INDIA BUSINESS WORLD - MAY 2006
THE MONTH THAT WAS...

MALAYSIAN NAVIS TO BUY NIRULA'S FOR 90 CR

  AFTER being in the market for a year or so the country's original western style fast-food chain Nirula's is finally tying up with Malaysia-based Navis Capital Partners to sell its operations. According to sources, the deal is in the range of Rs 85-90 crore.

Sources say the homegrown fast food chain was struggling to find a buyer for some time primarily due to the high asking price — said to be much in excess of Rs 100 crore.

For Nirula's the deal comes after negotiations with Ravi Jaipuria and the Philippines-based Jollibee failed to take off. At one point it was also considering the possibility of an IPO. When contacted by ET, Nirula's spokesperson refused to comment.

Navis is not new to the foods business. It is the largest shareholder in the Hong Kong-based KFC franchisee company — Birdland's. Besides, it also has recently invested in Dunkin' Donuts. It made its first investment in India in 2004 by acquiring one of the largest airline catering companies.

Sources say the private equity player is planning a Mumbai office later this year and Nirula's could be a perfect fit in its expansion plans. When contacted, Navis Capital Partners founding and managing partner Richard Foyston told ET that he could not share any details at the moment.

Sources say Navis also wants to use the Nirula's platform to get a bigger hold in the air catering business, especially with the Indian aviation sector growing in double digits. Analysts, however, say Nirula's does not have a very attractive sales and profit multiple. The only real asset for the family-owned restaurant chain is real estate.

One of the major reasons for Nirula's to look for a buyer was the absence of a male heir. Both the Nirula brothers have two daughters each. Of late, the fast-food chain has been plagued by high employee turnover due to the uncertainty over the company's future. It may be pointed out that another family member — Samir Kukreja — had also quit the business.

North India-based Nirula's currently has 64 outlets with 59 in NCR with a prime property in Delhi's Connaught Place under dispute. For Delhiites, this was the primary fast-food hangout joint.

IN AN election billed to change the ruling UPA's chemistry of dependency, a Left tsunami swamped West Bengal and the CPM-led LDF notched an emphatic victory in Kerala. While the Tamil Nadu verdict pointed to DMK's critical dependence on the Congress, the grand old party beat anti-incumbency to register a two-thirds win in Pondicherry. In Assam, which threw up a hung House, the Congress looked comfortably placed to stay in power.

The Left on Thursday demonstrated its invincibility by renewing its 29-year-old lease over Kolkata's Writers Building. The electorate conclusively rejected the Left's political rivals and gave it an impressive tally of 220 in the 294-member House. This is a remarkable improvement from its last election's score of 199 seats. In Kerala, the CPM-led LDF wrested power by winning 99 seats in the 140-seat Assembly.

The alliance spearheaded by Mr Karunanidhi showed the power of political arithmetic in Tamil Nadu when it managed to get 162 seats. But Ms Jayalalithaa's AIADMK, which lost power, was not swept aside. Defying the familiar pattern, the AIADMK alliance won in 71 constituencies. Mr Karunanidhi read the message correctly and promptly struck a reconciliatory note. That there was no anti-incumbency feeling towards the Congress in Pondicherry was evident when voters gave handsome endorsement for its re-election.

THE PARTY mopped up 21 of the 30 seats in the Assembly. The Congress has reasons to feel happy about the outcome in Assam as it has become the single-largest party with 54 seats. Although it needs nine more to reach the majority mark, smaller parties can be expected to gravitate towards it.

Now the big picture. The Left, which has been critical of the government, said on Thursday that its interventions in the policy matrix of the Centre will be more decisive. Already, its top leaders have begun interpreting the election victory as an endorsement of the Left's worldview.

“We will intensify our demands on pro-people policies. There will be a strengthened role of the Left in national politics and increased interventions,” CPM general secretary Prakash Karat said.

But the unexpected gains in Tamil Nadu for the Congress and DMK's dependence on it could restrain the Tamil Nadu ally from siding with the Left in the policy wranglings at the Centre. There is expectation in the Congress that DMK's reliance on it could help it insulate the government from the heat of the Left-ignited disputes.

The victory of DPA has come as a shot in the arm for UPA. A defeat for the alliance led by Karunanidhi would have weakened the ‘secular rationale' which is keeping the government afloat. As a matter of fact, many of the components of the DPA are known political freelancers.

Politically, the election results have sent out worrying signals for the Congress. While the loss of Kerala's Congress-led alliance is a worrisome advertisement of the erosion of its Muslim support base, the AUDF — an alliance of hardline Muslim outfits — has managed to walk away with large chunks of Congress' minority votes in Assam.

 The political recognition for hardline opinion — CPM managed huge wins in Muslim-dominated seats of northern Kerala with the help of Jamaat-e-Islami and Coimbatore blast-accused Abdul Nazar Madani's PDP — cannot but be distressing for the Congress and the Centre. These sections have been mobilising opinion against the Centre's foreign policy orientation.

THE government on Thursday ushered in a shorter timeframe for processing patent applications by notifying the Patents (Amendment) Rules, 2006. The new rules bring in more transparency, decentralisation of the functioning of Patent Offices and simplify various procedures associated with grant of patent applications. The move follows introduction of product patents in line with India's commitment to the World Trade Organisation (WTO).

“The thrust of the Patents Rules is to introduce transparency, decentralise the functioning of Patent Offices, simplify the procedures and to make them user-friendly, commerce & industry minister Kamal Nath said.

As per the changes notified under the Patents (Amendment) Rules, 2006, patent applications are now to be published within one month after expiry of the statutory period of 18 months.

In case of request for an early publication, the application is to be published within one month from the date of request. The step will introduce an element of certainty regarding the date of publication that was hitherto not available, according to an official statement issued here.

 Further, with a view to enforcing transparency and ensuring time-bound disposal of patent applications, definitive timeframes have been prescribed for various activities of the Patent Offices. A patent application now has to be referred to an examiner within one month of a request for its examination and the controller will be required to take a decision within one month of the submission, the statement said, adding that the first examination report must be issued in six months of the date of request for examination of a patent.

 In order to decentralise as well as facilitate the patent administration, all patent-related activities can now be performed by all the Patent Offices at Kolkata, Chennai, Delhi and Mumbai. The time for granting permission to file patents abroad has been reduced to just 21 days.

Seeking to make the system more user-friendly, the timeframe available for applicants and the public has also been extended. Accordingly, the timeframe for making a request for examination has been extended from 36 to 48 months while the time for filing a pre-grant opposition extended from three to six months.

The time for filing reply to pre-grant opposition has been extended from one to three months and that for meeting the requirements of the First Examination Report increased to 12 months.