Fact Junction

Thursday, December 3, 2015

Chennai rains may impact IT firms in December quarter

Chennai is the second largest base for IT companies in the country.

In a quarter with fewer working days for information technology (IT) companies, owing to the long holiday season towards the year-end, the rain deluge in Chennai is an added woe.

Though most of the companies have business continuity plans, primarily to staff projects requiring round-the-clock support, a majority of the works have been impacted by the flooding of campuses in the city.

Chennai is the second largest base for IT companies in the country.

It houses almost all the top-tier IT service companies, beside global ones like IBM and Accenture.

There are umpteen numbers of small and midsize IT and business process outsourcing entities with a base in the city, owing to easy availability of talent and relatively cheaper real estate.

“In view of the situation resulting from incessant rain in Chennai and the meteorological department’s forecast of more heavy rain, Cognizant offices in Chennai are closed today (Wednesday). However, there is no disruption to work on critical projects and 24x7 operations support. We have activated our business continuity plan and continue to closely monitor the situation,” said a spokesperson. Nasdaq-listed Cognizant alone has around 60,000 employees across 11 facilities in Chennai.

“In light of the rains and flooding in Chennai, Infosys campuses in the city were closed on December 2 and we have also declared a holiday on December 3,” said the country's second largest IT services company.

Infosys has two facilities in Chennai, one at Sholinganallur and another at Mahindra World City which employs around 17,000.

“Our business continuity plans have been activated and we have taken necessary action to ensure client commitments are met, which includes managing work from other locations,” the company added.

For India’s export-driven IT service companies, which primarily earn their revenues by billing global clients on a per-employee, per-hour basis for the software coding services they offer, loss of a business day impacts performance.

Most of the top-tier companies in the sector, including Infosys and Wipro, have sounded a caution for the October-December quarter, in anticipation of extended client furloughs and less working days.

Besides, the Q3 (Oct-Dec) quarter has also been traditionally weak for Indian IT services entities, as clients start evaluating their budgets for the next year, expecting a delay in project kick-ups and completion.

Apart from ensuring business continuity, the IT companies are also taking steps to ensure facilities to those either stranded in offices or having preferred to stay back, by providing food and accommodation.

“IT companies tend to have a business continuity plan which ensures work does not get affected because of natural calamity. In many of the contracts, clients are accommodative for (such) events...There could be some minimal impact in a quarter which is already getting affected due to lower number of working days,” said Shashi Bhusan, senior vice-president at IDFC. “If the rain and flood continue for a longer period, the impact can be assessed over the next five to 10 days.”

“We are closely monitoring the evolving situation in Chennai. Our staff at Sholinganallur have taken complete ownership to ensure the safety and wellbeing of our employees and assets. In addition to accommodation in hotels, special boarding arrangements have been made for those employees who have opted to stay back at the campus. Food and other essentials are being provided,” stated Wipro.

HCL Technologies has around 30,000 employees in Chennai across eight offices.

It said the company was giving utmost importance to employee safety and security. “(We) have well- defined business continuity processes...we continue to monitor the on-ground situation closely,” the company said.

India's 100 richest are all billionaires; Mukesh Ambani tops

For the first time, the 100 richest tycoons in India are all billionaires with Mukesh Ambani topping the league for the eighth consecutive year, according to Forbes.

Mukesh Ambani, chairman Reliance Industries

Rank: 1

Net worth: $23.6 billion

With businesses spanning from oil and gas-to-petchem-to retail, Mukesh Ambani, chairman RIL has it all.

Sitting on a cash pile of over Rs 85,000 crore (Rs 850 billion), Ambani is always keen to explore new business opportunities. A very good example of it would be his recent acquisition of one of the renowned media firms called the Network18 Group.

Photograph: Adeel Halim/Reuters

Dilip Shanghvi, founder Sun Pharma

Rank: 2

Net worth: $18 billion

Shanghvi’s firm Sun Pharmaceuticals is considered to be the most valuable pharma companies with a market cap of over Rs $25 billion.

The firm was in news after it acquired loss making pharma firm Ranbaxy at around $4 billion. Also, he is betting big on Ranbaxy’s huge presence in India and emerging markets.

Azim Premji, chairman and CEO, Wipro

Rank: 3

Net worth: $16.4 billion

Premji is known to have transformed a $2 million hydrogenated cooking oil company into the $7.3 billion revenue IT, BPO and R&D Services organisation with a presence in 54 countries.

Pallonji Mistry, chairman, Shapoorji Pallonji Group

Rank: 4

Net worth: $15.9 billion

Chairman of Shapoorji Pallonji Group, Pallonji Mistry’s saw a huge rise in wealth this year.

Shapoorji Pallonji Group owns Shapoorji Pallonji Construction, Forbes Textiles and Eureka Forbes Limited.

Pallonji Mistry’s son Cyrus Mistry is Chairman of Tata Group.

Photograph: Warren Little/Getty Images

Lakshmi Mittal, chairman and CEO of ArcelorMittal

Rank: 5

Net worth: $15.8 billion

Lakshmi Mittal is the chairman and CEO of ArcelorMittal, the world’s largest steelmakingcompany.

“Mittal created the world's largest steelmaker (MT) by pursuing a decades-long, impossibly audacious plan of consolidation -- working with governments, powerful labor unions, and other constituencies to rewrite the rules of the old steel industry in tough times,” says Fortune magazine.

Hinduja Brothers

Rank: 6

Net worth: $13.3 billion

Hinduja Group Chairman Srichand P Hinduja, along with brothers Gopichand, Prakash and Ashok run the Hinduja Group of Companies.

Srichand P Hinduja is the eldest son of Parmanand Deepchand Hinduja, the founder of the Hinduja Group.

Gopichand P Hinduja is the Co-Chairman of the Hinduja Group of Companies. Prakash P Hinduja is the Chairman of the Hinduja Group of Companies in Europe.

The youngest brother Ashok P Hinduja is Chairman, Hinduja Group of Companies (India).

Shiv Nadar, chief at HCL Technologies

Rank: 7

Networth: $12.5 billion

The biggest gainers amongst Indians include Shiv Nadar, who added Rs 31,100 crore (Rs 311 billion) to his wealth from 2013.

Under the leadership of Shiv Nadar, HCL has evolved into a $6.3-billion global enterprise with over 100,000 professionals.

Adi Godrej and family

Rank: 8

Net worth: $11.6 billion

An inspiring business leader, Adi Godrej is known for modernising and revamping his family business into one of India’s largest conglomerates.

Kumar Mangalam Birla, chairman, Aditya Birla Group

Rank: 9

Net worth: $9.2 billion

Kumar Mangalam Birla was instrumental in raising the group's turnover from $2 billion in 1995, to $40 billion today.

Birla has restructured the businesses to emerge as a leader in the sectors.

Sunil Mittal and family

Rank: 10

Net worth: $7.8 billion

Under Sunil Mittal’s leadership, Bharti Enterprises has emerged as one of India’s leading business groups with interests in telecom, retail, realty, financial services and agri-products.

Meet few tech titans who gave away billions in charity

Zuckerberg, 31, and his wife Priscilla Chan, already lauded for donating $1.5 billion in Facebook stock to the Silicon Valley Community Foundation (SVCF), are setting a high bar that is bringing more money to philanthropic endeavors.

Mark Zuckerberg’s pledge on Tuesday to give away most of his Facebook shares, a roughly $45 billion fortune, helps cement his role as one of Silicon Valley’s most generous donors.

The donation could also help bolster the reputation of the technology community, which has faced criticism for driving up rents and exacerbating income inequality in Silicon Valley while valuations of companies there reach stratospheric levels.

Nicholas and Jill Woodman, the founders of GoPro, the wearable camera company, said last year they would give $500 million to the SVCF.

Image: WhatsApp Chief Executive Officer and co-founder Jan Koum has pledged more than $500 million towards charity. Reuters/Albert Gea

Jan Koum, a co-founder of message service WhatsApp, pledged more than $500 million, also for the SVCF.

Image: Sean Parker, an early Facebook executive and a founder of music-sharing service Napster, has committed $600 million to his foundation, which has goals of improving civic engagement, public health, and life sciences. Photograph: Reuters

Sean Parker, an early Facebook executive and a founder of music-sharing service Napster, has committed $600 million to his foundation, which has goals of improving civic engagement, public health, and life sciences.

Google’s Sergey Brin last year gave $383 million to his family foundation, which supports causes such as eradicating poverty in the San Francisco region.

Image: His co-founder, Larry Page, gave Google stock valued at $177 million to a foundation named after his father, Carl Victor Page, that he started in 2006. Photograph: Reuters

His co-founder, Larry Page, gave Google stock valued at $177 million last year to a foundation named after his father, Carl Victor Page, that he started in 2006. It focuses on areas such as education and medicine.

The year before, Page had landed on Inside Philanthropy’s list of least generous donors.

“The foundation seems to give only to donor-advised funds that can sit on the money indefinitely,” the publication wrote at the time.

A representative of the Page Foundation did not immediately respond to a request for comment.

Image: Tech titan Yuri Milner has recently said he would spend $100 million looking for intelligent life in space by searching for radio and light signals. Photograph: Reuters

Another tech titan with a sizable philanthropic streak is investor Yuri Milner, who bankrolls the annual Breakthrough Prizes, which awards $3 million each to scientists.

Earlier this year, Milner said he would spend $100 million looking for intelligent life in space by searching for radio and light signals.

Image: Microsoft founder Bill Gates, who along with his wife Melinda, have given $30.7 billion as of last year to the Bill & Melinda Gates Foundation, known for work in poverty and healthcare. Gates is a leading advocate of the Giving Pledge, a commitment made by billionaires to dedicate the majority of their wealth to charity. Photograph: Reuters

But so far, the most famous tech donor is Microsoft founder Bill Gates, who along with his wife Melinda, have given $30.7 billion as of last year to the Bill & Melinda Gates Foundation, known for work in poverty and healthcare.

Gates is a leading advocate of the Giving Pledge, a commitment made by billionaires to dedicate the majority of their wealth to charity.

Why are our cities in a mess today?

Populations of cities are rising, more are coming in because cities continue to attract people for jobs and because of increased economic activity. One standard question would be: What is the government doing about this?, asks M Ramachandran.

Image: Most Indian cities are grappling with heavy traffic. Photograph: Kamal Kishore/Reuters

Basic civic services are not available to everyone, the quality and level of service remains poor, there is increasing confusion on city roads, slums are on the increase and a general sense of confusion prevails.

This seems to be the city resident's standard comment on living conditions today.

Before we attempt to answer this, let us examine the key reasons why most of our 8,000 cities and towns are in what could generally be called an urban mess.

In most cases, urban planning and creation of master plans for developing cities did not happen the way it should.

Till recently, the situation was that out of the 5,161 cities we had according to the earlier census, two-thirds did not have a master plan at all.

So, one can imagine the confusion that continues to prevail in the absence of a set scheme of development.

Even where master plans came into existence, enforcement was weak. On top of this, state governments, particularly powerful chief ministers, proactively presided over decision-making on individual land use change requests from cities.

It was only after about 45 years of independence that we could give constitutional status to our third level of governance.

But, that remained a half-hearted effort because proper empowerment of these urban bodies did not take place as it was constitutionally left to state governments to take a call on how much power, funds and functions were to be transferred to these bodies.

And this agenda still remains pending.

Hence, the scenario where mayors and chairpersons continue to complain about not having enough powers.

Basic services like water supply, solid waste management, drainage and sewerage were entrusted to urban bodies. But, either due to lack of funds or the will to prioritise what should come first, these bodies could not ensure 100 per cent access to services.

Urban roads and mobility remained a subject within the domain of state governments and because the voices of cities did not matter much, the focus and attention was just not there.

The backlog was so huge, that it is no wonder the high powered expert committee that looked into the issue of resource requirement for cities came out with an investment requirement of Rs 17,29,000 crore for urban roads and Rs 4,50,000 crore for urban transport.

Housing is another area where nothing much happened because assessing demand city-wise and adopting a target-oriented approach to meet requirements was not prioritised.

As a result, slums expanded. So much so that, in a major city like Mumbai more than 50 per cent of the population lives in slums. Housing is still not a subject assigned to urban local bodies.

It was only recently that the central government paid attention to this and set a target of housing for all by 2022, which means building at least 20 million new units for those who are without homes.

Though subjects were assigned to urban bodies, the seriousness and keenness to allow these bodies to undertake their functions varied from state to state.

They do not have enough resource generating capacity, as a result of which most of them are dependent on devolution of funds from states and the Centre.

Also, many of these did not try seriously to generate revenue based on the items entrusted to them and levy user charges and provide satisfactory delivery of services.

These bodies on their own are in no capacity to raise loans and, thus, find the resources for taking up major schemes.

Public-private partnerships as additional sources of investment could not take off, and the change in devolution of funds from states to urban bodies - expected as a result of mandatorily contituting state finance commissions every five years - did not serve the desired objective.

Allocation of resources by state governments to cities for schemes never received any priority, and there was no way concerns of cities could be heard properly at the state level.

And this despite the fact that contribution of cities to gross domestic product, tax revenues and employment generation was on the rise.

This is in contrast to the large number of rural development programmes that got introduced Plan after Plan. It is only now that the Centre has laid down basic priorities like toilets for all by 2019 with an outlay of Rs 62,009 crore, and to cover all households with water supply and sewerage.

Over the years, not much attention was paid to strengthening the capacities of urban local bodies so that they could take up the ever-increasing challenges competently and professionally.

As a result, municipal capacities continue to be weak, making them dependent on consultants for almost anything new and different, even regular maintenance.

Further, there are no clearly stated norms as to when a state will notify a rural village panchayat as an urban body, when a new local body is constituted what is the funding support it will get to meet infrastructure gaps and what sort of division of areas and work will follow among the elected body, parastatals and other entities working within city limits.

In many states, the mayor or chairperson gets a limited term of one year, the commissioner has no defined tenure, there is no review of where the city stands with regard to service level benchmarks in basic service areas. Also, there is no clear accountability laid down for satisfactory delivery of basics services.

There is also no watchdog. There is no agenda to take care of the steady urbanisation of our census towns, which continue to be villages.

There are no proper avenues available for citizens to participate in and contribute to the process of city building.

Broadly, these are the basic reasons why our cities do not succeed in meeting the desired satisfaction levels of residents.

The government needs to seriously take up the agenda of reforming city governance.

The writer is a former Secretary for Urban Development in government of India and an active urban thinker and policy facilitator

Riding Bajaj Avenger Street 220 and Cruise 220

Tanmay Pangam took the two Avengers for a spin and is mighty impressed

The Bajaj Avenger has been the quintessential cruiser with a wide audience appeal. People who sought an alternative to Royal Enfield's lifestyle offerings either out of choice or lack of funding often veered towards the Avenger.

The Bajaj brand's assurance behind the motorcycle, it's classic small-capacity cruiser styling and easy-riding position were among the key reasons behind its success. Having said that, the looks of the Avenger hadn't changed much over the years. Seeing that they had to look rather jaded, Bajaj decided to give not one but two variants on the same engine platform. Christened the Cruise 220 & the Street 220, each of the variants is targeted at a specific segment of buyers.

We had the opportunity to spend some time with the two Avenger models & here are our first impressions:

Styling

The 220 Cruise is the old Avenger that'll carry on the quintessential cruiser torch proudly. Everywhere you look there's a healthy lashing of chrome. The paint on the tank is new, as are the emblems and the sticker job. The oil-cooler is encased in shiny chrome too, as is the horn -- toot toot! View it in profile and you see that things haven't changed much here and you still have all the strengths of the Avenger platform that have endeared it to buyers over the years.

The 220 Street on the other hand is Bajaj's take on an easy rider that is the ideal tool for the urban prowl. Gone are the heavy doses of chrome, the tall handlebar and its ilk. The entire motorcycle goes matte and there's very little in terms of shiny reflective surfaces here. Viewing it from the front, the only chrome bits remaining are the surrounds for the meter and the headlight, together with the top of the front suspension pipes. The rest is all finished in matte paint, with the under-body in flat black.

There's a flatter handlebar that transforms the riding position and feels just perfect for the cut and thrust conditions of the urban prowl. The wire wheels are traded for snazzy 12-spoke alloy wheels. The tank follows the matte paint language and looks rather fetching in black, with its contrast graphics. The exhaust is all new and sports a rounded look, appearing almost bulbous instead of the chopped-looking one earlier. This is again finished in flat black with satin silver accents, but the latter end up detracting somewhat from the premium look of the motorcycle.

We spent a brief time in the saddle of both Avenger variants. Mechanically speaking, there's not much change. The 220cc DTS-i motor continues as before, though the visual makeup has transformed the way it looks nested within the chassis. The only functional changes are the RE T-Bird inspired foot-pegs and the handle-bars in the two variants. Pull in the clutch on the 220 Cruise, thumb the starter, and the motor smartly comes to life, accompanied by a tell-tale needle sweep across the speedo.

Let out the light clutch and the 220 Cruise darts off the line. If you've ridden the previous-gen Avenger, then you'll feel right at home. It is the same, familiar riding position, the comfort from the well-cushioned street and the fact that your feet can touch the ground. The gearbox feels butter-smooth, with shifts, both up and down the ratios feeling quicker than ever. There's chrome everywhere you look and touch around you, which ought to bring a smile to the faces of the purists. The exhaust note does sound like it has changed, getting slightly gruffy as we briefly took her up the rev range.

Switching to the 220 Street and the difference is immediately apparent. The flatter handle-bar is the first trick. Also, the bike feels better planted riding out of the parking lot. As we headed out on the open road, the 220 Street feels sure-footed and the bike appears to be at ease in the urban cut and thrust routine. The switch to those 12 spoke alloy wheels didn't just up the oomph factor but they also seem to have improved the road behaviour. Braking behaviour too felt a mite better on the Street than the Cruise.

Weighing in

On the road, it was the 220 Street with its matte paint job and minimalist appearance that grabbed the eyeballs. The mini-Harley Street 750 styling creating the stir that Bajaj is expecting. In terms of the initial riding feel too, the 220 Street felt better than its Cruise sibling (the latter should keep the purists happy).

For now, Bajaj Auto must be commended for this move of theirs. They may have taken their own sweet time with the updates to their Cruiser line-up, and even this has no real mechanical changes. But coming out with two, visually distinct variants on the same platform, yet appealing to two markedly different sets of customer needs indeed deserves an applause. The buyers however are expected to offer the last hurrah and it shall be interesting to watch which of the siblings surges ahead.

DISCLAIMER: This isn't a complete review, just a few initial impressions of the Avenger range of bikes.

Shh! Here's why IITians won't reveal their salary figures this time

All those news reports you've been reading about plum placement offers to bright IITians of the country may not be authenticated as yet. Read on to know why!

The country's premier technical institute, the IITs have decided not to reveal any pay package figures from this placement season following complaints of peer and parental pressure on students.

"Disclosing salaries puts unnecessary pressure on students. It kickstarts peer pressure as well as parental and societal pressure. People forget that only very few of them actually get those fat pay packages of over a crore. The minimum and average salaries are much less," Prof Sudhirkumar Barai, chairman, Career Development Centre at IIT Kharagpur, told PTI.

A decision to this effect was taken recently at a meeting of All IITs Placement Committee (AIPC) in Guwahati.

"We had this rule of non-disclosure earlier also but this time we took a conscious decision to implement it," Barai said.

The first phase of placements began at the IITs from yesterday.

So far the IITs used to reveal packages but kept identity of the students a secret.

"We have noticed that only the highest salary is discussed. But people forget that the average salary which an IITian gets is far less than the fattest one," Barai said.

Another issue lies with the employers as many of them have a confidentiality clause in their job contract which restricts them to publicly disclose their remuneration.

"Some multinationals will complain to us if we disclose the figures and breach the confidentiality clause," the placement in-charge of IIT-Kgp said.

In some cases, security and safety of the passouts and their families could be another cause of concern as they might even get kidnapped for a ransom, he feared.

"All the figures from any IITs being discussed in the media this season is unauthenticated as none of the premier engineering institute can disclose figures," Barai said.

Recently an IIT-Kgp student had disclosed directly before the media that he bagged an annual package of Rs 2 crore from Google after finishing internship.

"We can't stop students from making any disclosures on their own," the IIT official said.

There are 16 IITs in the country. Altogether 177 students have already got pre-placement offers (PPOs) from different companies at IIT-Kgp.

Chennai turns into an island, thousands rendered homeless; more rains predicted

Chennai on Wednesday turned a virtual island and coastal areas of Tamil Nadu were marooned after unprecedented rains in 100 years pounded the city, its suburbs and neighbouring districts destroying road and rail links, shutting the airport and rendering thousands homeless.

Army personnel rescuing people during their flood relief operations in rain-hit areas in Chennai on Wednesday. Photograph: PTI

Late tonight, the Airport Authority of India announced that Chennai airport will remain shut till December 6 in the wake of the battering downpour and predictions of more rains in the next 72 hours.

Chennai, which received 49 cm of rain and Chembarambakkam, where the reservoir surplussed about 25,000 cusecs of water into Adyar river, received 47 cm of rains in the last 24 hours that flooded the city and the suburbs, uprooting people from their homes.

Vehicle moves on the watter lodged road during heavy rains in Chennai on Wednesday. Photograph: PTI

Flood waters reached upto the second floor of the Housing Board colonies on the banks of Adyar river as people reached roof-tops looking for rescue and relief in several parts of the city and suburbs.

The death toll in the rains that have lashed the city and other parts of state has gone up to 197, officials said.

Prime Minister Narendra Modi, who spoke to Chief Minister J Jayalalithaa last night and promised all assistance, held discussions with his cabinet colleagues Rajnath Singh (Home), Arun Jaitley (Finance) and M Venkaiah Naidu (Parliamentary Affairs) in the morning to take stock of the situation.

People being rescued after heavy rains in Chennai on Wednesday. Photograph: PTI

The National Crisis Management Committee headed by Cabinet Secretary P K Sinha reviewed the situation and assured the state of all support from the centre.

All modes of transport -- air, road and rail services -- remained suspended due to the unprecedented deluge, leaving thousands of passengers stranded at the airport and various rail terminals. Suburban rail services also remained suspended.

Trains stand stranded at a railway station near flooded tracks after heavy rains in Chennai on Wednesday. Photograph: PTI

Adding to the worry of the citizens and administration, the weatherman has forecast rainfall over the next three days with the next 48 being very critical under the influence of a trough of low pressure and upper air circulation over the southwest Bay of Bengal and Sri Lankan coast.

Thereafter, the state will see an anti-cyclone activity which will be associated with "heavy rains" at some places.

People wade through the thick waters. Photograph: PTI

"The phenomenon will continue for the next seven days, but the next 48 hours are very crucial. Neighbouring states will also see rainfall activity," L S Rathore, Director General of Indian Meteorological Department told reporters in Delhi.