Infosys Wants CapGemini

Just the Kind of news I want to hear.
Music to my ears.
And the Top Indian IT services Companies, on account of better delivery models, better Human resources(the high attrition not withstanding, which is good and shows that the sector is VERY healthy) and cost effective solutions, are today much more valuable than the US or European Counterparts in terms of Profitablity, and Market Caps Obviously.

I had predicted that it won't be too far off when Indian IT Cos Bid for 3X their size US and European Counterparts. I thought that TCS with the TATA's experience of LBOs would be the first to move, but Infosys seemed to have taken the first step here.

Take it on Infy...

Is India's Inflation Wrong?

Via Rediff:

Some economists assert that India's method of calculating inflation is wrong as there are serious flaws in the methodologies used by the government.

Economists V Shunmugam and D G Prasad working with India's largest commodity bourse -- the Multi Commodity Exchange -- have come out with a research paper arguing that the government urgently needs to shift the method of calculating inflation.

Of Retail Chain and Big Corporates

Shop keepers, what they call Retail chains, become big corporates sometime. So Big, at times, that a string of shops started buy a shopkeeper called Sam Walton is today's Biggest Corporate, with revenues more than the GDP of any medium sized nations.

And so are some other retail chains.
At least in the US, and Europe where Big businesses have thrived, and some Asian countries where Big businesses have begum to thrive, Big businesses have rarely tried to build a retail or shops of thier big corporates.

I mean Retail Chains have become Big Corporates, but have seen any big corporates becoming retail chains? GE, The GM, Nike?

For that matter even Virgin?

Then, why are all the Indian Corporate Biggies rushing into the Retail bandwagon?

I will bet on pantaloon Retail and Subhiksha anyday over Reliance and Birla.
Bharti!!! They are the smarter of the lot, are they? Supply Chain and Intrastructures and all that?
In the californian Gold Rush, the ones who sold shovels made the fortunes.

Why I am worried about Big corporates going retail is that Retail is a low margin Business, and many Many Retailers going bankrupt in the past. Only one retailer can squeeze the margin, and it hits the rest.

For a traditional company making an X% ROI, starting a new venture from scratch, that will give less than X% ROI don't make too sound business sense, does it?
Core Competence anyone?

Mahinda Renault Logan

Saw the New Logan yesterday on the road. It looks very ordinary for a newly launched car. I wouldn't want to buy it.

Been thinking of going for a diesel car, what with my car giving 10-11 kms with the AC on in the delhi heat.

Then I did a little maths, and found that paying a couple of lakhs or about on a diesel car don't make as good an economic sense as we percieve. [I am not taking about the Logan here which is not too expensive]. I was comparing Verna Diesel and Petrol. 1.5 lakhs is about 3500 more on the EMI. Driving 1000 KMs a months, diesel would only save you as much... So it is the same after all.... :)

Indian IT Services Companies are the Future!

In net income, IBM, HP, ADP, Accenture, CSC, TCS, Infosys, Wipro, ACS and Atos Origin lead the global pecking order, while the top 10 list by m-cap includes IBM, HP, ADP, Accenture, TCS, Infosys, Wipro, EDS, CSC, and Cap Gemini. [source]

TCS might muscle itself into the top 10 IT services companies' club sooner than it anticipated. Though the Top three Indian IT services companies are nowhere near in terms of topline, The Top Indian IT companies comes in the top 10 in terms of net Income and Market capitalisation. Two parameters that is used in acquiring compapnies. These companies have been playing around with acquisitions for sometime now with small sub-100 million dollar acquisitions. Perhaps they were warming up, but with the kind of Cashflows and Market Value of the Indian IT cos, it will not be very far, let me even go on to say 2007-08, they Big companies like Accenture, EDS become take over targets of Infosys, TCS. These companies might not want to sell out, but there are some companies(in the top 10) that are already struggling with slow growth, and losing Bids.

Financiers are willing to back Indian companies in LBOs, Indian companies which were never in the radar, in Industries where we hadn't even proven ourself.

Outsourcing however is a different story altogether. Indian IT industry pioneered outsourcing. Not so long ago, Industry Oracles lamented about how Indian IT companies might lose out to American MNCs since they were based out of where the clients are. During that time, the US MNCs knew that more than their vicinity to clients, they needed to build up capacity in India. They were imitating what the Indian Comapnies were doing. Now who will the Financiers back?

It is not a question of which companies will be acquired. It is just a matter of which Company will be the first to move amongst TCS, WIPRO, Infosys and Cognizant. Perhaps Wipro going by past records, or perhaps TCS going by recent records.

Skoda Fabia or Swift?

All the Hatchback lovers, and you will certainly love hatchbacks if you drive in India, Skoda will be comming out this year the Fabia, whic looks very much like the Maruti swift, and even though Swift was there in the market earlier, Skoda's Technolgy might prove hard for Maruti Swift to sustain the market share, if the price is correct.

Indian and Air India to Merge

Wasn't it just yesterday that I wrote that the need of the hour of the Indian Airlines Industry is consolidation. Quickly.

The Indian govt. has also okayed the merger of Indian (Airlines) and Air India to create a behemoth.

The stage is set for the merger of Indian Airlines and Air India. An empowered group of ministers on Wednesday cleared the proposal to create a single national carrier — a move first mooted more than 20 years ago for providing muscle to the public-sector carriers to take on private and international airlines. The merger, expected to be completed over the next three months, will create an entity with a fleet of around 120 aircraft. As new planes join the fleet, some existing ones are phased out and those on lease returned, the carrier will have over 125 new-generation aircraft by 2010.

What I really like about the proposal is that some existing aircrafts wil be phased out.. Badly needed! And please please, enforce an age limit on the flying staffs. I am not discriminating, but that is what the customers want.

Year end Investments, Insurance or Mutual Funds?

This is the time that Insurance Agents and Mutual Fund salesman love the most. Instead of the usual pestering phone calls from the call center agents of Banks and Insurance companies, Hawking for Mutaul funds or Insurance, It is the investor who frantically calls up friends to ask for the friendly advisor's number who gave him a discount (** Rebate or discount by Insurance agents on the Premium paid is Illegal). The companies Bulletin baord is full of messages asking for contact details of Insurance agents.

It must be a heyday for the Agents and Insurance companies. Insurance Policies are usually hardsold..

I suggest that You should not buy Insurance for the purpose of savings, and tax savings. You stand the chance of getting wrong-sold, or buying the wrong policy just to save on Taxes. If you want to buy Insurance, do a proper research, and buy for protection of your Family. The tax Incentives are given for just that, Incentives. Incentives for you to buy Insurance. What policies to buy blah blah..... Just buy WHole Life Policies or Term Policies. Fist get adequate cover, and think about the other frills of Insurance.

For Investment purpose, we just happen to be in very lucky Times. We don't have to anymore allocate 10000 on pension plan, 10000 on Infrastraucture bonds, another 20 on National Savings Certificate blah blah Blah.. You can put the whole 1 lakh on any savings instruments Like Tax savings Mutual Funds also called Equity Linked Savings Scheme, Insurance premia, Bonds etc...

If you are running amok for last minute Investment, chances are that, you are a young professional, who forgot to save... I invested in Mutual Funds. There are a hosts of Mutual Funds to choose from, and I chose three Mutual Funds where I invested. These Mutual funds had good allocations into Certain Mid Cap Stocks, and since I am investing for at least 3 years, some of the mid caps could reap huge dividends.. I have chosen SBI Mutual Fund's Magnum Tax Gain, Icici Prudential Tax Plan-growth, and HDFC longnterm advantage fund.

Icici Prudential Tax plan hasn't grown yet, but the other two have started to grow exceptionally wel even in a short time..

If at all you are buying Insurance, SBI life sells very cheap Term cover. Get yourself a 50 lakh term cover. You will sleep in peace.Max New York life has a very good whole Life Plans.. You can try them too.

Kingfisher Airlines, Jet Airways and Indian!

Earlier My favorite Airlines used to be travel by Air Sahara. Air Sahara has a very warm ambience, or so it used to be. But combined with its internal troubles, and the industry in general, it would be a difficult comeback for Sahara now. Any other time, ie in absense of the price undercutting in the industry, any good marketing guy could have turned it around (Hush Hush about the financials). And Air Hostesses at Air Sahara Still had that old charm, untill stewards ran them over..


So now, about the only airlines left are Jet Airways, Indian and Kingfisher Airlines, and if you book at the right time, the economy fares offered by these airlines are not very different from that offered by the so called budget airlines. Of the three, Jet airways is clearly the market leader, with good service and a percieved brand Value. I have had only good service from Jet except for the fact that the Air hostesses are relatively rude. Rudeness Factor is clearly a parameter that Jet Airways consider when recruiting Flight Attendents. I long the golden days of Air travel when Air Hostesses were no less than Super Models, and some even marrying into Industrial Houses and with Actors.

Indian, is not coping well with the sudden opening up of the skies. The over aged Air Hostesess and Flight Stewards, and their fake smile have become an eyesore at best. And if you happen to fly by Alliance Air, god help you. Other the service quality and the rest, it is the ricketty condition of the Aircrafts that is most disheartening. In fact a weak hearted might have a heart Attack. The other day I came back by Indian Airlines, and the plane was giving out a VERY strange Noise.. It was indeed scary to be listening to sounds when you on board an aircraft, and the aircraft is about to take. I asked the Air Hostess who politely told me that it was the baggage handling system, and I was calmed. And the flight took off well.

It was when we landed in the Delhi, and the plane was taxiing, ie, the baggage handling system was no where close to the aircraft, and we just touched ground when that Creaky sound came again. I promised myself that it was an Airlines that I should avoid.

Only about the best thing Indian Airlines is that if you have extra baggage, it is the only airlines that allows 30 Kilos for domestic travel. But that creaky sound was too much a price to pay for a few extra baggage huh!

In another Indian Arlines flight, the toilet was dirty, and add to it, some fellow passenger had dropped Chewing Gum Wrappers and a small empty water bottle in the sink. Of course, I have photographs of the same..that I took with my Camera phone.

Kingfisher is however is an exception.
Service quality relatively much better.
Umm.. Air Hostesses attractively dressed. And well recruited.
I mean, take out the air hostesses, and there is no fun left in travelling :)
Inflight entertainment, which will pay for itself with inflight promotions..

I expected it to be nothing more than a Huge flying bill board , and a Massive surrogate advertising campaign for Kingfisher Beer. But, with the whole industry in troubled waters, Kingfishers might come out a clear winner. At least they would be selling more beer even if the airlines run into losses. And it will hold out longer than any other Airlines in the case of a price war going out of hand...

Fly the Good times.

Will The Indian Airlines Industry Bleed to Recession?

Ummmm!!! Those days, not the early days of the Internet, when I wasn't too used to reading off the Computer Screen, and when I took out printouts if an email was too long( stories from Desi Fantasy too at times shhh!!).. Those days were before RSS became popular, and Dave Winer was busy figuring a way out to bring RSS to the public. And my daily dose of reading included Fortune, Time, Businessweek, and all Indian Magazines.. Now I read so many many feeds in so less time, I don't even know what I am reading, and my habit of copying Intelligent Bloggers' OPML lists keeps my feed list grow at a pace I can't seem to control, or monitor..

Oh, and there was no delicious nor Digg, so I couldn't bookmark that article. Or perhaps I read that at several places.. Something about the American Airlines Industry.. In a few years, severe undercutting by competitors, had bled the US Airlines Industry all the profits that the Industry had earned since the Inception of Air Travel....

It, would be faster for the Indian Airlines Industry, I am presuming, unless something is done real quick. Things like fuel prices, regulations etc are out of their control, but things that are in control, the Industry leaders must control..

Looks like the customers have never had it so good though..
Or do they?

Low prices notwithstanding, the service quality today are comparable to some state owned transport corporation.
Long queues, Delays, Rescheduling (WTF.. I had booked a ticket on monday morning so that I can reach office on time, but they rescheduled it... one day in advance, and it wasn't even a no-frill Airlines... I reached office at 2 PM) and hostile cabin crews..

With near full occupancy, and costs squeezed wherever possible, Budget airlines can't make the tickets any cheaper, and there is no sign of a profit in sight. I am not the "perfect customer for cheap airlines" but I have promised myself never to travel by a Budget Airlines, and I have met many people who swears the same.. Perhaps we are not part of that target market... Are the seats Cramped at Air Deccan?

The airlines are bleeding, and service quality is becoming worse.. Add to it the Airport woes... There was joke today on times of india, about someone who has earned extra miles for hovering over delhi skies waiting for permission to land.. The point is, how long can they bleed?

The only Airlines that sem to be doing exceedingly well is Kingfisher. I am not sure if Mallya is even looking at a Profit.. His Aircrafts are Giant Hoarding for his BEER brands, All the passengers are exposed to the Kingfisher Brand for the whole duration of the flight, and with no remote control to switch to another brand... And The airlines commercials are the Biggest Surrogate marketing Campaign in the History of Surrogate Advertising...

When the rest of the Airlines bleed to bankcruptcy, Cases and Cases of beers are being sold.. It won't be long when Mallya buys out Virgin :)

As for the rest, they should look at consolidation quickly, before the government intervenes. After all INDIAN is also at stake.

Walmart Enters India via Bharti Finally!

And yes, retail is one sector which will immensely benefit the customers, as more and more players come in. Some players will even die out under cutting each other, but the customers won't complain.

I hope it don't heat up the already heated up real estate market. Walmart, fo course, usually sets up shop out of town, but the competitors in a mad rush to compete will set up more shops in the not-so-out-of-towns.
In the news,

After months of waiting for a policy change that would allow foreign companies to enter multi-product retailing, Wal-Mart, a company with annual sales of $312 billion (Rs14,00,000 crore), threw in the towel and tied up with telecom bigwig Sunil Mittal for a 50:50 joint venture.

Wal-Mart would, ideally, have preferred to come to India on its own, but the current policy allows foreign companies entry only into single-brand retailing or wholesale trading.

The Bharti-Wal-Mart agreement, announced on Monday, will thus have Bharti running the shops and Wal-Mart managing the backend sourcing, supply logistics, and wholesale cash-and-carry businesses. But contrary to what people believe, the real power of Wal-Mart, the company that pioneered everyday-low-prices for shoppers to become the world’s biggest retailer, lies in its backend process.

Over the next few years, Wal-Mart will be making investments to the tune of $1 billion to make its presence felt across the length and breadth of the country. [more]

And yeah, its been a surprise that Bharti tioed up with Walmart.
Suni8l Mittal had once told that, now that Airtel is on an auto pilot mode, he is looking at more business opportunies. His Agri Business is also doing very well, what with his knack of tieing up with the best of the industry. Even in retail, I couldn't have expectd anything less than Walmart. Walmart will eventually want to run the show on its own, regulaters willing, and by that time Bharti would have learnt the ropes. After all who could have started a telecom empire from selling telephone sets.
Expect something different from Bharti.
Perhaps the biggest agri-products supplier to Walmart?
Logistics providers to all the Retailers?
Or with Indian Companies becoming overly acquisition happy, it would be good to see Bharti staging a bid for Walmart. Ah!! India will have arrived.

What is Ratan Tata Doing?

Anil Ambani's Global Buyout Fund

While other Indian Companies are busy shopping in the Global M&A Bazaar, Anil Ambani is lining up a Multi-Billion Buyout Fund aimed at the global markets. He had tasted blood in the domestic market as an equity investor in many small firms. Now he wants to go after the Big fishes in the telecom sector. Anil Ambani is said to have putin $500 million of his personal wealth. Good going. More from ecotimes:

Anil Ambani plans to launch a global buyout fund of about $5 bn aimed at telecom and related sectors and is in talks with billionaire speculator George Soros, private equity giant Blackstone group and Singapore’s Temasek for participation. Mr Ambani has already contributed $500m of his personal money to the fund as anchor investor.

He has received commitments of up to $2.5 bn from several investors. Mr Soros, Blackstone and Temasek are likely to participate soon, people familiar with the developments said. The name of the fund has not been decided but it is likely to be headquartered in Singapore.

While Mr Ambani will be the fund’s main sponsor, the management team is likely to be separate. The money Mr Ambani has invested is his personal wealth, sources said. The fund will focus on buying companies in sectors like media, communications technology and software, IT-related services, BPOs, telecom or broadband services.

The mandate will be global and the fund will not operate in India. The objective is to take advantage of the vast opportunities in the global telecom and communications space. With a large corpus on which additional debt can be easily raised and with the backing of investors with deep pockets, the fund could look for big-ticket acquisitions in Asia and the Middle-East

India No 1 Exporter of Bribes, Beats China

India is the world’s top bribe payer, screams the headline today on the TOI.
I would just say Indians are.
Not to worry, perhaps bribery is the way to go.
Of the much talked about BRIC nations, 3 of the 4 nations held the top positions. Brazil is way below at the 8th position, tsk tsk.

Now everybody worth his salt have written or talked about that the BRIC nations are poised to become the world’s biggest nations by 2050, and if the list is any Indication, then India sure is becoming the most powerful nation amongst the 4. Simple logic, All 4 nations that are on the path to economic growth are willing to bribe their way to growth, and India tops the list. :)

Sarcasm apart, it is such a sad affair that India businessmen are exporting bribes along with the merchandise. Transparency International, the NGO which is publishing the Bribe payers index shows that Indian Exporters are willing to pay bribes even outside India to get the deal. We are out to spoil the world eh.

What was that joke?
Was it Japan who asked to lend Bihar for a year to change it to a place like Japan, and Laloo retorted that he can turn Japan to Bihar in a shorter time?

Bribing maybe bad, but perhaps it makes good business sense in certain businesses, commodities business and commodities exports for example. Whereas in businesses such as IT which require more intellectual capital than real capital, bribery doesn’t make much business sense.

We have seen two great companies in India. One is rumored to have bribed its way to the present billions, and the other was built without any such. The said second company, lets call it Wipro, had two divisions, still has. One is into IT, and the other into Commodities and such like. The IT arm today is a Billion dollar business and though the business may not be as big as the other company that was rumored to bribed its way to its billions, but then the owner is worth much more billions than the brothers, oops owners of the other company. Perhaps, not paying bribes pays off much better ;)
Oh, so the said division of this anti-bribe company that deals in commodities is not doing too well. So like I said, some businesses call for a certain amount of bribery, which is sad. But then, who are to blame. We can’t all be Azim Premji. We only aspire to be him, and revere him. But there are more people who want to be a Dhirubhai Ambani than Azim Premji. Sad Affair!!

[image courtesy: pestaola ]

Mumbai Salt Pan Lands to Open-up for Development

The Land Starved Real Estate Industry of Mumbai just got a breather. Privately owned salt pan land would be made available for redevelopment. The union govt have earlier opposed redevelopment of Salt pan land, but a recent high court order asking the Union Govt. not to create any legal obstructions for the developers seem to have given a fresh breath of air to the already land starved developers.


Some 2000 acres of salt pan land had already been bought by real estate developers for a long time now. Real estate developers seem to be most far sighted of all breeds, but then then eventually all land have be developed some time or the other. As Max said in superman returns, they have stopped manufacturing Lands.


On my way to work everyday for the past one year, when we approach Airoli from Mulund, and as we cross the airoli bridge, the vast tracts of Salt pan, with heaps of white salt piled in neat hillocks, have always been a treat to the eye. I had never seen salt pan before I cam to Mumbai, and would never have had the office not been in Mahape, Navi Mumbai. I always wanted to take some pictures, but I always forget to take my camera. If those land are also included, ugly building will now replace those beautiful salt lands.

It may not be such a natural sight to someone who have seen it all their lives, but to me it was different. Last vestige of natural beauty, in the concrete jungle that we are in.

Environmentalist, of course, have been saying that exploiting the salt pan lands for real estate development will be suicidal.