Industrial IoT will score over consumer IoT

In 2015 industrial and enterprise IoT solutions attracted over 75% of funding as compared to consumer IoT companies; this trend is expected to continue in 2016

A file photo of the EHang 184 passenger-carrying drone at Consumer Electronics Show (CES) in Las Vegas, Nevada, US.

With over $20 billion in merger and acquisition (M&A) deals and close to $2 billion in funding, the Internet of Things (IoT) witnessed significant traction in 2015.

Between 2010 and 2015, over $7.5 billion has been invested in IoT companies globally in over 900 deals. While until 2014, consumer-focused IoT solutions (primarily in Wearables and Quantified Self) garnered a slightly higher share of total IoT investments, industrial and enterprise IoT solutions attracted over 75% of funding in 2015 as compared to consumer IoT companies.

This trend is expected to continue in 2016 by a larger order of magnitude—2-3 times more than consumer IoT.

IoT is defined as a worldwide network of “things” that include identifiable devices, appliances, equipment, machinery of all forms and sizes with the intelligence to seamlessly connect, communicate and control or manage each other to perform a set of tasks with minimum intervention. The goal of IoT is to enable things to be connected anytime, anyplace, and with anything or anyone.

Industrial and enterprise IoT solutions are primarily in the verticals of smart manufacturing, Industry 4.0, smart grids, oil rigs and refineries, wind farms, retail and logistics. Most of these industries have had sensors and been experimenting with sensor-enabled automation for a long time. Now with IoT, the focus is on artificial intelligence and machine learning, security and sensor computing.

Consumer IoT solutions are being developed in segments like home automation, health care, quantified self (gaining self-knowledge by using technology such as sensors on your smartphones or wearables to track your own data such as heart rate, stress levels, etc.), sports, automotives, and entertainment. And, the focus of consumer IoT extends much beyond the three areas of industrial IoT, to include miniaturization, power management, mesh networks, better connectivity protocols, interoperability and convergence platforms.

We are witnessing disruptive innovation in the consumer IoT space across verticals. These include charging pods mounted on street-light poles wirelessly charging electric cars on the move; transparent, non-intrusive heads-up display (HUD) for cars that can handle voice calls, text and e-mail messages, music, radio, and map-based navigation; network-enabled, cloud-powered, AI-driven dolls that can converse with kids and double up as security devices; miniaturized and portable ambulatory/holter and stress analysis ECG (electro cardiogram) machines that one can carry on person, avoiding a visit to the big hospital; smart pots that allow users to remotely monitor soil and light conditions and even water their plants through a mobile application; and smart insoles that measure impact stress on a runner’s feet and knees and provide intelligent analysis and guidance to improve one’s body dynamics and performance.

Comparatively, in industrial IoT, innovation is incremental. Many large technology companies are cautiously participating in the consumer IoT innovation through corporate venture funds and accelerator programmes. But this does not amount to a true open support of the innovation ecosystem.

From a professional venture capital investor’s point of view, industrial IoT has short-term adoption and business potential, hence most consumer IoT products are perceived as point solutions. And, this sentiment is currently driving the investment decisions of professional venture capitalists in the IoT space.

However, one key trend that we are observing in the consumer IoT funding space is the rise of crowd-funding. Many consumer IoT companies, in their early stages are using crowd-funding platforms to raise seed funds.

These companies seek professional venture capital funding only once their idea is validated, the product developed and early adopters garnered, and the solution and the company are ready to scale. This model of democratizing the venture capital through crowd-funding (in the early stages) is the most sustainable and scalable framework for consumer IoT ecosystem growth, and is expected to continue for the next few years.

The recent regulatory breather—JOBS Act (in the US)—that allows investors to buy securities through crowd-funding is effectively a welcome step for the young IoT companies.

Currently, in the IoT evolution timeline, we are at a stage where we were during the early 1990s of the internet era. The Google(s) and Facebook(s) of the IoT are yet to be born and/or yet to come to the fore.

For IoT to evolve as a web of platforms for connected smart objects, the biggest challenge will be to overcome the fragmentation of vertically oriented closed systems and architectures and application areas towards open systems and integrated environments and platforms.

For IoT to go mainstream, the industry needs to solve remaining technological barriers (interoperability, security, etc.), explore integration models, validate user acceptability, promote innovation on sensor/object platforms, and demonstrate cross use-case issues. Moreover, industrial and consumer IoT solutions need to be duly supported and evolve together.

Make corporate governance a common cause: Amit Tandon

Both companies and investors need to focus on corporate governance to promote the health and well-being of companies

Amit Tandon

In America, the 5,000 or so public (or listed companies) account for a third of the employment and half of the capex. If the US is to continue to sit at the high table “(we) think it essential that our public companies take a long- term approach to the management and governance of their business (the sort of approach you’d take if you owned 100 per cent of a company)”. Clearly the health and well- being of listed companies is important for nation building.

With this objective, the chief executive officer (CEO) of some of the largest asset management firms (Blackrock, Capital, Vanguard, State Street, J P Morgan Asset Management and T Rowe Price), a public pension plan (CPP), an activist investor (ValueAct), as well as a few CEOs of some large publicly- owned companies (J P Morgan Chase, Berkshire Hathaway, GE, Verizon and General Motors), last month presented aseries of corporate governance principles for listed companies, their boards and shareholders. Called the “Commonsense Corporate Governance

Principles”, [www.governanceprinciples.org] these are a “framework for sound, long- term- oriented governance”.

Most noteworthy about this exercise is companies and investors coming together to jointly focus on governance. For long, markets have assumed that since corporates need to adhere to these, they alone are responsible for their drafting and implementation. But companies need money that investors have, and investors need well- governed companies to invest in.

The applicability of the principles spelt out here is universal and not in any way linked to the regulatory framework.

While parts of it are US- specific, for the most part these principles can be applied everywhere, including in India, as these are not overly prescriptive in how to achieve goals. An example: A company should not feel obligated to provide earning guidance — and should determine whether providing earning guidance for the company’s shareholder does more harm than good.

In the US, management and ownership generally tend to be separated. As aresult, the dialogue between a company’s shareholders and its management is through the board. Consequently, three sections in the document deals with the board: Board of directors — composition and internal governance, board of directors’ responsibilities and later in the document, board leadership (including the lead independent director’s role). These talk about not just the composition, election, compensation and effectiveness of the board but also about its responsibilities focusing on the directors’ communication with third parties and setting the board agenda. In India, as owners tend to manage their business, the focus on the board is relatively low. However, companies and shareholders are doing themselves a large disservice by not holding Indian board sufficiently accountable.

The other items included are:

Shareholder rights: This deals with proxy access and dual class of shares. I have written about dual class shares earlier for this newspaper (“Governance norms: Direction or diktat”, July 21). While the document highlights that dual class is not the best practice, it recognises that there might be circumstances when such shares have to be issued. In such situations, it’s desirable to insert triggers when dual shares will cease to exist. It makes a strong case for all shareholders to be treated equally in any corporate transaction — a clear reminder that there is no place for payment of non- compete fees.

Public reporting: This focuses on transparency around financial reporting but also encourages commentary around long- term goals being “disclosed and explained in specific and measurable ways”. One of the strengths — and possibly, weakness as well — of the Indian corporate sector is family ownership, which enables owner- mangers to take a generational view of their business.In this context, the recommendation that a company should take a “longterm strategic view, as though the company were private” should resonate with corporate India.

Given that listed companies fall under the tyranny of quarterly reporting, in a separate missive the group has questioned the need for quarterly reporting: but corporations still have some way to gain unbridled investor trust in India, so it’s not certain how this one will go down.

Succession planning: Clearly, this is one of the most important decisions the board will take. Unfortunately, the principles enumerated here are sketchy.Nevertheless, the lesson for Indian companies is that boards need to continuously plan succession. More so, because most companies in India are ownermanaged, boards tend to have a dynastic approach that tends to favour the bloodline. Indian boards need to learn from their global counterparts and prepare for eventualities, including protecting the company from its owner.

Compensation of management: There are some interesting points regarding CEO compensation. First, that a substantial portion, that is 50 per cent or more, should be in the form of stock options or their equivalent; second, that these should be made at a fair market value or higher, with “particular attention given to any dilutive effect of such grants on existing shareholders”.In India, while owner- mangers do not get stock options, they often forget their wealth is tied to their shareholding in companies and extract huge salaries for themselves. Regarding ESOPs to employees, the prevailing trend is that if the share price has fallen, the exercise price needs to adjust: this only goes towards protecting the downside risk of employee wealth and does not become an incentive for value creation. Independent directors are ignoring that shareholders are starting to vote against egregious pay and ESOP re- pricing, leading to these getting voted down and red faces in the boardroom.

Given their ownership of business, asset managers’ role in corporate governance is now critical. They have the ability to influence behaviour and shape outcomes. Therefore, asset managers must act thoughtfully. They must be proactive and raise issues with companies as early as possible, and be constructive in their approach.

Considering the heft of the institutional investors signing on these recommendations, Iexpect theseto gain currency across all markets, including India. And, in adopting them we, too, can hope to achieve what the signatories expect in the US. “(Our) effort will be the beginning of a continuing dialogue that will benefit millions by promoting trust in our nation’s public companies.

Piramal eyes more M&As in pharma, will launch new funds: Chairman Ajay Piramal

Piramal Enterprises has acquired US-basedAsh Stevens in an all cash-deal valued at $43 m

Piramal Enterprises has acquired the US-based Ash Stevens, a contract development and manufacturing company, in an all-cash deal valued at nearly $43 million. Ash Stevens will be the third facility for Piramal Enterprises in the North American market. Speaking to BTVI, Piramal Group Chairman Ajay Piramal says the company is looking at growing both organically and through acquisitions in the pharma space. The group is also looking at renewable and financial services as major growth opportunities, he said. Excerpts:

Can you take us through the benefits, the synergies and the rationale behind the Ash Stevens deal?

Ash Stevens is a manufacturer of high-potency API (active pharmaceutical ingredients). This is a niche, fast-growing market. In the last six years, the CAGR in this business has been about 9.9 per cent as far as the high-potency APIs are concerned. And we believe that this will form an important part of our client strategy

In North America, we have a facilityin Canada which makes high-value, low-volume products, intermediates and finished products. We also have an injectable facility in Lexington, Kentucky; and this will fit in well with that.

Besides, the customers that we have for Ash Stevens and our existing customers are very complementary to each other. Therefore, we will expand the customer base that we have; the sales force we have today will be able to sale these products as well. So we just increased our overall product offering to our customers.

You have been accumulating assets with niche abilities and capabilities. Where would your next focus area be in terms of geographic exposure or the addition of another such facility? Is it safe to assume that the interest will continue in the US?

In a pharmaceutical business, we have really three components. One is contract research and manufacturing (CRAM) or what we call pharma solutions. The other is critical-care product from which we make products such as inhalation and anaesthesia products, which go into critical-care centres such as surgery. And the third is OTC (over-the-counter).

Whereas CRAM and critical-care are both global businesses, OTC is an Indian business. So we look at growing both organically and through acquisitions in all these areas. So you could see acquisitions, both for products as well as for services.

It will not necessary happen only in the US, even though the US is the largest market. It could be also in Europe or in Japan as well. In the OTC space, which is only an Indian market that we carter to, we will do acquisitions only in India.

In the last eight months, we have acquired a series of three groups of brands for OTC in India.

You also recently invested ₹800 crore in ACME Solar. What is the rationale behind that and what are your future plans for it?

We are not really running these businesses as investment. It is not like we do in Ash Stevens. These are loans from which we earn interests over a fixed period of time and we will get it back. That is one thing.

On the other hand, we do feel that solar and renewable energy is a high-growth area and we want to back good promoters in this area so that they can create value and so can we.

The results have been good and you have been making acquisitions as well. What can we expect from the group in FY17?

As far as growth is concerned, I think we are fortunately well placed in those areas where we see good growth. So first, we see financial service, which is growing well with the growth in economy and PSU banks taking a little bit of back seat. It gives a good opportunity for NBFCs and private-sector companies to do well and gain market share. We will also launch a few funds in the near future.

Independent living for senior citizens

Buy a retirement home for use, not for investment

Abhimanyu Jain, 65, has been living at Ashiana Utsav, Bhiwadi, a housing project for senior citizens for the past eight years. Jain, who has two daughters, was keen to live independently after he retired as a computer engineer from software services company IBM. What he likes about this retirement community is that even a single person can live comfortably, with dining and medical facilities, lots of activities that keep residents engaged, and chores like maintenance, laundry, bill payment, etc, taken care of.

Growing demand

Financially independent senior citizens like Jain are fuelling the demand for housing projects developed specifically for them. A mix of demographic and social trends is driving this. According to projections by the Census of India, the percentage of elders in the total population is expected to rise from 7.4 per cent in 2001 to 12.4 per cent by 2026. India had about 76 million senior citizens in 2011. This figure is expected to more than double to 173 million by 2025.

Among social factors, the break-up of the joint family as an option that one could fall back on in old age, children moving abroad or to another city for work, the desire to not be a burden on the children but live independently among peers from the same age group, the upscale nature of current projects, and the vanishing stigma around such a move are all leading to an increasing number of people opting for such projects.

Growing demand has elicited a strong supply response. Currently, at least 30 entities are developing housing for this segment, including Ashiana Housing, Max, Tata Housing, Mantri, Brigade and Paranjape Schemes. (WIDE RANGE OF OPTIONS AND PRICE POINTS)

Buy, rent or lease?

Buy: This option is well suited for people with deep pockets. "Buying ensures you can live in those premises all your life. There is no anxiety that you could be driven out," says Shashank Paranjape, managing director, Paranjape Schemes (Construction). People who sell off a house and reinvest the money in a retirement home can also save tax on capital gains. Whatever capital appreciation happens in the property will be enjoyed by the buyer or his heirs.

The only risk in this option is that the senior citizen could end up spending a large part of his retirement kitty on purchase. Also, his heir will be able to live in it only after he crosses the minimum age.

Lease: The buyer makes an upfront deposit and then pays a regular rent and other charges. The cost of entry is lower here. If the children live abroad, they are freed of the burden of selling off the property after the parents' lifetime. When the lease period gets over, a certain portion is deducted and the balance deposit is returned. "The disadvantage of this model is that the lessee does not enjoy capital appreciation," says A Sridharan, managing director, Covai Property Centre. If you wish to exit early, you can only do so if the developer gives his consent.

Rent: People who are not sure about whether they like the concept of living within such a project might test the waters by renting and living there for a few years. If they like it, they can go ahead and purchase. As a long-term model, it carries the risk that the developer could ask you to vacate at any point.

Do the due-diligence 

Prospective buyers should bear in mind that service is a critical component in a retirement housing project. "Invest only with a developer who has the capability to offer high-quality service," says Ankur Gupta, joint managing director, Ashiana Housing, which offers senior citizens' projects in Bhiwadi, Jaipur, Lavasa and Chennai. A Shankar, head of operations, strategic consulting, Jones Lang LaSalle, too, agrees. "While amenities can be created through capital investment, it is how they are managed and the service delivery arrangements that will determine the project's popularity," he says.

The developer and his project should also have the capability to support senior citizens in their later years. "As the senior citizen ages, he might need assisted care, both long-term and short-term. There is a need for specialised centres manned by doctors, nurses and care givers who can offer rehabilitation and care with advancing age," says Sridharan. Only if the retirement community offers such facilities will seniors be assured that they will be taken care of when they become physically dependent.

Go with a project where the developer has a mix of sell and lease/rent model. "A 100 per cent sale model typically promotes speculative buying. A large percentage of the project might remain vacant on commissioning," says Shankar. It becomes difficult to develop a vibrant community in such a project. Retirement communities where the developer has sold entirely and outsourced the services should also be avoided. "If the service provider doesn't earn a high rate of return, he could quit and the senior citizens would be left in the lurch. Go with a developer who has a track record of running his projects himself," says Paranjape.

Visit the project if it is already occupied or go to one of the builder's older projects. "Speak to the residents. If they are satisfied, go ahead and buy," advises Jain.

A sound investment?

Financial planners are of the view that it is best not to treat a retirement home as an investment product. Invest in one because you need it. While most developers might assure you that demand exceeds supply and you are likely to exit at a profit, your experience could be different. "You will only be able to sell to those above 50. The return such a property fetches will depend on demand-supply and the project's quality. If supply increases in the future, your return could be low. Quality of the project, its maintenance and vibrancy of the community will also determine your return," says Vishal Dhawan, chief financial planner, Plan Ahead Wealth Advisors.

BUYER'S CHECK LIST

• Quality of services and staff
   
• Reasonable maintenance and catering charges
   
• In-house availability of basic medical facilities, doctor on call, medical store, ambulance and trained paramedics
   
• 24-hour availability of nurses and care
   
• Proximity to large hospitals
   
• Senior-friendly design
   
• Availability of activities such as religious, cultural and entertainment
   
• The company has a record of regular payment of bills and filing of I-T returns
   
• Proximity to airport and railway station

Royal Enfield to invest Rs 600 cr in new plant

Company wants to build manufacturing plant, in product development and R&D centres

Managing Director and CEO of Eicher Motors Siddhartha Lal during his visit to the Royal Enfield's manufacturing factory at Oragadam near Chennai on Friday

Royal Enfield (RE), motorcycle division of Eicher Motors, is to invest Rs 600 crore this financial year in a new manufacturing plant, in product development and research & development (R&D) centres.

Speaking to reporters at its Oragadam facility, 40 km from here, Siddhartha Lal, managing director of Eicher Motors, said by the end of this year, total capacity would be around 675,000 units, about 200,000 more from last year.

The first phase of the Vallam Vadagal facility, seven km from the one at Oragadam, will be ready by September 2017. This will take the company's total annual manufacturing capacity to 900,000 units.  

Asked if capacity expansion would bring down the waiting period, Lal said this had come down to three months, from a peak of 10-11 months. The company wishes to bring it down further, he said, while giving no numbers. A part of the proposed Rs 600 crore investment will go into the new facility. The balance will be for new engineering centres at Chennai and Britain, and for product development.

Lal said the company would be operating on two or three platforms at any given point. RE plans to bring the entire engineering team under one roof by stationing them at the new facility at Old Mahabalipuram Road, this metropolis' information technology 'corridor'.

Initially, this centre will have about 300 people and can accommodate up to 1,000. The UK centre will have 70 people.  

The company's Himalayan brand, the recent addition, is selling around 1,000 units a month. Lal said RE's focus would be the 250-750cc range of engines. Besides India, it will focus on Southeast Asia and Latin America.

RE, he added, had maintained strong volume growth in the first quarter of 2016-17, continuing to take more orders than monthly supply. It is also adding at least two dealerships every month, the current total being 566.

“Our immediate business outlook remains strong and Royal Enfield continues to grow consistently, competitively and profitably, towards leading and expanding the mid-sized motorcycle segment globally,” he said.

In June, RE opened a store in Manila, Philippines, with its global retail identity. That country is among the largest two-wheeler markets in the world. With a large chunk of the population using commuter motorcycles, there is an enormous potential for upgrading to mid-sized ones, the segment Enfield is in.  

In Europe, it participated in Wheels & Waves, one of the most popular motorcycle customisation and surfing festivals, organised in Biarritz, France.

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THE ROAD AHEAD

• Royal Enfield to invest Rs 600 crore in 2016-17 last year it invested around Rs 500 crore
• Company to increase its production capacity to 6,75,000 by end of March 2017; up by 200,000 units against last year
• Investment includes enhancing capacity, to set up engineering centres & for product development
• By end of 2018, after Vallam Vadagal project’s phase-I completes, total capacity will increase to 900,000 units. New centres in Chennai and the UK will initially have 300 and 70 engineers respectively
• Company’s focus will continue to be in 250-7500cc segment
• To replicate India model, it would first strengthen presence in main cities and then expand in and around Latin America and Southeast Asian countries

Soumya Rajan: ‘I look at family offices as patient capital’

SOUMYA RAJAN, MD & CEO, Waterfield Advisors

Family office capital, unlike a fund, has an investment horizon stretching to 15 years

As the number of high-net-worth and ultra-high-net-worth families grows, many advisors are now involved with setting up family offices to cater to the complex needs of these families. Globally, it is estimated that there are around 4,000-5,000 family offices, of which only 3-5 per cent are housed in Asia-Pacific, suggesting a significant growth potential over the next five to 10 years. Soumya Rajan, MD & CEO, Waterfield Advisors, an India-focused boutique multi-family office, shares her views on how family offices are making a difference to the way UHNIs manage their wealth.

Can you give a brief on how family offices operate?

The family office space is for ultra high net worth family segments. They look at the needs of families in a holistic manner. Unlike banks and other financial institutions that provide only investment guidance, family offices also advice on business succession, investing the liquidity generated by them and on legacy and philanthropy.

Banks do not typically cater to these areas, neither do they look at the sensitivities around company structures, shareholding pattern, differentiating between ownership and management, when it comes to succession.

So, what is the profile of your clients? Are they all from business families?

The profile is mainly family-owned businesses in the ultra high networth space, typically with investible surplus of over $60 million.

They would have operating companies that could be holding a stake in other businesses or could be interested in buying ancillary businesses. We manage around ₹9,000 crore of assets under advisory and this covers roughly 20 families.

We have two lines of business; one is the family-office business and the other is the corporate advisory business. Corporate advisory is also important because for many clients; liquidity is created because of what happens on the corporate side.

Many of them don’t want to go to investment banks right at the outset as the information is sometimes quite sensitive.

So, we hold discussions with the families in terms of the structuring or the restructuring they want to do and the investment bank comes in at a later stage.

Because once the deal enters the investment bank territory, it is information in public domain. The families we deal with are also in the listed space, so sensitive information needs to be dealt with care.

How are the investments managed? Is it on discretionary or non-discretionary terms?

It is completely non-discretionary. We are registered with SEBI as investment advisors because we believe that this is the only way you can avoid a conflict of interest with the client.

Our business model is predicated on the fee that we receive from the client. That’s the way things are expected to move forward too.

Many regulations that have come out from SEBI recently are aiming to make investors adapt to the fee-based advisory model rather than the commission-based one. They have stated that investment advisors will be a separate category.

Then they introduced the concept of two different NAVs for mutual funds; in the direct one, distributors are not involved. Recently SEBI has asked for disclosures on the commissions that are being paid to distributors.

All this is to move towards greater transparency and the advisory model is in tandem with this drive. Ultimately, what it does is to lower the cost of investment for the family; particularly if you are dealing with large corpuses, even 50 basis points can make a large difference to the returns. Ultimately, the distribution cost comes from the returns.

What are the asset classes that you recommend as investments to your clients?

We advise across assets classes that include equity, fixed income, real estate and alternative asset class. We see a growing interest of family offices in the alternative assets space due to the evolving eco-system in the venture capital and private equity side.

Many families are already looking at angel investment, seed investment, and so on, to participate in the start-up ecosystem. Allocation to this asset class has grown from 2-3 per cent to around 15 per cent now.

This is a very long-term and illiquid asset class. I look at family offices as patient capital because unlike a fund that has to exit an investment in five or seven years, family office capital is more long-term oriented, with investment horizon stretching to 15 years or even longer.

Since there is no re-investment risk in this space, family offices are allocating more to start-ups.

They use two routes to invest in this space; one, through fund managers with good track record, or by directly investing in unlisted companies. A group of families could come together to invest in these companies or it could be a single family making the investment.

So, do you help them with valuing an unlisted company?

We do. We help them do the due diligence and value the company. That is covered by our corporate advisory team.

Do you advise the families to churn their portfolios often based on your perception regarding the prospects of various asset classes?

The family office segment generally follows a ‘buy and hold’ strategy. They do not move their portfolios around much. They review their asset allocation strategy once a year, typically in April, taking the macro economic conditions into consideration. This is typically not changed unless there is a significant economic event that warrants a change. They are quite disciplined with their investments and the portfolios are tailored keeping in mind exposure risk and concentration risk as well.

What is the view on real estate investments among UHNIs now, given that price appreciation is hard to come by?

We are seeing a little bit of unwinding of real estate positions of many families. They have made big money over a certain period of time. They are not making any fresh investments in real estate. Most new investments are going into equities or five-year debt. My sense is that once there is a real estate regulator in place, money could flow into real estate again.

Burnpur Cement to invest Rs 500 crore for capacity expansion

KOLKATA: Cement maker Burnpur Cement plans to invest Rs.500 crore for expansion of its production capacity to 3 million tonnes per annum (mtpa) in the next 3-4 years, a company official said on Wednesday.

“Presently, our installed capacity stands at 0.6 mtpa and we are planning to enhance the capacity to 3 mtpa (million tonne per annum) in the coming 3-4 years,” the company’s vice chairman and managing director Ashok Gutgutia said.

He said the investment for capacity expansion would be around Rs.500 crores which will be spent in the next 3-4 years.

The cement producer has two plants, one in Asansol in West Bengal and the other in Patratu district in Jharkhand. Each plant has 0.3 mtpa installed capacity.

The company also aims to increase its sales revenue to Rs.250 crore in the next year from Rs.100 crore in the last fiscal.

The cement producer plans to build a 2 mtpa greenfield plant in West Bengal.

“For which, we are in a process of procuring 100 acres of land. The location for the greenfield project is not yet finalised, it may be in Bankura or Purulia district,” he said.

The company has already bagged two limestone mines through auction mode.

“In addition, we plan to bag 5-6 limestone mines. We are planning to increase the capacity of our Jharkhand plant to 1 mtpa having raw materials reserve for minimum 50 years,” he said.

Sun Capital

MTR Foods to invest Rs 200 crore in 3-5 years to scale up

MTR Foods on Tuesday said it will invest about Rs 200 crore in the next three to five years to scale up its manufacturing infrastructure.

The company also announced the opening of its new e-commerce platform, which will give consumers access to its entire range of products.

"Another big thing that we are doing is around operations and manufacturing, which is really in preparation for the future. If we have to grow... we will need additional capacity, we will need additional investment," MTR Foods CEO Sanjay Sharma told reporters here.

"We have put together a plan internally, based on our growth plans, to invest close to about Rs 200 crore in the next three to five years.

"This will be on increasing our capacity from close to about 45,000 tonnes to about 72,000 tonnes with state-of-the- art equipment and high quality infrastructure," he said.

In 2007, Norwegian conglomerate Orkla took over MTR Foods, which has been serving authentic Indian food for about 90 years.

Stating that MTR's capacity was about 18-20,000 tonnes when Orkla took over, Sharma said since then "we have doubled it."

"We have invested close to about Rs 220 crore just in capital investment and improving the standards of the factory, and took the capacity to about 45,000 tonnes," he added.

The company has a facility at Bommasandra in the city.

MTR today has a size of about Rs 700 crore with a compounded annual growth rate of 18 per cent. It has over 140 products.

"We have very high expectations out of MTR, we expect touching close to Rs 2,000 crore as we go ahead into 2020," he said.

Pointing out that MTR has retained number one position in all categories it serves, the company officials said exports form about 10 per cent of the business.

Chennai Angels to invest Rs 2.5 crores in Agile Parking Solutions

The Chennai Angels today announced an investment of Rs 2.5 crores in smart parking technology startup Agile Parking Solutions (Get My Parking). 

The New Delhi based StartUp founded by Chirag Jain and Rasik Pansare aims to solve the rising parking problems and has created cloud based mobile parking technology making real time parking information accessible for both supply and demand side. 

"Automotive customers now seek real-time solutions and a triangulation of location, service aggregation, payments and community shared feedback to delight their personal journeys with. The GMP team is driving towards a platform to delight its customers," said Sudhir Rao of IndusAge Partners who led the investment. "Within eight months of commercial operations, they are at the cusp of servicing over a million transactions a month in the NCR region alone", he pointed out. 

The mobile app allows users to search, book and navigate to parking saving them the trouble of driving around in search of space. The user gets a bird's eye view of all the legal parking lots with map of locations, availability, pricing and other details and gets assured parking with cashless payment and navigation. 

"The exponential rise in demand for parking space is crippling the urban infrastructure and causing needless congestion. We believe only technology and data driven solutions can solve this chronic problem with efficient use of existing parking space," said Chirag Jain, cofounder of the company. 

With a 25 member team the startup follows a data-centric approach that could help in giving better insights into urban traffic landscape. By saving time, fuel and energy, the technology is believed to help reduce urban traffic congestion and consequent pollution by up to 30%.

Sun Capital 

The 5 Highest Paid Executives in The Financial Sector (JPM, C)

Successfully guiding major financial firms through economic disasters can be a lucrative business, as shown by the skyrocketing salaries of countless executives in the financial sector. Not only do they earn big paychecks, but they are also among the most influential and powerful people in the world. While executives in the financials sector may not make quite as much as the top hedge fund managers, not many would complain with salaries like these.

JPMorgan Chase CEO and Chairman of the Board, James Dimon

James “Jamie” Dimon became CEO of JPMorgan Chase & Co. (NYSE: JPM) in 2005 and its chairman of the board in 2006. He was Bank One’s president and CEO before the two banks merged in 2004, and also played pivotal roles at Citigroup (NYSE: C), the Travelers Group, Commercial Credit Company and American Express (NYSE: AXP).

Dimon is credited with successfully guiding the company through the Great Recession, and JPMorgan shares have soared under his leadership. As a reward, his annual compensation package totals more than $27.7 million. Bank CEOs typically make a fraction of successful hedge fund managers, but Dimon has managed accumulate a net worth of $1.1 billion, as of February 2016.

Ameriprise Financial Chairman and CEO, James Cracchiolo

James "Jim" Cracchiolo has been chairman and CEO of Ameriprise Financial, Inc. (NYSE: AMP) since 2005, when American Express Financial Corporation completed its spinoff from American Express Company. Cracchiolo joined the company’s former parent in 1982, holding several senior executive positions.

Cracchiolo is credited with a successful transition to independence for Ameriprise and improving the company’s position as one of the largest diversified financial services firms in the United States. As a reward for the success of Ameriprise, Cracchiolo receives an annual compensation package valued at $24.5 million.

BlackRock Chairman and CEO, Larry Fink

As chairman and CEO of BlackRock Inc. (NYSE: BLK), Larry Fink is one of the most influential money managers in the world. As of February 2016, BlackRock has an astounding $4.6 trillion in assets under management, making it the largest money management firm in the world. The company manages the portfolios of the vast majority of the largest corporations in the world and was contracted to help revive the economy by the US. government following the Great Recession.

Fink has been the company’s CEO since co-founding BlackRock in 1988 under the corporate umbrella of The Blackstone Group (NYSE: BX). He has lead the massive mergers and acquisitions with Merrill Lynch and Barclays and receives an annual compensation package totaling more than $23.8 million.

Goldman Sachs Chairman and CEO, Lloyd Blankfein

As chairman and CEO of Goldman Sachs (NYSE: GS), Lloyd Blankfein heads one of the world’s most prestigious and wealthiest financial firms. The company’s CEO since 2006, Blankfein immediately became one of the highest paid executives on Wall Street as a reward for the company’s success, earning as much as $54 million in 2007.

Before taking the helm, Blankfein managed the Goldman Sachs currency and commodities division and was in charge of the fixed income, currency and commodities division (FICC) and equities division.

Blankfein came from humble beginnings, growing up in the housing projects of Brooklyn and has amassed a fortune valued at over $1 billion. Blankfein receives an annual compensation package valued at $23 million.

American Express Chairman and CEO, Kenneth Chenault

Kenneth Chenault joined American Express Co. (NYSE: AXP) in 1981, and when he was named the company’s chairman and CEO in 2001, he became only the third black CEO of a Fortune 500 company. Chenault serves on the boards of several major organizations and is also a member of the President’s Council on Jobs and Competitiveness. Chenault receives an annual compensation package from American Express valued at $22.4 million.

Sun Capital

Analyzing ConocoPhillips’ Return on Equity (COP, XOM)

ConocoPhillips (NYSE: COP) reported return on equity (ROE) of -2.04% for the 12-month period ending in September 2015. This represents a sharp drop from its 2014 ROE of 13.21% and an even bigger drop from its 2013 figure of 18.3%. The company has a trailing 12-month net loss of $1 billion, down sharply from a net income of $6.9 billion in 2014. Its shareholders' equity, which stood at $44.2 billion as of September 2015, has declined more modestly. It was $51.9 billion at year-end 2014.

ROE Analysis

ConcoPhillips' precipitous drop in ROE from 13.21% in 2014 to -2.04% for the 12-month period ending in September 2015 came as a result of a commensurately sharp decline in net income. Like all large-cap oil and gas companies, ConocoPhillips has struggled amid a crash in oil prices throughout 2015. Oil, which traded as high as $147 per barrel for a time in 2008, fell below $30 per barrel in 2015, its lowest price since the 1990s. The company's main competitors, Exxon Mobil Corporation (NYSE: XOM) and BP PLC (NYSE: BP), also saw their net incomes and ROE fall considerably from 2014 to 2015 -- though Exxon Mobil managed to keep both figures positive.

DuPont Analysis

A typical ROE analysis looks at net income and shareholders' equity separately and evaluates the effect that each has had on changes in ROE. The DuPont analysis, by contrast, breaks ROE into its constituent components of net margin, asset turnover ratio and equity multiplier and seeks to determine the influence each has on ROE.

ConocoPhillips' net margin for the 12-month period ending in September 2015 was -2.82%, down from 12.37% in 2014. A February 2016 press release from the company acknowledges that low commodity prices have squeezed its margins and, as a result, it is taking active steps to bring expenditures in line with its reduced revenue. It cut its quarterly dividend from 74 cents per share to 25 cents per share, lowered capital expenditures by $1.3 billion and reduced operating costs by $700 million.

Its competitors suffered falling margins as well, with Exxon Mobil's dropping from 7.89 to 6.73% and BP's declining from 1.05 to -3.06%. ConocoPhillips had the largest drop of the three, making it reassuring that the company has acknowledged the root of the problem and taken quick and decisive steps to address it.

ConocoPhillips' trailing 12-month asset turnover ratio is 0.32. This figure, which measures how efficiently a company generates revenue from its assets, has fallen steadily from 1.62 in 2011. Its influence on ROE appears moderate, though not as pronounced as that of net margin. Exxon Mobil and BP, both with asset turnover ratios of 0.85, have seen their asset turnovers slow down as well in the wake of the oil price collapse.

ConocoPhillips' equity multiplier for the 12-month period ending in September 2015 is 2.4. This figure has remained steady for a decade. While the company's equity position has fallen slightly, the company has also reduced its debt load, keeping the ratio between the two consistent. A silver lining for ConocoPhillips amid the oil collapse is, at least, the company is not overleveraged. Its equity multiplier sits squarely between those of Exxon Mobil (2.0) and BP (2.7).

Conclusions

ConocoPhillips' steep drop in ROE resulted from severe declines in net income and net margin, both symptoms of broader oil market malaise. On the bright side, the company has come forward with the steps it is taking to counter its declining revenue resulting from low oil prices, which involve slashing expenditures in several areas, such as dividends, capital expenditures and operating expenses. Every large-cap oil and gas company has suffered in the wake of the oil crash. Investors in ConocoPhillips should at least be comforted that the company is being proactive in responding to it.