Below the surface

Initially reluctant to make even his old partner InterContinental an equity partner, the hospitality magnate is now understood to be open to the idea of divesting as much as 30 per cent stake for the appropriate partner in the new hotel projects.

IPO braveheart

Shyamsunder Jindal, with his big IPO behind him, is already India’s largest flexible packaging film manufacturing company. Flush with funds he is now also, eagerly eyeing takeover targets in of the US, Korea and Japan. The acquisitions, the tycoon reckons, would not only help him gain access to advanced production technologies but also strengthen his distribution network in these markets. Jindal must also be looking at using these technologies back in India too.

The US, a good market for metalised and coated films, has remained the weak link in Jindal’s business accounting for a mere 3 per cent of his sales. Europe on the contrary, contributes more than 50 per cent to his exports. So it makes sense to make some acquisition in these segments in the strategic US market.

Jindal is also planning to expand his domestic capacities in a big way. He will be setting up new coating and metallising lines, which in turn should help him to add new high value added products to his existing portfolio. The tycoon is also going to set up a whole new polycondensation plant at his Nasik facility. All this expansion should be completed by the year-end, for the tycoon has many more planned for the following year. But the worry the markets have is whether the multiple objectives will dilute the big returns the market now expects from his company. Keep watching this space as the film rolls out into public view.

Helping an old partner

Brijmohan Lal Munjal, the elder tycoon behind two-wheeler market leader Hero Honda, could soon be joining hands with his foreign partner in Africa and Latin America to revive the fortunes of the ailing subsidiaries of the latter. The Hero lot has always shown a keen interest in the markets of Ecuador, Kenya, Nigeria, Tanzania etc. because of the tremendous demand there for 100-125 cc motorcycles — which incidentally is their forte. By joining hands, he would both be helping his partner and helping himself.

The tattle going around is that Munjal could possibly take up an equity stake in Honda subsidiaries in these markets and use Hero Honda’s low-cost manufacturing capabilities to introduce new products there. In fact, the tycoon recently began exporting fully built vehicles and completely knocked down (CKD) units to these markets. He, however, seems reluctant to set up any greenfield project even though his competitors Bajaj and TVS have nearly decided to do so. Meanwhile, the tycoon is planning his third plant in India. Given that his other two plants — Dharuhera and Gurgaon — are located in the North, it is most likely that he won’t be looking at any other region for the new one. It’s likely that the tycoon will choose between Uttranchal and Himachal Pradesh as his new location provided he doesn’t face any problem on the infrastructure and skilled manpower front in these states.

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