Category: finance and investing

Why are so many motels owned by Indians? This is even called the Patel Motel Cartel

As per some estimates, 70–80 percent of Motels across North America are owned or managed by Patels of Gujarati origin. When I lived in Colorado and North Carolina, I knew a few IT professionals of Gujarati origin who would continually muse and research ideas on getting into the business of running motels, franchises or gas station. Many eventually made the switch, thanks to the support from the strong network of community.

An interesting article in the New York Times from a decade ago chronicles the journey of Patels (re A Patel Motel Cartel?) “about 70 percent of all Indian motel owners — or a third of all motel owners in America — are called Patel, a surname that indicates they are members of a Gujarati Hindu subcaste.”

So, how do the Patels do this?

“Buying a motel, even one that’s in the red, usually requires a substantial down payment, one beyond the reach of most new immigrants. That, however, is one key to how this particular niche was captured. The down payment was seldom a problem for a prospective Indian purchaser, who was often able to turn to a network of relatives and friends to help him out. The story of Lata and P.J., for example, is not exactly the hardscrabble tale associated with some immigrant groups.”

Image result for patel motel"

Check out other articles in the media that chronicle the Patels in America

Millionaires fleeing India in larger numbers: GWMR Report

A recent report by Global Wealth Migration Review (GWMR) suggests that Indians who have the means to quit the country are doing so in large numbers. The report indicates that a large number of Indian high-net-worth individuals (HNWIs) moved to USA, UAE, Canada, Australia and New Zealand.

According to the GWMR report, India saw the third highest outflow of wealthy individuals last year. Nearly 5,000 millionaires, or high-net-worth individuals (HNWIs), left the country, which is 2 per cent of the total number of HNWIs in India.

The UK for the last three decades was ranked among the countries with the highest number of inflow of wealthy individuals but the trend reversed sharply in the last two years, thanks to Brexit.

China topped the list, as its economy is starting to show the impact of the trade battle with the US.  Russia occupied the second spot, ahead of India, as the Russian economy grapples with the impact of multiple embargoes. 

The report forecasts a growth in large number of entrepreneurs in India attributable to, good educational system and English speaking workforce. A strong growth forecast in the local financial services, IT, business process outsourcing, real estate, healthcare and media sectors (10 year wealth growth forecast: 200%).

The report also pointed out another critical problem with the Indian economy of the degree of inequality growing at an alarming rate. The HNWIs hold nearly half the total wealth in the country.

The report highlights  Pune, Hyderabad, Bangalore, Mumbai, Delhi, Kolkata, among global cities to look out for in the next decade.   However, the report also went on to mention that the outflow of HNWIs from China and India is not “particularly concerning”

The outflows of HNWIs from these countries are not particularly concerning as they are still producing far more new HNWIs than they are losing. Also, once the standard of living in these countries improves, we expect several wealthy people to move back.

Links

 

Texas Sikh community feeds federal employees affected by govt shutdown

The American public has been watching news of US Federal Government shutdown that continues for over a month. (ref: Trump cancels US delegation to Davos World Economic Forum due to shutdown). However, there are a few feel-good stories in the media too.

Houston, January 16 – In a unique gesture, the Sikh community in San Antonio, Texas, offered free meals to fellow American government employees affected by the ongoing shutdown that has left thousands without pay in the US.

The partial government shutdown, which entered the fourth week, has left more than 800,000 federal government workers out of work across the key departments.

Trump wants to build a US-Mexico border wall and is seeking USD 5.7 billion in funding for the physical barrier which according to him is a must to prevent flow of illegal immigrants into the US. The Democrats assert that such a move is a “waste” of taxpayers money.

All federal employees, who have been forced to work without pay, or have been furloughed during the partial government shutdown were offered freshly prepared, hot vegetarian meals for three days starting January 11.

The Sikh community workers prepared the gurdwara menu which comprised lentils, vegetables, rice and tortillas.

“Workers and families affected by the shutdown are invited to Sikh Centre all weekend for free meals starting today,” the Center posted on its Facebook on Friday.

The idea that originated from the community’s willingness to offer help during this hour of difficulty for many American families soon drew many volunteers who offered to come and cook to feed everyone who would come to enjoy the meals.

“Sikh Community is there to support the federal employees who did not receive their paychecks. Also, the Sikh Community appreciates their services and believes in giving gratitude to those men and women for doing a wonderful service for the nation,” Balwinder Dhillon, President of the Sikh Center of San Antonio, told reporters.

“The least we could do is support them with a hot meal for the next three days,” he said.

The Sikh Center of San Antonio is the oldest gurdwara in the city and was established in 2001. It also offers food, clothing and shelter to any needy new immigrants. – PTI

Listing of Gurudwaras in the US.

 

Professional golfer arrested for poaching at an Indian tiger reserve; Opportunity for hunting Tours to the USA?

Professional golfer arrested for poaching at an Indian tiger reserve; Opportunity for hunting Tours to the USA?

The Indian media is abuzz with the arrest of professional golfer Jyoti Randhawa, who was arrested for allegedly poaching in the Motipur range, an area that is protected at the Dudhwa Tiger reserve. Mr. Randhawa was apparently caught with skin of endangered animals and riffles and hunting gear in his possession, all of which are illegal in India.

This is not the first incident of the rich and famous being arrested for poaching. According to Washington Post, Earlier this year, the popular Bollywood star Salman Khan was sentenced to 5 years in prison for poaching antelope. After a legal battle that lasted nearly 20 years, a prominent Bollywood actor once seen by many as above the law was convicted of poaching two endangered blackbuck antelopes and sentenced to five years in prison.

Jyoti Rhandawa, golfer.JPG

Poaching in Indian forests is a major game of cat-and-mouse with a small band of underpaid and overworked forest department officials trying hard to guard dwindling parcels of forest land. They occasionally catch a few bad apples while many get away. Landing the rich and famous in the net makes for sensational news, but this doesn’t seem to deter a percentage of folks like Mr. Jyoti Randhawa who think they can get away with it.

Opportunity for American ‘Hunting Tours’ to fill the void by attracting rich Indians?

Setting aside the moral and ethical dilemma of hunting wildlife, one can perhaps look to the West, especially America. The United States, with large tracts of land and rather liberal gun laws has turned legal-hunting into a major industry in some American states.

In the United States, regulation of hunting is primarily performed by state law; additional regulations are imposed through Federal environmental law regarding migratory birds (such as ducks and geese) and endangered species. A map of total hunting licenses purchased in the United States in 2017. Like many licenses, a hunting license is considered a privilege granted by the government, rather than a constitutional right under the Second Amendment. (Wikipedia)

Even a cursory googling of “hunting tours America” brings up hundreds of entrepreneurs and companies providing guided and un-guided Hunting trips. For example, Montana Guided Big Game Hunting claims “We offer:  mule and whitetail deer hunts, archery elk hunts, archery whitetail hunts, wilderness elk hunts, wilderness multi-weapon hunts, wilderness combination big game hunts, spring and fall black bear, horseback hunts, lodge hunts, mountain lion hunts, moose hunts and goat hunts.” 

Superstars like Salman Khan and sportsmen like Jyoti Randhawa and thousands of rich closet-hunters from India are ideal clientele for hunting tour operators. They are interested in hunting and can surely afford a plane ride to the US.

Any entrepreneurs out there tapping this market?

 

 

References

  • Jyotinder Singh Randhawa (born 4 May 1972), also known as Jyoti Randhawa, is an Indian professional golfer who was ranked in the top 100 of the Official World Golf Ranking several times between 2004 and 2009
  • Golfer Jyoti Randhawa held for poaching in Dudhwa tiger reserve – Times of India
  • Professional golfer and his caddie arrested for poaching at a tiger reserve – Golf Digest
  • 5W1H: Golfer Jyoti Randhawa arrested for alleged poaching at UP – ZeeNews

Gulf dream, no longer cool for Indians

As we approach the end of 2018, there are a number of media articles that describe how the “gulf dream” is slowly dying for Indians.

A recent Right to Information (RTI) request and an inquiry in parliament revealed that in the last six years, an average of more than ten Indian workers died every day in Gulf countries. In August 2018, Venkatesh Nayak from the Commonwealth Human Rights Initiative (CHRI) submitted an RTI to the Ministry of External Affairs seeking to know the names, age, sex, and occupation of Indian workers who died in the six Gulf countries from January 1, 2012 till date. He also sought to know the cause of their deaths as mentioned in the death certificates.

Gulf countries, India, deaths, US dollar, working conditions, remittance, Telangana

About 24,570 Indian workers died in six Gulf Countries Since 2012. These include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). Saudi Arabia recorded the most deaths at 10,416 while Bahrain, at 1,317, had the least.

Mr. Nayak has also analysed the annual ‘Migration and Remittances Data’ released by the World Bank and found that Indians working in Gulf countries accounted for more than half of the remittance that India received from all over the world between 2012-2017. Out of a total of US$ 410.33 billion in remittances from the world over, remittances from the Gulf countries accounted for US$ 209.07 billion.

Articles of interest:

Famous four: Indian-origin women in Forbes’ list of 50 female technology moguls!

Four Indian-origin women have been named by Forbes among America’s top 50 female technology moguls, a list that includes tech heavyweights IBM CEO Ginni Rometty and Netflix executive Anne Aaron.

Padmasree Warrior, former Chief Technology Officer (CTO) of Cisco; Komal Mangtani, senior director at app-cab aggregator Uber; Neha Narkhede, Chief Technology Officer and co-founder of streaming platform Confluent; and Kamakshi Sivaramakrishnan, CEO and founder of identity-management company Drawbrige; are in the list.

“Women don’t wait for the future. The 2018 Inaugural Top 50 Women In Technology list identifies three generations of forward-thinking technologists leading more than a dozen tech sectors across the globe,” Forbes said in its ‘America’s Top 50 Women in Tech 2018’

Warrior (58) served in executive positions at both Motorola and Cisco and is now the US CEO of the Chinese electric-autonomous-vehicle startup, NIO.

ForbesTop50
Image from Forbes 50

At the $138-billion Cisco Systems, she had helped the tech giant grow in influence through acquisitions. She is also on the boards of Microsoft and Spotify.

“Warrior still finds the time to mentor other women in the tech industry, stay in touch with her 1.6 million Twitter followers and follow a nightly meditation routine,” the business magazine said.

Mangtani, an alumnus of Dharmsinh Desai Institute of Technology in Gujarat, heads business intelligence at Uber. Currently, she serves on the board of nonprofit organisation Women Who Code and led Uber’s $1.2-billion donation and partnership with Girls Who Code to increase access to computer science.

Narkhede, who studied at Pune university, had as a software engineer at LinkedIn helped develop Apache Kafka — which can process the huge influx of data coming from the site in real time. The data-processing software has become the heart of Confluent, an enterprise Narkhede founded with her LinkedIn co-workers to build tools for companies using Apache Kafka, Forbes said.

The 32-year-old’s firm counts Goldman Sachs, Netflix and Uber as customers.

Forty-three-year-old Sivaramakrishnan’s company, Drawbridge, uses large-scale artificial intelligence and machine learning to identify the different devices people.

“As the number of devices people use on a daily basis — computers, laptops and smartphones — increase, advertisers need a way to show ads to a person across all their devices. Facebook and Google already offer these services to advertisers, but now they have a competitor with Kamakshi Sivaramakrishnan’s Drawbridge,” Forbes added.

Article compiled from Forbes and other sources

The Dos and Don’ts of NRI Investing In Indian Realty

Amongst the NRI’s there are 3 types of investors. The first type look for short term gains over a period of 1-3 years, the second type look to buy for themselves and the third type are long term investors who want to be in the market for 7-10 years.

The first type of investors have disappeared and more number of people looking to buy for personal use have surfaced.

Samir Jasuja, the founder and CEO of PropEquity added that the market has stabilized in the last 6 months and the worst times are behind us. Over the last 3 years with the advent of demonetization, GST and RERA, the new launches have come down by almost 90%. The best cities to buy into are governed by 3 major factors, which are employment generation, infrastructure and the overall supply demand situations prevailing in the market. Banglore and Mumbai are two of the most hot sites of Real Estate because of the presence of all the 3 aforementioned factors.

“The NRI fraternity is used to 10-14% returns on investment from the residential segment in India” said Virendra Adhikari, the CEO of Asset India Ltd., on being asked about the do’s and dont’s of NRI investment. However, these figures have been bearish due to the current market scenario.

Amongst the NRI’s there are 3 types of investors. The first type look for short term gains over a period of 1-3 years, the second type look to buy for themselves and the third type are long term investors who want to be in the market for 7-10 years. The first type of investors have disappeared and more number of people looking to buy for personal use have surfaced.

More online in the article (link)

After years of heady growth Patanjali Ayurved is facing a slowdown

A while ago, we featured Patanjali Ayurved, and it was the fastest growing FMCG company in India. Our feature (link).

Patanjali Products

A few recent articles in the Indian media seem to indicate that Patanjali Ayurved is facing a slowdown after years of heady growth. According to an article in Economic times,

It closed the last financial year at around the same level as the previous fiscal year’s revenue, Rs 10,000 crore.
However, there could be a bigger worry for Patanjali than flat revenues. According to a recent Credit Suisse report, consumer offtake has declined in many product categories. While the company continues to hold sway over toothpastes with Dant Kanti, and in ghee, incremental gains in these categories are said to have declined. “Patanjali is facing headwinds with FY18 sales  ..

Another article also reviews if Distribution could be Patanjali’s Achilles heel? 

There is a huge gap between demand and supply, admits Acharya Balkrishna, MD of Patanjali Ayurved, who’s recently been in the news for his 94% stake in the organisation. (A development touted as a strategic move to take the limelight off Baba Ramdev who has been the face of the company all this while). Balkrishna tells us that besides 1200 Patanjali Chikitsalayas, 2500 Aarogya Kendras, 7000 open stores in villages, and 5600 marketing vehicles, his team is working on launching 250 mega stores in .

According to industry estimates, Patanjali products are currently available in 2 lakh traditional retail outlets popularly called as kirana shops. That’s 1/30th the presence of Hindustan Unilever in the kirana universe (over 60 lakh outlets) — the market leader in FMCG space who Patanjali has reportedly been giving sleepless nights to. As for Colgate and Nestle — players Baba Ramdev took a direct dig at and threatened to oust within a year — the numbers are 47 lakh and 35 lakh, respectively.

Prem Watsa named ‘NRI Of the Year’

Prem Watsa, founder of Fairfax Financial Holdings, was conferred the Special Jury ‘NRI of the Year Award’ at the fifth edition of Times NOW & ICICI BankNSE -1.67 % NRI of the Year Awards 2018. Indian football team captain Sunil Chhetri was presented with the ‘Global Indian Icon’ award. The Times Network and ICICI Bank awards were hosted in Mumbai on Friday.

Image result for prem watsa blackberry

One of India’s top recognition platforms, The NRI of the Year Awards salute the spirit of global Indians who have made a mark for themselves worldwide. “Over the course of five editions, NRI of the Year, our flagship property has emerged as the most distinctive and coveted awards platform, instituted to recognise the achievements of the global Indians. It is an important component of our engagement with the Indian diaspora as a media group representing a nation with a global agenda,” said MK Anand MD, Times Network. Kiren Rijiju, minister of state for home affairs, was the chief guest for the function.

Read rest of the article in Economic TimesEconomic Times

Prem Watsa has a sizable investment in Blackberry (According to bloomberg)

“The reason we put a lot of money in [BlackBerry] was because of [CEO] John Chen. John Chen is an outstanding executive — long track record. And I met him just like that in San Francisco. And he had a terrific turnaround at a company called Sybase. And then he says, you know, I bought every BlackBerry that existed and I really don’t want this company to go down. So I said, would you look at perhaps joining the company, and he said, ‘I’ve got to talk to my wife. If she says yes, I will.’ And she said yes and he joined us. If he hadn’t come, we likely wouldn’t have put [in] any money.”

10 money management tips for NRIs

ET Now has an interesting article that highlights money management tips for NRIs. The practical tips include

  • Maintain An NRO/NRE Account In A Bank In India – If you are an NRI and still have income sources in India such as income from ancestral property or from a rented out property, you can keep the money in India by opening an NRO bank account.
  • Create A Power Of Attorney To Manage Your Property In India – If you are leaving behind your property in India, you must assign a person to take care of your assets on your behalf. I
  • If You Wish To Keep Money in An Indian Bank – If you want to maintain a fund with an Indian bank, while you are abroad, you must look for a bank which has a branch in the country you reside at.
  • Watch Out For Currency Rate Fluctuations – You should be careful about the currency fluctuations when making an investment or taking loan in India. A slight change in the value of Indian Rupee against the foreign currency can significantly impact your effective return.
  • Weigh Your Options Before Taking Loan – Being an NRI, you have the advantage of taking loan from both Indian and International banks in the country you live in.
  • Manage Your Taxes – As an NRI, you need to comply with the tax laws of both countries: where you reside and in India. The tax deduction benefits in India are more or less similar for both NRIs and the residents. Still, you might want to consult a tax advisor to maintain tax discipline.
  • Stay Updated With What’s Happening in the Indian Economy – If you own properties or have money invested in India, then it is important that you stay updated with the policy and regulatory changes taking place in the country.
  • Buy Health Insurance Cover – NRIs often prefer to get treatment done in India to deal with a health issue, as there is family back home to take care of them. So a health policy in India always comes handy. You can claim tax benefits on the premiums paid under Section 80D and reduce the tax liability for income accrued from India.
  • If You Plan To Move Back To India – One of the important decisions to make once you are abroad is whether you want to continue living abroad or move back to India.