The Financial Express

Industry okay with expat Tata leader, but swears by cultural fit

2009-11-20T11:34:00.001+05:30

Proud Indians who were earlier boasting to the world about a Muslim President, Sikh Prime Minister and an Italian-born leader of the ruling coalition got another reason to coo about India's diversity this week from Ratan Tata, chief of India's second largest corporate group by market capitalisation.

In an interview to a foreign daily, Tata said he was open to the idea of an expatriate heading his diversified group, itself a product of India's freedom struggle and the Swadeshi (use-only-the-local) movement. But industry captains and experts are not surprised, considering the $70.8-billion (about Rs 3.25 lakh crore) group's culture and "rich diversity".

They believe the Tata culture would as the deciding factor for any leadership from outside the company . Janmejaya Sinha, chairman for Asia region of The Boston Consulting Group,

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Hyundai India sales set to beat China

2009-11-19T11:22:00.002+05:30

Hyundai Motor India, the country’s second largest passenger car manufacturer, is very close to being the largest contributor to its parent company, Hyundai Motor Corporation (HMC) of Korea, in terms of sales and may soon overtake the company’s subsidiary in China. Currently, Hyundai’s cumulative sales in China between January and September stood at 4,12,399 and India is close behind at 4,05,689 units, a difference of mere 6,710 units.

“India contributes 15-17% to the total sales and revenues of HMC and the growing demand for small cars will help us increase our profits further in 2010,” HW Park, the newly-appointed managing director and CEO of Hyundai Motor India (HMIL) said. Hence, given the pace of growth, India is likely to outpace China by next year.

According to Park, after the scrappage incentives that have been doled out by various countries in the West,

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Obama calls for stronger yuan, but Hu remains tight-lipped

2009-11-18T11:48:00.001+05:30

US President Barack Obama called on Chinese counterpart Hu Jintao to make good on a commitment to allow the yuan to appreciate to help prevent trade imbalances that exacerbated the global economic crisis.

“I was pleased to note the Chinese commitment, made in past statements, to move toward a more market-oriented exchange rate over time,” Obama said during a joint appearance with Hu after a meeting in Beijing on Tuesday. “Doing so based on economic fundamentals would make an essential contribution to the global rebalancing effort.”

America’s trade deficit with China widened to a ten-month high in September, raising concern that the combination of a recovering US economy and a fixed yuan exchange rate against the dollar will worsen global imbalances.

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Blueprint for green car development in works

2009-11-17T11:30:00.000+05:30

By the time the Indian contingent leaves for the global climate change summit in Copenhagen next month, the government will be ready with a holistic strategy for promoting environment-friendly vehicles.

The idea is to not just incentivise more research by industry but also help build the infrastructure that would make it easier for petrol and diesel car users to switch to greener options like electric and solar vehicles.

“Every additional car produced is adding to carbon emissions and other air pollutants. Blending ethanol with petrol only reduces the pollution.

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UltraTech merger gets nod; swap ratio at 4:7

2009-11-16T13:31:00.003+05:30

The consolidation process of cement business within the Rs 1.34 lakh-crore Aditya Birla Group crossed a significant milestone on Sunday, with the boards of directors of both UltraTech Cement and Samruddhi Cement, a wholly owned subsidiary of Grasim Industries, approving Samruddhi’s merger with UltraTech. The exchange ratio for the merger was pegged at 4:7. Samruddhi shareholders will receive four shares of UltraTech at a face value of Rs 10 each for every seven shares of face value Rs 5 each. UltraTech will also issue 14.95 crore new shares, thereby increasing its equity capital to Rs 274.20 crore.

The deal will make UltraTech, already the largest cement company in India, the 10th largest in the world. The merger will take UltraTech into the big league of cement makers such as Lafarge, Holcim and Heidelberg. The merged entity will have 48.8 mtpa of grey cement across 22 plants and 11.7 million cubic metres of ready-mix concrete across 68 plants, along with captive thermal power plants generating 504 mw. Prior to the merger, UltraTech had a capacity of 23.10 mt, and Samruddhi 22.55 mt. Samruddhi will also commission a grinding unit at Kotputli in Rajasthan by the third quarter of FY10. Domestically, UltraTech leads the pack, followed by ACC (22.7 mt) and Ambuja Cement (21.9 mt).

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Microsoft crosses swords with pirates, to offer cloud software

2009-11-13T11:18:00.001+05:30

In what will be a first for the country, technology giant Microsoft will offer its software suites like MS Office on rent over the Internet. The move is aimed at reducing software piracy, as the packages will be available for as low as Rs 120 a month. Allied with the offer of a low-cost personal computer at Rs 3,000 from Microsoft s partner in this venture, Airtel, the combination is expected to appeal to retail consumers weaned on pirated software.

The aim is to make the offerings so attractive that consumers will bypass the cheap, but pirated, stuff and go for original offerings. It will be something like Apple did with iTunes and the music industry, said Sachin Duggal, CEO & president at Nivio, the technology company that claims credit for bringing Microsoft and Bharti Airtel into the venture. Though it is still early days, Duggal says SMEs could benefit hugely from this offering as it could significantly reduce their IT spend.

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Yahoo! sees India as next wave of growth

2009-11-12T10:42:00.001+05:30

CEO Carol Bartz's mantra for positioning Yahoo! at the 'centre of people's online lives' is simple: "Go where the Internet population is growing." And India is 'central' to her plans to revamp the struggling Internet giant's operations after signing a long-term search deal with once arch-rival Microsoft.

On a three-day, two-city trip to India, her strategy for the country is focused on mobile phone platforms and partnering content providers who serve relevant content in local languages. "India is the next wave of growth," she insists, while confirming plans to hire in India even as the company has cut more than 2,000 jobs globally in the past one year.

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Wipro Tech scouting for BPO buy: Vaswani

2009-11-11T11:44:00.001+05:30

Ahead of the slight recovery in IT spending, the country’s third largest software exporter, Wipro Technologies, on Tuesday said it is looking for an acquisition in the BPO space, which is likely to be the next engine of growth for the IT industry. “The economy has improved. The IT demand situation is certainly improving. The deal pipeline is good, the demand environment is building up," Wipro Technologies joint CEO Suresh Vaswani said on the sidelines of the India Economic Summit. He added the company is looking at acquisitions in the BPO space. “BPOs have strong performance... BPOs will drive growth for the IT industry. Acquisition is part of our strategy and we keep looking at it, he said.”

The company had recently reported a 5% year-on-year jump in revenues for IT services, which contributes 72% to the company’s overall revenues and stood at Rs 4,996 crore. Wipro had then said that the growth in volumes has been broad-based instead of coming from one particular vertical. The company had also increased its revenue guidance for the third quarter ending December 31, 2009. In the present quarter, revenues from IT services are expected to be in the range of $1,092 million to $1,113 million, an increase of 2.5 to 4.5%.

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Tata Steel inks pact with Canadian firms, to invest Rs 1,311 crore in ore mine

2009-11-10T11:37:00.002+05:30

In a bid to enhance raw material security for Corus, Tata Steel Ltd, India’s largest and the world’s sixth largest steel manufacturer, on Monday said that its subsidiary Tata Steel Global Mineral Holdings had signed a joint venture (JV) with Canada’s New Millennium Capital (NML) and LabMag for developing a direct shipment ore (DSO) project in Canada. The steel major plans to take up to 80% stake in the joint venture, and will fund the entire project cost of C$300 million (around Rs 1,311 crore), it said in a statement to the Bombay Stock Exchange (BSE).

The company, however, did not mention how the funds will be raised. Tata Steel holds cash and cash equivalent of Rs 6,100 crore as on September 2009. It has a total outstanding debt of Rs 24,236 crore. NML expects to produce 4 million tonne per annum of iron ore products from the DSO project.

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Income Tax Department plans to make names of habitual tax defaulters public

2009-11-09T10:46:00.002+05:30

Tax defaulters beware. The income tax department is considering publishing the names of habitual tax defaulters with large tax demand spending.

According to official sources, the department is planning to compile a list of all cases,where there is a tax demand of over Rs 1 crore with no pending appeals. The information, along with names of the defaulters,will then be published in newspapers or other media. The defaulters will include both individual as well as corporate assesses. While the proposal is yet to get approved,the Central Board of Direct Taxes (CBDT) is confident of its likely utility .

"Once their names are out in public domain, we expect most of these defaulters to pay their arrears simply out of shame.

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Forex reserves fall by USD 1.12 million

2009-11-07T11:03:00.002+05:30

The forex reserves have fallen by $1.12 million to $284.39 billion in the week ended on October 30. The rupee rose for a third day, the longest stretch of gains in a month, assigns of the global economy is recovering from a recession buoyed demand for then ation's assets.

India's 10-year bonds fell for a third day, the longest losing streak in almost four weeks, as some investors sold their holdings to buy securities at an auction on Friday . The yield on the 6.90 % note due July 2019 climbed two basis points,or 0.02%,to7.31%.

The yield on the benchmark note maturing in 2019 rose to the highest in more than a week as the government sold $1.92 billion of debt.

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Demand up but Genpact net falls 2 percent

2009-11-06T11:26:00.002+05:30

The country's largest business process outsourcing (BPO) company , Genpact, on Thursday reported a 1.7% drop in its net profit at $33.1 million for the quarter ended September, compared to the same period last year.

However, on back of a slightly better demand situation, the company's revenues were up 5% to $284.4millionagainstthesameperiod last year and up 4% sequentially .

In line with the other top IT companies, Genpact said it is seeing less of volume contraction and more ramp-ups. The company has maintained its revenue guidance of a growth of 6-9% in the current financial year over 2008.

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Gold crosses USD 1,095 as dollar wilts

2009-11-05T11:07:00.002+05:30

Gold hit record highs above $1,095 an ounce on Wednesday as dollar weakness added to momentum lent to the market by India's purchase of 200 tonne of gold from the IMF to push prices through key technical resistance levels.

Gold is now poised to target the psychological $1,100 an ounce level, dealers said. Spot gold struck a high of $1,095.05 an ounce and was bid at $1,093.55 an ounce at 1055 GMT, against $1,084.50 late in New York on Tuesday .US gold futures on the Comex division of the New York Mercantile Exchange also hit record highs at $1,096.20 anounce.

At the moment, there is technical buying on the back of Tuesday's rally in the aftermath of the IMF India transaction, said Alexander Zumpfe, a trader at Heraeus

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Sell-off, telecom meltdown continue

2009-11-04T11:00:00.002+05:30

The stock market saw the steepest fall after August on Tuesday as benchmark indices fell for the sixth straight trading session on huge sell-off in heavy weight stocks and weak cues from global markets.

The pressure on telecom stocks continued as Reliance Communications fell 5.7% to close at Rs 165.8, in it seventh straight day of losses. Though its rival Bharti Airtel closed on the positive zone, the pressure on telecom stocks persisted. In the current year, RComm slid by 27% and Bharti by 16% when the benchmark Sensex jumped 64%.

Analysts like Arup Misra of Elara Captial said RComm could face more selling pressure if the first 3G auction is held only for the GSM players,which the company is not. This will delay its entry into the new field.

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Car-makers ride the festive spirit: Maruti sales up 21 percent

2009-11-03T10:05:00.002+05:30

Car-makers have reported healthy numbers for the festive month of October, courtesy new launches and discounts. Domestic sales of Maruti Suzuki India, the country’s largest passenger car producer, jumped by 21% to 71,551 units compared with 59,127 units in October last year the month that followed the Lehman Brothers’ collapse.

Sales of Hyundai Motor India, the second largest carmaker, surged 41.4% in the domestic market in October this year at 28,301 units vis-à-vis 20,009 units.

Tata Motors, the third largest player, reported a 17.6% increase in its October sales at 20,011 unit vis-à-vis 17,014 units in October

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Uttar Pradesh cane farmers burn raw sugar import from Brazil

2009-11-02T10:23:00.002+05:30

Hundreds of farmers from the Bharatiya Kisan Union, the Rashtiya Kisan Mazdoor Sangathan and Kisan Mazdoor Sangathan on Sunday set fire to a consignment of raw sugar at Shamli railway station in Muzzafar nagar.Hundreds of agitating cane farmers, who had laid seige to Shamli railway station in Muzaffar nagar on Saturday night and set fire to a raw sugar consignment imported from Brazil, allowed the goods train they had blocked to leave the station on Sunday evening after the authorities agreed to send back the imported sugar.

The farmers, belonging to the Bharatiya Kisan Union, Rashtiya Kisan Mazdoor Sangathan and Kisan Mazdoor Sangathan, were protesting against the sugarcane purchase policy of the Centre and Uttar Pradesh government.

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Air India pilots to get Sep pay in two days

2009-10-30T10:45:00.001+05:30

With an impending stir threat by its pilots, Air India is likely to pay the September salaries of its employees in two days and incentives and allowances by November 10, airline sources said on Thursday.

Talks were held with banks and financial institutions for working capital loans to arrange the amount for payment of salaries, productivity-linked incentives (PLIs) and flying allowances to the employees,including the pilots,they said.

Sources also said the management of the cash-strapped airline was making all efforts to pay the dues of the employees very soon, including the salaries by October 31 and PLI and allowances by November10.

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PE funds' exit could shake up BPO space

2009-10-29T10:53:00.001+05:30

The coming months could see a spate of mergers & acquisitions in the Indian business process outsourcing (BPO) space, with several private equity funds looking at exercising the exit option.

Investment banking officials said PE firms generally invest for 5-7 years and then cash out. In some of their current investments, the normal investment cycle is either over or coming to an end. Last year, several funds had to postpone their exit because of the global meltdown.

Sources said several PE funds have opened channels with top IT firms, exploring the exit options.

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Wipro net profit rises 19 percent in Q2

2009-10-28T09:58:00.002+05:30

Wipro Ltd on Tuesday reported a 19% jump in its net profit for the second quarter. Its revenue increased 6% year-on-year.

The company, the country’s third largest software service exporter which also makes soaps, light bulbs and hydraulic equipment, earned a net profit of Rs 1,162 crore for the quarter ended September 30, 2009 against Rs 978 crore earned in the same quarter last year. Its revenue stood at Rs 6,917 crore in Q2 against Rs 6,507 crore a year ago.

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Free branching tops banking reform plan

2009-10-27T10:34:00.002+05:30

The government is considering far-reaching reforms in the banking sector, including giving banks the freedom to open branches in Tier-3 and Tier-4 cities, and granting 15 new licences to smaller banks for the first time in almost 11 years.

Prime Minister Manmohan Singh is learnt to have discussed several reform measures with Reserve Bank of India governor D Subbarao in the second week of October. They also discussed the idea of giving foreign banks full national treatment by suggesting they incorporate in India as wholly owned subsidiaries.

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Raja faced objections from then DoT secy Mathur

2009-10-26T10:37:00.000+05:30

Communications and IT minister A Raja, who is under fire with the CBI conducting an enquiry into the alleged irregularities in licensing and spectrum allocation to eight new operators in January 2008, had faced severe opposition from his then secretary DS Mathur over the entire process.

The opposition from Mathur, most of which are recorded in files, was so strident that he refused to sign any files on the matter till his retirement. Mathur retired on December 31, 2007 and licences were granted towards the end of January 2008. One of the main objections of Mathur was that no new licence and spectrum could be granted without an “equitable and transparent policy”.

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It's two out of three for the Congress

2009-10-23T15:00:00.002+05:30

The Congress coasted to power in Maharashtra for the third consecutive term and won a landslide victory in Arunachal Pradesh, but its gamble in Haryana failed to pay off, with the party falling short of a majority. Overall, the Congress victory will help the UPA consolidate further and push for more economic reforms.

The Congress-NCP combine, which has been ruling Maharashtra for the past ten years, got 144 seats out of a total 288, needing one more for a simple majority. With rebels of both parties and independents winning 49 seats, the ruling alliance may not have difficulty in mustering up the required number. The Congress-NCP combine marginally improved upon its performance of the last state elections, when it got 140 seats.

The Congress, which will continue to have the chief minister’s post, secured 79 seats

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United Spirits QIP raises Rs 1,600 crore to pare debt

2009-10-22T10:29:00.002+05:30

United Spirits Ltd (USL), the world’s third-largest spirits maker by volumes, has raised Rs 1,615 crore through the placement of shares with institutions at Rs 913.70 each. The issue was launched on October 14 and closed on Wednesday.

The company issued 17.68 million additional shares, accounting for 16.4% of the existing capital, and will take its current share capital to 125.59 million after the issue, which was at a 0.9% discount to the Rs 921.75 closing price on the NSE on opening day.

Fund raising by USL follows the failure of its recent talks to sell a minority stake to Diageo Plc and private equity players.

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Air India, Indian Airlines call centres set to merge

2009-10-21T10:20:00.000+05:30

Even as Air India's demand for equity infusion of Rs 5,000 crore is expected to be considered by a group of ministers on Wednesday, along with its financial restructuring plan, the state-owned carrier has inched a step closer towards integration of the IT platforms of Air India and the erstwhile Indian Airlines.

After being embroiled in legal battles, the call centre operations of Air India and Indian Airlines will finally be serviced by InterGlobe Technologies (IGT), which was awarded the contract for the common call centre in January this year.

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Win 7 launch may need finmin update first

2009-10-20T10:27:00.003+05:30

India could miss the worldwide launch of Microsoft’s new Windows 7 operating system on Thursday, as the retail consignment of the software has not been cleared by the customs authorities, which is demanding physical proof of the software licence. Windows 7 is one of the most anticipated launches in recent times from Microsoft.

Ironically, the problem stems from an industry-friendly move in Budget 2009-10, which changed the tax structure on packaged software by partially exempting it from excise duty. As a result, packaged software is taxed in two parts. While the cost of the media (the CD containing the program) would attract excise duty, the license would attract only service tax.

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