Corporate Announcements

HYUNDAI MOTOR INDIA APPOINTS EX-MARUTI OFFICIAL RAKESH SRIVASTAVA AS VICE PRESIDENT

Country’s second largest car maker Hyundai Motor India said it has appointed Rakesh Srivastava as the Vice President for national sales.

"Hyundai Motor India Ltd (HMIL) has appointed Rakesh Srivastava as Vice President National Sales," the company said in a statement.

Prior to joining HMIL, Srivastava was the Chief General Manager at rival and the country's largest car maker Maruti Suzuki India (MSI), where he served for 15 years.

Srivastava was responsible for commercial vehicles at MSI and was also looking after the north zone.

NARSING RAO TO BE COAL INDIA CHAIRMAN NEXT WEEK

Narsing Rao, a bureaucrat, will take charge of Coal India next week, giving the state-run company a full-time chairman after more than a year.

The coal ministry has issued the appointment letter to Rao after the approval of the cabinet committee for appointments, officials said.

Rao, who currently heads Singareni Collieries Company, will be the first 'outsider' to lead the company. The 1958-born bureaucrat of the Andhra Pradesh cadre will also be its youngest chairman.

Rao will take charge at a time when the company is going through a coal supply crisis due to various reasons, including delay in environmental clearance.

MAX INDIA ROPES IN VIBHA PAUL RISHI FOR BRAND BUILDING AND HUMAN RESOURCES OPERATIONS

Healthcare and insurance group Max India has roped in Vibha Paul Rishi to take care of its brand building and human resources operation, two people aware of the development said.

Rishi, who quit retailer Kishore Biyani's Future Group last month, will join Analjit Singh's Max India as executive director, brand and human capital, later this month, they said. She will report to Max India MD Rahul Khosla.

FIRSTSOURCE APPOINTS RAJESH SUBRAMANIAM AS MD AND CEO

Firstsource Solutions Ltd's board of directors has appointed Rajesh Subramaniam, the company's present Deputy Managing Director & CFO, as its MD & CEO.

The company's Managing Director & CEO Matthew Vallance has decided to step down from May 15, an official statement said.

"While the decision to move from Firstsource was a difficult one, I feel the timing is right to hand over the reins to Rajesh. I am confident that under the new leadership team, the company is well-equipped to progress in its next phase of growth," Vallance said. 

STUART MILNE IS NEW HSBC INDIA CEO AS STUART DAVIS MOVES OUT

The country's second largest foreign bank HSBC said it appointed group veteran Stuart Milne as the new chief executive, effective April 1 with Stuart Davis, after a three-year stint in the same role, moving out of the country but within the group. 

This makes HSBC the second foreign bank in the country to have a new CEO, after rival British lender Standard Chartered Bank. 

Davis' new role is yet to be announced, but it has been reported that he will be holding a larger role at the bank's Asia headquarters in Hong Kong as part of a global reshuffle of the bank as the largest European bank tries to trim costs in the Western markets which are yet to recover from the 2008 credit crisis. 

HCL INFOSYSTEMS WHOLE-TIME DIRECTOR AJAI CHOWDHRY STEPS DOWN

 IT company HCL Infosystems  said its founder member  Ajai Chowdhry  has decided to step down from the position of whole-time director of the company.

"In line with pre-planned transition with the recruitment of new CEO in October 2010, Ajai Chowdhry has decided to now step down from the position of whole-time director of the company with effect from March 31, 2012," HCL Infosystems said in a filing to the BSE.

Chowdhry will continue to be non-executive Chairman of the Board of the company.

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EMPLOYMENT WATCH

OVERALL 12% SALARY INCREASE EXPECTED ACROSS INDUSTRIES IN 2012: SURVEY

In overall 12% salary increase is expected across industries in 2012 while 84% companies indicate buoyant hiring intentions this year, states Mercer's All Industries Total Remuneration Survey, a comprehensive survey of HR leaders representing 682 organizations across various industry sectors.

The salary increase forecast for 2012 continues to be the same as the actual salary increase of 12% for 2011. Among different industries surveyed, projected salary increase for the automobile industry is highest at 14.3%, followed by pharmaceutical and medical equipments at 12.8%, chemical at 12.2%, consumer at 12%, IT & telecom at 12%, and ITeS at 11.3%.

Employees in the insurance sector are expected to receive a relatively lower salary increase at 11% compared to other industries.

INFOSYS TO SET UP SECOND CAMPUS IN THIRUVANANTHAPURAM

Infosys Limited, India's second largest IT Company, signed an agreement with Technopark for 50 acres of land for setting up a second campus in Technocity

The agreement was signed by Infosys Senior Vice President H.R. Binod and Technopark CEO KG Girish Babu in the presence of Chief Minister  Oommen Chandy.

Infosys has two development centres in Technopark Phase-I and Technopark Phase-II, employing about 4,100 professionals. Starting its Kerala operations in January 2004 at Technopark, Infosys now has its own campus adjacent to Technopark which forms part of Technopark Phase II Special Economic Zone (SEZ).

POTENTIAL JOB LOSSES IN TELECOM SECTOR ENORMOUS, FEEL EXPERTS

The potential job losses in the Indian telecom industry are "enormous" in the wake of 2G licence cancellations and many of the affected entities have started trimming their workforce, according to HR experts.

"Most of the companies whose 2G licences were cancelled are reducing their workforce. This is happening at all levels only people at key strategic positions are being retained...," HR firm TeamLease Services General Manager (Services)  Madhubala Vaidyanathan said.

The Supreme Court in February cancelled as many as 122 licences for 2G spectrum, a move that has resulted in uncertainty in the fast-growing telecom sector.

"Potential job loss is quite enormous as the telecom industry was supposed to have provided thousands of jobs which would have done well for the economy," Vaidyanathan said.

Executive search firm GlobalHunt's Director Sunil Goel said that there could be potential job losses by looking at local market scenario for the telecom space.

However, hospitality, FMCG, financial services and banking "would be resource grabbing industries for ideal surplus resources from sales and marketing, customer service areas," Goel added.

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ECONOMY UPDATE!!

INDIA LIKELY TO GROW AT 6.1 PER CENT IN 2012: ERNST & YOUNG

India is expected to grow at 6.1 per cent in calendar year (CY) 2012, similar to the pace recorded in the fourth quarter of 2011, according to the Ernst & Young's quarterly Rapid Growth Markets Forecast (RGMF).

Growth should be picking up in H2, 2012, provided the global economy does not experience a further shock. Over the medium term, we expect a strong recovery in investment, which will help lift overall GDP growth over 9 per cent by 2014, it said.

"India's domestic demand-driven growth model is acting as a catalyst for attracting foreign investments into the country.

Although the ongoing global uncertainty may have prompted global investors to become more cautious, India's inherent advantages and proven resilience to counter-act macroeconomic challenges generally outweighs these concerns," Ernst & Young India Partner & India Markets Leader Farokh Balsara said. 

STRONGER DOLLAR HITTING GLOBAL IT SPENDING GROWTH: GARTNER

A stronger US dollar and public spending cuts in the indebted euro zone are weighing on global IT budgets; research firm Gartner said trimming its outlook for 2012.

Gartner now expects global IT spending to rise 2.5 percent to $3.7 trillion, instead of a previously forecast 3.7 percent gain. Growth will be supported by the popularity of smart phones and an improved global economy, it said.

The change was partly due to a stronger dollar, Gartner said, adding that growth would be a solid 5.2 percent at constant currencies.

HIRING GAINS IN US TRAIL MOST-PESSIMISTIC FORECASTS

Hiring by American employers trailed forecasts in March, casting doubt on the vigour of the more than two-year-old economic expansion.

The 120,000-increase in payroll reported by the Labor Department in Washington was the smallest in five months and less than the most pessimistic estimate in a Bloomberg News survey of economists.

The unemployment rate fell to 8.2% from 8.3% as people left the labor force.

Stock futures, the dollar and Treasury yields all fell as the report highlighted Federal Reserve Chairman Ben S Bernanke's concern that stronger economic growth is needed to keep the nation's jobs engine humming.

 Data also showed that Americans worked fewer hours and earned less on average per week, boding ill for the consumer spending that makes up 70% of the world's largest economy. 

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News Update - BFSI Sector

31 MAR, 2012, LOAN-DEPOSIT RATIO MAY TIE RBI HANDS ON RATES

The Reserve Bank of India is facing yet another challenge in its endeavor to lower benchmark rates, as high loan-to-deposit ratio will make it difficult for lenders to lower borrowing costs even if the RBI takes policy measures to ease the pressure.

Profitability of banks could also be hit due to the scramble for deposits among lenders due to the slowdown in savings. Loan-to-deposit ratio, or credit deposit ratio, of Indian banks touched a new high of 76.65% in early March, indicating resource pressure in the system and forcing many banks to raise interest rates on deposits. Put simply, banks are lending from other resources than deposits.

Given that for every Rs 100 they raise as deposits, they have to park Rs 5.50 (until early January) as cash reserves requirements with the central bank and another Rs 24 that needs to be parked in government bonds, they are left with only Rs 69.50 to lend.

This indicates that at the systemic level, banks could be using their reserves and surplus to lend. Moreover, they have already invested almost 5% extra in government bonds.

Market analysts, however, said while some banks are opting for cheaper sources such as bonds to fund long-term assets like infrastructure loans, for some, it could be a temporary phase as they face liquidity pressures. 

APRIL 1 2012, MALAYSIA BANK CIMB TO BUY ROYAL BANK OF SCOTLAND'S INDIA DIVISIONS

Commerce International Merchant Bankers, or CIMB, Malaysia's largest lender, will acquire Royal Bank of Scotland's corporate finance, investment banking and institutional equity broking businesses in India and some of the Asia Pacific markets. 

The deal is expected to be signed in Malaysia next week, said people familiar with the transaction. Senior CIMB officials, including Carol Fong, CEO of CIMB Securities, were in India on Friday to meet financial market regulators and stock exchange authorities.

RBS, whose history in India goes back to 1921, and has the third largest concentration of RBS Group employees after the UK and US, will retain its international debt financing, transaction services and risk management in all 11 Asia Pacific countries it operates in.

For the sale of its retail and commercial banking operations in India, RBS is already in discussions with HSBC. CIMB entered into a memorandum of understanding with RBS earlier this month to acquire its cash equities, equity capital markets and corporate finance businesses in Asia Pacific. Lazard is advising RBS on the transaction.

Sources said CIMB has aggressive plans to expand in broking, investment banking and equity capital markets segments in India. The Malaysian group may acquire an institutional brokerage in India to expand its footprint in the country. 

APRIL 2 2012, 'BANKS CAN SAVE RS 300 CR ANNUALLY BY SWITCHING OVER TO RUPAY'

A switchover to RuPay Card, the Indian version of Visa or MasterCard, can help domestic banks save as much Rs 300 crore annually in transaction fees, says the National Payments Corporation, which launched the card last week.

"Adoption of the RuPay Card will help banks save Rs 250-300 crore annually as our interchange charge is cheaper by up to 40 per cent than what banks pay to foreign cards like Visa and MarsterCard," according to National Payments Corporation of India (NPCI) Managing Director and Chief Executive Officer A P Hota.

After years of preparation and soft launch, NPCI commercially launched RuPay Card on March 26, with major banks such as SBI, BoB, UBI, BoI, Corporation Bank and Axis Bank launching their domestic debit cards on the RuPay platform.

This makes the country second after China to have an indigenous electronic payment card.

APRIL 3 2012, DBS ENHANCES INDIA UNIT CAPITAL WITH $100 MN INFUSION

DBS Group Holdings, Southeast Asia's biggest bank, has infused about 5.1 billion rupees ($100 million) into its India unit to enhance its capital base and help launch of new services.

DBS' total capital base in India was at more than 33 billion rupees as on end-March after the latest round of fund infusion.

The bank, which started operations in India in 1995, offers corporate and  investment banking  services, including corporate lending and mergers and acquisitions advisory.

 It also offers wealth management services in the personal banking segment.

In March 2010, DBS sold its stake in a financial services joint venture as part of its strategy to focus on corporate clients in India, high net-worth individuals and emerging affluent segments.

APRIL 4 2012, DHANLAXMI BANK PLANS TO SHUT 30 BRANCHES, APPOINT DEPUTY CEO

 The Thrissur-based Dhanlaxmi Bank is planning to shut 30 branches in key metros, including Mumbai and Delhi, and it may elevate a key official to the post of deputy chief executive officer.

The bank's network covers 275 branches and 401 ATMs over 140 centers in 14 states.

The downsizing is a part of the revival plan submitted by PG Jayakumar, MD and CEO, to the bank's board on March 28.

Some of the branches operate in high-cost areas and the bank does not want to keep them open. "The bank is also planning to shut its corporate banking unit,'' said an official with knowledge of the developments.

Muralidaran Rajamani, the bank's chief operating officer, is likely to be made the deputy chief executive officer.

APRIL 5 2012, BANK CREDIT GREW 23% IN JULY-SEPTEMBER: RBI

Credit by banks grew by 23.5 per cent in the quarter to September 2011, up from 19.3 per cent over the same period a year ago, indicating greater economic activity in the country despite higher interest rate regime.

Meanwhile, aggregate deposits during the July-Sept quarter increased by 22.1 per cent against 13.9 per cent from a year ago, RBI data showed

State Bank of India, country's largest public sector lender, along with its associates, showed an increase of 18.2 per cent in credit, up from 16.4 per cent over the same period a year ago, it said.

SBI Group's total deposits more than doubled to 18.2 per cent in the quarter, from 7.8 per cent a year earlier.

As per the data, top hundred centres accounted for 78.5 per cent of the bank credit.

Nineteen nationalised banks taken together accounted for 52.2 per cent of the total deposits, while SBI and its associates contributed 21.8 per cent, it said.

The share of new private sector banks, old private sector banks, foreign banks, and regional rural banksin total deposits remained at 13.7 per cent, 4.8 per cent, 4.6 per cent and 2.9 per cent respectively.

The number of banked centres stood at 35,435 as on September 2011, the RBI data said adding 27,913 were single office centres and 68 centres had 100 or more bank offices, the data said.

APRIL 6 2012, BAD LOANS SPARK BANK DOWNGRADES

Distressed borrowers are taking a toll on the credit profiles of Indian banks with almost half a dozen lenders being downgraded by rating agencies in recent weeks.

In the past fortnight, rating agency ICRA has downgraded Central Bank of India, Oriental Bank of Commerce and Union Bank of India, citing rising bad loans and the high value of restructured loans. 

Some time earlier in 2012, Moody's had lowered its credit opinion on Syndicate Bank, Union Bank and Bank of India, again citing rising bad loans. 

In a report after the Budget, Mahrukh Adajania ofStandard Chartered said that all public sector banks have asset quality issues in the form of huge restructuring pipelines, which are more or less in the same proportion. 

According to the report, Allahabad Bank, Bank of Baroda, Bank of India, Canara Bank, Punjab National Bank, State Bank of India and Union Bank have restructured loans ranging from 3.5% to 5.9%. 

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News Update -I.T/ ITES

30 MAR, 2012: INFOSYS, TCS, SIFY BAG POSTAL DEPARTMENT'S TECHNOLOGY PROJECTS

The Department of Post (DoP) has issued Letters of Intent (LoIs) to Infosys, TCS, Sify and Reliance Communications Infrastructure for different technology advancement projects. 

"Department is trying to induct technology in a big way. There are eight RFPs (Request for Proposal) we have floated and issued Letter of Intent in five (projects) to companies which include Infosys, TCS, Sify and Reliance," said Secretary (Posts) Manjula Parasher

The Department has got approval of Rs 1,877.2 crore to be spend across these projects over period of two years and will seek additional funds when the need arises. 

DoP has issued to Infosys for two projects which are Rural System and Financial Services Integration, Tata Consultancy Services for Change Management, Sify for Network Integration and Reliance Communications Infrastructure for Data Centre. 

APRIL 2, 2012: AEGIS REFINANCES DEBT, PROFITABILITY STILL A CHALLENGE

After an initial delay in tying up alternate funding that put the firm on a negative credit watch, business process outsourcer Aegis partially re-financed its $190-million (Rs 970-crore) debt on Saturday, even as profitability continues to be a challenge for the Essar group firm.

According to an executive with direct knowledge of the matter, $156 million of the loan maturing in April has been refinanced through dollar and euro denominated debt of five-year tenure. Rest of the loan would be repaid using internal accruals

Aegis, which specialises in call-centre business, is planning an initial public offering soon but the low profitability and high debt could hamper the prospects of such a share sale.

Last week, credit rating agency Standard & Poor's had placed Aegis on credit watch with negative implications due to the firm's "weaker-than-expected operating performance and a significant delay in refinancing a large upcoming debt maturity".

APRIL 3, 2012: TCS SAYS US CLASS ACTION 'WITHOUT MERIT'

Tata Consultancy Services denied a US class action suit that it unfairly kept the US tax refunds of Indian employees working abroad, saying the claims were "without merit". 

A US judges on approved the suit against TCS. The plaintiffs accuse the company of forcing its Indian employees to sign over their US tax refunds, according to the Lieff Cabraser Heimann & Bernstein law company, which is representing them. 

The complaint also alleges that TCS did not pay its employees the amount it promised them before going to the United States. 

APRIL 4, 2012: EDUCOMP BAGS RS 209 CRORE ORDER FROM ASSAM GOVERNMENT

Education solutions provider Educomp said its ICT division; Edureach  has bagged an order worth Rs 209 crore from the Assam government under the ICT@Schools project. 

Educomp signed the agreement with Assam Electronics Development Corporation Ltd, Government of Assam on March 23, 2012 for the implementation of Rajiv Gandhi Computer Education Programme (RGCEP), Educomp said in a statement.

RGCEP reaches 1,054 governments high and higher secondary schools in the state and over 6.5 lakh students are expected to benefit from this program me every year, it added. 

Educomp said with the addition of 1,054 government schools in Assam, the company now reaches a total of 12,176 government schools across 10 states, serving over 6.7 million students. 

The project will be implemented under Build, Operate and Transfer (BOT) model for a period of five years. 

APRIL 5, 2012: VISA REJECTIONS DISRUPT INDIAN IT OPERATIONS IN US

The US visa restrictions are causing huge disruptions in the onsite activities of Indian IT companies.

 Visa rejections are at an all-time high and companies are not able to send enough support and maintenance staff to their client locations overseas to complete projects on time. 

Between 2005 and 2007, the denial rate for L1 petitions ranged from 6 to 7%, in 2008 it rose to 22% and reached 27% in 2011. L1 is a visa given for intercompany transfers of specialist talent.

"But what is understood as specialization by Indian companies is often not understood by the US consulates. So there is always this perception difference,'' said an immigration consultant at a leading IT firm. 

At the same time, companies are very eager to secure L1 visas, as they are almost 50% cheaper than H1 visas. An L1 visa costs $2,300 (end to end cost for application to work permit), while it is $5,300 for an H1 visa, which comes with an annual quota of 65,000. 

But some blame the Indian companies. "L1 is an austerity measure for companies today. They apply for L1 visas even when they require H-1 B visas. The consulates are aware of all these Indian tricks. Rejections happen due to this too," said Pradip Tukral, a visa consultant.

APRIL 6, 2012: NASSCOM CREATES HEALTH INSURANCE PLAN FOR IT COMPANIES

Nasscom has created a health insurance plan in association with oriental insurance for the 2.5 million people industry. 

Insurance premiums come down when more people are part of a plan, and given the scale of the IT sector, Nasscom's techie-health plan will bring down substantially the cost of providing insurance especially for small and medium businesses.

Nasscom said over 200 companies have already committed to join the plan. The association's target is to bring 1,000 small and medium businesses under the scheme in 15 months. 

"The scheme offers a 30% to 50% cost savings to companies with up to 100 employees. It will have a cover of up to Rs 3 lakh for employees and their spouses and children,'' said Sangeeta gupta, senior V-P, Nasscom.

There are different kinds of plans, and the cost of the plan for a 100-employee company would vary between RS 1.5 lakh and RS 9.5 lakh based on the plan. 

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