Ratul Puri, 39, is a charismatic young man. It is impossible not to like him. He is polite to a fault, coolly analytical—a computer engineering degree from Carnegie Mellon helps, no doubt—almost always impeccably dressed in a business suit and smokes Marlboro Lights. He has no hobbies and is a workaholic. No wonder then, that he is usually in office by 10 am and is often the last to leave. If you are an investor you would want someone like Puri to be at the helm of affairs.
Akhil Gupta, senior managing partner and chairman of the Indian arm of Blackstone, one of the world’s largest private equity firms, believes that Puri is one of the best entrepreneurs he has met. Gupta invested $300 million (about Rs 1,650 crore) in a company Puri founded: Moser Baser Projects Private Ltd. This company is an independent power producer and an energy company. “Ratul has reached every milestone before time,” says Gupta, pausing to deliver one of the highest praises an Indian entrepreneur can hope to get, “He reminds me of a young Mukesh Ambani.”
That’s Gupta. Now let’s talk about another investor, Rajesh Khanna. Khanna was the managing director of Warburg Pincus, another blue-blooded private equity firm, who invested heavily in Moser Baer India Ltd, the magnetic storage and solar panel manufacturing company. This is a company where Puri has been a key decision maker. He became the executive director in 2001. While Khanna did not talk to Forbes India for this story, his actions spoke quite clearly.
Warburg Pincus recently sold a major portion of its stake in Moser Baer, taking a substantial haircut on its original investment. It is estimated that the fund invested almost $220 million (Rs 1,210 crore) in the company. It sold about 24.5 percent of its stake in an off-market transaction to a Seychelles-based entity called Global Town Investment for about $11 million (Rs 61 crore). And then in June, Rajesh Khanna resigned from Moser Baer’s board. Investing in Moser Baer is possibly one of the worst investment decisions that Khanna must have made at Warburg Pincus.
Brave New World, Brave New Moser
A far bigger problem was that personal storage in the digital world was changing again. Thanks to the internet, the cost of storage had fallen dramatically. Flash memory was the next big thing for storage and transfer. In an interview with Forbes India in 2009, Ratul Puri had said growth rates fell from a CAGR of 70-80 percent in 2001-03 to about 15-20 percent by late 2004-05. “So you started expanding your capacity and adding capital cost in a falling market,” says a senior Moser official.
(This story appears in the 03 August, 2012 issue of Forbes India. To visit our Archives, click here.)
Before investing in a technology driven business we must be initially slow this was the mistake senoir mgmt did in pv business. we must have carried out all r&D and looked into competitive pricing which we could sustain for longer time and then gradually expand. I myself was a former employee of moserbaer compact disc division.
on Dec 13, 2014many families belong to this company , so PLEASE don\'t close this company as long as possible........
on Aug 20, 2014Ups and downs is part of life today I have bought 10000 shares of this company with a hope that everything will change for better. BEST OF LUCK MR. RATUL the worst is over lets hope for the best...
on Aug 12, 2013Investing in Moser Baer is a bad investment, The management are bunch of Muggers and Puri is not a proper businessman he is smart plunderer
on Jul 22, 2013Focus on solar is a futuristic good we can say, but it is important for Moser Baer to stronghold themselves in the CD, DVD, Blu-Ray business and increase market capitalization in it. However, it requires some critical production, financial and marketing strategies to out beat the competitors and gain market expansion.
on Nov 20, 2012Time invested is wealth. every business has its ups and down. in this case, the management has the capability to come back stronger to save moser baer. the subsidiary solar / power companies will some point of time will bail out the parent company in this case .
on Aug 12, 2012Think they should have diversified into relative media/entertainment segment than into solar even though a sunrise sector in many geographies but with de-valued chinese yuan, its like giving your head to the wall!Hope they somehow come out of this debt trap...
on Aug 5, 2012\"He is the first Indian entrepreneur of size to be tested and bested both by changes in technology as also the Chinese manufacturing juggernaut.\" That\'s a weird ending to the article. Neither of the two reasons have been elaborated on anywhere else in the article. So very open ended. I hope there\'s a part II to this article.
on Aug 4, 2012you only read page 1 of 4.
on Aug 6, 2012Cyclical nature of business. Creative disruptions by a creature called Innovation. Wrong footed in decision making. Call it anything. There is one more aspect to doing business and creating value creating organizations that last long, really long. Why companies like IBM, GE, Apple (till now), Nike, etc. have continued to be one of the best in business for so long? I find a very simple reason behind this, organizations which are founded by a motive of achieving something else than just money are more likely to outlast others. Senior Puri, started a business, because he wanted to do business and make money. He got unlucky for the first time, in making money. Second time, he thought, let me make media storage devices because there is a huge market out there, which was rightly so. And, so he succeeded at that point in time. But what next? Had his motive been to revolutionize the media storage industry, he could have surely avoided this bankruptcy of his business. If I am not wrong at one point in time Moser Baer were selling everything - from LCD TVs, to Monitors, etc. and I thought have they gone mad? Just because consumer electronics is booming in a rapid growing economy fuelled by one of the largest middle class in the world, you wont start selling each and everything that they can buy. Ridiculous. Here also, the way Puri Junior is sounding and has worked till now, he is motivated by doing business to make money, to make profits. He might prove lucky just like his father and later gain some business wisdom which is guided by a broader vision. Or he might get just one time lucky and make some more money for some more years. But this is not the way to make long lasting, value creating and enviable organizations.
on Aug 1, 2012China is the becoming the world\'s factory and many manufacturing companies in India are just taking baby steps. We should commend people like Ratul Puri who still walk against the whirlwind of China.
on Aug 1, 2012