Mumbai: In what comes as relief for the private equity industry, the foreign direct investment (FDI) policy unveiled by the Department of Industrial Policy and Promotion (DIPP) on Thursday brought out a clear picture on convertible instrument prices.
DIPP said companies would now have the option of prescribing a conversion formula, instead of specifying the price of convertible instruments. Last year’s policy, which said the conversion ratio should be specified upfront, led to a delay in the flow of private equity deals, in which most of the prices of convertible instruments were decided during conversion, not upfront.
Convertible instruments offer an investor the choice of whether or not to convert on a specified future date. The instruments include compulsory convertible preference shares (CCPS) and compulsory convertible debentures (CCDs).
According to the DIPP circular, “Instead of specifying the price of convertible instruments upfront, companies will now have the option of prescribing a conversion formula, subject to the Foreign Exchange Management Act and Securities and Exchange Board of India guidelines on pricing. This would help the recipient companies obtain better valuations, based on their performance.”
In January, Business Standard had reported that private equity/venture capital deals routed through CCPS or CCDs were delayed due to the ambiguity over the new policy introduced last year.
Mayank Rastogi, partner (private equity), Ernst & Young, said, “In a scenario in which the instrument is issued with a determined ‘conversion formula’, the actual conversion price should not be lower than the price worked out according to the relevant guidelines at the time of ‘issuance’ of the instrument.” As a result, a rise in performance would enable Indian companies to issue shares at a higher conversion price, thus benefiting the company and the promoters. On the other hand, if there is a decrease in the valuation, foreign investors will not benefit as much, since the conversion price will be locked on the minimum price determined, based on the discounted cash flow (DCF) at the time of issuing the convertible instrument, Rastogi said.
According to the DIPP and the commerce ministry circular dated March 31, 2010, the pricing of all convertible instruments issued to offshore investors must be carried out at the time of issuance, without leaving any room for adjustment at the time of conversion. This would be applicable even if the pricing complies with the applicable pricing guidelines.
Roshan Thomas, partner, Lexygen, said, “There was an ambiguity regarding the requirement of determining an ‘upfront price’ for convertible instruments and whether it meant a numerical conversion price had to be agreed upon, or whether a conversion formula would suffice. As convertible securities are probably the most efficient method to affect valuation adjustments, this would be a welcome move for the investment community...Thursday, DIPP has clarified that the parties are free to either agree on a numerical price or a conversion formula, as long as the price at which the conversion takes place is not less than the floor price prescribed by RBI’s pricing guidelines,” he added.
“While there have been a few deals over the course of last year that involved convertible securities, the risk that regulators saw in numerical conversion prices being fixed upfront, had led to waning interest in convertible securities. This clarification will now help provide valuation adjustments in an uncomplicated, logical, transparent, and enforceable manner, ” Thomas said.
Success in my Habit
Thursday, April 7, 2011
LinkedIn and Facebook: Personal Vs. Professional in the Identity Wars
LinkedIn has launched a series of website plugins that effectively duplicate the features of the 'open graph' platform Facebook launched last year -- a move that throws the business-oriented network into what looks like head-to-head competition with Facebook for the clicks and identities of web users
Microsoft, Toyota team up on digital auto network
Microsoft Corp and Toyota Motor Corp unveiled a plan on Wednesday to work together on bringing Internet-connected services to Toyota's cars across the world.
The world's biggest software company and the biggest automaker said they were investing about $12 million (1 billion yen) in Toyota Media Service Co, a Toyota unit that handles its digital offerings for customers.
Toyota is planning to set up a network based on Microsoft's Azure 'cloud computing' platform by 2015, which would allow customers across the world access to Toyota's digital services, such as GPS, multimedia, and managing power on electric and hybrid vehicles.
The world's biggest software company and the biggest automaker said they were investing about $12 million (1 billion yen) in Toyota Media Service Co, a Toyota unit that handles its digital offerings for customers.
Toyota is planning to set up a network based on Microsoft's Azure 'cloud computing' platform by 2015, which would allow customers across the world access to Toyota's digital services, such as GPS, multimedia, and managing power on electric and hybrid vehicles.
Apple bucks trend and is doing well in China
Nice piece from San Jose Mercury News:
Not far from the massive glass cylinder and spiral staircase that lead to Apple’s always crowded underground store in the heart of Shanghai’s gleaming financial center of high rises and high-end stores is a shuttered Best Buy. Home Depot has retreated as well, closing a number of outlets as its successful American strategy sputtered in this emerging economic giant. Mattel recently abandoned its flagship Barbie store in this metropolis of 19 million people.
Apple is bucking that trend.
Not far from the massive glass cylinder and spiral staircase that lead to Apple’s always crowded underground store in the heart of Shanghai’s gleaming financial center of high rises and high-end stores is a shuttered Best Buy. Home Depot has retreated as well, closing a number of outlets as its successful American strategy sputtered in this emerging economic giant. Mattel recently abandoned its flagship Barbie store in this metropolis of 19 million people.
Apple is bucking that trend.
Genpact to acquire Headstrong for $550m
Outsourcing giant Genpact said it will acquire consulting and IT services firm Headstrong Corporation for a cash consideration of $ 550 million.The transaction is being funded by a combination of existing cash and acquisition financing, and is expected to close by May 31, 2011, subject to customary regulatory and other conditions, Genpact said in a statement.
Genpact expects the transaction to be accretive to earnings per share on a GAAP basis in 2011.
'Headstrong is a complementary high-growth business, built by talented leaders, that is an excellent fit strategically, financially, operationally and culturally. With this acquisition, we are gaining critical domain and technology expertise in the complex, but highly attractive, capital markets industry vertical,' Genpact President and CEO Pramod Bhasin said.
This expertise - combined with capabilities in business process management (BPM) and Smart Decision Services that encompass analytics and reengineering -- will create a uniquely powerful value proposition for clients, he added.
Headstrong has domain expertise in several segments of the capital markets vertical like asset management, derivatives, wealth management, prime brokerage, reference data, compliance and mortgages.
With a strong mix of onsite and offshore expertise, Headstrong counts nine of the world's top 10 investment banks and three of the top five asset managers as clients.
Genpact expects the transaction to be accretive to earnings per share on a GAAP basis in 2011.
'Headstrong is a complementary high-growth business, built by talented leaders, that is an excellent fit strategically, financially, operationally and culturally. With this acquisition, we are gaining critical domain and technology expertise in the complex, but highly attractive, capital markets industry vertical,' Genpact President and CEO Pramod Bhasin said.
This expertise - combined with capabilities in business process management (BPM) and Smart Decision Services that encompass analytics and reengineering -- will create a uniquely powerful value proposition for clients, he added.
Headstrong has domain expertise in several segments of the capital markets vertical like asset management, derivatives, wealth management, prime brokerage, reference data, compliance and mortgages.
With a strong mix of onsite and offshore expertise, Headstrong counts nine of the world's top 10 investment banks and three of the top five asset managers as clients.
Wipro restructures to take on TCS, Infosys, Cognizant
At least forty senior and middle-level managers at Wipro - the country's third-biggest tech firm undergoing a rejig under the new CEO, TK Kurien - have quit over the past few weeks, as the company attempts to create a leaner organisation focused on fewer strategic bets.
People familiar with these exits told ET that those leaving Wipro include at least half a dozen senior officials across business units, several general managers apart from few dozen junior managers.
Having scrapped the joint CEO model, Wipro plans to do away with any redundancies that existed because of different teams reporting to the two CEOs. Moreover, closer alignment of business units with sales and delivery teams means several overlaps in managers involved with these functions.
'It was always coming - the good thing is that there are enough opportunities this year,' said a person who quit Wipro a few weeks ago. He requested anonymity.
Wipro's attempts to create a more focused organisation better equipped to fend off rivals such as Cognizant is expected to help the company regain lost ground and make substantial progress in markets like healthcare that offer multi-billion business opportunities.
In a year when new business is not hard to come by, companies such as Wipro are realigning their strategic bets. They are putting the best talent to execute their plans
People familiar with these exits told ET that those leaving Wipro include at least half a dozen senior officials across business units, several general managers apart from few dozen junior managers.
Having scrapped the joint CEO model, Wipro plans to do away with any redundancies that existed because of different teams reporting to the two CEOs. Moreover, closer alignment of business units with sales and delivery teams means several overlaps in managers involved with these functions.
'It was always coming - the good thing is that there are enough opportunities this year,' said a person who quit Wipro a few weeks ago. He requested anonymity.
Wipro's attempts to create a more focused organisation better equipped to fend off rivals such as Cognizant is expected to help the company regain lost ground and make substantial progress in markets like healthcare that offer multi-billion business opportunities.
In a year when new business is not hard to come by, companies such as Wipro are realigning their strategic bets. They are putting the best talent to execute their plans
Google to finance $100 million worth of original programs for YouTube
Google plans to create 20 special channels on its YouTube site, and will spend $100 million to create original programming to populate them, according to sources who talked with the Wall Street Journal.
Like Netflix announced last month, Google wants to create its own streaming video programs, however, according to the WSJ sources, the company will create low-cost programming designed specifically for the web and YouTube, and support the shows with advertising. The sources said this will be a “major overhaul” to YouTube, which already has a lucrative advertising system in place.
It was unclear when Google would begin spending the money to create the new programs, but the source said that Google has visited top Hollywood talent agencies in search of ideas, and will probably end up making deals with production companies and directors to produce the content.
Good move, Google. The direction broadcast television is taking is beginning to look obvious, where web-connected screens are finding their way into the living room and home theater in ever-increasing numbers. In addition to a plethora of set top boxes, many new TV sets are equipped with Internet connections, and Google’s own Google TV hardware is starting to make sense in light of this latest initiative.
With original content produced specifically for the web inserted into the battle for viewers, it’s going to be more difficult for cable TV, broadcast and satellite TV to dominate television broadcasting as they still do. Now, instead of 500 channels and nothing on, there will be 5 million channels, and if Google has anything to do with it, there will be something on. It might be cats playing the piano — now dressed up in tuxedos because of their expanded budget — but it will be something. And that something is just the beginning
Like Netflix announced last month, Google wants to create its own streaming video programs, however, according to the WSJ sources, the company will create low-cost programming designed specifically for the web and YouTube, and support the shows with advertising. The sources said this will be a “major overhaul” to YouTube, which already has a lucrative advertising system in place.
It was unclear when Google would begin spending the money to create the new programs, but the source said that Google has visited top Hollywood talent agencies in search of ideas, and will probably end up making deals with production companies and directors to produce the content.
Good move, Google. The direction broadcast television is taking is beginning to look obvious, where web-connected screens are finding their way into the living room and home theater in ever-increasing numbers. In addition to a plethora of set top boxes, many new TV sets are equipped with Internet connections, and Google’s own Google TV hardware is starting to make sense in light of this latest initiative.
With original content produced specifically for the web inserted into the battle for viewers, it’s going to be more difficult for cable TV, broadcast and satellite TV to dominate television broadcasting as they still do. Now, instead of 500 channels and nothing on, there will be 5 million channels, and if Google has anything to do with it, there will be something on. It might be cats playing the piano — now dressed up in tuxedos because of their expanded budget — but it will be something. And that something is just the beginning
HCL Info bags Indian Railways broadband project
HCL Infosystems Ltd said it won a contract to provide broadband internet connectivity to Indian Railways through state-run RailTel Corp of India Ltd , but did not give the value.
The project will provide internet service to various railway offices and residences at 108 locations across the country, supporting about 30,000 users, HCL Info said in a statement.
HCL shares were up 3.5 per cent at 110.45 rupees on a weak Mumbai market.
The project will provide internet service to various railway offices and residences at 108 locations across the country, supporting about 30,000 users, HCL Info said in a statement.
HCL shares were up 3.5 per cent at 110.45 rupees on a weak Mumbai market.
BlackBerry phones hit by ZeuS Trojan virus
you thought your phone is virus-proof, think again. There is a virus on the block that has started affecting all BlackBerry devices. And the worse part is that a user will never know whether her phone has been affected or not.
Amit Nath, country manager, India and SAARC at Trend Micro, claims researchers at the firm were alerted to the discovery of a ZeuS Trojanspecifically targeting BlackBerry users. It aims to monitor users' private information especially when they conduct mobile banking, says Nath.
'It does not display any graphical user interface that can prompt users about the infection. Instead, it removes itself from the list of applications. The virus can view, delete and forward text messages, block calls, change the administrator on the device and block phone numbers. It allows the hacker to change the telephone number the device sends all the data to in the event that it gets shut down,' he said.
'Although there is no definite data on how many phones have been hit, we are sure it is spreading fast even in India. However, as users mostly don't get to know they have been infected, it's difficult to fix a number. We have detected instances of the virus on our clients' networks. This virus has the capability of spreading on its own and infecting phones that do not have antivirus software installed,' Nath points out.
Jagannath Patnaik, director, channel sales south Asia at Kaspersky Lab, says, 'There has been a new wave of malware attack that has started affecting BlackBerry and it has originated fromPoland. The aim is to extract banking passwords.'
An email sent to Research In Motion, manufacturers of BlackBerry phones, went unanswered despite repeated reminders. Trend Micro Researchers, the ZeuS Trojan is capable of blocking calls, registering a new administrator, adding and removing sender, switch the phone on or off remotely and, most important, hiding text messages and sending it to the hacker without the user's knowledge.
Abhijit Limaye, director, development at Symantec, said, 'BlackBerry has a reputation as being a secure platform. However, it is still susceptible to malware threats and has issued advice documentation for customers to minimise risks. They have also released software applications to help customers protect their data.'
Vinoo Thomas, technical product manager at McAfee Labs, said, 'While Trojan virus can replicate and spread on its own, there are a few spyware that needs to be loaded manually. One can buy the spyware programs like MobiSpy, MobiStelath and FlexiSpy for between $40 and $80
Amit Nath, country manager, India and SAARC at Trend Micro, claims researchers at the firm were alerted to the discovery of a ZeuS Trojanspecifically targeting BlackBerry users. It aims to monitor users' private information especially when they conduct mobile banking, says Nath.
'It does not display any graphical user interface that can prompt users about the infection. Instead, it removes itself from the list of applications. The virus can view, delete and forward text messages, block calls, change the administrator on the device and block phone numbers. It allows the hacker to change the telephone number the device sends all the data to in the event that it gets shut down,' he said.
'Although there is no definite data on how many phones have been hit, we are sure it is spreading fast even in India. However, as users mostly don't get to know they have been infected, it's difficult to fix a number. We have detected instances of the virus on our clients' networks. This virus has the capability of spreading on its own and infecting phones that do not have antivirus software installed,' Nath points out.
Jagannath Patnaik, director, channel sales south Asia at Kaspersky Lab, says, 'There has been a new wave of malware attack that has started affecting BlackBerry and it has originated fromPoland. The aim is to extract banking passwords.'
An email sent to Research In Motion, manufacturers of BlackBerry phones, went unanswered despite repeated reminders. Trend Micro Researchers, the ZeuS Trojan is capable of blocking calls, registering a new administrator, adding and removing sender, switch the phone on or off remotely and, most important, hiding text messages and sending it to the hacker without the user's knowledge.
Abhijit Limaye, director, development at Symantec, said, 'BlackBerry has a reputation as being a secure platform. However, it is still susceptible to malware threats and has issued advice documentation for customers to minimise risks. They have also released software applications to help customers protect their data.'
Vinoo Thomas, technical product manager at McAfee Labs, said, 'While Trojan virus can replicate and spread on its own, there are a few spyware that needs to be loaded manually. One can buy the spyware programs like MobiSpy, MobiStelath and FlexiSpy for between $40 and $80
Thursday, March 17, 2011
Kingfisher, Paramount in default of payment to AAI
NEW DELHI: Kingfisher and Paramount are defaulting airlines in payment to the Airports Authority of India for services including landing charges, parking and housing charges and licence fees for space/land allotments.
"The dues outstanding by these two airlines as on February 28, 2011, was Rs 255 crore on Kingfisher Airlines and Rs 4.88 crore on Paramount Airways," Civil Aviation Minister Vayalar Ravi said in the Lok Sabha during the Question Hour.
The charges/fee levied by AAI on the private airlines annually are landing charges, parking/housing charges, route navigation facility charges, terminal navigation landing charges and licence fees for space/land allotment.
The minister said that only Kingfisher Airlines and Paramount Airways are in default.
The AAI has taken action against these entities and they have been asked to clear the over dues in a time bound manner.
Penal interest is being charges on account of delay in the settlement of bills, Ravi said adding that in case of continued default, AAI proposes to encash the security deposit and put the airlines in "cash and carry" mode
"The dues outstanding by these two airlines as on February 28, 2011, was Rs 255 crore on Kingfisher Airlines and Rs 4.88 crore on Paramount Airways," Civil Aviation Minister Vayalar Ravi said in the Lok Sabha during the Question Hour.
The charges/fee levied by AAI on the private airlines annually are landing charges, parking/housing charges, route navigation facility charges, terminal navigation landing charges and licence fees for space/land allotment.
The minister said that only Kingfisher Airlines and Paramount Airways are in default.
The AAI has taken action against these entities and they have been asked to clear the over dues in a time bound manner.
Penal interest is being charges on account of delay in the settlement of bills, Ravi said adding that in case of continued default, AAI proposes to encash the security deposit and put the airlines in "cash and carry" mode
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