Thursday, March 28, 2013

B&E Indicators

Indian IT/ITeS on the fast lane With a CAGR of 24% in the last decade, the Indian IT/ITeS industry has emerged as a key growth engine for the economy, contributing around 5.6% to India’s GDP in FY2009-10 and also providing direct employment to about 2.3 million people (from just about half a million in 2001). In fact, as per NASSCOM, the sector is estimated to provide direct and indirect employment to over 30 million people by 2020.

Overseas markets driving the growth
Even the export revenues touched $50.1 billion in FY2009-10, accounting for over 68% of the total industry revenues. The IT services segment was the biggest contributor (54%) to the export revenues (the export revenues from IT services have grown from $10 billion in FY2004-05 to $27.3 billion in FY2009-10) followed by the ITeS/BPO segment, which contributed $14.7 billion to the total industry revenues.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Monday, March 25, 2013

Nothing less than Adam’s Dilemma

Dhamra Port on the coasts of Orissa may well Open The Gates of fortune for The State, but at The Same time it may also Prove fatal for The rare Olive Ridley Turtles. This is now writing The Newest Chapter of Tussles between Environmentalists and Industrialists in The State.

Ever since the Naveen Patnaik government stepped ahead to bring in an industrial revolution in Orissa, the state has been witnessing increasing number of agitations and activism cases. Owing to the same while India’s biggest FDI backed (Rs.520 billion) POSCO steel plant project is stuck with land acquisition issues, global steel major Arcelor Mittal, who signed a MoU with Orissa government in 2006 to set-up a Rs.400 billion steel plant, finally gave up hope and moved on to sign a MoU with the Karnataka government. Vedanta Group suffered a double blow with it’s aluminium plant in Lanjigarh (Western Orissa) and Rs.150 billion Vedanta University in the eastern part of the state. Most of the mega industrial ventures in Orissa are now at halt or fighting hard to salvage a situation out of nothing. They are facing road blocks created by either pro-environment activists or anti-displacement agitators. The latest addition to this struggling bunch of projects is the Port of Dhamra, though with a little twist. While most of the above mentioned projects are struggling to start off, Dhamra port is facing the heat when it is just about to be completed.

Before getting into a discussion of development vs environment, which is the real issue haunting the project at the moment, one must know that on completion Dhamra port – developed by Dhamra Port Company Ltd. (a 50:50 joint venture between L&T and Tata Steel at an estimated cost of Rs.24.6 billion) – will become the first ever fully mechanised port on the eastern shore of the country. In addition, the port, which is strategically located between Haldia (West Bengal) and Paradip port (Orissa) on the Bay of Bengal, will be one of the largest deep water ports in India adding impetus not only to the trades of the state but also of the country in a serious way. The important fact about this port is that when the project work started in 2006 (agitation against POSCO for land issues were at their peak), there were no such issues against DPCL though government acquired around 3,000 acres of land in 74 villages for the port and rail corridor. Displacement was never a hurdle for the project. Recollects K. C. Patra, District Collector, Bhadrak, “Issues relating land acquisition were handled in an exemplary manner. The process was accomplished in a way that no one was left landless at the end. Thus district administration did not face any problem during acquisition of lands.”

However, the real pain for DPCL at the moment is the protest of environmentalists, which has gained a lot of momentum with international NGOs jumping into the bandwagon in a big way. And the issue raised by the environmental NGOs is the ports closeness to Gahirmatha Marine Sanctuary, where 200,000 to 500,000 Olive Ridley turtles nest every year. Though the port site is not a nesting area, environmentalists are concerned about the fact that dredging and industrial pollution will disrupt the environment and the natural food chain in the whole region.

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Sunday, March 17, 2013

Punjab & Sind Bank in conversation

Executive Director,Punjab & Sind Bank in conversation with B&E’s Avneesh Singh

B&E: Your average net interest margin (NIM) at present is at a low of 2.50%. Is it because you have problems in raising low cost deposits?
PKA:
There were a couple of reasons for which our NIM went low some time ago. Traditionally, our NIM was over 3%. But we had to make a few sacrifices to achieve the kind of growth we have exhibited in the last few years. We had to resort to a little low NIM to fund our growth and credit needs. However, we have now reached that critical mass where we can moderate our growth. So, we are now planning to strike a balance between growth and better ratios. Nevertheless, our NIM has already improved from 2.45% to 2.79%; but we are not satisfied with this figure as we want it to be above 3%. We have plans to resort to CASA deposits, which will help us to improve our NIM. In fact, the branches we are opening in the rural areas will also help us a lot in this direction as every branch that we are opening in these areas is getting us CASA of Rs.50 to Rs.100 million. In addition to this, we will also be running a CASA scheme to increase our deposits. Last year, we ran a scheme and managed to mop up deposits worth Rs.15 billion in just 3 months time. We are planning to run similar schemes this time also... and very soon.

B&E: Are you looking at other areas like fee-based income to boost your income in the near future?
PKA:
We get additional income from things like letter of credits, bill guarantees, upfront fees, processing fees et al, which are part of normal banking activities. Besides, we are into selling third party products, like life insurance products for Aviva Life Insurance, and non-life products for Bajaj Allianz. Of late, we have started taking this quite seriously. Thus, we are recruiting more people and getting them trained to boost revenue from these sources. Apart from these, we also sell products like gold coins on different occasions. Like on Dhanteras, we launched our gold coin scheme and sold roughly 70 to 80 kgs of gold in one day. In terms of additional revenue sources, recently, we are also eying micro insurance sector and are getting into loan syndication in a small way. But then, at present, it’s the fee income and bank assurance where we are betting big on.

B&E: Considering the entry of more number of foreign banks and new licensing, Indian banking sector is set for some serious competition in the days to come. Being a small bank, do you think that your existence may come under threat then?
PKA:
I think we will remain light on our feet because of the small size; ourturn around time and decision making will remain very fast. For example: I have 400 branches and 12 zonal offices in Punjab. So, all the proposals that come to these 400 branch heads can be quickly sent forward to the zonal heads and decisions can be taken super fast. As a result, it will not be necessary for the customer to go to third or fourth level managers, and his problems can be sorted out quickly making him happy and loyal.

Read more.....

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles


Monday, March 11, 2013

The Initial surge of Canon in India

Kensaku Konishi has been leading the Initial surge of Canon in India that began from 2006, A surge he attributes to Major Strategic Realignments and the Aggressive Pursuit of Localised Campaigns. In this Exclusive Discussion with Virat Bahri, He talks about the Company’s long term plans in India and the Recent Key Initiatives being taken to Build on The Initial Momentum.

B&E: Companies like LG and Samsung moved into manufacturing when the Indian market became substantial. Do you have any similar plans?
KK:
Canon products are smaller with higher value. Our conditions for setting up a factory are as follows – once we set up a factory, it will not only be for that particular domestic market, but all over the world. When we evaluate India in that context, basic infrastructure is not catering to our demand like regulation, transportation, ports et al. Competition is not only there in India but Malaysia, Vietnam, Thailand and even China. Thus, there is no schedule to open a factory in India. The closest plants are in south east and East Asia – China, Malaysia, Thailand, et al. Work force is not a problem. Indian people have the capability and creativity. The issues are beyond that.

B&E: You will be doing up to 100 launches this year. Why is this necessary and what is the direction that innovation is taking in the camera category for Canon?
KK:
All Canon products are digital. Fortunately or unfortunately, the product cycle is getting shorter. For analogue cameras, one product lasted for around 3 years. In digital cameras, the lifecycle is around one year. The young generation wants to buy every six months. We make these launches for stimulation of the market, technical advantage and also with a view of competitors. In terms of innovations in cameras, people linked innovations to megapixels earlier. Now megapixels are big enough. Too many megapixels implies problems in handling the data. Now the key focus is high sensitivity. Even in dark conditions or twilight conditions, we try to make good pictures. We need to have high sensitivity cameras that adjust to such conditions just like our eyes do. We are trying to make zero-failure cameras. In any situation, all that people need to do is to click. The camera will automatically adjust and provide good pictures.

B&E: You have seen different markets while working with Canon. What, according to you, are the unique facets about working in the Indian market and with Indian people?
KK:
I have been with Canon for over 30 years, and seen different markets (like Hong Kong and Singapore). The Indian customer is, in one word, pretty diverse. We have to be focussed and put resources in particular areas in order to succeed in India. Some markets are very aggressive, while some are relatively conservative. There are a lot of shopping malls in the south and west, as well as Gurgaon and Noida; but not so much yet in Kolkata. Language, culture and background also affect consumer behaviour. We have realised the need to allow the local or regional branch to decide their campaigns as much as possible. Headquarters cannot control everything. And sometimes in national campaigns, we have not done so well.

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles




Wednesday, March 6, 2013

Game, Set, Match Vujacic

Tennis beauty Maria Sharapova is entering into a different ball game altogether with Sasha Vujacic, star of the L.A. Lakers. Seen holding hands not long ago, Vujacic, who is on the bench recovering from a concussion, fairly utilised this time to pop the question to the diva. The engagement, a setback for many a bachelor, came on the day that marked a year’s anniversary of Sasha meeting Maria.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Tuesday, March 5, 2013

George Alexander Muthoot

Managing Director, Muthoot Finance Ltd in conversation with B&E’s mona mehta

Muthoot Finance Ltd (MFL) has of late gained considerable media presence and brand recall, much because of their unique positioning as a ‘gold loan’ company – an area that previously used to be in the realm of typical gold and jewellery houses. It’s now India’s largest in the niche gold loan area, and has managed to notch up a humongous asset base of `100 billion with over 1,800 branches. Collaborating with mammoth global PE firms like Baring Private Equity Partners and Matrix Partners, MFL has the aim of doubling its asset base to `200 billion in this fiscal...

B&E: Despite being a huge gold loan company and despite having a considerable asset base, you recently decided to partner with private equity players. What’s the rationale behind this move?
George Alexander Muthoot (GAM):
Our company is known as a fully family owned entity. The inclusion of global investors is a significant milestone and marks a new chapter in our journey. This capital infusion will further strengthen the capital base of the company. These investments are made after elaborate due diligence by the investors. The support that we have received from reputed investors like Baring Private Equity Partners and Matrix Partners India is an endorsement of the robust business enterprise that we have nurtured and built over our lifetime. This will position the company to further embark on an aggressive asset build up and will be a fillip to our growth plans. This is also a prelude to our plans to float our IPO in the near future. All these are part of our plans to double the company’s business to `200 billion by the end of the current financial year.

B&E: With respect to your gold loan segment strategy – what was it that worked so well for you?
GAM:
The Muthoot Group has been in business for the last 123 years and has an unblemished record of trust and goodwill among customers and stake holders alike. We have constantly innovated to deliver customer-oriented products and personalised service deliveries to set new bench marks in the gold loan industry. During 2009-10 fiscal, the company recorded a growth of 119% over the previous year in terms of distribution of gold loans. During the year we mopped up a turnover of `74 billion from gold lending and `31 billion from gold bonds. Even this year, the company, which used to be dependent on gold loans for 90% of its revenue, is aiming at a business of $51 billion from gold bonds, almost 25% of the target of `200 billion.

B&E: The gold market has gone through a dynamic change over the last 4 to 5 years as gold prices have shot up from a level of `8,000 per 10 gms to almost `19,000 per 10 gms. How has it impacted your business practice?
GAM:
That’s true, the price of gold has gone up very high, and so is the competition in the gold loan market. Nevertheless, our consistent customer friendly services still attract customers to our branches. But then, customers are now increasingly looking for easy accessibility and to meet those needs, we are trying to set up new branches so that we can be present wherever the customers need us.

B&E: Apart from providing fast processing of loan applications, what are the other offerings that separate you from your competitors?
GAM:
Earlier, a gold loan was looked upon as a distress product. But now customers have realised that gold loan is an easy alternative to personal loans and loan against credit cards. Talking about Muthoot Finance, we process loan applications really fast with minimum documentation. The interest rate is also attractive. In fact, we have products to suit all segments. There are products that give maximum amount for their gold; there are products that are suitable for people who are interest sensitive. Our repayment system is also quite different. Apart from allowing our customers to repay in installments, we also allow them to repay in one go with out paying any penalty.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Report from ground zero

Tathagata Bhattacharya and Haroon Reshi report from ground zero

Prabhakar Tripathy, commanding officer, 117 Battalion CRPF and PRO, CRPF (Kashmir), confirms, “They have no fear. They try to snatch our guns. Very often, there is no choice but to open fire.” We ask both X and Tripathy that why do stones need to be answered by live ammunition. X says, “It is not that simple and innocuous. These people pelt stones to kill you. It is not easy being a policeman on these streets.” Tripathy points to the thousands of rounds of rubber bullets and tear gas shells fired. “If you compare the situation, you will see the forces have acted with great restraint,” he adds.

But clearly people in the Valley are not impressed with this restraint. Syed Ali Shah Geelani, the foremost leader of the separatist movement and chairman of the Hurriyat (G), “People are resisting the Indian military occupation of J&K. There is no legitimacy or justification for the same. Since 1952, we have had more than 130 rounds of talks and there has been no headway. For talks to be fruitful, New Delhi should accept that J&K is a disputed territory. It has to withdraw forces, withdraw Armed Forces Special Powers Act (AFSPA), Public Safety Act (PSA) and release the detainees.”

Mirwaiz Omer Farooq, chairman of Hurriyat (M), says, “This is a spontaneous outburst of public anger brought about by decades of alienation. These youth, who are pelting stones, have been raised and brought up in conflict. After militancy erupted in 1989, people started looking at Pakistan to further the cause of freedom. That phase is also gone now. But now, they have a clear direction that they have to win their freedom themselves and they are ready to die for the same. India has to realise that it is Kashmiri nationalism at work here. New Delhi has to come out of denial. The government does not allow any demonstration and sit-ins. It has created this pressure cooker situation and hence this violent outburst.”

Mirwaiz concedes that the pro-freedom parties have not been able to deliver in concrete terms. “We have held dialogues with New Delhi in 2004, 2005, 2006, 2008 and 2009, we went with ideas and proposals but Delhi did not act on a single issue. People today construe dialogue as a sellout, as a ploy to buy some time. One has to understand that there can’t be any lasting solution to the Kashmir problem within the Constitution of India or that of Pakistan.”


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

B(l)ooming flowery business

Himachal Pradesh is all set to compete with Kashmir in floriculture as it will be supplying blooms for the Capital city during the Commonwealth Games; it’s a multi-million business contract. But will the flower-growers be fortunate enough to live such lucrative days in the future as well? Questions Swati Sharma

The beautiful hills of Himachal Pradesh (HP), where they say the gods reside, is profusely smelling of the sweet scent of Lilies these days. In fact, it’s not just Lilies, several other varieties of flowers too are in full bloom spreading the elation all around. Raison d’être: The state is all set to allure the guests with its exquisite range of flowers during the forthcoming Commonwealth Games (CWG) in New Delhi. While it has already been awarded orders worth over `310 million for the supply of flowers by CPWD Delhi, private procurement too is estimated to be at about `420 million during the Games. And it’s not only the flowers that are in demand, the farmers are also getting orders for flower-pots and loose flowers for the decoration of the stadiums during the mega event.

Boasting about the order to supply flowers to the Capital city, HP’s Horticulture Minister Narinder Bragta says, “The forthcoming event provides a great opportunity for our farmers to market these valuable and pure products to the participating players and officials.” According to him, flowers like Rose, Carnation and Chrysanthemum, et al, will be in great demand during the Games as Himachal is the only state where these flowers, particularly Chrysanthemum bloom in October, the month in which the Games will be played.

It’s not that hundreds of villagers in Himachal took to floriculture just because of the CWG, in fact the State’s love for floriculture dates back to 1992 when, for the first time, it started supplying flowers to other states. Though the work was initially confined to Solan and Kangra districts, where individual growers undertook cultivation of traditional flowers like Gladiolus, Carnation, it later got extended to exotic and new varieties including Lilium, Tulip, Liatris, Chrysanthemum, et al. And why not? While flowers from different agro-climatic zones can be made available all through the year by the State for the domestic market, export quality flowers too can be ensured by cultivation under controlled environment conditions of greenhouse. In fact, this is one reason why the area under commercial floriculture has steadily increased many folds from just 30 hectares in FY1993-94 to 681.86 hectares in FY2009-10 with major cultivating areas being located in Sirmaur, Kangra, Mandi, Solan, Shimla, Kullu & Bilaspur districts.

It is estimated that about 2,800 farmers are engaged in floriculture in the State at present producing a variety of flowers worth `428.2 million (FY2009-10). This has not only benefited the State economy, but has also transformed the lives of hundreds of villagers engaged in floriculture. For instance, Mahog, a village in Solan district, has transformed ever since farmers there took up floriculture. Today its residents have three-storeyed houses and their standard of living has drastically improved with over 200 greenhouses spread in and around the village. “I am very happy that the demand for Himachali flowers is increasing. I started with just 335 sq mt of land, but today I have more than 1,000 sq mt area under cultivation. We are vigourously pruning roses and carnations for the forthcoming Commonwealth Games and are very excited about it,” Nandi Ram, a farmer of the village who started cultivating flowers in 1998 tells B&E. In fact, one can easily figure out the level of success that these farmers have achieved from the fact that Nandi today earns over `3-4 million per annum by just selling flowers.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles