No tax concession will be available to those Satyam shareholders, who would be selling their shares after the open offer is made by a strategic investor in the fraud-hit IT firm, official sources said.
"There is no case for tax concessions to be given to Satyam shareholders as is being aired in certain quarters," the sources said.
The question of tax concession arises only in case of short-term capital gains, as long-term holder of Satyam shares would in fact be incurring loss as the scrip plummeted after the company's disgraced founder Chairman Ramalinga Raju confessed to fudging of accounts.
Since the gains would be made only in case of those who would have bought the shares recently, the sources said such shareholders would have to be taxed as they made a killing in the stock market.
About long-term shareholders, who would be holding the scrip for more than a year, the question of tax does not arise at all since they would in fact be making losses, the sources added.
Shares of the company were trading at over Rs 170 before the fudging of accounts book was revealed while the same shares are trading at about Rs 45 now after hitting the low of Rs 11 on the Bombay Stock Exchange.
Sunday, March 15, 2009
Friday, February 27, 2009
Tata names Kirby Adams Corus CEO, Nerukar is ED
Global steel giant Tata Steel today named Kirby Adams as the CEO of its European subsidiary Corus and approved the appointment of H M Nerukar as the executive director on the company's board.
While Adams is the former chief executive of BlueScope Steel, Australia, Nerukar is at present the Chief Operating Officer of Tata Steel. The appointment of the two executives would be effective from April 9.
The board of directors of Tata Steel, which met to adopt the company's consolidated third quarter results, approved the appointment of Nerukar as executive director, India and South- East Asia, and Adams as additional director who would take charge as the CEO of Corus on March 2, the company said in a statement.
Philippe Varin, the present CEO of Corus and Tata Steel Europe would step down on April 6.
"(Both) Kirby Adams and H M Nerukar will report to B Muthuraman, managing director of Tata Steel, who will, in addition, be responsible for the group corporate function," the statement said.
As executive director, Nerukar will be responsible for the company's Indian and South Asian operations while Adams will oversee the operations of Tata Steel in Europe and will be in-charge for the global raw material pursuits of the company, primarily for European business.
While Adams is the former chief executive of BlueScope Steel, Australia, Nerukar is at present the Chief Operating Officer of Tata Steel. The appointment of the two executives would be effective from April 9.
The board of directors of Tata Steel, which met to adopt the company's consolidated third quarter results, approved the appointment of Nerukar as executive director, India and South- East Asia, and Adams as additional director who would take charge as the CEO of Corus on March 2, the company said in a statement.
Philippe Varin, the present CEO of Corus and Tata Steel Europe would step down on April 6.
"(Both) Kirby Adams and H M Nerukar will report to B Muthuraman, managing director of Tata Steel, who will, in addition, be responsible for the group corporate function," the statement said.
As executive director, Nerukar will be responsible for the company's Indian and South Asian operations while Adams will oversee the operations of Tata Steel in Europe and will be in-charge for the global raw material pursuits of the company, primarily for European business.
Tuesday, January 27, 2009
Corus axes 3,500 jobs
Union pledges to fight to reverse the decision.
Corus, Europe’s second-largest steelmaker, today announced plans to cut 3,500 jobs as part of a new strategic initiative launched to enhance competitiveness. “It should bring annual improvements in operating profit of more than £200m," a statement released by the company said.
Corus currently employs about 42,000 people and a little over half of them are stationed in the United Kingdom. A company spokesperson told Business Standard that jobs will be cut in three plants — 1,100 in South Wales, 1,400 in the United Kingdom and another 1,000 in Holland.
Tata-owned Corus is the latest steel maker to announce downsizing of its workforce. Faced with an economic slowdown, steel makers the world over are cutting output, cancelling investments and reducing their workforce. ArcelorMittal, the world’s largest steel maker, plans to eliminate as many as 9,000 jobs and curtail production by a third.
Corus CEO Philippe Varin said the structural changes have been carefully considered and are essential for the future of the business. "This will ensure Corus is in the best possible shape to compete strongly in the future," he said.
The new initiative includes sale of Corus' aluminium smelters in Germany and the Netherlands (announced on January 21) and sale of a majority stake in Teesside Cast Products. The group proposes "mothballing" of the Llanwern hot strip mill and the restructuring of engineering steels into two businesses — a specialty steels business at Stocksbridge and a bar business at Rotherham.
Community, the Corus union, in a strongly worded media release expressed its disappointment over the job cuts and said it will continue to hold dialogue with the company to avoid this.
"This announcement is a devastating blow to workers and contractors at Corus and will have a knock-on effect for thousands in steel communities across the UK,” Michael J Leahy, the general secretary of Community, said. “This is no reflection on the workforce, which has consistently delivered productivity improvements year-on-year."
Later, a Community spokesperson added that there will be dialogues with the management of Corus to ensure that the job cuts are either avoided or minimised.
Corus, Europe’s second-largest steelmaker, today announced plans to cut 3,500 jobs as part of a new strategic initiative launched to enhance competitiveness. “It should bring annual improvements in operating profit of more than £200m," a statement released by the company said.
Corus currently employs about 42,000 people and a little over half of them are stationed in the United Kingdom. A company spokesperson told Business Standard that jobs will be cut in three plants — 1,100 in South Wales, 1,400 in the United Kingdom and another 1,000 in Holland.
Tata-owned Corus is the latest steel maker to announce downsizing of its workforce. Faced with an economic slowdown, steel makers the world over are cutting output, cancelling investments and reducing their workforce. ArcelorMittal, the world’s largest steel maker, plans to eliminate as many as 9,000 jobs and curtail production by a third.
Corus CEO Philippe Varin said the structural changes have been carefully considered and are essential for the future of the business. "This will ensure Corus is in the best possible shape to compete strongly in the future," he said.
The new initiative includes sale of Corus' aluminium smelters in Germany and the Netherlands (announced on January 21) and sale of a majority stake in Teesside Cast Products. The group proposes "mothballing" of the Llanwern hot strip mill and the restructuring of engineering steels into two businesses — a specialty steels business at Stocksbridge and a bar business at Rotherham.
Community, the Corus union, in a strongly worded media release expressed its disappointment over the job cuts and said it will continue to hold dialogue with the company to avoid this.
"This announcement is a devastating blow to workers and contractors at Corus and will have a knock-on effect for thousands in steel communities across the UK,” Michael J Leahy, the general secretary of Community, said. “This is no reflection on the workforce, which has consistently delivered productivity improvements year-on-year."
Later, a Community spokesperson added that there will be dialogues with the management of Corus to ensure that the job cuts are either avoided or minimised.
Wednesday, January 21, 2009
L&T to set up R&D facility for weapons systems
Heavy engineering giant Larsen & Toubro (L&T) will set up a major research facility that will conceptualise weapons systems developed by government agency DRDO for commercial production.
"We are not looking to set up something parallel to the DRDO. It will be complementary," L&T Board Member M V Kotwal told PTI.
"As far as investments are concerned, we are ready. Once the green signal is given (by the government), then we can work on it," he added.
Elaborating on the research facility, he said the DRDO will play a valuable role if it restricts to real cutting edge high-end technologies, which India is yet to acquire. There are huge facilities and capable people in the DRDO, Kotwal said.
L&T would concentrate on applying the high-end technologies developed by DRDO, he said. "We can take up that role rather than DRDO wasting its time."
The premier defence research agency should look at the front-end, which requires large investments, because that is what it already has, he said. "DRDO has huge facilities and capable people," the L&T official said.
But as far as applying those technologies are concerned, L&T can take up that role, Kotwal said.
"We are geared up for things."
The heavy engineering firm is also planning investments at its manufacturing base in Coimbatore where various divisions of the company are setting up a unit.
The Coimbatore facility was mainly for defence and aerospace equipment manufacturing, Kotwal said, adding, "the facility would concentrate on high precision manufacturing."
Also, it being a base for high-precision manufacturing, the company has set up two modules there, he said. "We have capacity to add on because it is a very large area."
The private firm is looking at building aircraft as well at Coimbatore, but it depends on government policies, he said.
As there is no road map for aircraft manufacturing, "today we are talking about precision manufacturing. We are supporting a large number of Hindustan Aeronautical Ltd (HAL) programmes. Not only metallics, but composites," he said.
"We intend growing in that area. The base at Coimbatore can build towards aircraft manufacturing."
"There is a potential to go into full aircraft manufacturing in the years to come. We are progressively going in the direction. But there is no immediate plan to get into the commercial aircraft business," the L&T board member said.
As of now, HAL in Bangalore is the only aircraft maker for air force. L&T has been working for HAL to make sub-assemblies.
"In addition to Coimbatore, we have got a facility in Vadodara. That has been expanded to take up composite manufacture, which are used for aircraft and missiles," Kotwal said.
"We are not looking to set up something parallel to the DRDO. It will be complementary," L&T Board Member M V Kotwal told PTI.
"As far as investments are concerned, we are ready. Once the green signal is given (by the government), then we can work on it," he added.
Elaborating on the research facility, he said the DRDO will play a valuable role if it restricts to real cutting edge high-end technologies, which India is yet to acquire. There are huge facilities and capable people in the DRDO, Kotwal said.
L&T would concentrate on applying the high-end technologies developed by DRDO, he said. "We can take up that role rather than DRDO wasting its time."
The premier defence research agency should look at the front-end, which requires large investments, because that is what it already has, he said. "DRDO has huge facilities and capable people," the L&T official said.
But as far as applying those technologies are concerned, L&T can take up that role, Kotwal said.
"We are geared up for things."
The heavy engineering firm is also planning investments at its manufacturing base in Coimbatore where various divisions of the company are setting up a unit.
The Coimbatore facility was mainly for defence and aerospace equipment manufacturing, Kotwal said, adding, "the facility would concentrate on high precision manufacturing."
Also, it being a base for high-precision manufacturing, the company has set up two modules there, he said. "We have capacity to add on because it is a very large area."
The private firm is looking at building aircraft as well at Coimbatore, but it depends on government policies, he said.
As there is no road map for aircraft manufacturing, "today we are talking about precision manufacturing. We are supporting a large number of Hindustan Aeronautical Ltd (HAL) programmes. Not only metallics, but composites," he said.
"We intend growing in that area. The base at Coimbatore can build towards aircraft manufacturing."
"There is a potential to go into full aircraft manufacturing in the years to come. We are progressively going in the direction. But there is no immediate plan to get into the commercial aircraft business," the L&T board member said.
As of now, HAL in Bangalore is the only aircraft maker for air force. L&T has been working for HAL to make sub-assemblies.
"In addition to Coimbatore, we have got a facility in Vadodara. That has been expanded to take up composite manufacture, which are used for aircraft and missiles," Kotwal said.
Tuesday, January 13, 2009
Satyam scam: Infosys, IBM, Accenture may benefit most
Infosys Technologies is expected to gain the most among the top Indian IT players from Satyam’s loss of credibility. Although there will be no shift towards one single provider, Infosys’ reputation as a firm with high corporate governance standards as well as its US listing is expected to stand it in good stead when customers make a choice, said analysts.
On Wednesday, when Ramalinga Raju confessed to cooking Satyam’s books, Infosys was among the few IT stocks that ended higher. The stock was up 1.7% to Rs 1,187, as compared to Wipro and TCS that ended almost flat at Rs 243.30 and Rs 503.70, respectively. HCL Technologies, the other top player, was down 15%.
"The senior management of Infosys has come out quite aggressively in the media on maintaining high corporate governance standards," pointed out Ascendia Consulting principal analyst Alok Shende. However, the hitch to this could be Infosys’ premium pricing, which some analysts said was 10-15% higher than Satyam’s rates. This, along with a substantial customer overlap, could work in the favour of the number one IT exporter, TCS.
"It is not going to be as easy as that to say any one vendor will benefit. TCS probably has the largest overlap of clients. General Electric (GE), General Motors and Citigroup are all clients of TCS as well as Satyam. Citigroup is also a client of Infosys but it is small," said an analyst with a foreign brokerage. Infosys had stopped servicing GE because it was unwilling to compromise on its billing rates and provide services at the discounts GE was looking for. This one of the reasons why GE had moved more work to Satyam, recollected an analyst.
Apart from Infosys, the US-headquartered India-based Cognizant Technology Services is also well poised to take advantage of the situation.
Overseas brokerage Stifel, Nicolaus & Company, Inc said in a report that Cognizant could have an edge over Infosys if it emphasises its US domicile status, as opposed to Infosys which is domiciled in India. "In e-mails to employees, management is already highlighting its US-listed status, and compliance with Sarbanes Oxley laws," according to a report from brokerage firm CLSA. Wipro had also sent e-mails to all salespersons asking for aggressive messaging to customers that Wipro is ready to take on operations running at Satyam, according to CLSA.
IBM and Accenture, which have a significant offshore presence, will be the biggest gainers, said some analysts. IBM has around 75,000 employees in India and Accenture, around 35,000. "Best positioned to benefit from such a situation, we believe, are the large, global, well-known MNCs like ACN (Accenture) and IBM. We consider them of tier-1 calibre in terms of offshore capabilities, but their size, stature, brand, global reputation, and high-level client relationships (particularly ACN) differentiate them, in our view, and will make them more attractive to worried clients than even the tier-1 offshore firms like INFY and WIT (Wipro)," said an analyst at Stifel Nicolaus.
These analysts believe the MNCs stand to benefit more because they are large (with the ability to take on Satyam’s revenues), established and with "sterling reputations" and "recognisable brands" that put them in the best position to reassure worried clients.
On Wednesday, when Ramalinga Raju confessed to cooking Satyam’s books, Infosys was among the few IT stocks that ended higher. The stock was up 1.7% to Rs 1,187, as compared to Wipro and TCS that ended almost flat at Rs 243.30 and Rs 503.70, respectively. HCL Technologies, the other top player, was down 15%.
"The senior management of Infosys has come out quite aggressively in the media on maintaining high corporate governance standards," pointed out Ascendia Consulting principal analyst Alok Shende. However, the hitch to this could be Infosys’ premium pricing, which some analysts said was 10-15% higher than Satyam’s rates. This, along with a substantial customer overlap, could work in the favour of the number one IT exporter, TCS.
"It is not going to be as easy as that to say any one vendor will benefit. TCS probably has the largest overlap of clients. General Electric (GE), General Motors and Citigroup are all clients of TCS as well as Satyam. Citigroup is also a client of Infosys but it is small," said an analyst with a foreign brokerage. Infosys had stopped servicing GE because it was unwilling to compromise on its billing rates and provide services at the discounts GE was looking for. This one of the reasons why GE had moved more work to Satyam, recollected an analyst.
Apart from Infosys, the US-headquartered India-based Cognizant Technology Services is also well poised to take advantage of the situation.
Overseas brokerage Stifel, Nicolaus & Company, Inc said in a report that Cognizant could have an edge over Infosys if it emphasises its US domicile status, as opposed to Infosys which is domiciled in India. "In e-mails to employees, management is already highlighting its US-listed status, and compliance with Sarbanes Oxley laws," according to a report from brokerage firm CLSA. Wipro had also sent e-mails to all salespersons asking for aggressive messaging to customers that Wipro is ready to take on operations running at Satyam, according to CLSA.
IBM and Accenture, which have a significant offshore presence, will be the biggest gainers, said some analysts. IBM has around 75,000 employees in India and Accenture, around 35,000. "Best positioned to benefit from such a situation, we believe, are the large, global, well-known MNCs like ACN (Accenture) and IBM. We consider them of tier-1 calibre in terms of offshore capabilities, but their size, stature, brand, global reputation, and high-level client relationships (particularly ACN) differentiate them, in our view, and will make them more attractive to worried clients than even the tier-1 offshore firms like INFY and WIT (Wipro)," said an analyst at Stifel Nicolaus.
These analysts believe the MNCs stand to benefit more because they are large (with the ability to take on Satyam’s revenues), established and with "sterling reputations" and "recognisable brands" that put them in the best position to reassure worried clients.
Thursday, January 1, 2009
Yamaha bucks trend, records 3-fold rise
Two-wheeler maker Yamaha today reported a nearly three-fold increase in its domestic sales during December last year at 16,000 units, compared to 5,524 units in the same month in 2007.
The company witnessed a growth of 13.32 per cent in 2008, at 1,36,468 units as against 1,20,428 units in the previous year, the company said in a statement.
"The year 2008 has been a turnaround year for Yamaha. We have made efforts to replicate Yamaha's global brand image by launching two new models — YZF-R15 and FZ16," Yamaha Motor (India) Managing Director CEO Yukimine Tsuji said.
These two models received good response from experts and helped the company to achieve higher sales as against last year, he added.
"We are aware that these are challenging times for the industry as the economy passes through a slowdown," Tsuji said, adding the company was confident to do well with its current range of products.
The losers
December sales for Hero Honda Motors, India’s biggest motorcycle maker, fell 10 per cent. Hero Honda sold 215,931 motorcycles and scooters last month, compared to 240,532 a year earlier, the company said in a statement today.
Other two-wheeler maker Bajaj Auto also reported 33 per cent decline in two-wheeler sales during December last year at 119,215 units against 177,249 units in the same month previous year. The company said its motorcycle sales also declined by 33 per cent at 118,510 units against 176,441 units in December 2007.
Three-wheeler sales during the month grew by three per cent at 22,948 units against 22,221 units in the same month of the previous year.
The sharp reduction in two-wheeler primary sales reflects the continuing effort to reduce dealer inventories, Bajaj Auto Managing Director Rajiv Bajaj said in a statement.
"In keeping with its objective to stimulate demand through a major product offensive, Bajaj will, in January 2009, launch an all-new motorcycle," he added.
The first of several models to be introduced in 2009, the new bike will target 'Sport Commuter' segment and is intended to further Bajaj's leadership in the 125 cc+ segment, he said.
For the April-December 2008 period, total motorcycle sales were down eight per cent at 1,534,149 units against 1,660,182 units in the corresponding period previous year.
The company witnessed a growth of 13.32 per cent in 2008, at 1,36,468 units as against 1,20,428 units in the previous year, the company said in a statement.
"The year 2008 has been a turnaround year for Yamaha. We have made efforts to replicate Yamaha's global brand image by launching two new models — YZF-R15 and FZ16," Yamaha Motor (India) Managing Director CEO Yukimine Tsuji said.
These two models received good response from experts and helped the company to achieve higher sales as against last year, he added.
"We are aware that these are challenging times for the industry as the economy passes through a slowdown," Tsuji said, adding the company was confident to do well with its current range of products.
The losers
December sales for Hero Honda Motors, India’s biggest motorcycle maker, fell 10 per cent. Hero Honda sold 215,931 motorcycles and scooters last month, compared to 240,532 a year earlier, the company said in a statement today.
Other two-wheeler maker Bajaj Auto also reported 33 per cent decline in two-wheeler sales during December last year at 119,215 units against 177,249 units in the same month previous year. The company said its motorcycle sales also declined by 33 per cent at 118,510 units against 176,441 units in December 2007.
Three-wheeler sales during the month grew by three per cent at 22,948 units against 22,221 units in the same month of the previous year.
The sharp reduction in two-wheeler primary sales reflects the continuing effort to reduce dealer inventories, Bajaj Auto Managing Director Rajiv Bajaj said in a statement.
"In keeping with its objective to stimulate demand through a major product offensive, Bajaj will, in January 2009, launch an all-new motorcycle," he added.
The first of several models to be introduced in 2009, the new bike will target 'Sport Commuter' segment and is intended to further Bajaj's leadership in the 125 cc+ segment, he said.
For the April-December 2008 period, total motorcycle sales were down eight per cent at 1,534,149 units against 1,660,182 units in the corresponding period previous year.
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