Friday, 29 June 2012

Hidden Agenda of Sending Pranab to Rashtrapati Bhavan

Why  Pranab Mukharjee should become president of India? Sonia Gandhi has reasons:
 
The Corporate Pressure: Sonia Gandhi is always known to have good relationship with corporates since from Bofors deal. Few important decisions of Pranab Mukharjee made the eyes of corporate red. He introduced retroactive tax in the 2012-13 budget, with regard to capital gains tax payable to the government on transfer of Indian corporate assets through Vodafone-style M&A deals held abroad. This provision angered British Prime Minister Tony Blair, German Chancellor Angela Merkel and US Secretary of State Hillary Clinton had taken up the issue directly with Prime Minister Manmohan Singh. A report tells seven top US industry, trade and securities associations had sent written complaints against his 2012-13 budget to the US treasury secretary and secretary of state and wanted them to convey their concerns to the highest level of the UPA government. He was also keen in recovering the tax loss of Vodafone deal. So there was a corporate pressure to exit him from finance ministry to enjoy the loop holes of tax framework to enjoy the benefits of  tax heavens.


To make him exit from Finance Ministry: Sonia Gandhi was unhappy with Pranab Mukharjee for not convincing alleys in the recent decisions of finance ministry like the FDI in retail, foreign participation in pension fund management, foreign control in banking and insurance sectors and fuel price increase. A high inflation was seen during last couple of years leading to high interest rates which made industrial and development activities come down. This again resulted in a slow-down in FDI and FII inflows. So the prime minister and the UPA chairperson Sonia Gandhi were looking for the exit of Pranab Mukharjee from the finance ministry.

To decide the next prime minister: Yet another most important reason why Pranab Mukharjee should be the President. Definitely PM Mr Singh will make way for new face in prime minister's office in next general election. Pranab was a potential candidate after Singh. Congress does not have another unquestionable leader to replace Mr Singh as Pranab will be in Rashtrapati Bhavan. Rahul Gandhi's way to PMO will be clear now. Or it may be Sonia Gandhi, as Mr Kalam is not there to stop her from becoming PM.

Saturday, 16 June 2012

What Happened to Subhiksha?

 Once a favorite model of retail success, now a study of financial failure

It was in 1996 that the idea of Subhiksha (prosperity in Sanskrit), organized retail services came to the mind of Subramanian, and IIT Madras and IIM Ahmedabad alumnus. He opened the first shop in Chennai in March 1997. By March 1999 there were 10 Subhiksha shops in Chennai. Its unique discounting model enraged the retail trade in Chennai
By 2000 Subhiksha grew to nearly 50 shops in Chennai retailing groceries and medicines. ICICI Venture's decision then to pick up a 10 per cent stake in Subhiksha for Rs 15 crore gave the retailer enhanced credibility in the market. This money was used to expand outside Chennai, into the rest of Tamil Nadu. By 2002-03, Subhiksha had 140 stores across 30 towns in Tamil Nadu. Sales grew steadily. Cash flows were reasonable and debt, at Rs 15 crore against the net worth of Rs 23 crore, was comfortable.
Tamil Nadu was not enough for the growth of Subhiksha. Subramanian wanted to expand it all over the nation. There was two choices- expand Subhiksha in one state by one and expand many states at a time. The subhiksha model proved to be successful. He choosed second option. Between late 2004 and early 2007, Rs 160 crore worth of equity was raised. That apart, a debt of Rs 220 crore and a bridge loan of Rs 125 crore (for pending raising of equity from capital markets) was arranged to fund the national rollout.
On an average, 60 to 70 stores were added in a month. The pace of rollout is evident from the fact that till September 2006, Subhiksha had a store count of just 160, but by March 2007 it had shot up to 670 and by March 2008 to 1,320. By September 2008, it was 1,650-in all 1,500 stores were added ih just 24 months. 2006-07 and 2007-08 Subhiksha doubled the stores, tripled revenues and almost quadrupled profits
At the time of tough retail competition with the entry of Reliance, Tata and Aditya Birla group into the field Subhiksha had become the country's largest mobile phone retailer with an annual turnover of Rs 1,000 crore. The performance of Subhiksha attracted the investors. Wipro Chairman Azim Premji, in March 2008, picked up the 10 per cent stake in Subhiksha that was offloaded by ICICI Venture for Rs 230 crore, pegging the company's valuation at Rs 2,300 crore.

Subhiksha- Rise and Fall
That was the time for Subhiksha to capitalize Premji’s interest in the company. Company kept postponing the IPO. It did not want to dilute the shareholders interest. So it continued to raise money through debts. During September 2008, people lost their interest in share markets. There was a complete collapse of equity market. At the time when liquidity was tight, Subhiksha needed Rs 125 crore in cash to repay the loan.  It was due for Subhiksha to repay the bridge loan. The working capitals were diverted to rescue and expand Subhiksha with the hope of IPO in the confidence of success of the model. Working capital eroded. Many shops were closed as a rescue measure. Suppliers stopped supplying. Shops’ stands became empty. The security guards did not turned to the work. These all happened in less than 3 months. And finally in February 2009 there were not a single Subhiksha faced even cheque bounce case. Ajim Premji accused him for financial fraud. ICICI asked for detailed investigation of financial mismanagement. And he and his company became defaulter for over Rs 750 crore to 13 banks.
Probably, if IPO was done instead of postponement, equity could have been used to reduce the debt and Subhiksha would have survived.
Adopted from a case study in IGNOU MBA question paper.

Friday, 15 June 2012

9 VTU colleges in The Week’s top 100 Engineering Colleges


12 of India's top 100 engineering colleges are in Karnataka
Karnataka has its own name in the quality engineering colleges. Bangalore is always a favorite choice for the technology education. The Week, India’s leading weekly has published the list of 100 top engineering colleges in the country in its June 17, 2012 issue. 12 institutions of Karnataka have secured their place in the list. Out of 12 best engineering colleges in Karnataka, 9 are affiliated to VTU. Other three intuitions are National Institute of Technology (NITK), Surathkal at 15th place, University Visweswaraya College of engineering at 37th place and Manipal Institute of Technology Manipal at 38th place. The 9 best engineering colleges in Bangalore and Karnataka according to The Week which are affiliated to VTU (some are autonomous) are as follows:

No
Rank
College
Place
1
16
RV College of Engineering
Bangalore
2
29
PES Institute of Technology
Bangalore
3
51
Sir M Visvesvaraya Institute of technology
Bangalore
4
56
M S Ramaiah Institute of Technology
Bangalore
5
59
Acharya Institute of Technology
Bangalore
6
64
BMS College of Engineering
Bangalore
7
68
Sri Jayacharajendra College of Engineering
Mysore
8
74
National College of Engineering
Mysore
9
91
MVJ College of Engineering
Bangalore

In my personal view the list may interchange. But definitely all are good colleges and felt the The Week- Hansa research survey is fair. Even the ranking may change engineering stream wise. One should also enquire about department in a particular college before taking an admission into it. A best college may a bad department. Thankfully few institutions like New Horizon college of Engineering which used to advertise as India’s second best college through a result of paid survey have not made entry into list to misguide the students. Surprisingly very few colleges of Tamil Nadu are in the list though it has a huge number of engineering colleges. Visvesvaraya Technological University (VTU) has the highest best affiliated colleges.

Search Rising Indian


Related Posts Plugin for WordPress, Blogger...