In a bind

As the tycoon is in dire need of more funds and a drastic restructuring of his existing debt, he may have to accede to FIs’ demands even with regard to his darling cement business.

Modi goes 24X7

Sameer Modi loves writing new stories. Since Modicare, his direct marketing success story, is close to a decade old now, it’s clearly time for him to find a new script. His Rs 2,500 cr group seems to have found a new one in organised retailing; 24X7 convenience stores, an unexplored sector in India. The tycoon has just launched his first ‘Twenty Four Seven’ store in Delhi.

Modi’s stores would be selling both branded FMCG products as well as his own private labels. They would also be stocking prescription and over the counter drugs and staples like pulses and rice, besides making available movie tickets and banking services via ATM machines.

The tycoon claims to have studied the highly competitive markets of Japan, Philippines, Thailand and Taiwan extensively for over two years to understand the concept of 24-hour convenience stores before taking the plunge. He is planning to invest Rs 40 crore over the next two years and looking to set up 500 such stores across just Delhi and Mumbai over the next five years.

Starting with company-owned stores, he has plans to rope in franchisees later. Makes sense, as he can expand faster afield only through the franchising route. The tycoon appears open to the idea of partnering with a foreign investor as and when the sector is thrown open to FDI. Despite all the hype around the sector, the tycoon is aware that profits won’t pour in right away. He, however, seems reasonably confident of breaking even in two years and notch up revenues of Rs 1,000 crore a year by 2010. Long way off. But then aren’t success stories also about dreams!

Banking on expertise

Arun Jain, the tycoon who founded Polaris in 1993, has never looked back since then. The going fortunately has been great except for the fiasco with the Indonesian Bank, which he is not likely to forget easily. Having swam the course for over a decade, Jain knows the real challenge in software lies in reinventing oneself, as business models get gradually outdated over a period. He has appointed a global management-consulting firm to do a re-evaluation of his business plans including a strategy validation exercise.

Having started the exercise in May 2005, he is expected to work on the recommendations in three months. Unlike many other software tycoons, Jain had given his advisor a wide mandate. He is not averse to even a drastic re-engineering of his operations and is even willing to consider whether he should retain the existing offerings or modify them. The tycoon might not have had great success when major outsourcing deals were signed during the ‘first burst of outsourcing’ in 2002, as deals then were being decided purely on vendor size and not domain expertise. Today he believes things have changed as more deals are being struck on the basis of the vendor’s expertise. He is optimistic that Polaris’ expertise in banking and finance domain will stand him in good stead in the days to come. As deals with 15 global banks have already been processed during the last few months, Jain’s optimism is certainly not misplaced.

dilipcherianhotmail.com