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Quiz

Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of consciouchoice, and discipline . Jim Collins

Identify the Personalities ( Answers in the same issue)

1 2 3

Answers to the previous issue 1. UBS 2. Infrastructure Finance Co Ltd 3. Jet Blue Airways

4. Tata Communications Ltd, Tata 5. Symex International

Reasons for the Sub-Prime crisis in a nutshell By : Gnana Devi

The subprime crisis arose primarily because funds were loaned to people who were not creditworthy.

creditworthy we mean that they cannot repay or service their loans. Interest rates on loans were low in ord

to increase consumption in the economy. Interest is nothing but the compensation for money used. Thr

factors influencing interest: Inflation- State of rising prices, Propensity to Consume- Urge to spend, Cre

default.

Banks converted sub-prime (non-creditworthy) customers to prime (creditworthy) customers firstly

elongating repayment period. And secondly by Differential EMI (Equated Monthly Instalments). EMIs were lo

in the first few years and then assuming that incomes would rise, EMIs were raised later .These rates a

called Teaser Rates.

Securitization is the sale of assets. Bonds are issued by selling assets through a Special Purpose Vehicle (SP

to: Mutual Funds, Trusts, Hedge Funds, Endowment Funds, Pension Funds, High Network Institutions. Th

invested as they thought that the security was high and the interest rate was high too.

Time Management - some tips By : Gnana Devi

There are no time management tools that will work for everyone all of the time. Yet, some of the following t

may help you in your search for tools. These are as follows:

1. Learn to say no.

2. When feasible, delegate.

3. Do not let paperwork pile up.

4. Ask yourself, What is my objective or goal?

5. Think of your effectiveness first, your efficiency second.

6. Break a job into bite-sized pieces. Do not procrastinate because it cannot all be done at once.

7. Identify your time wasters and resolve to eliminate them.

8. Add times for relaxation and recreation into your schedule.

9. Identify and make use of your personal biorhythms, or up time and down time.

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Did you Know?

Google - a delibemisspelling of w o r d g o o g

r e f l e c t i n g t

companys missionorganize the immeamount of informa

Many great ideas go unexecuted, and many great executioners are without ideas. Onewithout the other is worthless. Tim Blixseth

Hotmail - FounJack Smith got idea of accessing

mail via the web fra computer anywhin the world. W

Sabeer Bhatia ca

up with the busin

plan for the mservice he tried

kinds of names endin mail and finsettled for Hotmai

it included the let

HTML the marlanguage used write web pages.

As Indian Companies Unfurl Their Acquisition Plans,Here Are a Few Mistakes They Should Avoid

In yet another demonstration of India's growing buying power, the Tata Group is

vying to acquire Jaguar and Land Rover from Ford Motors. If the deal were to close in the

next couple of weeks, it would cap 10 months of record deal-making this year by

corporate India. In the first 10 months of 2007 Indian firms have already spent a record

$31.7 billion acquiring companies abroad. With 2006 witnessing only $9.9 billion outbound

acquisitions, this has been a trend-setting year for Indian firms.

Acquisitions, outbound or not, have one common feature. The buyer pays the

target firm a premium above its current market value. Underlying this willingness to pay apremium is the belief that the target would be worth more if it were owned by the buyer.

This increase can arise from a reduction in combined costs (cost synergies) or an increase

in combined sales (revenue synergies) due to the acquisition. A key tenet for financial

success in acquisitions is, "Do not overpay." In other words, the price paid for the target

should not exceed the value of the target to the buyer.

When it comes to affecting the value of the target to the buyer, cost synergies and

revenue synergies are very different. Most changes required to realize cost synergies are

internal to the firm, so they tend to be realized faster -- often within a year or two. Since

cost synergies essentially come from replacing one firm's method of producing by

another's, it might entail some political resistance, especially in cross-border deals. Many

company owners -- and politicians -- would be hesitant to agree to an acquisition by an

international firm if this meant that their workers would be laid off and replaced by lower-

cost workers elsewhere.

Revenue synergies, in contrast, depend not only on internal factors but also on the

reactions of several players outside the firm, such as competitors and customers. They

consequently take time, often longer than three years, to truly take effect. Beliefs about

potential revenue growth also tend to fall short of expectations because they are affected

by the actions that competitors take in response to the merger. Many acquirers, when

they estimate the increases in sales due to the acquisition, assume the competitors will

remain as they are today. Revenue synergies also require a greater level of integration

between the merged firms. Often this is a process fraught with the potential cultural

conflict between the two organizations. Such cultural conflicts make the process of

integration difficult. Often the conflict between divisions is so high that liberation turns outto be a better option than integration.

Is the Price Right?

To buy a company at the right -- or the lowest price -- it helps to be the only

interested buyer. If possible, avoid competition. The best tactic for this is to think

differently. Doing so makes it more likely that you will be the only one approaching a

target. Private targets have another advantage. Since owners of private firms typically

have a large part of their wealth in the firm, they are less diversified and value their firm

less than a diversified owner might. For a diversified firm, this creates a greater possibility

of paying a reasonable premium to the seller and still not overpaying. If a buyer does get

into a competitive environment, the discipline to walk away at a pre-determined threshold

price is critical. Companies sometimes also underestimate the importance of non-pricedimensions in a merger. This is especially the case in cross-border deals. The support of

workers and other non-shareholder groups is critical in cross-border deals. These groups

support firms that have a good track record with respect to social factors. Mittal Steel

benefited from their factory safety record in gathering support from the labor unions in

France. This was an important ingredient in the outcome of the bidding war.

Indian companies that are prowling for targets to take over would do well to

understanding these basic issues, because it can help them avoid the single biggest

mistake that many new acquirers make -- overpayment. The old saying "caveat emptor" --

let the buyer beware -- applies as much to a merger as it does to any other kind of

purchase.

Apple - for

favorite fruit of founder Steve J

and/or for the time

worked at an aporchard. Apple wanto distance itself f

t h e c o l

u n a p p r o a c h a bcomplicated imag

created by ot

computer compaat the time.

Personalities

1. Paul Allen , Co

Founder Micros

2. Michael Bloomb3. Comrad Hilton

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How to prepare:

Be strong with your basic calculations and shothe negotiation skills you have to the interviewer.

There will be a case study to be solved collections on which the Group Discussion will taplace. Remember to focus on right solutions in castudy. This is an elimination round.

There will be a personal interview which is final round on which one will be tested in areas specialization and also on negotiation skills. Be sure

what you say and make sure you know it better.

You should show the flexibility in your preferentowards location to the interviewer.

As collections is in news its better to updoneself about the recent happenings.

Pearls Of WisdomName: Mohd. Ansar Nalakath (mohdansar@gmail.com)

Designation: Functional Trainee at Assistant Managerial level

Company: GE Money

Profile: Works under the division of India Bank Cards of GEMoney which manages the SBI card collections

Handles the agency which has 10-12 field staff, a team leader and itsproprietor reporting to him.

Ensures the performance of agency in the form of collection of

payments.A total in house, challenging job filled with high pressure which givesyou high learning and market exposure

Please mail your valuable feedbacks, reviews at chaanakya.ccim@gmail.com

Buzz Word Caveat Emptor -Another way to say, "let the buyer beware."

Agflation - An increase in the price of food that occurs as a result of increased demand from human

consumption and use as an alternative energy resource. The term is derived from a combination of the words

"agriculture" and "inflation".

Dog Eat Dog - When the market for a good or service is ruthlessly competitive. Electronics retail is often thought tobe a dog eat dog market. Blockbuster sales every weekend, bashing competitor products, and "lowest price

guaranteed" tactics are characteristics of dog eat dog competition.

Power Ratio - Measures a media company's revenue performance in comparison to the audience share it controls.

You need to know three numbers in order to make this calculation work: Total market revenue, The company'srevenue, The audience share

Maple Bond -A Canadian dollar denominated bond that is sold in Canada by foreign financial institutions and

companies. Similar to other foreign bonds (such as the bulldog bond, samurai bond and the matilda bond), the

maple bond gives domestic investors (in this case, Canadian investors) the opportunity to invest in foreigncompanies

Tag Lines:

Talk. Theyll Listen - Philip Morris

All The News Thats Fit To Print - The New York

Times

Enjoy The Ride - Nissan

Something Special In The Air - American Airlines

Higher Standards - Bank Of America

a. Adelaide Bank

b. Barclays

c. The Royal Bank Of Scotland Group

d. Reliable Insurance

e. Trusted Choice

f. IRDA

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Contributions made by :

(First Year Students)Anoop RajanDennis AbrahamFouzia Taranum

Gnana DeviLavanya.S

Nikhil MehtaSukrutha Selvarajan

(Second Year Students)Ajay Dhuvri

Anshu AwasthiBhavana Kataruka

Gopal Pai MMathew A ThomasSindhu B Navali