Hotmail is Not being Killed Off: Bhatia

Corporate 3
WWW.ECONOMICTIMES.COM
In a Nutshell
Unitech Moves CLB to
Hotmail is Not being Killed Off: Bhatia
E-mail service is being enhanced to break Gmail’s hegemony, says Hotmail’s co-founder Sabeer Bhatia
Stall Uninor Asset Auction
Sabeer Bhatia, the Indianborn co-founder of Hotmail, has hailed Microsoft’s decision to relaunch the iconic email service as
Outlook.com, as the technology major not only looks to break the hegemony established
by Google’s Gmail in recent years, but also
plans to bring about greater integration between social networking and email services.
Speaking to Biswarup Gooptu from San Francisco, Bhatia, who along with co-founder Jack
Smith, sold the email service to Microsoft in
1997 for $400 million, explains the need for
the rebranding, which he insists, is
not the “phasing out of Hotmail,” but a move targetted
Q&A
NEW DELHI Unitech on Thursday approached
the Company Law Board (CLB) to stall the auction of Uninor’s assets, a day after its telecom
joint venture with Norway’s Telenor invited
companies to bid for assets at the base price of
`. 4,000 crore. The real estate developer that
owns one-third of Uninor, asked CLB to disallow the asset sale, since Telenor may be the
only possible bidder, or any transfer of business. Unitech also challenged the authenticity
of the July 31 board meeting of Uninor, in
which a resolution for hiving off the telecom
business was passed
A Clarification
In response to a news story, ‘Govt Wins, BlackBerry Agrees to Hand Over its Keys to India' in
the edition dated August 2, RIM has clarified
that it cannot provide access to secure encrypted BlackBerry enterprise communications. The
company said it is providing an appropriate
lawful access solution that enables India’s telecom operators to be legally compliant with respect to their BlackBerry consumer traffic, to
the same degree as other smartphone providers do in India. “But this does not extend to secure BlackBerry enterprise communications.
As we have stated on several occasions, RIM
cannot access information encrypted through
BlackBerry Enterprise Server as RIM is not ever
in possession of the encryption keys,’’ said a
company statement.
Strides, Ranbaxy in Tie-up
with Gilead for HIV Generic
NEW DELHI Gilead Sciences has tied up with
Ranbaxy Laboratories and Strides Arcolab under which the American firm will transfer technology and fund the Indian companies to make
generic cost versions of its HIV medicine emtricitabine (FTC) for developing countries at a
lower cost. The deal covers both single tablet
emtricitabine sold under the brand Emtriva
and fixed-dose combinations of emtricitabine
marketed as Truvada.
NIIT Tech Promoters Sell
7% Stake at .̀ 267 a Share
MUMBAI Rajendra S Pawar and Vijay K Thada-
ni, the promoters of NIIT Technologies, have
sold 44.36 lakh shares of the company through
bulk deals on the BSE at `. 267 a share. The stake
sale amounts to 7% of the company’s equity.
Following these transactions, promoters’ holding in the company has come down to 31%. Citigroup Global, Birla Sunlife Trustee and Segantii India Mauritius were some of the buyers.
Sebi Fines 2 Cos for Circular
Trading in Videocon
MUMBAI Sebi has imposed a penalty of `
. 2 lakh
each on Mansukh Securities & Finance and Intec Shares for circular trading in shares of Videocon Industries way back in 2004. The two
entities have been found to have violated
norms related to synchronised or circular trading while dealing in shares of Videocon on behalf of their clients.
Hotel Leela to Issue Pref
Shares to Promoters
MUMBAI Hotel Leelaventures has decided to
issue equity shares to promoters on a preferential basis for an aggregate value not exceeding `. 100 crore. The board has also approved
raising of funds up to `. 1,000 crore through
various options.
NSE Plans to
Join Action
From Page 1
“It’s critical we have more such platforms,
because they can act as avenues for greater
influx of seed capital in India, which is
something that the entrepreneurial ecosystem severely lacks in India,” says Sunil
Goyal, chief executive and fund manager
of Your Nest Angel Fund, a Sebi-registered
venture fund. “We believe this blends in
well and supports the ecosystem. An increasing number of HNIs will invest in
companies, either participating through
funds or co-investing with them,” he added.
While Venturefund.com has taken on a holistic approach towards building the entrepreneurial ecosystem, by educating and
mentoring budding entrepreneurs, another
platform, Venturesutra.com, has a much
sharper focus — of just helping entrepreneurs raise funds.
“Our focus is really on qualifying the deal
flow which reaches an investor. What we’ve
done is tie up with over 60 investment
houses across the country. With one click, an
entrepreneur can send his business plan to
the country’s leading investors,” says its
founder, Abhijit Maheshwari. Venturesutra.com charges startups a fee of Rs 4,500 for
its service, and has seen around 100 business plans uploaded so far.
Another platform recently launched in the
country is TrepUp, positioned as a networking platform for companies and overseas investors keen on investing in Indian firms
but don’t know how to.
TrepUp.com’s founder John Verbic, formerly with private equity fund, The Chatterjee Group, says he noticed a big opportunity in creating a platform that would help
foreign investors invest in Indian companies. “Investors will pay an exponential
multiple for opportunities in India, but the
problem is, nobody in the West knows anybody here and vice-versa,” says Verbic,
whose company acts a bridge between entrepreneurs and investors.Verbic does not
charge a fee, but may do so once he reaches
user critical mass. With various webbased platforms trying to find their niche
and space in the entrepreneurial ecosystem, the National Stock Exchange (NSE)
too plans to join the action.
It is planning to soon launch a web-based
platform called ‘India Venture Board’,
which will aim to be a bulletin board for
startups and serve as a platform to bring
them and investors together.
towards rejuvenating what was once regarded
as a mainstay of the internet in the late 90s.
What’s your reaction to the news that
Microsoft is rebranding Hotmail? Is this, in
fact, the final phasing out of Hotmail?
I am absolutely delighted with Microsoft’s decision to rebrand Hotmail. Hotmail is not being
killed off, but is being enhanced with a host of
new features that will allow it to reach out to bigger and wider audience.
What does Hotmail represent in today’s tech
culture? Is it still regarded as an icon?
Absolutely. Even today, taking into account all
metrics, Hotmail has almost 400 million unique
users. It has more users than Gmail and Yahoo!
which have been hugely popular as well. Hotmail
Outlook.com will be the total communications package — live video, live chat, and integrated with
Skype, LinkedIn. Its interface will allow the user to
do so much more
SABEER BHATIA, Co-founder, Hotmail
Sun Pharma Looks to Acquire
Germany’s Stada Arzneimittel
Drugmaker seeks to raise
$1b for a deal; co looks to
step up European play
ALBERTINA TORSOLI, AARON KIRCHFELD
& GEORGE SMITH ALEXANDER
BERLIN | MUMBAI
S
un Pharmaceutical Industries, India's largest drugmaker by market
value, is looking for acquisitions in
Europe including a possible takeover of
German generic drugmaker Stada Arzneimittel, people familiar with the matter said.
Sun has sought to raise about $1 billion
for a European deal, said one person familiar with the matter, who asked not to
be identified as the process is private.
Company executives recently toured Europe to meet with potential targets, another person said.
Stada, based in Bad Vilbel, Germany,
has a market value of about ¤1.4 billion
($1.7 billion). Stada shares dropped as
much as 5.7% on Thursday to ¤24.11, the
biggest intraday decline since April 13,
after Deutsche Bank cut its stock- price
prediction to ¤32.5 from ¤34.
Sun fell 0.6% to `. 656 in Mumbai trading
on Thursday, valuing the company at
`. 675 billion ($12 billion). The stock has
climbed 32% this year, compared with
the 12% return on the 17-company BSE
India Healthcare Index.
A spokesman for Sun said the company
wasn't in talks to buy Stada.
A spokesman for Stada declined to
comment on a potential deal. Sun,
controlled by billionaire Dilip Shanghvi, has about $927 million of cash reserves and may seek acquisitions
to broaden its geographic breadth or
enhance its presence in the US,
Nomura Holdings said in a May 31 report. — Bloomberg
was a pioneer in the email space, and has held up
very well even as the technology landscape continues to change at a stratospheric pace.
Why was the rebranding of Hotmail required
then, given that it still commands so many
users?
Google came and changed a lot of the rules. Gmail
offered faster email services, unlimited space,
cloud services. Hotmail continues to do well, but
Microsoft has made the right decision to upgrade and rebrand it, in order to reach newer
and younger consumers, especially at a time
when social networking has had such a colossal
impact on popular culture.
Outlook.com will be the total communications
package — live video, live chat, and integrated
with Skype, LinkedIn. Its interface will allow the
user to do so much more.
They can work on Office applications such Word,
PowerPoint and Excel, and will have greater integration with mobile devices.
[email protected]
Kaizad Heerjee is
Aircel’s New COO
GULVEEN AULAKH
NEW DELHI
India’s fifth-largest mobile phone company Aircel is bringing in a new chief
operating officer (COO) from Malaysia,
as part of a larger restructuring exercise, executives aware of the development told ET.
The telco, majority owned by Malaysia’s Maxis, will appoint Dr Kaizad Heerjee as its COO next week. Heerjee, the
former chief executive officer of Malaysian telecom company U Mobile, will report to Maxis Communications chief executive officer and Aircel executive
director Sandip Das.
The new COO will assume the roll of
Gurdeep Singh, who moved out of the
company in January along with a few
other executives when Aircel’s underwent an organisational restructuring.
Maxis Communications Berhad’s chief
executive officer Jean Pascal had replaced Singh.
Sandhar Tech
Buys Mag Engg;
Deal Size Seen
at .̀ 90 crore
KETAN THAKKAR
MUMBAI
Sandhar Technologies, an affiliate of `. 1,200-crore diversified
auto component major Sandhar Group, has acquired 100%
stake in Bangalore-based Mag
Engineering, one of the largest
driver-cabin manufacturers in
the country.
The Sandhar Technologies’ senior management was in Bangalore on Thursday to complete
the acquisition process.
ET learns the size of the acquisition is in the range of `. 70-90
crore and Sandhar Technologies will fund this deal through
debt and internal accruals.
People close to the development said Maple Capital Advisors and Right Horizons were
advisors to the transaction. Mag
specialises in supply of sheet
metal components for construction and engineering industry.
When contacted, Jayant Davar, vice-chairman and MD of
Sandhar Group, confirmed the
acquisition, but declined to give
specific details of the deal.
While explaining the rationale behind the acquisition,
Davar said, “Mag is an established player in specialised
fabrication and this acquisition will help us consolidate
our sheet metal and fabrication businesses and expand
further in niche products.”
The acquisition will give Sandhar an opportunity to offer
new products to its existing
and new customers.
[email protected]
SHIS (Status Holders Incentive
Scrip) Licence of Engineering
sector for for
duty credit of Rs 70 Lacs
is available for immediate transfe r
to any manufacturer-status holder
of Engineering sector.
Please Contact Phone No.
09780046172.
Genpact Takes ‘Special Payout’
Route to Rope in New PE Investor
Departing PE investors benefit as Bain Capital buys 30% in Genpact for $1 b
HARSIMRAN JULKA
NEW DELHI
The coffers of India’s biggest business
process outsourcing company will be raided to pay a special dividend to benefit departing private equity investors in a deal
where Bain Capital is buying a 30% stake
for about $1 billion, or .̀ 5,500 crore.
While the special dividend will benefit all
shareholders, the payout by Genpact is being seen as payback for private equity
firms General Atlantic Partners and Oak
Hill Capital Partners, which first acquired
a 60% stake in the company from General
Electric eight years ago. While on the one
hand Genpact will dip into reserves, on the
other it is borrowing about $925 million to
pay the dividend, retire some $350 million
in loans and use the rest for acquisitions.
NV ‘Tiger’ Tyagarajan, the chief executive, defended the decision to pay a special
dividend in a statement saying it will enhance shareholder value but did not say
how. “Taking into account the financial
flexibility needed to continue to pursue acquisitions and organic growth initiatives,
we concluded that a special dividend,
funded in part by additional, modest leverage, would enhance shareholder value,”
he said. The market seemed to welcome
the deal, sending the stock up nearly 6% on
the New York Stock Exchange to its highest ever. The deal with Bain, founded by US
Republican presidential nominee Mitt
Romney, was struck at $14.76 per share,
about a 15% discount to the closing stock
price on Wednesday. Bain will buy a total
of 30% from General Atlantic and Oak
Hill, which will be left with some 5% each.
Bain, which manages $65 billion in assets,
has committed not to sell its shares for at
least two-and-a-half years.
Mayank Rastogi, a partner specialising
in PE and transaction advisory services at
E&Y, described the deal as a landmark that
“renews faith in the India story”. “There
are certain deals that are transformational for the industry and this is one of them.
In the year to date we have clocked perhaps
a total of $3.5 billion in deals by value and
suddenly a deal of this size comes along.”
[email protected]
TO BREAK THE RULES ,
YOU MUST FIRST MASTER
THEM.
THE WATCH THAT BROKE ALL THE RULES , REBORN
FOR 2012. IN 1972 , THE ORIGINAL ROYA L OAK
SHOCKED THE WATCHMAKING WORLD AS THE
F RST HAUTE HOROLOGY SPORTS WATCH TO
We’re not Reckless with Our Investments
TREAT STEEL AS A APRECIOUS METAL. TODAY THE
NEW ROYAL OAK COLLECTION STAYS TRUE TO THE
SAME PRINCIPLES SET OUT IN LE BRASSUS ALL
From Page 1
HDFC Mutual’s assets have grown from
.̀ 86,648 crore in June 2010 to .̀ 92,624 crore
last month. Top schemes such as HDFC
Equity Fund, HDFC Top 200 Fund, HDFC
Prudence Fund and HDFC Opportunities
Fund attracted over 65% of equity fund inflows in 2011, according to estimates by top
distributors. Further, HDFC Top 200 Fund,
the largest mutual fund scheme in India
with assets over .̀ 11,100 crore, has generated three-year returns of 8% as against category average returns of 6.2%.
“We were lucky in the sense that right in
the early stages of our career, we made
mistakes; and those mistakes were made
with smaller sums of money. Since then, I
would like to believe, we’ve not made other
large mistakes,” says Jain, a recluse in the
roller-coaster universe of fund houses.
Centurion Quantum, a few years later,
was rechristened HDFC Capital Builder
after Twentieth Century Asset Management was acquired by Zurich MF and subsequently merged with HDFC Mutual
Fund. Today, the scheme has assets worth
.̀ 462 crore and an NAV of .̀ 101. The NAV is
the performance barometer that rules the
life of a fund manager. Perhaps, to take the
ups and downs in his stride, Jain is into
meditation. Friends and sell-side analysts
say the man is a stickler for research and
backs his stocks to the hilt if he is convinced about a company’s prospects.
Such conviction was demonstrated in
2011 when shares of power equipment
maker Crompton Greaves were under
pressure due to poor results and allegations of poor corporate governance. Many
investors and analysts cried foul over the
company’s decision to pay .̀ 270 crore to
buy an aircraft and Crompton’s non-executive vice-chairman SM Trehan’s move to
sell his entire holding between June 29 and
July 1 after he stepped down as the managing director on June 1. Even as many investors were considering dumping their
Crompton holdings, Jain was quietly accumulating the company’s shares after
they plunged almost 44% in a month from
July 19. “We’re not reckless with our investments... It’s fair to say, we put reasonable amounts of capital behind our high
convictions and ideas; but we’re not reck-
less,” says the soft-spoken fund manager.
Jain is the among the very few fund managers who have not been lured by market
momentums that lead to bubbles. The
most memorable one being the tech bubble
in the late-1990s, when Jain stayed away
from the raging rally in technology stocks
that turbocharged assets and returns of
many mutual fund schemes. As a result,
his schemes underperformed significantly, drawing sharp criticism from investors
and distributors. But, when the bubble
burst in early 2000, most managers had to
take severe hits on their portfolios, while
HDFC MF schemes were largely unaffected. This was probably the turning point in
Jain’s career.
“Our funds underperformed 20-30% that
year…we kept on going back to our numbers to reassure ourselves. Ultimately,
when the fall came, what we lost in one
year, we gained in two months. That is
when we stood apart from the crowd,” says
Jain, sitting in his office at Ramon House.
The lessons of the tech bubble strengthened his resolve to stay away from similar
bubbles in the real estate and infrastructure sectors in 2007-08 at the expense of
HDFC Mutual Fund schemes lagging its
peers. “Spotting a bubble is not difficult.
What is difficult is to bear the underperformance and the pain in the short to medium term. We did not invest in real estate in
2007 and that year turned out to be really
bad for us; we underperformed by almost
7%,” says Jain, a fitness freak who loves
his game of badminton.
But the stock market often has a way of
punishing cautious managers. The investment team Jain leads made a string of
wrong calls in debts papers in 2008-09, resulting in losses. Also, his conservativeness cost Jain a few multi-baggers. Brokers said Jain could not get his timing
right in companies such as Asian Paints,
Crisil, Bajaj Auto and Jindal Steel & Power.
He even mistimed his exit from consumer
stocks last year. “There have been companies which we sold a bit too early thinking
there were better opportunities elsewhere. But I don’t think we’ve missed any
large sectors. About two years ago, we sold
a few consumer stocks…these stocks performed much better than we had expected,” admits Jain, who is bullish on domes-
tic equities these days.
Twelve years after his first taste with success, Jain continues to avoid the media
glare. Friends say it’s this quiet attitude
that cost Jain a campus placement at ICICI
Bank, when they visited IIM-Bangalore
for recruitment. “Unlike other IIT-IIM
graduates, Jain could not rattle off management theories to save his life,” says one
of Jain’s batchmates at IIT-Kanpur.
According to Dhirendra Kumar of Value
Research, Jain did not manage funds differently from others. “He just kept it simple and committed lesser mistakes,” says
Kumar. Sunil Shah, former HDFC Securities MD and owner of Evergreen Family
Office, remembers Jain as a value-picker
than a momentum player. “Prashant
knows 300-400 balance sheets by heart,”
says Shah. “HDFC funds are not momentum-driven funds. They may not generate
best category returns at all times; but they
will remain in the top quartile at all times.”
The institutional sales head of a leading
domestic brokerage qualifies Jain as a
‘strongly opinionated’ fund manager,
who trusts very few in the market. Jain,
according to him, rips apart sell-side
analysts who do not have strong views to
support their stock recommendations.
“Jain talks to analysts with his own set of
numbers, estimates and assumptions. If
you do not have anything to counter his
argument or excite him, he’ll not suffer
you long in his office,” said the institutional sales head.
Such traits bring to the fore the quiet yet
aggressive, steady but ambitious nature
of a man who is otherwise a recluse. “I
don’t think my urge to beat the markets
has gone down one bit. The day that goes
down, a fund manager should stop managing direct money at least,” says Jain,
looking up from the spreadsheets scattered on his table. Maybe, it’s this fear of
failure that keeps him on his toes. Indeed,
the very thought of failure scares him.
“If you are not scared to fail, you’re
more likely to fail. It’s fine if you make
mistakes with your own money... you’re
not answerable to anyone. But when
you’re managing money for people, failure does impact more,” he says slowly, before turning to the endless numbers
flashing across the computer screens.
1 HOSE YEARS AGO:
BODY OH SI EEL , H EARl OF
GOLD ’
OVER 130 YEARS OF HOROLOGICAL CRAFT, MASTERY
AND EXQUISITE DETAILING LIE INSIDE THIS CONIC
MODERN EXTERIOR ; THE ALWAY S PURPOSEFUL
ROYAL OAK ARCHITECTURE NOW EXPRESSED IN
41MM DIAMETER. THE AUDEMARS PIGUET ROYAL
OAK: CELEBRATING 40 YEARS.
ROYALOAK
AA
STANLESS STEEL .
SEILFVVI N D NG
MANLiFACT URFMOVF I 1FNT
f
RoyaI
Qk
40 Years
AUDEMARS PIGUET
Le Brassus
Available at:
De hi
K.APOOR WATCH G 7 South Extension Part 1 Tel: (11) 4134 5678
243 -A AEmporlo Mall 1st Floor Tel: (1 1) 46 (6 (( ( (
Mumba:
TIME AVENUE 189 Turner Rd Tel: (22) 2651 5858
audemarspigu et. corn