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Infosys looking at overseas acquisitions

IT major Infosys Technologies is looking at acquisitions in Europe, Latin America, the Middle East, Japan and Australia, a top company official said. “The size of the company should be around $450-500 million,” Infosys chief executive and managing director S. Gopalakrishnan told reporters on the sidelines of a seminar organised by the Confederation of Indian Industry (CII).

The US accounts for around 62 percent and Europe around 26 percent of the company’s total revenues of $4.6 billion. The company is now looking at increasing the revenue share from Europe to 30 percent.

Regarding recruitments, Gopalakrishnan said the company had hired 18,000 people in 2008, adding that it would look into further recruitment next January-February depending on the economic scenario.

Infosys is pursuing contract deals worth $1 billion, he added.

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October 6, 2009 Posted by | Business, General, India Related, IT, Science, Software, Technology, World News | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Infosys Layoff – The IT giant Infosys Technologies fires 2100 employees

With companies keen on maximum utilisation of employees and low tolerance to poor performance in the backdrop of global economic turmoil, nearly 2,100 employees in software firm Infosys have faced the axe.

“Some of these employees have been asked to go while some have left on their own,” V Balakrishnan, CFO of the Bangalore-based company, told PTI on April 11, 2009.

Prior to asking the employees to leave, they were put on a performance improvement course and those who showed no improvement were asked to leave while some others quit, he said.

“Tolerance to poor performance is very low given the current economic scenario,” said Infosys CEO Kris Gopalakrishnan.

Usually, the employees who showed poor performance were given some more time to improve themselves, but this time there had been no such consideration, he said.

Both the officials said the sacking was part of annual routine, which usually formed five per cent of the total number of employees but this time it was much lower.

Some of the employees had been “outplaced”, Kris said, which refers to the firm hiring the services of placement agencies to help the employees to get placements in other firms. Infosys has a workforce of 105,000, including trainees.

April 13, 2009 Posted by | General, India Related, IT, Software, Technology, World News | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment

Ramalinga Raju is hit over Obama in Internet search

He may be popular for all the wrong reasons, but Satyam’s disgraced founder Ramalinga Raju has beaten US President-elect Barack Obama on internet popularity charts in India, and is closing the gap abroad too.

By now infamous IT czar Raju shot to limelight earlier this month after disclosing what has emerged as the country’s biggest ever corporate fraud in India and has been called

‘India’s Enron’ right from the word go. Google’s search volume index shows Raju and Obama were generating almost equal searches from India during the first six days of the year, with Obama leading by a small margin. However, Raju jumped up the charts on January 7, when he admitted to a massive fraud of about Rs 7,800 crore.

The search volumes for Raju are estimated to have been over 10 times more than that of Obama on January 7, after which it has been declining consistently but Raju is still holding an edge over the US President-elect.

In terms of search volumes generated from various regions, Raju’s own state Andhra Pradesh is on top, followed by Tamil Nadu, Karnataka, Gujarat, Maharashtra and Delhi. In terms of cities too, the maximum search volume has been from Hyderabad, where both Raju and Satyam are based, followed by Chennai, Bangalore, Pune, Mumbai, Mahape and Delhi.

As regards searches for Obama, Tamil Nadu has been on the top, followed by Maharashtra, Karnataka and Delhi among the regions. For cities, the maximum search volumes for Obama has come from Chennai, Mumbai, Navi Mumbai, Bangalore and Delhi. Outside India too, Raju has generated significant search volumes from UAE, Singapore, Finland, US, Poland, Australia, UK, Canada and Germany, but has lagged Obama. Raju has been searched for in Abu Dhabi, Singapore, Dallas and San Fransisco, while search queries have come in Polish language too, other than English.

January 19, 2009 Posted by | General, India Related, IT, Software, Technology, World News | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Infosys to freeze hiring, says signs aren’t good

S Gopalakrishnan, CEO and MD of Infosys, speaks at the Reuters India Investment Summit.

COMPANY FORECAST: S Gopalakrishnan, CEO and MD of Infosys, speaks at the Reuters India Investment Summit.

Infosys Technologies Ltd will freeze recruitment after meeting this fiscal year’s target of hiring 25,000 staff, a telling sign the global downturn is hitting India’s $52 billion outsourcing sector.

The country’s second largest software services firm however has no plans to cut jobs and is sticking with its third quarter outlook, CEO Kris Gopalakrishnan told reporters.

He said the outsourcing sector’s growth rate would halve next year as some customers delay orders. “Last year the IT industry grew more than 30 per cent, this year it is looking at somewhere in the region of 15 per cent,” Gopalakrishnan said.

India’s export-driven IT sector, used to a scorching pace of growth, has been hit by the financial crisis and recession in the United States, which contributes more than half their revenue. In the last few years, the outsourcing industry has created tens of thousands of jobs, mainly attracting young workers, as global companies look to trim labour costs.

Infosys hired 16,000-17,000 employees in the first half of the fiscal year that began in April and would honour commitments to 6,000 under training, Gopalakrishnan said. Infosys, which counts Goldman Sachs and Philips Electronics among its clients, cut its full-year dollar revenue outlook in October due to the worsening global downturn.

Gopalakrishnan said on Dec 04, 2008 the company would freeze fresh recruitment, apart from meeting specific skill needs. “We will have to look at controlling our cost, controlling our expenses making sure that we run an optimised business. We will have to look at what are things we need to do in order to prepare ourselves for the recovery.” “Growth is coming more and more from emerging markets so hese are the things we need to prepare ourselves. We should not lose momentum in this slowdown,” he said.

But Infosys still expects its strong client base and a weakening rupee to help it meet a forecast for December quarter earnings of $0.57 a share. The Indian rupee has fallen nearly six per cent so far this quarter against the dollar.

“Infosys is seeing further degradation of the demand environment, with headwinds from leadership changes at customers, a shrinking large deal pipeline …. Pricing pressure has emerged,” CLSA Asia-Pacific said in a report this week.

December 4, 2008 Posted by | General, India Related, IT, Software, Technology | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment

Why Lehman Brothers went bust ?

$362 bn Lehman brothers went bankrupt today. Merill Lynch was sold to Bank of  America for merely $50 bn.

Lehman and Merill were 2 of the 5 biggest investment banks in US. Both are history now. 26000 employees working for Lehman lost their jobs in one day. It was  a big news on all TV channels showing the Lehman employees packing their stuff, clearing their desks and closing their offices on the Wall street. NYSE rep said on TV that Stock holders of Lehman will not get anything.

The economists say this is going bring a worst economic depression of this century. And of course it is going to affect global economy.

US economy is supposed to slide further down and get worse till next June.

Why Lehman Bros went bust; what it means for you


L
ehman Brothers is not more. Merrill Lynch has gown down the Bank of America maw. AIG too could go belly up. With a doubt, these developments in America are the most shocking events to have hit global financial markets. So where did it all begin? And what does it mean for the Indian stock markets? Find out. . .
What is (or was) Lehman Brothers?

America’s fourth-largest investment bank Lehman Brothers Holdings Inc has filed the biggest bankruptcy petition known to mankind.
The 158-year-old firm was founded by brothers Henry, Emanuel and Mayer Lehman, Jewish immigrants to the US from Germany, in 1850. Henry set up a general store in Alabama in 1844 and was later joined by his brothers. In 1850 they set up the merchant bank in New York after having made money in railway bonds. So what went wrong?

Lehman Bros, which till June 2008 had not reported a quarterly loss even once, had earlier survived many an economic crises, like railroad bankruptcies of the 1800s, the Great Depression in the 1930s, and the collapse of Long-Term Capital Management in the 1990s.

Thus the collapse of the giant investment bank came as a major shock for the entire world markets that plunged after Lehman filed a Chapter 11 petition with US Bankruptcy Court in Manhattan.

The $613 billion (some estimates put the size at $639 billion) bankruptcy thus throws up the question: why did the Wall Street giant go bust? Here’s why. . .

Why did Lehman Brothers go bankrupt?

The giant investment bank succumbed to the sub-prime mortgage crisis that has rocked the United States and the global economy. Lehman was strangled by a massive credit crisis and fast plummeting real estate prices.

The gargantuan $60 billion loss in bad real estate loans forced the bank to file for bankruptcy.

However, the fall of the 158-year-year institution that started cotton trade in US before the American Civil War and financed the railroad that built a nation, got hit by a large dose of bad luck, pride, arrogance and greed. Primarily, the pride of its chief executive office Richard Fuld.

But there were more reason. Check out what they were.

Lehman’s collapse was also triggered by the refusal of other banks to do business with it because of its complex and, at times, opaque ways of trading. Housing loans made by the bank to people with little support made these loans very risky, and when interest rates rose, these borrowers could no more repay Lehman. This led to huge losses, the extent of which is not yet clear.

Thus other banks stopped trading with Lehman. This led to it losing almost all business and triggered its fall.

The final straw for Lehman was the fact that both Barclays Plc of the United Kingdom and Bank of America Corp pulled out of takeover talks. BofA bought out Merrill Lynch for $50 billion.

However, Barclays has now said that it is in discussions with Lehman Brothers about buying certain assets of the stricken US investment bank.

“Barclays confirms that it is discussing with Lehman Brothers the possible acquisition of certain Lehman Brothers assets on terms that would be attractive to Barclay’s shareholders,” Britain’s third largest bank said in a statement.

When other banks do not want to buy Lehman, why is Barclays interested?

Barclays wanted to buy Lehman out at a discount, so to speak. But when Lehman CEO Fuld decided that his bank was worth much more than what Barclays had apparently offered, Barclays stepped back.

Now that Lehman has filed for bankruptcy, its assets are available fairly cheap. However, the biggest problem is to take on Lehman’s enormous liabilities.

How far is the CEO of the company responsible for Lehman’s fall?

Wall Street analysts believe that it was the ‘hubris’ of Richard Fuld, the 62-year-old CEO of Lehman, who did not take the telltale signs of impending doom very seriously. Fuld, nicknamed The Gorilla for his foul temper, intimidating presence and tough talk, rejected many bids to save Lehman because he thought that the sinking giant was much bigger than Wall Street was giving it credit for, and wanted to get more price for the sale of the company.

Analysts say if the bank was sold just a week before it went kaput, it could have been saved the ignominy of a bankruptcy, but Fuld was far too adamant to see reason. Result: the end of a 158-year-old financial giant.

Could the United States government helped, like it helped Bear Stearns in May this year, and Fannie Mae and Freddie Mac earlier this month?

The US government could have helped, but US Treasury Secretary Henry Paulson said that it would not use up any more taxpayer dollars to bail out Lehman Brothers as it would lead to investment banks getting away with their gambling ways. Paulson had bailed out Fannie Mae, Freddie Mac and Bear Stearns, saying that if the government had not done so, the US housing loan market would have collapsed leading to gigantic losses for hundreds of banks all over the globe that have invested in US property.

Paulson, however, believes that a brokerage major like Lehman, which does not have a direct connection with ordinary people who have taken on home loans, need not be bailed out as it would not cause any systemic damage to the US economy

Will everyone in Lehman lose their jobs?

The bankruptcy administrators, PricewaterhouseCoopers, feels that as Lehman’s operations were essentially centralized at New York, the folding up of the investment banker in the US will have a telling impact on all its operations globally.

Over 5,000 employees in the UK have already lost their jobs, while about 20,000 in the US might as well forget going back to their work stations. About 2,500 Lehman employees in India too face the axe.

Will the whole bank be liquidated?

Unlikely, at least for now. The US Chapter 11 that deals with bankruptcy says that PwC, the administrators, can go about taking its time to find good offers and buyers for Lehman’s ‘least affected businesses.’

The entire exercise can take months before all of Lehman’s assets are sold, given the complexities linked to the bankruptcy.

What about the Bank of America and Merrill Lynch deal?

Merrill Lynch’s buy out by Bank of America is also a shocking development. ML, saw the writing on the wall once it guessed that Lehman was going bust, and decided to sell out before it actually has to file a bankruptcy petition..

What about the insurance giant AIG?

The world’s largest insurer, American International Group, has been downgraded by credit rating agencies and is racing against time to find a multi billion dollar infusion to stay afloat. US Federal Reserve officials and two leading banks, JPMorgan Chase and Goldman Sachs, were negotiating to put together $75 billion package to save the insurance giant to stave off crisis.

AIG has sought $40 billion in bridge loan to stave off the crisis. But the Fed rebuffed the request. AIG’s ills came to fore, when three leading credit rating agencies – Standard and Poor’s Moody’s and Fitch – lowered the company’s credit scores.

Who could be the next to fall?

Some Wall Street analysts, reports The Guardian, name Washington Mutual as the next financial major to ‘find itself in serious trouble.’

However, the even bigger worry is whether the world’s largest securities firms, Goldman Sachs and Morgan Stanley, would be able to survive this brutal financial crisis. But many say that these two gaints will not melt down as they have ‘done a better job of spreading their bets across world markets and are also more diversified, less leveraged and have managed such risks much better.’

What do Indian markets fear?

The fall of two global financial behemoths — Lehman Brothers and Merrill Lynch — is expected to dent India Inc’s ability to raise resources via the equity route.

Experts feel that such events significantly increase the risk perception, which in turn will put all future investments by institutional investors such as pension or endowment funds, on the back burner.

While the public issue market has already dried up, the private equity funds are also becoming conservative in terms of pricing. This is resulting in either inordinate delays in concluding deals or transactions being called off.

There are many instances of private equity fund managers refusing to go ahead with deals after signing the term sheet. Sources said that a leading fund conducted due diligence on two companies in the last fortnight but did not close either deal primarily because of the developments in the US, their home country.

The crisis faced by Merrill Lynch and Lehman Brothers is expected to have a cascading effect on PE firms too.

Will it hit the Indian growth story?

The ongoing financial sector crisis in the United States and its repercussions on developed markets worldwide will result in lower capital inflows into emerging markets like India, economists and government officials said today.

At the same time, they called for the government to make it easier for Indian companies to borrow overseas by easing the restrictions that have been imposed in the past to reduce excessive liquidity in the system and control inflation.

This will, in turn, lead to a slowing in investment growth in the months ahead. As lending gets tighter and investment flows dry, corporate India will find it more difficult to raise both equity and debt.

Technology firms are shivering

Lehman Brothers’ bankruptcy filing may well prove to be the last straw for Indian IT firms, which were expecting the second half of FY09 to be better. As a result of the US financial market crisis, analysts do not expect Indian IT firms to sign any significant contracts in the banking, financial services and insurance (BFSI) space in the months to come.

While IT firms do not disclose client-specific details, it’s estimated that Lehman Brothers has outsourced deals amounting to anywhere between Rs 550 crore and Rs 700 crore (annually) to numerous IT firms, including majors like Tata Consultancy Services, Satyam Computer Services and Wipro. Lehman Brothers, say sources, works with 14 services providers in India – Wipro and TCS being the largest. It also has investments in a few IT firms. It’s not clear if these holdings will be liquidated to raise funds.

Moreover, the sources add that Lehman Brothers’ unit in India has issued termination letters to a majority of its 2,500 employees.

What kind of investment does Lehman have in India?

Lehman does not have direct large holding in the Indian stock markets. These holdings are estimated at around $200 million, including Participatory Notes. This figure is not enough to cripple the Indian stock markets.

But Lehman has exposure to the Indian stock market through special purpose vehicles. This exposure to real estate stocks is said to be of about $1.5 billion, enough to shake up the markets.

October 20, 2008 Posted by | Business, General | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment