A Sunrise Sector Again

A changing demography has become the paradigm of India’s growth story. With a young, affluent and ambitious population, lifestyles too have changed resulting in the proliferation of lifestyle diseases and stress. The good part if any about this is a trend which is helping a complete business segment – diagnostic services. closely watching the developments in this sector, investors are getting more and more convinced about its success going forward. Early signs of this are visible in Aditya Birla Private Equity’s interest Thyrocare Technologies. The company is close to acquiring an 8% stake in Thyrocare, owned by medical entrepreneur A Velumani. The Birla PE firm will mop up the shares through a secondary deal with peer CX Partners, which is cutting its stake in the Mumbai based Thyrocare valued at about Rs 1600 crore. This pegs the deal size at Rs 125-130 crore. CX Partners had earlier sold a two per cent stake to an affiliate of ICICI Bank at a valuation of more than Rs 1300 crore last year. Even after it sells a part of its stake to the CX will still retain a 20 per cent interest in the company.

Cost Cutting Seems To Be The New Mantra

A sluggish market and poor financial performance, is taking its toll on executive pay slips. Ashok Leyland, the flagship of the Hinduja Group has proposed to cut the remuneration of its Managing Director by as much as 21 per cent. The company is seeking shareholders’ approval for the same. It is not that the axe always falls only on the top guy. The economic condition (not just here but throughout the world) seems to be getting really bad. Signs of it are quite glaring.

IBM is reportedly looking at axing hundreds in India as a cost-cutting measure. The company has even larger plans to lay-off thousands of people globally. IBM has already asked about 40 people at its Systems Technology Group in Bengaluru to leave. According to the union, job cuts in the Systems and Technology Group are happening because of a drop in profits and IBM’s drive for USD 20 earnings per share. IBM reported a 5 per cent drop in revenues in the December quarter against the same period last year.

Getting Ambitious

After losing out to rivals in the Indian passenger vehicles market, Tata Motors is plotting a comeback with a sense of urgency and will bring a couple of new models every year. With the new hatchback Bolt and compact sedan Zest, the firm is looking for the much-needed kick-start for revival under its 2020 product plan. Hope these plans don’t go the Nano way.

BANK FOR THE BUCK 

Warring For Customers At Any Cost

A price war is on. In a fresh twist to the rate war in home loans, the country’s largest lender State Bank of India is pitching its low customers where it is marketing a balance transfer scheme in addition to selling fresh loans. SBI offers loans up to interest rates to lure buyers who have already availed mortgages from rivals. The bank has sent out emails to prospective Rs 75 lakh at an interest rate of 10.15 per cent or 15 basis points above its base rate of 10 per cent. The other highlights of its home loan include an absence of charges on foreclosures or pre-payments and a balance transfer fee of Rs 1000. In addition, the bank also promises a maximum tenure of 30 years. Housing loan major HDFC is currently offering an interest rate of 10.25 per cent for loans up to Rs 75 lakh. Other lenders too are in the same range. While the war of rates has just begun not all seems to be okay with the PSBs…

Raising Funds Or Seeking A Bailout?

Indian Overseas Bank plans to raise Rs 400 crore by selling shares on a preferential basis to Life Insurance Corporation. The lender will hold an extra ordinary general meeting on February 26 to seek approval for the allotment. It proposes to issue 8.15 crore shares at Rs 48.80 each to LIC or its insurance schemes. Thought the management says it is raising funds, this looks more like the state owned LIC helping the bank by infusing funds into it. Is the government at play?

TOP LEVEL SHUFFLES, EXITS & APPOINTMENTS

Multi Commodity Exchange of India (MCX) has appointed Ajay Puri as its Company Secretary and Chief Compliance Officer, in place of P Ramanathan with immediate effect. Part of the beleaguered FTIL group, MCX has been going through some real tough times of late. A change at the helm is probably its last bet in a dying situation.

Changes at the top level whether forced or voluntary, happen for the same reason – chasing growth. Gurmit Singh, an MBA from Faculty of Management Studies at the University of Delhi and an engineer by basic education, has been appointed as Yahoo! India’s Managing Director. Singh will report to Yvonne Chang, Vice-President and head of India and SouthEast Asia. Singh was the chief executive of Forbes India at Network18 before he decided to take up Yahoo!

In another significant development, Sundeep Bhandari, the man credited with laying the foundation and then building what is now Cairn India, has quit the company. Bhandari, who brought together Command Petroleum of Australia, Videocon Petroleum and Marubeni in 1994 to operate the Ravva oil and gas field off the Andhra Pradesh coast, reportedly sent in his resignation to the Vedanta Group chairman Anil Agarwal. Bhandari had played a crucial role in the takeover of Command Petroleum by Cairn Energy in 1997.