Tata Housing with Arvind Ltd to develope 134 acre integrated township in Ahmedabad

This story first appeared in DNA Money edition on Saturday May 14, 2011.

Tata Housing and Arvind Ltd have entered into a strategic partnership to develop an integrated township project spread over 134 acres near Ahmedabad. The two have floated an equal (50:50) joint venture for this project which will have a built up area of more than 9 million square feet (msf), located on the western outskirts of Ahmedabad. The township will include residential, commercial and retail spaces apart from a hospital, a school and other civic amenities.

Brotin Banerjee, MD & CEO of Tata Housing Development Co Ltd, said, this JV is part of our long-term strategy of establishing presence in the emergent tier I and tier II cities. “This partnership will help us tap onto a very important Gujarat market,” he said without divulging information on the JV company and related financial details.

Elucidating the arrangement with Tata Housing, senior officials from Arvind Ltd said that the land valued at Rs 250 crore has been being transfered to the joint venture company and that the company will receive immediate payments Rs 125 crore being 50% partner in the project. The project, due for completion in 2012, is expected to generate revenue of Rs 2,000 crore.

Jayesh Shah, chief financial officer, Arvind Ltd, said, “We would get around Rs 125 crore from the land sale in the next six to eight months time, within which the land would be transferred. We plan to start construction in three to four months time. The joint venture company is looking at a couple of thousand crore worth of revenues, out of which around Rs 500 crore to Rs 700 crore could come to us."

While media reports stated the township was valued at Rs 1,250 crore, Tata Housing officials said that a market study is still under way hence exact value of the project cannot be arrived at at this stage. On the payments to be made to Arvind, THDC officials said it will be made in various stages after making some adjustments because the JV partner will also be sharing some proportion of the development / construction cost.

According to a Reuters report Arvind Ltd is looking to liquidate Rs 800 to Rs 900 crore worth of land over the next 3 years, including the Rs 250 crore it expects from the JV. “Currently we are focussing on the land bank that can be converted into an earning asset,” Shah said.

In another development, Tata Housing has launched a new residential project in Gurgaon called Primanti. With this premium luxury housing complex the realtor will further expand its presence in Delhi NCR region. Spread across 36 acres, the development will offer 102 villas, 75 executive floors, 89 executive apartments and 828 tower residences.

(Amritha Pillay contributed to this story in DNA Money)

Nine months in hand, Tata Capital mops up 80% of $1 billion funds target

This story first appeared in DNA Money edition on Thursday May 12, 2011.

Tata Capital has announced the first close at $800 million for a family of five private equity funds announced in August last year.Most private equity firms do fund-raising in stages, typically with three or four closures, if the corpus is huge. Beating the trend, however, Tata Capital has raised 80% of its targeted $1 billion corpus — through a growth fund, an opportunities fund, a special situations fund, an innovation fund and a healthcare fund — in just six months of hitting the street and expects to make a final close well within the targeted deadline of December this year.

Praveen P Kadle, MD & CEO, Tata Capital

“The overall timeframe for closing the fund-raising exercise was 18 months and nine months was sort of a half-way point we had internally targeted as the date for first close. It so happened that $800 million was the figure as of March 31, 2011,” Praveen P Kadle, managing director and CEO, Tata Capital Ltd said.

How did the company manage this despite the difficult fund-raising environment? “In retrospect, we can say now that it was a good decision to take the non-conventional route to raising the funds. Because, when we’d started the exercise, the market was already cluttered with a host of existing and new private equity firms which had set out to raise money for their respective funds. Most of these funds went to the traditional US and European investors and if we’d taken the same approach, we’d have been just another fund in the queue,” said Kadle.

Of the overall corpus, the domestic component of $220 million, or 35% of the overall corpus, has been raised from banks and other financial institutions and through promoter equity (around 15%). The balance $580 million, or 65% of the overall corpus, has been raised from investors in Japan, South East Asia, Europe and Asia Pacific. In fact, close to 40% of the foreign component has been raised from six or seven entities in the Japanese market.

On end use of the funds, Kadle said the company will look to invest in a mix of Tata and non-Tata companies. “We are not really being very adventurous by getting into completely unrelated areas. We have chosen the investment profile of companies which are either raw material suppliers or customers or service providers to the Tata Group companies.”

Working within the Tata ecosystem will ensure that a significant proportion of the investment proposals will be proprietary in nature and not from investment bankers. This, according to Kadle, makes the valuation exercise more advantageous, focused and realistic for the company.

On the deployment side, Tata Capital is taking the stage (early, growth, expansion and special situations) and sector agnostic route (barring real estate and infrastructure, for which group company Tata Realty and infrastructure is raising a separate fund). Tata Capital has already made six investments, totaling $150 million, for its family of funds. The funds have gone into companies operating in sectors like engineering (11%), auto parts (12%), IT & ITES (21%), Healthcare (8%) and Consumer (48%).

Over the life of the current funds, the company plans to make 40 investments —- this means it will make around 34 more investments in the next three years or so. Kadle said the company has an advantage over pure-play private equity firms as it invests in group entities or entities related to them and is therefore able to sniff exit options better.

The expected return on equity is around 18-19%, said Kadle. “While I would not like to put a number to return on equity, all I can say at this stage is that early stage investments are very likely to give us much higher returns provided various other parameters are met with at the time of making the investment. While in contractual terms the investment horizon is around 7-8 years, it will be our endeavour to try and give our limited partners an early return of their capital.”

Global online distribution just got easier for independent labels, music groups

This story first appeared in DNA Money edition on Tuesday May 10, 2011.

Indian independent record labels and artists facing significant challenges with online distribution of their content overseas have a big reason to rejoice. A new service in the offing is all set to revolutionise monetising opportunities for independent content owners allowing them to sell globally through over 600 online retailers including the likes of iTunes, Amazon etc.

That’s not all. The content owner gets to keep a significant share of the selling price of the song/album unlike the mobile distribution (download) space where the network operator (mobile company) takes the giant’s share. Facilitating this service in India is Sony Music Entertainment India in partnership with Independent Online Distribution Alliance (IODA).

Shridhar Subramaniam, president-India and Middle East, Sony said, “This platform will offer a whole new digital landscape to access a seamless distribution network across audio and video digital retailers. The content owner gets to keep a significant percentage of the sales translating into earnings for independent artists, which was not possible earlier.”

The process basically involves independent content owners to fill up an online application with IODA (www.iodalliance.com) which is then scrutinised by Sony Music officials across various parameters. Once short listed, the content owner is required to submit sound tracks that are then processed by Sony to meet online download formats and quality standards before being hosted on the web. The distribution network, Sony said, includes all major services like iTunes, Amazon, Spotify, Netflix, Unbox, CinemaNow and mobile carriers such as Verizon Wireless, Sprint and Vodafone.

While exact revenue sharing ratios differ from content to content, Subramaniam said content owner will get anywhere between 45% to 50% of the gross download cost. “For instance, if iTunes is selling a soundtrack for 99 cents, it will keep 30 cents. Sony-IODA’s share will be 20% of the remaining 69 cents while the content owner keeps the rest,” he said.

Large music companies operating in India, such as Universal, Saregama and T-Series, generally have their own mechanism (in the form of Tunecore, The Orchard, Hungama.com, respectively) to monetise online distribution of music overseas. However, the independent content owner had very limited avenues to monetise the intellectual property rights (IPR). And with no backing from big record labels, these creative professionals are left with not many options to effectively capitalise the legitimate online download market.

Neeraj Roy’s Hungama.com had initiated a similar model (for independent artists) through its www.artistaloud.com platform two years ago. The management claims their new vertical is working well but refrained from sharing any statistical data on downloads and related earnings. Industry experts, however, said their business model still requires a lot of fine-tuning.

As for competition in the form of Sony-IODA, Soumini Sridhara Paul, general manager, ArtistAloud.com, said, “We never expected to be the only player in the market. Now that they are entering the space, we’ll re-strategise our approach to business, exercise more caution in dealing with the independent content owners and sell innovatively.”

Kanwal Kohli, founder of the two year old independent label Indya Records, feels this initiative by Sony-IODA is a very timely platform especially for music professionals and entrepreneurs like him given the significance of online downloads and revenue generation opportunity it offers.

“Legitimate online downloads is still nascent in India, but it’s a huge phenomenon globally. This (Sony-IODA) platform will play a crucial role by helping independent content owners make decent money from their IPR which otherwise was getting downloaded free or was falling prey to piracy,” Kohli said.

Kohli’s Indya Records along with another independent label Frankfinn Music are among the first few to have already registered with Sony-IODA for online distribution.

Industry experts feel that though service providers like iTunes allow independent content owners to directly upload their IPR for legitimate downloads, they don’t offer flexibility, real time monitoring, control on distribution and marketing and promotional support. “This is where the Sony-IODA platform has an upper-hand,” said a senior official from one of India’s largest music companies.

To elucidate the point, the Sony-IODA platform allows creating an online dashboard for the independent content owners enabling them to access real-time download sales data of their music and videos globally. The platform allows independent content owners to control the distribution by choosing specific retailers and geographies, option of internet and mobile downloads or a combination thereof.

“Transparency has been addressed very effectively with this platform. Besides, there is no exclusivity arrangement between the two parties so the content owners continue to enjoy full control of their IPR. Content owners get promotional support and the revenue share ratio is also fairly skewed in their favour. The most important of it all is the brand pull Sony Music offers globally which is a huge plus for independent content owners trying to establish a foothold in the market place,” said an industry expert, consulting with a leading digital media company.

The platform has put in place an online promotional system called Promonet to help potential customers / music fans discover and share music from thousands of top independent artists and labels. “It also offers a unique opportunity for artists and labels to connect through over 3,000 blogs, podcasts, internet radio stations, social networking and music websites,” Subramaniam said.

Royal Orchid can use Orchid name for now

This story first appeared in DNA Money edition on Tuesday May 10, 2011.

Bangalore-headquartered Royal Orchid Hotels Ltd (ROHL) has got permission for the use of the name ‘Orchid’ for its immediate hotel launch in Vadodara, Gujarat, from the Bombay high court.

Following Kamat Hotels India Ltd’s (KHIL) interim injunction order last month, ROHL promoters filed an appeal to a division bench of the Bombay high court, which stayed the earlier order of the single judge.

“The division bench has admitted the appeal of Royal Orchid which is now scheduled to come up for hearing in July,” Fredun De Vitre, senior advocate, appearing for Royal Orchid Hotels, said.

Meantime , ROHL has been allowed to open Vadodara hotel under the Royal Orchid banner. Chender K Baljee, chairman and managing director, ROHL, said, “The partial stay order is a bit of a relief for us. We have 10 hotels in the advanced stages of completion and the first one is opening in Vadodara this month. We requested the court to allow launching this hotel under the Royal Orchid brand which has been agreed up on.”

The Kamat Hotels management however is not perturbed. Vikram Vithal Kamat, executive director, KHIL, said they have sought complete injunction against the use of their trademark and the court has seen merit in their case.

“The permission has been granted on the condition that if the other party loses the appeal, they will refrain from using the term Orchid in any of their future launches including the Vadodara hotel which will have to be rebranded,” he said.

Minting money by nurturing nature

This story first appeared in DNA Money edition on Thursday May 4, 2011.

Kishore Kulkarni, a resident of central Mumbai suburbs, is planning to take his family on vacation for 10 days. Though quite excited about travelling out of Mumbai, they are concerned about their small balcony garden. “It is too hot outside and without regular watering the plants will not survive for a long duration. I may have to seek assistance from neighbours and keep the plants with them till we return,” Kulkarni said.

Bharat Soni, Director, Go Green Nursery P Ltd

Kulkarni, however, also has another option. One that will not only keep him free of worries but also ensure that his plants are taken care of. “He can avail one of our services called ‘plants on vacation’, wherein the plants will be collected from his residence (at a nominal charge) or he can bring them to our nursery at Panvel and we will ensure the plants are taken good care of while he enjoys holidays with his family,” said Bharat Soni, director, Go Green Nursery. This service from Go Green will cost Kulkarni approximately Rs25 per plant for a week.

Don’t you think it is an interesting service? This private enterprise has an equally interesting story about its existence. It all started eight years ago when Bharat Soni bought a piece of land near Karnala Bird Sanctuary (Panvel) and was thinking of ways to keep it encroachment free. After a lot of brainstorming, Soni figured that the safest way to protect his newly acquired asset was to make it a farmhouse with a variety of plantations.

“I started visiting nurseries to identify plants and related items. In the process, I realised that most nurseries were being operated in an unorganised and unprofessional manner. The plants were in a bad shape, there was no guidance provided by the nursery operators, services were poor, people had to run from one place to another in search of the right gardening equipment/items etc,” Soni said.

Soni’s ground work gave him good insight in the way existing nurseries functioned and the gaps to be bridged. “I realised there was an opportunity and changed my plans eventually in favour of a nursery. Having gathered all the know-how, I launched Go Green Nursery, positioning it as a ‘green concept’ and a one-stop shop for anything and everything one looks for in a facility like this,” he said.

The facility currently houses 1,500 varieties of plants including medicinal, aromatic etc, employs 175 skilled and unskilled people and operates from various locations across Mumbai. Everything from plants/saplings, organic fertiliser, accessories to services related to gardening, horticulturists, plant pathologist and botanist etc can be availed under one roof. Among other specialised services include landscaping, garden consultancy, maintenance and farm management that are undertaken on a turnkey basis across the country.

With an initial investment of Rs 7 lakh odd (including cost of land), the marketing and advertising professional’s business has grown significantly over the years. Go Green Nursery is currently an Rs 25 crore enterprise clocking annual revenues of Rs 4 crore. Individual customers, real estate developers, corporate houses and government organisation are Go Green’s clients.

There were challenges too. “Building this business wouldn’t have been easy if we focused only as a nursery. A lot of hard work, planning and strategising had to be done in the initial years to bring in a host of services in the portfolio thereby broadening the offerings. We widened our bouquet of services and designed them especially to cater to the different set of customers. And, it was only in the fourth year of operation that we started seeing some revenues coming into the business,” said Soni.

Who’s who of the corporate world feature in Go Green’s client list. Among leading names in the realty space include Hiranandani Constructions, K Raheja, Kalpataru, Lokhandwala, Wadhawa Developers, Aamby Valley and Lavasa Corporation. Some of the corporate sector clients include Deepak Fertilisers, Deloitte, ICICI, Mahindra & Mahindra and Reliance. On the hospitality industry front, Taj Group, Marriott’s JW and Renaissance Hotels in Mumbai and InterContinental The Grand are their clients.

Aspects that differentiated Go Green included unique offerings like developed plants that can be used for making instant gardens. “People these days want quick results and do not want to wait for years to see their plants start bearing fruits. We facilitate them by offering 8 to 12 feet developed plants that are ready to be planted. We also specialise in transplantation of old trees. Lavasa is one project where we transplanted a lot of trees and we have had 80% success ratio with it,” said Soni.

For individuals, households and offices, Go Green has chalked out some very special offerings. While ‘dial a mali’ service allows people to call and avail services of a mali (gardener), ‘plants on vacation’ service is for individuals/households going out of city and looking for some one to take care of their plants. ‘Plants on hire’ is another service targeted especially at corporate offices, banks, shopping malls etc.

“The ‘dial a mali’ service is priced in the Rs 700 to Rs 5,000 range, while it is Rs 25 per plant for a week under the ‘plants on vacation’ scheme. The costs associated with plants on hire are anywhere between Rs 60 to Rs 175 per month wherein plants are changed every fortnight,” he said.

Soni has also introduced a new gifting concept called ‘terrariums’ wherein select few plants are placed in a glass bowl which is partially sealed from the top. “These plants do not require regular watering and can stay fresh for months in a controlled environment. We are promoting them as unique gifting items as part of our green concept initiative,” he said.

In a bid to reaching out to the retail customers, in the last one year, Soni has opened outlets in Mumbai and currently has 5-odd stores in high footfall areas like shopping malls, retail hubs and high streets. “We have also launched a green concept mall under the Go Green Mall banner inside shopping malls. For this we have tie-up with Hypercity and are present in their two locations in Mumbai,” he said.

Future plans include expanding the service network to other key metros in the country. “We are currently working out operations and logistics related nuances to extend the service out of Mumbai and take it to cities like Pune and Bangalore,” he said.

‘Even rivals raved about Leela Delhi. That’s why ITC’s buying our shares’

This interview first appeared in DNA Money edition on Monday, April 25, 2011.

Captain CP Krishnan Nair

Nearly 90, Captain CP Krishnan Nair, chairman of Hotel Leelaventure Ltd, has decided to hang his boots and give his sons Vivek and Dinesh the reins of a hotel chain which he built from scratch along with his wife Leela.

Recently, the patriarch of Indian hospitality created a storm when he said Mukesh Ambani, chairman and managing director of Reliance Industries Ltd, will back him if ITC, a stakeholder with a sizeable minority interest, turns hostile and tries to increase its stake. He strongly believes that the old ties he had with the late Dhirubhai Ambani will continue. He is keen to find investors, too.

“Two white knights,” as he says, who will also help pare the hotel’s huge debt. The Nair family is also increasing their stake to 60% from 55%. Excerpts from an interview with Ashish K Tiwari & Satish John:

The Leela in Delhi is your second try in that market. Why took so long?

We had acquired a land parcel from Housing and Urban Development Corporation (Hudco) Delhi, approximately 15 years ago. It was during H D Deve Gowda’s tenure as prime minister of India that the 3-acre plot in the Asian Games Village was acquired to develop a hotel. I thought if a south Indian like Deve Gowda can become the prime minister, then a south Indian like me can also put up a hotel in Delhi. Being the highest bidder at Rs200-odd crore, I got the land parcel in an auction conducted by Hudco Delhi. Being government land, it had a clear title and we were assured that all sanctions / approvals will be given once we have started work on the project. V Suresh was the Hudco chairman then and Ram Jethmalani was Union minister for urban development.

We hired one of the world’s best architecture firms WATG (based in London) who had also created two monumental hotels for us in Bangalore and Goa. They surveyed the land and other historical structures in Delhi. This time around I was fully prepared which was not the case earlier. The site was a very ideal location not too far away from Rajpath and we were quite excited about doing a project there. Within two months we came up with a plan for the hotel and gave it to the Hudco officials. All clarifications were provided to the municipal authorities there. But suddenly, after sometime they came back to us saying we cannot do a hotel there because it was reserved for low-cost housing or something like that. We eventually ended up getting into big trouble with that land parcel.

Today in the context of Jan Lokpal Bill, I can only imagine the kind of torture people would have had to face all these years in this country. The situation is just not compatible to justice and fairplay because of bureaucracy and political play. Can you imagine, people like V Suresh and Ram Jethmalani could wash their hands of it quietly and get away with it too?

So did you get the land parcel from them?

We never got back the land. Instead we got caught in a web of problems and we were attacked from all sides. Because of vested interest of some people in the system, the land acquisition deal was termed as unauthorised and the government decided not to pay us the money and forfeit it instead. I went from pillar to post to sort out the matter but in vain. Our bank accounts were frozen and there was a significant interest expenditure piling up because we had borrowed money in addition to equity.

It was really a terrifying situation. I was surprised that I didn’t get a heart attack. I was left with no option but to comply with whatever I was told. Despite all this, the Hudco officials unnecessarily delayed the matter and dragged it in court for another three years.

Did you finally get the money back with interest?

The irony of the matter is that I am still in the court fighting to get a complete refund. It so appears that they (Hudco) somehow wanted to use the Rs200 crore for themselves and used ‘court sanction’ as an excuse for not paying us back. We eventually had to approach Lal Krishna Advani, who directed the cabinet secretary to issue a directive to Hudco to pay Rs100 crore without any delay. So we did get 50% of the dues which was a great breather at that time. Hudco, however, wasn’t ready to pay us 22% interest (as per the rules and regulations) and decided to appeal the matter in a higher court. As a result the matter is still pending final decision. This entire incident only demonstrates the kind of torment one has to go through fighting bureaucracy in this country.

Despite all the hurdles you were determined to flag off the The Leela brand in Delhi…

The incident only motivated me further to establish presence in Delhi and I was determined to make that a reality. So while I did lose an opportunity then, the very thought of getting a much better location for our Delhi hotel kept me going. So when a few land parcels were being identified and auctioned to meet demand for hotel rooms during the Commonwealth Games, we chose to bid for the Chanakyapuri site. It was an international bid and I told my sons Vivek (vice-chairman and managing director) and Dinesh (joint managing director) that it will be a very competitive process and we must get it at any cost.
We assumed the price will be above Rs600 crore for the 3 acre land parcel. Among some of the competitors in the electronic bidding process included a Dubai sheikh and Ong Beng Seng (the Singaporean businessman). However, we also participated in the enclosed bidding procedure and were the highest bidder for that land parcel at Rs611 crore. The challenge then was to open the hotel well in time for the Commonwealth Games. We did open before the games but only partially and have now launched the property with all the facilities including restaurants and spa.

What has been the response for the new hotel?

It has been mind-boggling especially because of its strategic location in the Diplomatic Enclave. The property is getting rave reviews from patrons across the globe. Really heartening is the fact that the Indian hospitality fraternity including RK Krishna Kumar (Tata Group/Indian Hotels) have lauded our efforts.

In fact, Vikram Oberoi (of Oberoi Hotels) wrote to me saying the hotel is way above the quality standards of any other Indian hotel operating in the country so far. I personally wrote back thanking Vikram for the feedback. It brought back memories of Rai Bahadur Mohan Singh Oberoi, who at one point was very keen on partnering with us when we had put up the Mumbai hotel. We told him that we could certainly look at a marketing tie-up but he was more keen on taking the management so we did not take up the offer.

In fact, my wife Leela has been very clear from day one that the hotel business be run by the family members. That was the reason why we also sent Vivek to Cornell (University in New York) to study hotel management. He was the first Indian to have undergone a proper three-year programme there. Vivek’s wife is equally well-qualified from Cornell and very well understands the hotels business.

Management contracts seem to be the way forward with most domestic and especially international chains entering the Indian market...
We have done a deal in Gurgaon which is a mix of hotel and serviced residences and it has been doing great business from day one. It’s today the most preferred hotel in Gurgaon with almost 100% occupancy despite the highest rates in that category. Management contracts certainly is one way to expand presence/reach but you need the right partner and hence it’s always better to be on your own. As for the asset light strategy adopted by foreign companies, I think they have nothing to loose with that approach. The asset owner is building the hotel, making all the investments, gives management to a foreign brand but if the management company isn’t able to perform well, they can always de-flag the brand.

You have been saying that your ambition is to put up 18 hotels and then retire. What is the status of that goal?

We already have eight luxury hotels in our portfolio including the Chennai hotel that will open in August this year. The only capital city not in the network currently is Kolkata, we are looking for a place and we will be there soon. This will be followed by a second league of hotels in the pilgrim destinations. I think there is great potential for organised hotel companies in these locations. The new additions will now be done by my sons and grand daughters while I will play the advisory role.

Vivek’s two daughters are already in the business wherein the elder one (who also studied at Cornell) is looking after the finance and the younger one (studied at the Culinary Institute of America) is focussing on food and beverages and wines segment of the business. My third grand daughter Samyukta (Dinesh’s daughter) is currently studying at Lausanne in Switzerland and will be spearheading our foray into new pilgrim/business hotels after completing her course. In fact, she has already put up a business plan and has identified Nashik and Ahmedabad as locations for the first few launches.

She wants to call it Leela 1922, the number being my birth year. I am not saying no to her. It’s her concept. She will be back in August and then begin work on the project. These will be three-star hotels with a room rent of Rs4,000 ($100) for a night, will offer clean rooms in a very green environment. Such hotels are the need of the hour and that was the key reason why we thought of introducing the new category in our offerings. I was also wanting to have some environment-friendly hotels under The Leela Gardens brand.

You look very fit for your age…

Every day for one hour I go to our health centre. I feel so fit after that. I also go to the spa every alternate day.

The Delhi hotel, we are told, is your new flagship…

Even my competition has admitted we are far ahead of them. That’s why ITC is buying our shares. Even our Bangalore hotel (a money spinner) is beaten by Delhi. Chennai will be built on the same lines. But Chennai is not a market that is comparable to Delhi. Even before opening the hotel in Delhi there are many delegations which have come and raved about the hotel. The target audience are the foreigners and upscale Delhites.

You said in June you’ll retire.But hoteliers rarely hang up their boots. If you look at PRS ‘Biki’ Oberoi, he’s still going strong...

PRS is 80. I am 89. Rai Bahadur retired when he was 85 years. I am going to be 90 and I think it is time to give the young people the chance to show their mark before our eyes.

I am healthy enough and I can continue. My memory is good and I am very happy and contented that in this lifetime I could see India growing to become a powerful nation.

How did you and Dhirubhai Ambani become friends?

We were both into textiles. He had Vimal and I had a textile firm called Leela Lace. When he came back from Aden, he started a yarn business. He wanted me to buy yarn from him and he had a very affable and friendly demeanour. I said yes to him, provided he (Dhirubhai) ensured that the yarn was of the requisite quality and tensile strength. He used to call me Krishna. He bought the yarn from Kohinoor Mills, a special tensile strength yarn which will not break like nylon does. And I bought from him from day one until we closed our textile unit.

(An attendant interrupts, to say Mrs Leela Krishnan Nair is ready to leave. He looks at the watch, smiles, and says “ten more minutes”. But the interview continues for half-an-hour more.)

You see, Leela and I have planted 2,00,000 trees in the vicinity near the airport. Most of the trees have been uprooted, but still for nostalgia’s sake we go for a drive around the airport to look at the trees and the foliage...

You were talking about Dhirubhai…
He was a dear friend of mine until his end. I used to go everyday to the Breach Candy Hospital. When he first got a stroke, he was admitted to the Jaslok Hospital. The moment I heard, I rushed there. You see, he was a very jovial person, bubbling with energy.

You must have met him before he had a stroke...
He used to call me those days and invite me to Oberoi Hotel. I used to go at times, as it was difficult to leave everything as I stay in the suburbs.
Once President (Hugo) Chavez of Venezuela was to stay in our hotel. Dhirubhai learnt about it and said he wanted to meet him. When the day arrived, Dhirubhai suddenly took ill and didn’t turn up. Instead, he told me to take his place, and sent Mukesh to make a presentation on the Jamnagar refinery. They have got good support from Venezuela.

What is Mukesh’s interest in hotels?
Mukesh went to the rescue ofthe Oberois. Mukesh is blessed with oil & gas, the biggest source of revenue in the world. He is unfettered. If he can develop and ramp up the gas fields, he can supply the whole of India with gas from KG basin. It has inexhaustible gas.

Is ITC thinking there’s an opportunity when father-figures such as you and PRS Oberoi fade into the background they probably can go for the kill?

Yogi (Yogesh Chander) Deveshwar (chairman of ITC) is a very shrewd man.

Have you spoken with him?
We are friends. He was in charge of The Searock Hotel (opposite Taj Land’s End in Bandra, Mumbai) about 25 years ago as its general manager. He came here (to The Leela in Andheri East) and accepted that we had indeed built a fabulous hotel. Out of curiosity, he had come with 8-10 of his colleagues, all heads of departments to inspect our hotel. I was sitting in a corner and he came up to me and sized me up. He is a tall figure and an astute man.

He asked: “Sir, are you the owner?”

“No, I am the housekeeper,” I replied (laughs).

“In that case, I will tell you have put your money in the gutter. You have built it so beautifully, but this will never sell,” Yogi told me.

How did you react?

“Yogi,” — I called him by that name — “You are an employee of ITC.” His boss P M Menon, who was on the board of ITC, was my cousin. “You are doing a good job at Searock. You have managed to make Searock the most happening hotel in this part of town, so I’ll hire you at double the money you earn now to run this hotel.” He walked away (laughs).

Have you checked with him on his interest in your hotel?
I never asked him. I told my people, if ever Yogi Deveshwar comes to our Delhi hotel, treat him with great respect. I am told he stopped his car in front of our Chanakyapuri hotel and looked at it very, very carefully from the outside for 10-15 minutes. He looked at the elephants. He’s an astute man and he’s a businessman. He’s leading a big company. My cousin was the director of Imperial Tobacco, which is now ITC. But the money is being made from cancer. Tobacco business (shakes his head)... Now he’s moving away and is making soaps and other things. That’s the way to do it. He should go for solar energy. Why is he putting money in hotels? If he has got money, he should put money into solar energy. All Indian entrepreneurs should put their money into this. I want Mukesh Ambani to do that. Discover a cheap way to generate solar power.

Mukesh is doing that, we hear...

Mukesh (Ambani) must develop it. He must employ the best technicians from all over the world. One day will come, when we’ll not depend on oil and gas. Nuclear power is not good for us. I was a votary of nuclear power, but today after seeing Japan and its plight, I fear the earth may get crippled if we go ahead with such energy resources.

You were friends with politicians and freedom fighters?
When I was a young boy I fought untouchability, the British. I was a student leader when I was 13. I was a fighter.

Are there any unfinished tasks that you expect your sons to complete?
My sons will bring this group to a higher level. My children will make this group a truly Indian hospitality chain. I am ashamed that all our people are running after Marriott, Sheraton and Hilton. Kempinski was just a tie-up. We foolishly called it Leela Kempinski, on the advise of our marketing people. That was the challenge. I’ll be on my own.

You remain a passionate hotelier. Do you see the same passion in the current generation?
Why not? Both my sons are very passionate. Vivek studied in Cornell. I wanted them to study hotel management in all respects. Vivek bought the first architects for this hotel 27 years ago. They were from Boston. They changed the plans even though the building was already up. They changed everything. Dinesh’s skills are in operations, whereas Vivek is strong in thinking, political liasoning.

How do you perpetuate the...
I have three grand children.

No, we are asking because there are stakeholders such as Yogi Deveshwar’s ITC prowling in the shadows…
We have 55% and we’ll make it 60%. It’s a fact that we carry huge debt on our books. It’s a fact. But the assets we have put in place such as the Rs1,600 crore Chanakyapuri hotel is now worth Rs2,000 crore. Costs have gone up, but we still built one of the most valuable hotel properties in recent times in India. Without batting an eyelid, our competitors will pay at least Rs2,000 crore for that property. So the debt is still manageable. If you tell Sheikh al-Waleed (the Saudi billionaire), he’ll pay Rs3,000 crore.

You’ve had an association with Sheikh al-Waleed?

Al-Waleed has invested in Four Seasons. He was very keen to have a stake in my company. “Krishna, he told me, I want the stake through Four Seasons.” “Sheikh al-Waleed, I told him, it is in my wife’s name. She has put her heart and soul into everything — landscaping, cuisine … even today my wife is very compassionate towards the boys working in the hotel.”

We are lavish when we spend on food for our people. Leela, even today, gets the food from the cafeteria. In the beginning, when we were giving our boys ration rice, my wife intervened and told the chef that when the boys are serving five-star food to guests, they should also have it. The same rice should be served to them and arrange a bada khana (big feast) for the boys and girls every month. They should be treated like the guests at least in a small measure.
(We point to a picture of his with US president Barack Obama.)

This picture of you in deep conversation with the US president, what was that about?

Well I told him, “Mr President, you captured India.”

“Have I? Have I?” Obama replied, looking at a loss. “I mean, you captured the mind of Indians,” I explained.

“When you invoked Mahatma Gandhi, you touched a chord in the heart of all Indians. People have forgotten Gandhi here, you’ve revived him,” I told him.

“You’ve become an Indian,” I told him. “Have I? Have I?” Obama asked.

In the same vein, I told Michelle Obama I have five grandchildren who are Americans. “Where are they in America?” she asked me. I told them two are in Washington. She told me: “Ask them to see me.”

They are very kind people and very informal in their interaction.

I had supported Hillary Clinton. I had told her, Clinton, make sure, that Capt Nair is invited for your inauguration. She didn’t make it because of her miscalculation. In the beginning she ignored Bill Clinton, and only half way through the campaign did she invite him on board. If his services were taken in the beginning they would have easily won.

You spoke about your troubles? Any regrets?
India has to be a land devoid of greed and corruption. We preached Panchsheela. This is the land of Swami Vivekananda and Gautam Buddha. Now look at (Andimuthu Raja (the tainted, jailed former telecom minister), how he has behaved. He did not treat our prime minister with respect, he felt he could do anything. This Anna Hazare should be upper most in everybody’s priority. We must get back the trillions of rupees stolen. We should rebuild India in the next 10 years.

I am a true Indian. Soniaji is an upright woman leading a simple life. Both Rahul and Priyanka are simple kids, well-behaved. Priyanka, if she ever decides to get into politics will fly like Indira Gandhi. Rajiv Gandhi was a good man, he used to stay here (points to the hotel). The last time he went for election campaign, from here he went to Chennai. He put his hands on my shoulder and said: “Sir, we’ll come back victorious.” He was dreaming of a big
victory. I’ll not commit the mistakes I committed in the past. The moment you become a minister or prime minister, forces of greed come and capture them.

The asuras. That should be avoided.

What is the most dear memento in your office?
This (pointing to a crystal) lotus. Priyanka (Gandhi) gave me this lotus with a note. She gave this seven years ago. I have a thousand gold lotuses in Delhi designed by Satish Gupta. I love lotuses. I have ponds for beautiful lotuses in the hotel and even in my house. Priyanka knew about this and send it to me. I was so touched.

This is (points to a figurine) Buddha, which the Dalai Lama gave me. He has stayed here 27 times.

What do you like to be remembered as?

A true Indian host. Let us bring back our ethos back. Let the world say we Indians are a class by themselves. Today, Indians are walking with pride everywhere.

HCC blames govt, politics for fourth quarter debacle

This story first appeared in DNA Money edition on Saturday April 30, 2011.

Hindustan Construction Co (HCC) has blamed its poor performance in the quarter ended March on lax government machinery and delay in decision making, besides high interest costs.

The engineering and construction company reported a sharp decline of 47.4% in net profit at Rs22.6 crore even as turnover increased 10.8% to Rs1,209.73 crore. Earnings before interest, tax, depreciation and amortisation margin for the quarter stood at 14.4%, but the gain was offset by interest costs, which were up 100% at Rs90.27 crore.

Ajit Gulabchand, chairman and managing director of HCC, pointed out the slowdown in government spending on infrastructure last fiscal. “The entire slowdown has been due to a variety of reasons including projects that have not been cleared or have been stopped because of environmental clearances. There are other projects, work on which could not progress because ministries were revamped, thereby causing delay in the entire decision making process. Similarly, elections in five states have had an impact in addition to unearthing of various scams that further delayed bureaucratic decision making. The impact of slowdown isn’t restricted to the government institutions alone as the private sector has been caught up with its own set of issues.”

Making matters worse, many of the expected order backlogs did not materialise, said Gulabchand.

The current fiscal looks better, he said. “The financial year in progress is looking a little better because some of the orders that got delayed from the last year and those expected to come in are likely to get clubbed, thereby creating a better situation for infrastructure. While slowdown continues, the quantum of orders that will be on hand, not necessarily secured by us, would be far more in the next six months than what they were before. To that extent, I think we are better poised in some of the cases to be able to seize a reasonable number of projects in the current year.”

With an order backlog of Rs18,127 crore as of March 31, the HCC management is looking at a 20% increase in annual turnover from the current Rs4,000 crore. “If we are looking at that kind of a turnover, in order to increase the order backlog, we have to look at additional orders of Rs6,000-8,000 crore. Whether this is possible... I think there is a good chance. But if the slowdown persists, then it may not really change the situation much. This is a fact we have seen and we are only hoping things get better here on,” he said.

Meanwhile, HCC is looking to introduce the business activities of the recently acquired Swiss company Karl Steiner AG to the Indian market sometime during the second or third quarter this fiscal. The management will be setting up an India subsidiary (Karl Steiner AG) with plans to grow the business up to Rs5,000 crore. Thereafter, it will look at possibilities of making opportunistic forays into Europe, Middle East and Africa.

The performance of Lavasa Corp, another subsidiary, has been hurt by the environment ministry’s order to stop work.

Lavasa reported a lower net profit of Rs112 crore for last fiscal as against `140 crore the previous fiscal. The HCC management expects the issue to be resolved shortly as it is awaiting environmental clearances.

Another subsidiary, HCC Infrastructure, has an asset portfolio of `5,500 crore including six NHAI road concessions. There are fundraising plans in the infrastructure business and the company may announce a placement in the coming months.

Mahindra Holidays sets higher inventory target

An edited version of this story first appeared in DNA Money edition on Friday April 29, 2011.

Mahindra Holidays & Resorts India Ltd (MHRIL) is gearing up to cover lost ground in the current financial year. Having managed to add just 148 rooms against the target of 500 in FY'11, the management is now targeting an overall inventory addition of 800 rooms in the current fiscal.

A part of auto major Mahindra & Mahindra Group, the BSE-listed hospitality company, has taken up higher targets in terms of new room additions thereby ramping up inventory to meet future growth targets. Taking a three-pronged strategy, the company is looking to close a few acquisitions as well that will cost approximately Rs 300-odd crore. In fact, some of the acquisitions, the company management said, are likely to be closed in the first and second quarter this year.

Ramesh Ramanathan, managing director, Mahindra Holidays, said the company is adding rooms though a mix of greenfield, brownfield and long-term lease arrangements. “The plan is to add 800 rooms in the current fiscal of which 400 will be added through greenfield developments. The balance inventory is in various stages of development including around seven projects through the inorganic route. In fact, we are already in a fairly advanced stage of due diligence with three such projects. If only we could have finished the exercise in time, these would have become part of our last year's room addition,” he said.

The acquisitions to be made will be in the domestic market (within India) and include both small and big inventory (under 70 rooms to over 100 rooms) projects from across the country. “It would be inappropriate of me to give out specifics at this stage, all I can say is that some of the acquisitions will very likely get closed in the first and second quarter this year. All in all the inorganic approach will cost us around Rs 300-odd crore,” he said.

The company has earmarked an overall capex of Rs 700 crore which will be funded mainly through internal accruals. MHRIL is sitting on Rs 200 crore worth of cash on books of which Rs 75 crore is the IPO money and balance is from operations. “We also have Rs 800 crore of receivables (EMIs due from our customers) which can be securitised to raise the balance. We have taken this approach in the past and we can securitise the same as and when there is a requirement,” Ramanathan said.

MHRIL's overall guestroom inventory in FY'11 stood at 1,624. The company added 69 rooms during the last quarter FY'11 with 44 rooms in Udaipur and 25 rooms in Kanha. Lat year, the company had a backlog 352 rooms (500 – 148) which are part of current year's plan as well.

Elaborating on what really went wrong with meeting last year's target, Ramanathan said, addition of rooms is something that can take long at times. “We would have really liked to meet the target but a few things didn't happen the way we envisaged. We were to add a resort at Tungi with 155 rooms. Most of the work on this project had been completed and we were awaiting occupancy certificate (OC) which has been pending for a while now. This project unfortunately couldn't form part of our room addition last year else the picture would have been completely different as we speak now,” he said.

On reason behind sounding so bullish on meeting the company's new targeted addition of rooms, he said that their project in Tungi will bring in 155 rooms, a project near Coorg with 150 rooms will get completed within this year and another 100-odd rooms will get added between Gir and Kanha projects. Thus the four greenfield projects will take care of 400 rooms and the balance will be added through a mix of lease agreements and acquisitions as detailed earlier.

Analysts tracking the company had earlier expressed concerns about the management's ability to execute expansion plans thereby making a meaningful positive impact on the overall business prospects. “We believe, only meaningful addition of rooms will help the company sell its offerings aggressively. We believe headwinds in membership additions will continue for a few more quarters before the restructuring starts showing results. We also believe that new schemes to be launched are far in future to have a meaningful impact on near-term financials,” said Manav Vijay and Manish Sarawagi, analysts with Edelweiss Securities, in their latest report.

Responding to the analysts' concerns Ramanathan said that the company relates rooms with the number of members on board and that anyone buying membership will not be elligible to take a holiday unless they have paid the company in full. “So there is a time delay between when you enrol and when you can go on a holiday. Presently we have an enrolled membership base of over 125,000 of which 80,000 are eligible for a holiday. Our current inventory of 1,624 rooms is sufficient to meet holiday requirements of the elligible membership base. Thus, if you look at work-in-process versus what we have actually managed to accomplish, we are doing pretty good,” he said.

On the membership front, MHRIL added net 3,418 members (2,717 Club Mahindra Holidays and 701 Zest) in Q4FY11 against 3,758 (3,146 CMH and 612 Zest) in Q3FY11 and 774 in Q4FY10. On gross basis, the company added around 5,500 members - 4,700 as CMH memberships and 800 as Zest. During FY'11, the company added 15,285 members on net basis and around 20,900 on gross -  its total membership base currently stands at 1,25,169.

The company in FY'11 has been rationalising its membership base as a result a considerable number of memberships had been categorised as non-permorming members. The number of such members was significantly high at over 7,000 last year which has be reduced significantly. I'd say these is very normal in business like ours and can very well be absorbed in the system. What we are also doing is putting in place a very robust system to ensure the non-performing membership numbers are brought down significantly. We cannot completely eliminate it but there are always ways to reduce the number of such members going forward and we are already doing that,” he said.

However, writing-off of around 2,000 members during Q4FY11, analysts feel, also indicates that the pain in the system is far from over. “We would like to maintain our 16% growth or around 20,000 membership addition estimates for FY'12, along with 10% increase in average membership ticket size,” the Edelweiss analysts said in their report.

A part of the country's leading business conglomerate, the Mahindra Group, the company named Rajiv Sawhney as the new CEO of Mahindra Holidays & Resorts India who is likely to assume office in May 2011. Ramanathan has appointed as head of Mahindra Group's pioneering initiative in setting up Hospitality Schools and other learning platforms for the hospitality business.

Realtor Omkar raising Rs 500 cr in private equity

An edited version of this story first appeared in DNA Money edtion on Saturday, April 23, 2011.

Mumbai-based real estate player, Omkar Realtors and Developers Pvt Ltd, is in the process of raising private equity to part fund its residential and commercial developments in the city. The company management is in the advanced stages of discussions with potential investment firms and is likely to close the deal within a couple of months from now.

Deepak Mishra

Confirming the development, Deepak Mishra, head – sales and marketing and official spokesperson for Omkar, said, “Talks are currently on with a select few private equity investments firms. I can’t disclose any details at this moment though because it will create confusion and we’d like to avoid that situation.”

The private equity placement, according to Omkar management, will be at the entity level wherein the company will off-load minimum stake. “We have a very good pipeline with banks and financial institutions and have tied-up over Rs 1,000 crore from them. So I don’t really need to off-load a majority / large stake in the company. Secondly, most of our assets will be unleashed only in the next two to three years thus it is in our interest to divest minority stake as a benchmarking process to get a financial partner on board,” said Mishra.

When inquired about the extent of funds to be raised and if the sum was anywhere in the Rs 400 to 500 crore bracket or more, Mishra said, “It should be in and around that figure.”

A closely held company, Omkar’ registered a turnover of Rs 262 crore (top-line) last year. The company expects to grow this number to Rs 10,000 crore in the next 3-4 years. “That’s our internal target,” he said.

Having already developed and delivered 2mnsft of residential and commercial projects, the company has a pipeline of nine projects across different pockets in Mumbai. In all, the realtor has 20mnsft (saleable) of projects under various stages of development of which 10mnsft will be launched within this calendar year. In fact, the company has already launched approximately 2mnsft in the market and another 2mnsft is work in progress.

Elucidating their pricing strategy, Mishra said that both projects have been very attractively priced and rates are significantly lower than those charged by the nearest competition. “It’s a standard approach in our company as we believe ticket size and speed of sales is inversely proportional – higher the price slower the selling pace. Our business approach is to create, deliver, exit and move on to newer developments by selling our inventory in the shortest time-frame,” he said.

Among its marquee projects in Mumbai include residential-cum-commercial development at Worli (on the erstwhile Crest House land parcel) which it had earlier acquired. With a saleable area of 2.5mnsft, the residential development will have saleable area of 2mnsft and the balance (0.5mnsft) has been earmarked for commercial space with a proposed five-star premium / luxury hotel. Featuring 500 units, the company has already got on board London-based architectural firm ‘Foster + Partners’ and is positioning the residential apartments as top-of-the-line living spaces with a ticket size of Rs 6-7 crore.

Another high-end residential-cum-commercial project with a saleable area of 2.5mnsft in Malad is currently in the pre-launch stage. The company has already appointed channel partners, international property consultants (IPCs), brokers etc. to soft-launch and expect to officially open it for public sales in another three months. The project will offer 2/3/4 BHK apartments (1,100 units) spread across 1,200 to 2,200sqft. This development will also have 0.5mnsft of commercial space which will be launched at a later date.

The total investment required to construct projects under various stages of development is in the region of Rs 6,000 crore, of which the Worli development itself will absorb Rs 3,500 crore.

I&B min moots new timeline for cable TV digitalisation

This story first appeared in DNA Money editoon on Monday April 18, 2011.

The Ministry of Information & Broadcasting has come out with a revised time schedule for a four-phase digitalisation process of cable TV across the country. The move follows Telecom Regulatory Authority of India's (Trai's) rejigged recommendation in February this year for a December 2013 deadline to implement digitalisation with addressability in cable TV systems. The revised schedule from the ministry has chosen December 2014 as the final sunset date for analog cable systems across the country.

Industry experts, though, aren't excited. "We don't view the revised time-frame as a big change — as the government maintains its initial timelines for the first two phases and has only revised its timelines for the last two phases by three months. While the intent remains positive, we think the recommendations alone may not be enough to fuel digital growth," Surendra Goyal and Aditya Mathur, analysts at Citi Investment Research & Analysis, wrote in a report.

Getting Cabinet approval is seen as the deciding factor, especially with respect to implementation.

Analysts tracking the development said the contract will have to be reviewed to ascertain if it is attempting to significantly change The Cable Television Networks (Regulation) Act, 1995. "If it's not, then there won't be any difficulty in getting parliamentary approval. However, if there are significant changes being suggested in the Act and the matter goes to Parliament, it will be a serious problem because the opposition isn't really supporting any initiatives from the government/ ministry at this point in time," an analyst with a domestic broking firm said, requesting anonymity.

Finally, assuming the proposal goes through, industry experts feel the next big challenge will be its execution/ implementation. Timely execution is key and the possibility of delays can't be overlooked, especially in smaller towns, feel the Citi Investment Research analysts. "There could be some execution hurdles even at the state government level. Further, digitalisation will require high capital investment for upgrading equipment, devices and accessories, which may be a challenge. In terms of overall investment that may get pumped in, our discussions with industry participants' estimate investments at $9-13 billion," Surendra Goyal and Aditya Mathur wrote in their report.

Digitalisation in Phase I, analysts feel, will be quicker as metros are very lucrative markets. Besides, MSOs operating in these cities have deep pockets and hence wouldn't mind investing for digitalisation. What also works in favour of metros is the fact that quite a few pockets in Mumbai and other Phase I cities have already undergone digitalisation.

The digitalisation process will require significant investments by the players, who will have to either raise capital internally or look for external resources. "I think once the metros have been digitised, the market players will then look to raise money for ensuing phases. In fact, if Phase I sees a good success ratio, I think there is going to be a mad rush for raising funds and private financial institutions/ investment firms are likely to play a crucial role by providing growth capital for DTH players and MSOs. This because the investment community is also looking to place their bet on businesses that will drive consumption in the market and digitised media is very high potential segment," said the analyst from the domestic broking firm.

Benefiting the most from this mandatory digitalisation move by the I&B ministry will be direct-to-home players such as DishTV, Tata Sky, Airtel Digital TV, Reliance Big TV, Sun Direct and Videocon DTH, besides cable and satellite companies like Wire & Wireless, Den Networks and Hathway.

Welcoming the I&B ministry's move, Ajai Puri, director and CEO, Airtel Digital TV (Bharti Airtel) said the initiative will only bring in transparency in the entire process and all stakeholders, broadcasters, customers and the government will benefit from this. However, Puri suggested a few more steps which, if implemented, will make it a lot more feasible and practical to bring in digitalisation.

"Custom duty on import of digital boxes should be withdrawn to fuel rapid growth of digitalisation in the country. In fact, with the new mandatory sunset date in place, the box requirement will go up significantly from 13-15 million boxes at present to 25-30 million boxes annually. The second issue is the 10% license fee on DTH services while there is none on digital cable and the HITS format. This makes it completely non-viable besides proving to be a non-level playing field for DTH players. Third issue is the entertainment tax being levied by the various state governments. For example, UP has 25% entertainment tax in addition to annual registration charges in the region of `5,000 to `25,000 to be paid by all DTH retailers operating in the state. Lastly, to make this addressable system to work efficiently, there should be a complete review of the tariff order by Trai. We have been demanding that the tariff for digital platforms should be 10% of the analog platform because the latter is not completely transparent in its operations and declares just 10% of its entire subscriber base. The broadcaster's tariff has been arrived at keeping this scenario in mind," said Puri.

Currently, there are 500 channels, of which 400 are active and the carrying capacity of the majority of cable operators is between 100 and 150 channels. If one takes the total tariff of channels being broadcast, the figure comes to around `1,742 per subscriber per month.

"That's the sum broadcasters will charge the operator, who in turn levies his own cost, taking the overall price in the region of `2,500 to `3,000 per subscriber per month. It is public knowledge that customers pay under `250 per month for their cable subscription. Thus, because there is 90% under declaration, the broadcasters arrived at such high tariff, which gives them anything between `150 and `170 per subscriber per month from the cable operator," said Puri.

All this, feel market players, needs to be corrected in the light of the fact that the entire distribution system is being digitised and is addressable, thereby bringing down the broadcaster's tariff to more acceptable/ reasonable price points. Getting the aforesaid issues right will lead to a significant growth (in the media digitalisation) and the entire country will get digitalised well within the sunset time schedule prescribed by the ministry.

As far as getting investments is concerned, the four suggested changes will help build a strong business model (for DTH, digital and analog systems), thereby instilling confidence in the existing market players who, experts feel, will be more than willing to pump in all the money required to grab market share and boost revenues.