Source:Financialexpress.com

The finance ministry may give in to demands by trade unions to exclude some activities from being outsourced by banks. According to government and trade union sources, the Indian Banks’ Association (IBA) and the finance ministry have now asked the unions to submit a report on outsourcing.The ministry and RBI had earlier stressed that core activities would not be outsourced. But trade union sources said the opening and closing of accounts, issuing chequebooks and identifying borrowers were categorised as non-core. Broadly, only accounting activities have been classified as core, they said.

This is a cause for concern and we strongly feel that most of these come under the main activities of any bank and, therefore, should be considered core,” said CH Venkatachalam, secretary, All-India Bank Employees’ Association. A report on outsourcing would soon be submitted to the IBA, he added.

The unions have said that the government should discuss the issue with their representatives. The unions had threatened a nationwide strike in April, but relented after the ministry asked them to submit a report to the IBA.

Official sources said state-owned banks had seen serious erosion in their customer base. Many had opted to bank with private banks, primarily because of reliable services.

Source: www.business-standard.com

Digital Group Infotech (Digital India), a subsidiary of the New Jersey-based IT Solutions firm, has announced its plans to scale up operations in Pune, from its current headcount of 250 to 600-employees by year-end.

Operating out of three locations in Pune, just recently the Digital Group opened its fourth 100-seater development centre in Pune. As well, it has also applied for 10-acres in Hinjewadi phase III, on which it plans to build its very own campus.

“We were awaiting clarifications on the sunset clause for 2009 on the Software Technology Park in the Budget. But, we have decided to go ahead with our plans either in phase III, which is a notified special economic zone, or Phase I, where we are interested in acquiring a building close to our facility there,” affirmed Aditya Sharma, Managing Director of the $16-million Digital Group.

A Microsoft certified Gold partner, the company will be expanding its service offerings to Java, including BPO. “We have set up a Java centre of excellence and expect to recruit 40-50 Java professionals and expand our BPO offerings from five people servicing JP Morgan Bank to 150-people,” confirms Sharma.

Whatever, the natter and the chatter, and Australia may have won the World Cup, however, it is India that is on a strong wicket where IT / ITes / BPO off-shoring / outsourcing is concerned! Only ten trillion-dollar economies world wide till yesterday, today it is official that India has joined the trillion-dollar club, upping the membership count to eleven. Bring on the chants, roar the huzzahs, salute the Tri-colour, it is the 21st century and India has laid claim to it! Unstoppable India, hurtling at break-neck speed to catch up with the brilliant destiny that is in store for it! Was it only a few years back that the western press likened India to the tortoise of Aesop’s Fables, dubbing China as the hare!

As for Aesop, most of his fables are nothing but a compilation of tales from various sources, many of which originated with authors who lived long before Aesop. However, the roots of fables go back all the way to India, where they were associated with Kasyapa, a mystical sage, and which were subsequently adopted by early Buddhists. Nearly three hundred years later, some of these fables made their way to Alexandria. This collection introduced the use of the moral to sum up the teaching of a fable, similar to the ‘gatha’ of the Buddhist Jatakas. As with other things, Aesop’s fables are just a small part of what India has given to the world.

And, well, while you can be sure the hare settles for a nap, even as the tortoise pips it to the winning post! Let’s hear it for India or should we say Bharat, now that Bombay is Mumbai, Madras is Chennai, Calcutta is Kolkata, and Banglore is Bengalaru!

Source: Economic Times

A strong showing by Infosys Technologies for the fourth quarter ending December 2006 has reaffirmed the optimistic outlook for the rest of the Indian technology firms slated to announce their results.

Much of the cheer comes from a confirmation of the healthy demand environment for technology firms and the trend towards higher off-shoring reflected by the sequential double-digit growth in dollar revenues that Infosys posted for the quarter.

Although, there were no huge positive surprises like in the second quarter, the company improved its operating margins by 60-basis points despite a 3.8% appreciation in the value of the rupee and fewer working days during the December quarter. “There are no negative surprises in the results. Fiscal 2008 should also be good, although guidance will be given only in the next quarter,” confirms an IT analyst with a brokerage firm.

“The results of other large companies will be in line with expectations. I see no reason to change them,” says Sandeep Shenoy, strategist, PINC Research. “Despite the swing in rupee, Infosys has been able to manage its margins and improve the billing rates. The improved billing rates coupled with more business volumes should see good growth in the coming quarters,” he said.

Based on the projected FY-07 earnings, top tier companies in the sector are trading at a price to earning multiple of 30. The industry is projected to grow at 30% annually and the P/E is in tune with this.

Involuntary attrition or attrition because of employees leaving for reasons other than moving to a different firm, was 1.3% for Infosys in the third quarter leading to a higher than expected 13.9% attrition for the company.

Source:www.Hindustantimes.com

Mobile phone giant Vodafone, which is in the race for buying the 67 per cent stake in India’s fourth-biggest mobile player Hutchison Essar, while being pitted against Reliance in the $20 billion bid battle, has said that it won’t overpay.

The statement is a bid to pacify the analysts who have expressed their concern that the company might overpay to go for buying three-fourth stake in Hutch.

Although funding is not regarded as an issue for Vodafone, which is expected to pay all-cash if successful, analysts are concerned that the group might be dragged into paying a hefty premium for the buyout, reported The Times.

The mobile operator, which is facing mounting investor concern about over-exuberance in a heated race, vowed not to breach the “strict financial criteria” recently introduced by Arun its chief executive Sarin.

Its defence came as the battle for the Indian operator intensified with an alliance of four of the world’s biggest buyout groups behind Reliance, one of Vodafone’s rivals. Apax, KKR, Carlyle and Blackstone are understood to be close to joining forces to back Reliance, India’s second-largest mobile operator, in its efforts to secure Hutchison Essar.

“Any acquisition would fit with our published financial mergers and acquisition criteria,” the paper quoted a Vodafone spokesman as saying.

As the battle for Hutchison’s 67 per cent stake in the venture has hotted up and more deep-pocketed rivals such as the billionaire Hinduja brothers have entered the fray so the price for the asset has soared. Analysts now put an enterprise value on the entire group, including debt, of about $20 billion. Both Vodafone and Essar - the 33 per cent joint venture holder - have tabled formal preliminary offers.

In a bid to pacify the analysts, Sarin had recently made public the guidelines about the group’s share-price performance under him.

Richard Marwood, a fund manager at AXA, which holds just under 1 per cent of the stock, said that although it was reasonable for Vodafone to examine such opportunities, he did not want it to return to the strategic, footprint-building deals of its old days. “We do not want them to pursue it at all costs. If it cannot make the numbers stack up, then it should walk away,” he said.

Analysts at JPMorgan said preliminary calculations suggested that Vodafone’s strict mergers and acquisitions criteria “might be stretched”. Their comments followed a warning earlier in the week from State Street, a key investor in Vodafone.

Sarin, who is leading the Vodafone negotiations, had his reputation seriously damaged by a similar frenzied auction in 2004 - the 41 billion dollars AT&T Wireless battle in the US. Vodafone’s bid failed and Sarin was criticised for having a lack of communication with the City.

Source: Economictimes.indiatimes.com

 Computer Associates, the enterprise software major, has outlined a three-fold strategy for India. Besides continuing its focus on its development center at Hyderabad, CA is looking at increased partnership with IT outsourcing companies like Infosys and TCS among others. It will also not ignore the product market, though it sees a limited opportunity in this space with only a few banks and government agencies forming the market.

CEO John Swainson said, `We have 1,300 people in our development centre in India, which is almost 10% of our worldwide headcount and you’ll see that continue” CA has projected a 26% growth rate for India by 2010, making it the fastest growing markets in the Asia- Pacific region.

Though Mr Swainson admitted to having a low key presence in sales, he attributed it to a very small -base of customers in enterprise management software solutions which is largely confined to banks and government agencies. IT usage is less sophisticated in the country he said.

But the larger focus will be on partnerships in the country and building strategic relationships with IT outsourcing companies. “We’ve started building relationships with the biggest five or six Indian outsourcing companies such as TCS, Infosys and Wipro. We see this as increasingly important for our worldwide business.’’ Mr Swainson said this week at CA World being held at Las Vegas.

The discussions with the companies are likely top his agenda during his visit in October this year . Besides meeting up with the government and internal meeting, business is also on agenda, with his visits lined up to Chennai Bangalore and Delhi, Mr Swainson told ET. Though acquisitions are not ruled out in the Indian, market, the company is not looking at big ticket acquisitions in the near-term in the global market space.

Struggling to regain customer confidence after a $2.2bn accounting scandal involving former CEO, Sri Lankan native Sanjay Kumar, Mr Swainson underscored the merit of the vendor and importance of the customer. Announcing a launch of a new unified service strategy and further reassurances to customers about the transformation of the company in the wake of the scandal.

Mr Swainson highlighted the need to simplify IT solutions as they are getting more complex by the day. And he highlighted that its enterprise information management (EITM) strategy is designed to integrate the CA product line and simplify the management of IT within enterprises.”EITM unifies and simplifies the approach to managing IT,” he said. “We realised there needed to be a more holistic approach to managing IT.”

A number of initiatives were also announced at the event, including the launch of its mid-market business unit focused on companies with 500 to 5000 employees and revenue of $100m to $1bn. There are an estimated 66,000 such companies around the world.