Summit Notebook

Exclusive outtakes from industry leaders

A bubble in the real estate market?

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INDIA-URBANISATION/Have you tried buying or renting a house in Mumbai recently? If so, then I won’t be surprised if you think real estate prices are plain expensive, and incredibly so. But that’s almost always been the case in India’s commercial capital. After all, when was the last time someone told you they got a cheap house in the city?

So is the real estate market in a bubble? We asked Adi Godrej, the man who controls Godrej Properties, if things could get bubblicious. This is what he had to say: “I don’t think we are in a bubble, because demand is strong, but we could get into a bubble.”

Godrej, whose family fortune is estimated to be about $5.2 billion, doesn’t really care if prices go up in south Mumbai’s old-money neighbourhoods such as Malabar Hill or Altamont Road, where Reliance Industries chairman, billionaire Mukesh Ambani, is building a 27-storey $1 billion home.

“I would be more disturbed if middle-level and lower-level housing in Mumbai were to go up much,” Godrej told the Reuters India Investment Summit in Mumbai.

‘String of pearls’

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  ”String of pearls” could have different meanings.

It is how MphasiS Chief Executive Ganesh Ayyar refers to the Indian IT services provider’s strategy of going for small to mid-size acquisitions. The bigger ones can become a “noose around your neck”, Ayyar said.

The company, 61 percent owned by Hewlett-Packard, is buying the India-based IT services arm of troubled U.S. insurer American International Group. Ayyar, who spoke to us about the company’s “ambidextrous approach” to business, indicated today that any future acquisitions would be in the AIG ballpark.

Breakfast with SAP, anyone?

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If you know 5,500 software professionals in India looking for a job, just send them over to Stephen Watts, SAP’s chief operating officer for Asia Pacific and Japan. The Irish-born Watts, who is also temporarily heading the business software group’s India operations, denied any talk of doubling headcount in India by 2010.

SAP has focused in the past on contracts with large customers but is increasingly turning towards mid-sized companies. While talking to us on a conference call from Singapore, Watts compared
small and medium enterprises (SMEs) to breakfast. “Life begins with a good breakfast,” he said, emphasising the importance the company gives to SMEs.

What’s in a Name?

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Mahindra Satyam’s president of global operations, Atul Kunwar, told us the “first instinct” was to drop the Satyam name when the company was acquired in the wake of India’s biggest corporate fraud.

“We all need to have a name; sometimes we like them, sometimes we don’t,” Kunwar said while explaining that the company known as Satyam Computers was also known for its “solidity” and “great delivery.”

The Reuters India Summit comes to Bangalore

On Wednesday, the Reuters India Investment Summit comes to the information technology hub of Bangalore.

The city has become synonymous in the West with outsourcing and “cheap labor” but is rapidly emerging as a hot spot for research and development. Bangalore is also marching ahead in the information technology value chain. Some companies like Wipro actually outsource work from India to Egypt.

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