India has lost the opportunity of employing more than 160,000 people with 18 major steel, power and auto projects getting delayed over land acquisition and forest and environment clearance issues, says a study by a business chamber.
According to the study by the Associated Chambers of Commerce and Industry (Assocham), "the 18 strangled projects of India Inc to the tune of Rs.244,815.5 crore (Rs.2.45 trillion) remained on papers, in the form of memorandum of understanding (MoU) and agreements over the past three-four years".
However, a smooth implementation could have created job opportunities for at least 164,000 people directly and 270,000 people indirectly, it added.
"Assocham Research Bureau has identified 18 major projects announced by India Inc in sectors such as power, steel, automotive, IT, real estate and metals and mining that are just on papers and struggling for government clearances since 2003-04 till 2008," Assocham president Sajjan Jindal said.
The delayed projects include Posco India's proposed 12 million-tonne capacity steel plant in Orissa; it has already obtained in-principle for the special economic zone status needed for getting land in August 2005, and has pumped in some Rs.1.75 billion.
But delay in land acquisition has been a major stumbling block, Assocham said, adding that a green signal could have generated employment for 35,730 people.
Tata Steel's three greenfield projects in Jharkhand, Orissa and Chhattisgarh - on a cumulative investment of Rs.820 billion - are similarly in a state of uncertainty on account of land acquisition procedures. Assocham said the three projects could have created employment for at least 2,000-3,000 people directly.
Similarly, Arcelor-Mittal's steel projects in Orissa and Jharkhand are facing peculiar situation for the past three years.
In Jharkhand, the company has got iron ore mines, but not the land, whereas in Orissa, it has land, but are yet to get mines. The planned investment in both the states are a little over Rs.43,050 crore, and is estimated to have generated direct employment for over 5,000 people and indirect employment for about 20,000.
Some mega greenfield projects in Jharkhand, if implemented, would have created nearly 9,000 jobs, Assocham said, basing its estimates on proposed investments of about Rs.40,900 crore by Essar Steel, Jindal Steel and Power and Jindal South-West.
Likewise, in the automotive sector, M&M's joint venture in Chennai with Renault and Nissan has been deferred following a delay in land acquisition; this would have created work for at least 5,000 people directly, Assocham said.
Agencies
Monday, March 2, 2009
Sunday, March 1, 2009
Is HCL BPO eyeing acquisition in US, UK and Australia?
HCL BPO is looking for acquisitions of platform-based BPO firms in the US, UK and Australia with revenues of up to $250 million, its chief executive said. “We want to de-link revenue growth from headcount growth. So, we want to acquire companies in English-speaking countries that derive revenues from output or outcome-based pricing and platform-led services,” HCL BPO president and CEO N Ranjit said.
Last year, the BPO arm of HCL Technologies had acquired two firms —UK-based Liberata Financial Services (LFS) and US-based Control Point Solutions. The BPO firm aims to earn revenues of $1 billion by 2010-11 and expects about 56% or $560 million to come from acquired entities.HCL BPO had revenues of about $223 million in the year-ended June 2008.
Confident of closing at least one buyout this year, Ranjit said the company’s strategy is to buy loss-making or marginally profitable entities at low prices and turning them around. So, while BPO firms typically go under the hammer at 1.5-2 times their revenues, Control Point, with revenues of $27 million, was bought for $20 million. HCL BPO paid $2 million to acquire LFS’ fixed assets and committed an investment of another $24 million. The firm is confident of turning around both acquired companies by the end of calendar year 2009.
The two acquisitions impacted the margins of the BPO firm. In the quarter ended Dec ‘08, its EBITDA margin went down to nearly 14% from 26% a year ago. “We completed the integration of Control Point and LFS in the Oct- Dec quarter. We are hopeful of achieving margins of over 25% by 2009-end ,” Ranjit said. The BPO firm’s revenues were also impacted due to the pound losing value against the dollar as about 72% of its revenues come from the UK.
The company, which only has one Indian client in a large auto maker, said it will not look at increasing its exposure to the domestic market at this stage. “Until Indian companies show willingness to pay more for value addition and information security, we will not look at the market,” Ranjit said.
Agencies
Last year, the BPO arm of HCL Technologies had acquired two firms —UK-based Liberata Financial Services (LFS) and US-based Control Point Solutions. The BPO firm aims to earn revenues of $1 billion by 2010-11 and expects about 56% or $560 million to come from acquired entities.HCL BPO had revenues of about $223 million in the year-ended June 2008.
Confident of closing at least one buyout this year, Ranjit said the company’s strategy is to buy loss-making or marginally profitable entities at low prices and turning them around. So, while BPO firms typically go under the hammer at 1.5-2 times their revenues, Control Point, with revenues of $27 million, was bought for $20 million. HCL BPO paid $2 million to acquire LFS’ fixed assets and committed an investment of another $24 million. The firm is confident of turning around both acquired companies by the end of calendar year 2009.
The two acquisitions impacted the margins of the BPO firm. In the quarter ended Dec ‘08, its EBITDA margin went down to nearly 14% from 26% a year ago. “We completed the integration of Control Point and LFS in the Oct- Dec quarter. We are hopeful of achieving margins of over 25% by 2009-end ,” Ranjit said. The BPO firm’s revenues were also impacted due to the pound losing value against the dollar as about 72% of its revenues come from the UK.
The company, which only has one Indian client in a large auto maker, said it will not look at increasing its exposure to the domestic market at this stage. “Until Indian companies show willingness to pay more for value addition and information security, we will not look at the market,” Ranjit said.
Agencies
Indian IT sector may be significantly hurt by global crisis
The Indian IT industry is likely to be impacted significantly by the global financial crisis due to the loss of overseas markets as well as protectionist trends, according to PM's special envoy Shyam Saran.
Saran further said that the sector has been focused on the export market so far. It has not looked at the domestic market as a significant business opportunity.
"Now could be the time to do this. More competitive conditions in both domestic as well as external markets require Indian industry to be more efficient and productive," he told at a seminar on 'GeoPolitical Consequences of Current Financial and Economic Crisis: Implications for India'.
This is where the country's IT industry can play a significant role, but this will require the dynamic sectors of economy, the services and the manufacturing sector, to come together to deliver a major punch, once the global economy settles down into a new and altered landscape, he said.
He suggested that there should be a willingness in business and industry to think through and come up with an ambitious and potentially winning strategy.
They should seek government support for delivering on such a strategy rather than looking only for short-term relief, added Saran.
Agencies
Saran further said that the sector has been focused on the export market so far. It has not looked at the domestic market as a significant business opportunity.
"Now could be the time to do this. More competitive conditions in both domestic as well as external markets require Indian industry to be more efficient and productive," he told at a seminar on 'GeoPolitical Consequences of Current Financial and Economic Crisis: Implications for India'.
This is where the country's IT industry can play a significant role, but this will require the dynamic sectors of economy, the services and the manufacturing sector, to come together to deliver a major punch, once the global economy settles down into a new and altered landscape, he said.
He suggested that there should be a willingness in business and industry to think through and come up with an ambitious and potentially winning strategy.
They should seek government support for delivering on such a strategy rather than looking only for short-term relief, added Saran.
Agencies
Saturday, February 28, 2009
Mobile number portability licences to be granted in March
The list of companies that will be granted licences for mobile number portability (MNP) - a technology that enables cellphone users to retain their phone numbers when changing operators - will be announced next month, the government said Thursday.
"The successful bidders for grant of mobile number portability service licences will be announced by March 5," Communications and Information Technology Minister A. Raja said in Rajya Sabha.
The letter of intent will also be issued the same day, Raja said, adding that the implementation of MNP has not been delayed.
The government had issued guidelines for award of MNP service licences Jan 1 this year.
As per the guidelines, MNP is to be implemented in all metro and category 'A' service areas within six months of the award of the licence, and in rest of the service areas within one year.
Agencies
"The successful bidders for grant of mobile number portability service licences will be announced by March 5," Communications and Information Technology Minister A. Raja said in Rajya Sabha.
The letter of intent will also be issued the same day, Raja said, adding that the implementation of MNP has not been delayed.
The government had issued guidelines for award of MNP service licences Jan 1 this year.
As per the guidelines, MNP is to be implemented in all metro and category 'A' service areas within six months of the award of the licence, and in rest of the service areas within one year.
Agencies
Minimum pay hikes for Infosys employees this year
Infosys Technologies, India's No. 2 outsourcer, would hand out minimum wage rises in April to its staff, its chief executive Kris Gopalakrishnan said on the sidelines of an industry conference.
"This is going to be a prolonged downturn," he said referring to the global economic slowdown.
The company expects IT services business to be slow in the foreseeable future as clients delay technology spending amid the global economic crisis, he added.
India's large pool of English-speaking engineers and cheaper wages has helped attract outsourcing from Western firms such as Citigroup, General Electric, Qantas and Airbus. But a recession in the United States, which accounts for more than half the sector's revenue, and turmoil in the global financial sector have halted the sector's scorching pace of growth and battered stocks.
"The environment continues to be challenging," Gopalakrishnan said. "The feedback we are getting from clients are that the budgets are going to be down, in some cases significantly down," he said of likely technology spending by the firm's customers.
"They are also saying that when the budgets are released there will be a delay in spending."
India's exports of software and services in the year to March will be sharply below an earlier forecast, expanding 16-17 per cent to about $47 billion, the National Association of Software and Service Companies said earlier this month.
On US President Barack Obama's pledge to end tax break for companies that send US jobs overseas, Gopalakrishnan said the Indian IT companies would wait to see how the proposal was implemented.
"My take on it is of course protectionism will only prolong the downturn," he said. "This is a challenge which we all have to face collectively."
Agencies
"This is going to be a prolonged downturn," he said referring to the global economic slowdown.
The company expects IT services business to be slow in the foreseeable future as clients delay technology spending amid the global economic crisis, he added.
India's large pool of English-speaking engineers and cheaper wages has helped attract outsourcing from Western firms such as Citigroup, General Electric, Qantas and Airbus. But a recession in the United States, which accounts for more than half the sector's revenue, and turmoil in the global financial sector have halted the sector's scorching pace of growth and battered stocks.
"The environment continues to be challenging," Gopalakrishnan said. "The feedback we are getting from clients are that the budgets are going to be down, in some cases significantly down," he said of likely technology spending by the firm's customers.
"They are also saying that when the budgets are released there will be a delay in spending."
India's exports of software and services in the year to March will be sharply below an earlier forecast, expanding 16-17 per cent to about $47 billion, the National Association of Software and Service Companies said earlier this month.
On US President Barack Obama's pledge to end tax break for companies that send US jobs overseas, Gopalakrishnan said the Indian IT companies would wait to see how the proposal was implemented.
"My take on it is of course protectionism will only prolong the downturn," he said. "This is a challenge which we all have to face collectively."
Agencies
Is Silicon Valley on a reviving phase?
Martin Pichinson has never been busier. The co-owner of Sherwood Partners makes his living by helping the financial backers of start-up firms that file for bankruptcy and wind down their operations.
This year, he's helped shut down 30 firms -- more than the total number in 2008. "Business is booming. It's exploding," Pichinson said from his Silicon Valley offices. "It's sad," he added. Venture capitalists and market experts expect the pace of firms that shutdown in the tech industry to accelerate this year, potentially rivaling the dot-com crash, as funding dries up.
Mergers, acquisitions and IPOs are no longer a reliable exit strategy with capital markets tanking and buyers wary. So as in 2000, investors are now putting pressure on their invested firms, forcing them to cut back and save, or just cashing out and cutting their losses. Others say they are hunkering down and awaiting a turnaround and a resumption in deal and IPO activity in 12 to 18 months.
Paul Deninger, vice chairman of investment bank Jefferies & Co in Boston, reckons that about a 10th of the 500 to 1,000 start-ups his institution now tracks nationwide will fail. "The mergers and acquisitions market is firing on four out of eight cylinders," said Deninger, who runs a team that advises on deals. "Are we in a recession or depression? If 18 months from now we're in the same situation as today, then we have a much more serious problem."
To entice investment from a shrinking cash pool, startups now have to come up with fully realized business strategies. Next week, many of Silicon Valley's venture capitalists and chief executives gather near Palm Springs for Demo.Com, a conference showing off undeveloped new products and technology. But unlike in years past, organizers expect many products will be tied to fleshed out business plans and market strategies.
"Companies will present a solid business proposition with a clear path to revenues," promised Chris Shipley, Demo's producer. Last year, many of the start-ups there hoped to "collect a lot of customers and then figure out how to create business value around them. That's not working in the market today." Silicon Valley got a wake-up call in October, when a private slide-presentation put together by well-known VC Sequoia somehow got leaked onto the Internet.
Entitled "RIP Good Times", it forced an already-nervous industry to mull over declarations like "it is different this time," and "recovery will be long," and "spend every dollar as if it were your last." Venture capital funding tanked 71 per cent in the fourth quarter of 2008, but investment hasn't completely vanished. This week alone, Apparent Networks Inc of Massachusetts, which designs software to help firms access networks, raised $12 million from venture firms.
Aveksa Inc, which tailor-makes security software for corporations, secured $10 million. And private equity investor Good Energies invested $20 million in SAGE Electrochromics Inc, a 20 year-old firm that makes glass-coverings to cut heating and lighting costs. But investors are getting pickier, scrutinizing every firm as rigorously as they had in the bubble's aftermath.
Michael Kwatinetz of San Francisco's Azure Capital agreed that the era of "fluffy" investments was over -- not a bad thing if healthier and more fiscally responsible companies emerge. "Get your burn rate under control. Even the best companies are cutting their forward expense rate," Deninger advised.
Agencies
This year, he's helped shut down 30 firms -- more than the total number in 2008. "Business is booming. It's exploding," Pichinson said from his Silicon Valley offices. "It's sad," he added. Venture capitalists and market experts expect the pace of firms that shutdown in the tech industry to accelerate this year, potentially rivaling the dot-com crash, as funding dries up.
Mergers, acquisitions and IPOs are no longer a reliable exit strategy with capital markets tanking and buyers wary. So as in 2000, investors are now putting pressure on their invested firms, forcing them to cut back and save, or just cashing out and cutting their losses. Others say they are hunkering down and awaiting a turnaround and a resumption in deal and IPO activity in 12 to 18 months.
Paul Deninger, vice chairman of investment bank Jefferies & Co in Boston, reckons that about a 10th of the 500 to 1,000 start-ups his institution now tracks nationwide will fail. "The mergers and acquisitions market is firing on four out of eight cylinders," said Deninger, who runs a team that advises on deals. "Are we in a recession or depression? If 18 months from now we're in the same situation as today, then we have a much more serious problem."
To entice investment from a shrinking cash pool, startups now have to come up with fully realized business strategies. Next week, many of Silicon Valley's venture capitalists and chief executives gather near Palm Springs for Demo.Com, a conference showing off undeveloped new products and technology. But unlike in years past, organizers expect many products will be tied to fleshed out business plans and market strategies.
"Companies will present a solid business proposition with a clear path to revenues," promised Chris Shipley, Demo's producer. Last year, many of the start-ups there hoped to "collect a lot of customers and then figure out how to create business value around them. That's not working in the market today." Silicon Valley got a wake-up call in October, when a private slide-presentation put together by well-known VC Sequoia somehow got leaked onto the Internet.
Entitled "RIP Good Times", it forced an already-nervous industry to mull over declarations like "it is different this time," and "recovery will be long," and "spend every dollar as if it were your last." Venture capital funding tanked 71 per cent in the fourth quarter of 2008, but investment hasn't completely vanished. This week alone, Apparent Networks Inc of Massachusetts, which designs software to help firms access networks, raised $12 million from venture firms.
Aveksa Inc, which tailor-makes security software for corporations, secured $10 million. And private equity investor Good Energies invested $20 million in SAGE Electrochromics Inc, a 20 year-old firm that makes glass-coverings to cut heating and lighting costs. But investors are getting pickier, scrutinizing every firm as rigorously as they had in the bubble's aftermath.
Michael Kwatinetz of San Francisco's Azure Capital agreed that the era of "fluffy" investments was over -- not a bad thing if healthier and more fiscally responsible companies emerge. "Get your burn rate under control. Even the best companies are cutting their forward expense rate," Deninger advised.
Agencies
Is more layoffs planned by TCS at its UK centre?
Just a day after the report of India’s biggest software exporter TCS laying off several employees at its UK office, comes a report that the company has put another 130 employees under scanner.
According to a report in a business daily, the 130 employees are said to be working for its UK-based insurance client Legal and General’s (L&G’s).
In June 2008, TCS signed a five-year agreement with L&G to provide IT managed services. Under this, TCS was to provide application development and support services from the client's premises plus TCS' new delivery centre based in UK.
Earlier reports said that Mumbai-based TCS laid off most of its marketing team in London, plus a large number of professionals in the consulting division. According to sources, the targets were mainly the high-end consultants who are said to be an expensive lot to keep on the bench, and marketing.
Giving reasons for the over 100 layoffs in the UK office, TCS CEO & MD S Ramadorai said that either the contracts of these employees had ended, or can be due to bad performance. He added that going forward in the year, a lot of emphasis will be on employee efficiency.
This week, the IT major also accepted that it may go for further job cuts to tackle global economic downturn. The company also ruled out salary hikes next year.
Ramadorai said, "There would be no hike in salaries in the forthcoming year" and added that "job cuts are possible if the situation worsens".
Adding further that TCS has frozen "lateral intake" he said the company is reviewing variable pay component on employee salaries.
The variable pay component of TCS employees differs between 22 per cent and 35 per cent of his/her gross salary, depending on employee rank, he said.
Variable pay represents eight percent of the total revenue of TCS, whose headcount is 1.3 lakh. Ramadorai said the company is also looking into all aspects of cost reduction, including capex and infrastructure.
Unconfirmed reports also suggest that the company is planning to increase its working hours by 10-15 per cent over the current 40-hour, five-day week cycle.
Agencies
According to a report in a business daily, the 130 employees are said to be working for its UK-based insurance client Legal and General’s (L&G’s).
In June 2008, TCS signed a five-year agreement with L&G to provide IT managed services. Under this, TCS was to provide application development and support services from the client's premises plus TCS' new delivery centre based in UK.
Earlier reports said that Mumbai-based TCS laid off most of its marketing team in London, plus a large number of professionals in the consulting division. According to sources, the targets were mainly the high-end consultants who are said to be an expensive lot to keep on the bench, and marketing.
Giving reasons for the over 100 layoffs in the UK office, TCS CEO & MD S Ramadorai said that either the contracts of these employees had ended, or can be due to bad performance. He added that going forward in the year, a lot of emphasis will be on employee efficiency.
This week, the IT major also accepted that it may go for further job cuts to tackle global economic downturn. The company also ruled out salary hikes next year.
Ramadorai said, "There would be no hike in salaries in the forthcoming year" and added that "job cuts are possible if the situation worsens".
Adding further that TCS has frozen "lateral intake" he said the company is reviewing variable pay component on employee salaries.
The variable pay component of TCS employees differs between 22 per cent and 35 per cent of his/her gross salary, depending on employee rank, he said.
Variable pay represents eight percent of the total revenue of TCS, whose headcount is 1.3 lakh. Ramadorai said the company is also looking into all aspects of cost reduction, including capex and infrastructure.
Unconfirmed reports also suggest that the company is planning to increase its working hours by 10-15 per cent over the current 40-hour, five-day week cycle.
Agencies
Subscribe to:
Posts (Atom)