| | | Question of the Week Mckinsey was set up by a University of Chicago professor who was an expert on management accounting, also the subject of the only book he wrote. Who was the man and what was the book titled? | | |  | | Good Morning | | The News in Summary India’s fourth largest IT services company Wipro, suffered a setback with Thierry Delaporte quitting as CEO a year before his term was slated to end. Elsewhere, the planned merger of two of the Tata group’s airlines, Vistara and Air India, is having a deleterious effect on the former’s operations with many of its pilots rebelling against their new compensation structure. Meanwhile, even as Kumar Birla’s UltraTech Cement is planning to invest Rs 32,400 crore to boost capacity, at its Southern rival Indian Cements the promoters are pledging more shares to raise debt. More struggles for edtech Byju’s which is seeking arbitration in its dispute with some of its key investors while Aditya Birla Fashion and Retail Ltd (ABFRL) is evaluating a vertical demerger to create two separate listed firms. Finally, Vodafone Idea shareholders cleared a critical fundraising initiative. | | |  | | | | Amidst Continuing Underperformance Thierry Delaporte Quits as Wipro CEO  Wipro’s leadership struggles that started with the 2005 exit of Vivek Paul continued with Thierry Delaporte becoming the latest CEO to quit, a year ahead of July 2025 when his tenure was officially slated to end. He will be succeeded by Srinivas Pallia, who was the CEO for the company's America region and has been with Wipro since 1992. The timing of Delaporte’s resignation, just ahead of the company’s results, reflects its continuing underperformance. In the last 19 years the IT services company, once the frontrunner in the business, has tried various models, and people, both internal and external to fit into the leadership role. But each of them has left the task of restoring the company's growth and profitability to the next man in. Delaporte who took over from Abidali Neemuchwala in 2020 promised a lot in the first couple of years but after the Covid-driven boost to the IT sector had ebbed, Wipro's performance has slipped alarmingly. His exit came as little surprise to sector watchers with a Mint report in December 2023 flagging that under him “Wipro’s turnaround has been hobbled by sweeping cultural changes, falling growth and profitability, a steady stream of exits and underperforming stock.” | | | | Pilots Leave Vistara Passengers Stranded  Tata-owned Vistara, in the midst of a complicated merger with the group’s flagship airline Air India, faced a mini revolt from its pilots many of whom didn’t show up for work last week leading to dozens of flight cancellations. As part of the merger process wherein both airlines are being brought under a uniform pay structure from March, Vistara’s pilots will now get a fixed salary for 40 hours of flying instead of the previous 70 hours. This has caused consternation among the pilots and meant considerable chaos among passengers of what was hitherto considered India’s best airline in terms of service. Air India’s chief executive and managing director Campbell Wilson said last month that customer-facing elements, including the brand, won’t change before 2025, but with irate fliers taking to social media to air their displeasure, that commitment is being tested. The airline blamed poor rostering for the current wave of flight cancellations and warned that it may have to curtail its network for May as well to gradually stabilize operations. | | | | | | | | As Vistara struggles to manage the fallout of its merger with Air India, this video on how another such marriage between US Airways and America West in 2005 turned into a disaster, serves as a timely reminder of the hurdles that lie ahead. | | | | While UltraTech Looks at Expansion, India Cements Battles Debt Contrasting news from two cement heavyweights with the Aditya Birla Group company UltraTech Cement, announcing major investments in capacity expansion even as India Cements, the country’s tenth largest cement maker, fights working capital shortages. UltraTech earmarked Rs 32,400 crore for capital expenditure (capex) over the next three years to increase its capacity to around 200 million tonnes per annum (MTPA). That includes commissioning two new greenfield projects in Chhattisgarh and Tamil Nadu, as well as closing its acquisition of Kesoram Cement, the flagship company of the BK Birla group which it bought in November last at a valuation of approximately Rs 7,600 crore, including debt. Meanwhile, with its balance sheets stretched as debt mounts to six times its operating profit, India Cements’ promoters led by managing director N. Srinivasan, continued to borrow against their shares with the latest debt raised as recently as last month. Already, 45.5% of their shares had been pledged with banks at the end of December 2023, and the new pledge will take that up even further. | | | | Byju’s Seeks Arbitration even as Raveendran’s Wealth Drops from Billions to Zero Debt-laden edtech Byju's has filed a plea with the National Company Law Tribunal (NCLT), which is hearing a plea challenging its recent rights issue, seeking arbitration in its dispute with some of its key investors. PE firms including General Atlantic, Prosus and Peak XV have alleged that the company violated the tribunal’s 27 February order, forbidding it from allotting shares to investors participating in the $200-million rights issue without increasing its authorized share capital. The tribunal has given Byju's, which denied the investors’ allegation, 10 days to file its response in the matter. The development comes in the midst of a complete meltdown in the wealth of Byju Raveendran, the company’s founder. According to the latest Forbes Billionaire Index, Raveendran was previously listed with a net worth of Rs 17,545 crore ($2.1 billion), which has dropped to zero in the 2024 Index. | | |  | | | | ABFRL to Demerge Into Two Separate Companies  Aditya Birla Fashion and Retail Ltd (ABFRL) is evaluating a vertical demerger of the Madura Fashion & Lifestyle business (MFL) which comprises of four lifestyle brands, Van Heusen, Louis Phillippe, Allen Solly and Peter England along with other casual wear brands like American Eagle and Forever 21, as well as the sportswear brand Reebok, into a separate listed entity. That will leave ABFRL with a portfolio which consists of Pantaloons & Style Up, ethnic wear brands such as Tasva and Masaba, luxury formats including The Collective, Galeries Lafayette, apart from the company’s more recent foray into direct-to-consumer brands under the TMRW portfolio. The company’s board cleared the demerger plan which will lead to two separately-listed companies allowing the group to realize value-creation opportunities for shareholders. Post the demerger, ABFRL will raise growth capital within 12 months to strengthen its balance sheet. Analysts view the move as a huge positive for the company’s stock which has been a laggard as compared with the Tata group’s Trent whose market cap is now six times that of ABFRL. | | | | Vodafone Idea Shareholders Clear Critical Fundraise Plan Debt-laden Vodafone Idea received the approval of its shareholders to issue securities worth about Rs 20,000 crore from existing investors. The shareholders’ approval came at the company's virtual extraordinary general meeting (EGM), following board approval for a Rs 45,000-crore fundraising initiative. The funds raised will help the country’s third-largest telco reduce liabilities from its massive Rs 2.1 trillion debt, launch 5G services commercially and better compete with its larger rivals Jio and Airtel, to whom it has been steadily losing market share. Vodafone Idea, which remains only one of the top three which hasn’t yet rolled out 5G services, lost 1.5 million subscribers in January this year on top of the 1.4 million it lost in December 2023. Its average revenue per user at Rs 145 is also significantly lower than Jio’s Rs 182 and Airtel’s Rs 208. The fund raise is therefore vital to the company’s survival. | | | | Last Word The self-appointed physician to global corporations is trying to heal itself. After several years of aggressive hiring and low attrition rates, Mckinsey, in an effort to reduce headcount is now offering sops to employees who will leave. A year after the consulting company embarked on a plan to eliminate about 1,400 roles mostly in support functions, high-level staffers in the UK are now being given a chance to resign in exchange for nine months salary. Mckinsey has been forced into cost cutting in face of a slowdown in the business along with intensified scrutiny of their work both from the public and stalwarts of the industry. An anonymous memo, believed to have been written by McKinsey ex-partners, referred to the firm’s “unchecked and unmanaged growth" and “lack of strategic focus". | | | | Answer to the Question The founder of the consulting giant was James Oscar McKinsey, a certified public accountant and professor of accounting at the University of Chicago. In 1922, four years before setting up Mckinsey, he wrote a book titled Budgetary Control. | | | Do you have any questions? Send in your queries to sundeepkkhanna@gmail.com Were you forwarded this email? Did you stumble upon it online? Sign up here. | | Written by Sundeep Khanna. Edited by James Mathew. Produced by Shad Hasnain. Send in your feedback to newsletters@livemint.com. | | | | | Download the Mint app and read premium stories | | | | | | View in Browser | Privacy Policy | Contact us You received this email because you signed up for Mint Top of the Morning or because it is included in your subscription. Copyright © HT Digital Streams. All Rights Reserved | | | | |
