Caught between politicians

When a politician messes up your life, does it make sense, to get another politician to fix it? Clearly the beleaguered scooter king Rahul B...

When a politician messes up your life, does it make sense, to get another politician to fix it? Clearly the beleaguered scooter king Rahul Bajaj thinks so. Matters at the house of Bajaj are now at the serious stage, where reconciliation is no longer a possibility. They say the family fissures issue got escalated after a small quarrel at the World Economic Forum. The outspoken and traditionally fearless Rahul chose to pick a fight then with a man who is arguably one of India8217;s most feisty politicians. Neither side was willing to back away. One of the big boys, who attempted to make peace with the agent of discord, was none other than Bajaj acolyte and fellow tycoon, Videocon boss Dhoot, who is now a member of the Rajya Sabha. Obviously it was too little and too late. The fact that the politician who provoked matters is proud to state publicly that he is a loyal Birla family retainer made it obvious that he would take Shishir Bajaj8217;s side. What was not so obvious at that point time is how this politician8217;s machinations could escalate the full-scale family war. Now that the Bajaj empire is resigned to the fact that it is splitting, referees are being called in to oversee the division of spoils. The selection of Sharad Pawar, as one of the referees is significant. The man is known to be a skillful and patient negotiator with previous experience in sorting business battles and is himself big enough to tackle the opposition. If Pawar magic works, a politician would have helped finish what another of his tribe started.

Where there8217;s a will

Yogi Diveshwar8217;s foray into lifestyle retailing business certainly enjoys salience with his Wills Sport brand already a name in the casualwear market. However, how much of this is newly created and how much is owed to cigarettes is debatable. His divisional CEO Sanjiv Keshava is on an expansion spree and 45 outlets have mushroomed up in the country. Yogi8217;s agenda is simple8212;make inroads into the exciting Rs 1,200 crore branded apparel market and arrive at 8216;the8217; profit making formula. But his strategy of outsourcing all garments does cause some anxiety. At the moment, the brand is happy to be seen as a 8216;follower8217;. Somehow it8217;s not yet taking any risk of setting trends. But the existing profile is working since it8217;s designed for the top rung in society only. Perhaps the solution will finally be in the launch of a mass-market brand. But then it may mean losing out on the cregrave;me-de-la-cregrave;me market since the rich and famous cannot buy from a mass-market store. All in all, a quandary. The man with the 8216;will8217; will have to relook at what he is willing to lose in the pursuit of victory in the days to come. But indications that India8217;s domestic garment retail business is expected to skyrocket is on his side.

Buying dear to profit more

Azim Premji8217;s panic overdrive on the acquisitions front is out of character. A shopping basket of 98 million in one week is a lot for a conservative company that8217;s grown organically. Insiders in the giant Wipro group suggest that panic at a weaker profit figure is not the only cause for Premji8217;s discomfiture. The real problem seems to be that Wipro8217;s core businesses are now seeing significant though slow erosion of margins. Can purchases made last week help Premji? To some extent. Both GE8217;s infotech business and Spectramind are in the new focus areas for Wipro8217;s future. Premji8217;s hope is that his Wipro management style will help extract bigger margin in these businesses. This will probably work. But whether the high price he has paid for the acquisitions will ever be justified is unclear. Anyway for India8217;s richest man, profit margins rather than price, seems the current obsession. Also, Premji is betting that companies he wants to buy may now come cheaper to him, since he has cherry picked the best.

Dilip Cherian, runs a public affairs firm Perfect Relations. He is an economy watcher and tycoon tracker. None of the people he writes about are his clients. Your insider tales are welcome at dilipcheriannow-india.net.in