ICICI Venture may sell its 67% in Medica Synergie to Quadria Capital for 160 crore

Sabarinath M, ET Bureau | Nov 28, 2013, 10.53AM IST

MUMBAI: ICICI Venture, India's largest home-grown private equity firm, is close to finalising a deal to sell its 67% stake in Kolkata-based unlisted healthcare firm Medica Synergie to Singapore-based Quadria Capital for Rs 160 crore.

The Mumbai-based private equity fund had invested about Rs 90 crore to acquire two-thirds in Medica in 2007-2008.

Private equity funds poured money into India's growing primary healthcare sector last year, fuelled by rising propensity among patients to visit modern hospital chains. Warburg Pincus, Goldman Sachs Group Inc, Sequoia Capital and the Government of Singapore Investment are among the funds to hold stakes in healthcare companies.

"The proposed deal underscores the fact that foreign investors are keen on investing in the growing healthcare sector. India has only a handful of hospital chains though our doctor to population ratio is even lower than a country like Pakistan. Since foreign investors are willing to wait for a decade, they get multiple returns," said Hitesh Mahida, pharma analyst at Fortune Equity Brokers.

An ICICI Venture spokesperson declined to comment. Quadria Capital did not respond to email questions. The deal will help Quadria Capital, promoted by Abrar Mir, Amit Varma and William Costello, to consolidate and grow hospital assets in a growing market like India. The fund has already invested in Andhra Pradesh-based super speciality chain Krishna Institute of Medical Sciences and Cancer Care Hospital HealthCare Global Enterprises.

"India's eastern and southern states offer tremendous potential for growth," said Mahida. Medica Synergie manages hospitals with a combined capacity of 1,000 beds through its own chain and franchisees besides a chain of pharmacy shops in Kolkata. 

 

 

vijay kr yadav

pgdm sem-1

sou- times of india

Samsung’s marketing splurge doesn’t always bring value for money

Thu, Nov 28 2013.

Samsung is expected to spend around $14 bn on marketing this year; Google spent less on buying Motorola’s handset business 

 

 

Samsung spends a bigger chunk of its annual revenue on advertising and promotion than any other of the world’s top-20 companies by sales. Photo: Bloomberg

Seoul: Samsung Electronics Co. is expected to spend around $14 billion—more than Iceland’s gross domestic product (GDP)—on advertising and marketing this year, but it doesn’t always get value for money.

The outlay buys the South Korean technology firm publicity in TV and cinema ads, on billboards, and at sports and arts events from the Sydney Opera House to New York’s Radio City Music Hall. Google Inc. spent less on buying Motorola’s handset business.

And Samsung, which has a market value of $227 billion, has made no secret of keeping up its aggressive marketing and promotion splurge as it seeks to make its brand as aspirational as Apple Inc.’s. But the money it’s spending doesn’t always bring the desired result.

Last month, a Samsung-sponsored short-film contest finale at the Sydney Opera House received poor reviews for blatant product placement in a series of “behind the scenes” videos. In Britain, viewers panned a product placement deal with ITV’s popular X-Factor talent show. “Is this a singing competition or an extended Samsung advert?” asked Twitter user Ryan Browne.

Earlier this year, Samsung’s New York launch of its latest top-of-the-range Galaxy smartphone came under fire for being sexist, portraying giggling women chatting about jewelery and nail polish while the men discussed the new phone, and the company’s new fridge and washing machine launch in South Africa drew similar complaints as it featured swimsuit dancers.

“Samsung’s marketing is too much focused on projecting an image they aspire to: being innovative and ahead of the pack,” said Oh Jung-suk, associate professor at the business school of Seoul National University. “They are failing to efficiently bridge the gap between the aspiration and how consumers actually respond to the campaign. It’s got to be more aligned.”

Samsung spends a bigger chunk of its annual revenue on advertising and promotion than any other of the world’s top-20 companies by sales—5.4%, according to Thomson Reuters data. Apple spends just 0.6%, and General Motors Co. 3.5%.

“When your brand doesn’t have a clear identity, as is the case with Samsung, to keep spending is probably the best strategy,” said Moon Ji-hun, head of brand consultant Interbrand’s Korean operation. “But maintaining marketing spend at that level in the longer term wouldn’t bring much more benefit. No one can beat Samsung in terms of (ad) presence, and I doubt whether keeping investing at this level is effective.”

In a statement to Reuters, Samsung said it will “continue to leverage our brand power to maintain growth momentum, while focusing on optimizing the efficiency of our marketing activities,” reiterating recent comments by its co-chief executive officer (CEO).

“Our product innovation and marketing strategy have made Samsung the world’s most preferred smartphone brand,” J.K. Shin, who also heads the group’s mobile business, told investors recently. “Now we’ll move from the most preferred brand to become one of the world’s leading aspirational brands.”

Innovating, not following

Samsung’s “Next big thing”, and “It’s time to change” marketing campaigns stress that its products are cutting-edge, and even trumpet its technology “world firsts” before they’re ready for prime time, such as curved smartphones, available only in South Korea, and curved TVs that cost nearly $10,000.

For a company long seen as a follower, this is now a big sell on it being an innovator.

But, while Samsung has become the world’s biggest advertiser, spending $4.3 billion on ads alone last year, its global brand value of $39.6 billion is less than half that of Apple, which spent only $1 billion on advertising, according to Interbrand and ad researcher Ad Age.

To be sure, Samsung has a more diverse range of mobile products, which along with its chips and household appliance businesses need more marketing across different target audiences. But the heavy marketing spend suggests a need to convince consumers that it belongs at the top. Apple can afford to spend less as it already has that brand recognition, and cachet.

“The stronger, more differentiated the product, the less it needs to be propped up by advertising,” said Horace Dediu, founder of independent research firm Asymco and a former Nokia business development manager, referring to Apple’s ad spend.

Defending its marketing budget, Samsung can point to its lead in the global smartphone market—it sells one in every three smartphones and has more than double Apple’s market share. The Korean group’s savvy adverts mocking Apple devotees, and heavy investment in distribution channels have strengthened its Galaxy mobile brand.

“The Galaxy brand has established itself, and the Samsung brand is now much stronger than Android or any of the other OEM brands, except Apple,” said Benedict Evans, an independent technology and media consultant in London. “The underlying problem is that Samsung has established itself as a dependable quality brand, not a differentiated or premium quality product, so it does best where it’s not competing directly with Apple.”

Samsung works with a number of advertising agencies, including Publicis Groupe, Interpublic Group, and MDC Partners.

In low gear

Samsung’s latest marketing splash has been on its Galaxy Gear smartwatch, which has been almost universally panned by reviewers. The device has been aggressively marketed through adverts and collaboration with fashion shows—yet only 800,000 Gears have been shipped since its launch two months ago. Compare that to the more than 5 million Note 3 smartphones that have been shipped since its late-September launch, and it suggests fewer than a fifth of the Note buyers are also buying the accessory device.

Undeterred, Samsung has vowed more Gear promotions for the crucial year-end holiday season as it seeks to lead the wearable computer market and prove its innovation credentials.

“Probably Samsung knows better than anyone that Gear will not become a mainstream product. Still, they are trying to convey the message that ‘we are first with such technology’, which they hope will help build their brand as an advanced technology firm,” said Interbrand’s Moon.

A deep-pocketed Samsung—it earned operating profit of $9.6 billion in the third quarter alone—is still pushing the envelope to win over consumers.

This month, the big-spending official sponsor of the past eight Winter and Summer Olympics launched a fantasy-inspired soccer marketing campaign ahead of the mid-2014 World Cup in Brazil—selecting 11 of the world’s top players, including Argentine striker Lionel Messi, for a virtual match to save Earth from aliens—with the help of Galaxy devices. REUTERS

 

ABHISHEK KUMAR 

 

PGDM 1ST YR

India tops US, China as investment destination

India tops US, China as investment destination

After a spate of bad news on the Indian economy, there is finally something to cheer about. Global consultancy firm Ernst & Young (EY) has said that India is the most attractive investment destination, ahead of China and the US, after the government recently relaxed the policy on foreign investment.

The government had in August announced relaxation of foreign direct investment (FDI) norms in several sectors that such as multi-brand retail and telecom.
“With sharp currency depreciation and opening up of FDI in various sectors, India has become an attractive destination for foreign investors,” EY said in its report, Capital Confidence Barometer. This report is based on a survey of 1,600 senior executives in more than 70 countries.

The report highlighted automotive, technology, life sciences and consumer products as sectors in which deals are likely to be high. Due to the present macro-economic pressures and heavy debt pile, several Indian companies are looking to divest non-core businesses, it added.
“This has created a large opportunity for foreign players vying for a greater role in the Indian market,” it said. The top three investing countries into India are the US, France and Japan. FDI from these three countries from April 2000 to August 2013 amounted to Rs. 53,673 crore, Rs. 17,718 crore and Rs. 71,870 crore respectively.

The survey said 38% of the respondents felt merger and amalgamations volume in India would improve over the next twelve months, while 30% believe it would remain stable. 
“After two years, European countries (Britain and Germany) have made a comeback on the potential investment destinations list for Indian companies,” the report said. Sentiments have improved, specifically on acquisitions and merger plans, it said, adding that these are at a two-year high with credit and cash available.
“The investor outlook for India remains positive, despite challenges in the recent past. At the same time, the improved condition of the world economy has helped increase confidence amongst deal makers, prompting them to take a bolder stance toward transactions,” said Amit Khandelwal, a national leader at EY.

 AKANKSHA SHANU
PGDM 1st SEM.

NSA monitored porn access to discredit ‘radicalisers’

 

This week the U.S. National Security Agency’s counterterrorism-related justification of massive Internet spy programmes came under fire after new documents supplied by whistleblower Edward Snowden suggested that the Agency was collecting records on the “online sexual activity and evidence of visits to pornographic websites” of individuals who allegedly sought to radicalise others into terror plots.

According to a top-secret NSA document published by the Huffington Post the covert monitoring of the activities of six individuals, all said to be Muslims, took place despite none of them being accused of terrorism and at least one of them being a U.S. citizen.

While the Director of the National Security Agency is listed as the “originator” of the document, it was evidently circulated to law enforcement outside of the NSA, with listed recipients including officials with the Departments of Justice and Commerce and the Drug Enforcement Administration.

The document released by Mr. Snowden, who is a former NSA contractor and has been granted temporary asylum in Russia, suggest that the six targets radicalised people “through the expression of controversial ideas via YouTube, Facebook and other social media websites,” and India was among the list of countries where the speeches and writings of these individuals “resonated” the most.

The other countries on the list included the United Kingdom, Germany, Sweden, Kenya, Pakistan, and Saudi Arabia, and the targets of the so-called radicalisers was said to include “individuals who do not yet hold extremist views but who are susceptible to the extremist message,” according to the document.

In theory the global-scale surveillance programmes of the NSA are governed by the Foreign Intelligence Surveillance Act (FISA) Court, although under the applicable laws the surveillance of U.S. citizens not directly suspected of terror activities is generally banned.

The sections of the NSA document, dated October 3 2012, published in the report frequently referred to the value of accusing such radicalisers of hypocrisy so as to undermine them and their message.

The document explicitly argues, “A previous SIGINT [signals intelligence, the interception of communications] assessment report on radicalisation indicated that radicalisers appear to be particularly vulnerable in the area of authority when their private and public behaviours are not consistent.” 

shane haider 

pgdm 2nd 

Tata group pulls out of bank licence fray

Tata group pulls out of

bank licence fray

Mumbai: The Tata group withdrew its application for a banking licence, months before the Reserve Bank of India (RBI) is expected to open up the sector to a new set of new private banks in Asia’s third largest economy.

Tata Sons Ltd, the holding company of the Tata group, said in a statement that its “current financial services operating model best supports the current needs of the Tata group’s domestic and overseas strategy, and provides adequate operating flexibility to its companies, while securing the interests of the group’s diverse stakeholder base”.

RBI said in a press release that has accepted the withdrawal.

That leaves 25 applicants, including the Aditya Birla Group, the Bajaj Group and Anil Ambani’s Reliance Group, in the race for a banking licence.

Tata Sons added in its statement that said it had written to RBI on Tuesday withdrawing the application after a detailed evaluation of the “guidelines for licensing of new banks in the private sector” and analysis of clarifications.

Tata Sons is not the first business house to have a change of heart. In June, Mahindra and Mahindra Financial Services Ltd decided not to apply for a banking licence, saying RBI’s norms were not conducive for large and successful non-banking financial companies (NBFCs) to turn into banks.

Chennai-based Shriram Capital Ltd has also decided to withdraw its
md.aquil alam
pgdm 1st sem
source. mint

ITC trading at discount to FMCG mid-caps: Is it right time to buy into the stock?

Read more at:
http://economictimes.indiatimes.com/articleshow/26492197.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

ITC trading at discount to FMCG mid-caps: Is it right time to buy into the stock?

Read more at:
http://economictimes.indiatimes.com/articleshow/26492197.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

ITC trading at discount to FMCG mid-caps: Is it right time to buy into the stock?

Read more at:
http://economictimes.indiatimes.com/articleshow/26492197.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

ITC trading at discount to FMCG mid-caps: Is it right time to buy into the stock?

Read more at:
http://economictimes.indiatimes.com/articleshow/26492197.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

ITC trading at discount to FMCG mid-caps: Is it right time to buy into the stock?

Read more at:
http://economictimes.indiatimes.com/articleshow/26492197.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Government moves to avoid JN Port rerun

 

Mumbai/Bangalore: Stung by a back-to-back, two-month-long labour dispute at two private container terminals in which it was unable to intervene, state-owned Jawaharlal Nehru port said the government is reworking the model concession agreement to include performance monitoring and penal clauses to prevent such situations in the future.

 

“The model concession agreements to be signed with private partners in future will have a special provision on performance monitoring and a penal provision for breaching the performance parameters prescribed in the contract,” N.N. Kumar, chairman in-charge of JN port, India’s busiest container gateway, said in Mumbai on Wednesday.

 

A concession agreement sets out the terms and conditions of a port contract.

 

Kumar said there were no such provisions in the concession agreements that JN port had signed with its two private container loading facilities—Nhava Sheva International Container Terminal Pvt. Ltd and Gateway Terminals Pvt. Ltd.

At the time when the concession agreements were signed, this kind of a thing was not envisaged.

 

“But, with the new concession agreements, the port would be having powers to penalize the private operators for not complying with certain performance parameters,” he said.

In any case, private cargo handlers would be ineligible for a performance-linked tariff hike if they don’t comply with performance standards specified in their contracts, according to the new tariff regime for new port contracts that was announced by the shipping ministry in July.

The Tariff Authority for Major Ports (TAMP), the port tariff regulator, will notify a reference rate which is indexed to the Wholesale Price Index (WPI), a measure of costs, to the extent of 60%.

Cargo handlers will be allowed to charge a maximum 15% more (termed a performance-linked tariff) than the indexed reference rate, during each year of a 30-year port contract if they comply with certain performance standards prescribed by the regulator in the previous year.

The government’s decision comes after some 40,000 cargo containers piled up at all the three terminals of JN port, near Mumbai, following a two month-long labour dispute over wages at two of its private terminals.

The last dispute at Gateway Terminals was called off last week. Run by a joint venture between Denmark’s APM Terminals Management BV and Container Corp. of India Ltd (Concor), Gateway had shut the gates through which export containers are brought to the terminal for nearly a month.This was the second disruption in less than two months. Last month, another private terminal at the port—Nhava Sheva International Container Terminal run by DP World Pvt. Ltd—faced work stoppages over a wage contract dispute, hurting operations for more than two weeks.

 

Though, JN port was unable to intervene in the internal matters of its private terminals, the port authority had issued a show-cause notice to Gateway seeking reasons for not running the concession agreement properly, said Kumar.

“GTI has responded to the show-cause notice and they have explained the reasons for the labour dispute. We are examining the explanations and will shortly decide future course of action,” he said.

 

Meanwhile, containers continue to be re-routed via Pipavav and Mundra ports in Gujarat at an additional cost.

“We are getting more containers because of the labour dispute at JN port. In any case, this was a good season for our port as there are a lot of cotton movement happening through the port,” said a senior executive at Gujarat Pipavav Port Ltd, the entity that runs Pipavav port.

 Ranjay kumar

PGDM,1st Year

Source:-Mint

Infosys after Narayana Murthy’s return: taking stock

 

Infosys Ltd is certainly making the right sounds and the right moves. The company said in a meeting with analysts at Barclays Securities (India) Pvt. Ltd that it is no longer hung up about maintaining premium billing rates, but is rather focused on cutting costs to improve margins. Besides it has increased focus on traditional outsourcing deals to return to industry growth rates. 

 

Needless to say, this will be music to the ears of investors. Even so, while the company may be making the right moves, the departure of some of the company’s senior executives is likely to impact its momentum. Infosys has done fairly well in the past two quarters, and it has already managed to win a reasonable number of large deals. But every now and then, a senior executive has resigned, leading to concerns about the sustainability of the company’s recovery. 

 

Analysts at CLSA Research said in a recent note to clients, “Continuous churn and reallocation of responsibilities at the top does bring along the risk of undermining some of the good work done post (N.R. Narayana) Murthy’s return. A change in CEO scheduled in 18 months time could continue this top management flux.” Speaking to Barclays’ analysts, the company’s chairman N.R. Narayana Murthy said he isn’t worried about the churn in senior management, citing that the company has a full bench of senior managers to fill any gaps. Whether that is so, only time will tell. But, by and large, momentum does get disrupted, given the close association senior management has with large customers. 

 

CLSA’s analysts wrote in their note, “Infosys believes that the second half of FY14 could be weak beyond normal seasonality, with the recent re-allocation of management responsibilities impacting some growth. This is the key driver of Infosys’ weak implied revenue guidance of 1-2% quarter-on-quarter decline in the December and March quarters.” 

 

All this is not to say that some of these issues can’t get sorted out in the medium-term. In the interim, if the company is successful in cutting costs, there could be a surprise on the margin front, which will help reinforce investors’ belief about the recovery. Murthy told Barclays’ analysts that the company is looking to cut costs in three areas—a) decrease the proportion of senior people onsite, by rationalizing its role ratio; b) reduce the usage of subcontractors by improving internal training; and c) reduce the number of people in onsite locations in business enabling functions. 

 

While all this is welcome, it remains to be seen to what extent the company gets flexible on pricing to win back market share, as this could completely wipe out the gains from cost cutting. 

 

All told, while Murthy’s return is doing the company good, it’s still premature to conclude that the company will return to its glory days.

 

At 10.30am the Infosys stock was trading 0.63% down at Rs.3,275 while the benchmark Sensex was up 176.22 points to 20,596.48.

 Rahul kumar gupta

PGDM,1st Year.

Source:-Mint