Hyderabad: New Delhi-based agro-chemical company Crystal Group, which acquired Rohini Seeds last week and raised private equity of Rs 150 crore, is planning to expand its operations to Africa and the Gulf.
The company, with a turnover of Rs 800 crore, is in the process of establishing bases in Uganda, Tanzania, Ghana and Nigeria.
“We will first go there with our flagship agro chemicals. After achieving sustainable figures, we will start seed business there too,” Mr Ankur Aggarwal, Managing Director of Crystal Group, toldBusiness Line.
“At present, exports contribute Rs 5 crore to the turnover. We would like this to grow by expanding our operations in Africa and the Gulf region,” he said.
funding
The company raised Rs 150 crore from the PE firm Everstone Capital in December. “We have the flexibility to deploy the funds for working capital needs, investments or acquisitions,” he said.
For the acquisition of the Hyderabad-based seed firm, it pooled in resources internally.
He refused to divulge cost of acquisition.
Asserting that there are no plans to raise more funds, Mr Aggarwal said the company is not looking to go in for a public issue.
“But it certainly is on our agenda. We will go for it in a 4-5 year timeframe or even before,” he said.
Consolidation
He said that the Rs 8,000-crore Indian seed industry is poised for growth.
It is expected to grow to Rs 13,030 crore in the next five years.
“There is huge scope for consolidation in the Indian seed industry. We will see more acquisitions in the next five years,” he said.
Success in my Habit
Wednesday, January 4, 2012
JP Morgan invests Rs 100-cr in Narain Karthikeyan's green power company
Chennai: JP Morgan Asset Management has recently invested Rs 100 crore in Leap Green Energy Pvt Ltd, a company promoted by India's ace motor racer Narain Karthikeyan's family.
Leap Green owns installed capacity of 100 MW of wind assets, which is to be doubled in the current year.
According to Venture Intelligence PE Deal database, JP Morgan first invested Rs 107 crore. The investment was made into both equity and convertible debt instruments, which, when converted would give JP Morgan a majority stake. Therefore, JP Morgan has invested over Rs 200 crore in Leap Green, which describes itself as a green Independent Power Producer.
Leap Green's Web site says that the company its “portfolio includes wind, solar and hydel projects” which are at various stages of completion.
JP Morgan's investment in Leap Green underscores the interest that private equity funds are showing in renewable energy sector. There have been quite a few deals in the last six months, the biggest of them being Rs 1,000 crore in ReNew Wind Power, founded by Mr Sumanth Sinha, a former executive of Suzlon.
IDFC-incubated Green Infra, which has operating assets of 164 MW, received Rs 90 crore from IDFC PE. Bharat Light & Power, founded by Mr Tejpreet Chopra, a former President & CEO of GE India, also raised an undisclosed sum from DJF Ventures.
Leap Green owns installed capacity of 100 MW of wind assets, which is to be doubled in the current year.
According to Venture Intelligence PE Deal database, JP Morgan first invested Rs 107 crore. The investment was made into both equity and convertible debt instruments, which, when converted would give JP Morgan a majority stake. Therefore, JP Morgan has invested over Rs 200 crore in Leap Green, which describes itself as a green Independent Power Producer.
Leap Green's Web site says that the company its “portfolio includes wind, solar and hydel projects” which are at various stages of completion.
JP Morgan's investment in Leap Green underscores the interest that private equity funds are showing in renewable energy sector. There have been quite a few deals in the last six months, the biggest of them being Rs 1,000 crore in ReNew Wind Power, founded by Mr Sumanth Sinha, a former executive of Suzlon.
IDFC-incubated Green Infra, which has operating assets of 164 MW, received Rs 90 crore from IDFC PE. Bharat Light & Power, founded by Mr Tejpreet Chopra, a former President & CEO of GE India, also raised an undisclosed sum from DJF Ventures.
Manufacturing rises to 6 month high in December
New Delhi: Manufacturing activity climbed to a six-month high in December as new orders rose, reinforcing signs of industrial revival.
The HSBC Markit India Manufacturing Purchasing Managers' Index rose to 54.2 from 51.0 in November, the highest level since June and the sharpest monthly rise since April 2009, according to data released on Monday. A reading below 50 indicates contraction. It was 52 in October and 50.4 in September.
The rebound in manufacturing follows core sector numbers last week that hinted at a pick-up in industrial growth. The index for eight core sector industries, which have a combined weight of 38% in the index of industrial production ( IIP), expanded 6.5% in November.
"Activity in the manufacturing sector rebounded in December, led by higher demand from both domestic and foreign clients, suggesting that the momentum in the sector is not quite as weak as official and more dated IP (industrial production) data would suggest," said Leif Eskesen, economist at HSBC.
A 5.1% contraction in industrial growth in October had triggered a slew of downgrades in GDP growth estimates, with some even forecasting below-7% growth.
The positive PMI data aided the benchmark stock index in its 0.4% rise but failed to enthuse independent economists.
"The overall manufacturing picture looks gloomy and one can't expect any major improvements in the coming three months," Institute of Economic Growth professor Pradeep Agrawal said, adding that only after state elections can one expect recovery-boosting policy reforms.
Biswajit Dhar, director-general of RIS, a think-tank, said, "It is definitely good news as far as signals to market sentiments are concerned, so one can't dismiss it, but don't expect much effect on overall growth (GDP) performance."
The PMI is calculated using data from a questionnaire-based survey of purchasing executives in over 500 manufacturing companies.
The survey is not always an accurate gauge of manufacturing because of the presence of a large unorganised sector. Greater input purchases by companies would suggest a rise in production.
The managers surveyed said higher purchases were primarily due to rise in new orders, both domestic and international. The new orders index rose to 57.9 from 52.8 in November, biggest jump in two years.
The survey showed rising input costs, which the companies were able to pass on because of the still robust demand.
"The solid demand from clients allowed manufacturing companies to increase output prices at an accelerated pace to pass on rising costs... All in all, these numbers suggest it's premature for the RBI to replace inflation with growth as the main concern," Eskesen said.
The Reserve Bank of India (RBI) has indicated it will cut policy rates if inflation moderates. The central bank has lifted repo rate 13 times since March 2010 by 3.75 percentage points to 8.5%.
The steep climb in interest rates has hit heavily leveraged companies hard and dampened demand in rate sensitive sectors such as real estate and automobiles.
The HSBC Markit India Manufacturing Purchasing Managers' Index rose to 54.2 from 51.0 in November, the highest level since June and the sharpest monthly rise since April 2009, according to data released on Monday. A reading below 50 indicates contraction. It was 52 in October and 50.4 in September.
The rebound in manufacturing follows core sector numbers last week that hinted at a pick-up in industrial growth. The index for eight core sector industries, which have a combined weight of 38% in the index of industrial production ( IIP), expanded 6.5% in November.
"Activity in the manufacturing sector rebounded in December, led by higher demand from both domestic and foreign clients, suggesting that the momentum in the sector is not quite as weak as official and more dated IP (industrial production) data would suggest," said Leif Eskesen, economist at HSBC.
A 5.1% contraction in industrial growth in October had triggered a slew of downgrades in GDP growth estimates, with some even forecasting below-7% growth.
The positive PMI data aided the benchmark stock index in its 0.4% rise but failed to enthuse independent economists.
"The overall manufacturing picture looks gloomy and one can't expect any major improvements in the coming three months," Institute of Economic Growth professor Pradeep Agrawal said, adding that only after state elections can one expect recovery-boosting policy reforms.
Biswajit Dhar, director-general of RIS, a think-tank, said, "It is definitely good news as far as signals to market sentiments are concerned, so one can't dismiss it, but don't expect much effect on overall growth (GDP) performance."
The PMI is calculated using data from a questionnaire-based survey of purchasing executives in over 500 manufacturing companies.
The survey is not always an accurate gauge of manufacturing because of the presence of a large unorganised sector. Greater input purchases by companies would suggest a rise in production.
The managers surveyed said higher purchases were primarily due to rise in new orders, both domestic and international. The new orders index rose to 57.9 from 52.8 in November, biggest jump in two years.
The survey showed rising input costs, which the companies were able to pass on because of the still robust demand.
"The solid demand from clients allowed manufacturing companies to increase output prices at an accelerated pace to pass on rising costs... All in all, these numbers suggest it's premature for the RBI to replace inflation with growth as the main concern," Eskesen said.
The Reserve Bank of India (RBI) has indicated it will cut policy rates if inflation moderates. The central bank has lifted repo rate 13 times since March 2010 by 3.75 percentage points to 8.5%.
The steep climb in interest rates has hit heavily leveraged companies hard and dampened demand in rate sensitive sectors such as real estate and automobiles.
Volvo to make India global hub of its Asia range
New Delhi: Expects revenues for India subsidiary to shoot up to $1 bn from the present $200 mn.
India is set to emerge as the global development and manufacturing hub for Swedish bus maker Volvo Bus Corporation’s Asia range over the next four years.
The company, which has production facilities in 20 countries, has global manufacturing bases in Poland, Mexico and China. While the facility in Poland supplies premium buses to Europe, the centres in Mexico and China roll out premium products for countries in the Americas and southeast Asia respectively.
“India will be the fourth global hub for Volvo. The Asia range of buses will be designed, developed, manufactured and exported exclusively from India to the rest of the world. The new 9100 model is the first in this range of products,” said Akash Passey, Managing Director and Chief Executive Officer, Volvo Buses (South Asia). The Volvo 9100 coach is a medium haulage bus designed to operate over 300-400 km. The Indian unit expects at least 40-50 per cent of overall sales to come in from the Asia product range over the next two years.
Highlighting the growing importance of India in Volvo’s global operations, Hakan Karlsson, president, Volvo Bus Corporation, said, “We have a clearly defined role for India in the future. With a planned investment of at least Rs 400 crore, India would emerge as the second largest market for us globally over the next four years. It would be the manufacturing hub for selected models and have a research and product team focused on developing specific products for Asian markets, which would then find their way to the rest of the world.”
The company, looking to sell 25,000-30,000 units worldwide by 2015, expects nearly half the volumes to come from the emerging markets of India and China. The Indian unit is projected to increase sales fivefold to 5,000 units per annum to become the second largest market for Volvo Buses worldwide over four years. India is now the sixth largest market for the company, behind China, South America and Europe.
Revenues for the India subsidiary, too, are expected to shoot up to $1 billion from the present $200 million. As much as 25 per cent of overall volumes would be registered as exports from India to countries in Asia-Pacific, West Asia and South America.
To build scale, the company is expanding its product range to offer 10 variants across both inter-city and city segments in 2012. Volvo Buses India has the capacity to manufacture 1,200-1,500 units per annum at its facility in Hoskote, Bangalore. The company is considering options to expand capacity at the existing facility and to set up a second manufacturing unit in the country.
While a final call on the site for the second unit has not been taken yet, Karlsson says investments over the Rs 400 crore (already planned) will be made for the new plant. Volvo Buses India has a market share of 70 per cent in the luxury inter-city coach segment and over 50 per cent share in the low-floor air-conditioned city bus segment.
India is set to emerge as the global development and manufacturing hub for Swedish bus maker Volvo Bus Corporation’s Asia range over the next four years.
The company, which has production facilities in 20 countries, has global manufacturing bases in Poland, Mexico and China. While the facility in Poland supplies premium buses to Europe, the centres in Mexico and China roll out premium products for countries in the Americas and southeast Asia respectively.
“India will be the fourth global hub for Volvo. The Asia range of buses will be designed, developed, manufactured and exported exclusively from India to the rest of the world. The new 9100 model is the first in this range of products,” said Akash Passey, Managing Director and Chief Executive Officer, Volvo Buses (South Asia). The Volvo 9100 coach is a medium haulage bus designed to operate over 300-400 km. The Indian unit expects at least 40-50 per cent of overall sales to come in from the Asia product range over the next two years.
Highlighting the growing importance of India in Volvo’s global operations, Hakan Karlsson, president, Volvo Bus Corporation, said, “We have a clearly defined role for India in the future. With a planned investment of at least Rs 400 crore, India would emerge as the second largest market for us globally over the next four years. It would be the manufacturing hub for selected models and have a research and product team focused on developing specific products for Asian markets, which would then find their way to the rest of the world.”
The company, looking to sell 25,000-30,000 units worldwide by 2015, expects nearly half the volumes to come from the emerging markets of India and China. The Indian unit is projected to increase sales fivefold to 5,000 units per annum to become the second largest market for Volvo Buses worldwide over four years. India is now the sixth largest market for the company, behind China, South America and Europe.
Revenues for the India subsidiary, too, are expected to shoot up to $1 billion from the present $200 million. As much as 25 per cent of overall volumes would be registered as exports from India to countries in Asia-Pacific, West Asia and South America.
To build scale, the company is expanding its product range to offer 10 variants across both inter-city and city segments in 2012. Volvo Buses India has the capacity to manufacture 1,200-1,500 units per annum at its facility in Hoskote, Bangalore. The company is considering options to expand capacity at the existing facility and to set up a second manufacturing unit in the country.
While a final call on the site for the second unit has not been taken yet, Karlsson says investments over the Rs 400 crore (already planned) will be made for the new plant. Volvo Buses India has a market share of 70 per cent in the luxury inter-city coach segment and over 50 per cent share in the low-floor air-conditioned city bus segment.
Mu Sigma raises $108 mn from General Atlantic
Bangalore: Mu Sigma, an analytics and decision support service provider, on Wednesday closed a $108-million investment round led by General Atlantic. This is said to be the biggest private-equity investment in the emerging market for analytics services.
Sequoia Capital, which invested $25 million in Mu Sigma in April, also participated in the latest round, the company said in a statement.
Founded in April 2004, Mu Sigma's main delivery centre is in Bangalore. The company specialises in providing analytics to companies across multiple businesses like marketing, supply chain and risk analytics. It boasts of over 50 Fortune 500 clients, including Microsoft and Dell.
“We are excited to partner with the clear market leader in the emerging field of analytics and decision sciences for large global enterprises. The Big Data phenomenon is creating huge challenges for corporations as they look to harness information to accelerate and improve decision making, and Mu Sigma is an excellent antidote,” said Bill Ford, CEO, General Aatlantic in a statement. Ford will join Mu Sigma board as a part of this funding.
According to Mu Sigma, a part of the funding would be used to purchase shares held by the existing shareholders, all of who would continue to have stakes in the company. “The company is profitable and will use the new money for growth by acquiring new clients and developing more services. With General Atlantic and Sequoia Capital as investors, we now have a world-class private-equity firm and venture capital firm,” said Mu Sigma’s founder & chief executive officer Dhiraj Rajaram, a former consultant at Booz Allen Hamilton.
The company claims its revenues from 2008 to 2010 grew by close to nine times (886 per cent), which earned itself a place in Inc 500 list of America’s fastest-growing private companies. The company employs 1,500 people across its facilities in Bangalore and the US.
Shailendra Singh, managing director, Sequoia Capital, said, “Mu Sigma has world-class analytics capabilities, a unique operating model that continues to create tremendous client impact for dozens of Fortune 500 companies. We are delighted to back the company in its mission.”
General Atlantic has been an active investor in business services companies globally with portfolio such as TASC, QTS, TriNet, Genpact and ServiceSource.
In addition to business services, GA focuses on providing growth equity to businesses in the sectors such as healthcare, energy and resources, financial services, internet and technology.
Sequoia Capital, which invested $25 million in Mu Sigma in April, also participated in the latest round, the company said in a statement.
Founded in April 2004, Mu Sigma's main delivery centre is in Bangalore. The company specialises in providing analytics to companies across multiple businesses like marketing, supply chain and risk analytics. It boasts of over 50 Fortune 500 clients, including Microsoft and Dell.
“We are excited to partner with the clear market leader in the emerging field of analytics and decision sciences for large global enterprises. The Big Data phenomenon is creating huge challenges for corporations as they look to harness information to accelerate and improve decision making, and Mu Sigma is an excellent antidote,” said Bill Ford, CEO, General Aatlantic in a statement. Ford will join Mu Sigma board as a part of this funding.
According to Mu Sigma, a part of the funding would be used to purchase shares held by the existing shareholders, all of who would continue to have stakes in the company. “The company is profitable and will use the new money for growth by acquiring new clients and developing more services. With General Atlantic and Sequoia Capital as investors, we now have a world-class private-equity firm and venture capital firm,” said Mu Sigma’s founder & chief executive officer Dhiraj Rajaram, a former consultant at Booz Allen Hamilton.
The company claims its revenues from 2008 to 2010 grew by close to nine times (886 per cent), which earned itself a place in Inc 500 list of America’s fastest-growing private companies. The company employs 1,500 people across its facilities in Bangalore and the US.
Shailendra Singh, managing director, Sequoia Capital, said, “Mu Sigma has world-class analytics capabilities, a unique operating model that continues to create tremendous client impact for dozens of Fortune 500 companies. We are delighted to back the company in its mission.”
General Atlantic has been an active investor in business services companies globally with portfolio such as TASC, QTS, TriNet, Genpact and ServiceSource.
In addition to business services, GA focuses on providing growth equity to businesses in the sectors such as healthcare, energy and resources, financial services, internet and technology.
Real estate houses most PE investments in 2011, attracts $1,700 million
Ahmedabad: Real estate emerged as the popular parking place for private equity funds who invested $1,700 million in the sector during 2011. Power sector that topped the PE charts during the first six months of the year finished third with $892-million investments behind automotive sector that could attract $1006 million private equity funding.
Overall PE investments during the year rose to $7.7 billion through 347 deals, up from $6.2 billion and 253 deals in 2010. However, the country's total investment in the private sector was a tad lower than last year.
In 2011, PE players signed 29 deals in real estate at a time when the sector found it tough to receive bank funding, a report by consulting firm Grant Thornton says. "Banks have become too cautious to lend to the sector and PE players found a new opportunity. They expect high returns within a year or so," says Raja Lahiri, partner, transaction advisory services, Grant Thornton India. Of the 100 transactions handled by the firm, more than half are into real estate.
Private equity in real estate projects will fetch considerable returns by next year-end or early 2013, says Vikram Hosangady, partner, KPMG. "Limited partners (who write cheque for funds) expect 15-25% returns from real estate deals. Foreign investors are optimistic about India. All they want is prompt action and friendly policies," he says.
Automotive, power & energy, banking & financial services and IT & ITes received PE investments of $1006 mn, $892 mn, $816 mn and $783 mn respectively. The sectors were ahead of telecom, metals & mining, pharma & healthcare, hospitality who saw a declining interest from private equity firms.
Bain Capital and Govt of Singapore clinched the top deal of the year of $849 million when they together took 30% stake in Hero Investment.
Macquarie SBI Infrastructure Investments, Blackstone and a consortium of Standard Chartered PE (Mauritius), JM Financial and NYLIM Jacob Ballas have invested $200 mn each in separate deals. "Though the outbound deals have seen lesser activity due to weak global conditions, PE firms continue to attract better deals," adds Lahiri.
The year saw $50.9 billion invested through various forms of private investments like mergers & acquisitions, PE deals and qualified institutional placement (QIP). The invested amount in 2011 was however, lower than $62.2 billion investments in 2010 and so were the number of deals that fell to 961 deals from 971 deals last year.
Overall PE investments during the year rose to $7.7 billion through 347 deals, up from $6.2 billion and 253 deals in 2010. However, the country's total investment in the private sector was a tad lower than last year.
In 2011, PE players signed 29 deals in real estate at a time when the sector found it tough to receive bank funding, a report by consulting firm Grant Thornton says. "Banks have become too cautious to lend to the sector and PE players found a new opportunity. They expect high returns within a year or so," says Raja Lahiri, partner, transaction advisory services, Grant Thornton India. Of the 100 transactions handled by the firm, more than half are into real estate.
Private equity in real estate projects will fetch considerable returns by next year-end or early 2013, says Vikram Hosangady, partner, KPMG. "Limited partners (who write cheque for funds) expect 15-25% returns from real estate deals. Foreign investors are optimistic about India. All they want is prompt action and friendly policies," he says.
Automotive, power & energy, banking & financial services and IT & ITes received PE investments of $1006 mn, $892 mn, $816 mn and $783 mn respectively. The sectors were ahead of telecom, metals & mining, pharma & healthcare, hospitality who saw a declining interest from private equity firms.
Bain Capital and Govt of Singapore clinched the top deal of the year of $849 million when they together took 30% stake in Hero Investment.
Macquarie SBI Infrastructure Investments, Blackstone and a consortium of Standard Chartered PE (Mauritius), JM Financial and NYLIM Jacob Ballas have invested $200 mn each in separate deals. "Though the outbound deals have seen lesser activity due to weak global conditions, PE firms continue to attract better deals," adds Lahiri.
The year saw $50.9 billion invested through various forms of private investments like mergers & acquisitions, PE deals and qualified institutional placement (QIP). The invested amount in 2011 was however, lower than $62.2 billion investments in 2010 and so were the number of deals that fell to 961 deals from 971 deals last year.
Monday, January 2, 2012
Four SEZs to receive new investments of Rs 140 cr
Ahmedabad: Ten companies will start their units in four SEZs of the state following a nod by the zonal director of SEZs. Together, these companies will invest Rs 140 crore in the first phase in technology, textile and pharma sectors.
The SEZs that will receive the new clients are Aqualine SEZ (Gandhinagar), GIDC Electronics Park (Gandhinagar), GIDC Apparel Park (Ahmedabad) and JB Pharma SEZ in Bharuch.
The Aqualine SEZ for Information Technology (IT) and IT enabled Services (ITeS), had received applications from Ahmedabad-based Third Eye Enterprise, Gandhingar-based Roving Radiology, Mumbai-based Annet Technologies, Ahmedabad-based Infosense Services, Ahmedabad-based Raegan International and Ahmedabad-based Plenar solutions.
Third Eye will set up an online and offline Software Development Services centre, while Annet and Plenear Soutions will set up an IT-ITeS centre. Similarly, Infosense will start a Web Services and Project Management Centre; Raegan International will set up a BPO-KPO centre, while Roving Technologies will set up a Knowledge Process Outsourcing centre for Tele-Radiology. Togather, these companies will invest Rs 8 crore initially and employ around 400 persons.
Ghaziabad-based Compark E-Services Private Limited will invest close to Rs 60 lakh and employ around 150 people at Gandhinagar-based GIDC Electronics Park, a SEZ for IT-ITeS sector.
Ahmedabad-based GIDC Apparel Park will see investments from Ahmedabad-based Mahavir Tex Fab, who will manufacture shirts, trousers and other textile products. Ahmedabad-based Utkarsh Exim Private Limited will manufacture aprons and gloves for medical use in the SEZ. Together, the companies will invest Rs 1 crore initially and employ close to 300 people.
Pune-based Biodeal Laboratories Private Limited has received a nod to set up facilty for making nasal spray, drops, inhalers, dry powders and tablets at J B Pharma SEZ in Bharuch district. The company will pump in over Rs 130 crore and is expected to employ close to 700 persons at the SEZ.
"We have given nod to 10 companies to set up units in SEZs. We expect that they will soon start their operations," said Pravir Kumar, zonal development commissioner for SEZ.
The SEZs that will receive the new clients are Aqualine SEZ (Gandhinagar), GIDC Electronics Park (Gandhinagar), GIDC Apparel Park (Ahmedabad) and JB Pharma SEZ in Bharuch.
The Aqualine SEZ for Information Technology (IT) and IT enabled Services (ITeS), had received applications from Ahmedabad-based Third Eye Enterprise, Gandhingar-based Roving Radiology, Mumbai-based Annet Technologies, Ahmedabad-based Infosense Services, Ahmedabad-based Raegan International and Ahmedabad-based Plenar solutions.
Third Eye will set up an online and offline Software Development Services centre, while Annet and Plenear Soutions will set up an IT-ITeS centre. Similarly, Infosense will start a Web Services and Project Management Centre; Raegan International will set up a BPO-KPO centre, while Roving Technologies will set up a Knowledge Process Outsourcing centre for Tele-Radiology. Togather, these companies will invest Rs 8 crore initially and employ around 400 persons.
Ghaziabad-based Compark E-Services Private Limited will invest close to Rs 60 lakh and employ around 150 people at Gandhinagar-based GIDC Electronics Park, a SEZ for IT-ITeS sector.
Ahmedabad-based GIDC Apparel Park will see investments from Ahmedabad-based Mahavir Tex Fab, who will manufacture shirts, trousers and other textile products. Ahmedabad-based Utkarsh Exim Private Limited will manufacture aprons and gloves for medical use in the SEZ. Together, the companies will invest Rs 1 crore initially and employ close to 300 people.
Pune-based Biodeal Laboratories Private Limited has received a nod to set up facilty for making nasal spray, drops, inhalers, dry powders and tablets at J B Pharma SEZ in Bharuch district. The company will pump in over Rs 130 crore and is expected to employ close to 700 persons at the SEZ.
"We have given nod to 10 companies to set up units in SEZs. We expect that they will soon start their operations," said Pravir Kumar, zonal development commissioner for SEZ.
Indian internet industry sees 300m users by 2015
The internet in India has taken more than 15 years to cross the 100-million user mark. Now, it's at the cusp of a giant leap. A rash of reports - from industry associations like Internet & Mobile Association of India (IAMAI) to global consultancies like Boston Consulting Group (BCG) - is heralding the dawn of the internet economy and a user base of 300 million in the next three years.
Consider this: In 2011 alone, investors poured $350 million into 57 internet startups - that's more than the collective dotcom investment of the past four years, according to VCCEdge, an Indian online deal platform.
Some $3 billion worth of e-commerce was transacted in 2011, says IAMAI. And, according to Helion Venture Partners, $20 billion worth of e-commerce will be done in five to seven years, with 12-15% of shopping going online in this period. Till date, however, the Indian Railways website for booking tickets is easily the most successful e-commerce model. Launched in 2002, irctc.co.in sold just 27 tickets online on its first day. Today, it sells 4 lakh. According to Verisign, an internet registry, about 2.6 million dotcom and 'dotin' companies are registered out of India. I
In 2012, the National Internet Exchange of India (NIXI), which manages the dotin registry and routes internet traffic in India, will launch 'dotbharat' domain names. Says Dr Govind, CEO, NIXI, "With a 100-million-plus user base, we anticipate rapid growth now." NIXI also plans to help get a web presence for 250,000 panchayats to ease delivery of citizen services from tax payments to registering births. Then there are social networking sites like Facebook andLinkedIn, which see India as their next growth frontier.
Each boasts 40 million and 12 million users, respectively, in India. And internet advertising, at $300 million, has already overtaken advertising on radio. The year ahead will see a rapid increase in user numbers-which stand at just 11 milllion now- but via mobile internet rather than fixed internet. That's due to a convergence of factors: cheaper mobile devices, 3G networks, greater adoption of dongles (a hardware that makes software run when plugged in) and Wi-Fi at homes. Telcos also see cyberspace as their next growth engine.
Says K Srinivas, president, consumer business, Bharti Airtel, "The next phase of growth for telcos will be data-driven. The internet is getting into the daily fabric of life-everything from videos and banking to healthcare and education will be delivered online." The rapid growth masks some challenges: not all e-commerce plays will survive. Says Sanjeev Aggarwal, senior MD, Helion Advisors: "E-commerce has too many moving parts: logistics, merchandising, customer experience... There will be a shakeout. Companies have to be careful about burning cash in ads or engaging in irrational price wars to bag
Consider this: In 2011 alone, investors poured $350 million into 57 internet startups - that's more than the collective dotcom investment of the past four years, according to VCCEdge, an Indian online deal platform.
Some $3 billion worth of e-commerce was transacted in 2011, says IAMAI. And, according to Helion Venture Partners, $20 billion worth of e-commerce will be done in five to seven years, with 12-15% of shopping going online in this period. Till date, however, the Indian Railways website for booking tickets is easily the most successful e-commerce model. Launched in 2002, irctc.co.in sold just 27 tickets online on its first day. Today, it sells 4 lakh. According to Verisign, an internet registry, about 2.6 million dotcom and 'dotin' companies are registered out of India. I
In 2012, the National Internet Exchange of India (NIXI), which manages the dotin registry and routes internet traffic in India, will launch 'dotbharat' domain names. Says Dr Govind, CEO, NIXI, "With a 100-million-plus user base, we anticipate rapid growth now." NIXI also plans to help get a web presence for 250,000 panchayats to ease delivery of citizen services from tax payments to registering births. Then there are social networking sites like Facebook andLinkedIn, which see India as their next growth frontier.
Each boasts 40 million and 12 million users, respectively, in India. And internet advertising, at $300 million, has already overtaken advertising on radio. The year ahead will see a rapid increase in user numbers-which stand at just 11 milllion now- but via mobile internet rather than fixed internet. That's due to a convergence of factors: cheaper mobile devices, 3G networks, greater adoption of dongles (a hardware that makes software run when plugged in) and Wi-Fi at homes. Telcos also see cyberspace as their next growth engine.
Says K Srinivas, president, consumer business, Bharti Airtel, "The next phase of growth for telcos will be data-driven. The internet is getting into the daily fabric of life-everything from videos and banking to healthcare and education will be delivered online." The rapid growth masks some challenges: not all e-commerce plays will survive. Says Sanjeev Aggarwal, senior MD, Helion Advisors: "E-commerce has too many moving parts: logistics, merchandising, customer experience... There will be a shakeout. Companies have to be careful about burning cash in ads or engaging in irrational price wars to bag
Staff Turnover Could Be IT's Biggest Issue for 2012
How long have you held your current position? If you answered less than two years, you are not alone. It seems that turnover could be IT's biggest challenge in the new year: keeping talented developers. Network World's Carolyn Marsan writes this week about the topic and it is well worth reading her story.
This isn't a completely new problem. In 1980, I took my second job, about two years after I started work at a consulting firm in Washington, DC. My father was not happy about the switch. He was working as an accountant for the same place (and ended up putting in 30 years by the time he eventually retired, yes complete with gold watch that I have somewhere). He thought it was too quick a transition. What would other employers think? Little did I know I was starting a trend in the tech field lo these many years ago
A CIO quoted in Marsan's article mentions how turnover is his biggest issue: 'knowledge keeps walking out the door.' I wondered if what he paid his developers was one of the reasons for the huge turnover. All of his six-person team has been with him for less than a year. But it turns out his particular issues aren't so simple.
Part of the problem is that loyalty is so over. Back in my dad's day, you wanted to amass a retirement portfolio, or get more vacation time, or other benefits of being with a firm for decades. Now, those seem old-fashioned, and there are fewer pension plans and more contract workers. Hypergrowth is what matters. Getting challenged, learning stuff. Layoffs can happen at a moment's notice, making more of a 'what's in it for me' attitude.
The CIO interviewed in Marsan's article spoke about a very different developer mindset for today's 20-something coders. 'There have been a number of cases where we have had a system that runs into issues, bugs, defects or a major change requirement. We thought it would be a challenge for a developer to own it. But their first reaction is to want to scrap it and start over.'
Another problem is that we expect instant gratification in our work lives. We can download what we need almost immediately from the Internet. If we don't get super-fast bandwidth and sub-second response times from our computer we get frustrated. If it takes more than a few minutes to understand something, we move on. I have noticed this in my own use of apps recently: I get very impatient when I can't understand something at first, and tend to drop products that have even a modest learning curve. (This is one of the reasons why Second Life went nowhere: it was a lot to learn at once.)
One often-heard demand is for better workplace flex times. Back when I was in my 20s, I worked day and night sometimes to get projects done. There was no such thing as 9-to-5, telecommuting, or flexible Fridays. Today's GenY wants it all.
IT has to do a better job explaining the business context of their code and be engaged in what the company is actually doing with their apps. Coding just for coding's sake is passé, as it should be. Granted, this was true back in my formative years, but it has gotten more important as IT has become more of a distributed operation, and coders are closer to their departments.
Certainly, it is a delicate balance to train and retain highly technical people. But it does seem as if these times have made it more of a challenge. What has been your experience?
This isn't a completely new problem. In 1980, I took my second job, about two years after I started work at a consulting firm in Washington, DC. My father was not happy about the switch. He was working as an accountant for the same place (and ended up putting in 30 years by the time he eventually retired, yes complete with gold watch that I have somewhere). He thought it was too quick a transition. What would other employers think? Little did I know I was starting a trend in the tech field lo these many years ago
A CIO quoted in Marsan's article mentions how turnover is his biggest issue: 'knowledge keeps walking out the door.' I wondered if what he paid his developers was one of the reasons for the huge turnover. All of his six-person team has been with him for less than a year. But it turns out his particular issues aren't so simple.
Part of the problem is that loyalty is so over. Back in my dad's day, you wanted to amass a retirement portfolio, or get more vacation time, or other benefits of being with a firm for decades. Now, those seem old-fashioned, and there are fewer pension plans and more contract workers. Hypergrowth is what matters. Getting challenged, learning stuff. Layoffs can happen at a moment's notice, making more of a 'what's in it for me' attitude.
The CIO interviewed in Marsan's article spoke about a very different developer mindset for today's 20-something coders. 'There have been a number of cases where we have had a system that runs into issues, bugs, defects or a major change requirement. We thought it would be a challenge for a developer to own it. But their first reaction is to want to scrap it and start over.'
Another problem is that we expect instant gratification in our work lives. We can download what we need almost immediately from the Internet. If we don't get super-fast bandwidth and sub-second response times from our computer we get frustrated. If it takes more than a few minutes to understand something, we move on. I have noticed this in my own use of apps recently: I get very impatient when I can't understand something at first, and tend to drop products that have even a modest learning curve. (This is one of the reasons why Second Life went nowhere: it was a lot to learn at once.)
One often-heard demand is for better workplace flex times. Back when I was in my 20s, I worked day and night sometimes to get projects done. There was no such thing as 9-to-5, telecommuting, or flexible Fridays. Today's GenY wants it all.
IT has to do a better job explaining the business context of their code and be engaged in what the company is actually doing with their apps. Coding just for coding's sake is passé, as it should be. Granted, this was true back in my formative years, but it has gotten more important as IT has become more of a distributed operation, and coders are closer to their departments.
Certainly, it is a delicate balance to train and retain highly technical people. But it does seem as if these times have made it more of a challenge. What has been your experience?
Friday, December 30, 2011
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