Over 100 MBA students at the Indian Institute of Management Bangalore were unsuccessful in this year’s summer internship placements, marking a one-in-six failure rate described as "unheard-of" within the IIM ecosystem.

Some attributed the development to a recession-driven slowdown in hiring in the US information technology sector, which provides the bulk of the clientele for Indian IT and ITes (IT-enabled services) companies.

Students of the IIMs' flagship two-year MBA programme need to undergo an eight-week summer internship at the end of the first year to be eligible to be promoted to the second year.

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Only students with over 34 months of past work experience can opt out of the internship, but even they eagerly seek internships since the opportunity involves some remuneration, boosts their CV, and helps their training.

IIM Bangalore is now expected to "arrange" internships for the unsuccessful students. But many students are worried about the quality of these prospective internships and their usefulness in later helping them find good jobs.

"We don't know when and which types of company would now come (forward to give the students internships)," an IIM Bangalore student told The Telegraph, requesting anonymity.

IIM Bangalore charges Rs 24.5 lakh as fees for the two-year MBA course. "Most of the students have taken hefty bank loans to pay for the course, and the repayment would start after they get a job," the student added.

"To secure good jobs, the internship is a vital area. This (large-scale failure at securing internships) is very worrying."

A student wrote on WhatsApp: "The placement situation at IIMB is just plain chaos. 120 plus students are unplaced…."

The student suggested that "tele sales roles are coming now". Tele-sale refers to the selling of goods or services over the phone and is not deemed to require specialised expertise.

A faculty member from IIM Calcutta said the failure rate at the internship placements at IIM Bangalore had to be a "record", at least for recent years.

He said all the older IIMs such as the ones in Bangalore, Calcutta, Ahmedabad, Indore and Lucknow tended to score 100 or near-100 per cent success at the internship placements, and the others excluding Bangalore had done so this year too.

However, these other IIMs have about 400 students per MBA batch each compared with about 600 at IIM Bangalore.

Last year, all 529 students at IIM Bangalore that took the interviews bagged internships.

This year’s interviews at IIM Bangalore were conducted between November 6 and 11, with 490 students securing internship placements.

The IIM Calcutta faculty member said an internship helps a student understand how the companies conduct different kinds of operations, and choose a specialisation in the second year.

"During the internship, students receive handsome training in various areas like marketing, finance, IT, operations and so on," he said.

An email was sent to IIM Bangalore director Rishikesha T. Krishnan to understand the reasons for so many students failing to bag summer internships.

Kavitha Kumar, head of communications at the institute, wrote back saying that IT and ITes companies had stayed away from the internship placement drive this time.

"We are proud that over 3 active days, IIM Bangalore placed over 490 students which far exceeds the batch sizes in other similar prestigious institutes," Kumar wrote.

"This reflects the confidence and faith of industry which prefers our students in market with repressed global sentiment. Nonetheless, it is important to note that a couple of sectors like IT, ITeS, which do volume hiring have stayed away from campuses, this year."

Anil Wagde, an Atlanta-based Indian IT worker and a former student of IIM Calcutta, said the recession in the American IT and ITes sectors had hamstrung hiring by Indian IT firms.

"Nearly 60 to 70 per cent of the business by IT and ITes companies in India is dependent on their American clients. There is already a recession in the US in these sectors, which is adversely affecting recruitment by Indian firms," Wagde said.

He cited the example of Indian IT services giants Tata Consultancy Services, Infosys, HCLTech and Wipro whose employee strength declined in the July-to-September quarter from the April-to-June quarter by a combined figure of 21,000.

Wagde said that internships give companies exposure to the talent pool and help the students' performance in the actual placement interviews in the second year.

There have been instances of students receiving pre-placement offers from firms based on their performance during the internship.

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