Famous In India

Archive for the ‘Business’ Category

Airlines FairsMUMBAI: Last week, Jet Airways chairman Naresh Goyal called his protesting pilots ‘‘terrorists’’ and they in turn were unperturbed by
the airline’s $8 million losses per day thanks to their agitation. But now it’s bonhomie again.

‘‘We have reached an amicable settlement on all issues,’’ said executive director of Jet Airways, Saroj Datta at 2.20 am on Sunday formally announcing the end of their strike that lasted for five days.

‘‘There was some misunderstanding in the family, but now the love has come back. We are the same loving family again,’’ said Capt Girish Kaushik, president of the National Aviators Guild (NAG). Capt Sam Thomas, one of the dismissed pilots, read out an MoU signed by the two parties. It included the airline’s demand of forming a consultative committee with five members from the airline — its chief executive officer, two representatives from flight operations department — and five from the pilots’ side.

The second important clause was status of National Aviators Guild, the pilots’ union. It was decided that the registrar of trade unions will review his earlier order — to register NAG — and with this the matter would stand concluded.

Hours later, on Sunday morning in a press conference, the Jet top brass read out Goyal’s statement to his employees. ‘‘The past few days, when we have stumbled, have been the most challenging our Jet Airways has ever faced in our 16-year old history…..,’’ it read. ‘‘Let us get back to where we were headed — the No.1 slot in the world. From Sunday, the 13th of September, let us write a new chapter in our proud history.’’

Last week, Jet’s ticket bookings fell from 23,000 a day to 7,500. ‘‘Bookings are coming back at a ferocious pace,’’ said Sudheer Raghavan, chief commercial officer, Jet Airways, on the sidelines of the press conference.

The airline has also thrown flyers a bait by offering a ‘‘50% discount on total fare (economy class)’’ on all domestic flights across Jet Airways and Jet Konnect for travel valid up to September 18.

Raghavan expects flight operations to be normal by Monday or latest by Tuesday morning. On Monday, the airline pilots and management are scheduled to meet the regional labour commissioner, the conciliation officer for the dispute. He will be informed that ‘‘on the personal intervention of the chairman the four pilots whose services had been terminated shall be restored back to service with immediate effect’’.

The stand-off has proved costly for the airline — a loss of over Rs 200 crore ($40 million). A grim executive director Saroj Dutta revealed to mediapersons on Sunday afternoon that on an average the airlines is patronized by nearly 24,000 passengers daily across its network spanning domestic and international sectors.

‘‘On an average, our daily revenues are in the range of $8 million (Rs 40 crore), so you can calculate how much we stand to lose for the past five days,’’ he said.

However, he pointed out that there were minor savings on certain variables, like aircraft turbine fuel (ATF) since the flights did not operate.

Moreover, during the past five days, the airline made attempts to transfer nearly 60% of the passengers to other airlines and a small number even to its sister airline, JetLite.



NEW DELHI/BANGALORE: Top Indian tech firms including TCS, Infosys and Wipro are currently pursuing several outsourcing contracts worth $150-200
million each, even as customers such as British Petroleum (BP), insurance major AXA and British bank Lloyds seek to reduce the number of IT suppliers they work with in order to rationalise costs.

At a time when companies are attempting to cope with lower demand for their products and services, outsourcing customers plan to work with fewer vendors at lower rates. Last month, Australia’s biggest phone firm Telstra selected Infosys and EDS for a $450-million application development and maintenance contract and shifted work from IBM and Mahindra Satyam to these vendors.

BP, which spends in excess of $300 million every year on outsourcing, currently works with over two dozen IT suppliers and plans to rationalise its supplier base to about five. When contacted by ET on Tuesday, a BP spokesman confirmed that his company is currently in the process of reducing the number of suppliers.

“Yes, we have been reviewing our strategic IT providers and are getting close to the end of that process, but I can’t confirm the number of current or possible future providers,” said BP spokesman Robert Wine.

Experts such as Siddharth A Pai, partner and MD of sourcing advisory firm TPI, said, that many customers are attempting to centralise their buying power for better rates.

“During boom time, many of these outsourcing decisions were taken by operational managers. Now, companies want to rationalise those decisions by moving towards best-of-breed vendors,” he said. In another instance, one of the biggest European insurance firms AXA plans to bring down its number of IT suppliers from seven to three. While TCS supports AXA’s UK operations, Wipro provides IT services to the insurance firm’s French business. “AXA is a large outsourcer, with hundreds of millions of pounds worth of work being outsourced,” said an outsourcing expert.

He requested anonymity because he advices customers on their sourcing decisions and is not allowed to speak with the media. “Lloyds took out a large RFP of about $400 million about two years ago, and is now in initial stages of vendor consolidation,” he added. Lloyds, after taking over HBOS, has been looking to consolidate its vendor base as HBOS had a large number of small suppliers. In reply to an e-mail questionnaire, a Lloyds spokesperson said the bank has no current plans to consolidate IT offshore suppliers.

While IBM, EDS and Accenture, apart from several European suppliers, are established incumbents in many of these accounts, Indian offshore service providers are hoping to gain because of their specialised skills across different verticals.

“Traditionally known only for their IT outsourcing capabilities, Indian players’ value proposition is now built around offering end-to-end services. As companies look to consolidate their IT-BPO vendors, Indian vendors are well-positioned to take advantage,” said Vikram Gulati, director at outsourcing advisory firm Quantum Step.


NEW DELHI: Mahindra Satyamimages on Thursday said that it has signed a five-year multi-million dollar deal with UK-based GlaxoSmithKline to provide
SAP and other critical systems support.

Satyam has been working with GSK since 2002 in providing IT application development and support services, Mahindra Satyam said in a statement.

Bill Louv, Chief Information Officer, GSK said, “GSK is delighted to be able to extend our contract for another five years. We look forward to continuing to receive the high level of professionalism and commitment from Satyam and its associates that we have experienced over the past seven years.”

“GSK’s selection truly recognizes the competitive spirit and resolve of the associates of Mahindra Satyam, whose skills, commitment and delivery excellence were unmatched,” said CP Gurnani, CEO of Mahindra Satyam.

Source: http://economictimes.indiatimes.com/

MUMBAI: Mahindra Holidays & Resortsindex.jpg 1 India Ltd has fixed the issue price at Rs 300 per share for its initial public offering of 92,65,275
shares of Rs. 10 each. The 100% book-built issue opened on June 23 and closed on June 26.

The price band was fixed between Rs 275 and Rs 325 per equity share. The size of the issue stood at Rs 301.12 crore at the upper end of the price band and Rs 254.80 crore at the lower end of the band.

The issue was subscribed 9.8 times with QIB portion subscribed around 12.83 times; HNIs around 11.01 times and Retail around 3.3 times. At the top end of the price band (i.e. Rs. 325) the overall issue was subscribed 7.13 times with QIB bucket 8.56 times, retail investors’ portion 3.36 times. The issue received bids for 9,08,33,800 shares as against issue size of 92,65,275 shares, as per data available on the NSE website.

“I am delighted with the overwhelming investor response which demonstrates acceptance of the product concept and the business model of the company and faith in the Mahindra Group Management,” said Arun Nanda, Chairman, Mahindra Holidays.

The issue had been assigned 4 out of 5 IPO grading by Fitch Ratings reflecting ‘above average fundamentals’ of the Issue relative to other listed equity securities.

Source: http://economictimes.indiatimes.com


Jaguar.jpgMumbai, June 28
Two of Britain’s most luxurious and elegant auto brands, Jaguar and Land Rover, were today launched here at prices as rich as their features, although their Indian owner Tata Motors swallowed a Rs 2,500-crore loss on account of them.

Tata will sell the Jaguar, which had its origins in a motorcycle sidecar company, XF and XKR series for between Rs 63 lakh and Rs 92 lakh, while Land Rover’s Discovery and Range Rover would be priced between Rs 63 lakh and Rs 89 lakh.

“It’s quite a memorable day in the history and heritage of Tata Motors… JLR has been well received and well established in India (in the past), but over the years this brand has been disconnected from India,” Tata group chief Ratan Tata told reporters here announcing the launch.

“We will measure the response to the brands here and at an appropriate time, we will expand the brand to other cities, which is yet to be determined,” Jaguar managing director Mike O’ Driscoll said.

Asked how many units the company hopes to sell in India, Land Rover managing director Phil Popham said: “These are premium niche brands, so we are looking at relatively small numbers. Our challenge is to establish the brands here.”

About the two brands’ official entry into the country, Tata said: “I think the cars will exhibit the levels of technology and levels of performance here.”

The two brands would give Indian public an opportunity to experience the “pleasure of driving the superior technology” and now “we have decided to extend the penetration of the two brands in India,” he added.

Asked about the current status of JLR asking for financial assistance from the UK government, Tata said: “We are in discussion with the UK government on loan guarantee. We are hopeful that we will find a solution to it. Our funding plans for JLR will progress further…” “Sustaining downturn is extremely important… I would like to see these two brands to come out of the downturn and the companies will have new vehicles and new models.

“…the loan that we are talking to, would be allotted to the company by European Banks,” he added.

On sharing, leveraging JLR’s strong markets, like the US, for Tata Motors’ products, Tata said company did not have any such plans as the vehicles were in completely different segments.

He , however, said: “We will work closely on R&D. We will share intellectual property, but we have never tried to merge the two brands with Tata Motors. Over time, the sophistication of dealing with customers and spares will start to commonalise between the two companies.”

Tata Motors would also decide about assembling the premium cars in India depending upon the business scales by the two iconic brands, he said. — PTI


MUMBAI: Tata Motorsindexjpg1 posted its first annual loss in eight years and announced more job cuts and plant closures at Jaguar and Land Rover
as the
worst global recession in more than seven decades slashed demand for the marque brands purchased by the company last year.

Tata, the maker of Indica and Nano cars, posted a consolidated loss of Rs 2,500 crore for the year ended March, while sales slumped 37%. The last time the company had made a loss was in 2000-01, when it experienced a similar demand slump for trucks and its small car, the Indica.
Jaguar and Land Rover posted a loss of Rs 1,777 crore for the year. The deepening recession in the US and UK worsened the demand for luxury vehicles, forcing Tata Motors to cut jobs and consider plant closures. JLR has already shed 2,000 jobs and Tata Motors senior executives warned on Friday that more will be needed.

Ford sold JLR to Tata Motors for about $2.4 billion in June last year. As a result, Tata Motors gained access to complex luxury car technology, two iconic if jaded brands and a distribution system in the world’s wealthiest countries. But it also inherited a high cost workforce, and a market which was witnessing a steep drop in demand for high-end cars. Jaguar sales for the year fell 4% to 47,000 while Land Rover sales crashed 40% to 1.2 lakh units.

“Although domestic demand has started showing signs of revival since January, its too early to call it a recovery. However medium and heavy commercial vehicle sales continue to be weak,” said Ravi Kant, vice chairman of Tata Motors.

Tata Motors shares gained 0.3% to Rs 340.3 and the results were declared after market hours. Even as the company highlighted that new product development and R&D would not be affected over the 16-18 months in JLR, it would further tighten its cost control measures which includes further job cuts at its UK operations. Recently JLR has got approval of 340 mn pounds from the European Investment Bank, but it is still in negotiation with the UK government and private banks for a counter guarantee, pointed out Mr Kant.
C Ramakrishnan, the chief financial officer, said that the company’s cost cutting measures at JLR would help to lower the break-even point going forward. JLR is expected to launch the Jaguar XJ next month in London and the LRX , new small soon
“The financial condition of Tata Motors is precarious and it will need to take urgent action on product development and capital expenditure
which would mean that the future growth will hinge on the current array of products that the company has,” says Mahantesh Sabarad, Centrum Broking .

The company’s consolidated total operational income jumped 99% Rs 70, 939 crore during FY 09. However, the results of FY 09 are not comparable from a year earlier, the company said in a statement. Its operating loss was Rs 2821 crore (excluding expenditure transferred to capital and other accounts) compared with an operating profit of Rs 3210 crore a year earlier.

Tata Motors had reported a consolidated net profit of Rs 2167 crore for the year ended March 2008. The numbers for the year ended March’09 are not comparable as the year-ago numbers did not include that of Jaguar and Land Rover. Tata Motors in 2000-01 had reported a loss of Rs 500 crore on a stand-alone basis.
Contrary to expectations, the company management pointed out that their UK pension fund’s fair value was 3.1 billion pounds, as compared to their liabilities of 3 billion pounds, and that was largely due to a conservative approach for investing the pension funds. However, the actuarial net loss of Rs 1457.2 crore related to the pension plans of Jaguar Cars and Land Rover, UK have been accounted in the reserves and surplus of the company, as per the relevant accounting standards, the company said in a statement.

Source:  http://economictimes.indiatimes.com/

Nworld_bank2_090622_mnEW DELHI: The World Bank has projected an 8% growth for India in 2010, which will make it the fastest-growing economy for the first time,
overtaking China’s expected 7.7% growth.

The multilateral lender has revised upwards the growth rate for the Indian economy this year to 5.1% from an earlier projection of 4%, according to its Global Development Finance Report
released on Monday. India has consistently outperformed growth forecasts by the World Bank in the past.
The prospects for the global economy remain ‘unusually uncertain’ despite recent signs of improvement in some parts of the world, the report points out. Barring a few countries, including India and China, the bank has cut 2009 growth projections for all other economies and expects the world economy to contract by 2.9% this year.

“Developing countries are expected to grow by only 1.2% this year, after 8.1% growth in 2007 and 5.9% growth in 2008.

“When China and India are excluded, GDP in the remaining developing countries is projected to fall by 1.6%, causing continued job losses and throwing more people into poverty,” the report said.
The report calls on governments around the world to be vigilant when drawing up strategies to reverse the recent expansionary monetary and fiscal policies once the world economy takes off.

The bank has urged rich countries to boost the flow of credit to developing nations to help speed up economic recovery. “Developing countries can become a key driving force in the recovery, assuming their domestic investments rebound with international support, including a resumption in the flow of international credit,” said Justin Lin, chief economist at World Bank.

Despite the gloomy picture for this year, the bank says growth in developing countries, led by India and China, could reach 4.4% in 2010 and 5.7% by 2011.

Since global growth will only return to its full potential by 2011, the gap between actual and potential output, unemployment and disinflationary pressures continue to build, the report adds.

This World Bank report compares with a more upbeat assessment by the International Monetary Fund, which said last week the decline in global output has moderated and it may raise its 2010 growth forecast for the world economy.

Source: http://economictimes.indiatimes.com/

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