Tuesday, November 28, 2006

Walmart Enters India via Bharti Finally!

And yes, retail is one sector which will immensely benefit the customers, as more and more players come in. Some players will even die out under cutting each other, but the customers won't complain.

I hope it don't heat up the already heated up real estate market. Walmart, fo course, usually sets up shop out of town, but the competitors in a mad rush to compete will set up more shops in the not-so-out-of-towns.
In the news,
After months of waiting for a policy change that would allow foreign companies to enter multi-product retailing, Wal-Mart, a company with annual sales of $312 billion (Rs14,00,000 crore), threw in the towel and tied up with telecom bigwig Sunil Mittal for a 50:50 joint venture.

Wal-Mart would, ideally, have preferred to come to India on its own, but the current policy allows foreign companies entry only into single-brand retailing or wholesale trading.

The Bharti-Wal-Mart agreement, announced on Monday, will thus have Bharti running the shops and Wal-Mart managing the backend sourcing, supply logistics, and wholesale cash-and-carry businesses. But contrary to what people believe, the real power of Wal-Mart, the company that pioneered everyday-low-prices for shoppers to become the world’s biggest retailer, lies in its backend process.

Over the next few years, Wal-Mart will be making investments to the tune of $1 billion to make its presence felt across the length and breadth of the country. [more]

And yeah, its been a surprise that Bharti tioed up with Walmart.
Suni8l Mittal had once told that, now that Airtel is on an auto pilot mode, he is looking at more business opportunies. His Agri Business is also doing very well, what with his knack of tieing up with the best of the industry. Even in retail, I couldn't have expectd anything less than Walmart. Walmart will eventually want to run the show on its own, regulaters willing, and by that time Bharti would have learnt the ropes. After all who could have started a telecom empire from selling telephone sets.
Expect something different from Bharti.
Perhaps the biggest agri-products supplier to Walmart?
Logistics providers to all the Retailers?
Or with Indian Companies becoming overly acquisition happy, it would be good to see Bharti staging a bid for Walmart. Ah!! India will have arrived.

What is Ratan Tata Doing?

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Friday, November 24, 2006

Will Real Estate Bring Down India's Growth?

Just a thought...
No research. no home work.. Top of the mind as they say...
You don't even have to believe what I write :)
... at your peril !

When we were in Engineering college, and a senior got a job with HP (Hewlett Packard) for a princely sum of 25000 per month, which was more than my IITian cousin got at that time( it was ages ago), many of us refused to sit for the campus interview for the 13-15 K jobs. Some even declined after getting an offer, starting the mad rush for Bangalore. When this said gentleman bought a Fiero ( the TVS -SUZUKi Bike), it was rumoured that he bought a Cielo.

25000 could buy a lot of stuff, definitely not a Cielo, but 25000 could buy you alot of stuff then. It was not even too long ago. And 25000 could definitely have afforded you the emi for a House then. A good one at that. In bangalore. In 2003, Houses still were affordable. Another friend bought a pigeonhole for 800,000. He was paying a rent of 6000 per month, and the pigeon hole was what his rent when converted to an EMI bought him. A similar apartment in that area today goes for no less than 25 lakhs, when i last enquired. In Pune.

I doubt if someone with a 60K salary could afford a decent House today. That is Indian Real Estate Scene today!

End of the LIG:
With Land prices so high, I don't know if there ever will be the LIG housing schemes, tomorrow. LIG housing schemes or Lower Income group's Housing schemes were built so that the LOWER Income people could afford a house. The Houses came cheap because the house were built cheap, adjacent to land where there were Medium Income and Higher Income Group Housing complexes. The cost of housing was brought down by not providing luxurious Amenities', no frills as they say, but with a large portion of the cost of building houses going for the land acquisition, how will one bring down the cost of housing.

One way is Growing up. Skyscrappers!!! But there will master plans and policies before that!!!!!
What the hell is FSI?

FDI in Real Estate:
FDI in any other sector had more or less translated to benefits to the end consumer. Take the case of telecom, and more visibly Retail. If walmart came to India, there will be discounts galore. Prices won't shoot up.

Why, then have the prices of real Estate shot up with the opening up of FDI in the real Estate. The answer is quite simple I guess. Where as the Foreign Funds in all the other sectors were used to fight for a market share with reduced Prices, or in other words SELLING, the FDI in Real estate was being used in pushing up the costs. They were BUYING up lands, and lands are the scarciest resources. Supply and Demand mechanics.

Lots of money chasing the same piece of land. As a result the land prices shoot up. The same Builders are bidding for the new HIGH Priced (FDI Induced) land and they have to get the money some where (well everywhere) and the end consumers are the best choice. And prices have shot up unlike other sectors.

Same solution. Grow Upwards... prices should come down when there are more units of Apartments per square feet of the land.

Let me plug in a small personal opinion.
FDI is good, and moeny is always welcome but given a choice between Insurance and Real Estate, Insurance should have been the better Choice.
World over Infrastructure developments which takes a very long gestation period needs very long term funds and Pensions and Insurance are about the only source that could provide cheap funds for 20-30 years even more. Without good Infrastructure, there would be no roads to apraoch the Skyscrappers, no water to bathe the residents and no lights to pull the Lifts. And Chidambaram jee and Manmohan Singhjee Know this. Does Sonia and Yechuri ?

So it is not the NRIs buying up flats that have shot up the prices but the bulders buying up land. With Apartment prices skyroketting 100-200% in the last 2-3 years, the profit margin of property developers should have shot up, but the profit margins have remained flat.. Never mind the topline and the net worths.

The Investors are also fueling the Real estate Inflation in a way. We value the Real estate Stocks way too high, giving them money to bid higher and higher for land. That doesn't mean I won't apply for the IPO of Shobha Developers :) ..

Indian Real Estate should grow upwards for the prices to grow downwards.

Will Real Estate bring down India's growth?

Say what you, India's growth have been fueled by low cost. Skilled Low cost resources.

Exports of IT, ITES, Auto Components, textiles that are fueling the growth of the nation have all been because of Low cost. Salary in the IT and Financial services might have skyrocketted, but average salary of a skilled engineer at Bharat Forge and Bajaj Auto are still as low as that of an unskilled worker in medium developed countries ( This I read in an old swaminomics article today morning).. When your basic need of housing becomes unaffordable, you will join the next company that is giving you a better hike and the company will have to hire a replacement at a higher package than your previous salary because more often than not, your replacement will also come from a different company for a Hike.

And all resources being scare, this salary hike war will continue as is continuing, and the cost advantage of India won't be valid too much longer..

Why do I blame the real estate?

Well, but for movie tickets and petrol, I don't see any drastic price rises in any other thing than Housing. In fact, Mobile phones, Mobile phone calls, Food, Laptops, all have become all the more cheaper and when I see people cramped in 1 room houses but each with a laptop, I can clearly see where the real estate prices will bring us.

If only the real estate prices were rational!

Earlier, when I believed that the Inflation in real estate was due to bulk buying by NRIs, I thought the prices will come down eventually. But, then I saw that the Mills owners are not going to return the 100's and 1000's of crores back to the Developers, and those crores have to be recouped back :)

The prices will not come down as long as they building don't grow skywards.
For those who are waiting for prices to come down, it will be a real long wait.

>>Vote this on Indian Pad.

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Wednesday, November 22, 2006

Anil Ambani's Global Buyout Fund

While other Indian Companies are busy shopping in the Global M&A Bazaar, Anil Ambani is lining up a Multi-Billion Buyout Fund aimed at the global markets. He had tasted blood in the domestic market as an equity investor in many small firms. Now he wants to go after the Big fishes in the telecom sector. Anil Ambani is said to have putin $500 million of his personal wealth. Good going. More from ecotimes:

Anil Ambani plans to launch a global buyout fund of about $5 bn aimed at telecom and related sectors and is in talks with billionaire speculator George Soros, private equity giant Blackstone group and Singapore’s Temasek for participation. Mr Ambani has already contributed $500m of his personal money to the fund as anchor investor.

He has received commitments of up to $2.5 bn from several investors. Mr Soros, Blackstone and Temasek are likely to participate soon, people familiar with the developments said. The name of the fund has not been decided but it is likely to be headquartered in Singapore.

While Mr Ambani will be the fund’s main sponsor, the management team is likely to be separate. The money Mr Ambani has invested is his personal wealth, sources said. The fund will focus on buying companies in sectors like media, communications technology and software, IT-related services, BPOs, telecom or broadband services.

The mandate will be global and the fund will not operate in India. The objective is to take advantage of the vast opportunities in the global telecom and communications space. With a large corpus on which additional debt can be easily raised and with the backing of investors with deep pockets, the fund could look for big-ticket acquisitions in Asia and the Middle-East

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Tuesday, November 21, 2006

How to Deal with Nosy Neighbors?

The landlord have been extremely nice, and went all over to please me.
He even brought me his spare LPG cylinder and told me I don't need to apply for a new connection. I only need to phone him, and he is at the doorstep.

He asked for 8K for a roomy 2.5 room flat.
I said I can only pay 6.5 and he agreed.
Strange mate!!
I usually try to be good to others, but when others are acting good, my alarms bells start to ring.
Ah!!! There .... He did mention that I should ignore the neighbour, who was a little crazy!

Now she can't be that crazy!
She was doing it intentionally.
Second day at the house, and when I met her outside the door, she was quite rude.
OK, she was extremely ugly, but it was only my perception ( it is a different matter that your perceptions will match mine) and she tried to act her looks. To the sound!

She told me not to talk on the phone outside the house near the common gate. It disturbs her!
The scooters passing the narrow passageway next to her bedroom all day don't disturb her perhaps!
Then she started speaking foul about the landlord for keeping tenants.
She mumbled to herself or someone in her house( she was outside) or was she speaking to me?
She said that she had called the police because girls used to visit the previous tenant.
They also played Music!

I was a little pissed, but I find it hard to reply back to foul mouthed Ladies. I never could.
I talked to another neighbour, and she confirmed that she did called the police though the girls were the tenant's cousins, confirmed by parents!!!
She has done that quite a few times..

Third day into the house, she was quite nice. Maybe because I was quite, and don't disturb her. And my music is not loud. She came out as she heard me closing my door.
She smiled and me and I was shocked.
The, she told me, "You flush makes noise". Can you have it mended!

I told my real estate agent to get me a new house, where I don't have meddling neighbors .
I just paid the token money to a new house.
Much smaller, with 4 flights of stair and 500 more rent.
But more peaceful I hope!

How else would you have dealt with her?
I thought of waiting till she dials 100 and counter charge her of harrassment. That she was harassing not me, but the landlord so that he sells the house to her cheap! But I thought escape was the better route since I had the choice!

The landlord indeed said that he was sorry I had to go through the same.


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Thursday, November 16, 2006

onelook.com - on the tip of my tongue!

How many times have you come across such moments when the word is right on the tip of your tongue, but you can't quite form it.

Usually happens when you are writing slowly, thinking up sentences and phrases. Then and there, you know the perfect word to describe that thought. Only it gets stuck somewhere in a part of your brain, and you have to make do with a not so WOW word. It sure does gets your goat, not ebing able to remember the correct word at the right time..

You can describe it well though. Google wasn't much help either..

Here is help!
Have you heard of the reverse dictionary.
In onelook you type the phrase and you get the word! Howzatt..
No more words will ever get stuck on the tip of my tongue!!!

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Wednesday, November 15, 2006

Making Free Mobile Phone Calls !!

There was this post on watching google video over smart phones. Then Google's Eric Schmidt suggested that phone calls could be made free by inserting Ads, with phones now optimised for advertsiements (or is it the other way round). Ad sponsored free Phone is not a totally new concept, and the idea has yet to turn Profits.

But, It is true that this is one of that great Ideas Investors would love.
Laser Targetted Audience { at least 50% perfect, since the two people on phone need not be of the same target segment }, and phone carriers have all the details of a phone user unlike Email providers, and it has been debated that voice commercials are more effective than Visual- You can create a mountain of Ice-cream on TV, but you sure can describe it on radio.

Imagine a doctor making a phone call and he gets a voice over of comaxoflaxin as he waits for the call instead of those dial tones. With call charges already as low as 1 rupee per minute in India, advertisers would be willing to shell out so much for sucha targetted and measurable audience...

The link above also mentions voice commercials instead of dial tones. Now that would be effective, but imagine the plight of the callers. Would it turn off the customer instead?


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Tuesday, November 14, 2006

In the Lines of Fire

Vivek Pradhan was not a happy man. Even the plush comfort of the air-conditioned compartment of the Shatabdi express could not cool his frayed nerves. He was the Project Manager and still not entitled to air travel. It was not the prestige he sought, he had tried to reason with the admin person, it was the savings in time. As PM, he had so many things to do. He opened his case and took out the laptop, determined to put the time to some good use.
“Are you from the software industry sir," the man beside him was staring appreciatively at the laptop.
Vivek glanced briefly and mumbled in affirmation, handling the laptop now with exaggerated care and importance as if it were an expensive car.
"You people have brought so much advancement to the country sir. Today everything is getting computerized."
"Thanks," smiled Vivek, turning around to give the man a look.
He always found it difficult to resist appreciation. The man was young and stocky like a sportsman. He looked simple and strangely out of place in that little lap of luxury like a small town boy in a prep school. He probably was a railway sportsman making the most of his free traveling pass.
"You people always amaze me," the man continued, "You sit in an office and write something on a computer and it does so many big things outside."
Vivek smiled deprecatingly. Naivety demanded reasoning not anger. "It is not as simple as that my friend. It is not just a question of writing a few lines. There is a lot of process that goes behind it." For a moment, he was tempted to explain the entire Software Development Lifecycle but restrained himself to a single statement. "It is complex, very complex."
"It has to be. No wonder you people are so highly paid," came the reply.
This was not turning out as Vivek had thought. A hint of belligerence came into his so far affable, persuasive tone.
"Everyone just sees the money. No one sees the amount of hard work we have to put in.Indians have such a narrow concept of hard work. Just because we sit in an air-conditioned office does not mean our brows do not sweat. You exercise the muscle; we exercise the mind and believe me that is no less taxing."
He had the man where he wanted him and it was time to drive home the point.
"Let me give you an example. Take this train. The entire railway reservation system is computerized. You can book a train ticket between any two stations from any of the hundreds of computerized booking centres across the country. Thousands of transactions accessing a single database, at a time concurrency; data integrity, locking, data security. Do you understand
the complexity in designing and coding such a system?"
The man was stuck with amazement, like a child at a planetarium. This was something big and beyond his imagination. "You design and code such things."
"I used to," Vivek paused for effect, "But now I am the Project Manager,"
"Oh!" sighed the man, as if the storm had passed over, "so your life is easy now."
It was like being told the fire was better than the frying pan. The man had to be given a feel of the heat.
"Oh come on, does life ever get easy as you go up the ladder. Responsibility only brings more work. Design and coding! That is the easier part. Now I do not do it, but I am responsible for it and believe me, that is far more stressful. My job is to get the work done in time and with the highest quality. To tell you about the pressures, there is the customer
at one end always changing his requirements, the user wanting something else and your boss always expecting you to have finished it yesterday."
Vivek paused in his diatribe, his belligerence fading with self-realisation. What he had said, was not merely the outburst of a wronged man, it was the truth. And one need not get angry while defending the truth. "My friend," he concluded triumphantly, "you don't know what it is to be in the line of fire."
The man sat back in his chair, his eyes closed as if in realization. When he spoke after sometime, it was with a calm certainty that surprised Vivek.
"I know sir, I know what it is to be in the line of fire," He was staring blankly as if no passenger, no train existed, just a vast expanse of time.
"There were 30 of us when we were ordered to capture Point 4875 in the cover of the night. The enemy was firing from the top. There was no knowing where the next bullet was going to come from and for whom. In the morning when we finally hoisted the tricolour at the top only 4 of us were alive."
"You are a..."
"I am Subedar Sushant from the 13 J&K Rifles on duty at Peak 4875 in Kargil. They tell me I have completed my term and can opt for a land assignment. But tell me sir, can one give up duty just because it makes life easier. On the dawn of that capture, one of my colleagues lay injured in the snow, open to enemy fire while we were hiding behind a bunker. It was my job to go and fetch that soldier to safety.”
“But my captain refused me permission and went ahead himself. He said that the first pledge he had taken as a Gentleman Cadet was to put the safety and welfare of the nation foremost followed by the safety and welfare of the men he commanded.”
“His own personal safety came last, always and every time. He was killed as he shielded that soldier into the bunker. Every morning now, as I stand guard I can see him taking all those bullets, which were actually meant for me. I know sir, I know what it is to be in the line of fire."
Vivek looked at him in disbelief not sure of his reply. Abruptly he switched off the laptop. It seemed trivial, even insulting to edit a word document in the presence of a man for whom valour and duty was a daily part of life; a valour and sense of duty which he had so far attributed only to epical heroes.
The train slowed down as it pulled into the station and Subedar Sushant picked up his bags to alight.
"It was nice meeting you sir."
Vivek fumbled with the handshake. This hand had climbed mountains, pressed the trigger, and hoisted the tricolour. Suddenly as if by impulse,he stood at attention and his right hand went up in an impromptu salute. It was the least he felt he could do for the country.
PS: The incident he narrates during the capture of Peak 4875 is a true-life incident during the Kargil war. Capt. Batra sacrificed his life while trying to save one of the men he commanded, as victory was within sight. For this and his various other acts of bravery he was awarded the Param Vir Chakra the nation's highest military award.

This was forwarded on account of the 7th anniversary of the Kargil War.
Let us all remember the 700 Jawans who died so that we may sleep in peace.

PS: The mail stated that this article was found on a blog. The first reference of this article in a blog appeared in this blog, though it might not be the first result on Google. I reposted because it quite moved me.


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Watch Google Video On CellPhone

Did I mention 'only on smart phones'?

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