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Summer placements begin on an optimistic note at B-schools despite the global recession, the September 11 attacks, and the disturbance in West Asia.
Fact is, we shouldn't even be writing about summer placements now. After all, everyone who is anyone expects things to be bad on the jobs front: the global economy isn't really in the pink of health; its Indian counterpart is proving to be a straggler; and the events of September 11, and the ensuing fracas in West Asia seem to have taken everyone's mind off business. The good news is, summer placements-they begin in most schools around October and go on till everyone has been placed-aren't as bad as everyone thought they would be this year. At the Indian Institute of Management, Ahmedabad, 37 students were placed on Day Zero. The school's summer placement season began October 7, and continued through every Sunday of the month. By October 22, 105 of a batch of 195 had been placed. Things aren't very different at the Faculty of Management Studies, Delhi. The statistics: 96 students, 34 companies, and 126 offers. ''We planned two days of summer (placement) activity,'' explains FMs Dean S.P. Gupta, ''but ended up placing more than 90 per cent of the students on Day 1 itself''. Have extraneous factors made things different this year? Gupta thinks not. ''This isn't very different from our summer placement record last year.'' Not convinced. Well, things look pretty rosy at the Delhi-based Indian Institute of Foreign Trade too. ''Despite the recession, there is no drop in the number of companies participating in our summer placement,'' says D. Kumar, Corporate Advisor (Placements), IIFT. ''Like last year, we managed to place 20 per cent of out students in October itself.'' Are Wall Street firms absent from the scene as one would expect them to be? Not quite. IIM-Ahmedabad rigged up video conference links with some of these firms and placed eight students each with Goldman Sachs and Lehman Brothers. All these bode well for placements 2002. The only cause for concern was the fact that stipends remained more or less at the same levels as last year. At the top three IIMs the average stipend was around Rs 12,000. But no one's complaining. -T.R. Vivek TELECOM It's time to blow the conch shells and rattle trishuls. The Swadeshi brigade has notched up another victory. The vanquished this time is not an unsuspecting bunch of teens visiting Wimpy to nurse Valentine bites or movie-goers queueing up for Deepa Mehta's Fire. It is merely a Rs 1,000 crore project for a nationwide broadband data network with a final bandwidth of 40 giga bytes per second. The dot services was to hold 45 per cent equity in it, the IT ministry, 2 per cent, and educational institutes, 4 per cent. And Carnegie Mellon University of the US, through a company, IUNet, set up to execute the project, would get 49 per cent for bringing in the technology. Political opposition to the project however travelled much faster than 40 GBPs. Even the Prime Minister could not quell the opposition to the project, which largely came from his present and former brothers-in-arms. They voiced security concerns even though the driving force behind the project were three Indians: V.S. Arunachalam, who is a former head of the Defence Research Development Organisation; Raj Reddy, a computer science and robotics professor at CMU known for his work on artificial intelligence; and Andhra Pradesh CEO N. Chandrababu Naidu. They ignored that Sankhya Vahini had to follow the regulations laid down in the ISP licensing norms, could not use its network for voice telephony unless permitted by the government, and was subject to all government diktats. They forgot that CMU has a record of fruitful collaborations with many Indian universities and ongoing research programmes focusing on India's economic and technological development. It has undertaken collaborative research worth millions on issues related to Indian technology and infrastructure. Finally, in October 2001, CMU pulled out of the project, cleared by the it Task Force on September 5, 1998 and the Cabinet in January 2000. Suddenly CMU is being painted as not essential to the project. The Minister for it, Communications and Parliamentary Affairs Pramod Mahajan says Bharat Sanchar Nigam Ltd can execute the project. Maybe it can, in spite of being burdened with the job of guarding its threatened hegemony in telecom. Maybe, even an end to Sankhya Vahini will not be much of a setback. There are other projects-one by ERNET, another called Vidyavahini, and yet another called Schoolnet-for similar networks, albeit of smaller capacity. But then, we should perhaps stop complaining that non-resident Chinese are more patriotic than non-resident Indians. -Suveen K. Sinha
The government has been doing a fine job of warding off foreign investment. The People's War Group's help was hardly needed. Nevertheless, the outlawed Naxalite group took it upon itself to lend a helping hand by attacking the bottling plant of capitalism's icon Coca-Cola in the Guntur district of Andhra Pradesh in the wee hours of October 21. They left a note in, fittingly, Telugu, which dubbed the Americans the biggest terrorist group in the world and raised slogans denouncing multinationals and globalisation. The act may has given PWG, which may well be feeling an identity crisis in these bin-Laden times, some much craved column space. But of far graver consequence will be how Coke reacts. The company has so far shown constraint, merely saying that it will restart the plant as soon as possible. But its brass would sure be wondering why Coke has to be at the receiving end-be it government action in 1978 or action against the government in 2001. NIIT usurped the role of the United Nations by declaring December 2 as the World Computer Literacy Day. But by far a more audacious move is to launch on that day a programme to make India's legislators computer literate through free courses. Our leaders are not known refuse what comes free, but this one will be tricky. As Pramod Mahajan pointed out while launching the effort, some legislators acquire a swagger when boasting that they know nothing about computers. GOLDEN EGG
Is cash a liability? Yes, if it remains parked in a company's balance sheet. That is the message from two recent corporate decisions: Hindustan Lever's to issue bonus debentures and Hero Honda's to reward shareholders with a 250 per cent dividend. ''We have cash. We don't need part of it. Why not give it back to shareholders?'' asks Hero Honda's Vice President (Finance), Ravi Sud. The cash he refers to was Rs 325 crore invested in mutual funds and bank deposits as on March 31, 2001. The spare cash invested in mutual funds and bank deposits fetches returns of 10-12 per cent. In contrast, Hero Honda's return on capital employed in its main business is over 80 per cent. The special dividend, which cleans out about Rs 110 crore from the balance sheet straightaway improves the company's overall ROCE. FMCG behemoth Hindustan Lever couldn't take this course. The company has announced that it will issue a debenture worth Rs 6 for every Re 1 share; in dividend terms that translates to 600 per cent, and to make that kind of payment, HLL would have had to dip into its reserves. Besides Lever could need this money for expansion. That could explain the complex bonus-debenture route which involves a 50 per cent payout after two years, and the rest, after the third. But the move means Rs 1,650 crore goes out of the share capital (equity, reserves, and surplus) increasing HLL's return on equity. The company could have achieved the objective through the issue of bonus preference shares, but that would have entailed a tax outgo of about Rs 118 crore. Does ROCE matter all that much? Well, HLL's shares jumped Rs 19 after the announcement. QED. -Suveen K. Sinha
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