Wednesday, October 15, 2008

RBI: Deposits in Indian banks are safe, not to worry!

The Reserve Bank of India (RBI) has assured that the deposits of the Indian common man in indian banks are safe and not to worry at all. Due to the financial crisis in US and incertainity of the global financial markets everyone in the world is fearing about their hard earned money kept in their respective country's bank. As far as India is concerned RBI governer assured that Indian banks are not hit due to the sub prime crisis in US, which is the root cause of the financial turmoil seen in the world economy. All central banks of almost all countries are taking care of the their banks- Japan & S.Korea have promised unlimited cover to their banks. Even Indian central bank RBI is injecting about Rs:60,000 crore liquidity by reducing the CRR ratio.

Yes, we are witnessing worst time in the stock market industry, but this is just the result of fear and uncertainity in the global economy. So, the conclusion is not to worry about your deposits in Indian banks and just chill! If you are an indian stock investor you may find this article (What to do in such turbulent times? ) to decide upon your strategies to face the stock market uncertainities.

Saturday, September 27, 2008

Nestle to spend about Rs: 600 crore in India

Nestle is one brand of chocolates which people of my age and even elder than me have grown up munching. On basis of last year's strong growth in revenue from India, Nestle will be investing about Rs: 600 crore in year 2009, which is almost double than that of last year.
We will be doubling our investments in India next year. There is no envelope to the number as long as it is strategically and economically sound investment,
said Peter Brabeck-Letmathe, chairman of Nestlé SA.

The inflation has also struck companies and the pressure of increased raw materials problem worries even Nestle. But the company officials said the solution for this will be planned soon and only consumers won't pay for that entirely. Currently, Nestle India accounts for 1.5% of total turnover of the company - pretty low according to me considering the number of young people and especially choco-crazy girls in India. Nestle India has already registered 25% growth in the first half of this year.

As a part of its special marketing initiative to serve the needs of the price-sensitive consumers in India, Nestle has dedicated its Uttarakhand plant for designing, formulating and packaging products under Rs 10 price point. Identifying the huge growth potential in developing markets, Paul Bulcke, CEO of Nestlé SA, said that the developing markets currently accounting for one-third of its business would grow significantly. The company also sees the recent Chinese milk scare as an opportunity to provide safer options for consumers rather than a threat to its sales.

The company will continue to grow from being an agri-based to a nutrition, health and wellness company with a focus on regional products.

Sunday, August 31, 2008

TATA's face Singur farmers: But what's the exact problem in Singur?

is facing tough opposition from the Singur farmers (Singur is a village in West Bengal) where it wants to set up the manufacturing plant for the production of the world's cheapest car - TATA's 1 lakh car- TATA NANO. Singur farmers are not ready to give there land even after compensation of about Rs:8 lakh per acre of land and even more for farms which produce 3 crops/year, or which have plots nearer the main road and fields that have tubewells sunk in them. The issue has now taken a form of agitation and TATA is facing wrath of it. According to the The Times Of India TM people from Trinamol Congress have threatened TATA officials and people who work in a small plant set up there to physically prevent from entering plant, and according to the fresh news 5 hours back TATA has decided to move out its 800 employees out of singur plant.

The farmers complain about 2 things - first is about the low compensation and the second is about the lack of faith in getting the promised money from government - and from my point of view these are truely issues worth talking about! This is what one of the farmer Prasenjit Das in Khaserbheri village says "What use is cash to me? Putting money in the bank and earning interest is not enough, especially looking at the rising inflation. With land, my asset remains intact and what I earn from selling my produce is a bonus." Das has another argument to press his case: "Even if the government promises to give me a job, it fails to secure my children's future." - perfect! I agree with him! Why not...nice to see that villagers and farmers- heart of India are understanding the economic factors and inflation concepts.

The question is about the land spanning 997 acres of land, and farmers aren't sure whether government will give them the promised money or not. According to Hindu Business Line article on Nov 16th 2007 -> "The acquisition of the entire 895 acres of private land is virtually complete. Each of the landowners has given his consent to acquisition at prices which are much higher than the prevailing rates. We have already disbursed payments for 550 acres and the rest will be completed within this month," the State Commerce and Industry Minister, Mr Nirupam Sen, told media persons.. So, today is 31st Aug, 2008 - it's been 9 months after this statement from Mr.Nirupam Sen and still the payments aren't in the hands of farmers..? If yes then they shouldn't be agitating and if no then the governemnt has to answer why farmers haven't been paid uptill now?

If TATA decides to withdraw now, they will suffer losses of about Rs:150 crore - and they need to withdraw as per the prevailing conditions in the Singur. While the West Bengal government gets ready to acquire close to 50,000 acres all over the state for a slew of SEZs, ports, roads and so on, it should be a good idea to look at this other side of the story.

This wraps up the complete story till now behind the fight for land, the business people on one side, farmers on others and government in between - who's to blame?? This is not only in Singur, this problem is in many parts of the country since the developments of SEZ's have starting gaining pace.. what's the solution...? Expres yourself in comments...
With Help From Sources: RediffNews, HinduBusinessLine, EconomicTimes.

Sunday, August 10, 2008

What is consulting?

Consulting is nothing but guiding anyone to achieve his/her targets. Today consulting has become a form of business, where consulting companies guide other companies( clients ) to achieve the target. Now the target can be anything. But there are many companies/people who call themself as consultants but aren't actually. Today you will find many people and consulting companies which are not exactly guiding, they may be helping but not guiding. Innovation in the way work is done lies at the core of consulting, but is very rarely seen in many consulting companies. To be a good consultant you should know in depth about the client's business, you should know the pitfalls in every way you have to acheive what client wants and then follow one which is optimal for the client. Now all this calls for knowledge, experience, being updated on latest things in that business and ofcourse a lot of creativity. The one who has all these things and puts all this into use is a good consultant. Also the adaptability to various plans and situations is important. All this implies that all the consultants should have better understanding of the business domain, lot of experience and should have farther vision than the client - and thats why I feel something fishy when I see a person of age 23 at some consulting company consults the client's project whose project manager is himself 40 years old! Strange itsnt it..? Well, Bruce Eckel also has to say something about this.. visit his post here..What is Consulting?
Comments are welcome!!

Thursday, July 3, 2008

Franchise Business in India

India is called a developing country, as we don't have another classification as a rapidly developing country. Let me today put some light on India in the franchise business.(Hey hey if you don't know what franchise business is and what exactly you should do to own a fanchisee then you should first read : What is a franchise business??.) The Franchise business isn't new in India and it's early days date back to 1990's. Today India has many franchise businesses of foriegn brands like KFC, McDonald's, Holiday Inn, Gold's Gym, Marks and Spencers and they have reached not only first tier but also many second tier cities in India and they are running successfully.

After 1990 the franchise business has boomed by leaps and bounds and there are many success stories to tell. Franchise business industry in India records a growth of 30%-35% per year from the past 5 years. And yes why not, because the core thing for any business to be succesful is the customers. And India has lot of it- and the world knows this, as a result many multi national companies are happy to offer franchise to Indian businessmans. One of the latest offering I know is of "beard papa's" from Japan. They are an international quality brand when it comes to cream puff's and they are inviting Master Franchisees.

The 4 sectors which have show the most rapid growth in franchise business in India are telecom sector, food sector, retail sector and education sector. These are all poised to grow with rate above 40% per annum atleast for the next 5-6 years. Food and retail sector have seen tremendous growth because the spending power of indian middle class is increasing. Read a splendid article about India's retail sector - India's retail sector is Boooooming...??.

Apart from these 4 sectors, the brewerage industry,health,beauty, and tourism are next to sparkle. India has favourable conditions for any fresh business to florish, also the competition is not as intense as in US and there are a lot of customers-hope you know that India is second largest in population- you don't need to be the king of your sector, you can be not even in top 10 but still you business may grow by leaps and bounds and you will have good profit margin. Couple this with the low rate of francise failure in India and significant return of investment and you will realise India's potential in franchise businesses.

Sunday, May 18, 2008

Airbus views demand for 24 thousand aircrafts!

Aircraft manufacturer Airbus foresees a demand of 24,300 new passenger and freighter aircrafts which are valued at about $2.8 trillion. This visualization is for the period till 2026. The Annual Global Market forecast of Airbus says that it will create an average annual delivery of around 1,215 aircrafts, which is certainly a big number. Although this will give a boost to manufacturing sector of airplanes but there are two grave problems to this growth. First is the fuel cost. As the world knows, the fuel prices have risen sharply in past 2 years which was not even foreseen by the economy analysts. This sudden rise in fuel prices (A nice article about this: The Price Of Oil: affecting factors and it's future...) is another game of the gap between supply and demand. By, 2026 the fuel burnt per 100 passengers per Kilometer is expected to be 3 litres!

The next problem is of the air traffic. Even today the Air traffic controllers are having a tough time to resolve the traffic problems. In world's most developed cities like NewYork, Los Angeles, Hong Kong and even our own amchi Mumbai the condition is very close to saturated. The condition in 2026 will be horrible if no solutions are put in place. One of the solution to increase efficiency is to discontinue the old planes which consume more fuel and deploy new planes. But again the degree of practicality is associated with it. In India, the aviation sector has seen a downfall in last 6-10 months and there is a very tough competition. Even the customers will be increasing in future, the scenario will be same. Invest wisely in Aviation sector.

Friday, January 18, 2008

Reliance Power IPO - how should a retail investor approach it?

Reliance Power IPO is causing daily news and todays is its last day of offering. The price band is 405-450. This is 4th day - the last day and untill tommorrow the issue was over subscribed about 38 times - I dont know exact figures but it will be around it. Now should you apply to this one or not?
I think its not a good company to remain invested in. Relaince Power have no mega projects going on - all it has are promises. Other power companies in India like Tata Power, NTPC look more strong than Reliance Power, just for comparison NTPC will have a capacity double to that of Reliance Power in 2016 - even we consider all the promises of Reliance Power to be true. I feel we should make just listing gains in this IPO as i think above 800 the Reliance Power share is over priced.