India Inc is likely to witness a 22.8% growth in its profit after tax (PAT) in the current fiscal, an economic think-tank has said in its report. “Corporate sales growth will average at a meagre 4.1% in 2009-10. At the same time, the PAT will rise by a robust 22.8%,” the Centre for Monitoring Indian Economy (CMIE) said in its latest report.
The manufacturing sector (excluding petroleum sector) would report a 24.3% growth in PAT mainly because of low prices of raw material and soft interest rates, CMIE said, adding that the PAT of the financial and non-financial services would rise by 32.2% and 20.4%, respectively.
The Financial Express
Thursday, October 22, 2009
India Inc On A Fund Raising Spree, Raises $9 Bn
India Inc is on a fund raising spree, garnering $9 billion (Rs 32,400 crore at the current exchange rates) through sale of shares and convertible bonds to institutional buyers since April as companies, locked out from capital markets for almost a year due to the liquidity crisis, rush to finance growth plans.
The Economic Times
The Economic Times
PM Economic Panel Sees 2009-10 GDP Growth At 6.5%
India’s accommodative monetary policy may continue until the end of March, with the need for tightening once inflation picks up, a government panel that advises the prime minister said on Wednesday. Former central bank governor C. Rangarajan, who heads the panel, said growth in the fiscal year that ends in March 2011 would accelerate to 7 to 8% after growing by about 6.5% in 2009/10, with inflation at around 6 percent by the end of March 2010.
MINT/Reuters
MINT/Reuters
Cross Border Deals: Now Is As Good A Time As Ever
One of the most intriguing ironies of the business world is the fact that when economies are booming and asset prices skyrocket, we see companies making audacious bids to buy other companies. On the other hand, when the economy takes a tumble and asset prices are at historic lows, we see CEOs become inward-looking and go into defensive mode, even though they might be in a relatively good position.
Bleak economic scenarios like the present time should be used by strong companies to bolster their standing in their respective industries and to orchestrate "game-changing" initiatives, prime among which is mergers & acquisitions. It's a buyers' market and companies acting now are likely to emerge as winners when the upswing comes. Now is as good a time as ever for dealmaking.
Bangkok Post
Bleak economic scenarios like the present time should be used by strong companies to bolster their standing in their respective industries and to orchestrate "game-changing" initiatives, prime among which is mergers & acquisitions. It's a buyers' market and companies acting now are likely to emerge as winners when the upswing comes. Now is as good a time as ever for dealmaking.
Bangkok Post
India's HNI Club To Swell 3 Times In 10 Years
India and China are together projected to treble the number of high net worth individuals (HNIs) from 4.48 lakh in 2008 in the next one decade, as per a report collated by Merrill Lynch Wealth Management and Capgemini, which pegged the number of Indian HNIs at 84,000 for the past year. After seeing a 22.7% growth in the population of HNI in 2007 to 1.23 lakh - the highest percentage jump in the world - India saw a 31.6% drop in the number of HNIs past year. India happened to witness the second-biggest drop in the population of the rich, as defined by the survey, behind Hong Kong, which recorded a 60% drop in HNIs in 2008.
The survey defined HNIs as those with investable assets of at least $1 million (Rs 5 crore), excluding their primary residence and consumables. With the Indian economy showing clear signs of revival and the stock market bouncing back, the number of HNIs in the country is expected to bounce back soon.
The Economic Times
The survey defined HNIs as those with investable assets of at least $1 million (Rs 5 crore), excluding their primary residence and consumables. With the Indian economy showing clear signs of revival and the stock market bouncing back, the number of HNIs in the country is expected to bounce back soon.
The Economic Times
Monday, October 05, 2009
Why Bharti-MTN Broke Up?
A mega transnational deal and over USD 20 billion transaction, a new south-south alliance, the creation of the world’s third largest telecom firm, two public attempts, unprecedented government lobbying, a combined 12 months of negotiations, thousands of hours in legal fees and yet this deal came unstuck.
Bundeep Singh Rangar, Chairman of IndusView; Lauri-Lynn Pursall, Partner of Mayer Brown; and Vivek Gupta, Partner at BMR Advisors discuss what went wrong in the Bharti-MTN deal
CNBC-TV18
Bundeep Singh Rangar, Chairman of IndusView; Lauri-Lynn Pursall, Partner of Mayer Brown; and Vivek Gupta, Partner at BMR Advisors discuss what went wrong in the Bharti-MTN deal
CNBC-TV18
Friday, September 25, 2009
India To Invest $18 bn In Ports Over Next 5-7 Years
India is likely to invest $18 billion in ports and over $4 billion in its ship building industry in the next five-to-seven years, shipping industry players said at a meet here. Shipping Corporation of India's Chairman and Managing Director, S Hajara, who spoke at the meet, said that shipping should be brought under the infrastructure ambit. He called for a relaxation in the present cabotage law to allow shipping into the infrastructure sector.
The Economic Times
The Economic Times
13 Indian firms in Forbes Asia's Fabulous 50 list
As many as 13 Indian companies, including Reliance Industries, Infosys Technologies and Tata Steel, have made it to the list of Forbes' 50 best listed companies in the Asia-Pacific region.
In the Forbes list, there are four Indian entities – Reliance Industries, Bharti Airtel, Infosys Technologies and Tata Consultancy Services – among the top ten firms in terms of market value, while Reliance Industries and Tata Steel feature in the top ten league in terms of sales. Other than RIL, Infosys and Tata Steel, the other Indian firms that have made it to the prestigious list include - Adani Enterprise, Axis Bank, Bharat Heavy Electricals, Bharti Airtel, HDFC bank, Jindal Steel & Power, Larsen and Toubro, Mahindra & Mahindra, Tata Consultancy Services and Wipro.
The Economic Times
In the Forbes list, there are four Indian entities – Reliance Industries, Bharti Airtel, Infosys Technologies and Tata Consultancy Services – among the top ten firms in terms of market value, while Reliance Industries and Tata Steel feature in the top ten league in terms of sales. Other than RIL, Infosys and Tata Steel, the other Indian firms that have made it to the prestigious list include - Adani Enterprise, Axis Bank, Bharat Heavy Electricals, Bharti Airtel, HDFC bank, Jindal Steel & Power, Larsen and Toubro, Mahindra & Mahindra, Tata Consultancy Services and Wipro.
The Economic Times
Govt Backs Bharti-MTN Deal
Finance minister Pranab Mukherjee said on Wednesday that the Indian government backs the proposed merger of Bharti Airtel Ltd and South Africa’s MTN Group Ltd and it was looking into legal aspects related to a dual listing.
“Our position on this is very clear. In the first week of September, I had met the South African finance minister on the sidelines of the G-20 finance ministers’ summit in London, and told him that we are in favour of the deal,” Mukherjee said in Kolkata. “As far as dual listing is concerned, that is linked with full (capital account) convertibility. This has legal aspects, which we are looking into.”
On whether India would alter legislation to allow the record $24 billion (Rs1.15 trillion) deal, the finance minister said: “We welcome the deal but in the context of the law of land. There are some legal implications, which are being looked into.”
Livemint
“Our position on this is very clear. In the first week of September, I had met the South African finance minister on the sidelines of the G-20 finance ministers’ summit in London, and told him that we are in favour of the deal,” Mukherjee said in Kolkata. “As far as dual listing is concerned, that is linked with full (capital account) convertibility. This has legal aspects, which we are looking into.”
On whether India would alter legislation to allow the record $24 billion (Rs1.15 trillion) deal, the finance minister said: “We welcome the deal but in the context of the law of land. There are some legal implications, which are being looked into.”
Livemint
Monday, August 31, 2009
MTN Wants Speedy Conclusion To Bharti Deal
South African mobile operator MTN wants to conclude a proposed tie-up with Indian partner Bharti Airtel quickly to end any doubt about the deal, chief executive Phuthuma Nhleko said.
“We want to do the deal sooner rather than later because we are really uncomfortable with the uncertainty,” Nhleko told Reuters on Thursday.
Last week, Bharti and MTN extended talks aimed at creating the world’s third-biggest mobile company for a second time, frustrating investors who wanted the deal finalized, and raising concerns its structure was too complex to succeed. Both firms agreed to extend talks to 30 September, after previously extending discussions by a month to 31 August, as they negotiate a $23 billion cash and share-swap deal aimed at an eventual full merger.
Livemint
“We want to do the deal sooner rather than later because we are really uncomfortable with the uncertainty,” Nhleko told Reuters on Thursday.
Last week, Bharti and MTN extended talks aimed at creating the world’s third-biggest mobile company for a second time, frustrating investors who wanted the deal finalized, and raising concerns its structure was too complex to succeed. Both firms agreed to extend talks to 30 September, after previously extending discussions by a month to 31 August, as they negotiate a $23 billion cash and share-swap deal aimed at an eventual full merger.
Livemint
ExxonMobil In Talks With Local Vendors For $1billion IT Contracts
World’s biggest oil company ExxonMobil is in talks with India’s top technology firms and multinational vendors for outsourcing of several IT contracts worth up to $1 billion.
A day after British Petroleum (BP) formally awarded over $1.5-billion outsourcing contracts to TCS, Infosys and Wipro along with IBM and Accenture, top Indian offshore vendors including L&T Infotech and HCL Technologies - along with other MNC vendors - have locked horns with each other for almost $1-billion outsourcing deal being fleshed out by ExxonMobil.
The Economic Times
A day after British Petroleum (BP) formally awarded over $1.5-billion outsourcing contracts to TCS, Infosys and Wipro along with IBM and Accenture, top Indian offshore vendors including L&T Infotech and HCL Technologies - along with other MNC vendors - have locked horns with each other for almost $1-billion outsourcing deal being fleshed out by ExxonMobil.
The Economic Times
Indian Automakers Rope In International Designers
Spurred by a worldwide consolidation wave, Indian carmakers are rushing to global automotive designers in a bid to give a cutting edge to their products line-up. Auto majors such as Bajaj Auto, Maruti Suzuki, Mahindra & Mahindra and Tata Motors are understood to be meeting several top auto designers in a bid to scale up their in-house design functions.
Senior officials of these companies have conducted several rounds of interviews at a recent Society of Automotive Engineers event with designers from Chrysler, BMW and others based out of Europe and the US.
The Economic Times
Senior officials of these companies have conducted several rounds of interviews at a recent Society of Automotive Engineers event with designers from Chrysler, BMW and others based out of Europe and the US.
The Economic Times
Indian Premier’s 100-Day Stock Rally Best Since 1991
Indian stocks rose more in the first 100 days of Prime Minister Manmohan Singh’s leadership than under any new government since 1991. Investors predict more gains as he opens up the world’s second-fastest growing economy.
The Bombay Stock Exchange’s Sensitive Index climbed 16 percent since Singh started a second term on May 22 as international investors bought $4.9 billion more shares than they sold, data compiled by the bourse show. The advance is the biggest since the 40 percent rally after Prime Minister P.V. Narasimha Rao came to power, and compares with the 8.4 percent increase for the Standard & Poor’s 500 in the first 100 days of U.S. President Barack Obama’s administration.
Bloomberg
The Bombay Stock Exchange’s Sensitive Index climbed 16 percent since Singh started a second term on May 22 as international investors bought $4.9 billion more shares than they sold, data compiled by the bourse show. The advance is the biggest since the 40 percent rally after Prime Minister P.V. Narasimha Rao came to power, and compares with the 8.4 percent increase for the Standard & Poor’s 500 in the first 100 days of U.S. President Barack Obama’s administration.
Bloomberg
Thursday, August 13, 2009
MphasiS To Buy AIG's Indian IT Arm
The acquisition is expected to strengthen its domain-based solutions in key BFSI vertical
IT and BPO services company MphasiS today said it will acquire AIG Systems Solutions (AIGSS), the IT arm of the US-based insurance giant AIG (American International Group), for an undisclosed sum.
The acquisition, which comes with guaranteed business from AIG, is expected to strengthen MphasiS’ domain-based solutions in its key banking, financial services and insurance (BFSI) industry vertical, MphasiS CEO Ganesh Ayyar said. The BFSI segment brings in 40 per cent of the company’s revenues.
MphasiS, a majority of which is owned by Hewlett-Packard subsidiary EDS, did not disclose the financial details of the deal. With cash and bank balances of $74 million in its second quarter ended April 30 this year, the company is likely to fund the acquisition through internal accruals, according to analysts.
The MphasiS buy of AIGSS signals renewed activity in the tech merger and acquisitions space, which has been sluggish since January this year. TCS had bought the back-office unit of Citigroup Inc for $505 million in October last year, while Wipro acquired in December another captive unit of Citigroup for $127 million.
“Indian IT companies are positive on cash flows and are looking at rebounding from the recession through inorganic growth. We expect action to pick up on the M&A scene,” said Neeraj Atri of IndusView Advisors, a strategic consulting firm.
AIG, once the world’s largest insurance company, was part of an $800-billion fiscal stimulus package from the US government and has been looking at hiving off assets which fall outside its core insurance business.
AIGSS has around 800-850 people on its rolls, with offices in Chennai and Kolkata, and provides IT services to AIG companies worldwide, according to an MphasiS filing with the Bombay Stock Exchange. MphasiS currently employs 33,810 people, of which the applications services business has a total of around 15,000 employees. The acquisition is expected to help MphasiS gain market share in the insurance domain and enhance its portfolio of domain-specific solutions.
“This acquisition gives MphasiS the depth and breadth for us to be the preferred partner of choice in their (AIG’s) IT transformation,” MphasiS President (Applications Services Business Unit) Gopinathan Padmanabhan said in a statement.
Post-acquisition, AIGSS is expected to become part of the key application services business unit of MphasiS. This unit showed a quarter-on-quarter growth of 5.2 per cent for the period ended April 30 this year, and brought in 63.8 per cent of MphasiS’ total revenues. While the company has seen pressures in terms of pricing and solutioning, it has been winning new deals in the marketplace, CEO Ganesh Ayyar had said in a internal mail to employees in May this year.
For the second quarter ended April 30, MphasiS showed 219.1 per cent growth in PAT to Rs 224.5 crore from Rs 70.3 crore earlier. Total revenues for the quarter crossed Rs 1,000 crore, with consolidated topline at Rs 1,048.5 crore increasing 52.3 per cent from Rs 688.4 crore in the same period of 2008. The company hired 3,822 people to support growth during the quarter, of which 117 were freshers.
IT and BPO services company MphasiS today said it will acquire AIG Systems Solutions (AIGSS), the IT arm of the US-based insurance giant AIG (American International Group), for an undisclosed sum.
The acquisition, which comes with guaranteed business from AIG, is expected to strengthen MphasiS’ domain-based solutions in its key banking, financial services and insurance (BFSI) industry vertical, MphasiS CEO Ganesh Ayyar said. The BFSI segment brings in 40 per cent of the company’s revenues.
MphasiS, a majority of which is owned by Hewlett-Packard subsidiary EDS, did not disclose the financial details of the deal. With cash and bank balances of $74 million in its second quarter ended April 30 this year, the company is likely to fund the acquisition through internal accruals, according to analysts.
The MphasiS buy of AIGSS signals renewed activity in the tech merger and acquisitions space, which has been sluggish since January this year. TCS had bought the back-office unit of Citigroup Inc for $505 million in October last year, while Wipro acquired in December another captive unit of Citigroup for $127 million.
“Indian IT companies are positive on cash flows and are looking at rebounding from the recession through inorganic growth. We expect action to pick up on the M&A scene,” said Neeraj Atri of IndusView Advisors, a strategic consulting firm.
AIG, once the world’s largest insurance company, was part of an $800-billion fiscal stimulus package from the US government and has been looking at hiving off assets which fall outside its core insurance business.
AIGSS has around 800-850 people on its rolls, with offices in Chennai and Kolkata, and provides IT services to AIG companies worldwide, according to an MphasiS filing with the Bombay Stock Exchange. MphasiS currently employs 33,810 people, of which the applications services business has a total of around 15,000 employees. The acquisition is expected to help MphasiS gain market share in the insurance domain and enhance its portfolio of domain-specific solutions.
“This acquisition gives MphasiS the depth and breadth for us to be the preferred partner of choice in their (AIG’s) IT transformation,” MphasiS President (Applications Services Business Unit) Gopinathan Padmanabhan said in a statement.
Post-acquisition, AIGSS is expected to become part of the key application services business unit of MphasiS. This unit showed a quarter-on-quarter growth of 5.2 per cent for the period ended April 30 this year, and brought in 63.8 per cent of MphasiS’ total revenues. While the company has seen pressures in terms of pricing and solutioning, it has been winning new deals in the marketplace, CEO Ganesh Ayyar had said in a internal mail to employees in May this year.
For the second quarter ended April 30, MphasiS showed 219.1 per cent growth in PAT to Rs 224.5 crore from Rs 70.3 crore earlier. Total revenues for the quarter crossed Rs 1,000 crore, with consolidated topline at Rs 1,048.5 crore increasing 52.3 per cent from Rs 688.4 crore in the same period of 2008. The company hired 3,822 people to support growth during the quarter, of which 117 were freshers.
Global Investors Fancy India Growth Story
-
A Spurt In Overseas Fund-Raising By Indian Companies
-
Indian Companies Preferring GDR More In Comparison To ADS Route
-
Institutional Fund Raising Through Qualified Institutional Placement Also On Rise
-
Foreign Institutional Investors Turned Net Buyers In The Indian Markets
The appetite of global investors for Indian equity is increasing again, as reflected by a spurt in overseas fund raising by Indian companies in recent times. The fact that India still continues to grow at 6% - 7% while the global economy is facing one of its most severe economic crises, has made the global investors less risk-aver
As a result, overseas public offerings of Indian blue-chip companies, which provide the global investors an attractive option to participate in the India growth story, are on the rise. Also, the Qualified Institutional Placements (QIPs) in which mostly the Foreign Institutional Investors (FIIs) participate, have become a preferred route for fund raising by Indian companies. Apart from that, the recent outperformance of the Indian stock markets when compared with other prominent markets is largely due to the renewed buying interest among the FIIs, who want to ride the next wave of India’s growth.
| QIPs | |||
| Year | No. of Issues | Amount
| Amount
|
| 2006-2007 | 25 | 4963.03 | 1024.36 |
| 2007-2008 | 38 | 25770.38 | 5318.96 |
| 2008-2009 | 2 | 188.82 | 38.97 |
| 2009-2010
| 16 | 14686.32 | 3031.23 |
| GDRs / ADRs | |||
| Year | No. of Issues | Amount
| Amount
|
| 2004-2005 | 14 | 4435.45 | 915.47 |
| 2005-2006 | 56 | 15895.91 | 3280.89 |
| 2006-2007 | 21 | 4922.50 | 1016.00 |
| 2007-2008 | 33 | 30949.26 | 6387.88 |
| 2008-2009 | 12 | 893.42 | 184.40 |
| 2009-2010
| 7 | 11990.47 | 2474.81 |
Indian Companies Become One Of The Biggest Fund Raisers In Overseas Markets
The $1.5 billion (Rs.7,305 crore) ADS issue of Sterlite Industries, a subsidiary of London-listed Vedanta Resources Plc. and India’s largest copper producer, closed in just six hours on 16th July 2009. It was the largest U.S. share sale by an Indian company in the last two years. Earlier, India’s largest private sector bank ICICI Bank had raised $2.46 billion through ADS offering in June 2007.
The other big fund raisers through ADR/GDR route in the recent weeks are, by the world’s sixth largest steel maker Tata Steel Ltd($500 million), India's largest private power producing company Tata Power ($335 million) and the world's fifth-largest wind-turbine maker Suzlon Energy Ltd($110 million).
Tata Steel’s $500 million GDR issue is not only the largest ever Indian Global Depository Receipt (GDR) offering in London, but also one of the biggest new equity issues to be conducted by a company outside its home market on any global exchange in the last 12 months.
"As a globally ambitious Indian company, with significant operations in Europe, Tata Steel is a high profile addition to our markets. Tata Steel's listing demonstrates that London remains the market of choice for companies from across the globe seeking to access a truly global pool of international investment capital and benefit from trading on the International Order Book, the world's most liquid trading platform for GDRs." London Stock Exchange Group’s Xavier Rolet, Chief Executive appreciating Tata Steel’s offering said.
Prithvi Haldea, CMD of PRIME Database, however warns that it should not be viewed as hype. “Investors are still very selective in what they are buying. They are willing to look at investment opportunities from credible companies with a substantial track record and where the pricing is attractive,” he says.
Indian Markets Outperform The U.S. And Asia On The Back Of FII Buying
The outperformance of the Indian equity markets in the recent months can directly be attributed to the renewed buying interest of the foreign institutional investors (FIIs). July 2009 is set to become the fifth consecutive month in which the FIIs have made net purchases on the Indian bourses. March 2009 proved to be the turning point when FIIs turned buyers again after almost a year. From May 2008 to February 2009, they had been on a selling spree (barring December 2008) in India due to global worries. The selling in India during this period was also due to the fact that India was one of the few markets where they could have sold their old stock investments in profit even after a significant decline from the peak.
Since March 2009, the net FII purchases in this year have now reached almost $8 billion including $4.15 billion in May 2009 – the month in which the United Progressive Alliance (UPA), India’s ruling coalition gained a clear majority in the elections for the lower house of the Indian parliament setting aside the political uncertainties. In line with the FII buying, India’s benchmark index Sensex has moved up from 8,110 on March 09, 2009 (the lowest of the year 2009 so far) to 15,379 on July 24, 2009 scoring a 90% gain in just about four and half months. Earlier, in contrast, FIIs had made net selling on the Indian bourses to the tune of $11.97 billion during the year 2008. Accordingly, Sensex had fallen from 20,287 on December 31, 2007 to 9,647 on December 31, 2008 registering a decline of 52.4%.
Venture Capital Magnet
India continues to attract venture capital firms seeking extra-ordinary returns. The country’s attractiveness is highlighted by the fact that about 60 foreign investment firms have expressed eagerness to invest in India, as per data as on May 31, according to the country’s stock market regulator Securities and Exchange Board of India (SEBI).
Currently, there are 129 foreign venture funds and 132 domestic funds operating in India. These funds collectively invested about $8 billion in FY 2008-09, with almost equal amount of investments.
Real Estate sector emerged favourite, attracting $1.4 billion of investments followed by telecommunication and services sectors sharing the second slot at about $630 million each and information technology $550 million, respectively.
Overseas Investment Matches Domestic Capex
India Inc.’s appetite for overseas investments at about $37 billion in the financial year 2008-09 is underscored by its corresponding increase in capital expenditure and inorganic expansion strategy to accelerate growth.
The surge in capital expenditure of $47.5 billion at more than 21% in the financial year 2008-09 has a very visible contribution of the infrastructure sector that accounted for a large chunk of the increase at $18 billion, with a share of more than a third.
As a clear signal of revival, the increased capital expenditure in the sector coupled with the Indian government’s well timed stimulus packages, amounting to 3.5% of the country’s GDP, resulted in a healthy growth of 6.5% in the six core infrastructure sectors in June 2009. The sector had grown by 5.1% in corresponding month the previous year, while the figure for May 2009 stood at 2.8%. Cement topped the chart with a growth of 12.8%, while steel rose 5.3%, both crucial inputs for construction activity.
Of significance is the fact that a part of the expense finds its way in to mergers and acquisitions (M&As), as in the case of the largest acquisition of the sector by state-run Oil and Natural Gas Corporation Ltd’s (ONGC) of then London Stock Exchange listed-Imperial Energy Corporation for $2.8 billion in August 2008. The other large overseas acquisition by an Indian company was that of the U.K.-based automobile marquee brands Jaguar and Land Rover by Tata Motors Ltd for $2.3 billion.
Bollywood’s Hollywood Rescue
Steven Spielberg, Hollywood’s iconic film director’s cash strapped DreamWorks Studios will receive a lifeline of $825 million in financing for film production as part of a 50:50 joint-venture with India’s Anil Ambani founded Reliance Big Entertainment (RBE).
Of the $825 million, RBE’s parent company Reliance-Anil Dhirubhai Ambani Group (R-ADAG) will provide $325 million as equity infusion while The Walt Disney Company will table $175 million in distribution advance. Rest of the funding will come from the global financial services firm JP Morgan Chase & Co as debt.
The Indian Film industry popularly called ‘Bollywood’ that churns out the largest number of movies in the world, has welcomed global film production companies in to its fold including the U.S.-based Twentieth Century Fox Film Corporation, Warner Brother Entertainment, Inc., Viacom Inc., Sony Pictures Entertainment, Inc., among others in partnership deals with Indian counterparts for film production and distribution.
Renowned Indian actor Shahrukh Khan's Red Chilies Entertainment and director Karan Johar's Dharma Production's have recently entered in to a marketing and distribution deal worth more than $20 million with Oscar winning film Slumdog Millionaire’s fame Fox Star Studios, a joint venture between Twentieth Century Fox and the U.S.-based News Corporation’s Indian subsidiary Star India.
DreamWorks has required funds since it parted ways with the U.S.-based media conglomerate Viacom Inc’s Paramount Motion Pictures Group in September 2008. The financing deal will enable Spielberg to resume movie production, with the target to make five to six films per year. The first production is scheduled to start this year for release in 2010.
The Ambani-Spielberg joint-venture potentially elevates the fledgling $2 billion Indian movie entertainment sector growing at 9% compound annual growth rate (CAGR) to global scale with projects in the pipeline involving Hollywood stars George Clooney, Julia Roberts and Brad Pitt, among others.
RBE’s Holywood ambitions are not limited to DreamWorks only. BIG Pictures, owned by RBE, has plans to produce films with Nicolas Cage’s Saturn Productions, Jim Carrey’s JC 23 Entertainment, George Clooney’s Smokehouse Productions, Chris Columbus’ 1492 Pictures, Tom Hank’s Playtone Productions, Brad Pitt’s Plan B Entertainment, Jay Roach’s Everyman Pictures, Brett Ratner’s Rat Entertainment and Julia Roberts’ Red Om Films.
Of the $825 million, RBE’s parent company Reliance-Anil Dhirubhai Ambani Group (R-ADAG) will provide $325 million as equity infusion while The Walt Disney Company will table $175 million in distribution advance. Rest of the funding will come from the global financial services firm JP Morgan Chase & Co as debt.
The Indian Film industry popularly called ‘Bollywood’ that churns out the largest number of movies in the world, has welcomed global film production companies in to its fold including the U.S.-based Twentieth Century Fox Film Corporation, Warner Brother Entertainment, Inc., Viacom Inc., Sony Pictures Entertainment, Inc., among others in partnership deals with Indian counterparts for film production and distribution.
Renowned Indian actor Shahrukh Khan's Red Chilies Entertainment and director Karan Johar's Dharma Production's have recently entered in to a marketing and distribution deal worth more than $20 million with Oscar winning film Slumdog Millionaire’s fame Fox Star Studios, a joint venture between Twentieth Century Fox and the U.S.-based News Corporation’s Indian subsidiary Star India.
DreamWorks has required funds since it parted ways with the U.S.-based media conglomerate Viacom Inc’s Paramount Motion Pictures Group in September 2008. The financing deal will enable Spielberg to resume movie production, with the target to make five to six films per year. The first production is scheduled to start this year for release in 2010.
The Ambani-Spielberg joint-venture potentially elevates the fledgling $2 billion Indian movie entertainment sector growing at 9% compound annual growth rate (CAGR) to global scale with projects in the pipeline involving Hollywood stars George Clooney, Julia Roberts and Brad Pitt, among others.
RBE’s Holywood ambitions are not limited to DreamWorks only. BIG Pictures, owned by RBE, has plans to produce films with Nicolas Cage’s Saturn Productions, Jim Carrey’s JC 23 Entertainment, George Clooney’s Smokehouse Productions, Chris Columbus’ 1492 Pictures, Tom Hank’s Playtone Productions, Brad Pitt’s Plan B Entertainment, Jay Roach’s Everyman Pictures, Brett Ratner’s Rat Entertainment and Julia Roberts’ Red Om Films.
Monday, July 20, 2009
Anil Ambani, Spielberg Script a $825-mn Dream Deal
Its the biggest and the most high-profile deal in Indian entertainment. Anil Ambani-promoted Reliance Big Entertainment (RBE) has finally sealed the funding for its much-hyped 50:50 joint venture with Hollywood’s iconic director Steven Spielberg’s DreamWorks.
DreamWorks Studios will get an initial funding of $825 million, which includes equity from Reliance ADAG to make films for a global audience. The company would make five to six films per year, and the first production would start this year for release in 2010. Of the $825 million, $325 million will be equity infused by Anil Ambani as his personal investment, $150 million will come from The Walt Disney Company as a distribution advance, and the rest will be funded by JP Morgan via debt.
DreamWorks Studios will get an initial funding of $825 million, which includes equity from Reliance ADAG to make films for a global audience. The company would make five to six films per year, and the first production would start this year for release in 2010. Of the $825 million, $325 million will be equity infused by Anil Ambani as his personal investment, $150 million will come from The Walt Disney Company as a distribution advance, and the rest will be funded by JP Morgan via debt.
Top-10 Cos Add Over Rs 1.42 lakh cr
India's top-10 firms added Rs 1,42,000 crore to their market capitalisation last week with country's most valued firm, Reliance Industries crossing Rs 3 trillion mark after two weeks.
The country's most-valued firm, Reliance Industries Ltd, added Rs 24,395 crore to its market valuation taking its total market cap to Rs 3,04,292 crore. Shares of RIL surged nearly 9 per cent on the Bombay Stock Exchange (BSE) to end the trade at Rs 1,933.40 on Friday...
The Financial Express
The country's most-valued firm, Reliance Industries Ltd, added Rs 24,395 crore to its market valuation taking its total market cap to Rs 3,04,292 crore. Shares of RIL surged nearly 9 per cent on the Bombay Stock Exchange (BSE) to end the trade at Rs 1,933.40 on Friday...
The Financial Express
Retail Sector Witnessing Winds Of Change
A palpable improvement in economic conditions and low inflation have helped the retail sector stage a recovery in the recent past. After two bad quarters, same store sales (SSS) have again turned positive. While discretionary spending remained low, value retail has been the show stealer during this recovery.
This trend is expected to continue into the coming quarter, as monsoon sales would start soon. This will boost revenue growth for lifestyle retailers. However, despite growing sales, profit margins will continue to be under stress on account of increasing share of value retailing.
The Economic Times
This trend is expected to continue into the coming quarter, as monsoon sales would start soon. This will boost revenue growth for lifestyle retailers. However, despite growing sales, profit margins will continue to be under stress on account of increasing share of value retailing.
The Economic Times
Wednesday, July 08, 2009
Indian Automobile Sector: Going At Steady Pace
The website of Tata Nano, the world’s cheapest car, recorded more than 20 million hits in merely 15 days since its launch on March 23, 2009. Between April 9, 2009 and April 25, 2009 Tata Motors Ltd, the manufacturer of Nano and
The strength of
Toyota Motor Corporation, the largest automaker of the world that has relatively smaller presence in the Indian market so far, has recently brought its Sports Utility Vehicle (SUV) model Toyota Land Cruiser in the car market of
Global automotive companies are also using
Another Japanese company Suzuki Motor Corp, which specialises in small cars, holds more than 54% stake in
Relying on the Indian market is now paying off to Suzuki a handsome reward. Today, Suzuki not only controls 62% market share in India’s domestic car market (and about 50% share in the total car production of India), but also getting a much needed cushion for its global operations contributing almost half of the Suzuki’s global consolidated profits. Maruti Suzuki’s share in Suzuki’s profit moved up to 46% in 2008-09 from 30% in 2007-08. At a time when Suzuki is facing a downturn in all of its key markets such as
The dominance of Suzuki in the small car segment in India has forced Japan’s second-largest carmaker Honda Motor Co. to introduce its first small car named ‘Jazz’ in India on June 11, 2009. It aims to sell 20,000 units of its first small car in
Renault-Nissan Automotive India, a 50:50 JV between Nissan Motor Company, Ltd of
General Motors Corporation, the world's second-largest automaker, which filed for Chapter 11 bankruptcy protection in the U.S., has its Indian operations that continue to grow at healthy pace, hence are not being included in the U.S. filing for Chapter 11. Expansion plans of GM India are intact. The company is going ahead with its plans to introduce three new cars this year. GM India has invested more than $1 billion in
Indian Automobile Market: Going Strong Even In Tough Environment
Indian automobile sector’s growth is primarily driven by the two-wheeler segment, which continued its fast pace in May 2009 with sales reaching at 727,937 units, 12.5% higher than the sales in May 2008. In the two-wheeler market, the motorcycle segment grew by 12.34% at 576,000 units compared with 513,000 units in May 2008. Passenger car sales grew a bit slow, but remained positive, with 2.47% growth at 113,490 units. The one segment, which is not having good performance, is the commercial vehicle segment comprising of trucks and buses. This segment reported a drop of 13% in sales to 60,642 units last month.
Maruti Suzuki, the largest car manufacturer of
| Recent Performance Of Prominent Indian Automakers | |||||
| Company | May 2009 | May 2008 | YoY growth | April 2009 | MoM growth |
| Maruti | 79,827 | 69,001 | 15.8% | 71,748 | 11.3% |
| Tata Motors | 40,196 | 46,339 | -13.3% | 38,723 | 3.8% |
| Mahindra & Mahindra | 30,366 | 30,123 | 0.8% | 34,821 | -12.8% |
| Hero Honda | 382,678 | 312,317 | 22.5% | 370,575 | 3.3% |
| TVS Motors | 118,574 | 112,770 | 5.1% | 113,119 | 4.8% |
| (Source: Respective Companies) | |||||
Trends In The Recent Years:
If we look at the production figures of Indian automobile sector in the recent years, it’s quite visible that the growth continued to be very strong till 2006-07 with annual growth in the range of about 14%-17%. For the last two fiscal years, production has stagnated, particularly due to pressure on commercial vehicle segments. This segment has suffered due to two reasons, a) very high interest rates, and b) slowdown in the economy. Now, with the banks easing the interest rates again and an improvement in the economic outlook, it is expected that sales of the commercial vehicle segment would start picking up in the next few months.
Indian auto companies have started increasing their presence in the global auto market. For this purpose, these companies are not only focusing on increasing their exports, but also acquiring companies, brands and assets overseas. The most prominent example of a foreign acquisition by an Indian company was the acquisition of the
The company has just introduced the Jaguar and Land Rover (JLR) brands in the Indian market giving the discerning Indian customer direct access to these prestigious brands. The launch of JLR by Tata Motors in
In fact, Tata Motors had started looking beyond Indian markets quite early, when it set up its first assembly operation in
Bajaj Auto, the second largest two-wheeler manufacturer of
Overall,
Better Times Ahead For The Indian Auto Sector
The coming months are set to be exciting for the Indian auto sector with a series of new models being introduced, both by domestic and foreign companies. With the inflation touching almost zero, the Indian banks are expected to cut their lending rates sooner or later.
Rural initiatives of the new government will have a positive impact on the rural demand. The benefit of rural demand getting stronger will spread across segments including tractors, commercial vehicles, two-wheelers, multiple-purpose vehicles and small cars. With the low penetration level of two-wheelers in the country, the companies still have a sizable potential upside left. Once the industrial production starts improving, which is expected by July or August 2009 according to economists, the commercial vehicle demand will also pick up.
Indian Auto Sector: Moving Into High Gear
The Indian automotive sector aptly showcases the country’s prowess in manufacturing, indicative of a marked shift from the earlier perception of outsourcing and services based economy, such that some of the leading global automotive companies plan to make India their manufacturing and exports hub.
The country’s automotive sector that has grown at about 15% over the past five years is projected to grow to $145 billion by 2016 from $35 billion, according to the Automotive Mission Plan (AMP) 2006–2016. India will emerge as the destination of choice for design and manufacture of automobiles and auto components during the period involving investments worth more than $40 billion.
While the Indian auto sector has witnessed steady growth as domestic and global companies launch new models and increasing capacities, global automobile manufacturers in their home countries are seeking bailout packages and reporting bankruptcies. For instance, the Indian unit of the U.S.-based General Motors Corporation, which filed for Chapter 11 bankruptcy protection in the U.S., continues to grow at a healthy pace and is not being included in the U.S. filing for Chapter 11.
And Tata Motors, part of India’s largest diversified Tata Group, launched models of its U.K.-based marquee brands Jaguar and Land Rover that it bought from U.S.-based Ford Motor Co., into the Indian market on June 28. See our Special Report that outlines the current state of India’s automobile sector and how it is emerging as a manufacturing hub for the global companies.
The country’s automotive sector that has grown at about 15% over the past five years is projected to grow to $145 billion by 2016 from $35 billion, according to the Automotive Mission Plan (AMP) 2006–2016. India will emerge as the destination of choice for design and manufacture of automobiles and auto components during the period involving investments worth more than $40 billion.
While the Indian auto sector has witnessed steady growth as domestic and global companies launch new models and increasing capacities, global automobile manufacturers in their home countries are seeking bailout packages and reporting bankruptcies. For instance, the Indian unit of the U.S.-based General Motors Corporation, which filed for Chapter 11 bankruptcy protection in the U.S., continues to grow at a healthy pace and is not being included in the U.S. filing for Chapter 11.
And Tata Motors, part of India’s largest diversified Tata Group, launched models of its U.K.-based marquee brands Jaguar and Land Rover that it bought from U.S.-based Ford Motor Co., into the Indian market on June 28. See our Special Report that outlines the current state of India’s automobile sector and how it is emerging as a manufacturing hub for the global companies.
The Jewel of the BRIC Crown
India is the preferred destination for Doing Business among the emerging BRIC countries, comprising of Brazil, Russia, India and China based on key factors that include, protecting investors’ interest; getting credit; employing workers; starting a business; and trading across borders, according to the rankings in the global report on ‘Doing Business 2009’ by the World Bank and its affiliate the International Financial Corporation.
India occupied the top slot in three of the parameters – protecting investors, getting credit and employing workers; while emerging second in trading across borders and starting a business. India’s improving business environment is a reflection of the regulatory reforms by the Government to bring uniformity in urbanisation across its regions to bridge the urban-rural divide, representing what it calls an “inclusive approach” to development.
This approach is reinforced in the Financial Budget 2009-10 announced by the Indian Finance Minister on July 6, committing increased investments in the infrastructure sector to more than 9% of the Gross Domestic Product (GDP) by 2014 from 5% currently, apart from other rural development and welfare programs. This opens scope for investment opportunities, in the form of Public Private Partnership (PPP) developments that the government has championed.
Regional variations remain, however, due to internal pressure groups and anti-reforms voices within certain state governments. Cities such as Ludhiana in the north Indian state of Punjab; Bhubaneshwar, capital of the eastern coastal state of Orissa; Ahmedabad in the western state of Gujarat and Hyderabad, capital of the south Indian state of Andhra Pradesh rank high in ease of doing business. In contrast, Kolkata, the capital of the East Indian state of West Bengal ranks lowest.
India occupied the top slot in three of the parameters – protecting investors, getting credit and employing workers; while emerging second in trading across borders and starting a business. India’s improving business environment is a reflection of the regulatory reforms by the Government to bring uniformity in urbanisation across its regions to bridge the urban-rural divide, representing what it calls an “inclusive approach” to development.
This approach is reinforced in the Financial Budget 2009-10 announced by the Indian Finance Minister on July 6, committing increased investments in the infrastructure sector to more than 9% of the Gross Domestic Product (GDP) by 2014 from 5% currently, apart from other rural development and welfare programs. This opens scope for investment opportunities, in the form of Public Private Partnership (PPP) developments that the government has championed.
Regional variations remain, however, due to internal pressure groups and anti-reforms voices within certain state governments. Cities such as Ludhiana in the north Indian state of Punjab; Bhubaneshwar, capital of the eastern coastal state of Orissa; Ahmedabad in the western state of Gujarat and Hyderabad, capital of the south Indian state of Andhra Pradesh rank high in ease of doing business. In contrast, Kolkata, the capital of the East Indian state of West Bengal ranks lowest.
India Inc. Remains U.K. Bound
India Inc.’s distinct preference for the U.K. was highlighted as Indian companies emerged as the second largest investor in the U.K. in the financial year 2008-09, replacing Japan as the largest Asian supplier of Foreign Direct Investment (FDI) projects and ahead of China by about twice the number.
Indian companies set up 108 new Foreign Direct Investment (FDI) projects during the period, moving up five places when compared to the previous year, creating and safeguarding about 8,000 jobs according to the U.K.’s Department of Trade and Industry.
India’s affinity for the U.K. is marked by its historic ties, similar legal, accounting, finance and judicial systems. The English language and Parliamentary democracy are as Indian as they are English.
The U.K., however, needs to keep its competitive edge vis-à-vis other European countries that are moving aggressively to capitalize on Indian companies’ growth ambitions. Indian FDI in the European Union (E.U.) soared to $3.4 billion (€2.4 billion) in 2008 from zero in 2004, according to Luxembourg-based Eurostat, the EU statistical office.
Indian companies set up 108 new Foreign Direct Investment (FDI) projects during the period, moving up five places when compared to the previous year, creating and safeguarding about 8,000 jobs according to the U.K.’s Department of Trade and Industry.
India’s affinity for the U.K. is marked by its historic ties, similar legal, accounting, finance and judicial systems. The English language and Parliamentary democracy are as Indian as they are English.
The U.K., however, needs to keep its competitive edge vis-à-vis other European countries that are moving aggressively to capitalize on Indian companies’ growth ambitions. Indian FDI in the European Union (E.U.) soared to $3.4 billion (€2.4 billion) in 2008 from zero in 2004, according to Luxembourg-based Eurostat, the EU statistical office.
Infrastructure Winner in Budget 2009-10
In the Indian Financial Budget announcement for the fiscal year 2009-10, the first budget since the Indian National Congress led United Progressive Alliance (UPA) government won its second consecutive term to power in May this year, the infrastructure sector emerged winner as it was accorded top priority by the Indian Finance Minister.
This reinforces the government’s commitment to augment the antiquated infrastructure of the country, vital to achieve a Gross Domestic Product (GDP) growth of 9% per annum from the current 6.7%. The lack of adequate infrastructure is responsible for pushing back India’s GDP growth by about 2% annually, according to estimates.
The minster responded to an urgent demand for new infrastructure, announcing that 9% of the country’s GDP will be spent on infrastructure by 2014, from the current 5%. Estimates suggest that a third of this investment will come from private companies, paving the way for unprecedented investment opportunity under Public Private Partnership (PPP) model.
“However, the Finance Minister missed this opportunity to address sectoral reforms and liberalization in Foreign Direct Investment (FDI) norms, falling short of the investors’ expectations who sent the Sensex, the benchmark index of the Bombay Stock Exchange down 870 points to 14,043.40 (5.83%) on Monday, the level that it was at in the month of May. The minister further disappointed by not being explicit on the aspect of disinvestment of the Public Sector Undertakings (PSUs).” says Bundeep Singh Rangar, Chairman, IndusView Advisors Ltd, the India-focused cross-border advisory firm.
“India's challenge is not only to augment its antiquated infrastructure, but also to build new infrastructure to keep up with its $1 trillion economy and the aspirations of its 1.2 billion population that grows by 16 million people each year”
“The government’s spotlight on Infrastructure Development heralds the importance it attaches to the sector as a means to counter the prevailing economic woes.” added Rangar
Recognising that good infrastructure are a vital pre-requisite to build a strong nation, infrastructure development had been accorded key priority for the 11th Five-Year-Plan for the years 2007-2012 and the 12th plan period 2012-2017 with projected investment requirement of $500 billion and $1.5 trillion respectively by the Prime Minister's Committee on Infrastructure.
“These initiatives pale when compared to China that spends about 11% of its GDP for infrastructure development, indicative of the scope and extent of scaling up needed in infrastructure development in India to match global standards.” added Rangar
“The Interim Budget for the financial year 2009-10 announced in February by the Finance Minister of the ruling United Progressive Alliance (UPA), focused on infrastructure development, easing of Foreign Direct Investments (FDIs) norms and economic stimulus packages announced last year, had set the ground for how the alliance was approaching the General Elections that took place in May.” said Rangar
The minister was way short of taking the initiative further as various sectors including, pharmaceutical, retail, telecommunication, aviation, insurance, among others keenly awaited reforms to facilitate higher foreign investments. These sectors collectively have the potential to attract more $200 billion worth of investments over a period of five to ten years.
Indian Telecom: Scope of Growth & Investment
“India’s mobile telecommunication services sector has defied the economic recession. The incumbent mobile telecommunication service providers collectively add more than 10 million new subscribers a month, which is more than the population of Finland, home country of largest mobile handset manufacturer Nokia Corp., taking the country’s total tally of wireless subscribers to 400 million.” explains Rangar
To ensure quality service to match the growing subscriber base and achieve the target of 45% tele-density, the telecom sector is estimated to need about $73 billion during the next five years.
The world's fastest-growing mobile telecom services market estimated to reach a subscriber base of more than one billion by 2014, exposes the growth potential in investments that the sector can attract from aspiring global mobile telecom service providers.
Pharmaceutical Sector: Prescription for M&As
The Indian Pharmaceutical sector is positioning itself to be among the top five centres of global innovation as the Department of Pharmaceuticals (DoP), Government of India outlined its roadmap for the sector up to the year 2020 (Vision 2020). It foresees investments of about $2 billion annually, under the public-private partnership model.
“This spells out the scope of growth for global pharmaceutical companies and can fuel the next wave of mergers and acquisitions (M&As) in a market where consumer spending on healthcare increased to 7% in 2007 from 4% of the Gross Domestic Product (GDP) in 1995 and is expected to rise to 13% of GDP by 2015.” says Rangar
India also offers the benefits of low cost research and development (R&D), a domain in which it is estimated to capture about 10%-20% share of the world’s R&D business by 2020 from less than 1% currently.
Expansion by global pharmaceutical companies in to emerging markets like India becomes imperative as about $103 billion worth of patented drugs will go off patent in the next few years.
Retail Sector
“The retail sector in India is witnessing a huge revamp as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Easing regulations in the sector would help bring the benefits of organised retail to customers.” said Rangar
The overall retail market is expected to grow to more than $1 trillion from $262 billion by 2016, with organised retail at $165 billion, according to the Investment commission of India.
Aviation Sector
India’s aviation sector presents investment opportunities of $110 billion envisaged up to 2020 $80 billion in new aircraft and $30 billion in development of airport infrastructure. The investments will be needed to cater for approximately 300 million passengers that are expected to be airborne by 2020, according to estimates.
“With such sectoral growth indicators, the need of the hour was to take existing initiatives to the next level of implementation and completion, with enough scope of ramping up and innovation. To that extent, the finance minister would have helped by being more generous and explicit in his policy initiatives.” said Rangar
This reinforces the government’s commitment to augment the antiquated infrastructure of the country, vital to achieve a Gross Domestic Product (GDP) growth of 9% per annum from the current 6.7%. The lack of adequate infrastructure is responsible for pushing back India’s GDP growth by about 2% annually, according to estimates.
The minster responded to an urgent demand for new infrastructure, announcing that 9% of the country’s GDP will be spent on infrastructure by 2014, from the current 5%. Estimates suggest that a third of this investment will come from private companies, paving the way for unprecedented investment opportunity under Public Private Partnership (PPP) model.
“However, the Finance Minister missed this opportunity to address sectoral reforms and liberalization in Foreign Direct Investment (FDI) norms, falling short of the investors’ expectations who sent the Sensex, the benchmark index of the Bombay Stock Exchange down 870 points to 14,043.40 (5.83%) on Monday, the level that it was at in the month of May. The minister further disappointed by not being explicit on the aspect of disinvestment of the Public Sector Undertakings (PSUs).” says Bundeep Singh Rangar, Chairman, IndusView Advisors Ltd, the India-focused cross-border advisory firm.
“India's challenge is not only to augment its antiquated infrastructure, but also to build new infrastructure to keep up with its $1 trillion economy and the aspirations of its 1.2 billion population that grows by 16 million people each year”
“The government’s spotlight on Infrastructure Development heralds the importance it attaches to the sector as a means to counter the prevailing economic woes.” added Rangar
Recognising that good infrastructure are a vital pre-requisite to build a strong nation, infrastructure development had been accorded key priority for the 11th Five-Year-Plan for the years 2007-2012 and the 12th plan period 2012-2017 with projected investment requirement of $500 billion and $1.5 trillion respectively by the Prime Minister's Committee on Infrastructure.
“These initiatives pale when compared to China that spends about 11% of its GDP for infrastructure development, indicative of the scope and extent of scaling up needed in infrastructure development in India to match global standards.” added Rangar
“The Interim Budget for the financial year 2009-10 announced in February by the Finance Minister of the ruling United Progressive Alliance (UPA), focused on infrastructure development, easing of Foreign Direct Investments (FDIs) norms and economic stimulus packages announced last year, had set the ground for how the alliance was approaching the General Elections that took place in May.” said Rangar
The minister was way short of taking the initiative further as various sectors including, pharmaceutical, retail, telecommunication, aviation, insurance, among others keenly awaited reforms to facilitate higher foreign investments. These sectors collectively have the potential to attract more $200 billion worth of investments over a period of five to ten years.
Indian Telecom: Scope of Growth & Investment
“India’s mobile telecommunication services sector has defied the economic recession. The incumbent mobile telecommunication service providers collectively add more than 10 million new subscribers a month, which is more than the population of Finland, home country of largest mobile handset manufacturer Nokia Corp., taking the country’s total tally of wireless subscribers to 400 million.” explains Rangar
To ensure quality service to match the growing subscriber base and achieve the target of 45% tele-density, the telecom sector is estimated to need about $73 billion during the next five years.
The world's fastest-growing mobile telecom services market estimated to reach a subscriber base of more than one billion by 2014, exposes the growth potential in investments that the sector can attract from aspiring global mobile telecom service providers.
Pharmaceutical Sector: Prescription for M&As
The Indian Pharmaceutical sector is positioning itself to be among the top five centres of global innovation as the Department of Pharmaceuticals (DoP), Government of India outlined its roadmap for the sector up to the year 2020 (Vision 2020). It foresees investments of about $2 billion annually, under the public-private partnership model.
“This spells out the scope of growth for global pharmaceutical companies and can fuel the next wave of mergers and acquisitions (M&As) in a market where consumer spending on healthcare increased to 7% in 2007 from 4% of the Gross Domestic Product (GDP) in 1995 and is expected to rise to 13% of GDP by 2015.” says Rangar
India also offers the benefits of low cost research and development (R&D), a domain in which it is estimated to capture about 10%-20% share of the world’s R&D business by 2020 from less than 1% currently.
Expansion by global pharmaceutical companies in to emerging markets like India becomes imperative as about $103 billion worth of patented drugs will go off patent in the next few years.
Retail Sector
“The retail sector in India is witnessing a huge revamp as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Easing regulations in the sector would help bring the benefits of organised retail to customers.” said Rangar
The overall retail market is expected to grow to more than $1 trillion from $262 billion by 2016, with organised retail at $165 billion, according to the Investment commission of India.
Aviation Sector
India’s aviation sector presents investment opportunities of $110 billion envisaged up to 2020 $80 billion in new aircraft and $30 billion in development of airport infrastructure. The investments will be needed to cater for approximately 300 million passengers that are expected to be airborne by 2020, according to estimates.
“With such sectoral growth indicators, the need of the hour was to take existing initiatives to the next level of implementation and completion, with enough scope of ramping up and innovation. To that extent, the finance minister would have helped by being more generous and explicit in his policy initiatives.” said Rangar
Subscribe to:
Posts (Atom)
