Investment In India | "Private sector investment in power sector high in Rajasthan"

By: Rachna Singh
Source: http://timesofindia.indiatimes.com
Category: Investment In India

JAIPUR: A recent Confederation of Indian Industry CII report on the power situation in north India, titled 'Power Scenario in Northern India', highlighted the significant gap between demand and supply in almost all the northern states.

According to the report, UP had the highest quantum of deficit among the northern states. Along with UP, Haryana and J&K witnessed a rise in energy deficits, while Punjab, Rajasthan and Uttarakhand witnessed a fall for the year 2010-11 from the previous year (2009-10).

A comparative analysis of the power situation in the northern states (on technical, financial and outlook parameters) reveals that Himachal Pradesh, Delhi and Rajasthan emerge as the best performers. In 2010-11, deficits in Himachal Pradesh were at a comparatively low level of 3.4%, thanks to the pro-activeness of the government in exploiting the state's hydro potential and reducing T&D and aggregated technical and commercial losses. Delhi has the lowest energy deficits among all the northern states at 0.3%. Peak deficits are also comparatively lower than other states. Further, Delhi has one of the best working T&D systems in the north. A remarkable improvement in all the parameters can be seen since Delhi privatised its distribution system in 2002.Like Delhi, Rajasthan too has one of the lowest deficits -- both energy and peak deficits.

"The government of Rajasthan has been successful in anticipating the increase in power demand and has accordingly invested in increasing installed capacity. During the period 2005-06 to 2010-11, Rajasthan had one of the highest Compounded Annual Growth Rates (CAGRs) in terms of capacity additions, both in public as well as private sector," stresses the report.

Rajasthan's success in attracting private investment can be seen in the fact that the percentage of private sector in total installed capacity in the state is 16.4%, higher than most other states. The state has also been successful in encouraging renewable energy. A quick overview of the power sector reforms in the country shows that the history and evolution of the power sector in India has been a chequered one, marked by fragmented efforts to reduce structural deficiencies, enhance performance and strengthen institutions.

The policy and legal structure that guides the power system in India today is a product of challenges perceived in the past and policy interventions that sought to overcome them. In most northern states so far, the strategy followed to improve power availability has mainly concentrated on capacity additions, with emphasis on coal-based thermal plants.

However, given the scarce coal resources in the country, a broader, more sustainable strategy needs to be adopted. Such a strategy should include supply side management, demand side management, improvement/modernisation of T&D network, load centre based flexible generation, tariff rationalisation and peaking power solution.

Source: http://timesofindia.indiatimes.com/business/india-business/Private-sector-investment-in-power-sector-high-in-Rajasthan/articleshow/15559289.cms

Investment In India | "India one of the most risk ridden data centre locations in the world"

By: Raj Saxena
Source: http://www.thinkdigit.com
Category: Investment In India

India has milked its reputation of offering cheap IT labour for long but the reputation might be in danger tells us a study conducted by Cushman & Wakefield and Hurleypalmerflatt named ‘Data Centre Risk Index’ . The study evaluated “Data Centre Risk Index” i.e., the risks to global data centre facilities and international investment in business critical IT infrastructure.

In the survey, India scored an unsurprising second position in the most risk ridden Data Centre location among top 30 countries, the last being Brazil. The centre of global outsourcing over the past few years may not look so attractive anymore! This may be due to India’s low score in “Ease of Business”, “Inflation”, “per capita GDP” and “Corporate Tax”. The recent power grid collapse only adds to such a low ranking of India in the study.

Arvind Nandan, Executive Director, Consultancy, India, Cushman & Wakefield says, “India and key Asian economies remain preferred locations for DCs and have witnessed a growth in demand owing to various advantages. India offers the advantages of cost benefits and sustainability of operations. We would expect the growth to continue as this is also coupled with a rising domestic demand for IT services where internet and mobile communication penetration is still moderate. Investment by overseas players continues showing confidence in the future potential of India. At the same time it is important to put in place various initiatives for developing other areas such as energy, bandwidth, improving business environment, data protection laws, etc., which can enhance the proposition for India.”

More and more companies are looking towards the Nordic nations to locate their data centers as they offer renewable sources of energy. Another reason may be that the countries have been blessed by Boreas with cold weather which is favourable for data centers as they bring down the cooling costs of the data centers.

The US retains the top position in the ranking as the lowest risk location to set up a data centre and UK ranks second as these data centers have the good bandwidth, perform well in other tiers such as tier 1 risk categories, and have the largest percentage of their population completing tertiary education.

The safest place in Asia to setup a data centre is Hong Kong, the second being South Korea, ranking seventh and thirteenth respectively.

Stephen Whatling, Global Service Director at Hurleypalmerflatt, said: “Indonesia, India and Brazil are all considered growth markets, but with barriers to entry, regulated markets and high energy costs they do score poorly relative to the more established economic markets. Connectivity is also a problem but as these markets continue to be invested in and the infrastructure becomes more developed we would expect them to rise up the rankings.”

The Indian government will have to come up with better policies and reforms to make India a lucrative market again for major IT companies. Let us wait and watch what the Indian government does (rather let’s hope it does something) to revitalize the business critical IT infrastructure in India.

Source: http://www.thinkdigit.com/Internet/India-one-of-the-most-risk-ridden_10489.html

Investment In India | "Chicago hosts China India Investment Conference"

By: Theodore Koumelis
Source: http://www.traveldailynews.com
Category: Investment In India

Artisan Business Group will be sponsoring a two day China and India investment conference in Chicago August 23-24, 2012. The event will focus on exploring inbound EB-5 investment and foreign direct investment from China and India.

“US China India Investment Forum” will be drawing U.S. business executives, attorneys, investment bankers, government officials, and venture capitalists, among others, to be educated on the latest trends in EB-5 immigrant investors program and foreign direct investment from China and India. In addition to its educational value, the event will provide a great opportunity for capital seekers to network and connect with others in the industry. The conference aims to help U.S. companies tap into foreign capital sources, with the ultimate goal of stimulating the economy and creating American jobs.

The two day event will feature some of the most highly-renowned and experienced international investment professionals. Scheduled speakers include, Mr. Seann Nelipinath, Founder, Chairman & President, India Chamber of Commerce, Ms. Radhika Reddy, Founding Partner Ariel Ventures, LLC & Ariel Int'l Center, LLC. Mr. Rajan Pillai, COO Nanocrystal Technology, Inc. Mr. Suraj Krishnan Director, AlixPartners. Dr. J. Mark Muno,z Associate Professor of International Business, Millikin University, Mr. Vishal Bhandari, Principal, A.T. Kearney. Mr. Brian Su, CEO, Artisan Business Group, Inc. Mr. Lu Sun, VP of Maslink Group (China), Mr. John Jiang, President, Micon International. Legal experts will also be speaking at the two day forum.

The conference will provide valuable insight and networking opportunities to those with previous international investment experience, as well as to first-time capital seekers. This year’s event is being hosted and sponsored by Artisan Business Group, Inc., and will be held at the Embassy Suites Chicago Lakefront, 511 North Columbus Drive. Those attending the event also have the opportunity to meet the prior day with Artisan Business Group’s CEO, Mr. Brian Su, for a 1-hour private consultation.

Source: http://www.traveldailynews.com/news/article/50880/chicago-hosts-china-india-investment

Investment In India | "Govt to soon announce steps to boost investments: Sharma"

By: Anand Sharma
Source: http://zeenews.india.com
Category: Investment In India

New Delhi: The government is likely to announce major decisions in the next three weeks to boost investments and revive economic growth, Commerce and Industry Minister Anand Sharma said on Thursday.

"What can be done is under active consideration. You can expect some firm steps taken by the government. There have been consultations among senior secretaries of the concerned ministries and departments and also between key ministers and the Prime Minister," Sharma said.

He was speaking to reporters after holding a meeting with industry leaders from CII and Ficci.

".... We hope that in the next three-weeks, there will be decisions by the government which will bring a positive improvement," the Minister said.

Sharma said the industry has raised issues related to cost of credit, reduction in capacity addition and matters related with foreign direct investment.

"There is a sharp concern about the decline in industrial production particularly in the manufacturing sector. We know that there are strong head winds and a conscious effort has to be made...I will urge the RBI to take an early view on cost of credit for industry," he added.

Worsening economic situation has pulled down the index of industrial production by 1.8 percent in June, third fall in four months.

"Though inflationary pressure is there but depreciation of rupee also adds to that pressure. The economic activity has to continue. Cost of credit has to be made available and it has to be affordable...In the rest of the world, the cost of credit has been brought down," Sharma said.

The Minister said the industry has also raised problems related with land acquisition. "In the new Land Bill we have already registered this issue that the manufacturing zones, DMIC and SEZ have to be included in what is described in public purpose," Sharma added.

CII former President Sunil Munjal said there is need for urgent steps to improve investment climate in the country.

"Unless some quick action is taken, the slowdown may continue or even get worsened because global slowdown is not showing any type of improvement," Munjal said.

He also suggested the government to reduce subsidy bill and incentivise investments for capacity addition and job creation.

Hit hard by global woes and domestic problems, India's economic growth rate slowed to a nine-year low, both in the March quarter at 5.3 percent as well as in 2011-12 at 6.5 percent.

It was the fourth meeting of the government-industry task force which was constituted in July last year.

Besides, industry leaders, secretaries participated in the meeting include Department of Industrial Policy and Promotion, Revenue, Commerce, Environment and Forest and Labour.

Sharma said that industry leaders have also raised the issue of rationalisation and simplification of procedures to set up units.

"To a large extent that has been done so that the timeframe for starting up (an unit) after the mandatory approvals are compressed, which in India has been fairly high. That has been done both for National Investment and Manufacturing Zones (NIMZs) and Delhi-Mumbai Industrial Corridor Project (DMIC)," Sharma said.

Ficci President R V Kanoria said the government should ensure a political consensus and tackle uncertainties dogging the economy in earnest.

"The government should bring down interest rates as public financing of fiscal deficit is crowding out private investment. They should ensure competitiveness by bringing in GST as the levy is a self-policing mechanism as well as a stimulus," Kanoria said.

Kanoria also asked to re-introduce investment allowance, abolition of minimum alternate tax on infrastructure projects and allowing access to pension and insurance funds for infrastructure development.

Source: http://zeenews.india.com/business/news/economy/govt-to-soon-announce-steps-to-boost-investments-sharma_58240.html 

Investment In India | "CM's panel to frame investment policies"

By: TNN
Source: http://timesofindia.indiatimes.com
Category: Investment In India

KOLKATA: Unlike her predecessor Buddhadeb Bhattacharjee, who explored private routes only, chief minister Mamata Banerjee has kept both the doors - public and private players or a mix of both - open to fetch investments for the state. While she plans a deep sea port in Sagar in collaboration with the Railways and Kolkata Port Trust, the other sea port will be set up by reclaiming land at Rasulpur, 35 km from Haldia and within 50 km from Nandigram, by a consortium of public and private investors.

In a bid to boost the investment climate, Mamata has set up a committee of empowered group of ministers (EGoM) like the one at the Centre to spearhead policies matching the "upbeat investment climate." State finance minister Amit Mitra will lead the panel that includes state commerce and industry minister Partha Chatterjee, panchayat minister Subrata Mukherjee, labour minister Purnendu Bose and power minister Manish Gupta.

The EoGM will help the government carve out an investment policy, a policy for the NRIs, a software policy and a new industrial policy that will make a difference with the policies pursued by the erstwhile Left Front government.

What is unique among Mamata's policy prescriptions is a Big Bazaar-like mall to be set up over 150 acres of government land at Bolpur where artisans, craftsmen, jewellers and zari workers will display their items to the tourists. Mamata has conceived the idea to showcase the works of the self-help groups who seldom find a market to sell their commodities.

The Cabinet sub-committee on infrastructure in its meeting on Thursday took note of the plight of tea garden workers. "Workers are reeling under financial crunch in sick tea gardens of the state. There are some legal hassles over the garden lands but we have decided to address the problems of the garden workers. In a bid to offer them roti, kapda and makan, the government will engage them under the National Rural Employment Guarantee Scheme and offer them housing under schemes such as Gitanjali, Amar Thikana and Indira Abas Yojna," the chief minister said.

The sub-committee also took stock of the rise in sugar prices. "Centre's quota for the state has been slashed. However, we are writing to the Centre to increase the quota of sugar and suji during festival time," Mamata said.

She observed in the meeting that the price rise was mainly due to the escalation in road transport and production costs. However, the CM asked the task force to keep tabs on sugar, oil and maida prices and avert artificial crisis.

Source: http://timesofindia.indiatimes.com/city/kolkata/CMs-panel-to-frame-investment-policies/articleshow/15525019.cms

Investment In India | "India, Nigeria hope to have direct flights"

By: IANS
Source: http://timesofindia.indiatimes.com
Category: Investment In India

ABUJA: India is set to review the bilateral air service agreement (BASA) with Nigeria so that airlines can operate non-stop flights to both countries.

Indian high commissioner Mahesh Sachdev said direct flights were necessary as trade and investment between the two countries now stands at $26 billion.

"We are negotiating with Nigeria renewal of BASA. Ideally, it should be possible for us to use the opportunity to ensure direct flights, especially for medical tourists," Xinhua quoted him as saying.

According to the envoy, the excellent relations between Nigeria and India were evident in the current volume of trade.

"The data from the Nigerian Bureau of Statistics (NBS) in the first quarter of this year shows we have become the largest market in Nigeria, overtaking the US," he added.

Sachdev said the current trade figure was in favour of Nigeria, with an annual gain of $12 billion. "Nigeria sells more than they buy from India."

Saying India's investment in Nigeria had doubled to $9 billion since 2009 in pharmaceuticals, transportation and IT, Sachdev explained that people-to-people contacts were rising.

Some 33,000 visas were issued to Nigerians in 2011.

In 2005, Bellview Airline launched a non-stop flight from Lagos to Mumbai, but the firm was grounded after one of its Abuja-bound flights crashed last year killing all 117 passengers and crew.

Source: http://timesofindia.indiatimes.com/india/India-Nigeria-hope-to-have-direct-flights/articleshow/15514633.cms

Investment In India | "Indian PM urges steps to boost economy"

By:   Nirmala George  
Source:  http://www.businessweek.com
Category: Investment In India

NEW DELHI (AP) — India's national security is at risk if urgent steps are not taken to boost economic growth, attract new investment in infrastructure and legislate against corruption, Prime Minister Manmohan Singh said Wednesday.

Singh warned that if economic growth remained stagnant, new investments were discouraged, government finances did not improve and energy security was not ensured, "then it most certainly affects our national security."

Singh's speech marking the 65th anniversary of India's independence from British rule comes after large parts of India's power grid collapsed over two days last month, leaving hundreds of millions without electricity.

Singh promised to accelerate infrastructure development and said the government would work to remove barriers to investment to attract foreign capital in those sectors of the economy.

The government has set ambitious targets to develop roads, airports, railways, electricity generation and coal production for which it would seek help from private companies, he said.

"To attract foreign capital, we will have to create confidence at the international level that there are no barriers to investment in India," he said.

Singh called on political parties to pass legislation to reduce corruption and bring greater accountability to the government. The measure has already passed the lower house but awaits approval from the upper house.

In an effort to curb corruption, Singh also said the government would ensure that every household in the nation of 1.2 billion people had a bank account within the next two years.

"We want to create a system in which money from government schemes — pensions for old people, scholarships for students or wages for laborers can be credited directly into people's bank accounts."

In the past year, India has been roiled by widespread protests by millions of people who are fed up with the rampant corruption that infests almost every part of government. The past two years also saw a string of scandals involving top government officials while hundreds of millions of people are trapped in poverty.

Singh's image as an honest technocrat has been dented by accusations that he has not done enough to curb corruption since his Congress Party was first voted into office in 2004 and for a second term in 2009.

Singh's government has faced a slew of corruption allegations involving the murky sale of cellphone licenses in 2008 and the hosting of the 2010 Commonwealth Games. Critics estimate that those two events alone cost the country as much as $45 billion. Meanwhile, a leaked auditor's report in March suggested that up to $210 billion in potential revenues were lost as coal assets were sold cheaply without a competitive bidding process.

Anti-graft activists say it is not enough for Singh to claim he is honest if he remains oblivious to misdoings of his colleagues in government.

Source:  http://www.businessweek.com/ap/2012-08-15/indian-pm-urges-steps-to-boost-economy

Investment In India | "Nalco plans Rs 40,000 cr investment in projects, energy sector entry"

By:  Bhubaneswar   
Source:  http://businesstoday.intoday.in
Category: Investment In India

Aluminium giant Nalco plans to invest about Rs 40,000 crore in various projects - new and existing, with special focus on its entry into the energy sector.

The company has formed a joint venture with Nuclear Power Corporation of India Ltd (NPCIL) to set up nuclear power plants in India.

Both the partners have selected Kakrapar Units 3 and 4 of 700 MW each in Gujarat as their first JV project with an estimated project cost of Rs 11,500 crore.

"The company has taken up several greenfield projects. As part of this drive, plans are afoot to set up a new smelter in Western Odisha with an investment of about Rs 16,000 crore," Nalco Chairman and Managing Director B L Bagra said.

The project is now being pursued with the Odisha government by the Navaratna PSU, he said

PROFILE: Nuclear Power Corp

The company is also planning to set up a Rs 4,500 crore alumina refinery in Gujarat with 1 million tonne per annum capacity. Preparation of Detailed Project Report (DPR) has been taken up.

It also has plans to set up a 1.4 million tonne a year alumina refinery in Andhra Pradesh, based on bauxite reserves in that state.

"To start with, some CSR works have been undertaken in the vicinity," he added.

On the NPCIL venture, Bagra said the construction work has already started and the project is scheduled to be commissioned by December 2015.

Besides, Nalco is setting up a Rs 274 crore Wind Power Project in Andhra Pradesh with a capacity of 50.4 MW, which is in the final stage of commissioning. Plans are afoot for a second Wind Power Project of equal capacity, he said.

A third plant has been planned in the company's own worked out mined area at Panchpatmali in Koraput district of Odisha. Also, a Solar Power Plant of 15 MW is on the cards.

Nalco has also shown keen interest in the proposed 4,000 MW Ultra Megal Power Plant (UMPP) in at Bedabahal in Sundargarh district of Odisha, Bagra said, adding that the bidding for the project is likely later this year.

The company is in the process of forming a consortium of PSUs including BHEL, NMDC and Neyvelli Lignite Corporation in an effort to strengthen its bid.

Carrying forward its diversification plan, Nalco has expressed keen interest in the steel sector too.

The company proposes to take over Kalinga Iron Works Ltd (KIWL) at Barbil in Odisha, he said, adding that a proposal for takeover and establishment of a 1 MTPA steel plant has been submitted to the state government.

Referring to expansion plans, Bagra said Nalco has initiated activities for 3rd phase brownfield expansion at the existing facilities in Odisha at an estimated investment of Rs 7,500 crore.

Source:  http://businesstoday.intoday.in/story/nalco-plans-rs-40000-cr-investment-energy-sector-entry/1/187244.html

Investment In India | "Regulations need to encourage pooling of funds in India: Raja Kumar"

By: Raghuvir Badrinath
Source:  http://www.business-standard.com
Category: Investment In India

Ascent Capital, which manages $600 million across three funds, was among the few Asian private equity (PE) firms able to raise funds successfully, before closing the fund during the tumultuous period of 2009. Founder and Chief Executive Officer Raja Kumar, also a former senior officer at the Securities and Exchange Board of India (Sebi), in an interview with Raghuvir Badrinath, tells how the Indian PE industry has learnt its lessons the hard way. Edited excerpts:

The Indian PE industry is seeing turbulent times, with a 50 per cent fall in investments in the June quarter. What led to this?
The pace of investments has slowed considerably, owing to uncertainty over policy and regulations, especially the General Anti-Avoidance Rules, which led to concern among venture capital (VC)/PE investors. Also, fund managers have become selective and due diligence efforts are taking considerably longer. Thankfully, ‘auctions’ and ‘chasing deals’ is history. Fundamentally, the change is we now have fund managers who have been through the entire cycle of VC/PE investing and have learnt their lessons the hard way. The VC/PE industry in India is maturing and this bodes well for its future.Given the fall in PE investments, you are probably facing intense heat in deploying funds. How are you gearing for this?
We have concluded seven investments from our third fund, the latest being iNurture, a company in the higher education space. iNurture bridges the gap between the academia and industry by developing industry-relevant courses that boost employability. It offers these courses in collaboration with established universities and colleges. We continue to focus on backing quality businesses with good management teams. We have already invested in sectors such as infrastructure, healthcare and education, and are actively scouting for opportunities in the technology, life sciences and consumer-facing businesses. In a development at the firm level, we have taken majority positions in certain niche businesses. We believe the next two years would provide an excellent opportunity to invest in good companies at reasonable valuations, and we intend to make the most of it.
You are among the few fund managers who have seen various cycles. As you embark on the next, arguably one of the toughest for exits, what are the major differences this time?
These are challenging times for the Indian VC/PE industry. During the boom years of 2006 and 2007, the number of fund managers had risen from 30 to 300 and a lot of VC/PE capital was committed to India. Investors had taken a macroeconomic call on India, but Indian general partners have not delivered, leading to restraint among investors on committing more capital to the country. Fund raising would, therefore, remain a challenge. Also, there isn’t room for so many fund managers. My estimate is only 50-60 managers would be active in the next five years. VC/PE investments made in 2006 and 2007 have turned out to be high-cost ones. There was lack of traction in portfolio companies of most funds over the past three years, owing to high interest costs. And, lacklustre equity markets have not helped, with exits being deferred indefinitely. The industry is ripe for consolidation and only funds with a good track record of exits would survive.

Various regulatory issues related to the PE sector in India drew flak. How would the new Alternate Investment Fund (AIF) regulations shape the sector?
AIF regulations have accommodated a few of the industry’s suggestions. These include the ability to make secondary purchases in listed securities and investment in non-banking financial companies. Many existing funds are unable to avail of these regulations due to lack of clarity on ‘tax pass-through’.

However, some provisions in the regulations impinge on the operational freedom of VC/PE fund managers and their investors (limited partners, or LPs). Unlike in mutual funds, LPs in VC/PE funds exercise direct control over their fund managers and prefer to retain the ability to change the fund’s strategy, based on circumstances. Such investors are not looking at a regulator for protection. Ideally, funds that raise capital from large investors (Rs 10 crore per investor) should be covered by a specific set of AIF regulations that provide more operational freedom. Today, most VC/PE funds prefer to pool their funds abroad, as this provides more operational freedom. AIF regulations need to address this issue to encourage pooling of funds in India, as this brings about a level playing field between funds pooled abroad and those pooled in India.

The tax status of VC/PE funds has been debated. How would this weigh on the sector?
VC/PE funds are not significant tax-generating entities per se (the nature of income is mostly long-term capital gains). However, their portfolio companies are robust tax-paying entities that can sustain growth in tax revenue for several years. An illustrative study by our fund estimated total revenue potential for the government from a Rs 1,000-crore VC/PE fund’s portfolio companies at Rs 1,800 crore, through the term of the fund.

Considering more than $60 billion has been invested by VC/PE funds since 2005, the revenue realisation to the government from VC/PE-backed companies is significant. A thriving VC/PE industry can be a golden goose for the government to realise sustainable tax revenue. All investors are seeking is clarity and certainty on tax laws.

Source:  http://www.business-standard.com/india/news/regulations-need-to-encourage-poolingfunds-in-india-raja-kumar/483390/

Investment In India | "Goldman Sachs invests in Nova Medical Centres"

By: Sumitra Deb Roy
Source:  http://timesofindia.indiatimes.com
Category: Investment In India

MUMBAI: Global investment bank Goldman Sachs will be investing in Nova Medical Centers, who have led the way in establishing the idea of day/short-stay surgical care in the country. Goldman Sachs will invest INR 2.2 billion.

NEA, a leading venture capital firm, has also announced that it will make an add-on investment of INR 800 million. Nova operates day/short-stay surgical centers in partnership with surgeons across India and the Middle East. It pioneered the concept of short-stay surgical care in India and undertakes procedures that take 24-72 hours from admission to discharge.

A large majority of Nova's patients get discharged the same day. Nova provides around 700 surgical procedures in orthopaedics, spine surgery, general surgery, gynaecology, bariatric surgery, ENT, plastic & cosmetic surgery, urology, gastroenterology, ophthalmology, pain management and IVF. Nova was based on a 'doctor-owned and doctor-managed' concept enabling doctors to have a sense of ownership and a long-term association with the company. It recently grabbed headlines in the city when it announced a centre for teen bariatric surgery.

Suresh Soni, chairman and CEO, Nova Medical Centers, said, "This landmark investment will ultimately better serve India's healthcare delivery services industry, surgeons and, most importantly, patients."

Source:  http://timesofindia.indiatimes.com/city/mumbai/Goldman-Sachs-invests-in-Nova-Medical-Centres/articleshow/15512790.cms?

Investment In India | "FIIs invest Rs 4,800 crore in August so far"

By: THE TIMES OF INDIA
Source: http://timesofindia.indiatimes.com
Category: Investment In India

NEW DELHI: Overseas investors seem to be unperturbed by the country's slow economic growth and weak monsoon as they pumped nearly Rs 4,800 crore into stock markets this month so far.

During August 1-10, foreign institutional investors (FIIs) were gross buyers of shares worth Rs 17,544 crore, while they sold equities amounting to Rs 12,750 crore, translating into net inflows of Rs 4,794 crore, according to the data available with the Securities and Exchange Board of India ( SEBI).

Market experts said foreign investors have sidelined concerns over weak monsoon, slowing economic growth and a high interest rate regime, mainly on hopes that government would initiate fresh reforms initiatives. "With the government indicating a softer stance on the controversial General Anti-Avoidance Rules (GAAR) and retrospective taxation issues, many FIIs which had stayed away with the Indian equities are once again coming back to India," a stock broker said.

Another analyst Destimoney Securities MD and CEO Sudip Bandhopadhyay said, "The huge FII inflows were not driven by the country's fundamentals, its mainly because of the global factors such as ECB and the US Federal Reserve. In India, there are some concerns like weak monsoon, slowing economic growth among others."

Industrial production declined by 1.8 per cent in June mainly due to sharp dip in manufacturing and capital goods sectors, official data showed last week.

On the hand, FIIs withdrew Rs 143 crore from the debt market this month.

FIIs poured in Rs 10,273 crore in the stock market last month after a pull out of Rs 1,957 crore in the April-June quarter.

Buoyed by strong inflows, BSE's benchmark Sensex rose 321 points, or 1.8 per cent, this month so far to settle at 17,236.18 points on Friday.

After taking the latest inflows into account, FIIs investment in the equity market stood at Rs 57,060 crore so far in 2012 and Rs 24,109 crore in the debt market during the same period.

The number of registered sub-accounts has risen to 6,362 as on August 10 from 6,278 at the end of last year, while the number of registered FIIs has fallen to 1,756 from 1,767 during the same period.


Source: http://timesofindia.indiatimes.com/business/india-business/FIIs-invest-Rs-4800-crore-in-August-so-far/articleshow/15463385.cms

Investment In India | "Brazil's auto demand, incentives lure foreign investment"

By: Imaduddin
Source: http://www.brecorder.com
Category: Investment In India

SAO PAULO: Rising demand and government incentives are prompting foreign carmakers to boost their investment in Brazil, which analysts say could become the third largest auto market in the world as early as 2015.
Industry group ANFAVEA forecast that domestic sales of cars and light commercial vehicles may grow by four to five percent this year compared to 2011, to up to 3.81 million vehicles.
Production is slated to reach 3.49 million units, up about two percent from last year, the National Association of Motor Vehicle Manufacturers added.
On Thursday, Japanese giant Toyota inaugurated its third plant in Brazil, in the southeastern town of Sorocaba, with the goal of producing 70,000 new Etios compact models a year.
A modified version of a model already being sold in India and South Africa, the Etios will be available from September, priced at an average of $17,300 to compete with similar models from Volkswagen, Fiat, General Motors and Hyundai.
Toyota, in Brazil since 1958, said it also planned to begin selling the Prius, its popular hybrid electric car, in Brazil later this year and to invest $495 million to build an engine plant near Sorocaba.
With a share of less than three percent of the Brazilian auto market last year, the Japanese carmaker lags behind leading players Fiat, Volkswagen and General Motors.
But the world's biggest carmaker plans to double its sales in Brazil to around 200,000 vehicles in the next two years and become one of market leaders in the next decade.
Industry Minister Fernando Pimentel said the Sorocaba plant, which employs 1,500 workers, amounted to a vote of confidence by Toyota "in the strength of the Brazilian economy and the Brazilian auto market."
Although sales dropped 1.2 percent in the first half of 2012, leading carmakers and analysts are generally upbeat about the future.
"The Brazilian economy is going to post solid growth in the second half of the year. Interest rates (now down to a record low of 8 percent) will continue to decline, and credit will continue to expand," ANFAVEA president Cledorvino Belini said Monday.
Home to 191 million people, Brazil currently ranks as the world's fourth largest car market behind the United States, China and Japan.
The industry, which employs 147,000 people, contributes roughly 5 percent of Brazil's GDP.
But rising demand for better quality cars by the country's expanding middle class -- now estimated at 95 million people -- a low motorization rate (333 cars per 1,000 inhabitants), the absence of domestic producers and government incentives offer good prospects for foreign makers, analysts say.
Roland Berger Strategy Consultants estimates that Brazil, the world's sixth largest economy, could displace Japan as the world's third biggest market by 2015 and sales rise to 6.6 million vehicles by 2020.
In April, the government introduced new rules to make the auto industry more competitive.
The rules require carmakers to increase regional content by purchasing more locally-produced spare parts, invest in engineering and innovation, and improve car fuel efficiency, or face higher taxes.
Sao Paulo state, where nearly half of the national auto industry is concentrated, also provides tax breaks to attract foreign makers.
South Korea's Hyundai is also set to begin production at a $600 million plant in the state in September while Nissan, Fiat, Volkswagen and PSA Peugeot Citroen are expanding their plants or building new ones.
But analysts said foreign carmakers face a host of problems such as high production costs due to relatively expensive wages, a lack of automation and low productivity.
General Motors, for example, is facing growing unrest from workers at its plant in the industrial hub of Sao Jose dos Campos over its plans to cut 1,840 jobs at a struggling production line.
The two sides have agreed to delay the cuts until at least November.
The US carmaker told union representatives it intends to shut down the production line, which has already stopped making Zafira, Merica and Corsa models and would not make any new investments in Sao Jose dos Campos due to "structural adjustments."
The workers have appealed to the federal government to intervene to save their jobs.

Source: http://www.brecorder.com/world/global-business-a-economy/73315-brazils-auto-demand-incentives-lure-foreign-investment-.html

Investment In India | "India to establish a pharmaceutical manufacturing hub in Sri Lanka"

By: Quintus Perera
Source: http://www.sundaytimes.lk
Category: Investment In India

Indian Commerce, Industry and Textile Minister Anand Sharma, who was in Sri Lanka last week with a large contingent of businessmen and officials representing 108 large Indian companies, highlighted how the bilateral trade and investments would be further accelerated.
He said trade and investment between the two countries would expand and be enhanced to $10 billion by 2015. Several Sri Lankan ministers were present at the inauguration of the Indian Show and among them were Dr Sarath Amunugama, Senior Minister of International Monetary Cooperation, Rishad Bathiudeen, Minister of Industry and Commerce and Basil Rajapakse, Minister of Economic Affairs.

The first India Show was held in 2003 and the second was in 2005. The show was organized by the Confederation of Indian Industry (CII) in partnership with the Ceylon Chamber of Commerce (CCC). The Indian Show 2012 went on for three days held at the BMICH.
Mr Sharma indicated that the Indian investments are directly linked to manufacturing and exports and preferential access would create better prospects for both countries. He said that they would also venture into what they have not already gone into such as agro-processing, pharmaceuticals, bio-tech, tourism and knowledge based activities. He said that Indian business leaders would strengthen these investment decisions through Sri Lankan counterparts.

Some of the highlights Mr Sharma made were to establish two new export zones and to be directly involved in promoting the five hub strategies of Sri Lanka and establish a pharmaceutical manufacturing hub in Sri Lanka with the participation of Indian pharmaceutical firms. India is also keen to expand their presence in the oil and gas exploration in Sri Lanka. The hospitality industry is another area they hope to involve.

The export manufacturing zone that would come up in the Trincomalee district would manufacture auto components and engineering goods, and to assist the zone an industrial skills training institute would also be established. The Indian Show promotes a two-way flow of goods and services between India and Sri Lanka enabling Indian companies to show their prowess and encourage Indian investment in Sri Lanka and to provide opportunities to the Sri Lankan companies to enter into partnerships and collaborations with Indian companies.
Sri Lanka now is India’s largest trade partner in SAARC and India is Sri Lanka’s largest trade partner worldwide.

Some of the key sectors represented at the exhibition were infrastructure, power, mineral fuels, oil related products, electrical machinery and components, food products, agro-processing, mining machinery, railway equipment, rolling stock, paper, paper board and paper pulp, handicrafts, textiles and garments, information and communications technology and financial services.

Source: http://www.sundaytimes.lk/120812/business-times/india-to-establish-a-pharmaceutical-manufacturing-hub-in-sri-lanka-8089.html

Investment In India | "Hyundai WIA to invest $30 million in machine tools"

By: V. RISHI KUMAR
Source: http://www.thehindubusinessline.com
Category: Investment In India

HYDERABAD, AUG 11:
Hyundai WIA India plans to invest up to $30 million in setting up machine tools division at Sriperumbudur near Chennai.

Young Kim, Head-Machine Tools Division, Hyundai WIA, part of the diversified Hyundai of Korea, said the company plans to complete the heavy machine tools division unit by July. “We may invest $10 million more in the project later to expand the facility and also add more products,” he said. “This is very crucial for our operations in India and will support our internal expansion and also existing manufacturing plants in the country. We plan to repeat the success we achieved in China by setting up such a facility there,” he told Business Line. Young Kim was here as part of the Machine Tools and Engineering Process Conference at Fapcci. The company is seeking to display its precision engineering and tooling capability, which played a crucial role in the growth of the Korean automotive major.

Source: http://www.thehindubusinessline.com/companies/article3754770.ece

Investment In India | "Reality of realty investment"

By: Jayant Pai
Source: http://www.business-standard.com
Category: Investment In India

Many investors (especially high net worth) prefer real estate over the stocks as an investment option. They argue that that stocks are too volatile and the price rise in real estate is substantially more.

While it is true that property prices have risen over time, so have stock prices. Sure, properties in prime locations in the metros (where supply is scarce) have risen rather exponentially. Investors who compare this price performance with the rise in the broad stock market indices will surely feel that stocks pale in comparison. However, to counter this, I can also think of myriad stocks whose rise has been nothing short of spectacular. Hence both these examples are not really representative. There are some other features of the stock market which, rather perversely, have actually bolstered this rather erroneous belief in investors’ minds. They are:
Transparency
Today, everyone can get virtually minute-by-minute updates on stock prices either on the television or internet. Watching prices bounce all over the place, fosters the impression that stocks are volatile.

On the other hand, in the case of real estate there is no mechanism to disseminate prices in this manner. In fact one hardly gets any update unless it is sought actively. Even after that, there is no one credible source of information. Often, one just averages the estimates of various brokers or websites in order to arrive at some figure. Since this is a relatively tedious process, one embarks on it rather infrequently (often, only once every few years). After that when one compares the period-on-period change, optically it may appear outsized, and consequently, impressive. However, if one drills it down to a Compounded Annual Growth Rate (CAGR) figure, it may not be much different from the CAGR offered by stocks during the same period.

Again, as mentioned earlier, as there is no single property index which is widely followed in India, one cannot make accurate comparisons vis-a-vis the stock market indices.

Liquidity
Undoubtedly, this is a positive feature for any investment. However, the flip side to it is that it may encourage over-trading. Benjamin Graham has often mentioned a fictional character known as Mr Market in his books. This person apparently visits you several times a day, offering to buy from you or sell to you. Constantly being in the company of Mr Market makes it difficult for you to resist the urge to trade. You are drawn to the flashing prices on the screen like a moth to a flame. Consequently, many a time you sell off good stocks on a whim, merely because you have earned a small profit, thereby foregoing any future potential appreciation. After that you will blame the stock market for not giving decent returns.

On the other hand, in the case of property, as there is no one who visits you daily with a quotation to purchase your house, you often end up holding the property for many years. When the time comes to actually sell it, you are pleasantly surprised by the price appreciation that has ensued in the interim. I often tell my friends in South Mumbai that if their parents (who had bought the houses in the 1980s) were visited by Mr Market daily in the mid 1990s they would have sold their houses long ago and missed out on the parabolic appreciation witnessed in the 2000s.

Lack of liquidity may cut the other way too. Investors who are overweight on property, sometimes end up being asset rich and cash poor. They may be compelled to to liquidate their property at a steep discount in case of emergencies.

Returns
You may be driven by the fact that property prices appreciate substantially. It easily rises 5-6 times in 6-7 years in any big city. But, remember all the increase is just notional! If you calculate the internal rate of return (IRR) for an investment in property, you will see that it isn’t great.

To calculate the same you need to factor in the maintenance costs, loan cost, tax and the rent you receive, if any. You will see that very often a three time increase turns out to be a 6 per cent return on investment. If a property is lying vacant, then the return may go down further.

Sample this, a person bought a flat for Rs 1 lakh in 1980s. Today the property is valued at more than Rs 1.50 crore. Some sample calculations will show that the IRR is not more than 10-11 per cent. You need the correct maintenance and accrual cost. This kind of return even fixed income instruments like fixed deposits (in some cases) and fixed maturity plans (FMPs) are giving today. Over such long tenures, stocks always give very good returns, easily 12-15 per cent.

Investment amount
To own a property, you need heavy investments while you can buy even one share if you don’t have enough cash. Assuming you want to buy a house worth Rs 50 lakh. A bank would be willing to lend you 80 per cent of this amount, or Rs 40 lakh. You will need Rs 10 lakh as down-payment. While in case of stocks you can buy even one, which depending on the price of the stock will be very less in comparison.

Tax
Your investments in stocks can be exempt from capital gains taxes if you hold the investment for one year or more. While in case of real estate the same increases to three years. A property held for less than three years is subjected to short-term capital gains tax.

I believe that both, property and stocks are an essential part of one’s portfolio. Both have different liquidity and volatility characteristics and are often a good fit in tandem. To be obsessed with one at the cost of another may therefore be sub-optimal.

Source: http://www.business-standard.com/india/news/realityrealty-investment-/483021/