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Saturday, September 7, 2019

economic news of india - world economic news - economics news for students - indian economy news

economic news of india - world economic news - economics news for students - indian economy news


Founders who scored big exits are back with a second venture

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At an entrepreneurship event in Bengaluru in September, Kunal Shah was treated like a veritable celebrity. The hackathon for wannabe financial technology entrepreneurs was meant for some 100-plus startups to showcase their technical chops. Instead, young engineers & managers milled about around Shah, curious about his secret sauce for startups.Having sold his previous venture, Freecharge, to Snapdeal for $400 million in 2015, the serial entrepreneur took some time off to turn angel investor, venture advisor and also to mentor dozens of startups for a little over a year.It was only so long before the entrepreneurial bug bit him again. In April 2018, Shah got started again, this time with Cred, which rewards credit card users for paying their bills on time. It seems to have taken off.In barely 10 months, the valuation of Cred has crossed $500 million and appears on course to become India's next startup unicorn. Marquee investors, including Sequoia Capital and Tiger Global, have scrambled to jump aboard India's hottest fintech venture in years.Shah is today aware that the stakes are high. Having shown off his skills in building one venture, scaling it and, most vitally, scoring a blockbuster exit, the ecosystem is watching his every move. In August 2019, he added to the speculation around Cred's fortunes when he raised $120 million in the venture's latest round of funding, taking the total to $176 million.During a conversation on the sidelines of ET Startup Awards, he brushed off the contention that serial entrepreneurs like him were cornering a chunk of investments in the space, queering the pitch for newbies. Booting up a start-up, whether as a first-timer or a veteran, feels the same, he reckons. "There is nothing like the thrill of starting up," he says.A number of such successful entrepreneurs who sold their first or second ventures and struck pay dirt are finding that they have become startup junkies — can't sleep well too long away from the crushingly stressful life of a founder. Many who thought once they exit for the big bucks, they will retire and play golf, travel or pursue gardening, discover within weeks that leisure doesn't bring much fulfilment. So they swing right back and start a new venture. Now that India has a significant number of successful entrepreneurs who have profitably sold their first ventures, there is now a recognisable phenomenon of rebounding founders, and the ecosystem comprising funders, rivals and customers are reacting to this tribe in interesting ways."After a while, you can't resist the urge. You can only garden and potter about so long," says Saurabh Kochhar, founder and CEO of Meddo, an end-toend medical services provider, who earlier founded online printing service Printvenue and food delivery platform FoodPanda. Ola later purchased Food-Panda India for $250 million.While some markets such as foodtech have waxed and waned (leaving behind just three large players), others such as fintech have evolved from segments such as digital wallets to wider digital lending opportunities.As these enabling factors have strengthened, investors, executives and entrepreneurs have flocked to the market. "The market has become a lot more competitive and cluttered, even if there is a lot more capital," says Ashish Kashyap, founder of IND Wealth, an AI-driven financial advisory platform, which counts marquee investor Tiger Global among its backers. Nearly three years ago, his previous venture, Ibibo Group, was acquired by Makemytrip for $720 million."The enablers are in place to build out a multi-billion dollar business," says serial entrepreneur Thirukumaran Nagarajan, CEO and cofounder of Ninja Cart, a B2B grocery delivery venture. Thus far, the venture has raised around $150 million (and may raise $100 million more) as it seeks to grow its business. The founders are thinking big for this business: at least a 10-fold growth from 500 small and 150 big trucks to ferry agri produce.The market has grown and become more conducive from the time these founders seeded and grew their first ventures. Compared with the time Shah founded Freecharge, mobile data has gone mainstream, handsets have got cheaper and the Jio revolution that has seen the addition of 300 million users and an effective 90% reduction in rates has catalysed a new wave of opportunities. Opportunities in regional languages and video have boomed, and startup funding has also expanded.In 2015, the year Freecharge was sold, risk capital investors ploughed $7 billion into Indian startups. In 2018, that number was $11 billion. Investors ET Magazine spoke to say that early rounds are expanding too — $2 million is the new $500,000 — and the source of this capital has expanded too. "The ecosystem is far more developed," says serial entrepreneur K Ganesh, founder of ventures such as Tutorvista and Big Basket. "Almost everything is more organised and supportive. Both the time required and costs are lower."With co-working spaces, software on the cloud, differentiated angel and seedstage investors, various accelerators and incubators and availability of talent, it is a much more conducive environment today. An investor ecosystem that seeks to minimise risks loves the second coming of successful entrepreneurs. While one in 10 investments usually survive and thrive, investors hope that signing up with seasoned entrepreneurs will somewhat even these odds. Accel Partners has launched Rebound, an investment programme focused on second-time entrepreneurs, as has several other VCs.While there are murmurs of disenchantment about serial entrepreneurs cornering chunks of investments, it doesn't mean they are necessarily cutting into what is available to the first-timers, because the overall pie is expanding as well. A more mature ecosystem has emboldened a raft of bankers, for example, to start up, even as well-heeled founders ranging from Flipkart's Sachin Bansal to Makemytrip's Deep Kalra are providing money and mentorship to them. "Despite the headlines, your odds of being noticed are much better today as a first-timer," says Vinay Bagri, founder of online lender Niyo.But there is no denying that serial entrepreneurs enjoy greater access to networks that are crucial to startup success. Consider the jostle for Jitendra Gupta's latest venture Amica — a slew of top VCs are pouring money into a venture that is yet to be launched. They bet that a past founder of a fintech success story — he sold his venture Citrus to Naspers — knows the contours of the market best and can, therefore, yield the best returns. "We are seeing founders becoming more thoughtful and deliberate.Hence, they are raising a larger amount to account for greater runway so that once they raise, they can focus on taking the product to market and rapidly scale up sales," says Sanjay Nath, managing partner, Blume Ventures, an early-stage investor.His peers, too, are happy to back the skills of serial entrepreneurs. "Where serial entrepreneurs score significantly is the execution chops and a network that allows them easier access to financiers," says Sanjay Swamy, managing partner of Prime Ventures.Serial Successes 71028155 "The market has changed massively since I last started up, and adapting will be a challenge"Jitendra GuptaPreviously- Founder of Citrus PayIs now Cofounder of Amica PayStar power Sold Citrus Pay, his previous fintech venture, to Naspers for $130 mn; has reportedly raised $24 mn for new venture.What has changed - More early-stage capital - Blockbuster exits led by Flipkart-Walmart deal - More experienced talent available - Jio has transformed segments such as video and regional languages - Access to the hinterland is much easierWhat hasn't changed -Regulatory flux around startups -Few startups have made profits - Limited exit options for investors - Investors tend to chase opportunities in herds - Investor focus on returns hasn't dimmed"More people are willing to back them. It is a rare group of people who can maintain the hunger and passion the second time around." He contends that it isn't only the entrepreneurs who've scored big that are sought after. Instead, it is the hunger of those who have failed but have the drive (or seemingly a blockbuster idea) that are worthy of backing.Among Prime's portfolio, Swamy points to Moneytap and Mfine as examples of having backed people who have had successful startup stints. In Moneytap's case, the founders include a team of successful entrepreneurs (they sold Snapfish to HP for $300 million in 2005) and people like Anuj Kacker and Kunal Verma who had failed with their previous ventures. 71028308 Ashutosh LawaniaPreviously Cofounder of Myntra, online fashion sold to FlipkartIs now Founder of medtech venture MfineStar power Able to raise money in a tough segment; lined up $17 mn-plus in June"Our previous experience with Myntra was certainly helpful while raising capital with Mfine"Similarly, Vijay Arisetty, the founder of gated community tech platform Mygate, stuttered with previous attempts. Mygate has fared better, raising $9 million, led by Prime Venture in less than two years from launch, and expansion is underway to at least a dozen cities.Gupta isn't revealing too much about his new venture, even though there is a constant constant buzz around how much funding he has raised and how he may upend existing fintech players. However, he candidly admits that serial entrepreneurs like him also have to keep up with a fast-changing market. "The market has changed massively since I last started up, and adapting will be a challenge," he says. 71028371 Thirukumaran Nagarajan-"The enablers are in place to build out a multi-billion dollar business"Previously Cofounder of ShoutIs now CEO and cofounder of B2B venture NinjacartStar power Raised $100 mn in latest round of funding led by AccelIn May 2014, Myntra, an online fashion platform, was acquired for $300 million by Flipkart. Since that deal, both Ashutosh Lwania and Mukesh Bansal have flourished as serial entrepreneurs, founding medtech venture Mfine and fitness chain Cure Fit, respectively. Both have raised millions of dollars in funding and growth has blossomed."Our previous experience with Myntra was certainly helpful while raising capital with Mfine," says Lwania. Mfine today has some 600 doctors and 150-plus hospitals on its platform and over 100,000 patients have used its AI-driven service. 71028346 Ashish Kashyap- "The market has become a lot more competitive and cluttered, even if there is a lot more capital"Previously Ibibo Group Is now Founder of IND Wealth SStar power Previous venture acquired by online travel industry leader MakemytripEven as investors chase these serial entrepreneurs, they are also acutely aware of the dangers of herd mentality, which has seen investment bets blowing up in their faces in recent years. Nath of Blume, for one, points to sectors such as food tech that a couple of years ago saw a bubble, with some 30 to 40 startups trying to outdo each other, funnelling millions of dollars in VC money to back unrealistic expectations, only to see almost all of it disappear. "Investors have also been burnt and have learnt the hard way¡K 2015-17 saw a period of over-investment, whereas by 2018 you saw us enter a period of rationalisation," he argues. "Now with the growth and hedge funds - and Softbank back in - we are seeing an abundance of capital available, but mainly for category leaders (or those getting there)." 71028398 Kunal Shah- "There's nothing like the thrill of starting up"Previously Sold Freecharge for $400 mn to SnapdealIs now Founder of Cred, a fintech venture that has seen its valuation hit $500 mn in under 12 monthsStar power Between ventures, was an aggressive angel investor and advisor to Sequoia CapitalEven then, veterans such as Ganesh warn against complacency from serial entrepreneurs. "Sometimes overconfidence and complacency can hurt you... each venture is a new start and as they say, past performance is not indicative of future returns."Even as serial entrepreneurs gather in strength for another go with their latest ventures, they have a new world order to deal with.

Niti CEO on making India a $5-tn economy

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NEW DELHI: States will have to become key agents of growth to help achieve India's target of becoming a USD 5 trillion economy, Niti Aayog Chief Executive Officer Amitabh Kant said on Saturday.Speaking at an event organised here by industry chamber PHDCCI, Kant said states have to work together and learn from each other to radically transform India.Kant said one of the things which PM Narendra Modi has been focusing on in recent times is the target of becoming a USD 5 trillion economy by 2024 and subsequently a USD 10 trillion economy by 2030."...therefore, our challenge really is that it will not be possible for India to achieve this till states do not aim to double and triple their GDPs. And this would require major structural reforms and structural reforms over a vast range of sectors," he said.He underlined sectors like agriculture and labour where structural reforms are required.The current size of the Indian economy is estimated at USD 2.7 trillion. The central government has announced and initiated several steps to make India a USD 5 trillion economy over the next few years.PHD Chamber of Commerce and Industry (PHDCCI) organised the 'States' Policy Conclave 2019' conceptualised with the mission of empowering states to strengthen India's federal structure of governance and contribute in making India a USD 5 trillion economy.

Why moon matters for future space missions

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Visitors to a village called Khodad, about 80 km north of Pune, can easily spot a series of giant dishes that rise against the sky. These are part of a network of radio telescopes called the Giant Metrewave Radio Telescope (GMRT). Built by the National Centre for Radio Astrophysics (NCRA) in Pune, GMRT looks deep into space and back in time, at events in the universe not easily accessible to optical telescopes.A set of radio astronomers at NCRA are especially interested in events soon after the Big Bang, with which the universe is supposed to have been born, 13.8 billion years ago. Optical telescope can only look back to about 500 million years after the Big Bang. Radio telescopes alone can peer into the secrets beyond that. But radio telescopes like GMRT are running into a problem on the earth — interference from mobile towers and other electronic equipment.Sometime in the near future, when the moon opens up for scientists to set up experiments, radio astronomers will be among the first set of scientists to exploit the radio-quiet zones there. A network of radio telescopes on the moon can peer deep into space without electrical interference. With proven expertise in telescope-building, India will be an automatic partner for international projects to build radio telescopes on the moon.When the GMRT was built 20 years ago, Khodad was a quiet village. Now mobile towers have sprouted everywhere, and radio astronomers at NCRA have had to develop clever ways to weed out the noise. Now no place on the earth is free from signal interference.The echo of electrical signals from the earth can reach even the near side of the moon, but telescopes on its far side will be completely free from interference. "The far side of the moon is completely shielded from the earth," says Yashwant Gupta, director of NCRA. "Setting up a telescope there is like a dream."Radio astronomers have been watching the moon keenly for a few decades, hoping to set up their telescopes on the satellite one day. Powerful and sensitive radio telescopes, free from interference, can probe deep questions about the evolution of the universe. Optical telescopes can look back only to a point after the first stars were born. Radio waves carry information about early structures in the universe like the first stars and galaxies. They are also supposed to carry information about the first atoms in the universe, which may have formed 380,000 years after the Big Bang. But these signals are so feeble — less than a trillionth of the energy of a mobile phone signal — that astronomers need to weed out all noise. While radio astronomers want to use the moon to figure out events in the early universe, planetary scientists want to explore it to figure out how the solar system was formed, and how the earth evolved into its present state. The composition of the moon and the earth are so similar that it is sometimes hard for a geologist to figure out where a rock or soil sample has come from. But there is a crucial difference.The moon is supposed to have been hived off from the earth when both were still hot, some 4.4 billion years ago, by the impact of a body roughly the size of Mars. It is the reason why the earth and the moon are so similar. However, the earth has evolved while the moon is frozen in time.The earth has plate tectonics that gradually erases history from its surface. The moon died geologically a billion years ago. Or, so we thought. Recently, scientists have noticed some geological activity on the moon, but it is not of the kind that will erase history on the surface. The moon has had large volcanic eruptions like the earth, but the last major set of eruptions happened 3.2 billion years ago.Lacking an atmosphere, the moon does not have weather, and so the surface remains largely intact. Looking at the moon is like looking at the earth a long time ago. "The moon is the closest image of the ancient earth," says Deepak Dhingra, assistant professor at IIT Kanpur. Dhingra, who had worked on Chandrayaan-1 while at the Physical Research Laboratory (PRL) in Ahmedabad, is a planetary scientist who studies lunar crust evolution. Our understanding of the moon has improved in recent times. The most important in the last decade was the presence of water on the moon. Scientists have detected a small layer of water all over the moon. Multiple missions, including Chandrayaan-1, have confirmed the presence of water on the poles. Recent research has also indicated that there is water inside the moon. 71027664 If there are large amounts of water on the moon, it may become easier to set up a base there. Apart from sustaining life, water can be split to generate hydrogen and oxygen, and they can serve as fuel during the long lunar night (one lunar night lasts about two earth weeks). It also removes the need to carry water from the earth when setting up bases.The Apollo missions brought back 380 kg of samples, of which 50% was preserved for five decades. This was because NASA knew that technology to analyse the samples will improve in the future, & so didn't want to waste them. These samples were opened and distributed this year to scientists who wanted to study them. "There will be a lot of discoveries soon," says Dhingra.The Indian moon missions have been driven by a combination of scientific and strategic factors. The moon will be a base for planetary exploration, and being present there will be of strategic value for any country. It is the reason why the US, Europe, Russia, China, India, Japan, South Korea and a few other countries are all planning moon missions in the future. Scientists will continue to piggyback on many of these technology-led missions. And hope for exciting discoveries over the next few decades.

Will Titan Company continue to be customers' darling?

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Thanks and wishes came pouring in for Bhaskar Bhat during Titan Company's earnings conference call in early August to discuss its first quarter numbers. This would, after all, be his last as managing director of the company before he retires on September 30. Among those who spoke was billionaire investor Rakesh Jhunjhunwala, who with his wife owns 7% of Titan. "First of all, a very emotional byebye. We would not be having Bhaskar on the calls again. I'll really miss him," Jhunjhunwala said.It is no secret that investors love Titan. And Bhat has played a key role in making the company a titan on and off the bourses. The Tata group company has been one of the storied stocks of the past decade and a half. Since Bhat took charge as MD on April 1, 2002, its shares have risen a remarkable 400 times, compared with an increase of nearly 11 times in the Sensex.At the end of the hour-long call, Bhat — who speaks multiple languages, including Tulu, Kannada, Tamil and Gujarati — thanked everyone and said, "From an anpadh (illiterate) I became quite savvy at answering your questions." 71027380 The 65-year-old, who has often ditched his car for the airport shuttle, is known for his modesty. In an interview with ET Magazine at the company's airy headquarters in Bengaluru's Electronic City a couple of weeks later, the IIT-Madras and IIM-Ahmedabad alumnus continued in the same vein. "I don't ascribe anything to myself. A company's achievement is ascribed to its MD, unfortunately." But it is difficult not to give him some of the credit for Titan's growth, especially considering how big Titan has become in the last two decades.When he took over the reins of Titan, the company's market value was a mere Rs 220 crore, a 10th of Tata Power's and around a 15th of Tata Steel's and Tata Motors'. Now Titan is valued at Rs 95,000 crore — more than all those companies combined. It is the second biggest listed Tata company, after Tata Consultancy Services. Moreover, between 2001-2002 and 2018-19, Titan's revenues and profits grew at an annual rate of over 20% and 30%, respectively. "We feel good, certainly, when the stock does well. At the same time, we don't feel bad if the market cap goes from Rs 1 lakh crore to Rs 95,000 crore," says Bhat.However, Bhat's legacy goes beyond numbers. He turned a watchmaker with a jewellery business (Tanishq) into an enviable lifestyle company with brands in eyewear, accessories, perfumes and now sarees. The company even has a precision engineering subsidiary called Titan Engineering & Automation, a spin-off that caters to industries like aerospace, defence and electronics. The jewellery vertical contributed 83% to Titan's standalone revenues of Rs 19,250 crore in 2018-19, with watches accounting for 13% and eyewear 3%, according to the company. Bhat was the first hire of the predecessor to Titan, The Watch Project of Tata Press led by Xerxes Desai, in May 1983, according to a recent book on Titan by Vinay Kamath, a journalist. 71027386 Bhat moved from Ahmedabad, where he was with Godrej & Boyce, to Mumbai, where he grew up, to take up the new job in sales. He saw the birth of Titan Watches a year later as a joint venture between the Tatas and the Tamil Nadu Industrial Development Corporation (Tidco), which was one of the few entities with a licence to manufacture watches back then. The company's first plant was in Hosur in Tamil Nadu, around 40 minutes from Titan's headquarters in Bengaluru. Titan was an acronym of Tata Industries and Tamil Nadu. Tidco owns around 28% and the Tatas 25% in Titan. The chairman of the board is nominated by Tidco. Interestingly, the governor of the Reserve Bank of India, Shaktikanta Das, an IAS officer from the Tamil Nadu cadre, was chairman of Titan between 2006 and 2008.After it started selling quartz watches in 1987, Titan went on to eclipse the then market leader Hindustan Machine Tools, a state-owned company. Looking for new avenues of growth for the company, Desai led Titan into the jewellery business under the banner of Tanishq in the mid-1990s. But the foray would turn out to be more difficult than anticipated, as Titan found it difficult to prise Indians from their family jewellers. Things started improving slowly for Tanishq after it encouraged prospective customers to come to its stores to check for free the purity of the gold jewellery they own. This way, it was able to show the customers if their trusted jewellers were cheating them or not.By the time the Titan mantle passed from Desai to Bhat in 2002, the jewellery unit was profitable. But there were still questions about the future of the business. In his book, Kamath quotes a senior executive saying the then Tata Sons chairman Ratan Tata wondered whether Titan was a watch company with a jewellery business or the other way round. But after an external assessment of the business, Tata decided to give it some more time. Bhat and his team made the most of it. Now Tanishq is the country's largest jewellery chain. "That we would succeed in this manner was impossible to dream of," says Bhat, sitting in his office overlooking a lake. His cabin — and the most of the campus — is not air-conditioned. But it is kept pleasant using air cooled by evaporating water.Rama Bijapurkar, a management consultant who was an independent director on the board of Titan in the early 2000s, credits Bhat for his perseverance. "Success does not come from just being a visionary leader and envisioning the future. It comes from getting there, which requires patient, calm and resilient leadership, which Bhaskar has shown." Bijapurkar was a batch ahead of Bhat at IIM-Ahmedabad and remembers him as a "confident IIT boy whom everyone loved". She, like anyone who knows Bhat, attests to his abilities as a mimic. 71027394 It was under Bhat that Tanishq pioneered a strategy to guard itself against volatility in the price of gold. Instead of buying gold, Titan leased it from international banks for a fee and bought the gold from the banks at the same time it sold it to a customer. Some of Tanishq's competitors also use this risk-mitigation tactic. This ensured Titan's valuable capital was not tied up as stock in stores. Other challenges that Bhat had to deal with as MD of Tanishq included handling a lockout at the Hosur plant in 2003 and winding down Titan's loss-making European operations in 2004. The European operations had saddled the company with debt.However, he has also guided Titan to identify market segments that are unorganised or underpenetrated. As a result, it launched the Fastrack watches in 2003, Titan EyePlus in 2007, accessories in 2010, Skinn perfumes in 2013 and Taneira, its saree chain, in 2017. "There was no hoo-haa when Titan got into a new business like eyewear," says Bijapurkar. "They quietly did it. Individually, these businesses may be small but together they add up to a nice jewel string that is valuable." Eyewear brought in revenues of around Rs 510 crore in 2018-19 and other businesses Rs 270 crore. Watches, which accounted for 13% of the standalone revenues, notched up Rs 2,440 crore.Titan has also launched and acquired new brands to widen its offerings — for example the purchase of 62% in online jewellery seller CaratLane in 2016 for Rs 360 crore. "We focus on those businesses where there can be a design-led differentiation," says Ajoy Chawla, senior vice-president of business incubation at Titan.The focus now is to do to the saree business what Titan did to jewellery. Bhat says the saree business is largely unorganised like the jewellery market and the company can put its knowledge of managing the supply chain for Tanishq to good use in Taneira. Chawla says the special-occasion women's wear market is Rs 35,000-40,000 crore. There are five Taneira stores spread across Bengaluru, New Delhi and Hyderabad and Titan plans to take it to 60-70 in five years. Taneira came out of an internal programme that invited ideas from employees around 2015, as did EyePlus earlier. Of the many ideas that were received, three were finalised. The teams that submitted these were given six months to hone their ideas and make a final pitch. Of the three ideas, the one on sarees was chosen.Chawla is loth to disclose the other two finalists, which could be possible future diversifications for Titan. CK Venkataraman, CEO of the jewellery business who has been named Bhat's successor, says one of Bhat's strengths has been harnessing the collective potential of the workforce. "Modern-day managers are focussed on shareholders to the exclusion of other stakeholders. Bhaskar was never a slave to that." Venkataraman points to Bhat's constant queries about Titan franchisees' profitability as proof of that. Titan has 1,700 exclusive outlets across India covering 2.1 million sq ft.Besides Titan's stellar numbers, what has endeared the company to investors is its transparency. "Titan has been upfront about negative developments and Bhat's overall communication with investors has been exemplary," says Abneesh Roy, executive vicepresident at Edelweiss Securities. He adds that Titan's practise of releasing a preview before announcing the results for the quarter is uncommon among companies in the consumer space. Despite the immediate concerns over a drop in demand for the company's products, he remains upbeat on Titan's long-term prospects.Smooth TransitionWhile the departure of a leader of Bhat's stature usually results in some hand-wringing at a company, the transition at Titan has been smooth. That could be because Bhat is being replaced by someone who has been with the company since 1990 and has built Titan's biggest business, the jewellery segment. "When a leader leaves, you see a ship with many holes. But at Titan, the system will not skip a beat as it moves on. That is what Bhaskar has done," says Das Narayandas, a professor at Harvard Business School and former independent director at Titan. 71027399 So what after September 30 for Bhat? He jokes that he is only relevant as long as he is running a company. "I'm happy to have all the time in the world now. I'm still on several boards. It was impossible to manage all these responsibilities but I still managed with sleepless nights and extreme strain. Now that will reduce." Bhat is on the boards of Tata Sons, Tata Chemicals, Trent and Bosch. He is also the chairman of Vistara and Rallis India. For now, Bhat is bidding goodbye to his employees in groups of 50-60 each. Most sessions are spent exchanging anecdotes with the employees of the company he helped grow.His lauded stint at Titan has not been without its missteps, including Titan's delayed entry into the smartwach segment, which Bhat says the company has made up for. Titan's smart products clocked Rs 100 crore in revenues in 2018-19. "The company's fundamental urge to continuously explore adjacent categories in the personal lifestyle space will impel it forward." His successor may be inheriting a stronger company than Bhat did, but Bhat is certainly a tough act to follow.

Will Titan Company continue to be a darling of customers after MD Bhaskar Bhat retires this month?

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Thanks and wishes came pouring in for Bhaskar Bhat during Titan Company's earnings conference call in early August to discuss its first quarter numbers. This would, after all, be his last as managing director of the company before he retires on September 30. Among those who spoke was billionaire investor Rakesh Jhunjhunwala, who with his wife owns 7% of Titan. "First of all, a very emotional byebye. We would not be having Bhaskar on the calls again. I'll really miss him," Jhunjhunwala said.It is no secret that investors love Titan. And Bhat has played a key role in making the company a titan on and off the bourses. The Tata group company has been one of the storied stocks of the past decade and a half. Since Bhat took charge as MD on April 1, 2002, its shares have risen a remarkable 400 times, compared with an increase of nearly 11 times in the Sensex.At the end of the hour-long call, Bhat — who speaks multiple languages, including Tulu, Kannada, Tamil and Gujarati — thanked everyone and said, "From an anpadh (illiterate) I became quite savvy at answering your questions." 71027380 The 65-year-old, who has often ditched his car for the airport shuttle, is known for his modesty. In an interview with ET Magazine at the company's airy headquarters in Bengaluru's Electronic City a couple of weeks later, the IIT-Madras and IIM-Ahmedabad alumnus continued in the same vein. "I don't ascribe anything to myself. A company's achievement is ascribed to its MD, unfortunately." But it is difficult not to give him some of the credit for Titan's growth, especially considering how big Titan has become in the last two decades.When he took over the reins of Titan, the company's market value was a mere Rs 220 crore, a 10th of Tata Power's and around a 15th of Tata Steel's and Tata Motors'. Now Titan is valued at Rs 95,000 crore — more than all those companies combined. It is the second biggest listed Tata company, after Tata Consultancy Services. Moreover, between 2001-2002 and 2018-19, Titan's revenues and profits grew at an annual rate of over 20% and 30%, respectively. "We feel good, certainly, when the stock does well. At the same time, we don't feel bad if the market cap goes from Rs 1 lakh crore to Rs 95,000 crore," says Bhat.However, Bhat's legacy goes beyond numbers. He turned a watchmaker with a jewellery business (Tanishq) into an enviable lifestyle company with brands in eyewear, accessories, perfumes and now sarees. The company even has a precision engineering subsidiary called Titan Engineering & Automation, a spin-off that caters to industries like aerospace, defence and electronics. The jewellery vertical contributed 83% to Titan's standalone revenues of Rs 19,250 crore in 2018-19, with watches accounting for 13% and eyewear 3%, according to the company. Bhat was the first hire of the predecessor to Titan, The Watch Project of Tata Press led by Xerxes Desai, in May 1983, according to a recent book on Titan by Vinay Kamath, a journalist. 71027386 Bhat moved from Ahmedabad, where he was with Godrej & Boyce, to Mumbai, where he grew up, to take up the new job in sales. He saw the birth of Titan Watches a year later as a joint venture between the Tatas and the Tamil Nadu Industrial Development Corporation (Tidco), which was one of the few entities with a licence to manufacture watches back then. The company's first plant was in Hosur in Tamil Nadu, around 40 minutes from Titan's headquarters in Bengaluru. Titan was an acronym of Tata Industries and Tamil Nadu. Tidco owns around 28% and the Tatas 25% in Titan. The chairman of the board is nominated by Tidco. Interestingly, the governor of the Reserve Bank of India, Shaktikanta Das, an IAS officer from the Tamil Nadu cadre, was chairman of Titan between 2006 and 2008.After it started selling quartz watches in 1987, Titan went on to eclipse the then market leader Hindustan Machine Tools, a state-owned company. Looking for new avenues of growth for the company, Desai led Titan into the jewellery business under the banner of Tanishq in the mid-1990s. But the foray would turn out to be more difficult than anticipated, as Titan found it difficult to prise Indians from their family jewellers. Things started improving slowly for Tanishq after it encouraged prospective customers to come to its stores to check for free the purity of the gold jewellery they own. This way, it was able to show the customers if their trusted jewellers were cheating them or not.By the time the Titan mantle passed from Desai to Bhat in 2002, the jewellery unit was profitable. But there were still questions about the future of the business. In his book, Kamath quotes a senior executive saying the then Tata Sons chairman Ratan Tata wondered whether Titan was a watch company with a jewellery business or the other way round. But after an external assessment of the business, Tata decided to give it some more time. Bhat and his team made the most of it. Now Tanishq is the country's largest jewellery chain. "That we would succeed in this manner was impossible to dream of," says Bhat, sitting in his office overlooking a lake. His cabin — and the most of the campus — is not air-conditioned. But it is kept pleasant using air cooled by evaporating water.Rama Bijapurkar, a management consultant who was an independent director on the board of Titan in the early 2000s, credits Bhat for his perseverance. "Success does not come from just being a visionary leader and envisioning the future. It comes from getting there, which requires patient, calm and resilient leadership, which Bhaskar has shown." Bijapurkar was a batch ahead of Bhat at IIM-Ahmedabad and remembers him as a "confident IIT boy whom everyone loved". She, like anyone who knows Bhat, attests to his abilities as a mimic. 71027394 It was under Bhat that Tanishq pioneered a strategy to guard itself against volatility in the price of gold. Instead of buying gold, Titan leased it from international banks for a fee and bought the gold from the banks at the same time it sold it to a customer. Some of Tanishq's competitors also use this risk-mitigation tactic. This ensured Titan's valuable capital was not tied up as stock in stores. Other challenges that Bhat had to deal with as MD of Tanishq included handling a lockout at the Hosur plant in 2003 and winding down Titan's loss-making European operations in 2004. The European operations had saddled the company with debt.However, he has also guided Titan to identify market segments that are unorganised or underpenetrated. As a result, it launched the Fastrack watches in 2003, Titan EyePlus in 2007, accessories in 2010, Skinn perfumes in 2013 and Taneira, its saree chain, in 2017. "There was no hoo-haa when Titan got into a new business like eyewear," says Bijapurkar. "They quietly did it. Individually, these businesses may be small but together they add up to a nice jewel string that is valuable." Eyewear brought in revenues of around Rs 510 crore in 2018-19 and other businesses Rs 270 crore. Watches, which accounted for 13% of the standalone revenues, notched up Rs 2,440 crore.Titan has also launched and acquired new brands to widen its offerings — for example the purchase of 62% in online jewellery seller CaratLane in 2016 for Rs 360 crore. "We focus on those businesses where there can be a design-led differentiation," says Ajoy Chawla, senior vice-president of business incubation at Titan.The focus now is to do to the saree business what Titan did to jewellery. Bhat says the saree business is largely unorganised like the jewellery market and the company can put its knowledge of managing the supply chain for Tanishq to good use in Taneira. Chawla says the special-occasion women's wear market is Rs 35,000-40,000 crore. There are five Taneira stores spread across Bengaluru, New Delhi and Hyderabad and Titan plans to take it to 60-70 in five years. Taneira came out of an internal programme that invited ideas from employees around 2015, as did EyePlus earlier. Of the many ideas that were received, three were finalised. The teams that submitted these were given six months to hone their ideas and make a final pitch. Of the three ideas, the one on sarees was chosen.Chawla is loth to disclose the other two finalists, which could be possible future diversifications for Titan. CK Venkataraman, CEO of the jewellery business who has been named Bhat's successor, says one of Bhat's strengths has been harnessing the collective potential of the workforce. "Modern-day managers are focussed on shareholders to the exclusion of other stakeholders. Bhaskar was never a slave to that." Venkataraman points to Bhat's constant queries about Titan franchisees' profitability as proof of that. Titan has 1,700 exclusive outlets across India covering 2.1 million sq ft.Besides Titan's stellar numbers, what has endeared the company to investors is its transparency. "Titan has been upfront about negative developments and Bhat's overall communication with investors has been exemplary," says Abneesh Roy, executive vicepresident at Edelweiss Securities. He adds that Titan's practise of releasing a preview before announcing the results for the quarter is uncommon among companies in the consumer space. Despite the immediate concerns over a drop in demand for the company's products, he remains upbeat on Titan's long-term prospects.Smooth TransitionWhile the departure of a leader of Bhat's stature usually results in some hand-wringing at a company, the transition at Titan has been smooth. That could be because Bhat is being replaced by someone who has been with the company since 1990 and has built Titan's biggest business, the jewellery segment. "When a leader leaves, you see a ship with many holes. But at Titan, the system will not skip a beat as it moves on. That is what Bhaskar has done," says Das Narayandas, a professor at Harvard Business School and former independent director at Titan. 71027399 So what after September 30 for Bhat? He jokes that he is only relevant as long as he is running a company. "I'm happy to have all the time in the world now. I'm still on several boards. It was impossible to manage all these responsibilities but I still managed with sleepless nights and extreme strain. Now that will reduce." Bhat is on the boards of Tata Sons, Tata Chemicals, Trent and Bosch. He is also the chairman of Vistara and Rallis India. For now, Bhat is bidding goodbye to his employees in groups of 50-60 each. Most sessions are spent exchanging anecdotes with the employees of the company he helped grow.His lauded stint at Titan has not been without its missteps, including Titan's delayed entry into the smartwach segment, which Bhat says the company has made up for. Titan's smart products clocked Rs 100 crore in revenues in 2018-19. "The company's fundamental urge to continuously explore adjacent categories in the personal lifestyle space will impel it forward." His successor may be inheriting a stronger company than Bhat did, but Bhat is certainly a tough act to follow.

Slowdown no worry as Samsung growing across channels: Samsung mobile business VP

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New Delhi: Samsung does not see the economic slowdown impacting its smartphone business -- both online and offline -- and the outlook is only healthy and positive to grow further, a top company executive has stressed.According to Asim Warsi, Senior Vice-President, Mobile Business, Samsung India, there has been no change either internally or during the meetings with e-commerce players on lowering down expectations."We base our discussions on business and solid facts. Till date, we are on a healthy growth rate. In fact, online business has seen triple-digit growth as we speak, and this will only grow as we enter the festive season," Warsi told IANS."We do not see any letting up either in our internal plans or in discussions with our ecommerce partners in India. The outlook continues to be positive and I see growth across channels, not just online," Warsi added.The India smartphone market saw its highest-ever shipment of 36.9 million in the second quarter (Q2) of 2019 -- with 9.9 per cent year-on-year (YoY) and 14.8 per cent quarter-on-quarter (QoQ) growth, according to the International Data Corporation (IDC).According to Warsi, intelligent consumers are today visiting both the virtual world and brick and mortar stores to get a holistic experience."Both online and offline are equally important for the business and growth in India and we are addressing both the segments with our Galaxy 'M' and 'A' series smartphones," said Warsi.In the second quarter (Q2) this year, Samsung closed the gap with Xiaomi on the back of its India-first strategy and a strong portfolio refresh, with Galaxy 'A' and 'M' series.The South Korean giant plans to sell over two million smartphones led by its upcoming Galaxy 'M' devices before Diwali.According to Warsi, the most exciting part is selling the device-plus experience."Samsung offers smartphones, smartwatches, Bluetooth-enabled buds (Galaxy Buds), fitness bands and so much more to provide its customers a true connected experience. We have been doing it for the past 3-4 years and will continue to launch smart devices across our ecosystem," the Samsung executive noted.According to him, while the online smartphone industry is growing at 20 per cent (year-on-year) in value terms, Samsung India's online smartphones business is doing extremely well, ."We're growing at 2x (triple digits) year-on-year when in comes to online sale of smartphones in the country," informed Warsi.

D-St week ahead: Nifty needs to take out 11,100-11,290 zone

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In the week gone by, the domestic equity market did not make any directional move on either side. Nifty oscillated back and forth in a defined range and went on to end the week on a flat note. The India Volatility Index – INDIAVIX, also remained flat losing just 0.01 points (-0.05 per cent ) during the week. In the previous weekly note, we had mentioned that the 11,100-11,200 zone will act as a stiff resistance area. The headline index was not able to move past this zone and ended with a weekly loss of 77.05 points (- 0.70 per cent ).Nifty has managed to keep its head above the 100-week moving average (MA), which is currently at 10,901. On the other hand, the next immediate resistance point lies at the 50-week MA, which currently stands at 11,111. On the weekly charts, it would be critically important for the market to maintain above the 100-week MA at 10,901. Any slip below this crucial level will infuse more weakness in the market.While expecting a quiet start to the week, we expect the 11,100 and 11,190 levels to act as resistance, while supports are expected to come in at 10,800 and 11,640. The weekly RSI stands at 40.83; it remains neutral and does not show any divergence against the price. The weekly MACD stays bearish and remains below its signal line.On the candles, a Hanging Man pattern has occurred. Since it has emerged during a downtrend, it is called a Bullish Hammer. When it occurs during a downtrend, it indicates the formation of a support area, which signals a potential trend reversal. However, this will require confirmation on the next bar.If we correlate the formation of a bullish candle with pattern analysis, the previous week's low of 10,746 is crucial to watch in the coming days. For a Bullish Hammer to be confirmed, and for the market to form a potential base, the previous week's low needs to be protected.If one were to summarise the aforementioned technical setup, 10,746 on an intra-week basis and 10,900 on a closing basis become key levels to watch.Any violation of these levels will be detrimental to the short-term trend of the market. On the higher side, Nifty will need to take out the 11,100-11,290 zone for any sustainable directional uptrend to occur. 71023957 Given the above setup, unless any of the levels are taken out in the directions discussed, we expect Nifty to oscillate in a broad range just like it did during the previous week. We recommend avoiding excessive exposures on either side and vigilantly protecting profits with any move that the market makes during its range-bound oscillations.In our look at Relative Rotation Graphs, we compared various sectors against CNX500 (Nifty500 Index), which represents over 95 per cent of the free float market-cap of all the listed stocks. The review of Relative Rotation Graphs (RRG) depicts a picture similar to that of the previous week, albeit with some minor improvement. The FMCG and the IT indices are firmly in the leading quadrant and are seen improving their relative momentum when compared against the broader market. These groups are likely to relatively outperform in the coming week. Apart from these groups, the consumption index is almost about to move into the leading quadrant while remaining in the improving quadrant at present.The Auto index has moved into the improving quadrant, indicating some respite from the prolonged weakness that it has been seeing. We expect some stock-specific performance from this group along with the Pharma index, which is also placed comfortably in the improving quadrant.Besides these groups, we have Bank Nifty, Infrastructure, Financial Services, Metal, Energy, Nifty Mid50, PSE, and CPSE indices and PSU banks in the lagging and weakening quadrants. These groups, collectively, may underperform the broader market on a relative basis.

Have equity indices stopped mirroring right picture of economy?

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By DK AgrawalHave Indian equity indices stopped reflecting the true characters of the economy? That was the talk among some market watchers in recent times.But we feel it is not that Indian equity indices have stopped reflecting the true picture of the economy. Instead, there is a lag because of a host of reasons, including but not limited to investor perceptions, money flow, global economy and policy decision.When the market is roaring and soaring, it is usually in an anticipation of future earnings growth potential or because of investors flocking towards riskier assets when other investment opportunities dry up.When investing or trading, one has to look beneath the basis of the market move and perception and gauze that basis to access whether things are moving in line with the market perception or not. Any distortion caused by fall or rise in the market happens when the underlying belief is misaligned.Generally speaking, if one looks at the boarder market indices, Nifty and Sensex, it becomes very difficult for the average investor to assess the situation of the economy from the index movements. The indices are a composition of various stocks and sectors that have weightage assigned to them on a free float basis, meaning thereby, that if there are two companies having same market capitalisations, the company which have higher free float will move index with higher intensity.Let's take the example of banking stocks in Nifty. Now look at the performance of Nifty Bank and that of its constituents in general. In the ongoing quarter, three big names i.e. HDFC bank, ICICI bank and Kotak Bank fell on an average 8 per cent and contributed about 2 per cent of Bank Nifty's 8 per cent overall fall. On the surface, things may look normal, but there is a much bigger story playing out in the underneath i.e. banking stocks as a whole have fallen more than 20% on an average while Nifty Bank has fallen 13 per cent.This makes it evident that a broader index may not be giving you the right picture of the sector/industry's performance. The true picture lies in individual stocks, and not in the performance of sectoral and thematic indices.

Experts raise privacy concerns over Facebook’s dating foray

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NEW DELHI: Dating apps and security experts have raised privacy concerns about social network giant Facebook's foray into the world of online dating. Facebook on Thursday launched a new dating service in the US and 19 other countries, and said it will be extended to Europe by early 2020. The company, though, didn't specify when it is planning to launch the product in India. Most global dating apps such as Tinder, Hinge, Bumble and Indian apps like TrulyMadly and Woo have been using Facebook accounts for user logins. But TrulyMadly and Woo said they have also introduced new ways of user logins this year after getting some user feedback on privacy concerns. "Signing up with Facebook does provide us with some sort of social credibility, but from our own experience, earlier we just had Facebook logins but we were forced by our user feedback to allow people to login without Facebook," said Snehil Khanor, cofounder of TrulyMadly. "There is this concern even in India, which is not a very privacy focused market as of now. I can assume what would it be like in the US." Facebook, however, claimed safety, security and privacy are at the forefront of its dating product. In a blog post, the company said it will allow people to integrate their Instagram posts directly into their Facebook dating profile and will give people the ability to add Instagram followers to their secret crush lists in addition to Facebook friends.Users can choose to opt into Facebook dating and create a dating profile separate from their main profile if the person is 18 years or older and has downloaded the most recent version of Facebook. By the end of this year, it plans to make it possible to add Facebook and Instagram stories to the dating profile of users. The dating service is available in Canada, Brazil, Mexico, Singapore, Philippines, Thailand and Vietnam among other places. Sumesh Menon, cofounder of Woo, said unlike Facebook where users need to be "tied into the ecosystem" to use the dating feature, Woo users can log in with a phone number besides the Facebook credentials. "Phone number allows for maximum privacy while ensuring that we onboard trustworthy users and can continue to curate our user community," Menon said. "I believe that the dating industry is very personalised and Facebook as an application is quite social." Woo has 7.8 million downloads across Google and Apple app stores. TrulyMadly, which has around five million users, too, started providing an option to login with phone numbers three to four months ago, Khanor said. It also uses facial recognition technology to match selfies with photos to ensure user authentication, although 70% of its logins are still through Facebook. Solene Paillet, marketing specialist at women-focused French online dating service Gleeden, said Facebook being a social media platform has a lot of user data which is public. "Recently, they were tangled in the data security issue which raised many eyebrows around the globe," she said. "The dating market segment is a whole new domain for them and here the user data and privacy are of utmost concern. Online dating users don't like their data being public and it's the responsibility of the platform to secure the data of their consumers so that it does not affect their private lives."