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Nitin Pahuja
This is the forum to discuss the topics of issues addressed in the Dec 24 edition of the newsletter.
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Newsletter 24 Dec, 2007
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Nitin Pahuja
HEDGE FUNDS
A hedge fund definition can be defined simple as a managed portfolio where a specific return on investments is targeted regardless of market conditions. Hedge funds use a variety of investing strategies to achieve this goal. These strategies are devised by a portfolio manager. A portfolio manager is essentially a person who manages a particular set of investments (a portfolio) in a market. A portfolio is created on the basis of investor preferences – risk appetites, capital appreciation, return requirements and investment period.
Hedge funds are investment vehicles that take big bets on a wide range of assets and specialise in sophisticated investment techniques. Some of these funds have made huge amounts of money for their investors in recent years. They are meant to perform well in falling as well as rising markets.
Some of the strategies that can be used by hedge funds for investing are short selling, arbitrage, hedging and leveraging. The portfolio manager can use these options to remain flexible and weather the various storms of the market. A lot of hedge funds are run by former bankers or traditional investment managers who set up their own funds. They can make a lot of money out of them by charging high fees, typically a 2 per cent management fee as well as 20 per cent of the profits.
At its core, the very term ‘hedge fund’ is used to indicate a 'hedge' against investment deterioration. Typically, to hedge means to avoid risk. In financial markets, it is impossible to eliminate risk altogether. What, however, can be done is that the risk involved in investments can be reduced to a fair extent.
Because they are unregulated and risky, the managers will only accept investment from wealthy, sophisticated investors. Some banks, pension funds, and companies also invest.
By concept, a hedge fund indicates everything contrary to the market, safety, guaranteed return and stability regardless of market conditions. But large, wealthy investors seek the safe haven that the hedge funds and the portfolio managers offer. These large retail investors better known as HNIs (High Networth Individuals) invest in it to maintain and grow their extensive fortunes. Hedge funds primarily cater to high net worth individuals.
Hedge funds explicitly pursue absolute returns on their underlying investments. etc. the structure of a hedge fund is typically a limited partnership where the manager acts as the general partner and the investors act as the limited partners with performance related fees, high minimum investment requirements and restrictions on types of investor, entry and exit periods.
So what does it mean to "hedge"?
To "hedge" means to manage risk. Any investment has some embedded risks involved. There are many types of perceivable risk - Market, Interest rate, Inflation, Sectoral, Regional, Currency, etc. Hedge fund managers utilise the complete arsenal of financial weapons (holding cash, short selling, buying or swapping, options, futures, commodity and/or currency futures, etc.) and are expert in concocting hedging positions for most conceivable risks.
There are many ways in which one can earn returns in financial markets. Some of them are speculating, arbitrage and hedging.
When a manager makes an allocation/investment that can be described as speculative; he simultaneously makes an allocation specifically designed to balance or counter-act any negative performance from his position then that would be his hedging position. Some funds may be long-only in stocks, and may even use leverage-making them explicitly speculative and "un-hedged".
The correct questions to ask regarding hedge or absolute return funds is how much perceivable and quantifiable risk underlies its returns. The lower the risk on higher returns the better the fund performance.
In theory, a hedge fund is less speculative than a long-only "traditional fund". There are some aggressive hedge funds, but there are also many others that explicitly and methodically pursue consistency of returns and/or preservation of capital. However, this aspect of hedge fund finance is not appreciated as investors in this spectrum have large risk-appetites.
A hedge fund differs from a regular mutual fund in its investment strategies. Such funds typically generate returns through security selection.
Suppose a fund has only ABC(a stock) in its portfolio. Assume that the stock generates 15 per cent return in six months against the market index return of 10 per cent. The return specific to investing in ABC is, therefore, 5 per cent.
A hedge fund would build its portfolio such that it generates only 5 per cent return, while a regular mutual fund would generate 15 per cent. That though, is only part of the equation. Because hedge funds aim for stock-specific returns, they run a lower market risk. Suppose the market declines 20 per cent but ABC falls by only 7 per cent. The hedge fund will approximately lose 7 per cent, whereas a regular mutual fund will lose 20 per cent.
Hedge funds neutralise or at least reduce market risk by primarily investing in derivatives. In the above case, the hedge fund would take short position in index futures to protect against the decline in the market index.
Another important characteristic is that hedge funds borrow heavily to increase their portfolio size. Assume a hedge fund collects Rs 1,000 crore from investors. It may borrow, say, Rs 2,000 crore and invest Rs 3,000 crore in stocks and bonds. Many perceive hedge funds as risky because of this leverage factor.
Finally, hedge funds construct a concentrated portfolio. A typical mutual fund will invest in many stocks to reduce risk. This is called portfolio diversification. A hedge fund, however, invests in few stocks because it aims at generating security-specific returns.
Many investment vehicles that offer you good and stable returns. Products like diversified mutual funds, blue chip stocks and property are some of them. But for high net worth individuals (HNIs), there are more routes, especially in the international markets.
Why have hedge funds earned a lot of criticism?
Some hedge funds have been caught out by betting the wrong way on recent market movements. Some of them have also made losses by buying the complex packages of debt that contain many of the U.S. mortgage loans now turning sour.
By some measures hedge funds account for a third of stocks traded on the London Stock Exchange and a fifth of those in New York. They are also the most lucrative customers of leading investment banks. They are an integral part of the financial system and problems with hedge funds can have a big knock-on effect.
There are several thousand hedge funds in existence accounting for trillions of dollars of investments. They have enjoyed a surge in popularity in recent years, despite the criticism, as investors have tried to diversify their assets and increase their returns.
By Divya Vasantharajan
A hedge fund definition can be defined simple as a managed portfolio where a specific return on investments is targeted regardless of market conditions. Hedge funds use a variety of investing strategies to achieve this goal. These strategies are devised by a portfolio manager. A portfolio manager is essentially a person who manages a particular set of investments (a portfolio) in a market. A portfolio is created on the basis of investor preferences – risk appetites, capital appreciation, return requirements and investment period.
Hedge funds are investment vehicles that take big bets on a wide range of assets and specialise in sophisticated investment techniques. Some of these funds have made huge amounts of money for their investors in recent years. They are meant to perform well in falling as well as rising markets.
Some of the strategies that can be used by hedge funds for investing are short selling, arbitrage, hedging and leveraging. The portfolio manager can use these options to remain flexible and weather the various storms of the market. A lot of hedge funds are run by former bankers or traditional investment managers who set up their own funds. They can make a lot of money out of them by charging high fees, typically a 2 per cent management fee as well as 20 per cent of the profits.
At its core, the very term ‘hedge fund’ is used to indicate a 'hedge' against investment deterioration. Typically, to hedge means to avoid risk. In financial markets, it is impossible to eliminate risk altogether. What, however, can be done is that the risk involved in investments can be reduced to a fair extent.
Because they are unregulated and risky, the managers will only accept investment from wealthy, sophisticated investors. Some banks, pension funds, and companies also invest.
By concept, a hedge fund indicates everything contrary to the market, safety, guaranteed return and stability regardless of market conditions. But large, wealthy investors seek the safe haven that the hedge funds and the portfolio managers offer. These large retail investors better known as HNIs (High Networth Individuals) invest in it to maintain and grow their extensive fortunes. Hedge funds primarily cater to high net worth individuals.
Hedge funds explicitly pursue absolute returns on their underlying investments. etc. the structure of a hedge fund is typically a limited partnership where the manager acts as the general partner and the investors act as the limited partners with performance related fees, high minimum investment requirements and restrictions on types of investor, entry and exit periods.
So what does it mean to "hedge"?
To "hedge" means to manage risk. Any investment has some embedded risks involved. There are many types of perceivable risk - Market, Interest rate, Inflation, Sectoral, Regional, Currency, etc. Hedge fund managers utilise the complete arsenal of financial weapons (holding cash, short selling, buying or swapping, options, futures, commodity and/or currency futures, etc.) and are expert in concocting hedging positions for most conceivable risks.
There are many ways in which one can earn returns in financial markets. Some of them are speculating, arbitrage and hedging.
When a manager makes an allocation/investment that can be described as speculative; he simultaneously makes an allocation specifically designed to balance or counter-act any negative performance from his position then that would be his hedging position. Some funds may be long-only in stocks, and may even use leverage-making them explicitly speculative and "un-hedged".
The correct questions to ask regarding hedge or absolute return funds is how much perceivable and quantifiable risk underlies its returns. The lower the risk on higher returns the better the fund performance.
In theory, a hedge fund is less speculative than a long-only "traditional fund". There are some aggressive hedge funds, but there are also many others that explicitly and methodically pursue consistency of returns and/or preservation of capital. However, this aspect of hedge fund finance is not appreciated as investors in this spectrum have large risk-appetites.
A hedge fund differs from a regular mutual fund in its investment strategies. Such funds typically generate returns through security selection.
Suppose a fund has only ABC(a stock) in its portfolio. Assume that the stock generates 15 per cent return in six months against the market index return of 10 per cent. The return specific to investing in ABC is, therefore, 5 per cent.
A hedge fund would build its portfolio such that it generates only 5 per cent return, while a regular mutual fund would generate 15 per cent. That though, is only part of the equation. Because hedge funds aim for stock-specific returns, they run a lower market risk. Suppose the market declines 20 per cent but ABC falls by only 7 per cent. The hedge fund will approximately lose 7 per cent, whereas a regular mutual fund will lose 20 per cent.
Hedge funds neutralise or at least reduce market risk by primarily investing in derivatives. In the above case, the hedge fund would take short position in index futures to protect against the decline in the market index.
Another important characteristic is that hedge funds borrow heavily to increase their portfolio size. Assume a hedge fund collects Rs 1,000 crore from investors. It may borrow, say, Rs 2,000 crore and invest Rs 3,000 crore in stocks and bonds. Many perceive hedge funds as risky because of this leverage factor.
Finally, hedge funds construct a concentrated portfolio. A typical mutual fund will invest in many stocks to reduce risk. This is called portfolio diversification. A hedge fund, however, invests in few stocks because it aims at generating security-specific returns.
Many investment vehicles that offer you good and stable returns. Products like diversified mutual funds, blue chip stocks and property are some of them. But for high net worth individuals (HNIs), there are more routes, especially in the international markets.
Why have hedge funds earned a lot of criticism?
Some hedge funds have been caught out by betting the wrong way on recent market movements. Some of them have also made losses by buying the complex packages of debt that contain many of the U.S. mortgage loans now turning sour.
By some measures hedge funds account for a third of stocks traded on the London Stock Exchange and a fifth of those in New York. They are also the most lucrative customers of leading investment banks. They are an integral part of the financial system and problems with hedge funds can have a big knock-on effect.
There are several thousand hedge funds in existence accounting for trillions of dollars of investments. They have enjoyed a surge in popularity in recent years, despite the criticism, as investors have tried to diversify their assets and increase their returns.
By Divya Vasantharajan
nitinpahuja
Nitin Pahuja
Financial Inclusion and Microfinancing in India
India as a country presents great diversity in its geography, history, culture and population demography. This diversity makes it extremely difficult to suitably categorize the country on economic, political, religious or demographical grounds. Post independence growth has led to overall development of the country as a whole but it has also divided it into two distinct segments thus providing a suitable basis of categorization in the form of Rural India and Urban India. As per the census of 2001 only 27.78% population of the country lives in the urban segment while the rest are still residing in the inherently characteristic Rural India. The things however have changed significantly since independence when around 82% of the population lived in the rural segment. The rural segment is distinct in respect of various features such as purchasing power, development, social system etc. These distinctions relate directly to the kind of distinct demand patterns that the rural sector has in various product segments especially when it comes to financial services. The sector presents a real challenge given its technological backwardness and mass illiteracy as people are still caught in ancient financial systems that were both exploitative and futile. Financial inclusion is the biggest problem in front of the financial system today in rural India and infrastructural bottlenecks are worsening it even further with each passing day.
Banking and other financial services were acknowledged as the ultimate growth drivers in rural India at the time of independence. The role of the banking sector in financing rural households was envisioned in the 1950s, in pursuance of the recommendations of the RBI survey, viz. All-India Rural Credit Survey (AIRCS), which observed that “Agricultural credit fell short of the requirements, was not of the right type, did not serve the right purpose and often failed to go to the right people”. Despite the insignificant role played by cooperatives in financing rural households at that time, a proactive role for cooperatives was suggested stating that “Cooperation has failed, but cooperation must succeed”. Commercial banks were also inducted in the 1970s into the ambit of financing agriculture and other priority sectors. Thus both commercial and cooperative banks have been financing the rural segment holding a major share in institutional finance. However a lot remains to be achieved so far in the rural domain which will be the future key to growth for the banking sector in India. We must analyze the role of Micro finance Institutions in providing cheap and prompt access to financial services in the rural terrain so as to explore a massive untapped segment of the financial market in India.
Micro financing has emerged as the promising arena to channelize the savings of millions of rural citizens all over the world to create a sustainable model of growth, development and empowerment. The context for this discussion derives from the current overriding emphasis on microfinance in rural finance discourse and its celebration as the new ‘magic wand’ in the fight against poverty. We must also discusses the factors and theoretical position associated with evolution of microfinance and its global acclaim based on it being a Win-Win proposition for both Micro Finance Institutions (MFIs) and Clients.
Pour in your views on this topic as this is one new emerging field and there is still a lot of scope to incorporate creative intellect and mind you it has national importance...
India as a country presents great diversity in its geography, history, culture and population demography. This diversity makes it extremely difficult to suitably categorize the country on economic, political, religious or demographical grounds. Post independence growth has led to overall development of the country as a whole but it has also divided it into two distinct segments thus providing a suitable basis of categorization in the form of Rural India and Urban India. As per the census of 2001 only 27.78% population of the country lives in the urban segment while the rest are still residing in the inherently characteristic Rural India. The things however have changed significantly since independence when around 82% of the population lived in the rural segment. The rural segment is distinct in respect of various features such as purchasing power, development, social system etc. These distinctions relate directly to the kind of distinct demand patterns that the rural sector has in various product segments especially when it comes to financial services. The sector presents a real challenge given its technological backwardness and mass illiteracy as people are still caught in ancient financial systems that were both exploitative and futile. Financial inclusion is the biggest problem in front of the financial system today in rural India and infrastructural bottlenecks are worsening it even further with each passing day.
Banking and other financial services were acknowledged as the ultimate growth drivers in rural India at the time of independence. The role of the banking sector in financing rural households was envisioned in the 1950s, in pursuance of the recommendations of the RBI survey, viz. All-India Rural Credit Survey (AIRCS), which observed that “Agricultural credit fell short of the requirements, was not of the right type, did not serve the right purpose and often failed to go to the right people”. Despite the insignificant role played by cooperatives in financing rural households at that time, a proactive role for cooperatives was suggested stating that “Cooperation has failed, but cooperation must succeed”. Commercial banks were also inducted in the 1970s into the ambit of financing agriculture and other priority sectors. Thus both commercial and cooperative banks have been financing the rural segment holding a major share in institutional finance. However a lot remains to be achieved so far in the rural domain which will be the future key to growth for the banking sector in India. We must analyze the role of Micro finance Institutions in providing cheap and prompt access to financial services in the rural terrain so as to explore a massive untapped segment of the financial market in India.
Micro financing has emerged as the promising arena to channelize the savings of millions of rural citizens all over the world to create a sustainable model of growth, development and empowerment. The context for this discussion derives from the current overriding emphasis on microfinance in rural finance discourse and its celebration as the new ‘magic wand’ in the fight against poverty. We must also discusses the factors and theoretical position associated with evolution of microfinance and its global acclaim based on it being a Win-Win proposition for both Micro Finance Institutions (MFIs) and Clients.
Pour in your views on this topic as this is one new emerging field and there is still a lot of scope to incorporate creative intellect and mind you it has national importance...
nitinpahuja
Nitin Pahuja
TATA and Orient Spat
Amidst all the fanfare that the Indian growth story commands around the world, some events intrude this reasonably eloquent expression of Indian growth and succeed to put up a question mark on the sanctity of this unprecedented Indian celebration. The recent spat between the Tatas and the orient group is indeed a resounding statement on the constrained yet insidious global perception about Indian corporate competency. The Tata owned Indian hotels who control the Taj group of hotels are the single largest investors in the European Orient group. It was in reply to an expression of interest submitted by the Tata's to further invest into the shares of the Orient group that Paul White the CEO of the orient group commented that an augmented Indian ownership of the company will dilute its brand image. The comment although abrasive but stands out as a testament to the naive outlook on part of Mr White, who refused to take cognizance of the contemporary business paradigm where India has emerged as a brand it self. The comment however unfortunately harsh, stands out as a strong candidate for being completely ignored in the light of tremendous respect that the Indian corporates command in the global business world.( May be MR White doesn't have access to Wall Street Journal or the Internet, but i am sure Mr Tata wouldn't mind getting him a complimentary subscription). Mr White's comment didn't go to well with the normally tranquil Mr Ratan Tata who demanded a public apology over the issue. The Indian industry and commerce minister Dr. Kamal Nath also termed it as an isolated misdemeanor by a company who call them "Orient" but yet fail to recognize the brand value of the east.
This spat has been covered extensively in the media and in a recent editorial written by Barkha Dutt in the Hindustan times, she has tried to identify the potential reasons for this occasional trial of Indian corporate competence at the global level. She has forwarded the argument of noninclusive growth that leaves a significant portion of the population under developed as the basic reason for such comments. I believe it would not be appropriate to ignore this argument at all. We must consider the fact that a major chunk of our population is still underdeveloped and the world knows it very well. It thus makes an opportunity for people such as Mr White to completely ignore the shine of Indian corporate success and comment about the so called impoverished India. However generalizing India in either of the two forms, one being the flamboyant economy and the other being the impoverished segment is unjustified.
We must address the reality that it is this very diversity of perception, existence and belief that makes India the real INDIA. It is this ability of the Indian populace to exhibit tremendous mix of different colors of life and form a beautiful multi chromatic portrait of culture and Indianness rather than an aesthetic caricature which is designed to suit the eyes of fledgling global commentators like Mr White. It is indeed comical to acknowledge that the CEO of a company whose brand identity is based on the word "Orient" referring to the exotic beauty of the east, considers an association with the east a debilitating action to their brand image.
Although this event is not significant enough to worry the Indian brand image but it serves the purpose of a reminder that there is still lot to be achieved in terms of positioning the country as a brand in itself and it is only possible through equitable growth for the Indian populace. It is time we realize that this young talented population is not a burden but probably the most productive asset of our economy. Therefore the public policy must be directed towards nurturing the young generation of zealous Indians who will by the virtue of their performance position India on the map of developed countries.
Please put in ur views on the issue.......I will soon be posting something related with the Financial Inclusion status of the Indian Economy.
Amidst all the fanfare that the Indian growth story commands around the world, some events intrude this reasonably eloquent expression of Indian growth and succeed to put up a question mark on the sanctity of this unprecedented Indian celebration. The recent spat between the Tatas and the orient group is indeed a resounding statement on the constrained yet insidious global perception about Indian corporate competency. The Tata owned Indian hotels who control the Taj group of hotels are the single largest investors in the European Orient group. It was in reply to an expression of interest submitted by the Tata's to further invest into the shares of the Orient group that Paul White the CEO of the orient group commented that an augmented Indian ownership of the company will dilute its brand image. The comment although abrasive but stands out as a testament to the naive outlook on part of Mr White, who refused to take cognizance of the contemporary business paradigm where India has emerged as a brand it self. The comment however unfortunately harsh, stands out as a strong candidate for being completely ignored in the light of tremendous respect that the Indian corporates command in the global business world.( May be MR White doesn't have access to Wall Street Journal or the Internet, but i am sure Mr Tata wouldn't mind getting him a complimentary subscription). Mr White's comment didn't go to well with the normally tranquil Mr Ratan Tata who demanded a public apology over the issue. The Indian industry and commerce minister Dr. Kamal Nath also termed it as an isolated misdemeanor by a company who call them "Orient" but yet fail to recognize the brand value of the east.
This spat has been covered extensively in the media and in a recent editorial written by Barkha Dutt in the Hindustan times, she has tried to identify the potential reasons for this occasional trial of Indian corporate competence at the global level. She has forwarded the argument of noninclusive growth that leaves a significant portion of the population under developed as the basic reason for such comments. I believe it would not be appropriate to ignore this argument at all. We must consider the fact that a major chunk of our population is still underdeveloped and the world knows it very well. It thus makes an opportunity for people such as Mr White to completely ignore the shine of Indian corporate success and comment about the so called impoverished India. However generalizing India in either of the two forms, one being the flamboyant economy and the other being the impoverished segment is unjustified.
We must address the reality that it is this very diversity of perception, existence and belief that makes India the real INDIA. It is this ability of the Indian populace to exhibit tremendous mix of different colors of life and form a beautiful multi chromatic portrait of culture and Indianness rather than an aesthetic caricature which is designed to suit the eyes of fledgling global commentators like Mr White. It is indeed comical to acknowledge that the CEO of a company whose brand identity is based on the word "Orient" referring to the exotic beauty of the east, considers an association with the east a debilitating action to their brand image.
Although this event is not significant enough to worry the Indian brand image but it serves the purpose of a reminder that there is still lot to be achieved in terms of positioning the country as a brand in itself and it is only possible through equitable growth for the Indian populace. It is time we realize that this young talented population is not a burden but probably the most productive asset of our economy. Therefore the public policy must be directed towards nurturing the young generation of zealous Indians who will by the virtue of their performance position India on the map of developed countries.
Please put in ur views on the issue.......I will soon be posting something related with the Financial Inclusion status of the Indian Economy.
nitinpahuja
Nitin Pahuja
Stock of the week- DECCAN AVIATION
Highlights
• Deccan Aviation is on the lines of a merger with Vijay Mallya’s Kingfisher Airlines. The merged entity will be known as Kingfisher Airlines. Vijay Mallya will be the chairman and CEO, while Captain Gopinath will be the vice-chairman of the merged entity.
• The charter business of the company will be spun off into a separate entity to be jointly owned by Captain Gopinath and the UB Group. Vijay Mallya-promoted UB Holdings already holds 46% stake in Deccan.
• Low cost carrier Deccan announced that it has breached the 15 million passenger landmark in a short period of 4 years.
• Deccan recorded a 23% year-on-year increase compared to passenger volume in 2006.
• The company is studying how to grow the charter business not only for corporate travel but also for infrastructure purposes as well, over the next few months.
Highlights
• Deccan Aviation is on the lines of a merger with Vijay Mallya’s Kingfisher Airlines. The merged entity will be known as Kingfisher Airlines. Vijay Mallya will be the chairman and CEO, while Captain Gopinath will be the vice-chairman of the merged entity.
• The charter business of the company will be spun off into a separate entity to be jointly owned by Captain Gopinath and the UB Group. Vijay Mallya-promoted UB Holdings already holds 46% stake in Deccan.
• Low cost carrier Deccan announced that it has breached the 15 million passenger landmark in a short period of 4 years.
• Deccan recorded a 23% year-on-year increase compared to passenger volume in 2006.
• The company is studying how to grow the charter business not only for corporate travel but also for infrastructure purposes as well, over the next few months.
nitinpahuja
Nitin Pahuja
#2 Kiran Mazumdar-Shaw
WELL-KNOWN AS : INDIA’S RICHEST WOMAN in 2004
REASONS FOR SUCCESS
Kiran Mazumdar-Shaw's pioneering efforts in biotechnology have drawn global recognition both for Indian Industry and Biocon. Her unique vision has steered Biocon's transition from an industrial enzymes company to an integrated biopharmaceutical company with strategic research initiatives. Biocon is today recognised as India's pioneering biotech enterprise.
KEY STATISTICS:
Born: March 23, 1953
Achievement: Chairman & Managing Director of Biocon Ltd – the country’s leading biotech enterprise
BUSINESS: BIO-TECHNOLOGY
ACADEMIC BACKGROUND:
She had her schooling at Bishop Cotton Girls School and Mount Carmel College at Bangalore. After doing completing her B.Sc. in Zoology from Bangalore University in 1973, she went to Ballarat University in Melbourne, Australia and qualified as a master brewer. Recently she also received an Honorary Doctorate from the Manipal Academy of Higher Education (MAHE), in recognition of her outstanding achievements in biotechnology and industrial enzymes.
Kiran Mazumdar Shaw started her professional career as trainee brewer in Carlton & United Beverages in 1974. In 1978, she joined as Trainee Manager with Biocon Biochemicals Limited in Ireland. In the same year, Kiran Mazumdar Shaw founded Biocon India in collaboration with Biocon Biochemicals Limited, with a capital of Rs.10,000. She initially faced many problems regarding funds for her business. Banks were hesitant to give loan to her as biotechnology was a totally new field at that point of time and she was a woman entrepreneur, which was a rare phenomenon.
FAMILY BACKGROUND:
Country Of Citizenship: India
Residence: Bangalore, Karnataka, India
Marital Status: married.
She is married to John Shaw, a Scotsman and Indophile, who headed a leading textiles MNC, Madura Coats from 1991-1998 as Chairman and Managing Director. John Shaw has since joined Biocon as Director, International Business and is the Vice Chairman of the Board.
THE STORY SO FAR…
Today, Biocon is recognised as India's pioneering biotech enterprise. In 2004, Biocon came up with an IPO and the issue was over-subscribed by over 30 times. Post-IPO, Kiran Mazumdar Shaw held close to 40% of the stock of the company.
As Chairperson and Mission Leader of CII's National Task Force on Biotechnology she has led several delegations to USA, Canada, UK, etc. to propel India into the global super league of biotech trailblazers. She chairs Karnataka's Vision Group on Biotechnology and also served on the Board of Science Foundation, Ireland. She presently serves on the Advisory Council of the Government’s Department of Biotechnology where she has been instrumental in bringing government, industry and academia together, to chart a clear and progressive growth path for Biotechnology in India. Ms. Shaw is also a Board member of BVGH (Bio-Ventures for Global Health). Most recently, she has been invited to join the Prime Minister’s Council on Trade & Industry in India.
Her firm has grown to be the biggest biopharmaceutical firm in India today. Though her business interests keep her occupied, she has found time to write a book titled 'Ale and Arty'. A very active social activist, she has been involved in various projects like the Bangalore Agenda Task Force (BATF). She was the Chairperson and Mission Leader of the Confederation of Indian Industry's National Task Force on Biotechnology, a member of the Prime Minister's Council on Trade & Industry in India, Member, Board of Science Foundation, Ireland , Member, Board of Governors, IIM Bangalore and many others. In doing so, she has set an example for other Indian women to follow.
Some of the Prestigious Awards bestowed upon her:
• ET Businesswoman of the Year
• Best Woman Entrepreneur
• Wharton Infosys Business Transformation Award
• Lifetime Achievement Award from the Indian Chamber of Commerce
• Ernst & Young's Entrepreneur of the Year Award for Life Sciences & Healthcare
• Technology Pioneer
• MV Memorial Award
• PADMASHRI (1989)
• PADMA BHUSHAN (2005) presented by the President of India, for her pioneering efforts in Industrial Biotechnology.
WELL-KNOWN AS : INDIA’S RICHEST WOMAN in 2004
REASONS FOR SUCCESS
Kiran Mazumdar-Shaw's pioneering efforts in biotechnology have drawn global recognition both for Indian Industry and Biocon. Her unique vision has steered Biocon's transition from an industrial enzymes company to an integrated biopharmaceutical company with strategic research initiatives. Biocon is today recognised as India's pioneering biotech enterprise.
KEY STATISTICS:
Born: March 23, 1953
Achievement: Chairman & Managing Director of Biocon Ltd – the country’s leading biotech enterprise
BUSINESS: BIO-TECHNOLOGY
ACADEMIC BACKGROUND:
She had her schooling at Bishop Cotton Girls School and Mount Carmel College at Bangalore. After doing completing her B.Sc. in Zoology from Bangalore University in 1973, she went to Ballarat University in Melbourne, Australia and qualified as a master brewer. Recently she also received an Honorary Doctorate from the Manipal Academy of Higher Education (MAHE), in recognition of her outstanding achievements in biotechnology and industrial enzymes.
Kiran Mazumdar Shaw started her professional career as trainee brewer in Carlton & United Beverages in 1974. In 1978, she joined as Trainee Manager with Biocon Biochemicals Limited in Ireland. In the same year, Kiran Mazumdar Shaw founded Biocon India in collaboration with Biocon Biochemicals Limited, with a capital of Rs.10,000. She initially faced many problems regarding funds for her business. Banks were hesitant to give loan to her as biotechnology was a totally new field at that point of time and she was a woman entrepreneur, which was a rare phenomenon.
FAMILY BACKGROUND:
Country Of Citizenship: India
Residence: Bangalore, Karnataka, India
Marital Status: married.
She is married to John Shaw, a Scotsman and Indophile, who headed a leading textiles MNC, Madura Coats from 1991-1998 as Chairman and Managing Director. John Shaw has since joined Biocon as Director, International Business and is the Vice Chairman of the Board.
THE STORY SO FAR…
Today, Biocon is recognised as India's pioneering biotech enterprise. In 2004, Biocon came up with an IPO and the issue was over-subscribed by over 30 times. Post-IPO, Kiran Mazumdar Shaw held close to 40% of the stock of the company.
As Chairperson and Mission Leader of CII's National Task Force on Biotechnology she has led several delegations to USA, Canada, UK, etc. to propel India into the global super league of biotech trailblazers. She chairs Karnataka's Vision Group on Biotechnology and also served on the Board of Science Foundation, Ireland. She presently serves on the Advisory Council of the Government’s Department of Biotechnology where she has been instrumental in bringing government, industry and academia together, to chart a clear and progressive growth path for Biotechnology in India. Ms. Shaw is also a Board member of BVGH (Bio-Ventures for Global Health). Most recently, she has been invited to join the Prime Minister’s Council on Trade & Industry in India.
Her firm has grown to be the biggest biopharmaceutical firm in India today. Though her business interests keep her occupied, she has found time to write a book titled 'Ale and Arty'. A very active social activist, she has been involved in various projects like the Bangalore Agenda Task Force (BATF). She was the Chairperson and Mission Leader of the Confederation of Indian Industry's National Task Force on Biotechnology, a member of the Prime Minister's Council on Trade & Industry in India, Member, Board of Science Foundation, Ireland , Member, Board of Governors, IIM Bangalore and many others. In doing so, she has set an example for other Indian women to follow.
Some of the Prestigious Awards bestowed upon her:
• ET Businesswoman of the Year
• Best Woman Entrepreneur
• Wharton Infosys Business Transformation Award
• Lifetime Achievement Award from the Indian Chamber of Commerce
• Ernst & Young's Entrepreneur of the Year Award for Life Sciences & Healthcare
• Technology Pioneer
• MV Memorial Award
• PADMASHRI (1989)
• PADMA BHUSHAN (2005) presented by the President of India, for her pioneering efforts in Industrial Biotechnology.