MindTree eyes defence, avionics; rejigs organization

MindTree eyes defence, avionics; rejigs organization

Bangalore: Software services firm MindTree Consulting Ltd says it will focus on new customers in avionics and defence sectors to tap opportunities from the mandatory offset orders in defence deals.

India’s defence procurement policy mandates foreign arms vendors to source 30% of the value of the equipment they sell as “offset" in the shape of services and goods from local companies. The Bangalore-based company has customers such as the European aero engine maker, Safran, and India’s Defence Research and Development Organisation.

On Monday, MindTree announced its first companywide restructure since its inception in 1999, appointing the current chairman and managing director Ashok Soota as the executive chairman, and naming Krishnakumar Natarajan as the new chief executive and managing director.

In his new role, Soota will focus on strategic growth initiatives and provide leadership to the company.

Chief operating officer Subroto Bagchi will return to India from the US to groom young leaders and staff, the company said.

MindTree also created a new position of chief strategy officer and appointed Salil Godika, who will report to Soota.

“The restructuring is about creating MindTree Version 2.0. What we have achieved in the last eight years is just the foundation for the next 12," Soota said.

MindTree hopes to be a billion-dollar entity, although it has not set any time frame for achieving the goal.

“If we expect to sustain and grow our revenues at 38% for the next six years, we will become a billion-dollar company by 2014," Soota said.

The company is hoping to get empanelled as a vendor for the defence deals, said S. Janakiraman, president and chief executive of MindTree’s research and development services business.

For the quarter to September, MindTree clocked a net profit of Rs27.13 crore on revenue of Rs181.95 crore.

ABB will invest $100 mn to set up new factories

The Swiss maker of equipment for power plants and electricity management ABB Ltd said it would invest $100 million (Rs396 crore) in setting up new factories in Bangalore and Vadodara, besides expanding capacity in other units as demand rises from customers in the Indian power sector. The investment would be carried out in the next two-three years.

“We don’t cap the capex," said Biplab Majumder, country manager and managing director of ABB Ltd, the India subsidiary of ABB Group.

Revenues from India, among the top five markets for ABB, is growing at 40% annually, while in China, the other big market, sales for the company is growing at 20% a year. ABB India earned profit of Rs340 crore on revenue of Rs4,274 crore for the year to December 2006.

“Our investments is to meet the growing demand for power infrastructure here and also (for) export opportunities," said Hubert von Grunberg, chairman of ABB Group, after the Zurich-based company’s board meeting in Bangalore. “If the team here comes (for) more investments, we will approve it," he added.

Global electricity demand is expected to double by 2030, driven by increased energy consumption in India and China to feed its growing economies, said Grunberg.

ABB will build new factories in Nelamangala on the outskirts of Bangalore, for low voltage products and units in Vadodara for small power transformers as well as distribution and automation products. ABB will increase its India workforce by one-third to 10,000 or nearly 10% of the global workforce by 2010. “In China, we have 12,000 people, it is a matter of time when India reaches there," said Fred Kindle, president and CEO of ABB Group.

Multi-product SEZs may get to acquire more land

New Delhi: The government may look at relaxing the 5,000ha ceiling on land for special economic zones (SEZs) once the Land Acquisition Act is in place, commerce secretary G.K. Pillai said on Monday.

“Now that the new relief and rehabilitation policy has come into being, the government may think of relaxing the upper limit of 5,000ha for SEZs," he said. The rules would be relaxed, “especially for multi-product SEZs", 34 of which are already in place. Three to four of these SEZs have an area of 5,000ha, including that of Reliance Industries Ltd and DLF Ltd.

“We will take a view on this and have a fresh look (after the land acquisition Bill is passed) on a case-by-case basis," the commerce secretary said.

Pillai said farmers would also be given an option of becoming stakeholders in the company that comes up on their land. PTI

Pillai said farmers would also be given an option of becoming stakeholders in the company that comes up on their land. PTI

Lanco Infratech to bid for power, road projects

Mumbai: Infrastructure company Lanco Infratech Ltd plans to bid for power generation projects in three states.

The company will also bid for two road projects worth $500 million (Rs1,985 crore) each, G. Venkatesh Babu, Lanco’s managing director, said on Monday.

The Hyderabad-based company will bid for electricity projects capable of generating as much as 500MW each in Karnataka, Punjab and Rajasthan, he said.

The company will also increase generation capacity at its Orissa unit, Babu said in New Delhi, where he’s attending the World Economic Forum’s India economic summit.

India, which currently generates 128,182MW of electricity, wants to add 32,000MW of generation capacity in the next five years. Lanco had to give up a contract to build a 4,000MW project in central India in July this year after the government disqualified its bid following changes in the ownership of consortium partner Globeleq Ltd.

The company plans to set up separate holding companies for its power and property businesses, Babu said. The company has no plans to sell equity, he added. Bloomberg

Staff of SBI associate banks go on strike

Mumbai: Employees of seven associate banks of State Bank of India (SBI) went on a strike on Monday to protest against the planned merger of Bank of Saurashtra with SBI.

A senior SBI executive said the strike was uncalled for as the proposed merger had been cleared by the boards of the two banks.

The executive said the top management will deal with the striking employees “appropriately".

Officers of the associate banks are expected to join the striking employees on Tuesday. Staff Writer

Direct tax receipts in Apr-Nov up 44.9%

New Delhi: Direct tax receipts rose 44.9% year-on-year during April-November to more than Rs1.45 trillion, or 54% of the annual target for this fiscal year, the finance ministry said on Monday.

Corporate tax receipts were up 46.6% at Rs86,526 crore, while income tax grew by 42.5% to Rs58,303 crore until November.Reuters

Meeting fails to resolve spectrum tangle

New Delhi: The high-intensity telecom tangle remained unresolved with the rival GSM and CDMA service providers sticking to their stands on the spectrum issue at a meeting convened by telecom secretary D.S. Mathur. “No peace formula has been proposed to us by the government on the spectrum issue," Bharti Airtel Ltd chairman Sunil Mittal said after the meeting.PTI

Sharif’s nomination papers rejected

Lahore: Pakistan’s Election Commission on Monday barred former prime minister and Opposition leaderNawaz Sharif from an 8 January general election because of his criminal record.

Sharif, a two-time prime minister overthrown in 1999 by the then army chief, Pervez Musharraf, has been threatening to boycott the elections but had nonetheless registered to run.

“His nomination papers are rejected because of his convictions," presiding election official Raja Qamaruzaman said.

Sharif, who returned from seven years of exile on 25 November, said the convictions secured against him were politically motivated.

“Let them reject the nominations ... 10 times or even 100 times. I will serve the people with much more vigour and resolve," he told his supporters. Reuters

Manufacturing growth eases in November

Mumbai: Manufacturing activity expansion in the country eased slightly in November after rising at its fastest pace in two-and-a-half years in October, but robust new orders and export orders suggested the economy stayed buoyant.

The ABN Amro Bank purchasing managers’ index (PMI) eased to a seasonally adjusted 60.9 in November from 61.7 in October, when it reached the highest reading since the survey began in April 2005.

“Higher levels of new business, both from local and foreign sources, continued to underpin robust output levels and indicate a healthy order book position," said Gaurav Kapur, senior economist at ABN Amro Bank.

The PMI tracks changes in manufacturing business conditions by polling 500 companies each month on output, new orders, employment and prices. Reuters

IFCI offers stake to multilateral institutions

Mumbai: Development finance company IFCI Ltd said on Monday it is in talks with multilateral institutions to offer a stake in it. But the firm did not mention the name of the institutions or the stake it wants to offer.

‘The Economic Times’ reported on 3 December that the board of IFCI has decided to bring in International Finance Corp., an arm of the World Bank, as an investor and that it would hold less than 20%.

The IFCI board also approved issues relating to the conversion of zero coupon optionally convertible debentures by banks and financial institutions worth Rs1,479 crore.

Financial institutions—Life Insurance Corp. of India, General Insurance Corp. and associates—agreed to convert part of the debentures into equity, which would retain their holding in IFCI in percentage terms at existing levels, IFCI said in a statement. Reuters

Business confidence bounces back in Q2

New Delhi: Business confidence rebounded in July-September from the quarter earlier, as firms expect robust profits on a higher economic growth and investments in the coming six months, an economic think tank said on Monday.

The business confidence index (BCI) for the quarter was at 145.9 points, higher than 137.9 in the previous quarter, but still lower than 152.5 recorded a year ago, the National Council for Applied Economic Research (NCAER) said.

Although high interest rate and a firm rupee were hurting sentiments of corporates, NCAER said firms took advantage of a benign inflation and cheaper imports.

“The present round indicates the business sector’s swift response to the improvements achieved in containing inflation," it said. Reuters

‘Wheat reserves to top requirement in April’

New Delhi: India, which is importing wheat for a second year, expects to have more than sufficient reserves of the grain by April, likely reducing the pressure on the government to buy more from overseas at record prices.

Reserves at state warehouses may total 5.5 million tonnes (mt) by 1 April, more than the mandatory requirement of 4mt, Alok Sinha, chairman of the state-run Food Corporation of India, said on Monday.

Meanwhile, Glencore International AG, Toepfer International and Cargill Inc. were among six companies that offered to sell wheat to India at a tender on Monday as India builds stockpiles to meet rising demand.

State-owned PEC Ltd, seeking to import as much as 350,000 tonnes, received bids for 630,000 tonnes at between $395.88 a tonne and $483 a tonne, said a government official, who didn’t want to be identified as talks with the suppliers are confidential.

Bids must be valid till 8 December, the company said. The grain must be delivered by 10 March. Bloomberg

Credit Suisse to start wealth management biz

Mumbai: The second largest Swiss bank, Credit Suisse Group, plans to start a wealth management business in India early next year to tap the country’s economic growth, said Mihir Doshi, Credit Suisse’s India head.

The Zurich-based bank, which started the securities broking and investment banking businesses in India earlier this year, also plans to increase employees to 130 from 90 as companies raise more funds and seek mergers or acquire rivals locally and overseas in the fastest growing major economy after China.

“We have just applied for a wealth management licence and once we activate that, probably by 31 March, we will have about 130 people," Doshi said on Monday. “Most of the businesses that we wanted to be have been activated." Bloomberg

RINL clears sale of 25% government equity

New Delhi: The government will soon offload 25% stake in Rashtriya Ispat Nigam Ltd (RINL), making it the first disinvestment in a profit-making steel public sector unit (PSU).

“The RINL Board has okayed (sale of) 25% stake in the company, of which 5% would go to the employees and the remaining 20% to the public," RINL chairman and managing director P.K. Bishnoi said.

Steel minister Ram Vilas Paswan had earlier opposed any dilution of stake in any of his ministry’s PSU.

A top steel ministry official confirmed that the ministry has received the RINL Board’s approval to the stake sale.

The stake sale would fetch nearly Rs4,000 crore to the government, sources said. The company had reported a net profit of about Rs1,350 crore last fiscal and its equity capital is around Rs5,000 crore.

Steel ministry sources said around 10% of the government equity could be diluted at the first instance and 15% thereafter. PTI

Jindal Steel & Power to spend Rs69,000 crore

New Delhi: Steel and power producer Jindal Steel & Power Ltd plans to invest as much as Rs69,000 crore in expanding steel mills and power plants, its managing director Naveen Jindal said.

Jindal Steel & Power will spend Rs45,000 crore to increase annual steel making capacity more than seven fold to 15 million tonnes (mt) from 2mt now, Jindal said on Monday. The rest of the money will be spent on raising power generation capacity to 6,000MW, he said, without giving details.

The expansion of the steel mills and power plants will be completed by 2015, Jindal said. Jindal Steel & Power may sell shares to raise money to part finance its expansion, he said. The company will also take some loans. Bloomberg

Fidelity, Goldman may retain comex stake

New Delhi:Fidelity International Ltd and Goldman Sachs Group Inc. may get approval from the government this week to retain stakes in commodity exchanges, allowing them to profit from a surge in trading.

The cabinet will consider raising overseas investment caps in sectors including the exchanges and petroleum refining, trade minister Kamal Nath said on Sunday. Goldman and Fidelity each own more than 5% in Indian bourses, higher than the limit allowed for foreign investors in stock markets.

“We are going to ease caps in some sectors," Nath said in New Delhi, where he’s attending the World Economic Forum. Bloomberg

Malaysia brooks no foreign interference

Kuala Lumpur: Malaysian foreign minister Syed Hamid Albar on Monday warned other governments not to meddle in his country’s affairs after ethnic Indian activists wrote to Britain urging UN action over what they alleged was ethnic cleansing in Malaysia.

Albar said Malaysia’s government is able to resolve any woes of members of the ethnic Indian minority, and urged them to refer any complaints to the government rather than foreign countries. “If there is anything that we are dissatisfied with, there are avenues within our system to deal with it. Malaysians don’t want foreign interference," he said.

Ethnic Indian activists, who say they suffer discrimination because of an affirmative action policy that favours members of the Malay Muslim majority, cited the demolition of dozens of Hindu temples as evidence of “ethnic cleansing" in two letters sent to British Prime Minister Gordon Brown last month. AP

VC firms invest $777 mn in 57 deals this year

Mumbai: Venture capital (VC) firms have invested more than $777 million (Rs3,084.6 crore) across 57 deals in India during the first three quarters of 2007, according to the Quarterly India Venture Capital Report released by Dow Jones VentureOne and Ernst & Young. This is nearly five times the $158 million invested during the first nine months of 2006, said a press release.

The investment numbers pertain only to VC investment in early and growth-stage entrepreneurial companies.

The information technology sector accounted for 54% of the total number of deals concluded during the period, but the business-consumer-retail sector received the highest funding at $376 million. Snigdha Sengupta