Innholdsfortegnelse for 21 May 2017 i Business Today

The post-Independence Indian pharma industry was really created by a generation of scientist-entrepreneurs who took advantage of the two changes made by the government in the 1970s. The first was the new Patent Act that recognised only process patents of a drug. Till then, India followed a patent law that was modelled on the patent laws of western countries and recognised both the product and process patent of a drug. Since all the original drugs were developed by global giants, they dominated the market as well. Even the bulk drug manufacturing in India was dominated by multinationals. The Indian Patent Act, 1970 changed that. It recognised only process patents, and not product patents. This essentially meant that any company that could create the same drug following a different chemical process…

01 03 BRAINSTORMING WHAT: Global Think Tank Summit 2017 WHEN: May 1-3, Yokohama, Japan WHAT TO LOOK FOR: The Asian Development Bank Institute and the Think Tanks and Civil Societies Program of the University of Pennsylvania are organising the Global Think Tank Summit 2017. The meet is expected to attract over 100 think tank officials from over 80 organisations in more than 60 countries. The speaker list includes Haruhiko Kuroda (Governor, Bank of Japan) and Muhammad Yunus (Nobel Peace Prize Laureate; Founder of Grameen Bank). The event will generate papers and policy briefs. 05 LEARNING INNOVATION WHAT: Workshop on ‘Innovation for Market Leadership’ WHEN: May 5, Chennai WHAT TO LOOK FOR: The one-day CII workshop shall provide insights on what innovation is all about and its importance in creating leaders in…

In the last week of March, private weather forecasting agency Skymet Weather Services predicted that rainfall this monsoon would be below normal. In early April, India Meteorological Department (IMD), the country’s 142-yearold national weather bureau, came up with its assessment – rainfall would be normal. In a country where about 54 per cent of the gross cropped area is rain-fed, and agriculture and allied sectors contribute 17 per cent of its gross value added or GVA (`20.93 lakh crore at current prices during 2015/16), any comment on the monsoon calls for an instant response. Right after the Skymet prediction, Ritesh Kumar Sahu, an a n a l y s t w i t h A n g e l Commodities Broking, pointed out a surge in guar gum futures prices,…

India’s venerated $37 billion pharma industry is at the crossroads. The road to new drug discovery – after decades of disappointing results – is famously pot-holed and, with half-discoveries being touted as new drugs, appears to be leading nowhere; The road to money-spinners such as Para-IV exclusivity, generic-generics and branded generics is facing rapid speed-breakers of competition, commoditisation and price erosion. In the interim, domestic pharma majors went on the road to tactical M&As to foster growth. But the most promising road is the way to complex generics, specialty drugs and bio-similars. It is also the most arduous, requiring a decoction of cutting-edge science, speed and agility and outstanding selling prowess – neither of which is Indian pharma majors’ strength. That calls for reassessing the ground realities and implementation of new…

COMPANY: Zydus Cadila DESIGNATION: Joint Managing Director, Zydus Cadila; Chairman, Zydus Wellness AGE: 38 At a time when Big Pharma is desperate for blockbuster breakthroughs and viable business strategies, one Indian firm is basking in the knowledge that its leadership baton will be passing into younger hands. Be it delving deep into pharmaceutical research or urging the marketing teams to get more patient-centric, chalking out business strategies or brainstorming to transform the quality of culture across the manufacturing sites, Sharvil Patel is always in the thick of action at Zydus Cadila, India’s fourth largest drug company. Perhaps it is all in his genes. Born into a family of pharmaceutical scientists and innovation enthusiasts, Sharvil is the third-generation scientist-entrepreneur, much like his father and mentor Pankaj Patel, the group’s chairman and…

COMPANY: Divi’s Laboratories AGE AND DESIGNATIONS: Kiran S Divi (40), Director (Business Development) Nilima Motaparti (33), Chief Controller (Commercial) Kiran Divi and Nilima Motaparti are under the spotlight. Indeed, all eyes are on the son and daughter of Divi’s Laboratories founder Murali Divi after the US Food and Drug Adminis-tration or USFDA recently issued a warning letter to and import alert on the Vishakapatnam plant of the company. Kiran and Nilima have been driving change at the pharma major as it aims to become one of the largest manufacturers of active pharmaceutical ingredients or APIs in the world. The import alert is the first major regulatory hit on the company since inception in 1990. The immediate impact is not expected to be huge as the USFDA has exempted some products…

Ali Baba had only to say ‘Open Sesame’ for the treasures of his cave to be opened to him. Modern payment systems, too, are fast approaching this fairy tale scenario. A bank in The Netherlands, for instance, has begun a voice-activated payment system where a customer just has to utter the requisite command to make payments. South Korea has developed a biometric sensor in mobile phones which enables secured e-payments without further authentication. A Japanese bank is working on ‘facial recognition’ technology as a substitute for debit or credit cards. There are banks that are exploring the use of a biometric which reads a vein in the user’s palm to make payments. The world of payments seems to be waking up to a new technology every day. India, too, isn’t…

Andhra Pradesh Chief Minister N. Chandrababu Naidu was the prime mover behind Cyberabad, the information technology hub that hosts global giants such as Microsoft, as an extension to the twin cities of Hyderabad and Secunderabad. After the loss of Hyderabad to Telangana, the new state carved out of Andhra Pradesh, he is scripting another infrastructure development story around Amaravati, Andhra’s new capital city in the making. Naidu, in New Delhi to present the interim report of the committee of chief ministers on promotion of digital payment systems, which he heads, spoke to Joe C. Mathew about India’s digital future and plans for his state. Edited excerpts Digital infrastructure is fairly good in cities. But there is a lot to be done in other areas. What are the bottlenecks? What needs to be done? That…

A tax of onethird (33 per cent) on energy would enable the finance minister to abolish income tax It is April, but the temperatures in north India are already touching their June levels. By the time we get to June, they may well be even higher: the past few years have been breaking maximum temperature records, and so may this year. We think of the unprecedented heat only in terms of discomfort and palliatives – a fan, a water cooler, an air conditioner, or a trip to cooler climes – these are the times when people recognize the wisdom of planting a son or daughter in America or Europe. But, however much India may have prospered, most of its people are far from such financial comfort as would enable them…

It’s High Time Banks Move Fast for Dissolving NPAs This refers to your cover story Cleaning the Bad Loans Mess (May 7). The article was a good summation of issues that have been hitting creditworthiness and discussions on possible solutions to NPAs of both private and public sector banks. It is appalling that the NPAs have been allowed to soar so high and that the lenders woke up only after policy interventions of the Centre and the RBI. In this era of digital money, virtual exchange, and gee-whiz technology for banking transactions, the Indian financial system has been damaged severely. When the RBI earlier slashed repo rates under Raghuram Rajan's tenure, the banks did not pass the savings to debtors, and NPAs led to administrative constraints from the RBI, apart…

In April last year, Axis Bank came out with a ‘watch list’ of `22,000 crore-plus stressed corporate loans, accounting for 15 per cent advances to companies. The bank, headed by Shikha Sharma, a former ICICI banker, admitted that 60 per cent of these loans would become non-performing assets, or NPAs, in the next two years. To the bank’s surprise, half turned into full-blown NPAs by the end of the first year itself, that is, by March 2017. The bank is now staring at further slippages as a bulk (almost 60 per cent) of the remaining loans in the list have been given to the battered power sector. Exposure to other troubled sectors such as steel, oil & gas and cement could create further problems. Things have turned so bad at…

The demonetisation decision of November 8 last year struck rural India a cruel blow, but it was not a crippling one. Haribhau Gaikwad, 30, a farmer in Nandgaon village, 70 km from Nashik, Maharashtra, reaped a good paddy harvest. But thanks to demonetisation, it sold at a much lower price than the previous year, when the crop had been poor. His friend, grape farmer Banshi Pageri, in the same village, had a bumper grape crop, but again it sold for less than half its price the previous year. How did they cope? Gaekwad postponed the buying of farm-levelling equipment he had been planning. Instead of buying four bags of fertiliser for his next crop as he usually did, Pageri made do with only one. But despite demonetisation, Gaekwad did buy…

COMPANY: Lupin Ltd AGE AND DESIGNATIONS: Nilesh Gupta (43),Managing Director Vinita Gupta (49), CEO An air of urgency has been visible at the Mumbai headquarters of the second- largest Indian pharmaceutical company by sales, Lupin Ltd, for the past three to four years. In September 2013, Dr Desh Bandhu Gupta, a former BITS Pilani professor and founder of the 48-year-old Lupin, had set a stiff target for the company while appointing his son Nilesh Gupta as Managing Director and daughter Vinita Gupta as Chief Executive Officer. The goal was to make Lupin grow more than threefold to become a $5 billion company (`32, 000 crore) by 2018. To assist Nilesh and Vinita, the longserving MD Kamal K. Sharma was made a mentor of the two and elevated to Vice Chairman…

COMPANY: Mankind Pharma DESIGNATION: Director (Operations) AGE: 31 Arjun Juneja joined New Delhi-based Mankind Pharma in 2008 after completing his Bachelor of Business Management from the University of Bradford and MBA from the University of Strathclyde, UK. Back then the biggest challenge he faced was adjusting to the traditionbound environment in the company. It was a steep learning curve for Arjun, the son of chairman R.C. Juneja. While Mankind had emerged as one of the fastest growing pharmaceutical companies in India and was ranked among the top 10, it was a very young company compared to its peers. The company was managed by the family along with very senior loyal employees with a traditional mindset and unwilling to accept new ideas. Mankind was formed after a rift in the family.…

Koustav Dhar knows the aviation business like the back of his hand. He’s been an industry insider for over 15 years, first as the CEO of the now-defunct MDLR Airlines and then the CEO of Jagson Airlines. Dhar, 44, is now donning a new hat by becoming the promoter of an airline – Zoom Air, the latest carrier to fly in the Indian skies. No one knows the pain of regional airlines better than Dhar. When the government opened up the aviation sector for regional carriers in 2007, MDLR became the first airline to acquire a permit. For over two years, the airline operated in the northern region but it struggled to fill up seats, resulting in frequent cancellation of flights. Finally, MDLR promoter Gopal Kanda, the flamboyant politician from…

Much of the focus of fintech vis-à-vis financial inclusion has been on payments and the ability to transfer money with relative ease using a mobile phone and an app such as the United Payment Interface (UPI)/Bharat Interface for Money (BHIM), or using the USSD protocol in case of feature phones. Here, I want to discuss two fintech applications that have received less attention, but which can be transformative for financial inclusion. These include riskbased pricing of microloans and personalised financial advice. A central feature of finance, especially lending, is information asymmetry. The customer knows more about her creditworthiness than the lender. This is aggravated if the customer has no collateral to offer, which would otherwise serve as a ‘signal’ to the lender. Therefore, there is often a significant risk premium…

Indian Railways: The Weaving of a National Tapestry BY BIBEK DEBROY, SANJAY CHADHA, VIDYA KRISHNAMURTHI PAGES: 264 PRICE: `299 PENGUIN RANDOM HOUSE Over the past six months, a number of Indian economists have talked about Sir William Mitchell Acworth. In the 1920s, a 10-member committee headed by Acworth had recommended separating railway finances from general government finances. Now, nearly 92 years after Acworth’s death, the government has reversed this decision. In this year’s Union Budget, Finance Minister Arun Jaitley tabled a comprehensive Budget; the NDA government is also pushing some other critical reforms in the Railways, many of which were suggested by Acworth. Acworth was one of the busiest men of his time. He was working with the Royal Commission of Enquiry into the Canadian Railways, the Royal Commission on…

QUOTE “As many have pointed out, it is not clear that we need so many sector banks. The system could be better off if they are consolidated into fewer but healthier banks” RBI Governor Urjit Patel INDIA TO SOON GET KIA CARS Kia Motors Corp, a unit of Hyundai, will invest $1.1 billion in Andhra Pradesh to build its first manufacturing facility in India. Kia has signed a memorandum of understanding with the state government in this regard. The company plans to start selling a compact sedan and a compact SUV from 2019. CAIRN CASE: SETBACK FOR INDIA An international arbitration panel has rejected India’s demand for a stay on an arbitration proceeding by Cairn Energy plc against a `10,247 crore retrospective tax notice. The tax department had in 2014…

Green Shoots There has been a huge rise in the number of projects revived since 2014/15 Is the Indian economy on the cusp of a revival? There is a sense of momentum if we look at the number of projects revived over the past three financial years. According to data from the Centre for Monitoring Indian Economy (CMIE), a total of 360 projects were revived between 2014/15 and 2016/17 compared to the 248 projects that came back on track during the previous three financial years – from 2011/12 to 2013/14. Also, in the fourth quarter of 2016/17, 26 investment projects were resuscitated, taking the total count to 109 compared to 135 and 116 projects in 2015/16 and 2014/15, respectively. Overall, the numbers look good, especially if one keeps in mind…

The main purchases in rural areas (villages with population of 500-1,000) of Maharashtra, Andhra Pradesh, Telangana, Uttar Pradesh, Gujarat, Rajasthan and Madhya Pradesh, according to a survey conducted by marketing consultancy DY Works Clothes: An average rural consumer buys 5-10 garments/ garment sets per year. Shoes: High frequency of online shopping, not just basic footwear but also reputed brands such as Puma and Adidas, especially in markets such as Kutch, Gujarat and Latur, Maharashtra Wedding-related goods: Expensive photo albums, often three feet by two feet in size, wedding day clothing for the couple, refrigerators, furniture and mattresses Personal care items: Sachets are passé – Rural consumers prefer bottles of shampoo and hair oil. They mostly buy sachets of only premium brands. Consumer durables: Flat screen TVs, split airconditioners, washing machines…

COMPANY: Cipla Ltd DESIGNATION: Vice Chairman AGE: 41 Circa 2011. Samina Vaziralli, granddaughter of Cipla’s founder Dr Khwaja Abdul Hamied, had taken a break from her professional career as a banker. Cipla happened to be going through a major upheaval at the time. The then joint managing director Amar Lulla, close to the promoter family and instrumental in shaping Cipla’s fortunes for over a decade, fell seriously ill and passed away. The 80-year-old chairman Dr Y.K. Hamied and his younger brother and vice chairman M.K. Hamied, 76, had decided to move on to nonexecutive roles. But both brothers wanted the family legacy and values to continue moulding the company while creating a new Cipla run by professionals. It was the reason why Samina, M.K. Hamied’s daughter, was asked to join…

COMPANY: Wockhardt Ltd DESIGNATION: Managing Director AGE: 44 Unlike many of the India Inc. successors who had got smoothly running companies on a platter, Habil Khorakiwala’s younger son Murtaza faced a tough beginning. His elevation to the role of managing director in April 2009 came at a time when Wockhardt was passing through the worst-ever crisis in its 50-year history. Of course, his articulate and assertive father has seen many ups and downs in the course of his business career. But since Murtaza was a soft-spoken, unassuming executive, many doubted his capability to steady the trouble-torn company. Till that time, he preferred to be in the shadow of his illustrious father and was never projected as the face of Wockhardt. One of the top domestic pharmaceutical companies, Wockhardt was then…

Kiran Gowda works as a manager at a wellknown 5-star hotel in the heritage city of Mysuru – a city of palaces that draws nearly as many visitors as does the Taj Mahal. One of the prerequisites of Gowda's job is that he should be ‘well-groomed and presentable at all times’ while attending to the upmarket clientele. “It is an unwritten code, which means one has to sport a clean-shaven look and wear impeccable clothes. So, during the peak tourist season, when I spend 10-12 hours on the job, I end up changing my clothes and shaving at least twice a day,” says Gowda. But he recently faced a problem that compelled him to change his shaving routine. In spite of using a multi-blade cartridge razor of a popular company,…

Taking Wings and Winning BY K.V. SUBRAMANIAM PAGES: 230 PRICE: `500 RUPA PUBLICATIONS By his own admission, K.V. Subramaniam “was not schooled in biology or medicine”. Yet, he was “given a mandate by Mukesh Ambani (in November 2001) to build from scratch a researchdriven, relatively new biotechnology business – Reliance Life Sciences”. A chemical engineer by training, Subramaniam or KVS (as he is known within Reliance) had by then spent seven years handling ‘corporate business development’ at Reliance. Anyone who has interacted with him can vouch for his zeal and knowledge on the subject – be it about plasma proteins, molecular medicine or regulatory matters. His maiden book, Taking Wings and Winning, is an informative and interesting read on how he transformed a new entity – from being “an overhead”…