Invest In India

Indian Inc with global presence did better in 2011

Ziaulla Namani — Sun, 05 Feb 2012 15:55:10 +0000

A study revealed that Indian firms with overseas presence have performed better in 2011 compared to entities focused on the domestic market alone.

The findings come amidst signs of Indian economy, which was less impacted by the global financial meltdown of 2008, slowing down due to various domestic as well as global factors

The study, conducted by workplace solutions provider Regus among 387 Indian companies, found that 212 companies with overseas operations posted better financials compared to 175 respondents that are focusing on domestic markets. In addition, among companies already operating internationally 89% of respondents intend to expand further and those operating in home markets alone only 75% plan to expand abroad over the next few years. “.

In the current economic climate, Indian firms which have diversified overseas are faring better than those which have stayed with their home markets. This applies to companies both large and small and should act as a wake-up call for those still solely focused on domestic markets to find effective and cost-efficient ways of moving cross-border in order to enhance their earnings and spread their risk,” Regus Regional Vice-President (South Asia) Madhusudan Thakur said. He further said that Indian companies have the US in their sights, with 26% looking to focus on the US for the expansion purpose. In addition, a significant proportion of Indian companies have expressed interest in investing in the Gulf states, particularly the UAE and Saudi Arabia, as well as in the South East Asia, most notably Indonesia and Vietnam. “.

The report further added that that 58% of firms surveyed consider the biggest obstacle to overseas expansion is a challenge of setting up a physical presence in a foreign country.

Bank to disclose defaulters in newspapers

Malvika — Sat, 04 Feb 2012 14:16:12 +0000

India’s largest lender, State Bank of India, will name and shame ‘wilful’ defaulters and will display their pictures in newspapers to get them to pay up.

“The fresh approach will ruffle a few feathers,” the paper quoted a bank executive as saying.

A ‘wilful defaulter’ is one who does not meet payment obligations even when he or she has the funds.

According to the RBI regulation, ‘a wilful default’ would be charged against the borrowers who fail to pay the dues. Even if they don’t channelise the given fund for the specific purpose for which it was availed and divert for some other purpose, they would be considered as defaulters.

Bad loans in the country could jump to as much as 5.8% of the total within two years in a severe risk scenario, up from 2.8 percent in September, according to an RBI report.

The non-performing loan ratio for Indian banks was 2.3% in the last fiscal year.

Till September 2011, the total bad loans for the bank was at the tune of 33,946 crore, as against 23,205 crore in the corresponding period last year.

Such a strong measure has been contemplated against the defaulters as non-performing assets (NPAs) of various banks have been increasing.

Source – Reuters

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Tax slab in 2012 – 13 budget unlikely to change

Ziaulla Namani — Fri, 03 Feb 2012 05:24:09 +0000

The Budget for 2012-13 is unlikely to tinker with the rates or widen the slabs for both direct as well as indirect taxes, despite chambers seeking more money in the hands of people to prop demand. Economists have also demanded a rise in indirect tax rates to boost government finances.

A finance ministry official said the government needed to boost its revenue collections immediately and it would be difficult to widen personal income tax slabs further. “The last Budget had tried to bring tax slabs closer to those proposed in the Direct Taxes Code (DTC) and there is not much scope for any tinkering this time,” he said.

The DTC Bill, currently with a Parliament standing committee, proposes to tax annual income over Rs 2 lakh up to Rs 5 lakh at 10 per cent, more than Rs 5 lakh up to Rs 10 lakh at 20 per cent and income above Rs 10 lakh at 30 per cent a year. Currently, income over Rs 1.80 lakh up to Rs 5 lakh attracts 10 per cent income tax, over Rs 5 lakh up to Rs 8 lakh is taxed at 20 per cent and income above Rs 8 lakh is taxed at 30 per cent.

Finance ministry officials said there was scope for raising the tax exemption limit, which currently stands at Rs 1.80 lakh for men and Rs 1.90 lakh for women. The DTC Bill seeks to increase this limit to Rs 2 lakh a year for both the categories. Officials said the corporate tax rate may also be kept intact at 30 per cent (exclusive of cess and surcharge).

On the indirect tax front, officials said the excise duty and service tax rates may also be retained at the current level of 10 per cent. The ministry felt any rise in the rate could hurt the industry and raise inflation. The peak customs duty rate is also unlikely to be altered from the current 10 per cent, owing to fears of revenue loss and its impact on the domestic industry. However, specific proposals on tax rates could be altered. For instance, excise duty on diesel cars could be raised, the officials said.

Retaining the current tax rates means the government would have to depend on non-tax revenue and non-debt capital receipts to resume the path of fiscal consolidation, as suggested by the Reserve Bank of India.

Source – Business Standard

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Pvt Sector banks to work as govt agent

Ziaulla Namani — Thu, 02 Feb 2012 07:02:18 +0000

The Apex Bank, Reserve Bank of India maintained that all private sector banks will now be considered eligible to handle any Central or State Government business at par with public sector banks.

Till now, only three private banks, namely ICICI Bank Ltd, HDFC Bank Ltd and Axis Bank Ltd were appointed by RBI as its agents to carry out limited general banking business.
Banks earn a fee while working as an agent of the central bank for collecting revenues as well as disbursing the payments under various schemes.
In a notification issued from Mumbai, RBI said that this move would improve customer convenience by increasing the number of customer service outlets. It will also broadbase the revenue collection and payments mechanism of Central and State governments.

In this connection, all banks intending to handle Government business need to send a proposal to the Controller General of Accounts for examination.

For State Government business, the concerned Department of the State may work out the arrangement and approach the Finance Department of the State which will recommend the proposal to the Regional Director of RBI for the State. These revised guidelines have come into effect immediately.

RBI said those banks interested to handle government business need to be appointed as agents of RBI. For this purpose, it said government may work out the arrangement with the bank and send the proposal to the Controller General of Accounts (CGA) for examination. The CGA, in turn, will forward the recommendation the central bank and then RBI will formally appoint a bank as an agency bank.

Source – PTI

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India’s per capita income grew by 15.6 %

Ziaulla Namani — Wed, 01 Feb 2012 05:33:47 +0000

India’s per capita income grew by 15.6 per cent to Rs 53,331 per annum in 2010-11, crossing the half-a-lakh rupees mark for the first time, according to government data.

“The per capita income at current prices is estimated at Rs 53,331 in 2010-11, as against Rs 46,117 for the previous year, depicting a growth of 15.6 per cent,” said the Quick Estimates of National Income released by the Central Statistical Office (CSO).

The growth in per capita income comes on the back of 8.4 per cent expansion of the Indian economy during the last fiscal.

Per capita income is the earnings of each Indian if the national income is evenly divided among the country’s population of around 120 crore. It is an important indicator of overall prosperity in the country.

However, the increase in per capita income at constant (2004-05) prices, after discounting for inflation, was about 6.4 per cent in 2010-11. It was Rs 35,993 in 2010-11, as against Rs 33,843 in the previous year.

According to the figures, the size of the economy at current prices rose to Rs 71,57,412 crore last fiscal, up 17.5 per cent from Rs 60,91,485 crore in 2009-10.

Based on 2004-05 prices, the Indian economy expanded by 8.4 per cent during the fiscal ended March, 2011.

The GDP at constant (2004-05) prices in 2010-11 has been estimated at Rs 48, 85,954 crore, as against Rs 45, 07,637 crore in 2009-10, as per the Quick Estimates.

Source – Agencies

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Mission to help Indian PSUs to go global

Ziaulla Namani — Tue, 31 Jan 2012 06:03:28 +0000

Indian missions abroad will be actively involved to help the government-owned firms realise their global ambitions to acquire critical raw material assets overseas, the Department of Public Enterprises (DPE) has said.

It has asked the public sector units (PSUs) and their administrative ministries to “undertake a consultation procedure with the Ministry of External Affairs (MEA)/missions to develop possible value addition to the original proposal…”

Also, state-owned units may consult Indian missions for value-addition in terms of infrastructure development in the country of possible acquisitions, the DPE said in a circular to the PSUs and their administrative ministries.

The Energy Security division in the MEA has been designated as the nodal agency for the initiative, it said.

The embassies and the missions have to be kept in loop at all stages of the deal-making, including due diligence, leveraging the lines of credit and government-to-government interactions required to expedite the acquisitions, the DPE said.

The Union Cabinet had approved a new policy on October 14 for acquisition of raw material assets abroad by central PSUs which have a three-year record of profit, vesting more powers with Maharatna and Navratna companies for such buy-outs.

As a follow-up action, the government had formed a panel of secretaries to help PSUs in their global hunt for strategic wealth such as oil, minerals and agricultural resources.

India has to catch up with China which has done some aggressive overseas buy-outs of key raw material assets like coal, iron ore and oil.

Source – PTI

©2009 Copyright by Invest In India

India Presents galore of opportunities for Investors

Malvika — Tue, 31 Jan 2012 06:00:55 +0000

In a bid to improve the economy the Western world should get into emerging markets including India and China.

Stating that “sky is the limit for investors” in India, conglomerate Hinduja Group’s Co-Chairman G P Hinduja said the investment in the emerging countries would help both sides to improve their economies.

India, Brazil, African countries where the growth is better and it will be two ways. It will help those countries as well as it will help them,” Hinduja said.

He was speaking to British daily Financial Times on the sidelines of the just concluded World Economic Forum (WEF) annual meeting.

His comments come at a time when the escalating European debt turmoil and sluggish prospects in the Western world threaten to derail overall global economic growth.

A diversified group, Hindujas employs over 40,000 people worldwide and has presence in all the continents. The entity has good presence in diverse sectors in India.

On the group’s India business, Hinduja said that he does not see “any of our businesses in India are not going forward”.

“But our plans of investing USD 6 billion in India in infrastructure, we have not been successful. Not that we didn’t want to put in the money, we are still optimistic, I am not worried about India,” he said.

“But I think the authorities in India are not ready yet to welcome an investor and clear up all the barriers if we have to go into green projects.

“But if we have nothing to do with the government and if we are in the private sector and you want to do things where you have less interference of government, I think sky is the limit for any investor,” he noted.

According to him, there is a good demand in India. “If somebody wants to go long term, I would definitely recommend infrastructure. Whether it is airports, whether it is power, whether it is roads. There is lot of potentiality,” he added.

Hinduja pointed out that there is lot of money in the emerging markets.

Source – Agencies

©2009 Copyright by Invest In India

Starbucks coffee in India by September

Malvika — Mon, 30 Jan 2012 14:14:09 +0000

Starbucks Corp, the world’s largest coffee company, signed a deal with Tata Global Beverages to open its first coffee shop in India, a year after it announced its retail foray into the country.

Starbucks, the world’s largest retailer of coffee, announced a strategic, 50:50 joint venture with Tata Global Beverages, parent of Tata Coffee.

The Seattle-based company signed a pact with Tata Global Beverages in January 2011 to buy coffee from India and open retail outlets in the country.

Tata Global Beverages, part of the salt-to-software Tata conglomerate, said it would form an equal joint venture with Starbucks to run cafes and develop business in India.

Howard Schultz, Chairman, president and Chief Executive Officer, Starbucks said, “India is one of the most dynamic markets in the world with a diverse culture and tremendous potential. This will be a long term joint venture, but we will not be looking at raising stake to 100 per cent. Our desire is to leverage Tata properties for setting up cafes.”

R K Krishna Kumar, Vice Chairman, Tata Global Beverages, said that India is the only market where Starbucks is co-branding products. “There are unique features in this arrangement. Initial investment for the deal is Rs 400 crore between the two partners. Tata group is extremely excited about this venture,” he added.

It will open its first retail outlet in Mumbai, Delhi and Bangalore around August or September.
Source – Agencies

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Housing finance a priority sector for weaker sections

Malvika — Mon, 30 Jan 2012 14:10:42 +0000

The apex bank of India, Reserve Bank said it is considering categorizing housing finance for weaker sections as priority sector lending by early next month to ensure adequate flow of credit.

“We are trying to put housing finance for weaker section as a part of priority sector. There is a committee which is looking into it. Hopefully, by the first week of February this report will come,” RBI Deputy Governor H R Khan told reporters.

The committee is headed by Union Bank of India Chairman and Managing Director M V Nair, was constituted by the RBI to look into various issues related to priority sector lending, including review of loan limits under the segment.

The committee has sought to address issues like desirability of simplifying the approach to direct lending, inconsistencies or ambiguities in the existing guidelines, nature of activities, presently classified as priority sector, that need relook and new areas, which should be incorporated.

The terms of reference of the Nair committee is to revisit the current eligibility criteria for classification of bank loans as priority sector with reference to nature of activities and types of borrowers (individuals versus institutions, corporate and partnership firms) of loans.

It will review nature of activities and types of borrowers (individuals versus institutions, corporate and partnership firms) of loans which can be brought under priority sector segment.

The terms of reference of the panel include review of limits on loan amounts.

It will also review appropriate documentation and due diligence thresholds to ensure that loans extended by banks are for the eligible categories of purposes and borrowers, which need special attention and treatment, the terms of the report state.

As much as 40 per cent of the bank’s total lending is for priority sector including agriculture and small sector industry.

Source – Agencies

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How to choose the best available Mutual Fund?

Ziaulla Namani — Mon, 30 Jan 2012 13:36:08 +0000

If you want to invest in mutual funds, you will be required to flip over 1,000 mutual fund schemes that are offered by all the fund houses put together. In this scenario, how do you go about choosing the best available Mutual Fund?

In order to dig the answer you need to answer simple questions like:

* What is it that I am trying to achieve from my investment? – Am I looking at generating X amount of returns or do I want a steady appreciation on the capital invested or is it my objective to generate some wealth from the investment which will help me achieve a particular financial goal.

* For how long do I want to stay invested – is my investment for a short period or am I willing to stay invested for long, say 10 years?

* How much risk am I willing to take on the investment – Will I be able to cope up with momentary loss or would I prefer selling off the investment instead of taking any loss

* Am I in a position to invest one time or will I be more comfortable investing in bits over a period of time.

If you diligently answer the above questions, the long list of available options would automatically get curtailed to a far more manageable number. Answering the above questions would also allow you to pursue those schemes which are more relevant instead of trying your luck purely on the basis of past performance or other ad hoc factors. As Ralph Seger, an Investment Guru once said

“An investor without investment objectives is like a traveller without a destination.”

Having zeroed down on your investment goals and preferences, you need to dovetail these with the investment objective of the scheme. Every mutual fund scheme has a clearly defined area of investment which it focuses on. You need to make sure that your investment goals are in line with the investment objective of the scheme.

Another important aspect that you need to consider is the risk profile of the scheme. There could be a situation wherein the scheme’s investment mandate matches your requirements however its risk profile may not be in line with yours. For example, you may be someone who avoids highly risky situations but the scheme which you have chosen may be investing in say small and mid-sized companies which are relatively more risky. In this case, you would be better off staying away from it as you may not be able to cope up with its volatile performance. To quote Warren Buffet, “The most important quality for an investor is temperament, not intellect.”

The third factor that you need to consider is the investment horizon. While most equity mutual fund schemes are open ended i.e. without a specific investment time frame, debt schemes generally have a specific investment horizon which is reflected in the instruments that they invest in. Even in case of equity, you need to be clear that you are willing to wait for a reasonable period of time, say 3 — 5 years to allow your investment to fructify and generate returns instead of bothering about the day to day variations in terms of its performance.

Courtsey Indian Express and GIRISH KALRA ( Head, Marketing and Corporate Communication,Mirae Asset Global Investments)

©2009 Copyright by Invest In India

India present opportunity of $ 1 tn consumer market

Ziaulla Namani — Sat, 28 Jan 2012 05:01:51 +0000

PricewaterhouseCoopers (PwC) today said India’s middle class will grow in size to become a USD 1 trillion opportunity to be tapped for various consumer-oriented industries.

The country’s total population will be around 1.36 billion by 2021 of which middle class will account for 570 million. The demographics will result in higher aspirations which will have to be served by companies, the consulting firm’s Executive Director, Shashank Tripathi, told reporters here.

Companies in the retail and consumer goods, telecom, financial services, industrial products, and healthcare and pharmaceuticals space can benefit from this opportunity, he said.

Even though Asia’s third-largest economy will urbanise faster, a majority of the demand for this USD 1 trillion opportunity will come from the rural areas, Tripathi said, adding that aspirational people indulging in vocations beyond agriculture will contribute to the demand.

Companies will have to pull up their socks and incorporate changes in product designs to make more disruptive offerings, work towards creating scalable business models and create a trust around the brand for leveraging on the opportunity, he maintained.

PricewaterhouseCoopers (PwC) is a global service firm, headquartered in London, UK. It is the world’s largest professional services firm measured by revenues.

PwC firms help organisations and individuals create the value they’re looking for. It has network of firms in 158 countries with close to 169,000 people working.

©2009 Copyright by Invest In India

Indian Inc creating jobs in US, Europe

Ziaulla Namani — Fri, 27 Jan 2012 07:37:34 +0000

With HCL Technologies announcing 10,000 jobs for locals in the US and Europe, India Inc chose the WEF meet to send a strong message that Indian IT firms are creating and not stealing jobs in troubled western economies.

Also, a message emerged from British Prime Minister David Cameron’s advice to the European Union (EU) that instead of being a threat, the emerging economies like India can be of great help to Europe.

Concluding a Free Trade Agreement(FTA) with India by the year-end would be in Europe’s interest, he said.

“We need to have a check-list to tackle the euro crisis… There has to be FTAs, bilateral trade agreements and EU trade agreements with countries like India and Singapore, among others by the end of the year,” he said.

His plain-speak to Brussels (EU headquarters) comes against delay in trade-opening pact with India.

Barely a day after President Barack Obama hit out against outsourcing, HCL Technologies’ Vice Chairman Vineet Nayar made a major announcement here that his company would create 10,000 locals jobs in the US and Europe in the next five years.

“Companies in today’s world of globalisation need to create jobs wherever they go. We have taken a pioneering step,” he said.

Wipro chief Azim Premji, known for his frank talk, said the issue of outsourcing is “getting hyped up since elections are coming up. The US has become over-sensitive on jobs”.

Chairman of Mahindra Satyam Vineet Nayyar hinted at creating jobs in the western economies from where they get bulk of business.

Source – Agencies.

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Indian tycoons put Dubai in Billionaires list

Ziaulla Namani — Fri, 27 Jan 2012 07:32:42 +0000

Superrich business tycoons from India has strengthen Dubai’s position as the city with the most billionaires in the Middle East, according to a latest index that ranks Mumbai fifth largest hub of billionaires.

The emirate is now home to the highest concentration of billionaires in the region – there are 14 of them — and ranks 18th globally, fresh data from WealthInsight, which analysed more than 1,300 billionaires, showed.

New York was ranked as the city with highest number of billionaires, followed by Moscow, London and Hong Kong.

“In terms of competition with Dubai, it has more to do with the Indian business,” Stephen Gross, a senior analyst in WealthInsight, was quoted as saying by The National newspaper.

The UAE has a number of foreign national billionaires in the country, coming from countries including Bahrain, India, New Zealand, Pakistan and Saudi Arabia.

“There’s a lot of Indians who are not residents in India, and those are the ones that Dubai and Singapore are both competing for. Both locations are also courting billionaires seeking a haven from having to pay taxes, particularly after scrutiny increased over accounts in Switzerland.”

“Dubai could benefit from wealthier individuals coming into the emirate following the Arab Spring, and if more unrest in the region continues — but there had not been such an effect among billionaires as of yet,” Gross said.

Since 2007, the average per-capita wealth of billionaires residing in the UAE has dropped 10 per cent, though the number of billionaires has doubled, WealthInsight said.

Source – Agencies

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Reduce interest rates to boost housing demand

Ziaulla Namani — Fri, 27 Jan 2012 07:27:15 +0000

Indian’s apex bank, RBI’s decision to cut cash reserve ratio (CRR) will help improve the liquidity position of various sectors, including realty, but realtors feel that interest rates should be brought down to boost housing demand.

Lalit Kumar Jai, President of Confederation of Real Estate Developers’ Association of India (CREDAI) said, “The CRR cut will bring in liquidity. It will help the real estate market which is cash starved. However, it is important to see the interest rate shall have to come down to facilitate the home seekers to buy homes.

In its third quarterly review of the monetary policy, RBI on Tuesday injected Rs 32,000 crore into the system by lowering the CRR by 50 basis point but kept the short-term lending rate unchanged in view of persisting inflationary concerns.

Echoing the view, Unitech Managing Director Ajay Chandra said: “A reduction in the CRR is a positive move from the RBI as it will increase the credit-supply to different sectors of the economy.”

Chandra noted that an increase in the credit supply would also benefit the realty sector.

CREDAI Chairman Pradeep Jain said the apex bank has given a signal that interest rates would come down.

Credai Chairman said that RBI has attempted to do a delicate balancing act between the need for growth and urgency of containing price line.

CHD Developers Managing Director Gaurav , said “This is just an indication that the sequence of rate rise is now behind us, the signal will serve as a boost for the real estate sector with sentiments of buyers turning favorable. This move is set to help stimulate growth.”

Source – PTI

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Intl Airlines cautious of stakes in Indian aviation

Ziaulla Namani — Wed, 25 Jan 2012 17:03:17 +0000

Several major international airlines seem to be wary of picking up stakes in the loss-making Indian carriers at this stage, even as the government plans to take steps to allow them to do so.Even before the government formally notified changes in the aviation policy that currently bars foreign carriers from investing in Indian airlines, officials and spokespersons of major international airlines have said they were not interested in investing in the Indian aviation market.

Airways like Virgin Atlantic, Lufthansa and Emirates said they were not interested. “We are focussed on growing our business out of Delhi to London Heathrow and New York and as such we are not interested in investing in India’s domestic carriers,” Edmond Rose, Director Commercial and Revenue Planning of Virgin Atlantic, said in a statement when asked whether they would like to invest in any Indian carrier.

“Emirates has no plans to acquire a stake in another airline in India or anywhere else. We are busy focusing on many aspects of our own growth including the launch of flights to five new destinations in as many months,” Emirates Senior Vice President, said.

Lufthansa spokesperson said the airline currently has “no plans to take up equity stakes in any Indian airline. Our strategy to achieve a strong presence in India is working”.

A spokesperson of the International Airlines Group (IAG), said, “The process to allow foreign airlines to invest in Indian carriers has not yet been fully approved. So it would be wrong to speculate about IAG’s interest in any Indian airlines at this stage.”

Kuala Lumpur-based Air Asia said it would examine all options, including setting up a subsidiary airline in India, rather than look at investing in an Indian carrier.

Its CEO Tony Fernandes said, “Some Indian companies will require a lot to be recapitalised. However, since the news is new we will examine all options.”

Singapore Airlines Vice-President (Public Affairs) Nick Ionides said the airline keeps all investment options open but added that there were no discussions taking place on the purchase of stake in an Indian carrier. “We aren’t in a position to comment on hypothetical questions.”

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