India Inc.

All you wanted to know about GST

Anurag — Thu, 24 Dec 2009 08:27:01 +0000

Probably the biggest tax overhaul system, which independent India has seen could be the introduction of Goods and Services Tax, leave apart the Direct Tax Code (which could replace the Income Tax Act, 1961). Though the implementation date of GST is still unclear, but it could see the light of day soon.

Here is an idea of the whole GST system and how it would work and its benefits.

The concept of GST is prevalent successfully in many countries. In India, there is multiplicity of taxes both at the Central and the State level. Although introduction of CENVAT and VAT have considerably helped in reducing this burden, however they still have their anomalies.

CENVAT doesn’t include taxes like Additional Excise Duties, Additional Customs Duty, Surcharges while VAT omits taxes such as Luxury Tax, Entertainment Tax in its fold. Further all these taxes omit the taxes on Services, which is a major component of overall tax structure.

With GST, all taxes would be removed and a continuous chain of set-off from the original producer’s point and service provider’s point upto the retailer’s level would be established which would eliminate the burden of all cascading effects.

The system would allow setting off GST paid at previous stages with the GST charged.

The model likely be followed under GST could be as follows:

GST will have two components- Central GST (levied by Centre) and State GST (levied by the State)
All laws and definitions, rates, valuation, classification would be uniform across all states
CGST and SGST would be applicable to all transactions of goods and services except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits
CGST and SGST would be paid in the accounts of Centre and States separately
Taxes paid against Central GST shall be allowed for input tax credit (ITC) for the Central GST only. Similar is the case for State GST. No cross utilisation of ITC between CGST and SGST would be allowed.
Each taxpayer would be allotted a PAN linked taxpayer identification number with a total of 13/15 digits and periodical returns to both Central and State GST authorities would have to be submitted. Linking the ID number with PAN would facilitate data exchange and improved compliance.
Every transaction would have a component of SGST and CGST and would be levied on the same price or value. SGST would be chargeable only when both supplier and recipient are located within the State.

The Central Taxes which could be subsumed under GST are: Central Excise Duty, Additional Excise Duties, Excise Duty levied under the Medicinal and Toiletries Preparation Act, Service Tax, Additional Customs Duty(Countervailing Duty – CVD), Special Additional Duty of Customs (SAD) – 4%, Surcharges and Cesses.

The State Taxes which could be subsumed under GST are: VAT / Sales tax, Entertainment tax, Luxury tax, Taxes on lottery, betting and gambling, Entry tax not in lieu of Octroi.

Taxes which are kept outside the purview of GST are Purchase tax, tax on items containing Alcohol, Tobacco products and Petroleum Products.

GST is likely to have a two-rate structure both at Central and State level: lower rate for necessary and basic importance items and standard rate for general goods. There will also be a special rate for precious metals and a list of exempted items. Services are likely to have a single rate for both CGST and SGST.

GST is likely to have a uniform threshold limit of gross annual turnover of Rs. 10 lakh both for goods and services across the country. While for Central GST, the limit may be fixed at Rs.1.5 Crore for goods and comparatively higher for services.

For small traders and industries, a compounding scheme of levy of 0.5% on a maximum annual turnover of Rs. 50 lakhs may be fixed to avoid the legal procedures, compliance and framework for these people.

The likely GST rate, which can be revenue neutral for the Government, may be fixed at 14-16%.

GST would help widening the coverage of tax base and improve tax compliance, leading to higher generation of revenues which may in turn lead to the possibility of lowering of average tax burden.

It would help in uniformity of tax rates around the country and thus improving competitiveness among Indian businesses, and the whole country would become a single market rather than an array of different states.

All you wanted to know about GST

Originally published at Digital Inspiration by Amit Agarwal.

3 Idiots Marketing Journey

Anurag — Sun, 20 Dec 2009 08:28:52 +0000

Every time an Aamir Khan flick is up for release, one could easily expect slew of marketing initiatives. This time is also no exception, with 3 Idiots slated to release on Christmas, the brand ‘Aamir’ is busy with his own style.

Firstly, he is on a Discover India tour, where he is visiting places in different parts in a disguised manner giving away prize to anyone who recognizes him. Once his day is over in a city, the recording is shown across all news channels the next day. Uptil now he has been to six cities and nobody knows where his last (seventh) stop would be.

Around the country, special butt chairs have been placed at leading multiplex chains to figure out the curiosity. Also, unique stickers on 10,000 rickshaws around the country have been placed reading ‘Capacity: 3 Idiots’.

And after Amitabh Bachchan, the Reliance ADAG group has also associated with Aamir in a big way. Two of its verticals – gaming site, Zapak.com and Reliance Life Insurance have associated themselves with the movie.

Zapak has partnered with a gaming website idiotsacademy.zapak.com where Aamir has gone hiding. Reliance Capital has launched ‘All Is Well Insurance Plans‘, keeping in view the movie’s anthem.

Aamir Khan has even designed a range of 3 Idiots T-shirts which are being marketed by Pantaloons.

Statistically, Aamir has always scored whenever he is involved in a film’s marketing, hopefully he would score this time too.

3 Idiots Marketing Journey

Originally published at Digital Inspiration by Amit Agarwal.

IPL 3.0 – Becoming a Cash Register Already

Anurag — Sun, 20 Dec 2009 07:57:37 +0000

Recession may have taken a toll on economies and businesses worldwide, but not on Indian Premier League (IPL), which has become a pseudo Indian religion.

Inspite of the controversy over IPL Commissioner Lalit Modi, and talks of IPL taking toll on player’s health and questions being asked about players giving priority to money over nation interest, the preparations for IPL 3.0, scheduled to commence on 12-March-2010, are in full swing.

The Indian cricket team wasn’t able to muster a sponsor owing to high reserve price but IPL is raking in huge money from all quarters.

The 9 year telecast rights deal was signed with Multi Screen Media for $1.7 billion while ICC could just get $1.1 billion for 3 World Cup, 4 T20 Cups and Champions trophy.

This year IPL is also giving 10 year theatrical rights for live telecast of matches with prices going upto $70 million. This would also give a boost to cinema business in India which is normally dull during summers.

IPL 4.0 would also see entry of 2 new franchises, and the base price of each team would be $225 million and the final figures are expected to double these prices, thus pushing revenues far higher for IPL.

IPL is also working on a model whereby it could have its own merchandise and sign licensing agreements with different brands to exploit its high brand value.

This all may seem good and glamorous, but it remains to be seen for how long Indian viewers would remain comfortable watching Indian and Australian players playing with each other and not against each other.

IPL 3.0 – Becoming a Cash Register Already

Originally published at Digital Inspiration by Amit Agarwal.

For MasterCard & Visa Card holders in India

Amit — Fri, 31 Jul 2009 12:40:15 +0000

Something for people who use a Visa or MasterCard Credit /Debit card to make online transactions in India.

Online transactions in India have always lagged behind those of other countries in terms of usage and demographic penetration because a lot of people are afraid that their credit card details will be misused if they divulge them online. The truth, of course, is that there is a greater chance of mischief occurring when you absent-mindedly hand over your card to the waiter in the restaurant than if it were used for an online transaction.

Anyway, there’s now a bit of news that ought to decrease the risk of fraudulent online transactions occurring in India. The Reserve Bank of India recently issued a directive asking banks and online vendors of Indian origin to beef up security for all credit card transactions that have a value of INR 5,000 or more. So whether you buy a home stereo system on eBay or book air tickets by calling up MakeMyTrip.com, you’ll need to provide an additional password for completing that transaction.

What is Verified by MasterCard / Visa

Effective August 1, 2009 (tomorrow), all online credit card and debit card transactions in India will require an extra level of verification.

Visa calls its service “Verified by Visa” (VBV) while MasterCard users will be offered the “SecureCode“. A number of banks also refer to this as 3D Secure Service – so although the terminology might vary depending on the bank, the underlying principle is the same. This service, through a simple checkout process, confirms your identity when you make purchases on the Internet. Through a personal assurance message it also reassures you of the authenticity of the online store.

While it was optional earlier, the RBI’s directive makes it mandatory effective 01 August 2009, for all online card transactions to be processed using these enhanced security procedures. While this means an additional verification step for a user, it most certainly brings yet another layer of security to the entire process.

How is 3D Secure Different?

As things stand, users authenticate an online payment by specifying details such as the Name of the Card Holder, date of expiry of the Card and the CVV2 number (usually the 3 digit number located behind the card). This is all well and good for users while the Credit Card is in their possession but it doesn’t offer any protection in the case when your card winds up in the hands of an unscrupulous person.

That’s because all the details required to authenticate an online payment are already present on the card. So if someone has physical access to your card or even a photocopy of both sides of your card, they can always ensure that a transaction is validated even without your knowledge.

What “Verified by Visa” and “MasterCard SecureCode” do is that these services add an intermediate authentication step before the payment is authorized. Quite simply, you’re asked for a password. That password is something that only you would know and it certainly will not appear on the card. So, even if your card is stolen, misplaced or misappropriated, online transactions above Rs. 5,000/- will NOT be validated without the correct password.

How to Register your Debit & Credit Card(s)

Registering your existing Visa/ MasterCard Debit and Credit cards for the 3D Secure service is simple. You can either register for the “Verified by Visa” or “Master Secure Code” service while you are shopping on the Internet or you can visit your bank’s website right now and register all your cards.

If you have an add-on card for your spouse or relative, the card holder will have to register separately to create his/her own personal PIN. The PIN should be all numerals because it will also be used for IVR transactions that happen over the phone and most phones don’t allow you to type alphabets or special characters.

If you have multiple debit or credit cards, you can assign the same Internet PIN to all these cards. For more information, visit your bank’s website – here are a few links of popular Indian banks & their information pages on these authentication services:

HDFC Bank, ICICI Bank, Citibank, HSBC Bank, Standard Chartered, State Bank of India, Axis Bank, ABN Amro, Deutsche Bank, Karur Vysya Bank

Set a Personal Greeting

Although certainly NOT foolproof, these systems certainly increase the security of online transactions. However, security experts in other countries, differ on certain aspects of this system, citing the fact that it becomes quite easy for phishing scams to garner the VbV password thereby allowing for fraudulent transactions. The risk is somewhat mitigated if one is careful about retaining one’s password, not clicking on links received in emails – type out the URL in your browser’s address bar instead, and of course using some basic common sense like using only a secure and verified HTTPS connection to perform any financial transactions online.

When you register your debit or credit card for Verified by Visa or MasterCard SecureCode, you will be asked to create a Personal Assurance Message – set this to something memorable (e.g., “my wife loves shopping at Macy’s”). Now when you pay online, this Personal Assurance Message will be displayed on the checkout page of the website to ensure that your bank is authenticating your transaction and not a phishing website.

By Shahrzaad M Parekh.

For MasterCard & Visa Card holders in India

Originally published at Digital Inspiration by Amit Agarwal.

Airtel Brings a Google Android Powered Mobile Phone to India

Amit — Wed, 24 Jun 2009 11:36:47 +0000

HTC Magic, a touchscreen mobile phone that runs on Google Android OS, is now available in India through Airtel. And it’s an unlocked phone so you can use the device on other GSM networks in India as well.

Google Android vs Google Phone

If you have never heard of Android before, it’s an Operating System for mobile phones that is developed by Google.

Unlike RIM (BlackBerry), Apple (iPhone), Nokia (Symbian) and other mobile phone companies that develop the mobile OS and the hardware, Google is only developing the OS part while the hardware of mobile device is manufactured by other companies like HTC, Lenovo and Samsung.

So when someone says "Google Phone", it essentially means the that phone runs on the Google Operating system which is known as Android. And since Android internally runs on Linux, some users have even managed to install the Google Android OS on their Nokia phones and Asus notebooks.

Video Tour of Google Android – HTC Touch

Google Phone in India

The HTC Magic is the first Google Android phone that will become available in India through Airtel at around 30k INR. It’s the same phone that’s marketed as Android G2 or myTouch 3G by T-Mobile in America and a unlocked version of this phone was given to all attendees of the Google I/O conference.

The HTC Magic is Wi-Fi enabled and features a 3.2 Megapixel camera (that can record still photos as well as video) but unlike the Nokia N97, it has no physical keyboard. Other models like the HTC Touch and HTC Dream (or G1) feature a keyboard but none of them are in India yet at least through official channels.

The phone features a unique bar coding application so if you are shopping somewhere, you can quickly scan the barcode of any product in the shelf to get more information about that product using your Google phone.

While Airtel is the exclusively selling HTC Magic Android phones in India, the good news is that these are unlocked phones so you can buy a phone from Airtel and use the SIM of other cellular networks like Vodafone, BSNL, Reliance, etc.

Picture Gallery – HTC Touch

Should you buy the HTC Touch

HTC is about to launch a new smartphone called the HTC Hero that is just as big as the HTC Magic but features a 5 megapixel camera and best of all, it will be the first Android smartphone to include a native Flash player. The HTC Magic can only play MP4 (MPEG-4) video format while the Hero has support for Windows Media files as well. I will probably wait.

Video Tour of Google Android – HTC Hero

References:

HTC Magic – Official Website of HTC Phone
Google Android – Learn more about Android Operating System
Airtel Press Release – Price & Availability of HTC Touch in India

Airtel Brings a Google Android Powered Mobile Phone to India

Originally published at Digital Inspiration by Amit Agarwal.

Invest in Mahindra Holidays & Resorts IPO at lower price band

Anurag — Tue, 23 Jun 2009 05:43:50 +0000

With the stock market revival, the primary market is also witness to the boom with the launch of much awaited IPO from a known stable after a long gap. Mahindra Holidays & Resorts have launched their IPO, open between June 23-26 to raise Rs 162-192 crore at a price band of Rs.275-325.

After the IPO, the stake of Mahindra & Mahindra in Mahindra Holidays & Resorts will fall from 93.6% to 83.1%. The company has total 27 resorts and is in process of building 4 more resorts.

The business model of company is based on vacation ownership which is a niche segment in India. It takes membership fees of Rs.2.5 lac of which 60% is non-refundable. Apart from it, there is on an average annual subscription charge of Rs.8000 each year. Currently, the company has around 1 lac members with an average growth of 33% over the years and is expected to increase with the increase in disposable income.

However the valuation of IPO is highly priced in as the PE multiple works out to be 23-27 times next year’s earnings and 29-34 times current year’s earnings. And when compared with competitors like EIH, Indian Hotels and Country Club, the valuation look expensive.

Moreover in recession, discretionary spending usually witnesses a fall which may result into lower occupancy and profits. The business model may also lack novelty as customers may be averse to stay in similar types of resorts for their holiday each year.

But the positives side is that the company is backed by a strong group which has a proven track record and also has a first mover advantage in concept of vacation ownership in India.

The benefits may be reaped in future once the economic cycle takes an upward turn leading to better margins. The business model also has scope for sustainable revenues and growth opportunity in future.

Although, the increase in subscriber base may also force the company to build further capacity as the current capacity would be inadequate to accommodate all of its members leading to consumer dissatisfaction.

So, investment is only advisable if one has a long term horizon and is betting on the impending tourism boom in India.

Invest in Mahindra Holidays & Resorts IPO at lower price band

Originally published at Digital Inspiration by Amit Agarwal.

Zoozoo has Competition – Reliance Communications steps in

Anurag — Thu, 18 Jun 2009 10:50:36 +0000

The hugely successful Vodafone’s Zoozoo campaign have attracted scores of eyeballs and even forced competitors to take a look at this medium rather than signing multi-million stars.

Reliance Communications is among the first to embrace it by launching a series of advertisements which will have five animated characters (named ‘humanised network bars’) representing network bars on a mobile phone.

These characters would advertise the features and VAS of the mobile service. In future the concept may be extended to further leverage the idea with other commercial services according to bs.com.

Now, one can even expect a counter-ad from the stable of Vodafone.

Zoozoo has Competition – Reliance Communications steps in

Originally published at Digital Inspiration by Amit Agarwal.

Amar Chitra Katha Comics Now on iPhone

Amit — Wed, 03 Jun 2009 11:40:19 +0000

The hugely popular Amar Chitra Katha comics are now available for reading in digital format on your iPhone or iPod Touch.

To get started, you just have to open the iTunes store and download any of the available Amar Chitra Katha titles (the full story) directly to your phone for $1.99.

The printed version of Amar Chitra Katha comics are available for around $1 in Indian bookstores so this ebook (or rather ecomic) format looks a bit expensive but the advantage is that these books can now be purchased anywhere in the world.

The comics can be read in both landscape and portrait mode and the iPhone reader app remembers the location of your last read page so you don’t have to start all over again.

Good move but I wish they had used a universal ebook format (like epub) as that would have allowed Amar Chitra Katha fans to enjoy these classic tales without the iPhone on devices like the Kindle or even the BlackBerry.

Other than the iPhone, you may also read entire Amar Chitra Katha comics on Vodafone mobile phones for a monthly subscription fee.

Related: BlackBerry as an eBook Reader

Amar Chitra Katha Comics Now on iPhone

Originally published at Digital Inspiration by Amit Agarwal.

Jet Airways expand low cost service with Jet Konnect

Anurag — Fri, 08 May 2009 08:23:22 +0000

Airways with a 25.3% market share has made a surprise move of launching an additional low cost carrier brand ‘Jet Airways Konnect’ to augment its existing LCC ‘JetLite’ bought from Sahara Airlines. The move has raised questions about the need for such a move and that too in down times.

As the fine print suggests that there the only difference between Konnect and JetLite shall be that in the former, one will have to buy meals on-board. The fare structure, routes and services would also be quite similar.

There has been no exact reason given for launch of Konnect but it may well turn out to be a smart move by Jet Airways.

Firstly, there is a legal dispute between Jet and Sahara over payment of dues and as such Jet would not like to transfer more assets to the disputed company. Due to economic slowdown, LCC stands at an advantage, and as such Jet may replace mini metro routes with LCC and again replace them with full service carriers at a later stage.

This may help Jet in arresting the dip in load factors and cater to price sensitive sectors, without any extra involvement of staff or legal hassles.

Jet may also use the new aircraft to deploy on metro routes also during non-peak hours and even on international routes. The move could also be seen as a precursor to imminent consolidation to LCC market in India.

However, with increasing competition and reducing margins, the going will not be that easy. And with too many brands, there may be a problem of brand integration and optimum capacity utlisation.

Jet Airways expand low cost service with Jet Konnect

Originally published at Digital Inspiration by Amit Agarwal.

Zoozoos in Vodafone TV Ads Aren’t Animated

Anurag — Sun, 03 May 2009 22:09:46 +0000

On first look, these “zoozoos” in Vodafone TV ads for IPL may resemble animated cartoon characters with an alien look or simply a stupid egg-head character with disproportional white bodies and black dots for eyes and mouth.

These Zoozoo characters, in case you haven’t seen them yet, have been created by O&M for Vodafone to convey different value added services offered by the mobile phone company including phone Backup, cricket alerts, etc.

Watch Zoozoo videos

This was something which was created purely out of textbook and is totally an Indian idea. The characters are such that they lead simple lives, speak insane and incomprehensible language and move in a certain way with human emotions.

But the interesting part is that Zoozoos are not animated characters but are actually slim women actors from local Mumbai theatres, dressed in white costumes that are stuffed with foam to portray the characters.

Prakash Varma, who directed the Vodafone ZooZoo commercials, told Afaqs that they only had women – and occasionally children – as their main cast to keep the hands and legs thin of the Zoozoo characters.

Such is the craze with Zoozoo that Vodafone ads are among the most watched videos on YouTube and there are over 50,000 Zoozoo fans on Facebook.

Vodafone has an IPL microsite for quizzes and contests where one can know the kind of Zoozoo he or she is as each Zoozoo character has a unique set of characteristics and traits allotted to it. Fans may also download wallpapers and screensavers from the Zoozoo microsite.

It seems that the new Vodafone campaign, which is immensely popular during IPL ad-breaks, would make way for the departure of good old pug ‘Chitika’.

Making of Zoozoo TV Ads

Here’s a behind the scenes video that shows how these creative Zoozoos were made with human characters and not animation as most of us have assumed.

Zoozoos in Vodafone TV Ads Aren’t Animated

Originally published at Digital Inspiration by Amit Agarwal.

Coming Soon: Low Cost iPhone 3G for India sans Wi-Fi

Amit — Wed, 01 Apr 2009 13:44:30 +0000

Unlike North America, iPhone in India has been a total failure because of the high price.

Now an analyst report has suggested that Apple could release a new low cost iPhone 3G model in countries like India and China that will run on the 3G network but won’t have support for Wi-Fi.

That could reduce the entry cost for buying an iPhone here but 3G networks aren’t available everywhere in India yet so one may still have to rely on the expensive data plans of Airtel or Vodafone for Internet connectivity so, if you are a heavy web user, it won’t really make a huge difference in the long run.

The same analyst has also predicted that Apple will release a new version of iPhone 3G with 32 GB storage capacity but only for the markets of North America and Europe.

In any case, if you are planning to buy an iPhone somewhere in the near future, it may be a good idea to wait until June because that’s the time when Apple generally announces new models.

Coming Soon: Low Cost iPhone 3G for India sans Wi-Fi

Originally published at Digital Inspiration by Amit Agarwal.

Subsidy burden prompts Reliance to sell pumps to Govt oil companies

Anurag — Mon, 16 Mar 2009 14:06:34 +0000

The much hyped rollout of the 1432 fuel pumps opened by Reliance Industries met with a premature ending owing to the rising crude prices and differentiated Government policies.

All of the pumps owned by Reliance and established with an investment of over Rs.5000 crore were closed in March, 2008 indefinitely.

However with drastic fall in crude prices, the company is thinking of reopening these pumps albeit in a joint venture partnership with state owned retailers like IOC, BPCL and HPCL.

The reason for partnering with a PSU may be two fold. Firstly in case of a jump in crude prices, the subsidy burden can be shared and secondly it cannot supply fuel from its Jamnagar refineries, as they have attained 100% EOU status.

Meanwhile, Reliance has opened some outlets in Gujarat and Maharashtra by buying fuel from MRPL and Essar.

The move will help the stakeholders in the fuel retail business, as they may be able to earn return on investment as well as utilize the resources invested. source

Subsidy burden prompts Reliance to sell pumps to Govt oil companies

Originally published at Digital Inspiration by Amit Agarwal.

Bharti Airtel to shift focus to non-voice services

Anurag — Mon, 16 Mar 2009 11:10:19 +0000

India’s largest and world’s 3rd largest wireless telecom operator, Bharti Airtel is restructuring its telecom business into nine vertical businesses each under a separate head.

This is in departure to its existing structure where the businesses are under 3 heads – Wireless Mobile Services, Telemedia Services (DTH, Broadband, IPTV, Fixed Line) and Enterprise services (undersea cable, NLD/ILD).

The prime motive for this move could be that with the reduction in ARPU and expectation of slowdown in growth of wireless services, the company needed to shift its focus to other business areas other than its core business of voice telephony.

The new business verticals could be mobile commerce, entertainment (DTH), media, internet, enterprise services and small & medium businesses.

The move may also serve the purpose of retaining talent pool within the company as it would create separate profit centers for different businesses, with each charting its own strategies for growth.

It may also be possible that once different businesses achieve targeted scales, they may be listed separately to achieve further scale. source

Bharti Airtel to shift focus to non-voice services

Originally published at Digital Inspiration by Amit Agarwal.

Who will end up with Satyam in its fold?

Anurag — Sat, 14 Mar 2009 07:36:13 +0000

With the bidding process of Satyam gaining momentum, till now it seems that there are just 3 players vying for the company, that are L&T Infotech, Tech Mahindra and Spice Corp.

Other IT Indian majors like HCL Tech, Wipro, Infosys and international players such as IBM, HP, Oracle and Cognizant seems to have stayed away from the bidding process maybe due to the lack of clarity on Satyam’s financial position and legal liabilities.

Satyam’s m-cap stands at over Rs.3000 crore and the board may sell around 51% stake, thus giving a precondition that the bidder must show Rs.1500 crore cash at disposal to buy the stake.

So the competition boils down among the 3 players with each having their own requirements and strategic aim to buy Satyam.

Spice Corp. is owned by BK Modi, who few months back sold his telecom firm Spice Communications to Idea Cellular for Rs2191 crore. But it is difficult to interpret the synergies which he will derive by buying Satyam and can only succeed at a lower bid price.

Tech Mahindra has surplus cash of Rs.4000 crore which can help the company in bidding at Rs.80 per share. It would also help the company in diversifying its business into other sectors since currently it gets 100% revenues from telecom only of which 60% is contributed just by British Telecom alone.

The third suitor is L&T Infotech, backed by the strength of its parent company and huge piles of investments and surplus. So it can be highly expected that it would be the most aggressive bidder for Satyam.

L&T already holds around 12% in Satyam and its intentions are well in public domain. It would also garner synergies by using the ERP and manufacturing vertical business of Satyam and integrate with existing business.

L&T Infotech could also then go for a reverse merger with Satyam and list the company without much efforts and costs, and also become a much larger infotech company then.

Who will end up with Satyam in its fold?

Originally published at Digital Inspiration by Amit Agarwal.

Bad time in retail – Kishore Biyani senses opportunity in restructuring

Anurag — Fri, 13 Mar 2009 16:40:45 +0000

Future Group, faced with topline and bottomline pressures is thinking otherwise. The recent easing of FDI norms has prompted the company to undertake a major retructring exrcies to unlock the hidden value in its various formats.

Uptil now Future Group has 2 listed companies – Pantaloon Retail (value, lifestyle and home retail) and Future Capital (financial services). And as per CNBC TV18, Biyani wants to demerge Pantaloon Retail into four separate companies and then sale stake in different companies to raise funds, mainly to foreign players.

The four formats could be:
1. Value retail – which house Big Bazaar and Food Bazaar and contribute to 60% of total sales
2. Lifestyle retail – which may house Pantaloons, Home Town, Central, Brand Factory, Planet Sports among other formats.
3. Financial Services – which is already a listed entity and 75% stake is held by the promoters
4. Support Services – Currently loss making and houses Media channels, Branding, Leisure Entertainment, e-retailing, logistics, shopping malls.

The move may work well for the company as it may separate objectives and directions to different formats, which each charting its separate strategy for growth under separate vertical heads.

It may also work that Biyani may hive of certain of its loss-making, non-coherent businesses which does not add value to group’s performance.

But in times, where fund raising is difficult and capital flow dried up, consumer spending at a low, it would take time for the company to build up on its plans. Also, when other retailers downsizing its operations, and companies such as Reliance Retail consolidating its retail operations, it is certainly a move to look forward for.

Bad time in retail – Kishore Biyani senses opportunity in restructuring

Originally published at Digital Inspiration by Amit Agarwal.

Citi mantra to global market revival: Capital Strength and Earnings Power

Anurag — Fri, 13 Mar 2009 14:24:32 +0000

The global markets are witnessing a brief revival during the week primarily attributed to the internal memo issued by Citi CEO Vikram Pandit to its employees.

Off late Citibank had become a penny stock with 40% of it owned by US Government, however it has but all seems to have tide the storm and brought back the bank into shape.

In its internal memo, Pandit has laid strength on two factors – capital strength and earnings power, which can also be understood as Debt/Equity ratio and operating profit respectively.

According to the memo, Citi is expected to become the strongest capitalized U.S. bank and sale of certain of its divisions would add to its strength.

In addition for the first time since October 2007, the bank has delivered operational profit and continues to grow is business and remain the number one investment banker, thus signifying its inherent strength.

No wonder the stock has gained over 80% from its historical low of 99cent per share. But is it a good contrarian play, is anybody’s guess.

Can we apply the same revival quote for other beaten down sectors in Indian context and bet on them; I feel it would be a tad early to make a call.

Citi mantra to global market revival: Capital Strength and Earnings Power

Originally published at Digital Inspiration by Amit Agarwal.

How to earn steady tax free income from equity investments?

Anurag — Mon, 09 Mar 2009 14:02:11 +0000

With stock market touching new lows every day and still no chances of calling a bottom, investors are hardpressed with choices for their investment decisions.

Even the safe fixed return investments are seeing reduced returns owing to cut in deposit rates. Other avenues such as Debt Mutual Funds, company FDs have safety issues while ULIPs levy heavy charges on the premium paid.

In such cases, there is a scenario wherein investors can choose those stocks which have been paying regular dividend over the years and have reasonably good growth prospects.

And with stock prices at lows, the dividend yield (dividend/market price) of the stock comes out to be rewarding and advantageous too as dividend amount is tax free in the hands of investor.

Investors can also hope for a change in cycle and sell these scrips whenever the market booms and earn substantial capital gains.

Some of the noticeable high dividend yielding stock includes – Indiabulls Sec, Varun Shipping, Coromadel Fertilisers, Bongaigaon Refinery, NIIT Ltd, Chennai Petroelum, Tata Elxsi among host of other stocks.

However, investors should keep an important note that high dividend does not imply that the company is doing well as it can be also interpreted that the company is short of ideas to further deploy the cash and generate further shareholder returns.

Also stocks should be purchased with a mindset to earn capital gains and profits should be booked at levels which the individual seems content with.

How to earn steady tax free income from equity investments?

Originally published at Digital Inspiration by Amit Agarwal.

Design a Currency Symbol for the Indian Rupee

pratham — Wed, 04 Mar 2009 09:02:58 +0000

Most countries in the world have distinct identification symbols for their currency – $ represents the US Dollar, £ is used for GBP, € for Euro, etc. but there’s still no official currency sign for the Indian Rupee.

Design the India Rupee Symbol – Public contest

While symbols like Rs and रू are commonly used to represent the Indian Rupee, these are no official currency signs and therefore the Government of India has now announced a public contest to pick up a sign that will represent the currency of India.

You may send the symbol on an A-4 size paper in black and white print and that the size of the final currency symbol design should not be smaller than 36 sq inches.

The symbol has to be either in the Indian National Language Script or a visual representation but should be applicable to the standard computer keyboard.

This PDF form from the Ministry of Finance has full details of the competition. The Government also wants to ensure that your Indian Rupee design represents the historical and cultural ethos of India.

Related: Online Currency Converters

Members from Reserve Bank of India and art institutes like National Institute of Design, Lalit Kala, Sir JJ Institute of Applied Art, and othre would comprise the jury that will select the winning currency design.

If you are a creative artist or designer, this is your ultimate chance to create history – if your currency design is chosen, you’ll be forever remembered in history books of the world (and Wikipedia) as the “official designer of Indian currency symbol”.

Design a Currency Symbol for the Indian Rupee

Originally published at Digital Inspiration by Amit Agarwal.

Bloggers in India Beware: You are Responsible for Comments Posted on your Blog

pratham — Tue, 24 Feb 2009 20:23:51 +0000

In what could turn out to be a landmark case, the Supreme Court of India has said bloggers may face libel and even prosecution for the entire contents of their blog, including user submitted comments.

It started when 19 year old Kerala resident Ajith D started an Orkut community against Shiv Sena that received several anonymous posts leveling certain allegations at the party. The Shiv Sena youth wing registered a criminal complaint, and Ajith was served a summons by a Maharashtra court to appear for the hearing.

Ajith got anticipatory bail from the Kerala High Court and moved the Supreme Court seeking quashing of the case. The Supreme Court rejected the plea stating that Ajith was responsible for all the comments posted on the community and must explain his conduct in the Maharashtra court.

So if you’ve been hoping that the disclaimer – “All comments are views of users” – would save you from a legal tangle, you might want to follow this case very closely.

Bloggers in India Beware: You are Responsible for Comments Posted on your Blog

Originally published at Digital Inspiration by Amit Agarwal.

Nationalisation fears make Citigroup less valuable than SBI

Anurag — Mon, 23 Feb 2009 09:46:28 +0000

Over four quarters of continuous losses and erosion in 90% of its market cap, Citigroup shares have touched a new low of $1.95 making it less valuable than even State Bank of India.

The m-cap of SBI as on 20-Feb-09 was Rs.66,285 crore, 25% more than that of Citigroup which was Rs.52,931 crore.

Citigroup had earlier received a Government funding of $45 billion, however accumulated losses has forced hopes of the US government nationalising the bank and taking upto a 40% stake in the bank.

In last 12 months, Citigroup’s revenue was over 11 times the revenue earned by SBI, but the total losses for Citigroup was Rs.83,474 crore while SBI had profits of Rs,8,262 crore.

In UK too, the Government there is contemplating a 70% stake in RBS. [via]

Nationalisation fears make Citigroup less valuable than SBI

Originally published at Digital Inspiration by Amit Agarwal.