MUMBAI: Ramky Infrastructure Thursday said it has bagged two road projects worth Rs.2,240.65 crore from the National Highways Authority of India (NHAI).
The first project is for six-laning of the Agra-Etawah bypass section of National Highway (NH)-2 under the National Highways Development Project (NHDP) Phase V in Uttar Pradesh, the company said in a regulatory filing.
The second project is for four-laning of the Hospet-Chitradurga section of NH-3 in Karnataka under NHDP Phase III, it added.
The estimated costs of the projects are Rs.1,207.00 crore and Rs.1,033.65 crore, respectively. The concession period for the first project is 30 years and for the second 25 years. Both the projects include a construction period of 910 days each.
At the Bombay Stock Exchange, the shares of the company closed 4.75 per cent up at Rs.215.
Success in my Habit
Sunday, December 4, 2011
FDI breathes new life into shelved projects of DLF, Unitech, Oberoi Realty and others
NEW DELHI: Despite intensifying political opposition in several states to the centre's nod to foreign direct investment in multi-brand retail, real estate developers are gearing up to fast-track their investments in shopping malls.
India's largest real estate developer DLF is re-evaluating its plan to build 4.5 million sq ft Mall of India in Gurgaon, a project that it had shelved following the global economic meltdown in 2008.
Similarly, other real estate developers are also looking to cater to demand from foreign retailers that have been waiting to set up shop in India. According to global consultancy Ernst &Young, the Indian retail market is expected to grow from $400 billion in 2010 to $700 billion by 2015.
With the easing of FDI norms, analysts expect the share of organised retail to rise from the current 5%-6% to about 10% over the next five years, spelling opportunity for real estate developers. DLF is planning to invest close toRs 2,500 crore over five years to develop malls across the country.
It is also planning retail complexes in its residential and commercial properties in Kolkata, Bangalore, Kochi, Goa, Chennai and Hyderabad. Unitech has lined up an investment of Rs 4,000 crore over the next four years to develop 13 malls across the country. "The demand for quality retail real estate will certainly grow as more and more players will invest in this sector," said Munish Baldev, the company's retail head.
"Mall development is very capital-intensive and companies with a strong balance sheet will be able to take advantage of the situation," said Vikas Oberoi, managing director of Mumbai-based Oberoi Realty, the only real estate developer which has a debt-free balance sheet with Rs 1,400 crore cash in hand. Bangalore-based Nitesh Estates recently started construction activity for its 1.3 million sq ft mall in the city centre in anticipation of the opening up of FDI, said managing director Nitesh Shetty.
The company will invest Rs 1,500 crore over the next three years to develop malls in Kochi and Chennai, along with Bangalore. "When foreign players come in, we will be able to fill up a large mall better. Today it doesn't make sense to make a big mall," said Kishore Bhatija, director and chief executive officer of Inorbit Malls, a part of Mumbai-based real estate developer K Raheja Corp.
India's largest real estate developer DLF is re-evaluating its plan to build 4.5 million sq ft Mall of India in Gurgaon, a project that it had shelved following the global economic meltdown in 2008.
Similarly, other real estate developers are also looking to cater to demand from foreign retailers that have been waiting to set up shop in India. According to global consultancy Ernst &Young, the Indian retail market is expected to grow from $400 billion in 2010 to $700 billion by 2015.
With the easing of FDI norms, analysts expect the share of organised retail to rise from the current 5%-6% to about 10% over the next five years, spelling opportunity for real estate developers. DLF is planning to invest close toRs 2,500 crore over five years to develop malls across the country.
It is also planning retail complexes in its residential and commercial properties in Kolkata, Bangalore, Kochi, Goa, Chennai and Hyderabad. Unitech has lined up an investment of Rs 4,000 crore over the next four years to develop 13 malls across the country. "The demand for quality retail real estate will certainly grow as more and more players will invest in this sector," said Munish Baldev, the company's retail head.
"Mall development is very capital-intensive and companies with a strong balance sheet will be able to take advantage of the situation," said Vikas Oberoi, managing director of Mumbai-based Oberoi Realty, the only real estate developer which has a debt-free balance sheet with Rs 1,400 crore cash in hand. Bangalore-based Nitesh Estates recently started construction activity for its 1.3 million sq ft mall in the city centre in anticipation of the opening up of FDI, said managing director Nitesh Shetty.
The company will invest Rs 1,500 crore over the next three years to develop malls in Kochi and Chennai, along with Bangalore. "When foreign players come in, we will be able to fill up a large mall better. Today it doesn't make sense to make a big mall," said Kishore Bhatija, director and chief executive officer of Inorbit Malls, a part of Mumbai-based real estate developer K Raheja Corp.
Escorts Construction Equipment eyes land in Gujarat and MP for manufacturing unit
BANGALORE: Escorts Construction Equipment (ECEL), the fully owned equipment arm of the Rs 3,000-crore Escorts Group, is in talks with the governments of Gujarat and Madhya Pradesh to acquire land for a manufacturing unit.
Escorts will manufacture cranes, backhoe loaders and excavators at the proposed plant, which will have an installed capacity of 50,000 units. The company refused to share investment details but industry sources said Escorts will invest over Rs 5,000 crore.
Madhya Pradesh is currently the frontrunner for the proposed plant, a company executive said on condition of anonymity. Escorts has zeroed in on the two states because of logistical convenience, huge vendor base and availability of huge land parcel.
"We will require 40 acres of land and are currently negotiating with state governments. The decision will depend on the facilities the state governments offer," said Rajesh Sharma, vice-president, sales and marketing, ECEL. Gujarat and Madhya Pradesh are fast emerging as the favoured investment destination for corporates because of their tax regime and cheap labour. Gujarat has already attracted investments from domestic and foreign automakers.
While Ford and Peugeot have decided to set up manufacturing plants in Sanand, Maruti Suzuki has finalised a deal with the state government to set up aRs 18,000-crore manufacturing facility after production at its Manesar plant in Haryana was hit by a series of labour strikes.
In 2008, Tata Motors moved its production of 'Nano', the world's cheapest car, to Gujarat from West Bengal where it was facing stiff resistance from farmers. In a recent report on India's manufacturing sector, property consultancy firm Knight Frank India said that Gujarat's manufacturing sector is growing at 30% annually and has gained traction from corporates due to faster project clearances.
Separately, the company is also doubling its manufacturing facility at Ballabhgarh, Haryana. "We are operating at full capacity and is de bottling the plant to take up the production capacity to 12,000 units by 2012," Sharma said.
Escorts will manufacture cranes, backhoe loaders and excavators at the proposed plant, which will have an installed capacity of 50,000 units. The company refused to share investment details but industry sources said Escorts will invest over Rs 5,000 crore.
Madhya Pradesh is currently the frontrunner for the proposed plant, a company executive said on condition of anonymity. Escorts has zeroed in on the two states because of logistical convenience, huge vendor base and availability of huge land parcel.
"We will require 40 acres of land and are currently negotiating with state governments. The decision will depend on the facilities the state governments offer," said Rajesh Sharma, vice-president, sales and marketing, ECEL. Gujarat and Madhya Pradesh are fast emerging as the favoured investment destination for corporates because of their tax regime and cheap labour. Gujarat has already attracted investments from domestic and foreign automakers.
While Ford and Peugeot have decided to set up manufacturing plants in Sanand, Maruti Suzuki has finalised a deal with the state government to set up aRs 18,000-crore manufacturing facility after production at its Manesar plant in Haryana was hit by a series of labour strikes.
In 2008, Tata Motors moved its production of 'Nano', the world's cheapest car, to Gujarat from West Bengal where it was facing stiff resistance from farmers. In a recent report on India's manufacturing sector, property consultancy firm Knight Frank India said that Gujarat's manufacturing sector is growing at 30% annually and has gained traction from corporates due to faster project clearances.
Separately, the company is also doubling its manufacturing facility at Ballabhgarh, Haryana. "We are operating at full capacity and is de bottling the plant to take up the production capacity to 12,000 units by 2012," Sharma said.
Government wants fresh estimate of RIL's KG-D 6 reserves
NEW DELHI: The oil ministry has asked Reliance Industries ( RIL) to prepare a fresh estimate of gas reserves in satellite fields of the KG-D 6 block and submit a cost assessment for developing the new discoveries, further delaying the $1.5-billion plan to raise gas output by 10 million cubic metres a day.
The proposal, which is awaiting government approval for two years, was discussed on Friday by the block's managing committee comprising oil ministry officials and executives of global oil major BP and Reliance Industries, government and industry officials said.
The relationship between Reliance and the oil ministry has deteriorated after the company slapped an arbitration notice on the government after Petroleum Secretary GC Chaturvedi publicly stated that the ministry may revise the production-sharing contract to penalize Reliance for falling output from the block.
The director general of hydrocarbons SK Srivastava and the oil ministry's joint-secretary for exploration D Narsimha Raju did not attend the three-hour meeting of the management committee. They were represented by their juniors, officials said, adding that the minutes of previous meetings had not been signed.
Sources close to the development said the government sought a fresh estimate because Reliance's proposal was based on prices prevailing in 2008 and officials wanted to prevent a cost review after approval. The development cost in the existing gas field in the block was reviewed, triggering strong comments from the Comptroller and Auditor General.
"After the current controversy over cost escalation and CAG's comments, we want to make sure that estimates of cost and gas reserves are accurate," an official at the directorate general of hydrocarbons (DGH) said. The management committee has asked Reliance to conduct fresh seabed surveys, which the company estimates would cost $30 million, an executive said.
This was expected be on the agenda of the next meeting of the committee, he said. Gas output from the D6 block has fallen to about 42 mmscmd against the target of 80 mmscmd, creating a severe shortage of gas for power, fertilizer and other units, which are being forced to import costly LNG.
The proposal, which is awaiting government approval for two years, was discussed on Friday by the block's managing committee comprising oil ministry officials and executives of global oil major BP and Reliance Industries, government and industry officials said.
The relationship between Reliance and the oil ministry has deteriorated after the company slapped an arbitration notice on the government after Petroleum Secretary GC Chaturvedi publicly stated that the ministry may revise the production-sharing contract to penalize Reliance for falling output from the block.
The director general of hydrocarbons SK Srivastava and the oil ministry's joint-secretary for exploration D Narsimha Raju did not attend the three-hour meeting of the management committee. They were represented by their juniors, officials said, adding that the minutes of previous meetings had not been signed.
Sources close to the development said the government sought a fresh estimate because Reliance's proposal was based on prices prevailing in 2008 and officials wanted to prevent a cost review after approval. The development cost in the existing gas field in the block was reviewed, triggering strong comments from the Comptroller and Auditor General.
"After the current controversy over cost escalation and CAG's comments, we want to make sure that estimates of cost and gas reserves are accurate," an official at the directorate general of hydrocarbons (DGH) said. The management committee has asked Reliance to conduct fresh seabed surveys, which the company estimates would cost $30 million, an executive said.
This was expected be on the agenda of the next meeting of the committee, he said. Gas output from the D6 block has fallen to about 42 mmscmd against the target of 80 mmscmd, creating a severe shortage of gas for power, fertilizer and other units, which are being forced to import costly LNG.
ONGC Videsh faces Syria shutdown after European Union blacklist
NEW DELHI: ONGC Videsh, the overseas investment arm of state-run Oil and Natural Gas Corporation, faces the prospect of a near-shutdown of crude production from its field in Syria after the European Union late on Friday night blacklisted that country's oil companies to isolate President Bashar al-Assad's government.
ONGC Videsh is a 33% partner in the Al Furat Petroleum Company, a joint venture that pumps oil from the Al-Furat project and has state-owned General Petroleum Company, which has been blacklisted along with Syria Trading Oil. Agency reports from Brussels quoted Shell as saying the Anglo-Dutch major "will cease activities" in Syria. But ONGC Videsh sources here said that it may be Shell's views and the consortium was seeking legal opinion and examining "all available options".
Along with Shell, ONGC Videsh has China National Petroleum Company and Syrian Petroleum Company as partners. The project has had to reduce production from 82,000 bpd (barrels per day) to 70,500 bpd since September due to problems in finding enough number of ships to carry the crude. The Syrian government had asked all operators in the country to cut production after the initial sanctions since evacuation of crude became difficult as most of the tankers were registered either in Europe or the US.
This is the second time that operations of Indian oil companies are being affected by Western sanctions against various regimes. Earlier, Indian refiners could not make payments for crude after the RBI scrapped a regional clearing mechanism to avoid US sanctions on Teheran affecting other transactions. The payments remained stuck for almost a year since the sanctions also blocked transaction gateways through European banks. Dues were recently cleared through a Turkish bank.
US sanctions have also forced India to pussyfoot discussions on the proposal to lay a $10-billion pipeline to wheel gas from Iran through Pakistan as Indian companies investing such massive amounts would automatically be blacklisted. Friday's sanctions listings of Syrian oil companies are part of a concerted push by Europe, the US and the Arab League to intensify pressure on Assad in response to continued state-sponsored violence against protesters. The United Nations estimates 4,000 people have been killed since March in the unrest.
ONGC Videsh is a 33% partner in the Al Furat Petroleum Company, a joint venture that pumps oil from the Al-Furat project and has state-owned General Petroleum Company, which has been blacklisted along with Syria Trading Oil. Agency reports from Brussels quoted Shell as saying the Anglo-Dutch major "will cease activities" in Syria. But ONGC Videsh sources here said that it may be Shell's views and the consortium was seeking legal opinion and examining "all available options".
Along with Shell, ONGC Videsh has China National Petroleum Company and Syrian Petroleum Company as partners. The project has had to reduce production from 82,000 bpd (barrels per day) to 70,500 bpd since September due to problems in finding enough number of ships to carry the crude. The Syrian government had asked all operators in the country to cut production after the initial sanctions since evacuation of crude became difficult as most of the tankers were registered either in Europe or the US.
This is the second time that operations of Indian oil companies are being affected by Western sanctions against various regimes. Earlier, Indian refiners could not make payments for crude after the RBI scrapped a regional clearing mechanism to avoid US sanctions on Teheran affecting other transactions. The payments remained stuck for almost a year since the sanctions also blocked transaction gateways through European banks. Dues were recently cleared through a Turkish bank.
US sanctions have also forced India to pussyfoot discussions on the proposal to lay a $10-billion pipeline to wheel gas from Iran through Pakistan as Indian companies investing such massive amounts would automatically be blacklisted. Friday's sanctions listings of Syrian oil companies are part of a concerted push by Europe, the US and the Arab League to intensify pressure on Assad in response to continued state-sponsored violence against protesters. The United Nations estimates 4,000 people have been killed since March in the unrest.
After ITC closure, Manipal Group warns service halt in Nepal
KATHMANDU: A month after Indian tobacco giant ITC's joint venture in Nepal shut down its garment factory due to workers' militancy, now it is the turn of the Manipal Group, one of the single largest Indian investors in Nepal, to warn that it could suspend its hospital services in view of continued disruptions.
The Manipal College of Medical Sciences run by the Manipal Group in Pokhara city in central Nepal has run into fresh trouble since Sunday with a group of junior Nepali doctors going on strike, alleging discrimination between the pays of local and expatriate doctors.
The strikers refused to attend a meeting called in Kathmandu Monday with the medical regulatory body, Nepal Medical Council, as well as the management and Nepal Medical Association.
The college also runs a 700-bed teaching hospital and despite the strike, the authorities have continued to provide services to patients.
"However, if this continues, I have informed the chief district officer that we will be forced to suspend hospital services," said B.M. Nagpal, dean of the college.
Soon after its inauguration in 1994, the college and hospital has been facing union unrest, illegal strikes and an adverse media campaign.
"The allegations that there is a pay disparity between Indian and Nepali doctors are false," Nagpal said. "We are a business organisation. Why should we employ doctors from outside at a higher pay?"
However, Nepal is still unable to provide the number of senior doctors and specialists whose presence is mandated by the regulator.
"Till that is rectified, we have to get doctors from India," Nagpal said. "And if you get them from outside, you have to pay them an expatriate allowance to cope with additional expenses in a new country. That is the universal accepted norm."
All multinational organisations follow the principle, including the UN and European Union and even the Kendriya Vidyalaya run by the Indian government in Kathmandu.
However, Manipal is being targeted for a smear campaign that says the organisation discriminates against Nepali doctors.
"The strikers are saying expatriates receive higher pay, giving the examples of doctors who were brought from India on contract," Nagpal said. "A contract is not the same as employment. If you don't get the specialists and senior doctors you need in Nepal, you have to get them from outside. And for that, you have to pay them more."
Nagpal points out that Manipal has been grooming its students, training them and absorbing them. Currently, there are 120 faculty members out of whom 52 are from Nepal.
Hospital sources say the strikers have been abetted by the Maoist trade union. In the past, the union triggered cut-throat rivalry among the other trade unions at Manipal, causing frequent illegal strikes demanding pay raises in contravention of agreements signed with the management.
Some of the local doctors have been running private practices in violation of their service agreement and in spite of drawing a non-practice allowance.
The Manipal crisis comes after ITC's joint venture, Surya Nepal, the republic's biggest tax payer, was forced last month to shut down its garment factory in eastern Nepal that produced ITC's John Players and Springwood brands of clothing.
The closure came after militant workers, mostly women, vandalised the state of the art factory and took management staff captive, holding them without food and water for 24 hours.
The Manipal College of Medical Sciences run by the Manipal Group in Pokhara city in central Nepal has run into fresh trouble since Sunday with a group of junior Nepali doctors going on strike, alleging discrimination between the pays of local and expatriate doctors.
The strikers refused to attend a meeting called in Kathmandu Monday with the medical regulatory body, Nepal Medical Council, as well as the management and Nepal Medical Association.
The college also runs a 700-bed teaching hospital and despite the strike, the authorities have continued to provide services to patients.
"However, if this continues, I have informed the chief district officer that we will be forced to suspend hospital services," said B.M. Nagpal, dean of the college.
Soon after its inauguration in 1994, the college and hospital has been facing union unrest, illegal strikes and an adverse media campaign.
"The allegations that there is a pay disparity between Indian and Nepali doctors are false," Nagpal said. "We are a business organisation. Why should we employ doctors from outside at a higher pay?"
However, Nepal is still unable to provide the number of senior doctors and specialists whose presence is mandated by the regulator.
"Till that is rectified, we have to get doctors from India," Nagpal said. "And if you get them from outside, you have to pay them an expatriate allowance to cope with additional expenses in a new country. That is the universal accepted norm."
All multinational organisations follow the principle, including the UN and European Union and even the Kendriya Vidyalaya run by the Indian government in Kathmandu.
However, Manipal is being targeted for a smear campaign that says the organisation discriminates against Nepali doctors.
"The strikers are saying expatriates receive higher pay, giving the examples of doctors who were brought from India on contract," Nagpal said. "A contract is not the same as employment. If you don't get the specialists and senior doctors you need in Nepal, you have to get them from outside. And for that, you have to pay them more."
Nagpal points out that Manipal has been grooming its students, training them and absorbing them. Currently, there are 120 faculty members out of whom 52 are from Nepal.
Hospital sources say the strikers have been abetted by the Maoist trade union. In the past, the union triggered cut-throat rivalry among the other trade unions at Manipal, causing frequent illegal strikes demanding pay raises in contravention of agreements signed with the management.
Some of the local doctors have been running private practices in violation of their service agreement and in spite of drawing a non-practice allowance.
The Manipal crisis comes after ITC's joint venture, Surya Nepal, the republic's biggest tax payer, was forced last month to shut down its garment factory in eastern Nepal that produced ITC's John Players and Springwood brands of clothing.
The closure came after militant workers, mostly women, vandalised the state of the art factory and took management staff captive, holding them without food and water for 24 hours.
China would buy large quantity of tobacco from India:Kamalvardhan Rao
GUNTUR: Tobacco Board chairman Kamalvardhan Rao on Tuesday exuded confidence that China would buy a large quantity of the commodity from India.
Addressing mediapersons after his three-day extensive tour of China, Rao said he was happy that China was showing interest in Indian tobacco.
China, which produced 2,300 million kgs of tobacco, needs more of the commodity for internal consumption and Indian tobacco mixes well with their tobacco, he said.
"That is why China prefers Indian tobacco," he said adding, that a Chinese trade delegation would visit India in a couple of months.
Rao said though India exported 800 million kgs of tobacco valued at Rs 4,400 crore in 2010-2011, this year there may be slight decline in the exports.
Addressing mediapersons after his three-day extensive tour of China, Rao said he was happy that China was showing interest in Indian tobacco.
China, which produced 2,300 million kgs of tobacco, needs more of the commodity for internal consumption and Indian tobacco mixes well with their tobacco, he said.
"That is why China prefers Indian tobacco," he said adding, that a Chinese trade delegation would visit India in a couple of months.
Rao said though India exported 800 million kgs of tobacco valued at Rs 4,400 crore in 2010-2011, this year there may be slight decline in the exports.
Topsgrup eyes Rs 1,500 cr revenue in FY12
MUMBAI: Security solutions provider Topsgrup is eyeing over 62 percent revenue growth at Rs 1,500 crore and is planning to enter the capital market by mid next year to raise Rs 300 crore, a top company executive has said.
"We are the largest security solutions provider in the country and are planning to further strengthen our presence further. We are also planning to hit the capital market by mid next year to raise around Rs 300 crore to fund our expansion," company Global Chairman Diwan Rahul Nanda told PTI here.
Topsgrup, which employs 93,000 people from 120 offices pan India, reported a revenue of Rs 925 crore, he said, adding the company has about 8,000 customers.
"We are planning to hire another 30,000 employees in next three years," Nanda said.
Topsgrup has 11 training centres, including two in the UK, where the company gives training to its workforce.
"We also have a strategic tie-up with the Ministry of Rural Development to train rural youth living below the poverty line across the country to enable them to earn their livelihood," he said.
The company, which forayed into the UK in 2008, is currently focused on domestic expansion, he said.
"Besides strengthening our existing presence through more acquisitions we are also looking into rural penetration as the opportunities there are growing," he said.
In May 2008, Topsgrup became the first Indian security company to foray into the UK by acquiring majority stake in the security company, The Shield Guarding Company.
"We are the largest security solutions provider in the country and are planning to further strengthen our presence further. We are also planning to hit the capital market by mid next year to raise around Rs 300 crore to fund our expansion," company Global Chairman Diwan Rahul Nanda told PTI here.
Topsgrup, which employs 93,000 people from 120 offices pan India, reported a revenue of Rs 925 crore, he said, adding the company has about 8,000 customers.
"We are planning to hire another 30,000 employees in next three years," Nanda said.
Topsgrup has 11 training centres, including two in the UK, where the company gives training to its workforce.
"We also have a strategic tie-up with the Ministry of Rural Development to train rural youth living below the poverty line across the country to enable them to earn their livelihood," he said.
The company, which forayed into the UK in 2008, is currently focused on domestic expansion, he said.
"Besides strengthening our existing presence through more acquisitions we are also looking into rural penetration as the opportunities there are growing," he said.
In May 2008, Topsgrup became the first Indian security company to foray into the UK by acquiring majority stake in the security company, The Shield Guarding Company.
Minus Ericsson, Sony to only make smartphones
MUMBAI: Sony Corp is all set to rebrand its mobile phones post the acquisition of Ericsson's share in the ten-year-old joint venture-Sony Ericsson. Asenior executive from the Japanese conglomerate, which also makes PlayStation video game consoles and Bravia TVs, said by mid next year, the Sony Ericsson brand will be phased out even as it looks to become a complete smartphone company. It would then sell its smartphones under the Sony brand.
The mobile handset maker, famous for its Walkman series phones, has been left behind in the race for market share in the last few years but is now banking on the Android-based smartphone segment to give it anew lease of life. Indian operations of Sony Ericsson will also follow the global strategy and by next year become a pure play smartphone brand as its line of feature phones makes an exit, said Kristian Tear, executive VP & head of sales & marketing, Sony Ericsson , while talking exclusively to TOI.
"A lot of planning goes into getting the branding right but we will be done by middle of next year. It will also mean that the marketing and advertising investments will go up. We haven't been as fierce as we were a few years back but we will step it up, refocus and invest more in brand-building in select markets and India is one of those markets," Tear added.
Sony Ericsson, which currently has about a 2% market share globally of the mobile handset market, underwent a management change about two years ago, got rid off the Symbian operating system in lieu of Google's Android and made the decision to focus only on the smartphone segment as losses mounted for the company . The Android platform, dominated by Samsung, now accounts for more than 50% of the overall smartphone market , according to Gartner, while Apple's iPhone has been the other big non-Android player in the overall smartphone category.
With full control of the company, the mobile phone maker is now looking to leverage more from its parent to help it bounce back. "Sony is the world's biggest entertainment company. We were earlier a 50-50 JV, but now that we are a wholly-owned subsidiary of Sony Corp. We expect to gain from its assets on the content , technology and brand side," he added.
The euro 6.2 billion Sony Ericsson will also integrate in some way at the sales and marketing level with its $86 billion parent company, although, with the acquisition still to get final approval, the process will only start next year, Tear said. Besides, gaining brand equity and assets of its parent, Sony Ericsson, which has 19% and 12% share of the Indian and global Android smartphone market, respectively, will increasingly focus on the valueend of the market.
Some industry watchers said this could mean foregoing a big chunk of the Rs 30,000 crore Indian handset market, still dominated by sub- Rs 3,500 phones. "Smartphone's still account for only about 6% of the overall market as low-cost devices rule majority of the Indian market. Although, the growth is happening rapidly at 30-40 % in the smartphone category it will be a while before we get to the adoption rate of the mature markets," said Anshul Gupta, principal research analyst, Gartner, a global information technology research and advisory firm.
The company is banking on the huge growth potential in the smartphone category to also push its profitability. "Last eight quarters have been good for us and we are proud of that. We went from focusing only on volumes to value but the big setback was what happened in Japan with the Tsunami, which put us back for this year quite a bit. But we are going in the right direction," Tear said. The target is to become the number one Android player in the smartphone segment, he added.
The mobile handset maker, famous for its Walkman series phones, has been left behind in the race for market share in the last few years but is now banking on the Android-based smartphone segment to give it anew lease of life. Indian operations of Sony Ericsson will also follow the global strategy and by next year become a pure play smartphone brand as its line of feature phones makes an exit, said Kristian Tear, executive VP & head of sales & marketing, Sony Ericsson , while talking exclusively to TOI.
"A lot of planning goes into getting the branding right but we will be done by middle of next year. It will also mean that the marketing and advertising investments will go up. We haven't been as fierce as we were a few years back but we will step it up, refocus and invest more in brand-building in select markets and India is one of those markets," Tear added.
Sony Ericsson, which currently has about a 2% market share globally of the mobile handset market, underwent a management change about two years ago, got rid off the Symbian operating system in lieu of Google's Android and made the decision to focus only on the smartphone segment as losses mounted for the company . The Android platform, dominated by Samsung, now accounts for more than 50% of the overall smartphone market , according to Gartner, while Apple's iPhone has been the other big non-Android player in the overall smartphone category.
With full control of the company, the mobile phone maker is now looking to leverage more from its parent to help it bounce back. "Sony is the world's biggest entertainment company. We were earlier a 50-50 JV, but now that we are a wholly-owned subsidiary of Sony Corp. We expect to gain from its assets on the content , technology and brand side," he added.
The euro 6.2 billion Sony Ericsson will also integrate in some way at the sales and marketing level with its $86 billion parent company, although, with the acquisition still to get final approval, the process will only start next year, Tear said. Besides, gaining brand equity and assets of its parent, Sony Ericsson, which has 19% and 12% share of the Indian and global Android smartphone market, respectively, will increasingly focus on the valueend of the market.
Some industry watchers said this could mean foregoing a big chunk of the Rs 30,000 crore Indian handset market, still dominated by sub- Rs 3,500 phones. "Smartphone's still account for only about 6% of the overall market as low-cost devices rule majority of the Indian market. Although, the growth is happening rapidly at 30-40 % in the smartphone category it will be a while before we get to the adoption rate of the mature markets," said Anshul Gupta, principal research analyst, Gartner, a global information technology research and advisory firm.
The company is banking on the huge growth potential in the smartphone category to also push its profitability. "Last eight quarters have been good for us and we are proud of that. We went from focusing only on volumes to value but the big setback was what happened in Japan with the Tsunami, which put us back for this year quite a bit. But we are going in the right direction," Tear said. The target is to become the number one Android player in the smartphone segment, he added.
Dalits venture into funding to help community with Rs 500 crore fund
BANGALORE: India's Dalit businessmen are pooling together risk capital to set up a venture capital fund for their brethren, the first initiative of its kind in the country. The Rs 500-crore fund, being championed by the Dalit Indian Chamber of Commerce and Industry, will be registered with capital market regulator Sebi by the end of the year.
It will open for business in the middle of 2012. The initial corpus for the sector-agnostic fund will come from the community's business elite, a group which includes Ashok Khade, chief executive of the Rs 500-crore Mumbai-based Das Offshore Engineering, and Rajesh Saraiya, chief executive of the $400-million (Rs 2,000-crore) UK-based steel trading firm Steel Mont, who will anchor the fund as Limited Partners, or LPs.
"The current funding mechanisms are largely collateralbased, which means they are out of bounds for a number of Dalit entrepreneurs," said the chamber's Chairman Milind Kamble, explaining the rationale for setting up the fund. Dalits number about 200 million, or one-sixth of India's population, but control only 1% of the country's wealth because they own very few assets, according to D Shyam Babu, a Dalit scholar and activist, who is researching the community's economic progress.
The Dalit business community has traditionally faced major hurdles in accessing capital despite the creation of government institutions such as the National Scheduled Caste Finance and Development Corp. "The amounts disbursed are too small - barely Rs 5 lakh - and even that is doled out in instalments. There is no denying the government programmes are designed to help, but they fall short," Babu said.
The fund will be run as a regular risk capital entity but will need to balance social good with commercial interest as the aim is to broaden the availability of capital for Dalit businessmen. "But this fund is not a charity; it will be run as a business," Kamble said.
Prasad Dahapute, MD at Varhad Capital, a boutique investment banking firm involved in setting up the fund, said they are seeking at least 30 members to contribute Rs 5 crore each. A number of well-known Dalit businessmen have been asked to contribute to the fund and many have agreed, he added.
It will open for business in the middle of 2012. The initial corpus for the sector-agnostic fund will come from the community's business elite, a group which includes Ashok Khade, chief executive of the Rs 500-crore Mumbai-based Das Offshore Engineering, and Rajesh Saraiya, chief executive of the $400-million (Rs 2,000-crore) UK-based steel trading firm Steel Mont, who will anchor the fund as Limited Partners, or LPs.
"The current funding mechanisms are largely collateralbased, which means they are out of bounds for a number of Dalit entrepreneurs," said the chamber's Chairman Milind Kamble, explaining the rationale for setting up the fund. Dalits number about 200 million, or one-sixth of India's population, but control only 1% of the country's wealth because they own very few assets, according to D Shyam Babu, a Dalit scholar and activist, who is researching the community's economic progress.
The Dalit business community has traditionally faced major hurdles in accessing capital despite the creation of government institutions such as the National Scheduled Caste Finance and Development Corp. "The amounts disbursed are too small - barely Rs 5 lakh - and even that is doled out in instalments. There is no denying the government programmes are designed to help, but they fall short," Babu said.
The fund will be run as a regular risk capital entity but will need to balance social good with commercial interest as the aim is to broaden the availability of capital for Dalit businessmen. "But this fund is not a charity; it will be run as a business," Kamble said.
Prasad Dahapute, MD at Varhad Capital, a boutique investment banking firm involved in setting up the fund, said they are seeking at least 30 members to contribute Rs 5 crore each. A number of well-known Dalit businessmen have been asked to contribute to the fund and many have agreed, he added.
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