Finance Minister Pranab Mukherjee on Tuesday stated the fiscal stimulus packages would not be withdrawn until the economic recovery is on a firm growth track. He said he would take a call on withdrawing from stimulus packages after being convinced that the economy had come out of the slowdown. Incidentally, the Finance Minister’s assertion came on a day when the Bombay Stock Exchange (BSE) nosedived, with the Sensex tanking 491 points to close at a two-month low of 15,404.94 on poor corporate earning results coupled with sluggish global equity markets in the wake of uncertainty over the pace of economic recovery.
Speaking at the Economic Editors’ Conference here, Mr. Mukherjee said that it was imperative to return to fiscal discipline “as soon as the current economic circumstances permit us to do so”. Even as mopping up of additional resources through disinvestment would help the government in consolidating its finances, the worrying factor was the fiscal deficit which has started shooting up to 6.8 per cent of the GDP (gross domestic product) under the impact of a series of stimulus packages. “There is no dearth of liquidity in the economy and inflation as yet is not a pressing area of concern,” he said.
Turning to the economic challenges at hand, Mr. Mukherjee said “the first challenge is to take the economy back to the high GDP growth of 8.5 to 9 per cent per annum and even beyond, at the earliest, and to ensure that it can be sustained for the next few decades.” The other two challenges before the government were improving governance and deepening inclusive growth and development, he said.
The Finance Minister conceded that the sub-normal monsoon would have an impact on the GDP growth rate. However, he said: “We may fare better than the initial estimates of the decline in food production and agriculture GDP”.
Expressing concern over the low offtake of credit, he said banks have been asked to take advantage of coming busy season and enhance credit flow to need sectors of the economy. “…an all-out effort is being made to ensure that credit off-take to employment generating sectors, especially agriculture, and micro and small enterprises picks up,” he said.
On disinvestment, Mr. Mukherjee said that apart from NHPC and Oil India, a few other state units have been identified for offloading of small portions of government holding and issues of fresh equities to meet their funding needs, if needed. While the government has already approved disinvestment in NTPC, Satluj Jal Vidyut Nigam and Rural Electrification Corporation, the timing has not yet been decided as that would depend on the sentiments on the bourses. On the issue of black money, the Minister said a team of officials would go to Switzerland to negotiate on amendment of the tax treaty. As for the searches by IT department on the premises of former Jharkhand Chief Minister Madhu Koda and his associates, the Mr. Mukehrjee said investigations “are on as per the law”, but argued against generalising the issue of corruption to the entire political class.
Wednesday, November 4, 2009
Mahindra Satyam reboots on order win
Mahindra Satyam jumped 3.28% to Rs 102.20 at 13:29 IST after the company won an IT outsourcing contract from Swedish defence and aerospace firm, Saab, to develop solutions in India for the global defence and homeland security market.
The announcement was made after market hours on Tuesday, 3 November 2009.
Meanwhile, the BSE Sensex was up 399.78 points, or 2.60%, to 15804.72.
On BSE, 23.62 lakh shares were traded in the counter as against an average daily volume of 84.21 lakh shares in the past one quarter.
The stock hit a high of Rs 104.90 and a low of Rs 100 so far during the day. The stock had hit a 52-week high of Rs 319 on 3 November 2008 and a 52-week low of Rs 11.50 on 9 January 2009.
The stock had underperformed the market over the past one month till 3 November 2009, falling 15.93% as compared to the Sensex 10.09% fall. It underperformed the market in past one quarter, falling 4.26% as against 3.26% decline in the Sensex.
The large-cap software company has an equity capital of Rs 235.13 crore. Face value per share is Rs 2.
The current price of Rs 102.20 discounts the company's Q2 September 2009 annualised EPS of Rs 35.48, by a PE multiple of 2.88.
Mahindra Satyam and Saab have already initiated moves to set up a Centre of Excellence for Network Centric Warfare. One of the activities under this initiative is that Mahindra Satyam and Saab will jointly address the battlefield management system (BMS) for the Indian Army.
Mahindra Satyam, which counts Citigroup, GE, GlaxoSmithKline, Cisco Systems Inc and Nissan among its top five clients, has over 430 clients now. Over the last four months, the company, erstwhile Satyam Computers, gained over 32 new customers including some large clients.
Satyam was acquired by Pune based IT services firm Tech Mahindra in April 2009, after the firm's defamed founder B Ramalinga Raju confessed to perpetrating India's biggest corporate fraud. Customer confidence took a knock after Raju's confession.
The company is attempting to regain contracts and enter into new strategic alliances to turn-around.
Mahindra Satyam's net profit rose 3.7% to Rs 597.43 crore on a 6.9% increase in sales to Rs 2700.52 crore in Q2 September 2009 over Q1 June 2009.
Mahindra Satyam is a global consulting and IT services company, offering a wide array of solutions; from strategy consulting right through to implementing IT solutions for customers.
The announcement was made after market hours on Tuesday, 3 November 2009.
Meanwhile, the BSE Sensex was up 399.78 points, or 2.60%, to 15804.72.
On BSE, 23.62 lakh shares were traded in the counter as against an average daily volume of 84.21 lakh shares in the past one quarter.
The stock hit a high of Rs 104.90 and a low of Rs 100 so far during the day. The stock had hit a 52-week high of Rs 319 on 3 November 2008 and a 52-week low of Rs 11.50 on 9 January 2009.
The stock had underperformed the market over the past one month till 3 November 2009, falling 15.93% as compared to the Sensex 10.09% fall. It underperformed the market in past one quarter, falling 4.26% as against 3.26% decline in the Sensex.
The large-cap software company has an equity capital of Rs 235.13 crore. Face value per share is Rs 2.
The current price of Rs 102.20 discounts the company's Q2 September 2009 annualised EPS of Rs 35.48, by a PE multiple of 2.88.
Mahindra Satyam and Saab have already initiated moves to set up a Centre of Excellence for Network Centric Warfare. One of the activities under this initiative is that Mahindra Satyam and Saab will jointly address the battlefield management system (BMS) for the Indian Army.
Mahindra Satyam, which counts Citigroup, GE, GlaxoSmithKline, Cisco Systems Inc and Nissan among its top five clients, has over 430 clients now. Over the last four months, the company, erstwhile Satyam Computers, gained over 32 new customers including some large clients.
Satyam was acquired by Pune based IT services firm Tech Mahindra in April 2009, after the firm's defamed founder B Ramalinga Raju confessed to perpetrating India's biggest corporate fraud. Customer confidence took a knock after Raju's confession.
The company is attempting to regain contracts and enter into new strategic alliances to turn-around.
Mahindra Satyam's net profit rose 3.7% to Rs 597.43 crore on a 6.9% increase in sales to Rs 2700.52 crore in Q2 September 2009 over Q1 June 2009.
Mahindra Satyam is a global consulting and IT services company, offering a wide array of solutions; from strategy consulting right through to implementing IT solutions for customers.
Mahindra Satyam ties up with defence firm Saab
Mahindra Satyam today announced its plans to collaborate with defence and security company Saab to develop its operations in India for the global defence and homeland security market.
While the company did not give any official figure, the “ongoing-MoU” deal is reportedly worth $400 million (around Rs 1,850 crore) over a five-year period.
“It is difficult to put a number to this collaboration with Saab. The only thing we can say is that this is a first of its kind and has a huge market opportunity,” a company spokesperson said when asked to comment on the deal’s size.
By far, this is the biggest deal that Satyam has secured after it was acquired by Tech Mahindra about six months ago. Mahindra Satyam had 500-odd customers, of which close to 100 dropped their contracts with the then fourth-largest IT outsourcer after the confession by its founder, B Ramalinga Raju, that he had cooked the company’s books for several years.
After the acquisition by Tech Mahindra, Satyam won 30 new logos, most of them single-digit million-dollar contracts, besides a five-year SAP contract with global pharmaceutical major GlaxoSmithKline and a three-year extension of a contract from General Electric.
The collaboration with Saab would require Mahindra Satyam and Saab to jointly address the Battlefield Management System (BMS) for the Indian Army. The solution for BMS, proposed by Saab, is field-proven and deployed in many countries. Both parties intend to work together for the Indian BMS programme and would explore globalisation of co-developed artefacts.
Both the companies have already set up a Centre of Excellence for Network Centric Warfare (CoE-NCW) to offer comprehensive skills and a repository of tools, systems, middleware, integration platforms and system showcases in the NCW field.
This would be a development centre for mission critical applications and Command, Control, Communications, Computers and Intelligence (C4I) solutions for global opportunities accessible to either of the partners.
The CoE’s capabilities would also span into the homeland security arena, where the focus would be on end-to-end security solutions.
In the wake of the Indian government’s large investment plans for nationwide security, this CoE’s homeland security expertise would be targeted towards tapping this high potential market, according to Mahindra Satyam Chief Executive Officer (CEO) C P Gurnani.
Saab CEO and President Åke Svensson, in a press statement today, said: “We view this relationship with Mahindra Satyam as a strategic meeting of two highly skilled teams believing in technical and engineering excellence.”
Mahindra Group Vice-Chairman and Managing Director Anand Mahindra said the collaboration was a strategic step “towards synergising Mahindra Satyam’s unique strengths in mission critical systems, enterprise resource planning (ERP), engineering services, avionics and integration and Mahindra Systech’s manufacturing capabilities and engineering excellence. This would leverage Saab’s expertise in C4I programmes, network-centric warfare and special IT systems”.
Saab is one of the major European defence and security players with around 13,300 employees. It develops and manufactures the Gripen combat aircraft (one of the contenders in the IAF’s multi-billion deal for 126 jets), and other operations include command and control, electronic warfare, sensors, weapons and communications.
While the company did not give any official figure, the “ongoing-MoU” deal is reportedly worth $400 million (around Rs 1,850 crore) over a five-year period.
“It is difficult to put a number to this collaboration with Saab. The only thing we can say is that this is a first of its kind and has a huge market opportunity,” a company spokesperson said when asked to comment on the deal’s size.
By far, this is the biggest deal that Satyam has secured after it was acquired by Tech Mahindra about six months ago. Mahindra Satyam had 500-odd customers, of which close to 100 dropped their contracts with the then fourth-largest IT outsourcer after the confession by its founder, B Ramalinga Raju, that he had cooked the company’s books for several years.
After the acquisition by Tech Mahindra, Satyam won 30 new logos, most of them single-digit million-dollar contracts, besides a five-year SAP contract with global pharmaceutical major GlaxoSmithKline and a three-year extension of a contract from General Electric.
The collaboration with Saab would require Mahindra Satyam and Saab to jointly address the Battlefield Management System (BMS) for the Indian Army. The solution for BMS, proposed by Saab, is field-proven and deployed in many countries. Both parties intend to work together for the Indian BMS programme and would explore globalisation of co-developed artefacts.
Both the companies have already set up a Centre of Excellence for Network Centric Warfare (CoE-NCW) to offer comprehensive skills and a repository of tools, systems, middleware, integration platforms and system showcases in the NCW field.
This would be a development centre for mission critical applications and Command, Control, Communications, Computers and Intelligence (C4I) solutions for global opportunities accessible to either of the partners.
The CoE’s capabilities would also span into the homeland security arena, where the focus would be on end-to-end security solutions.
In the wake of the Indian government’s large investment plans for nationwide security, this CoE’s homeland security expertise would be targeted towards tapping this high potential market, according to Mahindra Satyam Chief Executive Officer (CEO) C P Gurnani.
Saab CEO and President Åke Svensson, in a press statement today, said: “We view this relationship with Mahindra Satyam as a strategic meeting of two highly skilled teams believing in technical and engineering excellence.”
Mahindra Group Vice-Chairman and Managing Director Anand Mahindra said the collaboration was a strategic step “towards synergising Mahindra Satyam’s unique strengths in mission critical systems, enterprise resource planning (ERP), engineering services, avionics and integration and Mahindra Systech’s manufacturing capabilities and engineering excellence. This would leverage Saab’s expertise in C4I programmes, network-centric warfare and special IT systems”.
Saab is one of the major European defence and security players with around 13,300 employees. It develops and manufactures the Gripen combat aircraft (one of the contenders in the IAF’s multi-billion deal for 126 jets), and other operations include command and control, electronic warfare, sensors, weapons and communications.
Allianz Insurance unit sets up third facility in Kerala
Thiruvananthapuram: ACIS, a wholly-owned subsidiary of Allianz Insurance Plc of the UK, opened its third facility at the Technopark information technology (IT) campus here today.
British Deputy High Commissioner in southern India Mike Nithavrianakis and Allianz Insurance chief executive Andrew Torrance inaugurated the new facility, which is spread over 40,000 square feet.
The first phase of the facility will seat 250 and be primarily used for global application development and maintenance projects for Allianz. The facility will seat 600 when complete.
Nithavrianakis described ACIS as an "excellent example" of Indo-British partnership in Kerala.
Torrance said ACIS was on its way to emerging as a shared services centre for Allianz globally.
ACIS is a wholly-owned subsidiary of Allianz Insurance and part of Allianz SE, a global player in the financial services industry serving more than 75 million customers in 70 countries.
Recognising the potential of tier-III cities in India, it launched its IT operations at Technopark in 2003.
In 2004, ACIS forayed into the business process outsourcing (BPO) sector and was also the first to handle voice processes in Kerala.
With the new facility operational, ACIS currently employs 700 professionals. (IANS)
British Deputy High Commissioner in southern India Mike Nithavrianakis and Allianz Insurance chief executive Andrew Torrance inaugurated the new facility, which is spread over 40,000 square feet.
The first phase of the facility will seat 250 and be primarily used for global application development and maintenance projects for Allianz. The facility will seat 600 when complete.
Nithavrianakis described ACIS as an "excellent example" of Indo-British partnership in Kerala.
Torrance said ACIS was on its way to emerging as a shared services centre for Allianz globally.
ACIS is a wholly-owned subsidiary of Allianz Insurance and part of Allianz SE, a global player in the financial services industry serving more than 75 million customers in 70 countries.
Recognising the potential of tier-III cities in India, it launched its IT operations at Technopark in 2003.
In 2004, ACIS forayed into the business process outsourcing (BPO) sector and was also the first to handle voice processes in Kerala.
With the new facility operational, ACIS currently employs 700 professionals. (IANS)
POSTED BHY: PALLAVI SINGH
PGDM III SEM
Team India jersey logo up for grabs
The Board of Control for Cricket in India (BCCI) has put Twenty20 on a par with ODIs and Tests while setting the reserve price for the
bidding of Team India's logo sponsorship. Sources said the board is asking for a minimum reserve price of Rs 3 crore for each Test, ODI or Twenty20 game, which highlights the growing commercial value of T20 matches. Four years ago, the base price for an ODI match was Rs 90 lakh and Rs 1 crore for a Test. During that time, T20 didn't even have a market. But in the last two-and-half years, the valuation of logo sponsorship in a T20 game has exceeded those of Tests and ODIs. In the new deal, sources said, BCCI is offering 170 international matches for next four years starting from January 1, 2009 and expecting around Rs 800 crore. Sahara India, whose logo Indian teams have been sporting for 10 years, has paid a little more than Rs 400 crore in the last four years. The huge increase in logo sponsorship money could put bidders in a tizzy. It has already put Sahara in two minds. Sahara's spokesperson Avijit Sarkar, when asked if his company would bid again, said: "We have not decided yet." In fact, if the deal happens, it could be worth more than Manchester United's T-shirt logo deal which is pegged at around Rs 650 crore for four years. At present, Sahara is paying around Rs 2 crore each for an ODI and a Test match and Rs 1.5 crore for a T20 game. The logo deal is not limited to the national teams. The Board is also looking to raise at least Rs 25 lakh for each 'Test', One-dayer and T20 match that its U-19 team plays. Similarly, the target for the women's team is Rs 10 lakh each for all the three formats. The rights holders will have to give a bank guarantee of the entire bid money. Sources said that if the bidders are buying logo rights for the Indian team along with Under-19, India-A and women's team, then they are expected to deposit a security amount of Rs 50 crore by November 22, two days before the actual date of submitting the tenders. And, if the bidders are only aiming for the senior team, the tender security fee would be Rs 48 crore. According to sources, some of the interested Indian companies are now having second thoughts about bidding. "The interested parties are in the process of picking up the tenders but we will see how many actually submit the bid. It's too high. There is no way this kind of deal can sustain in the current market scenario. Probably, the multinational companies may be able to afford such a high price," a sports marketing expert told TOI on Tuesday. Apart from Sahara, some of the prominent bidders four years ago were Idea, Hero Honda, Reliance and Indian Oil.
DIPANKER SUHALKA
PGDM III SEM
Vodafone launches pre-paid bonus card at 1 p/sec in Mumbai
India's leading cellular service provider, Vodafone Essar, has launched apre-paid Bonus Card of Rs 52 here to allow customers make local and STD calls to Vodafone numbers at 1 paise/sec Calls to other networks, including landline phones, across India would be charged only 1.2 p/sec, a Vodafone statement issued here said.
The Bonus Card, which comes with a validity of 365 days, is already available through retail outlets in Mumbai.
"1p/sec will allow our customers to enjoy chhota conversations and pay for what they use. We will continue to offer the per minute tariff plans allowing customers to choose the plans that best suit their needs," Vodafone Essar Mumbai, CEO, Naveen Chopra, said.
SUDEEP SINGH
PGDM IIISEM
SEC B
The Bonus Card, which comes with a validity of 365 days, is already available through retail outlets in Mumbai.
"1p/sec will allow our customers to enjoy chhota conversations and pay for what they use. We will continue to offer the per minute tariff plans allowing customers to choose the plans that best suit their needs," Vodafone Essar Mumbai, CEO, Naveen Chopra, said.
SUDEEP SINGH
PGDM IIISEM
SEC B
Raja to clear the air on spectrum.
Telecom minister A. Raja will meet the heads of telecom companies and Internet service providers from tomorrow to discuss issues such as spectrum allocation and the CBI probe into irregularities in the grant of licences.
Sources said the meetings would be held over three days.
Officials of the department of telecom (DoT) said, “The main agenda of the meetings is to assure operators, especially the foreign players, of a smooth and transparent 3G auction process.”
The 3G service rollout is expected to attract foreign players and provide around Rs 35,000 crore to the government.
The process is facing some hurdles that threaten to delay the auction, which the government is keen to complete by the end of this fiscal.
Funds from the auction are expected to plug the government’s fiscal deficit, estimated at 6.8 per cent of the gross domestic product for 2009-10.
One of the issues is the delay in the vacation of spectrum by the defence authorities. Raja has sought finance minister Pranab Mukherjee’s intervention.
“If this issue is not resolved quickly, I apprehend that the revenues anticipated from 3G auction may not be forthcoming this year,” Raja had stated in a letter to Mukherjee.
3G mobile phone services allow users to surf the Internet and download digital content at speeds faster than current technologies.
However, the defence controversy has been swamped by the CBI investigation into the allocation of 2G spectrum to the new players in January 2008 and the consequent raids on the office of the DoT.
The Opposition parties have trained their guns at Raja, with the BJP demanding his resignation.
On the scheduled meetings with Raja, an executive from a top telecom firm said, “We will take the opportunity to seek clarity on policy directions regarding 3G auction, spectrum allocation, licence fees and other issues in the wake of the CBI investigation.”
The auction is scheduled to begin on January 14, and firms will have to submit their bids by December 21.
CBI’s investigation was ordered by the Central Vigilance Commission, which had received several complaints about irregularities in the allotment of licences.
CBI officials said they would examine all the records relating to spectrum allocation.
Raja has refuted the allegations of any “wrongdoing”, stating that the licences and the spectrum had been allocated in accordance with the telecom policy.
Last week, Raja slammed the NDA for causing the government huge losses through the auction of spectrum during its regime.
“On record it has been observed that the licence fee was brought down to Rs 1,000 crore to benefit some operators. The allocation and reduced licence fee are estimated to have cost Rs 1 lakh crore to the government,” Raja had said.
On irregularities in awarding 2G licences, Raja said the spectrum was given in compliance with the recommendations of the Telecom Regulatory Authority of India. Prime Minister Manmohan Singh was consulted, while the exercise had the “clear approval” of the solicitor-general.
The government is keen on foreign firms participating in the 3G auction, which will bolster its collections and give it the much needed funds for its ambitious social sector programmes. It has asked foreign entities to participate in the auctions directly and later apply for licences.
Foreign firms participation in a recent auction for oil blocks has been lukewarm. Only four had bid for the offshore blocks.
SUDEEP SINGH
PGDM IIISEM
SEC-B
Sources said the meetings would be held over three days.
Officials of the department of telecom (DoT) said, “The main agenda of the meetings is to assure operators, especially the foreign players, of a smooth and transparent 3G auction process.”
The 3G service rollout is expected to attract foreign players and provide around Rs 35,000 crore to the government.
The process is facing some hurdles that threaten to delay the auction, which the government is keen to complete by the end of this fiscal.
Funds from the auction are expected to plug the government’s fiscal deficit, estimated at 6.8 per cent of the gross domestic product for 2009-10.
One of the issues is the delay in the vacation of spectrum by the defence authorities. Raja has sought finance minister Pranab Mukherjee’s intervention.
“If this issue is not resolved quickly, I apprehend that the revenues anticipated from 3G auction may not be forthcoming this year,” Raja had stated in a letter to Mukherjee.
3G mobile phone services allow users to surf the Internet and download digital content at speeds faster than current technologies.
However, the defence controversy has been swamped by the CBI investigation into the allocation of 2G spectrum to the new players in January 2008 and the consequent raids on the office of the DoT.
The Opposition parties have trained their guns at Raja, with the BJP demanding his resignation.
On the scheduled meetings with Raja, an executive from a top telecom firm said, “We will take the opportunity to seek clarity on policy directions regarding 3G auction, spectrum allocation, licence fees and other issues in the wake of the CBI investigation.”
The auction is scheduled to begin on January 14, and firms will have to submit their bids by December 21.
CBI’s investigation was ordered by the Central Vigilance Commission, which had received several complaints about irregularities in the allotment of licences.
CBI officials said they would examine all the records relating to spectrum allocation.
Raja has refuted the allegations of any “wrongdoing”, stating that the licences and the spectrum had been allocated in accordance with the telecom policy.
Last week, Raja slammed the NDA for causing the government huge losses through the auction of spectrum during its regime.
“On record it has been observed that the licence fee was brought down to Rs 1,000 crore to benefit some operators. The allocation and reduced licence fee are estimated to have cost Rs 1 lakh crore to the government,” Raja had said.
On irregularities in awarding 2G licences, Raja said the spectrum was given in compliance with the recommendations of the Telecom Regulatory Authority of India. Prime Minister Manmohan Singh was consulted, while the exercise had the “clear approval” of the solicitor-general.
The government is keen on foreign firms participating in the 3G auction, which will bolster its collections and give it the much needed funds for its ambitious social sector programmes. It has asked foreign entities to participate in the auctions directly and later apply for licences.
Foreign firms participation in a recent auction for oil blocks has been lukewarm. Only four had bid for the offshore blocks.
SUDEEP SINGH
PGDM IIISEM
SEC-B
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