Ikya’s Issac buys HR co Magna for Rs100 crore

BANGALORE: AJIT Isaac, who sold his PeopleOne Consulting to Swiss staffing giant Adecco six years ago, has acquired Hyderabad-based tech staffing firm Magna Infotech for Rs100 crore.

Company officials, who requested anonymity because an integration process is yet to begin, said a definitive agreement has already been signed.

As demand for temporary software programmers picks up, outsourcing companies are increasingly looking to avoid adding more staff on their payroll, and are instead sub-contracting projects to companies such as Magna. Already, the Indian contracted staff market is expected to become around $2.5 billion industry in five years.

Mr Isaac, the CEO of Ikya Human Capital Solutions , confirmed the transaction and said the combined entity would make Ikya a 30,000-staff strong manpower firm. He declined to share other specific details, but people familiar with the acquisition said Magna had revenues of around Rs89 crore in 2009, and aims to double that to Rs180 crore during year ending March 2011.

“We are reaching a critical mass and could potentially become the first HR services firm to be listed on an Indian stock exchange in the coming years,” said Mr Isaac. Magna has around 5,000 staff with nearly 400 different IT skills.

“This relationship will help us scale this to 10,000 people,” said Pradeep Mittal, who heads Magna’s Indian operations. “This has just started picking up in India and is gaining acceptance among companies,” he added.

With around Rs240 crore in revenues, Ikya competes with domestic rivals such as Team Lease apart from multinational staffing firms including Adecco. “We want to be a standalone major in the emerging markets and then explore other developed countries,” added Mr Isaac.

In November last year, Ikya had acquired Delhi-based recruitment firm Coachieve for an undisclosed amount. Ikya had raised around $8 million from India Equity Partners , together with Mr Isaac who holds a majority stake in the company. As demand for more temporary IT staff gains momentum, firms such as Magna will face challenges of taking it to the next level. Another driver for hiring more temporary staff is that IT firms want to arrest their linear-people-led growth. Moreover, temporary staffing helps in bringing down people costs by at least 25%.

“Because this is still not a mature industry getting working capital loans from banks is a huge challenge. You need investors backing you to scale,” said one of the officials at a temporary staffing firm.

Ericsson bags contract for rolling out 3G in six circles

NEW DELHI: Telecom equipment maker Ericsson today said it has bagged a contract for rolling out 3G network infrastructure across six circles.

The company, however, did not disclose financial details of the contract.

Aircel has awarded Ericsson a contract to roll out a 3G/HSPA network across six out of its 13 circles, which currently serve more than 100 million subscribers, Ericsson said in a statement.

Ericsson will be Aircel's largest partner for 3G implementation, it added.

"We are confident that with this partnership, we will benefit from Ericsson's global expertise of 3G deployments, and will be able to offer our customers a world-class 3G experience," Aircel COO Gurdeep Singh said.

With the roll out of 3G services, Aircel customers would be able to access services like video telephony, mobile broadband , mobile TV and faster downloads on their handsets.

Under the agreement, Ericsson will provide core, radio and transmission network equipment along with network rollout, network technology and consulting and other support services.

The six Aircel circles covered are -- Tamil Nadu, Bihar, Orissa, Jammu and Kashmir, North East and Assam. The framework contract will be implemented from 2010 to 2012.

Videocon plans to split businesses

MUMBAI: Durables-to-oil and gas conglomerate Videocon Group said on Thursday it is planning to split its various businesses, a move that could help them raise capital or induct strategic partners into some businesses.

“With the help of independent external consultants, the company will look at various options available to reorganise and segregate various business segments of the company,” said Videocon in a statement to the Bombay Stock Exchange (BSE).

This move will ensure greater focus on the operation of each of the company’s diverse businesses and enhanced value for shareholders and improvement in the business prospects of the company, said the release. The company is run by three brothers, Venugopal, Rajkumar and Pradeepkumar but Venugopal has always the first among equals.

On Thursday, the company announced a 7.1% increase in its net profit at Rs 159.9 crore in the quarter ended September 30, over the same period last fiscal. The company had a net profit of Rs 149.3 crore as on September 30, 2009, Videocon Industries said in a filing to the BSE. During the quarter, the company’s income from operations stood at Rs 2,985.5 crore, a 13.9% jump from Rs 2,621.2 crore recorded in the corresponding period last fiscal.

On Thursday evening, two of the scions of the Dhoot family, Anirudh, and Saurabh, said that only Mr Venugopal, the chairman, would be able to elucidate on the logic behind the announcement. But calls to Venugopal Dhoot’s mobile remained unanswered.

The group had earlier indicated that it will separate a few of its businesses in order to have a more focused approach.

Earlier this week, Videocon had said it has appointed merchant bankers ICICI Securities and Morgan Stanley to help unlock value from its oil and gas assets, either through an initial public offering or a demerger. The company has recently discovered hydrocarbons in the Tarakan basin of Indonesia and had also announced a gas find in a second well in Mozambique in Africa.

Exactly a decade ago, Videocon group had restructured its operations by forming eight strategic business units or profit centres. Since then, the $2-billion Videocon Industries has diversified into capital-intensive businesses such as power, telecom, media, oil and gas.

Some experts feel such restructuring is an easy way to get new partners and financial options. “A company, which is diversified, will generally get lesser value compared to a single–focused company put together,” said Avinash Gupta, VP–research equity, Bonanza Portfolio. If the businesses are split, then it can help them get better valuation from each business and raise fresh resources from the market, he added.

On the day of the announcement, the company’s stock closed 0.25% up at Rs 260.50 on the BSE while the benchmark index Sensex closed 2.09% up to 20893.57.

Areva has Rs 13,300-crore plans for solar energy

New Delhi: Talks with FIs, state governments on for 1,000-Mw capacity; may also float subsidiary for solar EPC.

After a small presence in the biomass energy sector, Areva, the French energy major, is betting big on solar power in India. It plans to float two subsidiaries for channelising investment to the tune of $3 billion (Rs 13,300 crore) in solar power generation.

Areva has 60-Mw of biomass-based power capacity in India. It is looking to also tap the market for nuclear power in a big way. The company is in talks with two financial institutions for floating a joint venture to put up 1,000 Mw of solar thermal power capacity over the next five to seven years.

The projects, coming up outside the National Solar Mission programme, will be developed under power purchase agreements (PPAs) with state governments. The moment we get credible PPAs, we will form the joint venture; we will not wait for the full 1,000 Mw capacity to be signed, Anil Srivastava, chief executive officer, Areva Renewables, told Business Standard. He did not divulge the names of the financial institutions but said the announcement of a tie-up would come after six months.

EPC with partner

Areva is also planning to set up a fully-owned company for doing engineering and construction work to build solar islands (artificial membranes for the placing of solar panels) and turbines. We want to form an EPC (engineering, procurement, construction) company that would work with an Indian partner. While we will do the solar island and turbine, they will do the balance of plant and civil work. Our objective is to go to the market and offer the customers a fixed price turnkey for building the power plant and for operation and maintenance, he said.

The setting up of a EPC company would help Areva build a supply chain and enable it to export parts to Australia and West Asia. The French energy major started renewable activities in 2006 and has presence in four major segments globally wind, solar, bioenergy and hydrogen power, and energy storage.

The company, which has also bid for projects under the solar mission in a tie-up with nine companies, plans to put up 250 Mw capacity at four locations. For this, it is in talks with the governments of Gujarat, Rajasthan, Madhya Pradesh and Maharashtra. Going by our understanding of the solar mission, we would be probably investing $25 million (Rs 110 crore) at the least but we are not only dependent on this. We are working with other large developers who want to build their own solar plants, with state governments, he added.

At an estimated requirement of $3 million (Rs 13.4 crore) per Mw, the investment requirement for four 250 Mw units would be roughly $3 bn. On the cost economics of taking up projects outside the mission, Srivastava said the Central Electricity Regulatory Commissions rate of Rs 15.3 a unit is absolutely doable. Today, we can localise up to 60 per cent of the plant, with 10-12 per cent unleveraged returns. We can go right up to 80 per cent localisation in a short span of time, he said.

India-Indonesia trade to touch $20 bn

New Delhi/ Chandigarh: Republic of Indonesia Ambassador Andi M Ghalib has maintained the bilateral trade between India and Indonesia could touch $20 billion by 2013.

Having achieved the bilateral trade target of $10 billion in 2009, Indonesia and India are looking to double the value of trade between the two countries.

Andi M Ghalib was in Chandigarh to participate at a seminar organised by PHD Chamber. Ghalib said, as one of the most competitive and open economies in the world, Indonesia has a great deal to offer foreign investors.

Both India and Indonesia need to have a closer diplomatic coordination and stronger defence ties, he added.

TN signs pact with Hiroshima

Chennai: The Tamil Nadu government today signed a Memorandum of Understanding (MoU) with the Japanese prefecture of Hiroshima. The MoU envisages economic cooperation between Hiroshima and Tamil Nadu, said representatives from Hiroshima Prefecture.

Hidehiko Yuzaki, governor, Hiroshima Prefectural Government, who is leading a business delegation to India, said that the MoU was expected to encourage more Japanese companies to invest in Tamil Nadu and also increase networking between the business communities of the two regions.

The MoU was signed in the presence of Tamil Nadu deputy chief minister M K Stalin and Hidehiko Yuzaki. M Velmurugan, executive vice chairman, Guidance Bureau, signed the MoU on behalf of the government of Tamil Nadu while Toshihiko Shirota, director, Commerce, Industries and Labour Bureau signed on behalf of the government of Hiroshima Prefecture.

Addressing the Japanese business delegation, Stalin invited the Japanese investors to take advantage of the opportunities that Tamil Nadu offers. He said that state government proposed to establish a Japanese industrial cluster near Chennai to attract more Japanese companies, particularly medium-sized companies.

The governor said, “there is enormous potential for mutual economic cooperation. Considering the advantages of Tamil Nadu including availability of human resources, access to customers both domestically and internationally, ports and others.”

He noted that so far nine companies from Hiroshima have invested in India. Of these, four are in Tamil Nadu, including Hirotec, which manufacture closure panel solutions to the automotive industry, and Kobelco, a construction equipment manufacturer.

Kemrock forms JV with DSM

Mumbai/ Ahmedabad: Kemrock Industries and Exports Ltd, a Vadodara headquartered manufacturer of reinforced polymer composites, has formed a joint venture with a Switzerland-based DSM Composite Resins AG to manufacture unsaturated polyester and vinyl ester specialty resins in India.

With this alliance, DSM, one of the leading composite resins providers in the world, will strengthen its presence in India along with leveraging its technological knowledge and global customer relationships, while Kemrock will fortify its expertise in composite manufacturing and align it to global standards.

"Both partners will utilize and leverage each other’s strengths to provide specialized resin solutions to the fast growing Indian market," Kemrock said in a statement.

DSM Composite Resins is a part of DSM Resins. The company is the largest producer of structural resins in Europe and a technology leader in resins for the composites industry. The company is expanding globally, especially in China and India, targeting high added-value segments.

Kemrock is a leader in the field of FRP/GRP composites in India. Its state-of-the-art facility located close to Vadodara provides high-quality engineered advanced composite solutions. The company’s product range comprises of carbon fibre, windmill blades and nacelle covers, railway interiors/exteriors, telecom towers, pultruded profiles, pipes and many more FRP/GRP composite products.

Embassy Property in Rs 5,600-cr JV with Malaysian realty co

Bangalore: Realty major Embassy Property Developments has entered into a joint venture with MK Land Holding , a Malaysian company that specialises in pre-fabricated affordable housing, to build projects in the affordable housing segment. The proposed project entails an investment of over Rs 5,600 crore.

Under pre-fabricated housing, the shell of an entire home can be constructed from concrete poured into as many as 1,000 interconnected pieces of aluminium moulding. Once the concrete hardens, the moulds can be dismantled and reassembled later. The method is believed to generate less waste, reduce material cost and save construction time.

“The joint venture is aimed at developing affordable homes to help meet the acute shortage of housing for the masses in India. We plan to roll out a pilot project in North Bangalore, depending on the success we will launch more affordable housing projects,” said Gopi Krishnan, director and CEO, Embassy Property Developments. The proposed development will come up on 185 acres in North Bangalore and will comprise 14,400 residential units with two million square feet of commercial space.

The first phase of the project totalling 5,000 units will be launched in the next nine months. Spread over 650-700 sq ft the apartment will be priced at Rs 15-17 lakh.

The proposed development will be carried out by MK Embassy Land , which is a joint venture (JV) between MK Land, that holds 47.5% in the JV; Star Dreams, a subsidiary of Embassy Group that also holds 47.5%; and MKN Embassy Development , a subsidiary of the Emkay Group that holds the remaining 5%.

“The project will be funded through foreign direct investment and MK Embassy is also in discussions with local banks especially Ex-Im Bank of Malaysia to finance the development of the Bangalore project,” said Mr Krishnan.

MK Land is a vertically integrated home development company focused on affordable housing and high-end condominiums. It is also the largest home builder in Malaysia, based on the number of homes sold, revenues and net income. It has so far delivered around 40,000 housing units.

Thermax acquires Danish co for Rs 187 cr

Pune: In its drive to go global, Thermax has acquired European boiler maker Danstoker group for e29.5 million (around Rs187 crore). The Danish company has two manufacturing plants — one in Denmark and the other in Germany .

“This acquisition is part of Thermax’s plans to become a global company. We will retain the Danstoker and Omnical brands, both of which we acquired on Monday, since these have an appeal in Russian and Middle East markets. The acquisition will also help Thermax for its water treatment and pollution control products through the brand association,” said Thermax’s managing director , MS Unnikrishnan .

He added that they could expand capacities at the two European locations since both plants have the land to expand.

The Danstoker group, which comprises the Danstoker company based in Herning, Denmark, and its German subsidiary, Omnical Kessel , makes biomass and oil, and gas-based boilers as well as waste heat recovery products in the same range as Thermax makes standard packaged boilers, although Danstoker’s focus on renewable energy sources will provide Thermax with new technologies.

Renewable and green products account for over half of the European company’s current revenues of e40 million (October 2009-September 2010), while its non-renewable-energy-based boilers are carbon neutral.

Mr Unnikrishnan said the acquisition presented an opportunity for Thermax to source the latest technology, quality and production practices.

“We will now have a much wider supply chain available to us. We began our international purchase office in 2003, buying from China . Now we will expand this globally,” he said.

He was referring to the Rs3,300-crore energy and environment solutions provider’s manufacturing bases in India and China. These, he said, will be integrated, although currently the Danstoker group sources solely from the very expensive European market.

The standard packaged boiler market, used for heating and cooling, is globally worth $4.5-5 billion, with residential being the biggest segment. Till now, Thermax addressed only the industrial heating market.

With this acquisition, it enters the industrial segment, with no intentions at the moment to enter the residential segment.

While the cash-rich Thermax could have gone in for an all-cash buyout, it has chosen to raise debt of e10 million, thus putting the onus on the newly-acquired company to perform.

Danstoker was set up in 1935 by the United Coal Importers. Prior to Thermax’s acquisition, it was part-owned by some workers and a few investment funds. “The group lacked management bandwidth to grow outside the mature European market,” said Mr Unnikrishnan.

FII inflows cross the US$ 100 billion mark

New Delhi: The net foreign fund investments has crossed the US$ 100 billion mark on November 8, 2010, since the foreign investors were allowed to make investments in the Indian stocks in 1992.

With an addition of US$ 1.6 billion, as per the data from Securities and Exchange Board of India (SEBI), the figure now stands at US$ 100.9 billion. Taking the indication from the trend of the strong inflow of foreign institutional investors (FII) money into the India market, it was expected that the inflows would cross this milestone before the end of 2010.

Significantly, the net FII inflows into the market has already crossed US$ 3.5 billion, during the first eight days of the November 2010. A third of the total inflow came from the Coal India IPO.

In addition, so far this year, there has been a net FII inflow of US$ 28.3 billion, an all-time peak, as per the SEBI data.

Exports set to cross target of $200 billion in 2010-11: Sharma

New Delhi: The Commerce and Industry Minister, Mr Anand Sharma, said on Sunday that the country's merchandise exports will cross the $200 billion target for 2010-11 and the Government is working with the industry to double India's exports of goods and services by 2014.

Speaking at the inaugural ceremony of the 30th India International Trade Fair 2010 here, Mr Sharma said, in this regard, he has asked the Commerce Department to develop a systematic plan for trade promotion.

“Sector-specific trade fairs need to be encouraged in those countries which have a demand for products in which Indian competitive strengths lies,” he said.

The Minister said work is on to build world class Exhibition and Convention facilities at Pragati Maidan and international airports in the National Capital Region, adding that his Ministry is pursuing the matter with the Urban Development Ministry and the Delhi Development Authority.

Mr Sharma said the India Trade Promotion Organisation, which is organising the Fair, needs to modernise itself.

He said the Pragati Maidan ground, where the Fair is being held, presents a unique locational advantage, adding that a transformational change in this venue will position India as a convention hub of Asia, just as Singapore, China, Malaysia and even Vietnam have developed.

“The work on this activity will commence early next year,” he said, adding, “Work has also started in the earnest in creating similar facility near the international airport and I hope that when we meet next year, we would already have seen some positive movements on both these projects.”

Clean energy focus

The theme of this year's Trade Fair is ‘Energytech and Envirotech: Clean and Energy Efficient Technology, Products and Services', embodies the next big challenge for the entire global community – to ensure growth and development which is sustainable and in harmony with nature, he said. Companies and officials from over 24 countries are taking part in the Fair.

Maharashtra is the Partner State for the Fair and there is a Special Focus on Rajasthan and Chhattisgarh as these States are bringing in new technologies, including in renewable energy and bio-fuels.

In the first six months of the current fiscal, India's exports grew by 27.6 per cent over the same period last year to $103 billion. Exports in services have jumped from $16 billion in 2001 to $100 billion last year. The Minister said the Government has given incentives for market diversification of exports and to labour intensive sectors.

Forex reserves cross $300 b

Mumbai: India's foreign exchange reserves crossed the $300-billion mark for the first time since August 2008.

For the week ended November 5, 2010, India's forex reserves rose by $2.258 billion to $300.214 billion, according to the data in the weekly statistical supplement released by the Reserve Bank of India on Friday. The reserves rose on account of a $2.193-billion increase in the bank's foreign currency assets. For the week under review, foreign currency assets stood at $271.286 billion.

This is second week in succession where the central bank's foreign reserves have risen. The foreign exchange reserves for the previous week stood at $297.956 billion.

Foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the euro, sterling and yen, held in reserves. According to forex dealers, in the week under review, there was a valuation gain as the US dollar depreciated against other major currencies.

Gold reserves remained unchanged at $21.668 billion. SDRs rose by $43 million to $5.225 billion. The RBI's reserve position in the IMF grew by $22 million to $2.035 billion.

Economy will soon return to 9% growth path, says Pranab

Each country has to chart its own regulatory path'.

New Delhi: The Finance Minister, Mr Pranab Mukherjee, sees strong prospects for the Indian economy getting back, in the short term, to the nine per cent average economic growth level witnessed prior to the global economic crisis of 2008.

This expectation stems from the revival in investment and private consumption demand, impressive growth in merchandise exports since November-December 2009, favourable capital market conditions and improvement in capital flows besides manufacturing sector buoyancy reminiscent of the pre-slowdown years.

Addressing the India Economic Summit (IES) 2010 in the Capital today, Mr Mukherjee also came up with an encouraging outlook for the Indian economy in the medium to long run. He expressed confidence that the current high economic growth would be sustained in the coming decades as advantages like demographic dividend starts paying off.

The challenge now is to find the means to cross the ‘double digit growth barrier' in the coming year or two, he noted.

“We are seeking to make growth more broad-based and ensure that supply demand imbalances are better managed.”

Mr Mukherjee also told the IES, comprised largely of foreign investors, that the Government was striving to improve the regulatory environment in the country.

“As you know there are no off-the-shelf solutions available to the regulatory dilemmas facing any developing country. Each country has to chart its own path on the regulatory reform based on its native genius and the conditions on the ground. India too is striving to achieve the optimum path,” he said.

Financial stability council

On financial sector reforms, Mr Mukherjee said that India has decided to set up an apex-level financial stability and development council (FSDC), with a view to strengthen and institutionalise the mechanism for maintaining financial stability.

“This council would undertake macro prudential supervision of the economy, including the functioning of large financial conglomerates, and address inter-regulatory coordination issues. It would also focus on financial literacy and financial inclusion,” he added.

The Government has also decided to set-up a financial sector legislative reforms commission (FSLRC) to rewrite and clean up the financial sector laws and bring them in line with the requirements of the sector, Mr Mukherjee said.

India's gross domestic product (GDP) growth had averaged close to nine per cent in the four-year period from 2004-05 to 2007-08.

Due to the global economic slowdown, the GDP growth declined to an average of seven per cent in 2008-09 and 2009-10.

Setting up of 14 world-class universities gets approval

New Delhi: The National Development Council has approved setting up of 14 world-class universities for innovation across the 11th and 12th plan periods on the public private partnership model.

The innovation universities are part of the ministry of human resource development's (MHRD) "brain gain" policy to attract global talent and will be set up under the eleventh plan (2007-12).

The proposed universities will be set up in Bhubaneswar in Orissa, Kochi in Kerala, Amritsar in Punjab, Greater Noida in Uttar Pradesh, Patna in Bihar, Guwahati in Assam, Kolkata in West Bengal, Bhopal in Madhya Pradesh, Gandhinagar in Gujarat, Coimbatore in Tamil Nadu, Mysore in Karnataka, Pune in Maharashtra, Visakhapatnam in Andhra Pradesh and Jaipur in Rajasthan.

According to ministry, three distinct approaches are possible in establishing these Innovation Universities. First, new Innovation Universities focused on distinct issues of national importance to India and building various disciplines and fields of research around such issues. The second approach is to identify a few among existing universities and other institutions of repute, and help these attain world class standards through innovation in chosen areas of knowledge with marginal top-up investment. The third approach is to identify a few educational hubs (cities) in the country where institutions and universities of excellence by national standards are located, and creating the architecture of an Innovation University by building synergies for inter-disciplinarity and strong research and teaching within these institutions.