No longer hot

When Sun TV came out with its initial public offering in 2006, investors could not get enough of its shares. It was arguably one of India’s greatest franchise, having established itself as the leading broadcaster in the south. Its financials were impressive, with return way ahead of all other major rivals. No channel could touch Sun, let alone dislodge it from the top. With that sort of lead, Sun TV commanded tremendous pricing power and its profits were galloping. New businesses such as direct-to-home and movies did equally well.

Kalanithi Maran and wife Kavery continued to lead the annual compensation table year after year — even this year, the duo topped the list of India’s highest-paid executives, with a combined remuneration of ₹120 crore. Mind you, this is just their salary and does not include dividends. Hardly any questions were raised over governance. No one could have imagined the dramatic change in Sun’s fortunes.

The unraveling of the telecom scam at the Centre, which brought to light some uncomfortable secrets of the Maran brothers, and the change of guard in Tamil Nadu in 2011 gave Kalanithi’s vast business empire an unexpected jolt. As the family fights multiple battles, business is taking a turn from bad to worse. Sun TV is feeling the heat, with competition threatening its dominance like never before. And SpiceJet, which was making profits when Maran bought it from Wilbur Ross in 2010, is today reeling under heavy losses. Sun’s story is a telling example of the risks that businesses face when political clout and power, rather than pure business credentials, become the key source of competitive advantage.

Meanwhile, J Jayalalithaa’s arrest has added a new twist to the tale, though it may not help the Marans in any way, given how the DMK is placed politically. In our cover story, Krishna Gopalan delves on how things have suddenly turned grim for this politically connected business group. To read more about this see Is The Sun Setting On Maran's Empire?.

Another interesting feature in this issue looks at how e-grocers are giving mom-and-pop stores a run for their money. For more on that, see Go Carting Online.