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It’s the season when we get slow poisoned in Delhi and if it could be any less merciless, it is not even slow anymore. A good day in Del- hi starts with our AQI app telling us that it’s only poor air quality as opposed to severely hazardous. India’s capital used to pride it- self of having four seasons – we have a new one that runs concurrently with all four – the pollution season. And while this season runs all year through, the baseline pollu- tion is so high that any immediate trigger or local factor could build smog more toxic than what can be measured by monitoring devices. It is grimly predictable and to my mind, calling it an emergency doesn’t con- vey the chronic nature of this state of being. The situation is dire and there is no other way to put it. Just days ago, a col- league shared the picture of his infant girl—her little face hidden behind a nebuliser mask, a new routine recommended for young pa- rents in the national capital. It is not any better for older children who are being con- fined indoors — be it in school or at home with many on steroids and anti-allergy syrups. The elderly are forced to discontinue their breat- hing exercises and are having to miss their daily walk routine. Not to mention the poor who do not have the choice except to work in difficult ady citing reluctance from top executives to take up jobs in Delhi NCR because of air qu- ality concerns. With alarming but under- standable frequency I hear well-performing professionals talk about the need to re-eva- luate their options to move to other cities be- cause of pollution. Lucrative jobs being dee- med as hardship postings isn’t anybody’s idea of working in the capital. Whether or not any business has direct influence on the quality of air, the air quality is beginning to have an impact on business too. There is no way we can side step the rea- lity that the world’s fastest-growing eco- nomy also has the world’s most toxic air. Setting things right is neither going to be cheap or convenient. So far, India’s ef- forts to fight pollution have at best been scattershot – be it ban on fire-crackers or ra- tioning cars through ddd-even scheme. The- re is a page to pick from China’s book as it moved decisively to care about pollution as much as it did about economic growth. Chi- na’s blue-sky plan that included targets for air quality progress, wide network of moni- toring system, environment impact assess- ment for companies and heavy fines for vio- lators is paying off. While we need the go- vernment to give us a clean air action plan with stated reduction targets and clear compliance policy – private sector too could get more deeply involved by ha- ving its skin in the game to shape sus- tainable and economically competiti- ve cities of the future. Implementing solutions will require large amo- unts of capital, some of which can be supported through concerted CSR funds directed at tackling one of the most pressing problems of our ti- mes. The current mess also represents a unique opportunity and responsibility for India Inc and we will all do well by pul- ling our weight in conceiving and hel- ping implement solutions. (The writer is the founder of Make- MyTrip) DEEP KALRA conditions, unlike a lot of privileged people like myself, who can access breathable air thanks to air purifiers. The severity of pollution in Delhi is life-al- tering in more intense ways and we have he- ard the experts on how it is having a lasting impact as we breathe in this toxic stew. The ad-hoc firefighting is no strategy for a long- term fix – it’s time for us to press the reset button. This work involves cross-discipline, cross-sector, multi-ministry, centre-state go- vernment collaboration and inarguably ci- tizens’ effort. The recent example of protest against NHAI’S plan to build a highway through Gurgaon’s Biodiversity park is an example of alert citizenry seeking better so- lutions and piling pressure on administra- tion to make the right choices. Corporates need to step up and be counted too because we know it can’t be business as usual. A World Bank study released in 2016 revealed that India lost more than 8.5% of its GDP in 2013 due to the cost of increased welfare and lost labour due to air pollution. At its current size of $2.6 trillion, the loss equals to about $221billion. For business, an obvious implication is that poor air quality puts employee health at risk and impacts workforce productivity. It’s also going to extract talent cost with executive search firms alre- Biswarup.Gooptu@timesgroup.com New Delhi: An estimated 140 employees of Razorpay have cashed in their company-is- sued stock options, with New York-based in- vestment firm Tiger Global Management, an existing investor, snapping up the shares on offer. When contacted by ET, Harshil Mathur, chief executive of Razorpay, confir- med the development, which is also the first liquidity event for its employees at the three-year-old company. The company’s to- tal workforce is about 250 and the share sale is expected to benefit talent across ranks — from team leaders at the top of the hierar- chy to support executives at its call centre. “We negotiated a secondary deal with Ti- ger Global, our largest institutional inves- tor, and the transaction was done at a 50% premium to the valuation scored in our last funding round,” Mathur told ET. Razorpay had raised about $20 million in January earlier this year, which was led by the influential Lee Fixel-led investment firm and startup accelerator Y Combinator, at a valuation north of $100 million. The New York-based investment firm’s stake in the company is estimated at 25-30%. The company, which was part of Y Combi- nator’s 2015 winter batch, also counts the likes of venture capital firm Matrix Part- ners and global payments and financial ser- vices company Mastercard as investors, and has raised about $31million in equity fi- nancing to date. Mathur, however, declined to share speci- fics of the secondary deal, which kicked off in September, and is expec- ted to conclude by end-No- vember. The promoters, in- cluding Razorpay cofoun- der Shashank Kumar, have not participated in the se- condary transaction. While secondaries in the Indian startup ecosystem have be- en on the rise over the past 24 months, employees across ranks, except the top management, have rarely made windfall gains by cas- hing out. “The share sale was also open to employees who have exited the company, but had spent more than a year with Razorpay. We have grown quite a lot over the three years or so, and a lot of our col- leagues, who came from corporate backgro- unds, joined at far lower salaries. We feel it is the right time to reward their commit- ments,” Mathur said. Secondary deal with existing investor done at 50% premium to valuation scored in last funding round Paying it F orward Total staff at Razorpay 250 $20 million Amount raised by Razorpay in Jan 2018 +$100 million Valua- tion of Razorpay during funding round $31 million Equity financing raised by co to date Took part in sec- ondary sale 140 Tiger Global Snaps up Razorpay Esops The promoters, including Razorpay cofounder Shashank Kumar, have not participated in the secondary transaction THE ECONOMIC TIMES | MUMBAI | MONDAY | 19 NOVEMBER 2018 | WWW.ECONOMICTIMES.COM Disruption: Startups & Tech a For comprehensive and insightful stories about all things startups and technology, log on to www.ettech.com The responsibility of an entrepreneur i s to solve a problem. Don’t worry about the money. If you solve a problem and seek out ways to serve more people, money will find you. ROBERT T . KIYOSAKI @THEREALKIYOSAKI Tweet OF THE DAY Quick Byte ANIRBAN BORA A Corrigendum This has reference to the article “Aditya Ghosh: The man who chose OYO over Tata Sons; pub- lished on November 16, 2018. The Tatas have re- sponded “that the state- ments made in the first paragraph regarding Tata Sons are completely false and baseless. There has been no such discus- sions with the individual named in the story.” Our correspondent stands by the story. Jochelle.Mendonca @timesgroup.com Bengaluru: Cognizant said mid- term growth will accelerate to 7-11% in constant currency terms and the US-listed company expanded its buy- back authorisation to $5 billion. The Teaneck, New Jersey-headquartered company held its first investor day last Friday, spelling out its goals for the next three to five years, including spending a quarter of its free cash flow on acquisitions. “On the revenue side, we see potential for the growth to accelerate in the midterm as digital opportunities expand,” Karen McLo- ughlin, chief financial officer at the IT services company, told analysts. Cognizant forecast 6-9% organic constant currency growth and an ad- ditional 1-2% of revenue growth from acquisitions in the mid-term. The company also said it would work to- wards incremental 10 basis points of margin expansion year-over-year in the mid-term. The company has alre- ady said it expects to reach about 22% in adjusted margins in 2019. That imp- lies about 19% margins if it was to in- clude the impact of stock compensa- tion and other metrics. The company expects digital reve- nue to grow 20-25% year-over-year. “The midpoint of the 6-9% organic constant-currency revenue guidance reflects an acceleration from the past few quarters of about 6-7%,” David Koning, analyst with US brokerage RW Baird, said in a note published af- ter the analyst day. Cognizant also attempted to calm fe- ars about its banking and financial services business. Revenue from the company’s top-five banking clients fell from $900 million in the year to September 2017 to $790 million up to September 2018. Out of those, two cli- ents returned to growth on the back of digital capabilities. The company al- so spelt out plans to use its capital. Cognizant will use 20% of its free cash flow to pay for dividends, 30% for buybacks, 25% for mergers and acqu- isitions and the remaining 25% will stay in India. The company also increased its sha- re buyback authorisation to $5 billion by 2020. The company’s capital alloca- tion plan implies a 1% share reduc- tion a year, analyst Koning said. Cognizant also said it plans to boost its localisation efforts in the US and other local markets. “In North Ameri- ca, a little over 40% of our headcount is locally hired. In our other signifi- cant markets, we are over 50% local talent. In North America, we will be over 50% local talent in the next few years,” CEO Francisco D’Souza said. Cognizant says Growth will Accelerate to 7-11% in Midterm US-listed IT services company increases its share buyback authorisation to $5 billion by 2020 ON THE GLOBAL STAGE Cognizant said it plans to boost its localisation efforts in the US and other local markets L ooking Ahead COGNIZANT FORECAST Additional 1-2% of revenue growth from acquisitions in mid-term $5 billion Revised size of share buyback by 2020 6-9% Organic constant currency growth 20-25% Expected growth in digital revenue PLANS FOR CAPITAL USE (%) For dividends For buybacks For M&As For use in India 20 30 25 25 company Softvision last quarter. Ayyawamy said TCS partners with inno- vative companies, such as startups in Sili- con Valley, to get access to their technology and that acquisitions were not necessarily the only way. TCS has often said it will build competencies itself and buy only at the right price. Earlier this month, the compa- ny acquired a small digital design compa- ny in London, its first digital acquisition. “Whatever you say about the Indian edu- cation system, our focus on science and maths is very clear. And that is helping the industry. In Japan, companies say they will use their hardware but trust India for soft- ware. The domestic market is also opening up,” KS Viswanathan, vice-president in- dustry initiatives at Nasscom, said. TCS Looking at Scaling to $100m ER&D Clients Samidha.Sharma@timesgroup.com Mumbai: Kaushik Anand (in picture), the India head of CapitalG, the invest- ment unit of Google’s parent Alphabet is departing from the growth-stage fund. Anand is slated to join A91 Partners, an investment firm set up by three ex-Sequ- oia Capital managing directors. He is ex- pected to come on board A91 Partners as a partner early next year. Both Anand and CapitalG confirmed the develop- ment to ET. CapitalG, which was formerly known as Google Capital started investing in In- dia in 2014 and has backed companies like Aye Finance, Cuemath, CarDekho, Freshworks and Practo. Its first bet in In- dia was on property portal Common- floor, which was ac- quired by Quikr. Its global investments in- clude Airbnb, pay- ments startup Stripe, Snapchat, Uber, among many others. Besides the US and In- dia markets, CapitalG invests in China, too. “We have experimented with different operating models and have decided to re- turn to a centralised office located in San Francisco. We look forward to contin- uing to invest in India,” a Google spokes- person said in response to ET’s emailed query. The person added that there will be no material change with Anand’s exit and that the fund will continue to invest in Indian entrepreneurs. Anand, who had joined CapitalG in its Bay Area headquarters in 2015, had led investments in CarDekho, an auto classi- fied portal, math learning startup Cue- math and Aye Finance, which provides financial services to micro and small businesses. He will continue to focus on technology, healthcare and financial ser- vices sectors at A91as well. Abhay Pandey, VT Bharadwaj, and Gautam Mago, who left Sequoia Capital India over the past year are now raising a . `2,000-crore first fund. Pandey though is still in his cooling- off period with Sequoia and is expected to offi- cially join the fund in De- cember. CapitalG’s India Head Kaushik Anand Quits The Tabl e t Boom I s L ong O v er Year -over -year change in worldwide tablet shipments since 2011 -50% 2011 2012 2013 2014 2015 2016 2017 2018 50% 100% 150% 200% 250% 300% 350% 400% 0 -9% Source: Statista WORLDWIDE TABLET SHIPMENT 55.7m Q3 2014 Q3 2018 36.4m MC ESCHER, Belvedere THE INS AND OUTS Jochelle.Mendonca@timesgroup.com Bengaluru: Tata Consultancy Services is looking at scaling up to $100-million clients in engineering research and design (ER&D) outsourcing as deal sizes and dura- tions in the space continue to grow, a senior TCS executive said. ER&D is a fast growing part of outsourcing spend. On Thursday, the National Association of Software and Services Companies forecast that the mar- ket for those services in India would grow to $42 billion by 2022, helped by the adop- tion of internet-of-things, big data analy- tics, artificial intelligence and machine le- arning, cybersecurity and other new tech- nologies. As deals move beyond pilots, the- ir size and duration are increasing. “We are looking at scaling to $100-million clients in the ER&D space soon,” Regu Ayy- aswamy, vice-president and global head of internet-of-things and engineering and in- dustrial services at TCS, told ET. TCS won a $50-million digital deal with Rolls Royce last year, that would partly be delivered by the company’s internet-of- things platform. Company executives had then said the deal was a sign of things to co- me. Ayyaswamy added he was very bullish about the growth of the business even as large companies are looking at building their own captives in India. “There is a large client that has built a cap- tive in India in the ER&D space. We have as many people working on their projects as they do in the captive. With these new tech- nologies and the speed of change, there is room for a lot of growth,” Ayyaswamy said. The engineering research & development space has a large number of providers — from startups to GICs, to IT services play- ers and standalone ER&D companies. The sector has seen a slew of acquisitions most recently with Cognizant spending over $500 million to buy digital engineering Firm won a $50-m digital deal with Rolls Royce last year Kaushik Anand is slated to join A91 Partners early next year Expert Take Blue Sky Thinking: It Can’t be Business as Usual in Severely Polluted Delhi 6 THE ECONOMIC TIMES | MUMBAI | MONDAY | 19 NOVEMBER 2018 | WWW.ECONOMICTIMES.COM Disruption: Startups & Tech oddup ODDUP AS DATA PARTNER With Oddup, you can get access to: mom A . 15A Data that aids innovation investment , L partnerships q and varied strategic decisions Startup, sector , and location data to help traverse the chaotic startup landscape I Real-time data to follow movements in the sta rtups of any region and industry Comprehensive startup, location , and industry data at your fingertips 13 o o,
