The Hindu Business Line : IIM-A grads flock to <I>desi</I> entrepreneurship

Changing phase
72 per cent students are joining businesses in India
Eight per cent are going to take up a job in the US and 13 per cent in the UK, as against five per cent in the Asia-Pacific
As many as 11 have spurned mega-dollar offers to go on their own to set up start-up companies

Ahmedabad March 13 The sheen and lure has given way to hope. With the country's economy in boom and "performance-based bonus" forming some 40 per cent component of the hefty offers from abroad, the mega-buck chase of the Indian Institute of Management-Ahmedabad (IIM-A) students seems to have slowed down and Placement 2007 has seen new trends emerging this year.

In order to encourage entrepreneurship, IIM-A has introduced this year a major policy change and incentive to keep open for such entrepreneurs the option of participating in the placement procedure for two years. This is as a cushion for them to fall back upon in case their enterprises face problems.

For one, nearly 72 per cent students are joining businesses in India. Only eight per cent are going to take up a job in the US and 13 per cent in the UK, as against five per cent in the Asia-Pacific. Forty-four per cent of them will be in finance, 30 per cent consulting and eight per cent marketing. Contrary to expectations, only four per cent will move into IT sector, five per cent in operations and three per cent in strategy. A total of 63 students accepted international placements.

As many as 11 have spurned mega-dollar offers to go on their own to set up start-up companies. Even though the good, old hefty offers from abroad may still fetch them from $2,25,000 to $3,00,000 a year, they know the base salary remains $1,60,000 to $1,85,000, the balance 38-40 per cent being the "performance-based bonus" component, that is payable to them after a year, provided, they fulfil the expectations of the employer.

Briefing presspersons after the placement process, scheduled from March 8 to 13 but concluded on March 12 itself, the IIM-A Director, Dr Bakul Dholakia, said here that unlike last year's six, as many as 11 students either opted out of placements or rejected job offers to start their own enterprise. "Two of these students rejected associate offers in excess of Rs one crore from investment banks to opt for starting off their own venture."

In what was another growing trend, 11 other students rejected foreign offers in order to take up offers from firms in India and to be a part of the Indian growth story. Out of 224 placed, as many as 24 had availed themselves of the need-based scholarship.

Of course, the salaries offered to IIM-A students have increased.

The highest international acceptances ranged from $2,25,000 to $3,00,000, compared with $1,85,000 last year, and the highest domestic acceptances ranged from Rs 60 lakh to Rs 1 crore, compared with Rs 35 lakh last year, depending on minimum and average bonuses. The minimum international salary was $31,800 and the minimum domestic salary was Rs 8 lakh per annum.

The average entry-level domestic salary increased by around 40 per cent from Rs 9.72 lakh last year to Rs 13.6 lakh per annum this year. On the other hand, the international average stood at $1,15,300, a rise of 25 per cent. The average lateral domestic salary increased by 52 per cent to a high of Rs 16.13 lakh.

There were 11 associate offers from investment banks and 12 from international consulting firms, four of which were made to students without work experience. "All these offers were at par with those offered to Ivy League B-School graduates," Dr Dholakia said.

Recruiters' list

Some of the leading investment banks and consulting firms such as Bain, BCG, Deutsche Bank, Lehman Brothers, McKinsey and Merrill Lynch continued their long-standing association with IIM-A.

The highest number of offers was given by Lehman Brothers (17, 14 of which were accepted), followed by Merrill Lynch (15, 14 acceptances) and McKinsey (13, 12 accepted). Apart from that, firms such as Blackstone Real Estate, Fischer Jordan, ING, Opera Solutions and Value Partners were some of the new additions in Slot Zero this year.

Replying to questions, the IIM-A Director said these placements had belied apprehensions that a volatile situation in the global market could affect the job offers and salaries. Also, while the foreign companies had made similar offers to students at other IIMs, the number of jobs offered at IIM-A was certainly bigger that other B-Schools in India.

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