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Showing posts from December, 2008

"Inbound deals likely to surge first"

TheDeal.com has a video interview with Prof. Anil Gupta of the Smith School of Business who feels that, once the credit crisis eases, we are likely to see a wave of inbound deals into India and China driven by attractive valuations. He feels large companies which already have a presence on the ground are likely to lead the wave. The recent acquisition of Indo Tech Transformers by GE seems to indicate this as well. Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

Deccan Cargo's takeoff plans

Outlook Business has an article describing the start-up plans of Air Deccan founder Capt. Gopinath's second company. With the help of a headhunting firm, the serial entrepreneur quickly shortlisted six candidates to head his logistics venture. Jude Fonseka, who had spent 22 years in logistics major FedEx, fit the bill, and was appointed CEO. Gopinath’s brief to Fonseka was simple: "Build the best team." Over the last 18 months, Foneska has put together a 200-strong team with many years of experience in the express logistics business. Many of those who have joined are former FedEx, UPS and DHL employees. Some of Gopinath’s ex-colleagues from Air Deccan’s start-up team, including Pritam Phillip and Vijaya Menon, are also on the team. Mohan Kumar, ex-CFO of Air Deccan, is the financial consultant for the project. ...His team is working hard to make that happen. Construction is in full swing to build a 100-acre express cargo hub at Nagpur. Cargo handling facilities are also ...

Jobs@Venture Intelligence: Looking to add to our BD Team

Designation: Manager-Sales & Marketing Experience: 1+ years Technology / Skills : MS Office (Excel and Access in particular), Internet Browsing & Searching, Copy Writing Age: 24-28 Years Education: Bachelors or Masters Degree in any discipline. Personality Excellent Communication and Interpersonal Skills Technology Savvy High Tenacity level Advantage Degree in Business Management Overseas Experience Location: The candidate will be based out of our headquarters in Chennai. Should be prepared to travel often. Contact: S. Nataraj / Arun Natarajan; jobs@ventureintelligence.in

Interview with Naren Gupta of Nexus India

The Mint has an interview with Naren Gupta, Managing Director of Nexus India Capital. I think India will be affected more than what we have seen so far. Everybody feels that they are the better fund and in India that’s particularly the case because nobody has results. All we have are portfolios and companies that we are working with. In the US, it’s easy. If you look at people’s returns over the years, you can see who is good and who is not good. But in India that’s not the case, so it makes it much harder. And that’s where the experienced LPs in the US are able to tell the difference, see the early signs. Now it’ll really show if you’re good or not because ultimately the vote will come from the LP. ...Yes, we have made capital calls since then and we are pretty fortunate. We had a meeting with all our LPs a month back. Our view is it’s a better time to fund companies now than two years back. We have gone over our strategy with our LPs, they are all on board with what we’re doing now....

Basics of the credit crisis

Paddy Hirsch of Marketplace has a set of videos explaining the various basics of the global credit crisis using a whiteboard. Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

Tombstones with a difference

From Reuters' report on how a record number of M&A deals were canceled during the year. Most investment bankers would like to forget about the disastrous year that was 2008 -- even as they think about the fees that could have been. More deals were withdrawn in 2008 than ever before, and with overall mergers and acquisition activity down 35 percent around the world, you can bet bankers would like those deals back. Over 1,100 deals were canceled during the year, up from just under 800 in 2007, according to Thomson Reuters data. The total value of withdrawn deals for 2008 was nearly $800 billion, and banks lost more than $815 million in fees. Some of the notable ones included BHP Billiton Ltd's $188 billion offer for Rio Tinto Plc; the proposed buyout of Canadian telecommunications giant BCE Inc by a group of private equity firms; and Microsoft Corp's unsolicited bid for Yahoo Inc. Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of in...

Is the doom & gloom overdone?

Extracts from a Roundtable discussion organized by Economic Times, featuring Aditya Birla Group chairman Kumar Mangalam Birla, Tata Sons executive director R Gopalakrishnan, JP Morgan India CEO Kalpana Morparia and Temasek India chairman Manish Kejriwal. Manish: Things are bad. As in every downturn, it’s always exaggerated. In a bull market, you feel better than you should. In a market like this, you obviously feel worse than you should. Till August-September we didn’t realise the extent to which the slowdown had come. The fact is we are part of a global economy and we are not decoupled. Six months ago, you started seeing iron ore pile up in Chinese ports. These were early signs that one had to pick up. The next two quarters are going to be difficult. Having said that, I think India, unlike China, is not that dependant on the global markets. There is still a very strong domestic market. ET: What are the three key actions that the government needs to take to bring 9% growth back? Kal...

Why China couldn't decouple

Yasheng Huang, a professor of international management at the MIT Sloan School of Management, has an interesting article in WSJ. The fundamental problem, and a mortal bias of economists, is a fixation with simple measurements -- especially GDP data. Ask a professional economist how many provinces China has and you are likely to draw a blank stare. But ask him what the GDP growth of China has been and he'll quickly be able to tell you that China has grown at a double-digit rate for 30 years and that at this rate China will overtake the U.S. by 2035 (or some other date). GDP-centrism is endemic, and often comes at the expense of deeper analysis. Just look at the enthusiasm with which economists and analysts greeted Goldman Sachs's famed "BRIC" report forecasting dramatic booms in Brazil, Russia, India and China -- a report based on little more than fifth-grade mathematics. This obsession with China's impressive GDP growth often ignores discussion of what's caus...

Investment Banking Handbook & Directory - Updated Version

Venture Intelligence has published an updated edition of its Investment Banking Handbook & Directory. The handbook is as an authoritative and comprehensive guide for both entrepreneurs and Private Equity / Venture Capital firms to choose Investment Banking Partners. The directory section consists of an alphabetical listing of all active India-focused Investment Banks including contact name, address, phone numbers, e-mail and website details. To download the Handbook, please visit http://www.ventureintelligence.in/ibdirectory.htm

Interview with Vishal Tulsyan, CEO of Motilal Oswal Private Equity

Vishal Tulsyan , CEO of Motilal Oswal Private Equity , which has invested 50% of its $125 million first fund across eight companies including dairy firm Parag Milk, “reverse logistics” firm RT Outsourcing and Rajasthan-based NBFC AU Financiers, recently spoke to N. Sriram of Venture Intelligence. Some excerpts: Venture Intelligence: What is your outlook for the PE market in India over the next 2-3 years? Vishal Tulsyan: Deal flow will slowdown. In the last two years, many companies raised money, not because they required money but they wanted to set a benchmark valuation and eventually go public. Going forward, you would see a fewer number of such deals happening. Companies with genuine need for outside capital, who have the right mix of capital structure in place, will be the ones out there to raise money. We will see fewer pre-IPO deals because we will not see a strong capital market. Exits will definitely become difficult. Investments that happened in the last 2-3 years e...

Why MFIs have become a magnet for PE investors

Growth, growth and growth says this article in Economic Times. This shift in the nature of the investor has been driven by scorching growth in the micro finance sector over the last two years. MFIs, especially the larger ones, most of whom operate as non-banking finance companies (NBFCs), have been consistently growing at 200%-plus. SKS and Spandana would both fall in this category. Some like Bandhan in West Bengal have grown at an astounding rate of 600% per annum. However, Bandhan is yet to open itself to PE players. In fact, this fiscal, a cluster of large and mature micro finance entities appear set for over 100% growth as inflationary trends have triggered higher working capital needs for micro loanees. In the first quarter of fiscal 2009, these MFIs have bettered their half yearly disbursals of FY08. In other words, the demand for working capital needs by MFIs has outstripped the quantum that small PE investments or SIDBI could so far provide. Hence the bid to woo mainstream ...

"Multiplex business is recession proof"

Extracts from Economic Times' interview with Ajay Bijli, CMD of multiplex operator PVR. I, like some of my peers in the industry, hold the view that the entertainment industry is largely recession proof. It is mostly dependent on the supply of good content. At the beginning of the year, during the Indian Premier League (IPL), production houses delayed releasing their movies, that was when footfalls in multiplexes witnessed a drop. Again during the terror attacks in different cities, movie buffs didn’t feel safe enough to go to multiplexes. But in the last few months it has become clear that whenever good movies have been released, movie buffs have come to the multiplexes. The recent release Rab Ne Bana De Jodi is a case in point. I think it’s not economic slowdown that has affected sales of tickets, it is the quality of content which governs footfalls generated in the multiplex. Fortunately, India is still a growth story and to a certain extent the slowdown is more psychological t...

"Make or Break Years for Emerging Market PE Funds"

In an video interview to Private Equity Online, Jonathon Bond, Head of fundraising and investor relations at Actis (the UK-based emerging markets specialist which closed a new $2.9 billion fund earlier this month), says the current global economic crisis presents EM PE funds with an unique opportunity to "come of age". According to him, returns in Asia, Africa and Latin America will be relatively resilient over the next two years. "LPs will say we need to find growth and in most emerging markets, growth would be between 2-8%". While the holding periods might be longer, for "LPs looking for growth and positive returns and have pensioners to pay, liabilities to meet," emerging markets would be a good bet over the next 2-3 years. Provided they are disciplined, adopt strategies appropriate for local conditions and manage the expectations of the investors, EM PE funds will have an opportunity to prove to LPs that they deserve a 20-30% allocation in their inter...

Will Kingfisher Airlines navigate the air-pockets?

Business Today has a Cover Story on the path forward for Kingfisher Airlines. Kingfisher Airline’s yet-to-be revealed balance sheet may be weak, but there have been enough developments in recent days to help improve sentiment. The reduction in ATF prices and abolition of import duty of 5 per cent on the fuel will, indeed, help in stemming the losses. “If the sales tax on ATF is reduced to 4 per cent, Kingfisher will not have any loss in December for the month. There will be no cash burn and we will save between Rs 300 crore and Rs 400 crore a year on account of saving in taxes, which is 25 per cent on an average now,’’ says Raghunathan. Aware that he cannot get states to slash sales tax rates on ATF to 4 per cent, Mallya has stepped up the campaign to get the Centre to bring ATF under declared goods category so that it becomes taxable at 4 per cent. He has dangled a carrot, too: “If they cut taxes, I will cut fares.’’ The Kingfisher brass is quick to point to the benefits of the integ...

What Next for SKS?

Business Today has an article profiling the journey of SKS Microfinance thus far and looks at the challenges ahead for the VC-backed microfinance company. In just under 10 years, Vikram Akula has built SKS into one of the biggest brands in rural India. A survey that pitted SKS versus two big financial brands—ING and LIC—showed that borrowers preferred SKS in overwhelming numbers. Even those who weren’t borrowers opted for SKS because of its reputation. “There’s no one else that people trust,” explains Akula. “Everyone interested in rural India has to come to us. If they don’t, they’re out of the game.” ...SKS and Akula do have admirers in the industry, including Vijay Mahajan, Chairman of BASIX and a guru of India’s rural economic development. Mahajan feels that Akula has made an invaluable contribution to Indian Microfinance. “He has taught the sector what is scale and sustainability while ensuring social impact,” he says. Also, attracting capital is not easy, especially in today’s s...

Deal Alert: Leander Sport raises Angel Financing

From Press Release Leander Sport Pvt. Ltd., a sports management and marketing company promoted by Indian tennis legend Leander Paes, has received financing from multiple angel investors. Investment bankers Viedea Capital Advisors was the advisor to Leander Sport on the transaction. "We expect to do a larger institutional fund raise for the company in 8-12 months to fund growth and expansion", said Uday Disley, Director of Viedea Capital. Leander Sport offers clients’ sports education services such as content creation, content management & distribution, and sports media properties, aimed at the active life style segment. The company also offers sports infrastructure consulting services ranging from concepts & designs to implementation & facilities management. Traditional sports management areas such as sponsorship sales, brand licensing and asset management are also a part of the company’s services portfolio. Aside from Leander Paes, the company currently manage...

Deal Alert: IDFC PE invests Rs. 200-Cr in Deepak Cables

From Press Release: Deepak Cables (India) Limited, a Bangalore-based maker of aluminium conductors for Transmission & Distribution application, has raised Rs. 200 crores from IDFC Private Equity. With this investment, Deepak Cables has raised a total amount of Rs. 285 Crores, following the Rs.85 crores raised from UTI Ventures in June 2008. o3 Capital was the sole advisor for the deal. Bangalore based Deepak Cables was founded by K. Surya Rao in 1982 as an aluminium conductors manufacturing company and over the last two decades has grown to become one of the largest T&D EPC players in the country. Deepak Cables with its two aluminium conductor manufacturing plants at Tumkur and Pondicherry and in-house design and engineering capabilities is one of the few players having the expertise to execute projects end-to-end: from design to commissioning. The company has an client list of leading public sector T&D entities such as KPTCL, PGCIL, MSEDCL, Discoms and several prestigiou...

A New Indicator of US Unemployment

WSJ's Life & Style section has come up with a new indicator for US unemployment: Beards. Facial hair is showing up on more former corporate types. It's one of those tiny luxuries unleashed by unemployment, a time when people are briefly released from workaday habits and may wish to take stock of their lives before setting out anew. Al Gore grew a beard after losing the tumultuous presidential election of 2000. Neatly trimmed, it looked cozy and anti-establishment as he pursued creative projects on his way to the Nobel Peace Prize. Scott Berger, a 35-year-old investment analyst, stopped shaving in October after being laid off from hedge fund Laurus Capital Management. "It's something you can't do in the corporate world," he says. He does, however, cut his facial hair closely with a beard trimmer, pledging, "I'm not ever going to look like a lumberjack." ...For most office workers, the look remained too daring -- until they had nothing left to...

The "Positive VC" PR

After Sequoia Capital's much publicized "RIP Good Times" presentation , other VCs are now generating "good PR" for "rallying their troops". Arvind Sodhani of Intel Capital in TheDeal.com : "What we have now is a very broad based decline. It would not surprise me if we saw a fairly large GDP decline in the U.S. and a prolonged recovery after that. We view this as an opportunity. We will continue to lead and not waver. We will find the good investments and help them. We are leading our deals, by and large. That's different from 2001, when we were not leading deals. We had to rely on other VCs back then. The VC community pullback will not impact us at all. It will create the opportunity to do more investments for us." ...While in October some VC firms used scare tactics in communicating with portfolio companies about the impact of the economy on startups -- most famously Sequoia Capital with its "R.I.P. Good Times" presentation -- ...

Dr. Doom predicts more gloom

NYU professor Nouriel Roubini who had accurately predicted the economic crisis as far back as 2006, predicts more gloom for the US economy in 2009 in this Fortune survey of eight market experts. We are in the middle of a very severe recession that's going to continue through all of 2009 - the worst U.S. recession in the past 50 years. It's the bursting of a huge leveraged-up credit bubble. There's no going back, and there is no bottom to it. It was excessive in everything from subprime to prime, from credit cards to student loans, from corporate bonds to muni bonds. You name it. And it's all reversing right now in a very, very massive way. At this point it's not just a U.S. recession. All of the advanced economies are at the beginning of a hard landing. And emerging markets, beginning with China, are in a severe slowdown. So we're having a global recession and it's becoming worse. Things are going to be awful for everyday people. U.S. GDP growth is going t...

Status check on Lehman and AIG asset sales

WSJ.com's Deal Journal has an interesting post following up on the asset sales managed so far by Lehman and AIG. It isn’t working out exactly as the government may have intended. Potential buyers are hoarding their cash, and the recessionary environment is hardly welcoming for fully valued bids on the assets of troubled companies. As a result, as of Wednesday, Lehman has raised only $3.5 billion through asset sales, and AIG $254 million. The problem at the core of these asset sales is obvious: The only valuation that counts these days is the one that reads “dirt cheap.” On Wednesday, Banque Nomura France, a unit of Japan’s Nomura Holdings, bought Lehman’s French investment-banking assets for €1. That’s right. For $1.30. That for a business that has equity capital of $43.6 million, according to Bloomberg estimates. Nomura previously snapped up Lehman’s European, Middle East and Asia operations, not including the French arm, for $225 million. Barclays bought the U.S. businesses–incl...

The Private Equity View

Outlook Business has a set of invited articles by leading investors as part of its cover story on Private Equity. Some extracts: Akhil Gupta of Blackstone Also, since liquidity has dried up globally, the price of money will go up—and so will the price of private equity. Today, there is less money available with limited partners (institutions that invest in private equity firms), hedge funds, mutual funds, individuals and private equity. When anything is in short supply, its price goes up. This means we (private equity) will be looking for higher returns. Our bar for investing will be higher and we will show a lower appetite for risk. Therefore, we will do deals at lower valuations than we did in the past and we will be more selective. Ashish Dhawan of ChrysCapital The environment will be much better for control deals. In the next couple of years, the definition of core competency will become more genuine. In a growth economy, core competency can just be ‘I’m a good entrepreneur’. Now, ...

TiE Entrepreneurial Summit 2008; Dec 16-18; Bangalore

TiE Entrepreneurial Summit 2008 (TES 2008) is Asia’s largest Summit that brings bringing together a galaxy of entrepreneurs, venture capitalists, policy makers, academia, industry, thought leaders and other major stake holders. TES 2008 will focus on retail, real estate, healthcare, manufacturing, social entrepreneurship, clean tech and mobile. TES 2008 has been crafted to provide a comprehensive perspective on all aspects of entrepreneurship. Entrepreneurs with unbeatable track records of success behind them – and now stellar names in industry - will lead the summit across 43 impressive sessions, 13 stellar plenary sessions, 22 high-powered panel discussions and 8 inspiring My Story sessions outlining the future of entrepreneurship. Speakers Include: Azim H Premji Prof. C K Prahalad Dr. Vijay Mallya Nandan M Nilekani For more information, please visit http://www.tiesummit.org

Is development finally on the political agenda?

Political analyst Prem Shankar Jha writes in the Economic Times that the results of the recent state elections indicate that Indian voters are finally attaching a significant weightage to development-related parameters. The Congress’ success in retaining Delhi for the second time is relatively easy to understand. At 12% per annum since 2003, not only does the state have one of the highest growth rates in the country and therefore an abundance of new jobs, but it has in Sheila Dikshit a chief minister who is scrupulously honest, easily accessible and a good administrator. In short Delhi is to the Congress what Gujarat is to the BJP. Once may be happenstance, but twice reveals a pattern. Sheila Dikshit’s success in Delhi has, therefore, strongly reinforced the message that was sent out to all political leaders by Narendra Modi’s success in retaining Gujarat in December last year for the second time. Modi won because Gujarat too had been enjoying a 12% growth rate since 2003 and, whateve...

JiGrahak named among WEF's Technology Pioneers

Bangalore-based mobile payments company JiGrahak Mobility Solutions has been selected as one of the 34 "Technology Pioneers" for 2009 by the World Economic Forum. The WEF names such companies from around the world each year as among the "innovators of the highest calibre whose technologies will have a deep impact on business and society". Helion Ventures had invested $2.2 million in JiGrahak in August 2006. While JiGrahak is the only India-headquartered company on this year's list., another tech firm that does a lot of its development out of India - Nivio - has also been named. Venture Intelligence had helped in spreading awareness among the Indian VC community for this program. The full list of Technology Pioneers 2009 is available here .

The RBI has the most room to cut

Here's an "interesting" graphic from WSJ that shows how India is clearly the leader - in high interest rates that is. India is clubbed with Japan (whose rates rule at 0.3%!!) as the countries that have cut the least since Aug. 07. (Hat Tip: Paul Kedrosky ) Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

Should the US be merged with China or Canada?

Peter Rip, General Partner at Crosslink Capital, has a post on how US is currently looking like a classic "restart opportunity". The current discussions (December 2008) in Congress and the Press resemble the discussions original investors have about failing companies. How big should the bridge loans be? What are the terms? How deep are the cuts? Are they deep enough? Who's fault is this? ...What happens in a restart? First, existing stakeholders get wiped out; The $7T of ‘new money’ is accomplishing that. Second, management gets changed. November 4 did that. We now have new managers who have a four year ‘vest’ and, probably, a ~100 day cliff. ...A VC Restart would also look for alliance partners to strengthen the offering. Perhaps a merger with another competitor with complementary skills, e.g. China? Merging with China might resemble YHOO+ MSFT – distance and culture conspiring against success. We might also argue about valuation, as there are dramatic differe...

"US lawmakers have much to answer for"

In an article for Economic Times, noted IAS officer Srivatsa Krishna points out some historic regulatory blunders that led to the US credit crisis . First, at the heart of the current financial mess is what are called credit default swaps (CDS), a little-understood insurance cover, which feigned to be everything but an insurance cover (for otherwise it would need to come under regulatory purview), for an even more esoteric underlying financial instrument, namely mortgage derivatives. CDS constituted as much as a $60 trillion market or four times the entire national debt of the United States, before they came crashing down. And no one knows till date who owns them or their exact number or transactions in them, for there was no depository to track them. ...Secondly, on the last day of the last session of a lame duck 106th session of the US Congress in 2000, the last agenda item introduced the euphemistically titled: ‘Commodity Futures Modernisation Act’, which removed the various capit...

"Strong Dollar is bad news for Emerging Markets"

CNBC-TV18 has an interview with Shankar Sharma, Vice-Chairman and Joint Managing Director of First Global, in which he points to the inverse relationship between the US Dollar and the fortunes of Emerging Market stocks. Unless you have the dollar weakening and weakening substantially, there is going to be no bull market and emerging markets. That is a simple one line, simplistic way of looking at emerging markets. Through the 90s the dollar was more or less the strong currency and there was only one market to play which was the US market. EMs went nowhere, India went nowhere, Russia was a dog market, Asia went through some degree of upswing between 94 and 96 and then they all got crushed. Now you saw from 2002 dollar weakened, the EMs did well. The dollar strengthens, EMs don’t do well. It is as simple as that. ...Just looking at the way the world is going, you have pretty much the entire world in recession now. Looking at the China output numbers, looking at India CMIE (Centre for Mo...

"VCs will require to invest more per company"

Outlook Business has an interview with Promod Haque, Managing Partner of Norwest Venture Partners, in which he says the need for VCs to provide more support to existing portfolio companies - since exits will take longer to happen - will result in fewer new companies getting funded. For smaller funds, the challenge is to either support the company through the slow years or sell out, which is not a great option at a time when valuations are down. So, what’s going to happen is that you’re going to have to put that $200 million to work across fewer companies, and that means you will not have enough capital left to be diversified across many companies. This is a challenge that we’re going to see in the US, and I am sure that we will see it in India as well at some point. ...India will pretty much experience the same thing. Liquidity here is tight too. The IPO market is shut, and mergers and acquisitions are not happening either. That said, companies will get funded, but the bar will be hig...

More on how the financial crisis could benefit IT firms

Mastek CEO Sudhakar Ram has an article in ET on how the current financial crisis could be a boon for "second and third wave" of IT Services companies. When we dig into the reasons for the crisis, while we can blame blind optimism and greed, at a more fundamental level it is a failure of systems. The quality of underwriting at the point of loan origination had failed. Systemic controls that ensure uniform and consistent application of underwriting rules could have done much to avoid bad loans. Better controls and risk management systems governing individual firms as well as the entire financial system would have helped to track the quantum of leverage and the risks associated with it — both from the perspective of board governance and regulatory oversight. All these point to a desperate need for a massive overhaul of systems — and a substantial investment in new IT initiatives. For too long, large institutions have been trying to get away with spending 80% of IT dollars just...

"One day they would regret"

Extract from the minute book of Bank of Rajasthan's AGM proceedings (See Page 7 of 10). 5. What action we are taking against BNP Paribas and Avenue Capital as they have gone back on their commitment to subscribe to the preferential issue of shares? We are taking all the steps to increase the profitability of the Bank, which would be reflected in the share price. We are not taking any direct action against these investors but one day they would themselves regret the decision not to invest in our Bank as per their commitment. Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in

"Real Estate Developers Seek Santa Claus"

Dhirendra Kumar of mutual funds research firm Value Research has an article describing how the current woes of the Real Estate sector are largely self wrought. In the last three to four years, the real estate industry, with the implicit collusion of housing finance providers, has indulged in an unprecedented loot of house buyers. The 'demand-supply gap' that supposedly produced the price rise was an illusion. Here's how it was created. Basically, developers kept jacking up prices and since banks kept financing purchases at higher and higher prices, an illusion was created that there was enormous demand, no matter what the price. The buyers were of two kinds. One, the real end-users who were panicked into buying because they were told that prices would go on rising. These people saw prices rising at the rate of 5 to 10 per cent a month and were desperate to buy before houses became unaffordable forever. The interesting part was that vision of ever-rising prices acted both a...