Andrew Levermore, the expat CEO of Bharti Retail puts in his papers

He's moved out of Bharti, and Bharat too. In a sudden move, Andrew Levermore, the expat CEO of Bharti Retail, has put in his papers and is headed back to home country, South Africa. Levermore had joined the fully-owned subsidiary of Bharti Enterprises as chief operating officer in July 2010. Says a Bharti spokesperson: "We can confirm that Andrew Levermore has moved on from Bharti Retail as he wanted to return to South Africa to start his own business venture. The company will appoint an appropriate replacement in due course." This is Levermore's second exit from India. The first was in mid-2008 when he quit K Raheja's HyperCity Retail after a four-year stint. Any bets on whether he will be back a third time?

Western economies in deep freeze, expats look at India for jobs

MUMBAI: As the Western economies continue to remain in deep freeze, more and more foreigners, mostly from the US and Europe are looking at India for jobs, a trend that has seen up to 20 per cent spurt this year, according to head-hunters. According industry estimates, there are as many as 40,000 expats working in various industries in the country today. "Hiring of expats has picked up by 15-20 per cent at all levels since last year, mainly on account of India being one of the fastest growing economies offering huge job opportunities," recruitment process outsourcing firm Elixir Consulting manager for International Practices Ratnesh Kumar said. Increasing number of expats are seeking jobs in the country on account of job cuts in their home countries, coupled with rising outsourcing and high taxes, he said, adding that this is happening more in the US and Europe. The Indian experience also adds values to the expats' resume, reflecting an individual's ability to adapt and deal with diversity, he explained. These professionals are mainly being hired in banking and financial services, automobile, pharma and retail sectors, apart from areas, where the domestic industry does not have competency like alternative energy, complex infrastructural sector, etc he said. "While CXOs are generally offered around $2,50,000 per annum, mid-manager level employees get $80,000-1,25,000 per annum," he said. The number of foreigners seeking jobs in the country are no longer limited to the middle and senior levels, but is spreading over to beginners as well, he said, adding that at present, there are around 40,000 expats working in the country and the number is still growing. What is interesting is that these expats are given compensation almost at par with what is being paid in foreign countries. "Expats, with specialised skillsets, which are not available in the country due to financial or technology constraints such as molecular research, are being offered highly attractive packages," Kumar said. Companies are also offering attractive leadership positions to experienced expatriates ranging from mid-level managerial roles to departmental heads. However, the attrition rate of expats is around 10 per cent annually mainly due to difficulties in communication and cultural differences, Kumar added. Echoing similar view, Globalhunt director Sunil Goel said some global companies have their largest centres in the country on one hand, while on the other, many local organisations are also going global. "So, the expat hiring is becoming the need of the hour, where foreigner from various parts of the globe are taking up multiple roles and are recruited as experts in sectors like infrastructure, healthcare, power and energy, oil and gas and automotive," he said. According to TeamLease vice-president Rituparna Chakraborty, the country is seeing an increased demand in expats across various industries, especially post the 2008 recession in the developed economies. "Professionals from Europe, Southeast Asia and the US mostly are being hired mainly by sectors like travel and tourism, retail, aviation, education and sports, where we see maximum traction," she said. Talking about salary, she said, for most levels it is at par with industry standards, unless they are being brought in for a particular skill, which is niche and is non-existent within the country.

Home loan EMIs to rise by 6k cr

MUMBAI: Increase in equated monthly installments (EMIs) due to rising interest rates and reset of teaser loans will put additional annual burden of about Rs 6,000 crore on home loan borrowers. According to a report by Crisil, higher EMIs and slowdown in economic growth would also increase bad loans for lenders. In view of the persistently high inflation, RBI has hiked key policy rates 12 times in the past 18 months, leading to higher interest burden for home loan borrowers. The reference floating rate for the industry has increased by 200-250 bps during this period, which translates into an average increase of 15% in EMIs. Although banks and housing finance companies have reset their benchmark rates, the increase has not yet affected customers who have opted for teaser loan schemes, which were launched in early 2009 to stimulate dwindling home demand. For a teaser scheme customer, the rates are fixed for the initial 2-3 years, and subsequently get linked to the prevailing market rates. According to the Crisil report, a large number of borrowers who are on teaser loans will get hit with a sudden jump in rates when the teaser rates reset to market rates. This shift is expected to take place from April 2012. "As of March 2011, teaser loans accounted for 25% of the housing loan portfolio of Rs 5,100 billion." the report said. The difference between the teaser rate and the reset rate is likely to be as high as 300-350 basis points (bps). The report has highlighted that at the end of June 2011 quarter the asset quality of industry players like HDFC, LICHFL and DHFL has deteriorated by 10-40 bps on a quarter-on-quarter basis. "We expect the NPA levels to go up by around 30 bps over the next 2 years to reach 1.9 per cent by March 2013," the report said. On the positive side, yields for financiers will improve in 2012-13 as teaser loans availed in 2009-10 get reset to market rates. "We expect yields for a teaser loan customer to increase by 300-350 bps once they are reset to market rates. This will have a net positive impact of around 30 bps on the net profit margins of housing finance players in 2012-13," Crisil said. The impact of rising interest rates is best reflected on the EMI of a borrower with a 15-year home loan for Rs 15 lakh. With the current mortgage rates hovering around the 11%, the borrower's EMI would have risen by by 15% from Rs 14,771 to Rs 17,049. If rates were to go up to 13%, his EMI will rise to Rs 18,979.

Risks rise for India as global economy totters

NEW DELHI: Risks for the Indian economy have intensified in recent weeks and any drastic change in ratings by global rating agencies in coming months could pile pressure and add to the gloom that has gripped Asia's third-largest economy. Ratings agency Standard & (S&P) says risks associated with weaker-than-expected global growth, sovereign debt concerns in Europe and potential tightening in funding conditions weigh on Asia-Pacific's sovereign credit trends. The Indian economy faces the added risk of heightened policy paralysis, which economists say has the potential to hurt growth as investors stay on the sidelines. "The three risks would be inflation, low or negative growth in the agricultural sector and potential policy paralysis if further issues arise which could stop the proceedings in the Parliament, as has been the case until quite recently this year," Takahira Ogawa, S&P's director of sovereign and international public finance ratings, told TOI when asked about the key risks facing the economy. S&P has a BBB- (stable) rating on India, which implies investment grade. "We expect India's growth rate for fiscal year 2011-12 to be 7.8%," Ogawa said. Several economists that TOI spoke to said growth could slow to 7.2 to 7.5% in the current fiscal largely due to the impact of the Reserve Bank of India's aggressive interest rate tightening to counter stubbornly high inflation. The International Monetary Fund too has trimmed India's growth estimates citing weak growth in the rest of the world. According to Ogawa, the fiscal deficit - a measure of the extent to which the government has to borrow - could widen to 5.7% of gross domestic product this year if crude prices remain high. Asked when S&P will issue fresh ratings views for India, Ogawa said: "We review our sovereign ratings on a regular basis. Our analysts will make the calls on credit risk as they see them based on Standard & Poor's published rating criteria." The global economic situation has worsened in recent weeks. The Federal Reserve on Wednesday said there are significant downside risks to the US economic outlook, including strains in the global financial markets. The rising economic woes on both sides of the Atlantic have wreaked havoc across global financial markets. In India, the stock market has plunged while the rupee has posted its biggest weekly fall in more than 15 years. Industrial growth in July slowed to 3.3% while high interest rates have hit investments. Exports are expected to moderate and lower-than-expected receipts may make it difficult to bridge the fiscal deficit. Developments on the political front have added to the policy paralysis that had set in after a slew of scandals emerged last year. "There is complete drift and no decision making. There is a sense of despair. I don't remember a situation like this before. I don't see any cure in the short term," former RBI governor Bimal Jalan said. He said even if there were adverse rating actions in the months ahead it would lead to some short-term volatility in the stock market. According to him, the key issue is to restore confidence. Analysts say the slide of the rupee is not a good sign and there is an urgent need for the government to act and reverse the situation to enable the economy to return to its robust growth path. "What is worrying is that the rupee has collapsed. This is a real concern. This means money is not coming in. This is not good for a country which is planning to grow at 8%-9%," HDFC chairman Deepak Parekh told TOI. "We have to open up FDI, make it attractive for companies. Indian companies are going abroad, foreign companies are not coming in. This is a cause for great concern. We are a capital short country. The government has to find ways to get long-term foreign investment into the country. Policies have to be fixed," he said. But Kaushik Basu, the finance ministry's chief economic adviser, defended the government's handling of the price situation. "I believe it is a difficult situation that has been very well handled in India. This is clear from global comparisons. We are still amongst the most robust economies," he said.

Car sales growth may slow down to 2-4 %

NEW DELHI: The recurring hikes in interest rates and petrol prices have punctured the growth story of the Indian car industry. Against a 30% growth witnessed in 2010-11 , the car industry is projected to grow at a low single-digit level in 2011-12 . Auto industry body Society of Indian Automobile Manufacturers (Siam) said a flurry of negatives had pulled down car sales drastically. "Apart from interest rates and the petrol price, inflation has also dampened the sentiments ," S Sandilya, president of Siam, said. The gloomy outlook prompted Siam to again downwardly revise this year's growth projections for car sales, as part of its quarterly review . "Against the original projection of 16-18 % growth, we now forecast car sales to grow by 2-4 % this fiscal. The car industry is hit by a slowdown and it would take some time before demand picks up again," Sandilya said. Siam had cut down its forecast to 10-12 % in its firstquarter review in July. Indian car sales last grew in single digits in 2008-09 , at 1.4%. Car sales have been depressed for last many months as RBI's attempt to tame spiralling inflation by raising interest rates has hit vehicle financing rates. Sandilya said interest rate on car financing has gone up by 3.6% since April last year and are currently hovering around the 13% mark. Companies like Maruti Suzuki , Hyundai and Tata Motors are feeling the heat. Many companies have cut production to fall in line with slow demand. According to analysts, the dearer interest rates have also increased the EMIs on home loans, leading to reduction in disposable incomes. "So, many people have preferred to postpone car purchase to a later time," an analyst with a Mumbai-based brokerage said. Marketing heads of many top car companies are already complaining of reduced traffic at dealerships. The festival season , where demand usually peaks, is expected to be a moderate affair due to the despondent mood among buyers.

Mamata not in favour of foreign investment in aviation

NEW DELHI: A huge question mark hangs on allowing foreign direct investment (FDI) by foreign airlines in Indian carriers. West Bengal chief minister Mamata Banerjee - who, along with the Opposition, was instrumental in forcing UPA to suspend FDI in retail - is learnt to be opposed to FDI in aviation too. The Centre is unlikely to invite her wrath by going ahead with this issue in a hurry, or at least till the Parliament session gets over. "Allowing 26% FDI in aviation was an almost done deal (although aviation ministry had favoured 24%) but we have been told that Mamata is opposed to this move also. Now one does not know how and when the government would take up this issue again. The Congress-led UPA has to learn to deal with Mamata keeping the fact that she is not dependent on the grand old party for survival in West Bengal and would be very forceful in getting her demands met," said highly-placed UPA sources. Banerjee is learnt to be keen on reviving Air India where employees now have months of unpaid salaries and allowances. AI pilots and other employees routinely tell their woes to Bengal CM and TMC's Union Cabinet ministers like Dinesh Trivedi. The aviation industry is also divided on the issue of FDI. While Jet Airways and IndiGo are opposed to this idea, Kingfisher and Spice-Jet are in favour of it.

Britannia sacks 42 executives in one day

MUMBAI: Biscuit maker Britannia Industries pink slipped 42 executives in a single day signaling that FMCG companies, faced with soaring costs and hyper-competition, were cracking the whip on under performers. The development took place last week and came quite abruptly, said some of the employees who have been laid off. Britannia said it sharpened performance parameters for the staff this year differentiating them into "great, good and gone" and rewarded the top performers with bonuses as high as 150%, something not very common in the industry. Sources said Britannia decided to let go executives who had underperformed in two out of the last three years. All 42 employees, including some managerial staff, who have been asked to leave will be given their salaries for the next two months, but have been asked to go on leave immediately. These employees were from the manufacturing, sales, packaging and quality control teams, said a person aware of the development. While the percentage of employees who have been asked to leave is about 3% of the company's total strength of around 1,400, the haste with which the move was executed shocked many staffers. But the company said the affected employees were put on notice for some months now. "This is part of the ongoing performance management process, which differentiates the great, good and under-performers and has nothing to do with any other factor. Each year, under-performers (usually 20 to 30) are put on a performance improvement plan and progress is consistently and carefully monitored. In those cases, where the level of performance continues to be below the acceptable benchmark and there is no noticeable improvement, employees are transitioned. There is no surprise for the employee as it is discussed in advance as part of the performance review and happens every year," said the company spokesperson in an emailed statement. Some of the sacked employees said the development came as a surprise. "A senior management team accompanied by the Human Resource team had come down to Kolkata and asked us to put in our resignations. They simply said that this decision was taken in light of our performance," said an employee from the company's Kolkata unit, who did not want to be named. This employee has been with the foods major for over two decades and was given a salary hike last year. "I didn't get a salary hike in 2009 and 2011. The HR asked me to resign last week saying that my performance was not up to the mark. The management has asked officers who haven't got two salary hikes in the last 3 years to resign for under performance," said a production officer, who did not want to be named. A retired Britannia employee, on conditions of anonymity, added: "This is very unlike the way Britannia functions." Industry experts believe that companies like Britannia are bound to get tougher on performance expectation from employees with increasing competition in the marketplace. Britannia has been facing stiff competition from ITC, Kraft and Parle and also some regional players. The Rs 4,600-crore Britannia, which has 250 managers, has been growing at strong double digits every year for the last four-five years. It has consistently stepped up brand investments as well to support and maintain its market shares. Most companies in the FMCG space, including Hindustan Unilever (HUL) follow a performance appraisal system where employees are segmented into different levels of delivered performance every year. Those who fall in the lowest bracket are usually mentored for a certain period of time to upgrade their performance. The level of strictness observed in weeding out the bottom 1-2% employees may vary from company to company. However, no FMCG company has yet admitted to following a policy of laying off under-performers. Some companies like Procter & Gamble India (P&G) have in the past followed good practices of "outplacing" surplus employees based on their interests. On the flip side, however, there is also a war for talent in the FMCG industry which has an annual attrition rate of 18-20%. Companies like HUL, P&G and Godrej Consumer Products, which try to maintain a pipeline at ever managerial level, are constantly on a recruitment drive. Axe falls Britannia has categorized performance as "great, good and gone" this year It has rewarded the top performers with bonuses as high as 150% Sources said Britannia decided to let go executives who had underperformed in two out of the last three years ( With inputs from Shilpa Phadnis in Bangalore )