It happens only in IIM-I

Some time back a few students from France were there in the campus. They were here for a term as part of the student exchange program. In one of the lectures that they attended this thing is supposed to have happened. The following is a simplified version of a true story.

It was early in the morning. Lets say 11:30 Am. A section of PGP2 had a class conducted by our beloved prof X. One of the exchange students from France had an urge to sneeze and let go without following up with an excuse. I wasn't there in that class but I guess the incident must have been followed up with a noisy nose clean up job, if anything. But nothing justifies what followed. Prof X, being the mercurial personality that he is, asked the student to leave the class. I don't know why he did this..lets take it at face value and move forward.

Apparently the French guy thought that it is not okay to sneeze and not apologize in Here. He assumed that he broke some sanctimonious protocol of India. He wrote to the consulate of France to help him out. He thought that the Prof had barred him from the subject altogether. The French embassy followed up with the Indian government which lobbed the issue to the HRD ministry who get back to the institute to reinstate the student.

Will I get in touch with Obama if I burp in the US of A?
Sorry I don't want to see Obama. I could do with a certain Carla Bruni's personal attention.

Familiar Feeling

Last night I was preparing for some quiz. One of those quizzes that happened with an announcement. Being the procrastinator that I am, I postponed preparing for it till 1 am. There were about 100 pages of bland HR stuff to read. All of a sudden feeling became one that's very familiar. The one where one is tired but still has loads of things to finish. Those rare moments where even the most notorious of the nocturnal tissues of the eyes give up. The only option is to crash in bed feeling depressed and unhappy with oneself. Damn when it happens.

This is another in the same lines. There are no submissions to make tomorrow. Time was available in plenty. And lots of long term work pending. One and the most prominent was studying Finance 2. Exams were near and Fin had grown to become a huge Demon. I was very good in Fin 1 but Fin 2 was a different ball game all together. It is like a snake that throws venom the moment you try to go near it. So the plan was to somehow try studying when I had a slight temptation to play a game of cricket in the F block courtyard for 20 mins under the newly attached flodlights. So I called some friends who at first gave a sensible reponse of turning down my offer. I should have stopped then..but no I didnt. Finally we started what was supposed to be a 20 minutes game.

It went on and on and on. When I finally stopped it was 12:20 AM. I lost most of the games, lost the Pepsi bet. Lost energy. Lost the enthusiasm to study fin. Thats when I login to my blog and continue writing from a boring piece that I had left in draft. It is a pity that you had to read it. Sigh.

Chicks, Me and Roopa’s Marriage

The buggers back in the college created a buzz in campus. I’d like to call three people referring to a thing about me, four times, a buzz. As I was planning my trip for Roopa’s wedding they spread a rumours, the buzz, that I am going to Chennai to select girls to become my prospective bride. Any publicity is good publicity. And anything that connects me and the girls is good and rare at the same time.

There is something in me that keeps me away from the chicks. Probably I am magnetized North and the Girls are also magnetized North. I frequently find myself drawn un-necessarily drawn away from one corner of the room and later see a girl occupying a spot close to where I was standing. Ohh God. When a girl who has nothing remotely interesting to do ventures close to me, and if it is that one in a million days that I am relatively confident, I try talking to her. But all the creativity I have musters a “Hello” or a “Hi” and a vacant stare. My brain sometimes even refuses to process the response to the nervous “Hello”, even if the girl is considerate enough to actually respond, I wonder why. Unfortunately answer to this question comes in hordes. For one, my pale, dull looks, second reason could be my boredom inducing nature that some call studious. It could also me the nerdity. Or many things else.

There I landed at the wedding wearing an Orange shirt. There, I was teased by aged aunties and bored to death uncles, as the eligible bachelor who was going to go next and all. But how, I wish to know. When my family was going through the process of arranged marriage for my sister, I quipped stupidly to my mom that she wouldn’t have to go looking for a bride for me. How stupid of me. Where am I going to find a girl and feel like talking to her. When am I going to say something interesting that she replies in non-mono-syllables. For those who knows math, multiples of three probabilities <0.2 gives near certain impossibility.
Most of my friends have girl friends. They all run telephone bills in the thousands. But I never understood the knack of talking while having nothing to talk. How the hell do the bastards talk for hours when my conversations with anyone beyond 3 minutes have never been remotely interesting? . This has always been the truth for me even during the phase that I am concealing in this blog. Anyways…

At the wedding some interesting things happened. I saw a few girls looking at me a few times. I think this is what teens call “being hit on”. At least I hope so –for if it is true, it will offer some confidence for a few weeks. Of course I didn’t say Hi to any of them. Partly for fear of being proved otherwise.

As of now, the prospect of me seeing a girl and being able to woo her and she getting wooed looks remote. Until things change, I’ll have to hope my mom didn’t take me seriously. Seriously !!!.

Start of Term 3

What do people do when the are bored, they write blogs. This is precisely what I am doing. Why am I doing this? other than the already hinted reason, I want to write about the new feel of IIM I that I have been sensing for a few days now. I will look back at this after a while to see if I was right. Thus there is a dual purpose. Kill current boredom and future boredom. Hurray.

Prof. Ravichandran of IIM A took over recently as the new Director of IIM Indore. He made quite an impression in his first very address to the students. He was sharp, witty and articulate. But then he was among the sharpEST, wittiEST among people whom I have heard to recently.He emphasised on the importance of the PGP course which gladened me.

He had mentioned about the National Youth Conference that he intended to hold, back then. Given the time frame of the event I was not sure about the feasibility, but then it turned out to be a great success. I was impressed by the quality of the lectures, particularly one on Safe India by Dr. Karthikeyan - ex director of CBI. It made it a good start for the 3rd term.

Then it was time for classes. We were in for a surprise in this front too. We had Prof K K Choudary from the Indian Stastical Institute to take up QT. To be frank, I had settled for what we had earlier and in the process became cynical. In this light, it was great to see the change that was on offer. Then it was time for Operations Management. We had Prof A H Kalro (served as Prof at IIMA and Director of IIMK) to handle the subject. That puts an end to the Goldrads Goal that we were at earlier (Good for you if you aren't from my class and still understand what I mean).

So all this means something to look forward to. Let us see. Let us see if the good times are for real or an India Shining.

RaviC Quotes

http://mckinseymind.blogspot.com/2006/11/best-of-prof-ravichandran-at-great.html

-Prof Ravichandran is the new director of IIM I

Reliance power IPO: A bird’s eye of the financial engineering with emphasis on the agency relationship.
By R Balachandran. Section D.

The company we know as Reliance power today was started in January of 1995 as Bawana Power Private Limited. It was rechristened several times and was finally named as Reliance Power Limited in july 2007.

The company has plans to develop 4 coal fired, 2 gas fired and 4 hydroelectric power plants whose completion dates range from December 2009 to March 2014.
Prior to the mega IPO of Reliance Energy Generation Limited, as it was called then, had shareholders fund of roughly Rs. 200 Crores according to its balance sheet and total equities of roughly Rs 201 Crores.

At this point the company drew aggressive plans for the next 8 years and planned a series of power plans as mentioned above. The next step was to raise funds for all those plants. Anil Ambani renamed the company as Reliance Power Limited and sold 10% of the to investors company for Rs 10500 Crores via the biggest IPO India has ever seen. It may be noted that 10% stake of the company whose assets were just 201 Crores were sold for Rs 10500 Crores on the basis of the elaborate plans developed. The remaining 90 percent ownership remained with Reliance Energy Limited and Mr. Anil Ambani (45% each) and just 10% with investors who subscribed to the IPO.

Post IPO, the shareholders funds were roughly Rs. 13500 Crores of which Rs. 10500 Crores were raised from investors who got 10% of Reliance Power. This clearly defies logic and reason. The investors ought to have a got a substantially higher stake in the post IPO Reliance Power.
During IPO Reliance Power shares were sold for Rs 450 each. At that time market was bullish and analysts had predicted that shares would reach Rs. 650. Mr. Ambani holding 45% directly and more through Reliance Energy Limited would have become India’s richest man had the shares crossed Rs. 650. But unfortunately that never happened. In any case this analysis encourages speculation on the real reason behind the IPO.

Upon listing price of Reliance Power share price dropped 17% by end of trading on listing day. The fall continued a few days. As a stopgap arrangement, Reliance Power issued a bonus to the IPO investors 3 shares for each 5 shares they had. This brought down the cost of Reliance Power shares to IPO investors to Rs 269 from Rs 450. This move was completely arbitrary. If the real worth was Rs 269, then IPO should have been priced at Rs 269.

45% of Reliance Power belonged to Reliance Energy Limited. The bonus issue would have degraded the worth of the Reliance Energy Limited’s investment in Reliance Power, which would have degraded the worth of REL shares. Mr. Anil Ambani acted in the best interests of Reliance Power at the expense of REL’s shareholders. This is clearly an agency problem. To compensate for this and avoid lawsuits, he compensated REL’s shareholders with 2.5% stake in Reliance Power from his personal holding in the later. This move again was totally arbitrary.
In conclusion, it is obvious that the whole exercise enriched Mr. Ambani at the expense of Reliance Energy Limited and Reliance Power’s shareholders.

The gas-fired plants of the Reliance Power’s mega plans depended on gas supplied from KG Basin. The agreement for KG basin gas was drawn before the famous Anil Ambani –Mukesh Ambani spat. The price of gas decided at that point was Rs. 2.5 per MBTU. Post spat, the KG-basin went to Mukesh Ambani. The viability of the gas-powered plants depended on this pricing. But now Mukesh Ambani is unwilling to sell gas at that price. It may be noted that the market price of gas internationally is at Rs. 12 per MBTU.

The lawsuits that have currently surfaced for the gas pricing, further degrades the value of Reliance Power shares affecting shareholders.

Why MBA.

This is an abstract article. I will put in a few concepts and analogies that have very high chances of being disconnected to your view of logical correctness. So be aware and decide whether you want to read this.

Coming to the question, Why MBA. I was grappling with this question a few months back when I had to fill business school application forms. I had no clue as to what to write. Even at an intuitive level, I started doubting whether I was really born to be a manager. I anyway did fill something in the space provided for that question and going by what I had written there, I don’t know why I am here in IIM. The trouble caused by this question was enormous for me. I think of myself as someone who knows what he does and exactly why he should do it. So I had to find answer to the question. I think I’ve belled the cat now.

Conventional wisdom says that we have two types of sciences, pure and applied (I would use the words sciences and knowledge interchangingly). Going into what they are unnecessary considering that the possible audience of this blog. So it would suffice to say that pure sciences deals with atoms, molecules, magnetic field, gravitation, optical properties, etc –i.e. that abstract but real concepts and Applied sciences deals with engineering based on existing state of art of pure sciences and create products and services (from here on I will use the word product to mean product and services) that improve the standard of life. Frequently it is debated as to which is better, which is more important for people, etc, at an intellectual level. But from welfare point of view obviously both go hand in hand and have complementary relationships, as in it would be totally useless to have knowledge of pure sciences and do nothing which would make use of such knowledge similar to spiritual knowledge that people claim have or have no knowledge and try to make products which would be similar to designer cloths which no one knows where they derive value from.

People make their choices between pure and applied sciences based on their skills or more accurately based on their intuitive yearn. I made that choice. I would say at an intuitive level and I studied Engineering. Engineering was definitely not thrust upon me and I enjoyed it a lot. Fine thus far, but where to fit in management is the question that I am trying to answer.
Driving forward the notion of knowledge being pure and applied, there is a third genre in sciences that is management. Consider the reason as to why companies exist. Most of us will say, to make profits –yes, but that is just a part answer. A company basically creates and sells value. A car manufacturing company creates value for users in the field of transportation with luxury and creates a product that addresses this. Similarly Boeing manufactures planes, and apple manufactures IPods. These companies make money in the process of identifying and addressing a yearn –mostly unstated, among people. The objective of this article is not to discuss the objectives of companies to exist, So I leave it here, with the not-completely-substantiated thought that companies exist to create value.

Just as applied science exploits and depends upon pure knowledge to create useful products and services, management exploits these products and services for the betterment of human life. Management deals with the processes of determining the lacunae that it could fill (opportunity identification), invests in products that fill that lacuna (Research and development), creates those products (production) and places its products in a way that makes most people are benefitted (Sales and marketing). So basically efficiency in management leads to maximizing the cumulative benefit provided to customers of the product that an engineer created in the first place.
To answer the original question, with this knowledge, makes the intuitive yearn for management education pretty explicit. It suits my personality more to control this big picture of benefit rather than restricting myself to just producing the product. This is the same ghost (personality) that originally intuitively pushed to applied science as against pure science.

Let me crystallize the thought further by giving an analogy. Consider and Archer. The pure science is like the steel necessary for the bow. Applied science would be the bow itself, which wouldn’t have been possible without the steel but is much more useful than the steel. The Archer is like Manager who fires the bow in the right direction to hit bull’s eye. Choose for yourself where you want to belong. I want to belong to the Archer zone and I know it now.

At a certain level, an IAS officer(Indian Administrative Service, i.e civil service), is also a manager. His job is also to identify the resources, apply them properly, see to it that the system, i.e. application of resources- is happening properly, do firefighting when called for, etc. So he is also a manager and he, although, may not know, also deals with Management Science. Why restrict us to an IAS, even a politician is a manager. A manager with the greatest power and responsibility. A someone who can cause maximum benefit to the maximum number. So should one become a politician, yes, but only if he thinks he is good enough and thinks that current system will allow this kind of an attitude towards governance.

Let me conclude this article linking another favorite topic of mine, to management. Our country, India, has lot of intellectual people with exceptional potential for the betterment of pure, abstract and management sciences. The problem is, the potential gets manifested only for a few people with vast majority being wasted due to lack of education. In this context the role of a manager is pertinent as in he should apply his sciences to find ways to educate the maximum number of people with the minimal amount of resources that is at his disposal. Now whether the yearn to solve this problem more than inventing the next hot gadget that has the potential to become a best seller? Answer this to know whether you are an engineer or a manager at heart.

-R Balachandran
Class of 2010, IIM Indore


p.s. This article has been written with a view to share and induce thinking. It is not even in the least intended to serve as a guide to answering interview questions. Use it accordingly. Also be aware that this content is present online and any plagiarisation is easy to find.