1Q’FY17 BANKING PERFORMANCE REVIEW

Overall, the rate of increase in bad loans for the banking industry slowed in the June quarter, but the trend is not uniform even for the private banks

The dominant theme of conversation among banking sector analysts these days is whether the worst is over for India’s state-owned banks that roughly has 70% market share. I spoke to four of them last week. While two analysts say that these banks have been to hell and back, the other two are sceptical; according to them, some more pain is left for many banks. I am not naming any one of them as we spoke on condition of anonymity.

The answer lies in the numbers—more than the quantum of bad loans that each bank has piled up, the growth in the pile over the past three quarters ever since the Reserve Bank of India (RBI) asked them to clean up their balance sheets. Between August and December 2015, the RBI inspected the loan portfolios of all banks with a fine-tooth comb and asked them to set aside money for three kinds of loans—non-performing assets (NPAs) not recognized yet by them; loans given to projects where the dates of commencement of commercial operations had passed but the projects have failed to take off; and restructured loans.

The banks were directed to provide for the first two types of loans in two phases in the December and March quarters of fiscal year 2016, at least 50% each. For the restructured loans, they were asked to make 15% provision in six quarters, 2.5% each, till March 2017.

This simply means all banks should be through with recognizing NPAs and making provision for them by March 2016 even as they will continue to provide for their restructured assets till March 2017, by when the entire clean-up exercise gets over. Has this happened?

Bank of Baroda, which claimed to have bit the bullet in the December quarter itself, made a massive provision ofRs.6,165 crore and posted a Rs.3,342 crore net loss. It did an encore in the next quarter and made an even higher provision of Rs.6,858 crore and reported a marginally narrower loss of Rs.3,230 crore. In the June quarter, its provision against bad loans dropped some 71% to Rs.2,004 crore even as its gross NPAs rose 6% to Rs.42,992 crore.

This is more than double of the pile of bad assets the bank had a year ago (Rs.17,274 crore) but the pace of growth in NPAs has definitely slowed. In percentage terms, its gross NPAs rose from 4.13% in June 2015 to 11.15% now and after provisioning, net NPAs are 5.73%.

State Bank of India (SBI) had made close to Rs.8,000 crore provisions in the December quarter and an additionalRs.13,164 crore in March. In June, it made 44% less provision as its gross NPAs rose marginally. In the past one year, SBI’s gross NPAs rose Rs.56,421 crore to Rs.1.15 trillion, but accretion of new bad loans is certainly not as much as we had seen in the past three quarters. In percentage terms, its gross NPAs rose from 4.29% of loans in June 2015 to 6.94% in June 2016 and after provisioning, the net NPAs are now 4.05%.

Among large banks, Punjab National Bank, Bank of India and Canara Bank seem to have got a hang of their bad loans even though their level of NPAs vary, but for quite a few banks, we have not seen the worst yet. For instance, take the case of Indian Overseas Bank, saddled with more than one-fifth of its loan book turning bad. Its gross NPAs had risen 17% in the December quarter and 33% in March, fromRs.22,672 crore to Rs.30,049 crore. On top of that, in the June quarter, it has risen a further 13% to Rs.34,000 crore.

There is no respite from rising bad loans for a few SBI associate banks too. State Bank of Travancore had refused to recognize growth in NPAs in the December quarter, but had shown some aggression in March when its gross NPAs rose some 23%. However, that was not enough. So, in the June quarter, the pile doubled to Rs.6,401 crore.

Data compiled by Mint Research’s Ravindra Sonavane shows that State Bank of Bikaner & Jaipur too was slow in admitting the problem. Its gross NPAs rose around 5% and 17% in the December and March quarter, respectively, but in June, it has risen by more than 27%, on a higher base. State Bank of Mysore too has shown around 19% growth in bad loans in the June quarter after a 34% growth in the December quarter and another 25% growth in the March quarter. All of them will be merged with the parent.

The tale of woe continues for a few other banks such as Oriental Bank of Commerce, Allahabad Bank, Bank of Maharasthra and Andhra Bank. In percentage terms, Uco Bank and United Bank of India have higher NPAs than these banks, but both have added less bad assets in the June quarter than the preceding quarter.

Overall, the rate of increase in bad loans for the banking industry slowed in the June quarter, but the trend is not uniform even for the private banks. Axis Bank’s gross NPAs have risen 57% in the June quarter and that of Karur Vysya Bank, little more than 37% (after a drop in two successive quarters), while ICICI Bank has managed to contain the growth at a little less than 4%.

At a recent banking seminar, RBI deputy governor S.S. Mundra had said for some banks, it looks like the worst is over but some others are still struggling and “it is still work in progress”. The banks are in the business of lending and part of the loans will always go bad for a variety of reasons, including inefficient credit appraisal and monitoring, but shoving them under the rug is not a good idea.

The continuous rise of bad loans in the June quarter for some banks and a sudden surge for a few has two explanations. One, they refused to reveal the real picture in December and March; and, two, more loans turned bad in June, something the managements had not anticipated. Even if the second premise is true, it’s not a good sign when most banks have virtually stopped giving fresh loans.

Tamal Bandyopadhyay, consulting editor at Mint, is adviser to Bandhan Bank. He is also the author of A Bank for the Buck, Sahara: The Untold Story and Bandhan: The Making of a Bank.

How fintech can lift the insurance sector

New technologies and e-commerce platforms are set to gladden the customers as well as the insurers

The Insurance Regulatory and Development Authority of India (Irdai) came out with draft regulations for insurance e-commerce in June. Irdai hopes to lower the cost of transacting insurance business, and improve efficiencies and reach through these norms. E-commerce is also seen as an effective medium to improve financial inclusion in a cost-efficient manner, the draft said.

The regulator has proposed these norms in the wake of many startups trying to bring in digital innovation in the insurance sector. These measures gain importance as insurance penetration in the country is less than the global average, said the Irdai’s annual report for 2014-15.

Fintech in insurance

According to a PricewaterhouseCoopers (PwC) global survey in June, How InsurTech is reshaping insurance, for the insurers, cost reduction is the most significant gain from fintech. “A move towards cloud-based platforms means not only lower up-front costs, but also smaller ongoing infrastructure spending. Only this innovation, when compared to mainframe-based technologies, could reduce costs up to 10-fold,” the survey said. It also added that disintermediation, self-servicing and automation of core insurance functions will lead to further savings for insurers.

Experts also believe that digital innovations have to be first about operational improvement, which will then translate into better experiences for consumers. “Whether we like it or not, the general understanding of the word digital is online selling. What we need to understand is that this element is only a subset of the digital ecosystem,” said Anuraag Sunder, director, PwC.

The use of technology aims at employing existing as well as new data, analysing it, using artificial intelligence and machine learning to understand customer problems and reach a solution.

“Data has really not been a strong point of the Indian industry, and that holds true across sectors, not just insurance. From that perspective, insurance sector has recognised this issue and there has been movement,” Sunder said.

Online platforms enable capture and storage of rich, reliable and insightful consumer data that can be leveraged in the future to customise underwriting for individual customers, based on past history, said Balachander Sekhar, founder and chief executive officer, RenewBuy, a fintech startup focussed on motor insurance. Digital is all about business improvement, it is not about making things look pretty, Sunder said. “Customer ease, or solving the customers’ problem is the most important element in this entire journey. Digital would not have happened otherwise.”

Consumers often complain about lack of understanding and transparency while buying insurance. Fintech can help here. “Insurance contracts are defined using legal language. They contain exclusions and limitations to protect insurers, but are difficult to understand by the consumer. The traditional agent’s job was to explain this to the consumer but this does not always happen... we are trying to fill the gap by using a mix of technology and in-house experts,” said Anand Prabhudesai, co-founder, Turtlemint.com, an online insurance aggregator.

Lack of compliance

Non-compliance is a major concern in segments like motor insurance, where insurance is mandatory. Sekhar said the category sees large drop-outs. About 80% two-wheelers and 25% of cars are uninsured despite it being mandatory. This happens mainly due to lack of reach and distributor interest in pursuing small-ticket premiums, he said.

“Consumer surveys show that while most consumers want to insure their bikes, they are currently clueless about where to find an insurance agent or insurance branch office to get this done,” Sekhar added.

Pricing of insurance and the commission an agent earns are also factors in the widespread non-compliance in motor insurance. “Unlike more lucrative segments like life insurance, where commissions are high, a typical bike insurance policy premium is as low at Rs.1,000 and the agent may earn only Rs.50 to Rs.75 a policy. On top of that, the paperwork and process are cumbersome,” Sekhar said.

Fintech helps customers

While fintech may look like it benefits only the insurers—with benefits like operational improvement—industry insiders also expect these changes to benefit the customers. Fintech is making insurance buying a lot quicker and simpler than the traditional platforms.

“Today, technology allows one to make a quick comparison within seconds and understand the nuances that affect the premium or quality of services. Smart algorithms and clean user interface... allow a user to buy the best-fit insurance for her needs confidently in the least time,” said Jaimit Doshi, chief marketing officer, Coverfox.com, an Irdai-licensed broker. “It also makes managing the policy a lot easier. One can literally buy a policy within 3 minutes without any tedious paperwork,” he said.

According to the Irdai annual report, the penetration of life insurance in the country is slightly more than 2% of the total population and it has been less than 1% for non-life insurance for many years. The report also states that just 2% of total policies sold and 1% of the premium paid were from online channels.

“With mobile and Web technology, consumers across tier 2, 3 and 4 cities and rural India will have access to multiple insurers and transparent prices,” Sekhar said. Apart from reducing the cost of delivering the policy, and cutting down the branch network, online insurance selling also delivers transparent information to consumers.

“Using technology and the internet will allow for custom-pricing mechanisms and ability to sell long-tail products (when gap between filing a claim and its settlement is long), something both insurers and regulator should consider while creating product frameworks. Currently, most products are designed for leading channels like agency and bancassurance, which get adapted for internet sales,” he said.

What’s next

Doshi said low internet penetration in India, and even access to online banking are an impediment. “India is a promising and growing internet market. But currently the penetration level is abysmally low,” he said. However, things are improving. “According to a Boston Consulting Group (BCG)-Google report, by 2020 every three in four policy purchases will be influenced by the digital channel,” he said.

As internet penetration in rural areas improves, the market for these startups will expand. By 2020, about 315 million Indians in rural areas will be connected to the internet, compared to around 120 million at present, according to a study by BCG: The Rising Connected Consumer in Rural India.

Technology has given a boost to several sectors like e-commerce. However, Doshi said unlike in e-commerce, the current regulations do not allow discounts when selling insurance.

According to the draft regulations, insurers will be allowed to have differential pricing for products sold through insurance self-network platforms.

The new regulations could also do away with tedious processes such as physical signatures, by bringing in digital signatures and other authentication methods like one-time passwords.

The insurance regulator has laid down the infrastructure for digital sale of insurance, which is definitely a step in the right direction. This combined with a host of fintech startups in the industry could increase insurance penetration, while also easing the processes for consumers.

Investors come up with alternative funding plans for crisis-hit realtors

With developers hit by weak sales, investors offer innovative options to replace plain equity and debt lending

Private equity funds and non-banking financial companies are offering various modes of lending and repayment to real estate developers struggling with weak sales for the third consecutive year.

Innovative forms of investments are replacing plain equity and debt lending, with investors lining up special situation funds, uniquely-themed funds and construction finance.

ASK Property Investment Advisors, which made high risk-high return equity investments in the last seven years, is preparing to raise a special situation fund this year, which will invest equity-type (but not pure equity) money in residential projects for completion of development, or to replace existing high-cost debt and stay invested for 3-5 years.

Along with Rs.1,500 crore of pure equity dry powder, ASK believes there is need for a separate pool of capital for projects at an advanced stage.

“Real estate is passing through a difficult time, with project delays and repayment pressures. The need of the hour is to have different kinds of capital and funds are tweaking their offerings to fill in those funding gaps for developers,” said Sunil Rohokale, chief executive and managing director of ASK Group.

From the pure equity funds of 2005-06, structured debt and mezzanine debt instruments took over in the last few years, with PE funds and NBFCs demanding higher collateral and fixed repayments on a quarterly basis.

However, this put pressure on developers to service debt, as cash flows continued to remain tepid—it was not sustainable. Following this, PE funds and NBFCs started tweaking lending norms, offering more refinancing and repayment flexibility.

With a lot of liquidity chasing a few good projects, this also led to intense competition. PE funds moved towards debt-like structures.

According to Rajeev Bairathi, executive director and head of capital markets at Knight Frank India, NBFCs have evolved too. “From lending based on existing cash flows of a project, NBFCs are now offering acquisition financing to buy land parcels, construction finance as well funding for commercial office projects, different from simple lending to residential projects,” Bairathi said.

Altico Capital India Pvt. Ltd, an NBFC from Asia-focused investor Clearwater Capital Partners LLC, plans to offer construction finance and lend to commercial office projects.

Banks offer construction finance at 11-12%, while NBFCs charge a bit more, but the latter offer more flexible capital and an extended repayment periods.

“NBFCs are now well-capitalized and can compete with banks, by giving construction finance. We are also looking to offer construction finance but with established developers and also lend to office projects because there is a lot of potential in the office sector. We will do early-stage financing in residential and office projects to buy land and in pre-leasing stage respectively, and lend to projects in an advanced stage by facilitating transactions, in which we collect the last payments from customers,” said Altico Capital’s chief executive Sanjay Grewal.

Piramal Fund Management Pvt. Ltd, which introduced innovative financial products such as an apartment buying fund, Mumbai Redevelopment Fund and began construction financing early on, plans to focus on equity investments once again.

This year, it will execute a new strategy for equity investments in land opportunities for investors, to generate superior returns by investing in plotted land development. The firm is in the last leg of signing a $300 million offshore platform with a large Canadian pension fund and will also raise a second redevelopment fund. It also started deploying Rs.5,000 crore to fund commercial office projects this year, and introduced a Rs.15,000 crore line of credit to some of the top developers.

“When we started lending at 18-20% a few years back, it was opportunistic but not sustainable. We realized that developers need to be given time to repay, till the market revives. It is also important to have multiple pools of capital to service different kinds of financing needs but equity remains the need of the hour in the current scenario,” said Khushru Jijina, managing director, Piramal Fund Management, which has Rs.32,000 crore of assets under management, including equity investments and commitments made but not yet disbursed.

Customization is key while structuring transactions and each transaction is adapted to the needs of developers.

“Both equity and debt are offered through different customized products, but we think we will see more equity products coming in. With RERA (Real Estate Regulation & Development Bill) being implemented, investors will have more confidence in developers because there will be delivery timelines for projects, repayments,” said Chintan Patel, partner, deal advisory, real estate and hospitality, KPMG India.

Century Real Estate Holdings Pvt. Ltd, which raised Rs.720 crore from Piramal and Altico last year and an additional Rs.520 crore from Piramal in 2016, got an opportunity to refinance high-cost debt, use some of it as construction finance and to make land payments as well.

“These transactions offered much more flexibility in the usage of capital, which banks don’t offer even if it is cheaper. Because there are different kinds of capital involved, the blended cost of funding automatically comes down,” said Century managing director Ravindra Pai.

“They are under a little pressure in terms of margins, but if they want more margins, they have to take more risks,” he said.

Not only different capital structures, but repayment structures are also customized based on the risk-return perspective.

Repayment issues have cropped up, but funds and NBFCs have either refinanced their own loans to projects or given developers more time to service debt.

Balaji Raghavan, chief investment officer, real estate, IIFL AMC Ltd, said repayment structures are also being customized for each transactions, and instead of fixed repayment schedules, they are being matched with cash flows anticipated from a project.

“We are optimistic about investments in real estate over the next 24 months and are looking at substantial growth in India across investment platforms we have built and capitalized over the last 11 years,” said Rohan Sikri, senior partner, Xander Group Inc.

In the last two years or so, Xander has invested about $250 million mostly in residential assets through the preferred equity route. Separately, Xander Finance, which does senior secured debt transactions, has executed almost 50 transactions adding up to Rs.1,800 crore.

The question is, if the health of the sector doesn’t improve anytime soon, how long will the cycle of financing and refinancing help developers sail through this crisis?

S. Sriniwasan, chief executive of Kotak Realty Fund, is cautious and “hasn’t deployed any money in the last 18 months or so and is in wait-and-watch mode”.

Kotak Realty Fund raised $250 million from offshore institutional investors this year, to make equity investments in residential projects, at a time fund managers wary of equity risks extend only debt finance.

Valuation disconnect, delay in approvals stall road deals

Road deals are rising but despite an easing of norms for such sales, many deals are taking longer to conclude

Three years ago when IVRCL Ltd announced the sale of three highways it built at a cost of Rs.2,200 crore in Tamil Nadu, shares of the debt-laden infrastructure company leapt 13%.

Cut to the present and its deal with Tata Realty and Infrastructure Ltd (TRIL) has still not concluded, and IVRCL shares are languishing at a fraction of their 2013 highs. Despite several assertions from both parties that the deal is still on, it is still to close, since some preconditions have not been achieved.

Hyderabad-based IVRCL’s predicament will be familiar to the promoters of more than 60 road builders in India who want to sell projects, raise money, reduce debt and pick up new projects that are coming up. The situation also threatens to undermine the government’s grand plans to more than double the number of road project awards in the current fiscal year.

IVRCL chairman Sudhir Reddy did not respond to phone calls and messages and TRIL did not respond to an email.

Road sector deals are rising but despite a relaxation in norms for such sales last year, many deals are taking longer to conclude as buyers and sellers bicker over valuations, lenders refuse to accept losses, and due to delays in getting approvals from the National Highways Authority of India (NHAI).

“The reason for deals not going through in the roads and highways sector is the valuation disconnect between the buyer and seller due to the difference in estimates of WPI (Wholesale Price Index) and traffic growth. Also, in certain stressed cases, it seems buyers want bankers to take a haircut as well, which is still not happening,” said Rohit Singhania, vice-president and fund manager, DSP BlackRock Investment Managers Pvt. Ltd.

India has set a target to award 25,000km of road projects in 2016-17, compared with 10,000 km achieved in 2015-16.

Struggling infrastructure firm Supreme Infrastructure India Ltd has also been looking to sell its operational road assets to raise money for its delayed or under-construction projects amid cost overruns and high interest costs. “It’s a buyers’ market and there are many assets available to choose from,” said Vikram Sharma, managing director, Supreme Infrastructure. “All the developers have got into stress and every quarter, there is a feeling that there is a better situation for a distress sale. So, buyers wait.”

Similarly, IL&FS Transportation Networks Ltd (ITNL), the company with the largest build, operate and transfer (BOT) roads portfolio, has been in discussions with potential buyers, including private equity firm I Squared Capital, for the sale of its certain annuity road assets, Mint reported in April. But a deal is still not in sight. A year ago, the company had said it has a target of monetizing a few road assets in two quarters’ time. ITNL did not respond to an email seeking comment.

Larsen and Toubro Ltd (L&T), India’s largest engineering and construction company, has also said several times in the past few years that it is looking to monetize its operational road assets—either by a sale or through an infrastructure investment trust (InvIT). L&T is now working on a deal with Canadian pension fund CPPIB for these assets, Mint reported on 13 July.

“M&A in roads have picked up only in the last three years, and increasingly, it’s taking longer for deals to complete. The life cycle of a deal, from the time of term sheet signing to closure, has increased to four-to-six months, which is very high,” said Ashish Agarwal, director, infrastructure at investment bank Equirus Capital Pvt. Ltd.

“Delays are due to external reasons, including need for NOCs (no objection certificates) from NHAI, other lenders and also from stakeholders at the project or the holding company level. And within this time frame, if key project variables undergo a change, it can lead to renegotiations,” he said.

Some of the deals announced in 2015 could be concluded this year, Equirus’s Agarwal said.

It took seven months of hard bargaining for Gammon Infrastructure Projects Ltd to sew up a deal to sell a portfolio of nine projects—six roads and three power plants—to Canada’s Brookfield Asset Management last year, and several more months before money changed hands.

On the other side, Piramal Enterprises Ltd, controlled by billionaire Ajay Piramal, which said in 2014 that it was looking to buy a number of road assets, is yet to announce a deal.

Eight mergers and acquisitions and PE deals worth $315 million have been announced so far in 2016, compared with six deals worth $125 million during the same period in 2015, according to data from Grant Thornton Advisory Pvt. Ltd.

The infrastructure fund of multi-asset manager IDFC Alternatives has been one of the most active buyers of operational road assets in India, ahead of peer investors including US-based I Squared Capital and Canada’s Brookfield Asset Management.

“A lot of deal flow is starting to happen but a lot of investors are not aware of the long-drawn process and the patience these acquisitions entail... Our experience is that there are transactions that have gone down very smoothly and in a timely manner; but at the same time, there are a couple of transactions which have taken more time than we had expected,” said Aditya Aggarwal, partner at IDFC Alternatives.

In several instances, due diligence of assets itself throws up negative surprises leading to the collapse of talks, Aggarwal said.

While traffic growth and investor sentiment has revived, several companies continue to be stressed from previous years’ aggressive expansion. Highway developers that are labouring under debt, and dealing with lower-than-expected cash flows on completed projects and issues related to land acquisition on some incomplete ones will need refinancing to the tune of Rs.8,450 crore, India Ratings and Research Pvt. Ltd said in a June report.

About Rs.25,500 crore worth of project-level debt across 37 BOT projects, some under construction and others complete, could be under stress, the ratings agency said.

Road safety gear, an untapped route

There is immense marketing opportunity in helmets and other protective accessories

There is little hope for India’s road infrastructure. Numerous discussions, debates and plans have emerged every year and yet the story of battered roads, potholes and lack of roads continues.

As per published statistics, Indian roads are death traps, with nearly 16 deaths every hour. And the crumbling infrastructure, combined with ever increasing vehicles and traffic collisions, makes any kind of journey on Indian roads a hazard. India is one of the countries at the bottom in terms of WHO’s Road Safety Report with 2 lakh-plus reported deaths and who knows how many not reported.

The fact that road conditions have a slim chance of improving in the next few years is a reality. The increasing population of vehicles is another certainty. Take the two-wheeler market in India. Around 16 million two-wheelers are estimated to have been sold during 2014-15 in India, adding to 15 million sold in 2013-14 and another 13.7 million during 2012-13. Two-wheelers continue to be the most popular vehicle category in India and include scooters, motorbikes and mopeds. And no surprises that amongst all vehicles two-wheelers account for the largest number of deaths and injuries.

Safety, a neglected opportunity

With road conditions not improving, the extent of paved surfaces staying the same and with two-wheelers piling up on the roads, one of the most under-leveraged categories in India is the entire two-wheeler safety category.

First, let us start with the good old helmet. In terms of market evolution one would expect the top two-wheeler manufacturers to actually branch out into branded helmets — a Bajaj helmet with a Bajaj scooter and a Hero helmet with a Hero motorbike. However, most of the popular brands are ones such as Studds, Vega and Steelbird. While being a critical part of a two-wheeler, mainline helmet brands do not have the same level of awareness and saliency as the two-wheeler brands or even some of the lubricant brands that have made a huge effort in establishing their brand and its benefits. Surprisingly, for a market potential of 14 million new vehicles and a huge number of second-hand two-wheeler sales, the extent of branding and marketing done by the current helmet brands is way below potential.

Then comes the category-wise evolution. First is a linkage to vehicle type. So, ideally, a helmet designed for a scooter should be different from one designed for a moped. And the helmets designed for motorbikes need to be differentiated on the basis of a basic mobike versus a powerful mobike versus a high-performance biking enthusiasts hog. While accessories including helmets are a huge contributor to the revenues of cult brands such as Harley Davidson and Ducati, there is also room for the mass manufacturers to link this protective gear to their core brands — which lies untapped today.

How about stylish helmets?

Another category evolution opportunity is gender-based. Many bikes, such as Kinetic Honda and TVS Scooty, target youngsters or young women who want a taste of freedom. Specially-designed safety helmets for these type of bikes and their users are another untapped opportunity.

Additionally, while there have been many public awareness campaigns on the safety aspect of helmets and even regulation making helmets mandatory in some cases, there has been little marketing and branding activity to make helmets desirable. Creating helmet designs, colours and styles that reflect the driver’s personality is yet another unexploited opportunity, not to forget helmet forms and styles to endure weather conditions, ranging from summer to heavy rains to winter and snow. Nobody has tried to move this category from a regulation-driven utility to an extension of one’s personality or something with flash value and attitude.

Besides the lack of development in helmets, a bigger issue is the lack of evolution of the entire two-wheeler personal safety equipment category itself. Take India’s favourite passion — the game of cricket. At one time there were only gloves and pads. Then came Sunil Gavaskar with his forearm guard and skull cap. Now players have guards for all sensitive body parts and more to face the 100 km and more per hour swing.

Meanwhile, the entire fast growing category of two-wheelers with millions of first-time users is saddled with just one piece of safety equipment — a helmet. This is where category evolution is seriously required. Imagine a jacket or even an inner vest that provides spine protection, one of the most vulnerable areas during any collision and the cause of so many disabilities, besides death. If well-designed, spine-protecting equipment can become a fashion statement for many riders.

Knees are another highly vulnerable area for two-wheeler riders. Knee-protection devices can range from basic pads to trousers to colourful wraparounds on the knees that can, again, become chic and trendy with colours , designs and customisation.

Now, one comes to the other critical form of urban transport that has had zero evolution in terms of safety measures. The humble, revered and much exported autorickshaw. I know of a dialysis patient whose driver did not turn up one morning. She took an auto to get to the hospital for her dialysis session. Thanks to lack of signals and urban planning, the auto driver tried to take a quick turn into the hospital gate to avoid a speeding car coming at him and the rickshaw overturned. The patient ended up injuring her hand on which the dialysis procedure is done and had to spend a week in hospital. While millions and more passengers prefer to use autos for their urban transportation needs in our traffic-choked cities, there is not a single passenger-safety instrument that has been created for safe travelling in autos.

When you get on a ride in an amusement park, especially on roller-coasters, they have a safety harness that is affixed to the seat and wraps around one’s shoulders as protection to prevent you from getting hurled around or falling out. The same concept can be adapted for autos so the three people sitting do not get hurled around when the auto tries to speed, do not get back problems when the auto navigates massive potholes and do not get badly injured and thrown out when an auto overturns.

Seat belts, the clincher

And finally we come to our good old hatchbacks, the staple of most Indians as a means of transport. As affordability, ambition and accessible credit drive the growth of cars, one of the biggest safety issues stands out. Unlike sophisticated, high-end Mercedes cars, the affordable hatchbacks do not come with air bags that self-activate in the event of a collision. So, the only safety mechanism that exists is the humble seat belt. And while steering wheels have evolved into power steering and brakes have become more sensitive, the seat belt continues to be archaic and perhaps the most difficult mechanism to operate in a car.

There can be so many ways to manage the whole ‘belting up’ experience in a car than the current entangled belts that can cause a backache just by trying to pull them from wherever they are hidden. Moreover, they are are extremely difficult to adjust for rapidly expanding Indian bellies and are a task to strap on. A car with simple, easy-to-put-on seat belts can, by itself, become a phenomenon due to its exceptional safety features. Let us leave that to the kaizen masters at Suzuki to figure out. Perhaps auto activation and de-activation with sensor-based self-adjusting straps is the solution waiting to emerge.

Poor road infrastructure and potholes will continue to be a reality. Cars, two-wheelers and autos as a segment will continue to grow and crowd these creaky and broken-down roads. But the evolution of the mobility safety category, which is a huge opportunity for marketers, can actually help bring down significantly India’s mortality, disability and injury rate during collisions. Let’s doff our stylish helmets in anticipation of that.

Welcome to Hampi ! Travel Guide by SP Jain & Ashok Jainani

The royals and subjects of Vijayanagara and the vaanarsena (of Lord Hanuman) are not there to receive you. But some of their symbols and motifs do stand even today inviting travelers to come, explore and be amazed; the rocks and breeze gesticulate that a lot more fascinating facts may be buried beneath the ground.

Hampi, the capital city of the fourteenth century Vijayanagara empire in Southern India and its vedic connection with Kishkindha, the monkey kingdom in Ramayana, is charismatic even in its ruined state today. The city of victory, a city in ruins, India’s architectural legacy spread over 25 square kilometers is a world heritage site that every year attracts thousands of visitors from throughout the country and abroad. You need to stay there for a few days to appreciate its majestic glory.

Many of the noted foreign travelers and Indian scholars, for seasons together, have been exploring the form and purpose of the remains of the standing buildings, stone edifices and original appearance of the recently excavated structures for which only the basement blocks survive. One can only speculate for that part of Hampi’s vast invisible archaeological heritage still buried beneath the ground which can keep the researchers and scholars occupied for years and perhaps decades to come.

We were greeted by joyous feelings on the warm welcome received by the fresh air, clear sky and friendly ground staff when our fully packed 78-seater aircraft, Bombardier-Q400, touched down at the small airport at Belagavi (Belgaum) at 4.30 on a Thursday evening in the month of August. Hospet-based industrialist and our extremely warmhearted host Shri Narendrakumarji Baldota had sent chauffeur-driven car for our 270-km onward journey by road to Hospet, buzzing and humming, the gateway town 12 km ahead of Hampi. Hospet is home to many steel and engineering industries. Baldotaji’s business spans mining, gases, shipping and wind energy and he is also a noted philanthropist in town having many charitable projects to his credit.

Luckily, skies were clear the next day as well with pleasant temperature and we started early morning for exploring the vast stretches of boulder-strewn hills that make the backdrop of Hampi unique. “Dotted around the hills and valleys are 500 plus monuments,” our guide Mr Basavraj told us. It’s like an open air museum in natural setting. At every turn there is a surprising stone structure. Every monument appeared hiding many stories that people might be eager to hear. Among them are beautiful temples, ruins of royal palaces, remains of aquatic structures, ancient market streets, royal pavilions, fortifying rock walls... the list is practically endless. The entire town has a sort of mythical aura surrounding its environment. You would notice something spooky the moment you set foot on Hampi that used to be an important part of Vijayanagara city (1343 – 1565), which was later ruined but this beautiful place commonly referred as the temple town still exists.

We started our exploration from the epicenter of Hampi, the Vittala Temple, the most extravagant architectural showpiece of Hampi. One needs to be there, see, feel and contemplate on the spectacle as written and spoken words are bound by limitations of narrator. The temple named after one of Lord Vishnu’s name, is built in the form of a sprawling campus with compound wall and gateway towers. There are many halls, pavilions and temples located inside this campus. “The temple was originally built in the 15th century AD. Many successive kings have enhanced the temple campus during their regimes,” Mr Basavraj informed. You can even see the remains of a township called Vittalapura that existed around this temple complex. The highlight of Vittala temple is its impressive pillared halls and the stone chariot.

On the east of the temple entrance stands a chariot-like stone structure with pairs of wheels on the sides and a small Garuda shrine with exquisite cut-out colonnades above. Two free-standing mandapas are seen near the Garuda shrine. The mandapa was used to display the processional image of the god carried in a chariot that was pulled up and down the street.

This campus houses a hall perhaps dedicated to music performance in the ancient times. Some of the pillars produce musical instrumental notes when tapped with fingers. Our guide tapped his fingers on one pillar and we could hear “tabla” sound from another pillar. One needs to physically go there and experience this marvel.

Our guide informed that Hampi’s architecture is as stunning as the ambient in which it was built. Richly sculptured hard granite structures that dominate the ruins present a fusion of various types of architectures. For example, the civilian structures made in the Indo-Saranac are pleasant blend of Hindu and Islamic styles of architecture. The large Hindu temples were made in the typical Vijayanagara style with giant carved monolithic pillars.

Hanuman temple atop Anjaneya Hill is located about 4km away from the heritage site and is considered to be the birthplace of Lord Hanuman.

Our guide told us that this Empire had own sophisticated coinage. It is believed that one of the mints of the empire was in Hampi, the capital city. Typically, one side of the coins spot images of gods, birds, animals and inscriptions of who ordered to mint those coins on the reverse side.

The Lotus Mahal which dominates the zenana enclosure is one of the best-preserved structures in the royal centre. In spite of its fanciful name, this building probably served as a council chamber. Watchtowers, built in a similar manner, are seen in the southeast corner of the zenana enclosure and in the middle of the north wall. These also employ temple-like eaves and towers in combination with sultanate-style pointed arches and interior domes. A third tower at the northeast is now partly ruined. Other features within the enclosure include a deep tank for water storage, the remains of a rectangular granary.

A modest opening in the east wall of the zenana enclosure leads to a spacious plaza, probably used as a parade ground for troops. This is overlooked from the east by the elephant stables, a long line of eleven chambers each of which could accommodate two elephants.

After the Queens’ bath, the main road passes through a crudely reconstructed gateway that reaches on the outskirts of Kamalapura, mainly of interest for the Archaeological Museum. The Pattabhirama temple, besides the road, is about 600 metres from the museum. A 100-columned hall, now damaged, is built up to the south wall of the spacious enclosure.

Along the road to Talarighat, the monument of interest to be noticed is the Ganagitti Jain temple, one of the largest early edifices at the site. An inscription of 1385 on the lofty dipa-stambha in front records that the temple was built by Irugappa, a general of Harihara II.

The riverside gorge just north of the Kodanda Rama Temple is remarkable for various clusters of ruins.The sought after ones are the array of Shiva Lingas carved on the flat rock surface and the carved Anandashayana Vishnu on the rock cleft.A little exploration of this area, close to the edge of the river, can lead you to a couple of Shiva Lingas arrays carved on the surface of a flat rock. One is an array of 108 Lingas, the other a more fabulous 1008 lingas in a square area.

According to internet statistics,Hampi is the most searched historical place in Karnataka. The historical town of Hampi is a great place for visitors to have a glimpse of the long lost Vijayanagara Empire. Welcome to Hampi !

Riding a unicorn

With 100 mn users and counting, Mittal hits the right notes with his third app

                                                       Kavin Mittal

                                          CEO & Founder of Hike Messenger

Hike, the messenger app, is the latest Indian Unicorn: it has raised $ 175 million from its existing shareholders, Bharti SoftBank and Tiger Global, and new investors, Tencent Holdings of China and Foxconn of Taiwan, at a valuation of $ 1.4 billion.

Kavin Mittal, the 28- year- old founder and chief executive of Hike, wants to use this money to make the app smarter. Features like e- commerce and news could get added to it in the days to come. This, Mittal would hope, will help him take on the onslaught from WhatsApp and Facebook Messenger.

Like his father, Sunil Mittal of Bharti Airtel, Mittal is a fast talker and can mix macroeconomics with consumer behaviour and corporate balance sheet with consummate ease. Both believe in scale and leveraging the consumer for growth. And both are tech savvy.

Actually, Mittal has had a way with technology from an early age: at 15, he was writing software code.

In 2006, during the first year of his undergraduate course at Imperial College, London, Mittal helped McLaren Racing, the British Formula One team, embed a technology that would show the track flags on the steering wheel. The highlight of the assignment was a meeting with an upcoming driver named Lewis Hamilton.

Apart from technology, speed thrills Mittal. As a child, he had racing simulators fitted at home. Later, he was a member of the go- kart team at Imperial College. ( He was also in its cricket team.) In 2007, Mittal did his summer internship at the Google headquarters in Mountain View, California, and was impressed with its informal work culture.

And the next year, Mittal interned with Goldman Sachs in London. At the end of it, he decided that he would do any other work but become a banker “because the learning curve plateaus after a while”.

While at Goldman Sachs, Mittal founded his first start- up, AppSpark, along with classmate Namit Chadha to make apps for the Apple iPhone.

The first app they launched, in the middle of 2009, was called Movies Now. It would list all shows and feature trailers. In the US, users could even buy tickets on it. And based on your location, it could tell you which theatre was the closest to you.

The app was downloaded almost 500,000 times. Mittal then planned to give it another feature which would help theatres sell vacant seats at a discount one hour before the show. He even pitched the idea to PVR in India but there weren’t too many takers — the app was put on the shelf.

Mittal next came up with an app called Foodster which told people whenever they went to a restaurant what was popular there. This it did by converting online comments into scores. “ But the algorithm ran into trouble when it came to comments like ‘The lemonade is better than my girlfriend’s kiss’,” Mittal said in an interview in early 2015. Foodster met with the same fate as Movies Now.

By 2011, Mittal knew that he had to do something that was of more value than just movies or food. Growing up, he had seen how mobile telephony had changed lives in India. He decided that he would do the same in the mobile internet space in India.

He relocated from London, leaving his course for a private pilot’s licence midway, to New Delhi, and started work on Hike in early 2013, and rolled it out towards the end of the year. To attract youngsters to Hike, Mittal introduced features that hid personal chats from parents. Stickers were customised for local markets: those available in Mumbai were different from those in Patna. A range of coupons was made available to users.

Hike has over 100 million users, who, on an average, use it for 120 minutes per week. “ That makes it one of the top five apps in the country,” Mittal says with barely concealed pride.

The new investments are meant to give Mittal the wherewithal to close the gap with the market leaders. In addition, he hopes, Tencent and Foxconn will give him vital strategic inputs. “ Tencent runs the extremely popular messenger service WeChat in China which has half a billion users, and Foxconn’s knowledge of software, especially Android, on which India runs, is tremendous,” says Mittal.

The two investors were identified and inducted into Hike by Mittal. Tencent had launched WeChat in India, with limited success, in 2011; Mittal says he had been in touch with the company since then. Similarly, he had several meetings with the Foxconn brass which came to India regularly in search of investment opportunities.

In the early days, Hike was often called a Bharti Airtel app. Today, the users are spread across service providers and more or less reflect the market shares of the incumbents. Almost 75 per cent of our users are non- Airtel subscribers,” says Mittal. The big question is, will Hike be picked up by the subscribers of Reliance Jio, which wants to launch soon and has locked horns with incumbents like Airtel? “ Absolutely yes,” says Mittal.

Watch this space.