Retail penetration

Titan, a Tata group company headed by Bhaskar Bhat, is one of the play­ers enjoying the revival in urban consumption and is gearing to tap the market with a host of offerings. Already, the company will benefit from gold on lease coming back with the RBI giving the nod for re-intro­duction. It has also revised the min­imum monthly installment of the revised Golden Harvest Scheme (GHS) to L2,000 from L5,000 to make it more appealing to consumers. Now, Titan is gearing up to counter the e-com­merce threat with its omni-chan- nel strategy and tie-ups with many online players. The company is lay­ing more emphasis on digital and e-commerce in jewellery for working women-wear (like Mia) than on tra­ditional categories like weddings or high-value ornaments. Accordingly, it is leveraging the digital platform to enhance consumer convenience and experience. Continuing to eval­uate opportunities, the company has chalked out a five-year strategic plan to drive future growth.

On track

SevenHills Healthcare Pvt Ltd, which operates Asia’s largest private hospital in Mumbai, is all set to implement its second phase. This is in spite of all the talks of the company changing hands. Established in 2010, the multi-spe­ciality hospital which commissioned over 300-bed capacity some time ago, out of its total proposed capacity of 1,500 beds, is now in the process of implementing its remaining capac­ity in the next few years. The hospi­tal, which will possess the largest ICU capacity of 300 beds in a single loca­tion, recently got its loan re-payment restructured, amidst debts of over L900 crore owed to a consortium of banks lead by Axis Bank. Moreover, jPMorgan had come on board when it picked up 35 per cent stake through its Asia fund in the healthcare chain in 2008 and further infused $50 mil­lion in 2013 to keep the hospital afloat as the hospital chain was reel­ing under debt. To bring the hospi­tal back on track, the management recently also appointed a new CEO, Dr Ravindra Karanjekar, a seasoned campaigner who has been in hospital administration for 30 years in vari­ous hospitals including Lilavati, For- tis and Wockhardt. The management has also realigned its strategy to step up its occupancy. It is also planning to attract patients from countries like Africa and the Middle East.

Real foray

R.K. Jatia group promoted Prove­nance Land, the owner of Four Sea­sons Hotel, Mumbai, has entered the high-end residential segment of the real estate market. The hospitality chain that also owns Hyatt Regency in Pune, is constructing two 52-storey towers, adjacent to its existing hotel


Four Seasons Hotel, Mumbai



property in Worli, in Mumbai. Cur­rently, it has a land parcel of 4.5 acre, of which the hotel stands on 1.5 acre. In the Phase 1 of the project, the com­pany, formerly called Magus Estates, is constructing 26 limited edition ultra luxury homes (priced: L30 crore to LI 00 crore) in one of the towers, to be ready for possession in the next three years. This apart, the hospital­ity chain will also build 100 serviced apartments spread over a 52-storey tower. This will come up under the banner ‘Four Seasons Private Resi­dences’ and ‘Four Seasons Serviced Apartments’, not dissimilar to the Taj Wellington Mews. The company, which already has some presence in Pune, is also planning to replicate such projects in Delhi in future.

Unlocking value

According to a merchant banker, the publicly traded Kalpataru Power & Transmission Ltd (KPTL) plans to unlock value. It has Shree Shubham Logistics (SSL) as a subsidiary and is contemplating diluting its stake either through an IPO or a strategic inves­tor. This is with a view to restructure the company. The money raised will fund KPTL’s growth plans, capitalise the recently acquired NBFC – Punar- vasu Holding and Trading Company, which supplements its agri-com­modity business by providing fund­ing facilities to market participants against a collateral of stocks, and repay part of its debt. The company intends to raise over L200 crore from the stake sale of SSL. All in all, the SSL listing could unlock substantial value for KPTL. Meanwhile, SSL has chalked out an aggressive expansion plan to add 3.87 lakh mt of storage capac­ity to the existing capacity of 3.5 lakh mt. Today, there is no compara­ble listed entity in the agri-commod­ity logistics space to benchmark the valuation but the leading integrated general logistic companies are trad­ing currently at 20-25 time their FY17 estimated earnings. So no prize for guessing the valuation of SSL! Analysts believe, it can fetch a market capital­isation of around LI,000-1,200 crore. KPTL’s market capitalisation stands at L3,600 crore at present.

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Let’s be fair and patient


Modi has to be given time, as there are enough evidences to suggest that his government is moving in the right direction

Deepak Parekh’s recent comments*to PTI that ‘Modi was lucky during the first nine months of his rule due to the fall in prices of international commodi­ties’ has become an area of debate among the elite class. Parekh had also added that ‘there was no change on the ground level otherwise; and that some impatience was creeping in among the businessmen’. The reactions have fallen into two categories: one, which backs Parekh’s assessment and, the other, which believes that Parekh has been a little impa­tient in judging Modi and his government. Even social media went abuzz, with some peo­ple describing Parekh as the famous villain in the Bollywood movie ‘Teja’ aka Ajit.

Those who believe that Parekh was a lit­tle impatient suggest that he has not been appointed in any of the government commit­tees and, hence, he is a little disgruntled with the government. They also claim Parekh is pro-Congress and that one should not read much into his allegations.

Those who back Parekh argue that he has been matter-of-fact in his comments. Though sentiment has improved, nothing much has changed in terms of economic activities. On the contrary, this government has invited more controversies than accolades. What is worse is that, instead of fixing the economic woes, the government is remaining a silent spectator, when a few people are vitiating the political and social atmosphere with hateful comments. Attacks on churches and the ghar vapasi programme are not something India should be in the news for. They also feel this government has not been able to bring about any radical reforms that can truly inspire the business communities.

Also, the fact that the NPAs of the banks are on the rise even after more than six months of the new government clearly sug­gests that the economic scenario is far from improving. The pro-Parekhs point out that Parekh was the first businessman who crit­icised the UPA too – for its ‘policy paralysis’ and, hence, terming him pro-Congress was unfair, to say the least.

Without going into the merits of either side’s arguments, it has to be said that reforms take time to roll out and, once out, they still
take time to reflect on the economy, due to the lag effect. Secondly, India is a democratic country, where reforms function on consen­sus, rather than dictatorial whims. These con­sensuses have to be worked out not only with the Opposition, but even within the BJP, as also with its allies. The Land Acquisition Bill is an instance in point, where the Modi gov­ernment is facing flak from its own allies like Shiv Sena, SAD and others. There are enough empirical evidences across the world that sug­gest that transition to a new model of growth is never smooth. We have been witnessing such events recently in countries like Japan, Mexico and China, just to name a few.

When the UPA government left, the econ­omy was not in good shape. Also, the deci­sion-making machinery had broken down completely. With global volatility at its unprecedented high, it’s obvious that any new government would take time to correct things. Modi himself had gone on record that it would take the first two years to repair the economy and the next three years to induce aggressive growth in the economy.

What is evident is that sentiments have become more positive on the ground level. People are more optimistic with the Modi government than with the Manmohan Singh government. There is hope that this govern­ment would push reforms. Stock market is at an all-time high and Fils are more bullish on India than ever before. Inflation, which was stubbornly high during UPA II, has started moving south, with WPI for January in the negative zone. So, things are moving in the right direction, albeit not at the same pace one would have expected.

To some extent, Modi himself needs to be blamed for high expectations as, during elec­tion time, he had given a ‘feel’ that things would fall in place in quick time. Maybe he is paying the price for raising such expectations. It would be unfair to blame Modi so soon, when there are enough evidences to suggest that his government is moving in the right direction. He needs more time, considering the state of the economy he inherited. We need be to fair and patient with Modi. His intentions are right; only time will tell whether he will be able to make Ek Bharat shrestha Bharat.   ♦