Saturday, April 12, 2014

How Unique are Wonderla and its IPO? Interview with MD, Arun Chittilappilly

Seasonal Magazine interviews Wonderla Holidays's Co-founder and Managing Director Arun Chittilappilly on his plans to take the amusement park company public through its upcoming IPO:

It has been an year of eerie silence in India's primary markets after the highly successful Justdial IPO of last fiscal. The financial year passed on without any major IPOs. Was the jinx due to more regulatory tightening or lower promoter enthusiasm? The reason is more likely to be both. To be more precise, it must have been lower promoter enthusiasm due to more regulatory tightening!

But the Chittilappillys were unfazed. They kept on knocking at SEBI’s doors, complying with whatever a newly cautious regulator asked them to furnish. The result is the upcoming Rs. 190 crore Wonderla IPO, the first major IPO to get regulatory approval after Justdial and to thus become the first public offer in this new fiscal.

Chittilappillys’ home state of Kerala is infamous for entrepreneurship, but family head Kochouseph Chittilappilly is the man who changed all that perception. He is the founder of V-Guard Industries and co-founder of Wonderla Holidays. One of the largest income tax payers since his early days, Kochouseph has built up his businesses with a rare mix of accountability and growth appetite.

V-Guard went in for its IPO in 2008 and has been a 7X multibagger within the next six years. Can Wonderla better that track-record?

Whereas in V-Guard’s case, institutional enthusiasm had been low during the IPO time, the reverse should be expected in Wonderla’s case. Because, not only is the group now well-known in India’s capital markets due to V-Guard’s stock performance, but the market is likely to appreciate Wonderla’s much better profitability and Return on Equity.

Wonderla’s profitability after tax is 41% and its RoE is 27.57%, which are not ordinary figures. In fact, Wonderla’s Net Profit Margin is more than double that of Justdial, the last highly successful IPO. And while Justdial IPO demanded a hefty P/E valuation of 52-60 times, Wonderla IPO is coming at a reasonable pre-issue P/E of 13-15 times.

The only drawback is the capital intensive nature of the amusement parks business, but here too Wonderla fares better than competing parks with its unique cost-effective model, thanks to its capability in developing rides in-house, as against costly procurement from abroad.

Wonderla’s growth strategies too come across as contrarian, as they follow a multi-city / multi-park model for growth rather than the single-location / large-park model followed by almost all their competitors. The unique advantage from this approach is that apart from the steady growth in footfalls at existing parks, Wonderla can jumpstart growth to a much higher orbit whenever they commission a new park in a new city.

CRISIL has rated the Wonderla IPO at 4/5 indicating above average fundamentals. The IPO proceeds are for constructing their third park at Hyderabad which follows their first two parks at Kochi and Bangalore. The Wonderla Holidays IPO is open between April 21st to 23rd, and comes at a price band of Rs. 115 to Rs. 125.    

Seasonal Magazine interviews Co-founder and Managing Director Arun Chittilappilly in-depth regarding the upcoming Wonderla Holidays IPO:

Why did you choose the IPO route instead of private equity?

We could have gone the PE route any day, and we could have obtained better valuations too from PE funds. But then, such funds too would ask for an eventual exit route, and then we would be required to go for an IPO under such pressure. So, we thought that it would be better to go for an IPO now itself. Public Offer does have its advantages, like a wider shareholder base, better transparency, better visibility etc. which offsets the relatively lower valuations.

What took Wonderla so long in getting to its IPO date? Your initial papers were filed around 1 year back…

It was not only an issue with Wonderla IPO, as after the Justdial IPO last May, no major public issues have come out. I think the regulatory framework has been much more demanding than it was earlier. I can say this because I can compare it with the time V-Guard went in for its IPO. But I am of the view that the current framework is better for the investors and better for transparent companies like Wonderla.

Speaking about V-Guard IPO, it was aided more by retail investors than institutional investors. Do you foresee such issues for Wonderla IPO?

Not at all. That time we had to rely more on retail investors who knew about V-Guard, because being our first IPO, institutions didn’t know much about our background. But since then, institutional investors have tremendously warmed up to V-Guard, and the company has also performed well fundamentally as well as in the bourses. So, today, when Wonderla is going for its IPO, we are expecting just the reverse, and it has prompted us to reserve 50% of the issue for Qualified Institutional Buyers. The response from our recent road-shows and meetings in Mumbai also signal institutional enthusiasm.

What would be the TTM EPS of Wonderla and TTM P/E of the offer?

For the last financial year, i.e. ended March 13, Wonderla’s EPS was Rs. 7.97. This year, for the first three quarters, i.e. for the period ended December 31st, our EPS has been Rs. 7.38. We may close this full fiscal upwards of Rs. 8.5. Taking the EPS at the lower end of the guidance itself, the pre-issue P/E works out to only 14 to 15 times, at the top end of the IPO price band which is Rs. 125.

What would be the one-year forward P/E?

We plan to grow our bottomline at least at this fiscal’s YoY rate, or even better if possible. This is not an official guidance, but may be we can touch Rs. 9.4 or beyond, next fiscal. So the one-year pre-issue forward P/E now may be around 13 times only.

What has been the valuation criteria you considered? Was the comparison with the hospitality sector or with the entertainment sector like the multiplexes?

It may be the first time an amusement park business of our size is going for its IPO in India. Though we have a small hospitality business, comparison with that industry is not correct as there are too many differences like, their fixed inventory. Comparisons with multiplexes may be slightly better, but also not correct. Reality is that Wonderla doesn’t have any comparable peers in the listed space. We have noted it in our DRHP. 

When will the Hyderabad park get commissioned?

Our plan is to complete it by the next 20 to 22 months. Which means by the Q4 for FY’15-16, it should be operational.

Are there any unique specialities being planned for the Hyderabad park?

Being our latest park, the Hyderabad facility will have the next generation of rides. This will be the case, in both the rides we design and build ourselves, as well as in the rides we procure or import.

Speaking about your in-house ride development capability, where does it stand now?

It has come a long way. At the beginning, we were doing only the simple rides like the large merry-go-rounds. But my dad’s decision to implement such an in-house strategy from the very beginning has helped us tremendously. Because, our capabilities in ride development has improved over the years, and today we can design and build 3D and 4D rides of international standards.

Do you have the capability to do augmented reality rides in-house, like the ones you see in some Middle East malls and parks?

Yes, definitely we can do rides incorporating augmented reality.  

Are you confident of maintaining the growth in footfalls, revenue, and profit, even if the Hyderabad Park takes more time than anticipated?

As you know, growth for an amusement park company is two-fold. One is from commissioning of new parks and the other is from more footfalls and better profitability. Ever since our first park was commissioned at Kochi in 2000, we have grown the footfalls, revenue, and profits there. And ever since our second park was opened in Bangalore in 2005, that too has witnessed steady growth. In fact, due to the greater potential of Bangalore compared with Kochi, Wonderla Bangalore has been outpacing Kochi in growth rate, and this year it will surpass Wonderla Kochi in footfalls for the first time. So, even if there are no new parks, or even in the eventuality of a new park getting delayed, there is a steady growth in footfalls, revenue, and profitability.

Which brings us to the obvious question - what would be these growth rates without new parks?

Well, footfall growth would be around 5-7%. Revenue growth can be bigger as the non-ticket revenue too can be improved. Profit growth can, in fact, be double i.e. around 14-15% as we can grow the ticket rates too at 5-7% per annum.

What would be the ticket and non-ticket components of revenue, and how can it be improved?

Currently, our parks are registering 80% as ticket revenue and the remaining 20% as non-ticket income. The ratio was even more skewed earlier. But over the last few years, we have systematically beefed up non-ticket revenue, and it can get much better from here. Because, there are a lot of value-added services that we have started offering like fast-track, ride photography, resort rooms, merchandising etc.

Can you explain fast-track and ride photography?

Ride photography is a very promising area in this age of Facebook, Instagram, and social networking. Youngsters and families not only want to participate in hair-raising rides but to have their photographs on these rides instantly. So, we have tied up with Kodak and they are doing some sophisticated ride photography for our visitors. We even have underwater photography. The other one you asked about, Fast-track, is a facility by which, for a premium fee, you can have access to the park and rides without going through queues. In other words, you get preferential treatment like a VIP.

Comparing the land sizes of your earlier parks and the upcoming Hyderabad park, why is the land size significantly smaller?

There are two reasons, mainly. One is that though we have a larger land bank at Bangalore, we have not utilized more than 50% of it for the rides or facilities even after 9 years of commissioning and subsequent expansions. So, an excellent park can be built at half the land that we had acquired for Wonderla Bangalore. Secondly comes the land cost. There is no comparison between then and now. Whereas the Bangalore property cost us around Rs. 5 crore to acquire, the current land cost including land development and civil works is around Rs. 82 crore in Hyderabad. So, it doesn’t make sense to have as large a land in Hyderabad for a new park in 2014.

Are you planning to expand on your hotel rooms business?

We have resort rooms only in the Bangalore park. We are not planning to have any rooms in the beginning at the Hyderabad park. Rooms will work only in mature parks. So, we will see as we go forward in Hyderabad. Regarding Kochi, there is subdued demand for resort rooms as it is more nearer to the city and because there are already a couple of reasonable hotels there. Expansion in Bangalore rooms will be taken up as per the emerging demand. Currently we have 84 rooms, which are of 3-Star class, and it is more or less optimum for the current footfalls at Wonderla Bangalore. Expansion will be taken up judiciously as we incur around Rs. 50 lakh per resort room.

Where would be the next Wonderla park and the approximate time-frame?

Our next plan is for Chennai and we are planning towards completing parks within a shorter time-frame like 2 years.

Is Wonderla planning to get into any other entertainment business like, say, multiplexes?

No, we will be focusing on developing amusement parks alone, on a pan-India basis. But having said that, one area of interest that may emerge is, when our parks gradually get into city limits due to cities expanding. We may look at any possibilities like multiplexes or malls then.

Will the promoters ever have an entertainment park outside of the listed Wonderla?

No, there won’t be any such hanky-panky from this promoter family.

Have you beefed up the safety and security aspects of your parks in recent years?

Yes, those two are areas that we constantly work on. Regarding safety, the best thing that we have done is adopting the annual audit by TUV of Germany. They give us recommendations every year that we implement for bettering the safety standards. But even otherwise, the fact that we didn’t have any serious safety mishap in either of our parks, over these 14 years, speaks something about our diligence in ensuring safety. Whatever incidents we had so far were with regard to medical conditions like epilepsy, heart disease etc. Coming to security, we have done studies on this often, and what we find is that since amusement parks are far away from Central Business Districts, the potential for terrorism like activities is pretty low. But on that front too, we have been most diligent.

Why have you adopted this multi-city multi-park model as against the world standard of doing one large amusement park like say Disneyland, or Imagica here in India?

Disneyland works because Americans and international tourists who visit it can afford the hefty ticket rates. The same is not true for India. If you do only one park like Imagica here in India, you tend to do it large, and that inevitably raises the ticket rates beyond affordability. Finally, everything boils down to footfalls. You may be able to build the best park at one remote location, but if the footfalls don’t grow, how will it all work out? But having said that, parks like Imagica are good for the amusement parks industry. In our case, Wonderla’s combined footfalls can challenge something like Universal Studios, and it has been possible largely due to three reasons - quality of rides and service, multi location and affordability. That will continue.

As a business, how far is Wonderla different from the competition?

There are two major differences. Firstly, once upon a time, it was said that amusement park business has high entry barrier. It was mainly due to the expertise required. But today it is not fully true. If you are ready to invest, and procure from abroad, the Americans can come and fix the entire park and rides for you. But that would be at a high cost. Wonderla has not been set up that way. We have been extremely cost-conscious in every stage right from land purchase to in-house ride design to efficient but cost-effective management. That is one reason why Wonderla is worthy of investments. Our net profitability is above 41%. Our Return on Equity is still at an industry-leading 27.57%. When the Hyderabad park too is completed, we will be having three world-class parks within this company with an equity base of less than Rs. 50 crore. That is what makes this a high-quality business. Second difference is our growth appetite. Whereas the single park model can grow its footfalls and profitability only steadily, we can jumpstart all-round growth by opening new parks at new locations every 2-3 years. The Wonderla model has been proved very viable, and now the strategy is to replicate it at many locations, at a faster pace.

Monday, March 10, 2014

Apeejay Stya University - Pros and Cons During This Admission Season

Sushma Berlia, Chancellor, Apeejay Stya University
College admissions are just round the corner, and each university and college is trying to attract students for their varied courses. Of course, government universities and aided colleges don't have to do anything to attract students, but private universities have to battle it out among themselves, claiming their own advantages. Seasonal Magazine looks at one such private university - Apeejay Stya University, located near Sohna:

With 43 Central Universities, 16 IITs, 13 IIMs, 27 NITs, 130 Deemed Universities, and 311 State Universities as well as their thousands of affiliated colleges, already being in full-fledged operation for years, many newfound private universities found the initial going tough.

It was difficult to attract students away from the obvious advantages provided by established universities, institutes, and reputed colleges, like the high academic standards, industry acceptability, and of course state-subsidised education.

Adding to the competition was the fact that private universities were multiplying faster than rabbits. Within the two decades since the first private university was approved, around 173 private universities have cropped up across the nation.

Apeejay Stya University based at Sohna is also one such private university.

Most of the private universities were self-financing colleges magically getting transformed to private universities. With no scope for affiliating colleges, what was the logic behind allowing the transformational strategy no one knows, except that private universities enjoy more leeway in charging as they please.

Today, it is accepted that private universities are competing more among themselves and with self-financing colleges that are still unfortunate to remain so, rather than with IITs, IIMs, Central Universities, or State Universities.

As in any business, some among them like Amity, Lovely Professional, SRM etc have pulled far ahead of the rest of the pack due to better entrepreneurship, better marketing, better strategy, better money/muscle power, better political patronage, or better quality.

The rest of them have to work harder and more authentically to differentiate themselves and answer that difficult question from students - why we should choose your university?

Apeejay Stya University (ASU) has tried to answer that question very differently and innovatively than from all others. ASU wants you to choose it because it is ‘India’s 1st Liberal Arts & Meta University focused on Research & Technology’.

Sounds confusing? Well, it should be, as on a first read even the UGC Chairman would find it confusing.

To make things simpler, let us remove that ’focused on Research & Technology’ part. No student is going to believe that a newfound private university is already making great strides in research or technology.

But the rest of the USP is quite interesting, though neither ‘Liberal Arts’ nor ‘Meta University’ are understandable to the majority of students or parents, except perhaps those with an American exposure.

The ‘Liberal Arts’ approach signifies that even when one studies a professional degree, he or she is free to add some broad humanities or arts subjects as they wish, into the degree. It is a welcome move, something that broadens horizons, and makes candidates more appealing to some companies, especially in the West.

The ’Meta University’ concept is also attractive. In a nutshell it means that a student’s degree course can span more than one university, through a system of credit transfers.

But are these two projected USPs real game changers in the Indian context? Not likely at all.

So, why should one really choose ASU?

There are many reasons including the Apeejay Group’s strong standing in education, reasonably good infrastructure, excellent management, reasonable academic leadership etc.

And of course, all the stock reasons for choosing a private university equally applies for ASU too, like getting to study an in-demand branch in engineering despite poor ranks in a national entrance, and location advantages.

To explain, if you are residing in Sohna or Sohna-Palwal Road in NCR, and it is a private university you are looking for due to the above reasons, ASU is a preferred choice.

This is certainly not a private university with poor infrastructure or by a fly-by-night operator.

Friday, March 7, 2014

How Manappuram’s Current NCD is Different From the Last

Manappuram Finance Ltd’s ongoing Non Convertible Debenture (NCD) issue completed its third day today, and many investors are wondering what all features are different in this issue, compared with its last NCD issue during December-January.

On several parameters, both these NCD issues from the gold loan major are quite similar. For instance on parameters like issue size, green shoe option, face value, minimum investment, NCD rating, tenures, interest payout options, and even on the highest possible yield, both the NCD issues are exactly similar.

Like the last time, issue size remains Rs. 100 crore, green shoe option remains an additional Rs. 100 crore, NCD rating remains A+, face value remains Rs. 1000, minimum investment remains Rs. 10,000, tenures range from 400 days to 70 months, payout options include monthly, yearly, or cumulative, and the highest possible yield remains at 12.61% per annum itself.

So, for all those who missed the Manappuram NCD during December-January, this is another opportunity to invest. Seasonal Magazine had, back then, correctly predicted that the December-January issue may close before the tentative deadline, due to strong demand.

However, there are important differences too, not so much in these two NCD issues, but in the business environment for Manappuram. Soon after the NCD of Dec-Jan concluded, RBI gave a big boost to gold loan NBFCs like Manappuram when it allowed them a higher Loan-to-Value (LTV) of 75% from the earlier prevailing 60%.

Closely following and mirroring this development, rating agency CRISIL re-rated Manappuram Finance’s all banking facilities from Negative to Stable. Apart from more supportive RBI regulations, CRISIL in its report cited ongoing improvement in Manappuram’s business metrics, for the positive re-rating.

Even more recently, CRISIL Research has assigned a CRISIL IER Fundamental Grade of 3/5 to Manappuram Finance, with the grade indicating that the company's fundamentals are 'good' relative to other listed equity securities in India.

CRISL also assigned a Valuation Grade of 4/5 to Manappuram indicating that the market price has upside from the current levels, since CRISIL’s discovered fair value for the stock is Rs. 28. Manappuram closed today’s trade at Rs. 22.15 in NSE.

Manappuram has been one of India’s most notable wealth creators as well as wealth sharers, with its stock appreciating by 633 times between 2003 and 2010.

Top non-promoter or public shareholders in Manappuram Finance include some of the world’s most well-known funds like Hudson, Baring, Wellington, HSBC, Smallcap World Fund, Beaver, Sanlam, and BRIC II.

Anyway, with all the new developments, it is obvious that the current NCD comes at a time when Manappuram’s business prospects have improved significantly compared with the situation two months back.

Hence, for investors looking for even more safety, this is a better opportunity than during Dec-Jan. At the same time, Manappuram has maintained the maximum yield at 12.61%, which is higher than the rest of the current NCD offers, as well as one of the highest during this fiscal.

Since the maximum tenure is 70 months for the NCD, investors would be looking closely at Manappuram Finance’s long-term prospects.

Founder, Managing Director, & CEO VP Nandakumar is working overdrive to better the long-term prospects, by tackling the firm’s only drawback of being a non-diversified player.

While launching the NCD, Nandakumar disclosed that Manappuram has set its eyes on diversifying more into affordable housing finance, auto finance, and micro finance. His aim is to make 50% of the loan assets of the company come from these new segments by 2020, and the remaining 50% to be from the firm’s mainstay of lending against gold.

Manappuram currently has around 50 tonnes of gold in its lockers as loan assets.

Though this ex-banker as well as Manappuram’s Executive Director and Deputy CEO I Unnikrishnan are far away from retirement age, they are already grooming the next generation leaders at Manappuram.

The company’s board of directors is convening an EGM on 11th March to appoint Sooraj Nandan, a postgraduate in risk management from University of East London, as the Senior Vice President (Strategies). Sooraj Nandan is the son of VP Nandakumar, and also holds an Honours Degree in Business Studies and Diploma in Business Computing, both from UK universities.

Meanwhile, like last time, the current NCD too is likely to be oversubscribed before the closing date of March 25th, and if that happens the issue may be fore-closed.

The issue is rated by ICRA at A+ with a stable outlook. ICICI Securities is the lead manager for the NCD Issue.

Saturday, February 15, 2014

Why Kejriwal said, “People of the country will teach you a lesson”

It took only 49 days for the Establishment to destroy the anti-establishment. The headline was Jan Lokpal. But the fine-print was a specific corruption allegation.

Move aside 2G and Coal. India’s biggest scam has arrived. Or depending on your viewpoint, it can even be the biggest sham allegation.

Anyway, this scam or sham allegation, has been so huge in its impact that you found enemies becoming allies overnight. They had nothing in common, except that they were part of the Establishment. When the Establishment was threatened, they came together and removed the self-proclaimed anarchist.

The groundwork has been underway, ever since this mother-of-all-allegations was made by the anarchist.

In a case where FIRs were filed against two Congress ministers and a former Congress minister, the best defence came not from Congress, but from the most unlikely source.

“The Delhi government has no police powers. What thus is the function of the Anti Corruption Branch (ACB) of the Delhi Government? The ACB is part of the Vigilance Directorate of the Delhi Government. It is the function related to vigilance and not to the police powers."

He was not just claiming things out of thin air. He cited all the valid law points like these:

“Legislative and executive jurisdiction of Delhi is circumscribed by Article 239AA. Entries 1, 2 and 18 of the State List under the Seventh Schedule are not applicable to Delhi. Entry 1 deals with public order, entry 2 with police and entry 18 with land.”

And this was not just a career politician’s speak. The words are from the former Additional Solicitor General of VP Singh Government, the legal architect of Bofors allegations, the former Law Minister of Vajpayee Government, and a Senior Advocate of Supreme Court.

And don’t think Arun Jaitley stopped his defence of Veerappa Moily, Kapil Sibal, & Murli Deora, at that.

The veteran BJP leader, former Cabinet Minister, and Leader of Opposition in Rajya Sabha, went on:

“Ordinarily, when we perceive threats to federalism, it is suspected that encroachment of federal principles is by the Centre. The Centre, through its agencies, cannot usually investigate what happens in the states. It is only in extreme cases that it issues an advisory or, where there is breakdown of constitutional machinery, it can invoke powers under Articles 356."

Implying that just the reverse - or perhaps even worse than the reverse - has taken place, he continued his defence of the Congress trio:

"What happened in Delhi therefore merits a comment. Delhi is a Union Territory with a State Assembly.”

Got it? Delhi is not even a proper state. Just a Union Territory (read as property of the Union Government) which somehow happens to have a State Assembly. So, how can a mere tiny half-state attempt something unimaginable - entering Centre’s turf - that has never been attempted by even BJP’s biggies like Gujarat and Madhya Pradesh?

Then his masterpiece in the argument: “It is an attack on federalism.”

Imagine, Arun Jaitley of BJP defending powerful archrivals Sibal, Moily, & Deora of the all-powerful Congress and Central Government, against the onslaught of a Chief Minister of a minority government of a tiny half-state. That is what is called principle.

The principle that nobody is above money, and by its extension, nobody is above Mukesh Ambani when it comes to India.

That is what irked the sensibilities of Jaitley about an FIR that had no one from BJP, but only from Congress, plus the richest Indian on the globe. Maybe Jaitley was doing a pre-emptive strike against Kejriwal targeting Modi, who as a fellow-Gujarati and capitalist has been successfully weaning away Ambani from Congress.

Anyway, Kejriwal obviously doesn’t know as much about Jaitley, when it comes to federalism and the laws that govern it like Article 239AA, because he has never been a lawyer. Incidentally, that very disqualification may be Kejriwal’s biggest qualification, but that is another story altogether.

There are other rules too that Kejriwal doesn’t know anything about. Section 22(3) of the Government of NCT of Delhi Act 1991, and Rule 55 (1) of Transaction of Business Rules (TBR) of Government of National Capital Territory Rules 1993, are two other examples. Those were the ones cited by Lieutenant Governor in his letter to Speaker, for disallowing the tabling and discussion of Jan Lokpal Bill, which was regarded as a Financial Bill due to its financial implications on the Centre, without his prior sanction.

Jung is not a lawyer, but studied History for his BA and MA at St. Stephen’s, and took his MSc in Social Policy & Planning from London School of Economics. If this ex-IAS officer can master such fine law points, ex-IRS officer Kejriwal too should have followed suit. Instead, he kept on harping that there was nothing unconstitutional in either his Jan Lokpal Bill or in the way it was tabled. He even took legal advice from four legal luminaries, who admitted that such a position from the Centre, can be contested but only in a court. Kejriwal obviously disregarded that going-to-court part of that advice. 

Sure, as finally Kejriwal himself admitted in his farewell speech in the Delhi Assembly, they were freshers and they made mistakes. “When we came to this House we were newcomers. We thought we will learn from the seniors who are members of this House for so long. We admit we do not know the rules,” said the anti-corruption crusader before quitting as CM.

But such ignorance is limited to only Article 239AA or TBR, or such stuff. What about all the bigger rules that everyone in the establishment breaks day in and day out?

Just the day before his resignation, one MLA broke Kejriwal’s mike, tore some of his papers, and on the day of his resignation, a BJP MLA was seen grabbing and running away with Kejriwal’s papers, while he was out on an adjournment. Such behaviour may not have fancy names like Article XYZ or Section 000, but are even baser violations of democracy.

Or by what Article or Section name will one pin down the UPA-BJP-Ambani axis in the gas price scam? The issue is so complicated and divisive, with India standing to gain much and standing to lose much due to the price hike.

Only one thing is sure, which is that when there is big business like the Ambanis and the Establishment on the same side of an alleged scam, it calls for the most intricate of scrutiny. 

Even the TBR has been violated by Sheila Dikshit when she tabled 13 bills without LG’s consent, and BJP had no objection, claims Kejriwal. But who knows she and BJP might have finer law points in their support.

Aam Aadmi and their leader Arvind Kejriwal don’t know such finer law points.

The real answer is that Sheila and BJP are parts of the Establishment, which the common man and Kejriwal are not. 

However, the anarchist’s concluding remarks to the Establishment was telling.

"Remember, the people of the country will teach you a lesson. I pray to the Lord to bless us."

Tuesday, February 11, 2014

Can India Rebound Against New Zealand?

By Carl Jaison:

For the second test starting Friday, India’s chances against the Kiwis will depend upon how a handful of younger players will fare. So far, they have come across as too nervous, like lambs to be slaughtered.

Undue anticipation seldom rewards. The month-long tour to New Zealand was billed as a possible resurrection phase for Indian cricket following the heavy drubbing received at the hands of South Africa recently. However, there were only few positive signs going into this crucial series, one of which was the Virat Kohli phenomena.

The former U-19 skipper displayed exemplary temperament and astute game-sense during the challenging tour against South Africa, which unfortunately couldn’t even translate into a single victory. Also, the form of India’s newfound Dravid-in-the-making, Chetheswar Pujara, augured well for a team that lacked confidence ahead of a tough cricketing season.

Apart from these two promising youngsters, Indian skipper Mahendra Singh Dhoni was the only other one who made his mark despite some questionable tactical decisions. The rest of the team struggled to come to terms with the foreign conditions and were left to look like mere lambs that would soon face the axe.

But the selectors believed in sharpening their axes further more before the impending reality of mass-axing occurs (to provide an extended run to the young brigade) considering that the upcoming series would be against a lesser-fancied team like New Zealand. While the axes were put to rest for the time being, the lambs once again succumbed to an embarrassing ODI series loss that once again underlined their incapability of acclimatizing to the playing conditions in quick time.

The anticipation quickly transformed into desperation for winning at least a consolatory test series. The resurrection phase was already underway although with painful consequences. Taking into account the current state of affairs, even the possibility of a test-series loss looms large and eventually Indian cricket may indeed plunge into newer lows.

Shikhar Dhawan was out of touch for most part of the ODI series but regained his confidence by smashing a quick-fire century in the first test. Dhawan’s form will be important for a meaningful opening stand that has quite not happened in overseas test matches.

Murali Vijay appeared solid in technique while dealing with the pace bowlers and his role would be to play an able foil to Dhawan. However, Vijay is known for his aggressive game-play after he has settled down at the crease but has often fallen prey to rash strokes.

For some strange reason, Rohit Sharma has cut down on his stroke-play due to which he has consumed a lot of deliveries before getting off the mark. This in turn has put added pressure on the following batsmen who’ve been unable chase down huge totals. Rohit’s gritty knock in the first test will put him in good stead but his inability to play the long innings may expose the brittleness of the middle-order.

His short stature notwithstanding, the Ranji Trophy run-machine Rahane played beyond expectations to cement his spot in the squad but like some of his colleagues has squandered fruitful opportunities to score big.

The pace attack has been rejuvenated with the return of Zaheer Khan, who has made steady progress since his comeback test.

The biggest worry has been the sudden patchiness of Mohammad Shami who has leaked many runs with little returns. Ishant Sharma relishes bowling in such conditions with his towering height and hit-the-deck nature which has already earned him a five-wicket haul in the first innings though his early spell was as expensive as Shami.

Jadeja has transformed from a slow starter to a swashbuckling lower-order batsman always looking to score quick runs. It was evident even before the start of the series that the spinners would find it tough to adapt to unfavorable conditions but Jadeja hasn’t even been able to stem the flow of runs.

India should look to regain their lost momentum after having lost the first test. The bowlers did well to bundle them out for a low total but the batsmen need to show greater application if they are to stand a chance against a greatly improved Kiwi outfit.

Dhoni should retain the same team for the second test considering the spirited fight back while chasing down a 300+ target. The forms of Virat Kohli and Cheteshwara Pujara will be crucial for India to shed the image that continues to haunt them.

But will the lambs be up for it?

Wednesday, February 5, 2014

Amity University - What is the Future of This Model?

At over 1,00,000 students on its rolls, Amity arguably remains India’s largest private university. The speed with which this scale was set up reflects the potential in private university education.

Ironically, it also reflects what is not so fine in the sector. Pursuit of quantity above everything else is obviously raising concerns regarding quality as well as over-supply.

What differentiates the elite universities worldwide - from America's Ivy League to India's IITs - is the absolute rule of meritocracy. You have to earn a subject. Not everyone can study engineering, business, medicine, law, or social work. You need to have proven aptitude for a subject.

For example, like many private universities, Amity too is accommodating multiple test scores like CAT/MAT/GMAT for MBA admissions. It is doubtful whether this will ensure a level playing field.

Models like Amity are more popular because, practically, anyone can study any subject. You have to just pay for a subject. Aptitude is welcome, but not essential.

Even while everyone will welcome the democracy of this idea, it is not the way to develop and deliver respected professionals to the industry or community.

Amity’s issues in this respect are higher as it is more challenging to enforce uniform quality across its 20 different campuses across the country, rather than the one central campus most leading universities tend to have.

In recent months, Amity has been showing more bullishness on their overseas initiatives, like their new large campus in Dubai.

On the scholarships front, though Amity is offering significant programs at their Dubai Campus, it is unclear whether they have such a program in India, where it is needed more. A query sent to Amity in this regard, remained unanswered till the time of publishing this story.

Amity has recently pioneered an offshore campus in UK. But students pursuing degree from their UK offshore campus will be required to write Indian liicensing exams again if they need to work in India.

In their hitherto core Indian operations, even more profound is the danger of over-supply. It is one thing to sell a dream to a student. But quite another to land him or her an entry into the specialization that was sold.

Though every private university including Amity claims high level of placements, what is ironical is that 2012 and 2013, or for that matter 2014, haven’t been periods when recruiting was strong. Even the IITs found it difficult on the admissions and placements stage this academic year.

Does this lower-quality and over-supply of ‘talent’ offered by institutes like Amity combine to form a quicksand where the real victim will be India’s hitherto respected high-quality manpower standards?

If that is the eventual outcome of this national innovation, private universities like Amity would have created more problems than they had promised to solve, in this nation.

Monday, January 20, 2014

How Moyes and United Should Strike Back

By Pete Jaison:

To see United hovering around at the No. 7 spot is definitely not a common sight. 

Manchester United has been 19 times English Premier League champions. The most decorated and popular club all across the globe. One look at the EPL standings would leave any football fan wide-eyed.

When David Moyes received the reins of Manchester United football club from Sir Alex Ferguson (arguably the most celebrated manager in the history of football) little did he know that his freshman year at Old Trafford will turn out to be a horrendous nightmare.

Many experts and football analysts have openly expressed the concern that United seems to be losing their much coveted aura, to which Moyes, of course, has retorted strongly. The call for Moyes’ head is growing louder and louder with each dismal performance the Red Devils put up. It is high time David Moyes should sit down and start putting together the missing pieces.

What Moyes should realise is that he did not inherit a championship winning team from Ferguson. But what he did inherit was a team with a never-say-never attitude and immense grit. The United team doesn’t boast of gold plated names or flashy controversial players but it does consist of players who have been moulded over the years to suit the United kind of play.

Moyes must take up the uphill task of bringing back the glory days of United, and fans are hoping that it is only a matter of time before it happens. But the big question is how?

David Moyes must accept the few positives in the side and the many negatives. What Moyes has in Johnny Evans is an exceptional talent who is highly under-rated. The way Moyes plays him in the upcoming matches holds a major key for United.

However, the biggest trump card Moyes holds is the teen sensation, Adnan Januzaj who is rapidly making big strides in the football world.

United is also in dire need for some huge signings and Moyes reportedly received around a 150 million transfer budget which he should use in the smartest way possible. The last transfer for United (Marouane Fellaini) proved to be a flop as he couldn’t get himself acquainted to the United way of things.

The latest news is that Moyes is eyeing to sign Uruguay star, Cavani who can serve as an ideal replacement if Wayne Rooney doesn’t wish to renew his contract. David Moyes isn’t a newcomer in this scenario. He single-handedly led Everton through troubled waters and transformed the club into a potential title winner.

So there is no doubt that Moyes is capable and eventually United may overcome this lean period. Also, the United fans must be patient and give some more time for the new manager to sink in and cement his roots.

Only then will Moyes be completely equipped to lead United back to its lost glory days.

Thursday, January 9, 2014

Kochi Marine Drive - Will Recent Developments Revive Homebuyer Interest?

By Kerala standards, Kochi's Marine Drive is undoubtedly the state's most expensive location for apartments. But by Indian standards - especially if you compare with ocean-view locales like in Mumbai - this realty micro-market down south is not expensive at all. Adding to the equation is the international dimension, since many prospective buyers scouting for homes at Marine Drive are Non-Resident Keralites or Indians. On one side, land is getting scarcer at Marine Drive due to some recent administrative decisions, while on the other hand, several new development projects like a Tunnel Aquarium and Kochi Fast Ferry Service are coming up on Marine Drive. However, the million dollar question facing homebuyers today is whether an investment into a luxury home at Marine Drive today, would turn priceless 10 or 20 years from now like Mumbai's Malabar Hill, or fetch just normal returns. Seasonal Magazine investigates:  

One of South India’s most exclusive realty micro-market just got more exclusive. Because, the urban authority planning for the expansion of this waterfront locale is now planning to back off from the second phase development that would have created more land for development through reclamation. Yet, this location is arguably the largest beneficiary of several newly approved infra projects in Kochi, if not Kerala. The city in question is ranked 6th in the country by CII for Liveability. The micro-market in mention is unique in the country for being a seaside yet next to a central business district. Customers looking to buy homes here belong to what Nielsen ranks as the 7th most affluent city in the country, thanks also due to the large NRI population. With the scenario being such is it surprising that Kochi’s famed Marine Drive is in high-buzz during this NRI season of Kerala? But not all who wish for Marine Drive, and can afford it, are going to have an address here.

Authorities overseeing Kochi Marine Drive’s equitable growth are at loggerheads. On one side is Greater Cochin Development Authority (GCDA) which has been planning for long for the second-phase development of Marine Drive. According to GCDA, it is still a dream project with massive tourism potential. But not everyone is agreeing.

Kerala Coastal Zone Management Authority (KCZMA) is spearheading the movement to block GCDA’s move. As per KCZMA’s view, the second-phase development will involve massive reclamation of backwaters. But that is not a fool-proof argument, as even the first-phase development that widened Shanmugham Road and created Marine Drive from the waters, during the 80s, was through massive reclamation.

But times have changed, environmental concerns now eclipse every other concern, and at least for the time being, KCZMA appears to be winning. Their strategy of forcing GCDA to invest in a full-blown environmental impact study seems to be working. GCDA has recently expressed the stand that ‘wasting’ Rs. 4.5 crore for such a study alone, that too with an indefinite outcome, is not feasible. Though the final decision has not been taken, GCDA is clearly backing out.

While the authorities are fighting such, those who are smiling at the outcome include all those who have a current stake on the picturesque Marine Drive Walkway, which is really a 1.5 km stretch from Subash Chandra Bose Park in South to the first Goshree Bridge to Bolghatty Island, in the North. These stakeholders include malls, restaurants, offices, and, of course, luxury homes housed in the apartment complexes along the waterfront walkway.

Very few are blessed to live by the sea. For the rest of us, seashores are where we go as tourists, fill our hearts with breeze, and come back with nostalgia. Most seasides in India are also not fit for modern day living - except for perhaps some exorbitant Mumbai locales - as they will be far away from the nearest central business district (CBD). But what if a seacoast is just 1 km away from the CBD?

If you have even a little knowledge about real estate, we can see your enthusiasm turn to dismay. You are right; such a place won’t be available now, as upmarket customers including NRIs would have made a beeline for it already. Even a re-sale at such a location would command a fortune. That is how Mumbai’s sea-facing locales like Malabar Hill and the apartments there came to cost a bomb.

Because, there is no more land supply in such Mumbai seasides. High desirability coupled with low availability created this magic. Make no mistake, even Kochi’s Marine Drive has practically no more land. The timeless Arabian sea on one side, and the CBD at MG Road within a distance of 1 km have ensured it.

That is why the remaining few ultra-premium apartments  - if there are any left - make immense sense. They are practically the last chance to have a residential address at Marine Drive. The final call to live by the sea. NRIs, should take special note. Bangalore headquartered Puravankara Projects, for instance, has two projects here - the premium offering Purva GrandBay and the ultra-premium Purva Oceana which has a few more luxury units left.

In fact, due to the ongoing NRI season in Kerala, such projects are already witnessing many site visits by non-resident families. They are exposed to the world’s finest living in North America, Europe, Middle East, Far East, Australia and elsewhere, and it is such customers that readily appreciate the painstaking design, planning, and execution seen in such projects. When it comes to the matter of a new home, these non-resident Keralites don’t mind spending over the top to get what they want.

Site visits at such projects are also set to increase thanks to the numerous high-profile events being planned at Marine Drive for this tourist season. Prime among them is the  India International Aqua Show, organised by the State Government, once every two years. The latest Aqua Show will be inaugurated at Marine Drive on January 24, 2014, and will last for five days. This year’s theme is ornamental fishes, which is a buzzing hobby among the upmarket crowd.

Incidentally, don’t ever think Marine Drive is going to be an out-of-focus issue for either GCDA or Kerala Government, even if the second-phase expansion plan is dropped due to environmental concerns. In fact, Marine Drive is the one Kochi location that is going to be maximally benefited by some of the new Kochi projects proposed recently.

First among them is the Tunnel Marine Aquarium and Entertainment Park project that was recently approved. Coming up on Marine Drive near the first Goshree Bridge to Bolghatty Island, the Rs. 80 crore project will span 1.30 acres of GCDA land and will be a seven-storey air-conditioned complex. Being planned on a PPP model, the project aims to replicate the highly popular tourist attraction of a Tunnel Aquarium found at destinations like Singapore and Malaysia. Apart from the tunnel marine aquarium, the Complex will have a skywalk, research and seminar centre, 7D theatre, underwater restaurant, children's play area, snack bar and fish sale counter. The tunnel marine aquarium will consist of a 30-metre-long acrylic walkthrough tunnel, which will have an automatic travelator with a 180-degree view of an ocean habitat with about 1,000 varieties of fish. The project is expected to be fast-tracked as there was no need for environmental clearance for the project, thanks to the location not falling under the Coastal Regulation Zone (CRZ) Act. However, separate permission required for bringing in marine species such as piranha, seahorse and penguins, will be sought for in the second phase of the project. The skywalk on the sixth floor will connect one end of the plot to the other, and will depict the cultural heritage of the state.

The second most important project is perhaps a new Coastal Road connecting Vallarpadam Container Terminal Road with Pachalam Road via Vaduthala. Cochin Port Trust too is interested in this project as it can be used to decongest the Container Road. As such, it is likely to be included in the development plan of Cochin Port, thus speeding up processes like environment clearance and funding. GCDA is also looking to rope in support of the residents along the way, who will be benefited the maximum by this new road.

Another project directly benefiting Marine Drive is the newly proposed Kochi Fast Ferry Service. The new service will also connect both ends of the Marine Drive Walkway, through water. The project is being jointly promoted by Kerala State Inland Navigation Corporation (KSINC), and GCDA, with the feasibility study done by Cochin University. The buildings to be constructed along with this project will have various facilities, including passenger/tourist amenities, ticket counters, jetty office, maintenance office etc. The new jetty has been designed in such a way that it can accommodate bigger vessels.

Every agency is in fact doing its part to leverage the natural strengths of Marine Drive. Kochi’s District Tourism Promotion Council (DTPC) is in fact all set to mount a befitting challenge to more established backwater tourist routes like Alappuzha and Kumarakom in neighbouring districts. The new service by Kochi DTPC will start from the Cruise Terminal at Marine Drive, and will go to the islands located far off from Kochi like Thanthonnithuruthu, Pizhala, and Moolampilly, and conclude at Chathanad. The tourists would also be given the opportunity to conduct brief visits into the islands during these stopovers. The new route will give a firsthand exposure to traditional cultivation of ‘Pokkali’ rice and prawns, as well as the working of intricate Chinese fishing nets.

The tall luxury residential projects of Marine Drive has also an added attraction on the other side. If one side is the enchanting sea, the other side is equally or perhaps more beautiful, due to the one and only Mangalavanam Bird Sanctuary, an ecologically sensitive and protected area. Basically a dense mangrove, Mangalavanam is noted for its large migratory bird population with an extensive survey identifying 194 birds belonging to 72 species. The virgin vegetation of Mangalavanam has attracted the sobriquet, the ‘Green Lung of Kochi‘.

Can Marine Drive projects be good investments too? The dramatic way in which rupee has depreciated during the last couple of years is also helping NRIs to consider premium offerings on Marine Drive with renewed interest. For instance, ever since many of such projects were launched, rupee has depreciated against the dollar and dollar-pegged currencies like UAE Dirham, by more than 33%. The position of rupee against other major currencies like British Pound and Euro has been equally or even more advantageous for NRIs working in Europe or United Kingdom.

While that is about the quality and cost sides, NRIs who are accustomed to the big-city way of living, equally appreciate the proximity of such projects to Kochi’s CBD.

Because, the locations of such projects are second to none. Marine Drive has basically two segments divided in almost equal halves by the prominent junction with Banerjee Road. On one side is Marine Drive’s high street where there are not much new residential projects. And on the other side is the newer segment, where almost all national level developers including Puravankara, Prestige, Tata, & DLF have created their mega projects.

Completed projects command a premium here, like anywhere else. For example, Purva Oceana is one fully completed project that is ready for move-in. Seeing is believing. Touching is believing. And no debates, there is nothing like a finished product in today’s tough realty market.

While Purva Oceana spans 1.24 acres to house 95 ultra-premium apartments, Purva GrandBay occupies 2.65 acres to accommodate 265 premium apartments. Oceana excels in extraordinary spaciousness, with all homes being 3-BHKs ranging from 2466 sq ft to 3417 sq ft. Roominess extends through the large French windows to the king-sized balconies, which open up to the limitless Arabian Sea, with yachts sailing past from the world over, and a breathtaking view of the Bolghatty Island & Palace. It is a far cry from local developers who cram in 2-BHKs into 1100 sq ft and 3-BHKs into 1300 sq ft and call it super-luxury apartments.

Outstanding amenities at Oceana include an exquisite terrace pool with a stunning view of the sunset, the exquisite marble and granite lobby with high ceiling reminiscent of star hotels, and a generous landscaped garden complete with a jogging track, despite land being at a premium at Marine Drive. No wonder then that Purva Oceana is reportedly a hot-selling product among corporate world’s who-is-who as well as high-profile celebrities. When contacted, however, Purva officials declined to disclose the identity of these celebrity buyers citing their need for privacy.

Purva GrandBay, on the other hand, achieves a fine balance between efficiency and spaciousness. Home sizes at GrandBay range from 1885 sq ft to 1937 sq ft - but still significantly larger than most offerings from local developers. Also, all units in GrandBay too are 3-BHKs, thus not compromising on convenience. GrandBay too features most of the luxury amenities found at Oceana, including a premium swimming pool and a magnificent entrance lobby that is well-lit with a high ceiling and marble floors.

Luxury projects here can appreciate like anything, not just due to land scarcity, but thanks to many recent strategic developments.

How about a new railway station within less than one km? Marine Drive will soon have that. What if it is a metro station? That is what Kochi Metro’s planned station for MG Road at Madhava Pharmacy Junction is going to achieve for Marine Drive and its residential projects. Imagine a state-of-the-art metro station within walking distance! It is no utopia as the project is headed by Metro Man E Sreedharan and scheduled to be commissioned by 2016, less than three years from now.

There is also no dearth of malls near such projects. While earlier the nearest retail destinations were Broadway, Bay Pride Mall, Penta Menaka, and GCDA Complex, with the recent opening of Centre Square Kochi by retail giant Future Group at MG Road‘s nearer end, shopping alternatives are getting too many. Lulu Mall, the biggest of them all, is also not far, and access to Lulu is going to get lightning fast from Marine Drive when Metro is going to be commissioned.

Kochi’s Broadway - which is in reality one of its narrowest ways! - is the place to be if you don’t mind getting your hands and feet dirty in lieu of some great deals. This traditional mega market of Kochi is very near to Marine Drive, and is visited alike by the rich and the middleclass not only for its economy but for its collection of numerous speciality stores from where you can get everything - exotic dry fruits from Middle East to latest gadgets from China. If in doubt, visit Broadway during this Christmas season during evening, and it is sure to blow away one’s mind due to electrifying shopping buzz.

But even Broadway is gearing up to shed its old world systems and embrace the modern, like Marine Drive has done. A recently approved Rs. 25 crore project would revamp the historic trading area and landscaping of Broadway.

Marine Drive excels in not only access to shopping destinations, but in access to educational institutions like St. Theresa’s College, Government Law College, Chinmaya School, Maharajah’s College, as well as several reputed professional colleges, premium schools etc.

Access to other distant areas of Ernakulam District as well as to even neighbouring districts like Thrissur, Kottayam, Alappuzha & Idukki, is easy due to the new expressway connecting Vallarpadam to Edappally, which makes both NH 17 and NH 47 less bothersome to reach. Cochin International Airport is also easily accessible from Marine Drive.

Demand for premium housing at Kochi is also steadily on the rise due to various reasons. India’s only International Container Transshipment Terminal has come up at Vallarpadam, easily accessible from Marine Drive through the Goshree Bridges, and even visible with naked eyes from projects like Purva Oceana. Built and managed by Dubai Ports World (DP World), only the first phase of the Rs. 3200 crore project is now over, and it has already caused a spike in demand for premium housing. Petronet LNG’s second terminal in India has also been commissioned in Kochi recently.

Incidentally, Vallarpadam Island, which is also quite near to Marine Drive, is traditionally famous for the Basilica of Our Lady of Ransom (Mary, Mother of Jesus), which has been designated a Major Pilgrim Centre by Indian Government and a National Pilgrimage Centre by Roman Catholic Church, attracting thousands of devotees and tourists every week.

Another major project that is coming up at Kochi is Smart City, a mega IT Park, by an arm of the Dubai administration, and is sure to add to quality housing demand. Already, there is a growth in IT professionals in the city due to the high growth at the state-promoted Info Park. New wide roads connect Marine Drive to Info Park and the upcoming Smart City.

Marine Drive has also appealed to buyers native to other parts of India, as well as NRIs, due to Kochi’s heady mix of traditional as well as modern strengths. Buyers from outside Kerala include those who have fallen in love with Kochi’s natural beauty as well as investors looking for a second or third home elsewhere in the country.

For such customers, this city becomes a natural alternative, as Confederation of Indian Industry (CII) has ranked Kochi at the 6th position in India for Liveability, while Nielsen has ranked it as the 7th most affluent city in the country.

Despite being a bustling city, Kochi holds enough natural charms to rival any destination in India. The geography is that unique.

Kochi is made up of the mainland, islands, backwaters, lagoons, seasides, and what not. Beaches like Cherai & Fort Kochi; islands like Willingdon, Bolghatty, Vallarpadam, & Vypeen; mega infrastructures like International Transshipment Terminal, Cochin Port, Cochin Shipyard; and heritage locations like Mattancherry and Tripunithura Hill Palace, are all destinations unto themselves. Even the famed hill station of Munnar is quite near, less than 130 km away, and a new planned road will cut even this distance by a third. 

Kochi has a generous coastline of 48 km, and is virtually at the sea level. The metropolitan limits of Kochi include a scattering of islands on the Vembanad Lake, ranging from tiny 250 acre islands to modest 1500 acre ones.

Water bodies are the principal tourist attraction of Kochi, and the mesmerising sea-lake confluence can be explored from premium projects like Purva Oceana and Purva Grand Bay. Because, these two are projects that have benefited the most from the recent expansion of Marine Drive Walkway towards the north side from High Court Boat Jetty to the Goshree Bridge to Bolghatty Island. In fact, the uniquely beautiful Kettuvallam Palam (Houseboat Bridge) is adjacent to Oceana.

But time and space are definitely running out for owning such oceanfront homes.

Wednesday, January 8, 2014

What is Arvind Kejriwal’s Real Agenda?

Ideas keep flowing from Kejriwal. His latest idea is to turn abandoned buses in Delhi to night shelters for the city’s homeless, by providing them with blankets and other basic amenities. He has announced that a software for battling corruption is ready, and has called an unprecedented meeting of judges to drive home the message that delivery of justice needs to be hastened at any cost. Mass transfer of officials has been another strategy to bring in good governance. Keeping up with the message on his and his followers caps’ - “Mein Aam Aadmi Hoon” (I am a Common Man) - he has also refused to move in to a 5-bedroom duplex apartment he has been allotted as the CM of Delhi. And so far, he has kept his word on all electoral promises including difficult ones like free water and subsidized electricity. At the same time, he has announced that he won't be contesting the upcoming Lok Sabha polls. So, what is his real agenda?

But before that, how did this 45-year old diminutive aam aadmi upset the entire calculations of the established political class to become the CM of Delhi? In his tasteless and over-sized shirts as well as his ordinary glasses, this common man wouldn’t have attracted a second look from most in a city like New Delhi. So, it was obviously on the promise of rooting out corruption and implementing good governance that he succeeded. But to think that that is all there to Arvind Kejriwal would be a major mistake.

What is Kejriwal’s real message? Is it rooting out corruption? Not really. Is it about better accountability? Again, not really. Is it about extending RTI? Nope. Is it the freebies like free water and subsidized electricity? They were just popular strategies. Is his message Jan Lokpal? No, not even that.

To an extent, even the selection of a broom as his Aam Aadmi Party's (AAP) electoral symbol has been misleading. That put too much emphasis on cleaning up, or anti-corruption ideas, even though it helped them a lot in getting votes.

To understand the man’s ambition, one should read ‘Swaraj’, probably the only book he has ever authored. Despite being published in 2012 - during the height of the Jan Lokpal movement that Anna Hazare and he spearheaded - Lokpal is not even 1% of the book.

Swaraj is not a dense read. In fact, if there is one small book that every Indian should read in 2014, it is this book by Kejriwal. In his characteristic style, he doesn’t collect any royalties from the book, and the short work is even available on the web as a free download.

But a word of caution. It is not an interesting read like ‘India 2020’ by Dr. Kalam or ’Imagining India’ by Nandan Nilekani. Those are denser, more passionate works, and they served their purpose too; it is often thought that both these works were instrumental in making the ruling class - read BJP & Congress - appreciate the passion and innovative ideas that Dr. Kalam and Nilekani had for a prosperous India. It is noteworthy that these books preceded both of them being bestowed with high responsibilities - Dr. Kalam as President and Nilekani as Chairman of UIDAI/Aadhar.

Swaraj is of an entirely different genre. Shabbily edited - at least the English version is - the seemingly unglamorous work by Kejriwal doesn’t tout any magical ideas for a Superpower India like Dr. Kalam or Nilekani proposes. The current Delhi CM doesn’t even mine any ideas from his IIT/IRS backgrounds to impress the aam aadmi, unlike Kalam and Nilekani who uses ideas from their uniquely rich professional experiences.

Yet even while being so inferior, Swaraj is the book to be read by every Indian for a simple reason - it challenges the status quo like no other. While thinkers like Kalam and Nilekani starts from the premise that India is now fairing ok, and then goes on to explain how India could be made much better, Kejriwal starts from the position that India is absolutely not ok now. “Is This Democracy?”, Kejriwal asks in the book after demonstrating that it is not. He goes on to call India’s democracy as nothing but a deception.

In other words, Swaraj is not about business-as-usual. It is a bold attempt to turn the political system upside down, and the beauty is that when Kejriwal explains it in his simple style, we realize that it is very much possible. Not in 2020 or 30, but right now, if we all could take a stand.

Rooting out corruption, and bringing in accountability, good governance, Jan Lokpal etc all find mention in Swaraj, but the central premise of Swaraj is, well, as the title suggests, Swaraj or Self-Governance.

Kejriwal proposes a revolutionary way to turn the current administrative system - of Centre-to-States-to-Panchayats - upside down. In the new regime, power will flow from the Panchayats to the States to the Centre!

Yet, the beauty of it is that such a revolution wouldn’t need even one constitutional amendment. In other words, the Indian Constitution already accommodates for this kind of governance. To be precise, the Constitution’s 73rd Amendment Act that came into force in 1993 had formally institutionalized Panchayati Raj or democratic decentralization of power. Though the Balwant Rai Mehta Committee’s recommendation regarding the same had been approved in 1958 itself, it took Rajiv Gandhi to evangelize it again, and sadly it took Congress his death to approve it finally in 1992-93.

Incidentally, Rajiv Gandhi is the only past or present politician Arvind Kejriwal is willing to acknowledge as someone who fought for decentralization of power, post-Independence.

But even after 1993, the political class - be it Congress or BJP or both of their powerful allies - have succeeded in relegating Panchayati Raj to where it always has been since Independence - at the last rung of governance, toothless and spineless.

This is what Arvind Kejriwal wants to change. In fact, this is his biggest ambition, the seminal idea of his book Swaraj, as well as his life. One can only marvel when Kejriwal explains how each and every problem facing this nation - from corruption to poverty to education to healthcare to land acquisition to governance to natural resource allocation to economic development - can be addressed in a revolutionary way through a decentralized democracy.

His is not an armchair theory, but grounded in his activist work, of travelling across India and meeting with a wide variety of people and systems at the grassroots level. In that respect, his work has that feel for the whole of India, much like Nehru’s ‘The Discovery of India’.

Kejriwal has no kind words for the rot he identifies everywhere, spare for the green shoots of hope he cites in Kerala, Madhya Pradesh, & Delhi. He also proves that democratic decentralization is very much possible citing examples from Brazil, USA, & Switzerland.

His revolution is as grassroots as grassroots can be. He even wants to turn the current 3-level Panchayati Raj upside down. Currently it is District Panchayat to Block Panchayat to Village Panchayat, with District Panchayat calling most of the shots. In Kejriwal’s model of Swaraj, he wants the Village Panchayat or Gram Sabha to control everything local, and even contribute to everything at the district, state, & central level.

Kejriwal proposes that Gram Sabhas hold frequent public meetings where everything local can be debated by all villagers and consensus arrived at. The majority of the funds should be directly allocated to Gram Sabhas with no riders, and before making any payment to the contractors, it should have the Gram Sabha’s majority approval. Swaraj aims at controlling the powers of Sarpanch, BDO, and the Collector. By that move, independence from State and Central administrations can be arrived at.

Swaraj is indeed built upon the powerful idea that people knows what is best for them, instead of the status quo idea that those whom people elects - once in 5 years - knows the best.

Swaraj even proposes a powerful mechanism for the cities, where the 3-level Panchayati Raj is not available. Kejriwal proposes that the Residents Welfare Associations (RWA) which are highly active in Delhi and other large cities be given legal status equivalent to Gram Sabhas, and that RWAs should be encouraged in each and every city.

In this context, even AAP's electoral symbol of broom gets rich significance. It is not only the broom of anti-corruption, but the broom of responsibility that all common people should wield to achieve self-governance or swaraj.

Swaraj is not entirely original. It is obviously inspired from Mahatma’s passionate idea of Gram Swaraj or Village Self-Governance that he proposed as the ideal foundation of India’s political system. But as Kejriwal argues, the concept is even more old.

Here is he writing passionately on this history in Swaraj:

“Lord Metcalf, the Governor General of India, wrote in 1830 that the foundation of this country is its Village Sabhas. The people of village meet at a common point and take joint decisions. In 1860 the British brought in a law that destroyed the Village Sabhas because they had understood that until this foundation is destabilized, they cannot rule India effectively. A law was enacted to bring in the Collector Raj. All rights that the people had or the Vllage Sabhas had, were snatched from them and given to the British Collectors. All areas of life and living were now controlled by British through one or the other government department. On top of all the government  departments was a white man who was known as “The Collector” or “Burra Sahib”. It is bad luck that though we got independence in 1947 yet the rights of the people were not returned. The rights of Village Sabhas were not returned. We replaced the British collector with an Indian. We kept all the paraphernalia of the British government as it is: Its arrogance, its un-approachability, its mentality of being a ruler. The Indian collector, nay a bureaucrat, is still the Burra Sahib.”

To those of you who are wondering, the role of Kings, back then, Kejriwal continues:

“King’s son used to succeed the king. There were no election to choose the King but at the same time the King did not have absolute power. All decisions were taken by the Gram Sabhas. Whatever the people of the village wanted the Gram Sabha wanted the same. The King had no options but to accede to the wishes of the people. Today we elect our King once in five years but the King is not in our control. In ancient times people did not choose the King but the King was under their control.”

Kejriwal takes up from where Gandhi left the idea due to his unfortunate assassination. He presents Swaraj not only in its correct historical perspective, but in its nitty-gritty details of implementation that are very much needed for a deployment now. Kejriwal also comes across as a spiritual inheritor of Mahatma, having worked as a volunteer with Mother Theresa, Ramakrishna Mission, and as a practitioner of Vipassana meditation.                    

While Ramlila Maidan played host to Kejriwal’s swearing-in ceremony, a huge crowd of aam aadmis were chanting non-stop, “CM today, PM tomorrow”. 

Yes, shouldn’t we give this remarkable guy a chance at governing this country?

Today, Congress, BJP, and the so-called Third Front led by the Left are researching that secret formula for success in the upcoming Parliament elections. But the best formula is not a secret anymore. Ally with Aam Aadmis and make Arvind Kejriwal the coalition’s PM candidate. It will be a game-changer for any coalition.

But it would require some spine.

Tuesday, January 7, 2014

Manappuram's NCD Offering 12.61% to Close on or Before January 20th

The ongoing Non Convertible Debenture (NCD) Issue of Manappuram Finance Ltd will normally close on Monday, January 20th. But the Company and its underwriter has retained the option for an early closure, which means there might be only a few days left to subscribe to this NCD Issue.

ICICI Securities is the underwriter for this Issue.

Unlike many other comparable gold loan companies as well as NBFCs in other sectors, Manappuram has been very cautious in going for public issue of NCDs. This is only the second-ever NCD offer from this gold loan major. The first offer happened around two years back, before the gold loan sector started witnessing tremendous changes, both on the regulatory front and the gold price front.

It is commendable that Manappuram prudently waited out for two years for coming out with their next NCD issue. Because, both gold prices as well as regulatory changes have stabilized during the past few months.

Manappuram’s current NCD Issue size also comes across as prudent, because despite having a CRISIL rating of A+ for Rs. 300 crore of  NCDs, Manappuram is trying to take in only Rs. 100 crore. It retains the option to take in an additional Rs. 100 crore through the green shoe option if the demand is beyond their current expectations.

The effective annual yield or interest of the current offer is very attractive at 12.61%, and is industry-leading. Coming from a stable business like Manappuram it is likely to get good investor support much before the tentative deadline of January 20th itself.

As on Q2 end, Manappuram Finance had a branch network of 3,293 branches across 26 states, with assets under management worth Rs. 9,202 crore. It has been the first publicly listed gold loan company. Manappuram currently has 50 tonnes of gold in its lockers.

Manappuram Finance Ltd is led by its Founder VP Nandakumar, a former banker, who currently serves as its Managing Director. Its Executive Director I Unnikrishnan is a veteran Chartered Accountant and seasoned NBFC specialist.

On the equity front it has been one of India’s most impressive wealth creators. Between 2003 and 2010, Manappuram’s stock price had appreciated by 633 times.

Top non-promoter or public shareholders in Manappuram Finance include some of the world’s largest and most discerning funds like Hudson, Baring, Wellington, HSBC, Smallcap World Fund, Beaver, Sanlam, and BRIC II.

The current NCD offer has different options according to the requirements of its prospective investors. While tenures range from 400 days to 70 months, interest payout options include monthly, yearly, or cumulatively at the end of the tenure. The face value of the NCD is Rs. 1000.

Looking at the interest structure as well as the applicable tax structure, Manappuram’s current NCD is most suited for retail investors at the lowest or most common tax bracket.

While the current NCD Issue is for the core gold loan business, Manappuram Finance is now all set for a major diversification foray into SME Finance and Housing Finance. Within 3 months, it will start its secured SME lending business, as already 80% of its customers are running some SME business. And within six months, Manappuram will start its housing finance business, as a subsidiary, most probably after taking over a suitable NBFC Housing Finance Company (HFC).