Microsoft Corp (MSFT.O) agreed to buy online social network firm Yammer Inc for $1.2 billion in cash, which will allow the software company to offer a service like Facebook Inc's (FB.O) to corporate customers.
Talk of a deal had circulated earlier this month, but the two companies only confirmed an agreement on Monday.
Four-year-old Yammer, which has 5 million users of its private, in-company social networks, helps companies' internal communications and collaboration by allowing employees to form groups and interact with each other freely. Companies such as Ford Motor Co (F.N), Supervalu (SVU.N) and Deloitte are customers.
The 400-employee firm will keep its headquarters in San Francisco but will become part of Microsoft's Office unit under Kurt DelBene in Seattle. Yammer will still be led by current CEO David Sacks, a former PayPal executive.
The service should fill a growing gap that Microsoft was struggling to fill with its SharePoint application for creating private websites for intra-company projects.
"This acquisition will immediately make Microsoft a strong competitor in the enterprise social market," said Larry Cannell, an analyst at tech research firm Gartner. "It was a stretch to call the capabilities in SharePoint's MySite feature a social network site."
With Yammer, employees can use a private, online company directory to contact co-workers, form networks, chat, share links and post news. A basic version of Yammer is free, but a subscription buys more security and integration with other company-wide software. Yammer's subscription-based business model makes it different from ad-driven network companies like Facebook or LinkedIn Corp (LNKD.N).
The deal, which values Yammer's users at about $240 each, may ignite interest in companies offering similar services, such as Salesforce.com Inc (CRM.N), Jive Software Inc (JIVE.O) and Telligent.
The area of internal networking for companies has attracted other big tech companies such as Cisco Systems Inc (CSCO.O), which has a similar offering to Yammer called WebEx Social, and International Business Machine Corp (IBM.N) with a rival product called Connections.
Microsoft, which owns a small fraction of Facebook shares, has been looking for ways to make its desktop-bound products more interactive and attractive to its core corporate users and home consumers, and has even been experimenting with its own social network called So.cl (pronounced 'social').
Last year it paid $8.5 billion to buy online chat company Skype, which it is integrating into its offerings, including the next version of Office.
Microsoft's Office suite of applications - including Outlook email, Excel spreadsheets and PowerPoint presentation program - is the bedrock of most companies' day-to-day working software.
The Office unit is Microsoft's most profitable, contributing 60 percent of its profit last year, and amassing more sales than its flagship Windows operating system.
Success in my Habit
Monday, June 25, 2012
TCS, Infosys line up to invest in Indore
Indore has emerged as an attractive investment destination for IT companies which are looking to expand operations amid global economic slowdown. According to industry experts, availability of workforce, incentives by the Madhya Pradesh government and availability of facilities are attracting IT companies to invest in the city, known as financial capital of the state.
"These days, five big companies including the likes of Infosys and TCS are investing crores in the IT Special Economic Zones (SEZ)," Madhya Pradesh SEZ Development Commissioner A K Rathore said.
He added that six years after notification as an SEZ in 2006, work has commenced recently at the Crystal IT Park.
A senior official in the Union Commerce Ministry said Crystal IT Park is the first SEZ in the IT sector in which production was commenced for exports. Madhya Pradesh Audyogik Kendra Vikas Nigam (MPAKVN) was given the responsibility of developing the SEZ.
"Impetus has recently begun exporting from the Crystal IT Park. Apart from Imptus, companies like Cleartrail and Intellicus have been given approval for investment," the official said.
Rathore said companies are increasingly looking at investing in Indore as, "There are a large number of engineering colleges from where thousands of talented engineers graduate every year. Apart from that, the air and rail connectivity to the city has improved significantly."
Meanwhile, the state government is also rolling out the red carpet to IT companies and is working towards developing Indore as the new IT destination.
Officials said Infosys has been given 52.64 hectare (130 acre land), while TCS has been given 40.47 hectare (100 acre) on the Super Corridor by the state government.
They said the two IT giants were given the land to develop SEZs at Rs 20 lakh per acre and added that Ruchi Realty Holdings, Impetus and Agroweb Online are also working on similar SEZ projects.
"These days, five big companies including the likes of Infosys and TCS are investing crores in the IT Special Economic Zones (SEZ)," Madhya Pradesh SEZ Development Commissioner A K Rathore said.
He added that six years after notification as an SEZ in 2006, work has commenced recently at the Crystal IT Park.
A senior official in the Union Commerce Ministry said Crystal IT Park is the first SEZ in the IT sector in which production was commenced for exports. Madhya Pradesh Audyogik Kendra Vikas Nigam (MPAKVN) was given the responsibility of developing the SEZ.
"Impetus has recently begun exporting from the Crystal IT Park. Apart from Imptus, companies like Cleartrail and Intellicus have been given approval for investment," the official said.
Rathore said companies are increasingly looking at investing in Indore as, "There are a large number of engineering colleges from where thousands of talented engineers graduate every year. Apart from that, the air and rail connectivity to the city has improved significantly."
Meanwhile, the state government is also rolling out the red carpet to IT companies and is working towards developing Indore as the new IT destination.
Officials said Infosys has been given 52.64 hectare (130 acre land), while TCS has been given 40.47 hectare (100 acre) on the Super Corridor by the state government.
They said the two IT giants were given the land to develop SEZs at Rs 20 lakh per acre and added that Ruchi Realty Holdings, Impetus and Agroweb Online are also working on similar SEZ projects.
Huawei to open global R&D centre in India
Despite uncertainties in the telecom sector, Chinese equipment makerHuawei will invest $2 billion over the next four years in India as it looks to aggressively market consumer devices and set up global R&D centre in the country.
The company, which clocked $1.5 billion in revenues from India in 2011-12, is also betting big on the roll out of 4G LTE services in India and is targeting more than 50 per cent share of the contracts coming in.
"2011 was a good year for Huawei because our revenue in India increased about 20 per cent... Last year, we began building a new R&D centre in Bangalore, which will house more than 5,000 people. From 2011, the plan is to invest $2 billion in five years in india," Huawei India chief executive officer Cai Liqun said.
This includes the R&D centre, manufacturing and marketing among others, he added.
The company began work on setting up a research and development centre in Bangalore last year, which is expected to house more than 5,000 professionals. It is investing $150 million in the facility, which is expected to become operational from June 2013.
Besides, it also has a global service resource centre (GSRC) in Bangalore along with a global network operations centre (GNOC), which is its largest such centre outside of China. These centres cater to its clients across 140 countries.
"We are also planning to set up a global technology centre (GTEC) along with the others (existing centres) in Bangalore maybe this year or the next (year). This Centre will focus on providing technical support to clients globally," Liqun said.
He added that GTEC will handle technical issues of customers globally but declined to comment on the number of people that would be hired.
"We have GTECs in China, but this will be first outside china. It is under discussion. Indians have language advantage as well as technology, that is what we want to capitalise on through this centre," Liqun said.
Of the company's $1.5 billion Indian revenues, $1.2 billion was contributed by its network business driven by 3G deployment and network expansion by operators, while the remaining $300 million came from devices like handsets, dongles and set top boxes.
"I think 2012 is a tough year for the whole telecom industry in India because the policy is not clear. Operators are waiting for licences. This period will see no major investment but after all this is solved, we are confident of the Indian market," Liqun said.
Asked about the targeted revenue for 2012-13, Liqun declined to comment but added, "we are in discussion with all players...this year, we are looking at more than 50 per cent of all LTE contracts coming to us".
The company has already deployed 4G LTE network for telecom major Bharti Airtel in Bangalore.
Huawei, which has a low single-digit market share in the mobile phones segment in the country, is also looking at ramping up its presence in the category.
"In three-five years, we want to become one of the top 3-4 players in the Android smartphone space," Huawei vice president (corporate media affairs) Scott Sykes said.
Globally, it is targeting sales of 60 million mobile phones this year and is hopeful that its 'Ascend P1' (launched at the Mobile World Congress in Barcelona) will make waves in India.
The company, which clocked $1.5 billion in revenues from India in 2011-12, is also betting big on the roll out of 4G LTE services in India and is targeting more than 50 per cent share of the contracts coming in.
"2011 was a good year for Huawei because our revenue in India increased about 20 per cent... Last year, we began building a new R&D centre in Bangalore, which will house more than 5,000 people. From 2011, the plan is to invest $2 billion in five years in india," Huawei India chief executive officer Cai Liqun said.
This includes the R&D centre, manufacturing and marketing among others, he added.
The company began work on setting up a research and development centre in Bangalore last year, which is expected to house more than 5,000 professionals. It is investing $150 million in the facility, which is expected to become operational from June 2013.
Besides, it also has a global service resource centre (GSRC) in Bangalore along with a global network operations centre (GNOC), which is its largest such centre outside of China. These centres cater to its clients across 140 countries.
"We are also planning to set up a global technology centre (GTEC) along with the others (existing centres) in Bangalore maybe this year or the next (year). This Centre will focus on providing technical support to clients globally," Liqun said.
He added that GTEC will handle technical issues of customers globally but declined to comment on the number of people that would be hired.
"We have GTECs in China, but this will be first outside china. It is under discussion. Indians have language advantage as well as technology, that is what we want to capitalise on through this centre," Liqun said.
Of the company's $1.5 billion Indian revenues, $1.2 billion was contributed by its network business driven by 3G deployment and network expansion by operators, while the remaining $300 million came from devices like handsets, dongles and set top boxes.
"I think 2012 is a tough year for the whole telecom industry in India because the policy is not clear. Operators are waiting for licences. This period will see no major investment but after all this is solved, we are confident of the Indian market," Liqun said.
Asked about the targeted revenue for 2012-13, Liqun declined to comment but added, "we are in discussion with all players...this year, we are looking at more than 50 per cent of all LTE contracts coming to us".
The company has already deployed 4G LTE network for telecom major Bharti Airtel in Bangalore.
Huawei, which has a low single-digit market share in the mobile phones segment in the country, is also looking at ramping up its presence in the category.
"In three-five years, we want to become one of the top 3-4 players in the Android smartphone space," Huawei vice president (corporate media affairs) Scott Sykes said.
Globally, it is targeting sales of 60 million mobile phones this year and is hopeful that its 'Ascend P1' (launched at the Mobile World Congress in Barcelona) will make waves in India.
Africa rolls out red carpet for Indian poultry industry
Hyderabad: African countries present significant business opportunities for the Indian poultry industry for setting up hatcheries through joint ventures or supplying feed and technology for value-addition.
In this context, the Andhra Pradesh chapter of the Confederation of Indian Industry (CII) will be taking a trade delegation to some African countries in September.
As a run-up to this, the CII organised an interactive session on ‘Doing Business with African Countries’, here.
Ms Jerusalem Amdemariam, Minister Counsellor — Economy and Business, Ethiopia; Ms Maria Fatima Phume, Deputy High Commissioner, Mozambique High Commission; and Ms Susan Sikaneta, High Commissioner, High Commission of the Republic of Zambia, extended a “red-carpet invitation” for Indian entrepreneurs to invest in these African countries.
Mr Suresh Chitturi, Chairman, CII —AP Task Force and Agriculture and MD of Srinivasa Hatcheries, who had been on an explorative visit to Africa recently, said the cost of an egg in many parts of Africa was Rs 8 each, almost three times that in India.
“There are enough opportunities for poultry firms and ago-tech companies in Africa. There have been some preliminary visits by the Indian poultry industry to Africa of late,” he said. Srinivasa Hatcheries, a leading poultry firm in the State, is also thinking of doing business in Africa, although plans have not been firmed up yet.
Ms Amdemariam said Ethopia provided a stable business environment for foreign investments. Incentives for foreign investors include full exemption from import customs duties and other taxes levied on imports, 100 per cent repatriation of profits and two to seven years’ exemption of Income Tax on manufacturing and agro-product ventures.
Ms Sikaneta said Zambia had enormous appetite for investments in poultry farming, besides maize, soybean, sugarcane and cotton farming.
“We need lot of storage capacity for milk. Currently, we have a capacity for six lakh tonnes, while the requirement is over 1.3 million tonnes,” she said.
In this context, the Andhra Pradesh chapter of the Confederation of Indian Industry (CII) will be taking a trade delegation to some African countries in September.
As a run-up to this, the CII organised an interactive session on ‘Doing Business with African Countries’, here.
Ms Jerusalem Amdemariam, Minister Counsellor — Economy and Business, Ethiopia; Ms Maria Fatima Phume, Deputy High Commissioner, Mozambique High Commission; and Ms Susan Sikaneta, High Commissioner, High Commission of the Republic of Zambia, extended a “red-carpet invitation” for Indian entrepreneurs to invest in these African countries.
Mr Suresh Chitturi, Chairman, CII —AP Task Force and Agriculture and MD of Srinivasa Hatcheries, who had been on an explorative visit to Africa recently, said the cost of an egg in many parts of Africa was Rs 8 each, almost three times that in India.
“There are enough opportunities for poultry firms and ago-tech companies in Africa. There have been some preliminary visits by the Indian poultry industry to Africa of late,” he said. Srinivasa Hatcheries, a leading poultry firm in the State, is also thinking of doing business in Africa, although plans have not been firmed up yet.
Ms Amdemariam said Ethopia provided a stable business environment for foreign investments. Incentives for foreign investors include full exemption from import customs duties and other taxes levied on imports, 100 per cent repatriation of profits and two to seven years’ exemption of Income Tax on manufacturing and agro-product ventures.
Ms Sikaneta said Zambia had enormous appetite for investments in poultry farming, besides maize, soybean, sugarcane and cotton farming.
“We need lot of storage capacity for milk. Currently, we have a capacity for six lakh tonnes, while the requirement is over 1.3 million tonnes,” she said.
After small cars, global auto companies like Nissan and Toyota start exporting sedans & SUVs from India
Mumbai: Japanese carmakers Nissan and Toyota have started exporting midsized cars made in India, spearheading a strategic change that seeks to make the most of the country's cost advantage and growing technical prowess.
In the next 12-18 months, Nissan plans to export 50,000 units of India-made sedan Sunny to the West, executives familiar with the matter said, adding that rival Toyota will ship Etios cars, made at its Indian unit, to South Africa.
Volkswagen, Ford and Renault are expected to join them soon. Experts say exports not only help in dealing with the slowdown in the domestic market, but also act as a hedge against costlier imports, which have turned dearer by 25-30% in recent months.
French carmaker Renault plans to export to the UK about 25,000 units of its sports utility vehicle Duster over 12-18 months. The shipments may start in October.
Similarly, Germany's Volkswagen is keen on producing left-hand drive Vento sedans in India for markets in the West. Volkswagen, which exports India-made Vento cars to South Africa and Malaysia, has mandated vendors to develop components for a left-hand drive version of the sedan.
The carmaker plans to export 8,000-10,000 such units by 2013, said an executive, who did not wish to be named.
"Our export of the Vento to South Africa confirms that we are able to produce high-quality cars in India at competitive costs," Volkswagen India's spokesperson said, adding, "This also shows our potential to further extend our exports to other markets. We are looking at various opportunities in the future, also in left-hand drive markets."
The Volkswagen spokesperson, however, declined comment on target markets and numbers.
Ford Motor, too, is likely to export its yet-to-be launched EcoSport SUV from India, according to people familiar with the company's plans.
Executives dealing with the projects of multinational carmakers say that over 100,000 sedans and SUVs manufactured in India are slated for export over the next 12 months. The depreciating rupee, which ended at a record low on Friday, is only likely to accelerate such plans.
Experts say the growth in exports, which comes at a time the global economy is slowing down, could accelerate once the economy picks up. There are not many right-hand drive manufacturing bases that are as cost competitive as India, said Kumar Kandaswami, director at Deloitte.
"The cost of engineering, both at the carmaker's end and supplier's level is very competitive, which gives India an edge. Manufacturers use exports as not only an opportunity to mitigate risk arising out of volatile currency, but even to balance the demand in the domestic market," said Kandaswami.
Toyota Kirloskar, the Indian subsidiary of the Japanese carmaker, has already received orders to export 20,000 units of the Etios sedan to South Africa. The company's deputy MD, marketing, Sandeep Singh, told ET the exports will help cut losses on account of the falling rupee.
Ford, too, is firming up plans to export its EcoSport SUV from India to South Africa next year.
In the next 12-18 months, Nissan plans to export 50,000 units of India-made sedan Sunny to the West, executives familiar with the matter said, adding that rival Toyota will ship Etios cars, made at its Indian unit, to South Africa.
Volkswagen, Ford and Renault are expected to join them soon. Experts say exports not only help in dealing with the slowdown in the domestic market, but also act as a hedge against costlier imports, which have turned dearer by 25-30% in recent months.
French carmaker Renault plans to export to the UK about 25,000 units of its sports utility vehicle Duster over 12-18 months. The shipments may start in October.
Similarly, Germany's Volkswagen is keen on producing left-hand drive Vento sedans in India for markets in the West. Volkswagen, which exports India-made Vento cars to South Africa and Malaysia, has mandated vendors to develop components for a left-hand drive version of the sedan.
The carmaker plans to export 8,000-10,000 such units by 2013, said an executive, who did not wish to be named.
"Our export of the Vento to South Africa confirms that we are able to produce high-quality cars in India at competitive costs," Volkswagen India's spokesperson said, adding, "This also shows our potential to further extend our exports to other markets. We are looking at various opportunities in the future, also in left-hand drive markets."
The Volkswagen spokesperson, however, declined comment on target markets and numbers.
Ford Motor, too, is likely to export its yet-to-be launched EcoSport SUV from India, according to people familiar with the company's plans.
Executives dealing with the projects of multinational carmakers say that over 100,000 sedans and SUVs manufactured in India are slated for export over the next 12 months. The depreciating rupee, which ended at a record low on Friday, is only likely to accelerate such plans.
Experts say the growth in exports, which comes at a time the global economy is slowing down, could accelerate once the economy picks up. There are not many right-hand drive manufacturing bases that are as cost competitive as India, said Kumar Kandaswami, director at Deloitte.
"The cost of engineering, both at the carmaker's end and supplier's level is very competitive, which gives India an edge. Manufacturers use exports as not only an opportunity to mitigate risk arising out of volatile currency, but even to balance the demand in the domestic market," said Kandaswami.
Toyota Kirloskar, the Indian subsidiary of the Japanese carmaker, has already received orders to export 20,000 units of the Etios sedan to South Africa. The company's deputy MD, marketing, Sandeep Singh, told ET the exports will help cut losses on account of the falling rupee.
Ford, too, is firming up plans to export its EcoSport SUV from India to South Africa next year.
IKEA to invest Rs 10,500 cr in India, to open 25 outlets
New Delhi: It took a meeting in St Petersburg, Russia, for the euro 25-billion Scandinavian furniture giant IKEA to commit its investment in the Indian retail sector, almost six months after the government allowed 100 per cent foreign direct investment (FDI) in single-brand retail.
IKEA chief, Mikael Ohlsson, today gave an assurance to Commerce Minister Anand Sharma at a luncheon meeting during the St Petersburg International Economic Forum that his company would invest euro 1.5 billion (Rs 10,500 crore) in India over the next 15-20 years. Besides 25 retail outlets, it plans to also set up restaurants, food mart, nursing home and publications under its brand name.
IKEA, which had earlier tried to enter India when 51 per cent FDI was allowed in single-brand retail, and, subsequently, decided to come on its own when the rules were relaxed, said it had filed an application with the Indian government for clearances to set up a fully-owned subsidiary. The company has filed the application through its advisor Titus and Co Advocates. The proposal needs to be finally approved by the Cabinet Committee on Economic Affairs, as the investment exceeds Rs 1,200 crore.
IKEA’s would be the second foreign investment so far since the government relaxed the rules for single-brand retail. UK-based footwear retailer, Pavers, was the first chain to apply under 100-per-cent FDI regime in April.
Even as the largest furniture chain of the world, with 287 stores, had earlier raised concerns over the sticky condition of sourcing 30 per cent of value from Indian small and medium enterprises for 100 per cent FDI, it has now decided to set up shop in India under the same norms.
An IKEA spokesperson told Business Standard that the “challenge related to 30 per cent sourcing remained”. A commerce ministry official pointed out “there are no changes made in the procurement conditions. There is no question of any dilution.”
“Having studied the guidelines, we believe we can live up to the guidelines and keep within the spirit of the policy,” the spokesperson said.
Arvind Singhal, founder and chairman, Technopak Advisors, said the IKEA move would give the much-needed confidence to the international investor community.
The company would invest euro 600 million (approximately Rs 4,200 crore) in the first stage and an additional Euro 900 million (about Rs 6,300 crore) later, totalling euro 1.5 billion, a commerce ministry statement said. It could initially open two-three stores, based on the current sourcing values, and raise the number to 10 over a 10-year year horizon, and around 25 over a longer period.
Among the other global brands that want to enter India on their own are GAP, Abercrombie, Prada, Hennes & Mauritz and Arcadia. Among global retailers that are already present in India, either through franchisee or local JVs, are Louis Vuitton, Christian Dior, Jimmy Choo, Zara, Marks & Spencer and Canali. French luxury brand Christian Louboutin recently got the government approval to operate in India.
FM clears advance pricing scheme
New Delhi: Finance minister Pranab Mukherjee has cleared the Advance Pricing Agreement (APA) scheme, pertaining to transfer pricing regulations before filing his nomination for the presidential election.
The APA scheme, proposed in Budget 2012-13, is seen as one of the major industry-friendly measures. The industry has been keenly waiting for the notification of its provisions. APA is an ahead-of-time agreement between a taxpayer and the taxing authority on an appropriate transfer pricing methodology.
A senior finance ministry official told Business Standard the finance minister’s approval to the provisions formulated by the Central Board of Direct Taxes (CBDT) would facilitate implementation of the APA scheme from July 1. CBDT will notify the scheme shortly, after taking approval of the law ministry, he added.
Mukherjee would be in Kolkata over the weekend and then he is slated to file his nomination some time next week. The official earlier quoted said the scheme would cover the norms for coverage of cases under APA and also forms for availing the facilities provided. He added as demanded by industry fees for availing the scheme had been kept reasonable. “The applicant has to pay a fee of Rs 10 lakh for international transactions not exceeding Rs 100 crore, Rs 15 lakh for transactions up to Rs 200 crore and Rs 20 lakh for transactions above Rs 200 crore,” said the official.
The Budget inserted new sections in the I-T Act to provide a framework for APA. It empowers CBDT to enter into an advance pricing agreement with any person undertaking an international transaction.
What is APA?
Advance Pricing Agreement is signed between a taxpayer and a taxing authority on an appropriate transfer pricing methodology for a set of transactions over a fixed period of time in future. The APAs offer better assurance on transfer pricing methods and are conducive in providing certainty and unanimity of approach.
The APA scheme, proposed in Budget 2012-13, is seen as one of the major industry-friendly measures. The industry has been keenly waiting for the notification of its provisions. APA is an ahead-of-time agreement between a taxpayer and the taxing authority on an appropriate transfer pricing methodology.
A senior finance ministry official told Business Standard the finance minister’s approval to the provisions formulated by the Central Board of Direct Taxes (CBDT) would facilitate implementation of the APA scheme from July 1. CBDT will notify the scheme shortly, after taking approval of the law ministry, he added.
Mukherjee would be in Kolkata over the weekend and then he is slated to file his nomination some time next week. The official earlier quoted said the scheme would cover the norms for coverage of cases under APA and also forms for availing the facilities provided. He added as demanded by industry fees for availing the scheme had been kept reasonable. “The applicant has to pay a fee of Rs 10 lakh for international transactions not exceeding Rs 100 crore, Rs 15 lakh for transactions up to Rs 200 crore and Rs 20 lakh for transactions above Rs 200 crore,” said the official.
The Budget inserted new sections in the I-T Act to provide a framework for APA. It empowers CBDT to enter into an advance pricing agreement with any person undertaking an international transaction.
What is APA?
Advance Pricing Agreement is signed between a taxpayer and a taxing authority on an appropriate transfer pricing methodology for a set of transactions over a fixed period of time in future. The APAs offer better assurance on transfer pricing methods and are conducive in providing certainty and unanimity of approach.
Venture capital investments hit record high in 2011
Venture capital funding in Indian companies stood at a record Rs 56,868 crore at the end of 2011.
Clearly, entrepreneurs with innovative ideas are having no difficulty in raising funds for their ventures.
This was 18.8 per cent higher than their cumulative investment of Rs 47,859 crore as of December 31, 2010, according to the latest SEBI data. In 2010, cumulative venture capital investment had declined by 7.4 per cent vis-à-vis the previous year.
Venture capital consists of equity, quasi equity or conditional loan in order to promote unlisted, high-risk or high-tech firms driven by technically or professionally qualified entrepreneurs.
The typical venture capital investment occurs after the seed funding round, with a view to generate returns through a subsequent realisation event, such as an IPO or trade sale of the company.
Among the big-ticket venture capital deals in 2011, online retailer Fashionandyou. com raised $40 million from a group of investors, while group buying portal Snapdeal.com attracted $40 million.
Among other notable deals, e-commerce retailer Flipkart secured $20 million and shopping site Naaptol.com raised $25 million.
Foreign VC investors
Both domestic as well as foreign venture capital companies are vying for a piece of the pie.
While foreign venture capital investors (FVCI) accounted for the bulk of the investment in the quarter ended December 31, 2011, at 65.8 per cent, venture capital funds (VCF) contributed the remaining 34.2 per cent. FVCI investments have been showing a steady growth over the last two years.
These investments increased by 16.5 per cent in 2011, compared with the previous year, while the increase was 23.9 per cent in 2010.
Sector break-up
In terms of individual sectors, the bulk of the investment was in the real estate sector, which attracted Rs 10,831 crore.
The telecommunications sector was the next biggest target, with Rs 7,516 crore. Information technology attracted Rs 4,322 crore and other industries have taken in a cumulative Rs 26,673 crore.
While some sectors saw an increase in VCF/FVCI investments to an all-time high in the quarter ended December 31, 2011, most saw the level of investment drop from previous peaks.
The telecommunications sector (-9.7 per cent), real estate (-4.4 per cent), services (-15.7 per cent) and media/entertainment (-31.8 per cent) have seen VCF and FVCI investments decline from their peaks.
Nevertheless, the record VCF/FVCI investment in the information technology and ‘other’ category sectors, took the cumulative investment to an all-time high in the quarter ended December 31, 2011.
Clearly, entrepreneurs with innovative ideas are having no difficulty in raising funds for their ventures.
This was 18.8 per cent higher than their cumulative investment of Rs 47,859 crore as of December 31, 2010, according to the latest SEBI data. In 2010, cumulative venture capital investment had declined by 7.4 per cent vis-à-vis the previous year.
Venture capital consists of equity, quasi equity or conditional loan in order to promote unlisted, high-risk or high-tech firms driven by technically or professionally qualified entrepreneurs.
The typical venture capital investment occurs after the seed funding round, with a view to generate returns through a subsequent realisation event, such as an IPO or trade sale of the company.
Among the big-ticket venture capital deals in 2011, online retailer Fashionandyou. com raised $40 million from a group of investors, while group buying portal Snapdeal.com attracted $40 million.
Among other notable deals, e-commerce retailer Flipkart secured $20 million and shopping site Naaptol.com raised $25 million.
Foreign VC investors
Both domestic as well as foreign venture capital companies are vying for a piece of the pie.
While foreign venture capital investors (FVCI) accounted for the bulk of the investment in the quarter ended December 31, 2011, at 65.8 per cent, venture capital funds (VCF) contributed the remaining 34.2 per cent. FVCI investments have been showing a steady growth over the last two years.
These investments increased by 16.5 per cent in 2011, compared with the previous year, while the increase was 23.9 per cent in 2010.
Sector break-up
In terms of individual sectors, the bulk of the investment was in the real estate sector, which attracted Rs 10,831 crore.
The telecommunications sector was the next biggest target, with Rs 7,516 crore. Information technology attracted Rs 4,322 crore and other industries have taken in a cumulative Rs 26,673 crore.
While some sectors saw an increase in VCF/FVCI investments to an all-time high in the quarter ended December 31, 2011, most saw the level of investment drop from previous peaks.
The telecommunications sector (-9.7 per cent), real estate (-4.4 per cent), services (-15.7 per cent) and media/entertainment (-31.8 per cent) have seen VCF and FVCI investments decline from their peaks.
Nevertheless, the record VCF/FVCI investment in the information technology and ‘other’ category sectors, took the cumulative investment to an all-time high in the quarter ended December 31, 2011.
Saturday, June 23, 2012
V-Guard Industries targets 25% growth this fiscal
YDERABAD: Leading consumer electrical and electronics firm V-Guard Industries is targeting 25 per cent growth during the current financial year, a company official said Friday.
The company, which achieved a turnover of Rs.1,000 crore during 2011-12, has been growing at 35 to 40 per cent for last three years. "We set the modest target but achieved more," said V. Ramachandran, director, marketing and strategy, V-Guard.
He was talking to reporters on the occasion of launching Enviro, a high-speed pedestal fan with the unique magneto motive drive technology.
The fan can save up to 50 per cent energy. "A consumer with an average daily usage of eight to 10 hours can save Rs.1,000 annually on electricity bill," Ramachandran said. The key feature of Enviro is that it can perform better even in low voltage conditions.
Ramachandran said with the first-of-its-kind NMD technology, Enviro was introduced in Andhra market. The product will soon be introduced in other markets.
V-Guard hopes to sell 20,000 Enviro units in the Indian market and add Rs.5 crore revenues during 2012-13. Fans contribute to seven per cent of the company's total revenues.
V-Guard's revenues from the fan market was Rs.130 crore last year. The company, which forayed into fans only four years ago, is now one of the leading manufacturers.
The firms plans to invest Rs.25 crore this year in its Kashipur plant in Uttarakhand to double its wire capacity. The plant current capacity is 3.25 lakh coils per month.
The company, which achieved a turnover of Rs.1,000 crore during 2011-12, has been growing at 35 to 40 per cent for last three years. "We set the modest target but achieved more," said V. Ramachandran, director, marketing and strategy, V-Guard.
He was talking to reporters on the occasion of launching Enviro, a high-speed pedestal fan with the unique magneto motive drive technology.
The fan can save up to 50 per cent energy. "A consumer with an average daily usage of eight to 10 hours can save Rs.1,000 annually on electricity bill," Ramachandran said. The key feature of Enviro is that it can perform better even in low voltage conditions.
Ramachandran said with the first-of-its-kind NMD technology, Enviro was introduced in Andhra market. The product will soon be introduced in other markets.
V-Guard hopes to sell 20,000 Enviro units in the Indian market and add Rs.5 crore revenues during 2012-13. Fans contribute to seven per cent of the company's total revenues.
V-Guard's revenues from the fan market was Rs.130 crore last year. The company, which forayed into fans only four years ago, is now one of the leading manufacturers.
The firms plans to invest Rs.25 crore this year in its Kashipur plant in Uttarakhand to double its wire capacity. The plant current capacity is 3.25 lakh coils per month.
RIL to sell textiles business, appoints NM Rothschild to manage the sale
India's largest private sector company, Reliance Industries, has decided to sell its oldest business, textiles, along with its iconic brand `Only Vimal' in an effort to exit loss-making businesses. The Mukesh Ambani company has hired NM Rothschild to manage the sale, a top official directly involved with the sale said.
The textile business sale, which includes its Naroda factory, is expected to be concluded by the end of the year. The business was set up by the founder-Chairman of the group late Dhirubhai Ambani along with his brother Ramniklal Ambani way back in 1966. However, since then the group has diversified into energy and petrochemical businesses to become India's largest company with an annual turnover of Rs 85,000 crore. Its textile business contributes less than Rs 2,000 crore to the group's revenues.
According to the sale documents seen by ET Now, the textile business sale will also include the retail network of the Only Vimal brand of fabrics.
When contacted, a Reliance Industries spokesperson said: "We do not comment on market rumours."
The Reliance group is not interested in any business in which the annual returns are less than 12 percent, a source in the group said.
"We would rather invest that money in bank deposits," the source added, asking not to be identified.
The group's top management is also unhappy with the frequent labour trouble at the Naroda factory. In April this year, RIL's Naroda factory employees went on strike, seeking a 60 percent rise in wages. Although the Ambanis have an emotional connect with the business, the Only Vimal brand is being sold to sweeten the deal, the source noted.
In the annual general meeting of shareholders held early this month, Chairman Mukesh Ambani promised that the company will double its operating profits in five years and invest a massive Rs 100,000 crore in Indian businesses in the next five years. Most of this investment will go into expanding its petrochemicals operations, foraying to telecom as well as its oil and
gas business.
Even the retail business, the youngest baby in Reliance's family, is expected to double turnover from Rs 7,500 crore in FY 2012 to Rs 15,000 crore by March next year.
"The focus of the management is to invest in businesses where returns are around 25 percent. Hence, the textile business does not fit in the new strategy," the source said.
The Reliance stock was trading 2.47 percent down at Rs 719.40 when ET Now broke the story at 10 a.m. on Thursday.
In its annual report for the year 2012, Reliance said the textile industry was impacted due to volatile cotton markets. Within a span of around 5-6 months, international and domestic cotton prices saw a historic peak and, subsequently, a steep fall.
"The uptrend was primarily due to shortage of cotton availability across the world and certain government policies on cotton and cotton yarn exports, which were not receptive to textile industry growth. Consequently, the industry resorted to panic buying and stocked cotton. But with the beginning of a declining trend in cotton prices, the industry faced problems in sourcing cotton, impacting the downstream demand as well," it said.
The company further said the end-users moved into a strict wait-and-watch mode and the textile industry faced a huge pile-up of unused cotton and cotton yarn inventory, leading to severe stock losses.
Manmade fibre, especially polyester and yarn, fared relatively better as volatility in prices of polyester was much lower compared to cotton. Major textile production centres in Andhra Pradesh, Tamil Nadu and some northern states faced severe power shortage, adversely affecting output and profitability of mills. Labour shortage was another problem faced by the industry, the annual report noted.
The textile business sale, which includes its Naroda factory, is expected to be concluded by the end of the year. The business was set up by the founder-Chairman of the group late Dhirubhai Ambani along with his brother Ramniklal Ambani way back in 1966. However, since then the group has diversified into energy and petrochemical businesses to become India's largest company with an annual turnover of Rs 85,000 crore. Its textile business contributes less than Rs 2,000 crore to the group's revenues.
According to the sale documents seen by ET Now, the textile business sale will also include the retail network of the Only Vimal brand of fabrics.
When contacted, a Reliance Industries spokesperson said: "We do not comment on market rumours."
The Reliance group is not interested in any business in which the annual returns are less than 12 percent, a source in the group said.
"We would rather invest that money in bank deposits," the source added, asking not to be identified.
The group's top management is also unhappy with the frequent labour trouble at the Naroda factory. In April this year, RIL's Naroda factory employees went on strike, seeking a 60 percent rise in wages. Although the Ambanis have an emotional connect with the business, the Only Vimal brand is being sold to sweeten the deal, the source noted.
In the annual general meeting of shareholders held early this month, Chairman Mukesh Ambani promised that the company will double its operating profits in five years and invest a massive Rs 100,000 crore in Indian businesses in the next five years. Most of this investment will go into expanding its petrochemicals operations, foraying to telecom as well as its oil and
gas business.
Even the retail business, the youngest baby in Reliance's family, is expected to double turnover from Rs 7,500 crore in FY 2012 to Rs 15,000 crore by March next year.
"The focus of the management is to invest in businesses where returns are around 25 percent. Hence, the textile business does not fit in the new strategy," the source said.
The Reliance stock was trading 2.47 percent down at Rs 719.40 when ET Now broke the story at 10 a.m. on Thursday.
In its annual report for the year 2012, Reliance said the textile industry was impacted due to volatile cotton markets. Within a span of around 5-6 months, international and domestic cotton prices saw a historic peak and, subsequently, a steep fall.
"The uptrend was primarily due to shortage of cotton availability across the world and certain government policies on cotton and cotton yarn exports, which were not receptive to textile industry growth. Consequently, the industry resorted to panic buying and stocked cotton. But with the beginning of a declining trend in cotton prices, the industry faced problems in sourcing cotton, impacting the downstream demand as well," it said.
The company further said the end-users moved into a strict wait-and-watch mode and the textile industry faced a huge pile-up of unused cotton and cotton yarn inventory, leading to severe stock losses.
Manmade fibre, especially polyester and yarn, fared relatively better as volatility in prices of polyester was much lower compared to cotton. Major textile production centres in Andhra Pradesh, Tamil Nadu and some northern states faced severe power shortage, adversely affecting output and profitability of mills. Labour shortage was another problem faced by the industry, the annual report noted.
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