Bharti Walmart venture

B S : Nivedita Mookerji / New Delhi Oct 09, 2012, 00:15 IST

With Sam Walton’s brainchild Walmart about to enter India, many questions surrounding its size and proliferation are doing the rounds. 

What format will the stores assume?

 How big will they be and will the company stick with Bharti for this venture as well?

Many of the answers to these kinds of questions will be definitively laid out as the months go by and clarity emerges on how exactly the $447-billion retail behemoth plans to set up shop here. However, much of the writing is already on the wall.

 For instance, if you are looking forward to a large-format hypermarket store measuring 100,000 to 250,000 sq ft, complete with garden centres, pet shops, a pharmacy, and the rest of it, the world’s largest retail chain is sure to disappoint.

Multiple formats
According to Raj Jain, president of Walmart India, large-format stores are not an option as far as the Indian market is concerned. He cites the dearth of space and steep real estate prices in the country as reasons for rolling out smaller stores — anywhere between 10,000 and 50,000 sq ft. “Maximising the space productivity is going to be key to running a successful business. So, our formats will be invariably smaller than what is available internationally.”

WALMART’S UNIVERSE
Global revenues	$ 447 billion
Employees	2.2 million
Store locations	8,970
Countries	15
Owners	The Walton family
Listed on	NYSE
Brand names	62 different ones across the world
Store formats	Supercentres, discount stores, Walmart neighbourhood markets

There may be multiple formats too, to serve the large cities that have complexities in real estate and licence permit issues. The formats might include neighbourhood stores and compact hypermarkets (or supermarkets), among others. Neighbourhood stores are typically around 3,000 to 4,000 sq ft in size and the compact hypermarket outlets measure anything between 40,000 and 50,000 sq ft.

Walmart’s change in its store format strategy for the India market is also linked to the policy on foreign direct investment in retail that allows chains to only open stores in towns that have a population of a million- plus. Since these will be large, urban towns, availability of real estate is an issue.

Foreign goodies

Possibly the most controversial of issues surrounding Walmart’s entry is the nature of the goods it sells. Opposition parties led by the Bharatiya Janata Party (BJP), continue to raise a storm over Walmart filling its shelves with Chinese products. BJP leader Rajnath Singh said the decision on FDI in retail would harm the country because multinational companies like Walmart are buying 80 per cent of their goods from countries like China. “India will become a dumping ground for Chinese goods.”

This is a misconception that both Walmart and Bharti are trying hard to dispel. Rajan Bharti Mittal, vice-chairman and managing director of Bharti Enterprises, the company waiting to sign a retail JV pact with Walmart, retorted by saying, “Whether it’s in Brazil or Mexico, Walmart sources locally”.

 The business of import just does not work, pointed out an industry analyst. In India , the venture plans to source 90 to 95 per cent of the products locally. The only foreign stuff that could be sold at Walmart India would include some toys, appliances, olive oil etc. As for food items, around 98 per cent of the total is likely to be sourced from India. In India, the average invoice is likely to be low and number of transactions higher, thereby pushing up the staff strength.

The Walton family-owned retail giant from Bentonville, US, wants to offer its trademark “everyday low prices” in India. “It is all about not running promotions all the time and enticing customers to spend more money on items that are on promotion, but to let them buy whatever is on their shopping list at the best price,” Jain had said in a recent interview to Business Standard. Replying to a question, he pointed out that the no-questions-asked ‘return policy’ of Walmart would be replicated in India as well.

Whom to partner with

Whether the Walmart venture will get to brandish its name will depend to some extent on whom it partners with. The American chain has kept its cards close to the chest, though Jain calls Bharti Enterprises Walmart’s “natural partner”. After all, the two have been together in a 50-50 JV for cash-and-carry (wholesale business) for five years. Walmart also supports Bharti Retail’s Easyday stores with back-end infrastructure support. But, ask Jain if Walmart would tie the knot with Bharti, and he’s non-committal.

“All I would like to say is that we have had a great relationship with Bharti over the past five years. They are our natural partners in India. We would obviously like to explore that,” said Jain. “But, let’s see,” he adds. Jain didn’t deny there was room for talks with other potential partners either. According to him, “It all boils down to policy clarity in terms of what kind of partners and partnerships we need.”

Easyday, the new Walmart?

If Walmart and Bharti get together in the venture’s front-end, there could be at least half a dozen issues that need to be untangled. The brand name is one, and it is not the most significant by any account. Mittal pointed out that the Easyday brand name could be retained as it had established itself in the country already. There are around 200 Easyday stores in India. “Walmart is not in the habit of insisting on its brand name,” pointed out Mittal. In the UK, Walmart stores are called ‘Asda’, in Mexico ‘Walmex’, and ‘Seiyu’ in Japan. Walmart has 62 brands across the world.

A slightly trickier issue is that of equity holding by the partners. Jain clearly indicated that Walmart would like to go for whatever was allowed, adding that “we are legally permitted to have 51 per cent in the venture.” Mittal, on the other hand, is of the view that if there could be a 50-50 JV in cash-and-carry despite 100 per cent FDI being allowed in that business, a 50-50 partnership was a possibility even in front-end retail with Walmart.

Walmart’s India terrain Signed a 50-50 JV with Bharti Walmart in 2007 for cash-and-carry and back-end infrastructure Opened first cash-and-carry outlet in India in 2009, and now has 17 of them in the country Walmart refers to Bharti as its natural partner, but is yet to take a final call on retail partnership Bharti Retail’s Easyday map Of the 195 easyday outlets, 47 are located in states (UP, Chhattisgarh, Karnataka, MP, and HP), which are against foreign investment in multi-brand retail. Another 69 are in Punjab, being ruled by the Akali Dal-BJP combine. Punjab is yet to arrive at a decision on whether or not to allow multi-brand FDI, but it is likely to say ‘yes’ sometime soon. Easyday operates in more than 100 cities of India, many of which have a population of over 1 million. How states/Union Territories view Walmart’s entry The states/UTs which are favouring FDI include Delhi, Assam, Maharashtra, Andhra, Rajasthan, Uttarakhand, Haryana, Manipur, Daman & Diu and Dadra and Nagar Haveli. J&K is also endorsing it. Those opposing the move are Bihar, Karnataka, Kerala, Madhya Pradesh, Tripura, Odisha and West Bengal, among others

Roadblocks

The real hurdle for the Walmart-Bharti JV, however, could be the retail policy conditions that stipulate that states have a free hand in deciding where foreign chains will be allowed, with only a certain number of cities with a population of a million-plus permitted to have such stores. Since the 200-odd Easyday stores are already spread across the country, getting the math right on FDI — for only the friendly states and permitted cities — could well be a challenge. “Clearly, a pan-India approach would have been much better than a state-wise one. But you have to make a beginning,” says Jain.

Also problematic are the investment conditions — bringing in at least $100 million FDI and spending 50 per cent of that on the back-end within three years of the FDI induction. The interpretation is that the foreign investor must bring fresh funds, and therefore tying up with a running Indian chain could pose a problem. “My understanding of the policy is that the investment of a $100-million FDI will have to go into new stores and new back-end infrastructure. And that’s what we intend to do,” says Walmart’s Jain.

Assuming that Bharti and Walmart do ink a pact for retail, will there be a rejig of the cash-and-carry business? While pointing out that Walmart will continue to stay committed to the cash-and-carry business, Jain said, “Over the next 60 days, we will determine what our relationship with Bharti will be like, whether there will be any rejig of the cash-and-carry equity structure or not.”

Another option?

Due to policy roadblocks, it’s possible that Walmart chooses the bigamous route — stay married to Bharti for cash-and-carry, while opting for a different partner for front-end retail. It’s not strange to switch partners. In fact, Bharti was in advanced talks with UK’s Tesco for a retail JV and finally threw a surprise by coming together with Walmart. Tesco later joined hands with the Tatas for the back-end. Even French chain Carrefour was believed to be in serious talks with Kishore Biyani’s Future group, but left it midway. For the cash-and-carry venture, Carrefour went on its own, unlike Walmart, which showed commitment through its engagement with Bharti in a business which need not have any Indian partner

.

Even so, a source pointed out that there are no obvious signs of a break-up between Walmart and Bharti at this point, and there might not be one eventually. “Bharti has proven useful in the process culminating into FDI in retail. That gives them strength on the negotiating table,” the source said. At the same time, “Aces have moved from Bharti’s hand to Walmart’s, now that FDI has been allowed,” he added. So, it’s a case of trying to negotiate the best deal in a complicated policy environment.

Arvind Singhal, chairman of Technopak Advisors, however, asks, “If not Bharti, then who? I don’t think they would look at any other partner. They have been with each other for five years and have an understanding.” A top representative of an accounting firm, who did not want to be named, argues, “There’s no big case for another partner.” But, he adds, “Who knows what happens inside the boardroom?”

Govt banks resort to special loan schemes

B S : Namrata Acharya / Kolkata Oct 06, 2012, 00:16 IST





Ahead of the festive season, the high cost of funds and sluggish credit growth have prompted public sector banks to consider reducing interest rates in certain portfolios, especially the retail and small & medium enterprise (SME) segments.

Last month, the Reserve Bank of India (RBI) had cut the cash reserve ratio, or CRR, (the funds banks have to keep with RBI as cash) 0.25 per cent to 4.50 per cent. It was expected the move would infuse Rs 17,000 crore into the monetary system.




Responding to this, State Bank of India (SBI) cut its base rate 0.25 per cent to 9.75 per cent. Ruling out the possibility of a further cut in the base rate, Diwakar Gupta, chief financial officer and managing director, said ahead of the festive season, the bank might consider launching special loan schemes to boost demand.


“Currently, we do not contemplate further reduction in the base rate. However, we might decide to launch special schemes like providing a one-time rebate to customers,” he said.

SBI has excess case reserves of about Rs 60,000-90,000 crore. As credit growth is sluggish, the bank is finding it difficult to deploy these funds. Smaller public sector banks have already resorted to reducing interest rates on a few portfolios.

“Unless the repo rate (the rate at which banks borrow from RBI) comes down, it will not be possible to reduce the base rate. Due to the high inflation, we cannot reduce deposit rates, too. We responded to RBI’s CRR cut by offering preferential rates,” said M Narendra, chairman and managing director, Indian Overseas Bank. The bank has already launched several special rate schemes in the housing and car loan portfolios, apart from waiving processing fees for certain loans. Recently, it had cut the interest on housing loans 1.50 per cent and that on loans against jewellery from 14.25 per cent to 12.50 per cent. Narendra said the bank might reduce the rates further.

“The benefit of a reduction in the base rate is often limited to large companies. By reducing interest rates selectively, its benefits can be given to a large number of customers,” Narendra said.

Next week, asset liability committees of several public sector banks would meet to decide on base rates.

Recently, Kolkata-based United Bank of India had cut interest rates for loans to SMEs by 75-225 basis points. This was the first time the bank had cut interest rates in a particular portfolio. Currently, the bank’s base rate is 10.45 per cent. “We are working on ways to reduce interest rates. However, unless the cost comes down, it would be difficult to reduce the base rate. We are collecting information on different portfolios and would take a decision soon,” said Bhaskar Sen, chairman and managing director, United Bank of India.

Currently, the bank’s SME portfolio stands at about Rs 8,000 crore, about 12 per cent of its total portfolio. The bank has reduced its credit growth target for this financial year from 20 per cent to 15-16 per cent. In the quarter ended June, its credit growth stood at 19.85 per cent.

Kolkata-based Allahabad Bank has reduced interest rates on retail loans. “In our half-yearly assessment, we found the cost of deposits had declined only marginally. We will take a call on the possibility of reducing the base rate next week,” said T R Chawla, executive director, Allahabad Bank.

Asha Bhosle's daughter Varsha commits suicide

Money Control :Mon, Oct 08, 2012 at 14:36

Varsha Bhosle, daughter of playback singer Asha Bhosle, has committed suicide by shooting herself, reports said. Varsha was a political columnist and journalist based in Mumbai.

Varsha Bhosle, daughter of playback singer Asha Bhosle, has committed suicide by shooting herself, reports said. Varsha was a political columnist and journalist based in Mumbai.

Varsha has herself sung playback for some Hindi and Marathi movies. Asha Bhosle is currently in Singapore to attend MIFTA awards (Marathi Culture awards).

Varsha was in her mid-50s and had allegedly attempted suicide once four years ago. She was admitted to Mumbai's Jaslok hospital after a drug overdose in 2008. She stayed by herself in the same locality as her mother.

She has worked as a columnist for The Sunday Observer between 1994 and 1998 and at Rediff between 1997 and 2003.

According to TV reports, she reportedly shot herself at the singer's residence 'Prabhu Kunj' in Peddar Road. Varsha was divorced from freelance sports writer Hemant Kenkre.

State-run banks to cut debit card usage fee

At present, many vendors discourage card usage by customers, 
especially for high-value purchases, and sometimes even insist the customers
 bear the transaction costs. 
Photo: Pradeep Gaur/Mint

Remya Nair :Mon, Oct 08 2012. 01 14 AM IST

Charges could be as low as Rs.2 per transaction, 
are expected to promote greater use of debit cards

In a major fillip to e-commerce, state-run banks will soon lower fees for debit card transactions. The fee could be as low as Rs.2 per transaction and is expected to promote greater use of debit cards and a gradual reduction in cash purchases.

The fee will be charged per transaction rather than as a percentage of the value of a purchase, as a massive proposed roll-out of point-of-sale (POS) terminals is expected to reduce costs. Public sector banks are expected to collectively roll out 600,000 POS terminals in the next two years as part of the government’s plan to encourage shopping through cards.

Credit card transactions will continue attracting higher transaction costs.

At present, many vendors discourage card usage by customers, especially for high-value purchases, and sometimes even insist the customers bear the transaction costs. For credit cards, the charge is 1-2% of the value of the transaction, depending on the merchant size and location. For debit cards, the charge goes up to 1%. The Reserve Bank of India capped debit card charges earlier this year.

“Payments are still linked to value of the transactions for both debit and credit cards. At a time when we are looking to encourage e-payments, such high costs act as a big disincentive,” said a finance ministry official who did not want to be identified. “In debit cards, there is no risk of default. We have asked banks to charge a flat rate on every debit card transaction,” the official said.

The decision is in line with the recommendations of a committee set up by the finance ministry to examine issues affecting the growth of online shopping. The committee, which included software industry lobby Nasscom, recommended that the fee on debit cards be reduced because of the lower risk involved.

“With the roll-out of POS machines, costs for banks will come down to as low as Rs.2 and there is no reason why they should charge a higher fees,” the official added.

“Vendors may not pass on the costs to the customers, especially in high-value transactions, if charges are levied at a flat rate. This will lead to greater use of debit cards and also discourage cash handling,” said Anish Thacker, a tax partner at audit and consultancy firm Ernst and Young.

IDBI Bank Ltd has issued a tender to procure POS machines for all public sector banks. The bidding is likely to be completed by next month. An official with a public sector bank said there was scope to reduce the fee, but the rates will be finalized only once the bids come in.

Sudip Kumar, head, Tata Communications Banking InfraSolutions Ltd, said the proposed huge roll-out of POS terminals will help banks lower their costs due to economies of scale. “There will be savings on the information technology infrastructure. There will be pressure to lower interchange costs and change the business model,” he said.

Cibil’s new score to rate even fresh borrowers

Individuals with no loans outstanding and who have no pending enquires 
about them from banks will be rated at -1, Cibil says. 

The new version will grade first-time borrowers on a risk index of 1 to 5—1 being the highest risk of default and 5 the lowest

Photo: Priyanka Parashar/Mint

Live Mint :Joel Rebello Thu, Oct 04 2012. 10 55 PM IST

Mumbai: Credit Information Bureau (India) Ltd, or Cibil, the country’s largest collector of databases on borrowers, has launched a credit score that will help banks rate new borrowers with a credit history of less than six months.

The previous version rated all borrowers with a credit history of less than six months at 0. The new version, christened Cibil TransUnion Score 2.0, will grade first-time borrowers on a risk index of 1 to 5—1 being the highest risk of default and 5 the lowest.

“This will help credit institutions classify new-to-credit customers as high, medium or low risk,” Cibil said in a statement on Thursday.

Individuals with no loans outstanding and who have no pending enquires about them from banks will be rated at -1, Cibil said.

Indian banks use Cibil’s data to estimate the likelihood of loan repayments by borrowers. With a database of more than 200 million and 862 financial members, including banks and non-banking financial companies, Cibil is India’s largest credit bureau. Banks have been accessing the scores since 2007 and are increasingly dependent on them to check individual credit history before lending.

Cibil expects the new version of credit scoring to help banks identify 10% incremental defaulters, saidSatish Pillai, chief operating officer.

For borrowers with a credit history of more than six months, the credit bureau will rate according to a three-digit number ranging from 300 to 900—300 indicating the highest default risk.

“We think this new score will help banks distinguish between the good and very good borrowers. The Indian market is dynamic and there are many new borrowers particularly in the low-income category who take loans for two-wheelers. For these borrowers, the new system could provide sooner access to credit,” Pillai said.

For new borrowers with no loans outstanding and no enquiries from banks, the grade will be based on the type of loan, total indebtedness and demographics such as age, he added.

V.N. Kulkarni, chief counsellor at Abhay Credit Counselling Centre, said the new grades will help because “quite a few number of people have never borrowed before”.

He added, “Maybe going forward, just like in Western countries, Indian borrowers can also demand concessions from banks on lending rates based on their credit score. That, however, has not happened so far.”

Since April 2011, Cibil has permitted individuals to access credit scores for a fee. However, borrowers have not been able to use their scores as a bargaining chip for cheaper loans.

Consumers can access their detailed credit report and score by paying Rs.450 and completing a form at cibil.com and furnishing proofs of identity and address.

Pillai said the public will be able to access the new reports after all the banks migrate to the new system, which is expected to happen in three months.

How will Cibil’s newly launched score affect loan seekers

Vivina Vishwanathan: livemint: 8th Oct 2012

Those already with a score may find it lowered but
 that’s because of a change in the calculation method.

If you have borrowed first time in the last six months, you would now have a credit score. Earlier, the credit score for all first-time borrowers with less than six months credit history was zero. Last week, Credit Information Bureau (India) Ltd, the country’s largest credit information company, launched a new version of credit score—Cibil TransUnion Score 2.0—which will replace the earlier Cibil credit score and take under its wings even those with a credit history of less than six months.

As of now, you won’t have access to this score; the earlier version was available to customers by paying a fee. The new version will be provided only to credit institutions for now.

The change

Borrowers who have taken credit for the first time in the last six months will be graded on a scale of one to five, where one would mean highest risk and five would mean lowest risk of default. The risk index has three categories: a score of one or two means high risk, a score of three means medium risk and a score of four or five means low risk.

For those already with a score, the range will remain 300-900 as earlier. However, your score may be lowered a bit, but there’s nothing to panic as this is only because the calculation method has been modified. For instance, if your score in the old version was about 750, it will come down to about 700 in the new version. Accordingly, the credit institutions will also adjust. So earlier if 750 was the eligibility level, it will be lowered to 700 now.

The parameters for calculation remain the same; they will include delinquency, credit seeking activity, type of credit and demographics.

Why has the change been brought about?

According to Cibil, there has been a change in borrowing behaviour of consumers. Says Arun Thukral, managing director, Cibil, “There has been a shift in the borrowing trend. Earlier, the focus was on credit cards and personal loans; now it is shifting to home and auto loans. To cater to this changing development and the change in the ratio of secured and unsecured loans, we have introduced the new version.”

Says Rajesh Kumar, executive vice-president and head-debt management, risk intelligence and business analytics, HDFC Bank Ltd, “Credit score is of great help for banks when it comes to loan acquisition and account management. The earlier version of Cibil score was five years old and was due for recalibration. This is because a lot has changed in the database and also in customer behaviour. The new version is built on more recent data and can help differentiate between good and bad customers. Banks normally encourage first-time borrowers and people with less credit history. Hence, the new feature of risk index will be very useful.”

Says M. Narendra, managing director, Indian Overseas Bank, “Credit information companies have in-depth commercial and retail data, which is of great help for banks. Such data also helps in retail pool analysis and in policy decision-making.”

What it means for you

New borrowers: They will obviously benefit. Says Adhil Shetty, CEO, Bankbazaar.com, “This move will be beneficial for recent borrowers. Earlier, there was no differentiation between a person who paid his dues on time and the one who defaulted on his payments. But now there will be a demarcation between the two. This makes credit more accessible.”

This, however, also means that you will have to be a little careful when you enquire about loans. If you call 4-5 banks at a time, Cibil will be informed about the calls and it can work against your score.

Borrowers with existing credit history: For those with a credit history of more than six months, the credit score will come down by a few points. But there is nothing to panic about; it is just that the figure has been readjusted.

Jeweller No 1!

K. Srinivasan, Managing Director, Emerald Jewel Industry India

From salesman to leading jewellery manufacturer — Coimbatore’s own man with the Midas touch.

His is a fascinating rags-to-riches story. He started out as a salesman at a jewellery store in Coimbatore, at a monthly salary of Rs 100 in 1984. Today, K. Srinivasan is the Managing Director of Emerald Jewel Industry India — Coimbatore’s largest jeweller, and one of the biggest in Tamil Nadu.

Today, the Emerald brand offers a staggering 1.5 lakh designs; and Srinivasan has offices in Dubai (from where he services West Asia, Africa and the UK) and Singapore (for Malaysia, Sri Lanka, Bangladesh and some parts of Australia).

The man who started his venture with just 100–150 gm of gold jewellery, is now handling 15 tonnes of the precious metal a year — and hopes to shore this up to 24 tonnes by the end of this year. He confirms the staggering figure I quote about his annual turnover, but requests me not to mention it. Anyway, the numbers will be out when he goes for an IPO, “once I stabilise”.

I meet the soft-spoken and rather shy Srinivasan in his ultra-hep office in the textile city. He confirms that right from childhood, his dream was to start a business in jewellery. After graduating in mathematics, he joined a jewellery showroom. “I was just 22, and wanted to learn about the industry, which was then totally unorganised — so I thought I could grow fast.”

After a 10-month learning experience in design, technique, manufacturing and sales, he decided to start his own venture. “I came from a poor family; my father used to do electroplating, and I lost him when I was only six. My mother brought me up, with an uncle helping with my education. But I had the confidence that through hard work I could make it,” he recalls.

A STROKE OF LUCK

With a small loan from his brother he began on a small scale. Luck was on his side, because one day he found a Gujarati businessman struggling to communicate in Coimbatore. “Luckily I knew Hindi and was able to help him find what he wanted. He gave me his visiting card and said I should take Coimbatore jewellery to Ahmedabad, as people there were crazy about our intricate designs.”

The long distance and the 36-hour “painful journey” on the Navjeevan Express prevented jewellers from the South taking their wares to the Gujarat capital, “where there was a craze for South Indian jewellery. Gold price then was Rs 200-300 a gram, and I boarded the train on my first journey with some 150 gm of small items such as earrings and rings.” Twice a month he travelled to Gujarat and — thanks to the high demand — increased his sales. “Many jewellers agreed to give me advance, as my contact told them, ‘He is like my son and I take the responsibility’!”

Within 3–4 years, Srinivasan was hitting the Mumbai and Delhi markets, and “Tribhuvandas Zaveri started giving me 1–2 kg of gold as it was were very happy with my designs and quality.” From the very beginning, his focus was on design and finish. “That helped me a lot as nobody was concentrating on these aspects in those days; everybody started giving orders. One fellow gave an order, and his competitor said: ‘Srinivasan, I will also give you advance,’” he smiles.

Apart from design and quality, he also concentrated on innovation. After making “a lot of innovation in hand-made jewellery, I moved into mechanisation as I knew the future would be very competitive.” To stay ahead, he attended jewellery fairs in India and abroad, gathered a lot of technology, and slowly entered manufacturing. “Whatever I created was new to the industry and so got accolades from everybody,” he says.

WIFE HAS THE LAST WORD!

Emerald sets a high score for design, and has designing studios in Mumbai, Delhi, Kolkata and Coimbatore, with Srinivasan brainstorming on new designs twice a month with his senior designers. “I give them ideas to mix and match designs, tweak them to create new designs and finally approve them.” Does he consult his wife on what will work? “Once the designs are made, in the final selection she has the last word, with my daughter (15) being involved too.”

As he had started out with hand-made jewellery, one of his units continues to make it, accounting for barely 20 per cent of his overall sales. Simpler jewellery like chains and long necklaces are handmade, he says. Most of the machines come from Italy; others are made in India.

Srinivasan employs 3,000 workers at his units and they come from Bengal, Kerala, Bihar, Rajasthan and various South Indian cities. “Each region brings its own strengths and skills, but the best workmanship comes from Kolkata,” he says. Bengalis have a lot of creativity, and “an eye for beauty that nobody can match. As they are poor, they have the urge to come up in life and work very hard to create something unique. But if you take Keralites, their requirements are comparatively less, so they don’t show that much interest.” His company has created many brands: Jewel One, Ishtaa (18-karat zircon-studded jewellery), Nishtaa, and Corona (for diamonds). His most successful brand is Jewel One, and now he’s moved into light-weight jewellery for children.

FUTURE PLANS

Srinivasan says that once his son — who is now studying management in the UK — joins the business, he will think of diversification. “The jewellery business in India is still in the unorganised sector. In Coimbatore alone, there are 500 jewellers. Much more can be done in this sector, and I also want to enter the hotel industry.”

Interestingly, he owns four windmills that generate 3.5 MW of power. “Whatever electricity we need for our four factories, we produce — and have some surplus too, as I also use solar power.”

Looking back, this entrepreneur ascribes his success to both focus and hard work. “I really focused on my work because I wanted to come up in life and create something unique. And I worked very hard — without that, success is not possible. Today, youngsters prefer jobs to entrepreneurship because they don’t want to take challenges. You are bound to fail first… there are so many times I failed, but I always thought positive, worked harder and kept my goal. My energy and faith came from my knowledge that society only respects the rich!”

So, Why are Indian women so crazy about jewellery?

It’s a cultural thing, says K. Srinivasan, MD of Emerald. “It is in their blood, and also a social security which has always given good returns.”

Once upon a time Indian women preferred chunky jewellery but that is changing. “Today, the younger generation wants light-weight jewellery; it has to be very attractive, very stylish. So we need to have innovative ideas and create new designs all the time.”

But, of course, for marriages, chunky jewellery is still in demand, and Emerald makes that too, he says. Indian women generally prefer intricate designs, unlike the ones popular in Italy, France or rest of Europe. But technology-wise, as the Italians are far ahead, “I’ve taken inspiration from Italian jewellery and modified it to suit Indian taste.” The Indian jewellery industry welcomed this innovation and his business thrived. However, Srinivasan says Indian women don’t fancy white gold “that much; it’s a combination of enamel and gold and other little things.”

Given the name of his company, does he use a lot of emerald in his designs? “Not really; but I know that confusion is there thanks to the name, which I had chosen as a youngster; people name businesses after their mothers or children. Emerald was the first name that came to my head and I stayed with it!”

RASHEEDA BHAGAT: BL : sunday :7 th Oct 2012