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Sanjiv Puri's Classic Tussle

ITC Chairman Sanjiv Puri is in the midst of one of those tussles with the restless stock market. Four years into the job, his new businesses haven't matured enough to start firing up topline and bottomline, or delight the shareholders

Rajeev Dubey, Editor, Business Today Rajeev Dubey, Editor, Business Today

Iconic firms can often be at odds with the stock markets. Particularly, when they are engaged in the classic tussle between delivering quarterly profits and ploughing back for the long term. Amazon's Jeff Bezos thumbed down analysts for a decade before things turned around at the e-tailer. But CEOs — especially those running publicly listed firms — can rarely stand up to such pressure exerted by the markets. They either give in to the need to deliver short-term results, or delist their firms, just to avoid the prying eyes of analysts and investors. Michael Dell of Dell Inc. did the latter. ITC Chairman Sanjiv Puri is in the midst of one of those tussles with the restless stock market. Four years into the job, his new businesses haven't matured enough to start firing up topline and bottomline, or delight the shareholders. But Puri is holding on. These are testing times for his managerial perseverance, resilience and his conviction in ITC's new business strategy. He will define whether ITC fulfils the dream of its CEO of two decades Y.C. Deveshwar to make the FMCG major stand on its feet, and depend less on cigarettes — ITC's umbilical business. Ajita Shashidhar captures the full-blown tug-of-war between the management of India's largest FMCG firm and the stock markets. Who will have the last laugh? Read her account.

If markets don't see eye to eye with ITC, it remains to be seen whether they will agree with the valuation of India's Unicorns when some of them test the markets later this fiscal. At least 15 new Unicorns have emerged in India in just the first half of 2021. In April alone, six companies such as CRED, ShareChat, PharmEasy and Meesho — among others — turned a valuation of $1 billion or more. PE and VC investors pumped in more than $1.5 billion in these six firms. The rush of funds is a result of enormous liquidity in global markets. PE firms have raised $188 billion in Q1 of 2021 against $163 billion in Q1 of 2020 — a jump of more than 15 per cent since last year. Industry believes global liquidity will ensure the party continues — at least for some more time. The real question, says Rukmini Rao, is how will these firms be valued when global money supply slows down. Importantly, will the stock markets be as enthusiastic about these firms as PEs and VCs have been?

Next, the National Asset Reconstruction Company — considered the panacea for Indian banking's biggest headache — the non-performing assets — is still being set up. It is yet to be registered and its ARC licence is pending. Banks though have begun shortlisting the bad assets they intend to sell to the NARC. It is believed it can take care of nearly Rs 2 lakh crore worth of bad assets. Anand Adhikari provides cues about what models to follow, and what not — right from the South Korean experience to the Malaysian and the Chinese. The latter not so successful.

As I move on to take up an exciting new assignment, my gratitude to you all for patronising Business Today in all its avatars — print, digital, videos, graphics, podcasts. It's been an absolute honour and a privilege to edit India's No.1 business periodical.