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16
SC rejects bail
to Kerala
businessman
in murder case
T K Devasia
trivandrum — Supreme Court
on Friday rejected the bail plea of
controversial Kerala businessman
Mohammed Nisham, accused in
the murder of Chandrabose, security guard of Sobha City at Trichur in January this year.
Nisham, 38, owner of Kings
Group of Companies, rammed
his Hummer onto the security
guard for the delay in opening
the gate for him. The millionaire businessman was booked
with murder charges after
Chandrabose succumbed to
his injuries on February 16.
Senior lawyer Gopal Subramaniam, who appeared for the
accused, made a strong plea for
bail saying that the murder was
not a premeditated act and it
was an accident. He pointed out
that the SUV had hit the security
guard after he lost control of his
vehicle. Justice Deepak Mishra
rejected the arguments saying
that Nisham’s track record
showed that he did not value human lives. The incident is a glaring example of how the rich have
become “totally egocentric and
megalomaniacs”.
Referring to the life of the security guard, who died after battling
for life in a hospital for 18 days,
the court said there was pride in
poverty. “Poverty matters,” the
judge said in a scathing remark
against the ‘arrogant’ and ‘imprudent’ accused.
Denying the bail, the apex court
directed the trial court to complete
the trial proceedings within three
months. Appearing for the prosecution, senior advocate and former federal minister Kapil Sibal
said the crime resembled that of
“Goliath killing someone”.

Mohammed Nisham had
rammed his Hummer onto the
security guard for the delay in
opening the gate for him

President to get
three honorary
doctorates on
West asia trip
occupied jerusalem — President Pranab Mukherjee will
receive honorary doctorates
from three leading universities
in Jordan, Palestinian Authority
and Israel during his maiden
six-day visit to West Asia starting next week.
The University of Jordan (UJ)
will be the first of the three varsities to bestow the honour on
Mukherjee, a varsity statement
said, adding that Indian President will receive honourary doctorate in political science.
“Given the special ties enjoyed
between Palestinians and India
it gives us pride to felicitate the
Indian President with an honourary doctorate,” said an official at
the Al Quds university in the Palestinian Authority (PA).
“India has been at the forefront of academic cooperation
with the Palestinians and we receive a lot of help from the Indian government in the field of
education,” he added.
Mukherjee will be accompanied by vice chancellors and
heads of leading institutions in
India and his engagement gives
an impression of developing
strong educational links with the
leading universities in the region. Hebrew University of Jerusalem, ranked among the top
universities worldwide, will also
be conferring an honourary doctorate on Mukherjee at a specially organised event. — PTI

President Pranab Mukherjee

Saturday, OctOber 10, 2015 khaleej times

india

Chai
getting
an image
makeover
High-end tea outlets
seek to give a refined
experience of the
beverage

T

hat sweet and
milky tea concoction called
chai is getting
an
image
makeover in
India. Driving
the change is
the other beverage — coffee.
Rising incomes and demand
for a refined experience transcending chai are spawning in
the nation’s biggest cities, a
transformation mirroring 15
years of coffee revolution that
brought Starbucks in 2012. Entrepreneurs are pooling their
savings to set up these tea houses, inspired by the $175 million
initial public offering planned
by the parent of Cafe Coffee
Day, a chain backed by KKR &
Co.
Tea is a bigger opportunity
than coffee because consumption of the leaf-based beverage
beats its rival 30 cups to one,
says Nitin Saluja, who runs 12
tea outlets under the name
‘Chaayos’ in and around New
Delhi.
Euromonitor International
data show per capita spending
on tea in the second-most populous country was $1.7 a year
in 2014, versus $18 in the UK,
showing potential for up-selling
a premium version of the
drink.
“If at all any company becomes the Starbucks of India
one day, it will be a chai company,” said Saluja, 32, who started
his chain in 2012 after quitting
a management consultancy job
in the US. “The reason why Starbucks became so huge in the US
is that they started serving a
beverage that was already popular in America, but in a better
way. We are trying to sell something that is inherent in India’s
culture. That is the opportunity
we are tapping into.”
The ventures are seeking to
strip chai of its street credentials and elevate it to a higher
price point, while introducing
middle-class Indians to finer
leaves from around the world.
What it means is a relatively
well-off Indian now has more
and better tea options in a relaxed environment: A cup of
Japanese Sencha or Mumbai’s
favourite “cutting chai ,” which
is otherwise had during a
rushed break from work amid
the hustle and bustle of crowded sidewalks.
Even though India is the world’s
biggest consumer of tea after China because of sheer population,
the annual per capita consumption is among the lowest.
The state-run Tea Board of
India’s figure is about 800
grammes compared with two
kilograms in the UK and one kg
in neighbouring Sri Lanka.
“People’s awareness has increased and tea intake has been
steadily growing in India,” said
Ruchi Sally, founder and director
of Elargir Solutions Pvt., a retail
consultant based in Singapore and
Mumbai.
“Simply opening a place for
people to hang out won’t work,
because you already have Starbucks and other coffee shops. You
need to have a good value proposition.”
Saluja hit upon the idea of

$1.7

a year was the per
capita spending on
tea in 2014

800

grammes is the annual
per capita consumption of
tea in India

Rs2m

is the amount with which
Nitin Saluja set up Chaayos
after quitting his US job

$5m

investment poured in
Chaayos from NY-based
Tiger Global company

Customers sit at a table inside a Tea Trails cafe, operated by Zone8 Tea World Pvt, in Mumbai, on Friday. — Bloomberg

Tea is a bigger opportunity than coffee
because consumption of the leaf-based
beverage beats its rival 30 cups to one”
Nitin Saluja

Owner of 12 tea outlets under the name ‘Chaayos’ in New Delhi

setting up Chaayos about three
years ago when his craving for a
decent cup of Indian chai after
breakfast in Houston went unsatisfied.
He quit his job and started off
with his total savings of Rs2 million ($30,400), he says.
Now, he has plans for 50 stores
by May 2016, including in Mumbai and Bengaluru. In May, New
York-based Tiger Global Management LLC, which has emerged as
the biggest backer of e- commerce
startups in India, led a $5 million
investment in his company. Tea
Trails is another chain that started
off in December 2013 with 8 operational stores, two of them franchises. Uday Mathur, a co-founder
and director of Zone8 Tea World
Pvt., the company that runs Tea
Trails, says he has plans to scale
that up to 500 stores in about four
years.
“We will still be only scratching
the surface at that point of time,”
said Mathur, 57, who founded
and ran a chain of pre- schools before selling his stake to private
equity funds. His stores offer
about 80 varieties of tea, including the Indian chai in earthen

pots for about Rs70, more than
seven times the price of its street
avatar.
The best locations to have outlets are colleges and offices where
young people with decent purchasing power hang out, according to Mathur.
His product cost is less than 20
per cent of the selling price and he
expects to break even at Ebitda
level in the financial year through
March 2017, he said. There’s no
clear formula for success in the
food and beverage business. Chirag Yadav, 32, who started ‘Chaipatty’ in Bengaluru in 2009, expanded in the city with two
franchised outlets but had to shut
them down soon because of differences with partners. He still
has dreams to expand.
Meanwhile, tea producers like
Manjushree Plantations Ltd have
attempted to move up the value
chain by selling high-end leaves at
airports in their own boutiques,
which are similar to those run by
Singapore-based TWG Tea Pte. in
Southeast Asia and the US. The
Indian grower also has tea houses
in Mumbai and New Delhi.
The biggest challenge for these

The best locations to have outlets are colleges
and offices where young people with decent
purchasing power hang out”
Uday Mathur

Co-founder, director of Zone8 Tea World Pvt., the company that runs Tea Trails

businesses will be in picking
prominent locations that lure customers while keeping rental costs
under control in a country where
high real estate costs make it
tough to turn a profit. Spending
on real estate by supermarket
chains as a percentage in India is
two to three times higher than the
global average.
Average tea prices at weekly
auctions held across India have
risen 8.6 per cent this year to
128.07 rupees per kg, according
to the Tea Board.
The mushrooming of coffee
houses across the country in the
past 15 years has familiarised Indians with the global experience
of enjoying a non-alcoholic beverage. Coffee consumption in India
has jumped 50 per cent since
2000 to 1.2 million bags of 60kg
each, according to data from the
US Department of Agriculture.
Cafe Coffee Day, owned by
Bengaluru-based Coffee Day Enterprises Ltd., runs about 1,650
outlets across India, more than
three times all its rivals combined, according to a report by
consultants Technopak Advisors
Pvt. Rivals include Barista Cof-

fee, which was formerly owned
by Luigi Lavazza SpA, and UKbased Costa Coffee, besides Starbucks. The share sale by Coffee
Day next week will help the chain
cut its debt, Chairman V.G. Siddhartha said in an interview on
Wednesday. The company plans
to open 135 outlets and install
5,000 vending machines in commercial and corporate venues
each year for the foreseeable future, he said.
Leasing costs constitute about
20 per cent of revenue for the
company, Venu Madhav, a director, said in Mumbai the same day.
Tea Trails’ Mathur says the Coffee
Day IPO is good for the entire industry. It makes investors “more
receptive to models like ours,” he
said. For him, the focus now is on
building the brand and wait for
valuations later.
He is open to selling a stake at a
later stage, but he says he’d shun
private equity, a sentiment echoed
by Yadav, because that would
mean loss of independence.
“I don’t want to bring them in at
this stage,” he said. “We don’t
want to have PE guys breathing
down our neck.” — Bloomberg


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