EL OTRO TIGRE

I think of a tiger. The fading light enhances
the vast complexities of the Library
and seems to set the bookshelves at a distance;
powerful, innocent, bloodstained, and new-made,
it will prowl through its jungle and its morning
and leave its footprint on the muddy edge
of a river with a name unknown to it
(in its world, there are no names, nor past, nor future,
only the sureness of the present moment)
and it will cross the wilderness of distance
and sniff out in the woven labyrinth
of smells the smell peculiar to morning
and the scent on the air of deer, delectable.
Behind the lattice of bamboo, I notice
its stripes, and I sense its skeleton
under the magnificence of the quivering skin.
In vain the convex oceans and the deserts
spread themselves across the earth between us;
from this one house in a far-off seaport
in South America, I dream you, follow you,
oh tiger on the fringes of the Ganges.


Evening spreads in my spirit and I keep thinking
that the tiger I am calling up in my poem
is a tiger made of symbols and of shadows,
a set of literary images,
scraps remembered from encyclopedias,
and not the deadly tiger, the fateful jewel
that in the sun or the deceptive moonlight
follows its paths, in Bengal or Sumatra,
of love, of indolence, of dying.
Against the tiger of symbols I have set
the real one, the hot-blooded one
that savages a herd of buffalo,
and today, the third of August, '59,
its patient shadow moves across the plain,
but yet, the act of naming it, of guessing
what is its nature and its circumstance
creates a fiction, not a living creature,
not one of those that prowl on the earth.


Let us look for a third tiger. This one
will be a form in my dream like all the others,
a system, an arrangement of human language,
and not the flesh-and-bone tiger
that, out of reach of all mythologies,
paces the earth. I know all this; yet something
drives me to this ancient, perverse adventure,
foolish and vague, yet still I keep on looking
throughout the evening for the other tiger,
the other tiger, the one not in this poem.


Jorge Luis Borges
Translated by Alastair Reid

Norman Vincent Peale’s Top 10 Positive Pearls of Wisdom

Focus on today.

“Don’t take tomorrow to bed with you.” - Norman Vincent Peale

Focus on today by building “a habit of spending more time in the present and less time in imagined future scenarios or old memories.” You would probably be in shock if you were ever to take stock of how much time you spend daily daydreaming, fretting over things you can’t change and thinking about tomorrow. We all do it, the key is to be conscious of when you are doing it so that you can stop it and return back to the present. You may also “…do this through things like focusing on your breathing or on your inner body.”

Don’t go too fast.

“To go fast, row slowly.” - Norman Vincent Peale

This is such an Achilles heel especially for young men who want to conquer the world. They go at a million miles an hour trying to out achieve their compatriots. “It’s tempting to go fast…you may be tempted to grab on to the next big idea, the next “magic pill”, instead of steadily keep going on your current path. To actually get where you want to go a slower pace may be more useful and effective than a hurried and quick pace.”

While on the surface it seems counter intuitive to go slower if you want to progress faster, there is a ring of truth to the time old fable of the rabbit and the hare. We know that those who keep a constant state of progress done within their limits often achieve greater success and sustain it for longer periods of time than those who burst out of the blocks sprinting only to run out of juice before ever reaching the finish line.

Learn not only from your mistakes.

“We’ve all heard that we have to learn from our mistakes, but I think it’s more important to learn from successes. If you learn only from your mistakes, you are inclined to learn only errors.” - Norman Vincent Peale

“Our mistakes are interesting because they can often teach us something valuable if we just take a closer look at what happened. But, of course, the successes are really useful to analyze too…It is here we can find perhaps a crucial detail or something that we did that we missed the other 10 times we tried.” Success goes to those who are willing to pause and reflect on the successes and failures that have gotten them there. It is only through careful and meticulous reflection on one’s progress that you find what is working and what isn’t. To repeat what doesn’t work over and over again is just an exercise in mediocrity.

The Story of The Pencil - By Paulo Coelho

The story is excerpted from the book written by Paulo Coelho “Like The Flowing River”.

A boy was watching his grandmother write a letter. At one point, he asked:

‘Are you writing a story about what we’ve done? Is it a story about me?’

His grandmother stopped writing her letter and said to her grandson:

‘I am writing about you, actually, but more important than the words is the pencil I’m using. I hope you will be like this pencil when you grow up.’

Intrigued, the boy looked at the pencil. It didn’t seem very special.

‘But it’s just like any other pencil I’ve ever seen!’

‘That depends on how you look at things. It has five qualities which, if you manage to hang on to them, will make you a person who is always at peace with the world.’

‘First quality: you are capable of great things, but you must never forget that there is a hand guiding your steps. We call that hand God, and He always guides us according to His will.’

‘Second quality: now and then, I have to stop writing and use a sharpener. That makes the pencil suffer a little, but afterwards, he’s much sharper. So you, too, must learn to bear certain pains and sorrows, because they will make you a better person.’

‘Third quality: the pencil always allows us to use an eraser to rub out any mistakes. This means that correcting something we did is not necessarily a bad thing; it helps to keep us on the road to justice’

‘Fourth quality: what really matters in a pencil is not its wooden exterior, but the graphite inside. So always pay attention to what is happening inside you.’

‘Finally, the pencils fifth quality: it always leaves a mark. In just the same way, you should know that everything you do in life will leave a mark, so try to be conscious of that in your every action.’

8 Money Secrets From Warren Buffett

1. Rich Is A State Of Mind

“I always knew I was going to be rich. I don’t think I ever doubted it for a minute.” - Warren Buffett
The difference between being poor and being rich is really just a state of mind. Poor people think thoughts of poverty and lack, rich people think thoughts of abundance and prosperity. Your beliefs are going to determine the way you perceive wealth, the decisions you make and the way you act towards it.

2. Success Is More Than About Your Bank Balance

When asked by CNBC what is the secret to success, Buffett replied “If people get to my age and they have the people love them that they want to have love them, they’re successful. It doesn’t make any difference if they’ve got a thousand dollars in the bank or a billion dollars in the bank… Success is really doing what you love and doing it well. It’s as simple as that. I’ve never met anyone doing that who doesn’t feel like a success. And I’ve met plenty of people who have not achieved that and whose lives are miserable.”

3. Spend Less Than You Earn

“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.” -Warren Buffett

It seems like common sense advice and you’ve no doubt heard financial experts preaching about it for years. You can’t possibly get ahead financially if you’re spending more than your paycheck. Buffett is famous for living a simple and frugal lifestyle. He is the only billionaire I know that still lives in the same house he bought back in 1958 for $31,500. He drove a 2001 Lincoln Town Car for years which he bought second hand. Buffett has a net worth in excess of $52 billion and yet lives off an annual salary of $100,000. The relative percentage of his spending based on his overall net worth is minuscule.

4. Avoid Consumer Debt

The sooner we realize that consumerism is a social plague that has been propagated by billion dollar marketing machines to keep you shackled to your job, the sooner we can stop spending money on useless stuff. It is a fool’s game to spend today so that you can work tomorrow to pay it off. It is a losing proposition because one day your working days are going to be over but the debt is still going to be hanging over your head. Clever marketing has convinced our society that to be happy you have to have more, be more and do more. Buffett abhors consumer debt instead choosing to use debt wisely by leveraging it in investments. To help you deal with your debt consider reading “How To Get Yourself Out Of Debt“.


5. You Are Who You Associate With

“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.” -Warren Buffett

If you want to succeed financially you need to associate with people who are most conducive to encouraging and cheering on your financial journey. If the people you associate with see money as evil, object to capitalism and find wealth a foreign concept then your financial health and well being is going to be influenced by their views. Whether we like it or not we are all influenced to some extent by the people we spend our primary time with. If you aspire to achieve financial security then you need to find a mastermind of people in your life whom you can all encourage and help each other.

6. Gambling Is A Fools Game

“Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” - Warren Buffett

While we are young and naive we choose to take risks with our money that are dumb and stupid. Trying to hit a home run with your money every time is a losing proposition with long term consequences. To chase investments that offer a high rate of return you must also assume that it also comes with a higher rate of risk. Bill Gates once quipped “Warren’s and my betting has always been confined to $1 bets” when talking about them paying poker together. If two billionaires take risk management this seriously, it’s time we average punters did the same thing.

7. Give Back To The Community

“Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.” - Warren Buffett

They say that to have more you need to give more. A contradiction in terms, maybe, but it’s a simple truth that is as enduring as time. As the bible says “It is more blessed to give than to receive -Acts 20:35”. Buffett has announced in 2006 that he was giving away over $30 billion to the Bill and Melinda Gates Foundation making it at the time of writing the largest charitable donation in history. He also contributes large sums to his children’s charitable foundations.

8. Generosity and Abundance Goes Hand In Hand

“Even though Ben Graham [Buffett's mentor] had everything he needed in life, he still wanted to give something back by teaching, So just as we got it from somebody else, we don’t want it to stop with us. We want to pass it along too.” - Warren Buffett

A famous bible quote goes: “What benefit will it be to you if you gain the whole world but lose your own soul?” - Mark 8:36. The path to wealth isn’t a solo endeavor. How sad would life be if you come to the end of your life and there is no one to share it with. So as you journey on your path to financial abundance remember that there will be many people who generously helped you on your journey so it is only fitting to pay it forward when the opportunity arises. Generosity with your time, with your money, with your resources are great virtues to have. The greatest ally to building a strong friendship is to help others achieve what they want from life.

I leave you with this last quote “You only have to do a very few things right in your life so long as you don’t do too many things wrong.” - Warren Buffett

8 Money Secrets From Warren Buffett

The Cloud and The Sand Dune

The Cloud and The Sand Dune
(From Paulo Coelho's "Like A Flowing River")


“As everyone knows, the life of a cloud is very busy and very short” writes Bruno Ferrero..

And here’s a related story.

A young cloud was born in the midst of a great storm over the
Mediterranean Sea, but he did not even have time to grow up there, for a strong wind pushed all the clouds towards Africa.

As soon as the clouds reached the continent the climate changed. A
bright sun was shining in the sky and stretched out beneath them, lay the golden sands of the Sahara. Since it almost never rains in the desert, the wind continued pushing the clouds towards the forests in the south.

Meanwhile, as happens with young humans too, the young cloud decided to leave his parents and his older friends in order to discover the world.

‘What are you doing’ cried the wind. ‘The desert’s the same all over.

Rejoin the other clouds, and we’ll go to Central Africa where there are amazing mountains and trees!’

But the young cloud, natural rebel, refused to obey, and, gradually, he dropped down until he found a gentle, generous breeze that allowed him to hover over the golden sands. After much toing and froing, he noticed that one of the dunes was smiling at him.

He saw that the dune was also young, newly formed by the wind that had just passed over. He fell in love with her golden hair right there and then.

‘Good morning’, he said. ‘what’s life like down there?’

‘I have the company of the other dunes, of the sun and the wind, and of the caravans that occasionally pass through here. Sometimes it’s really hot,but it’s still bearable. What’s life like up there?’

‘We have the sun and the wind too, but the good thing is that I can travel across the sky and see more things.’

‘For me,’ said the dune, ‘life is short. When the wind returns from the forests, I will disappear.’

‘And does that make you sad?’

‘It makes me feel that I have no purpose in life.’

‘I feel the same. As soon as another wind comes along, I’ll go south and be transformed into rain but that is my destiny.’

The dune hesitated for a moment, then said: ‘did you know that here in the desert, we call the rain paradise?’

‘I had no idea that I could ever be that important,’ said the cloud proudly.

‘I’ve heard other older dunes tell stories about the rain. They say that, after the rain, we are all covered with grass and flowers. But I’ll never experience that, because in the desert it rains so rarely.’

It was the cloud’s turn to hesitate now. Then he smiled broadly and said:’if you like, I could rain on you now. I know I’ve only just got here, but I love you, and I’d like to stay here forever.’

‘When I first saw you up in the sky, I fell in love with you too’ said the dune.

‘ But if you transform your lovely white hair into rain, you will die.’

‘Love never dies’, said the cloud ‘it is transformed, and, besides, I want to show you what paradise is like.’


And he began to caress the dune with little drops of rain so that they could stay together for longer, until a rainbow appeared. The following day, the little dune was covered in flowers. Other clouds that passed over, heading for Africa thought that it must be part of the forest they were looking for and scattered more rain. Twenty years later, the dune had been transformed into an oasis that refreshed travellers with the shade of its trees.

And all because, one day, a cloud fell in love, and was not afraid to give his life for that love.

Genghis Khan and His Falcon

One morning, the Mongol warrior, Genghis Khan, and his court went out hunting. His companions carried bows and arrows, but Genghis Khan carried on his arm his favourite falcon, which was better and surer than any arrow, because it could fly into the skies and see everything that a human beiong could not.

However, despite the group’s enthusiastic efforts, they found nothing. Disappointed, Genghis Khan returned to the encampment and in order not to take out his frustration on his companions, he left the rest of the party and rode on alone. They had stayed in the forest for longer than expected, and Khan was desperately tired and thirsty. In the summer heat, all the streams had dried up, and he could find nothing to drink. Then, to his amazement, he saw a thread of water flowing from a rock just in front of him.

He removed the falcon from his arm, and took out the silver cup which he always carried with him. It was very slow to fill and, just as he was about to raise it to his lips, the falcon flew up, plucked the cup from his hands, and dashed it to the ground.

Genghis Khan was furious, but then the falcon was his favourite, and perhaps it, too, was thirsty. He picked up the cup, cleaned off the dirt, and filled it again. When the cup was only half-empty this time, the falcon again attacked it, spilling the water.

Genghis Khan adored his bird, but he knew that he could not, under any circumstances, allow such disrespect; someone might be watching this scene from afar and, later on, would tell his warriors that the great conqueror was incapable of taming a mere bird.

This time, he drew his sword, picked up the cup and refilled it, keeping one eye on the stream and the other on the falcon. As soon as he had enough water in the cup and was ready to drink, the falcon again took flight and flew towards him. Khan, with one thrust, pierced the bird’s breast.

The thread of water, however, had dried up; but Khan determined how to find something to drink, climbed the rock in search of the spring. To his surprise, there really was a pool of water and, in the middle of it, dead, lay one of the most poisonous snakes in the region. If he had drunk the water, he, too, would have died.

Khan returned to camp with the dead falcon in his arms. He ordered a gold figurine of the bird to be made and on one of the wings, he had engraved:

“Even when a friend does something you do not like, he continues to be your friend.”

And on the other wing, he had these words engraved:

“Any action committed in anger is an action doomed to failure.”

Be like the flowing river

Be like the flowing river,

Silent in the night.

Be not afraid of the dark.

If there are stars in the sky,reflect them back.

If there are clouds in the sky,

Remember,clouds,like the river,are water.

So,gladly reflect them too,

In your own tranquil depths

---------Manuel Bandeira

We impact others with every communication

..from the book "The alchemist"by paulo coello

The alchemist picked up a book that someone in the caravan had brought. leaving through the pages, he found a story about narcissus.

The alchemist knew the legend of narcissus, a youth who knelt daily beside a lake to contemplate his own beauty. He was so fascinated by himself that, one morning, he fell into the lake and drowned. at the spot where he fell, a flower was born, which was called the narcissus.

but this was not how the author of the book ended the story.

he said that when narcissus died, the goddesses of the forest appeared and found the lake, which had been fresh with water, transformed into a lake of salty tears.

“why do you weep?” the goddesses asked.

“I weep for narcissus,” the lake replied.

“ah, it is no surprise that you weep for narcissus,” they said, “for though we always pursued him in the forest, you alone could contemplate his beauty close at hand.”

“but… was narcissus beautiful?” the lake asked.

“who better than you to know that?” the goddesses said in wonder. “After all, it was by your banks that he knelt each day to contemplate himself!”

the lake was silent for some time. Finally it said:

“I weep for narcissus, but i never noticed that narcissus was beautiful. I weep because, each time he knelt beside my banks, i could see, in the depths of his eyes, my own beauty reflected.”

“what a lovely story,” the alchemist thought.

- paulo coello

What a man thinks of himself, that is which determines, or rather indicates, his fate” - Henry David Thoreau

Let us remember that the reflection of ourselves, in the eyes of others during our communication with them, is usually the one that we put there ourselves.

The Inside Story of Azim Premji's Next Billion Dollar Plan

Premji is anticipating that by 2020, the global market for environment products and services will double from $1.37 trillion
Source:Forbes India Magazine of 03 July, 2009

The same buzz of excitement and serendipity that swept the tiny campus of Wipro in 1977 has returned to its sprawling Bangalore headquarters today. More than three decades after Azim Premji sensed an opportunity in information technology for his consumer products company, the billionaire businessman is taking his next big step, ecology. And just like the way IT did, the new business is likely to transform the face of Wipro forever.

For those who know Premji, it is not uncommon to see the fifth richest Indian on the Forbes List and the 63-year-old chairman of Wipro switching off the lights before leaving office. It is this commitment to avoid waste that has turned Premji’s attention to ecology and sustainability. In October 2008, even as it warned of slowing growth in its main software outsourcing business in the backdrop of a global financial crisis, Wipro released a recruitment ad for two new businesses, Wipro Water and Wipro EcoEnergy. The company has spent the previous two years preparing for this diversification, which may turn out to be the company’s third big change. The first was when a 21-year-old Premji took charge at Wipro after his father’s sudden death; the next was when the vanaspati and soap maker transformed itself into a multi-billion dollar information technology giant in the 80s and 90s.

But for Premji, it’s not just a diversification. “Look at it in three dimensions: As a citizen, ecological sustainability is a global problem but completely unaddressed in India. So how do you influence… your employees, partners, customers? Second what can you do within the company? Third, we see incremental business opportunities that we can create in our existing businesses.” The business idea is simple. For the last quarter century, Wipro has been busy cutting technology and operational costs for some of the world’s largest corporations. Now, it wants to tell them how to cut energy usage and reduce their carbon footprint. It is convinced that green will be the largest force to influence the world economy in the years to come. According to a UN report last year, the global market for environmental products and services will double from $1.37 trillion at present to $2.74 trillion by 2020.

Chief Financial Officer Suresh Senapathy says green services and solutions will bring in up to one out of every four dollars of the company’s revenue, three years from now. In the financial year ending March 2009, Wipro had revenue of more than Rs. 25,000 crore. Even if the revenue were to stagnate, a fourth of it — Rs. 6,250 crore — from ecology is no small amount. The plan also aligns well with Premji’s desire to ease down IT’s profit contribution from 93 percent currently to 70 percent in the next few years.

Today it has 270 people in its water and eco energy businesses. In the last six months it has been setting up eco-friendly infrastructure for clients: A bio-gas plant in Taj Kovalam for recycling organic waste; sustainable lighting, cooling and recycling at Asian Paints’ Greenfield plant in Rohtak, Haryana; LED lights to reduce electricity bills at the Indian Institute of Management, Bangalore campus.

The Idea

The new idea was first thought up by the 41-year-old head of Wipro Infrastructure Engineering (WIN), Anurag Behar. The two new ecology businesses will be housed under WIN. In January 2007, Behar made the first formal presentation about the ecology business to Wipro’s board of directors. The board reacted positively but also advised caution: Ecology was a nascent field with rapidly evolving technology and Wipro should not get locked in a technology that ran the risk of becoming obsolete soon.

Rather than immediately start with manufacturing equipment, Wipro decided to enter the business as a consultant. “It’s the best way to learn about a new space. As you advise your customers, your knowledge base increases and later on if you want to make a bet, it is informed choice,” says T.K. Kurien, President, Wipro Consulting, global programs and strategic initiatives. “If we are in, we know which way the technology is going.”


Wipro’s approach to the business is measured. First, it will calculate the client company’s energy footprint and find a way to reduce that. Then, it will bring in renewable energy technology such as a micro windmill, solar lighting or a biogas plant to make the firm sustainable. But one question keeps coming back. Why should a large company entrust Wipro with all its energy problems, a domain that Wipro is not an expert in? The company is aware of that hurdle. It is also why Wipro is building the business slowly and is reluctant to set a big revenue target for it


Testing Ground

One way in which Wipro has sharpened its learning is to address its own energy problems first. That way, it becomes ecologically sustainable while gaining credibility with external customers.Wipro has turned its 50-acre campus at Electronic City in Bangalore into a test bed. While 25,000 software engineers write code for Fortune 500 corporations, waste food from the cafeteria turns into methane for lighting burners, harvested rainwater is used to cool air-conditioning towers, a paper pulping plant recycles waste paper into writing pads and a micro windmill lights bulbs along the perimeter of the campus. Wipro’s Sarjapur campus a few kilometres away has India’s largest LED installations — all compact fluorescent lamps have been replaced with LED lights, helping save 75 percent in electricity consumption. Since 2003, Wipro has cut water usage in its offices across India by nearly two-thirds.

Wipro is also building its knowledge by making beachhead acquisitions. One of them, Aquatech Industries, offers water purification solutions to industries. In May this year, Wipro signed a contract with the University of North Dakota, a leading expert on clean coal technology. It has tied up with 14 global technology partners and solution providers, ranging from a micro windmill manufacturer in Scotland to GE Energy. In some cases, Wipro will sell the products under its own brand. A lot of this work is systems integration (building a system with diverse components) of which Wipro has considerable experience.

Premji is aware that the only way for Wipro to truly become a “green” company — in its own operations and in offering solutions to customers — is when all business units come together. That’s why over the last one year, he and Behar have been getting other business unit heads to set targets for selling environment-friendly solutions and reducing emissions in their units. For the future, Senapathy says Wipro will evaluate financial and ecological returns before it takes on any new project for investment.


Leveraging IT for Green

Wipro wants to leverage its presence in two industries that directly have an impact on reducing energy consumption — IT and lighting. For instance, it combined lights with sensors so they would switch on and off based on ambient light. That helped Vineet Agarwal, Wipro’s head of consumer care and lighting business, win a large order from the Delhi metro rail project to provide lighting for 27 stations. Today green lighting accounts for 15 percent of Wipro’s lighting business. In fact, IT could play a significant role in helping corporations become green. While IT contributes only 2 percent to the global carbon footprint, it has a big role to play in reducing carbon emissions in the remaining 98 percent of the world’s businesses.

Besides, a green pitch is also a good way to shore up profitability. Operating margins in global IT business have fallen from 28 percent in 2003 to 21 percent last year. A few months ago, Wipro’s Global IT business started an energy consulting practice to offer green IT services to its Fortune 500 customers. In the next three years, Wipro’s goal is to have 10 percent of consulting revenues from green IT consulting (expected revenues: $500 million by 2011). It will invest $10 million to $15 million in the next three years in hiring people and building capability, tools, brand and marketing. “This is the absolute minimum that we are aiming for. If the market really opens up, then much more could be done,” says Girish Paranjpe, joint CEO, Wipro IT business. Green data centres and a carbon accounting tool called Hara (green) that can help a company measure its carbon emissions are some of the other ways in which Wipro is leveraging IT to make organisations more energy efficient.

FOUR GREEN HORSEMEN: Vineet Agarwal, Anurag Behar, Girish Paranjpe and Suresh Vaswani

Follower or Leader?

Wipro is hardly the only one to be thinking this way. Accenture, Deloitte, IBM and BT too are keen on the green IT services space. In November 2008, Gartner and WWF released a report naming the most environment-friendly companies in the information and communication technology sector. BT, Fujitsu, HP and IBM were doing a better job at handling climate change than others such as Cisco, SAP, Nokia and Wipro. Behar, while admitting that Wipro still has a long way to go before it can become completely ecologically sustainable, says that the point most people seem to miss is that Wipro is the only technology company from India that agreed to be tested for its environmental and climate commitment.

The company says ecology is a business for the long haul and that Wipro is now at the same juncture that it was when Premji first started the IT business in India 25 years ago. “No one knew then that offshore could be a $40 billion industry one day,” says Senapathy.

There is also the question of what happens to renewable energy technology at a time when the world economy is facing a slump. Initial cost of installation is higher for renewable energy than conventional energy. On Wall Street, stocks of renewable energy companies have taken a battering and there are concerns that funding for large-scale projects in wind and solar plants is drying up.

Wipro takes a contrarian stance. While the meltdown might hamper projects in the short term, it will work to the benefit of these companies in the long term, because hard times will force companies to look at saving costs by cutting energy bills. The challenge for Wipro is to establish its credentials in a market and industry where it seems to have no natural or geographical advantage. The West is clearly ahead in the game as far as the ecoology business goes. CEO Girish Paranjpe admits that selling these consulting services is currently more of a push from Wipro’s rather than a pull from the consumer.

“Wipro has always done well in following a trend rather than leading it. That’s how we have built our businesses. When everybody is getting into the market that is the wrong time to be going in. After a lot of people have gone bust, we can pick up assets at very good prices.” says Kurien

Vijay Mallya's Double Life

Vijay Mallya's Double Life
Beneath the cheerful opulence is a seasoned warrior battling to save his debt-ridden empire
Forbes India Magazine of 05 June, 2009

Burning tyre at Formula 1 races in Kuala Lumpur, Shanghai and Bahrain, cheering filly Set Alight at the Mumbai Derby, galloping to South Africa to watch Royal Challengers battle at the Indian Premier League (IPL). April was busier than usual for Vijay Mallya. But VT-VJM, his corporate jet that boasts of a Picasso as part of its beige and cream interiors, made it a breeze for the flamboyant booze baron. May has proved equally busy. As the IPL winds down, the corporate jet touched down in the south of France, the playground of the rich and famous. There, the Cannes film festival that brings together the glitterati and global media provided the perfect setting for Mallya’s big party. Previously, he had held parties at Cannes on his 312-foot yacht Indian Empress or at plush seven star hotels. But there’s no need for that anymore. Just a 10-minute boat ride away, on the picturesque island of Sainte Marguerite, is a $60-million villa that he owns. The black-tie event was hosted there on May 16.

Yet, in the middle of all this, Mallya has been leading a double life. He has spent the past few months negotiating for the survival of his empire. His debts have zoomed. So have his losses. The economic slowdown has made his daring bets of the boom period look like risky gambles. He must stem the losses, or even the healthier parts of his business will fall prey.Since April, Forbes India has tried to get in touch with Mallya as well as the senior management of his group companies in Mumbai and Bangalore for this story. But the officials have been consistently travelling or too busy to respond.

Mallya has accumulated about Rs. 14,000 crore worth of debt spread across his liquor and airline businesses through costly acquisitions of global liquor companies like Whyte and Mackay and a bleeding balance sheet courtesy Kingfisher Airlines. In an email to Forbes India just before we went to press, Mallya said the number is “grossly overstated”. Refusing to answer a specific question on the debt he said, “The UB Group comprises several independent public and private companies…. Each independent company has its debt and its cash-flows and there is no case for aggregation.” However, a look at the published results for six listed companies in the group reveals a total debt of Rs. 14,231 crore for Kingfisher Airlines, United Spirits (USL), UB Holding, Mangalore Chemicals, UB Engineering and United Breweries (UB).

Supersonic Loss-making

At the core of this battle is Kingfisher Airlines, losing cash at an alarming rate in the middle of the decade’s biggest fall in passenger turnout. The debt on the airline’s books is over Rs. 5,000 crore, much of it guaranteed by United Breweries Holding Ltd., the group’s holding entity. As the airline’s monthly losses have crossed Rs. 200 crore, Mallya has no option but to push for more corporate guarantees from his other companies. Already, UB Holding is seeking shareholder approval for doubling the limit of its corporate guarantees to Rs. 12,000 crore. Most of these will be to support loans taken for Kingfisher Airlines. It’s a pressure cooker situation inside the airline, say insiders. Four months ago, aircraft leasing company GE Commercial Aviation (GECAS) wrested back four jets it had leased to Kingfisher after the airline defaulted on lease payments. Since then, dozens of other lenders and suppliers have begun turning the screws. Among them are oil companies who have threatened to stop supplying fuel, unless Mallya settles their dues of nearly Rs. 1,000 crore.

The face of the smiling host at the French Riviera hardly showed it, but panic is spreading within the UB group. At Kingfisher, Mallya’s attempt to stem the cash burn has yielded few results and the cash-burn continues this quarter. Five of the A330 aircraft that Mallya so fondly fitted with bars, bartenders and chefs are either parked at airports or flying with many empty seats. The lease rental for each of the long-haul planes is about $1 million a month (Rs. 5 crore), and they are being used to operate the airline’s two international flights to London and Colombo.

If you took a peek into Mallya’s second life in the past two-three months, you would see him stalking the dusty corridors of the ministries of finance and aviation in Delhi, schmoozing with junior bureaucrats that he would have otherwise never condescended to acknowledge. The purpose? To lobby for soft loans and softer terms for airline repayments plus permission for foreign airlines to invest in Indian carriers. But the policy is in a flux and his bitter rival, Naresh Goyal of Jet Airways, has managed to counter-lobby and delay a decision till now.





Between the Cup and the Lip

Mallya’s golden goose, of course, is his alcohol business. Both beer and white spirits have been growing at 20 percent, the highest for any liquor company globally. USL has 52 percent market share. It is this edge that Mallya will try to cash on. It is quite another matter that the company has debts of Rs. 6,225 crore weakening its bargaining position. He has explored deals with Asahi and Bacardi, before starting protracted talks with the world’s largest liquor company, Diageo, to sell a stake in USL. He hasn’t yet accepted the offered price. It’s a game of brinkmanship.

But his counterparties know he is neck-deep in debt and must sell quickly. Earlier this month, the Diageo Asia-Pacific President John Pollaers said, “We have been in discussion, but we haven’t yet been able to find a structure that is acceptable to both partners. We shouldn’t assume that this will lead to a transaction overall.” USL stock price fell 8 percent on the day Mallya issued a statement saying talks were still on and were slow because of anti-trust tangles.

A lesser businessman might have caved in under the burden but not Mallya. The celebrations seem to go on forever. He is waiting for that magic moment when all the deals will materialise and blow away the debt. “I’ve never seen Vijay even remotely ruffled. He is super confident that he’ll be able to get things to work out,” says a leading banker who does business with Mallya but prefers to stay anonymous.


Between Life and Debt

Those who know him closely say he will pull through, just like he has done on many occasions in the past. Playing a high-stakes game has always been Mallya’s style. “Vijay has always been up to his eyeballs in debt,” says a senior investment banker, who does not wish to be quoted because he’s worried that he would be barred from the grand parties on Mallya’s yacht.

Not all is lost yet. This month, one confidence building measure he managed to swing is a marketing agreement with Dutch beer maker Heineken to sell the latter’s brands through the UB network. The deal is expected to fetch UB Rs. 300 crore

You’ve got to grant Mallya one thing: Not many tycoons can hope to mix champagne with debt covenants as adeptly as he does — and still retain their spunk

But the alarming levels of debt have spooked bankers. So while Mallya is pushing for a package of about Rs. 2,000 crore to pull his airline out from the brink, negotiations have been hard and the bankers are insisting on tough contracts, like securitised payments that mortgage the future earnings of the airline. “With more money being borrowed to fund higher losses, there is a danger of getting into a debt-trap,” says one banker working on the deal. Also, there is no sign of any meaningful turnaround in the business, which the bankers were promised early this year.

As of now, it is a battle of attrition between the bankers and the UB group financial team led by Mallya and his lieutenant Ravi Nedungadi, who has seen him through several tight corners. “He is a man with many lives,” says Ravi Jain, promoter of wine company Vallee de Vin and one who has worked at close quarters with Mallya at Shaw Wallace. He echoes popular belief when he says, “He just needs to hang in there for some more time. Things will change when the market recovers.”


Time is Running Out

Mallya urgently wants to conclude at least two deals. First, he has set a target to raise $800 million for a 14.9 percent stake in USL. Diageo is likely to be the partner for this, though he has not stopped talking to Asahi or Bacardi. He is also banking on a 49 percent stake sale in Scotch whisky maker Whyte and Mackay with a distribution management deal. If this works out, he’s hoping to make USL debt-free in one fell swoop. Mallya is also said to be negotiating with private equity firms for offloading a large stake in USL and Whyte and Mackay.

Mallya confirmed in his email response that there was strong interest from PE players. So till these two deals are consummated, Mallya has to hang in there. But before that, he’s got to take some hard decisions in his airline business. Over the past six months, the situation has become precarious: Overall capacity in the market has fallen with most airlines pruning operations.

“In Kingfisher’s case, the problem was that Mallya had his foot on the accelerator till much too late,” says Nigel Harwood, now CEO of Interglobe Aviation but who had been the CEO of Kingfisher Airlines during 2005-06. Even as global airlines started to hurt from overcapacity, Mallya relentlessly pursued new purchases that have led to the current mess.

One immediate way out is to stop international operations and focus on domestic flights. (The airline operates daily to over-served routes to London from Mumbai and Bangalore.) But this could be hard for Mallya who was personally involved in charting the flight plan for the global rollout to connect Europe, Singapore, Dubai and San Francisco.

A possible cut-back also means Mallya will have to play second fiddle to the man he loves to hate: Naresh Goyal, the London-based owner of Jet Airways. Mallya had vowed that he would best Jet and snatch the title of the king of the skies from Jet. So instead of pushing back, he forged ahead with plans for a new Bangalore-Dubai flight from June 25. Mallya remains hopeful that the new government would allow Indian airlines to sell a stake to foreign investors, but even if that happens, at current valuations, he is unlikely to get more than Rs. 500 crore for 49 percent of Kingfisher Airlines.

Till his deals fructify at the valuations he seeks, Mallya is hoping that a team of public sector banks share his burden. He has managed to get audiences with the chairmen of at least three PSBs, including State Bank of India, to ask for a new line of credit for his floundering airline. In his meetings in North Block with the joint secretary of banking, Mallya has relentlessly pitched for loan restructuring and easier terms from lenders. His argument: Airline companies were hit first by rising oil prices and now by depressed demand, and need help. SBI has already provided Rs. 500 crore of an approved loan of Rs. 900 crore. Other PSU banks are expected to chip in with about Rs. 1,000 crore more.

It’s only a matter of time before the king of good times gets a lifeline thrown to him to fly high all over again.

(Vijay Mallya was born on December 18, 1955. He is the Chairman of the United Breweries Group and Kingfisher Airlines, The United Breweries Group`s flagship beer brand; Kingfisher is famous across the world.
Mallya`s hometown is Bantwal, Mangalore in Karnataka. He finished his degree from St. Xavier`s College, Calcutta. He later set up business ventures in Dubai, United Arab Emirates. Mallya married twice so far. His first wife was Sameera and they have a son together, named Sidhartha Vijay Mallya. Later on, he got married to Rekha and has two daughters Leana and Tanya Mallya and one son.
In 1983, Mallya took over as Chairman of the United Breweries Group. Under his leadership the group has expanded significantly to turn into a multi billion dollar conglomerate. His group is engaged in several business activities like alcoholic beverages, life sciences, engineering, agriculture, chemicals, information technology, aviation and leisure.
In 2005 he acquired Millennium Breweries Ltd which brought the two premium beer brands named Sandpiper and Zingaro under his kitty. In May 2007, United Breweries Group acquired the Scotch whisky maker Whyte & Mackay for 595 million pounds in an all cash deal.
Vijay Mallya formed Kingfisher Airlines in the year 2005. Mallya`s Kingfisher airlines acquired Air Deccan, a low cost Indian airline which was subsequently integrated into his Kingfisher fleet, Vijay Mallya and his Jet Airways counterpart Naresh Goyal joined hands together after a marathon meeting on 13th October 2008 at Mumbai, India. The alliance will include code-sharing on both domestic and international flights, joint fuel management to reduce expenses, common ground handling, and joint utilisation of crew and sharing of similar frequent flier programme.)