The Ambuja Story
by Narotam Sekhsaria
Such an exciting time to read this book with all the consolidation happening in the cement industry!
One of the best biographies I’ve read after Shoe Dog. Masterclass of principles, marketing, building a company, financing AND the first generational players involved in the infrastructure development story of India.
With Adani closing in Ultratech’s lead this space has got even more exciting!
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What I Learned About Investing from Darwin by Pulak Prasad
Pulak Prasad is the founder of Nalanda Capital, which has managed USD 5 billion since 2007 with an annualized return of 20.3% post fees. They follow a simple Buffett-like strategy:
- Avoid Big Risks
- Buy High-Quality at a Fair Price
- Be Very Lazy
Avoid Big Risks:
- Minimize errors of commission (Type 1 errors) rather than errors of omission (Type 2 errors).
- Avoid big risks such as:
- Dishonest companies
- Turnaround
- High-debt companies
- Serial acquirers
- New trends like AI, microfinance, food delivery, and e-commerce
- Government-type businesses or overseas global MNCs where the founder’s interests are not aligned
Buy High-Quality at a Fair Price:
- High-quality means:
- High Return on Capital Employed (ROCE)
- No debt
- Competitive barriers
- Fragmented customer and supplier base
- Stable management
- Slow-changing industries
- Be cautious of Total Addressable Market (TAM) as it doesn’t capture profits and competition. E.g. GAP despite high TAM revenue flat since 2007 whereas income picked in 2014, this is due to competition.
Risk Comes First, Quality Second, Valuation Last:
- Study global proximities. For instance, if global top 10 airlines don’t make money, chances are airlines in India or China won’t either.
- Be wary of industries with inherently low profitability, like garment manufacturing, telecom towers, and commodity chemicals.
Identify Honest and Dishonest Signals:
- Avoid dishonest signals like press releases, management interviews, earnings guidance, and face-to-face meetings.
- Focus on honest signals, such as past operating and financial performance.
As per author after buffet, he thinks second best is Anthony Bolton – annualized return is 19.5% from 1979 to 2007 in UK. Post retirement Bolton is back in 2010 with Pound 460 M China fund where he failed measurably as he failed to discount risk of small Chinese co vs UK companies.
Be Very Lazy:
- Hold investments for the long term. For example, Nalanda added to their WNS investment 12 years after their initial purchase in May 2020.
- They have investment in 10 businesses since 2007.
Survival of Fortune 500 Firms:
- Only 12% of Fortune 500 companies from 1955 survived until 2015. However, that is faulty as many companies merged (15%) and 12-15% doing well despite out of fortune 500.
- About 55-60% failed over this period. Great businesses tend to remain great, and bad ones tend to remain bad for long periods.
Compounding Returns:
- Compounding is powerful but often misunderstood. Their investments in companies like Berger, Mindtree, Page, Ratnamani, and Supreme yielded 8 to 82 times returns.
Returns of their single company can compensate combine loss of their laggards like Ahluwalia, DB Corp, Triveni and Voltamp.
Sell Criteria:
- Sell only when governance standards decline, there’s wrong capital allocation, or the business faces irreparable damage.
Overall:
- I rate it 9 out of 10. However, the challenge of waiting for significant market corrections like COVID, as staying on the sidelines can also result in missed opportunities. It is a must-read for long-term investors.
21 Likes
But these funds performance avialable since 2007 only post 2008 crisis Central banks printed so much monies which expaned PE ratio to unsustainable level for QUALITY companies
Recently I read this book and found it very insightful and interesting. This book is highly underrated because of no advertisement. The intention for the writing this book by Mr Pulak Prasad is not to earn profit from selling it.
This book is about adopting a new mindset for investing-about reimagining investing by applying the time tested principles of biological evolution. Mr. Pulak Prasad told that the more he studied Darwinian evolution the more he learned about investing. This book is for long term investors and for readers with eclectic taste who are looking for something interesting to read.
I rate it 10/10.
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We have to see if they are trully following their own principles cited in the book. They are suggesting to become permanent owners, but how many companies they have sold recently? Some of their companies not doing that well, still they are sticking with them, for the sake of sticking? Business environment changes fast, new businesses emerge, new sectors emerge, new opportunities emerge, so does it make sense to be so rigid to select 20 companies and stay invested with them for next 40 years, just for the sake of Consistency and permanent ownership? Are we here to make money or get some award for loyalty? Even most promoters don’t do that?
Also we need to be mindful that most of their money is earned in 2008 crisis and 2020 covid crisis. They handle endowment funds of big institutes. But can we retail wait for such once in decadel opportunities like covid and GFC? How many such opportunities come in our life for funds deployment? So what will we do during other years? Sit on cash? Can we practically emulate their strategy? I doubt , even they follow their own strategy? Writing a book about morality and principles is one thing, practically following it, is another thing altogether.
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Came across this interesting book Synopsis 
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Magic Pill, Johann Hari, 2024 - This was a very useful book to understand GLP-1 agonists, diabetes, obesity, the biological, psychological, economic and cultural reasons that cause it. The author meets researchers, scientists who worked on GLP-1 drugs, amongst others to view the drugs, the need for it and how it affects the people who take it from multiple perspectives. Can easily place this alongside books like Gut, The Obesity Code and The Dorito effect from recent memory.
A lot of what’s in the book is peripheral to GLP-1 drugs but it is very important to understand the ecosystem as a whole to understand what unique circumstances gave birth to the drug and what might in the future kill the need for it.
My notes -
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People who use GLP-1 drugs (semaglutide - ozempic, wegovy; liraglutide - victoza, saxenda, tirzepatide - mounjaro, zepbound) lose between 5 to 24% of their body weight
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Within 10 years, 20-30% of the population will be on obesity drugs. Market size could be as big as $200b. Novo Nordisk the Danish corp that manufactures Sema and Lira currently is the most valuable company in Europe
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Ozempic’s iconic status as a blockbuster drug is on par with the contraceptive pill and prozac
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Obesity contributes to 200 known diseases and complications. Obesity was nearly unknown phenomenon. Today 26% of Britain and 43% of US are obese (tripled globally since ‘75) - mainly due to our food system, our relationship with food and our bodies
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One death is a tragedy, a million deaths is just a statistic - Stalin
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As a child, the author ate lot of junk and processed food but gained weight only in his late teens.
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Skinny fat is more harmful than uniformly distributed fat - high likelihood of diabetes and high BP
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Day 1 of Ozempic - the author feels mildly nauseous with no appetite. Tried eating but felt full after 4 bites. Lunch felt salty though the same lunch never felt like that before. Slept at 9 pm. It made food not disgusting but oddly unfeasible as a proposition (like someone brought you food after you finished a meal)
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Ozempic works by manipulating a tiny hormone called GLP-1 that exists in our gut and brain
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The scientist who discovered GLP-1 was working on glucagon gene produced in the pancreas - the chain found at the end of its genetic code is GLP-1. GLP-1 hormone when mixed with cells that produced insulin increased insulin production - it worked in rat’s pancreases and then in a pig and finally, a human
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GLP-1 also spikes in our gut after we eat making us feel full - GLP-1 when injected, worked just as well but since its present in the gut only for a short period, it worked very briefly and needed multiple injections to the gut
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The venom of Gila monster (lizard found in Arizona, New Mexico) had similar genetic code of GLP-1 and crucially, it was longer lasting - longer GLP-1 stays in your body, the more insulin the body makes. This helped drug companies make better copies of GLP-1 - the new ‘agonists’ could stay in the body for a whole week before breaking down
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First GLP-1 was approved for use in diabetes in 2005 (Exenatide - same family as Liraglutide)
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Novo Nordisk’s Ozempic (Semaglutide) was approved for Obesity in 2021. In 68 weeks, it led to 15% reduction in body weight - it was marketed as Wegovy for weight loss which could be prescribed at higher doses (Ozempic originally approved for diabetes in 2017). Both are once a week subcutaneous injections (Taken through a self-administered pen-like device)
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Most people on Ozempic/Wegovy regained 2/3rds of the weight lost within a year of stopping the drug
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Eli Lilly’s Mounjaro simulated not just GLP-1 but also GIP. People on Mounjaro lost 21% of their body weight (against Ozempic/Wegovy’s 15%). They also have another drug in development called ‘Triple G’ that simulates GLP-1, GIP and Glucagon - 24.2% weight loss. There are now over 70 anti-obesity drugs under development
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Food, beverages and snacking categories are most impacted since Ozempic - Krispy Kreme, Nestle’s frozen food, confectionary and ice creams, even alcohol markets have taken a hit
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Author went from 32% body fat to 22% body fat on Ozempic in 6 months
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Dosage for weight-loss drugs starts low and goes up - 0.25mg a week for a month, 0.5mg after that and a month later 1mg (or even higher) - nausea increases every time. Some of them have higher resting heart rate and feel light-headed or dizzy (from low calorie intake)
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Brain interprets the extreme satiety signalled by the GLP-1 agonists as sickness and hence the nausea. Drug companies are adding the hormone amylin to reduce nausea (under trials)
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Author was raised on a diet of new industrialised food by his mother and grandmother who mistook these to be nutritious and enjoyed the convenience of not having to cook a meal. Author’s father though was a chef and was confused by the utter lack of curiosity people in knowing where their food came from - as if it were electricity or clothes and so didn’t matter (that in essence sums up what went wrong in the last 50 yrs)
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Stuffing - paying no attention to food and piling it in with no attention to food or its flavour (as against savouring)
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Pump food full of sugar and fat, it reduces bacterial growth and adding salt, it lasts on shelves longer (hence industrial food is the way it is)
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Flavouring agents, food coloring dyes, glazing agents, acids, emulsifiers, releasing agents, antioxidants, thickeners, bleaching agents, sweeteners, chelators - industrial food is manufactured rather than cooked
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Cheapest nuggets are made of liquified chicken and emulsifier - similar to ‘pink slime’ that makes up minced beef items (hence these are cheap). Rats fed on these energy dense foods refuse to eat real food in experiments (they would rather not eat at all) - even fear of an electric shock wouldn’t deter them from their cheesecake
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Whole foods make you feel sated - steak, potatoes, fresh fruit, fish vs processed foods - biscuits, boxed cereals, cakes, flavoured yoghurts, croissants - you want more with no satiety
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Most processed food is ‘adult baby food’ - since you chew less, the delay it takes to signal satiety gets messed up. Chewing is a necessary brake to overeating.
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The carb-rich processed foods cause spikes and crashes in glucose causing you to feel hungry soon, unlike protein and fibre rich whole foods which stay longer. It is also easier to consume sugary beverages which are calorie bombs (2000 cals in a single driven even)
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Artificial sweeteners cause rats to gain weight - when brain gets tricked by the sweetness but doesn’t get calorie intake, it triggers more hunger
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Gut microbiome needs diverse food sources to stay healthy. Most processed foods only have wheat, corn, soy and meat - affects health of your gut
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Author’s friend on Mounjaro - lost 50 pounds and doc cut his BP pills, gout pills and statins by half and was likely to do another halving after that (demand for lot of these staple generics could be hit too, alongside junk food and alcohol, hip and knee replacement surgeries etc)
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Gluttony is one of the seven deadly sins - we think people who are fat thus deserve the punishment of exercise and can’t take the easy way out. Most cultures have some form of this. No different from women who would not be given painkillers because suffering was integral part of child-birth as god designed it
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Concern-trolling - where you pretend to be concerned about someone’s health so you can in fact, shame and humiliate them
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Insulin manufactured by the body helps glucose get into cell. When body doesn’t produce insulin, its type-1 diabetes but when cells develop resistance to insulin, its type-2 (more prevalent and common). Its the biggest cause of renal dialysis, blindness, leg amputations etc
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Being HIV-positive might be more desirable than living with diabetes - the former when on treatment live just as long as normal people but the latter lose 15 yrs of life on average
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Obese man is 6x more likely to develop diabetes than non-obese man, for obese-women its 12x more likely
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While your heart pumps blood, it also needs its own blood going through it to function. When it doesn’t, it can cramp without getting enough oxygen, like any other muscle. Obesity narrows these blood vessels over time. It also increases blood pressure and also causes plaques to form in blood vessels (atherosclerosis). There’s also high likelihood of stroke and cancer with increase in weight
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Fat cells when stretched beyond limit can cause inflammation - where body’s defence mechanisms are summoned to repair the damage. This causes normal immune system function to be impaired when real damage occurs
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Obesity increases likelihood of developing asthma, sleep apnea, arthritis, kidney problems, fertility issues, gallstones, thrombosis and even dementia (list goes on and on)
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If you are overweight, your risk of dying in the next 10 years goes up 20-40% and if obese, by 200-300%
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After bariatric surgery, 75% of people with diabetes see it vanish completely - so do 60% of ones with hypertension, 66% of those with back pain and change of death from diabetes falls by 92% and of cancer by 60% and coronary disease by 56% (The impact of weight-loss drugs should be comparable to this)
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History of weight-loss drugs 1. Redusols (1934-1938) - banned due to high fevers induced. 2. Amphetamines (post WW-2) - suppressed appetite while giving energy boost - mother’s little helper. 1980 8% of prescription were amphetamines. Addictive and needed higher and higher doses and caused paranoia, psychosis and heart damage 3. Sleeping Beauty (’70s) - you simply slept all day so didn’t have to eat! 4. Fen-phen (90s) - 18 million prescriptions in ‘95. Increased pulmonary hypertension by 30x and caused heart defects in 1/3rd people - drug company had to pay $12b in settlement. (Long history of wonder drugs that fell flat eventually)
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There’s inherent risk in GLP-1 - though safety is established in short-term. Longer-term impact of using it for decades so someone starting on these in their 20s or 30s is not certain (though millions of people have been taking these in the last 2 decades for diabetes)
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Ozempic face/butt - weight loss is so swift, it makes these look like deflated balloons (increasing need for fillers!)
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GLP-1 agonists have receptors in thyroid tissue - there’s an increased risk of developing thyroid cancer by 50-75% (1.2% to 1.8% - so incidence is already low and 84% of them survive)
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GLP-1 agonists increase risk of pancreatitis (remember GLP-1 is naturally produced by the pancreas). While its rare, GLP-1 agonists increase risk 9x (and can be treated). They can also cause stomach paralysis
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GLP-1 receptors also exist in our brains. We actually make GLP-1 in our brains too. It affects appetite and reward centres (hence reduces alcohol consumption too, alongside nicotine, cocaine, heroin and opioids). So taking GLP-1 boosts self-control across the board (and hence can make you feel emotionally dull if you depended on those rewards in the first place)
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People with gambling and compulsive shopping problems and other risk-taking behaviour as well curtailed the same when their reward centres didn’t function
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It is possible that blunting of reward centres could dull the very essence of life and could raise suicidal tendencies (no concrete evidence of anhedonia yet though as most people function normal)
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The way GLP-1 agonists affect brain might be to “reset” levels rather than blunting or turning up the aversion systems. These are not as yet clearly understood. You are not just changing your body also your mind and the very essence of you when on these drugs
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In pregnant rats, structural abnormalities were observed in fetus when on GLP-1 agonists
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31% of women and 19% of men respond to stress by eating in order to feel better (arises from parents comforting child with food, even when not hungry). How parents read and respond to child’s hunger shapes us deeply
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People have a bad relationship with their body because they consider it as separate thing from themselves. The shift from what your body looks like, to what your body is able to do (functional appreciation) is a profoundly healing change (it can walk, lift weights etc.)
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Japan has only 4.5% obese people compared to 26% in UK and 43% in US. Its the only country that got rich without getting fat
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Japanese Hawaiians are almost as fat as Hawaiians - so its not the genes (moved there early 19th and 20th century) so its more to do with what happened to Japanese culture in last 60 years post WW-II than their tradition or heritage (as usually misunderstood)
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Japanese cooking has 65 ingredients on average even compared to classic French style with 20 ingredients - the more diverse your diet, the healthier you get. Japs live on fish and vegetables, not milk and butter and meats.
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Western cooking is primarily adding things to food to make it tasty (butter, lemon, herbs, sauces) but Jap cooking is a minus cuisine (flavour is drawn out from ingredients themselves)
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Japanese cooking, each meal has 5 tastes (sweet, salt, sour, bitter and umami), 5 skills (cutting, simmering, grilling, deep-frying and steaming) and 5 colours (black, white, green, yellow and red). It ensures balance - food is total art, so beautiful plating is important. God lives in the details
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Eating one dish fully before moving on to another is “rude” way of eating. They follow triangle eating - moving from one dish to another - one bite of soup, one bite of the side and so on- ensuring balance of tastes in the mouth. They only eat until 80% full (taught from a very young age and insisted in schools)
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It is a legal requirement in Japan that principal of each school has to have same lunch as kids and has to eat first, to make sure its safe, nutritious and delicious (Taleb would approve)
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Metabo law - Every workplace in Japan has to bring a team of nurses and docs to measure weight and waistline and company has to get them into shape if off (govt. pays for it). Their life expectancy is not a matter of luck or genes
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In the West healthy food is expensive so one option is to tax sugary foods and unhealthy sodas (Mexico does it) and subsidise healthy food
What could happen to GLP-1 drugs in the future? They could go the way of fen-phen (highly unlikely), could lose impact over time (unlikely), could become cheap with generics (currently $1200/month) and prescribed and administered like generic statins (very likely) or we reform the food industrial complex and eat healthy (very unlikely). It would be interesting to see which way this goes over time. 9/10
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You have this amazing ability to explain stuff in an easy to understand way. Thanks for this write up.
2 Likes
Truck de India. Rajat Ubhaykar, 2019 - The book reads like a travel journal of the author as he criss-crosses the length and breadth of the country hitching rides on trucks from Mumbai to Srinagar and then on towards the north-east and then South. You meet colorful characters, from drivers, their helpers, people who build bodies for trucks and other hitchhikers that the truckers pick up en route. You learn about various things like militarisation of sikhs, consuming bhukki (opium), the families and communities of the drivers and helpers, the ustads of sirhind that build truck bodies, the gujjars and bakarwals that migrate in summer, of insurgency in the north-east, why salem is the sabudana capital of India and so on.
My notes -
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Bhiwandi was known for power looms and communal riots before the e-com revolution. Today its the warehouse of Mumbai due to it being just outside Mumbai’s octroi zone (less taxes). Its paddy fields are today hi-tech fulfilment centres (refer to the book ‘Arriving today’ to understand how hi-tech)
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Truck drivers pay Rs.400 to Mumbai traffic police to ply the roads before 9pm. Drivers who wait past 9PM get to pocket the Rs.400
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Mumbai-Delhi highway carries 40% of India’s traffic and connects key economic centres of Surat, Ahmedabad and Jaipur
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Vegetable trucks cover Delhi-Mumbai within a day and are the fastest - drivers dont even take a break to eat at a dhaba
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Only in 19th century (1833) child labour was prohibited in England (chronicled in Oliver Twist). In India, the medieval and modern are in an endless tussle as child labour is very common on our highways (most dhabas, shops employ them)
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Trucking industry is highly fragmented. The consignor wants to send goods while the trucker provides the services but in between you have two brokers - the booking agent on supply side (interfaces with consignor) and the commission agent on demand side (interfaces with truckers) - huge information asymmetry
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3/4th of total freight transport is dominated by truckers who own less than 5 trucks. > 20 truck owners constitute only 10% of transport (work with big corps on contract basis and have bargaining power and dont have to rely on intermediaries)
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Commission agent charges the trucker 600-1000Rs. for arranging a load - 600 for 16ton truck and 800 for 21ton truck (freight rate 1750/ton) - ~2% which trickles down to end-customer. Freight rates vary based on demand - low on rainy days and high during festivals like Diwali.
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Booking agents indulge in cartelisation and avoid each other’s territories and increase rates in co-ordination when fuel prices go up (AIMTC was fined by CCI)
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Freight charges paid to truck drivers are not the same as negotiated between consignor and booking agent. Booking agent and commission agent collude and pocket the difference. On top of this commission agent never pays in full making sure trucker comes back to him for his next trip (Ola type app here can reduce info asymmetry and benefit truckers and end-customers)
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Morality is luxury when one struggles to meet basic needs. Its a construct created by the powerful to hold the powerless in check
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Truck drivers are divided along lines of ownership, territory, caste, religion and language and no organisation has been able to bring all of them together - this makes them powerless but also at the same time invincible - even if few of them go bankrupt, others take their place and fragmentation remains. Many bosses, many workers - where bosses are not any better off than workers in this ecosystem
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Punjabis venture all over the country while other community drivers stick to nearest 2 or 3 states or ply fixed routes
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Average truck drivers covers 20 kms in an hour on long distance trips (any savings from fuel conserved is pocketed by driver hence)
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Never ignore a honking truck driver - he is likely driving an overloaded truck which reduces braking efficiency by 40%
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Overloading is illegal as per Supreme court ruling from 2005 but penalty is progressive in the way its implemented - easily overcome with bribes lower than penalties. RTO officials, transporters and consignors - all get benefitted (At the expense of safety of drivers and public and wearing of roads). A peon at an RTO in AP made Rs.100 Cr from passing files and didn’t want promotion as his peon job was more lucrative
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Overloading benefits transporters since they are paid Rs per km per tonne - so natural leverage exists in overloading truck. 21ton truck normal load earns Rs.25,000 when loaded as per norms - costs Rs.16000 in diesel, bribes, wages and tolls earnings profit of 9000. When overloaded to twice the norm - can earn Rs50,000, with input costs around Rs.30k leading to more than double profits of Rs.20000 (there’s hidden cost to reduction of life of truck and parts)
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Rajasthan’s main exports are mineral and marble - highly dense leading to overloading
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New trucks are more prone to overloading since there’s no maintenance cost in first two years and also loan repayments loom - overloading reduces once loan payments are gone
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10% overloading can reduce life of roads by 35%
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Most trucks are sold without a body from Tata Motors or Ashok Leyland and a body is built at places like Sirhind to spec (incl. the artwork), taking almost a month to mount on a chassis. Punjabi truckers might spend a lakh on decor while Kashmiris might spend even 2 lakhs (the sal wood is durable and last 20-25 yrs)
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NH39 is the lifeline of Nagaland and Manipur connecting Moreh in the plains to Dimapur on the Indo-Myanmar border, also India’ most unsafe highway (lot of East Asian good are smuggled through this porous border)
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Toll is collected by Naga, Kuki and Meitei revels for protection and the region is in perpetual conflict between the tribes for ideology and revenues
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There’s strong Korean influence in Manipur - prominently visible on tv and newspapers with K-pop and k-serials
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In Kerala you don’t have to worry about police or thieves - if you enter a no-entry by mistake, they will point you to the alternate route.
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GST has reduced wait times at the borders and also cut down bribes paid there by half
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Between Vijayawada to Guwahati, a trucker spends on avg. Rs.5000 in bribes, with pocket getting lighter from Icchapuram, Khurda, Cuttack, Bhadrak and Balasore with the worst to come in Bengal (trucker compares to cops to ULFA)
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Truck driving was a skilled job, like crane or fork-lift operator until power-steering came in
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U/S 190 (2) of Motor Vehicles Act is deliberates worded to be ambiguous for bribe-taking. Most cops just say the word “Mechanical” to demand bribes
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Different towns in TN has established competence and dominance in niche industries - Salem over sabudana, Dindugal over locks, Namakkal over rugged art of fashioning trucks out of metal and wood, Tiruchengode trucks with borewell rigs
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On A/C being manadatory in truck cabins - even if a/c is installed, owners will never let drivers use it and even if they do, the drivers will never do, to save fuel and pocket the cash
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Trucking industry is lot more formalised in south india than north, with VRL, Transport Corp. of India owning very large fleets of container trucks (these are never bothered by cops). Container trucks have a single driver without cleaner to save costs
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Most trucks are registered in Nagaland (NL plates) to save on tax
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Most modern trucks have GPS devices for fleet management, FASTag for automatic payments and drivers get a ATM card for emergencies. After GST, Delhi to Guwahati, 2 full days are saved for truckers
This was a book with a heart, in that the author gave up his educated, upper-class upbringing to discover the generosity, desperation, hospitality, obstinacy and hope of India through its truckers. Am not sure what gets into people’s heads to do something like this but it is this creative and adventurous spirit that makes life interesting and I totally enjoyed the book and its people while also learning a thing or two about trucking industry. 9/10
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