R Balakrishnan
Believe it or not

This story should surely be an eye-opener to all the HR guys who think that they know everything

A friend of mine, who is in the business of ‘collecting’ overdue personal loans, has his offices at several locations. He uses it to advantage. For instance, if a defaulter at Mumbai cannot be traced, he passes it on to his other offices, to try and see if something matches. Once, his Ahmednagar (a city near Pune) branch got a list from Mumbai about a large loan outstanding from a gentleman, whom we shall call “Gupta”. Something about the details in the file rang a bell. He knew a Gupta, who was branch manager of a private bank in Ahmednagar. After matching more details and the photograph, it was confirmed that it was indeed the same person.
A fascinating story emerged.

Gupta had submitted a fake resume about his qualifications and experience and got a job as an officer with a private bank, at Panjim, Goa. At Goa, he used his position and salary slip to considerable advantage, borrowing money from other private banks and finance companies. After a year or so, he just upped it and went to Mumbai. There he fudged his resume yet again, landed a job with a foreign bank and went through the same process. After a year, he could no longer face the heat of the overdues at Mumbai and decided to leave for greener pastures. He landed at Pune where he conned yet another private bank with his prize-winning resume. At Pune, he spent a good year, raising a lot of personal loans. Needless to mention, he enjoyed all good things in life and the liberal lenders kept his lifestyle going.

Soon, he decided to leave Pune. He now went to Ahmednagar and joined another private bank, using the same method. He was in his third month at Ahmednagar, when my friend’s network caught up with him. The remarkable thing is that he got the job at Ahmednagar, with the same bank that he quit at Panjim!

This story is interesting. Banks, in prosperous times, are short of people with experience. So much that they do not bother to verify the antecedents. And another remarkable feature was that Mr Gupta used the same name and his PAN number etc in this merry-go-round! All he did was to fabricate a new experience background each time! It was sheer chance that he got caught!

His former employers are too embarrassed to pursue him. He has no money left with him and the loans are beyond recovery. The banks have hopefully learnt a lesson. All they need is for the HR department to keep a database on employees who leave (or are sacked) and cross check. Surely, when a borrower applies, they check with some database. In fact, I always felt that every HR department should not only have this data handy, but also a name/PAN number kind of database of people who apply for jobs and are not employed.

(Gupta is a name of convenience. No offence meant to any Gupta. City names have been changed. Fact or fiction... I leave it to the reader and to the many private banks who rush in to fill vacancies).



Shadi Katyal

7 years ago

The story has failed to tell that what happened to all the loans this man took in Goa. Did the bank not try to track him???This is why IT system of permanent identify is required???


A breakout?

The Sensex may move up by another 200 points or so, but we are in an overbought situation

The Sensex has been trading in a narrow range of 17,200 and 17,000 for the past six trading sessions. A movement within such a tight range always leads to a significant move sooner or later. We were exactly in this kind of a tight range in mid-January. In fact on 15th January, we had suggested that a big move was coming (see here). Exactly two days later, the market began a sharp decline that shaved off 2,000 points from the Sensex.

Today it has broken out from a tight range. Are we in for a major move like in January—this time on the upside? It may well be that the market heads higher but chances of a 1,000-1,500-point move higher look difficult now. From an intraday low of 15,652 of 8th February, the Sensex has climbed about 1,750 points already. It could move up another 200 points or so, but we are in an overbought situation.

The market rally since the Union Budget has been fuelled by continuous inflows from foreign institutional investors. They have put in almost Rs9,225 crore since 2nd March and taken the market higher against continuous selling by domestic institutional investors. Where can this current move end? We see a strong resistance between 17,400 and 17,700 on the Sensex and this would not be easy for the market to clear.

Today, Asian markets ended mixed. The Hang Seng and Nikkei were lower while Shanghai’s and Taiwan’s indices were up. European markets are all in the green while US futures are up. The BSE's 30-share index rose by 218.2 points, or 1.27%, to 17,383.2 points, the highest closing level since 20th January.

Among the major Sensex movers, Reliance Industries was up 3.8% to Rs1066.80. CNBC reported that Reliance had zeroed in on three shale gas assets in the United States.

Among the other major movers in the Sensex were Infosys (up by Rs31.20 to Rs2,732.35),  Tata Steel (up 2.8% to Rs627), L&T (up 2.8% to Rs1,597), M&M (up 2.7%) and Sun Pharma (up 2.5%). Jai Corp Ltd jumped 13% to Rs262.25.

Bharti Airtel was the biggest index-wise loser (down by 1.6%) to Rs294 after reports stated that the special auditors appointed by the government to probe the issue revealed that Bharti Airtel may owe the government Rs174 crore. It was followed by ACC (1.3%) down to Rs969, among others.


Persistent’s IPO valuation looks attractive

The company’s EPS is expected to be Rs25 in FY10 with price-earnings of 11.92; its peers are currently trading at a P/E between a range of 10.99-15.97

Persistent Systems Ltd, a Pune-based software services company, will hit the markets with its initial public offering (IPO) on 17 March 2010 and there has been a positive call from brokerages on its issue so far.

During FY10, the company’s earnings per share (EPS) will be around Rs25 compared to Rs21.41 in FY09. The forward price-earnings would be Rs11.92 considering the upper band of Rs310 per share. Mid-cap IT companies like Infotech Enterprises, Sasken Communications and KPIT Cummins Infosystems Ltd are currently trading at P/E ratios of 15.97, 7.29 and 10.99, respectively.

“The issue is decently priced compared to its peers. We expect the EPS to be Rs25 to Rs26 (annualised) in FY10 because its nine-month EPS is around Rs21, and it would be around 11 times at a price of Rs310. The cash flow would be positive for most of the IT companies. If high net-worth individuals (HNIs) participate actively, and the qualified institutional buyer (QIB) portion receives good response, retail participation normally picks up on the last day,” said an analyst who tracks IT.

Persistent registered a net profit of Rs79.60 crore in the quarter ended December 2009, up 56% compared to Rs50.90 crore for the corresponding period last year.

A large proportion of its revenues also come from customers that operate in the telecommunication industry. In FY09, the company’s clients in the telecommunication industry contributed to 20.9% of its revenues. Due to its concentrated customer base, the company’s top ten customers accounted for 37.4%of revenues in 2009. CRISIL has assigned IPO ‘Grade 4’ to the issue, indicating ‘above average’ fundamentals. Enam Securities Pvt Ltd and JP Morgan India Pvt Ltd are the lead book running managers. The issue opens on 17 March 2010 and closes on 19 March 2010. The company is issuing 54.2 lakh shares at a price band of Rs290-Rs310. The issue size works out to Rs157.17 crore-Rs168.01 crore.

According to the prospectus, the IPO funds would be utilised to build development facilities, capitalise its subsidiaries for establishing development facilities and meeting fit-outs and interior design costs, hardware procurement and for general corporate purposes.

Persistent has clocked a healthy growth rate of 40% compounded annual growth rate (CAGR) during 2007-09, largely driven by an increasing trend of offshoring among independent software vendors (ISVs). However, in the first six months of 2009, the company faced pressure on revenues due to delay in product release/upgrade by a few large ISVs and closure of some small ISVs.

Persistent has won the 2008 NASSCOM Innovation Award and is recognised as one of the leading technology companies in the Deloitte Touche Tohmatsu Technology Fast 500 Asia Pacific 2009 survey, the prospectus said.


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