Weekly news report reema


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Weekly news report reema

  1. 1. Weekly News Report<br />BY:<br />ReemaJaggi<br />
  2. 2. Week ending 28th Aug’10<br />
  3. 3. Tech Mahindra CEO Sanjay Kalra quits firm after six years<br />VineetNayyar, who is the vice-chairman, will take over the operational responsibilities of CEO<br />Mr Kalra is quitting at a critical time when Tech Mahindra, which took over scam-hit Satyam Computer Services and the two are set to be merged after Satyam’s accounts are re-stated. Tech Mahindra’s revenues are also under pressure with its largest client, British Telecom (BT), ramping down business and contracts from other telecom clients, also under pressure. <br />Mr Kalra(BT revenues) and CP Gurnani(non BT revenues) , who is now heading Satyam Computer Services, were the two key people that helped Tech Mahindra win business to become the country’s sixth-largest software exporter. <br />Mr Kalra, Mr Nayyar and Mr Gurnani — all former HCL employees — were the trio that formed the key part of the executive management team at Tech Mahindra. <br />
  4. 4. India Inc turns stingy on payout; cos giving dividends declines 4.5%<br />NEW DELHI: Earnings growth has returned for India Inc after a brief spell of slowdown in 2008, but companies have not yet warmed up to sharing it fully with their shareholders with the number of firms doling out dividends declining in the first half of the fiscal. <br />Some say companies are acting stingy as they want to conserve cash for investments. <br />The numbers tell a part of the story. The total number of firms declaring dividends for the first half of this fiscal year ending September 30, has dropped 4.5% over the year-ago period. Companies announce dividend payment in advance and for the first half 1,144 firms out of the total space of over 3,000 listed companies, have declared dividend payouts. <br />
  5. 5. This is also the second successive year where the number of firms doling out dividend to shareholders has declined in the first half of a financial year. The peak was recorded in the April-September 2008 when 1,363 firms paid dividends. Among the BSE 100 companies, the prominent firms who have decided to skip dividends, include, or are yet to announce, names like Tata Communications and Ranbaxy Labs. <br />But at the same time, many firms paid dividends more than once in the first six months of the fiscal. These include names like Hero Honda, Colgate Palmolive, Crisil, Godrej Consumer, TCS, Patni Computer, AventisPharma, Gateway Distriparks and Hexaware Technologies. <br />
  6. 6. While on the one hand, companies appear to be cautious on the state of the global economy, corporate disclosures over the past 6-12 months indicate firms, especially those in the manufacturing sector, are in the process of initiating the next capacity expansion cycle.<br />A raft of companies across industries such as cement, paper, tyre, paints, automobiles and consumer durables have over the past one year announced capacity expansion plans that will be executed over the next 2-5 years. While some of these include companies reviving expansion projects that were put in the freezer during the slowdown, many others are investing to keep pace with domestic demand.<br />
  7. 7. For instance, as much as $30-billion investments are estimated to be in the pipeline by automakers in the next four years to meet the demand in the world’s second fastest-growing market after China. The country’s largest carmaker, Maruti Suzuki, is in the process of setting up its fifth plant and has already started working out plans for its sixth production facility. Not to be left behind, the auto component industry association, ACMA, said on Friday that local part makers are estimated to invest $35 billion by 2020. <br />Among others, cement is another industry where companies are looking at big investments. Even as the industry has seen production capacity increase by as much as 50% in the past three years, firms have lined up future investments of more than `25,000 crore. Half of this will be made by the top two players, Holcim and Ultratech. <br />
  8. 8. Experts say another reason for conserving cash is inflation that has put an upward pressure on the cost of borrowing. “The increasing cost of borrowing, coupled with global uncertainties, is translating into higher retention of internal accruals by Indian corporates to fund their expansion plans,” said DR Dogra, MD & CEO at rating agency Credit Analysis & Research. <br />
  9. 9. RCOM eyes strategic tie-up with Motorola, HP, Intel<br />NEW DELHI: Reliance Communications is planning to rope in strategic partners for its infrastructure and technology innovation unit for 3G mobile business, and is in discussions with global players like Motorola and HP. <br />Sources said that discussions are also being held with likes of Intel and Sony. <br />RCOM, Anil Ambani group's telecom arm, is looking for partners in its 3G Innovation Lab, which has been set up as an end-to-end wireless network infrastructure and new technology provider for high-speed 3G (third generation) mobile services. <br />Sources said RCOM will also let out the services of the Lab to other operators and service providers to further monetise its investment in this newly set-up unit. <br />
  10. 10. This could be part of RCOM's plans to raise funds for launch and expansion of its 3G services, for which it has made large investments, they added. <br />The company paid more than Rs 8,500 crore for securing the spectrum (radio waves) to offer 3G mobile services and analysts have estimated that more than Rs 5,000 crore could be required for rolling out the networks. <br />RCOM is planning to launch 3G services by the end of this year, subject to the release of spectrum next month. <br />The Lab has been set up at Reliance ADA Group's Headquarters in DhirubhaiAmbani Knowledge City, Navi Mumbai. <br />RCOM has won 3G spectrum in 13 circles, including key ones like Delhi, Mumbai and Kolkata<br />