Agri growth scorcher drives private equity activity

This story first appeared in DNA Money edition on Saturday, February 25, 2012.

The vast Indian agricultural market and a pick-up in related activity have triggered a surge in private equity (PE) placements and merger and acquisitions (M&A) in this sector over the past one year.

Pundits believe there is still so much of growth upside left. Raja Lahiri, partner - transaction advisory services, Grant Thornton India, said agriculture as a sector is promising and there is a reasonably good private equity interest, especially in the segment like seeds. “Funds tend to chase businesses that address the bottom of the pyramid theme and investing in agriculture and related businesses do fit in to their investment theme,” said Lahiri. Agriculture and related businesses as a segment include the entire value chain of foods, agriculture produce, seeds, fertilisers, agri-technology, and agri-infrastructure.

While three deals have already been announced in the current calendar year 2012, industry experts see a lot many in the pipeline, which will get closed in coming quarters. Among deals that have already been concluded are Malabar Trading Co’s majority stake acquisition in Protect Nature Pvt, takeover of Hyderabad based Rohini Seeds by agro chemicals company Crystal Group and private equity investment by Song Investment Advisors in SV Agro Processing. Deal value of all these transactions have not been made public though.

Even the terms of trade appear to be gradually changing in favour of agri crops which basically mean the price of agri crops is increasing at a much faster clip than manufactured goods.

Analysing the key factors driving the trend, G Chokkalingam, executive director and CIO, Centrum Wealth Management, said it’s the highly populated countries like China, India, Brazil, Russia, South Africa that have logged the fastest economic growth in the last 7-8 years. “However, the size of cultivable land has only declined in this period. This has put tremendous pressure on agri crops as well as demand for food which is only rising. Interestingly, within India, the fastest growth is coming from the densely populated states like Madhya Pradesh, Uttar Pradesh, Orissa etc. So, on one hand, there is increase in food demand and cost, and shrinkage in cultivable land on the other.” He felt that climate variations will necessitate strong inputs for the agriculture sector in order to improve productivity. “Taking these factors into consideration, I feel the agri and related businesses will attract a lot of attention from investment companies. In fact, I see it as a major theme on the bourses in the next 2-3 years,” said Chokkalingam.

Another reason for increased attention from PE firms is that the size of these businesses has reached a certain scale in the last 3-4 years. Earlier, such businesses were too small and would only attract the start-up investors or investments from venture capital funds. Unfortunately, there weren’t many such investment entities in India, thus dampening growth and investments in this sector.

“The real growth capital story will start to unveil now because the sector itself has reached a certain scale ranging between Rs 60 crore to Rs 200 crore. Thus, it now makes sense for funds to look at investments of Rs10 crore to Rs 50 crore in such businesses. My sense is it will largely be growth capital PE deals that will dominate the market in the next couple of years. This is likely to be followed by a couple of buyouts though generally speaking, India is still not ready for such transactions, especially in the agri and related segment,” said Rajesh Srivastava, chairman and managing director, Rabo Equity Advisors (an agri-focussed fund).

IDFC Private Equity has also hopped on to the agri-business investment bandwagon by acquiring a significant minority stake by investing Rs 150 crore in Jaipur-based Star Agri Warehousing and Collateral Management. Girish Nadkarni, partner, IDFC PE, said, “The placement has been done through our $650 million IDFC PE Fund III.”

The funds will be deployed by Star Agro for expanding the warehouse network and creating a pan India network of allied post harvest management services. We are expecting the investment payback time frame to be 3-4 years from now.” He did not share precise details on their expected rate of returns though, “It would be in the same region as is the case with any standard internal rate of returns (IRRs) with PE investments,” he said.

Additionally, Bombay Stock Exchange (BSE) listed Onelife Capital Advisors Ltd is currently in the process of considering a proposal to acquire a group company Oodnap Agrotech Ltd (OAL) engaged in the agricultural and related business activities.

According to data compiled by Grant Thornton India, agriculture and related business segment attracted 14 M&As and 8 PE deals amounting to $586.56 million and $19.12 million respectively in the year 2011. The number was significantly higher in 2010 wherein the sector witnessed 26 M&As and 8 PE deals worth $354.73 million and $157.41 million respectively.

Srivastava said that the number of funds targeting this space has increased significantly vis-a-vis just a handful of sector-focussed firms in the past. “This is a good development for the sector because ultimately PE investors are seeing value in such businesses which will eventually help them expand better in the coming years. From the perspective of both volume and number of deals, 2012 will be better than 2011 for PE investments in this sector.”

In fact, Rabo Equity Advisors is expecting to close 3-4 fresh deals in the next couple of quarters and will raise a new fund as the existing corpus will get exhausted post the new placements. “The new fund will be launched by the end of this year. Precise details on the same will be finalised in over a couple of months from now,” said Srivastava.

PE investor in Ginger is a Tata Capital firm

This story first appeared in DNA Money edition on Thursday, February 17, 2012.

Indian Hotels Co Ltd (IHCL), the Tata group hospitality flagship, had last March announced Rs320 crore investment by Singapore based private equity firm, Omega TC Holdings Pte Ltd, into its subsidiary Roots Corp Ltd (RCL) that runs the Ginger chain of budget hotels in India.

The IHCL management had then said that Omega TC was chosen after discussions with a few PE players and the investment, which was to be made in various tranches till 2014, included buying out some of the existing investors in RCL.

Curiously, IHCL then was not willing to share any details about the ownership and other information on Omega TC. The IHCL annual report for 2010-11 also has no information about the ownership details of Omega TC.

It now emerges that the Singapore PE is an entity backed by Tata Capital, a Tata group company.

Responding to a DNA query during the third-quarter results about media reports on Tata Capital picking up stake in RCL, Anil P Goel, executive director - finance, IHCL, had said, “Omega TC is actually Tata Capital.” He, however, did not share any details on it.

A request for a meeting with the IHCL management to get a better understanding of the PE firm’s investment in RCL was denied.

Tata Capital, too, when approached, did not offer any comment.

Later responding to a DNA uery, the Tata Group media agency said, “Omega TC Holdings is an investment holding company of the Tata Opportunities Fund LP, a limited partnership fully subscribed by global investors. The Tata Opportunities Fund is one of the private equity funds sponsored by Tata Capital Pte Ltd, Singapore.”

Meanwhile, experts tracking the company development said proper disclosures should have been made about the PE investor into the IHCL subsidiary.

“To what extent is this investment transparent is something I fail to understand. What is its purpose, how was the transaction valued, whether it was done to set a valuation benchmark, or largely to give an exit to existing investors because no other investor is willing to come in, are questions that only the company officials can answer,” said a top official of a leading hotel chain requesting not to be identified.

The PE placement was also being viewed as paving the way for RCL’s initial public offering, which is likely to happen in the next couple of years.

During an IHCL annual general meeting in August 2010, Ratan Tata, chairman, Tata Group had responded to a shareholder query saying, “The Ginger hotel chain would be listed in the next couple of years, depending on a series of circumstances.”

Roots Corporation was set up in 2003 and currently operates 24 Ginger hotels across India. While a significant proportion of the Ginger portfolio is owned, there are a few joint projects like Ginger Rail Yatri Niwas (operated under PPP arrangement) and two management contracts in Manesar and Agartala.

The Ginger pipeline currently comprises 10 hotels under various stages of development including Ginger’s Mumbai debut at Navi Mumbai. These hotels are likely to add another 1,000 guest rooms to the existing portfolio.

Lemon Tree out to prove a point with business recast

This story first appeared in DNA Money edition on Monday, February 17, 2012.

Warburg Pincus-funded Lemon Tree Hotels has embarked on a major restructuring of its business with an eye on unlocking value.

The company plans to separate ownership and management of hospitality assets and is also weighing setting up a third-party hotel management company and introducing new hospitality brands.

Patu Keswani, chairman and managing director, Lemon Tree Hotels Pvt Ltd (LTHPL), confirmed the move to separate brand management from asset ownership. "It certainly is part of our long-term strategy. We will have a very clear division and I hope to do something specific even before our IPO, which should happen within a couple of years from now. To start with, we are planning to merge Red Fox into Lemon Tree and amalgamate the two. Eventually, we will have a company that will own both Lemon Tree and Red Fox brands, the management will reside there and so will a lot of assets," he said.

Lemon Tree is open to distinct identities for projects provided they "come with tax benefits," said Keswani.

"What it basically means is we will not downstream or move around any asset that will entail payment of duties, taxes and so on."

The company has 4-5 projects — with 100% asset ownerships — in its portfolio.

As a long-term strategy, the management is looking at aggregating them to create an asset company.

"It is an ongoing process, and we are in talks with lots of people to invest with us in the asset company. And as long as we own a majority of that company, we will be open to creating multiple asset companies," he said.

On the buzz about a Dutch pension fund coming on board as an investor, Keswani said "We are talking to many people, including investors from Europe. Nothing has been finalised yet."

And is Warburg is in the exit mode?

"Not at all," said Keswani. "We certainly are hoping that Warburg will stay as it has invested in the main company (LTHPL), which is both an operating as well as a property company."

Why is the company bringing in new investors then?

Keswani said the company has around six hotels that are with independent subsidiaries whereas LTHPL either owns 100% or a majority stake. "When we tie up with funds --- sovereign, pension or a private equity --- we may move some of our existing assets that are tax-friendly and we will have new hotels in these asset companies. So, right now, we have 3-4 companies that can loosely be termed as asset companies because they are downstream and pure assets," he said.

The company is also looking at creating a property company, though the timeframe will depend on when the new investor comes in. "It could take anywhere from the next six months to maybe 2-3 years, depending on when we partner with somebody (financial investor), the quantum of investment, the alignment and so on," said Keswani.

LTHPL is keen to keep a majority stake, while allowing the new investor in the property company to bring in at least `1,000 crore. It is likely the investor will secure a very small stake in Lemon Tree Hotels as well. "In fact, whatever conversations we are currently having with a few funds, the figure is in the neighbourhood of Rs1,500 crore," said Keswani.

Lemon Tree also has its eyes set on management contracts.

"It is going to be a step-down company where we will do joint venture with other people. It could also be a subsidiary of Lemon Tree where we will be managing hotels of other asset owners," Keswani said.

"We intend to do management contracts only in the mid-scale, upscale and deluxe categories. Thus, three new brands are currently being conceived and the work is at a very preliminary stage. The new brands will be with the management company and we should be ready to unveil them in another 3-4 months from now," he said.

The company is backing up its intent with some high-profile recruitments.

Murlidhar Rao, who was vice-president (operations) with Alila Hotels & Resorts in Singapore, has already taken over as the chief operating officer (COO) of its newly launched Lemon Tree Premier brand of hotels.

Similarly, Saurabh Nandi, shopper marketing manager - ASEAN, Procter & Gamble, operating out of Thailand, is expected to join as LTHPL's chief marketing officer by mid-March. Nandi will also be entrusted with spearheading new branding initiatives expected to be rolled out before June.

Thomas Cook says no piecemeal sale of company

This story first appeared in DNA Money edition on Friday, February 17, 2012.

Despite the financial stress faced by its UK parent, travel operator Thomas Cook India, which has been put on the block, on Thursday said the proposed sale is not a distress sale and the decision was taken based on the number of unsolicited expressions of interest received for the company.

Madhavan Menon, managing director, TCIL, said, “From the UK parent’s point of view, they clearly recognise that this is a business that is doing well and is a major player among the businesses present in this country. It is not a distress sale and unless the parent sees a value, a sale will not happen.” Menon said.

Menon said a detailed process being conducted by Credit Suisse was a two-staged one and is yet to begin. “We would try and complete the process quickly because when there is a stake sale it can lead to some amount of distraction from the business. And it is our intent to finish it (sale) at the earliest,” he said.

Menon said there would not be any piecemeal deal and Thomas Cook India will be sold as one piece. “At this stage, however, it would be speculative on my part to speak anything about
what the new owner would do with the business after having acquired it because we don’t even know who
the owner could be,” he said.

Reiterating his views on the Indian entity, Menon said that Thomas Cook India has operated independently of the UK parent, be it financially or commercially. For TCIL, foreign exchange is a major contributor to its overall business while it is the packaged holidays for their UK parent.

TCIL also said that the company management did not have a preference as to who the potential buyer would be as it entirely depends on what value the parent expects to obtain from such a sale.

“I don’t want to get into the expectations of the parent, because it is too early to speculate as to what they want. It is also driven by the fact that there are rules and regulations that govern the price, given that we are publicly-listed company. We are going through a process whereby there will be a price discovery and we will have to wait for that to happen,” he said.

To a query on whether TCIL would prefer a financial investor as a buyer who will retain the existing management as against a strategic buyer who may not, Menon said, “We have a successful management team and anybody who buys this business would obviously see some value in it because the team has built up this company over the last six years.”

The new buyer will have to negotiate the terms for the use of the Thomas Cook brand.

“The brand is available for a minimum 7 years and it will depend on what the bidders make of it and what value they appropriate towards it,” said Menon.

Rattan Keswani quits after over three decades with Oberoi Hotels & Resorts

An edited version of this story first appeared in DNA Money edition on Monday, February 13, 2012.

Rattan Keswani

Rattan Keswani, president-Trident Hotels at East India Hotels (EIH) – Ltd is set to part ways with the company (popularly known as Oberoi Hotels & Resorts) he has been associated with for over three decades now. Industry sources said that Keswani has already put in his papers and is currently serving notice period.

“Keswani is serving notice period till end of April. While there is no concrete information about his new endeavour, there are talks he is launching own venture,” said a source privy to the development.

While Keswani could not be reached for a comment, EIH Ltd spokesperson confirmed the development saying, “He (Rattan Keswani) is moving out of Oberoi Hotels & Resorts to start a new venture,” without sharing any further details.  “And we have not appointed anyone in his place as yet,” added the spokesperson when asked if the company has got a replacement in place.

Keswani began his association with the Oberoi group as a student of Oberoi School of Hotel Management (OSHM) – now Oberoi Centre for Learning & Development (OCLD) – in the year 1981. Except for a brief stint with Holiday Inn Worldwide in 1987-88, Keswani has been an ‘Oberoi’ man for his entire professional life thus far. Starting as an assistant front office manager at The Oberoi in Mumbai in 1983, Keswani has held various responsibilities (India and overseas) in the group before taking over the reins of Trident Hotels in April 2008 as president of the five-star business hotel chain.

For PRS ‘Bikki’ Oberoi promoted Oberoi Hotels & Resorts this will be the second high profile movement in the company in the last 12-odd months. Last year Liam Lambert stepped down from his position as president of Oberoi Hotels & Resorts after serving notice period in April 2011. In-charge of The Oberoi chain of luxury hotels, Lambert joined the Oberoi Group on May 01, 2009 after serving as director of operations, Europe, Middle East and Africa at Mandarin Oriental Hotel Group.

What is really surprising though is that even after almost a year since Lambert’s resignation, the EIH management has not appointed any one to take over his responsibilities at Oberoi Hotels & Resorts. Considering EIH spokesperson’s statement that no replacement has been identified as yet for the president’s post at Trident Hotels, this could be a possible indication of a shift in the Oberoi management’s approach to manning the two top positions in the company.

Deutsche Bank exits Lodha with 55% returns

This story first appeared in DNA Money edition on Friday, February 10, 2012.

Deutsche Bank has got a 55% return on its Rs1,640 crore placement in Lodha Developers, despite having invested at the peak of 2007-08. The lender got back Rs2,542 crore — including fresh debt of Rs825 crore and Rs1,720 crore from internal accruals — from Cowtown Land Development Ltd, a Lodha subsidiary.

Lodha, which has earlier provided exits to JP Morgan and HDFC Venture Fund from its other projects, currently has investments from the likes of ICICI Ventures and Old Lane, besides HDFC Venture Fund.

Earlier this year, private equity firm Kotak Realty Fund took the promoter buyback route to exit its stake in 3C Company’s information technology park project in Noida. The investment firm said it earned a return of less than 30% from this exit.

With most funds nearing expiry of their term and investments getting matured over the years, industry experts feel 2012 and 2013 will see a good number of transactions in the real estate space.

“When the fund expires, private equity (PE) firms have to return a significant amount of money to investors. Besides, demonstrating returns is very crucial if one is raising a new fund. Given the current market situation, deliberated and negotiated exits will be more in number as compared to natural exits, wherein the latter (natural exits) would see superior returns,” said Amit Bhagat, chief executive officer and managing director, ASK Property Investment Advisors.

Jones Lang LaSalle said in a report recently that 2012 will be a big year for real estate exits by private equity players. It sees PE exits worth $2.5-3 billion (around Rs15,840 crore) this year — that’s equivalent to the total quantum of PE exits in the last four years.

According to Shobhit Agarwal, joint managing director - capital markets, Jones Lang LaSalle India, multiple investments took place in the 2005-2008 period involving both domestic and foreign funds.

Thomas Cook will sell India arm lock, stock & barrel

This story first appeared in DNA Money edition on Thursday, February 9, 2012.

It’s official. Thomas Cook is exiting its Indian subsidiary.
After a series of denials over the last three weeks or so, travel and tour operator Thomas Cook (India) Ltd, or TCIL, has informed the Bombay Stock Exchange that its UK parent has finalised plans to sell its entire 77.1% stake in the entity.

The sale is part of a global restructuring exercise that will see Thomas Cook Group Plc close 200 of its 1,300 high-street stores.
The UK parent is launching a formal sale process for its stake, said the filing, adding that it has received a number of unsolicited, informal expressions of interest from third parties to acquire the stake.

The company stressed, however, that the sell-off will happen only if a compelling bid is received.

“If the offers are attractive, the company will consider selling the stake and use the proceeds to continue to strengthen the group’s balance sheet. TCIL is a strong business, operating in an attractive market. Both the business and the market are growing and Thomas Cook will only sell its stake if a compelling offer is received,” Sam Weihagen, group CEO of Thomas Cook, was quoted as saying.

However, the filing did not disclose either the profiles of potential buyers or the likely timeframe for concluding the deal.

The market, however, is rife with rumours of potential suitors including the likes of Cox & Kings and Travelex in addition to leading global private equity players KKR, Actis, Bain and Carlyle. DNA Money could not independently confirm the participation of any of these entities.

The UK parent reported a pre-tax loss of £151.7 million ($241.2 million) in the three months to December 31 compared with a loss of £99.3 million a year earlier even as revenues increased 3% to £1.86 billion mainly because the operating expenses climbed 10% to £482.1 million.

The group, which has been under financial stress for a while now, sold off its Spanish hotel chain Hotels Y Clubs De Vacaciones to Grupo Iberostar for 72.2 million euro last year.

A Sunday Times report had, on February 4, 2012, said that the UK parent has hired Credit Suisse Group AG to sell the foreign exchange business in India. The BSE filing did not mention any such detail.

TCIL management continued to remain silent on the entire development.

TCIL has presence in 70 Indian cities across 153 owned locations and has close to 65% revenues coming from the foreign exchange business. The company employs 2,700 people in India and has a network of 110 ‘Gold Circle Partners’ and 184 preferred sales agents in over 100 cities in the country. It also has operations in Mauritius and Sri Lanka.

High Street back with a vengeance

An edited version of this story first appeared in DNA Money edition on Wednesday, February 8, 2012.

India witnessed addition of over 15 million square feet (msf) of organised retail mall space across primary and secondary locations in the calendar year (CY) 2011. Interestingly, approximately 60% of the overall space i.e. more than 9 msf was added in the period between July-December (H2) 2011.

And according to a CB Richards Ellis (CBRE) report, more than 90% of the entire organised mall supply during the review period was led by cities like Mumbai, Pune, Bangalore and Chennai.  The CBRE study reviewed retail real estate developments in seven cities including NCR, Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata.

Anshuman Magazine, CMD, CBRE South Asia Pvt Ltd, said the increased retail activity across key cities is an indication of the growing confidence of both domestic and international retailers in the India growth story. “On the back of growing urbanisation and an increase in the acceptance of organised retail, retailers have been expanding their operations across the country. The government allowing 100% FDI in single brand retailing has been a welcome step, however the caveats put by the government like making it mandatory for retailers to source 30% of their requirements locally are a dampener,” he said.

Presenting a promising outlook based on considerable increase in retailer inquiries, the report further said that retail mall rentals witnessed growth in prime city micro markets. However, the rental were stable in suburban (supply laden) destinations in key cities like NCR, Mumbai and Bangalore. A few micro markets of Pune, Chennai and Hyderabad witnessed correction but only with select mall developments.

While CBRE expects a significant increase in the transaction activity and size as a result of anticipated incremental demand, the experts also envisage a possible downside owing to large, retail mall supply pipeline in most leading cities. ‘This might lead to a demand – supply mismatch which might eventually lead to long-term pressures on retail rents in select micro markets’, the report said.

In fact, pressure on retail mall rentals has started showing up in a select few categories already. The developer of the recently launched Phoenix Market City Kurla was faced with the challenge of leasing the multiplex space in the mall. Industry sources said that, while PVR Ltd was initially approached by the mall developer for the multiplex lease, the film exhibition company (PVR) turned it down citing higher lease rentals.

“Eventually, a deal was inked with Reliance BIG Cinemas. However the multiplex chain walked out of the deal at the time of taking delivery as it felt the lease rentals were on the higher side. The mall developer then re-approached PVR with a mutually workable lease rental rate. PVR is currently in the process of getting the multiplex ready for launch which is likely to happen within the next few quarters,” said the source familiar with the development.

The general feeling in the retail sector is that while re-negotiations haven’t started yet, the process is likely in the first quarter of financial year 2013 (Q1FY’13). “Retailers who have already negotiated rates will take stock of the market situation by the end of current fiscal. Given the current economic scenario with financial standing of real estate companies, it is very likely that retailers will discuss rentals which will lead to some correction in the market. Having said that, high street locations will continue to enjoy a premium,” said a top official from a leading Indian retail company.

Echoing the sentiments, Pankaj Ahuja, proprietor, Rapid Deals (a Mumbai-based real estate consultancy firm), said rate negotiations are not happening in the established malls operating in south central and western suburbs of Mumbai. “However, some of the new mall developments that are not fully operational are facing challenges with lease rental rates. I wouldn’t be surprised if some of them take to reducing the rentals per square feet in an attempt to fill the retail space,” he said.

The quality of retail real estate is another problem faced by the Indian retail industry. A recent report by the research and real estate intelligence service of Jones Lang LaSalle (JLL) India cited that while substantial mall space is being built, only half of it is worth a second glance from retailers.

Ashutosh Limaye, head - Research and Real Estate Intelligence Service, Jones Lang LaSalle India, said in the report , “The trend is not confined to Mumbai as almost all cities in India are witnessing it. We are still stuck with the mistakes we made three or four years ago - jumping on the bandwagon and creating too many malls without reason. Few understood that building and running malls is a science, and that factors like catchment viability, location, supply benchmarking and mall management matter in their success.”

JLL estimates that 2011 saw a retail real estate supply of 13.8 million square feet hit the market, with 10.7 million square feet getting absorbed – it amounts to 130% of the figures for the years 2009 and 2010 put together.

With delays in completion and few retail-conducive projects being launched, it is malls, malls everywhere and nowhere to go for retailers. “Retailers have finally decided that enough is enough and have started scouting for stand-alone properties. With their eyes on old mansions, mixed-use buildings and small office blocks in established as well as emerging locations, big-format retailers and giant chains are mandating property firms to broker these deals for them,” said Limaye.

So while high streets were never out of form, they are now back with a vengeance. Properties which, with retrofitting, can enable retailers to start selling in no time at all are fast becoming precious assets for big retail companies. Even constructing glass cubes on plots that house the 'building next door' is seen as preferable over having to wait for properly located and configured malls to come along.

“In the world of retail, stagnation is the same as dying and these retailers have no intention of slipping into a market-induced coma. Moreover, these stand-alone stores are the perfect way of giving shoppers a personalised experience that many shopper often find missing in malls,” said Limaye.

‘Credit Suisse will steer Thomas Cook foreign exchange business sale’

This story first appeared in DNA Money edition on Tuesday, February 7, 2012.

UK-headquarterd Thomas Cook Group has appointed Credit Suisse Group to sell off its foreign exchange business in India, according to a Sunday Times report. The paper didn’t divulge the source though.

The tour operator is learnt to be pushing ahead with divestments of its non-core assets to raise £200 million in an attempt to lighten its debt load and shore up the balance sheet. Repeated calls and an e-mail seeking clarifications to the management went unanswered.

All along, the company has been in a denial mode. In a statement last month, Madhavan Menon, MD, Thomas Cook (India) (TCIL), had said the UK parent has no plans to sell its stake in the Indian entity. Media reports had earlier indicated that the Indian unit’s founders — Thomas Cook UK and TCIM — have pledged their TCIL’s 77.1% stake in favour of Royal Bank of Scotland (RBS) and that RBS has been engaged to find a buyer for the Indian unit.

On speculation in the British media about the parent company selling its foreign exchange business, reports had earlier quoted Menon saying, “We do not have such plans.”

TCIL’s foreign exchange business mainly deals in small-value remittance with Thomas Cook Express and money transfers with Moneygram or Express Money.

In 2006, the travel company had acquired LKP Forex and has over the years expanded its operations to 72 cities from the earlier 17.
Forex operations contribute approximately 65% of TCIL’s revenue. The company currently enjoys a sizeable market share — close to 50% — in the business and is witnessing a growth of 9-10%.

Thomas Cook swung to an annual loss last year after a series of profit warnings and the resignation of chief executive Manny Fontenla-Novoa in August. The mass-market travel group has taken a big blow from the economic slump, as consumers increasingly turn to the Internet to book their own vacations.

Dish TV eyes biggest pie of digital switch

This story first appeared in DNA Money edition on Friday, February 3, 2012.

Dish TV India, the country’s top direct-to-home (DTH) player, is gearing up to garner the maximum share of subscribers who would migrate to digital from analogue cable television in the four metros before June, the deadline for the switchover.

Industry experts say about seven million homes are likely to make the switch (from analogue to digital cable) in Mumbai, Kolkata, Delhi and Chennai, thereby opening up a potential market of 10 million new subscribers (homes with multiple television sets) for DTH and cable TV operators.

Of the six DTH players in the country, Dish TV India, the biggest, is optimistic of garnering a giant’s share of the new subscribers.

RC Venkateish, CEO, Dish TV India, said since digital cable has considerable presence in the four metros, close to 60% of the new subscriber base will be tapped by the DTH players.

“We expect to get anything between 26% and 28% of the new subscriber base that will switch from analogue to digital,” he said.

The Dish TV management has been working on this by readying the infrastructure to meet the surge in demand and will be pursuing it aggressively through above-the-line (ATL) and below-the-line (BTL) ad spend in the coming months. A new promotional campaign featuring film actor Shah Rukh Khan is on air.

In another technological innovation in the DTH industry, Dish TV has introduced a new product that offers unlimited recording capacity.

Christened Dish truHD+, the high definition (HD) box is being offered at no extra cost and will be sold at the price of existing box.

Salil Kapoor, chief operating officer, Dish TV India, said the unique feature of this box is its compatibility with any universal serial bus (USB) flash drive or hard disk drive (HDD).

“The new HD box comes with a software upgrade that allows consumers to simply plug-n-play an existing USB stick or HDD and builds an entire library of their favourite programmes. While most DTH operators charge a premium for their digital video recorders (DVRs), our idea is to expand the DVR market by making it accessible at the price of a normal HD box,” he said.

Dish truHD+ has a dual advantage of all HD and DVR features and the price includes the new box, along with one month Dish truHD Royale Pack.

As part of the promotional offer, Dish TV will provide a four gigabyte USB flash drive free.