Sun Pharmaceutical has acquired InSite Vision, a US-based specialty ophthalmic product maker, in a $48 million (about Rs 320 crore) deal. The acquisition will enable Sun Pharma, India's largest drug maker by revenue, to grow its US business. The US sales make up for about half of its consolidated revenue.
Sun Pharma said it was developing branded ophthalmic business in the US and acquisition of InSite Vision and in-licencing of Xelpros eye drops were steps in that direction.
For the six-month period ended June 30, InSite Vision reported revenue of $3.8 million, Ebitda loss of $6.4 million and a net loss of $7.5 million. InSite Vision's core competence is research and product development, and has research facilities in California. However, the company has been facing fund shortages, sources said.
Kal Sundaram, chief executive of Sun Pharma's North American business, said, "This potential acquisition is a part of our overall objective of transitioning to a specialty company. Besides dermatology, we have identified ophthalmics as one of the key segments for establishing our branded presence in the US."
Jerry St Peter, vice-president and head of Sun Pharma's US ophthalmic business, said, "The potential addition of the InSite Vision portfolio serves as a significant step towards enhancing our branded specialty pipeline in the ophthalmic segment. InSite Vision will bring with it a pipeline of three late-stage clinical candidates, validated drug delivery technology and a track record of achieving US FDA approval for ophthalmic products." The company has two branded eye drops, which are marked by other companies.
The size of ophthalmic product business is about $7 billion and top five companies in the space control over 95 per cent market share.
Success in my Habit
Saturday, September 19, 2015
Railways, Maharashtra government to set up Special Purpose Vehicle for railway infrastructure
In a bid to give boost to Railway infrastructure projects in the state, the Maharashtra government on Wednesday has decided to form the Maharashtra Railway Infrastructure Development Company. The decision was taken after Maharashtra Chief Minister Devendra Fadnavis held a review meeting with Railway officials of various development projects pending in the state.
The Maharashtra government has said that the Company which is a Special Purpose Vehicle (SPV) has been formed to ensure that the various development projects are completed in a time bound manner. Fadnavis would soon be meeting Railway Minister Suresh Prabhu in order to fix the modalities of how Railway officials would be members in this company and how many funds would be allocated by the Railways as well as by the state for the company.
Some of the projects that would be undertaken through this SPV would be the setting up of the Beed-Parli- Baijnath railway line. In Marathwada the state would also use the SPV to clear the decks for the land acquisition for the Wardha- Yavatmal- Nanded line.
Fadnavis also discussed with Railway officials to prepare a plan for building a Metro from the Mumbai Airport to Naina in Navi Mumbai in order to connect to the new Navi Mumbai airport and also asked Railway officials to simultaneously prepare a detailed plan for an elevated line from CST to Panvel.
The Maharashtra government has said that the Company which is a Special Purpose Vehicle (SPV) has been formed to ensure that the various development projects are completed in a time bound manner. Fadnavis would soon be meeting Railway Minister Suresh Prabhu in order to fix the modalities of how Railway officials would be members in this company and how many funds would be allocated by the Railways as well as by the state for the company.
Some of the projects that would be undertaken through this SPV would be the setting up of the Beed-Parli- Baijnath railway line. In Marathwada the state would also use the SPV to clear the decks for the land acquisition for the Wardha- Yavatmal- Nanded line.
Fadnavis also discussed with Railway officials to prepare a plan for building a Metro from the Mumbai Airport to Naina in Navi Mumbai in order to connect to the new Navi Mumbai airport and also asked Railway officials to simultaneously prepare a detailed plan for an elevated line from CST to Panvel.
NHAI global arm to build roads in Iran, Sri Lanka, Nepal and Bhutan
New Delhi: With offers to build roads and highways in Iran, Sri Lanka, Nepal and Bhutan coming its way, the National Highways Authority of India (NHAI) has decided to go global, and Roads, Highways and Transport Minister Nitin Gadkari will soon set up a separate body — NHAI International — to tap into road building possibilities outside India.
NHAI International will be a set-up outside the existing ambit of NHAI and will have its offices in several countries. It will work as a contractor mostly in neighbouring countries on the same model as railways PSUs -- IRCON, Railtel and RITES -- are undertaking construction and consultancy projects internationally.
"Recently, Iranian foreign Minister met the roads minister in Delhi and requested him to take up the roads and highways construction projects in Iran. We have an excellent opportunity to go international," a senior government official said on the condition of anonymity.
"The ministry has similar proposals from Nepal, Sri Lanka and Bhutan. We could get similar opportunities in Myanmar and several west Asian countries," the official said. The step would open up a revenue stream for the roads ministry that is planning to award contract worth Rs 5 lakh crore in India in the coming years.
The government has decided to increase India's national highways network to 1.5 lakh km within a year by adding 50,000 km more to the existing network. Roads ministry is already in the process to increase its road building capacity with the target of achieving 30 km of roads construction every day by March 2016. The government is also planning to set up a separate body to undertake its expressways project. The ministry has planned to build more than eight expressways at a cost of Rs 16,500 crore.
"There's a committee set up for the revamp of NHAI. So, we'll act as per its recommendations," the official added.
Other than building roads, the Nitin Gadkari-led ministry is also expanding its wing to build other mass transit projects connecting major cities with the suburbs. There's a proposal to build Rs 4,000 crore mass rapid transport system that connects Manesar to Dhaula Kuan. The work on the project is expected to start by the end of this year.
Under this project, small, fully automatic, driverless vehicles known as pods will travel suspended under an overhead network. The overhead network will be laid on the median of the highway stretch. The project will cost Rs 50 crore per km as against Rs 350 crore per km cost of building a metro network. The government is likely to set up a separate body on the lines of DMRC to build more such projects around the National Capital Region (NCR) and other big cities.
NHAI International will be a set-up outside the existing ambit of NHAI and will have its offices in several countries. It will work as a contractor mostly in neighbouring countries on the same model as railways PSUs -- IRCON, Railtel and RITES -- are undertaking construction and consultancy projects internationally.
"Recently, Iranian foreign Minister met the roads minister in Delhi and requested him to take up the roads and highways construction projects in Iran. We have an excellent opportunity to go international," a senior government official said on the condition of anonymity.
"The ministry has similar proposals from Nepal, Sri Lanka and Bhutan. We could get similar opportunities in Myanmar and several west Asian countries," the official said. The step would open up a revenue stream for the roads ministry that is planning to award contract worth Rs 5 lakh crore in India in the coming years.
The government has decided to increase India's national highways network to 1.5 lakh km within a year by adding 50,000 km more to the existing network. Roads ministry is already in the process to increase its road building capacity with the target of achieving 30 km of roads construction every day by March 2016. The government is also planning to set up a separate body to undertake its expressways project. The ministry has planned to build more than eight expressways at a cost of Rs 16,500 crore.
"There's a committee set up for the revamp of NHAI. So, we'll act as per its recommendations," the official added.
Other than building roads, the Nitin Gadkari-led ministry is also expanding its wing to build other mass transit projects connecting major cities with the suburbs. There's a proposal to build Rs 4,000 crore mass rapid transport system that connects Manesar to Dhaula Kuan. The work on the project is expected to start by the end of this year.
Under this project, small, fully automatic, driverless vehicles known as pods will travel suspended under an overhead network. The overhead network will be laid on the median of the highway stretch. The project will cost Rs 50 crore per km as against Rs 350 crore per km cost of building a metro network. The government is likely to set up a separate body on the lines of DMRC to build more such projects around the National Capital Region (NCR) and other big cities.
Govt makes Rs 3,000 cr from first batch of Phase 3 FM auctions
HT Media Ltd, the owner of the Fever FM radio station, outspent rivals to win 10 licences, including one for the sole available frequency in Delhi, in the electronic auctions for private FM radio. The company spent Rs.340 crore in the auctions that concluded on 8 September.
Entertainment Network India Ltd (ENIL), the radio broadcasting unit of Bennett, Coleman and Co. Ltd, won 17 licences for Rs.339 crore.
Other radio operators that won licences include Music Broadcast Pvt. Ltd, which is now a part of the Dainik Jagran Group, Reliance Broadcast Network Ltd (RBNL), DB Corp. and Rajasthan Patrika Pvt. Ltd. RBNL invested Rs.117 crore in the auctions.
The results of the first batch of the Phase 3 of FM radio auctions were declared by the ministry of information and broadcasting on Wednesday and posted on its website. However, the ministry withheld the results for three Sun group companies—Sun TV, South Asia FM and Kal Radio— in compliance with a Madras high court order.
After these auctions, Fever 104, the FM radio brand of HT Media, will expand its presence from four cities to 13 with 15 licences. The company, which picked up Delhi for Rs.169.2 crore, also won frequencies in Mumbai and Hyderabad and bought a number of stations in Uttar Pradesh.
“We are entering the UP market with seven new stations. Lucknow, Kanpur, Agra, Aligarh and Gorakhpur purchased at reserve price along with Bareilly and Allahabad,” said Harshad Jain, chief executive of Fever 104 FM. Fever FM hopes to leverage its synergy with Hindustan, the Hindi newspaper of HT Media, in expanding in Hindi-speaking markets. Jain added that with Hyderabad in its kitty, the company had completed its six-metro strategy.
ENIL’s Radio Mirchi will now own 49 stations all over the country, up from 32. Radio Mirchi’s 49 station network also includes the licences it bought for Amritsar, Patiala, Shimla and Jodhpur from Oye FM of the India Today Group. Among the new cities, the company has acquired frequencies in Chandigarh, Kochi, Kozhikode, Jammu, Srinagar, Guwahati, Shillong and second frequencies in Bengaluru, Hyderabad, Ahmedabad, Pune, Kanpur and Lucknow, among others.
Big FM, the FM brand of RBNL, has added 14 new stations to its existing 45. “We continue our leadership position in India…focusing on key cities such as Pune, Nagpur, Lucknow, Patna, Varanasi, Kolhapur among others. We now have an overall presence of 59 stations with newly acquired frequencies in key states of Maharashtra, Uttar Pradesh, Bihar and northeast India,” said chief executive Tarun Katial.
The Dainik Jagran group, too, won 11 frequencies and will now have a network of 39 stations, including the stations under the Radio Mantra and Radio City brands. Apurva Purohit, CEO, Radio City 91.1 FM, said that Music Broadcast Pvt. Ltd (owned by Jagran) had won frequencies in the markets that it was keen on. “This increases our footprint across important cities in each state as we become a 39 station network. Together Radio City and Radio Mantra will be dominant players in important state clusters and continue our successful phase 2 strategy of concentrating on advertiser relevant markets,” she said.
The electronic auctions that ran 125 rounds and lasted 32 days had on offer 135 channels in 69 cities. The total value of sold channels was Rs.1,187 crore. However, the government made more than Rs.3,000 crore from these auctions, including the migration fee from 245 stations that will move from Phase 2 to Phase 3.
Pleased with the company’s success at the auctions, Fever 104 FM’s Jain said that radio has a huge growth potential with its high listenership among youth, the biggest population segment in India. “Fever...is in a commanding leadership position in its existing markets of Delhi and Bengaluru and is the fastest growing station in Mumbai and Kolkata. With our investment in the FM Phase 3 e-auction…we are expecting impressive returns from our new stations as well.”
ENIL CEO Prashant Panday said that the company will roll out the Mirchi brand in all the new towns it has got, including the four cities acquired via Oye FM. Katial, too, is hoping to launch some of the new frequencies within this fiscal.
Fever 104, the radio station brand of HT Media that publishes the Hindustan Times and Mint, competes with different radio stations in several markets which participated in these auctions.
To be sure, some licences in the metros such as Delhi, Mumbai and Bengaluru were sold steeply even as 30% of the stations and 20 cities remained unsold. Delhi, for instance, was sold for Rs.169.2 crore, while the two frequencies in Mumbai were picked up for Rs.122.8 crore each. Bengaluru too went for a high Rs.109.2 crore.
According to Smita Jha, media practice head at consulting firm PriceWaterHouseCoopers, the auctions can be deemed successful on two counts—that it fetched the government 110% on its reserve price and that it was an absolutely transparent ascending e-auction. Agreed Jehil Thakkar, partner and head of media and entertainment at KPMG: “In terms of revenue to the government, the auctions were hugely successful.” However, he added that the scarcity of spectrum in the metros pushed the prices very high for radio operators in these cities.
According to Panday, there were too few frequencies in the metros. “After 9.5 years, the government offered one frequency in important cities like Delhi, Bengaluru, Chennai, Jaipur, and Ahmedabad...clearly, the prices reached in these cities is because of ‘scarcity premium’. These are not fair market prices, and the government must consider the auctions to be a failure, not a success.”
He does not think that some of these stations will make money in a hurry at these prices. “Not for at least five years. At these prices, the winners will have to do more revenues than even their first frequencies are doing. This is difficult, even if not impossible. And if there is one bad economic patch in the next five years, then the loss period will be extended further,” he said.
However, Fever’s Jain disagrees. He said that the metro markets are the largest advertising markets for FM radio channels. Besides, the second stations will come up at no significant additional infrastructure cost. Fever, which now has two frequencies each in Delhi and Mumbai, could tap the same sales team for advertising. “That’s not all. This time, the licence period is 15 years giving us a better leeway to make money,” he added.
Currently, the radio sector is seeing a compound annual growth rate of 18% and will touch revenue of Rs.3,950 crore in 2019 compared with Rs.1,960 crore in 2015, according to the 2015 media and entertainment industry report by the Federation of Indian Chambers of Commerce and Industry and KPMG.
Entertainment Network India Ltd (ENIL), the radio broadcasting unit of Bennett, Coleman and Co. Ltd, won 17 licences for Rs.339 crore.
Other radio operators that won licences include Music Broadcast Pvt. Ltd, which is now a part of the Dainik Jagran Group, Reliance Broadcast Network Ltd (RBNL), DB Corp. and Rajasthan Patrika Pvt. Ltd. RBNL invested Rs.117 crore in the auctions.
The results of the first batch of the Phase 3 of FM radio auctions were declared by the ministry of information and broadcasting on Wednesday and posted on its website. However, the ministry withheld the results for three Sun group companies—Sun TV, South Asia FM and Kal Radio— in compliance with a Madras high court order.
After these auctions, Fever 104, the FM radio brand of HT Media, will expand its presence from four cities to 13 with 15 licences. The company, which picked up Delhi for Rs.169.2 crore, also won frequencies in Mumbai and Hyderabad and bought a number of stations in Uttar Pradesh.
“We are entering the UP market with seven new stations. Lucknow, Kanpur, Agra, Aligarh and Gorakhpur purchased at reserve price along with Bareilly and Allahabad,” said Harshad Jain, chief executive of Fever 104 FM. Fever FM hopes to leverage its synergy with Hindustan, the Hindi newspaper of HT Media, in expanding in Hindi-speaking markets. Jain added that with Hyderabad in its kitty, the company had completed its six-metro strategy.
ENIL’s Radio Mirchi will now own 49 stations all over the country, up from 32. Radio Mirchi’s 49 station network also includes the licences it bought for Amritsar, Patiala, Shimla and Jodhpur from Oye FM of the India Today Group. Among the new cities, the company has acquired frequencies in Chandigarh, Kochi, Kozhikode, Jammu, Srinagar, Guwahati, Shillong and second frequencies in Bengaluru, Hyderabad, Ahmedabad, Pune, Kanpur and Lucknow, among others.
Big FM, the FM brand of RBNL, has added 14 new stations to its existing 45. “We continue our leadership position in India…focusing on key cities such as Pune, Nagpur, Lucknow, Patna, Varanasi, Kolhapur among others. We now have an overall presence of 59 stations with newly acquired frequencies in key states of Maharashtra, Uttar Pradesh, Bihar and northeast India,” said chief executive Tarun Katial.
The Dainik Jagran group, too, won 11 frequencies and will now have a network of 39 stations, including the stations under the Radio Mantra and Radio City brands. Apurva Purohit, CEO, Radio City 91.1 FM, said that Music Broadcast Pvt. Ltd (owned by Jagran) had won frequencies in the markets that it was keen on. “This increases our footprint across important cities in each state as we become a 39 station network. Together Radio City and Radio Mantra will be dominant players in important state clusters and continue our successful phase 2 strategy of concentrating on advertiser relevant markets,” she said.
The electronic auctions that ran 125 rounds and lasted 32 days had on offer 135 channels in 69 cities. The total value of sold channels was Rs.1,187 crore. However, the government made more than Rs.3,000 crore from these auctions, including the migration fee from 245 stations that will move from Phase 2 to Phase 3.
Pleased with the company’s success at the auctions, Fever 104 FM’s Jain said that radio has a huge growth potential with its high listenership among youth, the biggest population segment in India. “Fever...is in a commanding leadership position in its existing markets of Delhi and Bengaluru and is the fastest growing station in Mumbai and Kolkata. With our investment in the FM Phase 3 e-auction…we are expecting impressive returns from our new stations as well.”
ENIL CEO Prashant Panday said that the company will roll out the Mirchi brand in all the new towns it has got, including the four cities acquired via Oye FM. Katial, too, is hoping to launch some of the new frequencies within this fiscal.
Fever 104, the radio station brand of HT Media that publishes the Hindustan Times and Mint, competes with different radio stations in several markets which participated in these auctions.
To be sure, some licences in the metros such as Delhi, Mumbai and Bengaluru were sold steeply even as 30% of the stations and 20 cities remained unsold. Delhi, for instance, was sold for Rs.169.2 crore, while the two frequencies in Mumbai were picked up for Rs.122.8 crore each. Bengaluru too went for a high Rs.109.2 crore.
According to Smita Jha, media practice head at consulting firm PriceWaterHouseCoopers, the auctions can be deemed successful on two counts—that it fetched the government 110% on its reserve price and that it was an absolutely transparent ascending e-auction. Agreed Jehil Thakkar, partner and head of media and entertainment at KPMG: “In terms of revenue to the government, the auctions were hugely successful.” However, he added that the scarcity of spectrum in the metros pushed the prices very high for radio operators in these cities.
According to Panday, there were too few frequencies in the metros. “After 9.5 years, the government offered one frequency in important cities like Delhi, Bengaluru, Chennai, Jaipur, and Ahmedabad...clearly, the prices reached in these cities is because of ‘scarcity premium’. These are not fair market prices, and the government must consider the auctions to be a failure, not a success.”
He does not think that some of these stations will make money in a hurry at these prices. “Not for at least five years. At these prices, the winners will have to do more revenues than even their first frequencies are doing. This is difficult, even if not impossible. And if there is one bad economic patch in the next five years, then the loss period will be extended further,” he said.
However, Fever’s Jain disagrees. He said that the metro markets are the largest advertising markets for FM radio channels. Besides, the second stations will come up at no significant additional infrastructure cost. Fever, which now has two frequencies each in Delhi and Mumbai, could tap the same sales team for advertising. “That’s not all. This time, the licence period is 15 years giving us a better leeway to make money,” he added.
Currently, the radio sector is seeing a compound annual growth rate of 18% and will touch revenue of Rs.3,950 crore in 2019 compared with Rs.1,960 crore in 2015, according to the 2015 media and entertainment industry report by the Federation of Indian Chambers of Commerce and Industry and KPMG.
RBI issues 10 small bank licences
Mumbai: The Reserve Bank of India (RBI) on Wednesday granted 10 entities in-principle licences to open so-called small finance banks—another move towards expanding access to financial services in rural and semi-urban areas.
Ujjivan Financial Services Pvt. Ltd, Janalakshmi Financial Services Pvt. Ltd and Equitas Holdings Ltd are among the 10 entities. The others are Au Financiers (India) Ltd, Capital Local Area Bank Ltd, Disha Microfin Pvt. Ltd, ESAF Microfinance and Investments Pvt. Ltd, RGVN (North East) Microfinance Ltd, Suryoday Micro Finance Pvt. Ltd, and Utkarsh Micro Finance Pvt. Ltd.
Larger financial services firms such as Dewan Housing Finance Ltd, IIFL Holdings Ltd, SKS Microfinance Ltd and UAE Exchange and Financial Services Ltd did not qualify for the licences. No publicly traded entities have been included in the list.
Small finance banks will offer basic banking services, accepting deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries, and entities in the unorganized sector, RBI said when it released guidelines for such banks in November.
Eight out of the 10 entities granted the in-principle approval, which is valid for 18 months, are microfinance institutions. The exceptions are Capital Local Area Bank Ltd, which operates in five districts of Punjab, and Au Financiers. Local-area banks are institutions that lend in contiguous districts, mobilizing rural savings and making them available for local investments. Au Financiers is a non-banking financial company.
For microfinance firms that give tiny loans to low-income earners, the key incentive for converting into small finance banks will be the access they gain to deposits; they will also be able to offer a wider range of loan products to customers.
The licensing of small finance banks follows 11 payment bank licences given out by RBI last month to provide basic savings, and deposit, payment and remittance services to people without access to the formal banking system. Payments banks will not be in the business of lending.
Both initiatives are aimed at furthering financial inclusion, which the Bharatiya Janata Party-led National Democratic Alliance government has made one of its top priorities since it assumed office in May 2014.
It has launched the Pradhan Mantri Jan Dhan Yojana (PMJDY) to ensure a bank account for every household, offering accidental insurance cover of Rs.1 lakh, life insurance cover of Rs.30,000 and easy transfer of money across India as sweeteners. As of 12 August, 175.7 million bank accounts had been opened under the scheme, according to the PMJDY website.
In a statement released on Wednesday, RBI said it had selected the 10 candidates to start small finance banks after three different committees conducted a detailed case study of each applicant.
“Going forward, the Reserve Bank intends to use the learning from this licensing round to appropriately revise the guidelines and move to giving licences more regularly, that is, virtually ‘on tap.”’
After setting up a bank, it would take nearly two years to merely stabilize the operation, said Samit Ghosh, founder and managing director, Ujjivan Financial Services. Ujjivan’s loan book stands at about Rs.3,300 crore and it plans to continue its focus on smaller borrowers, he said.
“The next 18 months are going to be a lot of hard work. We have to figure out ways to bring down the 90% foreign shareholding in the company since RBI has strict guidelines for it. We will be looking at various options including private placements,” said Ghosh.
According to the current policy, the aggregate foreign investment in a private sector bank from all sources is capped at 74% of its paid-up capital.
Ahmedabad-based Disha Microfin said its focus will be to expand in the central and western Indian states where there is a huge base of unbanked customers.
“The initial challenge will be to restructure and transform into a bank from a non-banking financial institution and offer multiple banking products,” said Rajeev Yadav, director of Disha group, which runs the Ahmedabad-based microfinance company.
In total, 72 entities applied for a small finance bank licence. The applications were reviewed by a committee headed by former RBI deputy governor Usha Thorat.
“It is clear from the list (of licensees) that the RBI’s bias is towards people who have proved themselves in the priority lending space. Since larger banks have always felt it to be a drag on their books, these entities will be able to fill that gap and serve smaller customers,” said Abizer Diwanji, partner and national leader, financial services, EY.
According to Diwanji, the ability to maintain a full-fledged treasury department would be one of the advantages of turning into a small finance bank, apart from access to deposits and the opportunity to offer a wider range of loan products.
“But these will also be the biggest challenges, since these are players who have not had much experience in these services,” Diwanji said.
To be sure, the transformation will not be easy.
“For the initial few years, lives are going to be difficult for the licensees. Some extremely large challenges include the ability to form a sustainable business model and gaining trust from the depositors. However, this sector is capable of achieving these things,” said Alok Prasad, industry expert and former chief executive officer of Microfinance Institutions Network, an industry body for microlenders.
One challenge will be the prudential norms they have to adhere to.
Small finance banks will be subject to most of the prudential norms that scheduled commercial banks have to adhere to. For instance, they need to maintain a cash reserve ratio (CRR), or portion of deposits to be set aside with the central bank, and statutory liquidity ratio (SLR), or the portion of deposits to be invested in government securities, as stipulated for commercial banks.
Seventy-five percent of the credit advanced by small finance banks will need to go to sectors that are considered part of the so-called priority sector, which includes agriculture, small enterprises and low-income earners. Commercial banks have to mandatorily lend 40% of their net bank credit to such sectors.
Small finance banks will also have to ensure that 50% of their loan portfolio constitutes advances of up to Rs.25 lakh, said RBI.
Such banks can eventually apply to RBI to transit into universal banks once they have established a satisfactory track record. Such a transition would be subject to due diligence by the banking regulator.
The minimum paid-up equity capital for small finance banks was set at Rs.100 crore and the minimum initial contribution from promoters fixed at 40%.
Ujjivan Financial Services Pvt. Ltd, Janalakshmi Financial Services Pvt. Ltd and Equitas Holdings Ltd are among the 10 entities. The others are Au Financiers (India) Ltd, Capital Local Area Bank Ltd, Disha Microfin Pvt. Ltd, ESAF Microfinance and Investments Pvt. Ltd, RGVN (North East) Microfinance Ltd, Suryoday Micro Finance Pvt. Ltd, and Utkarsh Micro Finance Pvt. Ltd.
Larger financial services firms such as Dewan Housing Finance Ltd, IIFL Holdings Ltd, SKS Microfinance Ltd and UAE Exchange and Financial Services Ltd did not qualify for the licences. No publicly traded entities have been included in the list.
Small finance banks will offer basic banking services, accepting deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries, and entities in the unorganized sector, RBI said when it released guidelines for such banks in November.
Eight out of the 10 entities granted the in-principle approval, which is valid for 18 months, are microfinance institutions. The exceptions are Capital Local Area Bank Ltd, which operates in five districts of Punjab, and Au Financiers. Local-area banks are institutions that lend in contiguous districts, mobilizing rural savings and making them available for local investments. Au Financiers is a non-banking financial company.
For microfinance firms that give tiny loans to low-income earners, the key incentive for converting into small finance banks will be the access they gain to deposits; they will also be able to offer a wider range of loan products to customers.
The licensing of small finance banks follows 11 payment bank licences given out by RBI last month to provide basic savings, and deposit, payment and remittance services to people without access to the formal banking system. Payments banks will not be in the business of lending.
Both initiatives are aimed at furthering financial inclusion, which the Bharatiya Janata Party-led National Democratic Alliance government has made one of its top priorities since it assumed office in May 2014.
It has launched the Pradhan Mantri Jan Dhan Yojana (PMJDY) to ensure a bank account for every household, offering accidental insurance cover of Rs.1 lakh, life insurance cover of Rs.30,000 and easy transfer of money across India as sweeteners. As of 12 August, 175.7 million bank accounts had been opened under the scheme, according to the PMJDY website.
In a statement released on Wednesday, RBI said it had selected the 10 candidates to start small finance banks after three different committees conducted a detailed case study of each applicant.
“Going forward, the Reserve Bank intends to use the learning from this licensing round to appropriately revise the guidelines and move to giving licences more regularly, that is, virtually ‘on tap.”’
After setting up a bank, it would take nearly two years to merely stabilize the operation, said Samit Ghosh, founder and managing director, Ujjivan Financial Services. Ujjivan’s loan book stands at about Rs.3,300 crore and it plans to continue its focus on smaller borrowers, he said.
“The next 18 months are going to be a lot of hard work. We have to figure out ways to bring down the 90% foreign shareholding in the company since RBI has strict guidelines for it. We will be looking at various options including private placements,” said Ghosh.
According to the current policy, the aggregate foreign investment in a private sector bank from all sources is capped at 74% of its paid-up capital.
Ahmedabad-based Disha Microfin said its focus will be to expand in the central and western Indian states where there is a huge base of unbanked customers.
“The initial challenge will be to restructure and transform into a bank from a non-banking financial institution and offer multiple banking products,” said Rajeev Yadav, director of Disha group, which runs the Ahmedabad-based microfinance company.
In total, 72 entities applied for a small finance bank licence. The applications were reviewed by a committee headed by former RBI deputy governor Usha Thorat.
“It is clear from the list (of licensees) that the RBI’s bias is towards people who have proved themselves in the priority lending space. Since larger banks have always felt it to be a drag on their books, these entities will be able to fill that gap and serve smaller customers,” said Abizer Diwanji, partner and national leader, financial services, EY.
According to Diwanji, the ability to maintain a full-fledged treasury department would be one of the advantages of turning into a small finance bank, apart from access to deposits and the opportunity to offer a wider range of loan products.
“But these will also be the biggest challenges, since these are players who have not had much experience in these services,” Diwanji said.
To be sure, the transformation will not be easy.
“For the initial few years, lives are going to be difficult for the licensees. Some extremely large challenges include the ability to form a sustainable business model and gaining trust from the depositors. However, this sector is capable of achieving these things,” said Alok Prasad, industry expert and former chief executive officer of Microfinance Institutions Network, an industry body for microlenders.
One challenge will be the prudential norms they have to adhere to.
Small finance banks will be subject to most of the prudential norms that scheduled commercial banks have to adhere to. For instance, they need to maintain a cash reserve ratio (CRR), or portion of deposits to be set aside with the central bank, and statutory liquidity ratio (SLR), or the portion of deposits to be invested in government securities, as stipulated for commercial banks.
Seventy-five percent of the credit advanced by small finance banks will need to go to sectors that are considered part of the so-called priority sector, which includes agriculture, small enterprises and low-income earners. Commercial banks have to mandatorily lend 40% of their net bank credit to such sectors.
Small finance banks will also have to ensure that 50% of their loan portfolio constitutes advances of up to Rs.25 lakh, said RBI.
Such banks can eventually apply to RBI to transit into universal banks once they have established a satisfactory track record. Such a transition would be subject to due diligence by the banking regulator.
The minimum paid-up equity capital for small finance banks was set at Rs.100 crore and the minimum initial contribution from promoters fixed at 40%.
Wednesday, September 16, 2015
CLP Wind Farms to issue Rs 600 cr in green bonds
New Delhi: CLP India, one of the largest foreign investors in the Indian power sector, today announced the issuance of corporate Green Bonds for its wind portfolio - CLP Wind Farms. CLP Wind Farms will raise Rs 600 crore through issue of rated, secured, unlisted, redeemable non-convertible debentures.
CLP is the largest wind power developer in India with committed wind projects of more than 1,000 MW, spread across six states. The proceeds from these bonds will be used for funding the capital expenditure of its projects in the renewable space. CLP Wind Farms is the first mover to issue Corporate Green Bonds in the Indian power sector. This move will help CLP sustain its expansion of the renewable energy portfolio in alignment with the company's vision to lower carbon emission footprint.
India Ratings and Research Private Limited has assigned a rating of AA to the bonds. Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations and very low credit risk. The bonds, with a coupon of 9.15 per cent per annum being issued in three series of equal amounts, will mature every April in 2018, 2019 and 2020. Standard Chartered Bank, IDFC Limited and The Hongkong and Shanghai Banking Corporation Limited are the lead arrangers for the bond issuance.
Rajiv Mishra, Managing Director, CLP India, said, "Through the issuance of these bonds we plan to fund the expenditure of new projects in the renewable energy space and thereby support CLP's growth plans for India. There is enormous potential in the Indian renewable power market and we see ourselves making a vital contribution towards the government's objective of increasing capacities in clean energy."
Samir Ashta, Director - Finance and Chief Financial Officer, CLP India, said, "We were the first to introduce asset specific bonds in the Indian power sector for our Jhajjar power plant earlier this year. The issuance of the Corporate Green Bonds by CLP Wind Farms has set a benchmark for re-financing of power projects, post commissioning. At CLP India, we always think of innovative financial structures to improve the overall project viability."
Speaking to Business Standard, Ashta said the company has a varied debt portfolio which includes bank loans, external commercial borrowings and bonds. Unlike loans where the interest cost is revised, bonds have an advantage of fixed rate of interest, he said.
According to him, the structure of these bonds achieves the twin objectives of accessing long term funds at competitive rates and an attractive long term investment opportunity for the investors. It is also beneficial from the company's perspective to keep its interest cost in check as the interest outgo towards repayment remains fixed and is not variable as in the case of bank borrowing. "
Green bonds enable capital-raising and investment for projects with environmental benefits. These could include projects related to renewable energy, energy efficiency, sustainable waste management, sustainable land use, biodiversity conservation, clean transportation, sustainable water management, climate change adaptation, among others.
CLP is the largest wind power developer in India with committed wind projects of more than 1,000 MW, spread across six states. The proceeds from these bonds will be used for funding the capital expenditure of its projects in the renewable space. CLP Wind Farms is the first mover to issue Corporate Green Bonds in the Indian power sector. This move will help CLP sustain its expansion of the renewable energy portfolio in alignment with the company's vision to lower carbon emission footprint.
India Ratings and Research Private Limited has assigned a rating of AA to the bonds. Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations and very low credit risk. The bonds, with a coupon of 9.15 per cent per annum being issued in three series of equal amounts, will mature every April in 2018, 2019 and 2020. Standard Chartered Bank, IDFC Limited and The Hongkong and Shanghai Banking Corporation Limited are the lead arrangers for the bond issuance.
Rajiv Mishra, Managing Director, CLP India, said, "Through the issuance of these bonds we plan to fund the expenditure of new projects in the renewable energy space and thereby support CLP's growth plans for India. There is enormous potential in the Indian renewable power market and we see ourselves making a vital contribution towards the government's objective of increasing capacities in clean energy."
Samir Ashta, Director - Finance and Chief Financial Officer, CLP India, said, "We were the first to introduce asset specific bonds in the Indian power sector for our Jhajjar power plant earlier this year. The issuance of the Corporate Green Bonds by CLP Wind Farms has set a benchmark for re-financing of power projects, post commissioning. At CLP India, we always think of innovative financial structures to improve the overall project viability."
Speaking to Business Standard, Ashta said the company has a varied debt portfolio which includes bank loans, external commercial borrowings and bonds. Unlike loans where the interest cost is revised, bonds have an advantage of fixed rate of interest, he said.
According to him, the structure of these bonds achieves the twin objectives of accessing long term funds at competitive rates and an attractive long term investment opportunity for the investors. It is also beneficial from the company's perspective to keep its interest cost in check as the interest outgo towards repayment remains fixed and is not variable as in the case of bank borrowing. "
Green bonds enable capital-raising and investment for projects with environmental benefits. These could include projects related to renewable energy, energy efficiency, sustainable waste management, sustainable land use, biodiversity conservation, clean transportation, sustainable water management, climate change adaptation, among others.
Cellphone makers to set up manufacturing hub in Andhra
New Delhi: Three domestic mobile device makers—Micromax Informatics Ltd, Karbonn Mobile India Pvt. Ltd and Celkon Impex Pvt. Ltd—are coming together to set up the country’s first mobile phone manufacturing hub at Tirupati in southern Andhra Pradesh, giving a fillip to the Union government’s Make in India initiative.
The coming together of the three handset makers at a single place is expected to trigger the creation of a mobile device ecosystem as component manufacturers set up shop in the country. Most phone makers now assemble phones using components imported from China and Southeast Asian countries.
Prime Minister Narendra Modi’s government is encouraging electronic hardware companies to manufacture locally in an attempt to reduce the country’s electronics import bill.
In an attempt to create an ecosystem for electronic devices in the state, the Andhra Pradesh government has agreed to give value-added tax (VAT) exemption to component makers for 10 years. This is in addition to the 10-year VAT exemption promised to the three firms.
“Manufacturers, if they come one by one, there will be an ecosystem,” chief minister N. Chandrababu Naidu said in Vijayawada prior to signing in-principle agreements with the three firms. “We want to create this ecosystem. If you create the ecosystem, India will move very fast,” he added.
Celkon, the fifth biggest phone maker in the country, will initially work on semi-knocked down (SKD) mobile units by importing components from China, but over time expects to work on completely knocked down mobile units using components made domestically.
Y. Guru, chairman of Hyderabad-based Celkon, said his company is in the process of signing joint venture agreements with Chinese firms to make components locally. Rajesh Agarwal, co-founder of Micromax, said his firm would make products from its entire portfolio—mobile devices, tablets, LED televisions and computer monitors—at the Tirupati facility.
The state government has set aside 60 acres of land near Tirupati airport for the three units. It has identified additional land near the airport to accommodate units of other handset and component makers, Kartikeya Misra, director of industries, Andhra Pradesh, said. The state government is talking to other handset makers such as Intex Technologies (India) Ltd and Lava International Ltd to set up a base in the state, he said.
The three domestic phone makers will be located not far from an assembly unit of Foxconn, which is making phones for Xiaomi Corp. at Sri City, also in Chittoor district.
Guru and Agarwal did not disclose the scale of investment or capacities at their proposed facilities, but Misra said the projects fall under the state’s mega projects category—meaning they entail an investment of more than Rs.200 crore or employ 1,500-2,000 people.
Guru said the company plans to invest Rs.250 crore over the next three years at Celkon’s Hyderabad and Tirupati facilities. Agarwal said Micromax would invest “whatever it takes” at the Tirupati facility.
“By virtue of our scale of operation, I am sure when we come here we will invest whatever it takes to be the best,” said Agarwal, promoter of India’s second biggest phone brand. Micromax currently operates units in Uttarakhand and is investing Rs.80 crore in a unit at Hyderabad.
In addition to the VAT exemption, the Andhra Pradesh government is giving a logistics cost subsidy, and a 5% investment subsidy for the three handset makers. The facilities will be located about 120km from the Chennai airport.
“From what I have heard they got a very sweet deal with the government. This could very well be the start of something new,” said Sanchit Vir Gogia, chief analyst and group CEO, Greyhound Research,
“This kind of coming together is a very difficult task for a lot of organizations. When such big brands come together, second degree and third degree suppliers will start coming together because they will realize ultimately that manufacturing lines are the same,” he added.
The coming together of the three handset makers at a single place is expected to trigger the creation of a mobile device ecosystem as component manufacturers set up shop in the country. Most phone makers now assemble phones using components imported from China and Southeast Asian countries.
Prime Minister Narendra Modi’s government is encouraging electronic hardware companies to manufacture locally in an attempt to reduce the country’s electronics import bill.
In an attempt to create an ecosystem for electronic devices in the state, the Andhra Pradesh government has agreed to give value-added tax (VAT) exemption to component makers for 10 years. This is in addition to the 10-year VAT exemption promised to the three firms.
“Manufacturers, if they come one by one, there will be an ecosystem,” chief minister N. Chandrababu Naidu said in Vijayawada prior to signing in-principle agreements with the three firms. “We want to create this ecosystem. If you create the ecosystem, India will move very fast,” he added.
Celkon, the fifth biggest phone maker in the country, will initially work on semi-knocked down (SKD) mobile units by importing components from China, but over time expects to work on completely knocked down mobile units using components made domestically.
Y. Guru, chairman of Hyderabad-based Celkon, said his company is in the process of signing joint venture agreements with Chinese firms to make components locally. Rajesh Agarwal, co-founder of Micromax, said his firm would make products from its entire portfolio—mobile devices, tablets, LED televisions and computer monitors—at the Tirupati facility.
The state government has set aside 60 acres of land near Tirupati airport for the three units. It has identified additional land near the airport to accommodate units of other handset and component makers, Kartikeya Misra, director of industries, Andhra Pradesh, said. The state government is talking to other handset makers such as Intex Technologies (India) Ltd and Lava International Ltd to set up a base in the state, he said.
The three domestic phone makers will be located not far from an assembly unit of Foxconn, which is making phones for Xiaomi Corp. at Sri City, also in Chittoor district.
Guru and Agarwal did not disclose the scale of investment or capacities at their proposed facilities, but Misra said the projects fall under the state’s mega projects category—meaning they entail an investment of more than Rs.200 crore or employ 1,500-2,000 people.
Guru said the company plans to invest Rs.250 crore over the next three years at Celkon’s Hyderabad and Tirupati facilities. Agarwal said Micromax would invest “whatever it takes” at the Tirupati facility.
“By virtue of our scale of operation, I am sure when we come here we will invest whatever it takes to be the best,” said Agarwal, promoter of India’s second biggest phone brand. Micromax currently operates units in Uttarakhand and is investing Rs.80 crore in a unit at Hyderabad.
In addition to the VAT exemption, the Andhra Pradesh government is giving a logistics cost subsidy, and a 5% investment subsidy for the three handset makers. The facilities will be located about 120km from the Chennai airport.
“From what I have heard they got a very sweet deal with the government. This could very well be the start of something new,” said Sanchit Vir Gogia, chief analyst and group CEO, Greyhound Research,
“This kind of coming together is a very difficult task for a lot of organizations. When such big brands come together, second degree and third degree suppliers will start coming together because they will realize ultimately that manufacturing lines are the same,” he added.
India to get synthetic diamond detection centre next month
Mumbai: De Beers, the premier supplier of rough diamonds to the world, plans to set up a synthetic diamond detection centre in India next month. It has been a request from Indian processing companies. It might install the machines either in Surat or at Bharat Diamond Bourse (BDB), here. In March, it had set up a grading and inscription facility in Surat, at an investment of Rs 60 crore. There are a few synthetic diamond detecting machines at BDB but none are available to identify synthetic diamonds in ornaments. The BDB machines have a long waiting list for testing.
“We will launch a new low-cost, high-volume synthetic melee screening and referrals testing service in India in October,” said Jonathan Kendall, president of International Institute of Diamond Grading & Research, part of De Beers.
Adding: “We have renowned expertise in the application of diamond technology and India is the world’s largest centre for diamond cutting and polishing. Launching (this) service in India for screening synthetic melee and testing referrals will support both trade and consumer confidence.”
“A lot of mixing of synthetic with natural diamonds is happening. The new detection centre would help the industry to segregate (these),” said Sanjay Kothari, a sector veteran.
In recent years, import of synthetic diamonds has increased from many places, including Singapore, Dubai and Hong Kong. The Gems and Jewellery Export Promotion Council (GJEPC) has urged the government to fix a separate HS Code (under which imported goods are identified). Currently, synthetic diamonds are imported under the natural diamond code.
GJEPC data show rough synthetic diamonds’ import was $86 million in 2013-14, a 21-times increase in 10 years from a mere $4 mn in 2004-05.
“We had requested global diamond miners, including De Beers and Alrosa, for setting up such machines in India. We had also urged Gemological Institute of America. It is good that De Beers has honoured our request. We believe others would follow,” said Sabyasachi Ray, executive director, GJEPC.
“We will launch a new low-cost, high-volume synthetic melee screening and referrals testing service in India in October,” said Jonathan Kendall, president of International Institute of Diamond Grading & Research, part of De Beers.
Adding: “We have renowned expertise in the application of diamond technology and India is the world’s largest centre for diamond cutting and polishing. Launching (this) service in India for screening synthetic melee and testing referrals will support both trade and consumer confidence.”
“A lot of mixing of synthetic with natural diamonds is happening. The new detection centre would help the industry to segregate (these),” said Sanjay Kothari, a sector veteran.
In recent years, import of synthetic diamonds has increased from many places, including Singapore, Dubai and Hong Kong. The Gems and Jewellery Export Promotion Council (GJEPC) has urged the government to fix a separate HS Code (under which imported goods are identified). Currently, synthetic diamonds are imported under the natural diamond code.
GJEPC data show rough synthetic diamonds’ import was $86 million in 2013-14, a 21-times increase in 10 years from a mere $4 mn in 2004-05.
“We had requested global diamond miners, including De Beers and Alrosa, for setting up such machines in India. We had also urged Gemological Institute of America. It is good that De Beers has honoured our request. We believe others would follow,” said Sabyasachi Ray, executive director, GJEPC.
Gujarat to bring APMCs on e-market platform
Ahmedabad: From November, farmers here will be able to check stocks and buy or sell produce to those in Unjha at the click of a button, with Gujarat putting in place an electronic market platform for its Agricultural Produce Market Committees (APMCs), under the National Agriculture Market (NAM) initiative.
Initially, 26 of the 210 APMCs will be connected to the e-market platform. These include the APMCs in Ahmedabad, Rajkot, Bhavnagar, Himmatnagar, Unjha, Surat, Dahod and Gondal.
“The total project cost is about Rs 21 crore. To secure financial assistance, we have given a proposal to the central government,” said Mona Khandhar, secretary of the agriculture and cooperation department, Gujarat.
The state government plans to develop two types of markets under the e-market platform — a real-time market and a virtual one. “The local real-time market will see trading of smaller lots by local traders on the e-platform wherein traders will have some time to study before bidding. The virtual market will allow traders with valid licences from anywhere to trade in larger lots. During trading, laboratory results can also be shared on the lots,” Khandhar said.
Currently, traders can participate only in a single APMC for physical trading, though they can participate in multiple markets with a single licence in the in e-market. Under the current e-market model, trading can also be carried out with other states, through a prior agreement.
Mohanbhai Kundariya, Union minister of state for agriculture, said, “Our aim is to put all APMCs under one platform so that farmers can get better prices for their products. The Union government will provide all kinds of financial support to develop an e-market platform.”
The Gujarat government aims to bring at least 100 APMCs under the e-market platform by the end of March 2016. For this, the central government has allotted Rs 200 crore.
The 26 APMCs to be connected to the e-market platform initially will have modern grading and packaging facilities. The state government also plans to set up a laboratory for quality checks.
“We have issued a tender to identify a commodity exchange to be our partner for the e-market platform. We are studying numbers of such markets,” Khandhar said.
The state government plans to conduct a seminar for farmers, traders and APMC officials to explain to them the concept of an e-market.
The NAM model has been adopted from Karnataka, which has had an e-market since the past couple of years. Gujarat, however, might be the first state to implement the project directly under NAM.
The Gujarat government is planning to set up 100 warehouses for agricultural produce, for which Rs 5 crore has already been allotted. “The state government has decided to give priority to e-market-linked APMCs to set up warehouses in the next year,” said J G Pandya, director of the Gujarat State Agricultural Marketing Board.
Initially, 26 of the 210 APMCs will be connected to the e-market platform. These include the APMCs in Ahmedabad, Rajkot, Bhavnagar, Himmatnagar, Unjha, Surat, Dahod and Gondal.
“The total project cost is about Rs 21 crore. To secure financial assistance, we have given a proposal to the central government,” said Mona Khandhar, secretary of the agriculture and cooperation department, Gujarat.
The state government plans to develop two types of markets under the e-market platform — a real-time market and a virtual one. “The local real-time market will see trading of smaller lots by local traders on the e-platform wherein traders will have some time to study before bidding. The virtual market will allow traders with valid licences from anywhere to trade in larger lots. During trading, laboratory results can also be shared on the lots,” Khandhar said.
Currently, traders can participate only in a single APMC for physical trading, though they can participate in multiple markets with a single licence in the in e-market. Under the current e-market model, trading can also be carried out with other states, through a prior agreement.
Mohanbhai Kundariya, Union minister of state for agriculture, said, “Our aim is to put all APMCs under one platform so that farmers can get better prices for their products. The Union government will provide all kinds of financial support to develop an e-market platform.”
The Gujarat government aims to bring at least 100 APMCs under the e-market platform by the end of March 2016. For this, the central government has allotted Rs 200 crore.
The 26 APMCs to be connected to the e-market platform initially will have modern grading and packaging facilities. The state government also plans to set up a laboratory for quality checks.
“We have issued a tender to identify a commodity exchange to be our partner for the e-market platform. We are studying numbers of such markets,” Khandhar said.
The state government plans to conduct a seminar for farmers, traders and APMC officials to explain to them the concept of an e-market.
The NAM model has been adopted from Karnataka, which has had an e-market since the past couple of years. Gujarat, however, might be the first state to implement the project directly under NAM.
The Gujarat government is planning to set up 100 warehouses for agricultural produce, for which Rs 5 crore has already been allotted. “The state government has decided to give priority to e-market-linked APMCs to set up warehouses in the next year,” said J G Pandya, director of the Gujarat State Agricultural Marketing Board.
Amendments to model concession agreement a big boost for highways sector: Crisil
Mumbai: India’s national highways sector received a big regulatory boost with the ministry of roads and highways clearing amendments to the model concession agreement (MCA) for awarding projects on a build-operate-transfer (BOT) basis, rating agency Crisil Ltd said in a report on Tuesday.
Under the MCA amendments, which were cleared last week, payment of premium starts only from the fourth year of completion of a project, compared with the first year previously. This is a major relief for both developers and lenders, said Crisil.
The amendment also allows termination of projects that do not progress even after a year of award. Almost half the projects awarded between 2011 and 2013 had to be terminated because of delays in land acquisition and other clearances. The termination process itself was complex and painful, taking more than two years in half the instances, said the report.
In BOT projects, a private developer builds the project with its own funds, operates it for a period and then transfers it to the government.
In August, the government approved a conditional bailout package to help so-called BOT road developers exit highway projects two years after completion of such projects, irrespective of the year when the project was awarded. The proceeds can be used to retire corporate debt or for investment in other road projects, said the Cabinet Committee on Economic Affairs.
Last month, the National Highways Authority of India (NHAI) also removed a clause which required companies to invest the money received from monetization of their operational assets. The body also offered to fund projects that are stuck in advanced stages of completion. The government is also working towards being better prepared with clearances before putting up projects for bidding.
These changes will improve the confidence of both developers and lenders in the sector, said the report.
“Lender confidence, which was severely damaged in the last few years, will revive with the change in the clause related to premium payment, and introduction of the clause on deemed termination. Further, doubling the cap on equity contribution by NHAI will make more projects viable at a time when a majority of BOT projects being awarded are on a grant basis,” said Crisil Research director Ajay Srinivasan.
Project awards by NHAI could increase nearly 50% in the current financial year with the share of BOT projects rising to 50% by 2017 from 25% a year earlier, Crisil said.
Under the MCA amendments, which were cleared last week, payment of premium starts only from the fourth year of completion of a project, compared with the first year previously. This is a major relief for both developers and lenders, said Crisil.
The amendment also allows termination of projects that do not progress even after a year of award. Almost half the projects awarded between 2011 and 2013 had to be terminated because of delays in land acquisition and other clearances. The termination process itself was complex and painful, taking more than two years in half the instances, said the report.
In BOT projects, a private developer builds the project with its own funds, operates it for a period and then transfers it to the government.
In August, the government approved a conditional bailout package to help so-called BOT road developers exit highway projects two years after completion of such projects, irrespective of the year when the project was awarded. The proceeds can be used to retire corporate debt or for investment in other road projects, said the Cabinet Committee on Economic Affairs.
Last month, the National Highways Authority of India (NHAI) also removed a clause which required companies to invest the money received from monetization of their operational assets. The body also offered to fund projects that are stuck in advanced stages of completion. The government is also working towards being better prepared with clearances before putting up projects for bidding.
These changes will improve the confidence of both developers and lenders in the sector, said the report.
“Lender confidence, which was severely damaged in the last few years, will revive with the change in the clause related to premium payment, and introduction of the clause on deemed termination. Further, doubling the cap on equity contribution by NHAI will make more projects viable at a time when a majority of BOT projects being awarded are on a grant basis,” said Crisil Research director Ajay Srinivasan.
Project awards by NHAI could increase nearly 50% in the current financial year with the share of BOT projects rising to 50% by 2017 from 25% a year earlier, Crisil said.
Monday, September 14, 2015
Practo acquires Insta Health for $12 million
ew Delhi: India’s largest online doctor discovery company Practo Technologies Pvt. Ltd has acquired hospital information management solution provider Insta Health Solutions for $12 million, its third acquisition after fitness solutions firm FitHo and product outsourcing firm Genii in the past six months.
The acquisition opens up an additional revenue stream for Practo and helps the company expand its presence among hospitals. The company at present generates revenue from Practo Ray, a doctor-facing practice management software sold as a subscription-based, software-as-a-service product, and Practo Reach, a sponsored listing service for hospitals and clinics. Listing on Practo is free for doctors, while the company does not charge consumers for searches.
With Insta Health Solutions on board, Practo now gets access to more than 500 hospitals across 15 countries, including in Southeast Asia, West Asia and Africa, which use the company’s information management software. This adds on to Practo’s repertoire of software products for medical establishments, which ensures a steady revenue flow.
Insta Health Solutions will continue to operate as a separate entity, Practo said in a statement.
“Ray as a product is targeted towards individual practitioners while Insta targets hospitals and chains of clinics, which are larger in nature. Both the products have different focus and target audience,” said Shashank N.D., co-founder and chief executive at Practo. “Before Insta, we had Reach, which was targeted at hospitals. With this acquisition, we will also have influence over the software that the hospitals use.”
Practo claims to facilitate 10 million searches every month. There are more than 200,000 doctors, 5,000 diagnostic centres and 10,000 hospitals listed on its platform.
Insta Health Solutions was founded seven years ago by Ramesh Emani, an information technology veteran who had worked with Wipro Ltd in various capacities, including as chief technology officer and president of telecom and product engineering solutions.
The firm’s products enable clients to automate clinical, operational and financial processes, including scheduling, registration, patient management, billing, electronic medical records management, bed and pharmacy inventory management among others.
The acquisition comes amid Practo’s increasing focus on enterprises such as hospitals, clinics and diagnostics centres. The firm’s acquisition of Genii was aimed at strengthening its technology to roll out new products for enterprises, while FitHo was aimed at making an entry into the preventive healthcare segment by the end of the year.
Though Practo has the first-mover advantage in India, there are at least 140 start-ups in the doctor discovery, appointment booking and practice management service segment, according to Tracxn, a start-up tracker. Some of the businesses in this segment are Lybrate, Ziffi, Qikwell and HelpingDoc.
To maintain its market dominance, Practo is making acquisitions and launching several products in new businesses. It is also fast expanding in international markets and plans to expand to 10 countries, including Brazil, Turkey, Mexico and Malaysia, by the end of the fiscal year, from four currently.
The company has raised about $125 million since its launch in 2008, the last being a $90-million round in August from China’s Tencent, Belgian venture capital firm Sofina, Sequoia Capital Global Equities, Google Capital, Altimeter Capital and Yuri Milner, founder of Russian venture capital firm DST Global.
The acquisition opens up an additional revenue stream for Practo and helps the company expand its presence among hospitals. The company at present generates revenue from Practo Ray, a doctor-facing practice management software sold as a subscription-based, software-as-a-service product, and Practo Reach, a sponsored listing service for hospitals and clinics. Listing on Practo is free for doctors, while the company does not charge consumers for searches.
With Insta Health Solutions on board, Practo now gets access to more than 500 hospitals across 15 countries, including in Southeast Asia, West Asia and Africa, which use the company’s information management software. This adds on to Practo’s repertoire of software products for medical establishments, which ensures a steady revenue flow.
Insta Health Solutions will continue to operate as a separate entity, Practo said in a statement.
“Ray as a product is targeted towards individual practitioners while Insta targets hospitals and chains of clinics, which are larger in nature. Both the products have different focus and target audience,” said Shashank N.D., co-founder and chief executive at Practo. “Before Insta, we had Reach, which was targeted at hospitals. With this acquisition, we will also have influence over the software that the hospitals use.”
Practo claims to facilitate 10 million searches every month. There are more than 200,000 doctors, 5,000 diagnostic centres and 10,000 hospitals listed on its platform.
Insta Health Solutions was founded seven years ago by Ramesh Emani, an information technology veteran who had worked with Wipro Ltd in various capacities, including as chief technology officer and president of telecom and product engineering solutions.
The firm’s products enable clients to automate clinical, operational and financial processes, including scheduling, registration, patient management, billing, electronic medical records management, bed and pharmacy inventory management among others.
The acquisition comes amid Practo’s increasing focus on enterprises such as hospitals, clinics and diagnostics centres. The firm’s acquisition of Genii was aimed at strengthening its technology to roll out new products for enterprises, while FitHo was aimed at making an entry into the preventive healthcare segment by the end of the year.
Though Practo has the first-mover advantage in India, there are at least 140 start-ups in the doctor discovery, appointment booking and practice management service segment, according to Tracxn, a start-up tracker. Some of the businesses in this segment are Lybrate, Ziffi, Qikwell and HelpingDoc.
To maintain its market dominance, Practo is making acquisitions and launching several products in new businesses. It is also fast expanding in international markets and plans to expand to 10 countries, including Brazil, Turkey, Mexico and Malaysia, by the end of the fiscal year, from four currently.
The company has raised about $125 million since its launch in 2008, the last being a $90-million round in August from China’s Tencent, Belgian venture capital firm Sofina, Sequoia Capital Global Equities, Google Capital, Altimeter Capital and Yuri Milner, founder of Russian venture capital firm DST Global.
Air bag makers eye $2 billion opportunity in India
New Delhi: The world’s largest air bag suppliers like Autoliv Inc, Takata Corp, TRW Automotive Inc and Toyoda Gosei Co are setting up plants and increasing capacity in India as it provides a US$ 2 billion opportunity due to tougher rules aimed at improving India's road safety. The planned changes will create an opportunity for makers of safety equipment, as cars without air bags will achieve only the lowest safety ratings after tests. By 2020, overall revenues from airbag sales in India are set to rise 11 per cent a year to hit US$ 2 billion, outpacing the 9 per cent growth expected in China, according to data from Transparency Market Research. By then, India is expected to be selling over 5 million cars a year. This is a the right time to invest to grow the business,” said Harish Lakshman, managing director of air bag maker Rane TRW Steering Systems Ltd. The company opened a new air bag assembly plant in August in southern India with capacity to make 500,000 units a year, investing Rs 18 crore (US$ 2.7 million). Toyoda Goesi Minda India, a joint venture between the Japanese company and India’s Uno Minda plans to increase its capacity by up to six times to 150,000 air bags over the next two to three years. “We expect that within five years the large airbag makers will have a manufacturing hub in India,” said Ayay Bandopadhyay, automotive research analyst at Transparency Market Research.
UP receives investment intentions of Rs 32,963 cr at Mumbai conclave
Mumbai: Uttar Pradesh Chief Minister Akhilesh Yadav said the government received investment intentions worth Rs 32,963 crore from investors in Maharashtra.
The proposed investments are in the field of information technology and IteS (IT enabled services), electronics, food & agro processing, manufacturing, infrastructure, power, consumer goods and fertiliser. Yadav, after addressing investors summit, told reporters that his government has already released investor-friendly policies in the fields of industry, IT, agriculture and couple of other sectors.
“Today the government has received investment intentions from Reliance Jio, LG, ITC, Idea Cellular, Godrej Agrovet, Toshiba Power, Kanodia Group, Indo Gulf Fertilizer and Ecoreco,” he said.
The sector-wise investment intentions include infrastructure (Rs 13,405 crore), food and agro processing (Rs 6,630 crore), manufacturing (Rs 6,150 crore), power (Rs 3,400 crore), electronics (Rs 1,578 crore), biomass (Rs 1,000 crore), solar energy (Rs 700 crore) and IT (Rs 100 crore).
Further, Akhilesh said the government is currently involved in increasing the Metro network across the state on a fast-track basis. Besides, the state will focus on development of 13 cities which figured on the recent list of Smart Cities released by the Centre.
The proposed investments are in the field of information technology and IteS (IT enabled services), electronics, food & agro processing, manufacturing, infrastructure, power, consumer goods and fertiliser. Yadav, after addressing investors summit, told reporters that his government has already released investor-friendly policies in the fields of industry, IT, agriculture and couple of other sectors.
“Today the government has received investment intentions from Reliance Jio, LG, ITC, Idea Cellular, Godrej Agrovet, Toshiba Power, Kanodia Group, Indo Gulf Fertilizer and Ecoreco,” he said.
The sector-wise investment intentions include infrastructure (Rs 13,405 crore), food and agro processing (Rs 6,630 crore), manufacturing (Rs 6,150 crore), power (Rs 3,400 crore), electronics (Rs 1,578 crore), biomass (Rs 1,000 crore), solar energy (Rs 700 crore) and IT (Rs 100 crore).
Further, Akhilesh said the government is currently involved in increasing the Metro network across the state on a fast-track basis. Besides, the state will focus on development of 13 cities which figured on the recent list of Smart Cities released by the Centre.
Gujarat firms lead India's most attractive brand list
Ahmedabad: Gujarat's industry has reason to cheer as as many as eight Gujarat-based brands have made it to the India's Most Attractive Brands list of 2015 as category leaders in attractiveness.
Amul (owned by the Gujarat Cooperative Milk Marketing Federation) has been listed as India's most attractive dairy-diversified (F&B) brand and Amul Butter is the only reigning brand in the butter sub-category. Other Gujarat brands that featured on the list this year include Sintex, Ajanta, Symphony, Fortune Foods Products from Adani Wilmar, Vadilal and Rasna.
India's Most Attractive Brands 2015 Report is based on primary research based on the proprietary 36 traits of attractiveness. A Comniscient Group ccompany TRA (formerly Trust Research Advisory) that conducts primary research with consumers and other stakeholders to give brands insights on solutions to consumer behavior is the publisher of The Brand Trust Report, India's Most Attractive Brands Amul, however, has dropped 45 ranks from last year and became India's 63rd Most Attractive Brand this year.
N. Chandramouli, chief executive officer, TRA, said, "Gujarat has a deep and long tradition of business. Having eight Gujarat brands as category leaders in attractiveness shows how these brands have now begun to pervade the national consciousness. Gujarat is a place that everyone looks up to, not just for governance or quality of life, but also for the quality of brands that emerge from here. The brands from the state too are in a high point of the evolutionary cycle in terms of perception."
Sintex (all-India 355th rank) leads as India's Most Attractive Brand in the Manufacturing-Diversified Category followed by Finolex (All-India 924th rank). Ajanta is a forerunner in the Home Care Category and correspondingly is the lone leader in the Clocks Sub-category.Yet another brand from the region, Symphony (All-India 643rd rank) has been ranked as the Most Attractive Brand in the Coolers Sub-category of the Durable list.Gujarat's love for food is reflected in the number of brands in the F&B Category. This has subsequently boosted the ratings of the category and has made it the largest in Gujarat. Fortune Food Products from Adani Wilmar ranks 316th in its All India Rankings and is the sole leader in the F&B- Diversified Category. Vadilal (All-India 213th rank) ice cream is India's Most Attractive ice cream brand and is followed by Kwallity Walls, Havmor and Cornetto among others. Rasna (All-India 369th rank) is the ruling brand in the Powdered Drink Category and is followed by Glucon D and Tang.
This year's study involved 15,000 hours of fieldwork covering 2312 consumer-influencers across 16 cities in India and generated 5 million data-points and 17,000 unique brands from which the top 1000 brands have been listed in this year's report.
Amul (owned by the Gujarat Cooperative Milk Marketing Federation) has been listed as India's most attractive dairy-diversified (F&B) brand and Amul Butter is the only reigning brand in the butter sub-category. Other Gujarat brands that featured on the list this year include Sintex, Ajanta, Symphony, Fortune Foods Products from Adani Wilmar, Vadilal and Rasna.
India's Most Attractive Brands 2015 Report is based on primary research based on the proprietary 36 traits of attractiveness. A Comniscient Group ccompany TRA (formerly Trust Research Advisory) that conducts primary research with consumers and other stakeholders to give brands insights on solutions to consumer behavior is the publisher of The Brand Trust Report, India's Most Attractive Brands Amul, however, has dropped 45 ranks from last year and became India's 63rd Most Attractive Brand this year.
N. Chandramouli, chief executive officer, TRA, said, "Gujarat has a deep and long tradition of business. Having eight Gujarat brands as category leaders in attractiveness shows how these brands have now begun to pervade the national consciousness. Gujarat is a place that everyone looks up to, not just for governance or quality of life, but also for the quality of brands that emerge from here. The brands from the state too are in a high point of the evolutionary cycle in terms of perception."
Sintex (all-India 355th rank) leads as India's Most Attractive Brand in the Manufacturing-Diversified Category followed by Finolex (All-India 924th rank). Ajanta is a forerunner in the Home Care Category and correspondingly is the lone leader in the Clocks Sub-category.Yet another brand from the region, Symphony (All-India 643rd rank) has been ranked as the Most Attractive Brand in the Coolers Sub-category of the Durable list.Gujarat's love for food is reflected in the number of brands in the F&B Category. This has subsequently boosted the ratings of the category and has made it the largest in Gujarat. Fortune Food Products from Adani Wilmar ranks 316th in its All India Rankings and is the sole leader in the F&B- Diversified Category. Vadilal (All-India 213th rank) ice cream is India's Most Attractive ice cream brand and is followed by Kwallity Walls, Havmor and Cornetto among others. Rasna (All-India 369th rank) is the ruling brand in the Powdered Drink Category and is followed by Glucon D and Tang.
This year's study involved 15,000 hours of fieldwork covering 2312 consumer-influencers across 16 cities in India and generated 5 million data-points and 17,000 unique brands from which the top 1000 brands have been listed in this year's report.
PM Narendra Modi's PMJDY makes India #1 in commitment to financial inclusion: Brookings
New Delhi: Prime Minister Narendra Modi's push for financial inclusion has enabled India to earn the no. 1 rank in commitment to financial inclusion in the latest Brookings Institution's 2015 Financial and Digital Inclusion Project (FDIP) Report and Scorecard.
The report that aims at evaluating the access to and usage of affordable financial services by underserved people across 21 countries gave India ninth rank overall. The scorecard is prepared upon examining individual countries on four key parameters: country commitment, mobile capacity, regulatory environment, and adoption of traditional and digital financial services.
According to the report, India accounts for 21 per cent of world's and 67 per cent of South Asia's unbanked population. "Current guidelines, such as those for payment banks, and the overall JAM framework (Jan Dhan-Yojana, Aadhaar and Mobile numbers) are expected to facilitate a more enabling environment for digital financial services by allowing a multiplicity of providers to offer innovative financial services to underserved populations," the report states. It notes the importance of recent government initiatives in helping India enhance its access to formal banking services by the underserved population, remarkably. It goes on to commend the prime minister's Pradhan Mantri Jan-Dhan Yojana -- one of the biggest financial inclusion initiatives in the world -- for helping the country make huge strides in financial inclusion and financial literacy.
The initiative launched on August 28th, 2014 has already facilitated the opening of 185 million bank accounts as of September 2015. The report credited the government for its JAM (Jan-Dhan, Aadhar and Mobile) framework which seeks to allow government to transfer benefits and subsidies directly to the bank accounts of entitled households. "Further digitization of government payments could benefit both the government and recipients alike, as some sources project the government could save over $22 billion a year by paying subsidies for services like health care and education directly to the beneficiaries," the report states.
It goes on to acknowledge the various steps taken at regulatory levels to enhance the accessibility of Indians to mobile money and, further financial inclusion. India received a respectable seventh ranking on the regulatory environment component of the FDIP scorecard. The Reserve Bank of India's recent steps such as notification of guidelines for payment bank services in November 2014 and more recently, the provision of payment bank licenses to 11 applicants, including five mobile operators are seen by the report to be major steps towards making Indian financial services sector more open and inclusive, especially, for the underserved population of the country. Although, the report has commended the advances made in the regulatory environment of the country's financial system, it does suggest that there is room for improvement.
"Strong digital payments infrastructure, development of policies and regulations promoting digital financial services in India, and government's commitment to financial inclusion should allow India to better take advantage of its technological capacity and mobile penetration rates in order to increase financial inclusion in the country," the report said.
The report that aims at evaluating the access to and usage of affordable financial services by underserved people across 21 countries gave India ninth rank overall. The scorecard is prepared upon examining individual countries on four key parameters: country commitment, mobile capacity, regulatory environment, and adoption of traditional and digital financial services.
According to the report, India accounts for 21 per cent of world's and 67 per cent of South Asia's unbanked population. "Current guidelines, such as those for payment banks, and the overall JAM framework (Jan Dhan-Yojana, Aadhaar and Mobile numbers) are expected to facilitate a more enabling environment for digital financial services by allowing a multiplicity of providers to offer innovative financial services to underserved populations," the report states. It notes the importance of recent government initiatives in helping India enhance its access to formal banking services by the underserved population, remarkably. It goes on to commend the prime minister's Pradhan Mantri Jan-Dhan Yojana -- one of the biggest financial inclusion initiatives in the world -- for helping the country make huge strides in financial inclusion and financial literacy.
The initiative launched on August 28th, 2014 has already facilitated the opening of 185 million bank accounts as of September 2015. The report credited the government for its JAM (Jan-Dhan, Aadhar and Mobile) framework which seeks to allow government to transfer benefits and subsidies directly to the bank accounts of entitled households. "Further digitization of government payments could benefit both the government and recipients alike, as some sources project the government could save over $22 billion a year by paying subsidies for services like health care and education directly to the beneficiaries," the report states.
It goes on to acknowledge the various steps taken at regulatory levels to enhance the accessibility of Indians to mobile money and, further financial inclusion. India received a respectable seventh ranking on the regulatory environment component of the FDIP scorecard. The Reserve Bank of India's recent steps such as notification of guidelines for payment bank services in November 2014 and more recently, the provision of payment bank licenses to 11 applicants, including five mobile operators are seen by the report to be major steps towards making Indian financial services sector more open and inclusive, especially, for the underserved population of the country. Although, the report has commended the advances made in the regulatory environment of the country's financial system, it does suggest that there is room for improvement.
"Strong digital payments infrastructure, development of policies and regulations promoting digital financial services in India, and government's commitment to financial inclusion should allow India to better take advantage of its technological capacity and mobile penetration rates in order to increase financial inclusion in the country," the report said.
Wednesday, September 9, 2015
GSK begins work on greenfield pharma plant in Karnataka
Hyderabad: Glaxosmithkline Pharmaceuticals Ltd, the Indian unit of UK-based Glaxosmithkline Plc (GSK), on Tuesday said it has started work on its largest greenfield tablet manufacturing facility in Vemgal in Kolar district, Karnataka, with an estimated investment of Rs.1,000 crore.
The facility, coming up on a 50-acre site, will make more than 8 billion tablets and 1 billion capsules a year in the areas of gastroenterology and anti-inflammatory medicine. It will be fully operational in 2017, employing about 250 people.
This new facility is part of GSK’s strategic plan to rationalize, streamline and reduce costs in the supply network, while increasing capacity to meet the growing demands for important medicines, GSK said in its annual report.
It includes a warehouse, site infrastructure, employee welfare centre and utilities to support the manufacturing and packing of the medicines.
GSK said it chose Vemgal for reasons including availability of skilled staff, proximity to southern distribution hub, moderate climate, easy accessibility, availability of state based investment incentives and government land.
“We fully support the government in their efforts to increase access to affordable medicines to improve healthcare and we are very excited to begin work on what will become our largest manufacturing facility in India,” said Annaswamy Vaidheesh, managing director, GlaxoSmithKline Pharmaceuticals.
GSK which markets popular brands like Zinetac, Calpol, Neosporin, Betnesol, Zyloric, Zentel, and Cetzine in India, reported a a turnover of Rs.2,653 crore for the year ended 31 March and a market share of 3.48%.
The facility, coming up on a 50-acre site, will make more than 8 billion tablets and 1 billion capsules a year in the areas of gastroenterology and anti-inflammatory medicine. It will be fully operational in 2017, employing about 250 people.
This new facility is part of GSK’s strategic plan to rationalize, streamline and reduce costs in the supply network, while increasing capacity to meet the growing demands for important medicines, GSK said in its annual report.
It includes a warehouse, site infrastructure, employee welfare centre and utilities to support the manufacturing and packing of the medicines.
GSK said it chose Vemgal for reasons including availability of skilled staff, proximity to southern distribution hub, moderate climate, easy accessibility, availability of state based investment incentives and government land.
“We fully support the government in their efforts to increase access to affordable medicines to improve healthcare and we are very excited to begin work on what will become our largest manufacturing facility in India,” said Annaswamy Vaidheesh, managing director, GlaxoSmithKline Pharmaceuticals.
GSK which markets popular brands like Zinetac, Calpol, Neosporin, Betnesol, Zyloric, Zentel, and Cetzine in India, reported a a turnover of Rs.2,653 crore for the year ended 31 March and a market share of 3.48%.
GE takes IISc's biomass tech to US
Bengaluru: A home-grown technology to generate electricity using biomass designed by the Indian Institute of Science (IISc) is being taken to the US by General Electric.
GE, which had licensed the biomass gasifier technology that generates electricity from agro-waste and wood from IISc, will help Phoenix Energy set up power plants in California. GE demonstrated a model at its Tech event in Bengaluru over the weekend. “Technology transfers typically happen from the North to the South. In gasifier technology, it flows from the South to the North,” said S Dasappa, professor, Centre for Sustainable Technologies, IISc.
“GE officials had scouted across the globe and found this platform – power generation from biomass at IISc. The technology available with us is the best in the world.” While the indigenous gasifier technology gets a US presence, and has installations in countries such as Zambia, the uptake in India is still very slow.
Bioresidue Energy Technology, a Bengaluru-based licencee, has seen one of its projects in Mangaluru shut and another 1.2 mega watt (Mw) power plant generating below capacity in Gadag with revenue from electricity distribution companies not matching up with the cost.
In Karnataka, it costs Rs 6 to generate one unit of electricity, while the power generator is compensated with Rs 6.40 per unit.
“It is uneconomical to run these plants at this cost,” said Amar Kumar, founder of BETP.
India has a vast amount of biomass waste – wood chips from trees such as eucalyptus, coconut shell, sawdust, sugar cane trash and coffee husk - that can be converted into energy. The scientists at IISc estimate India can generate 15,000 Mw of electricity using agro and crop waste of 120-140 million tonnes using a distributed model of having 1-6 Mw power plants across the country.
“There is little parity with biomass and solar and other renewable energies. If it happens – this can provide grid quality 24/7 power giving direct and indirect employment,” said Dasappa. “We are looking at a level-playing field.”
Karnataka offers as much as Rs 12 a unit of power generated by solar, but pays less to biomass-based gasifier projects.
GE, which had licensed the biomass gasifier technology that generates electricity from agro-waste and wood from IISc, will help Phoenix Energy set up power plants in California. GE demonstrated a model at its Tech event in Bengaluru over the weekend. “Technology transfers typically happen from the North to the South. In gasifier technology, it flows from the South to the North,” said S Dasappa, professor, Centre for Sustainable Technologies, IISc.
“GE officials had scouted across the globe and found this platform – power generation from biomass at IISc. The technology available with us is the best in the world.” While the indigenous gasifier technology gets a US presence, and has installations in countries such as Zambia, the uptake in India is still very slow.
Bioresidue Energy Technology, a Bengaluru-based licencee, has seen one of its projects in Mangaluru shut and another 1.2 mega watt (Mw) power plant generating below capacity in Gadag with revenue from electricity distribution companies not matching up with the cost.
In Karnataka, it costs Rs 6 to generate one unit of electricity, while the power generator is compensated with Rs 6.40 per unit.
“It is uneconomical to run these plants at this cost,” said Amar Kumar, founder of BETP.
India has a vast amount of biomass waste – wood chips from trees such as eucalyptus, coconut shell, sawdust, sugar cane trash and coffee husk - that can be converted into energy. The scientists at IISc estimate India can generate 15,000 Mw of electricity using agro and crop waste of 120-140 million tonnes using a distributed model of having 1-6 Mw power plants across the country.
“There is little parity with biomass and solar and other renewable energies. If it happens – this can provide grid quality 24/7 power giving direct and indirect employment,” said Dasappa. “We are looking at a level-playing field.”
Karnataka offers as much as Rs 12 a unit of power generated by solar, but pays less to biomass-based gasifier projects.
PM Narendra Modi's Swachh Bharat Abhiyan doubles toilet cleaner sales
Mumbai: Consumer product sales may be going down the toilet but toilet cleaner sales growth has more than doubled since the launch of PM Modi's pet project Swachh Bharat, latest IMRB consumption data shows.
The toilet cleaners segment, which was growing at 3-6% in the past few years, has seen a sudden surge of 10-12% growth in quarterly sales since October last year when the sanitation programme was launched.
"Very clearly, we are seeing an upward trend in toilet and bathroom cleaner purchases after October, '14. Interestingly, the growth is driven by rural markets," said Manoj Menon, group business director at IMRB Kantar Worldpanel which studies consumption patterns through volume sales. Rural markets, where most of the nearly one crore commodes were installed, saw a 30-60% growth in the past three quarters between October and June, a phenomenal jump given that the segment was declining a year ago.
The data also revealed that nearly 60 lakh households used toilet cleaners during the recent June quarter compared with 42 lakh a year ago in the hinterland.
"The construction of household toilets is resulting in a growing awareness about sanitation and hygiene, and people in rural India are buying quality sanitation products for their households," said KK Chutani, Executive Director-Consumer Care Business at Dabur India that sells Sanifresh toilet cleaners. "This growing awareness about sanitation and cleanliness is helping drive demand for branded toilet cleaners." Homegrown Dabur rolled out a 'Swachh Toilet, Swachh Bharat Abhiyan', which will provide germ-free public toilets across the country.
Potty training
From scaring consumers about the dangers lurking beneath their bottoms to spreading awareness on better hygiene practices, marketers of bathroom sanitation products such as Reckitt Benckiser, Hindustan Unilever and Dabur are doing their bit too.
For instance, HUL through its Domex Toilet Academy, made toilets accessible and affordable, while promoting the benefits of clean toilets and good hygiene. "We aim to provide innovative solutions and create self-sustaining delivery models which generate both public health benefits and business growth while simultaneously enhancing livelihoods by enabling local ownership and entrepreneurship," said an HUL spokesperson.
Reckitt Benckiser, that sells market leader brand Harpic, has roped in Amitabh Bachchan as ambassador to cover villages in nearly a dozen states, pledging Rs100 crore for its cleanliness drive.
"Projects like these do translate into consumers buying more hygiene products but the big impact will be in the long term. Our immediate priority is to change consumer behaviour," Reckitt Benckiser regional director, South Asia, Nitish Kapoor, had told ET last month.
Pricing strategy
Not everyone grabbed the cleaners just because of a higher awareness initiative. Pricing strategy by companies helped too as both Reckitt and Dabur launched smaller packs of 200-ml at an affordable Rs 24-30, especially for rural markets to generate more trials and usage. This, in contrast, to their products that are sold at an average Rs 50-70 for a half litre pack and over Rs100 for a litre pack of toilet cleaners in urban markets.
Experts feel that many consumers, who traditionally used products such as acid, bleach and detergents, could have shifted to branded products as reach for such products is just 10%. "Consumer awareness for sanitation and hygiene need in rural and semi-urban areas has gone up where more consumers not just bought cleaners but also upgraded within category to using products designed for germ removal. With overall penetration for the category still low, such a start could have forced many more consumers reaching out for cleaning and hygiene products in time to come," said Devendra Chawla, president - food and FMCG at Future Group, which runs Food Bazaar, India's largest food supermarket.
The World Health Organization and the United Nations Children's Education Fund ( UNICEF) estimate that there are more than 620 million people engaged in open defecation due to lack of access to proper sanitation and 60% of all open defecation is in India.
The government claims to have constructed around 80 lakh countryside toilets across India under Modi's Swachh Bharat mission, which aims to make India "open defecation-free" by 2019 by building 12 crore toilets in rural India at a projected cost of Rs 1.96 lakh crore. PM Modi has already called for corporate entities and private sector to bring in their resources and expertise in managing large-scale projects, while maximizing impact and efficiency.
The toilet cleaners segment, which was growing at 3-6% in the past few years, has seen a sudden surge of 10-12% growth in quarterly sales since October last year when the sanitation programme was launched.
"Very clearly, we are seeing an upward trend in toilet and bathroom cleaner purchases after October, '14. Interestingly, the growth is driven by rural markets," said Manoj Menon, group business director at IMRB Kantar Worldpanel which studies consumption patterns through volume sales. Rural markets, where most of the nearly one crore commodes were installed, saw a 30-60% growth in the past three quarters between October and June, a phenomenal jump given that the segment was declining a year ago.
The data also revealed that nearly 60 lakh households used toilet cleaners during the recent June quarter compared with 42 lakh a year ago in the hinterland.
"The construction of household toilets is resulting in a growing awareness about sanitation and hygiene, and people in rural India are buying quality sanitation products for their households," said KK Chutani, Executive Director-Consumer Care Business at Dabur India that sells Sanifresh toilet cleaners. "This growing awareness about sanitation and cleanliness is helping drive demand for branded toilet cleaners." Homegrown Dabur rolled out a 'Swachh Toilet, Swachh Bharat Abhiyan', which will provide germ-free public toilets across the country.
Potty training
From scaring consumers about the dangers lurking beneath their bottoms to spreading awareness on better hygiene practices, marketers of bathroom sanitation products such as Reckitt Benckiser, Hindustan Unilever and Dabur are doing their bit too.
For instance, HUL through its Domex Toilet Academy, made toilets accessible and affordable, while promoting the benefits of clean toilets and good hygiene. "We aim to provide innovative solutions and create self-sustaining delivery models which generate both public health benefits and business growth while simultaneously enhancing livelihoods by enabling local ownership and entrepreneurship," said an HUL spokesperson.
Reckitt Benckiser, that sells market leader brand Harpic, has roped in Amitabh Bachchan as ambassador to cover villages in nearly a dozen states, pledging Rs100 crore for its cleanliness drive.
"Projects like these do translate into consumers buying more hygiene products but the big impact will be in the long term. Our immediate priority is to change consumer behaviour," Reckitt Benckiser regional director, South Asia, Nitish Kapoor, had told ET last month.
Pricing strategy
Not everyone grabbed the cleaners just because of a higher awareness initiative. Pricing strategy by companies helped too as both Reckitt and Dabur launched smaller packs of 200-ml at an affordable Rs 24-30, especially for rural markets to generate more trials and usage. This, in contrast, to their products that are sold at an average Rs 50-70 for a half litre pack and over Rs100 for a litre pack of toilet cleaners in urban markets.
Experts feel that many consumers, who traditionally used products such as acid, bleach and detergents, could have shifted to branded products as reach for such products is just 10%. "Consumer awareness for sanitation and hygiene need in rural and semi-urban areas has gone up where more consumers not just bought cleaners but also upgraded within category to using products designed for germ removal. With overall penetration for the category still low, such a start could have forced many more consumers reaching out for cleaning and hygiene products in time to come," said Devendra Chawla, president - food and FMCG at Future Group, which runs Food Bazaar, India's largest food supermarket.
The World Health Organization and the United Nations Children's Education Fund ( UNICEF) estimate that there are more than 620 million people engaged in open defecation due to lack of access to proper sanitation and 60% of all open defecation is in India.
The government claims to have constructed around 80 lakh countryside toilets across India under Modi's Swachh Bharat mission, which aims to make India "open defecation-free" by 2019 by building 12 crore toilets in rural India at a projected cost of Rs 1.96 lakh crore. PM Modi has already called for corporate entities and private sector to bring in their resources and expertise in managing large-scale projects, while maximizing impact and efficiency.
Streamlining of approvals for construction projects to be firmed up by year end
New Delhi: At an inter-ministerial meeting chaired by the Minister of Urban Development and Housing & Urban Poverty Alleviation Shri M.Venkaiah Naidu today, it was decided to conclude the process of streamlining approvals for construction projects in urban areas by the end of this year. Minister of Culture and Tourism Dr.Mahesh Sharma besides secretaries and senior officials of 8 Ministries and Departments including Housing & Urban Poverty Alleviation, Urban Development, Environment, Forests and Climate Change, Civil Aviation, Culture, Consumer Affairs, Defence and Department of Industrial Policy and Promotion attended the meeting.
Shri Venkaiah Naidu reviewed the progress made by various ministries and departments to enhance the ‘ease of doing business’ in respect of construction and housing projects in urban areas in the context of implementation of new urban sector initiatives like Housing for All, Smart City Mission and Atal Mission for Rejuvenation and Urban Transformation (AMRUT). It was decided in the meeting that the ongoing efforts in this regard will be completed and necessary notifications issued by the end of this year to enable urban local bodies accord approvals in a specified time period.
Further to the decision of the Ministry of Environment, Forests and Climate Change to delegate powers of according required approvals to urban local bodies, it was decided that a Workshop will be held on the 21st of this month to inform States and Urban Local Bodies on the modalities of using the delegated powers. Other ministries will also explain the initiatives being taken to streamline the approvals.
Shri Venkaiah Naidu urged the Ministry of Environment to come out with a simplified check list for ensuring compliance by urban local bodies.
Shri Naidu was informed that the Ministry of Civil Aviation has uploaded the Colour Coded Zoning Maps of Ahmedabad and Lucknow airports on the website of Airports Authority of India further to similar action taken earlier in respect of airports at Mumbai, Navi Mumbai, Delhi, Hyderabad and Kolkatat. Same would be done in respect of Guwahati, Bengaluru, Chennai, Nagpur and Jaipur by the end of this year. Such uploading of Colour Coded Zoning Maps would enable urban local bodies accord approvals without the applicants going to the Ministry of Civil Aviation.
Officials of the Ministry of Civial Aviation will hold talks with those of the Ministry of Defence to resolve the issue of uploading Zoning Maps in respect of 25 defence airports.
Ministry of Culture has informed that a Memorandum of Understanding has been signed with ISRO for survey and mapping of all the 3,686 protected monuments in the country for uploading and enabling online approvals.
Ministry of Consumer Affairs will come out with National Building Code-2015 keeping in view with the objective of enhancing the ease of doing business in urban areas.
Today’s inter-ministerial meeting is the third convened by Shri M.Venkaiah Naidu since February this year to discuss measures for enhancing the ease of doing business in urban areas in respect of construction projects.
Shri Venkaiah Naidu reviewed the progress made by various ministries and departments to enhance the ‘ease of doing business’ in respect of construction and housing projects in urban areas in the context of implementation of new urban sector initiatives like Housing for All, Smart City Mission and Atal Mission for Rejuvenation and Urban Transformation (AMRUT). It was decided in the meeting that the ongoing efforts in this regard will be completed and necessary notifications issued by the end of this year to enable urban local bodies accord approvals in a specified time period.
Further to the decision of the Ministry of Environment, Forests and Climate Change to delegate powers of according required approvals to urban local bodies, it was decided that a Workshop will be held on the 21st of this month to inform States and Urban Local Bodies on the modalities of using the delegated powers. Other ministries will also explain the initiatives being taken to streamline the approvals.
Shri Venkaiah Naidu urged the Ministry of Environment to come out with a simplified check list for ensuring compliance by urban local bodies.
Shri Naidu was informed that the Ministry of Civil Aviation has uploaded the Colour Coded Zoning Maps of Ahmedabad and Lucknow airports on the website of Airports Authority of India further to similar action taken earlier in respect of airports at Mumbai, Navi Mumbai, Delhi, Hyderabad and Kolkatat. Same would be done in respect of Guwahati, Bengaluru, Chennai, Nagpur and Jaipur by the end of this year. Such uploading of Colour Coded Zoning Maps would enable urban local bodies accord approvals without the applicants going to the Ministry of Civil Aviation.
Officials of the Ministry of Civial Aviation will hold talks with those of the Ministry of Defence to resolve the issue of uploading Zoning Maps in respect of 25 defence airports.
Ministry of Culture has informed that a Memorandum of Understanding has been signed with ISRO for survey and mapping of all the 3,686 protected monuments in the country for uploading and enabling online approvals.
Ministry of Consumer Affairs will come out with National Building Code-2015 keeping in view with the objective of enhancing the ease of doing business in urban areas.
Today’s inter-ministerial meeting is the third convened by Shri M.Venkaiah Naidu since February this year to discuss measures for enhancing the ease of doing business in urban areas in respect of construction projects.
India and Belarus set a Trade Target of US$1 Billion by 2018
New Delhi: Minister of State (Independent Charge) for Commerce and Industry, Ms. Nirmala Sitharaman, co-chaired the Seventh Session of the India-Belarus Intergovernmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation on September 7, 2015 in Minsk, Belarus. The Belarusian delegation was led by Mr Vitali Mikhailovich Vovk, the Minister for Industry in the Government of Belarus.
During the meeting of India-Belarus Inter Governmental Commission at Minsk, it was agreed by both the sides that the present level of trade at US $ 400 million did not reflect the true depth of engagement between the two countries. It was agreed to set a target of US $ 1 billion by the year 2018.
Both sides noted the potential to step up cooperation in pharmaceuticals and Mining machinery, energy, fertilizer, and tourism between the two countries. Both sides reaffirmed strong ties between the two countries which were further strengthened by the visit of Shri Pranab Mukherjee, Hon’ble President of India to Belarus from June 3-5, 2015, the first visit of Head of State of India to Belarus. During the visit of the President, India offered Lines of Credit worth US $ 100 million to Belarus and also accorded it the status of a free market economy.
The Belarusian side noted the recent initiatives taken by the Government of India to improve ease of doing business under “Make in India’ and further opening up of the investment regime to attract investment and technology to India. The Session discussed a number of concrete proposals to take trade and economic cooperation to the next level. Both countries also agreed to facilitate business to business contacts to promote investment flows in the two countries.
Ms. Nirmala Sitharaman also called on the President of Belarus Mr. Alexander Lukashenko. In focus were issues being faced by Indian pharmaceutical companies exporting their medicines to Belarus, cooperation in potash fertilizer sector and visa concerns of Indian businessmen. Pharmaceuticals constitute the bulk of India’s exports to Belarus amounting to about US$35 million per annum. The Belarusian President assured the Commerce and Industry Minister to address the concerns of Indian pharmaceutical companies operating in Belarus. It was also agreed to form a Joint Working Group to discuss further cooperation in health-care and pharmaceuticals. India and Belarus also discussed the issues relating to long term contract for supply of potash fertilizers to India and possible equity participation of Indian fertilizer companies in Belarusian company producing Potash Fertilizer. In this connection, it was decided that an Indian government led delegation would visit Belarus to discuss all issues relating to cooperation in potash fertilizer sector. Another important decision during the IGC was to form a Joint Working Group to promote tourism between the two countries. Both sides also expressed satisfaction in successful supply of equipment by BHEL for the reconstruction of Grodno Power Plant-2 in Belarus and hoped for further participation of Indian companies in projects for the reconstruction of power facilities in the Republic of Belarus. Belarus government has also agreed to facilitate participation of Indian companies for similar bids in Belarus in this sector.
Commerce and Industry Minister also called on the Chairman of the Council of the National Assembly of Belarus, Mr. Myasnikovich Mikhail and discussed matters of mutual interest.
The two sides agreed to hold the next session of the Commission in New Delhi in 2016 on mutually convenient dates.
During the meeting of India-Belarus Inter Governmental Commission at Minsk, it was agreed by both the sides that the present level of trade at US $ 400 million did not reflect the true depth of engagement between the two countries. It was agreed to set a target of US $ 1 billion by the year 2018.
Both sides noted the potential to step up cooperation in pharmaceuticals and Mining machinery, energy, fertilizer, and tourism between the two countries. Both sides reaffirmed strong ties between the two countries which were further strengthened by the visit of Shri Pranab Mukherjee, Hon’ble President of India to Belarus from June 3-5, 2015, the first visit of Head of State of India to Belarus. During the visit of the President, India offered Lines of Credit worth US $ 100 million to Belarus and also accorded it the status of a free market economy.
The Belarusian side noted the recent initiatives taken by the Government of India to improve ease of doing business under “Make in India’ and further opening up of the investment regime to attract investment and technology to India. The Session discussed a number of concrete proposals to take trade and economic cooperation to the next level. Both countries also agreed to facilitate business to business contacts to promote investment flows in the two countries.
Ms. Nirmala Sitharaman also called on the President of Belarus Mr. Alexander Lukashenko. In focus were issues being faced by Indian pharmaceutical companies exporting their medicines to Belarus, cooperation in potash fertilizer sector and visa concerns of Indian businessmen. Pharmaceuticals constitute the bulk of India’s exports to Belarus amounting to about US$35 million per annum. The Belarusian President assured the Commerce and Industry Minister to address the concerns of Indian pharmaceutical companies operating in Belarus. It was also agreed to form a Joint Working Group to discuss further cooperation in health-care and pharmaceuticals. India and Belarus also discussed the issues relating to long term contract for supply of potash fertilizers to India and possible equity participation of Indian fertilizer companies in Belarusian company producing Potash Fertilizer. In this connection, it was decided that an Indian government led delegation would visit Belarus to discuss all issues relating to cooperation in potash fertilizer sector. Another important decision during the IGC was to form a Joint Working Group to promote tourism between the two countries. Both sides also expressed satisfaction in successful supply of equipment by BHEL for the reconstruction of Grodno Power Plant-2 in Belarus and hoped for further participation of Indian companies in projects for the reconstruction of power facilities in the Republic of Belarus. Belarus government has also agreed to facilitate participation of Indian companies for similar bids in Belarus in this sector.
Commerce and Industry Minister also called on the Chairman of the Council of the National Assembly of Belarus, Mr. Myasnikovich Mikhail and discussed matters of mutual interest.
The two sides agreed to hold the next session of the Commission in New Delhi in 2016 on mutually convenient dates.
Zomato raises $60 mn in fresh round of funding
New Delhi: In a fresh round of funding, restaurant search and discovery platform Zomato has raised $60 million from Singapore government-owned investment company Temasek, along with existing investor Vy Capital. The company said that it will use the investment to further grow its new business verticals.
Zomato has raised a total of $225 million in eight rounds of funding since its launch in 2008. It comes from a set of only four investors — Info Edge, Sequoia India, Vy Capital, and now Singapore-based Temasek. “We will use this round to make investments in our new businesses such as online ordering, table reservations, point of sales, and our newly launched Whitelabel platform. With this round and with some of our markets turning profitable recently, Zomato is well capitalised for at least two year,” said Deepinder Goyal, founder and chief executive.
Zomato on Monday also launched Whitelabel Platform (zomato.com/whitelabel). The new platform offers a host of technologies for restaurants to run their business on the internet. Last week Zomato made strategic investments in Gurgaon-based Pickingo, and Mumbai-based Grab, both hyperlocal players, to enable last-mile delivery for restaurants including dine-in-only restaurants that don’t otherwise deliver.
Founded in 2008, Zomato is headquartered in India, and employs over 3000 people across 22 countries. Available on web and mobile, Zomato provides detailed restaurant information such as menus, contact details, pictures, geo-coded maps, and user reviews, for 1.4 million restaurants. Zomato sees over 90 million visits across its web and mobile platforms every month.
The platform launched for restaurants will enable them to launch custom-branded native mobile apps to help them connect with and engage with their customers
Zomato has raised a total of $225 million in eight rounds of funding since its launch in 2008. It comes from a set of only four investors — Info Edge, Sequoia India, Vy Capital, and now Singapore-based Temasek. “We will use this round to make investments in our new businesses such as online ordering, table reservations, point of sales, and our newly launched Whitelabel platform. With this round and with some of our markets turning profitable recently, Zomato is well capitalised for at least two year,” said Deepinder Goyal, founder and chief executive.
Zomato on Monday also launched Whitelabel Platform (zomato.com/whitelabel). The new platform offers a host of technologies for restaurants to run their business on the internet. Last week Zomato made strategic investments in Gurgaon-based Pickingo, and Mumbai-based Grab, both hyperlocal players, to enable last-mile delivery for restaurants including dine-in-only restaurants that don’t otherwise deliver.
Founded in 2008, Zomato is headquartered in India, and employs over 3000 people across 22 countries. Available on web and mobile, Zomato provides detailed restaurant information such as menus, contact details, pictures, geo-coded maps, and user reviews, for 1.4 million restaurants. Zomato sees over 90 million visits across its web and mobile platforms every month.
The platform launched for restaurants will enable them to launch custom-branded native mobile apps to help them connect with and engage with their customers
Baidu to boost spending on India, Indonesia as mobile sales boom
Taiwan: Baidu Inc. plans to boost investments in India and Indonesia as China’s largest Web search provider tries for a greater presence on smartphones.
“They have a lot of characteristics that mimic China’s development,” Chief Financial Officer Jennifer Li said during an interview in Beijing on Monday. “There is no legacy of PC user behavior and probably mobile is going to have a very speedy development.”
Baidu is spending on new businesses while locked in competition with Alibaba Group Holding Ltd. and Tencent Holdings Ltd. In July, Baidu forecast sales below estimates, and Chairman Robin Li pledged to tap its $12 billion of cash to build out its shopping, taxi and delivery services amid China’s economic slowdown.
China saw its first decline in smartphone shipments in six years during the first quarter, while India’s shipment volume surged 44% in the second quarter. India is now the world’s third-largest smartphone market.
During the past two years, Baidu spent almost $1 billion on more than 20 investments, including Uber Technologies Inc., travel website Qunar and video-streaming service iQiyi, according to data compiled by Bloomberg.
The company is now exploring investments in the local education and medical sectors, Li said. The spending likely will be small, with Baidu interested in minority stakes as well as full acquisitions, she said.
Baidu also is keen to make use of its relationships with educational institutions by providing student loans, President Zhang Ya-Qin said in a separate interview. It has issued 100 million yuan ($15.7 million) in loans, averaging 20,000 yuan each, since starting its lending program last month, he said.
Baidu is working with 50 education providers, including New Oriental Education and Technology Group Inc., and wants to capture 30% of an online educational loans market currently valued at 10 billion yuan annually, he said.
“They have a lot of characteristics that mimic China’s development,” Chief Financial Officer Jennifer Li said during an interview in Beijing on Monday. “There is no legacy of PC user behavior and probably mobile is going to have a very speedy development.”
Baidu is spending on new businesses while locked in competition with Alibaba Group Holding Ltd. and Tencent Holdings Ltd. In July, Baidu forecast sales below estimates, and Chairman Robin Li pledged to tap its $12 billion of cash to build out its shopping, taxi and delivery services amid China’s economic slowdown.
China saw its first decline in smartphone shipments in six years during the first quarter, while India’s shipment volume surged 44% in the second quarter. India is now the world’s third-largest smartphone market.
During the past two years, Baidu spent almost $1 billion on more than 20 investments, including Uber Technologies Inc., travel website Qunar and video-streaming service iQiyi, according to data compiled by Bloomberg.
The company is now exploring investments in the local education and medical sectors, Li said. The spending likely will be small, with Baidu interested in minority stakes as well as full acquisitions, she said.
Baidu also is keen to make use of its relationships with educational institutions by providing student loans, President Zhang Ya-Qin said in a separate interview. It has issued 100 million yuan ($15.7 million) in loans, averaging 20,000 yuan each, since starting its lending program last month, he said.
Baidu is working with 50 education providers, including New Oriental Education and Technology Group Inc., and wants to capture 30% of an online educational loans market currently valued at 10 billion yuan annually, he said.
Reliance Defence ties up with UAE's ADSB to build warships
New Delhi: Reliance Defence Ltd, a unit of Anil Ambani-controlled Reliance Infrastructure Ltd, has agreed to work with Abu Dhabi Ship Building (ADSB) to construct warships such as frigates and destroyers over the next 10 years for the Persian Gulf nations.
The companies are forming a joint venture to build and repair warships, and also commercial vessels, in the region, said a person close to the development, who did not want to be named. “The joint venture will open opportunities in the region over next 10 years for both the companies in excess of Rs.10,000 crore,” the person said.
ADSB is a regional provider of construction, repair and refit services for naval, military and commercial vessels in the region. It is 40% owned by Mubadala Development Company PJSC, 10% by Abu Dhabi’s government and 50% publicly traded on the United Arab Emirates’ stock exchange.
The pact could also see ADSB delivering maintenance, repair, overhaul and refit services to the vessels in line with regional requirements.
Reliance Group is likely to use its newly acquired shipbuilding facilities at Pipavav in Gujarat for implementation of this collaboration. The group did not disclose investment details in its statement issued on Monday.
“Skills developed and the experience gained through this collaboration will further add to Reliance Group’s capabilities and position it favourably as a strategic partner for Indian Navy’s future programs encompassing areas such as; combat management systems (CMS), integrated bridge solutions (IBS), combat system integration (CSI), integrated platform management systems (IPMS) and staff training and development,” the statement said.
This potential collaboration could help both firms expand their market share and address new opportunities, it said.
On 22 July, Reliance Group company Pipavav Defence and Offshore Engineering Co. Ltd and Russia’s JSC Ship Repairing Centre Zvyozdochka had agreed to jointly refit and certify submarines of the 877EKM category at an estimated Rs.11,000 crore.
Reliance Group is acquiring a majority stake in Pipavav Defence through an open offer, subject to necessary approvals.
Pipavav Defence had said the company proposes to execute the programme in a joint venture with the Russian firm, in which it will hold 51% stake.
India will see a defence budget allocation of $620 billion between fiscal 2014 and fiscal 2022, of which 50% will be capital expenditure, according to a February report released by industry group Federation of Indian Chambers of Commerce and Industry and financial services firm Centrum Capital Ltd.
The annual opportunity for Indian firms—both state-owned and private—is expected to be $41 billion by fiscal 2022 and $168 billion cumulatively, the report said.
In June, Reliance Group had applied to the department of industrial policy and promotion (DIPP), the nodal agency for foreign direct investment, for licences to make defence and aerospace products.
Group companies that applied for licenses are Reliance SED Ltd, Reliance Naval Systems Ltd, Reliance Unmanned Systems Ltd and Reliance Aerostructure Ltd, according to the DIPP website.
These firms want licences to manufacture, among other things, scientific investigation ships, parts and accessories of aircraft and spacecraft, engines, turbines and radar equipment.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.
The companies are forming a joint venture to build and repair warships, and also commercial vessels, in the region, said a person close to the development, who did not want to be named. “The joint venture will open opportunities in the region over next 10 years for both the companies in excess of Rs.10,000 crore,” the person said.
ADSB is a regional provider of construction, repair and refit services for naval, military and commercial vessels in the region. It is 40% owned by Mubadala Development Company PJSC, 10% by Abu Dhabi’s government and 50% publicly traded on the United Arab Emirates’ stock exchange.
The pact could also see ADSB delivering maintenance, repair, overhaul and refit services to the vessels in line with regional requirements.
Reliance Group is likely to use its newly acquired shipbuilding facilities at Pipavav in Gujarat for implementation of this collaboration. The group did not disclose investment details in its statement issued on Monday.
“Skills developed and the experience gained through this collaboration will further add to Reliance Group’s capabilities and position it favourably as a strategic partner for Indian Navy’s future programs encompassing areas such as; combat management systems (CMS), integrated bridge solutions (IBS), combat system integration (CSI), integrated platform management systems (IPMS) and staff training and development,” the statement said.
This potential collaboration could help both firms expand their market share and address new opportunities, it said.
On 22 July, Reliance Group company Pipavav Defence and Offshore Engineering Co. Ltd and Russia’s JSC Ship Repairing Centre Zvyozdochka had agreed to jointly refit and certify submarines of the 877EKM category at an estimated Rs.11,000 crore.
Reliance Group is acquiring a majority stake in Pipavav Defence through an open offer, subject to necessary approvals.
Pipavav Defence had said the company proposes to execute the programme in a joint venture with the Russian firm, in which it will hold 51% stake.
India will see a defence budget allocation of $620 billion between fiscal 2014 and fiscal 2022, of which 50% will be capital expenditure, according to a February report released by industry group Federation of Indian Chambers of Commerce and Industry and financial services firm Centrum Capital Ltd.
The annual opportunity for Indian firms—both state-owned and private—is expected to be $41 billion by fiscal 2022 and $168 billion cumulatively, the report said.
In June, Reliance Group had applied to the department of industrial policy and promotion (DIPP), the nodal agency for foreign direct investment, for licences to make defence and aerospace products.
Group companies that applied for licenses are Reliance SED Ltd, Reliance Naval Systems Ltd, Reliance Unmanned Systems Ltd and Reliance Aerostructure Ltd, according to the DIPP website.
These firms want licences to manufacture, among other things, scientific investigation ships, parts and accessories of aircraft and spacecraft, engines, turbines and radar equipment.
Reliance Group companies have sued HT Media Ltd, Mint’s publisher, and nine others in the Bombay high court over a 2 October 2014 front-page story that they have disputed. HT Media is contesting the case.
Govt to set up low-cost non-major ports to boost trade
New Delhi: Government of India plans to set up low-cost non-major ports along coastline under the Sagarmala project to boost trade. To support coastal shipping, the government has asked all the 12 major ports to accord priority berthing to such vessels and to encourage quicker movement of cargo, as a transient measure. "Holding up time at ports in India is noteworthy and hampers the effectiveness of vessel operations. It is assessed that coastal vessels in India invest around 70 per cent of aggregate time in ports and just 30 per cent of their time in genuine voyage. Such delays render coastal shipping uncompetitive" as per a report by Ministry of Shipping. Priority berthing to coastal vessels will enable shippers to transport goods from one port to another irrespective of origin and final destination of the cargo. The Sagarmala project would be implemented through the respective state/maritime boards. The government will put in place a national perspective plan for the coastline to identify potential geographical regions to be called Coastal Economic Zones. In the initial phase, the government would earmark approximately Rs 692 crore (US$ 103.8 million) for implementation of projects under Sagarmala in FY 2015-16.
PM to chair high-level meeting on global economic scenario
New Delhi: The Prime Minister, Shri Narendra Modi, will be holding a high level consultative meeting on 'Recent Global Events: Opportunities for India,' in New Delhi tomorrow morning.
The meeting will be attended by over 40 delegates, including Cabinet Ministers, top officials of the Government and RBI, industry representatives, top bankers and leading economists and sectoral experts.
A wide-ranging discussion is expected on the impact of recent economic events, and how best India can take advantage of them.
The meeting will be attended by over 40 delegates, including Cabinet Ministers, top officials of the Government and RBI, industry representatives, top bankers and leading economists and sectoral experts.
A wide-ranging discussion is expected on the impact of recent economic events, and how best India can take advantage of them.
Friday, September 4, 2015
Dr Reddy's looks to move beyond drugs with VC arm
Hyderabad: Dr. Reddy’s Laboratories Ltd’s new venture capital arm is considering 20 business proposals, including a chain of dental clinics and health-diagnostic laboratories and is likely to back one or two as part of a plan to transform India’s second-largest drug maker into a broader health-focused company.
“We haven’t invested anywhere, we are setting up the processes now,” said G.V. Prasad, co-chairman and chief executive of officer of Dr. Reddy’s, without giving details of the corpus allocated for the fund or the name of the start-ups that the company is evaluating. “I don’t think money is a concern for us.”
Hyderabad-based Dr. Reddy’s is evaluating investments in new technologies that offer medical diagnostics and services to help patients, and also complement the firm’s larger strategy of transforming itself into a broader health-focused entity. Smaller rival Cipla Ltd was the first Indian drug maker to set up a fund in 2013 to incubate start-ups.
“We won’t go wild and invest everywhere, we will be strategic investors. This is not to make money out of our investment, this is to build businesses or to learn things,” Prasad said.
“If it is directly in our business, we won’t invest. If it is an unrelated area we look at it. Suppose it’s a new way of treatment, or new way of diagnostic, or a new way to help patients in their journey of illness to wellness, we will invest,” Prasad said.
Prasad said that company’s venture group will also incubate start-ups in-house until they become sizable entities, in addition to encouraging the company’s own people to come up with ideas.
“If somebody has a brilliant idea, we may back it with investment and incubate it,” Prasad said.
Big pharmaceutical companies including Pfizer Inc., AstraZeneca Plc., GlaxoSmithKline Plc. and Novartis AG have been investing in start-ups for years through their venture capital funds.
“It’s not very surprising for company like Dr.Reddy’s to come up with a venture fund,” said P.R. Ganapathy, president (India) at social enterprise incubator Villgro Innovations Foundation.
The company understands the healthcare space, he explained, and the gaps in it, apart from having the money power and expertise to back start-ups.
Healthcare and lifescience start-ups raised $136 million of venture capital in 2014, second only to information technology and information technology-enabled services, which includes Internet companies such as Flipkart and Snapdeal, according to data compiled by Chennai-based researcher Venture Intelligence.
“More and more companies are seeing healthcare as a safe bet to invest—there is a huge demand and it is recession proof,” said Rana Mehta, leader, healthcare, at consulting firm PwC India.
“We haven’t invested anywhere, we are setting up the processes now,” said G.V. Prasad, co-chairman and chief executive of officer of Dr. Reddy’s, without giving details of the corpus allocated for the fund or the name of the start-ups that the company is evaluating. “I don’t think money is a concern for us.”
Hyderabad-based Dr. Reddy’s is evaluating investments in new technologies that offer medical diagnostics and services to help patients, and also complement the firm’s larger strategy of transforming itself into a broader health-focused entity. Smaller rival Cipla Ltd was the first Indian drug maker to set up a fund in 2013 to incubate start-ups.
“We won’t go wild and invest everywhere, we will be strategic investors. This is not to make money out of our investment, this is to build businesses or to learn things,” Prasad said.
“If it is directly in our business, we won’t invest. If it is an unrelated area we look at it. Suppose it’s a new way of treatment, or new way of diagnostic, or a new way to help patients in their journey of illness to wellness, we will invest,” Prasad said.
Prasad said that company’s venture group will also incubate start-ups in-house until they become sizable entities, in addition to encouraging the company’s own people to come up with ideas.
“If somebody has a brilliant idea, we may back it with investment and incubate it,” Prasad said.
Big pharmaceutical companies including Pfizer Inc., AstraZeneca Plc., GlaxoSmithKline Plc. and Novartis AG have been investing in start-ups for years through their venture capital funds.
“It’s not very surprising for company like Dr.Reddy’s to come up with a venture fund,” said P.R. Ganapathy, president (India) at social enterprise incubator Villgro Innovations Foundation.
The company understands the healthcare space, he explained, and the gaps in it, apart from having the money power and expertise to back start-ups.
Healthcare and lifescience start-ups raised $136 million of venture capital in 2014, second only to information technology and information technology-enabled services, which includes Internet companies such as Flipkart and Snapdeal, according to data compiled by Chennai-based researcher Venture Intelligence.
“More and more companies are seeing healthcare as a safe bet to invest—there is a huge demand and it is recession proof,” said Rana Mehta, leader, healthcare, at consulting firm PwC India.
Odisha unveils IPR 2015, to attract Rs1,73,000 crore investment
Bhubaneswar: Odisha Chief Minister Mr Naveen Patnaik unveiled the new Industrial Policy Resolution (IPR-2015), with a view to attract fresh investments of Rs 1,73,000 crore (US$ 26.05 billion) in next four years and provide direct employment to about 300,000 people. The IPR-2015 aims to achieve the state government's target of increasing the share of manufacturing to 15 per cent of the gross state domestic product (GSDP). Apart from mines and minerals, the policy would help in attracting new investments in manufacturing sector and make Odisha a destination for both domestic and international investors. Some of the sectors under focus include chemicals (including petro-chemicals), IT/ITeS, plastics, electronics system design & manufacturing (ESDM), auto components ancillary, food processing, and textiles. IPR-2015 also aims at providing employment-based incentives to the prospective investors. Other incentives include grants for investments in both greenfield and brownfield infrastructure, subsidies in power tariff, training, capital investment and reimbursement of value added tax (VAT), stamp duty exemption and concessional land cost for investments in specific sectors.
Maritime sector to get investment promotion cell
New Delhi: In a bid to attract investment into the maritime sector and provide facilitation services to global firms seeking to invest in India, the Indian Ports Association (IPA), in association with Ficci and shipping ministry, is planning to set up an investment promotion and facilitation cell.
The shipping ministry’s target for the sector is Rs 2.77 lakh crore worth of investments between 2010 and 2020.
The proposed cell will render advice and facilitate investments into the sector and will undertake investor targeting exercise in select countries. The cell will also maintain a database of relevant stakeholders (government and corporate) in India and abroad, and disseminate information about the opportunities in the country at different fora to attract foreign investors.
It will work in close coordination with the Indian embassies abroad, foreign embassies in India, state governments, investment promotion agencies, sector-specific associations and chambers in India and abroad.
“The cell will identify and target investors in three focus countries in the first year and two additional countries in each subsequent years. In addition to this, it will establish networking with maritime associations and trade bodies in India and in the target countries,” said a person close to the development.
The cell will address investment-related queries and provide information on policy guidelines relating to port development, coastal shipping, shipbuilding and ship-repair, the person added. The cell will also participate in and make presentations at domestic events relevant to investment in maritime industry and also highlight opportunities in the sector to delegations visiting India.
Sources added the cell would plan investors’ tour itineraries, help organise investor visits to states and accompany select delegations on visits within India. “It will also assist the investor in scouting joint ventures and technical partners,” said a source.
The shipping ministry’s target for the sector is Rs 2.77 lakh crore worth of investments between 2010 and 2020.
The proposed cell will render advice and facilitate investments into the sector and will undertake investor targeting exercise in select countries. The cell will also maintain a database of relevant stakeholders (government and corporate) in India and abroad, and disseminate information about the opportunities in the country at different fora to attract foreign investors.
It will work in close coordination with the Indian embassies abroad, foreign embassies in India, state governments, investment promotion agencies, sector-specific associations and chambers in India and abroad.
“The cell will identify and target investors in three focus countries in the first year and two additional countries in each subsequent years. In addition to this, it will establish networking with maritime associations and trade bodies in India and in the target countries,” said a person close to the development.
The cell will address investment-related queries and provide information on policy guidelines relating to port development, coastal shipping, shipbuilding and ship-repair, the person added. The cell will also participate in and make presentations at domestic events relevant to investment in maritime industry and also highlight opportunities in the sector to delegations visiting India.
Sources added the cell would plan investors’ tour itineraries, help organise investor visits to states and accompany select delegations on visits within India. “It will also assist the investor in scouting joint ventures and technical partners,” said a source.
Shri Piyush Goyal & Shri Dharamendra Pradhan Inaugurates Multi Skill Development Centre in Talcher Odisha
New Delhi: Shri Piyush Goyal, Union Minister of State(IC) for Power, Coal and New & Renewable Energy and Shri Dharmendra Pradhan, Union Minister of State (IC) for Petroleum & Natural Gas today inaugurated Multi Skill Development Centre at NTPC Talcher Kaniha, Odisha in presence of Shri Sanjay Kumar Das Burma, Minister of State, Food Supplies & Consumer Welfare, Employment and Technical Education & Training,Govt of Odisha ,Shri A K Jha ,CMD,NTPC Limited and Shri U P Pani,Director (HR).
"The multi-skill development centre is a long standing requirement of Odisha. This Centre will provide skill training in different trades keeping in view the requirement of local industries," Shri Goyal said, adding that the centre would be funded by the central government.
NTPC is supporting the skills development initiative of the Government of India, in line with SKILL INDIA MISSION, by partnering with the Central and State governments to improve the availability and quality of skilled workforce by upgrading/ transforming infrastructure and the quality of vocational education in the country in order to make it demand driven and ensure better employability of the skilled youth.
Talcher Kaniha in Angul District of Odisha state is one of the locations that have been identified to establish a Multi Skill Centre in collaboration with Ministry of Skill Development & Entrepreneurship (MSDE) and National Skill Development Corporation (NSDC).
The Multi Skill Centre is being set up with the objective to prepare the people of this backward region/ area more skillful, industry ready so that they can earn their livelihood in a better way and live with their dignified life in the society. NSDC and its training partner M/S GRAS Education and Training Services Private Limited (“GRAS Academy”), will setup a Multi-Skill Centre at Talcher to provide skill training to youths and women belonging to the Angul district and other parts of the state of Odisha.
The NTPC-Talcher unit has provided the space/ building to NSDC to setup a Multi Skill Centre. The NSDC & its Training Partner will setup classrooms and computer lab, etc with all required machinery & equipments, trainers, etc required to impart training in courses that are recognized by National Skill Qualification Framework (NSQF).
"The multi-skill development centre is a long standing requirement of Odisha. This Centre will provide skill training in different trades keeping in view the requirement of local industries," Shri Goyal said, adding that the centre would be funded by the central government.
NTPC is supporting the skills development initiative of the Government of India, in line with SKILL INDIA MISSION, by partnering with the Central and State governments to improve the availability and quality of skilled workforce by upgrading/ transforming infrastructure and the quality of vocational education in the country in order to make it demand driven and ensure better employability of the skilled youth.
Talcher Kaniha in Angul District of Odisha state is one of the locations that have been identified to establish a Multi Skill Centre in collaboration with Ministry of Skill Development & Entrepreneurship (MSDE) and National Skill Development Corporation (NSDC).
The Multi Skill Centre is being set up with the objective to prepare the people of this backward region/ area more skillful, industry ready so that they can earn their livelihood in a better way and live with their dignified life in the society. NSDC and its training partner M/S GRAS Education and Training Services Private Limited (“GRAS Academy”), will setup a Multi-Skill Centre at Talcher to provide skill training to youths and women belonging to the Angul district and other parts of the state of Odisha.
The NTPC-Talcher unit has provided the space/ building to NSDC to setup a Multi Skill Centre. The NSDC & its Training Partner will setup classrooms and computer lab, etc with all required machinery & equipments, trainers, etc required to impart training in courses that are recognized by National Skill Qualification Framework (NSQF).
Rs.194 cr released to 96 cities under Smart City Mission for preparation of city plans
New Delhi: The Ministry of Urban Development has sanctioned Rs. 194 cr at the rate of Rs.2.00 cr per each of the 96 cities included in the Smart City Mission. Of the 98 smart city candidate firmed up so far, funds will be sanctioned soon by the Home Ministry to the Union Territories of Delhi and Chandigarh.
Sanction Orders were issued to 38 smart city representatives from 11 states who attended the Regional Workshop here today by the Minister of Urban Development Shri M.Venakaiah Naidu. One city each from Jammu & Kashmir and Uttar Pradesh are still to be identified for inclusion in the Smart City Mission.
Later in the day, funds were transferred electronically to the respective states and Union Territories.
Rs.2.00 cr provided for each city is meant for preparation of city level Smart City Plans with the assistance of technical and hand holding agencies.
Sanction Orders were issued to 38 smart city representatives from 11 states who attended the Regional Workshop here today by the Minister of Urban Development Shri M.Venakaiah Naidu. One city each from Jammu & Kashmir and Uttar Pradesh are still to be identified for inclusion in the Smart City Mission.
Later in the day, funds were transferred electronically to the respective states and Union Territories.
Rs.2.00 cr provided for each city is meant for preparation of city level Smart City Plans with the assistance of technical and hand holding agencies.
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