Business Briefing 31/10

The Gas Behind Aircraft Pollution; Gingerly Steps on Deal Street; and The Penny Pinchers

This year you can breathe a little better. The global aviation industry will spew out 7 per cent less carbon than it did last year—5 per cent due to a slump in the business and 2 per cent due to ‘proactive’  environmental steps taken by the sector, says Giovianni Bisignani, director general, Iata, the industry’s apex body. Though aviation contributes only 2 per cent to all global carbon emissions, its green drive will continue, he says—hopefully with better business in the future—with the airlines going in for biofuels, which would become a certified alternative fuel by 2012. And further in the quest for a cleaner environment, Iata has set for itself the goal of stabilising carbon emissions from aviation by 2020, and have carbon-free operations 2050 onwards. All noble ideals, which should make even the most ardent of green activists root for aviation at the forthcoming Copenhagen climate summit; and also oppose the European Union’s proposed emissions tax on airlines.  If implemented, the tax could attract a wave of retaliatory taxes by other countries and  that could render air travel an unviable business. But no amount of sympathy for the sector can solve the mystery of how shifting to biofuels will reduce emission from aircrafts. Burning any oil will emit Co2 and other pollutants! For its 2050 target, with fuel getting precious by the minute, the future of aviation may well be nuclear-powered airplanes or WW II blimps.  n

If renewed corporate activity on the mergers & acquisitions front is any indicator of economic health, India still has quite some distance to cover on the recovery road. Venture capital firms invested $77 million in 17 deals in India during the three months ending September 2009. According to a report by Venture Intelligence, an M&A tracker in partnership with Global-India Venture Capital Association, the sums invested during the period were significantly lower compared to the same quarter in 2008, which had witnessed $298 million being invested across 55 deals, but a shade higher compared to the preceding three months ($64 million across 17 deals).  “The return of confidence in emerging markets in general and India in particular is now getting reflected in the quarter-on-quarter numbers,” says Sudhir Sethi, director of GIVCA and founder, CMD of IDG Ventures India. “Going forward, we expect the investing momen­tum to pick up even further,” he adds. The latest numbers take total VC investment in the first nine months of 2009 to $201 million (across 46 deals) as against $709 million (across 124 deals) during the same period in 2008. Among the largest investments reported during Q3 2009 was the Lightspeed Venture Partners-led investment of Rs 50 crore (about $10 million) in Mumbai-based Itz Cash Card, India’s largest multi-purpose pre-paid card company. Existing investors Matrix Partners India and Intel Capital participated.  Information technology and IT-enabled Services (IT & ITeS) companies accounted for 41 per cent of these investments during Q3 2009 (42 per cent by value).

The economic slowdown and the recession are forcing entrepreneurs to tighten their purse strings without lowering profitability expectations. Not surprisingly, there’s a spate of books in the market on how you can get the maximum bang for your buck. Close on the heels of Wipro’s Chief Marketing Officer Jessie Paul’s No Money Marketing, comes Sramana Mitra’s Bootstrapping (Hachette, Rs 295) that throws up ideas for entrepreneurs on how to develop and promote a business harnessing one’s own resources, without relying too much on outside help. Mitra, a technology entrepreneur herself, and a Silicon Valley strategy consultant, strings together a series of instructive interviews in an easy Q&A format with nearly a dozen successful young entrepreneurs. For her, the frugal art of bootstrapping is not just an alternative, but an imperative. She drives home her case by showcasing the lessons her subjects learnt from the bootstrapping trenches.

aviationM&A