Vodafone Plc.
Last September, when he got the first payout, of $2.2 billion, from Abbott, the phone started ringing.
“Because people knew we had money, we had so many people approaching us for projects in the infrastructure sector,” he said. “These people had no experience and no knowledge and no track record of having built a business in any area. And yet they were coming to us saying we have licenses and approvals. That just didn’t sound right or smell right.”
Each day, they paraded through his office: The investment banker who decided to build a 500 megawatt power plant, the coal trader assured of a government coal allocation, small-time miners with pretty presentations promising land, licenses and financing.
“They’d name politicians from the center and the state who had it all tied up for them,” he said. “It didn’t sound right. Obviously there were things going on in the system.”
Road and port projects weren’t much better, he said.
Piramal also looked at investing in engineering and infrastructure services companies, but couldn’t make sense of their books.
“We couldn’t find anything,” he said. “People get greedy. In their desire to get good valuations they resort to, if I can say, creative accounting.”
Today, India’s infrastructure companies are known as great wealth destroyers.
“Infrastructure investment has become untouchable, a sure way of losing money,” said Jagannadham Thunuguntla, head of research at SMC Global Securities. He calculates that four of India’s top infrastructure companies — GMR Infrastructure, GVK Power and Infrastructure, Lanco Infratech and Punj Lloyd — have lost over 80 percent of their value since 2007. A fifth, Larson & Toubro is down 50 percent.
Piramal may have dodged a bullet, but shareholders in Piramal Healthcare aren’t happy. Despite a $600 million special dividend and share buyback, the share price has sagged since the Abbott deal was announced on May 21 last year. They’d like to see the Abbott cash productively deployed. Instead, much of it is sitting in fixed deposit accounts.
Piramal said he really does want to run a pharmaceutical company and be the first Indian company to discover a world-class drug — despite his dabbling in telecom, financial services and real estate financing. It’s just that pharma can’t absorb all his cash. He plans to sell the 5.5 percent stake he picked up in Vodafone Essar for $640 million in a few years, when Vodafone Essar issues shares in an initial public offering, he said.
He has also launched Piramal Capital, to make real estate and infrastructure loans, and spent about $50 million to acquire IndiaReit, a real estate investment company.
Meanwhile, his thoughts have turned to Boston, where he set up IndUS Growth Partners with a professor from Harvard Business School to look for buying opportunities in the U.S., in security, financial services and biotechnology. And he said he’s still planning to spend over a billion dollars on biotechnology acquisitions in North America and Europe.
“India was going more towards capitalism than socialism,” Piramal said. “I think we’re going back. Capitalism went to too much excess. Corruption levels went to the extreme.”
He said he’ll announce his first overseas acquisition by March.
In a new report, Morgan Stanley analysts Chetan Ahya, Derrick Kam and Jenny Zhang write that they expect consumption to show resilience in China, while Indian consumption moderates.
In China, private consumption’s share of GDP fell to 34% in 2010, from 45% in 2001. In the past year, discretionary spending was checked by tighter monetary policy and higher inflation. Lower growth and inflationary woes will continue to impact the Chinese consumer for the next few months. But these pressures are expected to ease in the second half of 2012, as the Chinese government implements structural reforms which include steadily increasing minimum wages and lowering taxes. Morgan Stanley analysts cite three main reasons for this change:
- Consumption growth is expected to be driven by wage growth – “The government aims to grow household disposable incomes (wages) at a pace that at least matches nominal GDP growth.”
- The government is pushing for affordable social housing which will eventually drive consumption, as consumers begin to feel more secure about their homes.
- Disposable income is expected to free up as the government improves social security and works towards extending social services like public education, healthcare, and housing for more residents.
Meanwhile, Indian domestic consumption is expected to moderate. After the credit crisis, the Indian government increased its expenditure to GDP by 4 percentage points and most of it went towards boosting household consumption. It also increased rural wages, which have posted a 27% compound annual growth rate (CAGR) over the last three years. From Morgan Stanley:
“We believe that fiscal transfers have boosted rural household incomes and allowed rural consumers to raise their consumption levels. However, the macro feedback in terms of high and persistent inflation suggests that the boost to consumption growth will not be sustainable. Moreover, we expect the fiscal support to rural consumption to be gradually withdrawn.
…Signs of weaker rural consumption growth have already emerged. According to media reports (Business Standard), companies reported a slowdown in the rural sales of fast- moving consumer goods and household appliances in November, traditionally a good month for rural sales.”
After achieving the phase #1 of practical blogging on Seleani.com, it is the decision time to move into the direction of Non-Profit Portal that we will work on global voluntary social computing, without any commercial advertisement to this tough World where people are mind-controlled by growing need of surviving. In every generation there will be risen ones above the crowd to reveal the truth of our ages. This individualism concept drives us to come up with a way out of the chaos and confusion that surrounds us; at this moment, in this time, on the name of freedom. Read the rest of this entry
Working from home may lead to burnout or exhaustion, especially if a person has issues balancing the demands of a job with a family, according to an analysis in the Journal of Business Psychology.
Although the idea of “teleworking” may conjure up images of sitting in your pajamas with coffee in hand, research suggests it’s a difficult balancing act for people struggling to meet the demands of a job and family.
The study’s author, Timothy Golden, adds that telework isn’t just working from home during traditional hours; it’s also plugging away at tasks during the evening and weekends, too. In a way, non-traditional telework puts people in a place where their personal time may be overrun by their jobs.
By surveying 316 people who worked traditional hours for a large computer company, Golden asked participants to answer whether they agree with certain statements, including “Due to all the pressures at work, sometimes when I am home I am too stressed to do the things I enjoy” and “Because I am often stressed from family responsibilities, I have a hard time concentrating on my work.”
Most respondents were male, and 88 percent had children. He also measured peoples’ levels of work exhaustion.
He found that respondents with higher time and strain-based conflicts between work and family also showed higher rates of exhaustion from teleworking. Previous studies showed that these types of conflict were physically and emotionally draining, which affect people’s abilities to cope with feeling overwhelmed. As a result, people experience burnout and do not perform their jobs as well — or they may even be calling in sick more often.
Teleworkers constantly being reminded of their role at home could be a part of the problem, Golden told MSNBC.
Golden thinks managers should look more closely at their telework programs to ensure employees’ work environments aren’t negatively affecting their mental health. Telework programs can be beneficial if done right, though.
Many people reap the benefits of not commuting as well as having a space for work they feel comfortable in, Golden writes. Overall, it’s key to keep work and family separate from each other.
The Dangers of Fruit Drinks…Lets say you’ve decided to eat healthier, give up high calorie foods, overly sweet snacks and sugary sodas. To quench your thirst when enjoying your lunch of lean turkey breast on whole wheat with pesto, you forgo the familiar red can and reach instead for your juice drink, contented in the knowledge that you are doing something good for your body. Or are you? Read the rest of this entry
Don’t drink and Drive, Don’t waste too much time in video games and complete your studies, mentioning Mansoor in our recent interview with the skilled teenager, on the extended show of the “Idea that makes changes” view to have Mansour view on his life and how teenager could leverage more into better hope and good life based on his surprised interview with us. we also welcome other people view to share and grow with you all to beyond our limit of this lovely life.
Tony Schwartz on Seleani: I grew up hungry to do something creative, to set myself apart. I also believed creativity was magical and genetically encoded. As early as the age of 8, I began sampling the arts, one after another, to see if I’d inherited some gift.
Eventually, I became a journalist. For many years, I told other people’s stories. I was successful, but I rarely felt truly creative.
The first hint I might have sold myself short came in the mid-1990s. In the course of writing a book called What Really Matters, Searching for Wisdom in America, I took a five-day seminar on how to draw, led by Betty Edwards, author of Drawing on the Right Side of the Brain. Read the rest of this entry
Reuters on Seleani.com: You might not know it, but a key cog in the global innovation machine is hiding in plain sight in the world’s largest democracy…For many firms, developing new products for consumers around the world is the most visible manifestation of innovation – the “real deal.” But many people still see India as a place where other people’s ideas are made or executed and not where innovation begins. (After all, you don’t hear about an Indian equivalent to Google, iPod or Viagra.) Bu they’re wrong. In more than 600 captive research and development (R&D) centers across India today, corporations are designing and building amazing new things. Read the rest of this entry
DUBAI: Passengers at Dubai International Airport were given an added extra when music started playing and a flash mob of 55 dancers suddenly appeared in the concourse.
The surprise promotional event happened recently in the Dubai Duty Free shopping area of the busy airport, infront of hundreds of unsuspecting passengers.
All of the foregoing today devices are mostly manufactured with an “embedded” wireless networking chip that became common for manufacturers to allow anywhere and permanent internet data access. All new laptops, tablets, Smartphone, PDA are now manufactured with an integration of 3-way wireless capability: Wi-Fi, Bluetooth, and GSM/GPRS/3G/4G/LTE/LT-A…this make all devices around us truly computer devices capacity in the direction that Computer is disappearing on its early centralized form.
Millions of people are now using Social Media and Network to even stay in touch with families, relatives and colleague from everywhere they are, including coffee shops, hotels, airports, college campuses, and libraries.
3G, LTE and LTE-A networks have evolved to incorporate high-speed internet access and video telephony that today the proliferation of Mobile Apps change the Business model of Mobile Operator who are offering open and flat rate package to user who are now moving into flexible use with a predefine data connection fee..
Corporate marketers start thinking how they can leverage more their presence on Social networks and media. Some of these social sites are flexible enough to offer to consumers who are spending lot of their personal and office time looking for consumer base data.
For this trend we are seeing with Social sites based on the Web 2.0 framework, Seleani is projecting the enhancement of the automation and dynamic data that today social computing is delivering to end users. We precisely think the need of making the user Profile more virtual reality by allowing affiliation between contact on family tree group to announce sickness and death event realities. Not only updating the data but also to trigger all those who are in contact to see a new announcement for sickness or death news. We also extend this flow to the direction of updating and add new group on profiles where death, cemetery or graveyards will be updated automatically whenever a contact members has lost his life. We additionally propose the need of affiliating a son or the nearest relative to disable the Active stat into Death stats of the blessed lost father or relatives.
The ROI of such change on today social computing is clear to make advertisers and manufacturers more sharp to target consumers but also a wide range of life saving possibility than the actual pure virtual life we are spending. We will realize an enhancement of our real life that changing it into a virtual world that cannot be the objective need of Technology Innovations.