A Presentation on

Our capability to conduct e-auction

of FM Channels in FM Radio phase
III
To
Ministry of Information & Broadcasting
Ref: RFP No . N-38014/5/2013-FM

Contents

About mjunction services limited

Our e-auction experience & capability

Our proposed methodology for e-auction of FM

Channels

Proposed Marketing Plan

Why we should be chosen as service provider

About mjunction services limited

Our e-auction experience & capability

Our proposed methodology for e-auction of FM

Channels

Proposed Marketing Plan

Why we should be chosen as service provider

mjunction- The Company

Genesis

A 50:50 JV promoted by SAIL & TATA

Steel

Turnover

Transacted cumulative value of Rs. 2,03,000 Crs

since inception in 2001

Growth

Workforce

Clientele

Infrastructure

Grown at a CAGR of 67% in TV since

2001
600 professionals located at 12 locations
in India

Serving 115 clients in 9 businesses

Having own Data Center, IT Team &
Infrastructure

mjunction today
Indias largest

BPM

Organisation

eCommerce platform

115 clients from

Valued at

Rs 800
cr
Rs 123

public and private

sector

as on 31st March 11

TV of Rs 94 cr in FY02 to

cr

Rs 43,108 cr

Crores invested in
building office and
I.T infrastructure

Rs 118
cr

paid as dividends to
shareholders

Strategic Business
verticals

in

FY14
13 years CAGR of
Reserve & surplus
of

Rs 134

cr

67%

About mjunction services limited

Our e-auction experience & capability

Our proposed methodology for e-auction of FM

Our experience
Our Success
Our Technology team
Our IT Infrastructure
E-Security aspects in design and conduct of the auction

Channels

Proposed Marketing Plan

Why we should be chosen as service provider

Capability to conduct e-auction : Our experience

In the last 3 years, have conducted more than 1000 e-auction events for Rs 15,000 + crores
worth of goods and services

Designed and conducted e-auction for diverse industries / sectors

Transformed Coal & steel supply chain in India

Have implemented various e-auction variants / methodologies

English No Ties / Single Winner

Yankee / Multiple Winners

Rank Based Auction

Sealed Bid followed by auction

Template Bidding

Premium & discount bidding

Capability to conduct e-auction : Our Success

In 2005, Coal India Limited was facing

serious challenge in selling their coal through eauction in Indian market.

The requirement of the coal e-market was

Fair practices

The major drawbacks of the

Transparency

conventional e-auction model

Reach
Efficiency
Convenience
Market driven price

Conventional e-auction had given poor result.

Coal India appointed mjunction as the e-auctioneer

:
was
Inconvenient
for Buyers
Inflexibility of Lot Sizes
Multiple lots for selling higher qty
Easy to Cartelize
Scattered Competition

Capability to conduct e-auction : Our Success

1. Following processes provided us the inspiration

Book Building process (IPO of Equity Shares)

Bidders bid for Quantity & Price (within a band)

Yankee Rule used in US for sale of securities

First preference to Price
In case of Price Tie, preference to the bid for higher quantity
In case of Price & Quantity tie, preference to the bid received earlier

2. The innovative idea was to build upon the above 2 processes by making it Online &
Dynamic
Since 2005, Coal India has adopted mjunctions model for selling coal through e-auction.
Today Mjunction sell around 24 million ton of coal every year, sold around 200 milion ton of coal
till date.

Our e-auction system

Have capability to conduct large scale e-auction
Certified ISO 27001:2005 Primary Site & Backup/DR Site
Operational Disaster Recovery Site Since July 2008
Certified ISO 9001:2000 (Head Office and Branches)
Structured Software Engineering Processes
Project Management
Software Development Life Cycle
Follows SEI CMM
Blade Servers
Storage with RAID 5
Cisco ASA Firewall 5550, Cisco IPS 4260, Cisco ACE, Cisco CS-MARS
Multiple ISP level switches (Radware)
99.9% Uptime during Auction with Failover System
Capability to handle 2000 Concurrent Users
Response Time <5 Seconds

Our e-auction system : Technology & Application Infrastructure

Industry benchmark IT infrastructure
JAVA/J2EE
IBM Websphere
IBM DB2
Robust Deployment Architecture to support
High Availability & Disaster Recovery
High Load and Concurrency
Robust Infrastructure to Handle
Simultaneous Auctions by different clients
Secured Online EMD Payment and Refund
PKI enabled
IT Act 2000 ( AA 2008) and CVC compliant Systems & Processes
Maintain Audit log with IP tracking
ISMS Standards, Policies, Guidelines
Biometric/Proximity access to Auction Room & Data Centre
24 Hours call recording system Call Centre

Our e-auction system : Application Security

A world class security system
3 Tier Architecture
SSL Enable Portal
IT Act 2000 Compliant - Digital Signature Certificate, PKI Enabled
Compliance to CVC Guidelines
VA, PT and 3rd Party Application Security Audit STQC
OWASP Guidelines
Provision for IP Tracking
Separate Transaction Password (Sensitive Transactions)
Anonymous access secured through Captcha
Protecting Sensitive Data
Encryption of Password
Encryption of Bidder ID while Storing Bid Data
Log Shipping SYSLOG-NG
Server Clock Synchronization using Central NTP Server
Database Activity Monitoring (Imperva)

Our e-auction system : Our Technology Team

Our technology team is a 50 member team

The work experience distributed across the

with skills in

different roles in the Organization is as follows

o application management - (application

development, application support &
maintenance),
o infrastructure management and
o managed services for application &
infrastructure
The team has a vast experience in software
development using Java/J2EE and Microsoft .NET
technologies.

Roles

Total Exp. (person

year)

Project Manager

60+

Business Analysts

25+

Technical Architect

50+

Application Developer

100+

Testing & QA

25+

Infrastructure Management

30+

Contents

About mjunction services limited

Our e-auction experience & capability

Our proposed methodology for e-auction of

FM Channels

Our Marketing Plan

Why we should be chosen as service provider

FM channel auction : Requirements & objectives

MIBs requirements :

To design , structure and implement overall process of Simultaneous Ascending

e-auction of 839 FM Channels across 294 cities

& Objectives :
a) Ensuring, a transparent and fair auction and selection process
b) Optimising revenue received
c) Promoting equitable growth of FM radio

FM channel auction : Design of e-auction process

oposed e-action variant :

Simultaneous Ascending Auction

Auctions will have two stages:

1. Ascending
the winners of a generic
FM Channel in each city
are determined

Final Price paid is the sum of the common

winning price and any winning choice stage
bid.

2. Choice (Optional)
the specific FM
Channels allocated to
winning bidders in each
city are determined.
(Only if more than one
slots available in a city,
bidders may interested
to book same frequency
in a city)

Auction rules
Items

Auction Rules

Ascending Stage

The ascending stage will consist of a number of rounds for a specified duration. For
each city, bidders will be asked to state whether they wish to bid for any channel.

Closure of rounds

Every round will have a start time and planned time duration, with permissible Time
extension

Identify provisional
winner

Bids are ranked by the following criteria (listed in precedence):

1. value of bid in that city ( Highest bid get preference over carry-forward bid)
2. round in which bid was made (earlier ranked higher)
3. total value of bids across all cities
4. randomly

Auction closes

The final round will be the first round in which

1. for each city, the number of bids at the current round price is less than or
equal to the number of frequencies available in that city; and
2. the auction activity requirement is 100%. (The auction will continue even if
one bidder has unexpired points available.)

Price Increment , Activity Rule may be decided after analysing Bidders response and in discussion with MIB

An Illustration

E-Auction : Round #1
Bidder name : X
Total Activity point available : 100
City

No. of Slots

Activity required : 80%

Ask Price
( in Rs
Lakhs)

Activity point
required

Activity point
blocked

Decision
(Yes)

Silchar

200

50

Agra

300

70

Haldia

140

30

Jalpaiguri

Verify

120
10
0

Clicking to Verify will show :

REJECTION if Bids value more than available Activity point
Otherwise
WARNING in case less lots bid for in this round could lead to lower
than maximum lots allowed (point reduction) to be bid for in next
round.
Point(n+1)= Point(n)/(1/AR) ; eg Point(n+1) = 80/0.8=100
EDIT or SUBMIT YOUR BID
(AR: Activity requirement: varies from 80% to 100%)

Decision Scenario

City

Asking
Price

No. of
Slots

Number of
Bids
received

Provisional
Allocation

Next round
Asking Price

Silchar

200

3 ( X,Y,Z)

(X,Y)*

210

Agra

300

NA

300

Haldia

140

2 ( X,Y)

X,Y

140

Jalpaiguri

120

2 ( Y,Z)

Y,Z

123

* Z lost in overall bid value ( 320)

Price increment assumption ( decimal would be rounded)
Demand Supply >= 3 : 10%
Demand Supply >= 1 : 5%
Demand Supply = 0 : 2%
Demand Supply < 1 : No increment

E-Auction : Round #2
Bidder name : X
Total Activity point available : 20
City

Activity required : 80%

No. of
Slots

Last
Round
Price

Silchar

200

210

50

50

Agra

300

300

70

Haldia

140

140

30

30

Jalpaiguri

Verify

Ask Price
for current
round

Activity
point
required

Activity point Decisio

blocked
n (Yes)

120
123
10
0

Clicking to Verify will show :

REJECTION if Bids value more than available Activity point
Otherwise
WARNING in case less lots bid for in this round could lead to lower
than maximum lots allowed (point reduction) to be bid for in next
round.
Point(n+1)= Point(n)/(1/AR) ; eg Point(n+1) = 80/0.8=100
EDIT or SUBMIT YOUR BID
(AR: Activity requirement: varies from 80% to 100%)

Decision Scenario

City

Asking
Price

No. of
Slots

Number of
Bids
received

Provisional
Allocation

Next round
Asking Price

X,Y

221

Silchar

210

3 ( X,Y,Z)

Agra

300

Haldia

140

3 (A,B,C)

X**, Y**, A

154

Jalpaiguri

123

2 (A,Z)

A,Z

126

300

Z lost in overall bid value ( 333)

X**, Y** were allotted based on the rule of earlier round bidding at same price.
Price increment assumption ( decimal would be rounded)
Demand Supply >= 3 : 10%
Demand Supply >= 1 : 5%
Demand Supply = 0 : 2%
Demand Supply < 1 : No increment

E-Auction : Round #n
Bidder name : X
Total Activity point available : 20
City

Activity required : 100%

No. of
Slots

Last
Round
Price

Silchar

500

520

50

50

Agra

280

300

70

Haldia

220

230

30

30

Jalpaiguri

Verify

Ask Price
for current
round

Activity
point
required

Activity point Decisio

blocked
n (Yes)

200
210
10
0

Clicking to Verify will show :

REJECTION if Bids value more than available Activity point
Otherwise
WARNING in case less lots bid for in this round could lead to lower
than maximum lots allowed (point reduction) to be bid for in next
round.
Point(n+1)= Point(n)/(1/AR) ; eg Point(n+1) = 80/0.8=100
EDIT or SUBMIT YOUR BID
(AR: Activity requirement: varies from 80% to 100%)

Decision Scenario

City

Last
Round
price

Asking
Price

Silchar

500

520

2 ( X,Y)

Agra

280

300

Haldia

220

230

2 (Y,Z)

X,Y,Z

220

Jalpaiguri

200

210

2 (Y,Z)

Y,Z

210

Auction Closes

No. of
Slots

Number
of Bids
received

Final
Allocation

Closing Price

X,Y

520
No Bid

Contents

About mjunction services limited

Our e-auction experience & capability

Our proposed methodology for e-auction of FM

channels

Our Marketing Plan

Why we should be chosen as service provider

Our Marketing plan

Reach all the major cities and towns across India through advertisement in leading
newspapers
Insertions in both daily newspapers and Financial dailies to reach general and
Business audience
Newspaper insertion in English, Hindi and vernacular languages to increase the
reach
Appoint expert Consultants to create favourable atmosphere for the auction
Create awareness and buzz through visibility and participation in Seminar and
Conferences
cities in India

through national and regional Trade bodies in different towns and

Contents

About mjunction services limited

Our e-auction experience & capability

Our proposed methodology for e-auction of FM

channels

Our Marketing Plan

Why we should be chosen as service provider

Contents

About mjunction services limited

Our e-auction experience & capability

Our proposed methodology for e-auction of FM

channels

Our Marketing Plan

Why we should be chosen as service

provider

Why should we be chosen

Transacted more than INR 2 Lakh Crore worth of goods and

Associated with prestigious clients like SAIL, Tata Steel,

Coal India Limited, Ordnance Factory Board, etc

World class infrastructure to conduct e-auction. Own data

Centre hosted in our own premise backed by Disaster site
recovery site.

Strong association with Industry bodies which will help us

to promote the e-auction event

Experience in designing & implementing varied e-auction

methodologies.

Certified with ISO 27001 for Information security

ISO 27001
certification

services since 2001

Thank you
Chiranjib Datta Chaudhuri
E-mail : chiranjib.chaudhuri@mjunction.in
Contact : 033-66106323 / 9163348140

Annexure : Auction Rules

Auction Rules : Ascending Stage

There will be simultaneous bidding for generic frequencies in each of the 249
cities where FM Channel is available. Event shall be conducted in multiple phases.
Set of cities would be selected in each phase mutually through discussion with
MIB.
The ascending stage will consist of a number of rounds for a specified
duration.
The first round will begin with all FM Channels in all cities being offered at
the reserve price
For each city, bidders will be asked to state whether they wish to bid for one
frequency.
The ability to make bids is subject to the number of eligibility points held
by bidders and activity rules
When the first round finishes, the bids in each city will be ranked

Closure of rounds :
Every round will have a start time and planned time duration.
Time extension would be triggered automatically if any eligible bidder has not
bid.
Each bidder will have a pre-defined quota of extension time.

How to identify provisional winner:

At the end of a round, and for each city, each bidders highest bid made so far
in any round is taken and these bids are ranked by the following criteria (listed
in precedence):
1. value of bid in that city ( Highest bid get preference over carry-forward bid)
2. round in which bid was made (earlier ranked higher)
3. total value of bids across all cities
4. randomly
The relative ranking of any bids carried over from previous rounds will be
preserved
Where there are n frequencies available in a city, bidders ranked 1 to n will be
declared provisional winning bidders
The provisional winning price associated with these bids will be equal to the
lowest round price at which the provisional winning bidders submitted their

How to finalise price increment

Excess demand in a city is defined as the total demand for slot/frequencies in
that city at the price in the last completed round minus the number of
slot/frequencies available in that city
If excess demand is negative, the asking price in the following round will remain
unchanged.
If excess demand is zero or positive, the asking price set for the following round
will be the current round price plus a price increment related to the level of
excess demand.
Exact price increment may be finalised in consultation with MIB

When the Auction closes

The final round will be the first round in which
for each city, the number of bids at the current round price is less than or equal
to the number of frequencies available in that city; and
the auction activity requirement is 100%. (The auction will continue even if one
bidder has unexpired points available.)

This rule means that a current provisional winner is not guaranteed to become a
winner unless:
it raises its bid to the next ascending price; or
there is another provisional winner with a strictly lower bid.
(In the latter case, there is no excess demand and the next round will have the
same asking price as the current round.)

Eligibility Structure
Each city/lot will be assigned a specific number of eligibility points, based on the
reserve price of licences in that city.
Each bidder will have an initial number of eligibility points in the first round
based on its approved bidder application and associated Earnest Money
Deposit.
A bidder will maintain or lose part or all of its eligibility to bid in subsequent
rounds depending on its bid in the current round and on the auction activity
rules.
Activity rules allow bidders flexibility to switch between cities, except if they are
currently a provisional winner in any city, in which case, they can switch from
that city only after they are overbid.

Activity rules based on eligibility structure

A bidders activity in a round is the sum of:
the number of eligibility points associated with cities in which the bidder
has been determined to be a provisional winner at the end of the last
completed round; and
the eligibility points associated with cities where the bidder has made new
bids (i.e. bids where it was not a provisional winner in the previous round)
A bidder must demonstrate bid activity in each round that equals or exceed a
certain percentage of its eligibility; otherwise its eligibility will be reduced
proportionately in the following round.
This percentage (the auction activity requirement) increment over the duration
would be finalised after discussion with MIB
These increases will be made by the auctioneer as overall bidding activity
across all cities declines.

End