Leadership Changes in Past Week

MASTERCARD CEO AJAY BANGA TO HEAD US-INDIA BUSINESS COUNCIL

Ajay Banga, president & CEO of MasterCard Worldwide, has been elected next chairman of the US-India Business Council (USIBC), a trade association made of 350 top American and Indian companies.

Banga, who became the president and CEO of global payments and Technology Company in July 2010, takes over from Harold "Terry" McGraw III, president, chairman, and CEO of The McGraw-Hill Companies.

"As a long time supporter and member of USIBC, I have witnessed the Council's stature and influence rise dramatically as a direct result of the iconic leadership provided by former chairs Chip Kaye, Indra Nooyi, and Terry McGraw," said Banga.

SHELL INDIA CHAIRMAN VIKRAM SINGH MEHTA TO STEP DOWN IN OCTOBER

Shell Companies in India Chairman Vikram Singh Mehta, 60, will step down in October, a statement from the firm has said. Yasmine Hilton, a PhD in Genetics, who has worked in a number of leadership roles across the Shell Group, will be the new chairman.

The statement, however, did not mention why Mehta, who has been the face of Shell in India for 24 years, was stepping down.

"Vikram Singh Mehta, Chairman, Shell Companies in India has chosen to step out of the company after 24 years of service, effective October 31, 2012," it said.

MADHU KANNAN QUITS BSE, TO JOIN TATA SONS

BSE Managing Director and CEO Madhu Kannan has decided to leave BSE and will join Tata Sons.

BSE in a statement said: "Kannan has expressed his intention not to seek a new term at the expiry of his current term ending May 2012, to pursue another opportunity."

In a separate statement, Tata Sons said: "Madhu Kannan (38) will soon join Tata Sons as Group Head - Business Development reporting to the Deputy Chairman, Cyrus P Mistry," Tata Sons.

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News Update - BFSI Sector

14^TH APR 2012: HDFC's Keki Mistry says repo rate cut likely soon

 The largest mortgage player HDFC said there is a possibility of a cut in the repo rate or the rate at which banks borrow from the central bank, in the immediate future, but ruled out a reduction in cash reserve ratio.

"The amount of funds being raised by banks through the liquid adjustment facility has come down and is now hovering around RS 70,000-90,000 crore, which is not significantly higher than the reserve bank's comfort level of RS 60,000 crore.

So, any injection of liquidity (through a CRR cut) is unlikely.

“ However, reduction in interest rate during this quarter is very much expected," HDFC chief executive Keki Mistry told reporters

13 APR 2012: Liquidity challenge likely to re-emerge in 2012-13, says Standard Chartered

Projecting a challenging year for the Indian banking sector, global financial services major standard chartered said the liquidity challenge is likely to re-emerge in 2012-13, forcing RBI to take action. 

"Our projections for FY13 indicate that the liquidity challenge is likely to re-emerge, necessitating RBI action," a research report from standard chartered said.

After 125 basis points (bps) of cash reserve ratio (CRR) reductions in the second half of 2011-12, it said "we expect the RBI to rely more heavily on OMOS (open market operations) in FY13".

Even if central bank cuts the CRR by another 50 bps, it may have to buy Rs 1.5 Lakh crore worth of government securities this fiscal, standard chartered said. 

12 APR, 2012”: HSBC wants a bigger share of Indian banking business

HSBC rues the fact that expansion of banking business is still restricted for foreign entities in India, one of the fastest growing economies.

Its country head in India and director for Asia Pacific, Naina Lal Kidwai said that restriction of opening branches is an issue which very much bothers the management.

Foreign banks collectively account for less than 7% of banking business in the country while HSBC alone contributed 2% of it.

""India is slowing down. But a 7% growth is still one of the best growth rates anywhere in the world,"" she said. ""Our strength comes from the underlying strength of the economy,"" she said at an interaction with the media.

11 APR, 2012: Lending rates may not fall drastically in FY13, says Crisil

Corporate and retail borrowers will not see a significant reduction in lending rates in the current financial year owing to tightness in liquidity, higher Government borrowings and high cost of deposits, according to leading rating agency Crisil. 

Lending rates are likely to drop by 25-50 basis points (0.25-0.5%) during this period, it said. 

"Lending rates are likely to fall by 25-50 basis points (bps) over the next one year - lower than the 50-75 bps drop expected in repo rate as banks attempt to protect their margins," the agency said in a report

10 APR, 2012: Compensate bond investors at 8% for late interest credit: RBI

The Reserve Bank instructed banks to compensate investors in Relief or Saving Bonds (government securities) for the financial loss to them on account of delayed credit of interest at a rate of 8 per cent.

"...an agency bank should compensate an investor in relief/savings bonds for financial loss due to late receipt/delayed credit of interest warrants/maturity value, at a fixed rate of 8 per cent per annum," RBI said in a circular.

Interest on these bonds is paid either through interest warrants by registered post or credited to the investor's bank account.

Until now, banks were compensating the investors for the financial loss at their own savings bank rate.

The RBI's instructions follow deregulation of interest rate on savings bank accounts in October last year.

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News Update -I.T/ ITES

14^th april 2012: Infosys may lose 2nd spot to Cognizant; sees anaemic growth this fiscal

Infosys fell short of a revenue target it lowered twice during the financial year and forecast that growth would be anaemic, causing investors to dump a stock once regarded as the bellwether for the indian software industry.

With its forecast of 8-10% revenue growth during the year to march 2013, Infosys' guidance trails the growth estimate for the industry by NASSCOM and puts it in serious danger of being overtaken by rival cognizant as the second largest software exporter.

Other than the mortification of losing its place in the software industry pecking order, Infosys' underperformance could mean that it risks losing the confidence of investors and analysts who could question whether the management has a coherent strategy that is capable of delivering growth while protecting margins.

13^th april 2012: Aegis refinances $190 million bridge loan with mix of debt, cash

Essar group company aegis said it has refinanced its $190 million bridge loan through a mix of a new five-year debt of $156 million and cash available on its books. 

"Aegis has refinanced its bridge loan of $190 million by a mix of new five-year debt of $156 million and the balance out of cash available on the balance sheet," an aegis spokesperson said. 

Comerica bank, Deutsche bank,ING, Macquarie, Societe Generale and UBS have participated in this deal, he added.

With this, outsourcing company aegis' overall debt stands reduced by $34 million, the spokesperson said. 

The original book size that was coming up for refinancing was about $200 million, but the company has refinanced only to the tune of $156 million. 

12^{TH APR}, 2012: Serco launches new global BPO division, eyes $1 billion revenue

Services and consulting firm Serco on announced the launch of a new global BPO division and is targeting revenues in excess of $1 billion by the end of this year.

The new division is an amalgamation of the contracts and companies that deliver BPO services globally within Serco, including Intelenet global services in India, the listening company in the UK and Excelior in Australia, Serco said in a statement.

Last year, it had acquired Indian BPO company Intelenet for up to 385 million pounds (around rs 2,772 crore).

The new unit will improve the services of Serco provides to its customers and enable it to target global opportunities, both in the public and private sector. 

11^{TH APR}, 2012: WestBridge-backed Indecomm BPO on sale for $250 million

Back-office firm  Indecomm  Global Services , founded by a former Unilever top gun, has initiated a sale process with the 10-year-old company valued at about $250 million.

Private equity investors WestBridge Capital, Tiger Global and promoter investor Naresh Ponnapa have mandated JP Morgan Chase to find buyers for the outsourcing firm, which has had discussions with IBM, Accenture and Cognizant Technology Services.

Indecomm's revenue is estimated at $120 million with operating profit in the vicinity of $25 million. A possible transaction may give Indecomm about two-fold valuations on current revenue.

Indecomm has over 3,500 employees servicing clients in the mortgage, e-learning and IT services space, according to the company website. 

10 APR, 2012: GENPACT CRACKS CHINESE TECHNOLOGY SERVICES MARKET

India’s largest business process outsourcing firm  Genpact  claims to have cracked the Chinese technology services market. Asia's largest economy now accounts for almost 8% of Genpact's $1.6 billion revenues.

"We've cracked the market," says Tiger Tyagarajan, the chief executive. "Last year, China was the fastest growing market for us. Genpact China is expected to grow at about 35%, that's double the company's growth rate."

Genpact now has about 40 clients in China spread across five delivery centers. Four of these centers were added over the last 16 months.

 Next month, Genpact is taking its entire leadership team of 25 executives, to Dalian, China to learn more from the firm's experience in penetrating the Chinese market. 

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