Tag Archives: India

Role of Board of Directors: Do you have competence and excellence at the top?

An Effective Board!
An Effective Board!

I was recently invited by one ‘Fitness company’ to advise them on how to cut the losses. One of the ways devised by them was to appoint franchisees so that they can have economies of scale for buying equipments and marketing expenses. Now that the company had decided to expand through franchisee route, the whole focus of the said company was to find people, though acquaintances or any other other means who would be their potential franchisees. I had no problems in this strategy, which perhaps was a good and viable option. However, I was my concern was they were missing an important piece when you are expanding your business. In my assessment, they needed to expand their bandwidth at the top and it was necessary to think about composition and functioning of the board. The kind of milestones the company intended to reach would be near to impossible to achieve without a proper board.

In India, the board is plugged mere for regulatory network, in case of private limited, the number of directors required is two and in public limited, the number should be seven. Most of the time, the board is comprised of friends or families, irrespective of their qualifications. Board doesn’t meet often, and whatever transactions it does, it mere does for regulatory considerations. In India, there is a dire need of sound board, but the importance of board is not at all valued in India, let alone talk of actual functioning of board.

The fundamental problem is that, overwhelming number of business people are ill educated about the need of Board. Management studies are bereft about the emphasis of what board potentially can deliver.

Board Room on a lighter note!
Board Room on a lighter note!

Few years back, most of the traditionally business house did underwent professional makeover but board remained untouched, somehow its importance has picked up.

Another misnomer about board is that people think only listed companies require it, whereas in my view the smaller companies need it more. It can provide direction, accountability and better guidance.

In this direction, I am glad that Omnizent labs is driving this educative as well as actually providing Directors for small companies. It will be a low cost exercise for small and medium companies.

For details about how to become a director or how to avail the services of director and make your board strong you may read this introduction page here and write to us at raj@bizvidya.com.

Author: Raju Moza has 14+ years of experience across various industries and domains like Telecom, Retail, Education, Electronic & Mobile Services, Travel & Hospitality and Manufacturing. He has been a turnaround leader with deep insights in understanding of diverse markets. He is regularly invited to speak at seminars and conferences. Besides the strong business pedigree, he is an ‘active writer’, has written some of the critically acclaimed pieces on diverse subjects namely Kashmir, Afghanistan, Political Islam, International Affairs, Political Economy and Short Stories. He recently shot a documentary as well.  He is an MBA in finance and has recently done a Venture Capital development program from ISB, Hyderabad, India.

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Where India Went Wrong?

Where India Went Wrong
Where India Went Wrong

Few days ago I woke up to the last quarter growth figures, which have plummeted to unexpected 4.7 % in last quarter ending December 2013. As I write, latest news alerts say India’s exports fall by 3.67% in February 2014.

I got a feeling that this was coming and perhaps it will be difficult for India to come back to the growth trajectory it witnessed in last two decades. Market analysts are busy attributing this down fall to fiscal Deficit, high inflation, policy paralysis, bank rate and myriad of other reasons.

However, my humble submission is that India never looked at its growth impediments holistically. India’s Honourable finance minister is of the view that factors which have contributed to slow down have bottomed out, I beg to differ with him. I am of the view that “Era of high growth” for India is over, only a monumental repair work can bring back it to high growth trajectory, which it witnessed in last two decades.

There are numerous reasons, why this has happened and all of them are plausible but I don’t blame this to pure economics or structural problem, albeit root cause of the problem is somewhere else. I have tried to narrow down it to following three reasons why India have missed a great opportunity:

  1. Growth taken for granted: The perception amongst the policy makers, business people as well state apparatus was that of confidence or even over-confidence, it depicted a sense where all was hunky-dory and that the momentum of growth will remain unabated. Perhaps the basis of this confidence stemmed the way India remain insulated, when 2008 sub-prime crisis hit the world. Another aspect is the way India story was constructed, basis some reports, it gave a false belief in India that high growth is fait accompli. In the bargain, it overlooked the inherent problems in infrastructure, bureaucracy and polity.

  1. Lack of commensurate reforms: Reform was a new word in our lexicon, but the commensurate reforms I am talking about is not typical what we hear like Insurance sector, aviation or retail policy reforms. The two sets of reform which were not commensurate to India’s growth aspirations were Administrative and Political reforms. The way India was administered three decades back, same set of procedures are in vogue. With such an archaic administrative blanket, still one had ambition to become super power defeats logic. As far as the political reforms is concerned,barring some reforms in Election process, overall India polity has worsened.

  1. Over Reliance of Great Indian ‘Jugaad’: Shortcuts, manipulations and a short term view was still the way of life in India. It did some global acquisition, some of its corporations are in fortune 500 list but that ambition of setting up a global empire was conspicuous by its absence. The overall enabling atmosphere encouraged holding a short term view then a long term Nation building Vision.

The history of this world has missed a great opportunity when several million people could have been extracted from poverty. India, as a global power, given its history as nation state, would have been a great balancing power. Its not the misfortune of India, that it missed an opportunity but of world, as it could have been a great contributor to the world progress, if India would have leveraged this opportunity.

Author: Raju Moza has 14+ years of experience across various industries and domains like Telecom, Retail, Education, Electronic & Mobile Services, Travel & Hospitality and Manufacturing. He has been a turnaround leader with deep insights in understanding of diverse markets. He is regularly invited to speak at seminars and conferences. Besides the strong business pedigree, he is an ‘active writer’, has written some of the critically acclaimed pieces on diverse subjects namely Kashmir, Afghanistan, Political Islam, International Affairs, Political Economy and Short Stories. He recently shot a documentary as well.  He is an MBA in finance and has recently done a Venture Capital development program from ISB, Hyderabad, India.

Franchise India – Entrepreneurship Summit 2009 – Specialty Retail

Franchise India 2009
Franchise India 2009

Thursday, November 26, 2009. Ashoka Hotel, New Delhi. Day 1 of Franchise India 2009 saw scores of enthusiastic entrepreneurs eagerly evaluating various franchise opportunities (300 brands) in India.

Billed as “Asia’s Biggest Franchise Show”, the event came alive in various sections – Brand License 2009, Entrepreneurship Summit ’09, Food & Beverage, Fashion franchising, Knowledge Series, Licensing and Retail.

What aroused our curiosity was the “Entrepreneurship Summit 2009” conference series. Some of the speakers at “Business Opportunities : Specialty Retail” session were:

  • Aloke Banerjee, CEO, Rosebys
  • Vivek Bali, Group President, Spice Hotspot
  • S.Ravikant, COO, Titan Eyewear
  • N.P. Singh, Director, Samsonite
  • Rajiv Agarwal, The Mobile Store
  • Naveen Rakhecha, CEO, Cartridge World

S. Ravikant, COO, Titan Eyewear  was representing Titan, India’s “Largest Specialty Retailer” with turnover of Rs. 3000 Crores. He talked about his franchise offer, “Multi-Brand” Eye+ Retail Stores, as “World Class Optical Stores”. What makes this an attractive opportunity is the fact that most consumers in this space are clueless about quality parameters, concerned about accuracy of lenses and confused about lack of transparency in pricing.

N.P. Singh, shared how Samsonite’s innovations (from 1910) have made it a global leader with 34% of global luggage market share. He presented his Rs. 25+ lakhs franchise opportunity (3 year payback) with a unique offering – “obsolescence replacement”.

A recurring theme was “World Class” – world class products, world class operations, world class systems, world class training, world class technology and so on.

Rajiv Agarwal showcased “The Mobile Store” as a world class shopping experience for the existing fragmented mobile market with a chaotic shopping experience.

Naveen Rakhecha, CEO, Cartridge World shared his gyan, “Look beyond traditional franchise opportunities (Education, F&B, etc). Go for distinguished offering. Unique ideas are likely to give better returns”.

NEXT BUSINESS CAPSULE: Opportunities in Food & Beverage segment.

India Global Summit on MSMEs

Shri. Dinsha J. Patel, Hon’ble Minister of MSMSE at www.nsicindia.com launch
Shri. Dinsha J. Patel, Hon’ble Minister of MSMSE at http://www.nsicindia.com launch

The India Global Summit on MSMEs gets underway on Friday, November 20, 2009 at Hotel The Lalit, Barakhamba Road, New Delhi.

Expect the discussions to revolve around “Building the next generation of MSMEs”, the theme for the summit.

Shri Dinesh Rai, Secretary, Ministry of MSME, is one of the speakers (he was present at the launch of B2B web portal http://www.nsicindia.com for MSME’s as shown in picture). Other speakers include:

  • Arun Maira: Member, Planning Commission
  • Pravir Kumar: Joint Secretary, Ministry of MSME
  • H P kumar: Chairman & MD, NSIC
  • Rakesh Rewari: Deputy MD,  SIDBI
  • Rana Hasan: Principal Economist, ADB
  • Rakesh Singh:  Head SMEs, Standard Chartered Bank

One of  goals of the summit is to explore & deliberate on opportunities for integration of MSMEs in the value chain. Sub-themes include:

  • Investing with Technology upgradation ICT adoption and R&D
  • Dealing with Economic Cycles:  How to adapt the changed economic cycles ?
  • Capital Requirement: What is the right mix of credit and risk capital?
  • Developing people power: Challenges and solutions

On,  Saturday, November 20, 2009, a Buyer Seller Meet has been scheduled between OEMs/ Large Corporations / PSUs and the Micro, Small and Medium Enterprises on one to one basis. Participating companies include:

  • Bechtel India
  • BHEL
  • IDBI Bank
  • International Tractor
  • Maruti Suzuki
  • New Holland Fiat (India)
  • Philips
  • Proctor & Gamble Innovation Centre
  • Standard Chartered

For Registration, Speaking & Sponsorship Opportunities, contact:

Pooja Jha
Direct Tel : +91-11-24653006
Tel: +91-11 – 24629994 –7 Ext 407
Fax : +91-11 – 24615693
Email: pooja.jha@cii.in

For Buyer –Seller Meet & MSME Mart, contact:

Suvendu Mahapatra
Direct Tel : +91-11-24653006
Tel: +91-11 – 24629994 –7 Extn : 409
Fax : +91-11 – 24615693
Email: suvendu.mahapatra@cii.in

If you happen to visit the summit, we would be glad to hear about your experience. Do Write in!

Oakley: Appetite for luxury products is huge in India

Bindu D. Menon (Businessline, The Hindu) reports that Versace, Oakley and Nike Golf are increasing area and product assortments to draw consumer interest in what they consider one of the biggest markets in Asia.

Quotable Quotes:

Mr Scott Bowers, Senior Vice-President (Global Marketing and Brand Development), Oakley Inc:

“India is one of the strongest markets in Asia and this is where we are looking to establish our product line.

Until now, we were cautious with expansion but now we will be making a lot of noise.

The appetite for luxury products is huge. We are exploring means to entrench ourselves here.

Mr Marc Duhm, Wholesale Director, Versace:

“The purchasing power in India is a major factor while considering expansion. We will keep looking at opportunities in markets where we feel they are growing.

The slowdown in our business is a temporary one and we will keep looking at opportunities to grow our business.”

Mr Abhay Gupta, Executive Director, The Blue Clothing Company:

Consumers are seeking high-end brands and purchasing power is back with a bang. We have had a good response to Versace.

Our next venture will be to launch high-end jewellery brands in India. However, easing of FDI norms will help the industry grow.

Premium brands enable value addition by helping to improve retailing experience and manpower training.”

Read the full article here.

ET: SMEs drive India’s growth to prosperity

Now that SMEs can raise funds through NSE/BSE, what more can be done to empower SMEs to drive India’s growth to prosperity?

According to ET Bureau, SEBI’s latest move “can be but one step
towards removing the panoply of constraints that they face on a daily basis.”

Some suggestions by ET Bureau:

  • Remove routine informational rigidities between SMEs and lenders and potential investors.
  • A more responsive policy mechanism to finance SMEs: what is necessary is an array of advisory and business development services focused on SMEs: the idea is to improve credit and business-performance information.
  • Innovative financial products to reduce credit risks for SMEs and boost investor comfort.
  • Address the problem of delayed payments and rationalise the tax regime for SMEs.

Finally we  enthusiastically agree with the assertion:

We need a thriving SME sector to boost entrepreneurship and risk-taking pan-India, and spur innovation and growth.

Read the full article here.

NOW, SMEs can raise funds through NSE/BSE

CB Bhave, SEBI Chairman
CB Bhave, SEBI Chairman

Now,  SME Business Owners in India can raise funds with their IPOs on NSE and BSE!

This is the latest message from the Securities and Exchange Board of India (SEBI), which announced its decisions through its Press Release “PR No.344/2009”.

NSE and BSE will now be allowed to set-up SME trading  platform, which would have lighter eligibility norms for companies initiating public offers:  Clause 49 still needs to be complied with, and SMEs can prepare and present financial results on a half-yearly basis (instead of the quarterly requirement).

Other exemptions include diluting the profitability track record requirement and Takeover Code regulations.

  • Minimum IPO application size: Rs. 1 lakh
  • Minimum trading lot: Rs. 1 lakh
  • Upper limit for paid up capital for listing on the SME exchange : Rs. 25 crore
  • Minimum paid up capital for listing on NSE/ BSE: Rs.10 crore

Read the complete Press Release here.

Further, it said companies listed on the SME platform would be exempted from the eligibility norms for initial and follow-on public offers. While norms related to Clause 49 of the listing agreement will have to be complied with, SMEs have been exempted from quarterly preparation and presentation of financial results to keep their compliance costs low. Instead, accounts will have to be prepared and presented on a half-yearly basis