TCS, HDFC-India's best managed companies

IT giant TCS and financial services major HDFC have been named as India's two best managed companies in an annual poll conducted by Finance Asia magazine. TCS and HDFC are followed by IT major Infosys, telecom giant Bharti airtel and PSU behemoth ONGC in the list of the top-five best managed companies in the country.

The report also named TCS's Natarajan Chadrasekaran and ICICI Bank's Chanda Kochhar as the two best CEOs of the country, while Infosys' V Balakrishnan and Tata Steel's Koushik Chatterjee have been named the two best CFOs. The results are a part of an annual poll conducted by Finance Asia to find the region's best managed companies, based on votes from more than 300 investors and analysts across the region, the magazine said.

Other companies on the list of India's best managed companies include SBI at 6th place and Page Industries at 7th position, while as many as four companies -- Reliance Communications, Cadilla Healthcare, Tata Group and Tata Motors -- were ranked at 8th position. In terms of best corporate governance practices, Infosys has been ranked at the top, followed by HDFC, Wipro, Tata Group, ONGC, TCS, Bharti airtel, RCom and Tata Motors.

In terms of best investor relations, HDFC was on top, followed by Infosys, Wipro, Bharti airtel, ONGC, TCS, RCom, Reliance Industries and SBI. Tata Steel has topped the list of best companies for corporate and social responsibility, followed by Tata Motors, Bharti airtel, ONGC, NTPC, SBI, RCom, Wipro and Infosys. In terms of commitment to a strong dividend policy, Infosys has been ranked at the top, followed by Page Industries, HDFC, ONGC, Tata Group, GE Shipping, VST Industries, RCOM, ITC and Wipro.

The poll also named eClerx and Vardhman Textiles as the two best mid-cap companies in the country, while MM Forgings and SKF India were found to be the best small-cap companies.

Forbes Global 2000 list has 57 Indian Firms

As many as 57 Indian companies including Reliance Industries, State Bank of India and Oil & Natural Gas Corp. figure in The Forbes Global 2000 list of public companies based on their rankings for sales, profits, assets and market value.

Reliance with sales of $45.3 billion is ranked 121st in the list with three public State Bank of India Group (136, $29.1 billion), Oil & Natural Gas Corp. (172, 22.6 billion) and Indian Oil (243, $52.1 billion) taking the next three places among the Indian firms.

Other companies in India’s top ten were ICICI Bank (288, $13.2 billion), NTPC (348, $10.8 billion), Coal India (418, $10.4 billion), Bharti Airtel (453, $9.3 billion), Larsen & Toubro (499, $9.8 billion) and Tata Motors (512, $20.2 billion).

JPMorgan Chase is in the top spot for the second consecutive year as the world’s largest company followed by HSBC, up six spots fuelled by a 121 percent growth in profits in the past fiscal year.

In total, the Global 2000 companies now account for $32 trillion in revenues, $2.4 trillion in profits, $138 trillion in assets and $38 trillion in market value. These firms also employ 80 million people worldwide.

Cable companies plans to learn foreign broadcasters

A group representing Canada's biggest telecommunications companies has sent a letter to the head of the national regulator asking him to study the growth of new, foreign broadcast players like Netflix Inc. The letter asks CRTC Chair Konrad Von Finckenstein to launch a public consultation process to "determine whether and how such non-Canadian companies should support Canadian cultural programming."

Tuesday on Twitter, Industry Minister Tony Clement said that regulating Netflix would be "offside" with the Tory government's directive to encourage more choice and competition. Netflix first shook up the DVD rental and cable business in Canada last September when it began streaming unlimited movies and TV shows for a flat rate of $7.99 per month. Unlike traditional cable companies, the company is not bound by the CRTC to help fund Canadian programming.

The letter is signed by Alain Gourd, head of the Over-The-Top Services Working Group, which is made up of roughly 35 industry executives including ones at Astral Media Inc. and Rogers Communications Corp.

Aires Ali attracts Indian Companies to Invest

 

Mozambican Prime Minister Aires Ali has invited Indian businesses to invest in Africa, and particularly in Mozambique, in a "win-win" partnership that will bring benefits to both sides.  He made the invitation during the 7th edition of the "Conclave on India-Africa Partnership", organised this week in New Delhi by the Indian Foreign Ministry, the Ministry of Industry and Trade and the Exim Bank.

Ali stressed that Africa is a continent of 53 countries with a total population of over a billion, and vast natural resources, including large tracts of arable land, oil, natural gas, hydropower and a wide range of minerals. He noted that "Africa has preferential access to global markets (US, via AGOA, EU, via EBAs, China, Japan, as well as the Middle East) through continental, regional or bilateral agreements, but due to its low productivity and reduced production capacity it is hardly benefiting from those instruments and trade mechanisms".

"This represents a tremendous business opportunity for Indian companies looking for new markets to invest in", he stressed. In addition to its easy access to foreign markets, Ali added, Africa has established various sub-regional organisations with their own free trade areas, which allow the free circulation of people and goods and which "offer tremendous business opportunities for domestic markets". Ali cited the case of the 14 member Southern African Development Community (SADC) as an example of regional integration. SADC, he said, had a combined GDP of about 500 billion US dollars and a population of 257 million.

"Mozambique plays an important role in this organisation due to its strategic location, providing an easy access to the sea for hinterland countries in Southern Africa", he said. African countries, Ali continued, have been undertaking "legal and institutional reforms to improve the business climate to attract more investments. The extent of reforms varies from country to country, but the prospects are very good".

"Africa and India have a combined market of over two billion people", said the Prime Minister. "The Africa-India Conclave, if successfully conducted, could be an important global trade and investment promotion gathering. We therefore need to use effectively this platform to promote more tangible results, fostering strong partnerships and delivering value to our countries through new joint projects and Foreign Direct Investment".

"Africa is strongly committed to promoting private business initiatives and South-South cooperation as key engines of economic growth, in order to eradicate poverty and promote development in our countries", said Ali. "India is a key partner in this process given its continuous support to Africa through several ways, including the organisation of Conclaves such as the one we are now attending".

The India-Africa Conclave was established in 2005, as a platform for bringing together the governments, and public and private sectors of African countries and of India. Up until the holding of the 6th Conclave, 1,084 projects were discussed, valued at over 56 billion dollars. The conclave is believed to have contributed to a 400 per cent increases in commercial relations between Africa and India over the past five years.

Indian firms speed to link digital gap in Kenya

 

Top-tier Indian firms have stepped up their presence in Kenya in recent months hoping to secure lucrative telecom deals that are set to be finalised within the next six months. Tech giants such as Mahindra Satyam, Infosys and Tata who hope to capitalise on growing prospects in the sector have all recently increased their local presence as they move to establish regional bases operating out of Nairobi. On the radar is the expected hefty investment by mobile operator Airtel as it seeks to consolidate its entry into 13 African markets following its buyout of Zain Africa last year.

That aggressive play by one of India’s largest telecom firms has spurred more companies from the sub-continent to make forays into the local telecommunications market, which is expected to grow by 65 per cent over the next four years. But alongside the more visible investments in the mobile sector where the Indian mobile firms Airtel and Essar operate, ongoing efforts by the government and private firms to digitise their processes has attracted Indian firms operating in other sectors such as software, IT engineering and infrastructure.

Analysts attribute increased investment in the ICT sector to a number of enabling moves undertaken by the country to liberalise the sector. “Kenya’s new constitution, combined with private investments in infrastructure and a quickly growing telecom sector, shines an optimistic light on the state of Kenya’s economy. Moves by the CCK continue to encourage investments in this sector,” said Majd Hosn, Associate Research Analyst at Pyramid.

Pyramid says that vendors are responding to high demand for their products as more operators, companies and government agencies seek for services and technology to set them apart from their competitors. Mahindra Satyam recently restructured its operations to enable it to take advantage of the increased growth opportunities in Africa, picking out Kenya, Nigeria and South Africa as key markets where it immediately needed presence.

The company, which mostly supplies Enterprise Resource Planning products, hopes to deliver systems integration and outsourcing solutions to clients in numerous industries regionally. “Our interest has been steadily rising, and we intend to focus more fully on the East African region to capture some of the demand for IT services. It will be a subtle move, but in five years we should have a more visible presence,” said Manojeet Chowdhury, vice-president, Mahindra Satyam, Middle East and Africa operations.

Its entry into the Kenyan market four years ago has seen it capture a share of key projects for large entities such as Kenya Airways, Airtel and the Central Bank of Kenya. Now Mahindra Satyam intends to intensify its focus on larger contracts within the region, with an eye on recruiting more businesses to cloud computing – a concept that allows for documents and resources to be shared online. It also hopes to capitalize on its 2010 coup of winning the contract to supply IT systems for the FIFA World Cup to clinch more sports-related contracts. In its quest to establish a larger footprint in the region, Mahindra joins Infosys, a software service provider, who recently announced that it would start a long-term play for more business in Kenya.

40 firms participate in Indian pharma exhibition in Nigeria

 

More than forty companies from India participated in pharmaceutical exhibition organised by the Pharmaceuticals Export Promotion Council (Pharmexcil) in Nigeria's commercial capital of Lagos on Wednesday.  The two-day fair, tagged, "Brand India Pharma", witnessed a massive turnout from Nigerians seeking information or wanting to purchase Indian drugs.

In the opening ceremony, the oil rich African country's drug regulatory body commended the firms for being World Health Organisation (WHO) Good Manufacturing Practices certified, a factor he said is not known among Nigeria pharmaceutical companies.

"Many Indian companies are WHO pre-qualified companies and we are working with them to transfer knowledge and technology to our people," the chairman of regulatory body National Food and Drug Administration (NAFDAC), Paul Orhii, told a crowd that turned up to witness the opening ceremony of the two-day event.

He enthused that India has a lot to gain from cooperation and so does Nigeria, since it "is mutually beneficial cooperation".  The High Commissioner to Nigeria, Mahesh Sachdev, reassured NAFDAC of the determination of Indian companies to tackle the menace of fake Indian medicines from non-Indian sources. "I would also venture to suggest that the stakeholders could think in terms of entering in such areas as co-manufacture, distribution and retailing," Sachdev said, urging a greater presence of Indian drug companies in Nigeria.

India occupies the status of first supplier of pharmaceutical products to Nigeria and its drugs enjoy wide patronage in the country of 150 million people. Issues had arisen in the past over fake drugs alleged to be manufactured in India, but further investigations revealed they were produced in another country, but labelled   "Made in India".

Nigeria imports a large quantum of pharma products from India and many Indian companies already exist here. Furthermore, Nigerians seeking medical attention abroad make India their preferred choice as a result of affordability and efficacy.

Indian IT firms raises 5 % in pricing for outsourced contracts

 

Ever since the wave of Lehman crisis hit the market, companies have not seen an increase in their pricing. Various projects were shelved and recession showed its impact on the world market. This crisis did not leave any space for the companies to be volatile with their pricing. But today the present scenario of Indian economy is different and hence it can take the risks of restructuring the industry and pricing. Rising inflation, wages and attrition are some of the reasons for driving up billing rates for outsourcing contracts.

Driven by higher salary costs and improved business environment Tata Consultancy Services (TCS), Infosys, Wipro and HCL are beginning to see an uptick of up to 5 percent in pricing. Companies like Citibank, JPMorgan, Telstra, Wal-Mart and American Express have come up to 1-3percent higher rates as compared to what it was three years ago in relation to the larger contracts outsourced by customers.

The Indian IT players have always followed the per employee, per hour billing model. The pricing was decided on the basis of number of hours contributed by each employee involved in the project. Last three years, pricing has been a complicated issue for the IT firms.

Today the outsourcing clients have also been taking India's high inflation into account to give price increase. IT contracts will come with a clause that allows for fluctuations in pricing. A report released by CLSA, a brokerage firm said that with 4-6 percent revenues in any year from new business, it should add 40-50 basis points year-on-year to portfolio pricing. Hence next financial year would be able to get a 1.5-2 percent year-on-year pricing increase.

The last few years Indian IT players have been trying to move to a non-linear one where pricing is outcome based or fixed. This will help companies to provide more and more high - end services and dictate better prices.

Indian IT companies recall staff from Gulf

 

Shaken by the political unrest brewing in Bahrain, Indian IT majors Infosys, TCS and Wipro have started recalling their employees from the gulf country.

IT bellwhether Infosys has recalled all its employees from the nation. Infosys has less than twenty employees in Bahrain, the small island country located near the western shores of the Persian Gulf. The move comes in view of Bahrain's government declaring a three-month state of emergency on March 15 after troops from Saudi Arabia and other Arab Gulf states arrived to support the kingdom's Sunni monarch in suppressing pro-democracy demonstrations.

A spokesperson of Tata Consultancy Services (TCS), India's largest software services provider, on Monday said the company has recalled twenty people, including all its employees and their dependents in Bahrain, back to India.

Wipro, which has fifty employees in Bahrain, has recalled twenty five employees working in the sensitive areas. "The welfare and well being of Indians in these countries (Bahrain, Yemen) is uppermost in our agenda. We are closely monitoring developments in these countries," external affairs minister S M Krishna said on Monday.

Bahrain has nearly 3,50,000 Indians, making them the single largest expatriate community in the tiny Gulf country. The Indian authorities have already asked Indians in Bahrain to keep a low profile, stay indoors and to avoid all non-essential travel within the country.

Many Indian companies in Bahrain have been trying to get their employees and families out from there over the past three days. The shia community has led the protests alleging discrimination, lack of rights and seeking political reforms like restricting the country's monarchy to a constitutional role only.

Nigeria welcomes Indian pharma players to set up base

 

Even as the Nigerian authorities are inviting more and more Indian pharma players to set up manufacturing facilities and hike exports to the African country, the domestic pharma leaders have asked for some sort of financial incentives like tax holidays and free power to attract more investors from India.

Indian pharma members have suggested this to Dr Paul B Ohri, the director general of the National Agency for Food and Drug Administration and Control (NAFDAC), in Nigeria. The visiting DG, who held interactions with the leaders of the industry here on March 17, said he would take up the matter with the authorities there.

“India is very important to us as the main importer of quality generic drugs. We are initiating many steps to attract Indian companies to set up base in Nigeria. Besides, almost all those 22 companies blacklisted earlier have been cleared now and only a couple of them are left now. We also want the Indian companies to take part in the bids to supply drugs to the government programmes,’’ Dr Paul told Pharmabiz after the interaction with the industry members.

The pharma units here asked him to abolish the practice of inspection by NAFDAC officials in the units here. “It is better that Nigeria enters into some bilateral agreement with India to accept the valid WHO GMP certificate issued by Indian regulatory authorities and avoid holding inspections again by the NAFDAC. It can save lots of time and procedural delays,” Ashutosh Gupta, member of the Pharmexcil COA (Committee of Administration), said.

Likewise, India also sought some kind of financial incentives to attract Indian investors. “We look forward to some kind of support from the Nigerian Government in the form of tax holidays and free power. Power is a big problem there. Another request was to accept Indian Pharmacopoeia for the Nigerian market in the same way it has accepted British Pharmacopoeia. IP is as good and valid as BP,’’ said Nipun Jain, the chairman of SME panel of the Pharmexcil.

As part of its ongoing efforts to promote Indian brand of medicines in Africa, the Pharmexcil is organising an expo-cum-business meet from March 23 to 24 at Lagos in Nigeria to showcase the strengths of Indian pharma industry.

As many as 53 companies, mainly the small and medium scale units, from India will take part in the event which will also provide an opportunity to clarify the doubts about quality standards about Indian pharma industry, if any, among the stake holders there.

The business meet is expected to generate new collaborations and business opportunities for the units in the two countries as Nigeria is one of the key markets for the Indian exporters.

Centrotherm unveils Indian subsidiary

 

Centrotherm Photovoltaics AG, a supplier of process technology and equipment for the production of solar silicon, solar cells and solar modules, which are used in solar power generation, announced the launch on Friday of its Indian subsidiary that is to be based in Bangalore.

Kai Vogt, Director, International Business Development, Centrotherm, told this correspondent that although investor interest in solar power generation was growing, “India has a lot of catching up to do when compared with countries like China, South Korea and Taiwan, where solar power generation capacity has been growing at a scorching pace in recent years.” Mr. Vogt said that the installed capacity in India would be about 100 MW, as compared to 5-6 giga watts in China. He said the Indian subsidiary would not establish manufacturing capacities immediately, but would provide service, strengthen sales and help customers in “inducting the latest technologies.”

Arguing that the cost of photovoltaic (PV) modules is critical, Mr. Vogt claimed Centrotherm's technology offered a solar to electrical energy conversion efficiency of about 18.5 per cent, which he said “is the highest in the business.” “Mind you, a every percentage point improvement in efficiency translates into a six percentage point reduction in costs, which is extremely critical for the adoption of solar power,” he said. “We hope to achieve an efficiency rate of 20 per cent by the end of 2012,” he said. Last year, the company, based in Germany, invested 50 million euro in R&D out of total revenues of 600 million euro, he said. The disaster at the nuclear facility in Fukushima in Japan had caused governments all over the world to “reconsider the nuclear option, which places greater responsibility on solar power to mitigate the effects of global warming,' Mr. Vogt said.

Kolan Saravanan, General Manager of the Indian subsidiary, Centrotherm Photovoltaics India Pvt. Ltd., said the subsidies provided to solar power in Germany had been responsible for its growth in the last few years. “Already, in many places solar power is just as expensive as peak load tariffs from traditional sources of electrical power, he claimed. “The solar cell manufacturing capacity in India is now about 500 MW, and is expected to reach about 800 MW by the end of 2011,” Mr. Saravanan said. The National Solar Mission has targeted a capacity of 20 GW by 2022, he said. “Our efforts in India must be seen in the context of the mission's mandate that crystalline solar cells destined for the domestic market must also be manufactured locally,” he said.

Japan leaves IT cos

 

The earthquake-stricken Japan’s over $108-billion IT services market may continue to remain elusive for India’s top-tier software services companies for the time being, with the ongoing crisis likely to slow down deals and hit plans to grow inorganically after years of trying to establish a foothold in the country’s closed market.

Globally the second largest IT services market after the US, Japan currently contributes to less than 1.5% of revenue for the top players in Indian IT sector and some 2% to India’s total IT exports revenue of $50 billion. The minuscule size of the offshore outsourcing business and language hurdles are the major hurdles in penetrating the market. But the share of business has been gradually increasing over the past couple of years as Indian firms have climbed up the value chain and are now scouting for Japanese acquisitions, according to industry watchers.

Yen for foreign funds may grasp Indian cos

With the Yen for the first time in 16 years breaching the 80-mark against the US dollar,  Indian companies that had used the Japanese currency to raise overseas debt may have some reason to worry as their repayment cost could go up. The yen touched 79.98 against the greenback at around 9.55PM India time as increased risk of radiation from quake-hit nuclear power plants raised fears of Japanese companies repatriating funds home. In April 1995, three months after the Kobe earthquake, the Japanese currency had touched 79.75 against the US dollar, a post World War II high, as the Clinton administration had threatened sanctions over opening the auto market to US exports.

Currency traders are predicting that the currency could break the 1995 record as market intervention by the Japanese authorities could suck out liquidity since banks would have to sell US dollars. In the past several Indian companies availed of yen loans as it was seen to be less volatile. Though that notion has changed over the last three years as the Japanese currency has continuously appreciated and even caused some problems for several Indian companies, there is still a sizeable amount of yen loans, and it could cause some hardship in the short term.

"If corporate do have a yen liability, then, yes, it's painful. The current bias is of strengthening of the yen since people are still bringing money back post the crisis. But given the monetary policy and longer term prospects, yen would probably weaken," said Ananthanarayn G, Standard Chartered Bank's Managing Director and regional head for fixed income and currency for South Asia. "The firming of the yen is a short-term phenomenon because of repatriation of funds. It will affect only those companies whose repayments are becoming due in the next two months and who have not covered their exposure. Even then the impact will be only 1-1.5% becauase the yen was already 81.5 before the quake" added K N Dey Director Basix Forex Solutions.

In the medium term the yen is expected to weaken. The rating agencies had already lowered the outlook on Japan and the government that is already in deficit is making huge liquidity infusion and all this is bound to weaken the yen, he said. Dealers, however, said that Indian companies which had availed of yen loans were also protected as they had converted them into the US currency or Indian rupee.

Indian IT firms request staff to transmit families back

IT giants, including TCS, Infosys Technologies and Wipro, have offered their employees the option of returning home while allowing local workers to shift to safe locations. The three companies have an estimated 700 Indians working in Japan. The TCS has over 200 people in Japan.  Infosys and Wipro have over 250 and 400 professionals, respectively. Infosys on Tuesday advised its Indian employees to return their families to India.

Though Wipro has set up a hotline for updates, it has not yet sent any advisory on their movement. MindTree said it was continuously monitoring the situation and has set up a war room for the purpose, besides initiating process of evacuation of families from the disaster-struck country.

Japan contributes about 2 per cent to Indian IT-BPO export revenues. Japan is facing a radiation scare with some explosions across various reactors being reported, following a massive earthquake and a subsequent tsunami on March 11.

Japanese Prime Minister Naoto Kan has warned that the radiation had spread from crippled reactors and there was “a very high risk of further leakage.” The Indian Embassy in Tokyo has set up a control room that can be reached at 00813 32622391 to 97.

Life insurance industry is in need of foreign capital

As Nippon Life Insurance Company signed a definitive agreement to acquire a 26% stake in Reliance Life Insurance, experts read this as a benchmark for the industry as a whole. Ashvin Parekh of Ernst & Young and P Nandagopal managing director and CEO of IndiaFirst Life Insurance, in an exclusive interview with CNBC-TV18’s Udayan Mukherjee and Mitali Mukherjee share their views on the deal and its implication for the life insurance sector.

Sharing his views on the sector as whole, determining from this deal in particular, Nandagopal emphasizes that, “there is need for capital in the life insurance industry. And going to the market may not be the immediate available option for many other companies. Hence the foreign direct investment (FDI) route is a possibility.” Parekh also points out that “there is enough capital that is available with foreign investors. It can be introduced into this market and the foreign investors are prepared to pay a price for it.”

On the ramifications of the deal, Parekh says “Strategic inputs must have gone into determining the valuation. Nippon wouldn’t have got a better deal and a better partner and Reliance has got one of the world's largest life insurance companies.” He also believes, “Reliance Life is ready for an IPO.” Nandagopal agrees that “the deal is in the best interest of both the partners.”