Leisure, Lifestyle & Wellness
What They Don't
Sometime back, there was a strange ad in the Mumbai edition of Tamil Times. It said: “Lane worth 250 kilos per day of idli atta for sale.” What on earth could that mean? A Tamil journalist, who had spotted the ad, was asked to find out. After pleasant, customary greetings, things burst into staccato firing rounds. From four machines installed in a small rented room in Worli, central-west area of Mumbai, a ‘Tamilian’ makes idli batter which he sells to shopkeepers. After costs, he earns around Rs35,000 a month. Vanaseelan was offering to sell that business because he had made enough to have bought himself a business in Coimbatore where he was headed back. The cost of that ‘lane of business’ was Rs four lakh or roughly 11-12 months of earning.
 
 Vanaseelan had not only worked out the valuation but also the process of handing it over. He would entrust the new buyer with three months of providing the idli batter along with the customers’ delivery details and train him on how to treat his loyal customers. After three months, he would let go and, for a month, observe how the new buyer would fare. Then he would depart.
 
Well, he had many inquiries from ‘time-pass’ buyers; but he got into serious negotiations with three. As usual, there was haggling. The best offer was Rs3.95 lakh, but since Vanaseelan was no uncooked batter, he gave all smiles but no ground. He knew he would get his price. The operating principle was: “Stretch the negotiations, but not at the cost of breaking it.” Do they teach all this – valuation, bargaining, takeoverissues – in any business school?
 
 
 
Cash in Ash
 Ashes – that dark grey powdery stuff, which poets talk about when they become fatalistic, and which is as much a part of the God-men’s make-up as foundation packs are of a starlet. Some highly revered saints are even known to generate ashes out of nowhere for bewildered devotees who go into raptures about the ‘miracle’. But these ashes, hundreds of miles from Mumbai, are special. Recently, four sadhus, from a temple at Tardeo in south central Mumbai, were given a fond send-off by the head priest. As they left, he pressed down a hundred rupee note into their hands. While wishing bon voyage, he reminded them of their itinerary.
 
 They were travelling to Solapur (on the border of Maharashtra and Karnataka). After crossing the border, they would get off their vehicles and trek a certain distance till they reached a wasteland covered with mounds of volcanic ashes. They were to collect the ash and bring it back to the temple in Mumbai. But there were strict conditions set down by the land-owner.
 
 One, the ash cost Rs100 per five kilos per person. Two, not more than four persons from the same temple were allowed at a time. Three, no vehicles were permitted anywhere near the ‘Ash Farm’. Four, all the bags would be weighed before the exit. Five, the same temple cannot keep sending its people everyday and collect 20 kilos. Tracking is meticulous. All this sounds more like a Dr No establishment rather than a simple belief supplement. If these sadhus were to be believed, many temples across India would send their trekkers to fetch the ashes. Over 10,000 sadhus visit the farm daily.
 
What is so great about the ash? Well, since it comes out of the bowels of the earth, it is considered pure and edible as well. There is more. Once back in the temple, it is ground to a fine powder, mixed with a bit of salt and camphor and then placed before the temple deity or given to the ‘guru’ who mumbles something and voila…. Now, if some God-man yanks it out of nowhere, in your presence, remember the sacrifice behind it. He may be a charlatan but there was a blistered pair of tired feet that had travelled far to fetch it; and the heaving, pushing gullible believers are ready to pay anything for it. Flying Ashes are what clinches the deal for many. Or the effort would not be worth it. The guru has seen lucre in ashes.
 
A veteran journalist Raghu Nandan Dhar has an easy knack of seeing everything in a different light.
 

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Shipping companies sees further fall in asset prices
After witnessing a fall in the asset prices of vessels following the global slowdown, the shipping industry expects the asset prices of vessels, especially second-hand vessels, to fall further by about 5% to 10% due to volatility in freight rates and economic conditions.
 
"If the freight rates continue to remain volatile for the next three months, a correction in asset prices is likely to happen in the tanker and dry bulk segment," said Piyush Parag, research analyst from Religare Research.
 
Drewry's global freight rate index for container shipping has fluctuated between a maximum of $2,727 per forty feet equivalent unit (FEU) in July 2008 and minimum of $1,536 per FEU in May 2009. In August, the Baltic Dry Index (BDI), a measure of shipping costs for commodities, continued with negative momentum on signs of slowing Chinese raw material demand, BDI fell 28% over previous month. Port bottlenecks for ships have eased through reduced congestion in China, with about 7% of the fleet now held up outside ports, down from a peak of about 14% in early July, this coupled with fleet expansion were the major reason for significant decline in BDI.
In September, the Baltic exchange dry index has gone up to 2,390 points from 1,070 points in January, touching a high of 3,520 points in July. Though the second hand asset price momentum is high, which can be an indicator of an increase in trade activities, analysts feel that higher tonnage in the sea may act as a catalyst for downward movement of day rates in near future.
 
There are marginal activities for large sized vessels like VLCCs, however, the performance of other type of vessels like Suezmax and Aframax was below expectations, which was the result of lower activities and higher tonnage supply. The concerns of higher supplies are quite evident from this month as asset prices of second-hand tankers declined by more than 10% across the board, which implies that due to incremental addition in the tonnage, the business of second-hand vessels may be severely impacted, said Gupta Equities Pvt Ltd in a report.
 
Some two-three years ago, ship-owners were on a buying spree for deliveries from 2009 to 2011, but today many of them are trying either to cancel the orders or postponing the deliveries.
 
"In the dry bulk segment, there seems to be quite a freeze on new deliveries and prices may not fall. But in case the ship-owners are not cancelling their orders and new orders are coming in, then the prices of second-hand vessels also may fall," says SS Kulkarni, secretary general, Indian National Shipowners Association (INSA).
Indian shipping companies like Great Eastern Shipping Ltd (GE Shipping) and Varun Shipping Ltd are also in a wait-and-watch mode, to cash on this expected correction in asset prices.
 
GE Shipping says it is of the view that there could be some more pain in the asset market and therefore possibly another leg down in prices and the company, thus, is in a wait-and-watch mode.
 
"There has been a very sharp fall in second hand prices. In the dry bulk segment it is almost 60% to 70% and in the tanker segment the fall has been around 50%,” says a spokesperson from GE Shipping.
 
Buying vessels at lower rates and selling them at higher margins has been GE Shipping's forte for years and the company has kept a cash balance of about Rs26 billion for its next round of vessel purchases. In the past fifteen months, GE Shipping sold 13 ships with a good gain on sales margin.
 
Similarly, Varun Shipping also has set aside about $100 million for its fleet expansion plans and it expects the asset prices to fall further. "There is an ongoing fall in the asset prices and it could fall furthermore," says Manali Parekh, vice president, Varun Shipping.
 
Availability of second-hand vessels may also be causing the economic slowdown, wherein shipping companies would offer a couple of their vessels for sale, to maintain liquidity. 
 
Essar Shipping Ltd, the unit of India's Essar group, however, has a different view from others. V Ashok, director, Essar Shipping, Ports and Logistics Ltd, says, “I think the asset prices of vessels have reached a sort of bottom. Our view is the prices will not fall any further."
 
Even on the global front, the number of idle ships is increasing. According to a recent report from UK's Daily Mail, there are empty tankers and container ships anchored in the South China Sea. This fleet may be in a number close to 500 idle vessels, which is equal to 12% of the world's shipping capacity, the report said.
 
With the Korean shipyards continuing to produce new vessels for which orders were placed when the trade was booming, the number of idling fleet will only increase in near term. Yogesh Sapkale with Amritha Pillay [email protected]

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