Monday, May 22, 2006

Carnage at D-Dtreet

So the expected finally happened. And as usual, it looks like its the poor retail investor who will take the biggest hit, having come to the party last. However, that is not the purpose of this post.
My heart goes out to a most unexpected casualty, and that is Air Deccan. India's lowest cost, and the one with the biggest heart, has been dealt a body blow.
The poor guys must be wondering how much more off their timing for the IPO could have been. Not only has it been swept aside in the gale force of the market crash, it will also put at serious risk, their future plans. In a worst case scenario, it could also mean someone like Kingfisher Airlines buying in. And that my friends, would pretty much end all the fun we have been having with the air fares in the past two years. With that itching to be a monopoly Jet already pocketing Sahara, we will be back to a bunch of three players, with shares in the range of 25-30, who will happily fix the prices.

For those of you who have never actually travelled Air Deccan, or even travelled it, only to come cursing out of the experience, the inescapable fact is that no other factor is as responsible for the current low fares all round, than this Airline. In fact, ominously, the whole upturn in the economy and it's subsequent results on all other activities were practically signalled by the arrival of Air Deccan's Rs 1 for a ticket ads. People thought those were unbelievable, till you started meeting the first guys who actually travelled to share the tale, and before you knew it, a lot else was within reach.

And now, with an IPO dream in tatters, creditors barking at the door, and a promoter down to his last quarter share in the company, things couldn't get tougher fopr the airline. Of course, like all else they have done, Captain Gopinath didn't make life easier for himself by pushing his luck with the IPO valuation too, pricing it a clear 30-40% more than he shd have, I reckon. Anyway, that is the nature of the man, to push for things just a tad under impossible.

So there we are. I haven't applied for the IPO, for reasons mentioned above, but I do hope, sincerely, that this sirlibe sails through this storm safely.

Friday, May 19, 2006

Not everyone gets his due

We've all been through it. The feeling that comeuppance will surely come to the person who seems to have jumped lines. The sleazeball who managed to get promoted faster by licking the boss, the dumb girl who rose because of her 'looks', or the regular cases of nepotism where the owner's son/nephew/whatever gets to to take charge without knowning zilch.

Well, I've got bad news for you guys. All these so called underserving people donot necessarily meet a messy end, trying to atone for their 'mistake'. Chances are, unless they are complete retards, they would survive, and in a lot of cases, even thrive. Why? Because, if you are in a seat of power, knowledge will also flow to you at a preferential rate. I've seen this work through out my life, including with myself too.

In my case, I had joined this financial firm which promptly put me in charge of managing theoir receivables in a region. I knew zilch about their famous processes, customers or even how to go about doing it. But luckily, we had vendors who used to actually do it for us. Seeing a new man in charge, the vendors took no time in doing everything they could to curry favour, including sharing pretty much every trade secret, if only to undercut the other guy.. Result was, after a difficult three months, I had learnt enough to actually pull off the best subsequent 9 month performance the region had ever seen, leading to all round praises and bonuses.

This was a phenomenon I was to repeat, with me on the other side. As I joined an online media company dependent on advertising, we quickly realised that our prospective clients knew zilch about online ads, how you could track them, etc. Thus, we began a programme of touching as many as we could, trying to give them as simple, and as comprehensive understanding of the net as possible, to obviate the need for them to believe our competitor, who preferred to take the easy way out and just sell at any cost with any claim it took. result is, three years after we started, some of my earliest clients , who used to call every week on one aspect or the other, are respected within their comoanies for their understanding of the net.

So the moral of the story is, donlt expect just hard work to take you places, as all the 100 most important guys of the century would have you believe.. Work hard, but make sure it gets noticed, even if you have to quit to make your point.

Saturday, May 13, 2006

So what's happening with Indian media?

First we had the rash of IPO's from Deccan Chronicle, HT Media, Jagran Prakashan, Cyber Media and even the reticent Sun TV. And now we have the stratospheric valuations for all of these... In between all this, the biggest media daddy of them all, the Bennett Coleman Group, has been busy DIVESTING, or hedging it's investment in Radio through an IPO, while busily investing like a portfolio investor in everything but media. The last one was Air Deccan, and before that, they have been in textile comoanies, IT companies, fashion, retail and god knows what else. While remaining privately held of course.

So do they know something that investors don't? I think investors shd note this at least.

A key factor, based on my own experience would be the ability of media companies to straddle, and manage well, the various delivery models. So to expect a good TV guy to do well in print, as well as Radio and internet, which investors seem to be betting on, is a bit dicey. So go ahead in invest in pure play guys like Radio Mirchi, Jagran Prakashan, but watch out when the excess valuation is built on 'natural' expansions into outdoor, TV, print or whatever they don't do right now.