Industry Updates : ITeS / BFSI Sector

10 Aug 2011: Service tax on foreign telecom networks to hit cash of IT, ITeS firms

The finance ministry has said use of foreign telecom networks will be liable to service tax in India, dealing a blow to the cash flows of IT, IT-enabled services and telecom companies that may have to cough up past dues. 

The levy could also raise international telephony charges for domestic consumers, though telecom companies played down the impact.

Most business process outsourcing, IT, ITES and telecom firms lease foreign networks to provide services abroad. They will now have to pay service tax on payments made to the overseas service provider. Although the service tax paid will be eligible for credit against the tax liability, experts say companies will face cash flow issues.

10 Aug 2011: Intelenet appoints Singh as CEO of India domestic BPO biz

Business process outsourcing firm Intelenet has appointed Bhupender Singh as the Chief Executive Officer (CEO) of its new India domestic BPO business with immediate effect. 

As CEO, Bhupender will be responsible for managing and growing the company's businesses in India.

The creation of Intelenet's new domestic business follows the acquisition of Intelenet by Serco Group Plc earlier this year and combines the existing domestic businesses of Serco BPO and Sparsh. 

The combined business will be the largest entity in the domestic India BPO market, with 26,000 employees and 27 delivery centres. 

8 Aug 2011: Citi appoints Bassam Salem as Asia Pacific CEO for private bank

Citigroup named Bassam Salem as Asia-Pacific CEO for its private bank, replacing Aamir Rahim, who will become head of Citi's public sector group for Asia Pacific. 

Salem, who will begin his new role in early autumn 2011, will be based in Hong Kong and be a member of Citi's Asia Pacific Executive Committee.

5 Aug 2011: Nexus Venture to invest $10 mn in Druva Software

Druva Software, a Pune-based start-up that sells enterprise backup and retrieval software to customers, such as US space agency Nasa, French fashion brand Louis Vuitton and Xerox, will raise $10 million, in second round of funding, from Nexus Venture Partners. 

Druva, a three-year-old start-up, will use the capital to fuel international expansion and research and development, according to a person with direct knowledge of the transaction.

4 Aug 2011: Genpact posts 40% rise in net, eyes 25% growth in sales

India's largest BPO, Genpact , posted 40% growth in its net profit to $39 million, for the second quarter, ended June 30, 2011. The company expects sales to increase by 25% for the year, buoyed by revenues from Headstrong - Noida-based IT company - Genpact acquired in April, this year. 

"Despite ongoing concerns in the global economy we now expect good growth. We expect revenue growth of 23%-25 % this year. Though Japan and credit markets in the US continue to see lagged recovery, Europe is growing at a fast pace," said newly appointed CEO and President, Tiger Tyagarajan. Revenues from clients other than GE grew 44.1% over the second quarter of 2010 to $398 million, which includes two months of Headstrong revenues. The number of $5 million clients for Genpact grew to 56 from 40 last year. 

3 Aug 2011: Noida-based BPO EXL ups sales outlook to 42%

Buoyed by strong revenue flows from recently acquired US-based Outsourced Partners International (OPI) systems and better demand outlook, Nasdaq-listed BPO firm EXL Service Holdings has revised its sales guidance upwards by $3 million to $358 million, for the year. 

The Noida-based BPO now expects its revenues to grow to 42% this year, from the projected 40% earlier. Net profit for EXL jumped 73% to $8 million from last year. The company's sales jumped 40% to $85 million over last year. 

"Our outsourcing business enjoyed strong revenue growth this quarter in finance, accounting and industry-vertical focused processes. EXL has closed the OPI acquisition in line with our expected timetable," president and CEO Rohit Kapoor said.

 3 Aug 2011: IT, ITeS firms pack more employees in confined work space to save on real estate costs

Under pressure from their clients, or parent organisations, to reduce bills amid increasing rentals and employee salaries, the typical small or medium-sized IT-enabled services (ITeS) firms are taking stringent measures to cut costs. They are reducing space per employee, and decreasing the size of common areas like cafeterias and conference rooms. At a clutch of ITeS companies, office space is being shared between IT workers and the call centre workforce (as the latter work the late shift to synchronize with US timings). And a few firms have even been asking employees to work out of the library.

2 Aug 2011: Genpact strengthens US team for BFSI business 

Genpact announced appointment of two key business development heads in a bid to further strengthen its presence in the US market. 

The company has appointed Charles Present to head business development for banking and financial services, while Peter Cincogrono will head business development for the insurance vertical.

These business development executives bring extensive industry experience to their Genpact roles and are contributing to Genpact's strategy of expanding both its US presence and successful BFSI client base.

Genpact has also hired other domain experts for the banking, financial services and insurance verticals as well.

1 Aug 2011: Genpact ventures in Brazil, to serve Astra Zeneca

Genpact Limited announced the opening of its operations in Brazil, its first location in South America. 

"Like all start up operations we will start small. But given Brazil's large economy, our our operations are expected to grow very fast," said Genpact CEO and President Tiger Tyagarajan. Genpact has already begun providing finance and accounting (F&A) services to Astra Zeneca from this center. It is also providing IT services to a financial services client out of Brazil. 

1 Aug 2011: Capegemini appoints Anish Sarkar as consulting head, India

Consulting, technology and outsourcing services provider Capgemini said it has appointed Anish Sarkar as the head of consulting for India. 

Sarkar will play a key role in growing Capgemini's India consulting unit, which will focus on helping Indian organisations achieve their growth ambitions, improve business processes and reduce support costs.

Sarkar has been associated with the IT firm after completing his MBA from IIM Calcutta. He was global sales officer for Capgemini India, responsible for offshore sales and account development of global clients.

1 Aug 2011: Shantanu Mitra takes over as CEO of Fullerton India

Shantanu Mitra, who was Deputy CEO overseeing risk management and the urban business at Fullerton India, took over as CEO of the company on August 1, 2011. Shantanu joined the parent company Fullerton Financial Holdings, Singapore, in early 2010 as Head of Consumer Risk Management for consumer markets across all operational entities in various countries, including India. 

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Industry Updates : IT Sector

9 Aug 2011: Hexaware, MindTree, UST Global, Syntel and Tech Mahindra raking in more money from large clients like Airbus, American Express and Walmart for bigger gains

Small IT service firms are mining more from their major offshore clients like Airbus, American Express and Walmart as they move back to top of the deal table, where the Big 5 tech firms rule the roost. 

This shift is very clear in the way mid-sized companies are approaching business - focus on breadth is giving way to greater focus on existing accounts. Hexaware, MindTree, UST Global, Syntel and Tech Mahindra are among mid-tier firms raking in more money from large clients. 
And to boot, they are winning deals from larger clients given that some major customers are not-to-happy with the top outsourcing firms.

7 Aug 2011: Indian IT companies including Infosys, TCS confident of withstanding US-led downturn

Even though industries across the country have expressed concerns over the debt crisis in the US, aggravated after the downgrading of its sovereign rating by S&P, Indian IT industry remains confident of withstanding another downturn. 

While most IT companies have expressed caution in the past few months on the European debt crisis and high unemployment in the US, they also remain confident of being able to maintain their growth momentum. 

6 Aug 2011: TCS, Singapore Management University to collaborate in cloud-based IT solution

TCS has entered into a collaboration with the Singapore Management University (SMU) for a new R&D facility for cloud-based IT solutions for cities worldwide. 

The lab is said to be the first of its kind in Asia-Pacific for integrating cloud technology with the relevant business-know-how to create urban management IT solutions.

 6 Aug 2011: IT will be badly hit if US slips into recession again

A turbulent US market means trouble for the Indian outsourcing sector, for which the US market accounts for close to 60% of revenues. It will put pressure on the toplines of companies as clients postpone investments and renegotiate contracts to cut cost. But industry bigwigs say it's too early to make any predictions. 

Phaneesh Murthy, CEO of iGate Patni, says the US economy is so uncertain that it is becoming difficult to do even a one-month prediction on macro factors.

Pankaj Sharma, chief trustee of the Centre for Transforming India, a thinktank, however believes a double dip is inevitable, impacting Indian IT. 

Gaurav Gupta, managing partner of outsourcing consultancy Everest Group, said the long term impact of the US situation is not yet clear. 

2 Aug 2011:  IT companies' revenue growth at 25% in FY11 exceeds pre-crisis level

Led by Infosys, Wipro, HP and Cognizant, the top 200 IT companies in India posted 25 per cent revenue growth in 2010-11-- the highest in four years-- to take combined turnover to to USD 84 billion (Rs 3,84,250 crore), said a study. 

It further said that top 20 companies have contributed over 64 per cent to the combined revenue. 
The top 10 companies in terms of revenue were Tata Consultancy Services, Infosys, Wipro, HP India, Cognizant, IBM India, HCL Technologies, HCL Infosystems, Ingram Micro India and Redington India. 

2 Aug 2011: Cognizant overtakes Wipro as third largest software exporter

Cognizant Technology Solutions Corp continued its scorching pace of growth and forecast a strong third quarter, at a time when rival Indian IT services exporters have warned of slowing technology spending. 

Cognizant's quarterly revenue, which grew 34.4 percent to $1.49 billion, outpaced India's No.3 software services exporter Wipro's IT services revenue of $1.41 billion.

 2 Aug 2011: MphasiS buys US-based insurance solution provider Wyde

HP-owned IT services provider MphasiS has acquired US-based insurance solution provider Wyde Corp. With the buyout of the $30-million company, MphasiS will shore up its insurance business with an opportunity to marry its applications and BPO business with Wyde's software platform Wynsure. 

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Mancer presents Talent Acquisition Conclave 2011 !!!

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Industry Updates : ITeS / BFSI Sector

13 Jun 2011: Wipro IT business CFO Manish Dugar to head BPO operations 

In yet another management rejig at Wipro, the current CFO of its IT business Manish Dugar is set to take over from Ashutosh Vaidya as the head of its BPO operations. Dugar's role in the company will be taken over by Jatin Dalal, chief financial officer, Europe & Global Head of Finance - Manufacturing, Energy & Utilities SBUs.

The BPO business contributed almost 10% to Wipro technologies' revenue of over $5.1 billion revenue in FY 11 and the company has articulated its aim to take this to the billion dollar mark in the near future. 

 11 Jun 2011: Senior level executive Subhash Dhar resigns from Infosys

In yet another resignation at senior level at the country's second largest software exporter Infosys, Subhash Dhar, Head of Innovation, has decided to quit. "Subhash Dhar has decided to leave the company. He has said he is looking at a start-up, of becoming an entrepreneur," Infosys Technologies Chairman N R Narayana Murthy said.

11 Jun 2011: Infosys appoints four new members to Board

Infosys Technologies  inducted four new members to its board, including current CFO V Balakrishnan. While Balakrishnan is currently serving as the chief financial officer, Vemuri is the Senior Vice President and Global Head (Banking and Capital Markets) at the firm. Srinivas is the Senior Vice President and Member of the Executive Council at Infosys. Ann Fudge is the former chairman and CEO of Young & Rubicam Brands, a global network of marketing communications companies. She is also on the board of GE, Novartis and Unilever.

 10 Jun 2011: Infosys eyes UK government contracts to close in on TCS, Wipro

Infosys is evaluating options to tap into UK's multi-billion government outsourcing market, as it seeks to compete better with larger domestic rival Tata Consultancy Services by increasing its share of revenues from public sector departments looking to cut costs.

So far, India's second-biggest software exporter has stayed away from addressing the UK's government outsourcing market. In contrast, rivals TCS and Wipro have established subsidiaries and won several deals, including from the country's pension management authority and tax department.

8 Jun 2011: Religare Securities appoints Manish Shah as head of Priority Clients Group

Religare Securities Ltd (RSL), a wholly-owned subsidiary and the broking arm of Religare Enterprises Ltd (REL), has announced the appointment of Manish Shah as Head of Priority Clients Group (PCG), Religare Securities Ltd. Manish brings with him with over two decades of experience in IPO marketing, research, institution sales, depository services, internet broking, equity product development, equity advisory and business strategy.

8 Jun 2011: UBS names Mittal head of India investment banking: Memo

UBS AG has appointed Ashok Mittal as head of investment banking for India, according to an internal memo seen. Prior to joining UBS, Mittal was with Lehman Brothers and had also worked as co-head of investment banking with HSBC, the memo said. Mark Panday, a Hong Kong-based spokesman for UBS, confirmed the appointment of Mittal as head of India investment banking.

8 Jun 2011: Cognizant proposes Rs 600 crore campus in West Bengal

Investment proposals don't mean investments for sure, but if such proposals are exciting and come to a government that is merely 18 days in office, it is surely reason enough to feel happy. Still no announcements were made, no drums beaten. But Cognizant, the fourth-largest IT company in the country, has submitted a proposal to the West Bengal government to set up a new IT software campus on 40 acres, that can give jobs to some 30,000 people. 

7 Jun 2011: US economy and unemployment worry Indian tech firms

Early signs of a potential slowdown in the US, marked by high unemployment and weakening consumer demand, is causing anxiety among India’s top tech firms deriving more than half of their business from the world's biggest market for software outsourcing.

Concerns of worsening macro-economic factors including falling housing prices can delay new technology investments by American firms, force outsourcing customers to renegotiate lower billing rates for software projects and could eventually affect the growth forecast for India's $70 billion IT sector if a recession takes shape, experts and company officials say.

6 Jun 2011: HSBC India appoints Srikanth Srinivasamadhavan Marketing Head

HSBC India  announced the appointment of Srikanth Srinivasamadhavan as Head of Marketing for HSBC India.

His rich and varied experience will help him in positioning the HSBC brand in India as the bank of choice for India's growing retail and wealth management and corporate consumers, a press release issued stated.

Prior to joining HSBC, he worked with Hindustan Unilever across many marketing and leadership roles.

In his last role, he was Head of Media Services, South Asia, for Hindustan Unilever, where he was responsible for the FMCG major's media planning, strategy, budgeting and deployment across product categories.

6 Jun 2011: IBM expanding data centre business in India

IBM is betting big on its data centre business, driven by the telecom sector, as more companies look at outsourcing their data storage requirements. Sectors like manufacturing and BFSI (Banking, Financial Services and Insurance) and telecom are expected to see huge growth this year for data centre deployment.

4 Jun 2011: Challenges ahead for new Infosys sales head Basab Pradhan

As Basab Pradhan, a former company veteran, prepares to take over as sales head of Infosys, he faces challenges of increased competition from rivals such as Cognizant apart from visa abuse allegations in the top outsourcing market of US that threaten to dent the image of India's second biggest software exporter.

At 45, Pradhan, who left Infosys in 2005 to start Gridstone Research, is perhaps going to face the toughest assignment of career, at a time when Infosys is trying to fend of rivals growing better, and is undergoing the biggest management rejig in its history.

2 Jun 2011: Capgemini expands global leadership team

IT consulting major Capgemini  announced two key international appointments based in India with Arun Sridhar taking over as Vice President (Infrastructure Services) and Kiran Cavale as Vice President (Global Business Information Management).

Sridhar, as part of the Infrastructure Services Strategic Business Unit, will be responsible for driving Data Centre Services globally for Capgemini. Prior to Capgemini, Sridhar was with Accenture and has a career spanning over 15 years, working with large companies across US and Europe.

Cavale, as part of the Global Business Information Management (BIM) Global Service Line leadership team in Capgemini, will take responsibility for optimising Capgemini's BIM assets in India and for developing strategies to drive global growth for the practice.

1 Jun 2011: Ajit Tolani quits KPMG, joins ELP as associate partner

Audit firm KPMG's transfer pricing advisor Ajit Tolani is joining Mumbai headquartered corporate law firm Economic Law Practices (ELP) as an associate partner. He will be handling Transfer Pricing for the firm.

A chartered accountant and a lawyer by training, Mr Tolani has spent most of his career in the field of transfer pricing advisory and litigation. Mr Tolani has 9 years of experience in Global Transfer Pricing Services at KPMG. Before joining the global audit firm he had completed his article from RSM & Co.

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Industry Updates : IT Sector

11 Jun 2011: Ness Technologies to be acquired by affiliate of CVCI

Ness Technologies, Inc., a global provider of information technology solutions and services, announced its merger agreement with an affiliate of Citi Venture Capital International, a global private equity investment fund. It said the affiliate of CVCI will acquire it in a deal valued at around USD 307 million.

11 Jun 2011:  Mahindras to sue B Ramalinga Raju and former independent Satyam Directors over fee refund

Even as the Mahindras are planning to drag disgraced Satyam founder B Ramalinga Raju to court to claim damages, they are also learnt to be seriously considering suing the scam-hit company's erstwhile independent directors to recover the remuneration paid to them.

With the former independent directors of Satyam failing to heed the company's communications seeking a refund of the fee paid to them, a legal action is now becoming inevitable.

9 Jun 2011: Mahindra Satyam opens smart grid customer demo centre

Mahindra Satyam, a city-based consulting and IT services firm on Thursday said it has opened a smart grid customer demonstration centre at its 120-acre premises here.

The CDC will help customers understand the next generation technology in real time and evolutes various technologies underlying the smart grid technologies.

 9 Jun 2011: QuEST, Cades outbid Infy, Mahindra Satyam to clinch contract from Airbus

Niche tech firms, QuEST and Cades, outbid bigger Indian rivals, including Infosys , to win an outsourcing contract from Airbus — the world's biggest commercial plane maker signaling a trend of large outsourcing customers preferring to work with specialist vendors for complex , engineering projects. 

9 Jun 2011: Infosys acquires New Zealand's Gen-i's software solutions business

Infosys said that its Australia and New Zealand unit has acquired the software solutions business of New Zealand's Gen-i for an undisclosed sum. Infosys said it will take over 110 employees and contractors from Gen-i, which would raise its New Zealand staff strength to up to 150 people. It also plans to add 15-30 new hires immediately.

Gen-i is the corporate information communication technology (ICT) arm of Telecom New Zealand .

8 Jun 2011: IBM to increase its presence in 25 more cities by 2013

As part of its expansion plan, particularly in smaller cities in India, software major IBM aims to increase its presence in 25 more cities, besides the existing 22, by 2013.  The expansion is part of the company's strategy to establish its presence in growth markets, which are at present spreading to smaller cities, Nipun Mehrotra, Vice-President, General Business, Routes and Geographic Expansion, IBM India, South Asia said.

 8 Jun 2011: Security software market grew 12% in 2010 to $16.5 billion: Gartner

Worldwide security software revenue witnessed a growth of 12 per cent in 2010 to $16.5 billion, driven by a rebound in demand for such solutions, according to research firm Gartner.

While mature areas like endpoint security and web access management showed single-digit growth, security information and event management (SIEM) and secure web gateway products experienced double-digit growth, Gartner said.

 8 Jun 2011: Domestic cloud computing estimated to grow at 53%

The domestic cloud computing industry is estimated to grow at a CAGR of 53% to be a Rs 2,434 crore market by 2014, a study conducted by CyberMedia Research India said.

"Cloud computing is witnessing widespread interest from the vendor-service provider-channel community on the one hand and business leaders and CIOs on the other," CyberMedia Research India Software and IT Services Research Lead Analyst Kamal Vohra said.

This is fuelled by the strong belief that cloud computing will allow a large number of SMB enterprises to adopt the same enterprise class software and technology solutions, it added. As per the study, penetration in cloud computing is expected to grow by 6.8% in 2012 from 4% in 2010. 

 7 Jun 2011: Wipro creates technology executive & business councils to drive growth

IT major Wipro has formed a technology executive council (TEC) and a technology business council (TBC) to gear up for future waves of growth.

Like many of its peers, Wipro is now looking to move away from a pure services driven business model to one that involves developing platforms and products, including developing IP ( Intellectual property ).

The company's newly appointed CTO, Anurag Srivastava, said that the focus of the company is now to differentiate from its peers through unique offerings.

 6 Jun 2011: IBM bags IT contract worth Rs 298 cr from IIFL

 IBM will change IT infrastructure for financial services provider India Infoline, or IIFL, as a strategic partner over a contracted period of 10 years. The Rs 298-crore outsourcing contract will reduce operational and capital expenditure and create higher uptime for the company's broking platform.

Under the agreement, IBM will manage more than 700 IIFL branches, 450 servers spread across five data centers and nine local server rooms with over 15,000 end user assets spread across India.

 6 Jun 2011: Infosys to provide banking software to HBTF

 Infosys Technologies  said it has partnered with Jordan-based The Housing Bank for Trade and Finance (HBTF) to provide core banking solution to power the bank's customer care agenda.

The IT solution would empower the bank's 112 home country branches with a unified, future-proof technology platform delivering all the benefits of support for multi-currency transactions.

 3 Jun 2011: NIIT to acquire soft skill training company Evolv

 IT training company NIIT said that the company's Board of Directors has given the nod to acquire the balance 40 per cent stake in Noida-based English language and soft skill training company Evolv.  NIIT spokesperson Prateek Chatterjee said that NIIT is transitioning from an IT training company to a talent development company. Hence, the deal strategically fits the company future road map.

1 Jun 2011: IBM India's revenues cross $3 billion; contracts with Bharti Airtel & Indian Railways now worth $1.5 billion

IBM India's revenues crossed $3 billion (Rs 13,500 crore) in the year ended March, helped by contracts from a number of companies looking to improve their performance through better use of technology. Big Blue, a name IBM acquired from its blue-painted mainframe computers of the 60s, now controls over half of the outsourcing business in a market that is home to the world's fastest-growing tech firms.

Nearly half of this is from India's domestic market, where IBM handles computer hardware, software and services functions of customers such as Bharti Airtel. Some revenues also come from developing solutions for government customers such as Indian Railways, which took the company's help for developing a crew management system last year.

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