Showing posts with label IIPM Admission Detail. Show all posts
Showing posts with label IIPM Admission Detail. Show all posts

Monday, September 10, 2012

M. R. Rao, CEO, SKS Microfinance Ltd.

Launched in 1998, SKS Microfinance is one of the fastest growing Micro Financial Institutions (MFIs) in the world, which has served more than 5 million women members in poor regions of India till date. Of course, the company has been in the news for the wrong reasons following the unceremonious exit of its ex-CEO Suresh Gurumani. Current CEO M. R. Rao talks about the company’s business model and challenges it faces: 

B&E: What is the maximum amount of loan that can be availed and repayment options available?
MR: All members (clients) are eligible to borrow Rs.12,000 depending upon the activity which the member undertakes in the first year of joining SKS Group. From the second year onward, the loan size is increased by Rs.4,000. Loan repayments follow a weekly repayment schedule. All repayments and fresh disbursements happen during the centre meeting, which is held every week at every center. Our loans are given for a period of 50 weeks.

B&E: What kind of problems do you face while repayment of loans?
MR: SKS enjoys a very strong repayment record and our NPAs are negligible. If a member is unable to repay an instalment, the other members in the group/center share the responsibility for the repayment. The few cases of defaults are usually due to migration or due to some natural calamity.

B&E: What are the rates of interest charged by SKS?
MR: SKS works in 19 states. In Andhra Pradesh, Karnataka and Orissa, we charge a flat rate of interest at 12.5% and in rest of the states, the flat rate is set at 15% currently. In the newer states where we have started, our rates are a little higher at 15% flat and 26% diminishing. We also charge a loan cover fee of 1% that helps us offer insurance for the loan period.


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Saturday, September 08, 2012

No more “Short Cuts”, please!

After growing at a red hot annualised rate of 5.8% in Q1 2010, Canada’s Economic growth has come down to just 2% in Q2, 2010. Canadian policymakers now need to look beyond the ‘short cuts’, be it interest rates or output, if they want the Economy to sustain its growth momentum.

Of the seven industrialised nations that comprise the G7, Canada clearly stands out when it comes to economic recovery from the recent recession. Reason: It not only expanded at an annual pace of 5.8%, but also recovered both the employment and real output losses that accrued over the troubled course, in just one year. No other G7 nation can make an equivalent claim.

However, the party seems to be over for now for this North American nation as the recent economic data out of Canada suggest that its economy might not hold on to the top slot anymore. After growing at a red hot annualised rate of 5.8% in Q1 2010, Canadian economic growth has come down to just 2% in Q2, 2010. While a healthy job market (employment growing at 2.1% yoy) and solid wage growth (4.8% yoy in Q2 2010) should continue to fuel domestic demand, there are several potential headwinds that needs to be avoided. So, with the benefits of the inventory swing (inventory rebuilding had accounted for over 33% of GDP growth in 2009) behind and the boost from government stimulus (over $60 billion in 2009 and 2010) fading, is Canada’s economic boom finally over?

Jay Bryson, Global Economist at Wells Fargo Securities tells B&E, “The strong pace of growth that Canada has been able to realise over the past year led the central bank to take back 75 bps of earlier rate reductions that it believed were no longer necessary. But some of the key factors that helped propel growth during the recovery are no longer providing much help. The consumer, who started out with a fairly decent balance sheet, has become more levered and spending growth has been spotty recently.”

In fact, it has been just one month since Bank of Canada’s (BoC) last rate decision (on September 8, 2010, BoC increased the overnight lending rate to 1%) and just over one week until the next one (perhaps indicating another rate hike), but the risks have already begun to play out in the Canadian economy. The latest employment report, released two days after the last decision, was (after adjustments) the worst since May 2009. As per the report, the average monthly employment gain was just 6,600 in Q3 2010, down from 75,530 in the April to June period.

Housing starts too fell to 1,86,000 units, down nearly 10% from the peak reached last April. Interestingly, in 2009, several people had rushed into the market so that they could take advantage of near zero short-term interest rates and as a result in the 11 months between January and December 2009, existing home sales skyrocketed by almost 66% and prices by more than 21%. But, since the start of 2010, one can clearly see that phenomenon reversing. While sales have corrected by more than 20%, prices too have softened by 3% (as of August 2010).


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Wednesday, August 22, 2012

Of blood bags and an American dream!

His company came out with an IPO even before it rolled out the first medical device. Then, he had two choices – to make his dimes count or be annihilated. Luckily, his bet paid-off! Today, his outfit named Poly Medicure, is the largest listed medical devices manufacturer in India. B&E’s Steven Philip Warner and Amir Moin catch up with the risk-taker, as he lets-off some nostalgia at his oldest manufacturing plant in Haryana

When Himanshu Baid started off, he was not in an appropriate cash position to start a medical devices manufacturing business – what he had was just not enough. He was forced to borrow capital from his family and friends, roped-in banks and NBFCs and went public. 13 years later, his business is the largest-listed company on BSE (amongst all in the sector). It recorded a gross profit margin of 51.31%, much higher than the average of the sector (22.59%). With a revenue per employee record of Rs.1.44 million in FY2009, Baid, MD of Poly Medicure, who is also one of the largest shareholder of his company (8.83% stake held directly and another 4.32% indirectly), dreams to take this owner-cum-management entity to newer highs. With forays into the Chinese and Egyptian market already, he has his eyes set on his next target – the mature American market! Excerpts from the interview follow: B&E: 1997 was a time when everyone else was investing in the booming IT industry. Why did you choose the medical equipments business, even over the-then growing generic pharma?
Himanshu Baid (HB): When we started, my family was into the business of plastics. So this became a low-risk extension. The knowledge of that business helped us to set up this project. We had an experience in plastic-moulding. So medical equipments happened naturally.

B&E: You exist in an extremely fragmented industry, where you can at best enjoy a small pie of the overall business. Even the ratio of your revenues to the industry’s leads us to a figure which is less than 1%! Your explaination...
HB: We operate purely in a medical device segment. The industry figure that you are talking about is approximately $2.5 billion, which includes every single device that can be “quoted” directly or indirectly as a “medical equipment”. Out of this, we are mainly into products that are of one time usage in hospitals. This segment is roughly around Rs.30 billion in India. Now out of this Rs.30 billion market, the syringe category accounts for atleast Rs.10 billion. And we are not into syringes. So if you zero-down to the 78 products that we manufacture, we are left with a total market of less than Rs.10 billion, of which, we have a share of about 20%. That’s big.


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Thursday, August 09, 2012

SCRUTINY, IIPM THINK TANK: GREENING THE TRANSPORT

When it comes to mass transportation, green options are being developed aplenty, but almost all are failing the economic viability test. The IIPM Think Tank analyses the economic and social benefit of contemporary machines that will be green, clean and fast – but not necessarily in the same order of priority!

The last decade saw the growth of numerous green systems. But most of them, by the turn of the decade, did not find takers. The much touted hybrids are a key example. A conservative estimate shows that the sale of hybrid vehicles, after so many years of promotion, constitutes just about 2.9% of total automobile sales. Similarly, usage of vehicles using natural gas (called CNG in some countries) is largely confined to transit buses and a few other modes of public transport. Hydrogen fuelled vehicles, even today, remain limited due to lack of a proper fuel distribution network. Electric vehicles have not caught the customer’s fancy due to high battery costs and recharge issues. Even though auto giants are already working on prototype cars powered by fuel cells like Mitsubishi i-MiEV and Nissan Leaf, their time will be tested only when they’re introduced. And the lesser said about the concept of high-speed railways and green air transport systems, the better (even though the bio-fuel based Virgin Galactic airline does stand out in its promise of making the carbon cost of each flight come down to 60% of a conventional aircraft’s).

Strangely, a few initiatives to reduce emissions from current mass transport systems have worked better than the ‘green’ lot, especially considering the fact that oil reserves – by recent estimates – are perhaps never going to get depleted in the near future (or even far, for that matter). In France, pollution-free nuclear electricity has helped trains reduce the carbon emission rate. Researchers are en route to developing more efficient and effective catalytic converters that would further break down the toxicity of vehicle emissions. Auto manufacturers are even focussed on bettering mileages on automobiles with every passing year. For example, as per US Department of Energy data, while the Toyota Landcruiser gave 12 miles per gallon (mpg) on the highway in 1985, the 2010 model gives 18 mpg. The Camary is better, giving close to 35 mpg in 2010!

It’s evident that rather than attempting to invest magnanimously in green spheres that have very less or almost no guarantee of succeeding, there’s heavier credence for attempting to improve what can be done in a short time – the mpg example of Toyota being a totem pole. Can the world stand up to that?


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Wednesday, August 08, 2012

THE PHOENIX PERFORMERS

while both retail and real estate sectors took a beating during the slowdown, both are expected to perform much better in 2010, says Savreen Gadhoke

But in the process of getting over-excited over improvement in market affairs, the last two quarters saw real estate players raise prices of housing properties by 15-20%, thereby hampering demand once again. However, as Puri agrees, this is nothing to worry about as “for 2010, residential real estate demands appear to be the most promising. Residential will continue to lead the revival phase, led on by a lowering of mortgage rates and price rationalisation in the newly launched projects. It also looks the most positive in terms of funding. There is liquidity available for certain typologies and formats, most especially in the affordable housing segment.” The non-residential segment, which depends greatly upon overseas funding will witness a slower recovery as Vivek Mittal, CEO, Realty Stocks, says, “The office real estate space has been, to quite a measurable extent, hampered by the turbulence in the global economy, which has put a brake on the expansion of multinationals in India...” While the drying up of FDI in the retail space did play the spoilsport as far as the non-residential real estate segment is concerned, there is hope still. That the office space will bounce back is true. But unlike the residential space, it will need time beyond 2010 to regain lost ground.


THE SLOWER DRIVE...

he global retail sector will struggle for most part of 2010 due to high unemployment rates (in America & Europe) and stringent credit conditions. Fall in exports to the West will increase retail inventory in the Japanese market. There is however a chance of slow improvement, as companies will indulge in M&A activities. The growth of the IT/ITeS sector in the developed nations will primarily drive the demand for commercial real estate space.

Read more....

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Monday, July 30, 2012

Too costly to kill?

The death penalty, besides being a question of morality, is also becoming a question of cost. But the cost of crime must also be considered

James Ellis, Chief Criminal Judge, Oregon put forward the point quite succinctly, “Whether you’re for it or against it (capital punishment), I think the fact is that Oregon simply can’t afford it.” The rising cost of capital punishment is becoming a ground reality across the world; thus forcing nations to reconsider it.

According to the California Commission, the entire infrastructure behind an execution system costs $137 million per year, but a system without the death penalty costs only $11.5 million in California (as per 2008 data). A 2003 legislative audit in Kansas noted that the estimated cost of an execution case ($1.26 million) was 70% more than the cost of an analogous non-execution case ($740,000). As per the Urban Institute (2008), the cost of execution cases amounts to almost 3 times more as compared to non-execution cases in Maryland. Similar comprehensive studies are not readily available in other countries, but the fact that the death penalty is considerably more expensive is amply clear. Most costs relating to capital punishment occur prior to and during trial; not in post-conviction proceedings as the trial period becomes too lengthy over the time for execution. As per the Florida Department of Corrections, the average length of stay on death row prior to execution is 12.68 years.

However, this doesn’t nullify the relevance of death sentences, as it’s also important to calculate the cost of crime to a nation. According to Georgetown University Professor of Public Policy Jens Ludwig, the cost of crime to the US economy is around $2 trillion per year.




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Saturday, July 28, 2012

Let There be Synergies

India’s it Story so far was that of a few big players and a number of smaller ones. Now it’s time that some M&As Balance this Anomaly out

It has long been said that the Indian IT/ITeS and BPO sector is quite prone to M&A activity. For the IT/ITeS sector, the reason is that it has traditionally been akin to a comet with a small head and a long tail. Apart from the top few companies that steadily moved up the value chain and also build differentiated vertical expertise particularly in BFSI, a large part of the sector has traditionally thrived on pricing. That advantage has steadily eroded with other software destinations like Vietnam, China, et al coming into the picture; and this nightmare is particularly real for the BPO sector. In fact, they are also competing with home countries. This year, UK-based firms Aviva, BT, Santander and New Call Telecom decided to move their centres back to the home country citing rising joblessness there, the need for an onsite model and also the rising costs in India. Moreover, with the issue on visas wherein US lawmakers have passed norms restricting H1B visas to Indian companies and also hiked visa fees by around $2000, the cost of doing business with the main market – the US is steadily going up. In the subsequent negotiations over handling this row, US is looking for more Indian companies to hire overseas, and this is another trend that could significantly alter the cost model. There are further problems for them back home, as the STPI tax benefit was not renewed this year. For smaller IT players, margins are typically at around 15% and they may find it hard to survive.

Finally, the uncertainty in the global environment persists, and is particularly riskier for IT companies that are heavily dependent on exports. Some impact has already been seen on larger firms as the Q1 results indicate. Infosys Technologies saw net revenues of Rs.74.85 billion in the first quarter, a growth of 3.2% qoq while EBITDA declined by 6.4% qoq to touch Rs.21.76 billion. The guidance for the second quarter USD revenue growth has analysts somewhat concerned as it is just 3.5-5%; considering that the quarter is normally the strongest for the company. Wipro reported a drop in Q1 net profit by 2.9% qoq to record Rs.13.35 billion and revenues jumped by 3% qoq to Rs.85.64 billion. While Infosys has talked about the risk of reduced client spending, TCS (even though its results were better) and Wipro have admitted that they are facing an uncertain environment apart from currency fluctuations. Smaller players could be under serious distress in the coming months as a global slowdown begins to take shape.


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Friday, July 27, 2012

Prof. Jim Heskett, Baker Foundation Professor, Emeritus, at Harvard Business School

The Word Profit has Provoked a Wide Range of Issues and Emotions among Respondents & Businesses around The World. It also Launched Debates, and many readers Argued for Measures of Success other than Profit, writes Prof. Jim Heskett, Baker Foundation Professor, Emeritus, at Harvard Business School.

Charles Green (founder and CEO of Trusted Advisor Associates) continues the discussion by suggesting, “The really interesting question raised is: if profitability is higher when pursued as a by-product than when it is pursued directly, why then do managers (irrationally) choose to pursue profit directly rather than indirectly? I think the answer is to be found more in psychology than in economics.” Does that account for the increasing interest in the field of behavioural economics? What do you think? H. L. Hencken once said, “For every problem there is a solution that is simple, direct... and wrong.” This brings to mind experiences with leaders of the most profitable organisations that I have observed. Almost to a person, they treat profit as a by-product of other things to which they devote most of their attention, things such as a focused strategy that delivers results to carefully-selected customers while pursuing policies and practices that leverage results over costs, hiring people with the right attitude (one that fits with the organisation’s culture), and proper training and organisation (often in teams). Financial targets are given no more or less emphasis than targets associated with employee and customer engagement, often by means of some kind of balanced scorecard. Rewards and recognition – whether based on the performance of the entire company, teams, or individuals – reflect this philosophy. The idea is to create what my colleague, Michael Beer, calls a “high commitment, high performance” (HCHP) organisation.

This idea has been addressed at length in a new book, Obliquity, by British economist John Kay. You might guess that Kay thinks profit as a “direct goal” is overrated, otherwise he wouldn’t have much substance for a book on the subject. Kay argues that business problems cannot be solved by drawing a straight line between cause and long-term effect because they are so complex, a manager’s information so incomplete, the competitive environment so complicated, analytic techniques so inadequate, and the number of things over which a manager has control so limited, that it is impossible to make the connection with any assurance. As Kay puts it, “The mistake is to make inferences about the relationships between outcomes and processes when we cannot observe and do not understand the processes themselves.” The argument is that those things that contribute to long-term shareholder value will be revealed and achieved by realising intermediate goals or through some kind of overarching mission and vision that helps an organisation achieve long-term shareholder value as well. Of course, it assumes that we know what those things (missions, visions, intermediate goals) are and that we have some understanding of how they contribute ultimately to shareholder value.

There is some empirical evidence to support Kay’s thesis. For example, Fortune’s 100 Best Places to Work regularly produce more profit than a matched set of competitors. Kay’s response to this would probably be, “What does that prove?”
If it can be demonstrated that this approach yields more profit, why doesn’t the leadership of more organisations pursue profit through “indirect” means? Or is it, as Kay might ask, as simple as this? Can this philosophy be carried too far? Is it compatible with the need in a public company to “make the numbers” every quarter? Is it dangerous or misleading to give too much emphasis to the idea that profits are a by-product of many other policies and practices? Is it wise to communicate this concept to all levels of an organisation? If so, how is this best done without confusing people?

Is profit as a “direct goal” overrated? And if it is, why then is it so frequently found among goals?
Coordinated by: Steven Philip Warner


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Thursday, July 26, 2012

Kashmir on The Backburner

Now that Even Pakistan has Woken up to The Evils of Terrorism (or has it?), Is it possible for The Two Countries to Work Together?

When Pakistan’s Gibraltar Operation against India failed in 1965, the then Foreign Minister of Pakistan, Zulfiqar Ali Bhutto, vowed in frustration that “Pakistan would wage a war of a 1,000 years, a war of defence.” Stephen P Cohen, senior fellow at Brooking Institute, opined recently that “the Indo-Pakistan conflict, which includes Kashmir besides many other problems, will last for 100 years or even more.”

While putting a number to the years is really ignoring the gravity of the situation, this acrimony really doesn’t appear to be vanishing very soon. And interestingly, this is despite Kashmir going on the back burner in recent times. Discussion on the same between the two nations came to a standstill post the 26/11 attacks. Since then, the prime agenda for high level diplomatic interactions has been terrorism. In three diplomatic meetings between the foreign secretaries of both nations – in July 2009 on the sidelines of NAM meeting, then in September on the eve of the annual UN General Assembly session, and in February 2011 during the SAARC conference – the main agenda was terrorism, a speedy probe on 26/11, Rana, Headley, et al. The agenda remained the same when the Prime Ministers of both countries met in Pittsburg for the G20 summit. America’s successful ‘hunt Osama’ expedition in May followed by a series of terror strikes on Pakistani soil further enhanced the focus on terrorism.

So while Kashmir may remain important over the long term, given the fact that confidence building measures build anything but confidence, this is a good time for India to perhaps earn sincere brownie points by engaging Pakistan economically.


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Tuesday, July 24, 2012

With a Defence like This...

Debris Dumped into The Sea by Military Operations causes havoc for Marine as well as Human life. Unfortunately, all Advice is yet Unheeded

Ex-British PM Margaret Thatcher had a doctrine regarding ocean pollution caused by perilous military activities: conservatism is good for actions with long term negative consequences! Her vision formed the cornerstone of the London Dumping Convention that banned the release of military debris into the seas. Consequences notwithstanding, a majority of countries do not have such a convention and freely release military debris into the oceans, causing enormous damage to marine lives.

At the recent UN International Marine Debris Clearance conference, Paul Walker, director of Global Green inferred that a massive 8000 tonne of hazardous material has been plunked near Hawaii by the US army. US vessels have been dumping 34 million litres of untreated liquid waste and 16 tonne of plastic waste every month! Alarmingly, more than 400,000 rockets and bombs are drifting around US coasts! During the Cold War, under the shield of the Iron Curtain, the Soviet Union released 2.5 million curies of radioactive material into the Arctic Ocean, the Sea of Japan, the Barents Sea, and the Kara Sea, according to the Yablokov report. France carried out 137 nuclear tests under the sea between 1975 and 1996, creating an artificial crater with a diameter of 140 meters. The tests conducted in French Polynesia caused havoc to 1 million cubic meters of sand and coral. Japan’s seas are contaminated with chemical weapons with a total bulk of over 6,600 tons. And that is not counting the most recent irradiated water being released from the Fukushima plant.

But if military debris isn’t dumped in oceans, then where? Research institutes like Coastal Zone Enhancement Program in US or Swedish Geotechnical Institute talk about measures like recycling and reuse of oceanic debris.


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Friday, July 20, 2012

Time for a ‘Crude’ Landing, People!

The Current Surge in Global crude Oil Prices puts forth two basic Questions – what are The Underlying causes and what’s The Worst we can expect. While The Most Pessimistic Projections may prove untrue, The World is Indeed staring in The Face of another crude shock that could derail Global Recovery

Be it the oil shock of the 1970s or the impending oil crisis of 2011; the spike in oil prices in both cases has been the consequence of a combustible mix of geology and geopolitics; with the latter inflicting much more of the damage. The turmoil in Egypt, Tunisia, Yemen, Libya and the consequent fears of disruption of Suez Canal and SUMED pipeline have led to oil prices breaching the $100 per barrel mark (on February 24, 2011 it touched $120 per barrel, well short of the July 2008 peak of $147 per barrel). The continued political upheaval in Libya, which produces approximately 1.6 million barrels per day and accounts for close to 2% of global oil output, will further escalate prices and dampen the fragile global economic recovery.

As the ‘Day of Rage’ rules the roost throughout the Middle East and North Africa (MENA) region, oil-supply side vulnerabilities can only increase. It is to be noted that the MENA region is home to about 60% of global crude oil and 45% of the world’s natural gas reserves. Given such dynamic statistics, any disruption in the supply of resources from this region will tantamount to a significant price rise. Though Saudi Arabia and other OPEC members are bent on meeting the challenges, fear of underinvestment in the MENA region will undoubtedly push oil prices northwards.

Amidst this scenario, research houses are forecasting that oil prices could well surge to $220 per barrel (as suggested by Tokyo-based Nomura Holdings). With the bitter aftertaste of the economic crisis still lingering across the globe, the forecasts of spiralling crude oil prices is an indication that we could be in for a reversal of the global economic recovery, as if it wasn’t sluggish enough already.

Even if one assumes that the current spike is merely a result of speculation and that the dust would soon settle down; the potential loss is huge. As per estimates, the British economy would have to wipe out £45 billion in the next two years if oil prices surge to $160 per barrel this year. The economic recovery in the US too could be hurt; it is estimated that every $1 surge in oil prices would cost the consumers $1 billion over the course of a year. The entire episode of unrest has seen the West Texas Intermediate (WTI) and other crude oil spot price increase by about $15 per barrel since mid-February. The US Energy Information Administration (EIA), in its latest outlook (Short -Term Energy Outlook, published on March 8, 2011), has raised its forecasts for the average cost of crude oil to refiners to $105 per barrel in 2011, $14 higher than its previous outlook. However, EIA has raised its 2011 forecast for WTI by only $9 per barrel to $102 per barrel, because of the projected continued price discount for this type of crude. EIA has further projected a small increase in crude oil prices in 2012, with refiner acquisition cost for crude oil averaging $106 per barrel and WTI averaging $105 per barrel.

At best these projections are but optimistic in nature. BMO Capital Markets further goes on to suggest that given the lag and the cumulative 46% increase in WTI between 2009 and 2011, the oil price increase will reduce the US economic growth by 0.7% (a huge figure in their case). Substantially higher prices (as forecasted by Nomura) arising from a supply shock would also significantly heighten the risk of a renewed recession. The current political problem is more grave than the geopolitical problem of the 1970’s, since the problems have spread to the entire MENA region.


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