26.08.2008

• Infosys buys UK’s Axon for Rs 3,300 crore
• Infosys acquired UK based Axon Group, a SAP consulting services company listed on London Stock Exchange, for about $753 million (407.1 million pounds) in an all-cash deal
• Infosys has offered 6 pounds per share, which is a 33.1% premium on Axon’s six month average stock price and almost 19.4% over the closing price on Friday
• Axon, with around 2,000 employees, provides consultancy services to MNCs with SAP as their strategic enterprise platform. Axon’s revenues of £204.5 million in fiscal 2007 with a net profit of £20 million
• Rationale for the deal: The SAP practice is a growing business segment for Infosys, accounting for 24% of its revenue with a CAGR of 65% over the last three years. This deal gives them a foothold in the lucrative US and European markets
• Infosys deal is said to be the biggest overseas buyout by the Indian IT sector. The biggest acquisition till now was the Wipro’s acquisition of Infocrossing for $600 million last year
• Tata set 2-week deadline for Singur
• Tata Motors may pull the plug on Singur if the situation does not improve within the next fortnight
• The Singur plant is a readymade construction, which can be moved. The expected loss is estimated to be Rs 100-200 crore on account of expenses incurred in laying the foundation, besides the inevitable delay in full-scale production of the Nano.
• Nano’s launch may not get affected by the agitation in Singur, because the first batch of around 4,000-5,000 cars is reportedly ready at Tata Motors’ Pantnagar and Pune plant
• Nano project is getting offers from a number of state governments, including Maharashtra, Orissa, Andhra Pradesh and Uttaranchal
• 3G spectrum auction for CDMA players too
• The Telecom Commission under the Department of Telecom has modified its policy on allocation of spectrum for third generation (3G) mobile communications using the CDMA platform. Auction will be for radio frequencies in the 800 MHz band
• The Base price for 3G frequencies in the 800 MHz will be Rs 40 crore for metros and category A circles, Rs 20 crore for category B circles and Rs 7.5 crore for category C circles
• This implies that CDMA players such as RCOM, Tata Teleservices, Shyam, BSNL and MTNL as well as new players who want to enter India on the CDMA platform now stand a chance
• The earlier policy had decided to allot 3G spectrum in the 800 MHz band to the CDMA player with the highest subscriber base, without taking resort to auction as mandated for GSM players
• I think this is a fair move because the earlier policy was designed specifically to benefit Reliance Communications (RCOM) with its higher subscriber base
• 9.22 m Mobile wireless users added in July; Highest ever
• In July, mobile operators, GSM and CDMA together, added 9.22 million subscribers, Highest ever additions in Mobile subscription in a single month
• Bharti Airtel topped with 2.69 million new subscribers during the month while Reliance Communication got 1.5 million new CDMA subscribers. GSM operators own 218.9 million subscribers while CDMA players have nearly 77 million users.
• In the wire line segment, the subscriber base has decreased further to 38.76 million as subscribers prefer to take a mobile connection.
• Other news
• The five-month old coalition government in Pakistan collapsed on Monday when Nawaz Sharif announced that members of his minority party, the PML-N, would leave the fractious alliance, citing broken promises by Asif Ali Zardari, the leader of the majority Pakistan Peoples Party. It is expected that PPP would be able to cobble together a new coalition with smaller parties.
• VHP bandh turns violent in Orissa with burned churches, Christian prayer halls and church-run orphanage in various parts of Orissa. The bandh was called to protest killing of Swami Laxmanananda Saraswati and four of his disciples
• The toll in the ongoing violence in Srinagar since Sunday is gone to six as curfew remained clamped for the third consecutive day in the Kashmir valley
• Jharkhand Governor Syed Sibtey Razi on Monday invited the Jharkhand Mukti Morcha (JMM) supremo Shibu Soren to form the government and asked him to seek vote of confidence by September 1st.
• The government of India has accused China’s largest telecom player Huawei of serious legal and financial violations, including tax frauds, in India. The labour ministry has charged Huawei with employing a large number of Chinese workers in the country without proper work permits, beyond the permissible limits.

NOTE: Today’s notes is contributed by my friend Yusuf Kaydawala.