Bankerupt (Ravi Subramanian) Read Online Free PDF

even go up to a valuation of twenty times the projected earnings?’
    ‘Yes, they do. However, that’s not the problem. The disconnect is not in the profit multiple that you are demanding, it’s in your business plan. Your numbers have been projected to grow at 30 per cent for each of the next three years. However, you can’t ignore the fact that your growth has been in single digits—nowhere close to what we are projecting. Our projections are sounding very fanciful.’
    ‘So what are you saying?’
    ‘Nothing. Come, let’s talk over a drink.’ And he turned into Turner Road en route to his house in Pali Hill.
    Once they had reached home and after he had poured his first peg of Laphroaig, Aditya started off. ‘Look, Shivinder, as the CEO, you own 3 per cent in this company.’ Shivinder nodded.
    ‘Your profit last year was roughly eight crores. How the hell will you get to twenty crores in three years? In 2007?’
    ‘We have a business plan, a well-articulated strategy. If we execute it properly, we will get there.’
    ‘Cut the crap, Shivinder. For meeting your planned numbers three years from now, you need to get to an annual turnover of over six hundred crores. You seem to be woefully short. Worse, in the first six months of this year, you have shown a de-growth.’
    ‘OK. So?’ There was a tinge of disappointment in Shivinder’s voice. He didn’t like Aditya showing him the mirror.
    ‘If I take a multiple of fifteen times the earnings, instead of the twelve that we have demanded, the company, based on this year’s financials, is worth a bit over a hundred and twenty-five crores. Nothing more. And for the valuation to get to two hundred and fifty crores—the price we are asking for—we need to do something dramatic. Business as usual won’t get you there.’
    ‘So conjure up something dramatic. Who is stopping you?’
    Aditya thought for a minute. ‘I have a plan. It’s not too difficult, if we figure out how to execute it.’
    ‘What plan?’
    ‘Look, there are two ways in which companies can build valuations. One, top-line growth, or, simply put, sales growth. Companies with higher sales figures are valued higher than companies with not-so-high sales. Two, profitability growth. In a country like India, most investors fall for top-line growth. The assumption is that if we grow the top line, the bottom line will automatically grow. If not now, then definitely at a later date. If not today, it will happen tomorrow.’
    Shivinder had been in the trade long enough to know this. ‘The challenge is, how to grow either of these.’
    ‘It’s possible.’
    Shivinder looked at Aditya, surprised. ‘Look, Aditya. Growing the bottom line is difficult. Growing the top line is a lot easier if we are willing to compromise on our margins.’ And after a pause, he added, ‘And compromising margins is something we have never done as a business strategy. Step Up Shoes has never been in the discounting game.’
    ‘If your projections for the next three years are based on revenue growth, sales have to happen. Top-line growth has to come.’ And then he walked closer to Shivinder, put an arm around his shoulder and spoke softly. ‘By hook or by crook.’
    ‘I have no idea what you are referring to.’
    ‘Chill. There is a way out. But for that we need some help.’
    ‘Like what?’
    ‘Wait.’ Aditya picked up the phone and dialled a number. ‘Hi! Aditya here.’ He walked into the next room, gesturing to Shivinder to get himself a refill. In a few minutes, he was back. ‘OK. Deal done.’ Seeing Shivinder’s raised eyebrows, he explained, ‘Look, your turnover needs to go from four hundred crores to six hundred crores in three years. This year, if you grow by seventy crores, it should be fine. You figure out a way to increase your turnover by fifty crores, I will get you another twenty crores.’
    ‘When will you bankers stop talking in Greek and Latin?’ Shivinder rolled his eyes and went back to