Promoters snap up shares as prices slump

Promoters snap up shares as prices slump

The companies whose promoters have been seen buying shares from the open market in the recent days include Tata Power, HCL Infosystems, Motilal Oswal, Bombay Dyeing, JK Paper, Videocon, India Infoline, JSPL and Adani Power.

Taking advantage of four-month low levels in the stock market, promoters of many listed firms including those of Tata, Jindal and VideoconBSE -0.25 % groups, are buying their company shares at cheaper valuations.

The companies whose promoters have been seen buying shares from the open market in the recent days include Tata PowerBSE 1.43 %, HCL Infosystems, Motilal Oswal, Bombay Dyeing, JK PaperBSE -0.53 %, Videocon, India InfolineBSE 1.22 %, JSPL and Adani Power.

The shares are mostly being acquired in small quantities, but many such transactions are taking place and the momentum could pick up further this week as the current fiscal will end on March 31, say experts.

Stock portfolios generally witness a churn towards the end of a fiscal year and the shares are mostly being bought this time around due to cheap valuations, they believe.

Tata SteelBSE -1.68 %, part of the promoter group of Tata Power, bought over 20 lakh shares in India's largest integrated power company for around Rs 20 crore on March 20.

A day prior to that, Ness Wadia ramped up his stake in Wadia group flagship firm Bombay DyeingBSE -0.88 %with purchase of 40,000 shares for around Rs 37 lakh.

On the other hand, Shiv Nadar-led HCL Corporation bought 44.69 lakh shares or about two per cent stake in HCL InfosystemsBSE -0.27 % for over Rs 17 crore.

The stock exchange data further shows that Motilal Oswal FinancialBSE -1.24 % Services' promoter entity, Passionate Investment Management, picked up nearly 1.81 lakh shares for Rs 1.5 crore via open market transactions on March 20-21.

During the same days, Videocon's promoter entity, Nippon Investment & Finance Company, bought nearly 1.9 lakh shares of the diversified conglomerate for over Rs 3.5 crore, while India Infoline's Nirmal Jain picked up 46,000 shares of the financial services firm for over Rs 27 lakh.

Sluggish markets offer a window of opportunity to promoters to buy shares cheaper and consolidate their holdings in the companies.

The transactions come at a time when the BSE 30-stock index, Sensex, has tanked 834.84 points or 4.27 per cent in six trading days to a fresh 4-month low as worries over political uncertainty and issues in Cyprus have kept financial markets on tenterhooks.

Market regulator Sebi has a 5 per cent cap on the quantum of shares promoters can acquire in a company through creeping acquisition during the course of a financial year.

Among other such transactions, JK Paper's promoter BMF Investments acquired 3.2 lakh shares from open market on March 21 by spending nearly Rs 1 crore.

Vinod Adani, part of the promoter group and also brother of Adani PowerBSE -3.52 % Chairman Gautam Adani, bought 46 lakh shares of the power entity for over Rs 21.73 crore on March 19.

Jindal Steel and PowerBSE 3.11 % Ltd (JSPL) Chairman Naveen Jindal also hiked his stake by acquiring around 4.85 lakh shares for Rs 16.89 crore on March 21 and 22.

Source : PTI ,http://economictimes.indiatimes.com

Power of ideas: Five hottest sectors for startups that may yield healthy returns

Power of ideas: Five hottest sectors for startups that may yield healthy returns

With technology finding new ways to sneak into our lives, it is little wonder that the sector has thrived and has been dishing out healthy returns.

With technology finding new ways to sneak into our lives every single day, it is little wonder that the sector has thrived and has been dishing out healthy returns for investors. This, in turn, has created a robust network of mentors, who are supporting more technology companies, creating a virtuous cycle.

Zinnov, a management consultancy that closely tracks the sector, estimates that between now and 2015, up to 600 new technology ventures will be created every year in India. The gold rush is clearly on. "Across internet services, ecommerce and travel portals at least two to three companies will be billion-dollar bets for certain," says Vani Kola, co-founder of Kalaari Capital, an early stage investment firm.

However, picking the right bet from an overflowing technology basket is key for a new venture. Despite the advantages of money and a growing market, barely a fifth of the technology ventures set up in the last seven years have raised a second round of funding.

Industry experts reckon picking the wrong business idea can drive the failure rate even higher. "You cannot manufacture cars when there are no roads," says Kola. ET spoke to a cross section of investors and industry experts to pick the Top Five Sectors to launch a technology venture today.

CLOUD COMPUTING

The attractiveness of cloud-based applications across sectors, from hospitality to healthcare, is driven by ease of use and lower cost.
Thi has led to India becoming a hub for young cloud computing companies. Chennai's OrangeScape provides cloud solutions to firms like drugmakerAstra-Zeneca, consumer-goods company Unilever and automaker Ford.

In Bangalore, storage company Datagres, which sells data management products to large enterprises, was founded in 2010 by Srinivasan Viswanathan, an alumnus of Indian Institute of Science.
These young companies, which need less capital, are growing faster and are more profitable compared to traditional enterprise technology ventures.

The high rating for the sector also comes from some of the biggest exits for investors in this segment. He put in Rs 60 lakh as the initial capital to start the firm. Last September, the company recieved first round funding of over Rs 10 crore from Nexus Venture Partners.

In the past 18 months, Mumbai-based Netmagic sold a majority stake to Japan's NTT Communications for Rs 900 crore while Citrix Systems paid over Rs1,000 crore to acquire Cloud. com. Gluster, a cloud computing startup, was bought by Red Hat for about Rs 667 crore.

Seed investment: Rs 50 lakh

SINGLE-BRAND ECOMMERCE
Ecommerce in India, especially in the multi-brand category, has gone from being the new kid on the block to a crowded industry.
However, web-only brands, where a business can create its own brand of products in any category like apparel or jewellery and retail it online, is emerging as the new growth opportunity.

BlueStone launched in August 2011 as a manufacturer and retailer of light precious jewellery like earrings, pendants and rings has raised $5 million (about Rs 27 crore) in funding from Accel Partners, Silicon Valley Bank and serial entrepreneurs Meena and Krishnan Ganesh.

CaratLane, Zovi and Freecultur are some of the other internet-only brands. With 38 million Indians expected to transact online by 2015, according to data from Avendus Capital, the promise of ecommerce will lure many aspiring entrepreneurs. But this is a business best run with a clear goal to build a brand in the long run.

"The online part is incidental, internet is just the channel used for sales," says Gaurav Singh Kushwaha,cofounder and CEO of Bluestone which is targeting sales of Rs 80 crore in fiscal year 2014. "Low-hanging fruit might bring in money but might dilute your brand and confuse customers in the long run."

While BlueStone mainly manufactures its own jewellery, others like fashion brand Zovi outsource their manufacturing. In both models, it is the lower costs associated with building a pure online brand and the quick growth that is attracting entrepreneurs and investors.

MOBILE PAYMENT

With an estimated 900 million mobile users, India is the second biggest mobile market in the world after China. And as with ecommerce that is witnessing a second coming, mobilebased payments that failed to take off nearly five years ago are now being launched in newer and improved versions.

Ezetap Mobile Solutions, a company that processes card payments on mobile phones, has built technology that allows anyone to accept cards—from merchants to cabdrivers, grocers and pizza delivery boys. It allows feature phones, smartphones and tablets to be converted into full-fledged point of sale terminals.

Backed by AngelPrime, an incubator started by serial entrepreneurs, Bala Parthasarathy, Shripati Acharya and Sanjay Swamy, the venture is drawing from the failures of ventures such as mChek in the past.

Ezetap received its first round funding of Rs 19 crore from a group of influential Silicon Valley investors, including Yammer founder David Sacks and Paypal Inc co-founder Peter Thiel, last November.

Top ventures: Ezetap, Gharpay, Mswipe.

ECOMMERCE LOGISTICS

It was a road trip across the hills and along backwaters of Kerala in 2009 that changed the career of Afsal Salu, 31, and two of his IIM batchmates. Quitting a coveted job at Unilever, Salu and his friends launched a logistics business built on a technology backbone,an idea they had presented in their MBA classroom way back in 2003.

They formed Delyver Retail Network, which would deliver food and groceries to homes in Bangalore.

A logistics startup needs to build an IT platform, which typically takes four to six months, besides arranging vehicles for delivery.

"Costs for a city based logistics venture can be controlled by hiring mini vans, which would drop goods in a neighbourhood that can be picked up by delivery boys," says TA Krishnan, founder CEO of E-Com Express, which launched operations in 36 cities in North India this January. The young venture has now set up large warehouses due to increasing demand. Others like Chottu and Delhivery also provide logistics support to ecommerce firms.

Delyver'sSalu fulfilled his first order while on a lunch break from Unilever. "It's a capital intensive business. We started with a seed capital of Rs 3 lakh," he says. His parents, both doctors in Kerala, were alarmed to hear that their son, an IIM graduate, was delivering cakes and food to people's homes.

But the sector is a hot area for new startups as India's overall logistics market is estimated at over $100 billion, growing at a rate of about 20 per cent. The sector employs about 45 million people in the country, according to consulting firm Deloitte.

Top ventures: Delyver Retail Network, Chottu.in, Delhivery, E-Com Express.

BIG DATA ANALYTICS

From crafting strategies for cricket teams to helping scientists develop new drugs, Indian entrepreneurs are building specialised companies. These firms can chew through billions of bits of data, analyse them via self-learning algorithms and package the insights for immediate use.

"Big data is becoming hot, because people are using it to predict the future," says Ravi Gururaj, vice-president for cloud platforms group at Citrix Systems.

He said earlier it took at least Rs5 crore to start a data analytics firm. Now, with so many open source platforms available, an entrepreneur can launch a new venture with just Rs 50 lakh. One such example is Gramener, which converts insights drawn through data analysis into visual graphics.

It was a reunion in Bangalore for six friends that led them to quit their jobs and start Gramener in 2010. "We decided to do something on our own and have fun," says Naveen Gattu, 38, cofounder. In an innovative example of how such technology can be used, Gramener helps poultry company Suguna Foods enhance the longevity for chickens. The firm finds disease patterns, suggests precautions and even makes recommendations about how much sunlight the birds must be exposed to the type of feed.

Gramener, which counts telecom firms, car-parts maker Bosch and many IT and engineering companies as its clients, now earns around Rs 1-2 crore per annum.

(Inputs from: Peerzada Abrar, Harsimran Julka and Radhika P Nair)

Source : ET BUREAU 

Hot Startup : Fresco Retail uses ozone technology to purify vegetables

Hot Startup : Fresco Retail uses ozone technology to purify vegetables

Ozone treatment has been widely used internationally in food processing as ozone removes impurities without leaving any harmful residue.

Until a few years ago, Mumbai-based Karan Gaba, 28, had never been to a vegetable market.

Now as the founder of a one-of-its kind grocery chain in Mumbai, which is targeting Rs 6 crore in turnover next fiscal, the better part of Gaba's day is spent amidst vegetables. Fresco Retail, a venture he launched in November 2011 primarily retails vegetables and fruits that have been treated with ozone to remove pesticides and micro-organisms.

But the journey to becoming a retail entrepreneur began five years back when his mother dragged him to a vegetable market for the first time in his life to buy groceries for a party. "It was an eye opening experience for me as the vegetables were all so dirty and I asked my mother 'is this what we eat?'" says Gaba, who passed out of Mumbai's Thadomal Shahani Engineering College that year.

He began working with his father in his import business but remained keen to begin a new venture in food and honed in on organic farming. But he soon realised that he did not have the skills for it.

"At that time we had bought a water purifier for our home. That is how I thought of developing a machine to purify food," says Gaba, who set up Waltro Technologies and spent two years designing and building an ozone-technology based machine that purifies vegetables and fruits at home.  He began marketing the product in 2010 and in under a year he had sold around 500 units without any large-scale marketing initiatives. Though the company had reached profitability, Gaba realised he would need heavy investments to build the brand and scale it up nationally.
That is when he realised there was an opportunity to sell cleaned vegetables and food directly to customers. The profits from his appliance business, which he shut down, and a loan from his father helped Gaba set up a central purification centre in Santa Cruz and a retail store in Bandra.

Every morning at 4.30 am the produce from the whole sale markets reach the 2,000 square feet purification centre. It is weighed, sorted and graded and then machine washed with water to remove visible dirt. Once the produce is dry it is put for around 10 minutes in the purification machine, in which oxygen is converted into ozone to remove surface pesticides and micro-organisms. The cleaned produce is packed in sealed packets and is ready to be sent to stores by 8.45 am.

Ozone treatment has been widely used internationally in food processing as ozone removes impurities without leaving any harmful residue as it decomposes to become oxygen. However, retailers are yet to offer this to customers.

"Ozone will be the future for ensuring food safety especially for fresh produce," said Brijesh Tiwari, a professor at the Manchester Metropolitan University, UK, who has published numerous papers on use of ozone technology in food processing.

Gaba says the technology was the easy part, learning sourcing and stocking was much tougher. "At first I did not stock vegetables that I did not like, wholesalers would sell me 2-kg cauliflowers that no customer would pick up and I would buy too much or too little for a day," It took him a couple of months to iron out these issues.

Fresco has set up a home delivery unit and also started wholesale supplies to two restaurants, a school and a temple.

The company, which has net margins of around 20 per cent, is planning to launch three stores this year. "I want to cover Mumbai first and then I will expand nationally," says Gaba.

Source : RADHIKA P NAIR,ET BUREAU 

A Krazy Mug: Mumbai's handmade decoratives firm eyes up to Rs 50 lakh turnover

A Krazy Mug: Mumbai's handmade decoratives firm eyes up to Rs 50 lakh turnover

The interior designer was doing up a design studio in Kolkata in January 2011 when the clients asked her to include some artwork to brighten up the place.

Most entrepreneurs start their venture after weighing a business idea; others spot an opportunity and capitalise on it. However, 35-year-old Puja Bajpai took the first steps towards 'A Krazy Mug' without realising she had done so. 

The interior designer was doing up a design studio inKolkata in January 2011 when the clients asked her to include some artwork to brighten up the place. Instead of heading to the market, Bajpai decided to put up some of her own work. The client liked it and an idea was born. A year later, her dream became a reality.

Bajpai, who started as a junior designer in 2000, climbed the corporate ladder as she moved from Delhi to Pune, then Kolkata, before settling in Mumbai. "But as you rise, you realise that there are fewer opportunities to explore," says Bajpai.

The stagnation hit her in 2006, when she was working as a senior designer with an architecture firm in Pune. Four years later, she had to shift when her husband, Alok, who works with an oil and gas firm, was transferred to Kolkata.

It was here that she started freelancing, working as an independent designer for various firms. "I also started buying raw material and working on it," says Bajpai. The freelancing proved successful, but in end-2011 she had to move to Mumbai. By now, she was confident of starting her venture.

Over the next year or so, Bajpai and her husband researched and studied how she could make her work more business-friendly. "Alok helped me zero in on quirky art products that I could design and sell via e-commercewebsites," says Bajpai, planning to work from her Powai apartment. Finally, in April 2012, 'A Krazy Mug' was born with a seed capital of Rs 25,000.

A Facebook page was her only attempt at publicity, but she got lucky with favourable customer response. "Within two months, the order list became unmanageable and I had to hire a coordinator. She also employed a few artistes and work started on a bigger scale," she says.

After nine months, Bajpai and her team had earned Rs 30,000 and managed to break even. However, the orders did not abate and work from home became unfeasible. Her resident welfare organisation also objected to commercial activity, so she hired an office space at Sakinaka. Around this time, Bajpai also decided to expand her team. After interviewing nearly 1,000 artistes from across the country, she formed a core team of 20. 

While five of them work on a full-time basis, the rest are freelancers. In the meantime, Alok has also started helping with the day-to-day operations.

What has helped streamline costs is sticking to the third-party e-commerce websites like Shoppo and Its Hand Made instead of having their own payment gateway. "This helps us focus on the product while outsourcing marketing and payments to someone else. Since this has worked fine for us till now, we will continue with it," says Bajpai.

The handmade products, like kettles, mugs and sprinklers, take up to three days to finish and are tested to last longer. Costing Rs 499-5,000, Bajpai's creations are also sold through 7-8 retail outlets in metros. Given the response, the firm is eyeing a revenue of Rs 45-50 lakh in the coming fiscal year.

Source : AMIT KUMAR,ET BUREAU 

N Sathyanarayanan's startup Central Parking Services making millions through car parking solutions

N Sathyanarayanan's startup Central Parking Services making millions through car parking solutions

Bangalore-based startup is gaining currency by providing innovative solutions to parking problems in Indian metro cities, and making millions out of it.

At social gatherings when people ask N Sathyanarayanan, an engineer from Bharathiar University in Coimbatore, what he does for a living, he tells them he is a "parking guy".

"Most people in India associate the parking business with ruffians," says the 42-year-old, whose company, N Sathyanarayanan's startup Central Parking Servicesmaking millions through car parking solutions, provides parking facilities for cars and two wheelers in India's malls, airports and large scale weddings.

Braving preconcieved perceptions is paying off for the Bangalore-based entrepreneur, whose company aims at clocking revenues of about Rs 140 crore next fiscal. More so, as the business is one that he discovered quite by chance.

In 2005 he was running a technology services venture,Building Control Solutions that provided system integration facilities for large buildings. When Bangalore's first shopping mall, The Forum, was setup, the developers approached Sathyanarayanan to take over the parking systems.

"In building management we would install systems and then earn an annual maintenance but in parking management there is daily cash generation," says the intrepid entrepreneur who had to learn the ropes from scratch. On an average one parking bay generates around Rs 2,500 per month with a few busy lots like those within airports generating up to Rs 2 lakh of cash every month.

His initial stint at the Forum mall proved to be a success and brought in newer projects from new clients such as the Select City Walk in New Delhi and Amanora Town Centre in Pune where over a lakh people visit malls every month. "We don't have the bandwidth to manage such traffic and it best outsourced to outside parties like CPS," says Tushar Mehta, Centre Director at Pune's largest Mall Amanora Town Centre.

Buoyed by this growth in the consumer retail sector, CPS soon emerged as the flagship division for the company. "It is a capital intensive business.

We have to invest Rs 6-7 lakh per parking bay in any retail mall to make it functional," says Sathyanarayanan. The leap into the big league however came with the contracts to manage parking for Terminal 1 and Terminal 2 at Delhi Airport. In the same year, the young company also bagged the contract to manage 3,000 car slots at the Bangalore Airport. CPS now manages about 65,000 bays across 32 cities now.

Strong growth has helped the company attract the attention of risk capital managers. In 2010, early stage investor, Venture East put in $5.5 million (aboutRs30 crore now) in the company. CPS is also trying to change people's perception towards the business. Last summer, a customer's shirt was torn during a brawl in a parking lot managed by CPS in Greater Noida.

The customer asked CPS staff to sew the buttons. "Unlike the unorganised parking guys, our staff sewed the shirt just to demonstrate customer service," says Sathyanarayanan.


Another big challenge is retaining trained staff as semi skilled youth trained by CPS often switch jobs to food courts or air conditioned shops inside the same malls where they are employed."Its a dangerous job for staff in some of our installations in towns of Uttar Pradesh where goons take out country pistols when asked for parking fee," adds Sathyanarayanan. The company monitors parking bay occupancy at each of its installations through a command and control centre in Bangalore.

With about 26 lakh new cars on Indian roads every year, demand for parking spaces is at a peak in India's metros. Growth of about 25% in organised retail sector has led to similar companies like Secure Parking, Wohr, FAAC, Tenaga emerging in the parking solutions business.

Besides malls, CPS also earns from large day-long events such as political rallies, religious congregations or marriage functions of high profile industrialists which require management of over 4000 cars with valet service.

Next on the agenda for CPS India is toll and traffic management. CPS is aiming at earn revenues of Rs 250 crore in FY 15. "We aim to grab the majority market share of this business and becomes a billion dollar parking business in India," says Sathyanarayanan.

Source : HARSIMRAN JULKA,ET BUREAU 

Why Govt Stake Sale Planning Hit Stocks

Why Govt Stake Sale Planning Hit Stocks

MMTC Ltd. (Metals and Minerals Trading Corporation of India)

CIL (Coal India Ltd.)

EIL (Engineers India Ltd.)

Nalco (National Aluminium Company Ltd.)

Hindustan Copper Ltd.

IOC (Indian Oil Corporation Ltd.)

NHPC Ltd.

NHPC nosedived nearly 26% on heavy volumes on 4th March 2013.

PPGCIL (Power Grid Corporation of India Ltd.)

SAIL (Steel Authority of India Ltd.)

Rashtriya Chemicals & Fertilizers Ltd.

Unlisted Stocks : 

North Eastern Electric Power Corporation Limited (NEEPCO)

THDCL(Tehri Hydro Development Corporation Limited)

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Shares of disinvestment candidates such as MMTC, Nalco, SAIL, and RCF trading at 52-week lows

Punters pound stocks of state-run cos to grab them at dirt-cheap prices via the offer-for-sale route.

Shares of potential disinvestment candidatessuch as MMTCBSE -2.65 %, Nalco, SAIL, and RCF have taken a battering and are trading at 52-week lows, ahead of the government's 'offer for sale' (OFS) of shares. 

The m-cap of the combined four— MMTC, Nalco, SAILBSE -1.67 % and RCF — have eroded by over Rs 45,000 crore in the past two months, ever since the Street got a whiff of the divestment news. "The carnage in these PSU shares is happening because 'bears' got an opportunity to hammer these counters as they hope to buy these shares at a low price. The government announcement is actually killing the stock," said Deven Choksey, MD of KR Choksey. 

"The OFS route is destructive for existing shareholders; it's a structural problem for markets as fundamentally these companies are very sound," he added. 

The government is going full throttle on divestment, and an EGoM is likely to meet thrice — between March 11 and 19 — to fix the price for selling stakes in MMTC,Nalco and SAIL to raise around Rs 5,000 crore, said some investment banking people familiar with the matter. 

"As soon as an OFS is announced, 'bear sentiment' grips the stock. Smart investors generally exit the stock to buy again at a lower price as OFS is always at a discounted rate," said Pankaj Pandey, head of research,ICICI Securities. "If the stocks are in futures and options segment, then smart investors prefer to sell stock futures and later buy stocks in cash market at a lower price," he added. 

According to data provided by ETIG on a 12-month trailing basis, all the four companies are making profits. SAIL, the largest integrated iron and steel producer in India, has posted sales of Rs 45,195.74 crore, and profit of Rs 3,300.8 crore in the past 12 months. MMTC, the largest exporter of minerals from India, has recorded revenues of Rs 3,1746.25 crore, and a profit of Rs 16.64 crore, during the same period. Nalco has clocked sales of Rs 6,727.69 crore and profit of Rs 628.9 crore in the past 12 months while RCF has reported sales of Rs 4,573.28 crore and a profit of Rs 276.89 crore during the same period 

"Shares of these companies are trading at 52-week lows, but despite this, the government is divesting stake through OFS. This gives a signal that the government is trying to improve market sentiment," said Sandip Sabharwal, chief executive officer, PMS at Prabhudas Lilladher. "In the previous PSU divestments, investors have not made any money. But this time, investors have a good chance," he added. 

"The current market condition is not very conducive to raising money from such large issues within a span of weeks. Investors will only participate in OFS if they find the price at the lower end," said Sonam Udasi, head of research at IDBI Capital.

Source : nse2zoom,http://economictimes.indiatimes.com,BISWAJIT BARUAH,ET BUREAU 

How mushrooming microbreweries are taking beer guzzlers to a new high

How mushrooming microbreweries are taking beer guzzlers to a new high

Microbreweries are springing up all over country. Gurgaon was the first off the blocks, Bangalore, Pune and Mumbai are fast catching up.

Indians aren't exactly beer guzzlers—they like their hard liquor more. And the frothy brew they drink is mostly the staid, lager variety that is consumed sometimes a few months after bottling. While this hardly mattered to the novices, bon vivants—especially those who tasted the full-bodied beer on offer at microbreweries abroad—were left yearning for freshly brewed stuff. A few decided to take matters into their hands, and set up their own microbreweries here in India.

"People are well-travelled today. They know their beers, and they know what a good microbrewery offers as well," said Arvind Raju, sitting at his two-year old microbrewery , The Biere Club, located in Bangalore's trendy Lavelle Road.

"We aren't competing with the mass-beer producers, but we do feel that we are offering a superior product." The 30-year-old and a few other entrepreneurs across the country are in the process of transforming the average Indian beer drinker into a connoisseur of fine draughts. Weaned on international brews, and armed with business chutzpah, these 20- and 30-somethings are crafting a range of new flavours onpremise and serving them in settings starkly different from the smoke-filled pubs of the 1990s. And they obviously see a huge money spinner in the works. Microbreweries are springing up all over the country. While Gurgaon was the first off the blocks, Bangalore, Pune and Mumbai are now fast catching up.

According to industry estimates, the market for such finely crafted beers currently ranges between Rs75 crore to Rs 125 crore. "Beer clubs and microbreweries are expected to expand their reach and even target second- and third-tier cities all over India... premium and handcrafted beer have strong potential for growth," stated a report by global market research company Euromonitor.

At the microbeweries, which cost about Rs 6 crore on average to set up, it takes about seven hours to brew each variety of beer using imported ingredients. "It's a bit like how restaurants conceptualised the open kitchen format. So, if you liked seeing how your food was being prepared , why wouldn't you like seeing how your beer's being brewed?" reasoned Raju.

But there are hurdles. With liquor being a state subject, microbrewery operators have to obtain a separate licence from the excise department—an arduous task to say the least. To make matters worse, there are only a handful of states—Haryana , Karnataka and Maharashtra—that give out microbrewery licences.

"Getting a microbrewery license is a time-consuming task, because it is a licence that not only has to allow you to brew beers, but also sell them on your premises," said Gaurav Sikka of Arbor Brewing Co. Separately, getting people to recognise and appreciate their brews is a challenge as well. India, while one of the largest liquor markets in the world, has a tiny beer drinking population which has largely been brought up on a liquid diet of mass-produced lagers.

"Before going to study at the University of Michigan, I hadn't tasted anything like craft beer. I had never had anything like ale, never seen a black beer or an orange beer. Tasting something so full-flavoured left a lasting impression on me," Sikka said.

The 28-year-old is the first in the country to bring an existing micro-brewery—Michigan , Ann Arbor-based Arbor Brewing Co—to Bangalore. After returning to India in 2009, Sikka got in touch with Matt and Rene Greff, the owners of Arbor Brewing, where he discovered his love for craft beers, for a possible partnership.

"We never thought about exploring India as a market. But Gaurav invited us to check out the scene in Bangalore... We've realised that he is sitting at the cusp of what is going to be an incredibly dynamic renaissance of brewing and restaurants in India," said Matt Greff.

Sikka has invested close to $1 million in his microbrewery, partly with his own funds, and the rest from family and friends. The Greffs, who get a licencing and consultancy fee and own a small equity stake in the venture, have also completely immersed themselves in the operations of the microbrewery . Though it may be early days, Arun George of Toit Brewpub is already looking to compete with the best.

"We're planning to enter some of our brews in competitions across Asia for starters. It's a way of benchmarking ourselves against the best. We have good brews and it's time to match ourselves against the competition around us," he said.

Source : BISWARUP GOOPTU,ET BUREAU