Healthcare set to bring in next boom in BPO

Mini Joseph Tejaswi / TNN / Jan 15, 2007, 01:05 IST

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Healthcare is becoming a red hot BPO vertical in India, with many technology, as also traditional firms, entering the segment.

Healthcare set to bring in next boom in BPO

BANGALORE: Healthcare is becoming a red hot BPO vertical in India, with many technology, as also traditional firms, entering the segment.
A report by India Brand Equity Foundation and Ernst and Young released in December, 2006, finds that healthcare BPOs may account for nearly 2 lakh people in India by 2008, up from about 20,000 people in the medical, healthcare and pharmaceutical (MHCP) BPO space now.
The healthcare system in developed countries is seen to be riddled with inefficiencies, excessive administrative expenses, inflated prices, poor management, inappropriate care and wastage. "These problems significantly increase the cost of medical care and health insurance for providers and patients. This is what is pushing the growth of healthcare BPO in India," says K Vinayambika, vice-president (healthcare practice), Cognizant Technology Solutions, a company that employs over 4,500 healthcare domain experts, doctors, clinicians, pharmacologists, bio-statisticians and medical writers.
Nasscom president Kiran Karnik says several high-end services like clinical data analytics, biometric services and medical engineering are now coming to India. Traditionally, outsourced services have included mainly medical insurance claims processing and digitising patient health records (medical transcription).

The US-based First Consulting Group, an IT services firm, recently set up a healthcare BPO facility in Bangalore. "We currently have 140 health experts and we will scale up this number significantly," says R Subramaniam, MD, FCG Software Services India.
Karvy, a financial services company, has now moved onto providing services to the healthcare industry. According to Arthur Flew, CEO of Karvy Global Services, revenue from services to the healthcare industry is likely to account for about 20% of the company's revenue in the next two years.

BPO major Firstsource Solutions, formerly ICICI OneSource, recently acquired BPM, a Delaware-based healthcare claims outsourcing company in the US. Ananda Mukerji, managing director & CEO of Firstsource, says the healthcare vertical would be one of the company's three focus verticals "as it accounts for a high volume growth."
Newer services being outsourced include research, analyses and reports on emerging technologies for major US healthcare foundations and organisations, and for industry publications. "The healthcare sector has been keeping technology and outsourcing away for decades. It's all changing drastically and India stands to greatly benefit from this trend," says Saji Salam, a US-based healthcare expert and chairman of HL7, a global standard for healthcare.
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Govt to open ECB route further for core sector
At present, NBFCs are permitted to raise ECBs for financing the purchase and acquisition of machinery for core sector projects.
Sidhartha | tnn
NEW DELHI: Government is set to open the foreign exchange tap a little more by letting non-banking finance companies (NBFCs) to go for external commercial borrowings (ECBs) for financing infrastructure projects.
At present, NBFCs are permitted to raise ECBs for financing the purchase and acquisition of machinery for core sector projects. The move is a further liberalisation of the foreign currency loan window, which saw the government recently allow pure infrastructure financing companies like IDFC to raise ECB.
In addition, the government and Reserve Bank of India are expected to raise the ECB limit for the year �� which was originally fixed at $18 billion. The move follows the recent RBI initiative to raise FII investment cap in government securities. It had allowed portfolio investors to pump in up to $2.6 billion in g-secs by December 31, as against $2 billion earlier, and further up to $3.2 billion by the end of March 2007.
While the ceiling will be raised by $1-1.5 billion, sources said, the policy has become liberal and no legitimate proposal was being denied access to ECB. A final decision on two proposals will be taken by the high-level committee on ECB, scheduled to meet later this month.
With forex reserves rising (it was estimated at $176.58 billion at the end of January 5), the government and RBI have been gradually opening the window for companies to raise funds overseas. But the government is unwilling to let companies access foreign capital for meeting working capital needs since it does not want local players to lose out, while maintaining a check on foreign debt. A large pool of foreign debt has often created trouble for governments globally but India has managed to keep it under check.
By March 2006, India's foreign assets were estimated at $183 billion, while liabilities were around $229 billion, with the net foreign liabilities estimated at $46.07 billion. Companies are allowed to raise up to $500 million for use in infrastructure and industrial projects under the automatic route. Anything over this requires prior approval.
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Large public offers face major hurdles
They look out for registrars and transfer agents who have the experience to handle large size issues from start to finish.
Partha Sinha | tnn
MUMBAI: Merchant bankers handling public offers are in a bind. As they look out for registrars and transfer agents (RTAs or registrars) who have the experience to handle large size issues from start to finish, they can't find any.
With a huge pipeline of IPOs, a large number of which are over Rs 100 crore in size and expected to attract over one lakh applications, there could be some uphill task for merchant bankers and companies, sources said. The line-up includes companies like DLF, Omaxe Auto, Idea Cellular and Firstsource (earlier ICICI Onesource), four IPOs from the power ministry �� Power Finance Corporation, PowerGrid, Rural Electrification Corporation and National Hydropower Corporation, and a number of others.
As per estimates, 2007 could see IPOs and public offers worth $10 billion (about Rs 45,000 crore). A large number of these IPOs could face various problems, including allotment of shares and issue of refund orders, in case large RTAs are not out of their legal or regulatory wrangles, merchant bankers said.
To put things in perspective, over the last few years, three big RTAs �� Karvy, MCS and Intime �� have either been banned or are unable to take on new business because of various reasons. While MCS lost favour with merchant bankers and lost huge business after it erred massively in the ONGC public offer in early 2004, Karvy was banned last year for its alleged role in the IPO scam.
Intime, which was taking on large size IPOs in the absence of Karvy and MCS, and had planned to merge with the latter, has recently been banned from taking new business due to its failure to meet merger obligations. And that has left merchant bankers with just two choices, Bigshare Services and Mondkar Computers, both not having enough recent experience of servicing large issues, merchant bankers said.
Registrars are those firms which, along with the merchant bankers, take care of servicing IPO applicants at the IPO stage and then, on behalf of the companies, service shareholders. For example at the IPO stage they tally application forms with the payments received and issue shares or refund orders as may be the case. On behalf of companies they take care of issuing bonus shares, dividend warrants et al. While the three big RTAs are not taking new businesses, they are allowed to continue with their old business.
"Post-offer (IPO) services are a very demanding job, for merchant bankers as well as registrars. And today the
situation is forcing us to a point where we as merchant bankers have to hand-hold the RTAs a lot in case of large-size IPOs," head of the IPO division at a domestic securities house said.
At present, one of the biggest concerns for merchant bankers is that of paying a monetary penalty in the form of interest in case of any delay in completing the IPO process. Take the recent case of Cairn India IPO. After the book-building on the bourses closed, a court order forced merchant bankers to change its registrar to Bigshare from Intime. If the change had led to delays in listing of Cairn shares, it would have been forced to pay a penalty.
Oracle's open offer for i-flex also had to change its RTA from Intime to Mondkar Computers due to the same court order.
"If the situation (bar on RTAs competent of handling big issues) continues, large issues could run into problems," said the head of merchant banking at a foreign brokerage house. Usually public offers from government companies generate huge retail interest and forthcoming IPOs from the four power ministry companies could be a huge test for the existing registrars, the merchant banker said.
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Virgin Mobile plans India entry
The steel ministry plans to have steel dealers in all districts of the country by March 31, 2007.
Reeba Zachariah | tnn
MUMBAI: When the entire nation is engrossed in the unfolding Hutch drama, another landmark deal is in the works. Two of the world's most admired business leaders �� Ratan Tata of the Tata Group and Richard Branson of the Virgin empire �� are coming together for an alliance in India's telecom landscape.
A source familiar with the development said the Virgin Group is in talks with Tata Teleservices to introduce Virgin Mobile brand in India. Globally, Virgin Mobile's business strategy is to act as a MVNO (Mobile Virtual Network Operator) which buys bulk space from an existing wireless company and resell it under the Virgin brand. However, this model is not yet allowed in India.(For instance: Virgin Mobile has a tie-up with Bell in Canada, while it has an alliance with Sprint in the US).
Instead, Virgin is planning to become an exclusive franchisee of Tata Teleservices which is permitted in India. For this, a new entity largely owned by Tata Teleservices will be formed. The products and services will be bundled under Virgin name, supported by the services provided by Tata Teleservices. The source added that discussions so far has been good and if all goes well with the regulatory approvals in place, Virgin Mobile would be launched in April this year. When contacted, a Tata group spokesperson declined to comment.
In simple words, there would be two brands__Tata Indicomm and Virgin. Tata Indicomm positioned as a mass market brand, while Virgin would be positioned as a youth brand pitted against brands like Hutch. This is been done as Tata Indicomm does not appeal to everyone in terms of popularity and appeal. Tata Indicomm has already established itself in the mass market category while Richard Branson's touch could bring in more subscribers.
This comes at a crucial time when Dayanidhi Maran, Union minister of communications and IT, is pushing to promote passive (mobile tower sites) and active infrastructure (branding, service alliances) sharing, which would help companies to reduce its cost of rolling out services. Though wireless subscribers in India have already crossed the 100-million mark, making India one of the top five markets in the world, still more than 50% of the population is to be covered by mobile services.
For the British billionaire, this is part of his strategy to expand his businesses__telecom, radio, food and beverages, financial services__in India. In 2005, Branson launched his airline Virgin Atlantic's flight services in India.
Tata Teleservices pioneered the CDMA technology platform in India and it serves 13 million customers in over 2,500 towns. Its customer base increased thanks to its hugely successful schemes like 'non-stop' and 'don't stop'.
Recently, Tata Teleservices saw a change in ownership structure with NRI businessman C Sivasankaran's Sterling Infotech group and Singapore government's private equity arm Temasek acquiring stakes in the company.
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'Steel should be available to all areas'
The steel ministry plans to have steel dealers in all districts of the country by March 31, 2007.
NEW DELHI: The steel ministry plans to have steel dealers in all districts of the country by March 31, 2007. Steel minister Ram Vilas Paswan said steel should be available to even remote rural households.
"Today, if a villager wants to buy steel to build a house or for any other purpose, he has to travel to cities where steel is available," Paswan said.
Pursuant to this policy, public sector undertakings under the ministry, Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd (RINL), have started work to expand the distribution networks. Over 450 district level dealerships have been allotted.
Paswan said of the 450 dealers appointed, 202 belonged to the SC/ST category. tnn
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Maharashtra eases wine excise laws
The state government has relaxed excise laws on the sale and consumption of wine.
Abir Pal | tnn
MUMBAI: Here is something to raise a toast to in the New Year. Close on the heels of allowing supermarkets to stock and sell wine, the state government has relaxed excise laws on the sale and consumption of wine.
In a move that clearly draws the line between wine and hard liquor, establishments and eateries have now been allowed to serve wine without having to obtain a restaurant license. Temporary Liquor permit rates for wine have also been slashed by a tenth; from Rs 6,000 per day to Rs 600. "The two ordinances have already been given the go-ahead by state excise minister Ganesh Naik and formal excise notifications are expected within a week," a source said.
What this effectively means is that almost any public venue will now be able to serve wine by paying just Rs 600 per day, irrespective of whether they serve food or not. So far only places that served food and had a restaurant license from BMC were allowed to apply for a license to serve alcohol.
Getting a restaurant license is a cumbersome and expensive process , as a result of which many eateries and snack bars across the city have stayed away from serving alcohol.
The excise relaxation will make it easier to set up dedicated wine bars, something wine growers have been clamouring for a long time.
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India Post gears up to revive parcel biz
It will no longer be just passengers who'll enjoy the comfort of travelling in air-conditioned trains.
Yogima Seth | tnn
NEW DELHI: It will no longer be just passengers who'll enjoy the comfort of travelling in air-conditioned trains. Now even your parcels �� small, medium and large �� booked with the Department of Posts (DoP) will be delivered across the country via the network of AC trains running in India.
In an effort to revive its parcel business, India Post has inked a deal �� the Joint Parcel Product initiative �� with Indian Railways. As per the MoU, to be signed soon, while the Railways will reserve a space in all Shatabdis and Rajdhanis for these parcels, India Post will ensure the pick up and delivery part of it.
"A draft of memorandum has been exchanged between both the departments and we intent to sign an MoU by March this year to help us ensure faster and secure delivery of our entire range of parcels," says IMG Khan, secretary, Department of Posts.
Over the last five years DoP has seen a decline of over 77% in the unregistered parcel business with revenues coming down to a mere Rs 7.45 crore in 2004-05, as against Rs 32.70 crore in 2000-01.
Explaining that the tie-up would be on a revenue sharing basis, Khan said: "India Post is loosing a huge chunk of its revenues from the parcel business to private players in the industry and the initiative will help us cope up with our deficit of Rs 1,100 crore by 2011."
According to the last industry survey done in 2003, logistics and parcel business in India is to the tune of Rs 75,000 crore and DoP contributes a minuscule 0.5% or just Rs 400 crore to it. No wonder, the department is gearing up to establish a strong foothold in the parcel and logistics business.
"We aim to increase our revenues from the current Rs 400 crore to almost Rs 1,000 crore in next two years," he said adding that this is just the beginning and that the department will come out with faster and safer modes of delivering our parcels to ensure efficient customer service.
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Market rally: Investors bet on corporate results
The current week might give some answers, feel technical analysts, as the market has reached a crucial juncture.
times news network
MUMBAI: After a 700 point slide in five sessions, followed by a 650 point rally in two sessions, market veterans are left to wonder where the market is headed. The current week might give some answers, feel technical analysts, as the market has reached a crucial juncture.
Traders expect the reversal of foreign investment trend in the last two days of the previous week to continue into the current week. Investors would also eagerly await the third quarter results from software major Wipro and index heavyweight Reliance Industries, slotted for the week. The results from Wipro would get special attention after the stock witnessed some hectic buying during the end of the week, mainly after the Infosys results were announced. Investors are betting on Wipro, like Infosys, to also meet expectations and revise its year-end outlook to reflect a better scenario.
Most of the brokers and dealers believe that since Friday's rally was backed by robust industrial growth numbers, the current rally might sustain for some more days before any profit taking sets in. But there are a few voices who believe that since to a large extent the rally was boosted by short covering, it might turn tide as early as Monday afternoon. Although it's a few weeks to expiration of the current month's derivative contracts, outstandings of over Rs 42,000 crore might also force some to square off positions early, a market analyst said.
Technical analysts on the other hand are keeping their fingers crossed. With the sensex now in a never-seen-before territory, they believe anything could happen.
Technically 14,150 is a crucial sensex level for the current rally to sustain, a technical analyst with a local brokerage said. "For the sensex to go up further, it should close above the 14,150 level for at least three consecutive sessions," he said.
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Govt accepts Cairn-ONGC pipeline plan
The oil ministry has agreed to the proposal of Scottish explorer Cairn Energy and its partner.
times news network
NEW DELHI: The oil ministry has agreed to the proposal of Scottish explorer Cairn Energy and its partner, state-owned ONGC, to include the investment on a pipeline for transporting crude from Barmer in the overall cost of bringing the Rajasthan field into production.
The pipeline is proposed to be laid from Barmer to Gujarat's Viramgam for linking with IndianOil Corporation's terminal covering a distance of approximately 340 km at an estimated investment of $340 million. The total cost will be shared by the two companies in the ratio of their equity in the field, or 70:30.
Cairn and ONGC have chosen Viramgam terminal as it is connected to IndianOil's Koyali, Panipat and Mathura refineries, which could be potential customers of crude. Smaller pipelines can be built from this point to a port for coastal or export shipment, or even to Jamnagar where Reliance Industries and Essar Oil have refineries that have the technical capability to process Rajasthan's waxy crude.
Cairn and ONGC are taking advantage of a clause in the contract with the government that broadly says the cost of crude is to be based on the 'delivery point'. So the companies are shifitng the delivery point from the wellhead to the end of the proposed pipeline, thereby including the wheeling cost in the overall investment.
The arrangement will also mean that the firms will be allowed to recover this cost from crude sales before the government gets to share the profits.
It is apparent that ONGC will now move the oil ministry to get its subsidiary MRPL de-nominated as the official offtaker of crude oil found by Cairn Energy in Rajasthan and instead sell it to refiners.
This will end a long-drawn spat between the two companies over commercial dealings once crude production starts. ONGC had initially sought to set up a refinery in Rajasthan itself to refine the crude which is waxy in nature and difficult to transport over long distances. Since the Rajasthan crude tends to coagulate, it needs specialised heated pipes for transportation which are expensive.
However, with subsequent rethinking prompted by the refinery's financial viability, ONGC planned to wheel the crude
to MRPL for refining. But this plan got stuck after Cairn refused to accede to ONGC's demand for discount to compensate for the pipeline cost.
The two firms have now set up a joint working group which is talking to many refiners. The crude can be processed at Reliance's 33 million tonne Jamnagar refinery or its upcoming 29 million tonne refinery at the same site, Essar's Vadinar refinery, IOC's expanded Koyali refinery in Gujarat or Panipat refinery in Haryana.
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Reserve Bank may not cut SLR: Banks
The Reserve Bank is unlikely to cut SLR given the spurt in credit growth in December and the recent hike in CRR.
NEW DELHI: The Reserve Bank is unlikely to cut SLR given the spurt in credit growth in December and the recent hike in CRR, even though the government decided to provide more flexibility to the central bank in using that tool, feel a clutch of bankers.
RBI will announce policy measures in its credit review, slated for January 31. Statutory Liquidity Ratio (SLR) is the binding requirement on banks to keep at least certain portion (currently fixed at 25%) of their deposits in liquid assets, mainly government bonds. Cash Reserve Ratio (CRR), on the other hand, is the minimum cash that banks have to keep as proportion of their deposits with RBI.
Citing inflationary expectations in the economy, RBI had recently effected hike in CRR to 5.5% to suck out about Rs 13,500 crore from the system and a cut in SLR would instead infuse more liquidity, thereby almost nullifying the CRR hike, bankers believe.
"A 1% cut in SLR would release about Rs 25,000 crore in the system," Punjab National Bank CMD SC Gupta said, adding, "SLR is a weapon with RBI, but no immediate use is expected...when the necessity arises RBI may use it."
Oriental Bank of Commerce CMD K N Prithviraj said, though RBI would be armed with freedom on fixing SLR, he did not foresee the apex bank to make changes in SLR in the near future as it would more than square-off CRR hike.
Liquidity is already high in the system with bank credit growing at over 30%. A spurt in credit growth in December by Rs 82,614 crore despite hike in CRR shows that a cut in SLR would only inject more cash in the system and inflate inflation, which has breached the threshold projected by RBI for this year, further.
"RBI should not lower SLR below 25% since it will release substantial amount to the system where the liquidity is already very high. This will further fuel inflation, which is at a very high level," Hinduja Group CFO Prabal Banerjee said.
The Union Cabinet recently decided to promulgate an ordinance to remove the 25% floor for SLR, giving more headroom to RBI on managing liquidity.
But, with inflation crossing 5.5% and industrial production expanding to an 11-year high, top bankers and analysts feel RBI would have to strike a balance between attacking the rising prices and easing liquidity in its credit policy review slated for January 31.
"This is something RBI is concerned about. Inflation is the main target, but RBI is also concerned about liquidity," Gupta said.
Prithviraj said the central bank would have to strike a balance between liquidity and inflation. "Liquidity is required for stepping up investment in the country and inflation is a danger." Indian Bank CMD KC Chakrabarty said checking inflation was the key target for RBI. However, he refused to comment on expectation regarding RBI's stance on interest rates.
Inflation has already breached the upper range of RBI's target of 5.5% as it jumped to 5.58% for the week ended December 30 due to higher prices of food articles, fuel items and manufactured products. pti
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Financial services make hiring tough for IT industry: Nilekani
It may be India's biggest job provider, but the IT industry is facing tough competition from the financial services sector.
NEW DELHI: It may be India's biggest job provider, but the IT industry is facing tough competition from the financial services sector in tapping the right talent, feels software giant Infosys chief Nandan Nilekani.
"There is competition for the best of the best in the job market at the entry level and the financial services industry could lure them with higher salaries and a better glamour quotient," Infosys CEO and managing director said during a conference call with analysts to discuss the company's quarteky results.
Nilekani said the entry level salaries at the technology major Infosys are being raised from Rs 2,40,000 per annum to Rs 2,70,000 per annum for the next year and this could go up further by 10% after that.
Analysts believe that the higher salaries being offered in the IT space and the recent wage hikes announced by the likes of Infosys is also being influenced by other industries, in addition to the other players within the information technology sector.
"The entry level wages in the country are being influenced by only two industries �� IT and financial services," he said, adding these two are driving up the demand for entry level people with IT industry hiring the largest number of people.
While IT industry could hire about 3,80,000 people this year, there would be 75,000 to 1,00,000 new hirings in the financial services space, he said.
While both the industries are competing for the best talent, "the financial services could offer a slightly higher wage to grab them," the Infosys chief said.
"And certainly the glamour quotient of financial service industry is getting higher, because of the investment banking space and huge income earned by them," Nilekani added.
Analysts and industry experts believe that Infosys' decision to raise the salaries might have been influenced by other industries and players as they seek people at the entry level.
Nilekani warned that it could be much more challenging for other industries in the country to get right talent going forward, as they could find it hard to match the soaring wage levels and competition offered by the financial services and IT sectors.
"Right now, the retail industry is hiring but they are not able to get employees," Nilekani said.
"The construction industry is not getting people because all the engineers want to join IT and the situation cannot get any more difficult for the manufacturing industries," he said.
The Infosys CEO expects this situation to lead to a new phenomenon called the "right-skilling" in the next three-four years, when companies would start identifying people for the right time and not getting over-qualified people to do the work.
This would be in contrast to the current trend where Indian industry has been traditionally a place where over-qualified people are hired to do more mundane work, he said. While terming right-skilling as a solution for the whole industry, Nilekani expressed confidence that Infosys would be at the "top of the heap" in the new scenario. pti
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Osian's raises Rs 55 crore
India's pioneering arts and cultural institution has raised Rs 55 crore through private placement of equity to five new investors.
times news network
MUMBAI: Osian's Connoisseurs of Art, India's pioneering arts and cultural institution has raised Rs 55 crore through private placement of equity to five new investors. They include a major Indian manufacturing company, three investors representing financial institutions and a major Oman-based investor group.
Among investors representing FIs was Vallabh Bhansali, founder, Enam Securities. An art aficionado himself, Bhansali was spotted last month at the Indiatimes Art Auction in Mumbai with his wife.
Shareholders in Osian's now include Shiv & Kiran Nadar, Kumarmangalam Birla, Gautam Thapar, Kito de Boer, Jerry Rao, Sanjeev Khandelwal, Sangita Kathiwada, Kamal Morarka, Priya Paul, and Ashok Alexander, among others.
When Osian's was founded in 2000 by Neville Tuli, who holds a majority stake, its share price was valued at Rs 10. The current stake though was picked up at Rs 1,400 per share, representing a premium of Rs 1,390. At this price, the company is now valued at close to Rs 590 crore.
For stakeholders in Osian's, it represents a phenomenal 118% appreciation in their holding each year. Few companies witness such steep increase in their valuations over such a short time.
As things stand today, Osian's owns the finest archive, library and collection of medieval, modern and contemporary art and film culture in India. Conservative estimates place the value of this collection in excess of Rs 900 crore.
It also pioneered India's first auction house and started a film festival dedicated to Asian and Arab cinema. Some time ago, it acquired one of Mumbai's oldest movie theatres, Minerva �� now called The Osianama.
When completed, the complex will house a multiplex that screens global cinema and accommodate a state-of-the-art post production studio. This year, the company will also get into film production.
Osian's also manages the largest Indian Art Fund which successfully raised Rs 102.4 crore in July 2006 and the Indian Art Index in partnership with The Economic Times.
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WB, Ficci warn against Re full float
The World Bank and industry chamber Ficci have warned government against full float of rupee without putting in place necessary safeguards.
NEW DELHI: The World Bank (WB) and industry chamber Ficci have warned government against full float of rupee without putting in place necessary safeguards.
Past experience, especially the East3Asian crisis, calls for better management of risks, World Bank and Ficci said in a joint study titled 'developing markets for long-term finance'.
While acknowledging India's readiness to go in for full capital account convertibility, the study said government would have to ensure compliance of sound risk management practises before moving toward in this direction.
The government would also have to meet global standards relating to capital adequacy norms, banking supervisions and mechanism for close monitoring and regulation of short-term exposure and reduced dependence on one-way inflows, it said.
India faces three key challenges as it moves to the next generation of financial market reforms. It includes developing long-term local currency debt markets and new financial instruments to serve the needs of firms and households, WB acting country director for India, Fayez Omar said.

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