Billionaire media baron Kalanithi Maran is close to sealing a deal to acquire Star
Aviation for over Rs 1,000 crore, launching himself into a struggling industry by buying an airline that is yet to start operations.
Mr Maran, who runs the Sun Network with interests in television, radio and newspapers, is buying the regional carrier in his personal capacity, persons close to the development said. Other terms of the deal and how it will be funded are not known.
Top executives of Star Aviation and Sun Network maintained that no such deal has been finalised. Mr Maran, the son of late Union minister Murasoli Maran and the grand nephew of Tamil Nadu chief minister M Karunanidhi, could not be reached. The 43-year-old is ranked 601 in the Forbes’ list of billionaires, with a net worth of $1.2 billion.
Star Aviation is owned by a Dubai-based NRI, Syed Mohammad, who owns a business empire estimated to be worth $3.8 billion, including an aircraft leasing company. Star Aviation’s imminent sale comes in the backdrop of its delayed launch because of a challenging economic environment. The airline industry has been especially hard hit and trade group IATA estimates that Indian carriers will post a combined loss of $1.5 billion (Rs 7,500 crore) in 2009.
Star Aviation, which was scheduled to launch its services early this year, now plans to do so in January or February 2010, a company official said on condition of anonymity. The airline has placed orders for seven E170 aircraft from Brazil’s and two have been delivered so far, he added.
Kapil Kaul of the Centre for Asia Pacific Aviation said that if the deal materialises, it is “very good news for Star Aviation’s promoters.”
“The Maran family have access to huge resources and sustaining power; they can bring capital to fully fund the project. But most important is having a professional management as well the choice of aircraft,” he observed.
Star Aviation, the first carrier to get an approval to operate a regional airline in the southern part of the country, has asked the government for time up to June 2010 to launch its services after missing a previous deadline. “As the first airline, Star will have the first mover advantage and it could also benefit of operating from the less crowded airports in the South. The entry of regional carriers will also enhance connectivity to the underserved Tier II and Tier III cities,” said an aviation analyst on condition of anonymity.
Sun Network, which owns the Sun TV channel, Suryan FM radio stations and the Dinakaran daily, has a licence as non-scheduled airline operator for chartered flights and air taxi services under the name Global Express. Two years ago, the company won shareholder approval to operate commercial flights.
It is also learnt that a company by the name “Sun Aviation” has been incorporated with the Registrar of Companies in Chennai, with Mr Maran as the founder.
ET had reported in August that Star Aviation and Sun Network were in talks for 50:50 joint venture, but both companies denied the development. In recent weeks, Star Aviation has again been in the news, with Mr Maran and Paramount Airways seen as the likely buyers.
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Friday, November 13, 2009
Thursday, November 12, 2009
Car buyers now face longer waiting periods
Manufacturers report unexpected post-festival surge in demand.
The bad old days of waiting periods for cars seem to have returned, with manufacturers reporting an unexpected surge in post-Diwali sales, forcing customers to wait a month to as much as four months for almost all models from the Swift to the Honda City.
Maruti Suzuki’s newly-launched hatchback, Ritz, reportedly has a waiting period of over two months, while buyers will have to wait for up to four months for the upper-range Honda City models. The average waiting period for the car is six to eight weeks.
What has come as a pleasant surprise to car makers is that the queues haven't shortened even a month after the festive period.
Pawan Goenka, president (automotive sector), Mahindra & Mahindra (M&M), said, “We are running our plants to full capacity, which is unusual during this time of the year. November-December demand is much stronger than usual.”
According to Goenka, the Xylo (a multi utility vehicle), Scorpio (a sports utility vehicle) and the Bolero (an MUV) have an average waiting period of two to three weeks. M&M is India's largest manufacturer of utility vehicles.
Similarly, Korean car brand Hyundai Motors has reported a sustained demand boom for its flagship models, i10 and i20, after Diwali.
Arvind Saxena, senior vice-president (marketing and sales), Hyundai Motor India, said, “Retail demand now is at least 20 to 25 per cent more than last November.”
Auto players said the sustained boom in car sales was a result of the pent-up demand in the earlier quarters, attractive interest rates on vehicle loans offered by banks, discounts and other financial benefits offered by the manufacturers and the general fear of a rise in both automobile prices and lending rates in the coming months.
Kotak Mahindra Prime, the car financing subsidiary of Kotak Mahindra Bank, raised vehicle interest rates 50 basis points a couple of weeks ago, but that hasn't impacted demand.
Sumit Bali, chief executive officer, Kotak Mahindra Prime, said, “The momentum in demand this year after the festivals has been well carried over. There is a strong growth momentum in vehicle off take. Interest rates are manageably lower and should not move upwards too much in the coming months. That’s a positive for the sector.”
The two-wheeler market isn’t far behind, with both Hero Honda and Bajaj Auto showing a waiting period after many years.
Anil Dua, senior vice president, marketing, sales and customer care, Hero Honda Motors, said the festival spirit was spilling over, as was evident from the surge in demand in November as well. “We had earlier said that we will sell four million units this year but now we are confidently saying we will cross that target handsomely.”
Dealers say the waiting period for diesel cars is “just going through the roof”. The Swift Dzire diesel model has a waiting period of over three months. The same is true for the diesel models of the Swift and Ritz.
The bad old days of waiting periods for cars seem to have returned, with manufacturers reporting an unexpected surge in post-Diwali sales, forcing customers to wait a month to as much as four months for almost all models from the Swift to the Honda City.
Maruti Suzuki’s newly-launched hatchback, Ritz, reportedly has a waiting period of over two months, while buyers will have to wait for up to four months for the upper-range Honda City models. The average waiting period for the car is six to eight weeks.
What has come as a pleasant surprise to car makers is that the queues haven't shortened even a month after the festive period.
Pawan Goenka, president (automotive sector), Mahindra & Mahindra (M&M), said, “We are running our plants to full capacity, which is unusual during this time of the year. November-December demand is much stronger than usual.”
According to Goenka, the Xylo (a multi utility vehicle), Scorpio (a sports utility vehicle) and the Bolero (an MUV) have an average waiting period of two to three weeks. M&M is India's largest manufacturer of utility vehicles.
Similarly, Korean car brand Hyundai Motors has reported a sustained demand boom for its flagship models, i10 and i20, after Diwali.
Arvind Saxena, senior vice-president (marketing and sales), Hyundai Motor India, said, “Retail demand now is at least 20 to 25 per cent more than last November.”
Auto players said the sustained boom in car sales was a result of the pent-up demand in the earlier quarters, attractive interest rates on vehicle loans offered by banks, discounts and other financial benefits offered by the manufacturers and the general fear of a rise in both automobile prices and lending rates in the coming months.
Kotak Mahindra Prime, the car financing subsidiary of Kotak Mahindra Bank, raised vehicle interest rates 50 basis points a couple of weeks ago, but that hasn't impacted demand.
Sumit Bali, chief executive officer, Kotak Mahindra Prime, said, “The momentum in demand this year after the festivals has been well carried over. There is a strong growth momentum in vehicle off take. Interest rates are manageably lower and should not move upwards too much in the coming months. That’s a positive for the sector.”
The two-wheeler market isn’t far behind, with both Hero Honda and Bajaj Auto showing a waiting period after many years.
Anil Dua, senior vice president, marketing, sales and customer care, Hero Honda Motors, said the festival spirit was spilling over, as was evident from the surge in demand in November as well. “We had earlier said that we will sell four million units this year but now we are confidently saying we will cross that target handsomely.”
Dealers say the waiting period for diesel cars is “just going through the roof”. The Swift Dzire diesel model has a waiting period of over three months. The same is true for the diesel models of the Swift and Ritz.
Tuesday, April 21, 2009
Office rentals drop up to 37% in January-March
Office rentals declined up to 37 per cent in India during the first three months of the year due to sluggish demand, as business houses held back expansion plans to tide over the economic slowdown.
According to a study of eight Indian cities by global real estate consultant Cushman & Wakefield (C&W), supply in the cities outstripped absorption by 45 per cent in the January-March period of 2009.
Subsequently, drop in rentals in major business districts of the country ranged between three per cent and 37 per cent as compared to the previous three months.
For instance, at Lower Parel in Mumbai, office rentals fell by as much as 37 per cent in the first quarter of the current year, the study said.
Worli and Bandra Kurla Complex areas of the financial capital witnessed decrease of rentals by 29 per cent and 20 per cent respectively, it said.
"The first quarter of the year can be termed as the weakest so far in terms of commercial office take up across major cities in India as compared to a similar period for the last 2-3 years. Renegotiations and migration to more cost effective locations has been the norm for the cautiously advancing corporate sector," C&W Executive Director Kaustuv Roy said.
C&W said the National Capital Region (NCR) witnessed a fall in office rentals by up to 19 per cent during the first three months of 2009. Rentals at Connaught Place in the National Capital fell by 17 per cent largely due to occupants opting for more cost effective options.
The fall in office rentals was, however, the least at the Central Business District of Bangalore, which saw a decline of just three per cent.
All major markets moved towards an over supply situation mostly in response to plummeting demand from the key sectors such as BFSI (Banking, Financial Services and Insurance) and IT/ITeS, Roy said.
C&W pointed out that total fresh office space supply in Q1, 2009, across the eight cities was 11.5 million sq ft, which outstripped total absorption by over 45 per cent. Total absorption in the same period stood at 5.78 million sq ft and it was a decline of about 30 per cent over Q1, 2008.
While NCR and Mumbai witnessed fresh office space supply of 2.6 million sq ft and 2.47 million sq ft, respectively, absorptions in the two cities stood at 0.8 million sq ft and 0.9 sq ft respectively, the report said.
The consultant carried out their survey in Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, NCR and Pune.
Though supply levels in the market is expected to fall, C&W predicted rentals to remain under pressure in the coming few months as well.
"Going forward we are likely to see supply contraction. Acutely affected areas like IT/ITeS and certain corporate office destinations will see deferment of projects to bridge the gap between supply and demand.
"While rental values are expected to be under pressure in short to medium term, going forward lower rentals are likely to have a more positive impact on the absorption numbers," Roy said.
According to a study of eight Indian cities by global real estate consultant Cushman & Wakefield (C&W), supply in the cities outstripped absorption by 45 per cent in the January-March period of 2009.
Subsequently, drop in rentals in major business districts of the country ranged between three per cent and 37 per cent as compared to the previous three months.
For instance, at Lower Parel in Mumbai, office rentals fell by as much as 37 per cent in the first quarter of the current year, the study said.
Worli and Bandra Kurla Complex areas of the financial capital witnessed decrease of rentals by 29 per cent and 20 per cent respectively, it said.
"The first quarter of the year can be termed as the weakest so far in terms of commercial office take up across major cities in India as compared to a similar period for the last 2-3 years. Renegotiations and migration to more cost effective locations has been the norm for the cautiously advancing corporate sector," C&W Executive Director Kaustuv Roy said.
C&W said the National Capital Region (NCR) witnessed a fall in office rentals by up to 19 per cent during the first three months of 2009. Rentals at Connaught Place in the National Capital fell by 17 per cent largely due to occupants opting for more cost effective options.
The fall in office rentals was, however, the least at the Central Business District of Bangalore, which saw a decline of just three per cent.
All major markets moved towards an over supply situation mostly in response to plummeting demand from the key sectors such as BFSI (Banking, Financial Services and Insurance) and IT/ITeS, Roy said.
C&W pointed out that total fresh office space supply in Q1, 2009, across the eight cities was 11.5 million sq ft, which outstripped total absorption by over 45 per cent. Total absorption in the same period stood at 5.78 million sq ft and it was a decline of about 30 per cent over Q1, 2008.
While NCR and Mumbai witnessed fresh office space supply of 2.6 million sq ft and 2.47 million sq ft, respectively, absorptions in the two cities stood at 0.8 million sq ft and 0.9 sq ft respectively, the report said.
The consultant carried out their survey in Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, NCR and Pune.
Though supply levels in the market is expected to fall, C&W predicted rentals to remain under pressure in the coming few months as well.
"Going forward we are likely to see supply contraction. Acutely affected areas like IT/ITeS and certain corporate office destinations will see deferment of projects to bridge the gap between supply and demand.
"While rental values are expected to be under pressure in short to medium term, going forward lower rentals are likely to have a more positive impact on the absorption numbers," Roy said.
Sunday, March 22, 2009
Tatas eyeing 10 lakh Nano bookings in two weeks
Tata Motors’ Nano, the world’s cheapest car, is poised for another milestone. The company is likely to book a whopping 10 lakh cars in the first fortnight starting March 23, company sources said.
The previous best in India was Fiat Uno, which did about 2.90 lakh bookings in 1995-96.
Simply put, this means a collection of Rs 7,000 crore in a span of two weeks as booking amount for each car will be around Rs 70,000.
All dealers of Tata Motors and select branches of State Bank of India (SBI) will accept bookings simultaneously across the country.
The first batch of cars will roll out from the Pantnagar plant in Uttarakhand, which has a capacity to produce only 3,000 cars per month. Situation will ease only after the company’s Sanand plant near Ahmedabad, which will have an initial capacity of producing 250,000 cars per annum, becomes operational in one year.
A survey by Crisil suggested that Nano’s launch could expand the Indian car market by 65 per cent. The increase in the market is expected to push up car sales by 20 per cent over previous year.
Allotment will be made through a draw and, going by projections even during this recession, those at the top of the draw would have the choice of becoming proud owners of the first Nanos, or getting a premium in the black market.
The previous best in India was Fiat Uno, which did about 2.90 lakh bookings in 1995-96.
Simply put, this means a collection of Rs 7,000 crore in a span of two weeks as booking amount for each car will be around Rs 70,000.
All dealers of Tata Motors and select branches of State Bank of India (SBI) will accept bookings simultaneously across the country.
The first batch of cars will roll out from the Pantnagar plant in Uttarakhand, which has a capacity to produce only 3,000 cars per month. Situation will ease only after the company’s Sanand plant near Ahmedabad, which will have an initial capacity of producing 250,000 cars per annum, becomes operational in one year.
A survey by Crisil suggested that Nano’s launch could expand the Indian car market by 65 per cent. The increase in the market is expected to push up car sales by 20 per cent over previous year.
Allotment will be made through a draw and, going by projections even during this recession, those at the top of the draw would have the choice of becoming proud owners of the first Nanos, or getting a premium in the black market.
Friday, March 20, 2009
Govt estimates 500,000 job losses in textile industry
The estimate is less than industry’s estimate by half.
The Union textile ministry estimates that between 300,000 and 500,000 people will lose their jobs in this labour-intensive sector by March 31, due to the ongoing global economic downturn.
The government’s estimate is well below the projections of industry lobby groups, which put the number at around 1 million.
The textiles and garments industry is the second-largest employer in India after agriculture. It directly employs 35 million people and indirectly provides livelihood to about 88 million people.
“According to a survey carried out between October 2008 and December 2008, which covered 3,000 units, it was found that 0.92 per cent of workers would lose their jobs,” said a senior official of the ministry. Based on this survey, the overall industry job loss was extrapolated.
However, the textile industry contradicts this and projects a much higher figure of 1 million people who would be rendered jobless by the end of the current financial year.
This sector has been badly hit by the ongoing global recession, which has resulted in closing of many units. About 50 per cent of the total production of textiles and garments in India is exported, of which 60 per cent is exported to the United States and the European Union countries. But the recession in the West has hit the demand.
Indian exporters of textiles and garments are facing stiff competition from manufacturers in Bangladesh, China, Vietnam and Sri Lanka, which produce goods at much cheaper rates.
“There would be a drop of 3 per cent in overall production in the industry, which would see a job cut of around 10.5 lakh (or 1.05 million),” said DK Nair of the Confederation of Indian Textile Industry (CITI). He added that since many units might retain some workforce for new orders, this number would stand at 1 million.
The ministry official, however, disputed this figure, saying that the number of people losing jobs could not cross 500,000 due to the depreciating Indian rupee, which would have a positive fallout on the entire textile industry.
About 5,000 people were rendered jobless due to closure of 12 mills in the organised sector in the September 2008-January 2009 period, when the situation was at its worst. This, according to Nair, is not a correct indicator because the organised sector contributes to just 3 per cent of total textile production.
While 97 per cent of the spinning units are in the organised sector, only 3 per cent of the fabric manufacturing industry is in the organised sector. The entire garment industry comes under the unorganised sector.
The Union textile ministry estimates that between 300,000 and 500,000 people will lose their jobs in this labour-intensive sector by March 31, due to the ongoing global economic downturn.
The government’s estimate is well below the projections of industry lobby groups, which put the number at around 1 million.
The textiles and garments industry is the second-largest employer in India after agriculture. It directly employs 35 million people and indirectly provides livelihood to about 88 million people.
“According to a survey carried out between October 2008 and December 2008, which covered 3,000 units, it was found that 0.92 per cent of workers would lose their jobs,” said a senior official of the ministry. Based on this survey, the overall industry job loss was extrapolated.
However, the textile industry contradicts this and projects a much higher figure of 1 million people who would be rendered jobless by the end of the current financial year.
This sector has been badly hit by the ongoing global recession, which has resulted in closing of many units. About 50 per cent of the total production of textiles and garments in India is exported, of which 60 per cent is exported to the United States and the European Union countries. But the recession in the West has hit the demand.
Indian exporters of textiles and garments are facing stiff competition from manufacturers in Bangladesh, China, Vietnam and Sri Lanka, which produce goods at much cheaper rates.
“There would be a drop of 3 per cent in overall production in the industry, which would see a job cut of around 10.5 lakh (or 1.05 million),” said DK Nair of the Confederation of Indian Textile Industry (CITI). He added that since many units might retain some workforce for new orders, this number would stand at 1 million.
The ministry official, however, disputed this figure, saying that the number of people losing jobs could not cross 500,000 due to the depreciating Indian rupee, which would have a positive fallout on the entire textile industry.
About 5,000 people were rendered jobless due to closure of 12 mills in the organised sector in the September 2008-January 2009 period, when the situation was at its worst. This, according to Nair, is not a correct indicator because the organised sector contributes to just 3 per cent of total textile production.
While 97 per cent of the spinning units are in the organised sector, only 3 per cent of the fabric manufacturing industry is in the organised sector. The entire garment industry comes under the unorganised sector.
Friday, February 27, 2009
Nano launch on March 23, bookings from April
After a delay of more than six months, Tata Motors will finally launch the much-awaited Nano on March 23. The Rs 1-lakh car, pegged as the world's cheapest car, will be rolled out at an event to be held in Mumbai.
However, bookings for the 'people's car' will begin only in the second week of April, the company said in a statement today.
The car was earlier scheduled to be launched in the first week of October last year. But due to protests against land acquisition for the car's mother plant at Singur in West Bengal, the company was forced to abort the production plans from that site, which disrupted the original launch plan.
Although Tata Motors did not reveal the initial production numbers of the Nano, sources say that the company will launch the car with around 1,500 units, which have been manufactured at Pantnagar in Uttarakhand and Pune in Maharashtra.
Industry sources add that the company targets to produce 100,000 units in the next twelve months from - Pantnagar, Pune and Sanand (Gujarat). The Gujarat plant is expected to commence production by October-November this year, added sources. Consumers wanting to buy the Nano may have to cough up Rs 70,000 as booking amount, which is 55-60 per cent of the total on-road cost of the car, which is expected to be at Rs 1.3-1.4 lakh after addition of various levies and taxes.
But sources say that the company will have a pricing advantage on all Nano's built at its Pantnagar plant due to a tax holiday granted to automotive companies situated there, thus allowing the company to offer the car closer to the Rs 1 lakh price tag. The company is currently manufacturing around 25 to 30 cars every day for which, spare parts, gear boxes and transmission systems are being shipped from Pune.
"Some 900 cars are already ready at our Pantnagar plant. By the time of the launch, another 600 cars are expected to be ready," said a top executive of Tata Motors from the Pune plant. Even though the company pegged March 23 as the launch date, the car will be available in showrooms only by the first week of April, clarified the company.
"Tata Motors is making arrangements for the widest possible network to book the car, so that prospective customers can conveniently avail of booking facilities at their locations, across the length and breadth of India", stated the company release. Currently, the component vendors supplying to the Nano project are asked to moderate their supplies currently, which will be gradually hiked in the following months when Tata Motors increases production level.
"Once the Gujarat plant kicks in around October-November we will have hiked our output to the optimum level to keep pace with the production", said a vendor associated with the project.
The Gujarat plant has a capacity to produce 250,000 Nano's yearly.
The Nano was unveiled by Tata Motors amid much fanfare at the Auto Expo held at New Delhi in January last year. Violent protest by farmers led by Trinamool Congress leader Mamta Banerjee forced Tata Motors to quit from the state and relocate the plant to Sanand in Gujarat.
However, bookings for the 'people's car' will begin only in the second week of April, the company said in a statement today.
The car was earlier scheduled to be launched in the first week of October last year. But due to protests against land acquisition for the car's mother plant at Singur in West Bengal, the company was forced to abort the production plans from that site, which disrupted the original launch plan.
Although Tata Motors did not reveal the initial production numbers of the Nano, sources say that the company will launch the car with around 1,500 units, which have been manufactured at Pantnagar in Uttarakhand and Pune in Maharashtra.
Industry sources add that the company targets to produce 100,000 units in the next twelve months from - Pantnagar, Pune and Sanand (Gujarat). The Gujarat plant is expected to commence production by October-November this year, added sources. Consumers wanting to buy the Nano may have to cough up Rs 70,000 as booking amount, which is 55-60 per cent of the total on-road cost of the car, which is expected to be at Rs 1.3-1.4 lakh after addition of various levies and taxes.
But sources say that the company will have a pricing advantage on all Nano's built at its Pantnagar plant due to a tax holiday granted to automotive companies situated there, thus allowing the company to offer the car closer to the Rs 1 lakh price tag. The company is currently manufacturing around 25 to 30 cars every day for which, spare parts, gear boxes and transmission systems are being shipped from Pune.
"Some 900 cars are already ready at our Pantnagar plant. By the time of the launch, another 600 cars are expected to be ready," said a top executive of Tata Motors from the Pune plant. Even though the company pegged March 23 as the launch date, the car will be available in showrooms only by the first week of April, clarified the company.
"Tata Motors is making arrangements for the widest possible network to book the car, so that prospective customers can conveniently avail of booking facilities at their locations, across the length and breadth of India", stated the company release. Currently, the component vendors supplying to the Nano project are asked to moderate their supplies currently, which will be gradually hiked in the following months when Tata Motors increases production level.
"Once the Gujarat plant kicks in around October-November we will have hiked our output to the optimum level to keep pace with the production", said a vendor associated with the project.
The Gujarat plant has a capacity to produce 250,000 Nano's yearly.
The Nano was unveiled by Tata Motors amid much fanfare at the Auto Expo held at New Delhi in January last year. Violent protest by farmers led by Trinamool Congress leader Mamta Banerjee forced Tata Motors to quit from the state and relocate the plant to Sanand in Gujarat.
TCS mulls variable pay cut; staff to work more
In a clear admission that it is facing hard times, India’s largest software exporter Tata Consultancy Services (TCS) said it plans to review the variable component of employees' salaries every quarter in an attempt to cut costs. Variable pay accounts for 20 to 35 per cent of TCS employees' gross salary, depending on their hierarchy.
The company had earlier cut employees' variable pay by around 1.5 per cent in February 2008.
“We are trying to reduce costs. Our largest expenditure -- around 55 per cent of our gross revenue -- is manpower cost and employee salaries. We are not contemplating a pay reduction, but we are reviewing the employee variable pay," CEO and MD S Ramadorai told reporters here today.
All employees, from trainee to the senior-most manager, get variable pay. The total variable component -- which is linked to both the performance of the company as well of the individual — accounts for around 8 per cent of the company's gross revenue.
"We are also increasing employee working hours from 40 hours a week to 45 hours a week, with effect from April 1,” he added.
The company may also defer absorbing nearly 24,500 campus recruits, scheduled to join in June. Their salaries may also be revised, said Ramadorai.
According to analysts, a 10 per cent increase in working hours could add half-a-million billable hours for TCS alone, given that over 55 per cent of the company's contracts were the Time & Material variety.
The Rs 35,000-crore TCS also expects flat or lower Q4 results because its US clients have started pressing the company for a reduction in price ranging from 4 to 15 per cent. "Q4 results will either be the same as the third quarter or may see a dip,” Ramadorai indicated.
The company also plans to delay infrastructure and new projects to save costs. "Capital expenditure of TCS in the next financial year will be less than the Rs 1,400 crore announced for 2008-09,” Ramadorai said.
The company has reportedly laid off over 100 employees in the UK. “A lot of our work is on contract. Also, we retain employees, especially the ones on probation, on performance, and if their performance is not up to the mark, we ask them to leave. Although I am not sure why the employees in the UK were asked to leave, two of the reasons could be that their contracts ended or bad performance. Going forward, a lot of emphasis this year will be on employee efficiency,” Ramadorai said.
“We are also focusing on more offshore projects right now to cope effectively with the recession, by moving more roles and delivery functions to offshore locations such as India,” Ramadorai added.
TCS serves customers such as British Airways, BT and United Utilities in the UK. The company has around 4,800 professionals working at almost 65 customer sites in the UK and Ireland.
“In the last nine months, TCS has hired 30,000 people. For now, we have frozen our lateral hiring and may look at laying off employees if the situation does not improve. Currently, we have around 1,30,000 employees on our pay roll,” Ramadorai added.
The company had earlier cut employees' variable pay by around 1.5 per cent in February 2008.
“We are trying to reduce costs. Our largest expenditure -- around 55 per cent of our gross revenue -- is manpower cost and employee salaries. We are not contemplating a pay reduction, but we are reviewing the employee variable pay," CEO and MD S Ramadorai told reporters here today.
All employees, from trainee to the senior-most manager, get variable pay. The total variable component -- which is linked to both the performance of the company as well of the individual — accounts for around 8 per cent of the company's gross revenue.
"We are also increasing employee working hours from 40 hours a week to 45 hours a week, with effect from April 1,” he added.
The company may also defer absorbing nearly 24,500 campus recruits, scheduled to join in June. Their salaries may also be revised, said Ramadorai.
According to analysts, a 10 per cent increase in working hours could add half-a-million billable hours for TCS alone, given that over 55 per cent of the company's contracts were the Time & Material variety.
The Rs 35,000-crore TCS also expects flat or lower Q4 results because its US clients have started pressing the company for a reduction in price ranging from 4 to 15 per cent. "Q4 results will either be the same as the third quarter or may see a dip,” Ramadorai indicated.
The company also plans to delay infrastructure and new projects to save costs. "Capital expenditure of TCS in the next financial year will be less than the Rs 1,400 crore announced for 2008-09,” Ramadorai said.
The company has reportedly laid off over 100 employees in the UK. “A lot of our work is on contract. Also, we retain employees, especially the ones on probation, on performance, and if their performance is not up to the mark, we ask them to leave. Although I am not sure why the employees in the UK were asked to leave, two of the reasons could be that their contracts ended or bad performance. Going forward, a lot of emphasis this year will be on employee efficiency,” Ramadorai said.
“We are also focusing on more offshore projects right now to cope effectively with the recession, by moving more roles and delivery functions to offshore locations such as India,” Ramadorai added.
TCS serves customers such as British Airways, BT and United Utilities in the UK. The company has around 4,800 professionals working at almost 65 customer sites in the UK and Ireland.
“In the last nine months, TCS has hired 30,000 people. For now, we have frozen our lateral hiring and may look at laying off employees if the situation does not improve. Currently, we have around 1,30,000 employees on our pay roll,” Ramadorai added.
Friday, January 23, 2009
Rahman notches up 3 Oscar nominations
Continuing his spectacular run, A R Rahman today became the first Indian to get three Oscar nominations for his score in British-Indian movie Slumdog Millionaire, which was also nominated for seven other categories, including best film and best director.
Rahman has been nominated for Best Original Score and the numbers ‘Jai Ho’ and ‘O Saya’ have been shortlisted for the Best Original Song. Close on the heels of the dual-language film winning four Golden Globes, including one for Rahman, earlier this month, Danny Boyle and Simon Beaufoy have been shortlisted for best director and best adapted screenplay categories, respectively.
The film also won nominations in picture, cinematography, sound mixing, sound editing and film editing. The nominations were announced at the Academy of Motion Picture Arts and Sciences’ Samuel Goldwyn Theatre by Oscar-winning actor Forest Whitaker. The awards will be announced on February 22 at Hollywood's Kodak Theatre.
This is the first time that an Indian has won more than one nomination in the history of Oscars. Reacting to the nominations, Rahman said: “I did not think it will get there. God has been really kind. And I have to really thank all the people for their prayers and their good wishes.
“Something good is happening and I am really happy about it,” he said, adding there is a kind of optimism in the film and so much of positive vibes as you leave the movie hall.
Co-director Loveleen Tandon said: “We have proved everyone wrong. It's a crazy feeling beyond words. Ten nominations is something unbelievable.” She said Rahman’s work has been awarded and the “world has finally woken up to his talent”. In the original score category, Rahman will compete with Alexandre Desplat (The Curious Case of Benjamin Button), James Newton Howard (Defiance), Danny Elfman (Milk) and Thomas Newman (WALL-E). Rahman will compete with Peter Gabriel and Thomas Newman (‘Down to earth’ from WALL-E) in the original song category. Gulzar has penned the lyrics of ‘Jai Ho’ and Maya Arulpragasam ‘O Saya’.
The romantic periodical The Curious Case of Benjamin Button, starring Brad Pitt, topped this years Oscar race with a whopping 13 nominations. The films in the race for best picture are Milk, Frost/Nixon, The Curious Case of Benjamin Button and The Reader.
Those nominated in the best director category along with Boyle are David Fincher (The Curious Case of Benjamin Button), Stephen Daldry (The Reader), Gus Van Sant (Milk) and Ron Howard (Frost/Nixon).
Rahman has been nominated for Best Original Score and the numbers ‘Jai Ho’ and ‘O Saya’ have been shortlisted for the Best Original Song. Close on the heels of the dual-language film winning four Golden Globes, including one for Rahman, earlier this month, Danny Boyle and Simon Beaufoy have been shortlisted for best director and best adapted screenplay categories, respectively.
The film also won nominations in picture, cinematography, sound mixing, sound editing and film editing. The nominations were announced at the Academy of Motion Picture Arts and Sciences’ Samuel Goldwyn Theatre by Oscar-winning actor Forest Whitaker. The awards will be announced on February 22 at Hollywood's Kodak Theatre.
This is the first time that an Indian has won more than one nomination in the history of Oscars. Reacting to the nominations, Rahman said: “I did not think it will get there. God has been really kind. And I have to really thank all the people for their prayers and their good wishes.
“Something good is happening and I am really happy about it,” he said, adding there is a kind of optimism in the film and so much of positive vibes as you leave the movie hall.
Co-director Loveleen Tandon said: “We have proved everyone wrong. It's a crazy feeling beyond words. Ten nominations is something unbelievable.” She said Rahman’s work has been awarded and the “world has finally woken up to his talent”. In the original score category, Rahman will compete with Alexandre Desplat (The Curious Case of Benjamin Button), James Newton Howard (Defiance), Danny Elfman (Milk) and Thomas Newman (WALL-E). Rahman will compete with Peter Gabriel and Thomas Newman (‘Down to earth’ from WALL-E) in the original song category. Gulzar has penned the lyrics of ‘Jai Ho’ and Maya Arulpragasam ‘O Saya’.
The romantic periodical The Curious Case of Benjamin Button, starring Brad Pitt, topped this years Oscar race with a whopping 13 nominations. The films in the race for best picture are Milk, Frost/Nixon, The Curious Case of Benjamin Button and The Reader.
Those nominated in the best director category along with Boyle are David Fincher (The Curious Case of Benjamin Button), Stephen Daldry (The Reader), Gus Van Sant (Milk) and Ron Howard (Frost/Nixon).
Monday, January 19, 2009
Ban directors from other boards: CLB on Satyam scam
The government has approached the Company Law Board (CLB) with a request that all former directors of scam-hit Satyam Computers should be banned from becoming directors in other companies in India.
“One of the provisions in the Companies Act under section 388B(1)(a) is that if CLB finds that directors have not discharged their responsibilities properly, they can be banned from becoming directors in any other company,” said a senior official in the ministry of corporate affairs.
The request was in a petition filed January 9.
The CLB is understood to be waiting for responses to be filed by all nine directors — B Ramalinga Raju, Rama Raju, Ram Mynampati, Mangalam Srinivasan, Krishna Paleppu, Vinod Dham, M Rammohan Rao, V S Raju and T R Prasad — by February 20 on Raju's disclosures.
This development explains why many former Satyam directors have started resigning from other company boards.
Former cabinet secretary TR Prasad has already resigned from the boards of GMR Infra and Taj GVK. Professor M Rammohan Rao stepped down as Dean of the Indian School of Business, the BEL board and a government panel. Vinod Dham resigned from Sasken.
“One of the provisions in the Companies Act under section 388B(1)(a) is that if CLB finds that directors have not discharged their responsibilities properly, they can be banned from becoming directors in any other company,” said a senior official in the ministry of corporate affairs.
The request was in a petition filed January 9.
The CLB is understood to be waiting for responses to be filed by all nine directors — B Ramalinga Raju, Rama Raju, Ram Mynampati, Mangalam Srinivasan, Krishna Paleppu, Vinod Dham, M Rammohan Rao, V S Raju and T R Prasad — by February 20 on Raju's disclosures.
This development explains why many former Satyam directors have started resigning from other company boards.
Former cabinet secretary TR Prasad has already resigned from the boards of GMR Infra and Taj GVK. Professor M Rammohan Rao stepped down as Dean of the Indian School of Business, the BEL board and a government panel. Vinod Dham resigned from Sasken.
Monday, January 12, 2009
Rahman wins Golden Globe for Slumdog Millionaire
Music maestro A R Rahman, who became the first Indian to win the prestigious Golden Globe Award, dedicated it to the "billion people of India," as British Director Danny Boyle's Mumbai-based saga 'Slumdog Millionaire,' bagged four prizes at the ceremony today. A Mumbai underdog's rags-to-riches story, 'Slumdog Millionaire', swept all the four categories it was nominated for, winning the best director award for Boyle, the best music score for Rahman, best screenplay for Simon Beaufoy and also in the category of best drama.
Rahman, who won the coveted prize for his music score 'Jai Ho' in the film, thanked the director and his fellow musicians in Mumbai and Chennai, besides the "billion people from India".
"Unbelievable..! I thought, I would not win, so anyways thanks to the almighty God for bringing me here... Danny Boyle, Fox pictures, all my musicians in Chennai, Mumbai,.. and the billion people from India," he said while accepting the award.
Director Danny Boyle bagged the best director award, while Simon Beaufoy won the best screenplay award for the film that starred Bollywood actors Anil Kapoor, Irrfan Khan and British Indian Dev Patel.
Bollywood superstar Shah Rukh Khan, who was at the ceremony to represent India, introduced the film to the foreign audience with 'Slumdog' actress Frieda Pinto. It is also the first Golden Globe for 52-year-old Boyle, who is expected to be among the favourites at next month's Oscars following the phenomenal success of the film at award circuits.
Rahman, who won the coveted prize for his music score 'Jai Ho' in the film, thanked the director and his fellow musicians in Mumbai and Chennai, besides the "billion people from India".
"Unbelievable..! I thought, I would not win, so anyways thanks to the almighty God for bringing me here... Danny Boyle, Fox pictures, all my musicians in Chennai, Mumbai,.. and the billion people from India," he said while accepting the award.
Director Danny Boyle bagged the best director award, while Simon Beaufoy won the best screenplay award for the film that starred Bollywood actors Anil Kapoor, Irrfan Khan and British Indian Dev Patel.
Bollywood superstar Shah Rukh Khan, who was at the ceremony to represent India, introduced the film to the foreign audience with 'Slumdog' actress Frieda Pinto. It is also the first Golden Globe for 52-year-old Boyle, who is expected to be among the favourites at next month's Oscars following the phenomenal success of the film at award circuits.
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