IIMs to diversify profiles of firms for placements

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New Delhi, Apr 23 Hit by the slow down in hiring by its traditional sources of recruitments like investment banks, marketing and consulting Companies, the Indian Institutes of Management (IIMs) are set to tap new sectors and diversify the profiles of firms for placements for students.

From this year, the premier business schools have indicated that they may look at booming sectors like civil aviation and media.

Raman Thukral, placement representative, IIM-Calcutta told FE that Boeing has already confirmed to visit the campus for recruitment. This is the first time the world’s largest aircraft maker is visiting any IIM for placements.

This apart, domestic aviation Companies have also shown interest in hiring fresh graduates from IIMs.

“This is the first time we are planning to tap the civil aviation sector for our placements. This is a result of the huge investments pouring into the sector. In addition, we are looking at media too, which was initiated only last year,” Thukral told FE.

That apart, a host of private equity firms have also evinced interest in visiting the IIM campuses. An IIM-Ahmedabad student said that though there has been a general slowdown in job generation, the IIMs have not been affected. “Going ahead too for this year’s summer and final placements, we feel that the IIMs would not be affected, though it is too early to say anything concrete,” the student said.

It is also understood that the mood was not very upbeat during the final placement season, which got over last month. While placements of students get completed within the first three days, this time, the process took longer. “This shows that signs of slowdown,” a student, who wished to remain anonymous said. Most major banks and marketing Companies generally visit several business schools for their recruitment. However, this year, they resorted to selective recruitment exercise and visited only the top b-schools.

Unlike other years, when students bag multiple jobs through the campus recruitment process, this year, they had fewer in their hands to choose from.

Banks open wallets as IIM aspirants fret over fee hikes

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NEW DELHI: The recent fee hike at IIMs has not only created a stir in the academia, but also raised concerns among IIM aspirants and their parents. Although the hike has generated mixed reactions from students, thousands of MBA aspirants at the threshold of joining IIMs are worried about arranging finances.

Abhimanyu Singhi, a graduate from St Stephen’s College, Delhi, is one such example. He has offers from two IIMs, but is worried about the fee hike, “I feel that the hike is inexplicable because most of the B-schools get huge funds from the government. But now an MBA degree can easily cost more than Rs 5-6 lakh a year, which is more than what a lot of people even earn in a year.”

Agrees Ankit Agrawal, who has two years of experience, working with an MNC and looks forward to fund his education from his savings. “Many of us fund our education from our savings. Such increase in fee is very difficult to absorb. Only a few students are covered under scholarships, where 50-60% of the fee is absorbed, but the rest are left in despair.”
The solution may be around the corner. “I think availing of loans is the only option for most students now. The expected interest rate hikes will further hurt our prospects,” adds Mr Agrawal.

Since more IIM aspirants are expected to avail of loans this year, many banks have agreed to raise the bar of their educational loan offerings, to correspond with the higher fees. “SBI offers two educational loan options; general and scholar. Scholar loan is meant for institutes like IIM, MICA and NID, which are usually up to Rs 10 lakh for an entire course. We shall be ready to offer more loans this year since the fee has been hiked and at competitive rates. Our PLR is 12.25%, but we offer educational loans at 10.75%, which can be further negotiated,” says SBI (Gujarat) chief general manager HC Pattnaik.

SBI is planning to raise the loan amount to Rs 20 lakh approximately. The equation works like this; Rs 11 lakh (as per IIMA), plus Rs 1 lakh for a laptop/computer and Rs 3 lakh for additional expenses. Under the bank’s scheme, 95% of the fee amount can be availed as a loan.

Dena Bank, too, has similar schemes for students. “We offer educational loans up to Rs 10 lakh for higher studies within the country, and loan up to Rs 4 lakh does not require any collateral. The interest rate can be relaxed by 1% further, if the loan is being repaid during education,” says Dena Bank DGM TR Chawla.

The educational loan market has been steadily growing in India, since their introduction. For instance, in Gujarat alone, 31,000 educational loans have been given totalling Rs 711 crore. SBI alone contributes Rs 210.28 crore to this segment in the state, with Rs 28.20 crore accruing to scholar loans. Most of the educational loans can be repaid within 5-7 years.

Private banks do not want to be left behind either. “We not only offer educational loans for popular courses like MBA, but also offer loans for the preparation of CAT and SAP tests as well. The interest rate is around 13.5% and the loan amount can be up to Rs 20 lakh. Various factors are kept in mind while giving loans, but our focus is to lend money to the best students, opting for the best career opportunities,” says HDFC Bank business head of personal loan, and loans against securities and gold loan, Biju Pillai.

According to students, banks may be happy to provide loans to IIM aspirants. “The rate of interest is very high and most students can repay their fees in a year or two, looking at the kind of hefty packages they get. Compared to international B-schools, a $1,50,000 education at Harvard or Stanford is much more difficult to pay off,” says Aastha Sahdev, another IIM aspirant.

The data obsession

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Having studied in a B-school some 20 years ago, it is difficult to figure out what exactly one learnt there, and even more, to separate out what was missing. Anyway, the grades we got showed little of what they were trying to teach was going in our heads.

On a serious note, a lot of what is taught at B-school is black and white — theories, frameworks, templates and so on. What’s clearly missing are the shades of grey. I see many B-school graduates obsessed with data. Often, while they wait for perfect data, the decision moment has passed.

A lot in life is about deciding in real time with imperfect data — something that B-schools never teach. B-schools also have a huge assumption that competition is rational and logical, and will react to the same economic motives, the way you do — again something that real life teaches you is not always the case.

The biggest piece in B-school is about the emphasis on numbers and hard analysis; the importance of soft skills is often downplayed. The piece about teams and dealing with people is relatively less focused than what should be.

More important, most of what they teach in B-school is about marginal efficiencies — about making the widget better by squeezing all that can be made better. It is not about making a radically new widget itself. So creating or opening up a new market is hardly what you will hope to do based on B-school lessons.

To be fair, while I have pointed out what’s lacking in B-schools, let me also focus on what they help students with.

First, they provide a good opportunity for students to compete under pressure and to be exposed to different subjects — from human resource to organisational behaviour, economics to quantitative analysis, accounts to finance, and so on. It would be hard to find anyone exposed to such a range before B-school education.

Second, B-school creates a rational framework for analysis, whether of a plan or a post-mortem of performance. A lot of intuition and gut feel when it comes to real data, is stripped off to enable a non-emotional view — even if it can’t teach you to paint, it can teach you to figure how to get the best value for your painting!

R Subramanian graduated from IIM, Ahmedabad in 1989

B-Schools turn venture capitalists

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Not all business school (B-school) students want to work in someone else’s company. Many want to be their own boss. So, B-schools are pitching-in to make it all happen.

Every year, a handful of B-school students look to start their own businesses. But money is always an issue. Now, it seems B-school graduates may find the cash right in their backyards.

Take Jamshedpur-based Xavier Labour Resource Institute (XLRI). For the first time, the institute has pumped in Rs 3 lakh of its own money for a venture by six students. Then, there’s the Delhi-based Faculty of Management Studies, which is in talks with four angel investors. Out of the seven venture capitalists, deals with three have already been closed. Indian School of Business in Hyderabad has also wrapped up two deals for its students.

“Companies are forthcoming but details have to be worked out. At present, we have talked to about three companies and are at various stages of discussion. Next year, we will talk to not just venture capitalists but also for scholarships,” Rammohan Rao, Dean, ISB.

It gets better for students with an entrepreneurial spirit. Not just money for business ventures, but scholarships to help repay those education loans as well.

With B-schools providing assistance at various levels, it’s getting easier for graduating students to take the entrepreneurial plunge.

XLRI Jamshedpur gets 100 top-level placement offers

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KOLKATA: XLRI Jamshedpur’s lateral placements have ended on a high note with about a 100 offers made in varied profiles like finance, consultancy, operations, marketing and human resources for senior-level management roles.

The highest package offered was Rs 22 lakh annually, while the average package was Rs 15 lakh a year.

The financial services domain was represented by Barclays, Lehman Brothers, Standard Chartered, JM Financial, Centrum, among many others who made offers for investment banking, treasury sales, trading, product structuring, wholesale banking, relationship management and M&A advisory.

Consulting firms too, thronged the campus, offering students the roles of senior level consultants. Ernst and Young, Hewitt, PricewaterhouseCoopers, Mercer, KPMG, TSMG, Capgemini were the leaders in the pack.

The laterals process also saw a marked increase in the number of general management offers made by Indian business houses, including the Birla group, Hindujas, Essar, L&T and RPG. The Al Ghanim group offered international roles. The technology sector was represented by IBM, Cognizant, Infosys, HCL, Wipro, and the offers ranged from business development to global sales to project management. Infosys offered students fast track programs which would fetch packages of $1,00,000 a year into the job.

Professor Uday Damodaran, the chairperson of the placement committee said in a release, “The large number of high quality offers in niche areas reinforces the fact that XLRI is the preferred campus for recruitment by corporates.”