Towards 4th Issue

An effort by Stockyard in association with Mantra Consultancy Group

towards….

Unstoppable Argumentative Indians

www.stockyard.infinites.net

10th May2008

Issue 4

Content Argumentative Indians Indian Premier League Sector Report: Oil&Gas Corporate Radar Macro economy Frying Oil Guest Column Kalaripayattu

From Editor’s desk

T

“ owards…?” has finally crossed its 4th step. We believe ,day by day, issue by issue, magazine is getting appreciated and accepted by intellectual readers and our corporate partners. Towards…? ,is not just meant to be served to only our corporate and business friends…rather it is meant to spread a bigger massage of inclusiveness and bringing focus of India Inc towards a larger issue of nation building. For it is if

nation prospers, we prosper……

We believe, that India as a nation, as a society and as a cult is fast transforming….As I always say…this is a nation in the making….up into chapters of History…We have never been evolved as a nation….that reckons right from Kashmir to Kanyakumari…Assam to Gujarat… But now….with people in business ….and in knowledge society are fast conforming it into one nation….. It is great to see a thriving nation, full of activities and transformation…..full of energy and positivity….. I believe, corporate India has to play a much bigger role….and more so…for the Young Turks of India…that claims itself to be Unstoppable…..we name it Unstoppable Indians…..same people ..who can buy businesses 10 times bigger than their own…can negotiate with Walmarts,Shells Fords and MTNs of the older version of the globe…can take world on a stride….. We salute that revolutionary India….but task ahead are much tougher…. For it is to the same India…that has to take the blueprint or the roadmap of New avatar to remote Bharat version of the same nation…For the same Entrepreneurs…to take their growth agenda to bigger masses…to left out ones…..Remember ..it was only because these two nations could coalesce and could take the dream together…that we see all the difference….in post 1991 era…..

As someone aptly said….each day many people from that side of argumentative,sceptic and orthodox India are crossing the iron thorn fenced boundaries and entering into this side of unstoppable, ambitious and dreamy India…….Now it is high time,,,we destroy this old wornout walls between these to nations..India and Bharat….to converge in one great nation….

I believe, it is in the interest of Corporate India and also we,,,as part of 350 million+ middle class to take the initiative and gap this widening divide if at all we want our own success and prosperity to be sustainable……Gone are the days when rich and poor, haves and have-nots, stronger and the weaker could stay and survive together…… Definitions are fast being changed….rules of the game are fast being rewritten…..it is high time …share your part of responsibility towards..Your nation…your society…your people…your earth and yourself…… And if you fail to…..you are doomed to finish…destined to put yourself in the black-books of history…. We do not want our children to remember ourselves as cowards and selfish...who got an opportunity to change the lives and fate of millions but dare not to……… With these massages, 4th issue of towards…? …is in your hands….

With love and Affection

Argumentative Indians Sometimes, to me this country

This is some of what happening around…………………

looks hopeless. If you observe China has a special Cyber Army which is getting prepared for a much more sophisticated assault on India. The sustained assault goes back things around you little more with the political and military disquiet between the two countries. closely you will find the nation is According to a very classified information from Internal affair ministry getting crippled day by day. and Cyber vigilance departments, Chinese cyber systems are Before each election, one or progressively, methodically and tactfully intruding and penetrating into crucial Indian official networks and recruiting their cyber Informers in other political group tries to the system that can possibly be used to deactivate and dysfunction spout venoms against one or the crucial systems at the times of conflicts between two countries. These other group.Mr Raj Thakarey, attacks are not isolated incidents of something generic or basic as these days seem to be quite hacking, but far more sophisticated and methodical. The core of these active against North Indains, assaults is that the Chinese are constantly scanning and mapping India’s official network. There is already an attempted assaults on NIC especially Biharis.It is very sad (National Informatics Centre), National Security Council and Ministry of that, in India, some people are External Affairs. A quite effort, it is said, is underway to set up defense being treated as immigrants. We mechanism. have been hearing about these According to the statement of India’s Chief of naval staff, the head of things against Indians in South Indian naval Force, China is deploying number of nuclear submarines Africa, Europe, Fizi and other encircling Indian Territory across the Strait of Malacca and Eastern parts of World, but never regions bordering India. These submarines are equipped with expected this to happen with sophisticated Submarine ballistic Missiles with nuclear warheads that can penetrate deep into any part of India without easily getting Indians in India itself… It seems detected. as if few people have bought the country and are rulling, or In Baster District of Chhattisgarh state, every second house in tribal areas is infected by malaria. There has been reported death toll of ruining it at their whim, just to more than 100 tribal children from Malaria at the time when malaria is gain political millage.This trend is completely curable. The district health department does not have very dangerous as it weakens the enough medicine for people in the area. This is not the sole incidence basic fabric of India as a nation as this happens everywhere in Country with tribal when our and may start a vicious cycle of government is busy in giving them reservation while they are deprived of even the basic amenities. hatred and disunity. There are issues, numerous issues…some Our great Health minister is busy enough in banning liquor and with development, some with smoking on screens and cleaning AIIMS from someone like Docter Venu Gopal. Alas our minister could have rather paid little attention to the lags in it and more importantly fake medicines available in the market and did a little to take care that with its equitable distribution. It proper medical facilities reach to all nooks and corners of the country. looks that few people like Mr Arjun Singh are still living in the Agriculture, we all know, in this country is in a pathetic state. Our beloved Agriculture minister Mr Sarad Pawar has actually joined mindset of before liberalized another ministry that is called Cricket Ministry and perhaps has no time quota, reservation and licenceRaj to look after poor state of agriculture. mindset. Reservation in it most elementary form itself, attacks the merit and democratic fabric of nation. The burning question that youth need to ask from all our grannies that why do you need a reservation even after 50 years of reservation. Is not it a failure of the system that it could not create enough jobs, opportunities and space for each and every one to grow? How much more time we need to create a space for every one?

Why we need to squeeze somebody’s opportunity to make room for some one else. Keeping all my support and empathy to every one in politically, economically and socially backward section, one need to ask, why we still have those differences? Why we could not create a just an equitable society in 50 years? Why do we still need reservations? An answer is very obvious…There is some one who does not wish that you, at all, grow…some one whose very supremacy is at stake if, at all, you grow up from your age old imposed backwardness and slavery. Remember democracy is the monarchy where they rule over your mind, giving you false impression that your body is free. For freedom of the body hardly matters when your mind is slave. And they attack you is from all sides. These Arjun Singhs ,Raj Thakereys and Sonia Gandhis will never let you be empowered. They will never let you feel that just being Indian makes you equally eligible than any one else to stake your claim on anything, anywhere and anytime to whatever is of India to be your. They will never let you feel that you own India. Rather they will tell you that they are still trying to make India yours and you should perhaps vote them one more time to power if at all you want your safety in an India which is not yet yours. And what are the Advanies, Uma Bhartis, Vinay Katiyars, Prakash Singh Badals, Janrail Singh Bhinderawalas, Narendra Modies and Imam Bukharis of this country are doing? Well! they are trying to convince you that your religion is always at war front from other religions. For it is for them that they are safeguarding your religion, culture, caste, state or language from those of mine. And if you observe little more closely, they will always attempt that YOU REMAIN AGAINST ME ALWAYS .We and YOU may be Bihari –Marathi, North Indian-South Indian, Tamil-Kannadiga, HinduMuslim or any other differentiation. And I have been seeing these hostilities to always aggravate during election times. They forget that post election; they leave some open wounds, burnts and stigma of hatred. That remains teasing forever.

Is not this country just hopeless…? Now look at this…. Several Suply –Chain issues, that let our over 40% agro produces get spoiled. Less than 15% people 10th +. More than 60% people below poverty line. And if you observe ,you will feel that these are not only people who are creating nuisance at the political arena , there to be blamed…for there is one more picture…that is equally grimmer. I, as a young citizen of this great nation and as a representative of 110 billion + people of India, hold responsible all those who are blocking its prosperity and growth in any way…. Leaders like Madhu Koda, Prakash Karat and many more are equally responsible for they are the once who got chance at the helm of affairs but did not do any thing to bring this nation at the path of growth.

Remember growth opportunity foregone is the growth and prosperity denied to all the citizens of India, which in itself is a crime. It could be one more election time. Elections are around the corner. Take a new initiative, grab your leader’s collar and ask them WHAT THEIR AGENDA IS FOR THIS NATION? WHAT ARE THEIR THOUGHTS ABOUT INDIA AS A NATION NOT ANY SPECIFIC RELIGION, CASTE OR REGION? India, sometimes I feel has yet not emerged as a nation in ideology. A nation is not just a politically sovereign geographical, demographic establishment. Nation is a spirit that binds all its dwellers in ONENESS where sense of belongingness supersedes all differences and proclaims…WE ARE ONE...ONE NATION…ONE POWERFUL..EMOTIONAL UNITY…….and I feel, this sense of belongingness is still missing in all of us. I know…and so do you…we in India have several issues to be resolved before emerging as a strong nation and we all at some point or other have felt….that….this nation is hopeless…..simply hopeless…..

But is there a way out….? I think yes…..there is a way….. Why do not we start from the point we are at , exactly now…? Lets start it…..start creating your India..Share it with me…its problems…issues…difficulties…good and bad things…everything that has its share in this nation….and when I say nation…I mean distant Kashmir…in deep militancy…..Far north East…in separatist camps……….remote village of Bihar, Orissa or West Bengal…where no light of development has reached…… And when I say India…I also mean all those affluent people who are busy in extravaganza of IPL 20 – 20 at the time when more than half of nation is fighting its battle against poverty, malnutrition and ignorance….and exactly at the time when millions of soldiers are facing lethal bullets at their chest guarding our borders……at the same time when some people are making money selling the coffins of martyrs of kargil……at the same time when naxalites are slowly and steadily creating a separate country full of hostilities against your own nation…at the same time when an Adivasi(tribal) is getting killed in Assam by ULFA….…at the same time when a poor laborers from remote village of Bihar is being kicked away from Maharashtra to alter on political ambitions of Mr Raj Thakeray……at the same time when we, in India hold Lakmey fashion week …..at the same time when Salman khans charge Rs 50 crore per movie…aat the same time when millions of dollars are being wasted on cheer-girls…….at the same time when you and me are burning hundreds and thousands on birthday parties at PVRs and Mc Deys …at the same time when…..there is one boy of around 6-7 years is not attending basic primary school to work in a garage……at the same time……when India is taking birth…….and being foetisized in mother’s womb…..at the same time when someone tries to divide you ….at the same time……when I and You are just mute spectators… ………at this very moment…i….and …you can rise up …hold each others hand …..and …….create a strong nation which if free from all slaveries……….at the same time…few Baba Amte….Kiran Bedis….Anna Hazare….Sandeep Pandeys …..Dalai Lamas…..Rajendra Awasthis ….Mohammad Unush…..are doing their best to change few lives…..

Indian premier league IPL: Transition of Cricket from a Gentleman Game to New Business Venture

In INDIA, Cricket is the only sport which unites every generation and creates sensation with its thrilling atmosphere. It is played & watched in almost every part of our diversified society & culture. Huge fans following base had made the Indian cricket control body one of the richest among all the sports. As Indian economy is 2ND fastest growing nation with its young population, per capita income is also rising and that makes the huge surge in average disposable income. Now this young generation wanted live entertainment in smaller period and if that comes through their favorite game cricket then nothing can stop popularity of this game further. Indian cricket league(ICL) headed by Essel group ( Subhash Chandra) was a similar move to exploit this opportunity but BCCI saw this as a threat as a future competitor of the game of which it had a complete control. So BCCI also launched Indian premier league (IPL). Both of them came with a new but fast version of cricket that is 20-20 over match. ICL is already over with an average show but IPL started with a big bang and running successfully. Cricket frenzy fans are flocking to the stadium and making this tournament a big hit. One of the biggest surprises had been observed during the earlier IPL matches was the strong presence of women and children who normally remain away from the matches. This

clearly indicates that IPL is not only offering plain cricket but ultimate pleasure and live entertainment from which no age group is refraining. This 3 hour game in late evening could be compared to an evening movie show which is not that appealing. People wanted a change and that had been availed by T 20-20. Like the famous base ball or soccer matches between the city clubs in Europe & USA which attract huge crowd and these clubs have big name , IPL city based teams are also vying to stand in that famous league. It is too early to be said about the sustainability of this format but in short period it seems to be a huge hit. Indian corporate also saw the opportunity to make money out of this energetic game and hence a lot of money is flowing into the game. Huge bidding amount by the big corporate and celebrities (Reliance…..Mukesh Ambani, Kingfisher…Vijay Mallya, GMR, India cement, SRK, Preity Zinta) for the team franchisees is a clear example. Reason is pretty simple….Money the Financial Benefits & Marketing Benefits. Some of them are here for money some for brand building proposition and few of them for both. Now who gets what and up to which extent will be interesting to watch. Some of them call it as a calculated gambles….only future will decide the fate of these franchisees and their owner’s action to be in or out from this people loving action buzz.

T 20 -20: Future Prospects As India’s wealth base broadens, consumers will demand and be prepared to pay for more and better live entertainment opportunities. Watching live sport is a major weekly pastime in the world’s advanced economies - approximately 400,000 attend Premiership football every weekend in England generating nearly $5 billion in match day revenues (tickets, premium seating, ground concessions etc). In recent years international music acts such as the Rolling Stones, Shakira and Black Eyed Peas have played to packed stadiums in India – the Indian public are starved of high quality entertainment opportunities. A star studded Twenty20 cricket tournament will help to satisfy this increasing demand. The chart below clearly indicates the popularity if T 20-20 especially when Indian team is playing in that. So if we see the revenue side the money from TV Rights, advertisements will keep coming. Cricket has a big market in India there is not any big competitors of it.ICL could be one of the major competitor for IPL in coming time. But it all depends upon its accreditation by ICC and capacity to attract famous foreign & domestic players.T20-20 formats in other countries like England or Australia could affect mildly in terms of availability of their players. However viewership wise there will not be any major impact to IPL because Indian cricket viewers are more than the total cricket viewers around the world.

Sources: IPL Franchisee Prospectus

T 20-20: A Boon or Bane for the Future of the Indian Cricket Helping Cause to the Cricket:  Full entertainment to the viewers.  Young & regional players will get a chance to play with international players. This would definitely boost their confidence.  Huge revenue income through this tournament will be spent the development of better infrastructure like stadium, fitness centers, training centers. The level of local cricket will improve.  Shorter version of the game could be more popular in Europe and America when people prefer short duration games. This would help in increasing cricket fans all around globe and make it more appealing.

Ugly form of the Cricket:  As huge money following this game. Already, almost $1.7 billion has been wagered on the IPL, Real spirit of the game will be lost.  Players will lose focus on the real on field performance.  City based team will have their own fan following and that would create regionalism among the fans and also up to an extent in players.  Performance of the National team would suffer because the players will get less time to practice and excess cricket will cause fitness problems to the players. All the above points are not based on any facts or figures but from the general perception of cricket analysts and experienced players. Since everybody has their own explanation and justification some of the readers may not agree on above assessment. Sports Franchisee Business: A Brief Overview  Many of the world’s top sports competitions are run on a Franchise basis – NFL, MLB, NBA, NHL, MLS, Super league, AFL  The Franchisee enters the league by investing in a Franchisee  The Franchisee receives a share of the central revenues and has the opportunity to develop and retain local revenues  As well as benefitting from a number of realizable assets, the Franchisee is perceived as a “good corporate citizen”, and receives significant public relations and marketing benefits  As the league matures the revenues grow and the brand develops, the capital value of the Franchise grows  Franchises are traded under terms agreed between the Franchisor and the Franchisee  The Franchisee’s investment is secured by guaranteed continued participation in the competition  Expansion Franchises are awarded in a manner designed to benefit the existing stakeholders The valuation of Manchester United is £9 billion. The sheer number of people viewing cricket in India is much more than soccer viewers there so we can estimate the monetary benefits of this model in sports (Cricket) in India.

Reasons of the failure of Indian Cricket League(ICL)…. It has been launched by Subhash Chandra in May 2007; ICL is a unique concept in cricket after Zee was not able to secure rights of the World Cup 2011. ICL initially had six teams which have now increased to eight (over 200 players). All these teams were owned by Subhash Chandra unlike the eight teams in IPL owned by different franchises. The investments in ICL are in excess of Rs1bn. ICL has evolved despite several constraints like unavailability of venues, national-international cricketers & other professionals associated with ICC. It had a TVR of 1.2. Its revenues till date have been Rs750mn and are expected to break even in FY09E. Unlike IPL, ICL had not any clear financial details about its Business model san investors to put their money.

Business Model of the IPL

 8 Franchised City teams will compete – Franchise numbers will increase over time with founder Franchise’s rights protected.  The inaugural IPL season which has already started on 18th April will run for 44 days.  Each Franchise will play each other home and away – 7 guaranteed home matches per Franchise (Each NFL Franchise has 8 home games).  The top 4 Franchises in the league will contest the semi finals and the victorious semi finalists will meet in the Grand Final all over one weekend.  A total of 59 matches – this creates a total of 177 hours of live “content”.  The 2 IPL finalists will advance to the new Champions Twenty20 tournament provisionally scheduled for October 2008.  Matches will be played to ICC World Twenty20 regulations.  SONY-WSG has bagged broadcasting rights for 10 years for US$918mn, excluding marketing for US$108mn.  The franchise amount collected is US$724mn, with each of the clubs being sold for US$67112mn, depending on the city.  Besides acquiring teams, each of these franchises has spent US$6-7mn on acquiring players for their teams. Financial Prospects of IPL Making it financial viable and low risk game in long term Lalit Modi (BCCI Vice President & IPL Chairman) the man behind IPL has ensured that a top broadcaster and eight large business houses will have an equal financial interest in making the IPL a success. At the same time, he has spread the

business risks across three sets of stakeholders—the broadcaster, the franchises and the BCCI. Like other franchisee formats IPL has categorized their sources of revenues into two forms: Central & Local Central  Media Sponsorship

This is after reducing the share of BCCI from the Central Revenue. The rest money will be distributed equally to all franchisees.

 Official Suppliers Local  “Gate”  Franchise title & shirt sponsorship  Local sponsorships & Uniform merchandising  Hospitality and premium seating  Matchday concessions & Matchday promotions  Tournament winning prize (Around 12 crore)  Franchise media platforms e.g. Franchise channels and websites

Expenses of the Franchisee  The Franchise fee  The player salaries and the Franchise executive, management and coaching salaries  Marketing Costs to build the brand of the Franchisee  Stadium leasing costs & Matchday costs – e.g. staffing, security under guidelines provided by the IPL 

Franchise offices , administration , travel & accommodation

IPL- already a US$2bn property thanks to huge money pouring through media & sponsorships rights and from franchisee bidding. First: The Broadcaster For the $918 million the Sony-WSG (World Sports Group) combine has paid, it will get a minimum of 12,744 ten-second ad spots every year. Sony expects to sell these slots at a card rate of about Rs 2.53 lakh each. Be conservative I have taken only 2.25 lakh for each 10 second ad spots. Advertisers typically pay a peak value of Rs 3 lakh for a 10-second slot in a test match, Rs 5.15 lakh for a one-day international and Rs 8 lakh for a top-notch Twenty20 international. At a card rate of Rs 2.25 lakh the Sony-WSG combine stands to earn Rs 286 crore in advertising revenue in the first year. Still, this is not a bad first-year return on a Rs 3,672 crore ($918 million) investment made over 10 years. Cash flows for Sony & WSG

Cash Outflow Cash Inflow

1

2

3

4

5

6

7

8

9

10

367.2

367.2

367.2

367.2

367.2

440.64 440.64 440.64 440.64 440.64

285.75 314.33 345.76 380.33 418.37 460.20 506.22 556.85 612.53 673.78

By third year end Break even is on the cards and that may go very especially if there is the promise of a huge upside if the IPL takes off. "If the tournament does well, the ad rates could well cross Rs 8 lakh," Second: The Franchisees The eight successful franchise bidders. While they have paid anywhere between $67 million (Emerging Media for Jaipur) and $111.9 million (Reliance for Mumbai), they will also receive about $75 million over the 10-year period from assured payments coming from the central pool. This is a rough estimate based on a simple model, though the IPL follows a graded structure. "The IPL business model has minimal risks. Even if the tournament gets a lukewarm response, the franchises are assured of covering 60% of their expenses through the central pool fund. Indian Premier League: Will Franchisee break-even? The success of the IPL in the long run depends on whether the team owners would be able to breakeven in the near future. While some of the franchisees have expressed the confidence that they will break even within two to three years, doubts remain. To diversify their risk some of the franchisee owners are planning to raise funds though private equity by diluting minority stakes. Chennai Super Kings, the team owned by India Cements (ICL), has been approached by private equity investors.

Cash flows for Franchisees

Particulars/Years Cash In Flow Central-Tv Rights Central-Sponsor Ships Local Team Sponsorship Gate Money Shirt Sponsorship Stadium Advertisements Merchandising Total Cash Outflow Franchisee Owning Fee Players & others Salaries Marketing & Branding Costs Stadium & Allied Costs Team Administrative Costs Total EBIT

1

2

3

4

5

6

7

8

9

10

36.7 6.8

36.7 6.8

36.7 6.8

36.7 6.8

36.7 6.8

44.1 8.9

44.1 11.6

44.1 15.0

44.1 19.5

44.1 25.4

14.0 12.0 5.0 7.0 3.0 84.6

14.0 14.4 5.0 8.4 3.6 89.0

14.0 17.3 5.0 10.1 4.3 94.2

16.8 19.0 6.5 12.1 5.2 103.1

16.8 22.8 6.5 14.5 6.2 110.4

16.8 27.4 6.5 17.4 7.5 128.5

20.2 32.8 8.8 20.9 9.0 147.3

20.2 39.4 11.8 25.1 10.7 166.3

20.2 47.3 16.0 30.1 12.9 190.0

20.2 56.8 21.6 36.1 15.5 219.6

40.0 22.0 12.0 2.0 7.0 83.0 1.6

40.0 22.0 16.8 2.4 8.4 89.6 -0.6

40.0 22.0 23.5 2.9 10.1 98.5 -4.2

40.0 27.5 32.9 3.5 12.1 116.0 -12.8

40.0 27.5 36.2 4.1 14.5 122.4 -12.0

40.0 27.5 39.8 5.0 17.4 129.7 -1.2

40.0 38.5 43.8 6.0 20.9 149.2 -1.9

40.0 38.5 48.2 7.2 25.1 159.0 7.4

40.0 38.5 53.0 8.6 30.1 170.2 19.8

40.0 38.5 58.3 10.3 36.1 183.3 36.3

All the calculations for one franchisee by taking on averages revenues from central & local pool for 8 franchisees IPL prospectus suggests that these franchisees could command valuation akin to premium brands - a Price/Sales ratio of 3-5 on an average. These high valuations are in league with English premier league clubs like Manchester United. If we take a Price to sales of 4, then the Mumbai team, which went for $112 mn needs to show annual revenues of $28mn, or Rs 110 crore. This would perhaps need Rs 75-80 crore from local revenues. Any valuation gains may come only when revenues significantly exceed this. As per my projection this high Price/sales ratio will be only possible after 6-7 years by taking a conservative approach that the present financial condition will at least prevail if not much better. The cash flow analysis corroborates the point about the low risk of this investment made by the Franchisee owners. But the towering valuation of $5 bn for every franchisee seems to be very flattering one.

Third: Role of BCCI From this exercise, the biggest winner remains BCCI. The way the deal is structured, BCCI seems set to make almost riskless income of around $1bn from IPL. This income will primarily come from the $723mn or so that the 8 team owners have bid to own the teams. BCCI will also get a minority share of TV rights, ranging from 20% in first 2 years, to 40% from year 6 onwards. BCCI will get 40% of tournament sponsorship money. BCCI or more specifically the entity IPL that it has set up has largely an advisory role. There is no particular fixed cost it incurs. IPL is supposed to do things like award commercial rights, two big legs of which – the TV rights and the team ownership – are done. It also has to set up tournament schedule, provide umpires and match officials (the franchisee bears the cost). Compare this with say a consultant or a private equity partnership and you realize how good the deal is for BCCI. The general partners get a 2% fees and 20-30% of profits. Here BCCI gets 20-40% of net incomes from TV and tournament rights. Clearly BCCI benefits a lot from its monopolistic hold on the game.

Concluding Words When everything goes well, no body complains….remember the subprime crisis…..subprime was quite successful in its initial phases but when subprime borrowers started defaulting on their mortgage payments…the castle of financial securities got demolished. In some ways, IPL is like a castle of cards. Spectators and viewers form the base. At the second level is the BCCI, using its might in getting big Indian and international players to play in the IPL. At the third level is the broadcaster, whose $918 million seed money has been leveraged well. At the top of the deck are the franchises. But the foundation of the castle is India’s cricket-hungry public. If they fill up the IPL stadiums and stay glued to Sony’s live coverage, the castle will stand. If they stay away, the castle could come crashing down. If that happens, BCCI will suffer the least, financially at least. SonyWSG will take the biggest blow because it is the biggest financial investor in the IPL. And the franchises may get away with a few millions in losses.

Contributed by Vibhor ICFAI Business School, Hyderabad

Sector Report: OIL&GAS Based on Report by KPMG: By world standards, India’s current level of energy consumption is very low. With a target GDP growth rate of 7-8 % and an estimated energy elasticity of 0.80,energy requirement is expected to grow at 5.6 – 6.4%.This would mean a 4 times increase in India’s energy requirement over the next 25 years. Demand for Oil, comprising of 36% of India’s primary energy consumption, is expected to grow both in absolute and percentage terms to 196 MMT in 2011-12 and 250 MMT in 2024-25. Demand for Oil is expected to rise at an annual growth rate of 3.6% from 2004 to 2025(250 MTOE).During the same period, domestic production from existing developed reserves expected to grow at approximately 2.5%. This gap in demand and supply will catapult India to one of the largest consumers of crude Oil along with China. India and China, together will account for 35% of the world’s incremental energy demand. To address the growing demand-supply gap, the government has stepped up exploration and production efforts through private participation under the NELP, and has also developed a more holistic strategy for acquision of equity in Oil abroad. ONGC Videsh Ltd, the wholly owned subsidiary of ONGC, is now active in 15 countries in Asia Pacific, Latin America, Middle East, Africa and Russia. Other Indian companies like RIL, Gujarat State Petroleum Corporation Ltd.(GSPC) and Videocon are actively seeking Oil and Gas blocks across the globe. Policy and Regulatory Framework: The Government has allowed 100% FDI in exploration, creation of pipeline infrastructure, refining and in downstream retailing (subject to a minimum investment in mid-stream and upstream sector). E & P players are entitled to a 100% tax holiday for 7 years, with respect to profits earned from production of mineral oils.

Investments under NELP: 6 rounds of competitive have already been done, under which, 162 blocks were awarded and in-place volume estimated at 600 MMT of Oil and Gas have been discovered. The recent NELP-6 was a success with 165 bids being received from both domestic and international companies for exploration rights. DGH (Directorate General of Hydrocarbons) has already announced the 7th round of bidding for 57 blocks. Salient features of NELP-7: Upto 100 % foreign participation. No carried interest by National Oil Companies Freedom to market in domestic market. IT holiday for 7 years starting from year of production. No custom duty on imports required for operations. Option to amortize exploration and drilling expenditure over a period of 10 years from 1st commercial production. Royalty payable to the Government ranges between 5 to 12.5%,based on the type of operations. India as a refining hub: Lower construction and cash operating costs. Strategic location en route of Middle East Crude for East Asian and Pacific-rim markets Expected world –wide deficit caused by the shut down of small and uneconomical refineries around the world The inability of oil majors to invest in refining assets during last decade and significant increase in the Chinese demand has accentuated the deficit. There is a planned capacity addition of 80-90 MMTPA of refinery in India in the next 4-5 years to the existing capacity of around 149 MMTPA.

RIL is constructing a 28 MMTPA refinery at Jamnagar which is expected to be operational during the financial year 2008-09. HPCL has entered into a partnership with Mittal Investments, to set up a 9 MMTPA refinery-cumpetrochemical complex at Bhatinda. IOCL has planned investments of Rs 230 billion for several refineries. Significant investments are also planned for up gradation of existing refineries to meet specifications as per Euro 4 and Euro 3 (implementable by 2010).

India’s Trade of Oil Products:

India’s trade in Petroleum products is driven by sustained increase in refining capacity ,driven by cost advantage over erstwhile importing countries.Currently,India possesses surplus refining capacity generating exportable products. Significant proportion of exports is driven by petrochemicals sale by RIL. Building a strategic petroleum reserve: The Government has taken steps to set up strategic crude oil storage reserves at various locations, improving the country’s ability to respond to short term supply disruptions.

GAS SECTOR Per capita consumption of Natural Gas in India is currently amongst the lowest in the world; at 29 cubic meters compared to a world average of around 538 cubic meters. The present share of natural gas in the energy basket is only 9% compared to a world average of around 24%.. The demand for Natural Gas at about 180 MMSCMD in the country has far outstripped supply (about 95 MMSCMD).and there has been an increasing trend towards emergence of new Natural gas demand as well as conversion from existing fuels to Natural gas. By 2025, India is expected to bat both China and Japan in becoming Asia’s largest Natural Gas consumer. Demand is expected to be in the range of 350 MMSCMD.The share of NG in fuel mix is expected to go upto 22% by 2030. 80% of NG demand is met from domestic sources.70% of NG market is made up of the power and fertilizer sectors.

LNG as a substitute for costlier Naphtha has seen increasing absorption in the domestic market. The lack of a cross –country gas pipeline to enable transmission, the emphasis on coal as a preferred fuel for power generation and the gradual emergence of Coal Bed Methane have made LNG increasingly uncompetitive for power generation in short to medium term. Coal Bed Methane (CBM) and Underground Coal Gasification Opportunities: With proven reserves of 765 MTOE and indicated reserves of between 1,260 and 2,340 MTOE, CBM could be a great opportunity. More than 26 blocks are already awarded so far and more to be taken up as part of future phase of CBM bidding. Compression of CBM and marketing as CNG could be exploited in potential industries as a monetization option for stranded gas. A related exciting technology is that of underground coal gasification. Given India’s large coal reserves, the UGC technology could potentially produce volumes of multiples of India’s free natural gas reserves.

At least 30 cities are going to adopt city-wide gas coverage by private and public players as compared to 6 cities today. Companies in this space: Oil Drilling Company Name Jindal Drilling

Equity 11.47

Gr. Blk

PATM

B.V Rs

EPS Rs.

18.99

5%

211.3

16.6

74.1

5.82

Sales

NP

56.4

413.23

P/E

P/BV

Oil Exploration / Allied Services Aban Offshore Lt

7.56

1146.99

658.41

168.7

26%

194.9

44.6

78.7

18

Alphageo (India)

5.12

82.45

54.29

7.65

14%

55.5

14.7

38.3

10.14

Asian Oilfield

10.46

8.55

34.78

7.46

21%

50.4

7.1

27.2

3.83

Cairn India

1892.19

0

1.27

-78.82

168.7

0

0

1.49

Dolphin Offshore

9.56

69.79

205.81

14.82

7%

63.8

15.1

16.1

3.81

Hind.Oil Explor.

130.53

159.8

114.51

-25.5

-22%

76.7

0

0

1.88

Interlink Petro

8.1

3.23

0

-0.64

3.4

0

0

5.29

ONGC

2138.87

52038.07

56635.58

15327.87

27%

289.5

66.9

15.5

3.59

Selan Expl. Tech

14.42

12.74

34.46

13.1

38%

39.9

9.1

29

6.62

Shiv-Vani Oil

43.91

375.59

409.45

57.62

14%

141

10.5

54.3

4.04

Deep Industries

20

31.9

20.02

6.37

32%

34.9

3.2

43.8

4.01

GAIL (India)

845.65

14932.56

16036.59

2386.25

15%

134.7

26.8

16.7

3.32

Guj. Gas Company

12.83

652.02

1187.89

159.01

13%

85.5

24

11.3

3.16

Indraprastha Gas

140

613.13

622.02

138.18

22%

33.4

9.4

13.2

3.71

Petronet LNG

750

1945.53

6555.31

474.65

7%

21.6

6.3

13.2

3.84

Gas Distribution

Corporate Radar Shopper’s Stop: Leading fashion and lifestyle retail department store Shoppers Stop will be investing around Rs 1,500 crore over the next three years to double its outlets to 48. Of this, Rs 500 crore will be raised through equity and warrants, Rs 500 crore through internal accruals and the rest through debt," Shoppers Stop Managing Director B S Nagesh said in Mumbai.They are planning to have at least 48 stores by 2011-12 and the present 1.5 million sq ft area of operation of Shoppers Stop will touch 3.5 million sq ft. The per store area, currently about 40,000-45,000 sq ft, will be increased to around 75,000-85,000 sq feet. They are looking at having bigger formats of Shoppers Stop. The company will get into a number of new Tier-II cities like

Ahmedabad, Jalandhar, Ludhiana, Amritsar, Vijayawada and Mangalore. The high cost of operation still remains a concern while there was a hype surrounding the business. They will continue to focus on premium category and also on luxury and have high-end brands like Espirit, Mac, Tommy Hilfiger and Lancome. The company has also launched its own in-store radio format and tied-up with music content company Blue Frog, which would update customers on new fashion, homeware and others. A Norway-based private equity fund will invest Rs 400 crore (500 million Norwegian kroners) in India's energy sector that is expanding rapidly to meet the South Asian country's growing need for power and oil.

Ispat Industries: Ispat Industries Ltd said on Wednesday it will not raise steel prices till June due to pressure from the federal ministry to control prices to rein in inflation. Earlier, the company had said it will raise prices of

hot-rolled coil by 5,000 rupees a tonne in May due to escalating prices of raw materials such as iron ore and coke.

IDFC: Indian infrastructure specialist IDFC Private Equity is raising a new $700 million fund to buy stakes in firms expected to thrive as the country modernises its ragtag power and transport networks. IDFC's managing .Bajaj

director for investment, Satish Mandhana, said the fund would close in the next two to three weeks, with around 85 percent of the money coming from abroad

Electricals:

Lighting products and appliances maker Bajaj Electricals Ltd announced a strategic alliance with Italy's Nardi Elettrodomestici S.p.a to sell the latter's range of premium gas appliances in India. They are aiming for a 25 percent market share in the top-end segment in a span of three to five years. Bajaj Electricals sold 3.2 million units of appliances in 2007/08 translating into revenue of 3.75 billion rupees. The unit makes a range of home products including food processors, water heaters, irons and gas stoves and contributes about 30 percent to

revenues and 40 percent to net profit. The exclusive alliance in the first phase would sell stoves and chimneys, ovens and microwaves in the second phase, and will look for tie-ups for modular kitchens in the last phase. In 2006/07, Bajaj Electricals reported net profit of 385.3 million rupees on net sales of 10.8 billion rupees. Adjusted for inflation, oil is now above the $101.70 peak hit in April 1980, according to the International Energy Agency, a year after the Iranian revolution.

OBC: Public sector lender Oriental Bank of Commerce on Wednesday announced a net loss of Rs 99.44 crore for the quarter ended March 31, 2008. The bank had reported a profit of Rs 54.86 crore for the fourth quarter last year. However, total income has increased to Rs 2,071.01 crore for the three-month period from Rs 1,577.29 crore in the same period last year, the bank informed the Bombay Stock Exchange.

The bank's board of directors has recommended a dividend of 47 per cent for fiscal 2008, it said. OBC has posted a net profit of Rs 353.22 crore for the year ended March 31, a 39 per cent decline as compared to Rs 580.81 crore in the preceding fiscal. Total income has increased to Rs 7,454.84 crore from Rs 5,652.91 crore in the previous year.

Sterlite Tech: Company has received three contracts valued at Rs 296 crore from Power Grid Corporation of India (PGCIL) for the supply of power transmission conductors. As per PGCIL's requirements, supplies against these contracts would commence from

August 2008. Sterlite was chosen as the sole manufacturer and supplier for over 8,300 km of ACSR Conductors that would be installed in the 400 kV D/C Korba-Birsinghpur-Damoh-Bhopal Transmission Lines in Madhya Pradesh.

SBI: The losses suffered by the corporate clients of State Bank of India on account of currency derivatives could range between Rs 600 crore and Rs 700 crore in the just ended fiscal, said Mr O.P. Bhatt, Chairman of SBI. While the bank has a fair amount of derivatives transactions, it has not done any ‘exotic deals’. SBI has structured derivative deals only for its customers and each deal has an underlying clause. In books there is no provision on this account. SBI will make a provision of $10 million (approximately Rs 40 crore) on its marked-to-market losses on account of exposure to sub-prime paper in its overseas operations. While the impact will be seen in the bank’s bottomline in the fourth quarter of the just

ended fiscal, the situation is not getting worse. Bank does not have exposure to any sub-prime paper except this, which it is marking to market. This is not exposure to Credit Linked Derivative Notes, but some investment they made in Fortis Bank. Credit growth in fiscal 2008-9 is likely to be around 22 per cent, which is roughly the same as that of fiscal 2007-08. He also said that deposit rates are unlikely to rise. The home loan segment is likely to see growth between 20 per cent and 22 per cent and the bank hopes to maintain its top position in the segment. While speculative demand for housing loans has slowed down, actual demand from first time buyers is still strong.

ICICI Bank: ICICI Bank and its overseas subsidiaries have an exposure of over $2.2 billion in the credit derivatives market. (Credit derivatives are defined as tradable

financial instruments whose price and value derives from the creditworthiness of the obligations of a third party).

JSW: Jindal South West (JSW) Group will invest a whopping Rs 70,000 to Rs 80,000 crore to expand its operations in steel, power, infrastructure, cement and aluminum sectors. out that of the total investment his Group would invest about Rs 40,000 crore in steel sector, which includes ramping up production at its Vijaynagar Plant in Karnataka, while Rs 25,000 crore would be utilised to enlarge its operations in power sector both for captive and greenfield power plants. Another Rs 10,000 crore would be invested for making forays into the aluminum sectors and about Rs 5,000 crore for cement and infrastructure sectors. As part of the Group's efforts to establish itself as a major aluminum player, it was setting up an alumina refinery at a cost of Rs 10,000 crore at Vishakhapatnam and the first phase of it would be commissioned by 2011. JSW's greenfield steel project in West Bengal would be operationalised by 2011-12 and the company would begin the construction work for it by October-November. The entire project will cost about Rs 30,000 crore. The money of all the projects would be met entirely from the company's internal accruals while the Group would go ahead with an Initial Public Offering to garner about Rs 4,000-5,000 crore from the market for funding its power sector projects. The Group has posted a net profit after tax after of Rs 270.06 crore for the quarter ended December 31 last year, while its total income was Rs 2878,08 crore during the same period. By 2020, the company was looking at having a total capacity of 30 metric tonnes from our three plants in Karnataka, West Bengal and the one being planned in Jharkhand.

Macro economy European Commission

has forecasted the growth in the 15 countries sharing the Euro

would slow to 1.7% this year from 2.6 year in 2007 and to 1.5 % in 2009. In February, Commission had forecasted the growth to be at 1.8% this year, a cut from its earlier forecast of 2.2% in November 2007. The moderation in growth results from the persisting turmoil in the financial markets, the marked slowdown in the US and soaring commodity prices, all of which are taking their toll on global activity. The Commission expects inflation, which hit a record high of 3.6% yoy in March, to accelerate to 3.2% in the whole of year 2008 from 2.1% in 2007 and to ease to 2.2% in 2009.Euro appreciated by 13% against Dollar.

Economy Watch: FDI in India 2007-08 (April-February) 2006-07 2005-06 2004-05 2003-04

$ billion 25.45 22.08 8.96 6.05 4.32

FDI investment in India for month of February 2008 has been record $ 8.34 bn—largest in a single month so far.India continues to remain the most favorable destination for Private equity investments in Asia(Excluding Japan) in first quarter of 2008.In second quarter of 2007,India surpassed China in PE investments, intensified with the gap widening between two countries. India has attracted PE investment worth $ 4 billion in Q1 2008 against China’s $ 570 million. According to IndusView Advisors, PE investments in India doubled in Q1 2008 compared to the corresponding period of 2007, due to huge fund flow into real estate and infrastructure. These two sectors attracted $1.2 billion, 28% of total PE investment, followed by the Power sector (13%, $ 520 million). The Finance and Telecom were tied for the 3rd most favorable sector for investment with 8.7% ($ 340 million each). The momentum in India is on the rise while it may lower in China after Beijing Olympic. India was lagging behind China when latter bagged $13 billion against the former’s $ 7 billion. Globally, real estate and infrastructure fund raising by international real estate PE Funds, has been brisk, with $130 billion raised over last 2 years. The Government’s announcement that 9% of the country’s GDP will be spent on infrastructure by 2012 has created unprecedented investment opportunity.

Frying Oil Goldman Sachs Report: Crude Oil Crude oil may rise to between $ 150 and $ 200 a barrel within 2 years as growth in supply fails to keep pace with increased demand from developing nations. Triggers: US service Industry expanded in April, signaling higher energy usage. The Institute of Supply Management index of nonmanufacturing businesses, which make up almost 90% of the economy, grew for the first time since December. China is increasing refining capacity and boosting imports to meet rising demand for the Olympic Games. China has more than doubled oil usage since November 2001 (Decade low of $ 16.7 ).

Price forecasts for spot US benchmark WTI crude Oil for 2008 to 2011 are revised as $ 108 ( 2008), $110 (2009) and $120 (2010). These figures earlier were at $96, $ 105 and $110 respectively. Reasons for current Crude rally: Dispute between the US and Iran over Nuclear issue. Militant threats in Nigeria (Biggest Oil exporter of Africa). Venezuela Slump: Production has slumped to about 2.34 million barrels a day from almost 3 million barrels a day in 2002.before the President Mr Hugo Chavez, fired almost 20,000 workers, who had closed the State Oil Company in an attempt to overthrow the Government. Iraq issue: Production is yet to reach 2003 levels, as the country struggles with sectarian fighting and attacks on its energy infrastructure.

US gasoline demand typically climbs going into the summer season when Americans take to the highways for vacations. The peak-consumption period lasts from the Memorial Day weekend in late May to Labor Day in early September. Monthly fuel sales were the highest during August in 5 out of last 6 years.

……..And What CEOs of major Oil Companies say? Even as oil prices ascended to new highs of more than $124 a barrel this week, many oil and gas industry executives say they expect the price to fall significantly by year's end, a new survey shows. Fifty-five percent of 372 petroleum industry executives surveyed by KPMG LLP said they think the price of a barrel of crude will drop below $100 by the end of the year. Twenty-one percent of respondents predicted a barrel of oil will end the year between $101 and $110, while 15 percent forecast the year-end price to be between $111 and $120 a barrel. Nine percent said they expect the price to close the year where it's been this week _ above $120 a barrel. Participants included executives for major oil companies, independent exploration and production outfits and other energy companies. Widely watched oil price prognosticator Goldman Sachs said this week oil prices could rise to $150 to $200 within two years; others say crude could plummet to as low as $40 or $50 a barrel during the same period.

Mexico’s production has fallen below 3 million barrels a day since October as Petroleos Mexicanos, the state – owned oil company failed to compensate for a 30 % drop at Cantarell, its largest field, accounting for its 40% production.

OPEC President sees $200 oil possible: Chakib Khelil In terms of fundamental, stocks are high, demand is easing, supply is satisfactory. The prices are high due to the fact of the recession in the United States and the economic crisis which has touched several countries, a situation which has an effect on the devaluation of the $, and therefore, each time the dollar falls one percent, the price of the

barrel rises by 4% and vice versa. If dollar strengthens by 10%, it is likely that Oil prices will fall by 40%.If the US economic situation improves from now to the end of the year; it would help the market to stabilize.

Guest Column The Journey of the Volunteers of Inclusive Education Campaign of CRY

It all started when the Volunteer Action

appointments in schools for taking interviews, and

division of Kolkata attempted to look at

efficiently completed by the interns as their period

the status of inclusion in the schools of

of internship rolled to an end.

the city through the lens of children Volunteers with Dr. Javed Abedi

with

disability.

Although

the

discrimination against children with disabilities in the education system is a cross cutting issue which cuts across barriers of class, caste, gender it hardly ever gets importance in this sector as far as inclusive education is concerned.

compiling the report everything was eagerly and

However the campaign on Inclusive Education did not halt with the exit of the interns, a new group of volunteers who were there to stay for a longer period showed interest in joining the child rights movement and education. Coming from varied academic

backgrounds

like

psychology,

international relations and law, this group of seven

There was a group of student interns from

privileged and enthusiastic youngsters, had very

different academic background predominantly law

little grounding on the issue and were quite

who were eager to initiate the campaign on

confused on what they were supposed to do. For a

Inclusive

a

few of them volunteering in an NGO was more to

research study in order to find out the gap

do with feeding children, reading them stories and

between the existing realities and the policies that

spending time with them. The first time when she

exist. Anchored by Sruti disAbility Rights Centre,

was asked what she would like to do Indira

the group endeavored to study literature and

promptly answered: “Anything…. I can feed the

materials that were available, in order to build

children with disabilities, or help in managing

their own conviction and understanding. Starting

them”.

education

through

undertaking

from designing the questionnaires, to seeking As much as it seemed an impossible task to change their mindset on the discourse of rights based volunteerism, it was a revelation to note that right after 7 months this very girl was writing an angry letter to the authorities of a Kolkata based park Swabhumi , demanding them to make the place accessible as one of her peers in the group bound to a wheel chair was barred access to the park

Volunteer speak :“ I always knew the importance of studying together – disabled and nondisabled children in the same classroom..but did not knw how to make it happen. Implementation of the various laws was pretty vague before i joined, and only after working here i figure out its real picture.....”- Kingshook “There is so much still left to do and I will continue to work hard till the goal is

because of its long flight of

reached. Got so much exposure, met new people … I feel that I am not just a

stairs.

student but also a student with responsibility towards the society.” - Mandeep

eagerly joined the group making it an inclusive Coming

back

to

the

group.

formation of this group, this

Now as this group moves forward with filing PIL s

group of 7 students started

in court with demand for 3 % reservations for

their work only with the

children with disabilities in all schools, and

report

addressing press meets, it is interesting to note

compiled

by

the

previous group of interns. Volunteers at the press meet

While they made various presentations of the study at different forums, they continued to struggle with their own conviction and

how they keep battling at every point with societal myths that crowd their minds and their own experiences in the process of advocating for the rights. The conviction with which they became

myths about children with disabilities studying in

media

the mainstream school.

themselves were undergoing a spectacular process

As the second phase of the study required them to

of transformation.

interview students with disabilities who have been part of mainstream education, their apprehension knew no bounds. “How will we communicate with them? What questions do we ask them?” But as they went forward, it not only became an eye

spokespersons

showed

how

they

The group now determined to increase the scale of their advocacy as well as to maintain their continuity is in a process of orienting newcomers in their group and identifying ways of expanding.

opener for them but they became the best of friends

In just a year’s time volunteerism has attained new

as they chatted on phone, went to movies and

depth and meaning for these student volunteers

dinners together with these students who in spite of being disabled had the opportunity to study in mainstream schools. This gave a new turn to the movement as the volunteers realized the importance of their work and what change it was going to bring in the long run. The volunteer group also expanded with the

who are not only in the process of building public opinion

and

influencing

policy

but

also

strengthening their own conviction and have identified themselves with the movement and issue to such an extent that they are determined to see it attaining great height and becoming wide spread in the country.

some of the interviewees who had disabilities Want to be a part of the Campaign??

If you want to join this movement or start your own campaign on Inclusive Education in your own city please feel free to mail us at [email protected] or [email protected] for ideas. You can also call CRY Kolkata office at 03324148030 / 033241480 Or Shampa Sengupta @ 09433174978

Article Contributed by Diya Deb, CRY Foundation

Kalaripayattu Re-innovating Indian Culture

Kalaripayattu - The Orient's treasure trove, a

Tiger, Elephant, Wild Boar, Snake, and Crocodile

gift to the modern world and the mother of all

the Cholas, the Cheras and the Pandyas.

martial arts. Legend traces the 3000-year-old art

Shrouded in deep mystery and mists of secrecy

form to Sage Parasurama- the master of all

Kalaripayattu was taught by the masters in total

martial art forms and credited to be the re-

isolation, away from prying eyes.

........ Kalaripayattu laid down the combat code of

claimer of Kerala from the Arabian Sea. Kalaripayattu originated in ancient South India.

Following the collapse of the princely states and

Kung- fu, popularized by the monks of the

the advent of free India - Kalaripayattu has lost

Shoaling Temple traces its ancestry to Bodhi

its significance as a mortal combat code. In a

Dharma - an Indian Buddhist monk and

Phoenix-like resurrection, Kalaripayattu is today

Kalaripayattu master.

emerging in a new avatar - an ancient art form a source of inspiration for self-expression in

Crafted

in

ancient

South

India

drawing

dance

forms

-

both

traditional

and

inspiration from the raw power and sinuous

contemporary, in theatre, in fitness and in

strength of the majestic animal forms - Lion,

movies too.

Architectural Design of a Traditional Kalari

or battlefield", and payattu - which means to

The art is trained in an enclosure called ‘Kalari’,

"exercise

which is 21 feet by 42 feet. The entrance faces the

Martial arts have been in existence on the Indian

east. In the south-west corner is a seven-tiered

sub-continent for thousands of years. Long ago,

platform called the "poothara", which houses the

animal fighting styles were imitated by pre-

guardian deity of the kalari. These seven steps

historic man which was a system for survival. The

symbolise seven abilities each person requires.

first weapon used was the stick which was an

They include Vigneswa (Strength), Channiga

extension of the arm. Various weapons were later

(patience),

power),

invented during the Stone and Iron Ages. Even in

Vadugashcha (the posture), Tadaaguru (training),

Vedas they have mentioned about martial arts.

Kali (the expression) and Vakasta - purushu

Kalaripayattu is one such martial art, Crafted in

(sound). Other deities, most of them incarnations

ancient South India and draws inspiration from

of the Bhagavathi or Shiva, are installed in the

the raw power, majestic strength and instinctive

corners.

fighting techniques of animals like lion, tiger,

Vishnu

(commanding

elephant,

in

wild

arms

boar,

or

practice".

crocodile

etc.

Origin and Evolution

It is significant that some Kalaripayattu masters

Kalaripayattu is perhaps the most ancient martial

trace their lineages of practice to "Dhanur Veda"

art in the world. Religions have incorporated

and claim that the texts in which their martial

Kalaripayattu into their realm. The origin of

techniques are recorded derive from Dhanur

Kalaripayattu is still in the midst of obscurity.

Vedic texts. Although the Dhanur Veda means the

Traditional Kalari masters attribute mythological

"science of archery," it encompassed all the

stories and legends to the origin of the art.

traditional fighting arts. The explicit concern in

Legend traces the 3000-year-old art form to Sage

Dhanur Veda texts is not with battlefield

Parasurama- the master of all martial art forms

strategies, but rather with training in martial

and credited to be the re-claimer of Kerala from

techniques.

the Arabian Sea.

The Dhanur Veda opens by cataloging the subject,

At the turn of the 6th century A.D., martial arts

stating that there are five training divisions (for

spread from Southern India to China by Daruma

warriors on chariots, elephants, horseback,

Bodhidarma - an Indian Buddhist monk and

infantry, or wrestling), and five types of weapons

Kalaripayattu master. From China, martial arts

to be learned (those projected by machine

have spread to Korea & Japan. Kalaripayattu is

[arrows or missiles], those thrown by the hands

derived from the words Kalari - which means

[spears], those cast by hands yet retained

"place, threshing floor,

[noose], those permanently held in the hands [sword],

and

the

hands

themselves

Most of the final Chapters are brief descriptions

the Nair soldiers and Kurichya tribals of

of postures and techniques for wrestling and the

Wayanad. The British dreaded the widespread

use of a variety of weapons including noose,

Kalari training and objected to the traditional

sword, armors, iron dart, club, battle axe, discus,

system of carrying arms by the Nairs. Thus the

and the trident. A short passage near the end of

Malabar commissioners found it essential to

the text returns to the larger concerns of warfare

unarm the entire region to establish tranquility.

and explains the various uses of war elephants

Major Dow's direction in this regard, is note

and men. The text concludes with a description

worthy.

of how to appropriately send the well-trained

On 20th February 1804, Robert Richards, the

fighter

war.

Principal Collector of Malabar, wrote to Lord

Kalaripayattu reached its pinnacle of glory during

William Bentinck, President and General-in

the 100-years-war between the Cholas, Cheras,

Council, Fort. St. George, asking permission to

and Pandyas in the early part of the first

take action against persons carrying arms, either

millennium. The warring states refined the

imposing death penalty or deportation for life.

fighting skills and techniques prevalent in the

Lord Bentinck issued an order on 22nd April

area into a martial art form. The art flourished

1804, that those who concealed weapons or

between the 13 and 16 centuries, becoming a

disobeyed the orders of the British against

part of the education of youngsters. It was a

carrying

social custom in Kerala to send all youngsters

deportation

above the age of seven to learn Kalari.

At the time of the Pazhassi rebellion, British

The inherent beauty of this art form lies in the

soldiers raided each and every house of the

harmonious

and

rebels to confiscate their arms. The same

medicine. The various movements in Kalari are

situation repeated in Travancore at the time of

based on animal movements. Several poses are

the revolt orchestrated by Veluthampi, the

named after animals. Hence it is generally

Dalawa of Travancore. These developments led

believed to have developed in the jungles when

to the slow deterioration of Kalaripayattu. Yet,

hunters observed the fighting techniques of

there were a few Kalaripayattu gurus who

various

animals.

worked selflessly to keep this tradition of martial

The death blow to the Kerala military system and

art alive for the future generations by training

Kalaripayattu was dealt by the British. When the

youngsters away from the prying eyes of the

Malabar Province was ceded in favor of the

British

off

synergy

to

of

art,

science

British by the treaty of Seringapatam in 1792, there were a series of revolts in Malabar. The revolt led by Pazhassi Raja was well supported by

arms

would

be for

condemned

to life.

rulers.

Kalari's influence on other arts Kalaripayattu has strongly influenced the evolution of several of Kerala's theatre and dance forms, most prominently Kathakali and Theyyam. Kathakali practitioners are required to train under Kalari masters to develop various attributes such as fitness, stamina, and martial movements enacted in their performances. Kalari practitioners claim that Bodhi Dharma, a Buddhist monk who was responsible for training the Shaolin monks in kung-fu, was in fact a Kalari master.

Resurgence of Kalaripayattu Following the collapse of the princely states and the advent of free India - Kalaripayattu had lost its significance as a mortal combat code. Fortunately, Kalaripayattu has successfully survived the steady and sad decline in popularity. Kalaripayattu now has a compelling global audience and its fame and glory has won hearts all over.

In a Phoenix like resurrection, Kalaripayattu is today emerging in a new avatar - an ancient art form - a source of inspiration for self-expression in dance forms - both traditional and contemporary, in theatre, in fitness and in movies too. TRADITIONAL KALARI TREATMENT The training of a student to become a master includes the training in Ayurveda and in locating the vital points of the body. A Kalari Guru is not only a trained movement artist but also a professional in Ayurveda, a doctor who treats people of diseases and general ailments. Kalari has developed a traditional orthopedic system which is widely popular all over the states, especially for the setting of displaced bones. There are different types of Oils, pastes, herbs etc are used only by kalari masters to treat muscle and bone injuries.

Kalari Massage The first stage of the preparation of a warrior and the artiste is based on oil massage known as Udvarthaizam or Uzhichal. The Ayurvedic tradition of Susrutha says that diseases are afraid of approaching a body which has been foot-massaged, just like animals in the sight of a lion.

Kalari massage is a traditional massage, performed by the therapist using his hand and feet, applying appropriate pressure to specific vital parts of the body. It involves a full body massage with medicated oil and stimulating or massaging the Marma points on the body. Usually an uzhichil course lasts for fourteen days. At the time of this massage the student has to follow strict restrictions in his or her daily routines. He should not expose to the sun for a long time should take only the prescribed food and drinks and should follow strict celibacy.

Massage helps the body to attain a healthy constitution as well as flexibility, nimbleness and suppleness. Moreover, massage enables proper blood circulation and easy maneuverability of the body for turning and twisting. Kalari massage not only relieves back pain, stiffness and sports injuries but also stimulates various bodily organs and systems.

Marma points

Marmas are certain vital points of the body. A marma point is a juncture on the body where two or more types of tissue meet, such as muscles, veins, ligaments, bones or joints and 'where the Prana is present'. There are total 108 Marma points in the body in which 64 are considered as kulamarma (deadly points). These points could be used to heel or to harm. If these points are pierced hard, it could result in trauma or even death. A kalari masseur uses the Marma points to heal.

More information can be found on; http://www.kalaripayattu.org Kalari Academy of Performing Arts. #25, V N Plaza, Bazaar Streest, Brigade Cross Road, Bangalore - 560025. India. Mobile 91-99451 55995 Ph 91-80-41127789 Email: [email protected]

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