Tata Capital-IFC JV to tap clean energy sector

New Delhi: Tata Capital Ltd, a Tata Sons subsidiary, has set up a joint venture company with International Finance Corporation (IFC) to explore business opportunities in the climate change space. The company, Tata Cleantech Capital Ltd (TCCL), would provide funding and advisory services to small and mid-sized enterprises developing renewable energy projects in India. “The company has been incorporated with an initial capital of $20 million, in which 80 per cent stake is held by Tata Capital,” said Praveen P Kadle, Managing Director and Chief Executive Officer, Tata Capital. IFC, a member of the World Bank Group, would hold the remaining 20 per cent stake. Through TCCL, Tata Capital plans to finance around 200 renewable energy and energy-efficiency projects over the next five years. “Based on the current market opportunities, we estimate $750-million business over the next four-five years,” Kadle said. Tata Capital and IFC are hopeful of expanding the capital base of the Mumbai-headquartered TCCL to $120 million by 2016. The two partners indicated a third international partner would soon be roped into TCCL. Tata capital would, however, continue to hold 80 per cent in the venture. “By helping establish this green finance company, we would reach small and mid-sized companies that are committed to promoting clean technology,” said IFC executive vice-president and chief executive, Lars H Thunell. Apart from energy efficiency and renewable power generation projects for small and medium enterprises, the joint venture would also focus on water management initiatives. Thunell said the company would soon start looking at sustainable agriculture and smart-grid projects, besides clean transportation and pollution control. TCCL would utilise Tata Capital's network and huge corporate customer base. “IFC's experience and expertise in offering lending and advisory services in clean tech sectors would be an added asset to the new company,” Kadle said

Selco Solar in pact with Applied Materials to electrify 1,000 households, 10 schools

Bangalore: Selco Solar Pvt Ltd, a provider of energy services to underserved households, has tied up with Applied Materials Foundation (AMF) to electrify 1,000 households and 10 schools in Karnataka using solar lighting systems. AMF, an arm of Applied Materials - a provider of semiconductor, flat panel display and solar photovoltaic equipment, has contributed $1.7 lakh for the project. Selco will provide lighting systems to schools and houses in villages across Karnataka and the project, which started in May this year, is expected to be completed in March 2012. The project has already been implemented in 204 households and four schools across the State. The project will impact 10,000 individuals and 279 kWh of energy. Selco plans to implement the project across 5,000 households. Innovative buying Selco, promoted by Ramon Magsasay award winner, Mr Harish Hande, will execute the project in its model of “not donating the products as charity” but by selling it to the households through an innovative model where the users will have to pay a part of the cost of setting up the solar system and the rest of the cost will be borne by AMF. The users will have to pay for the products in EMIs through banks that Selco has partnered with. “Many people in rural areas are able to pay for solar- equalling what they were paying for kerosene for lamps and mobile phone charging, but what happens is they don't have enough assets to prove to banks that they can repay loans,” Mr Harish Hande, Managing Director, Selco Solar, said. So we are leveraging money given by AMF to help people get bank loans, he explained. The household solar lighting project is one where individuals will have to buy solar lights from Selco, and bear about 90 per cent of the costs and the remaining- the ‘down payment' would be taken care of by AMF's funding. The school lighting project is one where a solar system is installed at the schools, 20 per cent of the costs of which are borne by the school; and students of the school are given battery-powered LED lamps which can be charged at the system installed at school. Typically, people in villages will have to pay an average of Rs 140 a month for their kerosene/candle needs and Rs 40 a month to charge their mobile phones at nearby shops. But with Selco's project, the person would have to pay an EMI of Rs 150 a month for the solar-powered system till the entire loan is paid off and then turns the owner of the solar-powered system which can be used for free- but for a maintenance fee of Rs 150 a year. The idea of the project “is to show that people do repay loans and that you don't necessarily need coal or nuclear to electrify villages, and also make an impact on government policies” Mr Hande said.

Lupin to make second acquisition in Japan

Mumbai: Mumbai-based Lupin Ltd will acquire Tokyo-based I’rom Pharmaceuticals (IP) for an undisclosed amount to expand its footprint in the country. The transaction would be done through Lupin's Japanese subsidiary Kyowa Pharmaceutical Industry Co, Ltd (Kyowa), which it had acquired in 2007.. IP, subsidiary of I’rom Holdings Co, is a speciality injectable drug maker and its annual sales for the year ended March 2011 was ¤5.36 billion ($69.7 million). It has a significant presence in the DPC (diagnosis procedure combination) hospitals within Japan. Injectable products enjoy a significant usage in the DPC Hospital segment, and the generic injectable penetration is slated to grow significantly. There are currently over 1,400 DPC hospitals in Japan, covering 35 per cent of all hospital beds nationwide, and a market size of $11-billion. Earlier, Business Standard had reported Lupin's plan for a second acquisition in Japan for $50-100 million. The $75-billion market is the second largest in the world after the US. Though the Japanese government is taking initiatives to support generic drugs, the segment is only five per cent of the total in value terms and 19 per cent in volume terms. The government has also introduced a series of reforms to expand generic drug penetration to 30 per cent by 2012. Vinod Dhawan, president (Asia Pacific, West Asia, Africa and Latin America) at Lupin said, “Japan is a growth market of strategic focus for Lupin. IP’s strong presence in the DPC hospital segment, through its line of injectable products, is an ideal fit with our existing oral business portfolio in the country. The acquisition will not only strengthen our presence in Japan, but also provide for a stronger footprint in this priority market.”

Dabur's Burmans buy stake in Espirito Santo's India unit

Mumbai: The Burman family, promoter of Dabur India, has picked up a stake in Portuguese company Espírito Santo’s Indian unit, marking its entry into the investment banking and stock broking businesses. Espirito Santo Investment Bank said on Tuesday it had entered into a joint venture (JV) with the Burman family, which would operate under its unit, Espírito Santo Securities. The JV will incorporate Espirito Santo’s Indian team, which provides equity research to asset management institutions investing in the country. “With the Burman Family, a broader, stronger business can be developed, extending the brokerage capability initially, and extending the investment banking proposition for clients over time,” Espirito Santo said in a statement. The Burmans picked up less than 26 per cent in Espírito Santo Securities (India), according to two persons familiar with the development. “We look forward to building a great business together,” said Mohit Burman, director at Dabur India, in a statement. The Burman family owns 68 per cent in consumer products maker Dabur India. Mohit Burman holds a 74 per cent stake in his individual capacity in Aviva Life, while the rest is held by the UK’s Aviva. He also holds a 10 per cent stake in Universal Sompo General Insurance Co. He had also acquired nearly 14 per cent in Punjab Tractors. Lisbon-based Espirito Santo is the investment banking arm of Banco Espirito Santo SA, Portugal’s largest publicly traded bank. The firm is a strong player in its home markets of Iberia and the UK. “Espírito Santo is delighted to work alongside such a highly respected local promoter family as the Burmans, with shared values and long-term commitment to India, and to building a successful investment banking business here,” Jose Maria Espirito Santo Ricciardi, CEO of Espirito Santo Investment Bank, said in a statement. Last year, Espirito Santo had bought a majority stake in UK Securities firm Execution Noble, which had set up shop in India in May 2008. The Portuguese firm has a team of 30 employees in India.

Titan acquires Swiss brand Favre Leuba

Bangalore: Titan Industries Ltd has acquired global rights to the trademarks of Swiss watch brand Favre Leuba. Mr Bhaskar Bhat, Managing Director, Titan Industries Ltd, told Business Line, that the “high end of the watch market was growing in India and this acquisition will give us an opportunity to tap that market.” The Indian watch giant has, in a filing to the BSE, said that the company signed a binding offer on November 16, 2011, with Valfamily S. L., Spain and Maison Favre Leuba, S.A Switzerland, for the acquisition of brand Favre Leuba. This acquisition is being pursued on an asset purchase mode, for a sum under €2 million (Rs 13.8 crore), the BSE notification said. “The strategic rationale behind the above acquisition is to complement and strengthen the existing watches brand portfolio of the company with a Swiss heritage brand,” according to the company. Favre Leuba was created in Switzerland in 1737. The Swiss brand will straddle both the Titan and Xylys brands. The latter is a ‘Swiss-made' brand from the Titan portfolio. Premium watch category A Titan official said the premium watch category has been growing the fastest at 25-30 per cent annually and is around 15 per cent of the Rs 4,000 crore organised watch market. Favre Leuba will allow Titan to have a premium offering now in the high-end watch market. While it can parlay the brand in the Indian market, it will also look at re-launching the brand in other markets as Titan has acquired the global rights for the Favre Leuba brand. The acquisition will give it access to technology to make high-end mechanical watches which are in vogue now. Titan had entered the European market in the late '90s under its own brand but the foray was not successful. Revenues Titan Industries reported revenues of Rs 6,533 crore, while PAT stood at Rs 433 crore in FY11. The scrip gained 2.9 per cent to close at Rs 211.90 on the BSE. Trading volumes surged to 6.57 lakh shares against a two-week average of 4.12 lakh shares

Tractor ancillaries upbeat about growth prospects

Chandigarh: Will expand capacity on the back of robust demand in the domestic market. Over 300 tractor ancillaries situated in the northern region (comprising Chandigarh, Punjab, Haryana and Himachal Pradesh) are upbeat, because the robust demand for tractors in the domestic market is translating into growing demand for the components that they supply to tractor makers. The tractor industry, which is witnessing double-digit growth, is expanding capacity. This has provided an opportunity for the region’s tractor component suppliers, which are mostly SMEs, to cash in on the growing demand. Domestic tractor sales, which totalled around 480,000 units in 2010-11, are expected to grow by 18 per cent to around 565,000 units in the current fiscal year. In the first half of the current year, the industry grew 20 per cent over the year-ago period, selling 265,000 tractors in the domestic market. The northern region houses tractor makers such as International Tractors Ltd (ITL), Mahindra & Mahindra, Indo Farm Tractors, HMT, Escorts and Ace. In order to meet the robust demand, Punjab-based ITL, makers of the Sonalika brand of tractors and the flagship of the Rs 5,000 crore Sonalika group, is planning to ramp up capacity from 60,000 units a year to 100,000 units in the next two years. Similarly, Mahindra & Mahindra’s Mohali plant is expanding capacity to 84,000 units by next year, from 72,000 at present. Gaman Manga, director of Jalandhar-based G D International Private Limited, said, “We are supplying casting items to HMT Tractors. In the past we have also worked with Eicher. Considering the growing demand for tractors, we are also planning to work with Mahindra & Mahindra, and we have plans to expand our casting capacity.” “This is going to be a gateway for rapid growth for our sector,” added a spokeperson of Rayat Spring Ltd, a vendor. A spokesperson of Preet Forging, Manpreet Singh, said, “We are also growing in line with the industry. The current demand has boosted the ancillaries and we have plans to diversify into other products.” Further, in order to attract and help MSMEs, ITL has announced that the company had plans to set up a vendor development park near its plant in Hoshiarpur. It will also provide assistance in terms of technology and technical know-how. The proposed vendor park is likely to benefit key vendors making alloy steel and forging components, fabrication and sheet metal components. Infrastructure development and the mechanisation of agriculture have provided a boost to sales of tractors. Tractor manufacturers are highly dependent on ancillaries for components such as casting components, steering assemblies, gearboxes and brake assemblies.

Employment grew by 2.15 lakh in April-June

New Delhi: Overall employment grew by 2.15 lakh during the April-June 2011 quarter, with most sectors showing an increase except textiles, including apparels, and transport. “An upward trend in employment has been continuously observed since July 2009,” according to the Labour Bureau's quarterly quick estimates to assess the impact of the post-2008 economic slowdown on employment in the country. IT/BPO Sectors Lead The information technology and BPO sectors generated the maximum number of jobs at 1.64 lakh during June over March 2011, followed by 0.53 lakh in metals, 0.18 lakh in automobiles, 0.13 lakh in gems and jewellery, 0.01 lakh in leather and 0.01 lakh in handloom and powerloom sectors. “The maximum increase in overall employment by 1.90 lakh was seen in the direct category of workers as compared to 0.25 lakh in the contract category,” states a Ministry release. In export-oriented units, employment at the overall level rose by 0.67 lakh, while in non-exporting units, it increased by 1.48 lakh during June 2011 over March. However, compared with the last four quarterly surveys during 2010-11 (June 2011 over June 2010), overall employment increased by 10.31 lakh, with highest rise in IT/BPO (7 lakh) followed by 1.31 lakh in textiles, including apparels, 0.96 lakh in metals, 0.78 lakh in automobiles, 0.16 lakh in transport and 0.13 lakh in leather. The Labour Bureau surveyed 2,289 units and establishments spread across 11 States and Union Territories.

India IT spending will grow 9.1% next year: Gartner

Mumbai: Despite the global economic challenges, IT spending in India by enterprises will increase by 9.1 per cent in 2012, according to a report from research firm Gartner. IT spending in India is projected to total $79.8 billion in 2012, against $73.1 billion in 2011. And this is being attributed to the fast paced growth in India's burgeoning telecommunications space and the growing adoption of devices such as smart-phones and tablet computers, especially in tier-2 and tier-3 cities, a Gartner analyst said. “A lot of new IT infrastructure is being bought in tier-2 and tier-3 cities both in the enterprise and retail segments…moreover, the 2G spectrum scam has not had any sizeable impact on IT spending in the space,” he added. Largest segment The telecommunications market is the largest IT segment in India with IT spending forecast to reach $54.7 billion in 2012, followed by the IT services market with spending of $11.1 billion. The computing hardware market in India is projected to reach $10.7 billion in 2012, while software spending will total $3.2 billion, Gartner said. It may be recalled that the Telecom Regulatory Authority of India has pegged India's mobile teledensity at 72.12 per cent or 86.57 crore wireless subscribers as of August. According to Gartner, worldwide IT spending will reach nearly $3.7 trillion by current year end. Of this, emerging economies such as India, China, Brazil and others will account for $1.013 trillion. Speaking at the inaugural Gartner Symposium here in Mumbai, Mr Peter Sondergaard, Senior Vice-President at Gartner, said two-thirds of Chief Executive Officers surveyed by Gartner believe that IT's contribution to their industry in the next 10 years will be greater than in any prior decades. “IT is a primary driver of business growth. For example, this year 350 companies will each invest more than $1 billion in IT. They are doing this because IT impacts their business performance,” said Mr Sondergaard. Three ‘forces' Going forward, Gartner has identified three ‘forces', namely cloud computing, social media computing and information explosion that will change the way businesses will be conducted going forward. “The impact of these forces will make architectures of the last 20 years obsolete… Together, they force the issue – they drive us to create the post-modern business, drive simplicity and force creative destruction,” Mr Sondergaard said.

Footwear industry doubles to Rs 20,000 crore in 5 years as Indians go on a shopping spree

Bangalore/Kolkata: Madhu Malhotra could not believe her luck when she chanced upon a pink and white pair of heels that had an uncanny resemblance to her pinkembroidered white kurta at DB Mall in Bhopal last Thursday. The missionary school teacher also scooped up a pair of maroon flats that day to go with her jeans on weekends, increasing her shoe count to 35 pairs. "People have a tendency to buy only on Diwali, but I buy through the year," the 58-year-old giggles, having bought a pair of gladiator flats on a recent holiday to Mumbai. She is not an exception. Many Indian consumers now spend as much on footwear as on apparel and change their shoes for different occasions, helping expand footwear range from formals, casuals and home wear to weddings, monsoons, clubwear, sportswear, adventure, beachwear and lounge wear. They have also helped the footwear industry almost double in the past five years to an estimated Rs 20,000 crore and prompted retailers to widen their footprint with some urgency. Here is an industry where everybody is in a rush and nobody talks slowdown, which is being felt in most areas of the economy. Harkirat Singh, managing director of the Rs 600-crore Woodland, says the industry is not feeling any impact of slowdown due to a number of external triggers that include more women joining the workforce, an increasing desire to look good and rise in consumers' aspiration levels. "All these are pushing shoe retailing to newer heights," says Singh. Big retailers such as Bata, Liberty and Reliance Footprint are adding nearly two stores a week and opening large-format outlets in smaller cities. Footwear Shopping Has Increased The country's largest shoe retailer Bata India's group MD Rajeev Gopalakrishnan says increasing competition is forcing the companies to refresh their collection at a faster rate than before. Industry insiders say the frequency of footwear shopping has increased dramatically. While men buy a pair of shoes every quarter, women do it faster, every two months. "With fast-changing fashion, customers prefer to update shoes and accessories whenever they update their wardrobe with new apparel," says Kabir Lumba, MD of department store chain Lifestyle International, which has reported 50% year-onyear growth in the footwear segment since 2008. While women may labour over design, colour and heel sizes ranging from ballerina flats to kitten heels, wedges and stilettos, men sweat over anti-skid, biodegradable and waterproof materials. And a lot of customers are now more concerned about the looks than comfort and durability, says Jacob John, brand head of apparel brand Louis Philippe, which entered the footwear market last year. Footwear accounts for 10% of Louis Philippe's revenues. The fashion brand owned by Madura Fashion & Lifestyle recently opened a pure play men's footwear store in Pune. Anupam Bansal, MD of Liberty Retail Revolutions, says Indians now spend 8-10% of their income on footwear and accessories. Shailen Amin, CEO of multi-brand shoe portal Be Stylish, says young professionals crossing over from the unorganised segment to branded footwear are driving the growth. Luxury On Foot The organised footwear market is estimated at Rs 17,500-20,000 crore, growing at 10-15% a year, although top companies independently claim to be growing at 25-30%. The men's segment accounts for nearly 60% of the market, with leather products dominating. But women and children's segments are growing faster, making many retailers step into this market. Demand is growing in smaller cities such as Sangli, Dehradun, Bathinda and Patiala. The luxury segment too is growing rapidly. Luxury brand Jimmy Choo, popular for its Swarovski-encrusted heels retailing at over Rs 1 lakh, grew 30% year-onyear in 2010-11 and has opened five stores in the past three years. "Earlier, new, aspirational consumers entered the designer segment through handbags. But in many cases, shoes are becoming an entry point today," says Deepika Gehani, creative head of Genesis Luxury, which has brought Jimmy Choo to India. Anand Ramanathan, associate director at management consultancy KPMG, says that although it's driven by fashion trends, the footwear industry is comparatively less risky than the apparel business. "Not only is the ticket size of footwear much higher per sq ft but the exposure to market changes is also lower because the product does not expire as fast," he says. While Reliance Footprint and Liberty say sports and casual wear are the fastest growing, a loyal franchise for men's office wear brand Hush Puppies has prompted Bata to open 11 standalone outlets for the brand. Retailers are highly sensitive to regional preferences too. "If twoinch heels click in Kolkata, women in Bangalore prefer three-inch heels," says Rafique Malik, MD of Metro Shoes, which also owns the brand Mochi. "While vibrant colours must be stocked in Punjab, Tamil Nadu is the only market where white men's shoes sell through the year," he says.

Cabinet approves 51 per cent FDI in multi-brand retail

New Delhi: The Cabinet finally paved way for the entry of global retail majors like Wal-Mart, Tesco and Carrefour to open independent multi-brand retail outlets in India. The Cabinet has permitted foreign direct investment (FDI) of up to 51 per cent in multi-brand retail. Simultaneously, the Cabinet also gave the nod for raising the FDI limit in single-brand retail ventures to 100 per cent. The policy will allow multi-brand foreign retailers to open outlets only in cities which have a population of more than 1,000,000 as per the 2011 Census. At present, there are 55 such cities which would help big retail chains to move beyond the metros to smaller cities. The clearance comes with several conditions attached to it. Foreign investors will be required to invest up 50 per cent of total FDI in back-end infrastructure. Such infrastructure will include capital expenditure on all activities, excluding that on front-end units. Expenditure on land cost and rentals will not be counted for purpose of back-end infrastructure. Moreover, retailers will need to source at least 30 per cent of manufactured/processed products from small industries. However, there will not be any obligation on the part of retailers to source agricultural produce such as fruits and vegetables. The Government of India has also retained the first right on sourcing agricultural produce. It makes 30 per cent sourcing from small and medium enterprises mandatory, as soon as the FDI limit exceeds 51 per cent. Opening up of FDI in multi-brand retail trade and further liberalisation of single-brand retail trade, as per the Government, will facilitate greater FDI inflows besides additional and quality employment.