Nationally Nirula?

Nirula's, the North Indian fast food chain, is on its way to test new waters. The Delhi-based group seems to have been emboldened by the pos...

Nirula’s, the North Indian fast food chain, is on its way to test new waters. The Delhi-based group seems to have been emboldened by the positive consumer response that it has received after stepping outside the limits of the national capital.

Besides seeking an entry into the southern market, which it had scrupulously avoided till now, it appears gung-ho once again about international forays as well. The company has set an ambitious target of adding 27 new outlets to its existing 60. On the southern front, it is clearly eyeing the lucrative markets of Bangalore, Chennai and Hyderabad. It would possibly open one outlet in each of these markets during the coming year. On the overseas front, Nirula’s seems to have zeroed on the familiar Gulf region and the more competitive UK market. Sizeable Indian populations in these markets of course make them natural choices for its maiden entry. In fact, talks are already on to appoint master franchisees in the two markets, where the operations are only likely to start in 2006-07. It seems the overall expansion would primarily be franchisee-driven, with most of the proposed investment of the Rs 15-20 crore coming from the franchisees themselves. The company would also be expanding its 3-star hotel chain into smaller cities like Lucknow, Chandigarh and Ludhiana. But the most interesting expansion idea on cards could perhaps be the opening ice-cream kiosks in shopping malls, BPO companies, and airports. The business model for this expansion could however prove a little trickier — whether to have their own micro-outlets or take the easier franchisee route.

Back on track

The Nambiars are in news again. No son-in-law tension in the picture this time around. The revival plan of BPL-Sanyo joint venture is what is drawing a lot of attention in the corporate world. The JV having been plagued for long by project-time overruns, it would certainly take some effort from both the partners to get it back on rails. Ajit Nambiar, the scion of the Nambiar family and the designated Chief Executive Officer of the company would really be on test to prove his mettle!

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BPL, in the meanwhile, has nominated two on the JV board — Viswanath Nambiar, currently involved with BPL’s power projects and Ranjit Shah, who heads BPL Telecom’s embedded software business. Old hands that they are, they should be able to extend a helping hand to the junior Nambiar in a board that would have 3 members each from both the partners.

But the JV is reported to be facing some resistance from the foreign lenders on restructuring. The Nambiars, however, appear upbeat and have already gone to the High Court to make the foreign lenders fall in line. Luckily for the Nambiars, with 3/4th of the lenders having already approved the plan, the foreign lenders may not have any other choice. They are even planning to raise another $30 million for the venture’s working capital requirements, for which Sanyo has already given the nod. Good luck is what the Nambiars now need.

Sitting pretty

Some how Ekta Kapoor’s team till now have defied the law of ‘hits and misses’, that is so very normal in the entertainment world. Her K series soaps continue to rule the roost. Even new entrants like Kahiin To Hoga have consolidated their position and figure regularly in the list of top 20 most watched programmes. Despite the increasing pressure on margins, that has resulted primarily because of increased production costs and slide in revenues from sponsored programmes (that are marketed by the company itself) the Kapoors appear upbeat. Star-Plus is all set to split its 9 pm-10 pm hourly slot between two programmes within a few weeks from now. The new half-an-hour slot, is most likely to fall into the lap of Balaji, purely on the merit of the existing relationship.

The fact that Star holds 26 per cent stake in the production company, would only strengthen Balaji’s case. The Kapoors, however, are alert to the importance of maintaining an arm’s-length relationship with the benefactor. For, too close a relationship could have a direct impact on Balaji’s long-term competitiveness. The trap lies in the temptation of becoming an exclusive supplier to Star. Of late, the share of commissioned programmes, obviously the most profitable segment is rising in the Balaji revenue pie. The company is also expecting improved realisations in the coming days, as Star is likely to revise the rates for the commissioned programmes. The Kapoors are sitting pretty for the moment though.

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