domination - september 2013

DOMINATION VOLUME-III ISSUE-07 S

eptem

ber 2

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NEWSLETTER FROM DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

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Editorial ………………………………………………………

02 | DOMINATION, SEPTEMBER 2013 DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Dear readers,

As we bid farewell to the

month of September and wel-

come the new season, we pre-

sent another thought provoking

and interesting edition of

DoMination.

This edition contains a number

of articles from a diverse range

of topics from the growth pros-

pects in North Eastern region to

the issue of Employee Poaching

to the world of Mezzanine fi-

nances. The cover story for this

month is jointly written by

Nilaya Shankar and Prashant

Pandey. It gives us an account

of situation and growth pros-

pects for agriculture, tourism,

trade and power sector along

with action items for improve-

ments. The perspective of this

month is on another burning

issue of current times, Em-

ployee Poaching. In this, Kunal

Bansal tries to look at the root

cause of the problem and its so-

lution. On the finance side,

Sharad Srivastava presents a

piece on Mezzanine Finance, an

instrument which occupies a

middle spot between debt and

equity.

The learning does not stop here.

The current edition has inter-

view of Mr. Tejasvi Puniani, a

2009 batch alumnus of DoMS.

Additionally it also consists of

success story of Mr. Sunil

Handa, Chairman of Evlavya

Education Foundation. These

live examples and learning will

be helpful for budding manag-

ers and leaders. For the creative

souls, we present next round of

quiz. On top of it, a beautiful

poem by Kaushik H Makwana

enhances the charm.

The September month also saw

various summits being con-

ducted in the department.

Among them, the current edi-

tion contains Vipanan, the mar-

ket summit details. In addition

to this, the department was

abuzz with another high pow-

ered activity, Reminiscence in

which three batches of depart-

ment came together.

We hope that the current edi-

tion will be liked by you. Your

suggestions and feedback are

always welcome and valuable

to us. Happy Reading...

………………………………………………………

- Regards

Team DoMination

Contents

Faculty Adviser

Dr. R. L. Dhar

Team DoMination

Abhay Kumar

Arun George

Nilaya Shankar

Priyank Singhal

Rohan Krishnan

Saurabh Paul

Sharad Srivastava

Designing Team

Ashish Kumar Jaiswal

Dhruv Kadian

Rakesh Ranjan Kumar

Roorkee- 247 667, India Tel: +91-1332-285014, 285617 Fax: +91-1332-285565 Email: [email protected] Website: www.iitr.ac.in/departments/DM/Pages/Index.html

DEPARTMENT OF MANAGEMENT STUDIES INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

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Growth Potential of North-East States

Mezzanine Financing for Infrastructure Projects

Spotlight

Cover Story

Qutopia

DoMS da Evince

18

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Success Story

15

……………………………………03 | DOMINATION, SEPTEMBER 2013

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Chlorophyll

11

24

Perspective

mailto:[email protected]?subject=Feedback

http://www.iitr.ac.in/Departments/DM/Pages/Index.html

http://www.iitr.ac.in/Departments/DM/Pages/Index.html

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North East consists of eastern

most states in India viz. Assam,

Arunachal Pradesh, Mizoram,

Sikkim, Nagaland, Manipur and

Tripura. These seven states are

popularly known as “Seven Sis-

ters”. The region is endowed

with vast natural resources in

terms of forests, biological di-

versity, hydroelectricity etc.

however the region has re-

mained largely underdeveloped.

A major limitation to the

growth has been poor infra-

structure and limited connec-

tivity, both within the region as

well as with rest of the nation.

The region, linked to the rest of

India by a narrow stretch of

land called the “chicken neck”,

needs infrastructure to support,

significant investments and de-

velopmental aids.

The region has also wit-

nessed a series of insurgent ac-

tivities and is alienated from the

mainland India in terms of both

economic and physical attrib-

utes. According to World Bank,

NE region has a low-level sym-

metry of poverty, less develop-

ment, civil conflict and lack of

faith in political leadership. Go-

ing by the planning commission

data, the total GDP of India was

INR 8,53,495 crores for the fi-

nancial year 2011-12 in which

the contribution of North-East

India was only 2.3%. This is in

spite of the fact that these states

share 98% of the boundary with

five different countries of South

Asia – Nepal, Bhutan, China,

Myanmar and Bangladesh. The

region is highly endowed with

bio-diversity, hydro-potential,

mineral like oil and natural gas,

coal, limestone, dolomite etc.

and forest wealth.

Agricultural

Around 70% of the

population of northeastern

states is dependent upon agri-

culture.

There is a huge opportunity in

rubber, bamboo, fruits, vegeta-

bles and horticulture. India

holds third position in rubber

Growth Potential of North East States


Cover Story

Perspective | Chlorophyll | Qutopia | DoMS da Evince | Success Story | Regardez I’economie | Spotlight

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04 | DOMINATION, SEPTEMBER 2013

10,000 hectares of rubber (the

available plantation area is

35,760 hectares). Besides Tri-

pura, there is a huge opportu-

nity for rubber production in

Mizoram and Assam. The NE

states also produce a substantial

percentage of bamboo, account-

ing for 65% of India‟s produc-

tion value and 20% of the

global production value.

Mizoram alone contributes to

around 40% of the country‟s

bamboo production. While In-

dia‟s bamboo market is ex-

pected to grow to USD 5.5 bil-

lion by 2015, the UN‟s Indus-

trial Development Organisation

has estimated the NE‟s bamboo

production to grow up to USD

1.25 billion in the same period.

The region‟s comparative ad-

vantages in producing vegeta-

bles, fruits and other horticul-

ture products can be tapped by

setting up small-scale process-

ing units for the local market

which will also boost rural em-

ployment. This set-up is eco-

nomically viable as well as do-

able as a small processing unit

requires little capital. The re-

gion produces a large amount

of spices such as chillies, gin-

gers, mustard seeds, fruits and

vegetables which can be proc-

essed and marketed locally.

Arunachal Pradesh has taken up

the cultivation of horticulture

produce especially of sub-

tropical fruits on a large scale

with assistance from the gov-

ernment. In Mizoram, which

accounts for 12% of the total

fruits produced in the northeast,

a special purpose vehicle (SPV)

has been formed with private

sector companies to set up a

plant for the processing of tur-

meric, ginger, chilly, fruits and

other horticulture products.

There is also scope for dairy

processing and poultry, fishery

processing in the region. There

is huge demand for dried fish in

the region, processing of which

is not capital intensive. The Na-

tional Dairy Development

Board (NDDB), which has ex-

tensive experience in mobilis-

ing producers in milk, vegeta-

bles as well as other areas,

could play a key enabling role

in this process. Increase in milk

production will encourage the

milk, butter and cheese process-

ing industry in the region.

Tourism Opportunity

Even though northeast has huge

tourism potential yet tourism in

northeast region does not figure

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Source: North East Vision 2020, Ministry of development of North East Region

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among top 10 states of India.

Lack of transport infrastructure,

insurgency and less investment

are the main causes that affect

tourism industry. The rail net-

work in the North East form

only 3.7% of the national net-

work. As for the insurgency,

the Institute of Conflict Man-

agement estimated that 5283

people had been killed due to

related events in the North-East

since 2005. Tourism being one

of the largest service industries

in India, with its contribution of

6.23% to national GDP and

8.78% of total employment,

witnesses arrival of more than 5

million annual foreign tourists

and 562 million domestic tour-

ists. North-East India is well

blessed by Nature and it lies at

the centre of one of the world‟s

richest bio-geographic areas. It

has a rich cultural and ethnic

heritage that can easily make it

a tourist-spot. Moreover, the

wildlife sanctuaries at various

places of North-East India can

attract the tourists from all over

the world.

Trade opportunity

Cross-border trade is the most

important medium of the cur-

rent wave of globalisation. In

this development, the north east

economy has emerged into a

new dimension of cross-border

trade (informal trade) with

neighbouring nations and that

increases social welfare of the

poor masses. Under the “Look

East” policy, India seeks eco-

nomic cooperation with

ASEAN and other neighbour-

ing countries through the gate-

way of the region. The North

East is located at crossroads be-

tween three major economies –

East Asia, South Asia and

Southeast Asia. This geopoliti-

cal advantage, has however, not

really converted into the re-

gion‟s economic improvement.

Despite the superior growth in

India‟s trade ties with Southeast

Asia and China in the recent

past, the Northeast‟s role has

been marginal in terms of its

contribution to trade and as a

trade route. It has not been able

to integrate and benefit from

the various regional and sub-

regional initiat ives that

neighbouring countries have

taken. Out of India‟s export

volume of about $254.4 billion,

the Northeast‟s share is only

about $0.01 billion. In order to

benefit from the cross border

trade initiatives industries in the

region need to develop goods to

be exported to the neighbouring

states. Processing industries

have to be established to manu-

facture quality goods, which

can be sold in international

markets at acceptable prices.

Infrastructure and connectivity

improvements in terms of stra-

tegic roads to border areas as

well as Integrated Check Posts

and border trade points need to

be developed. This will also

lead to reduced informal trade

between NE and the neighbour-

ing regions.

Power Opportunity

The region is bestowed with

perennial rivers and water bod-

ies, and has a huge hydroelec-

tricity prospect. This potential,

if leveraged well, can be used

to export energy to other re-

gions of the country. The spill-

over benefits will be the devel-

opment of infrastructure such as

roads and electricity supply to

remote hilly areas, translating

in better quality of life. States

such as Sikkim, Mefhalaya and

Arunachal Pradesh have huge

potential in hydropower genera-

tion. Many policies such as the

„50,000MW hydro initiative‟,

the Hydro Policy 2008 have

been formulated by the central



………………………………………………………


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government to promote invest-

ment in hydropower in the re-

gion. As per the „North Eastern

Industrial and Investment Pro-

motion Policy (NEIIPP), 2007‟

by Ministry of Commerce and

Industry, the entire NER has

been declared a SEZ and many

subsidies, tax exemptions and

waivers have been offered on

cost of infrastructure, transport,

power, etc. The central govern-

ment is also promoting private

sector in the region to boost in-

vestment in the power sector.

About 14,000 MW has already

been allotted to private players

in NER for development as part

of the „50,000 MW hydro ini-

tiative‟.

Overall, we can conclude that

the region is promising in terms

of return if investments are

made. Currently the private

partnership is less in this region

which needs to be improved.

The government is encouraging

investment in the region and we

can be hopeful about a better

future.



………………………………………………………

By-

Nilaya Shankar

DoMS, IIT Roorkee (2012-2014)

[email protected]

Prashant Pandey


[email protected]


mailto:[email protected]


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Why is this even a topic worth

debating? Well, for me, if some

other firm is offering better in-

centives and lots of money,

does it really matter whether

my present employer is worth

sticking with? For starters, the

net worth of every company is

its people and the satisfaction

index of the employers is what

defines the real assets. Not the

patents, not the machineries and

certainly not the closing-

opening stock. Now, if you are

not creating a suitable environ-

ment for your employees, it is

certainly your loss. A study by

The American Society for

Training & Development pre-

dicts that by 2015, 60% of the

new jobs created will require

the special skills held by only

20% of the population. In 1991,

not even half of the U.S. jobs

needed skilled workers. Hence,

the poaching.

Where does the problem lies

then?

The problem lies in the unethi-

cal way and going beyond what

is fair and legal. For example,

well known stock brokering

firm OrdMinnett recently fell

afoul of restraints in a different

way. It utilized the classified

information of Wilson HTM, an

employer of some persons who

were involved in angling for

jobs at OrdMinnett, to try and

'lure away' even more of Wil-

son HTM‟s employees.


Perspective

Employee Poaching


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EMPLOYEE POACHING ………………………………………………………From the prospect of employ-

ers, they always look for

growth; and rightly so, but the

effect on the employee can be

hazardous due to this reasoning.

In several corporate trainings,

employees are trained to respect

the brand they are associated

with, to fill them with a sense

of pride and understanding. But

when the same people step into

the corporate boardrooms, the

result turns out to be destruc-

tive. Instead what employers

should do is, to take more care

on their HR policies, rather than

filling the employees mind with

garbage. If we look at the pre-

sent statistics, almost 12% of

the Google engineers are now

working for Facebook. It was

not the monetary incentives, as

we already know both the com-

panies are very competitive.

Then what was it that changed

the perspective of those 12%

employees.

It was the sudden urge for en-

trepreneurship, as most people

in the tech savvy Silicon Valley

aspire for. And here comes the

crazy Poaching part, where pos-

sible start up companies look

for these people, provide them

with great incentives and the

biggest advantage- give them

freedom like never before. And,

you have your skilled employee

in your lap. As soon as the

brand name has been estab-

lished and the IPO on the way,

these people look for “other ex-

citing stuff”.

So, what should be done?

There are some provisions to

retain your key employees. The

first and foremost is the legal

way. A contract signed and se-

cured with the penalty clause

will effectively protect a busi-

ness from the illegitimate con-

duct of employees and competi-

tors. The second option is to

provide them with the freeness

to work. As seen previously,

the handcuffed employee is

more prone to poaching cases.

Jack Welch started a new con-

cept to curb employee poaching

on a higher level. Whenever a

new VP or CxO wanted to go to

another firm or start his own,

his only reasoning was to train

his successor. And if duly

tested for the job, he allowed it.

The effect of this was the train-

ing and cost could be saved.

The points worth considering

before deciding the final deci-

sion on employee poaching are:

Know your employees right.

Make every suggestion

count. Feel the need to

change the strategy when-

ever necessary.

Link employee success to

business success. It may be

monetary, non-monetary or

even a pat on the back in-

centive.

Find out the reason why

they really want to leave. Is

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE 09 | DOMINATION, SEPTEMBER 2013


………………………………………………………

………………………………………………………it because some executive

decisions or internal dis-

putes?

Find out what others are

giving and why? The basic

poaching methodology

comes down to identifying

your competitors and moni-

tors them closely.

At the end, it comes down to

staff satisfaction. Employees

will always prefer to be in an

organization where they feel

happy and motivated. The risk

(or curiosity) in the uncertainty

will be outweighed by the em-

ployee‟s happiness in their cur-

rent offices. Businesses that fa-

cilitate to foster this environ-

ment will see the advantages,

not only in reduced turnover

and poaching, but also in pro-

ductivity and performance as

well.


EMPLOYEE POACHING



By-

Kunal Bansal


[email protected]


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"..शिखर पर है तू, और जमीन पर मै, पर एक यकीन है मुजमे कही है तू..

महऱो का साया छत पे उसके झोपडो मे रहता मै पर एक बात जो मुझ्मे है कक मुझमे कही है तू

सर पे तरेे छत न थी, रास्तों पे तू रहता था, तरेी यही तो बात है, जो तरेी थी, जो मेरी है..

बद्ऱेगा एक "ददन" यह ददन, मै बनूॉगा "तू" क्योंकक एक यकीन है, मुझमे कहीॊ है तू..."

Chlorophyll ………………………………………………………Its wise to learn, its GOD like to create


यकीन


By-

Kaushik H Makwana


[email protected]


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Qutopia ………………………………………………………

It’s Exquizite, Kills your Quriosity and adds to your Quizdom. Need we say more? ‘Qutopia’ – A Utopia of the best Biz Quiz Tidbits to wreck your brains! Rush in your answers to [email protected] before 21st October, 2012. The winner will have their names published in the next issue. Also, person getting the highest score in the current quarter will get a gift voucher. Answers in the next issue of DoMination.

Section A (1 Point for each correct answer)


1. What is called as the powerhouse of a biological cell?

2. .......................is the first state to register its brand with Government of India‟s trade-

mark registry.

3. Many elements have been named after countries. Which is the only country to be

named after an element

4. In late 1960s, this company was criticized for its marketing of powdered milk formula

in developing countries. Identify the company.

5. Headquarter of Tata Group is known as ........................................

6. Who are Bretton Woods sisters?



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Qutopia ………………………………………………………


Section B (2 Point for each correct answer)

1. Identify the occasion by the Google doodle.

2. Identify the organisation by the logo given below.

4) Identify the below personality.

3) Identify the country by its flag.


Qutopia ………………………………………………………

1. Death of Thomas Edison

2. Albert Einstein said it for Mahatma

Gandhi

3. Ministry of Corporate Affairs

4. Toxic Assets

5. General Motors 6. Accenture

1. The Big Bang Theory

2. Air Jordan

3. Angola

4. Rex Tillerson, Chairman &

CEO at Exxon Mobil

Answers for July edition

Winner of August edition

Shreyas Shrivastav

OSM India Pvt. Ltd.

14 | DOMINATION, SEPTEMBER 2013 DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Perspective | Chlorophyll | Qutopia | DoMS da Evince | Success Story | Regardez I’economie | Spotlight ………………………………………………

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DoMS-da-Evince

Tejasvi Puniani is a 2009 batch pass out of DoMS and presently

working as Pro-Manager at Mizuho Corporate Bank

Q: Please let us know about

your journey prior to joining

IIT Roorkee.

Ans: I am basically a mechani-

cal engineer from DBCRUST

Murthal. I don't know from

where I got interested in MBA

and started preparing in the fi-

nal year. I had a pretty tough

time in the interviews as I ap-

peared for 15 odd companies

before getting selected in two

companies Vedanta Resources

and Isgec Thomson. I joined

Vedanta in Orissa and left it in

15 days as I was not getting

enough time to prepare for my

MBA. Then I joined ISGEC

and side by side prepared for

my MBA. I appeared for test

series and appeared for JMET

and got AIR 337. I got calls

from all IITs and finally joined

IITR.

Q: What are your roles and

responsibilities at Mizuho?

Ans: I, like most of you, had

not heard the name of the bank

prior to my interview. Mizuho

Bank is the second largest Japa-

nese bank and a Fortune

303/500 player having presence

in more than 60 countries. I

have been with Mizuho for al-

most two years. The business

has been divided into Japanese

corporate and Non Japanese

corporate. I am a part of Non

Japanese corporate looking af-

ter large corporate. My role in-

cludes day to day interaction

with the clients as well prepar-

ing the credit appraisal note for

sanctioning the limits to the cli-

ent as per their requirements

and our analysis. The credit ap-

praisal is similar to what you

study in Project Appraisal.

Ironically, I did not choose that

subject as my optional subject.

Yeah the dynamics of real

analysis is different from what

you study but yes you get the

basic knowledge of what it is

and how it is to be done.

Q: How your experience at

Mizuho is different from Care

ratings or SIDBI?

Ans: I am a 2009 (during reces-

sion times) passout and did not

have much choice except to

join SIDBI. I am thankful that I

got a good profile of credit ap-

praisal as first think that comes

to your mind once you hear

bank is loan/credit or in a sense

credit is the bread and butter of

banking. I worked there for 1.5

years and I believe that helped

in learning the basics of credit

evaluation. Corporate whether

small or big, are good at mak-

ing stories or presenting rosy

pictures but it‟s your duty as a

credit person to question his

every assumption and do the

threadbare analysis of his busi-

ness and his projections. I

joined CARE Ratings where



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DoMS-da-Evince ………………………………………………………

Q: Please share your thoughts

whether credit rating depict

true picture of a sector or

company.

Ans: I am glad you asked this

question as I wanted to express

my opinion on this. I believe –

yes, they do or try to depict the

true picture of the sector or

company. Assuming you are an

investor who does not know

much about any particular sec-

tor/company/country and you

want to invest first thing you

look is the rating of the com-

pany and how this company

stacks among its peers. Credit

rating analysts purely do the

analysis part and express their

opinion. I was with rating

agency so I know how things

are done over there and now I

am a part of the bank and quite

often we use ratings from dif-

ferent agencies to get the first

feel of how good a company

that is through its rating. I read

it somewhere Credit rating

companies and politicians are

pretty much not contributing

but indispensable part of the

system which is fairly true.

Q: How much importance

you give to qualitative assess-

ment in risk analysis?

Ans: This question was asked

in some interview if my mem-

ory is serving me right. Qualita-

tive analysis is very important

from the point of risk analysis.

You evaluate the promoter‟s

credentials, number of years he

has been in this business, vari-

ous business risks in relation to

operations, pricing power, in-

dustry structure, his position in

the market etc. which provide

you with very good insights.

Q: What are your views on

Basel III reforms and its im-

plications in India?

Ans: Basel III reforms are set

of reforms to maintain financial

stability and common standards

regulations across banks. Basel

III norms are made with strict

regulations with better risk

management techniques which

are focused more on funding,

liquidity of banks, leverage and

more stringent capital adequacy

requirement. Indian banks are

needed to adopt these norms to

have universal global standards

to avoid any inconvenience in

overseas transactions. Banks

have to infuse an additional

capital of Rs 5 lakh crore to

meet the Basel III norms out of

which share of equity capital

has to be 1.75 lakh crore and

non-equity Rs 3.25 lakh crore.

The Government of India,

which owns 70 per cent of the

banking system, has to incorpo-

rate Rs 90,000 crore into the

state-run banks which looks

tough at this point in time so it

will take some more time to im-

plement.

Q: What is the most challeng-

ing role in your career so far?

Ans: My role in Mizuho is

quite challenging as the quan-

tum of money involved in lend-

ing is huge and you have to do

the ground work properly so

that you can get the approvals.

On the other hand while doing

the operational work; you have

to interact with people at differ-

ent hierarchical levels. On one

hand you would be interacting

with Director of any large cor-

porate and on the other hand

some person at really lower

level in your own organization.

So you have to apply interper-

sonal skills and deal differently

with people at different levels

of hierarchy. In corporate world

always follow top to bottom

approach to get your work

done.



………………………………………………………

DoMS-da-Evince ………………………………………………………

Q: Would you like to share an

interesting incident with us?

Ans: While we were at DoMS

we wanted to organize an event

and we discussed it with

Thomso organizing committee.

They gave us CORPORATA. I,

along with Prashant, Rahul, Ab-

hishek and Tushar (my batch

mates) formed a team, roped in

AIMA and started working on

it. We were worried about the

registrations but due to our

marketing efforts, we got really

good response and had to close

the registration half way

through. On the day of the

event, we came to know that

MPH has been allotted to some

other event and we were left

high and dry. Left with no other

options, we had to split the par-

ticipants into two groups as the

place we got finally was very

small. Therefore, we had to re-

conduct the whole exercise

twice but at the end of the day it

was very satisfactory.

Q: Any message for readers,

especially for the current

batch of DoMS?

Ans: I would advise you guys

to increase your participation in

the events held at other B-

schools. You have to participate

so that you can win. Keep try-

ing. It also adds value to your

resume. Secondly, at the start of

the career you can experiment

with career opportunities and 2-

3 years down the line when you

become aware of what actually

you are looking for you can

build your career in it. Thirdly,

I had a tough time clearing the

interviews particularly HR

round and somewhere found

this 64 interview questions

(type on google you will get it).

This questionnaire takes care of

everything except technical.

Must read. Any of you if inter-

ested in Banking then credit is

good platform to start your ca-

reer. You will have opportuni-

ties as credit is very basic pro-

file and is offered in almost

every bank.



“Strive not to be a success, but rather to be of value.” Albert Einstein

http://www.brainyquote.com/quotes/quotes/a/alberteins122232.html




http://www.brainyquote.com/quotes/authors/a/albert_einstein.html

Success Story ………………………………………………………

………………………………………………………

Peter Drucker once said

that “The best way to predict

the future is to create it”. And

here is a man Mr. Sunil Handa

who is silently following the

rule. In spite of being an alum-

nus of top rated institutions of

the country he chose to pursue

the less chosen path. Mr. Sunil

Handa an entrepreneur, a

teacher, a motivator and a main

man beh ind the LEM

(Leadership and Entrepreneu-

rial Motivator) course at IIM

Ahmedabad.

In his childhood days he was an

average student and scored only

45% marks in class X. However

a radical change happened in

class XII when he was one of

the of the top ICSE students.

This score had helped him to

get admission into BITS Pi-

lani.During his days in BITS

Pilani, he got so much mesmer-

ized and attracted by solar en-

ergy that at one point of time he

wanted to pursue careers in Re-

search.He along with his

friends has written a paper on

their research work which got

published in an international

conference in Italy. They also

got the opportunity to present

the paper in Italy. In his final

year of graduation he has job

offers from USA, Australia,

New Zealand and Israel. At that

time he was not interested in

management education. His

perception got changed only

after meeting Mr. Vijay Vanni-

kar, Personnel Manager of Jyoti

R&D and an MBA from IIM A.

In year 1977, he himself got

admitted into IIM Ahmedabad.

After graduating from IIMA in

1979, he joined FAIR –

„Foundation to Aid Industrial

Recovery‟. FAIR used to take

sick industries and turn around

the industry without firing any

employee. During his stint at

FAIR he worked with many in-

dustries. After that he and his

brother Sushil started a com-

pany called Core Consultancy

Services whose main area of

business a management con-

sulting and consulting related to

computers. Within one year the

company turnover crossed Rs 1

crore with a profit of Rs 60

lakh. His entrepreneurial spirit

had motivated him to close the

consultancy company and

opened a pharmaceutical com-

pany named Core Laboratories

Ltd.By 1994 Core Laboratories

was an Rs 600 crore company

with five huge factories.

After 1994 he got separated

from his brother. The separa-

tion has a massive impact on

his life and he lost his interest

in doing business. He even got

into depression. After being in

depression for 10 months he

decided not to do a normal

business but to open a school

and the idea of Eklayva School

came to his mind.

Eklavya is a non-profit making

company but is very entrepre-

Mr. Sunil Handa is Chairman of Evlavya Education Foundation, Ahmedabad – a nongovernmental and not for profit organization.



Success Story

………………………………………………………DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

………………………………………………………neurial. Before opening school

he did a lot of research on

schools. He visited nearly 150

schools situated in seven coun-

tries. He has also put lots of in-

novation at Eklavya like finan-

cial assistance to poor students,

small classroom, mother in-

volvement and other small

things which helped Eklavya to

become most sought out school

in Ahmedabad. Beside this, he

has also affected the entrepre-

neurship environment at IIM

Ahmedabad. He is taking LEM

(Laboratory in Entrepreneurial)

course in IIM Ahmedabad since

1992. Sunil believes many of

his students will turn entrepre-

neurs one day. Sunil is not only

encouraging entrepreneurs

among young graduates but

also embedding value and eth-

ics among them. Truly speaking

nation needs more of such peo-

ple.



………………………………………………………

Regardez I’economie ………………………………………………………

Infrastructure is among

the fastest growing sectors in

India. It has been accorded high

priority by the government of

India and the total investment is

envisioned to be around $1 tril-

lion in 12th Five year plan. The

infrastructure projects are a

capital intensive business with

long payback periods and fi-

nancing is a key concern in

these initiatives. The funding

for such projects is usually

done by two methods, Debt and

Equity. Both have their own

advantages and disadvantages

and a mix of the two is em-

ployed to meet the capital re-

quirement. Debt is given prefer-

ence as it is cheaper than Eq-

uity. However considerable de-

fault risk and regulatory pres-

sures have compelled banks to

put a ceiling on the debt financ-

ing. Adding to this, the no re-

course or limited recourse fac-

tor makes the situation worse.

Equity, by virtue of being a

costlier source, is always a not-

so-preferred choice. In light of

such situation, there is a need of

financing methods which lie in

between the above two modes.

Such types of modes are called

Mezzanine Financing.

Mezzanine Financing for Infrastructure Projects



………………………………………………………

MEZANNINE FINANCING FOR INFRASTRUCTURE PROJECT ………………………………………………….

Mezzanine Financing is done

through instruments that have

features of both debt and equity

and occupies a middle position

in terms of risk-return spec-

trum. In terms of hierarchy of

creditors, it comes after debt

but before equity. Overall, Mez-

zanine capital could be under-

stood as the layer of finance

which bridges the gap between

debt and equity and therefore

helps in optimizing overall

capital structure. It has several

advantages such as minor dilu-

tion of existing ownership, free-

ing up equity which can be de-

ployed in the project and thus

reducing the risk and increasing

the return on equity. Addition-

ally, Mezzanine Finance is

treated like equity capital on

balance sheet and hence facili-

tates smoother standard bank

financing procedure. The most

popular instruments for Mezza-

nine Financing are subordinate

unsecured debts, convertible se-

curities or preferred stocks.

Among them subordinate debt

is the most common form of

financing. The lender of this

instrument is in a junior or sub-

ordinate, lien position to senior

lenders and has no equity par-

ticipation in the project‟s cash

flow and do not have any role

in the management of the pro-

ject. The advantages and disad-

vantages are listed in the figure.

Mezzanine Finance is in prac-

tice for more than two decades

but limited mainly to USA and

European markets. With the

growing Indian economy and

infrastructure sector becoming

a hot spot, it is gaining accep-

tance here as well. ICICI Ven-

ture‟s Mezzanine Finance was

first to concentrate on such fi-

nance opportunities. Recently

Mytrah Energy India Limited

has raised Rs. 1200 million

($17.5 million) by mezzanine

financing which will be sub-

scribed for by Bindu Urja Infra-

structure Ltd. and Mytrah Wind

Developers Pvt. Ltd. Another

Asian example is of China‟s

Zhuhai Highway Company

Ltd., which succeeded in rais-

ing $115 million in the form of

subordinated notes in interna-

tional capital markets. The

Manilla Skyway project in Phil-

ippines, acquired a substantial

amount of capital through mez-

zanine financing.

Currently, India is viewed as a

flag bearer of the developing

world, with sufficient scope for

financial investments into infra-

structural sector. Therefore in-

vestors across the globe are ey-

ing this sector for investment

which has huge growth poten-

tial. Considering the unique

benefits offered by the Mezza-

nine Finance it is poised to see

the growth as already evident

from few examples.



By-

Sharad Srivastava


[email protected]


………………………………………………………

Spotlight

Alumni meet is always an emo-

tional subject for students, be it

current students or passed out

ones. The passed out students

are eager to go back and feel

the life where it all started and

on the other hand, current stu-

dents have a chance to meet the

seniors and learn from them.

We, at DoMS, had such an ex-

perience on 20th Sep 2013. The

occasion was Reminiscence

where three batches (first year,

second year and recently passed

out) of the department came to-

gether. It was one of the most

awaited events for the students.

The pass out students were

looking for their degrees and

reunion whereas second year

students were having an oppor-

tunity to meet their seniors

again and revisit the good

times. First year students were

more enthusiastic about meet-

ing their seniors.

The event was organized by

Alumni committee of DoMS,

IIT Roorkee. It started with a

welcome speech and then our

Head of the Department Dr.

Santosh Rangnekar addressed

the students. The event was also

graced by Dr. M. K. Barua who


Reminiscence


………………………………………………………

REMINISCENCE appreciated the efforts of the

students. After the addresses it

was the time for thrilling per-

formances. A series of high

voltage and enthralling per-

formances were given by the

first year batch. Meanwhile the

alumni are entertained by vari-

ous fun games.

After the performances, it was

the time for alumni to come for-

ward and share their experi-

ences. It was a pleasure to listen

to their stories. Meanwhile din-

ner was also served. Finally a

note of thanks was delivered

and it marked the conclusion of

the event. Now it was the time

to rock the stage. The past and

present students danced to their

heart. They lived once again

what they called as “Life”.



………………………………………………………

SpotLight ………………………………………………………

VIPANAN



Big data is already a buzzword in the field of Marketing. Marketers are getting increasingly interested and involved in capturing and analyzing Big Data for a variety of reasons. For a management stu-dent, it is of vital importance to understand about this new con-cept. DoMS, IIT Roorkee found such an opportunity to discuss the topic and learn from the industry leaders. The event was marketing summit, Vipanan which was or-ganized on 15-Sep-2013 at De-partment of Management Stud-ies, IIT Roorkee in association with ISTD Dehradun chapter. The event was sponsored by brands such as Namo Alloy & Indian Oil and con-ducted by MarkIIT, the marketing club of DoMS, IIT Roorkee. There was an aura of excitement in the department and students were

enthusiastic about the same. The event saw participation of some of the industry stalwarts. A total of four eminent personalities joined the occasion and shared their experience with the stu-dents. Their brief profiles are mentioned below: Mr. D. Bhattacharyya – Sr. Ex-

ecutive Director (HR), IFFCO Mr. Shushobhan Chowdhury –

VP and Head of Digital Strat-egy India, JWT

Mr. Raghu Iyer – Head Mar-keting (Vaccine Business), Panacea Biotech Ltd.

Mr. Divyang Gupta – Account Manager, IBM

The summit was also attended by the head of the department Dr. S. Rangnekar and Dr. J. K. Nayak.

The event took off by welcoming all our guests and lightening of the lamp. Then batch profiles of DoMS, IIT Roorkee were pre-sented. Then a welcome note was delivered by Dr. Rangnekar, HoD where he touched upon various activities of the department. He elaborated on the four basic ob-jectives of teaching, training, con-sulting and research and the ini-tiatives taken by the department in these areas. It was now the time for renowned speakers to enrich us. The first speaker was Mr. D. Bhat-tacharyya who expressed his hap-piness to be with the youth. He took us a few years back when an Indian was contributing to around 70% of the total wealth of the world. He also recalled how

………………………………………………………

VIPANAN

rupees and the dollar was equiva-lent 70 years ago. He shared his concern that now a days Indian people do not follow its own his-tory. He explained further by cit-ing an example of a Bangladeshi youth and his ignorance about his own history and leaders. He com-pared the similar situation for In-dia as well. According to him, peo-ple now are more open to the leadership of Jack Welch rather than Mahatma Gandhi. This has led to a shift in the overall value system which is now centered around “only we win”. He stressed on the fact that inclusive growth is essential for the nation and need of the hour. This can be achieved by focussing on the ru-ral India and he shared some sta-tistics on the condition of rural India. In this backdrop he intro-duced his organization IFFCO, the largest marketer of chemical fer-tilizer in the world. He revealed the fact that IFFCO is owned by 5.5 crore farmers of the country. If we include their families the figure reaches to one fifth (20-22%) of the total population of the country. This way IFFCO is a direct stakeholder in the food se-curity bill which is expected to provide subsidy to 75% of the ru-ral population and 67% of the to-tal population (82 crore people).

The scheme would cost approx. 130 lakh crore to the government. Overall he opined that rural mar-ket is expected to see high growth and it should be the area of focus. Another issue he touched was the gender diversity i.e., participation of women in the labor force. He supported greater participation of women and gave the example of the matured economies. The speaker was also a great admirer of Swami Vivekananda and quoted him several times in his speech. As a whole it was a great inspiring speech and a treat to listen to. The next speaker was Mr. Shushobhan Chowdhury who ini-tiated his dialogue with the quo-tation “Be the change you want to bring”.

He narrated his own story how he went through many adverse con-ditions before tasting the success. Mr. Shushobhan is an in and out marketing guy and he reflected upon the role of marketing. He said that it is more important how to see than what you sell. He then ran through a presentation which explained the digital media revo-lution. It also contained informa-tion about Big Data and sup-ported by insights from the

speaker who said that Big Data is actually a rehashing of the term business intelligence. He also ex-plained how digital marketing is helping in bringing loyalty. An ex-ample of Pepsi was given. Accord-ing to the guest, 72% of the peo-ple who drink Pepsi are also a cus-tomer for Coke hence hinting that there is no absolute loyalty. The data can only give us details such as what share of people of using a product but can’t tell us how to induce loyalty. Big Data can help us to predict, analyze and narrow-ing our decision making but can’t help with sales, creativity and marketing. We can have insights from the data but not at the cost of marketing. Therefore he con-cluded that data could not replace the marketing, at least not in the visible future. Nevertheless he acknowledged the power of data and quoted example of retail sec-tor where Big Data is extremely helpful in increasing efficiency. He also encouraged students to study about digital media and shared few sources where we could learn from. The third speaker was Mr. Raghu Iyer, an alumnus of SIES Mumbai. His areas of specializations are brand management, marketing


Perspective| Chlorophyll | Qutopia | DoMS da Evince | Success Story | Regardez I’economie | Spotlight

………………………………………………………

VIPANAN

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE 26| DOMINATION, SEPTEMBER 2013


and product analysis for pharma-ceutical products. He first explained us the distinc-tion between generic and branded drugs and some patent laws related to that. He also spoke about how cost of R&D is growing day by day and there should be a pipeline of future pro-jects. He mentioned that now the complete lifetime of a product is around 8-9 years which used to

be 12-13 years earlier. This also contributed towards growth in the R&D costs and on top of it, there is no guarantee of success (actually the success rate is one in one thousand). He then went on to describe the pharmaceutical industry in India which is domi-nated by local players, although foreign companies are catching up. It is a recession proof industry

and poised to be $70 billion mar-ket by 2020. He also introduced his organization Panacea Biotech Ltd. which is at number 3 in words as far as no. of tablet consump-tion is concerned. He also shared that India is hub of clinical trials too as per patient recruitment cost is low here. The speaker then discussed the delivery network in which doctors play a central role. The marketing is very different as well due to the fact that medi-cines are considered a need in a negative sense. The sales repre-sentative becomes a key player in overall marketing efforts. Opinion leaders are other important play-ers of the game. In this context, he talked about the digital social media marketing and how is changing the landscape. Lastly he enumerated the main features of a brand plan and its key elements. The fourth and final speaker of the day was Mr. Divyang Gupta. He is a 2005 batch alumnus of DoMS, IIT Roorkee and currently associated with IBM. He has also worked with organizations like TCS, PwC and E&Y in the past. The speaker briefed us about the IT industry. He also deliberated upon the changing nature of the

industry in which customers are at the center now. He explained us the various products and ser-vices offered in IT industry and also introduced us to the world of ERP. Then he went on to social media and what kind of role it is playing. He also walked through the different functions of IT com-panies. This marked the end of the event. A note of thanks was delivered and mementos were presented to the guests. This was a very well organized session with the well known names of the industry. The topic of the summit was as rele-vant as it could be. The take-away from the session was immense and students were very apprecia-tive of the same. The Vipanan is over now however the learning is

there to stay.

Department of Management Studies

IIT Roorkee


ROORKEE - 247667, INDIA

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