Bangalore: Mid-scale hotel chain Lemon Tree Hotels is investing Rs. 1,000 crore to ramp up room capacity from 2,800 to 8,000 across the country by the end of 2017.
In the first phase, about 1,200 rooms will be added in a year.Capital infusion
Lemon Tree has recently received Rs. 300 crore from Dutch pension fund APG, increasing APG’s shareholding in the hotel chain from 5.66 per cent to 13 per cent.
This is in addition to the Rs. 650-crore APG invested in Lemon Tree in 2012. The fresh infusion of capital will be used for development of the company’s under-construction assets and also for acquiring land for developing new hotels. The other three investors in Lemon Tree Hotels are global private equity firm Warburg Pincus, Japan’s Shinsei Bank and Kotak Realty Fund.
“We are the country’s third largest hotel chain that owns and operates rooms after Tata’s IHCL (Indian Hotels Company, the No. 1) and ITC Hotels.
Our ramp-up will include rooms in our upscale brand Lemon Tree Premier, mid-scale brand Lemon Tree Hotels and economy brand Red Fox,” said Sumant Jaidka, COO.
He was in Bangalore for the launch of Lemon Tree Hotel in Whitefield, a 130-room hotel that the company re-branded after acquiring the erstwhile Clarion Hotel last year through Fleur Hotels (a joint venture between Lemon Tree and APG).
The company is looking to increase its footprint in the South, where it currently has over 1,000 rooms in three cities — Bangalore, Hyderabad and Chennai. “We have two resort hotels, one each in Goa and Kerala, and are in the process of finalising two more – one in Aurangabad and the other in Jaipur. We are also in the process of finalising hotels in Coimbatore, Coorg, Kovalam, Ooty and Thiruvananthapuram,” said Jaidka.
Founded in September 2002 by Patu Keswani, the New Delhi-based company currently owns and operates 25 hotels in 15 cities, aggregating 2,800 rooms with 3,000 employees.
Its hotels are located in major destinations such as Ahmedabad, Aurangabad, Bangalore, Chandigarh, Chennai, Dehradun, Delhi, Goa, Gurgaon, Hyderabad, Indore, Jaipur, Kerala, Noida and Pune.
Some of the locations where Lemon Tree hotels are currently under development are – Mumbai, Pune, Kolkata, Udaipur, Hyderabad and Shimla.
Success in my Habit
Thursday, May 15, 2014
Kirusa buys Bangalore-based start-up Cooltok
Bangalore: New Jersey-headquartered voice messaging and social media solutions firm Kirusa announced the acquisition of start-up Cooltok for an undisclosed sum.
Cooltok specialises in developing technologies for mobile messaging apps for smartphones.
The six-member Cooltok team, including the founder CEO Sreenivas Karanam and co-founders Prakash Kaja and Thomas Mathew, have already joined Kirusa’s office in HSR Layout, Bangalore. Besides the team, Kirusa has acquired all the technology and intellectual property of Cooltok.
“The IP-based technologies that we developed for mobile apps, when combined with the product portfolio of Kirusa and the reach of its partner base across continents, will enable us to address a huge opportunity, going forward,” said Karanam.
Kirusa is associated with over 35 mobile carriers across the globe and its InstVoice app offers seamless telecom messaging.
Cooltok specialises in developing technologies for mobile messaging apps for smartphones.
The six-member Cooltok team, including the founder CEO Sreenivas Karanam and co-founders Prakash Kaja and Thomas Mathew, have already joined Kirusa’s office in HSR Layout, Bangalore. Besides the team, Kirusa has acquired all the technology and intellectual property of Cooltok.
“The IP-based technologies that we developed for mobile apps, when combined with the product portfolio of Kirusa and the reach of its partner base across continents, will enable us to address a huge opportunity, going forward,” said Karanam.
Kirusa is associated with over 35 mobile carriers across the globe and its InstVoice app offers seamless telecom messaging.
Cipla invests $1.5 million in Chase Pharma
Mumbai: Drug-maker Cipla has invested $1.5 million ( Rs. 8.9 crore) in Washington-based Chase Pharmaceuticals Corporation Inc, an early stage drug development company.
Chase, which has a patented approach to improve the efficacy, safety and tolerability of existing Alzheimer’s medications, is now focused on developing new approaches to treat the disease.
The investment, done through Cipla’s UK-based subsidiary, Cipla (EU) Ltd, translates into a 14.6 per cent stake in Chase on a fully-diluted basis. Cipla will invest another $4.5 million in Chase on the achievement of certain milestones. In addition to financing Chase, Cipla will collaborate with it to develop the drug. If successful, Cipla may provide low-cost access to Chase’s lead drug in India and South Africa, it added.
New ventures Cipla was in the news last week for reportedly rebuffing predatory overtures from Israeli drug-maker Teva Pharmaceutical Industries, a development Cipla denied in a note to stock exchanges. The funding by Cipla is part of a $21-million investment through a syndicate, said Chandru Chawla, head of Cipla New Ventures. The venture charts an innovation-led course for the company around areas including biologicals and revitalising of existing safe drugs, besides leveraging Cipla’s delivery technologies.
The venture looks at areas that play to Cipla’s strengths and fit into the company’s values of addressing affordability and access to the drug, Chawla told Business Line . Consumer healthcare is another area of interest, he added, without getting into the details.
Funding syndicate Cipla will look at growth opportunities, he said, adding that they are already invested in regenerative medicine and stem-cell therapies through Bangalore-based Stempeutics Research. The investment syndicate consists of Edmond de Rothschild Investment Partners and New Rhein Healthcare LLC.
The $21-million two-phase financing will support Phase 2a and Phase 2b clinical trials where Chase’s lead drug CPC 201 will be tested on humans. The original venture funding for Chase was provided by the Brain Trust Accelerator Fund in 2010.
Alzheimer’s on the rise Cipla Global Managing Director and Chief Executive Subhanu Saxena said the investment was consistent with Cipla New Ventures’ mission to build more innovation-led business streams for Cipla in the future. Chase’s work on Alzheimer’s assumes importance against the backdrop of its global prevalence. Over five million patients are estimated to suffer from dementia in India, most of who are afflicted with Alzheimer’s, says Cipla. And these numbers are expected to double by 2030.
Unlike other developed nations, in India, the caregiver is the family and the economic and social impact of the illness is far-reaching, the company added.
In North America, Alzheimer’s disease affects over seven million patients, and growing, as the population ages.
The disease costs the US $203 billion annually with projections to reach $1.2 trillion by 2050, Cipla pointed out.
Chase, which has a patented approach to improve the efficacy, safety and tolerability of existing Alzheimer’s medications, is now focused on developing new approaches to treat the disease.
The investment, done through Cipla’s UK-based subsidiary, Cipla (EU) Ltd, translates into a 14.6 per cent stake in Chase on a fully-diluted basis. Cipla will invest another $4.5 million in Chase on the achievement of certain milestones. In addition to financing Chase, Cipla will collaborate with it to develop the drug. If successful, Cipla may provide low-cost access to Chase’s lead drug in India and South Africa, it added.
New ventures Cipla was in the news last week for reportedly rebuffing predatory overtures from Israeli drug-maker Teva Pharmaceutical Industries, a development Cipla denied in a note to stock exchanges. The funding by Cipla is part of a $21-million investment through a syndicate, said Chandru Chawla, head of Cipla New Ventures. The venture charts an innovation-led course for the company around areas including biologicals and revitalising of existing safe drugs, besides leveraging Cipla’s delivery technologies.
The venture looks at areas that play to Cipla’s strengths and fit into the company’s values of addressing affordability and access to the drug, Chawla told Business Line . Consumer healthcare is another area of interest, he added, without getting into the details.
Funding syndicate Cipla will look at growth opportunities, he said, adding that they are already invested in regenerative medicine and stem-cell therapies through Bangalore-based Stempeutics Research. The investment syndicate consists of Edmond de Rothschild Investment Partners and New Rhein Healthcare LLC.
The $21-million two-phase financing will support Phase 2a and Phase 2b clinical trials where Chase’s lead drug CPC 201 will be tested on humans. The original venture funding for Chase was provided by the Brain Trust Accelerator Fund in 2010.
Alzheimer’s on the rise Cipla Global Managing Director and Chief Executive Subhanu Saxena said the investment was consistent with Cipla New Ventures’ mission to build more innovation-led business streams for Cipla in the future. Chase’s work on Alzheimer’s assumes importance against the backdrop of its global prevalence. Over five million patients are estimated to suffer from dementia in India, most of who are afflicted with Alzheimer’s, says Cipla. And these numbers are expected to double by 2030.
Unlike other developed nations, in India, the caregiver is the family and the economic and social impact of the illness is far-reaching, the company added.
In North America, Alzheimer’s disease affects over seven million patients, and growing, as the population ages.
The disease costs the US $203 billion annually with projections to reach $1.2 trillion by 2050, Cipla pointed out.
Indian Institute of Management Ahmedabad ranks 4th in Economist good value MBAs
Mumbai: Indian Institute of Management Ahmedabad (IIMA) has been globally ranked fourth-best overall among 20 leading B-schools globally in terms of return on investment for its students by The Economist good value MBA, the institute said in a release citing an article in the publication.
"The Economist calculations are one measure of how economically rewarding our students find the IIMA experience to be," said Prof Ashish Nanda, director, IIMA."But returns from education at IIMA go beyond purely pecuniary returns to self. Our alumni consistently report that they find the IIMA learning experience life-changing," he said in the press release. Many of them go on to contribute meaningfully to the enterprises they join and the society in which they live, Nanda added.
"The Economist calculations are one measure of how economically rewarding our students find the IIMA experience to be," said Prof Ashish Nanda, director, IIMA."But returns from education at IIMA go beyond purely pecuniary returns to self. Our alumni consistently report that they find the IIMA learning experience life-changing," he said in the press release. Many of them go on to contribute meaningfully to the enterprises they join and the society in which they live, Nanda added.
IT infra market will touch $1.9 b this year: Gartner
Mumbai: The Indian IT infrastructure market — comprising server, storage and networking equipment — is set to grow by four per cent this year to touch $1.9 billion, research firm Gartner has indicated.
“In the global landscape, India is a promising IT infrastructure market through 2017…The global IT infrastructure investment is expected to be almost flat in 2014 and will be primarily driven by hyper scale and data centre modernisation initiatives,” said Mike Harris, research group vice-president at Gartner.
Naveen Mishra, research director at Gartner, said that India’s IT infrastructure market will touch $2.35 billion by 2017. “After sluggish market conditions in 2013, the Indian infrastructure market will witness investments primarily fuelled by key IT initiatives that include mobility, cloud and big data,” said Mishra.
The research firm indicates that Indian enterprises will be focusing on building intelligent data centres that focus on optimising existing hardware assets by using additional software capabilities. Separately, Gartner said that competition for talent would determine the success of digital business.
“Bring in people from outside with the required knowledge, skills and competencies — some as external experts, not necessarily as permanent employees. Chief Information Officers who learn to orchestrate talent can take advantage of global ecosystems of expertise to build digital expertise quickly,” said Partha Iyengar, vice-president and distinguished analyst at Gartner.
“In the global landscape, India is a promising IT infrastructure market through 2017…The global IT infrastructure investment is expected to be almost flat in 2014 and will be primarily driven by hyper scale and data centre modernisation initiatives,” said Mike Harris, research group vice-president at Gartner.
Naveen Mishra, research director at Gartner, said that India’s IT infrastructure market will touch $2.35 billion by 2017. “After sluggish market conditions in 2013, the Indian infrastructure market will witness investments primarily fuelled by key IT initiatives that include mobility, cloud and big data,” said Mishra.
The research firm indicates that Indian enterprises will be focusing on building intelligent data centres that focus on optimising existing hardware assets by using additional software capabilities. Separately, Gartner said that competition for talent would determine the success of digital business.
“Bring in people from outside with the required knowledge, skills and competencies — some as external experts, not necessarily as permanent employees. Chief Information Officers who learn to orchestrate talent can take advantage of global ecosystems of expertise to build digital expertise quickly,” said Partha Iyengar, vice-president and distinguished analyst at Gartner.
Monday, May 12, 2014
M&M opens US factory
Mumbai: Utility and tractor vehicle maker Mahindra & Mahindra has inaugurated a factory and a research centre for electric two-wheelers in Ann Arbor, Michigan, US.
With an initial capacity to produce 9,000 vehicles annually, the plant will assemble its first electric two-wheeler later this year; the capacity can be increased to 20,000 a year later. The company did not disclose the investment for setting up the two units.
Christened Genze, it is the first electric vehicle from the company after it entered the two-wheeler segment in 2008.
In a few months, M&M will launch the scooter in the US. The company says it will give a top speed of 48 kilometres an hour and a range of 48 km on a full charge.
M&M has not said how much the Genze would cost, though certain reports expect it to be around $3,000 (Rs 1.8 lakh), about six times the price for the e-bike sold in India, with higher top speed and greater range.
Genze will be the first its kind in the US. Owning or using the vehicle will not require a licence in most states there, the Mumbai-based company said.
Anand Mahindra, chairman, said, "The North American Technical Center and Genze represent important disruptive product incubators for the Mahindra group."
A single-seater and powered by a lithium-ion battery, the Genze comes with a seven-inch weatherproof touchscreen instrument panel. It also has an under-seat cellphone and laptop charger. The Genze was conceived in the Silicon Valley and tested & assembled in the US.
With an initial capacity to produce 9,000 vehicles annually, the plant will assemble its first electric two-wheeler later this year; the capacity can be increased to 20,000 a year later. The company did not disclose the investment for setting up the two units.
Christened Genze, it is the first electric vehicle from the company after it entered the two-wheeler segment in 2008.
In a few months, M&M will launch the scooter in the US. The company says it will give a top speed of 48 kilometres an hour and a range of 48 km on a full charge.
M&M has not said how much the Genze would cost, though certain reports expect it to be around $3,000 (Rs 1.8 lakh), about six times the price for the e-bike sold in India, with higher top speed and greater range.
Genze will be the first its kind in the US. Owning or using the vehicle will not require a licence in most states there, the Mumbai-based company said.
Anand Mahindra, chairman, said, "The North American Technical Center and Genze represent important disruptive product incubators for the Mahindra group."
A single-seater and powered by a lithium-ion battery, the Genze comes with a seven-inch weatherproof touchscreen instrument panel. It also has an under-seat cellphone and laptop charger. The Genze was conceived in the Silicon Valley and tested & assembled in the US.
Indian IT companies to tap big business in Europe; up hiring plans
Banglore/ Mumbai: With European corporations emulating their American counterparts to make outsourcing mainstream , Indian software companies are tapping into a rich new vein of opportunity and are hiring and looking for acquisitions to grow in the continent.
As Europe rebounds from the lows of the economic crisis, firms on the continent are beginning to raise their IT spending as they look to cut costs and focus on a digital future. They are also open to working with Indian players, something that was not common a few years ago.
"Large European accounts are now ready to work with Indian IT players. Pressure to save costs is one of the reasons, but more importantly Indian IT companies have been selling more consulting work and delivering high-value services," Christophe Chalons, partner and chief analyst at Europe-focused IT advisory firm Pierre Audoin Consultants, told ET.
ET reported last month that Schneider Electric, whose $1 billion IT services contract with French provider Capgemini is due to be renewed, is looking at Indian outsourcers for the first time. At least three European deals with annual value of $100 million are being negotiated with Indian IT companies currently, industry players said.
Part of the reason Europe is warming to Indian IT players is the building of local talent, either through organic on-site hiring or through acquisitions. Tata Consultancy Services BSE -1.44 %, India's largest IT provider, invested in on-site hiring in Europe and then doubled down with a $75 million acquisition of French IT services player Alti last year.
Infosys BSE 0.40 % spent $349 million to buy Zurich-based consultancy firm Lodestone in 2012, and more acquisitions are on the cards. "We have invested in different European markets, built nearshore centres in Budapest, Poland etc. We may look at acquisition targets. We may look at something like a Lodestone in Nordics," said BG Srinivas, one of two presidents at Infosys who used to oversee Europe for the Bangalore-based company.
Indian IT players are focused on the European market both for acquisitions of companies and captive units. "In terms of acquisitions, Indian IT companies are looking actively at continental Europe and also eastern Europe for deals. Small consulting firms in stronger markets in northern Europe are very much on the radar," an investment banker, who declined to be identified, told ET.
The deal pipeline and conversion rate in Europe is also increasing. TCS BSE -1.44 % reported strong growth from the continent in its fourth-quarter results, higher growth than the US - the longtime dominant market. Continental Europe accounted for 11.4% of TCS' revenue for FY2014, up from 9.6% for FY2013. Other IT players also see a major scope to do well in that market . "Europe is a hunting ground for new opportunities. We see a strong demand pipeline from European customers and many first-time outsourcers." Ashish Gupta, head of Europe, Middle East and Africa, at HCL Technologies BSE -1.43 % said. Indian firms have also started bulking up their senior management on the continent. Late last year, Tech Mahindra BSE 0.38 % appointed managers for countries like Denmark, Sweden, lurin talent away from France's Capgemini. Even smaller player Hexaware BSE -1.87 % appointed a new head for Europe - HCL Tech's Amrinder Singh - last October.
As Europe rebounds from the lows of the economic crisis, firms on the continent are beginning to raise their IT spending as they look to cut costs and focus on a digital future. They are also open to working with Indian players, something that was not common a few years ago.
"Large European accounts are now ready to work with Indian IT players. Pressure to save costs is one of the reasons, but more importantly Indian IT companies have been selling more consulting work and delivering high-value services," Christophe Chalons, partner and chief analyst at Europe-focused IT advisory firm Pierre Audoin Consultants, told ET.
ET reported last month that Schneider Electric, whose $1 billion IT services contract with French provider Capgemini is due to be renewed, is looking at Indian outsourcers for the first time. At least three European deals with annual value of $100 million are being negotiated with Indian IT companies currently, industry players said.
Part of the reason Europe is warming to Indian IT players is the building of local talent, either through organic on-site hiring or through acquisitions. Tata Consultancy Services BSE -1.44 %, India's largest IT provider, invested in on-site hiring in Europe and then doubled down with a $75 million acquisition of French IT services player Alti last year.
Infosys BSE 0.40 % spent $349 million to buy Zurich-based consultancy firm Lodestone in 2012, and more acquisitions are on the cards. "We have invested in different European markets, built nearshore centres in Budapest, Poland etc. We may look at acquisition targets. We may look at something like a Lodestone in Nordics," said BG Srinivas, one of two presidents at Infosys who used to oversee Europe for the Bangalore-based company.
Indian IT players are focused on the European market both for acquisitions of companies and captive units. "In terms of acquisitions, Indian IT companies are looking actively at continental Europe and also eastern Europe for deals. Small consulting firms in stronger markets in northern Europe are very much on the radar," an investment banker, who declined to be identified, told ET.
The deal pipeline and conversion rate in Europe is also increasing. TCS BSE -1.44 % reported strong growth from the continent in its fourth-quarter results, higher growth than the US - the longtime dominant market. Continental Europe accounted for 11.4% of TCS' revenue for FY2014, up from 9.6% for FY2013. Other IT players also see a major scope to do well in that market . "Europe is a hunting ground for new opportunities. We see a strong demand pipeline from European customers and many first-time outsourcers." Ashish Gupta, head of Europe, Middle East and Africa, at HCL Technologies BSE -1.43 % said. Indian firms have also started bulking up their senior management on the continent. Late last year, Tech Mahindra BSE 0.38 % appointed managers for countries like Denmark, Sweden, lurin talent away from France's Capgemini. Even smaller player Hexaware BSE -1.87 % appointed a new head for Europe - HCL Tech's Amrinder Singh - last October.
CSIR-IHBT licenses unique, thermo-stable SOD enzyme to create global niche
New Delhi: CSIR-Institute of Himalayan Bioresource Technology (CSIR-IHBT), Palampur, has signed a MoU with its industrial partner, Phyto Biotech, Kolkata, to formalize Transfer of Technology for production of unique autoclavable Super Oxide Dismutase (SOD) enzyme, used in cosmetic, food and pharmaceutical industries for end applications, like developing anti-ageing creams, extending shelf life of fruits and vegetables and during cryo-surgery and preservation of organelles, respectively. The licensing has brought together the CSIR and the industry to enable commercial production of desired standard SOD so as to create a global niche for the country.
The enzyme was discovered by CSIR-IHBT during a survey at an altitude of over 10, 000 ftin the Western Himalayan region from Potentilaastrosanguniaplant growing under snow cover. Persistent hard work over the years has resulted in the isolation of the SOD gene. Thereafter,a protocol was developed for cloning of the gene in E.coli. The enzyme thus produced,retained the same unique feature as that of the native plant. Applying the knowledge of bioinformatics, the enzyme has been further engineeredby mutation of a single amino acid to increase its consistency and thermo-stability.
The characteristic features of this SOD lies in its stability and functionality ranging from sub-zero to high temperature of>40oc with varying specific activity. Owing to its high antioxidant properties and multiple uses, SOD enjoys high demand and price in the global market.
The enzyme was discovered by CSIR-IHBT during a survey at an altitude of over 10, 000 ftin the Western Himalayan region from Potentilaastrosanguniaplant growing under snow cover. Persistent hard work over the years has resulted in the isolation of the SOD gene. Thereafter,a protocol was developed for cloning of the gene in E.coli. The enzyme thus produced,retained the same unique feature as that of the native plant. Applying the knowledge of bioinformatics, the enzyme has been further engineeredby mutation of a single amino acid to increase its consistency and thermo-stability.
The characteristic features of this SOD lies in its stability and functionality ranging from sub-zero to high temperature of>40oc with varying specific activity. Owing to its high antioxidant properties and multiple uses, SOD enjoys high demand and price in the global market.
Indian IT companies to tap big business in Europe; up hiring plans
Banglore/ Mumbai: With European corporations emulating their American counterparts to make outsourcing mainstream , Indian software companies are tapping into a rich new vein of opportunity and are hiring and looking for acquisitions to grow in the continent.
As Europe rebounds from the lows of the economic crisis, firms on the continent are beginning to raise their IT spending as they look to cut costs and focus on a digital future. They are also open to working with Indian players, something that was not common a few years ago.
"Large European accounts are now ready to work with Indian IT players. Pressure to save costs is one of the reasons, but more importantly Indian IT companies have been selling more consulting work and delivering high-value services," Christophe Chalons, partner and chief analyst at Europe-focused IT advisory firm Pierre Audoin Consultants, told ET.
ET reported last month that Schneider Electric, whose $1 billion IT services contract with French provider Capgemini is due to be renewed, is looking at Indian outsourcers for the first time. At least three European deals with annual value of $100 million are being negotiated with Indian IT companies currently, industry players said.
Part of the reason Europe is warming to Indian IT players is the building of local talent, either through organic on-site hiring or through acquisitions. Tata Consultancy Services BSE -1.44 %, India's largest IT provider, invested in on-site hiring in Europe and then doubled down with a $75 million acquisition of French IT services player Alti last year.
Infosys BSE 0.40 % spent $349 million to buy Zurich-based consultancy firm Lodestone in 2012, and more acquisitions are on the cards. "We have invested in different European markets, built nearshore centres in Budapest, Poland etc. We may look at acquisition targets. We may look at something like a Lodestone in Nordics," said BG Srinivas, one of two presidents at Infosys who used to oversee Europe for the Bangalore-based company.
Indian IT players are focused on the European market both for acquisitions of companies and captive units. "In terms of acquisitions, Indian IT companies are looking actively at continental Europe and also eastern Europe for deals. Small consulting firms in stronger markets in northern Europe are very much on the radar," an investment banker, who declined to be identified, told ET.
The deal pipeline and conversion rate in Europe is also increasing. TCS BSE -1.44 % reported strong growth from the continent in its fourth-quarter results, higher growth than the US - the longtime dominant market. Continental Europe accounted for 11.4% of TCS' revenue for FY2014, up from 9.6% for FY2013. Other IT players also see a major scope to do well in that market . "Europe is a hunting ground for new opportunities. We see a strong demand pipeline from European customers and many first-time outsourcers." Ashish Gupta, head of Europe, Middle East and Africa, at HCL Technologies BSE -1.43 % said. Indian firms have also started bulking up their senior management on the continent. Late last year, Tech Mahindra BSE 0.38 % appointed managers for countries like Denmark, Sweden, lurin talent away from France's Capgemini. Even smaller player Hexaware BSE -1.87 % appointed a new head for Europe - HCL Tech's Amrinder Singh - last October.
As Europe rebounds from the lows of the economic crisis, firms on the continent are beginning to raise their IT spending as they look to cut costs and focus on a digital future. They are also open to working with Indian players, something that was not common a few years ago.
"Large European accounts are now ready to work with Indian IT players. Pressure to save costs is one of the reasons, but more importantly Indian IT companies have been selling more consulting work and delivering high-value services," Christophe Chalons, partner and chief analyst at Europe-focused IT advisory firm Pierre Audoin Consultants, told ET.
ET reported last month that Schneider Electric, whose $1 billion IT services contract with French provider Capgemini is due to be renewed, is looking at Indian outsourcers for the first time. At least three European deals with annual value of $100 million are being negotiated with Indian IT companies currently, industry players said.
Part of the reason Europe is warming to Indian IT players is the building of local talent, either through organic on-site hiring or through acquisitions. Tata Consultancy Services BSE -1.44 %, India's largest IT provider, invested in on-site hiring in Europe and then doubled down with a $75 million acquisition of French IT services player Alti last year.
Infosys BSE 0.40 % spent $349 million to buy Zurich-based consultancy firm Lodestone in 2012, and more acquisitions are on the cards. "We have invested in different European markets, built nearshore centres in Budapest, Poland etc. We may look at acquisition targets. We may look at something like a Lodestone in Nordics," said BG Srinivas, one of two presidents at Infosys who used to oversee Europe for the Bangalore-based company.
Indian IT players are focused on the European market both for acquisitions of companies and captive units. "In terms of acquisitions, Indian IT companies are looking actively at continental Europe and also eastern Europe for deals. Small consulting firms in stronger markets in northern Europe are very much on the radar," an investment banker, who declined to be identified, told ET.
The deal pipeline and conversion rate in Europe is also increasing. TCS BSE -1.44 % reported strong growth from the continent in its fourth-quarter results, higher growth than the US - the longtime dominant market. Continental Europe accounted for 11.4% of TCS' revenue for FY2014, up from 9.6% for FY2013. Other IT players also see a major scope to do well in that market . "Europe is a hunting ground for new opportunities. We see a strong demand pipeline from European customers and many first-time outsourcers." Ashish Gupta, head of Europe, Middle East and Africa, at HCL Technologies BSE -1.43 % said. Indian firms have also started bulking up their senior management on the continent. Late last year, Tech Mahindra BSE 0.38 % appointed managers for countries like Denmark, Sweden, lurin talent away from France's Capgemini. Even smaller player Hexaware BSE -1.87 % appointed a new head for Europe - HCL Tech's Amrinder Singh - last October.
April exports touch five-month high
New Delhi: After two months of contraction, merchandise exports rose at a five-month high of 5.3 per cent in April to $25.6 billion, against $24.35 billion in the same month last year, showed official data released on Friday.
Imports, on the other hand, were down were down 15 per cent to $35.7 billion in the month compared to $42.02 billion a year ago. This left trade deficit lower by 42.9 per cent at $10.1 billion in April against $17.7 billion a year before.
This would augur well for the already falling current account deficit and help ease pressure on the rupee.
The outbound shipments were driven by high-value engineering goods, drugs and pharmaceuticals, and some textile products. Exports of engineering products, which displaced petroleum products as the top most outbound shipment item, rose 21.3 per cent to $5.7 billion, while pharma were up 10.4 per cent to $1.3 billion. Besides, marine products increased 42.2 per cent, ceramic and glassware grew by 32 per cent and leather products 30.4 per cent. In textiles, readymade garments rose 14.3 per cent.
However, exports of petroleum products were up only 0.7 per cent to $5.15 billion. Gems and jewellery, facing rough weather because of curbs on gold and silver imports, contracted 8.1 per cent to $3.3 billion. Exports of iron ore, still facing various prohibitions, rose 23.4 per cent, albeit at a low level of $152 million.
While oil imports fell only 0.6 per cent to nearly $13 billion over $13.05 billion, non-oil imports fell 21.5 per cent to $22.7 billion, a large part of which came from the contraction in gold and silver imports. Gold imports fell 74 per cent, reaching $1.75 billion, over $6.8 billion earlier. Silver contracted 26 per cent to $467.6 million as against $636.6 million in the same month a year before. Non-oil, non-gold imports declined 3.9 per cent to $20.5 billion in April against $21.35 billion in the same month a year before, showing industrial sluggishness still there in the economy.
Project goods fell 14.8 per cent to $343 million against $402 million earlier, reflecting the downturn still in industry. Transport equipment and machinery moved down by 38.3 per cent and six per cent, respectively. Exporters believe the rise in in April was because of a rise in demand in the US and the European Union.
According to a report by YES Bank, the situation in the US and the globe in general will improve once short-term problems related to the weather fade away. That will prove beneficial for our merchandise export.
Part of the export rise was also due to a base effect, “related to higher shipments in February-March 2013, prior to the expiry of various export incentives in March 2013. Merchandise exports are expected to continue to record positive growth in the ongoing quarter, benefiting from healthy global demand and a stable rupee,” said Aditi Nayar, senior economist, ICRA.
The International Monetary Fund estimated US economic growth at 2.8 per cent in 2014 against 1.9 per cent in 2013. The euro area is projected to expand 1.2 per cent in 2014 against a contraction of 0.5 per cent in 2013.
However, exporters still demand a priority sector tag.
“Exports should be brought under priority sector lending for credit availability to the sector, with international benchmark rates. Availability of electricity for MSME (medium, small and micro enterprises) manufacturing, with concessional rates, is the need of the hour. Similarly, extra efforts are required on the marketing front of Indian products globally,” said M Rafeeque Ahmed, president, Federation of Indian Export Organisations.
Imports, on the other hand, were down were down 15 per cent to $35.7 billion in the month compared to $42.02 billion a year ago. This left trade deficit lower by 42.9 per cent at $10.1 billion in April against $17.7 billion a year before.
This would augur well for the already falling current account deficit and help ease pressure on the rupee.
The outbound shipments were driven by high-value engineering goods, drugs and pharmaceuticals, and some textile products. Exports of engineering products, which displaced petroleum products as the top most outbound shipment item, rose 21.3 per cent to $5.7 billion, while pharma were up 10.4 per cent to $1.3 billion. Besides, marine products increased 42.2 per cent, ceramic and glassware grew by 32 per cent and leather products 30.4 per cent. In textiles, readymade garments rose 14.3 per cent.
However, exports of petroleum products were up only 0.7 per cent to $5.15 billion. Gems and jewellery, facing rough weather because of curbs on gold and silver imports, contracted 8.1 per cent to $3.3 billion. Exports of iron ore, still facing various prohibitions, rose 23.4 per cent, albeit at a low level of $152 million.
While oil imports fell only 0.6 per cent to nearly $13 billion over $13.05 billion, non-oil imports fell 21.5 per cent to $22.7 billion, a large part of which came from the contraction in gold and silver imports. Gold imports fell 74 per cent, reaching $1.75 billion, over $6.8 billion earlier. Silver contracted 26 per cent to $467.6 million as against $636.6 million in the same month a year before. Non-oil, non-gold imports declined 3.9 per cent to $20.5 billion in April against $21.35 billion in the same month a year before, showing industrial sluggishness still there in the economy.
Project goods fell 14.8 per cent to $343 million against $402 million earlier, reflecting the downturn still in industry. Transport equipment and machinery moved down by 38.3 per cent and six per cent, respectively. Exporters believe the rise in in April was because of a rise in demand in the US and the European Union.
According to a report by YES Bank, the situation in the US and the globe in general will improve once short-term problems related to the weather fade away. That will prove beneficial for our merchandise export.
Part of the export rise was also due to a base effect, “related to higher shipments in February-March 2013, prior to the expiry of various export incentives in March 2013. Merchandise exports are expected to continue to record positive growth in the ongoing quarter, benefiting from healthy global demand and a stable rupee,” said Aditi Nayar, senior economist, ICRA.
The International Monetary Fund estimated US economic growth at 2.8 per cent in 2014 against 1.9 per cent in 2013. The euro area is projected to expand 1.2 per cent in 2014 against a contraction of 0.5 per cent in 2013.
However, exporters still demand a priority sector tag.
“Exports should be brought under priority sector lending for credit availability to the sector, with international benchmark rates. Availability of electricity for MSME (medium, small and micro enterprises) manufacturing, with concessional rates, is the need of the hour. Similarly, extra efforts are required on the marketing front of Indian products globally,” said M Rafeeque Ahmed, president, Federation of Indian Export Organisations.
FII holding in India Inc hit a record high of 25% in Q4
Mumbai: Foreign institutional investors (FIIs) continue to drive Indian equities. In the March quarter, FIIs have invested Rs 21,921 crore ($3.6 billion), owning a quarter of the top 75 listed stocks of India. During the quarter, their stakes have risen by 33 basis points sequentially.
Analysts track the quarterly ownership data to track purchases and preferences of large institutions both in terms of sectors and specific stocks. Foreign institutions benchmark their investments against the MSCI Emerging Market Index.
As far as the broader market is concerned, their stakes have risen by 17 basis points to 22.3 per cent in the 1,200 companies listed on the National Stock Exchange (NSE).
Morgan Stanley, which has analysed the change in ownership pattern of Indian equities in the March quarter, says FIIs’ stakes in Indian companies have hit a record high. The estimated value of FII holdings in India stands at $279 billion. Taking a cue from FIIs, domestic institutions too have turned buyers with their stakes rising by 30 basis points in the three months ended March. The only category that has reduced their stakes are promoters and their stake has declined 98 basis points to 49.3 per cent during the quarter.
The steady buying by FIIs and domestic institutions has taken their average sector positions to a five-year high. Ownership data suggests that FIIs remain bullish about financials, consumer discretionary and telecom. They are underweight in technology and healthcare. Holdings in financials have hit a eight-and-a-half-year high, while stakes in consumer staples have hit a five-year low. Morgan Stanley says domestic institutions added most positions in financials and reduced positions the most in materials and technology.
The stock that has been sold by both categories of institutional investors — FIIs and DIIs — is Infosys, while State Bank of India remained the most bought stock. The names most heavily purchased by FIIs were Axis Bank and Tata Steel, whereas Glaxo and Tata Power were the most sold. FIIs are overweight on ICICI Bank but were underweight on Reliance Industries. Currently, FIIs own 5.4 per cent of RIL against the stock’s weightage of 7.9 per cent on the MSCI Index.
FIIs have remained overweight (wherein they own higher percentage of stocks compared to their weight on MSCI Index) three out of the 10 MSCI sectors, with financials in lead position, followed by consumer discretionary and telecoms. The biggest underweight positions are in energy, consumer staples and technology.
Going by the inflows in April, the pattern of foreign inflows might continue. In the month of April, the investments of FIIs into Indian equities stood at Rs 10,182 crore. Kotak Institutional Equities, which analyses fund flows into emerging markets, says, “Allocations to India by GEM funds reached 10.5 per cent in March, indicating an overweight status for the region. Net asset allocations to China and Russia have dropped over the past four weeks; Indonesia and Brazil saw the largest upsurge.”
Analysts track the quarterly ownership data to track purchases and preferences of large institutions both in terms of sectors and specific stocks. Foreign institutions benchmark their investments against the MSCI Emerging Market Index.
As far as the broader market is concerned, their stakes have risen by 17 basis points to 22.3 per cent in the 1,200 companies listed on the National Stock Exchange (NSE).
Morgan Stanley, which has analysed the change in ownership pattern of Indian equities in the March quarter, says FIIs’ stakes in Indian companies have hit a record high. The estimated value of FII holdings in India stands at $279 billion. Taking a cue from FIIs, domestic institutions too have turned buyers with their stakes rising by 30 basis points in the three months ended March. The only category that has reduced their stakes are promoters and their stake has declined 98 basis points to 49.3 per cent during the quarter.
The steady buying by FIIs and domestic institutions has taken their average sector positions to a five-year high. Ownership data suggests that FIIs remain bullish about financials, consumer discretionary and telecom. They are underweight in technology and healthcare. Holdings in financials have hit a eight-and-a-half-year high, while stakes in consumer staples have hit a five-year low. Morgan Stanley says domestic institutions added most positions in financials and reduced positions the most in materials and technology.
The stock that has been sold by both categories of institutional investors — FIIs and DIIs — is Infosys, while State Bank of India remained the most bought stock. The names most heavily purchased by FIIs were Axis Bank and Tata Steel, whereas Glaxo and Tata Power were the most sold. FIIs are overweight on ICICI Bank but were underweight on Reliance Industries. Currently, FIIs own 5.4 per cent of RIL against the stock’s weightage of 7.9 per cent on the MSCI Index.
FIIs have remained overweight (wherein they own higher percentage of stocks compared to their weight on MSCI Index) three out of the 10 MSCI sectors, with financials in lead position, followed by consumer discretionary and telecoms. The biggest underweight positions are in energy, consumer staples and technology.
Going by the inflows in April, the pattern of foreign inflows might continue. In the month of April, the investments of FIIs into Indian equities stood at Rs 10,182 crore. Kotak Institutional Equities, which analyses fund flows into emerging markets, says, “Allocations to India by GEM funds reached 10.5 per cent in March, indicating an overweight status for the region. Net asset allocations to China and Russia have dropped over the past four weeks; Indonesia and Brazil saw the largest upsurge.”
Sunday, May 4, 2014
Hindustan Aeronautics sets up faculty chair at IIT Kharagpur
Bangalore: Hindustan Aeronautics Ltd (HAL) has entered into collaboration with IIT Kharagpur to set up a Faculty Chair to give thrust on R&D and academic work in new and emerging technologies in the aerospace industry,
This initiative is to conduct applied research and tackle multi-disciplinary problems in the field of aerospace technology and its applications.
The Chair will be set up at the Department of Aerospace Engineering.
R&D promotion
“Our intention is to promote R&D and academic work in new and emerging technologies in aerospace industry focusing in the field of radar, electronic warfare, avionics and aerospace systems. A strong research base already exists at IIT, Kharagpur, in the areas of direct relevance to the future programmes of HAL and this tie-up will be mutually beneficial,” said Dr RK Tyagi, Chairman, HAL.
The MoU was signed by Dr Pratha Pratim Chakrabarti, Director, IIT Kharagpur, and S Thenmozhi, General Manager, HAL. The HAL Chair will be responsible for carrying out research in various areas related to aerospace technologies, facilitating technical consultancy, training programmes and addressing other mutually agreed activities relevant to the HAL.
IIT-KGP will appoint a distinguished academician from the relevant branch of engineering as the Chair Professor for a period of three years.
Training programmes
The HAL Chair will also initiate new academic/ training programmes, identify and initiate specific research and development at IIT-KGP in the specific technical areas, provide technical consultancy to HAL, facilitate development of training programmes and training modules including mentoring/ coaching of HAL personnel for knowledge updating and capacity building.
The chair will conceptualise and facilitate annual conference of defence-related industries to provide platform to air new ideas, innovations, technologies, etc.
This initiative is to conduct applied research and tackle multi-disciplinary problems in the field of aerospace technology and its applications.
The Chair will be set up at the Department of Aerospace Engineering.
R&D promotion
“Our intention is to promote R&D and academic work in new and emerging technologies in aerospace industry focusing in the field of radar, electronic warfare, avionics and aerospace systems. A strong research base already exists at IIT, Kharagpur, in the areas of direct relevance to the future programmes of HAL and this tie-up will be mutually beneficial,” said Dr RK Tyagi, Chairman, HAL.
The MoU was signed by Dr Pratha Pratim Chakrabarti, Director, IIT Kharagpur, and S Thenmozhi, General Manager, HAL. The HAL Chair will be responsible for carrying out research in various areas related to aerospace technologies, facilitating technical consultancy, training programmes and addressing other mutually agreed activities relevant to the HAL.
IIT-KGP will appoint a distinguished academician from the relevant branch of engineering as the Chair Professor for a period of three years.
Training programmes
The HAL Chair will also initiate new academic/ training programmes, identify and initiate specific research and development at IIT-KGP in the specific technical areas, provide technical consultancy to HAL, facilitate development of training programmes and training modules including mentoring/ coaching of HAL personnel for knowledge updating and capacity building.
The chair will conceptualise and facilitate annual conference of defence-related industries to provide platform to air new ideas, innovations, technologies, etc.
Honda plans 'rural vertical' to catch up with Hero
Mumbai: Honda Motorcycle and Scooters (HMSI) is setting up a "rural vertical" in a bid to flank market leader Hero MotoCorpBSE 0.62 % which boasts of a deep rural distribution network.
ETlearns that Honda plans to spruce up its 100cc bike segment and create a new entry point for HMSI in India even as it builds its distribution network by adding 1,000 sales points within a year, of which 70% will come from the fast growing hinterland markets.
Y S Guleria, VP, sales & marketing, HMSI says the new rural vertical will be a key lever of growth going ahead.
"It is a new direction. With a dedicated rural vertical we will be able to achieve more. This vertical will not only take care of rural network but also rural communication, and give key feedback to R&D. Its approach will be completely different from the urban markets. There will be close to 15 people who will oversee the strategy, communication and implementation," Guleria says .
For HMSI, currently, the rural markets contribute about 30-33% of its overall sales. With the addition of rural vertical Guleria says, aim is to take up the rural share to 45% over a period of time. The aggressive network expansion is the need of the hour, claims Guleria. He says as against the competitors 5,500 to 6,000 touch points, HMSI has just reached the half way mark to 2,850 touch points, which will grow to almost 4,000 by end of FY15.
The mass market foray with Dream Series for HMSI so far has not matched the high expectations of the company. In the span of 18-24 months, the Dream Series (Neo and Yuga) has managed to sell a cumulative of 7.5-8 lakh units.
ETlearns that Honda plans to spruce up its 100cc bike segment and create a new entry point for HMSI in India even as it builds its distribution network by adding 1,000 sales points within a year, of which 70% will come from the fast growing hinterland markets.
Y S Guleria, VP, sales & marketing, HMSI says the new rural vertical will be a key lever of growth going ahead.
"It is a new direction. With a dedicated rural vertical we will be able to achieve more. This vertical will not only take care of rural network but also rural communication, and give key feedback to R&D. Its approach will be completely different from the urban markets. There will be close to 15 people who will oversee the strategy, communication and implementation," Guleria says .
For HMSI, currently, the rural markets contribute about 30-33% of its overall sales. With the addition of rural vertical Guleria says, aim is to take up the rural share to 45% over a period of time. The aggressive network expansion is the need of the hour, claims Guleria. He says as against the competitors 5,500 to 6,000 touch points, HMSI has just reached the half way mark to 2,850 touch points, which will grow to almost 4,000 by end of FY15.
The mass market foray with Dream Series for HMSI so far has not matched the high expectations of the company. In the span of 18-24 months, the Dream Series (Neo and Yuga) has managed to sell a cumulative of 7.5-8 lakh units.
Aviation job market should swell in 2014-15
Mumbai/New Delhi: In 2012-13, the closure of Kingfisher Airlines had nearly 5,000 employees out of jobs, spreading shock in the aviation industry.
Growth in the sector was muted the next financial year and private airlines, with only 18 aircraft additions, were not able to create more than 2,000 additional jobs. In other words, the airline job market had shrunk.
Will it get back on course in 2014-15? Few would hazard a guess, since it is based on many uncertainties. The good news is that two new airlines are expected to join the skies.
One is AirAsia’s joint venture with the Tatas; the low-cost carrier could begin flights next month. The other is the full-service carrier to be formed separately by the Tatas and Singapore Airlines (SIA), which should get in the air in the fourth quarter of the calendar year.
And, old warhorse IndiGo has said it would add nine aircraft to its fleet.
Yet, there are red signals, too.
The future of SpiceJet, expected to make huge losses, is uncertain. The restructuring of Jet Airways, to align itself with Etihad Airways, could also mean job losses.
Says Kapil Kaul, chief executive, Indian subcontinent and West Asia at the Centre for Asia Pacific Aviation, “Depending on when they start operations, our assessment is that AirAsia and SIA will bring in anything between 10 and 15 aircraft. However, there is also a possibility that some of the other airlines like SpiceJet and Jet could trim their workforce. But I still feel the net impact will be positive.”
Based on industry norms, each aircraft spawns about 100 to 110 direct jobs. With between 23 and 28 new aircraft coming, that means additional 2,700-3,000 jobs. However, this will only fructify if the impediments in the takeoff of the new airlines are removed. AirAsia’s operator licence clearance is pending a decision in court (the airline has already hired 350 people). SIA has to still to get the operator’s licence from the government. And, GoAir, which is to take in two new aircraft, as well as IndiGo, must not change their minds. Even regional airlines Air Costa has said it would recruit 400 for its two new aircraft, to be delivered this year. However, as Kaul says, there is an uncertainty factor, which could reduce net job creation for the year.
There was speculation of 40 employees being removed from the cargo department of Jet Airways, which the airline denied. Still, most analysts say the airline has been reducing the number of stations where the planes deploy and further changes could be in the offing as it integrates with Etihad. As for Spicejet, it is in a financial mess.
A Jet spokesperson said the airline continued to recruit in areas such as revenue management, cabin crew and pilots, based on operational requirements. “Depending on the work requirements, the contractual manpower would be engaged through our service providers,’’ Jet said. GoAir and SpiceJet did not respond to queries.
IndiGo, the largest domestic airline, is expanding and hiring staff across departments. An IndiGo spokesperson said “We have employee strength of 8,000-plus and have seen a year-on-year growth in each of the eight years of our operations. As we at IndiGo are adding to our fleet every month, we are active on expanding our teams across roles. This year, we will hire another 1,000 colleagues to the team.”
An airline workforce comprises ground staff (around 45 per cent), cabin crew (20 per cent), pilots (15 per cent), engineers and technicians (10 per cent) and the rest (10 per cent) in administration, sales, marketing, revenue management and other functions.
Government-owned Air India has been able to reduce its staff strength primarily by not hiring people who retire — in simple terms, a lost opportunity for the aviation industry. With around 1,500 employees retiring every year, it hopes to have a staff strength of 9,500 by 2015-16.
In sum, keep your fingers crossed and hope no airline changes its plan, and that the two new ones get to eventually take off this year.
PRAYING FOR A SMOOTH TAKEOFF
* 2012-13: Kingfisher Airlines closure leads to about 5,000 job losses
* 2013-14: The 2,000 additional jobs created not enough to absorb the number of people who lost jobs. Overall, the job market shrunk
* 2014-15 : Anything between 2,700 to 3,000 new jobs to be created. However, the net increase could come down, depending on the future shape of SpiceJet & Jet Airways, and whether AirAsia India and Tata-Singapore Airlines take off this year
* With Air India not replacing the 1,500-odd employees retiring every year, an opportunity for additional jobs is lost
Growth in the sector was muted the next financial year and private airlines, with only 18 aircraft additions, were not able to create more than 2,000 additional jobs. In other words, the airline job market had shrunk.
Will it get back on course in 2014-15? Few would hazard a guess, since it is based on many uncertainties. The good news is that two new airlines are expected to join the skies.
One is AirAsia’s joint venture with the Tatas; the low-cost carrier could begin flights next month. The other is the full-service carrier to be formed separately by the Tatas and Singapore Airlines (SIA), which should get in the air in the fourth quarter of the calendar year.
And, old warhorse IndiGo has said it would add nine aircraft to its fleet.
Yet, there are red signals, too.
The future of SpiceJet, expected to make huge losses, is uncertain. The restructuring of Jet Airways, to align itself with Etihad Airways, could also mean job losses.
Says Kapil Kaul, chief executive, Indian subcontinent and West Asia at the Centre for Asia Pacific Aviation, “Depending on when they start operations, our assessment is that AirAsia and SIA will bring in anything between 10 and 15 aircraft. However, there is also a possibility that some of the other airlines like SpiceJet and Jet could trim their workforce. But I still feel the net impact will be positive.”
Based on industry norms, each aircraft spawns about 100 to 110 direct jobs. With between 23 and 28 new aircraft coming, that means additional 2,700-3,000 jobs. However, this will only fructify if the impediments in the takeoff of the new airlines are removed. AirAsia’s operator licence clearance is pending a decision in court (the airline has already hired 350 people). SIA has to still to get the operator’s licence from the government. And, GoAir, which is to take in two new aircraft, as well as IndiGo, must not change their minds. Even regional airlines Air Costa has said it would recruit 400 for its two new aircraft, to be delivered this year. However, as Kaul says, there is an uncertainty factor, which could reduce net job creation for the year.
There was speculation of 40 employees being removed from the cargo department of Jet Airways, which the airline denied. Still, most analysts say the airline has been reducing the number of stations where the planes deploy and further changes could be in the offing as it integrates with Etihad. As for Spicejet, it is in a financial mess.
A Jet spokesperson said the airline continued to recruit in areas such as revenue management, cabin crew and pilots, based on operational requirements. “Depending on the work requirements, the contractual manpower would be engaged through our service providers,’’ Jet said. GoAir and SpiceJet did not respond to queries.
IndiGo, the largest domestic airline, is expanding and hiring staff across departments. An IndiGo spokesperson said “We have employee strength of 8,000-plus and have seen a year-on-year growth in each of the eight years of our operations. As we at IndiGo are adding to our fleet every month, we are active on expanding our teams across roles. This year, we will hire another 1,000 colleagues to the team.”
An airline workforce comprises ground staff (around 45 per cent), cabin crew (20 per cent), pilots (15 per cent), engineers and technicians (10 per cent) and the rest (10 per cent) in administration, sales, marketing, revenue management and other functions.
Government-owned Air India has been able to reduce its staff strength primarily by not hiring people who retire — in simple terms, a lost opportunity for the aviation industry. With around 1,500 employees retiring every year, it hopes to have a staff strength of 9,500 by 2015-16.
In sum, keep your fingers crossed and hope no airline changes its plan, and that the two new ones get to eventually take off this year.
PRAYING FOR A SMOOTH TAKEOFF
* 2012-13: Kingfisher Airlines closure leads to about 5,000 job losses
* 2013-14: The 2,000 additional jobs created not enough to absorb the number of people who lost jobs. Overall, the job market shrunk
* 2014-15 : Anything between 2,700 to 3,000 new jobs to be created. However, the net increase could come down, depending on the future shape of SpiceJet & Jet Airways, and whether AirAsia India and Tata-Singapore Airlines take off this year
* With Air India not replacing the 1,500-odd employees retiring every year, an opportunity for additional jobs is lost
Pvt banks made good profit on unsecured loans in FY14
Mumbai: Private sector lenders witnessed robust growth in credit cards and personal loan businesses in FY14, which helped them boost top line amid sluggish corporate credit demand in a slowing economy.
ICICI Bank, India’s largest private sector lender, witnessed 141.6 per cent growth in personal loan disbursement in the past financial year, according to a report by Emkay Global Financial Services. The lender also saw healthy growth of 20.8 per cent in credit card dues, the report noted.
Similarly, Axis Bank’s personal loan business grew 49.8 per cent last year, while the credit card business expanded 31.1 per cent.
Jairam Sridharan, head (consumer lending and payments) at Axis Bank, agreed that the unsecured lending business, which had been going slow, had begun to pick up. “Banks were staying away from it or were going slow on it. But now there is a lot of competition in the secured portfolio amongst banks and, as a result, banks are tapping the unsecured credit area where competition is comparatively lower.”
Sridharan added that banks also had a more stringent and prudent underwriting norm in place and that is also giving them the confidence to increase their unsecured lending portfolio. “Apart from this, the systematic use of credit bureaus by banks is also giving the banks confidence to extend these unsecured loans. With the credit bureaus in place now, it is much easier for us to figure out the credit history of a consumer and lend on that basis.”
HDFC Bank, the largest player in the credit card business, saw growth coming back in the last quarter of FY14 with the credit card business expanding 21 per cent and the personal loans by 17 per cent.
Parag Rao, business head (card payment products and merchant acquiring services) at HDFC Bank, said: “There has been a strong growth momentum for the past few years. We have a 35-36 per cent market share on spends and our portfolio has witnessed a 40 per cent growth in spends year-on-year. Our products are specifically focused in addressing the customer needs of travel, lifestyle and entertainment.”
The number of cards outstanding has also gone up in the past year. While the Reserve Bank of India’s (RBI) latest data is till January, the increasing trend is clearly visible.
For example, ICICI Bank’s number of outstanding credit card at the end of January 2014 was 3,180,401, up 12 per cent from 2,840,802 a year ago. Similarly, Axis Bank recorded 28 per cent growth in the number of outstanding cards from 1,036,206 in January 2013 to 1,324,790 in January 2014. The exception to this rule was HDFC Bank, which had been weeding out its inactive cards in the previous quarters.
The aggregate amount of transactions done via ATM and POS (point-of-sale) has also seen an uptick. While ICICI bank’s aggregate transaction amount has gone up 31 per cent, Axis Bank has recorded a 86 per cent growth in the transaction amount.
The growth in credit card business has also encouraged some lenders to enter the business. For instance, Federal Bank has said it might join the credit card business. However, it is not only private and foreign banks but even public-sector banks that have been trying to improve their share in the credit card business.
According to a Worldline India report, a player in the payments and transactional services pointed out in a report: “Private sector banks continue to be the largest issuers, with a 54 per cent share of the credit card base. After RBI’s EMV (Euro pay MasterCard Visa) mandate, there was an uptick in issuance from the public-sector banks, as a result of which their share has grown to 20 per cent (in FY14) from 18 last year (FY13).”
In fact, the credit card base has crossed the 20-million mark by the end of the last financial year, the Worldline report noted.
ICICI Bank, India’s largest private sector lender, witnessed 141.6 per cent growth in personal loan disbursement in the past financial year, according to a report by Emkay Global Financial Services. The lender also saw healthy growth of 20.8 per cent in credit card dues, the report noted.
Similarly, Axis Bank’s personal loan business grew 49.8 per cent last year, while the credit card business expanded 31.1 per cent.
Jairam Sridharan, head (consumer lending and payments) at Axis Bank, agreed that the unsecured lending business, which had been going slow, had begun to pick up. “Banks were staying away from it or were going slow on it. But now there is a lot of competition in the secured portfolio amongst banks and, as a result, banks are tapping the unsecured credit area where competition is comparatively lower.”
Sridharan added that banks also had a more stringent and prudent underwriting norm in place and that is also giving them the confidence to increase their unsecured lending portfolio. “Apart from this, the systematic use of credit bureaus by banks is also giving the banks confidence to extend these unsecured loans. With the credit bureaus in place now, it is much easier for us to figure out the credit history of a consumer and lend on that basis.”
HDFC Bank, the largest player in the credit card business, saw growth coming back in the last quarter of FY14 with the credit card business expanding 21 per cent and the personal loans by 17 per cent.
Parag Rao, business head (card payment products and merchant acquiring services) at HDFC Bank, said: “There has been a strong growth momentum for the past few years. We have a 35-36 per cent market share on spends and our portfolio has witnessed a 40 per cent growth in spends year-on-year. Our products are specifically focused in addressing the customer needs of travel, lifestyle and entertainment.”
The number of cards outstanding has also gone up in the past year. While the Reserve Bank of India’s (RBI) latest data is till January, the increasing trend is clearly visible.
For example, ICICI Bank’s number of outstanding credit card at the end of January 2014 was 3,180,401, up 12 per cent from 2,840,802 a year ago. Similarly, Axis Bank recorded 28 per cent growth in the number of outstanding cards from 1,036,206 in January 2013 to 1,324,790 in January 2014. The exception to this rule was HDFC Bank, which had been weeding out its inactive cards in the previous quarters.
The aggregate amount of transactions done via ATM and POS (point-of-sale) has also seen an uptick. While ICICI bank’s aggregate transaction amount has gone up 31 per cent, Axis Bank has recorded a 86 per cent growth in the transaction amount.
The growth in credit card business has also encouraged some lenders to enter the business. For instance, Federal Bank has said it might join the credit card business. However, it is not only private and foreign banks but even public-sector banks that have been trying to improve their share in the credit card business.
According to a Worldline India report, a player in the payments and transactional services pointed out in a report: “Private sector banks continue to be the largest issuers, with a 54 per cent share of the credit card base. After RBI’s EMV (Euro pay MasterCard Visa) mandate, there was an uptick in issuance from the public-sector banks, as a result of which their share has grown to 20 per cent (in FY14) from 18 last year (FY13).”
In fact, the credit card base has crossed the 20-million mark by the end of the last financial year, the Worldline report noted.
India signs global treaty to help the visually impaired
New Delhi: India has signed the “Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled (MVT)”.
The Treaty was adopted in June last year. India’s ratification of the Treaty will facilitate import of accessible format copies from the member states by Indian educational institutions, libraries and institutions working for the benefit of visually impaired persons, the Ministry of External Affairs said on Thursday.
The Treaty will also facilitate translation of imported accessible format copies and export of accessible format copies in Indian languages. The Indian Copyright (Amendment) Act, 2012 is in harmony with the Marrakesh Treaty.
The Treaty was adopted in June last year. India’s ratification of the Treaty will facilitate import of accessible format copies from the member states by Indian educational institutions, libraries and institutions working for the benefit of visually impaired persons, the Ministry of External Affairs said on Thursday.
The Treaty will also facilitate translation of imported accessible format copies and export of accessible format copies in Indian languages. The Indian Copyright (Amendment) Act, 2012 is in harmony with the Marrakesh Treaty.
E-tailers drive ad campaigns beyond digital
New Delhi: After making a debut as a sponsor for the Indian Premier League (IPL) twenty-twenty cricket tournament, Amazon, world’s biggest online retailer, is expected to launch a television advertisement campaign soon. Other e-commerce companies, such as Quikr, Flipkart, Snapdeal and Jabong, are also going all out on 360-degree advertising, going beyond digital marketing.
Category-specific companies such as furniture e-tailer FabFurnish also plan to run television ad campaigns. Experts say rarely do niche brands in such categories in the physical segment adopt such branding strategies.
Disadvantage digital
“We have already launched a new television campaign. This is because digital advertising is silent advertising; it can’t do brand story-telling for us. Also, television brings credibility to the brand,” says Piyush Bansal, founder and chief executive, Lenskart (which sells spectacles).
As e-commerce companies increasingly position themselves in the mainstream, part of their expansion strategy is to use mass media platforms such as television and radio to establish themselves, not just in e-commerce, but to a host of offline consumers as well, analysts say. The aim to capture a larger share of the market has raised the advertising budgets of most e-commerce companies. On an average, the advertising budgets of these companies are pegged at 20 per cent of their revenues.
Recently, Manish Kalra, head (integrated marketing), Amazon India, told Business Standard the company was involved in the IPL to connect with the Indian audience.
FabFurnish, which has a mixed format (it also has offline stores), uses mass media channels to reach untapped consumers or first-time buyers, primarily targeting the urban middle class. “During and after a few months of the television campaign, our traffic increased two and half times. We can afford to run such campaigns because furniture is a high-margin category,” said Vikram Chopra, chief executive and co-founder of the company.
Fashion e-tailer Jabong insists on an optimal mix. Apart from TV campaigns, the company has also sponsored leading fashion events, such as the Lakme Fashion Week in Mumbai. Rival Myntra was a sponsor for the Wills Lifestyle Fashion Week here.
Experts say television addresses 40-60 per cent of those who do not use internet. It is believed the two channels aid each other in furthering the cause of a brand to consumers.
For some, mass media helps address a wider audience. “It’s difficult to define our target audience, as we are out there to appeal to everyone who has a business or wants to sell something. Ours is more about building a brand and credibility,” says Pranay Chulet, founder and chief-executive of Quikr.
Category-specific companies such as furniture e-tailer FabFurnish also plan to run television ad campaigns. Experts say rarely do niche brands in such categories in the physical segment adopt such branding strategies.
Disadvantage digital
“We have already launched a new television campaign. This is because digital advertising is silent advertising; it can’t do brand story-telling for us. Also, television brings credibility to the brand,” says Piyush Bansal, founder and chief executive, Lenskart (which sells spectacles).
As e-commerce companies increasingly position themselves in the mainstream, part of their expansion strategy is to use mass media platforms such as television and radio to establish themselves, not just in e-commerce, but to a host of offline consumers as well, analysts say. The aim to capture a larger share of the market has raised the advertising budgets of most e-commerce companies. On an average, the advertising budgets of these companies are pegged at 20 per cent of their revenues.
Recently, Manish Kalra, head (integrated marketing), Amazon India, told Business Standard the company was involved in the IPL to connect with the Indian audience.
FabFurnish, which has a mixed format (it also has offline stores), uses mass media channels to reach untapped consumers or first-time buyers, primarily targeting the urban middle class. “During and after a few months of the television campaign, our traffic increased two and half times. We can afford to run such campaigns because furniture is a high-margin category,” said Vikram Chopra, chief executive and co-founder of the company.
Fashion e-tailer Jabong insists on an optimal mix. Apart from TV campaigns, the company has also sponsored leading fashion events, such as the Lakme Fashion Week in Mumbai. Rival Myntra was a sponsor for the Wills Lifestyle Fashion Week here.
Experts say television addresses 40-60 per cent of those who do not use internet. It is believed the two channels aid each other in furthering the cause of a brand to consumers.
For some, mass media helps address a wider audience. “It’s difficult to define our target audience, as we are out there to appeal to everyone who has a business or wants to sell something. Ours is more about building a brand and credibility,” says Pranay Chulet, founder and chief-executive of Quikr.
TVS Motor lines up Rs 250-crore capex, new launches
Chennai: TVS Motor Company has said it has lined up a capital expenditure (capex) of around Rs 250 crore and is set to launch new products, including an economy-category motorcycle and a scooter, in the next three months. The company is upbeat about FY15 and expects to improve its market share in the two-wheeler industry from 12.5 per cent to 14-14.5 per cent.
"I am happy about the fourth-quarter results and the cash flow was good. The company has generated around Rs 270 crore. Jupiter vehicle is doing very well. I am positive about 2014-15 and want to gain market share," K N Radhakrishnan, president and chief executive of TVS Motor, said while addressing analysts after releasing the fourth-quarter results.
He added that the two-wheeler industry in India would report a moderate growth of 8-10 per cent in 2014-15. According to him, the country's economy will do well in the second half, and, if there is reasonable monsoon, the industry can grow better. Considering these factors, the company hopes for a "great year in 2015-16".
BIG PLANS
The company is betting big on the TVS Jupiter and TVS Wego
About 100,000 units of TVS Jupiter have been sold since its launch in September 2013
In the three-wheeler industry, the firm hopes to increase the market share to 20-25 per cent
The company's overall capacity is 2.8 million- 3 million two-wheelers
FY15 is going to be a busy year for the company as it has lined up several launches. The new launches - Star City and Scooty - are not variants, but entirely new vehicles. These will be launched within the next three months, followed by an executive motorcycle and a bigger motorcycle by the end of the year. The Wego refreshment will be launched this month, said Radhakrishnan.
S G Murali, chief financial officer at TVS Motor, said: "The new launches will increase the top line of the company, which in turn will increase the margins."
The company is betting big on the TVS Jupiter and TVS Wego. It may be noted that the company sold about 100,000 units of TVS Jupiter since its launch in September 2013. In the three-wheeler industry, the firm hopes to increase the market share to 20-25 per cent.
"I am happy about the fourth-quarter results and the cash flow was good. The company has generated around Rs 270 crore. Jupiter vehicle is doing very well. I am positive about 2014-15 and want to gain market share," K N Radhakrishnan, president and chief executive of TVS Motor, said while addressing analysts after releasing the fourth-quarter results.
He added that the two-wheeler industry in India would report a moderate growth of 8-10 per cent in 2014-15. According to him, the country's economy will do well in the second half, and, if there is reasonable monsoon, the industry can grow better. Considering these factors, the company hopes for a "great year in 2015-16".
BIG PLANS
The company is betting big on the TVS Jupiter and TVS Wego
About 100,000 units of TVS Jupiter have been sold since its launch in September 2013
In the three-wheeler industry, the firm hopes to increase the market share to 20-25 per cent
The company's overall capacity is 2.8 million- 3 million two-wheelers
FY15 is going to be a busy year for the company as it has lined up several launches. The new launches - Star City and Scooty - are not variants, but entirely new vehicles. These will be launched within the next three months, followed by an executive motorcycle and a bigger motorcycle by the end of the year. The Wego refreshment will be launched this month, said Radhakrishnan.
S G Murali, chief financial officer at TVS Motor, said: "The new launches will increase the top line of the company, which in turn will increase the margins."
The company is betting big on the TVS Jupiter and TVS Wego. It may be noted that the company sold about 100,000 units of TVS Jupiter since its launch in September 2013. In the three-wheeler industry, the firm hopes to increase the market share to 20-25 per cent.
Domestic demand, exports spice up masala market
Mumbai: Spices from India are going places, with exports on course to top $3 billion by 2016-17.
Led by creative marketing strategies to ensure high brand recall, spice majors are competing with their domestic counterparts through continuous innovations in packaging, strength in quality and a strong distribution network.
Several local companies have also made their presence felt in the international market, by following a dual branding strategy to cater to the Indian diaspora in the global market.
Indian brands bought out by international spice majors, such as MTR, have also been straddling both strata.
Sanjay Sharma, CEO, MTR Foods, told Business Line , “MTR leads the spices market in Karnataka and AP. We also export these products across many countries, and our popular products are sambar powder, rasam powder and puliogare, amongst others.”
Huge market
Incidentally, Oman is a larges buyer of Puliogare powder, followed by the UAE and South Africa. South Africa turned out to be the largest buyer of puliogare powder during April, with Bangalore accounting for 50.1 per cent of exports, according to available shipment data.
Within the country, the company has been competing with big time players such as MDH, Badshah and Eastern Masala, and has also gone in for diversification.
The Indian spices market is pegged at Rs. 40,000 crore annually, of which the branded segment makes up 15 per cent.
According to Technopak, the branded space is dominated by national brands such as Catch, Everest, Ramdev, among others.
Readymade mixes
“All these brands have focused on product packaging, product customisation to local taste and positioning around quality. They have also ensured innovative marketing strategies for high brand recall,” said Reetesh Shukla, Associate Director, Food Services, Technopak.
Increasing urbanisation paired with a rise in number of working women has reduced the time of cooking.
Consequently, home-makers have started demanding readymade spice mixes such as sabzi masala, garam masala, chicken masala etc.
This has augmented industry revenues, officials said, as both spice mixes and branded spices entail greater profit margins, as compared to straight and unbranded spices.
An official from Everest Spices, which exports 10 per cent of its products to the US, West Asia, Singapore, Australia, New Zealand and East Africa, said: “The total market size of branded spices is estimated at Rs. 6,600 crore, and is growing at 14 per cent annually. While the US is the main importer of Indian spices, contributing 16 per cent of the total export value, it is followed by China at nine per cent. The UAE and Malaysia are at six per cent, while Saudi Arabia, Germany, Sri Lanka, Singapore and the UK at four per cent each.”
Led by creative marketing strategies to ensure high brand recall, spice majors are competing with their domestic counterparts through continuous innovations in packaging, strength in quality and a strong distribution network.
Several local companies have also made their presence felt in the international market, by following a dual branding strategy to cater to the Indian diaspora in the global market.
Indian brands bought out by international spice majors, such as MTR, have also been straddling both strata.
Sanjay Sharma, CEO, MTR Foods, told Business Line , “MTR leads the spices market in Karnataka and AP. We also export these products across many countries, and our popular products are sambar powder, rasam powder and puliogare, amongst others.”
Huge market
Incidentally, Oman is a larges buyer of Puliogare powder, followed by the UAE and South Africa. South Africa turned out to be the largest buyer of puliogare powder during April, with Bangalore accounting for 50.1 per cent of exports, according to available shipment data.
Within the country, the company has been competing with big time players such as MDH, Badshah and Eastern Masala, and has also gone in for diversification.
The Indian spices market is pegged at Rs. 40,000 crore annually, of which the branded segment makes up 15 per cent.
According to Technopak, the branded space is dominated by national brands such as Catch, Everest, Ramdev, among others.
Readymade mixes
“All these brands have focused on product packaging, product customisation to local taste and positioning around quality. They have also ensured innovative marketing strategies for high brand recall,” said Reetesh Shukla, Associate Director, Food Services, Technopak.
Increasing urbanisation paired with a rise in number of working women has reduced the time of cooking.
Consequently, home-makers have started demanding readymade spice mixes such as sabzi masala, garam masala, chicken masala etc.
This has augmented industry revenues, officials said, as both spice mixes and branded spices entail greater profit margins, as compared to straight and unbranded spices.
An official from Everest Spices, which exports 10 per cent of its products to the US, West Asia, Singapore, Australia, New Zealand and East Africa, said: “The total market size of branded spices is estimated at Rs. 6,600 crore, and is growing at 14 per cent annually. While the US is the main importer of Indian spices, contributing 16 per cent of the total export value, it is followed by China at nine per cent. The UAE and Malaysia are at six per cent, while Saudi Arabia, Germany, Sri Lanka, Singapore and the UK at four per cent each.”
Telecom Dept to set up Rs. 1,000-cr app development centre
New Delhi: The Department of Telecom is planning to set up an application development centre with an outlay of Rs. 1,000 crore over a three-year period.
The project will be financed by the Universal Services Obligation fund. The move is aimed at generating income for the USO fund in addition to the revenue share received from telecom operators.
According to the scheme being worked out financing will be limited to Rs. 2 crore per proposer and a single entity will not be given support for more than two projects. Financing will be considered only if the bank appraising the project agrees to finance the requirements initially up to 9 times the contribution of the proposer.
USO fund will reimburse up to four times the project cost. The payment will be made as equity participation.
The proposing entity will have the option to buy back 75 per cent of the equity anytime up to 5 years from disbursement at double the cost.
There will be a two-year moratorium on repayment and interest payment.
Payment of interest during the moratorium period will be borne by the USO fund.
USO fund plans to earmark an outlay of Rs. 50 crore, Rs. 200 core and Rs. 1,000 crore over the first 3 years.
To be called Application Development Infrastructure (ADI), the centre will provide testing facilities, support for launch and commercial run and storage capacities to selected entrepreneurs. The ADI will be connected with all telecom service providers and a payment gateway that will enable application developers to get access to customers across the country from day one of the launch.
The project will be financed by the Universal Services Obligation fund. The move is aimed at generating income for the USO fund in addition to the revenue share received from telecom operators.
According to the scheme being worked out financing will be limited to Rs. 2 crore per proposer and a single entity will not be given support for more than two projects. Financing will be considered only if the bank appraising the project agrees to finance the requirements initially up to 9 times the contribution of the proposer.
USO fund will reimburse up to four times the project cost. The payment will be made as equity participation.
The proposing entity will have the option to buy back 75 per cent of the equity anytime up to 5 years from disbursement at double the cost.
There will be a two-year moratorium on repayment and interest payment.
Payment of interest during the moratorium period will be borne by the USO fund.
USO fund plans to earmark an outlay of Rs. 50 crore, Rs. 200 core and Rs. 1,000 crore over the first 3 years.
To be called Application Development Infrastructure (ADI), the centre will provide testing facilities, support for launch and commercial run and storage capacities to selected entrepreneurs. The ADI will be connected with all telecom service providers and a payment gateway that will enable application developers to get access to customers across the country from day one of the launch.
Government plans special purpose vehicle for 'Brand India Pharma' promotion
Hyderabad: The government will create a special entity in partnership with private firms for a 'Brand India Pharma' campaign aimed at refurbishing drug exporters' image after recent setbacks overseas. The special purpose vehicle will come into being within the next few weeks, commerce secretary Rajeev Kher told ET.
The government is also considering stern action against copycat medicine producers who make substandard and spurious drugs, he said.
At $14.84 billion (Rs 90,000 crore), the growth rate of India's pharmaceutical exports slowed sharply in 2013-14 to just 1.2%. The near stagnation in growth is because of import alerts and bans by US regulators, a slowdown in the European Union and increased competition. India is the third-largest exporter of drugs to the United States by volume.
Kher said the US Food and Drug Administration import alerts, intensive audits and scrutiny of facilities of India pharmaceutical companies were a "matter of concern", and that "the solution lies in cent percent compliance".
Kher said the 'Brand India Pharma' campaign will attempt to build on the country's three key strengths as a major generic drug maker — affordability, quality and accessibility. The government and industry will pool in resources for the campaign. "We are now working towards augmenting the resources and enhancing the activities. The government has done its bit and now it is for the industry to come and contribute."
Utkarsh Palnitkar, partner and national head of life sciences practice at KPMG India, was of the view that the campaign is one part of rehabilitating the damaged image of the industry. "It will definitely help the industry, this campaign. However, branding alone is not enough. The Indian pharmaceutical industry should live up to the standards it is projecting to the world and what the whole world is expecting from it."
Referring to the visit of the USFDA commissioner to India about two months ago, Kher said Indian government authorities held extensive discussions with the representatives of US regulators on concerns over quality. "We found ways of the keeping the interaction regular and how to help our industry in responding to the American market's demands on quality."
PV Appaji, director general of Pharmaceuticals Export Promotion Council, said chief executives of drug companies met Kher recently to discuss the issue of the industry's image. The proposed SPV will be similar to the India Brand Equity Foundation, a trust established by the commerce department. Pharmexcil, he said, will play a "key role" in establishing and managing the proposed trust.
Commerce secretary Kher said the country is unlikely to achieve the guidance of $25 billion of pharma exports during 2014-15 because of several setbacks, including the global slowdown and inability to crack the Japanese and Chinese markets. "We will have to make very important policy decisions and very significant efforts by the industry to reach a good growth figure in pharmaceuticals. We have closed the previous year somewhere at around $15 billion. So surely, I don't expect that we will do $10 billion more in the year 2014-15."
The government is also considering stern action against copycat medicine producers who make substandard and spurious drugs, he said.
At $14.84 billion (Rs 90,000 crore), the growth rate of India's pharmaceutical exports slowed sharply in 2013-14 to just 1.2%. The near stagnation in growth is because of import alerts and bans by US regulators, a slowdown in the European Union and increased competition. India is the third-largest exporter of drugs to the United States by volume.
Kher said the US Food and Drug Administration import alerts, intensive audits and scrutiny of facilities of India pharmaceutical companies were a "matter of concern", and that "the solution lies in cent percent compliance".
Kher said the 'Brand India Pharma' campaign will attempt to build on the country's three key strengths as a major generic drug maker — affordability, quality and accessibility. The government and industry will pool in resources for the campaign. "We are now working towards augmenting the resources and enhancing the activities. The government has done its bit and now it is for the industry to come and contribute."
Utkarsh Palnitkar, partner and national head of life sciences practice at KPMG India, was of the view that the campaign is one part of rehabilitating the damaged image of the industry. "It will definitely help the industry, this campaign. However, branding alone is not enough. The Indian pharmaceutical industry should live up to the standards it is projecting to the world and what the whole world is expecting from it."
Referring to the visit of the USFDA commissioner to India about two months ago, Kher said Indian government authorities held extensive discussions with the representatives of US regulators on concerns over quality. "We found ways of the keeping the interaction regular and how to help our industry in responding to the American market's demands on quality."
PV Appaji, director general of Pharmaceuticals Export Promotion Council, said chief executives of drug companies met Kher recently to discuss the issue of the industry's image. The proposed SPV will be similar to the India Brand Equity Foundation, a trust established by the commerce department. Pharmexcil, he said, will play a "key role" in establishing and managing the proposed trust.
Commerce secretary Kher said the country is unlikely to achieve the guidance of $25 billion of pharma exports during 2014-15 because of several setbacks, including the global slowdown and inability to crack the Japanese and Chinese markets. "We will have to make very important policy decisions and very significant efforts by the industry to reach a good growth figure in pharmaceuticals. We have closed the previous year somewhere at around $15 billion. So surely, I don't expect that we will do $10 billion more in the year 2014-15."
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