Murthy’s Catamaran eyes Manipal stake: Set to be Premji’s co-investor in edu group

Three decades after N.R. Narayana Murthy and Azim Premji failed to find common ground to work together, co-founder of Infosys may soon be a co-investor with his information technology peer and Wipro chairman in an education venture. Catamaran, a proprietary venture capital fund of Murthy, is prospecting a potential investment in Manipal Universal Learning, in which PremjiInvest infused US$ 42 million almost two years ago. Catamaran is evaluating a deal even as Manipal, an Indian cross-border education story, is mulling a big-ticket initial public offering (IPO), possibly within the next 18 months.

The discussions pertaining to a possible investment are still in early stages and the details remain sketchy even though sources familiar with the situation said Catamaran could invest up to US$ 10 million. While PremjiInvest has a committed corpus of nearly US$ 1 billion, Catamaran is a smaller US$ 129 million fund, tracking venture investments. The possibility of having Murthy and Premji as investors could well be a coup for Manipal, which is looking at the capital market.

Before Murthy founded Infosys, he had a meeting with Premji for heading Wipro’s then nascent IT business. The meeting,obviously, went nowhere, with Premji later dubbing the encounter as just a drink at Welllington Club, and finding Murthy too high-powered for us and Murthy very happily admitting, “He rejected me. But I am very grateful to him for that.”

Global success and billions later, the two might come together at Manipal Universal Education. However, Catamaran’s investment head Arjun Narayan said the fund will not comment on speculation as a matter of policy, while Manipal Education MD Ranjan Pai said, “There is nothing as of now.” Manipal Universal Learning is part of the Rs. 2000-crore (Rs. 20 billion) Manipal Education and Medical Group (MEMG), which is a strategic player in education and healthcare services. There is an intent on the part of Catamaran and Manipal to strike a deal, but it depends on how the IPO story develops, another source added.

Pai declined to comment any further stating that his company’s board will have to meet and discuss on IPO and then go in for formal discussions with bankers. However, informed sources said Manipal Education could be looking at US$ 1-1.25 billion valuation for its public offering, which could be launched in the second-half of FY12. Informal discussions have been under way with bankers, they added.

Manipal’s education revenues could touch US$ 250 million by FY12. Its revenue is equally split between India and overseas operations, which include a large acquired campus in the Caribbean island of Antigua. The other international campuses are spread across Dubai, Malaysia and Nepal. In January this year, Murthy’s Catamaran made its maiden investment in a pre-IPO deal with SKS Microfinance, where it invested Rs. 28 crore (Rs. 280 million) for a 1.3% stake. Catamaran picked up the stake at a steep discount to the issue price as SKS looked at roping in marquee investors ahead of the IPO. Last year, Murthy sold shares worth Rs. 174.3 crore, or US$ 37 million.

Source: The Times of India, November 16, 2010

Tech hiring to hit record highs

With campus recruitments by technology companies only weeks away, early indicators suggest this year recruitments may touch a historic high, as top Indian tech majors, including TCS, Infosys and Wipro, will alone recruit close to 100,000 engineers, if not more. Back-of-the-envelope analysis, coupled with stated recruitment plans of the IT biggies, shows that December-January will be action-packed at engineering college campuses, not to mention the impact that MNC biggies like Accenture and IBM will have.

“According to our original plans, we were to recruit 30,000 people this fiscal, but we will close the current year with 50,000 persons added. For the next fiscal, we could hire as much as this year, if not more,” said N. Chandrasekaran, CEO and MD of TCS, which has a total employee headcount of 177,000 people. TCS follows a policy where it recruits 70% of its annual intake from campuses. The company recruited 24,000 persons in the fiscal ended March 2010.

NASSCOM, the industry body for software companies, has laid down ground rules for campus recruitments under which member-companies are allowed to enter campus only at the beginning of the eighth semester of engineering. Going by recruitment data and growth projections, most tech majors began 2010 with conservative estimates of manpower required but gradually scaled up their targets as the year progressed.

At the beginning of this fiscal, Infosys had said it would recruit 30,000 but hiked the figure to 40,000 by September-end. The annual report of Infosys says in the previous year (2009-10), the company interviewed 61,000 people and made 26,200 job offers. As of March 2010, Infosys and its subsidiaries had an employee strength of approximately 113,800 employees, of which 106,900 are technology professionals, including trainees.

Shankar Srinivasan, Chief People Officer, Cognizant, told TOI, “In the last one year (from October 2009 to September 2010), we saw a net addition of over 27,500 employees. We continue to be active in campuses as well as in the lateral market (hiring of experienced professionals). We ended the September 2010 quarter with approximately 95,600 employees globally.”

“A 20% growth rate in the industry will lead to total demand of around 310,000 employees. Part of this will include employees joining from fields like MBA and accounts, and some employees will be hired locally onsite,” Ashish Chopra, analyst with Motilal Oswal, said.

On the assumption that Cognizant, Wipro and HCL Tech will recruit as much in the forthcoming recruitment season if not more than they did in 2009-10, there are bound to be fireworks at engineering colleges. “We have never seen such large scale recruitment numbers. This is clearly the highest levels that I have seen in the past 10 years of campus,” a campus recruitment watcher told TOI. Placement officers and institutional administrators in Tamil Nadu too are upbeat that IT majors such as TCS and Infosys have revised manpower projections for the coming year.

“This is fantastic news. I am excited at this (revised HR projections). This is something that must keep not just placement officers, students, job seekers and job providers happy but the nation as a whole as the job sector is looking up,” says Jayakumar, former Deputy Registrar (Placements and Training) at the Indian Institute of Technology, Madras.

However, pay packages at campuses might not witness any significant uptick despite the surge in recruitments. An entry-level engineer is likely to get Rs. 300,000 to 325,000 as a starting offer, while a post-grad engineer may get an additional Rs. 20,000. Likewise, Professor S. Gowri, Registrar of Anna University of Technology, to which over 150 engineering colleges are affiliated in Chennai and surrounding regions, says “while it is appreciable that the job market is looking up, much will depend on the kind of jobs they provide.”

Source: The Times of India, November 16, 2010

New Silk to invest $70m in Chaitanya edu group

The US$ 1.4 billion New Silk Route (NSR) Private Equity is close to investing Rs. 325 crore (Rs. 3.25 billion) or roughly US$ 70 million, in Hyderabad-based Sri Chaitanya Educational Group, one of the country’s largest network of private schools and junior colleges, at least two persons familiar with the development said.

This could be till date among the biggest foreign investments in India’s education sector that is beginning to see a robust deal flow. NSR is an Asia-focused PE fund spearheaded by ex-McKinsey honcho Rajat Gupta, a former global head of Citi Victor Menezes and Parag Saxena.

The fund has issued a term-sheet (a document guiding legal counsel to a final agreement) and is in the midst of due diligence. The transaction, which will see the fund picking up between 33% to 49% stake, could be clinched within the next 45 days, said one banking source who declined to be identified since talks are private.

Sri Chaitanya runs around 160 institutions, mostly in Andhra Pradesh, including 116 schools and junior collages. The 25-year-old group had mandated Ernst & Young to raise funds after spurning buyout offer from a large southern corporate house with interest in education. A senior official at New Silk Route declined to comment. “Nothing yet. We will let you know when something happens,” said YLV Sridhar, Finance Director at Chaitanya when contacted.

Source: The Times of India, November 16, 2010

Placements at FMS, Delhi set a new record

Summer placements at Delhi University’s Faculty of Management Studies (FMS) have broken all records this year. All 235 students from two MBA courses got placements for two months in 91 companies in just five days. There was an increase of 150% in the highest stipend this year with an investment banking firm offering Rs. 250,000 to two students. In fact, the average stipend this year is Rs. 85000, which is an increase of almost 42% from last year.

Professor A. Venkat Raman, Placement Convener, FMS, said: “We are satisfied with the summer internship offers this year. Apart from roles in finance and marketing which have been the traditional strongholds, we also witnessed significant diversity in the profiles offered.” According to FMS, a record number of 145 companies had confirmed their presence in the placement drive this year, though 91 finally visited the campus. The rest could not visit the campus as all students had already been placed. “This year the response of the companies and the offers they made have been much better. We also got companies which havent been coming for summer placements for the last couple of years,” said Nagraj Chandrasekar, Media Coordinator, FMS.

This time, we had more private equity firms which are known to pay more. This explains the steep rise in the stipends this time, he said. Chandrasekar said coveted profiles like treasury, HR and risk management were offered, besides the traditional ones. No wonder, students are upbeat about the placement scene this year. According to them, summer jobs help companies discover the best talents on.

Source: The Times of India, November 16, 2010

IIMs want more girls, non-engineering students

The Indian Institutes of Management (IIMs) are now looking to rope in more girl students and those with non-engineering background to get a more diversified variety on their rolls. Directors of five IIMs from across the country held a conference and felt the need to change the quantitative bias in the Common Admission Test (CAT) to draw in more students in their classrooms from diverse academic backgrounds.

Giving a wrap-up of the discussion, Indian Institute of Management-Calcutta (IIM-C) Director Sekhar Chowdhury said the issues would be dealt with seriously though it was not yet certain that the changes could take place from next year’s CAT. “In many cases, despite efforts to get in students from other backgrounds, the number of engineering students has increased. The blame is on our admission process. We need to change how we admit students and how CAT is organized,” said IIM-Lucknow Director Devi Singh.

Singh said though a large section of the faculty would not have been favourably disposed to the idea of having a greater diversity in students, “now the realization has dawned on them and in the next few years we may see a change in the system.” IIM-Bangalore Sirector Pankaj Chandra felt girl students found the CAT examination with its stress on mathematics a deterrent. “That’s the reason many girl students do not sit for the entrance test.”

Statistics show that about 200,000 students take the annual CAT examination for admission to 2000 seats in the country’s ten IIMs. Of them, the percentage of engineers gaining entry into the premier B-Schools is over 90 per cent, while the percentage of female students is only 10-15 per cent taking all the IIMs together.

Chowdhury said while the world has a nearly 50:50 ratio of men and women, “why cannot we have a similar or more or less equal representation in the classroom? After all, the class should represent life.” He said on the contrary, private management institutes had a 40-45 per cent girl students.

Source: The Economic Times, November 15, 2010