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Ikya’s Issac buys HR co Magna for Rs100 crore

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

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

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

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

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

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

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

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

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

Ericsson bags contract for rolling out 3G in six circles

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

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

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

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

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

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

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

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

Videocon plans to split businesses

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

EPC with partner

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

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

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

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

India-Indonesia trade to touch $20 bn

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

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

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

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

TN signs pact with Hiroshima

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

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

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

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

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

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

Kemrock forms JV with DSM

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

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

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

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

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