Auto-Expo has seldom looked forward. It is time for a change
Auto-Expo week in Delhi is on us again. Invitations are already pouring in for a variety of functions, including a variety of car/bike of the year awards, where everybody will win, with multiple organisations claiming to provide ranks and grades for everything rolling on inflated wheels, all nicely coordinated so that timings and dates do not clash. Much fun, good food, excellent wine will flow.
The venues are packed with shiny cars and bikes as well as well-heeled and shiny people. This is the right time of the year in Delhi for all this. With any luck, the sun will be out during the day, making Pragati Maidan a very pleasant afternoon interlude for a week. The crowds will head for the cars, bikes, buses and trucks—the real business will be done by the vast number of component and other supplier stalls, and seminars as well as conferences will give golden opportunities to all to network and schmooze. The Chinese, as is increasingly the case at such fairs and exhibitions, will be there in even larger numbers than before.
Auto-Expo in Delhi has always been a great show. With the new low-floor buses and Metro trains serving the Pragati Maidan area, one does not have to worry about parking either, and walking about inside is better than any other entertainment in town. The list of displays is already available, though to be frank, as of now there is nothing really exciting, everything has already been shown and previewed. VW Polo, Chevrolet Beat and Maruti Eeco are ready for the market. Likewise in two-wheelers whatever had to be released has been done. There is no ultra excitement of the Tata Nano sort this time around, though that will not keep the crowds away, nor would it in any way reduce the "success" of this exhibition. Place a dummy model of any sports or luxury car, and see the crowd pour in.
This time around the theme at Auto Expo 2010 is "Green Wheels". Just about 14 years ago, during the 1996 Auto Expo, yours truly was almost thrown out of the show for asking fairly aggressive questions on environmentally friendly developments. Remember, manufacturers were of the view that India was too backward for fuel injection and cleaner engines. In reality, the truth was that between the liquid fuel industry and the automobile manufacturers, somebody had to absorb the old clunker technology and the lousy fuel coming out of ancient refineries.
What would one like to see at Auto-Expo? Not newer, but the newest engine technologies need to be heading for India. For example, the multi-fuel new generation engines and the compressed air engines. One would also like to see better road and traffic management techniques, options and opportunities, ongoing maintenance (both optional and statutory) and related systems and suppliers. And most of all, one would like to see more about how the automobile industry plans to go about taking India even further along the road of becoming a real automobile superpower.
Anybody can now make a good car in India. The basic infrastructure is in place. It is time now to make state-of-the-art solutions. Auto-Expo in India has seldom looked towards the future, choosing instead to dwell on past glories and present problems. This needs to change.
Tailpiece: Pity SIAM, the Society of Indian Automobile Manufacturers, which is supposed to be the voice of the industry. With competing views and expectations, they increasingly sound like a swimmer trying to reach out into a dozen directions at the same time, and it will be interesting to see them take positions on "Green Wheels", while at the same time pushing for more and more benefits to obsolete personal transport solutions.
It has been a fortnight since Osian Art Fund has promised the first part-payment, but around 85 investors are still waiting for the same
About 15 days back, Osian Art Fund sent a mail to its investors saying that it had started the process of redeeming their capital and all unit-holders would receive around 85% of their investment over the next 8-10 days. However, there are still around 85 investors who haven’t received a rupee from the Fund.
Sharat Jain, who invested Rs10 lakh in the Fund, is one among them. Mr Jain invested the amount in the name of Rachna Jain, but till date hasn’t received any amount from the Fund. He said,” We had sent an SMS also to the number provided in the email (which is the same number as provided by someone from the Fund’s Mumbai office). But no reply or message was sent back. We also sent an email to their office ID and also to Mr Neville Tuli, but there was no reply.”
When we checked with Mr Tuli, chairman, Osian’s-Connoisseurs of Art Pvt Ltd, he confirmed that there are still some investors (around 85) who have to be paid. “The process is ongoing in a systematic manner, and will be completed in the coming three to four days (outside of the holidays). Thereafter, all the investors will be paid the balance amount by 4 January 2010 as per my letter to unit-holders on 11 December 2009,” he said in an email sent to Moneylife.
As of July 2006, the total corpus held by the Fund was Rs102.40 crore and it had 656
unit-holders spread across 39 cities in India. On 9 November 2009, Moneylife was the first to report about the fact that Osian Art Fund reported poor returns, (Read it here). On 15 November 2009, we reported on how the Fund was having trouble repaying investors’ money (Read it here) and then we wrote on how SEBI has failed to regulate the Fund (Read it here).
Responding to charges of not answering unit-holders’ calls or replying to their messages, Mr Tuli said, “There is absolutely no truth in our team not answering the client's concerns. I myself have spoken to virtually every unit-holder, and if a call remains unanswered—as it is my personal mobile number—I always return the call in the evening or the next morning.”
In a note sent to all investors on 11 December 2009, the Fund said that it has started the process of redeeming unit-holder capital and within the next 8 to 10 days, all unit-holders would receive 85% of their investment, in addition to their earlier 5% dividend.
However, there is some confusion between investors who have received some payment and the Fund. While the Fund claims that it started paying 85% of the unit-holder’s investment, in addition to their earlier 5% dividend, investors are clueless about the percentage they have received out of their total investment. Some investors are saying that they received around 75% amount that comprises their investment and net asset value (NAV) of the fund, assuming an NAV of Rs112. As of 9 June 2009, the Fund’s NAV was Rs120.27 (cum income distribution) and Rs115.27 (ex-income distribution).
In its earlier mail to Moneylife, the Fund said that it would pay around 90% of the invested amount in its first instalment. However, in its mail to investors, the Fund had said the payment would be 85% of the invested amount in addition to the earlier 5% dividend. So the discrepancies in the percentage of amount repaid continue.
For investors like Deepak Daftari who have been lucky to receive their first instalments early this month, the date for final payment is fast approaching. According to Mr Tuli’s mail, the Fund is supposed to pay balance amount to investors by 4 January 2010.
Lauding Moneylife’s efforts to protect the investor, Mr Tuli said, “The manner in which Moneylife and yourself have tried to protect the investor's concerns is commendable, even though the Osian Art Fund is at the receiving end; this is the way a better system evolves.”
“It is important to make clear the difference between a 'delay' and a 'default' during the most difficult of times, let alone using other totally unjustified negative terms,” Mr Tuli added.
Most real-estate developers are converting their commercial ventures like IT parks and SEZs into residential projects
The real-estate market is witnessing a new trend. Most information technology parks and commercial office projects are now being converted into residential projects, as most developers are not feeling confident over the projected revival in the commercial segment.
“In the commercial segment, there is a huge oversupply and absorption is very low in the market. A lot of commercial and IT park spaces are now being converted into residential projects. Approximately two million sq ft of commercial projects have recently been converted into residential projects in the island city (mainly at Lower Parel). You can witness many such similar trends in the real-estate market now,” said Pankaj Kapoor, founder, Liases Foras.
Orbit Corporation Ltd, a Mumbai-based developer, has converted its IT park project at Andheri, a Mumbai suburb, into a residential project called ‘Orbit Residency Park’. It will be constructing one bedroom, hall & kitchen (BHK) apartments of approximately 600 sq ft–700 sq ft, one-and-a-half BHK of approximately 700 sq ft–800 sq ft, two BHK of approximately 900 sq ft–985 sq ft, two-and-a-half BHK of approximately 1,000 sq ft, three BHK of approximately 1,300 sq ft-1,400 sq ft and three-and-a- half BHK of approximately 1,350 sq ft-1,450 sq ft.
Real estate giants like DLF and Unitech have also discontinued many commercial development projects and are converting these ventures into residential projects. DLF has recently de-notified four Special Economic Zones (SEZs), as there is a lack of demand in the commercial space.
“The commercial sector is growing in supply but not in off-take. You can see an over-supply in office space and SEZs. It will still take six months to one year for the absorption to come back. So we have changed our IT park project into a residential project,” said Pujit Aggarwal, managing director and chief executive officer, Orbit Corp.
According to industry sources, Bombay Dyeing’s Dadar and Worli mills, Prakash Cotton Mills’ Lower Parel project and the proposed SEZ by K Raheja Corp in Navi Mumbai are among the commercial projects which are being converted into residential projects.
Bombay Dyeing’s mill lands at Dadar and Worli (at central Mumbai) were supposed to be utilised for two commercial and IT towers earlier. But the company is now converting these lands into residential projects. Moneylife contacted Bombay Dyeing on this development, but received no answer. K Raheja Corp had also planned an IT/ITes project at Navi Mumbai earlier.
“We have still not taken a final call. But we are mostly looking at residential project development,” said Ravinder Jalan, chairman, Prakash Cotton Mills.
During the boom time of 2007, the floor space index (FSI) for residential projects was 1.33 and for IT parks it was 2.66. Ergo, most developers opted to go in for IT parks rather than residential projects. But as the slowdown hit the market, there was no movement in sales in any of the realty sectors. After a year of slowdown, the residential segment has started showing some signs of recovery. The commercial segment is expected to take a year more to show some signs of recovery. This is why developers are converting their commercial projects into residential projects.
The additional FSI being offered (from 2.66 to 4), if developers also construct parking spaces in residential properties, is also attracting developers.
“The higher FSI option in the residential segment is pulling in more and more developers,” said Mr Kapoor.