Forgetting Fear and Winning Uncertainty

Uncertainty breeds fear. Despite all our strengths and preparation to face a situation in our lives, factors beyond our control exist as roots of uncertainty. Our perceptions, beliefs and past failures build upon such uncertainties to have a full fledged fear with deep roots inside us.

Significance of factors beyond our control vary and hence possible impact these factors have on the ‘Desired’ outcome. Please take note of ‘Desired’ here.
Fear has its roots, both, from uncertainty around factors beyond our control and from doubts on factors that are under our control, our strengths, in other words.
As individuals we all face situations in our lives- both expected and unexpected. Our ability to foresee/pre-empt these situations helps us prepare better but FEAR may still exist.
Law of attraction is a concept that teaches to fight fear and get a desired outcome. It educates us to practice sending out positive statements/desire statement to our brain. Constant positive re-enforcement impacts our thinking and finally, influences our actions. As a result, we forget about the uncertainty. We only remember what we desire and the strength that we posses to achieve the desired outcome.

Independence Day- Celebrate, Enjoy and Sleep

Aug 15 every year for most of us is a holiday. If it falls on a working day, we are even more happy to have a mid-week break when we have more time to enjoy.

I see no wrong if we fail to relate to the historic event. There’s no harm if we enjoy the day eating out, spending time with family or doing what we like the most. After all, we are common man and no different from the common man in 1940s.
When India got independence on Aug 15 1947, Indians were poor; deprived of basic amenities; most of them were farmers or workers who struggled to earn enough for their bread. Amongst them, we also had freedom fighters who played an active role in getting India independent. They were the ones who sacrificed everything even their lives for the cause of independence.
So, imagining Aug 15 1947 from the archive picture of flag hoisting ceremony that Hindustan Times supplement ‘Brunch’ published last Sunday, I visualize, true feeling of independence would have restricted to freedom fighters and their families or friends. The common man, residing in villages may have totally missed out on this historic event. For them, the day would have begun getting back to work, to earn enough for the day.
Even for the poor in Delhi where the celebration was an elaborate phenomenon, the meaning of Independence would have been ‘foreigners leaving our country’. They would have assembled at the Red Fort more with curiosity witnessing the events unfold and listening to speech of our first prime minister. Rest of the day, would have been spent in leisure, enjoying with family, playing cards with friends or resting.
So what’s the harm if we do the same today as well?

Leverage and SMEs- Is capital structure of any relevance?

Optimal mix of debt vs equity helps define the hurdle rate while taking capital expenditure decisions. Choice of capital structure; its optimal level compared to equity and how and when companies churn their capital structure has been researched widely in academic research.

While reviewing the relevance of capital structure for Indian companies due consideration to constraints to finance is important. Large and ‘A’ rated companies have a wide array to chose from while SMEs are highly constrained in terms of choices. Further, most of the SMEs in Indian are family-owned businesses who have a strong aversion to debt.
For SMEs, pecking order of financing (when internal accruals are not enough) are:
1) Unsecured loans from promoters/group companies;
2) Equity from promoter;
3) Secured borrowings from banks;
4) Equity/quasi-equity from non-promoters.
Working capital gap is funded by stretched trade credit and borrowings from non-market sources, as well. The quantum of borrowing usually depends on the nature of business and reputation the promoter enjoys in the business circle.
Traditionally, world over, family-owned businesses are known to re-deploy the retained profits to reduce debt and/or grow their business. Cost of capital is not a very important criteria for two reasons:
1) Promoters have reasonable return expectations and hence unlike an ROI of 20% and above for a PE, promoter is happy with a return of 10-12% spread for over a longer time horizon;
2) More than the cost of debt, control dilution is a far bigger reason for aversion to debt from banks.
 In recent years- with what is observed by me in case of Indian firms- over-leveraging has become quite evident in the balance sheets of Indian companies, especially more alarming in case of SMEs. Increased competition and shrinking profit-margins have forced firms to resort to debt, to ensure enough liquidity to tide over trough phase of business cycle.
Hence, any attempt to comment on the relevance of capital structure for SMEs, we should look at them in a financing-need induced framework. Byoun (2007) has suggested to review capital structure changes under 4 scenarios:
1) Financial SURPLUS with MORE than optimal level of debt
2) Financial SURPLUS with LESS than optimal level of debt
3) Financial DEFICIT with MORE than optimal level of debt
4) Financial DEFICIT with LESS than optimal level of debt
* Byoun, Soku, How and When Do Firms Adjust Their Capital Structures Toward Targets?. Journal of Finance, Forthcoming.  


“Mom!, my
breakfast,” shouted Rahi dressing herself in front of mirror in her room. She
lived in a two-bedroom apartment with her parents and younger brother. “I am
looking fatter in this mirror…do looks really matter?”, she muttered to herself
 while brushing hair quickly and letting
it fall free over her shoulders. She looked beautiful when she let her hair
She was
on the dining table in the living room when her mother brings in breakfast and
a bowl of curd. “Mom, I do not like milk products, they make me feel like puking
but you offer me everyday.” This was Rahi’s reaction everyday but always
obliged her Mom by finishing the curd.
Mrs Garg (Rahi’s MoM) got married before she could complete
her studies. She was blessed with three kids- Mahi who is now happily married
in Jalandhar, Rahi and Gopal who studied in Pune. Mr Garg worked with
Chandigarh Administration as a Compliance Officer- a man of principles who
enjoyed great reputation amongst his colleagues for  his sincerity and friendly
always have no time to eat.  I wish your
in-laws care for you the same way, when you are married? Eat well till you are with
Me.”, Mom said, getting emotional.
”Mom! Wrong
time to have tears, I am not missing my first lecture again today. Be Strong!”,
and she rushed out of house.
Rahi had no plans to get married soon. She wanted
to work post her graduation and get married to a person she ends-up loving. Somewhere
inside her heart she believed, love at sight is not in her destiny.
home, Rahi’s Mom said, “Rahi should be married soon. She can work once she
is married, if she wants to. Our financial position is stable now and let us
find a match for her.”
I am also
worried for Rahi. Ok! let me start exploring”, said father.
Rahi was in 2nd year of her MBA program
at MGM College, Chandigarh. Ashima and Geet were her best and only friends. Being
from a traditional middle-class Hindu family, Rahi was a religious girl,
emotionally strong and with lively nature. She was very accommodating and accepted
changes in her life as and when they came with a smile. She carried a strong
head and never decided anything before giving a rational thought to it. She was
not impulsive in her decisions quite contrary to personalities of Ashima and
The trio moved together wherever they went and
attracted the attention of boys. Ashima was the one who had most proposals
coming in. Rahi was not receptive to any such advances from strangers. Geet having
a long-time boyfriend was a known to all and had no pending proposals to deal
“I just
fail to understand why I should talk to these guys?” , Rahi  asked Ashima. They were walking towards the
bus stop after college and were being teased by two guys on a bike asking for
their name. Geet’s boyfriend picked her every day after college and dropped her
“You are
beautiful and they want to be your friend”, Ashima said, waiving to her new infatuation
waiting at the bus stop. “See, I got to date him for next few days to know him
better and if he suits me, I love him else break-off.” Ashima walked ahead of
Rahi and turned to say, “See you tomorrow. Bye!”
Love at sight was an alien concept for Rahi and
Ashima’s approach was also not acceptable to her. She believed, one day destiny
will bring her close to someone she may fall in love with. Rahi travelled back home
alone in the city bus. She use to let her thoughts flow freely with closed eyes
while travelling back home.
She imagined- He will be the one who is very
sensitive and will not mind to be on his knees to say sorry every time I get
angry. I should be a die-hard fan of this personality longing to see him at
home every day. I will cook for him while he stood next to me in the kitchen,
kissing me, teasing me. My first tea of the day should be prepared by him. His
intelligence should be well respected and appreciated with all who knew him. He
should a very good communicator with strong convincing skills so that he could
easily make-up reasons to convince me and win over me. He should respect woman
and be dependable, ethical, and logical and with a good sense of humor.
Two years later
She graduated and found her first break as an
Analyst with ICRA.
we have found a boy for you who is working and from a good family background. Will
you consider meeting him?”, her Mom called. “Yes!”, I will she said
The meeting day was fixed at Rahi’s house. She had
never put so much make-up before this day on her face. The eye liner used made
her soft eyes prominent, more defined; alert to judge her potential life
 All other members of family stepped out.
Post a
formal round of introduction, Rahi asked, “What are your plans for future?”
Inder was a tall 6 feet tall, clean shaven guy who
had a decent dressing sense. His gestures and dressing sense pointed to a comfortable
life he enjoyed. He worked for an advertising function as sales head. He came
across as a skeptical guy with soft eyes though. He looked comfortable talking
to Rahi. He was single son of his parents with strong financial background with
no experience of how tough life can be. His parents’ only attraction to Rahi
could be the quest to search for a girl less demanding and from a weaker financial
background compared to them.
 Inder said, “I work with an advertising
company as sales manager and do not believe in changing jobs frequently. I am
quite satisfied with what I have achieved in life and will like to sustain it.
That’s it.”
Rahi asked,
“What do you expect from your life-partner?”
This one response, she believed will speak a lot
about Inder. Even if he tried to window dress a response that will be quite
evident to her.
started, “I will expect my partner to take care of my mother first. She has
worked very hard all her life and I am the only son. So my partner should be
attending to her always. I am not very demanding person but will like my
partner to be a home maker who is available for me, keeping the house clean.”
He paused in between to seek affirmation from Rahi.
She just nodded with her full attention on Inder.
continued, “Further, kids who should be given full attention at home, my
partner should take consent from me when she wants to do anything in her life.”
Unaware of complexity of the question, the guy
blurted out all his expectations prioritizing his parents first, then himself,
then kids. Inder never asked back about her expectations from life partner.
“Yes, I
cook and I am a strict vegetarian.” She responded to one of Inder’s questions. She
added, “I will like to work after marriage.”
Inder taken
aback a little by promptness said, “Yes, I have no issues but you should be
home on time to fulfill her responsibilities.”
This statement of his made it quite clear to Rahi that
Inder was not guy she had been imagining.Later that evening, Rahi discussed Inder
with her parents.
Quite contrary
to her nature, she said, “I am ready to marry this guy.”
She was sensing the worries of her parents about
her marriage and Gopal’s future education expense. Gopal had expressed his
desire to go US for higher studies. She wanted to be married soon to lessen their
worries and let them plan for their only son’s higher education in US.
Rahi was
quite convinced that she will not change her mind with regards to Inder.
thought, “I will risk it and live with her decision- good or bad.
She got married exactly 70 days after her she
first met Inder at her place. All seemed to be going well. She gave enough
personal space to Inder and tried hard inside her mind not to be judgmental and
compare Inder to her dream boy. She cared for Inder.
“I have
kept your clothes on bed that you wear today to office. Breakfast is ready on
table and your shoes polished. I go for a bath you start with your breakfast.”,
Rahi said rushing around the house.
Rahi went overboard to win over Inder who never
seemed to be free and frank with her. Inder’s mother took pride in her decision
to have Rahi as her daughter-in-law. She was over the years taken for granted.
She ate dinner after she served all others but no one was awake to ask her if
she had food or needed any help, support.
She was sad and worried expecting her first kid.
Despite being pregnant, she still did not deserve a special care either from
Inder or her mother.
“Why are
you are always late from office.”, Inder fuming in anger when Rahi returned
from office, one day. He advanced to hit her but stopped when she yelled back, “How
dare you do this to me? I am pregnant and you behave like this. Be a Man! Mr
Inder and mind you!.”
The anger in the soft eyes was seen for the first
time in two years of her marriage.
Five years later
Rahi played with her two sons- Aahaan and Rehaan-
every day after returning from office. Seeing her two sons playing and grow
under her motherhood, she forgot her expectations from Inder. They lived in the
same house and were just husband-wife and not couples who were friends.
She could never guess what Inder wanted from her.
With every passing year, she was framing a clear picture of Inder- he has a negative
approach to life; never playful; always doubts me and does not trust me; never
speaks his mind.
Inder’s routine in evening after returning from
office was to lean on a sofa in living room and sip a drink.
Rahi use to dream about Inder coming to kitchen to
help her with work and she jumping on her feet and planting a kiss on Inder’s cheek
who was 6 feet tall and she a mere 5ft 4 inches. That day had not come in her life
till date.
With every passing year, Rahi was feeling exerted and
stressed for failing to get what she wanted out of Inder. He was not very
receptive to what she said and always managed to convince her on what he wanted
instead. Rahi being more adaptive gave-in to avoid any conflict.
New phase in Rahi’s life
Rahi did not change her first job since the HR at
ICRA allowed her the flexibility to attend to our family requirements every now
and then. Despite, all her efforts her life was not what she had imagined.
“Why don’t
you come with us for lunch, Rahi?”, said Aman getting up from his seat just
opposite to Rahi’s workstation.
Aman worked in same team as Rahi for last 3 years.
Aman was a playful guy with good sense of humor, hardworking and intelligent.
He had the wit to make people laugh with his strange but unique perspectives on
life. Rahi had been observing her all these years and started to relate Aman to
her dream boy. Aman was making her go back recalling her hour long city bus
ride back home, when she was alone and imagined love of her life. She was impressed
with his style, dressing sense and approach towards work- positive and ready to
help others.
Given the
prompt request from Aman, Rahi replied impulsively, “I will come along.” That
day they exchanged details about their life- where they stayed; what food
preferred, place to holiday etc.
“I am a
mother of two sons- Aahaan and Rehaan.”, when Aman enquired if she was married.
Aman was not married and lived alone in Chandigarh.
His parents lived in a village close to Ludhiana city in Punjab. Rahi came
closer to Aman over the next few months. She carried lunch for Aman at times.
“I want
to be your friend.”, Aman asked Rahi. Rahi said, “I think we are.”
With every passing month, Rahi looked eager to talk
to Aman. Aman with his playful and care free nature continued to impress her
every day.
Rahi was falling for Aman. She liked Aman
but hesitated to think further since she had kids and wanted no further
conflicts and stress in her life. Aman will be the first to be sacrificed if it
came to choosing between Inder and him. She wanted to have a secure future for
her kids and Aman did not fit into the scheme of things. Aman had come too late
in her life.
One day, she
asked Aman, “I want you to come out with me for a lunch meeting.”,
when do we go?”, replied Aman.
she said.
At the
lunch table Rahi said, “Aman, I liked you as a friend and I love you.” She paused
for Aman to respond.
 “I too love you.”, said Aman instantly.
“I am a
mother and cannot have an undefined relationship.”
“Yes, I
agreed and given the fact that you are married, I opt to be your friend..
forever and forever.” Rahi stretched her right hand to hold Aman’s hand and
thank him for understanding her.
Rahi was lost in Aman’s description of her and recalled
her decision she took to marry Inder. She had finally found the love she had
dreamt of; a life partner she imagined exactly but then resolved to live with
her first decision- good or bad.  
the lunch, she shook hands with Aman and said, “Aman! You met me so late in