Trakin' the india business buzz

Foreign Universities to Set up Campuses in India – Will it change the landscape of Higher Educational System?

Viral Dholakia — Wed, 17 Mar 2010 12:34:14 +0000

Most analysts had ruled out further push to the Reform process for the Education industry at least during the FY 2010-11 with nothing to hear in the Finance minister’s Union Budget 2010 speech except an incremental allocation of additional 15% for the sector from the previous year’s Rs. 26, 800 crore to Rs.31, 036 crore for FY 2010-11.

But, that’s not exactly the case to be. Like in the case Budget 2009, the Finance minister has chosen to remain mute in the Budget 2010 announcements as well, but gradually moved forward with the reforms process slowly but steadily during the year.

Did you aspire to fetch those premium degrees from renowned foreign universities like Harvard, Stanford or Yale? Worry not. You don’t have to fly abroad; the biggies are coming at your door step, precisely speaking – at your own home-land in India.

The UPA Cabinet has cleared the Foreign Education (Regulation of Entry and Operation) Bill which would further require Parliamentary nod to be turned into a law which would facilitate the globally renowned foreign institutes to set up campuses in India to cater to the higher education system.

HRD Minister Kapil Sibal has described this higher education reform as,

"A milestone which will enhance choices, increase competition and benchmark quality. A larger revolution than even in the telecom sector awaits us."

Until now, the options for the students of India’s top B-school destinations remained limited to IIT and IIMs. However, if the bill relating to the entry of foreign universities into India is ratified by the Parliament, the options for these students could receive an immense boost what with some of the best foreign universities in the fray to set up campuses in India to tap the bright prospects in catering to the higher educational system with in the country.

The need for the students, who are aspiring to seek degrees under the name of premium foreign institutes, to travel abroad can now be satisfied at home-land itself with lower costs as compared to flying to the foreign destination.

According to the proposal in the bill, the foreign institutes would be treated as private universities which would enjoy quota-free status with respect to admission processes in India. This would mean the foreign universities would not be obliged to reserve admission seats for lower-category class of people.

But, in return, these universities would have to follow national laws governing the education industry including registration under the University Grants Commission (UGC).

The introduction of foreign universities with in the country would go a long way in improving the over-all standard of higher education. The top Indian institutes will have to inculcate strict adherence to rules and ways of improving prevalent standards in order to conform to the internationally competitive standards of operations.

The intense competition from foreign universities based on their high standards would lead to better transparency, educational content, better admission procedures, improved infrastructure, and most of all controlling of corruption in an unorganized education sector of India.

With the likely introduction of foreign institution campuses into India, the market for better and improved higher education will receive a boost and at the same time will also pronounce into added number of options for top B-school candidates of India. It will also ensure competitiveness amongst the top-notch institutions leading to betterment of over-all standards.

Do you feel that foreign campuses can lead to improvement in India’s higher educational system?

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Author: Viral Dholakia

Viral Dholakia is a Mumbai based Businessman and has been a keen follower of Indian financial Markets for more than 5 years. You can get in touch with him at bull4bears-at-yahoo.co.in or follow him on twitter at @viralsss

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Does Aircel PEEK Email-only device make sense?

Arun Prabhudesai — Wed, 17 Mar 2010 04:14:04 +0000

By now, I am sure you may learned about the new Email-Only mobile device – PEEK. It sure has some amount of novelty factor, but does it really make sense – I think NOT !

Lets quickly look at the PEEK advantages – To be honest, I don’t see any if I compare it to any other GPRS phone with mail facility (which incidentally means 90% of them). Yes, it simplifies your email, being email only device, email functions will surely be easier than most other phones – but that’s about it.

Apart from that it has regular stuff like push email, Long Battery life etc, but most other phones do that as well. Yes, it is Cheap at 3000 rupees, but some of the new mobile hardware entrants offer you a full featured QWERTY phone for probably a thousand bucks higher.

Now, lets look at disadvantages – Can you make a call from this email only device ? NO. Do you have to pay separately for this Email Service? – YES. Is the Email Service Cheap? NO

PEEK Aircel Email Service pricing

Prepaid plans

On prepaid offers, get unlimited email service for Rs. 897 for 90 days. After the initial 90 days, subscriber can recharge with Rs. 89 for 7 days validity or with Rs. 299 for 30 days validity.

Postpaid plans

On postpaid, pay Rs. 897 for three months of unlimited email service, after three months rental of Rs. 299 per month will be charged.

Now just for the email service, I don’t think PEEK is cheap in anyway. Now-a-days mobile services are seeing a revolution of sorts, and I think PEEK is something that is come in very late.

I may be a little harsh in reviewing PEEK, but seriously, tell me – Who in the world will buy this device except for very very few people, who want to use email only on the go (and do want any calls). This is targeted at urban Internet-savvy people, who according to me will go in for a 5k QWERTY Mobile phone who have mails on their priority list

What say people?

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Author: Arun Prabhudesai

Arun Prabhudesai is founder / chief editor at trak.in. He jumped the Entrepreneurship bandwagon in early 2008 after a long 13 year stint in I.T Industry. You can follow him on twitter @trakin or get in touch with him at admin-at-trak-dot-in or 91.9822575676.

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Tata DOCOMO does it again: Now offers Mobile Daily Plans!

Arun Prabhudesai — Wed, 17 Mar 2010 03:17:04 +0000

Tata DOCOMO keep surprising us with their offerings – They have been innovative from the word go. Even though they launched their services much later than most of the peers, they have probably done more in changing the landscape on how we use our mobile services.

From one second billing to unlimited GPRS plans to pay per call to Buddynet, they have been set the trend with their innovative mobile offerings.

Now, they have taken it further with by offering Daily Plans. A Tata DOCOMO prepaid Mobile subscriber can actually change his plan on daily basis to suit his daily needs. The operator is offering the plan is various categories namely, Talkathon, Night Birds, GPRS, World Calling and Entertainment.

The Talkathon plan for example offers 30 local minutes on Tata DOCOMO Network costing Rs 5, 30 local minutes for to her networks for Rs. 12, 30 local or national minutes costing Rs. 14 and 10 local minutes at Rs. 5.

So, if a user knows that he / she is not going to use more than 30 mins a day or wants to restrict his daily billing to not more than 5 rupees can opt for this plan without worrying about how much he will be charged.

To activate these plans, users has to just dial *141# from his Tata DOCOMO mobile phone and can choose plan of his choice.

Here are some of the other interesting plan details:

Talkathon Plans

30 local minutes @ Rs.5 on Tata DOCOMO Network
30 local minutes @Rs.12 across Networks
30 local/National minutes @Rs.14
10 local minutes @Rs.5

Night Birds Plan

60 Free Local Night minutes on Tata DOCOMO Network

GPRS Plan

10MB Free Browsing @Rs.5 only

World Calling Plans

10 minutes to USA/Canada @ Rs.20
5 minutes to USA/Canada @ Rs.10
3 minutes to Gulf @ Rs.20

Entertainment Plans

15 minutes FREE music @Rs.5
Cricket alerts @ Rs.5/day

Terms and Conditions

Daily implies active till 12 midnight on the same day of pack activation. Ex: A subscriber activated the pack on 25th Feb’10 then the pack with daily validity will expire at midnight of 25th Feburary’10#.
In case on night packs the expiry of the pack will be 12 midnight of the next day of activation of the pack. Ex: A subscriber activated the night pack on 25th Feb’10 then the pack with daily validity will expire at midnight of 26th Feburary’10#.
The pack will get activated within 15 minutes of request receipt on the system. You will get an automated confirmation SMS once the same is configured on our systems
You can activate multiple packs in a day

According to me, the GPRS plan will be quite attractive for mobile Internet Enthusiasts – offering 10mb for Rs. 5 is really attractive.

Again, I think Daily Plans have lot of potential to be popular amongst the pre-paid customer and most of these plans are targeted at rural mobile users who are very price sensitive.

Whats your take, will they catch on ?

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Author: Arun Prabhudesai

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Accreditation for Hospitals – A step in right direction !

Viral Dholakia — Tue, 16 Mar 2010 12:04:48 +0000

The health care industry in India is emerging as one of the fastest growing sector of the country. The industry has witnessed a fast growth in areas of medical insurance and tourism. To an extent, the market for high-end health care services with the comfort of luxurious hospitalization is also witnessing a growth, if the occupancy rate of the sophisticated five-star hospitals of metro cities is anything to go by.

With the fast emergence of the upper-middle class group in the country, the need for providing quality health care services with sophisticated medical equipments has increased manifold. This calls for the need of Accreditation of hospitals to be made mandatory in the result-sensitive space of health care and medicine.

Instances of number of hospitals registering with National Accreditation Board for Hospitals and Healthcare Providers (NABH) for the process of accreditation are on the rise since at least last 2-3 years. Accreditation of hospitals involves testing the ability of the hospitals in providing certain basic and standardized health care services to the patients resulting into quality care and clinical excellence.

Currently, NABH accreditation is compulsory only for hospitals which are empanelled under Central Government Health Scheme (CGHS).

The process of accreditation could also involve, apart from checking patient treatment procedures, services like hygiene factors with in and around the premises, prevention of infections, enrollment processes for the patients, maintenance of pathological units and other departments, systematization of the procedures in critical care units like ICU and Operation theatres and efficiency of medical staff among various others factors.

Broadly speaking, accreditation would help patients in instilling their confidence and satisfaction among hospitals about being provided timely, appropriate and sophisticated health care services apart from being provided an evidence-based approach to healthcare based on data-driven decision making.

The process of accreditation will also boost the chances of India in improving and enabling its medical tourism industry with more foreigners looking to seek standardized yet cost-effective treatment from accredited health care centers.

In fact, hospitals with higher ambitions can also opt for accreditation from international agencies to attract tourists from abroad, who are more trust-worthy of international rating standards and procedures than local ones.

Like in the U.S, suing of hospitals / Doctors for Medical negligence is not common-place in India, so accreditations may bring about some amount of seriousness in maintaining proper Medical standards (something that we really lack).

This is definitely a step in right direction – What do you say?

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Author: Viral Dholakia

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Internet Access at workplace: Should be or Should Not ?

Arun Prabhudesai — Mon, 15 Mar 2010 12:22:56 +0000

Internet access at workplaces is restricted in most of the big & medium sized companies. They restrict blogs, social-networking, shopping sites, popular email sites (Gmail, Hotmail, Yahoo), forums, dating sites from being accessed while at work. Most companies do this as they think Internet access will affect productivity.

The question is – Does banning / restricting Internet really make Employees more productive ?

My personal opinion is – Absolutely Not !

Let us look at it from the company perspective:

First off, Employers have no legal obligation to provide you with Internet access, although we are now seeing that many countries like Finland & Estonia declaring broadband Internet as a fundamental right.

Opening up full access of Internet to employees is risky – classified data could be compromised through free email sites like Gmail, Yahoo where it is very easy to share data with anyone. Secondly, company network could get infected with virus if harmful file is downloaded / installed. Thirdly and most importantly loss of time and productivity due to time spent on internet to carry out non-work related activities. Offcourse, there are other risks as well but the 3 above are the most important reasons why Internet access is generally restricted.

Yes, I agree with the points mentioned above, but even with all these risks, I firmly believe that full Internet access will generally help company more than the harm it will cause. What I think company should do is – monitor the Internet access stringently and also gauge the productivity of its employees.

I think, in majority of cases internet is a big help to employees and in turn to its employers. Even if employee accesses Social Networking, online shopping sites etc, for little while through-out the day, I think their productivity increases and not decreases. Short breaks in work are known to rejuvenate and increase productivity.

According to a study Surfing the net at work for pleasure actually increases concentration levels and helps make a more productive workforce.

Having said this, there will be miniscule number of people who will abuse it and proper Internet monitoring could put an end to this as well.

P.S: This post is purely my point of view – I wanted to write about this for a long time, but did not get around doing it. I have not gone into detail as this post basically a question to readers to understand what do you feel? Am I the only one who thinks that workplace should provide full Internet access?

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Author: Arun Prabhudesai

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Bitter Pill: Is Sugar Industry headed for a Down cycle?

Viral Dholakia — Mon, 15 Mar 2010 07:18:57 +0000

Just as the world was witnessing a gradual recovery, over the last year, from the worst crises after the Great Depression, the asset class which clearly stood out and could be easily termed as a star performer for the FY 2009-10 is Sugar as a commodity.

Sugar – As the best performer? Na…A jackpot by no means for its Consumers but for its investors in this commodity-class or probably even stocks of companies involved in manufacturing of the white sugar. The price of sugar has moved up – from Rs.20 per kg a couple of years back to Rs. 50 per kg just two weeks back – on the back of demand supply mismatch in this commodity over last year.

The Bitter Tale of Sweet Sugar

However, after witnessing a huge upsurge, the sugar prices have turned bitter for a major part of last couple of weeks on the back of sharp downswing in the international prices. The sugar prices in the international markets had witnessed a peak of $740 per tonne this year.

Over the past week, the sugar prices have seen a correction of about $30. While the over-all slump from the peak price-point stands at around sharp 20% off from its peaks at sub-$550 per tonne, triggering a panic amongst traders and speculators holding long positions in the commodity or sugar stocks.

Has the Down Cycle Begun?

India remains the world’s largest consumer of the sugar and hence largely affected by the fluctuating tales of this white sweetener. At the same time, India’s policy initiatives and consumption pattern of the sugar also has a volatile bearing on the international prices of sugar as a commodity.

Charts Courtesy: Business Standard

As per an article in the Economic Times,
“Local sugar supply estimates for 2010-11 surged to an estimated 26 mt —two million tonne higher than the annual domestic consumption, indicating that India’s import dependency in the coming year would be virtually nil.”

This indicates a scenario of marginal supply-side surplus over the domestic demand scenario for the up coming year. In other words, it could be a pointer towards self-sufficiency in demand-supply equation for the world’s largest sugar consuming nation.

Thus, improving demand-supply equation in the domestic sugar market, which would result into lower dependency on imports, is one of the prime reasons for softening of the international prices of the sugar as a commodity.

As in any asset class which allows build-up of speculation, the volatility usually lasts for a longer period and occasionally even over-stretched in reply to relative fundamental shift in the asset class. Thus, even speculators have played their own role to play in dragging down the commodity prices sharply due to initial fears of a possible negative turnaround in the prospects for the sector going forward.

India is the biggest producer of sugar behind Brazil. Additionally, India is also the biggest consumer of sugar in the world. This could internally lead to local realignment of sugar production based on the consumption pattern of the domestic economy.

In a way, this directly affects the production output of sugar from India which forms a substantial chunk of global output as well. In fact, the woes for sugar prices is further fuelled by expectations of better crop output from the world’s leading producer Brazil.

Policy Initiatives for Sugar Industry

Until now the government had extended the duty free regime on the import of raw sugar up to March 2010 in order to combat the rising prices of sugar domestically. The government had given permission to private traders to import refined sugar at zero-duty with quantitative restrictions. This measure was initiated in order to augment domestic supply of sugar and consequently keep sugar prices under the check.

As per the official of Indian Sugar Mills Association (ISMA) as quoted by Economic Times,
“We have urged the government to re-impose import duty on white sugar at the earliest as our survival is at stake. Sugar is being offered at the Kandla port at Rs.30, 000 per tonne and there are no takers. World prices are also nose-diving, signaling the end of a profitable cycle.”

By above, the ISMA provides to convey the government that with sudden fall in prices of international sugar prices and the prevalence of zero-duty structure, the domestic sugar prices needs to be shielded by the sharp fluctuation in global sugar prices by way of import duty on sugar thus ensuring that domestic output remains competitively priced against cheaper imports.

Domestic production price for sugar are slated to be around little over Rs.35 per kg leaving little margin of profit for home producers on their refined products. Currently, the domestic prices are prevailing around Rs. 42-44 after sharp price correction witnessed in last couple of weeks.

To sum it up, the prospects of softening consumption demand and improving production estimates from India, better production estimates from leading producer Brazil and softening of international prices globally has led the analysts to debate in open as to whether the down cycle has actually begun in the global sugar industry.

The stock price of leading Sugar companies like Bajaj Hindustan & Shree Renuka Sugars have slumped to over 35% from their peak prices on the back of speculative built-up in these counters fuelled by higher commodity prices over the past year.

My Views on Sugar Industry

The Sugar industry may not be actually headed for yet another down cycle so soon. The industry has just come out of the slow down since last couple of years and may not settle for yet another down cycle so soon. The consumption has increased over a period of time and with increased prices even the production has received quite some fillip on the back of smarter prospects of returns on the farmer’s produce of cane over last two years.

However, the over-heated prices of sugar may seek some sort of consolidation and small sharp corrections as we rightly witnessed more recently. In fact, the correction seems healthy in nature for both consumers and producers as it seeks to check the over built-up of speculative positions in the prices of sugar.

My view is that the sugar industry may be headed for a down turn at a later date, but not now. Roughly, over a span of next 1-2 years, once the prices of sugar stabilizes at higher levels and the producers get handsome remuneration and enough encouragement to further augment the production of sugar, the softening of prices may be the call of the business cycle next up.

A bitter pill in form of softened sugar prices is better bet at least for a while? What say?

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Author: Viral Dholakia

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Media Monday: IPL counter strategy by Channels-will it work?

rabigupta — Sun, 14 Mar 2010 19:54:08 +0000

IPL may be a hit among masses but I’m sure that it’s a nightmare for marketing guys of all other channels (except Set Max). All major entertainment channels started preparing long back to counter IPL. And its time to analyze what they are doing and whether its helping them or not?

This is what various entertainment channels have done-

NDTV Imagine has launched “Jamunia” and “Kashi”, SAB TV started first silent comedy on TV “Gutur Gu”, Star Plus premiered “Sasural Genda Phool”, Sony came up with “God Bharai” and Zee TV with “Bahnein”. While these shows are launched with a bang, they don’t seem to be helping much. There are various reasons for same-

a) Many homes still have a single TV set. Since IPL primarily targets male audience, shows should be made keeping them in mind. This will tempt targeted audience to switch between Channels.
b) Starting a new series is not going to help as its easy for viewers to give it a miss. They have no incentive in watching such shows as they appear insignificant in front of a brand like “IPL”.

One of the better solutions would be to re-introduce an older but famous series and market it well. This would attract those viewers who are not die-hard cricket fans and are watching IPL simply because of lack of choice. For e.g. we can have a re-telecast of popular series like “Dekh bhai Dekh” or “Byomkesh Bakshi” etc. If Channels market such special re-telecasts well, they could gain a lot.

But it seems like “Colors” have got a good strategy in place. They are using IPL brand name to back up shows like ‘IPL Rockstar’, IPL edition of ‘Fearfactor’ and ‘IPL Awards night’. In ‘FearFactor’ various cricketers will compete with each other in daring tasks. Since these shows are more ‘Macho’, it looks like their strategy is bang on!

But how much are these Channels going to gain from such strategies is yet to be seen. Whether they will be able to attract audience or will see themselves getting washed away by IPL storm. What do you think?

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Author: rabigupta

Rabi Gupta is a start up enthusiast and Founder of iDubba.com (Intelligent Box). He is passionate about new and interesting ideas in media and entertainment field. Read more of his stuff at blog.idubba.com or follow him on twitter as @idubba.

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How To Sell It Like Steve Jobs ? Apple iPad Selling Like Hot Cakes

Ankit Agarwal — Sun, 14 Mar 2010 04:28:14 +0000

Call him crazy, arrogant and what not.But Steve Jobs does what he does best, “Sell a product like no one else can”. Well, the technology that goes in any Apple product is top notch too, but then so is the price.However, Steve Jobs manages to hypnotize the target audience with his presentation skills and make any Apple product a “Must Have”.

We all know how iPod has become a household commodity almost with virtually everyone using one or the another version of it and i don’t even want to get started on How iPhone has changed the dynamics of the Smartphone marketplace.

The newly launched iPad was a little deviation from the usual Apple products though.The product no doubt got the hype and publicity any other Apple product Steve Jobs introduces but this time around, questions were raised on the utility and the technological shortfall of the product.

Some called it a bloated version of the iPhone and nothing more.The absence of flash support was seen as one of the critical pain points that the iPad failed to address.No wonder then there have been umpteen surveys trying to gauge the interest of the consumers for iPad.Where some studies suggest that Customer don’t want to buy iPad , there are those which are suggestive of a huge demand for iPad

But why speculate when the hard numbers are out there for everyone to see.Indeed, the near true estimates of the number of buy orders for Apple iPad are out there in the market.

An estimated 120,000 Apple iPads have been sold on Day 1 Itself

Beat that if you can.For a product that most of the technology influencers didn’t have lot of kind words to say, the numbers are right in their face.These estimates have been released by the AAPL Sanity board based on the analysis of the pre-orders received for the iPad.

The study not only provides with the estimated number of orders but has also provided detailed insights into other parameters of the iPad.A few of them are,

Cheaper Wi-fi model with no 3G has been selling more than the Wi-Fi+3G model
All the product variants in terms of size i.e. 16, 32 and 64 GB versions are almost selling equally

To top it all, one of the key members who analyzed nails the initial success of the iPad by saying,

Apple has been able to generate over $75 million in revenue in one day on a product that 99.9% of purchasers haven’t touched or for that matter, even seen in person

Isn’t this sheer magical marketing genius if anything else.No doubt that these estimates and the research methodologies can be skewed and not very close to the truth, but even then a small % variation in the estimated number won’t take anything away from the iPad, will it.

As a caveat, the numbers for day 1 may not be suggestive that iPad demand will continue to soar.A week’s or probably a month’s sale might lend some more clarity to the real demand for iPad.But, no taking away from the fact that people are buying iPad

It’s the technology that sells the products,but in the case of Apple products i tend to believe that How Steve Jobs sells them makes a huge difference.What do you think?

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Author: Ankit Agarwal

Ankit Agarwal is an ERP Consultant by profession, a wannabe entrepreneur and stock market stalker by passion. You can follow him on twitter @ankit_a

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Expressing Digitally: Bharti Airtel forays into Digital Media and Entertainment Business

Viral Dholakia — Sat, 13 Mar 2010 13:34:36 +0000

The telecom market in India is slowly maturing and coming at terms to the reality of end of an era of weighing its business prospects led by higher average revenue per user (ARPUs) basis to gradually shifting at encoding the industry prospects, in this new decade, where the business may well be dictated by the new phenomenon of multiple SIM connections just as the urban markets reach their saturation point and the margin of profit per customer witnesses crunch based on severe price wars.

However, irrespective of the competition in the domestic markets, a section of the smarter investor community has still not given up on the long-term prospects of India’s numero uno telecom service provider Bharti Airtel Ltd.

Not only is the company a biggest player in one of the world’s fastest growing telecom market of India, Bharti Airtel also has a diversified presence in various other fields of operation including financial service like life insurance and general insurance in partnership with AXA of France, multiple-format retail stores, and integrated services like broadband, digital TV business (DTH service), IPTV and enterprise business solutions to corporate customers.

Further, the company has announced the launch of Digital Media business – its foray into Entertainment – to deliver content to a range of users, including producers and media firms.

By means of Digital Media Exchange service, a more secured distribution platform across multiple media platforms will be enabled ensuring integrated content delivery and aggregation platform directed towards all media formats for the content producers.

“There is a clear demand for secure digital distribution capability across multiple platforms. Airtel Digital Media Business will help establish India as an innovation hub for global content and format delivery,” said Sanjay Kapoor, chief executive of Airtel for India.

This move by the company of diversifying into the Digital Media business to tap growth prospects in yet another high growth business area comes at an opportune time when the Indian telecom markets are showing signs of stressed pricing regime for at least next couple of years to come on the back of entry of new players in the market.

The move will open up the market opportunity for the Indian media and entertainment industry that is estimated to grow from Rs.61,100 crore to Rs.92,900 crore at 11 per cent CAGR of over 2009-13, according to PWC Entertainment & Media Outlook 2005-09.

More recently, the company has been in the news on the back of its announcement of being in exclusive discussion with Zain’s Africa unit (until March 25) for its acquisition and foray into yet another fast growing telecom market of Asia.

For long-term investors of Bharti Airtel, an integral part of their investment strategy has been a clear faith in the strong and trustworthy management of the company. The management has left no stones unturned in order to ensure a first-mover advantage in thinking out-of-the box in order to out-class the competitors.

Thus, Bharti Airtel and its management can be called as working in the best interests of its long-term shareholders by means of diversifying into various different forms of business operations and also on look-out of geographical spread-out in form of inorganic growth route to tap fast growing markets.

Do you feel Bharti Airtel’s foray into Digital Media business will be a success?

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Author: Viral Dholakia

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Indian Internet dilemma!

rabigupta — Fri, 12 Mar 2010 20:26:25 +0000

I know each one of you is expecting an IPL post here, but I believe that you will be reading this post only if- 1. You are not watching IPL or 2. You are not watching IPL over youtube :).

It’s amazing how this internet industry has transformed and has changed many lives. No one could have ever imagined watching live cricket match (IPL is telecasted live with a 5 min delay on youtube) over internet and that too in ‘India’.

I can confidently say that Indian internet audience is quite matured now- they make friends over Facebook, converse over Twitter, watch/upload Videos, Book tickets, do Shopping and banking, review restaurants and what not?

But this post is not about matured internet audience. Audience is matured since they use matured products and 80% of such matured products (I need not to quote here) come from US or other western countries. The point I’m trying to raise here is-

Indian Internet audience is smart enough to discard off any web product which is not world class and hence Indian web companies (product based) find it extremely difficult to create a product which can live up to their expectations.

For past some days I was working on creating a new design for our product, and stumbled upon by many ideas. Many of those ideas came after looking at various other famous websites- some of them were from US, some from Israel and a few from Spain. During this process I understood that I had tremendous pressure for designing something which looks ‘classy’ and web 2.0ish, simply because consumers won’t buy anything which is less in functionality than “Facebook.com” or in looks than “Apple.com”.
When it comes to real web development, India as a market is still amateur. We lack designers who can design another Apple.com or developers who can write as effective codes as their counterparts in Silicon Valley. And I’m talking this from the point of view of a startup. We do have ‘some’ good web designers and developers but they charge huge and cater to a niche market.

So what’s the dilemma I’m talking about here?

Dilemma 1:

What I have seen lately is that so many companies and freelancers start working for Clients without having sufficient experience in the market. For e.g. Yesterday I saw a work profile which said “graduated in 2009, worked for a viral marketing company, left it and currently doing freelancing in SEO and viral marketing!” And that too when this guy’s own website has a rank of over 7 million. No offense here, but my point is- will you ever hire this guy to do SEO for your website?

Also if you want to outsource your work as a startup to some web development firm, you have loads and loads of choices. Really?Yes, you do have but don’t get too excited, as none of them will be able to do the kind of work you’re looking for! Some of them may be cheap and you will think that you can afford them, but at the end you will end up burning your pocket without getting any real value.

Dilemma 2:

Internet is not seen as a Career in India-

It’s hilarious to see college students (tier B and below) thinking of getting a Job at Oracle or Microsoft after doing part time courses in “Oracle DB” or “Visual Basic”.

And when these students pass out they are either placed at “Wipro” or “Infosys” or struggle and later join some “web development” firms. The problem lies here- Students from tier A college join likes of Oracle, tier B either join likes of “TCS” or any decent web firm and tier C or below struggles and then joins a web firm which may be running solely on the basis of a single client. It’s not that there is no good career in Web development, in fact, if you look at west many of the students from technical background choose ‘web’ as a career. Our problem lies in the course structure.

There is no subject related to ‘social media marketing’, ‘PHP’, ‘blogging’ or ‘SEO’ in our colleges, and the truth is 80% of engineers later work directly or indirectly on these platforms only.

It’s time that our education system goes for an overhaul and makes the course structure better oriented towards ‘latest’ technologies. And for those who call themselves an SEO or Social Media expert, I would suggest them to work for some startups first, take them to new heights and then work as a freelancer. What’s your take on this?

PS: All opinions are personal and I don’t intend to target any particular person or web development firm here :).

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Author: rabigupta

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Finance Friday: The Fate of Low Floating-stock Counters – Valuation Crunch in NMDC FPO

Viral Dholakia — Fri, 12 Mar 2010 08:23:39 +0000

The Follow-on public offer (FPO) of the largest iron ore producer in the country National Minerals Development Corporation (NMDC) is currently open for subscription with a price band of Rs. 300-350 wherein the government plans to divest 8.38% stake in the market. The last date for subscription is today.

Markets Way of Assigning Valuations

The stock price of NMDC has witnessed a drubbing on the bourses from its recent peak of Rs.571 on January 19 and 20 to Rs.380 for its closing on the first day (March 10) of the opening of NMDC FPO. The stock is down by a whooping 33% from its recent peaks, almost wiping-off a third of the market capital of this state-owned company.

After a recent subdued response to follow-up offerings from the state-owned companies NTPC and REC, the government has rightly chosen to do away with the ‘French Auction’ methodology of issuing shares to the subscribers.

However, the non-ability of stock price of NMDC to sustain at the higher levels of Rs.570 just before the announcement of FPO, is a clear cut signal from the market that the valuations of the NMDC are at a higher side. Another pointer to the high valuations for this stock could be its low floating stock.

Valuation Analogy of Low Floating Stocks

Low floating stocks are those stocks where a majority of the stake is owned by promoters and its group, thus limiting the scope of shares open to trading in public. Take, for instance, listed government owned companies like NMDC (98.38%), Hindustan Copper (99.59%) & MMTC (99.33%) where the Centre has a whooping over 98% stake in each of these companies, leaving little scope in the hands traders or investors to think about.

In such companies, the stock in float for retail investors and institutional investors is very low and limited. The stock price and valuations of such companies are based on a low floating stock in public, thus making investment and trading in such stocks susceptible to high volatility and lower average volumes on the bourses more often than not.

The excess valuations and speculative interest that such counter received till now based on its low float, could gradually lose the sheen with higher float in the domain of public / institutions with dilution of the promoter’s (Government in case of NMDC) stake post follow-on public offering.

As per latest available data on the NSE website regarding NMDC FPO subscription details, the QIB quota is over-subscribed by 1.55 times. Participation from other parties like retail investors (0.02 times), FIIs and HNIs were negligible with no contribution from Mutual fund industry as yet.

My question to our readers is,
if the stock had the demand and appetite from the investors while trading at astronomically high levels of Rs.570 few months back… but have no takers from the retail and HNI categories now, even at a lower band of price offering at Rs.300; where was the demand for the stock fuelled from at that time- Investment or Trading Speculation?

Valuations of NMDC

At the stock price of Rs.380, NMDC is valued at 43 times its earnings based on an annualized EPS of 8.7 for FY 2010. The valuations which are not cheap by any means but hardly fairly valued based on the strong financial performance by the company over the last few quarters.

As per one of the Economic Times news article, the price of NMDC is clearly way above its fundamentals when compared to the valuations commanded by its global peers:

“NMDC is overpriced by most valuation parameters when compared with larger global miners such as BHP Billiton and Rio Tinto and even local peers such as Sesa Goa controlled by Vedanta Resources.
“At Rs.300, it (NMDC) is trading roughly 13 times its FY11 earnings. So, there is very little upside left,” said Paresh Jain, analyst at Angel Broking. “In sharp contrast, global peers like BHP Billiton, Rio Tinto and Vale are trading at around 7-9 times their FY11 earnings, while pure iron players like Kumba and FMG (Fortescue) are trading at 8-9 times their FY11E. One could say all of them are trading at around 7-10 times.”
While NMDC may be more efficient when it comes to cost of production and the quality of ore it mines may be superior, but the price may still not be justifiable for global investors given its tiny size compared to BHP or Rio. NMDCs revenue is at about $2 billion, BHPs is at $51 billion and Rios is $41 billion.”

Demand Supply Scenario

The intent of this post over here is not to discourage readers planning to enter low floating stocks or encouraging them to exit such counters if they already hold them. Also, it is not necessary that all low floating stocks ought to be expensive. At times, there could be counters where the float is low but the volumes are healthy.

The valuations in stocks with low float may find it difficult to sustain at higher levels as the floating stock and volume increases for trading in the open market during the longer time span.

The simple logic that could apply over here is that with low floating stock the demand for the stock far out-strips the supply in such counters. However, post increased floating stock; the demand-supply scenario rationalizes on the back of higher participation by market participation leading to better price-discovery mechanism.

My Views on NMDC FPO and Valuations

Personally, I feel even NMDC may manage to scrape through with the issue backed by government-owned institutions like big-daddy LIC and other state-owned banks like SBI, BOB, etc. But, in spite of the government’s pricing of the issue at a steep discount to the market price before the opening of the FPO, the issue may not garner run-away subscription figures from retail investors.

Long term investors with moderate to high risk appetite can subscribe to the issue at the lower band of Rs.300. In fact, the retail portion of the investors would be privileged to a discount of 5% of the offer price determined pursuant to the closing of the book building process.

Take, for instance, if the issue price is fixed at Rs.300 the retail investors would be allotted the shares at a discounted price of Rs.285. Chances of allotment could stand to be strong in retail category, as response from retail investors is expected to be subdued. After all, it could be with buying some shares at Rs.285 from long-term perspective of this biggest iron ore company in India.

On the other hand, investors with short to medium term view or those who are risk-averse need to wait for listing of government divested stake in public. Later, over a period of time, if and when the valuations come down to more sober levels on the back of higher volumes and better price-discovery mechanism, low risk investors can grab shares from the open market.

Will the follow-up issues of other low floating counters like MMTC and Hindustan Copper receive same treatment valuation crunch from investors?

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Author: Viral Dholakia

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Twitter Statistics: 74% still have less than 10 followers – 21% really active !

Arun Prabhudesai — Thu, 11 Mar 2010 15:57:08 +0000

Twitter statistics have kind of become a rage – We already have feature more than couple of studies and research on this. Now Barracuda Labs has released the latest Twitter Report which shows that only 21% of all twitter can be termed as real active twitterers.

So how do they define an “Active Twitterer”

Has at least (≥) 10 followers
Follows at least (≥) 10 people
Has tweeted at least (≥) 10 times

I think that’s a fair assumption ! I think very clearly 80:20 rule applies here… 20% of all twitter population account for 80% of all the activity. This is also inline with all the previous studies that we have featured here.

Now on to some Interesting Highlights & statistics of the Barracuda Twitter Report

Distribution of Followers

17% of Twitter users have zero followers, as compared to 30% in June 2009.
61% have less than 5 followers, as compared to 70% in June 2009.
74% have less than 10 followers, as compared to 80% in June 2009.

Number of Following (Friends)

20% of Twitter users are not following anyone, as compared to 25% in June 2009.
51% follow less than 5 people, which is the same count as in June 2009.
60% follow less than 10 people, as compared to 66% in June 2009.

Followed or Follower?

48% of Twitter users are following more people than they have as followers, as compared to 50% in June 2009.
18% of users are following the same number of people that are following them, as compared to 30% in June 2009.
Combined, 66% of users are following at least (≥) as many people as follow them, as compared to 80% in June 2009.

Number of Tweets

34% of Twitter users have no tweets, as compared to 37.1% in June 2009.
73% of users have less than 10 tweets, as compared to 79% in June 2009.
27% of users have tweeted at least (≥) 10 times, which is a 29% increase since June.

Tweets vs. Followers

Here is an interesting statistic -the most active users on Twitter are not the ones with the most followers. Users with an average of 1,000 followers actually tweet the most, as compared to those with fewer than 100 followers or more than 100,000 followers.

Twitter Growth Era

This is an interesting graph – If you see maximum number of people joined between November 2008 to April 2009 – close to 50% of all users ! This was the time when most of the celebrities joined Twitter Bandwagon, Oprah & Ashton Kutcher to name a few !

What I really want to know from trak.in readers is – Where do you see twitter in next couple of years – Will it be as buzzing as it is today or do you see the twitter popularity waning…Let us know :)

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Author: Arun Prabhudesai

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Indian Stock Markets Going Global, How Good Is It ?

Ankit Agarwal — Thu, 11 Mar 2010 03:50:49 +0000

Ever since Mr.Bhave took the charge of SEBI, the Indian Capital Markets have had a metamorphosis of sorts be it via new regulations, ramped up security, new avenues to trade and various other initiatives.Most of these changes have had primarily two objectives,

To bring in more transparency in the markets and bring down the manipulators
To increase the volume in the Indian Stock Markets by providing new instruments to the investors for trading

On one hand SEBI has been keenly watching the violators( pulling down the Reliance MF ad ) and on the other, it has been introducing new invest instruments broadening the horizon of Capital Markets.Be it Trading through Mobile Phones or adding new shares in the NSE F&O roster, all the moves have been in line to provide investors with more and more options to trade in the market.Even the trading times were also increased to align the Indian Markets with some of the Asian markets.

On top of these volume boosting initiatives, the Indian capital markets have seen an increase interest in terms of trading in foreign exchanges.We recently had the Hangseng ETF launched for investors to invest in the supremely powerful Shanghai exchange.Well, talk about giving investors opportunities to get a taste of hedging their portfolio and get a taste of foreign exchanges too.

In another significant move, National Stock Exchange(NSE) has signed a cross-listing pact with CME Group, the world’s largest derivates exchange.This will allow Indian investors to trade in U.S. indicies and vice versa.According to the pact,

Indian rupee-denominated S&P 500 futures contracts will be listed for trading on the NSE and in return CME will list U.S. dollar-denominated contracts on India’s benchmark stock index futures contract, the S&P Nifty.

Another brilliant move to open up the exchange and increase NSE’s visibility globally.The move looks symbiotic to say the least, but is it really ? Now, i am not an expert on F&O trading, but as it is, Indian Stock Markets closely follow the global markets including Dow Jones et all.So, how much of a hedging leverage will the cross trading provide.May be the readers will be able to throw some light on the same.

One positive aspect from the cross-listing agreement is the fact that investor’s exposure to U.S. Indices will be in Indian Rupees.So, investors will not have worry about the currency risk.Also, evidently foreign institutional investors who can’t directly trade in India will get a chance to build positions in Nifty F&O.

What do you think of the cross-listing pact and its impact on the markets.Can it lead to increased valuations of Nifty Futures and also provide investors a good hedging option?

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Author: Ankit Agarwal

Ankit Agarwal is an ERP Consultant by profession, a wannabe entrepreneur and stock market stalker by passion. You can follow him on twitter @ankit_a

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Google App Marketplace: A Phenomenon in the making !

Arun Prabhudesai — Wed, 10 Mar 2010 13:41:53 +0000

WoW ! Just spent half an hour at Google marketplace, added 5 neat free application to my Google Apps account – Cant tell you how thrilled I am with the ease of use and the kind of functionality enhancements it brings to Google Mail, Docs, Calendar etc.

We have been reading & hearing about Google Marketplace for few weeks now, but I never expected it to be such a neat offering.

I can confidently say Google Marketplace is a phenomenon in making as is/was the Iphone Apps Market. I see many small companies making millions through this platform, at the same time many companies may soon close down (if they don’t decide to join hands). But before we talk about that, lets look closely at what Market place has to offer to a Google Apps user.

I use Google Apps for everything related to trak.in – Mail, Docs Calendar etc. – I have a free account which lets me add around 100 users. In last 3 years there has been very little downtime or any other issues for that matter. So, I am already a very satisfied customer Apps customer.

Now, with Google Marketplace coming into picture, I can extend the functionality of my Apps accounts in leaps and bound. I can currently add 100s of free (as well as paid application to my account).

The real scenario for Google Apps user

I added 5 free applications which will now extend my trak.in Google apps account to a full featured web based Project Management tool, a social Network, a collaboration & workflow application and even a Design Factory ! (BTW, I also added a 2 user Full Fledged ERP App :)

And all this for free !

Like I have mentioned before, adding these extensions to Google apps account is as easy a 1-2-3. Even a school boy could do it.

Repercussions on the Industry

In very simple terms, what Google has done is – Crowd sourced the work of building Apps functionality to hundreds and thousands of Internet companies & Individuals. Even at the time of launch, the marketplace seems to have hundreds of products & Services in different categories.

Now, with this model, it is just not possible for companies like Microsoft & Yahoo to compete with it. The only thing they can do is join the bandwagon, otherwise they will be at more than anyone else.

Initially, many looked at Marketplace as a serious challenge for Microsoft Exchange – but with the kind of functionality “Google Apps + Marketplace” is giving to its users, it just matter of time before most Enterprise users also start switching to it – There is just no competition….period !

Trust me, Google Marketplace is going to be a phenomenon… nothing short of it !

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Author: Arun Prabhudesai

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B-School Placement Salaries: Are we being told the real Truth?

Viral Dholakia — Wed, 10 Mar 2010 11:25:19 +0000

Finally, the placement season of ‘Top’ Indian MBA grads has begun (or, shall I say, ended the way it’s been projected that all have been placed already?). And with the placement seasons come eye-popping Salary figures as headlines in major newspapers. I never could understand the real reason for the major Institutes or major dailies to showcase these numbers.

Complications of Cross-Currency

Firstly, converting USD to INR in itself is a big distortion of facts. Converting foreign salaries to Indian Rupee brings in certain inherent anomalies. When we convert foreign salaries to Indian Rupees the amount may look huge but this is a salary earned at a different place having different set of expenses then home country.

Salaries are relative, geographically and culturally both, to the country where they are earned. This aspect connotes to having a totally different Purchasing Power Index (PPI), an aspect that takes backseat when cross-currencies gets converted with difference in their respective values.

For instance, as per calculations on salary differential deviations of cross country PPI, an employee with In-hand Salary of Rs.1 crore in New York is equivalent to Rs.45 lakhs in New Delhi in term of lifestyle and purchasing power parity.

Complications of Salary Structures

Secondly, no break-up of salary / perks / allowances are provided to adjudge as to what will be the real take home of the person. And, further, we rarely get to see the level of experience the student has brought in before his MBA and the position offered to candidates to which these salaries are offered.

To put it briefly: Don’t believe what you are "made" to see.

The actual in-hand income will no where be near the numbers portrayed in media. There are various factors that go in before a Cost -to-Company (the one shown in media) translates into actual take home. A salary of 9.6 lakh per annum almost always never translates to Rs.80, 000 in one’s bank account per month.

Anomalous Cost-To-Company Accounting

First and foremost the Salary projected by the Companies is Cost-To-Company (CTC), that is, the amount the company will likely be spending on the employee and this could include anything from training in Bahamas (which you don’t need) to a Laptop which the employee might have to return when leaving the company.

Secondly, there could be pay-outs which are one time, for example, joining bonus, relocation expenses, amount which will not be coming to the employee year on year. Now, these may vary vaguely from company to company, as a result the figure of Average Salaries of B-Schools doesn’t hold much significance as sometimes a person having lower CTC from a certain Company gets to take home more then a person with higher CTC of some other Company just because the way company structures its pay.

Let me give you an example, a person being offered a CTC of 6 Lakh might have taken home of Rs.40, 000 per month and the rest would be adjusted towards Bonus (which may or may not come depending upon various parameters) or the case of an offer of Rs.9.5 lakh per annum, where the take-home after taxes is only Rs.45, 000 per month as the company “pays” the rest in form of a house or trainings.

Similarly, stock options are freely doled out but these will not come in hand till they are actually vested, which could mean a wait of three-five years.

What actually seems to be the need of the hour is a holistic approach to viewing these 7 to 8 figured salaries. It’s high time that either the B-Schools or the media provide the complete picture or stop this annual jingoistic exercise of showcasing these exorbitant salaries as eye catching news

Trust me, for salaries "The beast lies in the details!!!”

Do you agree?

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Author: Viral Dholakia

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