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Corus says 3,500 jobs to go worldwideLONDON (Reuters) - Anglo-Dutch steel group Corus announced on Monday the loss of around 3,500 jobs worldwide, with the majority in the United Kingdom, as it restructures to battle a downturn in global steel demand.Source: Reuters: Money News | 26 Jan 2009 | 12:24 pm US Stock-Index Futures Rise as Pfizer Agrees to Acquire Wyeth - Bloomberg
Source: Google News India - Business | 26 Jan 2009 | 12:23 pm Pfizer net profit falls, hurt by charges - Reuters
Source: Google News India - Business | 26 Jan 2009 | 12:15 pm Oil prices ease in Asia!Oil prices eased in Asian trade on Monday following a report that the International Monetary Fund will further lower its world economic growth forecast.Source: Zee News : Business | 26 Jan 2009 | 12:12 pm FII inflows may resume in second half of 2009: Experts!Foreign Institutional Investors, who deserted the Indian bourses last year, leaving them to face the heat of the global economic crisis are likely to make a come back in the second half of this year.Source: Zee News : Business | 26 Jan 2009 | 12:12 pm Not thousands, we recruit in lakhs: LIC Chairman!The size does matter when it comes to employment generation at a time when companies are wielding axe on jobs, as insurance giant LIC said it would employ 11 lakh more agents by March 2011 to double its field workforce.Source: Zee News : Business | 26 Jan 2009 | 12:12 pm Yahoo! to freeze pay hikes in `09!Yahoo! has decided to freeze salary hikes of its employees this year as the Internet major explores cost cutting measures to cope with the deteriorating global economic situation.Source: Zee News : Business | 26 Jan 2009 | 12:12 pm `Pfizer, Wyeth deal nears`!Pfizer Inc, the world`s largest drugmaker, was close to a USD 68 billion purchase of US rival Wyeth in a move to diversify its revenue base, sources familiar with the situation said on Sunday.Source: Zee News : Business | 26 Jan 2009 | 12:12 pm Airbus chief sees 50-60% drop in world aircraft sales!World demand for new aircraft could plunge 50 to 60 percent in 2009 due to the global economic crunch and tight credit, Airbus chief executive Thomas Enders said in the Saudi capital on Sunday.Source: Zee News : Business | 26 Jan 2009 | 12:12 pm RBI sounds caution on growth outlookMumbai: The Reserve Bank of India (RBI) said on Monday the balance of risks on the growth outlook for Asia’s third-largest economy had tilted towards the downside due to the ongoing global economic slowdown and deterioration in world financial markets. “Several significant global and domestic developments recently have rendered the outlook uncertain and have increased the downside risks associated with real GDP growth,” the central bank said in its review of macroeconomic and monetary developments. It said a central bank survey of professional forecasters in December had placed 2008-09 growth at 6.8%, down from 7.7% forecast three months earlier. The RBI will review its monetary policy on Tuesday, as evidence of sharp downturn in the economy began to surface against the backdrop of an economic slowdown around the world. A Reuters poll last week showed the central bank was tipped to hold interest rates steady, but a sizeable minority of analysts polled by Reuters bet on yet another cut. The RBI has cut its short-term lending rate by 350 basis points in four steps since 20 October, including a cut earlier this month, as the global meltdown has hurt business sentiment and reduced demand. Source: Home - Livemint.com | 26 Jan 2009 | 12:05 pm Satyam board to meet tomorrow - Business Standard
Source: Google News India - Business | 26 Jan 2009 | 11:54 am India cbank sounds caution on growth outlook - Reuters India
Source: Google News India - Business | 26 Jan 2009 | 11:45 am Oil rebounds towards $47 - Economic Times
Source: Google News India - Business | 26 Jan 2009 | 11:43 am India celebrates 60th Republic DayNew Delhi: Kaleidoscopic images of India’s rich cultural diversity and the might of its military were on full display on the magnificent Rajpath here on Monday as the nation celebrated its 60th Republic Day amid an unprecedented security cover. An impressive and colourful parade, a traditional attraction of the national event, marched down the thoroughfare connecting the Rashtrapati Bhawan and the historic India Gate as President Pratibha Patil took the salute from marching contingents. Armed forces in battle regalia proudly marching before their supreme commander, scintillating show of air power, fascinating tableaux depicting the diverse culture and hundreds of colourfully-dressed dancing school children were part of the parade. The march-past was watched by the Republic Day chief guest Kazakhstan President Nursultan Nazarbayev, vice president Hamid Ansari, defence minister A K Antony and the country’s top political and military brass, including UPA chairperson Sonia Gandhi, besides a large enthusiastic crowd that had gathered on either sides of the Rajpath. As Prime Minister Manmohan Singh is recuperating from his bypass surgery in All India Institute of Medical Sciences, Antony performed all the customary duties of the Prime Minister during the Republic Day celebration. Minutes before the parade began, Antony and chiefs of Army, Navy and Air Force laid wreaths at ‘Amar Jawan Jyoti´, the British-era World War-I memorial at India Gate, where an eternal flame burns in memory of those who laid down their lives while defending the nation’s frontiers. Source: Home - Livemint.com | 26 Jan 2009 | 11:31 am Barclays not seeking capital after $11 bn hitLondon: Barclays is not seeking capital from private investors or the state as it remains profitable and can absorb a 2008 writedown of £8 billion, the British bank said on Monday, sending its shares soaring. In an unprecedented move after its shares almost halved last week, Barclays repeated a forecast on 16 January that its 2008 pretax profit would be “well ahead” of £5.3 billion ($7.3 billion) and include the impact of £8 billion in gross writedowns, and said it had made a good start to 2009. Shares in the bank were 43.8% higher at 73.6 pence by 0924 GMT although that was only enough to take them back to around Thursday’s opening price and still left them trading at one tenth of their value in February 2007. The statement gave a boost to other bank stocks, with Lloyds Banking Group jumping 18 percent and Royal Bank of Scotland gaining 12%. “There will still be scepticism in the market but it’s a very powerful statement,” said Ian Gordon, analyst at Exane BNP Paribas. Marcus Agius, Barclays chairman, said in a statement made available to Reuters: “The bank has taken significant writedowns in a very challenging environment, but record income levels across the business mean it remains profitable and well capitalised. We seek no further capital.” Writing in an open letter to customers and shareholders, Agius and chief executive John Varley said the 2008 profit estimates included all costs, impairment and market valuations. It included gains stemming from its acquisition of Lehman Brothers’ North American business and the sale of its closed life unit but that overall the projected profit reflected “strong operating profit generation”. Good Start To 2009 Analysts said the profit and writedowns were in line with expectations after the 16 January statement, but could reassure some investors who were wary the bank was not being conservative enough with its valuations of assets hit by the credit crisis. Agius and Varley said the letter aimed to address “the principal causes of concern which we are hearing”. Barclays said net of gains on the valuation of debt it carries on its books, hedging and attributable income, the bank’s writedowns for the year would be about £5 billion. “These figures demonstrate that although we have been heavily impacted by the credit crunch, our income generation was at a record level in 2008 and has enabled us to withstand this impact and still produce strong profits,” they wrote. Exane’s Gordon said Barclays’ capital position was slightly weaker relative to peers but that it was “adequate, and adequate is what counts”. “If Barclays is able to avoid capital raising until after the end of June it would unwind much of the damage done in the past week, as it would avoid triggering the anti-dilution clauses in the west Asia contracts,” Gordon added. If Barclays raises capital before the end of June investors from Qatar and Abu Dhabi who provided funds last year would receive more shares for no extra cost, which would dilute other investors. Shares in Barclays have lost more than two-thirds of their value over the last two weeks amid concerns the bank will be forced to raise fresh capital or even be part-nationalised as writedowns mount in tandem with the slowing global economy. But Barclays said it had £36 billion in committed equity capital and reserves and that it was not seeking new capital from anywhere. Its year-end equity tier 1 ratio was about 6.5% and its tier one ratio was about 9.5%. Its capital exceeded the UK regulatory minimum by “an amount equivalent to some £17 billion of pretax profit”, the letter said. The bank said it had seen “a good start to 2009” and that customer activity levels had been high. “In particular the operating performance of Barclays Capital, benefiting as it is from the now completed integration of the Lehman business, has been extremely strong.” The bank said it would bring forward the release of full 2008 financial results to 9 February. Source: Home - Livemint.com | 26 Jan 2009 | 11:13 am HUL names R Sridhar as CFO - Times of India
Source: Google News India - Business | 26 Jan 2009 | 10:33 am India has no better friend than US, says ObamaWashington: Greeting India on the occasion of the country’s 60th Republic Day, US President Barack Obama said Indians have no better friend and partner than the people of the United States. “As the Indian people celebrate Republic Day all across India, they should know that they have no better friend and partner than the people of the United States,” Obama said. Obama, who calls India as a natural ally of the US and seeks inspiration from Mahatma Gandhi, in a message said: “It is our shared values that form the bedrock of a robust relationship across peoples and governments. “Those values and ideals provide the strength that enables us to meet any challenge, particularly from those who use violence to try to undermine our free and open societies.” As Indians and people of Indian origin in the US and around the world celebrate Republic Day on 26 January, Obama said: “I send the warmest greetings of the American people to the people of India. Together, we celebrate our shared belief in democracy, liberty, pluralism, and religious tolerance.” Referring to the new bonhomie of relationships between India and the US in the last one decade, the US President said the two nations have built broad and vibrant partnerships in every field of human endeavour. “Our rapidly growing and deepening friendship with India offers benefits to all the world’s citizens as our scientists solve environmental challenges together, our doctors discover new medicines, our engineers advance our societies, our entrepreneurs generate prosperity, our educators lay the foundation for our future generations, and our governments work together to advance peace, prosperity, and stability around the globe,” he said. Source: LatestNews-Home - Livemint.com | 26 Jan 2009 | 10:29 am Oerlikon sells chip business units as it refocuses - EETimes.com
Source: Google News India - Business | 26 Jan 2009 | 10:21 am Himachal governor commends state's development on R-DayHimachal Pradesh Governor Prabha Rao Monday took the salute at the Republic Day parade held on the historic Ridge here and commended the development initiatives undertaken by the state on the occasion.Source: IndiaeNews.com: Business News | 26 Jan 2009 | 10:01 am Satyam's Rs 5000 cr cash disappeared in a quarter - Economic Times
Source: Google News India - Business | 26 Jan 2009 | 10:00 am UK union meets with Corus amid job cut fearsLONDON (Reuters) - British steelworkers union Community said on Monday it was meeting with Corus following a report that the Anglo-Dutch group will respond to falling steel demand by cutting 3,500 jobs, including 2,500 in the UK.Source: Reuters: Money News | 26 Jan 2009 | 9:58 am ING to take government guarantees,CEO steps downAMSTERDAM (Reuters) - Dutch financial group ING will take a 2008 loss of 1 billion euros ($1.3 billion) and will tap into 22 billion euros of Dutch state loan guarantees for its troubled loan portfolio, it said on Monday.Source: Reuters: Money News | 26 Jan 2009 | 9:46 am Satyam's Rs 5,000 cr cash disappeared in a quarterScam- tainted Satyam Computers is believed not to have made any term deposit after mid-February 2007.Source: Daily News & Analysis: Money News | 26 Jan 2009 | 9:44 am Satyam to look at funding options, L&T stakeHyderabad: Satyam Computer Services Ltd will this week discuss a shortlist of three candidates for chief executive and look at funding options to get the fraud-hit outsourcer through the next few weeks. A meeting on Tuesday of the new board, appointed by the government in the wake of the country’s biggest corporate scandal, is also expected to discuss a move by India’s largest engineer and builder, Larsen & Toubro, to treble its stake in Satyam to 12%. While the board’s focus had been expected to be on putting the damaged company back on track, with the selection of a new leadership team, Friday’s stake building by L&T will be a distraction. The software services exporter is also striving to keep hold of its global clientele, which includes General Electric and Nestle. The Economic Times reported on Monday that Caterpillar Inc, the world’s largest construction equipment maker and one of Satyam’s oldest customers, had raised the prospect of ending its outsourcing contract amid concerns over stability and the departure of key staff. “Caterpillar has approached Satyam with a notification seeking termination,” the paper said, citing an unnamed Satyam employee familiar with the discussions. A spokesman for Satyam confirmed Caterpillar is a client, but declined to comment further on the report. Satyam has been struggling for survival since 7 January when founder Ramalinga Raju resigned as chairman revealing profits had been overstated for years and $1 billion in cash on the books did not exist. Raju, the company’s former managing director and the chief financial officer are in police custody in Hyderabad. Satyam’s board said on Friday it was close to finalising additional funds needed until end-March -- to pay salaries and other bills -- and would announce the new arrangement by Wednesday. It said it had a shortlist of three for the chief executive and chief financial officer positions. “We fully recognize the urgency and importance to have the right person with the right experience and abilities to successfully steer the company through these turbulent times,” the board said. Circling With a 12% stake underlining its position among Satyam’s largest shareholders, L&T may emerge as frontrunner among potential buyers for the software services exporter. L&T, which operates a much smaller software services unit, had previously said it may look for an alliance with Satyam once the company’s accounts had been fully investigated. “L&T has taken the lead and being a local company it will be favoured by the government also,” said R.K. Gupta, managing director at Taurus Mutual Fund. “But my feeling is for the time being they will stop at just below 15%. That stake may get them a seat on the board. When the asset/liability positions become clear, they can go for a 20% open offer.” On Saturday, police said they arrested two partners at Satyam’s auditors, PricewaterhouseCoopers. Source: Home - Livemint.com | 26 Jan 2009 | 9:22 am Pfizer nears $68 bln deal to buy Wyeth - sourcesPHILADELPHIA/AMSTERDAM (Reuters) - Pfizer Inc, the No.1 drugmaker, was close to a $68 billion purchase of U.S. rival Wyeth in a move to diversify its revenue base, sources familiar with the situation said.Source: Reuters: Money News | 26 Jan 2009 | 9:17 am Arjun Malhotra on founding HCLThis is Kamla Bhatt. Today my guest is Arjun Malhotra who is CEO and Chairperson of Headstrong Inc. an IT global consulting firm. He was a co-founder of Hindustan Computers Limited (HCL), which opened up its offices in 1975 in New Delhi, in his grandmother’s barsaati.  Kamla: Welcome to the show. Arjun: Thank you Kamla. Kamla: What was it like growing up in Calcutta in the 1950s? You have a pretty colorful history, your father’s side of the family is from Burma and your mother’s side of the family is from Pakistan. Your grandfather was a very well known scientist. Arjun: You know my maternal grandfather had settled in Calcutta in the early 1900s. They were from Lahore and Gujranwala which is now in Pakistan. Basically we are a Calcutta family because when we moved in 1956, my grand mother said she lived in Calcutta for 40 years. What was Calcutta like in early 1950s when I grew up there? I think it was like relic of the Raj; it really was still a piece of the British empire but independent. Infact I remember going to the Loretto House and the Loretto used to admit boys at that time up to nursery and I remember going to Loretto House from our home at Park Mansions on Ripon Street, which is close by for those who know Calcutta. I would go on my servant’s shoulder- piggy back and my bag would go in the rickshaw and that’s how I remember my growing up days. Calcutta was a great experience. I spent a year in St. Xavier’s there and then in 1956 when my maternal grandfather passed away, the family moved to Delhi. We have really been Delhi bound since then. My father’s family actually settled in Burma some 200-300 years ago. It is funny- we are originally pathans from Peshawar, the North West frontier province. But they settled in Burma so a lot of them moved across to India or moved out of Burma I should say during the war. I still have my dad’s eldest brother and his family stayed on in Burma and I still have 2 first cousins I haven’t met ever- who lived there and they have grandchildren and now great-grand children. I do plan to go to Burma one day and catch up with them personally. Kamla: You also grew up at very interesting time in the history of the country because you were born in the 1940s, you went to school in the 1950s and 1960s. And in the 1960s and 1970s when you were teenager, a young person-- the country went through 3 wars. You were actually in school in Kharagpur, when the 1965 war broke out and you have a very interesting story about your Kharagpur experience. Arjun: Yes, I joined Kharagpur in mid-1965 and actually in our first term there, I think it was September if I remember. We woke up in the morning with the windows rattling and smoke coming from sort of nearby and we realize that this big airbase at Kalaikunda, there was some problem there. We did not know what the problem was, so a number of us just jumped onto our bikes and just decided you know we will forget class for today. Let’s go and see what the issue is and as we get to Kalaikunda and we find this ack ack gunner busy firing his gun. We asked him what is going on and found there is a dog fight between F86 Sabers from the Pakistan air force and Hunters from the Indian air force right above us. We were standing there and yelling- ”buck up air force” and you know whatever else you yell to try and cheer up people- not that it matters and I don’t think anyone could here us.Wwhen one of the Sabers decided that he wanted to straf this ack ack gunner and this guy the gunner told us to run like crazy. So we are running with all these bullets flying around. War sort of puts you into a different frame of mind, through the completely different trance. And he did hit that Saber and it sort of crashed into a rice paddy field, hit a tree about 150 yards in the direction we were running and of course we continued running. We got to the plane, stripped it- whatever we could to carry bag to IIT. We put it around our cycles you know-at the back, to get back. And of course, the air force folks came in the evening and asked for all of it to be given back to them- which we did. But yes, it’s something I remember. I can’t imagine myself behaving that way when I look at life rationally, but I think when you are in the middle of a war, somehow you do not think rationally. Kamla: Now lets shift to 1970s, you are working at DCM. You had graduated from IIT with a degree in Electronics and Electrical Communications which is kind of unusual by itself. I don’t know if you think it is and you were working at DCM. What prompted you all to found the company when starting a company was, I am assuming, not the norm? There was no start up culture in 1970s. Arjun: Interesting question.Let me describe India in the 1970s to you- it was very much socialist country and they had an act called the Monopolies & Restrictive Trade Practices Act, which really said that if you are a private company- private means not government held, not public sector, you could be a public company meaning you have your stock in stock exchange but you are still a private company. So if you are privately owned company, you were and being big was not a good thing. So you were restricted in what you were able to do. You could not grow more than a certain percent and you could not get into new areas. When we introduced the idea of a computer to DCM, there was a lot of excitement. We actually worked and designed both an 8bit and a 16bit, 8bit micro processor based and a 16bit bit sliced based computer. Unfortunately for us, the legal, finance and administration group in DCM advised the management that this would be going against the provision of the Monopolies & Restrictive Trade Practices Act and that the company should not take the risk of endangering their other businesses, by trying to get into something new because the government, it would upset the government. For us, I must be 25 at that time. You know, you do not see the end of your life at 25, you might be being paid a lot of money- not a lot, but being paid good money but you do not really see a life ending at that time. And we also figured that you know, micro processors were going to change the world and so 6 of us got together and said if DCM did not know what they were missing, why don’t we go out and start it ourselves. It was complete bravado I mean- (we had) knowledge of the market, knowledge of the technology but no money at all. No chance of VC’s and no chance of families coming up with the money because no one came from a business family; everyone came from a service family. That is how we started. Why did we choose my grandmother’s barsaati at Golf links? First of all, she gave it free, which was very important so you have got an office that was free second is for those of you who know Delhi, Golf links is one of those up market localities and the fact that you have an office there and you could put it on your business card, we felt people might think we had some old money behind us and it might give us some credibility. So that is the reason why we actually took up her offer. For a year or so, we used the bedrooms and had people working out of those offices and we rolled back the bedrooms in the evening till we moved to our first office a year later. We got so big that we had to get out of there. Kamla: So you got the company because of pure accident? Because of a bureaucratic hurdle that prevented Delhi Cloth Mill (DCM) from expanding? Arjun: Yes. If I can get it down to one reason, that is probably the one big reason why it happened. We were very happy at DCM. We were all doing lots of exciting things and I think we would have continued to do it except that you know they just decided to put a stop to how we were planning to move in the future. We just felt that hey, the opportunity was just too great and no one else was doing it in India at that time that we knew. So we thought we might as well step in and try and do it ourselves. Kamla: Did you have a business plan? Arjun: No, we didn’t and we had no money. So when we put it together we you know we said the total equity we will put in is about Rs. 2 lacs, which is about Rs. 200,000 which was about $ 20,000 in those days because it was Rs. 10 to a dollar. Ee divided up between 6 of us a total of Rs.1,75,000. We kept Rs.25,000 for people who we thought we might need in the future. So we will keep some equity open for them. Actually HCL finally, the denominator closed at 183,000. we never really gave the last 17,000 to anyone because you know we did not need money after that because the company was able to Again as Kamla puts it: it was a set of accidents that enabled us to become cash positive. Let me talk a little bit about the history. When we started we realized we had no money and we needed to invest some money into developing our own computer otherwise we are not going to have our own computer. So, we said let’s go back to calculators which we understand and let us manufacture calculator, sell them, make some money and pump that money into developing computers. Before we could do that, the late Mr. Ved Luthra from Televista Electronics approached us and said that you know he is already manufacturing calculators. He just does not know how to or he hasn’t been able to sell successfully in the volumes that he wanted. Why don’t we do a deal with him where he will give us the estimate of production cost, we will given him the estimate of sales cost and there will be a margin in between that we will divide in the middle. He will do a transfer pricing on that basis at the end of every quarter, we will look at the actual expenses and do the adjustment. So, we technically got stocks that we did not have to pay for 90 days and the cash that came out of that. So, we used that cash. -See if you have 90 days to pay and you keep your receivables at 30 days, you certainly have a lot of cash that you can invest in other activities which is really what we did and you know again as a pure co incidence for a year we sold Televista Calculators from company called Micproint that we had formed and used the money we were making to invest into developing computers and finally registered Hindustan Computers Limited as a company in August, 1976 with the joint venture with U.P. Electronics Corporation. Kamla: With the U P Electronic corporation? So what I am hearing from you is that you became a channel partner for Televista, is that what you became? Arjun: Yes, so Televista did the manufacturing, Televista let us use their offices around the country, so we did not have to invest in offices and we sold Televista calculators. It was their brand, we made our money on the marketing but we were a complete- they just manufactured and they manufactured what we told them to manufacture. So that is how it worked. It we were really a separate company but we were like the integrated sales and marketing arm. Kamla: It looks like you have had lots of crazy moments in the growth of HCL. Today it’s a billion dollar company. It was one of the early product companies that came out of India and it is probably a coincidence that when Steve Jobs and Wozniack released AppleOne, you guys also released your first computer. Is that right? Arjun: Yes, that is correct. It is - I think, the same year and the same month that we released our 8 bit commercial computer to the Indian market. You know, when you ask the question in that particular way, I never thought of it that way but yes, we probably were the first company that set up an R&D to do development, to make a product that was specific for India. We did not really take something that was being sold abroad and reverse engineer it or assemble it and do whatever people did at that time to make products for the Indian market. We actually developed our HCL 8C as it was called then, it had really what we called a PSAR unit- Power Shut Auto Restart Unit, which really ran with a big battery in it and basically- when you have power cuts in India, it would hold all the memory and computation of counters exactly where they were when the power went off and when the power came back, the computer would start from exactly the point where it had stopped so we did not loose any processing time or any data or information. That is really what we did and in some ways, our competition really picked up machines from overseas or probably did not do as much development, or did not think of that idea and that was unique and something that our customers found very useful. From that time on, actually HCL’s policy in terms of the computers that they delivered would always be developed in India, developed something that is relevant and unique to India and then make it available. And we continued that and probably they continued that even today with the PC’s, we really moved out of the large UNIX server boxes when we did a joint venture with HP in 1991. Kamla: So you have worn different hats at HCL but you were mostly in the front end sales and marketing. Is that what you did? Arjun: Yes. I ran the field operations for HCL. So yes, basically the sales and marketing- that is what I did., S. Raman actually ran the production and R&D and Shiv (Nadar) basically ran the cash flow of finance and really the rest of the company. Although he did have a lot of inputs I know in marketing, that we used to lean on him quite heavily when we looked at any new plans or any other things that we needed to do. But really- that is how we ran HCL; it pretty much ran as I would say two separate companies with one cap. Kamla: Generally when you have more than two founders in a company, you run into a problem. In your case, you had six people who founded the company. What were your decision making processes like? Who did you turn for you know- any kind of intervention, if outside intervention needed-needed to be used or who did you turn to for getting advice on how to resolve the problem because you guys were in the forefront of bleeding and leading edge technology? Arjun: You know, I had thought about that quite often because really the six people who started the company worked together for something like 19 or 20 years before some of them decided to do something else. And really, I think we had 2 or 3 sets of rules. One is that if Shiv was running HCL, then really the buck had to stop with him and that every one else was really a soldier that worked accordingly. If I was running the CAD/CAM division, then the buck stopped with me, if Pammi was running reprographics then the buck stopped with him. You know if Subhash was running Fareast computers, he took the decisions. That is really how it worked and people were responsible for results and so really they could come to you for advice. You gave them advice. It was up to them whether to take it or not. You could point out to some one if you thought they were doing something wrong. What we did avoid doing is I told you so. If you told some one to do something and he did not listen and he did not work out right because it hurts you as much it hurts him because you too owned the piece of the company. I think more importantly then that, the spouses got long with each other and they were good friends. So lot of times when you had a problem with the person whether at work or whatever else invariably when you met socially, the spouses would make sure that the problem got sorted out and that seemed to work really effectively. I think we enjoyed working together, we probably spent most evenings together also when we were working together because the wives got long with each other and got long with each very well- they still do. So while most of us are doing our own thing today, only two of the six founders are still in HCL. We still get together fairly often, socially and otherwise and really I know the spouses get together for lunch much more often than we get together in the evenings. Kamla: What prompted you to leave HCL? I know you have answered this question many times but when you look back at it today, do you think that was a right decision for you- to leave HCL- because it is a billion dollar company and you are now heading a small company with $ 200 million in revenue which is in the finance-the securities business. Arjun: HCL is bigger than a billion dollars, it is now some $4 or 5 billions, it is a very different size company but yes what any regrets… not really. I missed HCL. It is not that I do not miss them but yes- no regrets. I think one of the things I have learnt in life is when you take decisions you take decisions if you are going to regret decisions, you will spend most of your life decisions you have taken and regretting them. Yes learn from them, do not make the mistakes but regret is not the right way if you look at decisions that I take at least. Why did I leave? Good question! You know I was 25 when the micro processors came in and I really enjoyed riding that tiger, that technology tiger you know, saw that it changed the world. I was 49 when the internet came in and I was sitting here in the US. I probably saw it before most of the people in HCL really grasped what was going to happen with the internet or what the internet is going to do in their lives. I wanted to be at the cutting edge of the internet, just fool around with what happens. HCL Company had a strategy that was obviously right for their shareholder was that they really did not want to spend too much time and money on it. They wanted to wait, look in which direction it would go and then run very fast in that direction. Which really- as I said as a shareholder made a lot of sense to me but I figured that I had this opportunity and I thought I was really lucky. How many people got to see two major technology paradigm shifts in their lifetime? And so I decided to get out and fool around and. You then look back at why did I start the company or why did I agree to be a part of the group that started the company is - I wanted to have the economic freedom and the mental freedom to do what I wanted to do. I had never thought of what I wanted to do till then but suddenly when the internet came, I actually felt I wanted to do something and I had the economic freedom that HCL had given me, to be able to do it. So I decided that let me try and pursue that I thought was what I wanted to do. It took me a year and a half or some such period to extricate myself from HCL. It was tough, I think it was tough for me and I guess it was tough for everyone else and I wanted to make sure I did it amicably. I did not want to fight with people I had worked with for 20 plus years and I managed to do that. I think there were acrimonious moments in there, there were times when you felt it was never going to work the way I wanted to work but I think in the end, it sort of worked out ok. You were listening to Arjun Malhotra. Tune back in for Part-2 of our interview with Arjun. This is Kamla Bhatt. This program was produced in association with Live Mint Radio. And, as always thank you for tuning in. Source: LatestNews-Home - Livemint.com | 26 Jan 2009 | 9:17 am Oil falls towards $45 on economic outlook, dollarLONDON (Reuters) - Oil fell by around $1 towards $45 on Monday as forecasts of a deepening global economic downturn and a stronger dollar outweighed evidence that OPEC oil producers are reducing output.Source: Reuters: Money News | 26 Jan 2009 | 9:10 am Wyeth withdraws from Crucell takeover talksAmsterdam: US drugmaker Wyeth has withdrawn from talks to take over Dutch biotechnology firm Crucell, sending Crucell shares down as much as 23% on Monday. Shares in Crucell -- one of the world’s few remaining independent vaccine makers -- had already fallen last week on fears that merger talks between Pfizer, the world’s largest drugmaker, and Wyeth could scupper the talks between Wyeth and Crucell. Sources familiar with the situation told Reuters on Sunday that Pfizer was close to finalising the $68 billion purchase. Crucell shares fell to €11.90 by 0807 GMT, knocking about €230 million ($298 million) off its market capitalisation, to trade slightly above the levels seen before the talks between Wyeth were made public on 7 January. “We believe takeover speculation will likely remain a key driver of Crucell’s share price going forward, but the likelihood of such a scenario has become more remote in the short term,” Rabo Securities analyst Fabian Smeets said in a note. Crucell in November posted its first-ever quarterly profit, boosted by sales of its vaccines and cost savings, and raised its 2008 sales outlook. The Dutch company’s sales have been fuelled by strong growth in its paediatric vaccines, especially Quinvaxem, a vaccine cocktail for the childhood diseases diphtheria, tetanus, whooping cough and hepatitis B. Source: World Business - Livemint.com | 26 Jan 2009 | 9:07 am Wyeth withdraws from Crucell takeover talksAmsterdam: US drugmaker Wyeth has withdrawn from talks to take over Dutch biotechnology firm Crucell, sending Crucell shares down as much as 23% on Monday. Shares in Crucell -- one of the world’s few remaining independent vaccine makers -- had already fallen last week on fears that merger talks between Pfizer, the world’s largest drugmaker, and Wyeth could scupper the talks between Wyeth and Crucell. Sources familiar with the situation told Reuters on Sunday that Pfizer was close to finalising the $68 billion purchase. Crucell shares fell to €11.90 by 0807 GMT, knocking about €230 million ($298 million) off its market capitalisation, to trade slightly above the levels seen before the talks between Wyeth were made public on 7 January. “We believe takeover speculation will likely remain a key driver of Crucell’s share price going forward, but the likelihood of such a scenario has become more remote in the short term,” Rabo Securities analyst Fabian Smeets said in a note. Crucell in November posted its first-ever quarterly profit, boosted by sales of its vaccines and cost savings, and raised its 2008 sales outlook. The Dutch company’s sales have been fuelled by strong growth in its paediatric vaccines, especially Quinvaxem, a vaccine cocktail for the childhood diseases diphtheria, tetanus, whooping cough and hepatitis B. Source: Home - Livemint.com | 26 Jan 2009 | 9:07 am Philips swings to first quarterly loss since 2003AMSTERDAM (Reuters) - Dutch Philips Electronics on Monday swung to a fourth quarter net loss of 1.5 billion euros ($1.9 billion), its first quarterly loss since 2003, on write-downs on some of its stakes and acquisitions.Source: Reuters: Money News | 26 Jan 2009 | 9:00 am India may seek cap on Singapore investments - paper - Reuters India
Source: Google News India - Business | 26 Jan 2009 | 8:59 am India may seek cap on Singapore investments - paperMUMBAI (Reuters) - The finance ministry has proposed a cap on investments by Singapore sovereign funds GIC and Temasek in publicly-traded Indian companies, the Economic Times newspaper reported on Monday.Source: Reuters: Money News | 26 Jan 2009 | 8:53 am Steel firm Corus cuts 3500 jobs - BBC News
Source: Google News India - Business | 26 Jan 2009 | 8:32 am Satyam to look at funding options, L&T stakeHYDERABAD (Reuters) - Satyam Computer Services Ltd will this week discuss a shortlist of three candidates for chief executive and look at funding options to get the fraud-hit outsourcer through the next few weeks.Source: Reuters: Money News | 26 Jan 2009 | 8:05 am Wilbur Ross got option for up to 32 pc stake: SpicejetBillionaire private equity investor Wilbur Ross may become owner of up to one-third of carrier Spicejet by next year.Source: Daily News & Analysis: Money News | 26 Jan 2009 | 7:41 am Pfizer agrees to buy Wyeth for $68 bn: Media reportsPharmaceutical giant Pfizer is closing in on a USD 68-billion buyout deal with rival Wyeth, according to media reports.Source: Daily News & Analysis: Money News | 26 Jan 2009 | 6:11 am Not thousands, we recruit in lakhs: LIC chairmanSize does matter when it comes to employment generation at a time when companies are wielding an axe on jobs.Source: Daily News & Analysis: Money News | 26 Jan 2009 | 6:05 am Yahoo! to freeze pay hikes in 2009Yahoo! has decided to freeze salary hikes of its employees this year as the Internet major explores cost cutting measures.Source: Daily News & Analysis: Money News | 26 Jan 2009 | 5:59 am Now, read your favourite book on an MP3, mobile or laptopAs life hurtles on the fast lane, the publishing industry is opening up new, cost-effective and easier reading formats for literature buffs.Source: IndiaeNews.com: Business News | 26 Jan 2009 | 5:32 am Toyota sees 2009 global output down 20 pct - paperTOKYO (Reuters) - Toyota Motor expects to produce 6.5 million vehicles globally on a parent company basis this year, down more than 20 percent from an estimated 8.2 million last year, the Chunichi newspaper reported.Source: Reuters: Money News | 26 Jan 2009 | 5:29 am Indian fin markets closed for holiday on MondayMUMBAI (Reuters) - Indian financial markets are closed on Monday for a holiday. Trading resumes on Tuesday.Source: Reuters: Money News | 26 Jan 2009 | 3:09 am Profits shrink for first 550 cosIndia Inc is finding it increasingly difficult even to grow its profits, after effortlessly clocking scorching growth numbers over the last few years.Source: Business Line - Home Page | 26 Jan 2009 | 12:00 am ‘No doubt over Satyam employee count’Chennai, Jan. 25 It’s official. There are no ghost employees in Satyam and the stated figure of 53,000 as of September 30, 2008 is correct, according to a member of the new board of directors of theSource: Business Line - Home Page | 26 Jan 2009 | 12:00 am Centre plans 40 generic drug stores by MarchMumbai, Jan. 25 The Government-assisted retail stores to sell unbranded generic medicines have begun to open across certain States as part of the Centre’s multi-stakeholder strategy to get affordable medicines to people.Source: Business Line - Home Page | 26 Jan 2009 | 12:00 am Awaiting the RBI signalsEconomic observers are eagerly awaiting the third quarter review of the monetary policy to be announced by the RBI on Tuesday, January 27. In essence, the RBI has three tools at its disposal to influence the monetary conditions. It can increase theSource: Business Line - Home Page | 26 Jan 2009 | 12:00 am Comex gold futures to rise higherGold futures, ended sharply higher Friday fuelled by investment demand as risk aversion increases and the realisation that the financial crisis could last longer-than-expected. The on-going nervousness in the banking sector is boosting sentiment forSource: Business Line - Home Page | 26 Jan 2009 | 12:00 am Hind Unilever net falls marginally in Q4Mumbai, Jan. 25 Consumer goods major Hindustan Unilever Ltd (HUL) reported a 2.5 per cent decline in net profit for the fourth quarter ended December 31, 2008 at Rs 615.74 crore, compared with Rs 631.44 crore in the corresponding quarter of theSource: Business Line - Home Page | 26 Jan 2009 | 12:00 am Downward momentum may continueThe third quarter results have been testing convictions of the optimists. However, dampened sentiment has forced a large chunk of non-institutional investors to sell at a loss. Among the institutional investors, certain FIIs are also bookingSource: Business Line - Home Page | 26 Jan 2009 | 12:00 am More offshoring, staff utilisation save the day for IT majorsBL Research Bureau A higher offshore component and better employee utilisation helped Indian IT majors deliver a healthy profit growth in the turbulent demand environment for the December quarter. They also tweaked the proportion of fixed-priceSource: Business Line - Home Page | 26 Jan 2009 | 12:00 am When will gold hit $1,000 again?Last week, we witnessed gold touching a four-month high of $903.50 before dipping and ending at $895.30 an ounce for January contracts. April contracts, too, ended at a high of $897.70. Gold gained 4.3 per cent on Friday and the close was at aSource: Business Line - Home Page | 26 Jan 2009 | 12:00 am Why no one saw it coming?Bank of England recently reduced the repo rate to 1.5 per cent, which is the lowest in its 315-years history. The rate is the lowest since 1694 — yes, not 1964.The rates are near zero in the US and Japan. This is enough to shatter anySource: Business Line - Home Page | 26 Jan 2009 | 12:00 am Raju hid evidence in cars, kept them runningHundreds of original property papers were stacked in cardboard boxes and loaded into cars, even as CID officials ran all around Hyderabad to trace Raju's properties.Source: Daily News & Analysis: Money News | 25 Jan 2009 | 10:38 pm If Obama was IndianBarack Obama’s inauguration as President of the US marks one of the most remarkable political developments of the modern world. In some ways, it is the realization of an ideal that was described by Abraham Lincoln, the president whose oratory most inspires Obama: “...a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal”. Time and again in his inaugural address, Obama harked back to his country’s history and ideals in framing a vision of response to the challenges not only the US, but the whole world, faces. At India’s independence, Jawaharlal Nehru described the ideals of his new nation, and its grave challenges. India has come a long way, but still remains distant from the goals of bringing “freedom and opportunity to the common man” in “a prosperous, democratic and progressive nation”. What if Obama had given his inaugural address as an Indian? What might he have said? Like Nehru, Obama might note India’s glorious past, but also that some of the clinging past has held India back. Nehru said, “All of us, to whatever religion we may belong, are equally the children of India, with equal rights, privileges and obligations. We cannot encourage communalism or narrow-mindedness, for no nation can be great whose people are narrow in thought or in action.” Obama would be just the person to remind us how far we have fallen short of this ideal in practice. If an Indian Obama were giving an inaugural address, he would certainly also refer to Nehru’s call to service. “It is fitting that at this solemn moment we take the pledge of dedication to the service of India and its people and to the still larger cause of humanity.” But he would note how far we are from that pledge of dedication, so that civic engagement has not fully taken root in India, politics is too often about power and private gain, and is subject to “petty grievances and false promises…recriminations and worn- out dogmas”. An Indian Obama might inspire India’s youth to involve themselves in changing this situation, to believing that not only can they compete with the world’s best in private endeavour, but also be citizens of the world, serving the “larger cause of humanity”. An Indian Obama, unlike his American counterpart, might not need to remind his audience that the market can spin out of control—that particular fear seems to be ingrained in the Indian psyche. Instead, he might remind us even more forcefully that the market’s “power to generate wealth and expand freedom is unmatched”, for that is a lesson that India still has to absorb more fully. He might observe that India’s attempts to do more than just keep a watchful eye on the market have reduced prosperity, and ultimately failed to bring equality of opportunity, or lay a complete foundation for growth. An Indian Obama could make the case for “the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together”, but he would also have to point out that to do this, India’s government needs to shift from running factories and hotels and shops that can be managed more efficiently by the private sector, as long as a level playing field is created. An Indian Obama would note that Indians have gone to all corners of the earth, and thrived through risk-taking and hard work, built and fought for their adopted countries, but always sent back wealth and knowledge to their “much-loved motherland”. Most of all, an Indian Obama would emphasize the need for transforming “our schools and colleges and universities to meet the demands of a new age”. He would point out forcefully how limited the reach of India’s educational system is, how those limits hold back so many, and how “those…who manage” as well as those who receive “the public’s dollars will be held to account”. An Indian Obama would appeal to the people and governments of the nations that border India, seeking “a new way forward, based on mutual interest and mutual respect”. He would offer ways to share and spread India’s fledgling prosperity with those neighbours: clean and adequate water, food for the hungry and education for the young of all those countries. An Indian Obama would remind the nation’s citizens of the values of hard work and honesty, tolerance and fair play, and the price of citizenship: duties that are not grudgingly accepted but seized gladly, reminding us that “there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task”. Nehru told the people of India: “There is no resting for any one of us till we redeem our pledge in full, till we make all the people of India what destiny intended them to be.” An Indian Obama would remind its people of this pledge. Nirvikar Singh is professor of economics at the University of California, Santa Cruz. Your comments are welcome at eyeonindia@livemint.com Source: LatestNews-Home - Livemint.com | 25 Jan 2009 | 7:45 pm If Obama was IndianBarack Obama’s inauguration as President of the US marks one of the most remarkable political developments of the modern world. In some ways, it is the realization of an ideal that was described by Abraham Lincoln, the president whose oratory most inspires Obama: “...a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal”. Time and again in his inaugural address, Obama harked back to his country’s history and ideals in framing a vision of response to the challenges not only the US, but the whole world, faces. At India’s independence, Jawaharlal Nehru described the ideals of his new nation, and its grave challenges. India has come a long way, but still remains distant from the goals of bringing “freedom and opportunity to the common man” in “a prosperous, democratic and progressive nation”. What if Obama had given his inaugural address as an Indian? What might he have said? Like Nehru, Obama might note India’s glorious past, but also that some of the clinging past has held India back. Nehru said, “All of us, to whatever religion we may belong, are equally the children of India, with equal rights, privileges and obligations. We cannot encourage communalism or narrow-mindedness, for no nation can be great whose people are narrow in thought or in action.” Obama would be just the person to remind us how far we have fallen short of this ideal in practice. If an Indian Obama were giving an inaugural address, he would certainly also refer to Nehru’s call to service. “It is fitting that at this solemn moment we take the pledge of dedication to the service of India and its people and to the still larger cause of humanity.” But he would note how far we are from that pledge of dedication, so that civic engagement has not fully taken root in India, politics is too often about power and private gain, and is subject to “petty grievances and false promises…recriminations and worn- out dogmas”. An Indian Obama might inspire India’s youth to involve themselves in changing this situation, to believing that not only can they compete with the world’s best in private endeavour, but also be citizens of the world, serving the “larger cause of humanity”. An Indian Obama, unlike his American counterpart, might not need to remind his audience that the market can spin out of control—that particular fear seems to be ingrained in the Indian psyche. Instead, he might remind us even more forcefully that the market’s “power to generate wealth and expand freedom is unmatched”, for that is a lesson that India still has to absorb more fully. He might observe that India’s attempts to do more than just keep a watchful eye on the market have reduced prosperity, and ultimately failed to bring equality of opportunity, or lay a complete foundation for growth. An Indian Obama could make the case for “the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together”, but he would also have to point out that to do this, India’s government needs to shift from running factories and hotels and shops that can be managed more efficiently by the private sector, as long as a level playing field is created. An Indian Obama would note that Indians have gone to all corners of the earth, and thrived through risk-taking and hard work, built and fought for their adopted countries, but always sent back wealth and knowledge to their “much-loved motherland”. Most of all, an Indian Obama would emphasize the need for transforming “our schools and colleges and universities to meet the demands of a new age”. He would point out forcefully how limited the reach of India’s educational system is, how those limits hold back so many, and how “those…who manage” as well as those who receive “the public’s dollars will be held to account”. An Indian Obama would appeal to the people and governments of the nations that border India, seeking “a new way forward, based on mutual interest and mutual respect”. He would offer ways to share and spread India’s fledgling prosperity with those neighbours: clean and adequate water, food for the hungry and education for the young of all those countries. An Indian Obama would remind the nation’s citizens of the values of hard work and honesty, tolerance and fair play, and the price of citizenship: duties that are not grudgingly accepted but seized gladly, reminding us that “there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task”. Nehru told the people of India: “There is no resting for any one of us till we redeem our pledge in full, till we make all the people of India what destiny intended them to be.” An Indian Obama would remind its people of this pledge. Nirvikar Singh is professor of economics at the University of California, Santa Cruz. Your comments are welcome at eyeonindia@livemint.com Source: LatestNews-Home - Livemint.com | 25 Jan 2009 | 7:45 pm Egypt urges EU to offer fast aid to PalestiniansBrussels: Egypt urged Europe on Sunday to help with fast reconstruction aid for the Gaza Strip and to put pressure on Israel to quickly reopen border crossings. With shaky unilateral ceasefires in place after a 22-day Israeli offensive on Hamas militants in the Gaza Strip, Israel has said it would allow in food, medicine and other essentials to the sector but ruled out a full reopening of borders for now. “I ask the European Union to do (things) very, very quickly to rebuild to help the Palestinians to get out of this crisis,” Egyptian Foreign Minister Ahmed Aboul Gheit said before talks with European and Palestinian counterparts. “We need to force the Israelis to negotiate and also tell them to open crossings and to give Palestinians a chance to live in a normal way,” he told reporters. The EU has said it is ready to reactivate and expand a mission launched in 2005 to monitor the Rafah crossing between Gaza and Egypt, but says agreement on that is hampered by the split between Hamas and President Mahmoud Abbas’s rival Fatah, which lost control of Gaza to Hamas amid fighting in 2007. “The reunification of the Palestinians under the recognised and cherished voice of President Abbas is so important,” said British Foreign Secretary David Miliband. Luxembourg Foreign Minister Jean Asselborn called for a Palestinian national unity government. “When this government of consensus does not come about, I do not know how we can get out of this vicious circle,” he added of the repeated failure of efforts to solve the Israeli-Palestinian conflict. The EU ministers said last week they won assurances from Israeli Foreign Minister Tzipi Livni during talks in Brussels that crossings would be opened for humanitarian aid, while Livni urged the EU to help combat weapon smuggling into Gaza. European officials stress their scope for action is limited while Cairo refuses to have a foreign presence on its soil to monitor the Egyptian end of a network of tunnels bringing in supplies, including arms,(according to Israel) to Gaza. France is sending a naval mission to the region to pre-empt arms supplies coming into Gaza, and there are discussions among EU states about the possibility of a further maritime mission in the Red Sea. However, officials say they do not expect concrete decisions to emerge from Sunday’s discussions, which also involve Turkey and Jordan. Source: LatestNews-Home - Livemint.com | 25 Jan 2009 | 7:38 pm Ask Mint | With property, loan rates down, it’s a good time to consider a buy I believe it’s a good time to consider buying property, as the current interest rates are somewhere at their 2006 levels and in some areas even the total cost of acquiring the property has come down by anywhere between 15% and 25%. Moreover, since you are buying a property for your own use, I think you should seriously start exploring options. In times such as this, when sales have dropped, developers would be more than happy to negotiate and what’s more, there are higher chances of you getting a property of your choice. If you are able to further negotiate a good discount where the rates have not come down much, and at the same time get the property you like, then perhaps that could be the best thing for you. In any case, one will never be able to call a correct bottom. I am a Union government employee and want to buy a property that costs around Rs35 lakh. I have two options available: 1) I can opt for a part of the loan from my employer and the balance from a lending institution. 2) Or, I can take the entire amount from the institution. Please advise. As a Union government employee, you may be eligible for certain concessional loans from your employer and hence you may not want to miss that. For the balance amount, you could avail a regular home loan through a second mortgage. The process is similar to a normal housing loan. This home loan product is specially designed only for Union government employees to buy/construct a residential property. Renu Sud Karnad is joint managing director, HDFC. Readers may write in with their queries and comments to askmint@livemint.com Source: LatestNews-Home - Livemint.com | 25 Jan 2009 | 7:36 pm Padma Vibhushan for Sunderlal Bahuguna, Sister Nirmala, Anil KakodkarNoted environmentalist Sunderlal Bahuguna, Missionaries of Charity head Sister Nirmala and nuclear scientist Anil Kakodar are among the 10 Indians named for the Padma Vibhushan, India's second highest civilian award, it was announced Sunday.Source: IndiaeNews.com: Business News | 25 Jan 2009 | 7:32 pm Padma Vibhushan for Anil Kakodkar, Madhavan Nair, Sister Nirmala; 133 Padma awards announcedNoted scientists G. Madhavan Nair and Anil Kakodkar, environmentalist Sunderlal Bahuguna and Missionaries of Charity head Sister Nirmala are among the 10 Indians conferred with the Padma Vibhushan, India's second highest civilian award.Source: IndiaeNews.com: Business News | 25 Jan 2009 | 7:32 pm Ask Mint | The time value component of options decreases exponentially Johnny: Last week, you talked about American options. Tell me, how do the sellers of European options look at the intrinsic value and the time value? Jinny: Well, European options, as you know, can be exercised only on the expiry date. A seller of European options knows that he is not immediately going to lose anything by selling an “in the money” option. What matters more to him is whether or not the option remains in the money on the expiry date. So, while deciding the premium of European options, we are bothered more about what the intrinsic value of the option on the expiry date would be. But that doesn’t mean that we can completely ignore the present intrinsic value of the options. The current price of the underlying asset as well as the strike price under the option are used as valuable inputs in the Black Scholes model that is most commonly used for the pricing of European options. An option deep in the money enjoys a better chance of remaining in the money at the expiry date whereas an option deeply “out of money” may have no hope. The greater an option is in the money or out of money, the greater the movement in the price required to influence its intrinsic value. You would generally find that when all other factors are equal, the premium of an out of money option is less than an option “at the money”, which in turn is less than an option in the money. So, the present intrinsic value of an option in one way or the other is always connected with the time value. In fact, all option pricing models take into account both the intrinsic value and the time value while fixing the price of an option. Johnny: You have repeatedly talked about the time value. It would be better if you could explain it. Jinny: All options remain valid for a particular length of time, which could be a few weeks, a month or even longer, depending on the need of the parties. This length of time is like a running taxi meter—the longer the drive, the more money you pay. The length of time has a similar effect on the option premium. The greater the length of time of an option, the higher the premium. But, you may ask, why is an option having less time to expire cheaper than an option having a longer time?  Illustration: Jayachandran / Mint Our option pricing models make use of the historical data of price volatility to find out how much the price of an asset is likely to move over a period of, say, one month or a week or even a single day. With each passing day, the time value of your option decreases. But interestingly, this decrease in time value is not uniform throughout the entire life of an option. The time value component of an option premium decreases exponentially. This means that in the beginning the rate of decrease of the time value is slow but as the option approaches the expiry date the rate of decrease increases. Again, think of a long-distance run. You run at a leisurely pace in the beginning but as you start running out of time, you increase your speed. As a rule of thumb, we can say that an option may lose one-third of its time value during the first half of its life and two-thirds of its value during the remaining half of its life. This is how we arrive at the time value, which helps us in determining the price of an option. Johnny: Thanks, Jinny. I think we can keep on talking about options. But let’s stop now. I will ask you about something new next week. What:The time value of an option decreases exponentially with the decrease in the length of time for which an option is valid. Why: This is so because over a short period, greater movement in price is required to make the change in the intrinsic value. How much: An option may lose one-third of its time value during the first half of its life and two-thirds of its value during the remaining half of its life. Shailaja and Manoj K. Singh have important day jobs with an important bank. But Jinny and Johnny have plenty of time for your suggestions and ideas for their weekly chat. You can write to both of them at realsimple@livemint.com Source: LatestNews-Home - Livemint.com | 25 Jan 2009 | 7:32 pm Padma Vibhushan for Ashok GangulyNoted industry expert and former chairman of Hindustan Lever Ashok S. Ganguly was named one of the recipients of this year's Padma Vibhushan awards.Source: IndiaeNews.com: Business News | 25 Jan 2009 | 7:31 pm Management guru C.K. Prahlad among 9 NRIs/PIOs honoured with Padma awardsNoted management guru C.K. Prahlad and Khalid Hameed, a member of Britain's House of Lords, are among the nine NRIs/PIOs to be conferred with the Padma series of civilian awards in the Republic Day honours list.Source: IndiaeNews.com: Business News | 25 Jan 2009 | 7:31 pm Infosys expects clients’ technology budgets by mid-FebBangalore: India’s second largest software services vendor, Infosys Technologies Ltd, expects most clients to have their technology budgets in place by mid-February, but warns that customers may be cautious in spending the money as recession deepens in the US. Traditionally, Western clients finalize their annual technology spending in January, but the financial and economic turmoil resulting from the collapse of financial firms such as Lehman Brothers Holdings Inc. have delayed budgets. “In fact, it looks like the second wave of challenges are becoming visible at this point, with some of the financial institutions announcing their results in the last three to four days,” Infosys chief executive officer S. Gopalakrishnan said in an interview. “There is concern that now we are starting to see the impact of the economic slowdown in the real (US) economy, (with) mortgage defaults increasing, (and) credit card payments (getting) defaulted”. “They (customers) are also telling us that even if there are budgets, the decisions regarding actual spending could be slow due to concerns of the economy,” said Gopalakrishnan. Global banks such as Citigroup Inc., Bank of America Corp. and Royal Bank of Scotland Plc., have reported or forecast losses amounting to billions of dollars. Indian software firms earn more than one-third of their revenue from banking, financial services and insurance. Infosys has projected revenue to grow slower by 13% this fiscal from 35% growth it posted in the year ended March. Still, the company, which reported a 33% rise in net profit to Rs1,641 crore for the third quarter, has outperformed peers such as Tata Consultancy Services Ltd and Wipro Ltd. Infosys maintains that it would sustain operating margins of 35.1% it earned for the October-December quarter. “There is a pricing pressure, but we are saying that we are able to manage that and protect our margins,” said Gopalakrishnan. Source: Tech News - Livemint.com | 25 Jan 2009 | 7:31 pm Infosys expects clients’ technology budgets by mid-FebBangalore: India’s second largest software services vendor, Infosys Technologies Ltd, expects most clients to have their technology budgets in place by mid-February, but warns that customers may be cautious in spending the money as recession deepens in the US. Traditionally, Western clients finalize their annual technology spending in January, but the financial and economic turmoil resulting from the collapse of financial firms such as Lehman Brothers Holdings Inc. have delayed budgets. “In fact, it looks like the second wave of challenges are becoming visible at this point, with some of the financial institutions announcing their results in the last three to four days,” Infosys chief executive officer S. Gopalakrishnan said in an interview. “There is concern that now we are starting to see the impact of the economic slowdown in the real (US) economy, (with) mortgage defaults increasing, (and) credit card payments (getting) defaulted”. “They (customers) are also telling us that even if there are budgets, the decisions regarding actual spending could be slow due to concerns of the economy,” said Gopalakrishnan. Global banks such as Citigroup Inc., Bank of America Corp. and Royal Bank of Scotland Plc., have reported or forecast losses amounting to billions of dollars. Indian software firms earn more than one-third of their revenue from banking, financial services and insurance. Infosys has projected revenue to grow slower by 13% this fiscal from 35% growth it posted in the year ended March. Still, the company, which reported a 33% rise in net profit to Rs1,641 crore for the third quarter, has outperformed peers such as Tata Consultancy Services Ltd and Wipro Ltd. Infosys maintains that it would sustain operating margins of 35.1% it earned for the October-December quarter. “There is a pricing pressure, but we are saying that we are able to manage that and protect our margins,” said Gopalakrishnan. Source: LatestNews-Home - Livemint.com | 25 Jan 2009 | 7:31 pm List of Padma awardeesThe following is the full list of Padma awardees on the occasion of Republic Day:Source: IndiaeNews.com: Business News | 25 Jan 2009 | 7:30 pm Satyam staff get offers but with 50% pay cutEmployees of Satyam Computer Services are in a quandary over looking for jobs outside the company. Some admit that consultants are offering them jobs, but at salaries that are almost half their current cost-to-company (C-to-C) packages. Many others are running into a dead-end given the poor job market.Source: Business Standard | Front Page Headlines | 25 Jan 2009 | 7:26 pm What it takes to be a leader in the borderless world of businessYou hear people mention it all the time, but really, what’s a global mindset? —Michelle Sabti, Abu Dhabi, United Arab Emirates Come on, you know the answer! You, a native of Australia who now works for the Abu Dhabi Tourism Authority! When we met in your adopted hometown not long ago, all it took was one conversation for us to know that we were seeing a bona fide global mindset in action. “I love it here,” you said “It’s so different.” That comfort with difference—indeed, your embrace of it—is the foundation of a global outlook. Indeed, we’d dub that trait “empathy”, and list it as the first of the four new Es of global leadership—the qualities required for success in the brave new borderless world of business.  The first E was, and remains, energy, the capacity to go-go-go, always engaged and ready for a challenge. The second E is energize, the ability to invigorate others. Because too many smart people get stymied by over-thinking. The third E stands for edge, the capacity to make yes-or-no decisions. And the fourth E is execution, or getting the job done. The four Es, however, are not complete unless wrapped in a P—passion—for both work and life. Also See Jack and Suzy Welch’s earlier videos Now, in today’s global environment, with its ever-increasing competitive intensity, leaders still need the old Es. But the new Es are becoming just as essential. Take empathy. In the global business context, it means a lot more than warmth and compassion. It means understanding different cultures enough to show consistent respect for their values and traditions. Bill Amelio, CEO (chief executive officer) of the $16 billion (Rs78,720 crore) Chinese-American computer company Lenovo Group Ltd, for instance, told us that his American managers had to learn to be comfortable with silence during meetings so as to give their colleagues the chance to translate what they were hearing and make sense of it. Similarly, he said, “At the beginning, we didn’t have a corporate calendar with everyone’s holidays, and people would end up scheduling meetings on the Chinese New Year. If you want to build trust, you can’t do that. In the global world, you have to honour what diverse people care about.” The second global E is experimental, meaning a leader’s fearless exploration of new ideas, products and markets, even when the rewards are not immediate. Once, companies could consign innovation to a few geniuses at headquarters and take the eurekas as they came. Today, with gutsy entrepreneurs popping up in virtually every corner of the world and multinational companies harvesting their employees’ inventiveness no matter where they work, every company has to adopt risk-taking as a matter of routine. As Jeff Bezos, CEO of Amazon.com Inc., put it recently, “You can’t let short-term investors and pundits scare you off from experimenting.” Referring to Amazon’s highly successful venture that trades in used and collectible items, he said, “Marketplace was our third try at a new business. The first two failures did not stop us. They taught us.” The third E stands for example, as in setting one. As companies become more far-flung, leaders face the increasingly difficult challenge of building an organizational culture with shared values. That’s why leaders at every level need the ability to serve as role models: They must demonstrate the behaviour their company wants and expects from all its employees. Sure, leaders can get a megaphone and shout about the need for speed or candour, but as everyone knows, actions speak louder than words, especially when those words are being translated. The final E again springs from the increased competitiveness of the global marketplace. It stands for excited, or more specifically, “excited to win”. Plenty of people are perfectly happy to show up to work and put in their hours. But the never-turned-off, ever-changing world demands that leaders show up with a radically different attitude. “Just give me a person who is dying to win, a person who hates losing, and everything seems to take care of itself after that,” says Mel Karmazin, CEO of Sirius XM Radio Inc. “That desire, that hunger—if you don’t have it today, you cannot compete.” We couldn’t agree more. Yes, in business, some leadership qualities will never change. But the business world has expanded far and wide, and with it, the requirements of leadership have too. Write to Jack & Suzy Jack and Suzy are eager to hear about your career dilemmas and challenges at work, and look forward to answering some of your questions in future columns. Jack and Suzy Welch are the authors of the international best-seller, Winning. Their latest book is Winning: The Answers: Confronting 74 of the Toughest Questions in Business Today. Mint readers can email them questions at winning@livemint.com Please include your name, occupation and city. Only select questions will be answered. ©2009/BY NYT SYNDICATE Source: Home - Livemint.com | 25 Jan 2009 | 7:16 pm What it takes to be a leader in the borderless world of businessYou hear people mention it all the time, but really, what’s a global mindset? —Michelle Sabti, Abu Dhabi, United Arab Emirates Come on, you know the answer! You, a native of Australia who now works for the Abu Dhabi Tourism Authority! When we met in your adopted hometown not long ago, all it took was one conversation for us to know that we were seeing a bona fide global mindset in action. “I love it here,” you said “It’s so different.” That comfort with difference—indeed, your embrace of it—is the foundation of a global outlook. Indeed, we’d dub that trait “empathy”, and list it as the first of the four new Es of global leadership—the qualities required for success in the brave new borderless world of business. The first E was, and remains, energy, the capacity to go-go-go, always engaged and ready for a challenge. The second E is energize, the ability to invigorate others. Because too many smart people get stymied by over-thinking. The third E stands for edge, the capacity to make yes-or-no decisions. And the fourth E is execution, or getting the job done. The four Es, however, are not complete unless wrapped in a P—passion—for both work and life. Also See Jack and Suzy Welch’s earlier videos Now, in today’s global environment, with its ever-increasing competitive intensity, leaders still need the old Es. But the new Es are becoming just as essential. Take empathy. In the global business context, it means a lot more than warmth and compassion. It means understanding different cultures enough to show consistent respect for their values and traditions. Bill Amelio, CEO (chief executive officer) of the $16 billion (Rs78,720 crore) Chinese-American computer company Lenovo Group Ltd, for instance, told us that his American managers had to learn to be comfortable with silence during meetings so as to give their colleagues the chance to translate what they were hearing and make sense of it. Similarly, he said, “At the beginning, we didn’t have a corporate calendar with everyone’s holidays, and people would end up scheduling meetings on the Chinese New Year. If you want to build trust, you can’t do that. In the global world, you have to honour what diverse people care about.” The second global E is experimental, meaning a leader’s fearless exploration of new ideas, products and markets, even when the rewards are not immediate. Once, companies could consign innovation to a few geniuses at headquarters and take the eurekas as they came. Today, with gutsy entrepreneurs popping up in virtually every corner of the world and multinational companies harvesting their employees’ inventiveness no matter where they work, every company has to adopt risk-taking as a matter of routine. As Jeff Bezos, CEO of Amazon.com Inc., put it recently, “You can’t let short-term investors and pundits scare you off from experimenting.” Referring to Amazon’s highly successful venture that trades in used and collectible items, he said, “Marketplace was our third try at a new business. The first two failures did not stop us. They taught us.” The third E stands for example, as in setting one. As companies become more far-flung, leaders face the increasingly difficult challenge of building an organizational culture with shared values. That’s why leaders at every level need the ability to serve as role models: They must demonstrate the behaviour their company wants and expects from all its employees. Sure, leaders can get a megaphone and shout about the need for speed or candour, but as everyone knows, actions speak louder than words, especially when those words are being translated. The final E again springs from the increased competitiveness of the global marketplace. It stands for excited, or more specifically, “excited to win”. Plenty of people are perfectly happy to show up to work and put in their hours. But the never-turned-off, ever-changing world demands that leaders show up with a radically different attitude. “Just give me a person who is dying to win, a person who hates losing, and everything seems to take care of itself after that,” says Mel Karmazin, CEO of Sirius XM Radio Inc. “That desire, that hunger—if you don’t have it today, you cannot compete.” We couldn’t agree more. Yes, in business, some leadership qualities will never change. But the business world has expanded far and wide, and with it, the requirements of leadership have too. Write to Jack & Suzy Jack and Suzy are eager to hear about your career dilemmas and challenges at work, and look forward to answering some of your questions in future columns. Jack and Suzy Welch are the authors of the international best-seller, Winning. Their latest book is Winning: The Answers: Confronting 74 of the Toughest Questions in Business Today. Mint readers can email them questions at winning@livemint.com Please include your name, occupation and city. Only select questions will be answered. ©2009/BY NYT SYNDICATE Source: World Business - Livemint.com | 25 Jan 2009 | 7:16 pm MRPL revives retail planWith the ministry of petroleum and natural gas planning to free retail fuel prices from government control and link them to global crude oil prices, Mangalore Refinery and Petrochemicals Ltd (MRPL), a subsidiary of state-owned Oil and Natural Gas Corporation, is reviving plans to set up fuel retail outlets, a senior company executive has confirmed.Source: Business Standard | Front Page Headlines | 25 Jan 2009 | 7:13 pm Original land documents were hidden: Raju aideHyderabad: Police in Andhra Pradesh have seized five boxes of original land documents of as many as 147 firms floated by relatives of B. Ramalinga Raju, the founder of Satyam Computer Services Ltd, after a key employee at a family-controlled company admitted to concealing the papers from the police. The papers were seized by the criminal investigation department (CID) of the state police. In a confessional statement to the department, Datla Venkata Gopala Krishnam Raju (D.V.G.K. Raju), general manager of SRSR Advisory Services Pvt. Ltd, said he had hidden the documents on the instructions of B. Suryanarayana Raju, the younger brother of Ramalinga Raju. SRSR Advisory Services provides financial and advisory services. S. Bharat Kumar, a lawyer for the Raju family, denied that the SRSR manager had made any confessions, insisting that the CID was fabricating such statements to harass his clients. Ramalinga Raju’s family lawyer denies that any confession was made Suryanarayana Raju is a director of SRSR Advisory Services along with B. Teja Raju, the elder son of Ramalinga Raju and vice-chairman of Maytas Infra Ltd, which Satyam attempted to buy on 16 December in a deal cancelled less than 12 hours later as investors revolted. Some of the 147 firms hold equity stakes in Maytas Infra. D.V.G.K. Raju, who has been associated with the family businesses of Ramalinga Raju from 1985, confessed to the police that he had shifted all original land documents of the Satyam promoters’ family hurriedly to various places in the last fortnight to conceal them from the police. He said he was reporting directly to Suryanarayana Raju in the company. A copy of his confessional statement was reviewed by Mint. The SRSR Advisory general manager added he had handed over documents belonging to Maytas Properties Pvt. Ltd, another company that was sought to be bought by Satyam on 16 December, to its chief financial officer K. Badri. “On January 10, he (B. Suryanarayana Raju) came personally to my office and instructed me to shift and conceal documents. Later, he used to instruct me over the phone. On his instructions, I, along with my colleague K.V.N. Krishnama Raju, have taken all the documents, hired one Toyota Innova car and concealed them at various places in the city,” D.V.G.K. Raju said in the statement to the police. While producing D.V.G.K. Raju before a metropolitan magistrate here on Friday, the CID said it also seized a CD containing details of updated land records and original share certificates. He was sent to judicial custody for 14 days and shifted to Chanchalguda Central Prison in Hyderabad. A senior official of the Inspector General of Stamps and Registration, Andhra Pradesh, who did not want to be named, said his department has so far found some 275 firms floated by family members of Ramalinga Raju, which had bought some 4,190 acres of land in and around Hyderabad. Separately, officers of the CID on Saturday arrested two partners of the audit firm Price Waterhouse, an affiliate of PricewaterhouseCoopers Ltd (PwC), who were in charge of signing off on Satyam’s account books. The partners are S. Gopalakrishnan and Srinivas Talluri. PwC has been auditing Satyam’s books since 2000-01. Both officials have been sent to judicial custody till 6 February. The auditing firm said it regretted the detentions. “Over the last fortnight, the firm has fully cooperated in all inquiries and has provided the documents called for by the Indian authorities,” PwC said in a statement on Saturday. Lison Joseph contributed to the story. Source: Home - Livemint.com | 25 Jan 2009 | 7:11 pm Pranab returns to North Block after 24 yearsBreaks self-imposed rule never to return to an office he has occupied in the past.Source: Business Standard | Front Page Headlines | 25 Jan 2009 | 7:11 pm Farmers get breather on loan repaymentThe government has extended the repayment date six months under the farm loan waiver scheme, a move that is expected to help banks set aside less money for non-performing loans, but has raised expectations of another loan waiver ahead of general elections.Source: Business Standard | Front Page Headlines | 25 Jan 2009 | 7:08 pm Regional films in focus as Bollywood faces squeezeMumbai: Movie production houses are setting their sights firmly on regional film markets this year as they attempt to diversify risk away from Bollywood.  High appeal: An image from Marathi movie ‘De Dhakka’. The regional film market is considered to be less volatile than that for Hindi cinema. Reliance Entertainment Ltd has a slate of 10 films it plans to release this calendar year through its movie production division, BIG Pictures, up from two in 2008. UTV Motion Pictures Plc. plans to produce three films in calendar 2009, up from three released over the past two years. The drive for a wider niche in regional cinema comes as an economic downturn and exorbitant prices charged by top actors combine to squeeze returns on investment in Bollywood, as the Hindi movie business centred on Mumbai is called. The strategy has been taking shape recently, according to Sanjeev Lamba, director of marketing and sales at Zee Motion Pictures. “It seems that everyone is looking at the regional markets with the intention of becoming a major player,” says Lamba. “They are all looking across the board. Some of that consolidation has begun in Hindi cinema and has a long way to go. Consolidation has also begun in the regions and the companies that started looking at the regions in the past couple of years will see that bear fruit in the next two years.” Production houses look to make a combination of small, medium and big-budget regional films “As a national player, we have plans to participate in all segments and we cannot ignore regional films,” contends Ramanathan, adding that “it was always the plan” to move aggressively into regional cinema. “Each region has its own dynamic and each can make good cinema, but we have to put in more effort to get the script right because regional markets are far more dependent on theatrical revenues. Box office sales account for 80% of revenues in regional markets, compared with only 50% in Hindi cinema.” Spreading the risk In addition, the different sizes of the regional language markets result in a variation in the scale of budgets. A big-budget film in Tamil or Telugu potentially involves expenditure of up to Rs25 crore while a big-budget movie in Bengali or Marathi costs up to Rs10 crore. With up to 85% of total industry revenues derived from six language groups—including Hindi, Tamil, Telugu, Kannada, Marathi and Bengali—Lamba argues that diversifying into regional cinema helps to “spread risk across a wider spectrum” for Zee, which plans to be a “significant” force in the industry. He adds that although Hindi cinema contributes up to 50% of total movie industry revenue, it is more volatile than regional movie hubs and branching out into language cinema will help offset this.  Burgeoning market: A handout image of the Marathi film ‘Ek Daav Dhobi Pachhad’, running in theatres now. A big-budget movie in Marathi or Bengali costs up to Rs10 crore. “Although we have a fairly aggressive plan of up to 10 films in each language cinema, it is a moving target and is subject to economic conditions. A correction has been happening across the region and across the entire film industry, with the main part of the correction happening in Hindi language cinema, where the prices were a little too boisterous.” Production houses are looking to make a combination of small-, medium- and big-budget films, featuring a range of actors from top names such as Tamil star Rajnikanth to relative unknowns, according to Lamba. Price inflation He adds that the relatively more developed cinema infrastructure in India’s four southern states, where half of the country’s theatres are located, as well as the “enormous” price inflation seen in Hindi language cinema in recent years, have served to heighten the attraction of expanding into regional film markets. Ram Mirchandani, chief operating officer of UTV Rampage Motion Pictures, the regional film unit of UTV, says prospect of high returns in addition to creative opportunities is an incentive to move into language cinema. “The key drivers here are creativity and revenues,” says Mirchandani. “There are good films to be made in the regions at the right price. We have consolidated in the Hindi language space and now we have decided to look regionally. The business of Tamil and Telugu films is pretty huge—for them, going to the movies is like going to the temple.” neelam.v@livemint.com Source: LatestNews-Home - Livemint.com | 25 Jan 2009 | 7:05 pm HUL’s net dips 2.2%; strong sales in food, personal care offset by soapsMumbai: India’s biggest consumer goods maker Hindustan Unilever Ltd met forecasts with a 2.2% dip in quarterly profit, as strong sales in some segments was offset by a slowdown in others. Unilever, which makes Lux soap, Surf detergent and Lipton tea, said the strong volume growth in personal care products and foods was partly offset by a slowdown in soaps and detergents, due to high input cost-led price growth and volume contraction in detergents. Soaps and detergents account for the largest portion of its revenues, followed by personal care products. “Commodity prices are softening, and this augurs well for us, if sustained. We will have to see how this will reflect in running the business,” vice-chairman and chief financial officer D. Sundaram told reporters on a conference call. Hindustan Unilever, a unit of Anglo-Dutch Unilever Plc. said net profit dipped to Rs616 crore in the quarter to December 2008 from Rs630 crore a year ago, while net sales rose 16.8% to Rs4,310 crore. Analysts polled by Reuters had on average forecast net profit at Rs610 crore and revenue at Rs4,350 crore. Of the growth in sales, only about 2.3 percentage points was from volume growth, the rest from price rises, he said. Operating margin during the quarter was 16.8%, 20 basis points below the year-ago quarter. During the quarter the company was also affected by restructuring costs of Rs40.64 crore, while it booked a gain of Rs8.85 crore on the sale of properties. Unilever’s shares rose nearly 17% in 2008, while India’s bellwether equity index, the Sensex, lost half its value. Source: LatestNews-Home - Livemint.com | 25 Jan 2009 | 6:55 pm IPTV service yet to take on, but providers set target of 1 million subscribers by 2012New Delhi: India’s largest mobile phone operator, Bharti Airtel Ltd’s launch of Internet protocol television (IPTV) service on 19 January marked the entry of the first private player in the space so far served by state-run telcos Bharat Sanchar Nigam Ltd, or BSNL, andMahanagar Telephone Nigam Ltd, or MTNL. Anil Dhirubhai Ambani-led Reliance Communications Ltd, or RCom, which has already had a trial run of IPTV service last year, is believed to be the next in line, followed by Tata Teleservices Ltd, and multi-system operators (MSOs) such as Rajan Raheja-owned Hathway and the Hinduja Group. Also See Few Takers (Graphic) While the advantages of IPTV over cable and satellite TV include real-time interactivity, and time-shift TV, where a viewer can rewind live-TV, and fast-forward recorded programmes, MTNL and BSNL have not found too many takers for their service as yet. The total number of IPTV households remains a negligible 22,000 of the 120 million TV households in the country. Of these, cable and satellite takes the lion’s share of 80 million households, followed by seven million direct-to-home (DTH) households, respectively, according to industry body IPTV India Forum. “IPTV is a worldwide phenomenon but it has not taken off in India,” said Neha Gupta, senior research analyst at Gartner India, a research firm. Gupta says the market for IPTV in India is not mature yet. “The applications such as time-shift and live recording are still very expensive, and while the service will see a rise in demand if prices come down, it will still not be enough to get return on investments.” The IPTV triple-play plan launched by Airtel, which includes at least 100 channels, broadband and a landline connection, for instance, will cost customers between Rs599 and Rs999 a month depending on the offer they avail. But along with this, they will have to pay Rs3,999 for activation of the service. In comparison, for Airtel’s own DTH service, launched in October, customers have to pay between Rs130 and Rs264, while the set-top box and its installation costs are Rs1,750. Cable and satellite TV services are even cheaper at only Rs200-350 a month, depending on the number of channels a customer opts for. IPTV charges are not likely to come down significantly in the near future either. As IPTV gives viewers the option of fast-forwarding the ads, advertisers may pay less or not pay at all the channels that choose to ride the platform, say experts. The channels, thus, may seek a higher subscription charge from service providers, who, in turn, will have to seek higher fee from customers. “But this scenario will come up may be five years from now when IPTV actually begins to make an impact,” says Gupta. Broadcasters and advertisers also feel IPTV will take time to establish itself and grow as a popular distribution platform. “IPTV is still a very niche market where the numbers are very low so it doesn’t concern us yet. IPTV might grow in the next five-seven years, when the broadband grows,” said Rohit Gupta, president, network sales, Multiscreen Media Pvt. Ltd, the broadcast network that runs channels such as Sony Entertainment Television and Set Max. “Broadcasters will then probably have to customize offerings by giving different content to different platforms, but that’s not till the next four to five years at least,” he added. An advertising executive, who did not want to be named, said advertisers will have to chart a different strategy for IPTV. “When IPTV picks up, advertisers will have to strategize marketing and advertising campaigns according to the platform they want to be present on. IPTV, then, may lose out on mass market brands,” he said. Meanwhile, Mumbai-based television audience research firm TAM Media Research Pvt. Ltd has set up the system to track the viewership through IPTV, but it says it will wait for the penetration to come to a significant level before it starts measuring it. “TAM envisaged this situation a couple of years ago where multiple TV platforms would be available in India, so in line with our global parentage of Nielsen and Kantar Media Research, we adopted a new technology called TVM5 which is a digital peoplemetre and it can measure audience through DTH CAS and even IPTV,” said Siddhartha Mukherjee, vice-president, communications, TAM. IPTV industry, however, is optimistic. “Like every new proposition, there are a few hiccups one has to face,” said Anil Jain, general manager, broadband, BSNL. “Trai (Telecom Regulatory Authority of India) had not set any pricing for IPTV earlier. So broadcasters were charging IPTV carriers five times the amount they were charging say a DTH carrier. But now broadcasters have reduced their prices significantly after Trai has issued its consultation directive.” IPTV providers have to take a cable TV licence from the information and broadcast ministry before launching operations, Jain said. “These are the problems that once cleared will make IPTV an appealing service for the industry as well as the consumers.” The IPTV forum has, in fact, set a target of achieving one million subscribers by 2012. Graphics by Ahmed Raza Khan / Mint Source: Home - Livemint.com | 25 Jan 2009 | 6:50 pm Modi to celebrate R-Day in GodhraGujarat Chief Minister Narendra Modi has chosen Godhra town in Panchmahal as the venue of official celebrations of Republic Day Monday, and the district has received a special developmental package.Source: IndiaeNews.com: Business News | 25 Jan 2009 | 6:30 pm Firms say banks not disbursing loans; lenders claim poor demandMumbai: Banks are still not lending to companies despite the Reserve Bank of India, or RBI, cutting interest rates and increasing liquidity, complain analysts and chief financial officers of Indian firms. Bankers refute this, insisting that demand for loans is sluggish as companies contract expansion plans in the backdrop of an economic slowdown. RBI has slashed the cash reserve ratio, or the portion of deposits that banks need to keep with it, by 400 basis points and bond holding requirement by 100 basis points since October, releasing more than Rs2 trillion into the system. One basis point is one-hundredth of a percentage point. The liquidity-starved banks had borrowed Rs91,000 crore on a single day in September and are now parking their excess funds with the central bank.  Injecting money: In a bid to increase availability of funds to companies, the Reserve Bank of India has slashed the cash reserve ratio by 400 basis points and bond holding requirement by 100 basis points since October. Harikrishna Katragadda / Mint Bankers, however, are not willing to accept this argument. “We have to see the creditworthiness of those firms which are saying we are not lending. We cannot lend to those who will default (in repayment),” said an executive director of a Mumbai-based public sector bank, who didn’t want to be identified. Another executive director of a large public sector bank blamed the firms’ inability to raise owners’ equity in projects for the slowdown in loan growth. “For projects, companies need to bring in their own equities, and based on their equities, we disburse loans. If the companies are not raising their equities in the projects, why should we raise our loan limits?” the official asked, again on condition of anonymity. Interestingly, not all executives disagree with this. Seshagiri Rao M.V.S., finance director, JSW Steel Ltd, said: “For them (banks), it is a call they take, project by project, case by case, which I believe is a right thing to do. For promoters to fund new projects and put their share of promoter’s equity, there are difficulties in today’s climate, as the two sources of promoter’s equity—cash accruals from existing businesses and the equity market—are not the same as before.” According to him, working capital is more forthcoming. “Whatever sanctions and disbursements the banks had committed in the past, have not been stopped,” he said. However, Y.M. Deosthalee, chief financial officer and a board member at engineering and construction firm Larsen and Toubro Ltd, doesn’t entirely agree. Today, there is a lot of liquidity with the banks but nowhere to lend. M.D. Mallya, chairman and managing director of Bank of Baroda, said there could be some slowdown and slackness in demand for credit from sectors such as steel and auto ancillaries, but “we are not denying credit to the deserving customers if they pass our appraisal procedure.” S.C. Gupta, chairman and managing director of Kolkata-based United Bank of India, saw demand for loans from certain sectors such as small and medium enterprises, or SMEs. “We are not denying credit to the SMEs. They constitute a bulk of our loan book,” said Gupta. Despite a drop in credit pick up in the December quarter, the year-on-year credit growth continues to be high at about 24%. But even then, firms are not finding it enough and clamouring for more money from banks as other sources such as the equity market and external commercial borrowings have dried up. “If existing customers are seeking an enhancement in credit lines, we are giving it to them. We have not held back any disbursements,” said Romesh Sobti, managing director and chief executive officer, IndusInd Bank Ltd. According to Paresh Sukthankar, executive director of HDFC Bank Ltd, the credit demand has picked up picked up in the last few weeks. “There could be customers who are complaining about banks not lending to them, but the reason could be that banks are not wanting to increase their exposure to these customers,’’ he said. Indeed, banks are playing safe as their non-performing assets have been on the rise. An economic slowdown dents corporate profitability and ability to pay back bank loans. Rana Kapoor, managing director and chief executive officer of Yes Bank Ltd, defended banks’ caution in this “challenging environment” and said “they are right in being choosy when they add on new customers”. “In the coming quarters, I would not be surprised if the credit growth for the banking system slows down to about 18% to 20%.” Loan growth will be low this year because last year banks had lent aggressively to oil marketers to meet their rising need for working capital. Oil prices, which started rising since September 2007, zoomed to a record $146 a barrel in June 2008. According to analysts, about 40% of the credit disbursed in the first half of 2008-09 went to the oil marketing companies. Mint could not independently verify this. Crude prices have dropped to below $40 a barrel now and the demand for funds from the oil marketing companies have dropped sharply. In the changed economic scenario, it seems finding customers who want money and are also creditworthy is emerging as the biggest challenge for banks. Speaking at a function in New Delhi last week, Uco Bank Ltd’s chairman and managing director S.K. Goel said: “Today, there is a lot of liquidity with the banks but nowhere to lend.” Sobti of IndusInd Bank expects incremental credit demand to slow down as industries such as steel and commodities are going through tough times. “The sectors that lead the growth in credit, like exports, consumer finance, capital markets, have all seen slackening that will reflect on credit growth numbers,” Sobti said. Parthasarthy Mukherjee, president, credit, at Axis Bank Ltd, also voiced the same concern when he said: “We have not seen any new projects coming up. The advances growth we have seen in the quarter gone by was largely on account of old sanctions. Incremental credit demand has slowed down.” Andhra Bank’s chairman and managing director R.S. Reddy seemed to be the lone voice of optimism on the credit front. “We cannot decidedly say there is no demand for credit now. It will take one or two months to see where there is a slowdown,” he said. Meanwhile, in the absence of loan demand, banks are increasing their investments in government bonds. The yield on 10-year benchmark paper dropped to 4.86% in January from 9.5% in July. As yields drop, bond prices rise and banks make risk-free money in trading bonds. anup.r@livemint.com Satish John contributed to this story. Source: Home - Livemint.com | 25 Jan 2009 | 6:23 pm Tata Realty returns Rs800 cr to parentMumbai: Less than a year after it received Rs1,000 crore as investment from its parent, Tata Realty and Infrastructure Ltd is refunding Rs800 crore to Tata Sons Ltd at a time when the group is hard-pressed to raise funding related to past acquisitions and expansion. The decision, taken after Tata Realty decided to pull back some of its planned projects amid a downturn in the real estate market, will reduce its paid-up capital to Rs925 crore from Rs1,725 crore.  Some respite: Ratan Tata, the chairman of Tata Sons. Abhijit Bhatlekar / Mint Convertible preference shares differ from ordinary shares in that they do not normally come with voting rights, but promise a dividend until conversion into ordinary shares. The dividends in the case of non-cumulative preference shares are not accumulated in arrears. “At the moment, we are well capitalized,” said Sanjay G. Ubale, managing director and chief executive officer of Tata Realty, confirming the refund, which was approved by the Bombay high court earlier this month. While seeking approval from shareholders for the refund, the firm had said, “In view of the significant downturn in the real estate markets, the company has now decided to shelve/reduce the size of some of its proposed projects, resulting in reduced fund requirements.” Tata Realty had embarked on major projects, including information technology parks and so-called special economic zones. It also planned to jointly develop real estate with group firms such as Tata Consultancy Services Ltd and Indian Hotels Co. Ltd. Ubale said some of these projects would be financed through the $750 million (Rs3,690 crore) offshore fund, Tata Realty Initiatives Fund-I, that the company is managing. For Tata Sons, the refund comes at a time when it is trying to raise money to fund the expansion and acquisition costs of its group firms. Brokerage India Infoline Ltd last week estimated the Tata group needs $3 billion over 18 months, mainly to refinance a bridge loan taken by Tata Motors Ltd for its purchase of Jaguar and Land Rover, or JLR. “In the worst-case scenario, if the group needs a large cash infusion at JLR and funds equity requirement for growth plans of some its operating companies, the cash required could jump to $5.5 billion,” analyst Bijal Shah wrote. Mint reported on 3 October Tata Sons’ plans to raise its authorized capital by 30% to Rs4,335 crore. The closely held firm had also increased its borrowing limit by one-third to Rs20,000 crore. Decapitalizing, as the exercise Tata Realty is going through is called, is rare among Indian companies. In recent times, only Colgate-Palmolive (India) Ltd made a similar move when it returned Rs9 a share from the face value of Rs10 through a Rs122 crore dividend to shareholders. The toothpaste maker had said it was “paying off excess capital”. Tata Realty’s move comes in the wake of contracting demand for housing and commercial realty in the country after interest rates climbed in mid-2008, driven by a surge in inflation that has now begun to ease. In an 8 January report on the real estate sector, analysts Siddharth Bothra and Satyam Agarwal of Motilal Oswal Financial Services Ltd said an expected shift in the balance of power from real estate developers to home-buyers was becoming apparent. “Global and domestic events since September 2008 have worsened the outlook for real estate,” Bothra and Agarwal wrote. “In September 2008, it appeared that price cuts by developers along with (a) drop in mortgage rates could revive the sagging demand. However, experts and developers now feel that property demand is unlikely to get stimulated in the medium term even if real estate prices correct 20-25%; and mortgage rates decline 250-300bp (basis points).” One basis point is one-hundredth of a percentage point. As both Tata Realty and Tata Sons are not listed on the stock exchanges, only statutory approvals from the court and the registrar of companies were needed for returning capital. Justice S.J. Vazifdar said in a 9 January order that the “company is entitled to the orders sought” as the reduction of paid-up share capital does not decrease the firm’s liability and is not adverse to the interest of its creditors. In its court petition, Tata Realty had said “creditors of an aggregate value of about 99.38%” of its Rs122 crore debt had given their consent “and that subsequently, the remaining creditors have been paid and/or have also given their consent”. satish.j@livemint.com Source: Home - Livemint.com | 25 Jan 2009 | 6:22 pm Did Satyam funds evaporate after September 2008?Satyam may have been loaded with funds of over Rs 5,000 crore as on September 2008.Source: Daily News & Analysis: Money News | 25 Jan 2009 | 1:12 pm Profit-hit Kudremukh suspends sale of iron productsThe state-run Kudremukh Iron and Ore Co Ltd (KIOCL) in Karnataka has suspended production and sales of pellets and pig iron following record slump in prices and lower profit, a top company official has said.Source: IndiaeNews.com: Business News | 25 Jan 2009 | 1:00 pm Cost of funds still high, cut key rates: Industry tell RBIAbout 78 per cent of the 150 CEOs surveyed said the previous cuts by RBI could not improve their financing situation due to unwillingness by the banks to lend money.Source: Daily News & Analysis: Money News | 25 Jan 2009 | 12:55 pm High interest rates, cash crunch delay infrastructure projects: CIIHigh interest rates and credit crunch have delayed several infrastructure projects by up to six months, said a survey by the Confederation of Indian Industry (CII), released here Sunday.Source: IndiaeNews.com: Business News | 25 Jan 2009 | 12:01 pm
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