Wipro Issues Bonus Shares OF 1:1, to Consider Buyback

IT firm Wipro said it will offer bonus shares to its shareholders and will also consider buyback of equity shares around July this year. 

The Bengaluru-based company will offer one bonus share for every one share held by shareholders (including to ADS holders) and expects the bonus shares to be awarded within two months, i.E, June 24, 2017.

It said the step was taken to encourage participation of small investors, increase liquidity and expand retail shareholder base. Interestingly, the issuance of bonus shares was not part of the agenda papers for the Board meeting. 

The process, timelines and other requisite details with regard to the postal ballot will be communicated in due course. 

"The Board of Directors will consider a proposal for buyback of equity shares around July 2017," Wipro CFO Jatin Dalal said. 

In September last year, Wipro had concluded the buyback of 40 million equity shares that resulted in a total cash outflow of Rs 2,500 crore. 

Share buyback typically improves earnings per share and is a mechanism to return surplus cash to shareholders besides supporting share price during periods of sluggish market condition. 

Indian IT companies are under pressure to return excess cash on their books to shareholders through generous dividends and buybacks. 

Last week, shareholders of India's largest software company TCS approved a Rs 16,000-crore buyback plan, the biggest in the Indian capital market. 

Infosys, too, has outlined its capital allocation policy recently to return up to Rs 13,000 crore this financial year through dividend and/or buyback, and while its smaller peer HCL Technologies has approved a buyback of up to 3.50 crore shares worth Rs 3,500 crore. 

Earlier this year, bowing to pressure from activist investor Elliott Management Corp, IT company Cognizant announced a USD 3.4 billion share buyback. 

Wipro Board has also approved re-appointment of Azim Premji as Chairman and Managing Director for a period of two years from July 31, 2017. 

It also approved increase in authorised share capital of the company from Rs 610 crore to Rs 1,126.5 crore by creation of additional 258.25 crore equity shares.

Agencies

‘Over 50% Wipro’s US Employees to Be Local American Nationals’

From the first quarter of this financial year, more than 50% of Wipro employees in the US will be locals, and going forward, it plans to focus more on localisation.

Wipro Chief Executive Officer Abidali Z Neemuchwala said, “There is lot of local talent, and our focus on localisation will continue in all key markets.”

For the quarter ended March 31, 2017, while Europe grew 6.4% q-o-q on a reported currency basis, America grew 1.4% q-o-q on a reported currency basis.

“We have been significantly investing in the US, in terms of increased hiring, setting up delivery centres and focusing our sustainability initiatives specifically in the area of education,” Neemuchwala said.

The Americas accounted for 54.7% of Wipro’s $7.7045 billion revenues in FY2016-17. 

While APAC and other emerging markets contributed 10.8%, Europe contributed 24.4%, and India and the Middle East contirbuted to 10.1% of the revenues. Wipro has enhanced its capability in the US by adding two more major multi-client delivery centres.

Agencies

VMware Helps Organizations Adopt Digital Workspaces in India

VMware, Inc., a global leader in cloud infrastructure and business mobility, sees growth in adoption of its digital workspace solutions by Indian organizations. With more than 1 million end-points managed in India, VMware saw some notable customer wins including – Max Life Insurance, MSC Software, Malayala Manorama, Karunya University, among others.

 VMware is one of the industry leaders in delivering a secure digital workspace which gives IT a more efficient, simplified way of managing users, devices and applications. The average return on investment for digital workspace expenditures is 150 percent. In 2016, VMware surveyed more than 1,200 IT decision makers, IT influencers, and business decision makers worldwide and found 78 percent have successfully executed or are actively executing mobile initiatives and are moving to a digital workspace. Digital workspaces deliver better security, reduce IT management costs and complexity, and prevent data loss.

 “The digital workspace is the defining model for end-user computing in the mobile cloud era. Business is changing in India and digital workspaces are adding real business value for organizations, and at the same time allowing users to focus on the work to be done, not the technology in their hands,” said Arun Parameswaran, Managing Director, VMware India. “We are at the heart of this change by delivering a comprehensive end-user computing platform built on a mobile-cloud architecture that enables organizations to drive digital transformation.”

“Enterprise mobility is witnessing a paradigm shift towards consolidation of enterprise systems that seamlessly enable not just multi-platform devices and apps, but also emerging connected devices such as wearables, IoT, machine learning and virtual reality systems. Proliferation of mobile endpoints has compelled businesses to address threat management with automated and adaptive defence mechanisms while simultaneously driving richer user experience. This year will see a change in how businesses approach mobility, from a device-focused approach to a more comprehensive strategy. To ensure the long-term success of enterprise mobile strategy, many organizations are implementing ‘Mobile Center of Excellence’ where multiple stakeholders having IT and business expertise are collaborating to reshape business models, maximize corporate performance and derive business value,” said Benoy CS, Director, Digital Transformation (ICT) Practice, Frost n Sullivan.

“India represents a complex and competitive life insurance market. Technology plays a critical role in partnering with business and gives us a competitive edge in the market. Business Mobility is one key area where we are focusing on to enable our workforce to work more efficiently in servicing our growing customer base better. We’re working closely with VMware to help us with the end user computing strategy to empower our employees, while keeping our confidential information secure,” said Ekhlaque Bari, Executive Vice President & Head IT, Max Life Insurance.

 “Delivering critical news as it happens is the advantage you have over competition in the publishing industry. Thanks to VMware AirWatch, our reporters can break news live from the field, much to our readers’ delight,” said VV Jacob, General Manager, Systems, Malayala Manorama.

Building on the digital workspace innovations to accelerate its adoption, VMware recently introduced new updates to its award winning Workspace ONE solution. These updates make it easy for IT to deliver unified access and single sign-on experience to Intranet applications, and will offer richer conditional access capabilities that combine real-time security hygiene with compliance automation. Updates to the market-leading AirWatch Unified Endpoint Management portfolio have enhanced support across OS platforms for mobile (iOS, Android), desktop (Windows 10, macOS), purpose-built (ruggedized) and IoT endpoints to simplify provisioning and end-user onboarding.

About 8.8% of Total H-1B Visas Processed from TCS, Infy: Nasscom

Nasscom, the apex body of the Indian IT industry, on Monday refuted allegations of the US administration and defended TCS and Infosys, saying that the two got only 7,504 H-1B visas, which is 8.8% of the total visas processed during FY2015.

The clarification comes after the US complained that Indian IT firms TCS, Infosys and Cognizant unfairly received a major share of H-1B visas by putting extra tickets into the lottery system, which the Trump administration wants to replace with a merit-based immigration policy.

In a statement issued on Monday, Nasscom stated that only six of the top 20 H-1B recipients were Indian companies during FY2015. Indian technology companies use H-1B visas to send their employees to work at customer sites in the US, which is the largest market for the over $110-billion Indian IT export industry.

Nasscom also stated, “Every reputable data source in the US has documented a growing shortfall between the supply and demand for computer science majors in the US workforce, especially in cutting-edge fields such as cloud, big data, and mobile computing.”

It also states that all Indian IT companies cumulatively account for less than 20% of the total approved H-1B visas although Indian nationals get 71% of the H-1B visas. “This is a testimony to the high skill levels of Indian-origin professionals, especially in the very coveted STEM skills category. The US Department of Labor estimates that there will be 2.4 million unfilled STEM jobs by 2018, with less than 50% of these vacancies in IT-related positions,” points Nasscom.

In the US, along with other global markets, there is a growing sentiment of protectionism, including coming up with various measures to safeguard jobs for locals and raise the bar for foreign workers.

Every year, the US grants 65,000 H-1B visas while another 20,000 are set aside for those with American advanced degrees. Also, the Trump administration wants to replace the current lottery system with a more merit-based immigration policy.

The annual number of Indian IT specialists working on temporary visas for Indian IT service companies is about 0.009% of the 158-million-member US workforce. “A survey also finds that the average wage for visa-holders is over $82,000 apart from a fixed cost of about $15,000 incurred for each visa issued which includes visa cost and related expenses. This is over 35% higher than the minimum prescribed exempt wage of $60,000,” states Nasscom. 

Agencies

Study Reveals 95% Engig in India Unfit for Software Development Jobs

Talent shortage is acute in the IT and data science ecosystem in India with a survey claiming that 95 per cent of engineers in the country are not fit to take up software development jobs.

According to a study by employability assessment company Aspiring Minds, only 4.77 per cent candidates can write the correct logic for a programme — a minimum requirement for any programming job.

Over 36,000 engineering students from IT related branches of over 500 colleges took Automata — a Machine Learning based assessment of software development skills — and over 2/3 could not even write code that compiles.

The study further noted that while more than 60 per cent candidates cannot even write code that compiles, only 1.4 per cent can write functionally correct and efficient code.

“Lack of programming skills is adversely impacting the IT and data science ecosystem in India. The world is moving towards introducing programming to three-year-old! India needs to catch up,” Aspiring Minds CTO and co-founder Varun Aggarwal said.

The employability gap can be attributed to rote learning based approaches rather than actually writing programmes on a computer for different problems. Also, there is a dearth of good teachers for programming, since most good programmers get jobs in industry at good salaries, the study said.

Moreover, programming skills are five times poorer for tier III colleges as compared to tier 1 colleges. “Sixty nine per cent of candidates from top 100 colleges are able to write a compilable code versus rest of the colleges where only 31 per cent are able to write a compilable code,” the report said.

Agencies

Even 2017 Will See Indian Telcos Bleed Thanks to Jio, Says Crisil

Telcos will continue to face difficulties in fiscal 2018 as well and two of the top three telcos are set to “bleed” due to intense competition triggered after the launch of Reliance Jio, a report said today.

“The price war in the Rs. 1.5 lakh crore wireless telecom market will continue this fiscal year as well leaving bruised bottom lines,” Crisil’s said in a note.

“Two of the top three telecom players will bleed this fiscal,” it added.

It attributed the difficulties faced by the sector to the price war for data subscribers, but added market leadership is crucial to the business and if anything, competition will only heat up this year.

The note explained that global experiences have shown that the market leader enjoys superior profitability.

The report said two of the top three telcos will end last fiscal year with net losses, and this trend is expected to continue in the current fiscal year as well.

Since its launch last September offering free services for almost six months, Jio is estimated to have cornered 55 per cent of total data consumption, while the overall data traffic has grown five times in the last one year, it said.

“A 60 per cent fall in 4G data prices since launch of Jio has resulted in muted 2 per cent growth in adjusted gross revenue last fiscal year,” the report said.

For the current financial year, it sees a muted 0-5 per cent revenue growth for the top telcos, as they seek to protect their subscriber base, it said.

It said the picture on profitability is “grimmer” and pre-tax profit margins will drop further by 0.50-1 per cent, in addition to 6 percentage point fall seen for the past fiscal year.

It said the proposed merger between the second and the third biggest telcos—Vodafone and Idea Cellular—is aimed at strengthening market position if not leadership, alongside lowering investment needs and costs.

Agencies

11,500 People in Offshore Markets Hired for TCS in Fiscal Year 17

Tata Consultancy Services (TCS) recruited over 11,500 people outside India during 2016-17, including graduates from engineering and B-schools in the US, as it ramps up local hiring in offshore markets to tackle visa-related challenges.

The country’s largest software services firm added 79,000 employees (gross) and 33,380 employees (net), taking its employee base to 3.87 lakh at the end of March.

Hiring locals in overseas markets often pushes up operational costs for IT outsourcing companies.

However, with the governments in markets like the US, Australia and New Zealand tightening their work visa norms, Indian IT companies are hiring more local talents in offshore markets to ensure compliance with rules.

“Our local hiring programmes in various geographies are progressing well. In FY’17, we recruited over 11,500 employees outside India, including some engineering campuses and the top-10 business schools in the US,” TCS CEO and Managing Director Rajesh Gopinathan told investors.

TCS did not provide details of the geographies where hiring was done.

However, the 11,500 number is lower than TCS’ hiring from international markets in 2015-16. According to the company’s annual report, it had inducted 16,173 people from international markets into its workforce in fiscal 2016.

America accounted for over 55 per cent of TCS’ USD 4.4 billion revenue in the January—March 2017 quarter, while over 25 per cent revenue came from Europe.

Companies like TCS and Infosys use work permits like H-1B visa (in the US) to send engineers to work on client sites.

However, over the past few weeks, the US and other countries like Australia have taken steps to tighten their visa regime.

This, in turn, has forced companies to adjust their business models to reduce their dependence on visas and hire more locals overseas instead.

The development comes at a time when the over USD 140 billion Indian IT industry is grappling with challenges like fluctuating currency movement and technology changes at a fast pace.

New technologies like automation and artificial intelligence are also making a number of jobs redundant that in turn is impacting hiring at IT firms.

TCS added about 79,000 employees in 2016-17 as compared to 90,000 gross hires in the preceding financial year.

”...going forward, we have said directionally it is going to come down and the total net intake also will be lower than what we have done this year,” TCS Head of Global Human Resources Ajoy Mukherjee said.

Agencies