Indian businesses turn to IT to fuel growth: Study

Mumbai: Nearly nine out of every 10 (89 per cent) respondents in India believe that cloud computing or ‘as-a-service’ approach, is relevant to their organisation, according to a study by VMware.

The study ‘VMware Cloud Index’ also states that nearly eight out of every 10 (79 per cent) respondents in India have a cloud-related initiative in place within the organisation, or are planning to implement cloud in the next 12 months.

Indian organisations are turning to IT to help them grow the business in the current economic environment. IT is seen as a change enabler and source of business value for organisations by 85 per cent of the respondents.

In terms of the top business priorities in India over the next 12 months, 87 per cent of IT decision makers said improving the quality and capabilities of their products and 85 per cent said addressing the rising expectations of customers and improving customer satisfaction. The study also shows that the current perception of IT remains positive in India with 63 per cent of respondents noting that the perceived credibility, influence and power of the CIO in their organisation is increasing.

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Vodafone to invest Rs 10,141 cr to raise stake in Indian arm to 100%

New Delhi: British telecom major Vodafone Plc on Tuesday sought the Foreign Investment Promotion Board’s (FIPB’s) approval to bring in Rs 10,141 crore to raise its 64 per cent equity stake in Vodafone India to 100 per cent.

According to its application, Vodafone India has been valued at Rs 28,469.9 crore, compared with Rs 54,672.72 crore in February last year, when Ajay Piramal-controlled Piramal Enterprises had paid Rs 3,007 crore for a 5.5 per cent stake in the company. So, if the existing stakeholders — Piramal Enterprises, Max Group’s Analjit Singh, IDFC and other independent investors — exit at the current valuation, they get 47.9 per cent less than what they would have got in February 2012.

When Piramal Enterprises had bought its second tranche of 5.5 per cent stake in Vodafone India, it had said it expected to get 17-20 per cent return on its investment. Apart from Piramal, Analjit Singh holds 6.2 per cent in the company while IDFC and other individual investors own the remaining 18.8 per cent.

Vodafone’s application to buy out its Indian subsidiary’ partners has come within two months of the government allowing 100 per cent foreign ownership in an Indian telecom company. It is the second foreign telco seeking permission to do so, after Singapore’s SingTel recently received FIPB’s approval to buy Bharti Airtel’s 9.9 per cent stake in a joint venture for international long distance calls.

Earlier, in its 2012 annual report, Vodafone Plc had said it would pay Piramal Enterprises between Rs 7,000 crore and Rs 8,300 crore for its 11 per cent stake if the latter was not given an exit through an initial public offering between August 18, 2013, and February 8, 2014, or if Piramal chose not to participate in an exit through IPO.

According to the annual report, the company had benchmarked the valuation of its Indian entity between Rs 63,636 crore and Rs 75,454 crore. Compared to this valuation, the current value is 55-62 per cent lower.

“The value Vodafone has shown today is not justified. It could have been based on the company’s individual agreements with the investors at the time of their investments. Also, the previous valuations could have included the expected return from the 3G business, which did not actually come,” said a partner with a Gurgaon-headquartered management consulting firm. “How can Vodafone be valued at this price when Idea Cellular is valued at Rs 10 billion (about Rs 61,455 crore at Tuesday’s conversion rate),” he asked.

Industry experts attribute the erosion in valuation to Vodafone’s low 3G subscriber base. According to PhilipCapital India, in 2012-13, Vodafone India was fourth among operators in 3G user base (with 3.3 million users), while Bharti Airtel had 6.4 million and Reliance Communications (RCom) 7.2 million 3G users.

Prashant Singhal, telecom expert at Ernst & Young said: “This (Vodafone’s proposal) will improve the market sentiment in general — not for its valuation, but due to foreign investments coming in the sector.”

Confirming the move, a spokesperson for Vodafone Plc said: “We have always said we would like to increase our holding in the business and this further investment demonstrates Vodafone’s long-term commitment to India. The total inflow of foreign investment into India as a result of the proposed transactions will be approximately Rs 10,141 crore.”

When contacted, Ajay Piramal said: “I am confirming that we are getting our returns, but I will not be able to share any more information than that.” He refused to comment more on the issue.

Some analysts say the valuations are very conservative and hint at transfer-pricing issues. “The valuation is, in fact, much lower than conservative estimates. This low valuation might open a Pandora’s box, as it is too good to be true,” said Alok Shende, principal consultant and co-founder, Ascentius Consulting.

But Supreme Court advocate and tax expert H P Ranina says: “I don’t think there will be an issue with this, as they are not related parties and there is no associated person. According to the income-tax laws, if there is no associated person, transfer-pricing rules do not apply, he adds.

Kunal Bajaj, an independent analyst, says: “Vodafone is a private company and the owner of the shares can sell it at a valuation it wants.”

The British telco also announced that it would consider providing additional funding to Vodafone India by subscribing to equity shares of the Indian entity, after it had got 100 per cent equity control. “Looking ahead, Vodafone will continue to invest in India to bring the benefits of mobile communications and financial inclusion to more people across the country,” the spokesperson said, declining to give further details.

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McNally Bharat Africa unit wins Rs 229-cr order

Kolkata: McNally Bharat Engineering Co Ltd has said its South African subsidiary has received an order worth Rs 229 crore to set up a fluorspar beneficiation plant for miner Sephaku Fluoride Ltd in that country.

McNally Bharat Engineering (SA) Proprietary Ltd will have to execute the project in 21 months.

Fluorspar is a basic raw material in the chemical, metallurgical, and ceramic industries and beneficiation refers to crushing and separating ore into valuable substances or waste.

McNally Bharat had won a related order earlier this month from the same miner for supplying a 0.6-million-tonne fluorspar concentrate plant worth Rs 280.7 crore.

Sephaku Fluoride is a subsidiary of the Johannesburg Stock Exchange-listed Sephaku Holdings Ltd.

Both plants are for a fluorspar mining project of Sephaku, located in the Gauteng Province of South Africa.

McNally Bharat will have to set up the concentrate plant at the mine site in 15 months.

For the BM Khaitan Group engineering company, these two orders are the biggest value export packages

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Government approves thirteen proposals of foreign direct investment (FDI) amounting to about Rs 1258.53 crore

Based on the recommendations of Foreign Investment Promotion Board (FIPB) in its meeting held on September 19, 2013, Government has approved thirteen (13) proposals of Foreign Direct Investment (FDI) amounting to Rs. 1258.53 crore approximately.

In addition, one proposal viz., M/s Axis Bank Ltd. Ahmedabad, amounting to Rs. 6265.76 crore has been recommended for consideration of Cabinet Committee on Economic Affairs (CCEA).

Details of proposals in the Foreign Investment Promotion Board (FIPB) Meeting held on 19.9.2013.

Following thirteen (13) proposals have been approved:

Sl. No. Name of the applicant Particulars of the proposal FDI/NRI inflows (Rs. in crore)
1 M/s Indian Rotocraft Pvt. Ltd. Amendment in the approved activities of the previous FC approval letter to replace the helicopter model as AW 119Kx, the upgraded model, in place of AW 119Ke, the discontinued model. Nil
2 M/s BF Elbit Advanced Systems Pvt. Ltd., Pune Induction of foreign equity in defence sector. 37.44 (US $ 6 million)
3 M/s Camson Bio Technologies Ltd., Karnataka Issue of warrants to a foreign collaborator in the business of agricultural biotechnology. 32.18
4 M/s SD Bio Standard Dignostics Ltd Infusion of additional FDI in an existing foreign owned pharma company. 27.5
5 M/s Shantha Biotechnics Pvt. Ltd. An existing foreign investor in a brownfield pharma company to buy out the shares held by NRIs and Indian residents and to infuse fresh equity investment. 755.00
6 M/s Empays Payment System India Pvt. Ltd., Mumbai To set-up a Multi- Bank Payment System using the Instant Mobile Transfer System (IMT). 27.50
7 M/s Equitas Holdings Pvt. Ltd. A holding-cum-investment company in microfinance sector to increase FDI by issuance of equity shares and new foreign investors. 222.80
8 M/s Jaguar-Max Security Solutions Pvt. Ltd., New Delhi Induction of foreign investment to carry out the business of Private Security Services company. 0.11
9 M/s Stork Titanium Pvt. Ltd., New Delhi Induction of foreign investment to carry out the business of manufacturing, trading and dealing in titanium products. 156.00 (US $ 25 Million)
10 M/s Styrolution South East Asia Pte. Ltd., Singapore NR to NR transfer of shares within a group company by way of a block deal on the special trading window of BSE Ltd., /NSE Limited. Nil
11 M/s HCL Technologies Ltd., New Delhi Induction of direct foreign investment in its own total paid-up equity share capital and consequent indirect foreign investment in its wholly owned subsidiary. Nil
12 M/s Cable & Wireless Pvt. Ltd. Overseas group restructuring in telecom Sector Company without change in approved FDI/cap/investor. Nil
13 M/s Multi Screen Media Pvt. Ltd. To increase the foreign equity participation for production of television programmes in Indian and downlinking certain TV channels. Nil

The following eight (8) proposals have been recommended to be deferred:


Sl. No. Name of the applicant Particulars of the proposal
1 M/s SasMos Het Technologies Ltd., Bangalore Post facto approval to undertake manufacturing of electronic warfare subsystems, parts and accessories for airborne ground and naval application etc.
2 M/s Jubilant Aeronatics Pvt. Ltd. Amendment in the approved activities of the approval letter in defence sector.
3 M/s Kinedex Healthcare Pvt. Ltd., Jaipur Post facto approval for induction of foreign equity in the existing Indian pharma company.
4 M/s Laurus Labs Pvt. Ltd., Hyderabad Downstream investment in an Indian pharmaceutical company by way of subscription to fresh allotment of equity shares.
5 M/s Soma Tollways Pvt. Ltd. Post facto approval for increase in foreign equity in an investing company.
6 M/s M.D. Shajahan Bablu, Bangladesh Bangladesh nationals to incorporate a company in India with 100% FDI to engage in trading of Raw Jute and Jute Products and Agro based products.
7 M/s Green Destinations Holdings, Mauritius NR to NR transfer of shares before the expiry of lock-in period.
8 M/s Monsoon Capital LLC, USA To make FDI investments directly or indirectly in an Indian Trust.

The following two (2) proposals have been recommended for rejection:


Sl. No. Name of the applicant Particulars of the proposal
1 M/s Sundaram Ramaswamy, Gurgaon Conversion of an existing Indian Company into a LLP and additional FDI infusion.
2 M/s SQS India Infosystems Pvt. Ltd., Pune Post-facto approval for swap of shares to carry out the business of Software Testing Services.

The following one (1) proposals have been advised to access automatic route.


Sl. No. Name of the applicant Particulars of the proposal
1 M/s Octania Aerostructure Group Pvt. Ltd., New Delhi To issue equity shares to a foreign investor in lieu of technology transfer/knowhow to set up an aerospace machining and treatments company.

The following one (1) proposal has been advised that FIPB approval is not required:


Sl. No. Name of the applicant Particulars of the proposal
1 M/s Advanta Pvt. Ltd. Post-facto approval for induction of foreign investment into the company to carry out the business of Research, Production and marketing of hybrid seeds.

The following one (1) proposal has been recommended to advise the applicant that the proposal is not within the purview of FIPB:


Sl. No. Name of the applicant Particulars of the proposal
1 M/s Artura Pharmaceuticals Pvt. Ltd., Tamil Nadu Post-facto approval for delay of 6 months and 2 days in receiving part of the consideration for the issue of equity shares in an existing pharma company.

Decisions in the following five (5) proposals have been kept in abeyance


Sl. No. Name of the applicant Particulars of the proposal
1 M/s Brampton Pvt. Ltd. Clarification regarding limit on percentage of shareholding to be held either by Indian partner or foreign partner for forming the joint venture company.
2 M/s Acebright (India) Pharma Pvt. Ltd., Karnataka A foreign owned Indian pharma company to receive additional foreign investment by way of fresh issue and transfer. Post-facto approval is also sought for an earlier transfer.
3 M/s Manipal Technologies Ltd., Karnataka Induction of foreign investment in order to invest in the subsidiary to enter into cards payment system management and processing services for all kinds of alternate delivery channels including ATM.
4 M/s AU Housing Finance Limited, Jaipur An Indian Housing Finance Company proposes to increase direct and indirect foreign investment upto 95%, without meeting the minimum capitalization norm of USD 50 million.
5 M/s Aerrianta International CPT, Ireland To set up a 50:50 JV company to engage in running duty free shops at Mumbai airport.

The following one (1) proposal has been recommended for the consideration of CCEA, as the investment involved in the proposal is above Rs. 1200 crore.


1 M/s Axis Bank Limited, Ahmedabad A private bank proposes to increase the foreign equity from the existing 49% to 62%. 6265.76

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IL&FS Engineering bags Rs 150-cr rural electrification project

Hyderabad: IL&FS Engineering and Construction Company Ltd has received a Letter of Award (LoA) from Paschimanchal Vidyut Vitran Nigam Ltd for execution of rural electrification works in Bulandshahr district of Uttar Pradesh.

The Rs 149.68-crore project is to be executed within 18 months on a turnkey basis. The project comes under the Government of India scheme of Rajeev Gandhi Grameen Vidyutikaran Yojana (RGGVY) Phase-II. The project is funded by Rural Electrification Corporation.

According to a statement, construction and infrastructure company IL&FS Engineering Services recently won a rural electrification project from Madhyanchal Vidyut Vitran Nigam Ltd in Uttar Pradesh.

The company is already executing rural electrification works for West Bengal State Electricity Distribution Company Ltd and for Power Grid Corporation of India Ltd in Orissa.

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Healthcare Technology Innovation Centre, National Instruments to develop high-impact medical devices

Chennai: Healthcare Technology Innovation Centre (HTIC), a research and development centre established through a joint initiative of IIT, Madras and the department of biotechnology, will partner with National Instruments (NI), a US company that produces automated test equipment and virtual instrumentation software, to develop affordable and high-impact medical devices.

HTIC director Mohanasankar S signed a memorandum of understanding with Jayaram Pillai, managing director of National Instruments, India, Russia and Arabia, for the collaboration. The collaboration will extend to fields like patient monitoring, cardiovascular screening, surgical oncology and neonatal care.

NI will fund and provide software and hardware. Mohanasankar said, "NI's design and development platforms will allow us to shorten the time from idea to prototype, and quickly move the device for field testing and validation, which is crucial in med-tech R&D."

Jayaram Pillai of NI said, "We will support HTIC's initiatives with NI's graphical system design platform for product development and large scale deployment of affordable healthcare devices for emerging countries."

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Samsung, Sony, Nokia most attractive brands in East, says survey

Kolkata: Samsung , Sony and Nokia have emerged as the most attractive brands in the eastern part of the country, according to a study by Trust Research Advisory (TRA).

These brands have also been found to be top three most attractive in the country, India’s Most Attractive Brands 2013, noted.

According to Sachin Bhosle, Research Head, TRA, a brand insight company, the “report will be released annually, beginning this year.”

While ITC emerged as the 13th most attractive brand in Kolkata and 17th in East; Tata, Lux, Hero MotoCorp, Bata, Godrej, Philips, Britannia, Airtel, and Vodafone were among the top 20 attractive brands in the region.

Meanwhile, asked if Aditya Birla Group-owned brands would be impacted with Group Chairman Kumar Mangalam Birla’s name being dragged into the coal block allocation scam, Bhosle said: “I don’t actually think so because there are several brands which carry residual trust with them. I don’t see that it will impact the attractiveness quotients of the brands under the group immediately.”

He added: “There are several things that determine trust in a particular brand” and it should not be hurt due to “any such situation”.

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