RIP Anand Halve

23 11 2016

I follow Kiran Khalap, co-founder of Chlorophyll – India’s first end-to-end brand consultancy firm on Twitter. His twit today on Anand (Andy) Halve’s untimely death made me very sad. To Andy, another co-founder of Chlorophyll goes the credit of shaping the hitherto fledgling discipline of  brand planning in India . And the careers of hundreds of young advertising professionals.

Albeit for a few months, I had  the good fortune of working with Andy in Enterprise in the mid-90’s. His brilliance in fusing rigorous analysis with wild imagination set him apart from his peers.

Andy’s dazzling wit could  lit up even the dreariest of moments. I had never seen Andy losing his cool. Or, short of words. Andy’s joie de vivre was truly infectious.; his  parents were prescient in choosing his name.

In the days and months to come, Andy’s countless friends will be reminiscing about the episodes in their lives made unforgettable by the grace, warmth and joyousness of a gentle soul.

Rest in peace, Andy!






Why Do NRI Professionals Find India So Difficult ?

22 11 2016

As Indian companies want to expand overseas and become globally competitive, one often cited prescription is to get the best people particularly NRI professionals to work in India.

Some NRIs are keen to return to India for various reasons, sometimes professional and sometimes personal or both. Compensation at the top is hardly a constraint these days for top professionals.

Yet, I see from several anecdotal evidences that the NRIs who choose to return to India taking plum assignments in top corporates or even government, wish to return back and many do.

Raghuram Rajan is back to teaching at Chicago. Kaushik Basu is back to US as a World Bank Economist. The recently fired Nirmalya Kumar after being in Mumbai for three and a half years is also leaving India, though he has not announced where he is heading.

I have spoken to a few friends who chose to return back after spending a few years here and this is their gripe about India and Indian organisations.

1. Professionalism in even the so-called professionally managed organisations is a 3 Micron gold plating. Beneath the coat is feudalism, bureaucracy, nepotism and a deep seated hatred for outsiders. Factions based on state, caste, village and colleges prevail. Merit is often the casualty. Mutual respect and valuing other persons time is more an exception than a rule.

2. The families find it very difficult to navigate the daily life in India. Be it the school or the traffic or getting simple things done at home. Unlimited patience and perseverance is required. Also, one can hardly trust anyone, because falsehoods and promising more and delivering less is the norm here.

3. The high pressure school environment in India with almost total focus on academics often puts off children who started studying in a western system.

4. India is no longer inexpensive. For global class goods and services, you pay dollar prices.

Aswath Damodaran On Tata-Mistry Feud

19 11 2016

Aswath Damodaran, Prof of Finance at the Stern School of Business at NYU is considered an authority on valuation. He has written an interesting blog post on the Tata-Mistry feud.

Here is the link

Indian IT: As growth cracks, acquisitions the only way forward

17 11 2016

Big IT companies are parking their cash in mutual funds and bank FDs now

Source: Indian IT: As growth cracks, acquisitions the only way forward

Urjit Patel’s Signature in Rs 2000 Note

15 11 2016

After the demonetisation was announced, the newly issued Rs 2000 has come into circulation. The Rs 2000 notes currently being issued have the newly appointed RBI Governor Urjit Patel’s signature. urjit-patel-signature

PM Modi and FM Jaitley have claimed that the preparation and printing of currency notes were being secretly done for the last six months. This would mean the Rs 2000 currency notes should have been under printing for the last six months.

But, Urjit Patel was chosen as the RBI Governor only on August 21, 2016 and he took charge from Raghuram Rajan only on September 4, 2016, just two months before the November 8th announcement.

Something is amiss. Either, the government is lying when it says it has been printing currencies to prepare for demonetisation from the last six months or they had decided  Urjit Patel as the next RBI Governor, atleast four months before the official announcement.

It can be speculated that when Raghuram Rajan made an announcement on June 18, 2016 that he would not take the second term as Governor, already Urjit Patel’s signatures as the next Governor were being taken in the new Rs 2000 note. This could have well led to Rajan’s decision to return to academia.

Cash in the Wallet

14 11 2016

The announcement on November 8th by government to demonetise Rs 500 and Rs 1000 currency notes came like a sudden surprise to Indians. This announcement was followed by one day of banks ATM closure and an additional day of ATM closure.

Even the tax paying, educated middle class, who had nothing to hide by way of black money, was confronted with the challenge of how to pull through the next few days expenses with minimum cash using the lower denomination notes of Rs 100, Rs 50 and lower.

Even after the banks and ATMs opened from 11th November onwards, there were limits prescribed by RBI for exchange, withdrawals and ATMs. Also, the queues were very long and there was considerable pain to be experienced in withdrawing one’s own money.

That is the time, when I was faced with a question of how much cash to withdraw and keep in the wallet. In days when banks and ATMs would be functioning normally, I would draw a large amount in the beginning of the month for all the monthly payments and then I would withdraw a smaller amount sometime in the middle of the month for the  rest of the month’s expenses.

By withdrawing nearly 15 days expenses at one go, I was essentially losing out on some savings bank interest and also running the risk of losing money, if I lose the wallet. But this costs and risks were entirely mine. But in a cash crunch, if I overdrew, someone else was not getting the essential cash for their needs.

I knew that cash in the wallet or house is a psychological thing. So, I ran a straw poll among my friends on Facebook. I asked them, how many days expenses they would keep as cash in their wallet or house. There were 23 responses in all.

A. Less than 2 days – 3
B. Between 2 and 4 days – 2
C. Between 5 and 7 days – 8
D. More than 7 days – 10 

It is a biased sample of my friends so they are majority male, urban, salaried class, highly qualified people with families. The median age would be 45 years.

From this poll,it appears even when people have cards and electronic wallets, they find comfort in keeping 7 days or more expenses in the form of cash in their wallet. Many mentioned that they have 15 days of expenses in the form of cash with them.

My friends seemed to be quite like me. But it set me thinking, is this appropriate in this time and age ? Is there a need for so much cash in the wallet or home ?

Talking for myself, I reflected on why I was keeping 15 days expenses as cash at most times. I could think of the following reasons :

  • Habit –  Being a salaried person, most expenses are bunched at the beginning of the month. Going to bank in the beginning of the month and withdrawing money for monthly expenses has become a habit. The only change now is instead of walking into a bank branch, I visit the neighbourhood ATM.
  • ATM limits – As there are upper limits of daily withdrawal in most banks ATMs, I am compelled to go one more time at least during the month. This I normally time it in the middle of the month or when cash situation reaches below a limit.
  • Comfort of cash – Despite the cards and PayTM, when I set out of house I feel there should be enough cash. Just in case, I need it.No logic. I am gone past the age when I used to keep less cash in the wallet to avoid impulse purchases. These days, most spending is done on the cards and yet the cash continues to occupy the wallet. While travelling this fear multiplies, even when I know most airports and cities I go to have ATMs.
  • Emergency – As a family person, one wants to be prepared for a sudden health issue or be prepared to travel at short notice. But actually when they come, the 15 days expenses that you keep in the form of cash may be too less, so you end up rushing to an ATM immediately. Also, most hospitals and airlines would accept cards.

Most people of my age who started earning and spending money before the cards and ATM era, would continue to believe and hoard cash than is necessary because of old habits. This demonetisation exercise gives us a chance to recalibrate our cash requirement.





Ratan Tata’s Succession Plan was Incomplete

14 11 2016

After the October 24, 2016 unceremonious exit of Cyrus Mistry as the Tata Sons, Chairman and reappointment of Ratan Tata as the interim Chairman of Tata Sons, many media commentators are saying that Ratan Tata reversed his decision of 2011. In 2011, he chose Cyrus Mistry as his successor by appointing him as Vice Chairman. In 2012, Cyrus was appointed as Chairman of Tata Sons.

By appointing Cyrus Mistry as Chairman of Tata Sons and later as Chairman of the various operating companies it appeared to the world that Ratan Tata had chosen his successor and has quietly gone into retirement. He did not entirely. He had kept an important lever of control with himself. He remained the Chairman of all the Tata trusts.

To the world Tata trusts, may appear as some charity arms of the Tata group, they are more than that. Tata trusts own 66 % of Tata Sons Ltd, an unlisted public limited company. Tata Sons Limited is the holding company that has the promoter status in all the operating Tata companies where stakes vary from 26 % to even 100 %.

By remaining as Chairman of all Tata Trusts,  Ratan Tata did not give the most important lever of controlling the group to Cyrus Mistry. He used that lever to appoint directors in Tata Sons and also to oust Cyrus Mistry as Chairman.

Only for a brief while, the Chairmanships of Tata trusts and Tata Sons were in two different hands. When Ratan Tata took over as Tata Sons Chairman in 1991, JRD Tata remained as Tata trusts chairman until his death in 1993. After which, Ratan Tata took over as the Chairman of Tata Trusts.

It appears, the 66 % stake in Tata Sons by the Tata trusts will also allow Ratan Tata as Chairman of Tata Trusts to even oust Cyrus Mistry as a Director ofTata Sons Ltd, if they  call an EGM. This will violate an old tradition  where a member of the Shapoorji Pallonji Mistry family sits on the board of Tata Sons for their 18 % stake in Tata Sons as this Forbes article brings out

Shapoorji was smart enough to see his 17.5 percent stake was no match for this. His family was limited to having just one seat on the Tata Sons board, which is the case even today. His shares also gave him no authority to nominate board members and the company’s existing directors were all loyal to JRD. 

Shapoorji was also smart enough to see there was more value in him letting JRD’s team grow Tatas than in trying to do so himself. “He was practical, he was not aggressive,” a Tata insider says. “He committed to JRD that he would never vote against Tatas.”

It appears that the gentleman agreement between Tatas and Mistry family that continued for eight decades has got broken now. As Cyrus Mistry has already gone against the Tatas, Ratan Tata will see Cyrus Mistry out of Tata Sons board too.

Ratan Tata has the golden key because he is the Chairman of the Tata trusts. It is revealing that even before the unfortunate incidents of October 24, Cyrus Mistry was never even a trustee in any of the Tata Trusts. For those who speculate that whether Noel Tata, the half brother of Ratan Tata could be a successor to Ratan Tata after the four months period, it is revealing that Noel Tata is also not even a Trustee in any of the trusts. For a complete list of trustees visit  and Dorabji  Tata Trusts. Names like R.K.Krishnakumar, N A Soonawala and his former Executive Assistant R.Venkataraman appear in several boards.

The next Chairman of Tata Sons  would have to contend with a Board of Trustees who are well into their 70s and 80s. Also, given the unique structure and recent bitter experience, the Chairmanship of Tata trusts would not be given easily to the next Tata Sons Chairman.So I reckon that even after four months the succession plan would remain incomplete, even if a new Tata Sons Chairman takes charge.

%d bloggers like this: