The global financial turmoil is taking its toll on placements at the Indian Institutes of Technology and Indian Institutes of Management. Students at some IITs have begun to receive regret letters, while a few prominent banking and finance recruiters are likely to drop out of placements this academic year, heralding a dip in salary offers.

Finance and banking companies have not only been major recruiters but also the highest paymasters, especially at IIMs.

During this year's final placements at IIM-Calcutta in March, the highest salary offer was Rs 1.3 crore (Rs 13 million), by - say sources - Lehman Brothers. The beleaguered Lehman has opted out.

At IIT-Roorkee, too, Lehman Brothers and Citi Group have indicated that they wouldn't participate in placements this year. Barclays and HSBC are, however, understood to be keeping their options open.

A couple of days back, 15 students of IIT-Kharagpur received regret letters from US-based information technology companies - Montolova, Magma Design Automation and Paradigm - saying they could not absorb the students due to "internal restructuring plans".

To compound matters, IITs have more students to place this year. IIT-Kanpur has added 100 seats this year, IIT-Kharagpur 300. B K Mathur, the placements chairman at IIT-Kharagpur, says: "There is no dearth of jobs for our graduates. We are pinning our hopes on other companies, especially IT-ITeS, manufacturing and FMCG firms."

A faculty member at IIT-Bombay said no student had received any regret letter so far and predicted that companies would come in despite the financial turmoil.

"Of the 200 companies that have come so far to make presentations, 110 are engineering MNCs with offices all over the world. We don't have many finance companies coming here and Merrill Lynch will come this December for placements. It might affect the number of hires and cut down the variable component but will not reduce the pay packages," said Kushal Sen, the head of training and placement at IIT-Delhi.

Nevertheless, the students and placement co-ordinators at IITs and business schools are a worried lot. Last year, IIT-Delhi had led the pack with Pimco, a US-based specialty fixed income manager, offering $100,000 a year to its graduates. At IIT-Bombay and Kanpur, the highest offers were $92,000 a year and $90,000 a year by Mercer Oliver Wyman, a Boston-based financial consulting firm, and Lime Group, a US-based financial and technology conglomerate.

At IIT-Madras and Roorkee, global oilfield and information services company Schlumberger had offered salaries of $90,000 and $91,000 a year. IIT-Kharagpur had an international offer of $60,000 even as IT and ITeS companies recruited in smaller numbers. At IIT-Madras, 29 students had opted for international placements against 31 last year. IIT-Kanpur said that the number of international offers had doubled.

The trend is likely to change this year. "International companies may recruit less this year.  Although the number of international offers did not amount to much, their reduction may lead to the average salary going down. Students may have limited choices," said P K Jain, head of training and placement at IIT-Roorkee.

Added B Lohani, the head of training and placement at IIT-Kanpur: "Companies may recruit in fewer numbers this year considering the global crisis, which is why we had invited more companies compared to the previous year. We expect 10-15 more companies to be added this year."

With Vinay Umarji in Ahmedabad, Pradipta Mukherjee in Kolkata and Kirtika Suneja in New Delhi