Chennai: Gamesa Wind Turbines has won an order to supply wind turbines and set up a 50MW wind power project for Green Infra, an independent power producer backed by IDFC Private Equity.
Under this contract, Gamesa would set up 25 units of 2MW turbines at Kosegaon, Maharashtra. The project is scheduled to be complete in two phases. Gamesa would develop the site. It would supply, commission, operate and maintain the turbines for a period of 10 years, a statement from the company said.
"We are happy that Green Infra has joined the customer base of Gamesa India. This business deal comes at a time when the wind industry is poised to bounce back in the light of the government announcing restoration of generation based incentive scheme (GBI)" to the wind industry, Ramesh Kymal, chairman and managing director, Gamesa India, said.
Gamesa recently won orders to set up a 46MW wind power project for ITC Paperboards and Specialty Papers Division and two projects for Greenko and CLP India, totalling 230MW with an option to further supply 200MW to Greenko, and all are set to be commissioned in the first quarter of 2014.
Success in my Habit
Wednesday, December 18, 2013
GDF Suez picks up 74% in Meenakshi Energy project
Hyderabad: French energy company GDF Suez SA has consolidated its India presence with the acquisition of a 74 per cent stake in Meenakshi Energy and Infrastructure Holdings Pvt Ltd.
It is executing a 1,000-MW thermal power plant at Krishnapatnam in Nellore district of Andhra Pradesh.
Meenakshi Energy is part of the Hyderabad-based Meenakshi group, which is into power, infrastructure (roads), special economic zones and property development.
The Group will retain the remaining 26 per cent stake in the project.
The project comprises 300 MW of operational capacity and 700 MW under construction. More than 50 per cent of the work has been completed in the 700-MW portion and is likely to be commissioned by March 2015.
The unit one is based on imported coal and the remaining part of the project has fuel linkage from Mahanadi Coalfields Ltd.
“The Rs 6,000-crore project will see investment of about $400 million to complete,” D. Suresh, Chairman and Managing Director, Meenakshi Energy, told Business Line.
Meanwhile, PTC India Financial Services Ltd (PFS) has divested its entire 16.76 per cent stake in Meenakshi Energy for Rs 209.73 crore. PTC India Ltd is the promoter of PTC India Financial Services, and holds 60 per cent stake in the latter.
R.M. Malla, MD and CEO, said, “We planned this exit keeping in view the right opportunity and the robust return which will augment the company’s net worth. We remain confident of maintaining the pace of growth of our business.”
The proceeds will help strengthen the balance sheet and augment loan book growth.
It is executing a 1,000-MW thermal power plant at Krishnapatnam in Nellore district of Andhra Pradesh.
Meenakshi Energy is part of the Hyderabad-based Meenakshi group, which is into power, infrastructure (roads), special economic zones and property development.
The Group will retain the remaining 26 per cent stake in the project.
The project comprises 300 MW of operational capacity and 700 MW under construction. More than 50 per cent of the work has been completed in the 700-MW portion and is likely to be commissioned by March 2015.
The unit one is based on imported coal and the remaining part of the project has fuel linkage from Mahanadi Coalfields Ltd.
“The Rs 6,000-crore project will see investment of about $400 million to complete,” D. Suresh, Chairman and Managing Director, Meenakshi Energy, told Business Line.
Meanwhile, PTC India Financial Services Ltd (PFS) has divested its entire 16.76 per cent stake in Meenakshi Energy for Rs 209.73 crore. PTC India Ltd is the promoter of PTC India Financial Services, and holds 60 per cent stake in the latter.
R.M. Malla, MD and CEO, said, “We planned this exit keeping in view the right opportunity and the robust return which will augment the company’s net worth. We remain confident of maintaining the pace of growth of our business.”
The proceeds will help strengthen the balance sheet and augment loan book growth.
Tesco to enter Indian retail space through joint venture with Tatas
New Delhi/ Mumbai: Ministers often sound optimistic even when there are no obvious reasons. So, when Commerce & Industry Minister Anand Sharma told a reporter on Monday that the first application from a foreign multi-brand retailing entity would come by the end of this month, there was an air of suspicion, as most experts had ruled out any investment in this sector until after the 2014 elections.
However, Tesco Plc, the British multinational grocery & general merchandise retailer, sprang a surprise on Tuesday by announcing its intention to be the first foreign multi-brand chain to enter the Indian market, a little over a year after the country’s policy on foreign direct investment (FDI) in the segment was relaxed.
Extending its back-end and wholesale support franchise agreement with the Tata Group’s Trent, Tesco will invest $110 million (Rs 680 crore) in the India market for front-end multi-brand retail stores. This investment, believed to be for the first three years of business, is likely to be increased later. For now, Tesco has plans to invest only in Karnataka and Maharashtra.
WHAT’S TESCO?
HEADQUARTERS: Cheshunt, Hertfordshire, England
LISTED ON: The London Stock Exchange
REVENUE: £64.8 billion last year
STORES: Runs over 6,000 outlets across the UK, Europe, Asia (exited the US market recently)
RANGE: Cash & carry, convenience store, department store, discount store, hypermarket/supermarket
INDIA PRESENCE:Since 2008 under a JV with Tata Group’s Trent
Aside from the Trent business being established in the western and southern regions of India, the UK retailer may have chosen Karnataka and Maharashtra for political reasons as well. The Congress party, which has been backing FDI in retail, is in power in both these states. While Karnataka next goes to polls in May 2018, Maharashtra is slated for Assembly elections in December 2014. The multi-brand retail policy allows states to take a call on whether or not foreign retailers can open stores. BJP and other Opposition parties, including the Aam Aadmi Party, are against FDI in retail.
People in India would get to experience the Tesco stores soon after the company has got clearances from the government, as the Trent hypermarkets are to be converted to UK-branded outlets.
In May, Group CEO Philip Clarke had met Anand Sharma for a discussion on multi-brand retail policy, but the firm had stayed low key about its proposed India entry. The general expectation was that American chain Walmart, which has been much in news, would be the first foreign retailer to set shop India. Apart from internal investigations into Walmart’s compliance with the US’ Foreign Corrupt Practices Act, the chain had to face political opposition in India for its lobbying disclosures to the US Senate.
At present, Tesco is the only foreign chain with an Indian partner. Walmart recently broke up with Bharti and French retailer Carrefour is yet to find a partner. Another foreign retailer sounding positive on the India market is Japanese major Aeon, which has set up a small office in the country. When contacted, its spokesperson said the company was still “researching” the country’s market.
An official at the Department of Industrial Policy and Promotion (DIPP) confirmed a proposal had been received from Tesco Overseas Investment Ltd for approval of 50 per cent FDI in the issued and paid up equity share capital of Trent Hypermarket Ltd (THL), a Tata group enterprise, to engage in the activities of multi-brand retailing. According to the proposal, the JV will operate in India through a chain of stores under various banners, including Star Bazaar, Star Daily, Star Market — their tag line saying ‘A Tata and Tesco Enterprise’. THL planned to open three to five stores every financial year, the official added.
In a statement, the Tata group said Trent and Tesco had been in discussions over an investment by Tesco in THL, which operates the Star Bazaar business and is engaged in multi-brand retailing. “In this context, Tesco is making an application to the Foreign Investment Promotion Board. If the application is successful, the intent would be to enter into a partnership, where Trent and Tesco will each own a 50 per cent stake in THL.” On BSE, Trent shares rose around seven per cent over their previous close to end the day at Rs 1,066.55.
Trent Vice-Chairman Noel Tata said: “The application is a positive step forward in the relationship between the Tata group and Tesco.”
Anand Sharma, who has been much criticized for making an industry-unfriendly policy, on Tuesday said: “We hope this will mark a new beginning in transforming India’s retail industry. I am sure other global leaders will also look at investing in India.”
However, some of the multi-brand policy riders might still be a challenge to comply with, experts said. For instance, a minimum compulsory investment of $100 million needs to be made in new facilities and must not include acquisition of existing stores or infrastructure of the partner. At least 50 per cent investment in back-end infrastructure and a mandatory 30 per cent sourcing from micro, small and medium enterprises (MSMEs) are among the other tough riders. But, now that a proposal for FDI in the sector has finally come, the government might tweak the rule book.
Arvind Singhal, chairman of retail consultancy Technopak Advisors, said: “Tesco’s coming is very good news, not just for the retail sector but also for India.” A marquee name like Tesco would mean an endorsement for destination India, he added.
Another retail watcher, Third Eyesight CEO Devangshu Dutta, said: “When Tesco got into a partnership with the Tatas, the intent was to look at retail, and not back-end. Whenever Tesco has expanded into new markets, it has undertaken a high level of localisation. In partnership with the Tatas, they worked in the back end, so it’s logical to take this partnership to a joint venture in retailing.”
“We have been working with the Tata group in India for over five years, supporting the development of their Star Bazaar and Star Daily multi-brand retail stores through the provision of wholesale and franchise agreements,” said a spokesperson for Tesco.
Meanwhile, Tesco’s Asia CEO Trevor Masters blogged: “We really like working with the Tata group in India,” adding “we believe combining our global retail expertise and Tata’s unrivalled understanding of the Indian market has tremendous potential and we’re excited to be exploring ways to do more together”.
However, Tesco Plc, the British multinational grocery & general merchandise retailer, sprang a surprise on Tuesday by announcing its intention to be the first foreign multi-brand chain to enter the Indian market, a little over a year after the country’s policy on foreign direct investment (FDI) in the segment was relaxed.
Extending its back-end and wholesale support franchise agreement with the Tata Group’s Trent, Tesco will invest $110 million (Rs 680 crore) in the India market for front-end multi-brand retail stores. This investment, believed to be for the first three years of business, is likely to be increased later. For now, Tesco has plans to invest only in Karnataka and Maharashtra.
WHAT’S TESCO?
HEADQUARTERS: Cheshunt, Hertfordshire, England
LISTED ON: The London Stock Exchange
REVENUE: £64.8 billion last year
STORES: Runs over 6,000 outlets across the UK, Europe, Asia (exited the US market recently)
RANGE: Cash & carry, convenience store, department store, discount store, hypermarket/supermarket
INDIA PRESENCE:Since 2008 under a JV with Tata Group’s Trent
Aside from the Trent business being established in the western and southern regions of India, the UK retailer may have chosen Karnataka and Maharashtra for political reasons as well. The Congress party, which has been backing FDI in retail, is in power in both these states. While Karnataka next goes to polls in May 2018, Maharashtra is slated for Assembly elections in December 2014. The multi-brand retail policy allows states to take a call on whether or not foreign retailers can open stores. BJP and other Opposition parties, including the Aam Aadmi Party, are against FDI in retail.
People in India would get to experience the Tesco stores soon after the company has got clearances from the government, as the Trent hypermarkets are to be converted to UK-branded outlets.
In May, Group CEO Philip Clarke had met Anand Sharma for a discussion on multi-brand retail policy, but the firm had stayed low key about its proposed India entry. The general expectation was that American chain Walmart, which has been much in news, would be the first foreign retailer to set shop India. Apart from internal investigations into Walmart’s compliance with the US’ Foreign Corrupt Practices Act, the chain had to face political opposition in India for its lobbying disclosures to the US Senate.
At present, Tesco is the only foreign chain with an Indian partner. Walmart recently broke up with Bharti and French retailer Carrefour is yet to find a partner. Another foreign retailer sounding positive on the India market is Japanese major Aeon, which has set up a small office in the country. When contacted, its spokesperson said the company was still “researching” the country’s market.
An official at the Department of Industrial Policy and Promotion (DIPP) confirmed a proposal had been received from Tesco Overseas Investment Ltd for approval of 50 per cent FDI in the issued and paid up equity share capital of Trent Hypermarket Ltd (THL), a Tata group enterprise, to engage in the activities of multi-brand retailing. According to the proposal, the JV will operate in India through a chain of stores under various banners, including Star Bazaar, Star Daily, Star Market — their tag line saying ‘A Tata and Tesco Enterprise’. THL planned to open three to five stores every financial year, the official added.
In a statement, the Tata group said Trent and Tesco had been in discussions over an investment by Tesco in THL, which operates the Star Bazaar business and is engaged in multi-brand retailing. “In this context, Tesco is making an application to the Foreign Investment Promotion Board. If the application is successful, the intent would be to enter into a partnership, where Trent and Tesco will each own a 50 per cent stake in THL.” On BSE, Trent shares rose around seven per cent over their previous close to end the day at Rs 1,066.55.
Trent Vice-Chairman Noel Tata said: “The application is a positive step forward in the relationship between the Tata group and Tesco.”
Anand Sharma, who has been much criticized for making an industry-unfriendly policy, on Tuesday said: “We hope this will mark a new beginning in transforming India’s retail industry. I am sure other global leaders will also look at investing in India.”
However, some of the multi-brand policy riders might still be a challenge to comply with, experts said. For instance, a minimum compulsory investment of $100 million needs to be made in new facilities and must not include acquisition of existing stores or infrastructure of the partner. At least 50 per cent investment in back-end infrastructure and a mandatory 30 per cent sourcing from micro, small and medium enterprises (MSMEs) are among the other tough riders. But, now that a proposal for FDI in the sector has finally come, the government might tweak the rule book.
Arvind Singhal, chairman of retail consultancy Technopak Advisors, said: “Tesco’s coming is very good news, not just for the retail sector but also for India.” A marquee name like Tesco would mean an endorsement for destination India, he added.
Another retail watcher, Third Eyesight CEO Devangshu Dutta, said: “When Tesco got into a partnership with the Tatas, the intent was to look at retail, and not back-end. Whenever Tesco has expanded into new markets, it has undertaken a high level of localisation. In partnership with the Tatas, they worked in the back end, so it’s logical to take this partnership to a joint venture in retailing.”
“We have been working with the Tata group in India for over five years, supporting the development of their Star Bazaar and Star Daily multi-brand retail stores through the provision of wholesale and franchise agreements,” said a spokesperson for Tesco.
Meanwhile, Tesco’s Asia CEO Trevor Masters blogged: “We really like working with the Tata group in India,” adding “we believe combining our global retail expertise and Tata’s unrivalled understanding of the Indian market has tremendous potential and we’re excited to be exploring ways to do more together”.
100 % FDI allowed in storage and warehousing of farm products
New Delhi: 100% Foreign Direct Investment (FDI) is allowed under automatic route in storage and warehousing including warehousing of agriculture products with refrigeration (cold storage).
The National Centre for Cold Chain Development (NCCD) has been established as an autonomous body and registered as a Society under the Societies Registration Act 1860.
The main objectives of the Society are:
To recommend standards and protocols for cold chain infrastructure/building including post-harvest management so as to harmonize with international standards and best practices and suggest mechanism for bench marking and certification of infrastructure/building, process and services provided by cold chain industry.
To undertake and coordinate Research and Development (R&D) work required for development of cold chain industry in consultation with stakeholders.
To undertake and coordinate the task of Human Resource Development (HRD) and capacity building, conduct in-house training, short-term/long courses relevant for cold chain development.
To launch publicity campaign to educate the stakeholders including awareness building about the benefits of integrated cold chain.
To recommend appropriate policy framework relating to development of cold chain.
To facilitate and foster the development of multi-modal transportation facilities for perishable agricultural, horticultural and allied commodities.
This information was given today by Minister of State for Agriculture and Food Processing Industries, Shri Tariq Anwar in a written reply to Rajya Sabha questions.
The National Centre for Cold Chain Development (NCCD) has been established as an autonomous body and registered as a Society under the Societies Registration Act 1860.
The main objectives of the Society are:
To recommend standards and protocols for cold chain infrastructure/building including post-harvest management so as to harmonize with international standards and best practices and suggest mechanism for bench marking and certification of infrastructure/building, process and services provided by cold chain industry.
To undertake and coordinate Research and Development (R&D) work required for development of cold chain industry in consultation with stakeholders.
To undertake and coordinate the task of Human Resource Development (HRD) and capacity building, conduct in-house training, short-term/long courses relevant for cold chain development.
To launch publicity campaign to educate the stakeholders including awareness building about the benefits of integrated cold chain.
To recommend appropriate policy framework relating to development of cold chain.
To facilitate and foster the development of multi-modal transportation facilities for perishable agricultural, horticultural and allied commodities.
This information was given today by Minister of State for Agriculture and Food Processing Industries, Shri Tariq Anwar in a written reply to Rajya Sabha questions.
India, Macedonia sign new double taxation avoidance pact
New Delhi: India and Macedonia have signed a new double taxation avoidance agreement (DTAA) that provides for among other things exchange of banking information for tax administration purposes.
This DTAA was signed by External Affairs Minister Salman Khurshid and Macedonia’s Foreign Minister Nikola Poposki here on Tuesday.
As per the new agreement, dividend, interest and royalty will be taxed in the source country and the rate of taxation will not exceed 10 percent.
Capital gains on securities will be taxed in the source country.
Business income will be also taxed in the source country if the taxpayer has a permanent establishment there.
The DTAA also has a ‘limitation of benefit’ clause to prevent any misuse of treaty benefits.
This DTAA was signed by External Affairs Minister Salman Khurshid and Macedonia’s Foreign Minister Nikola Poposki here on Tuesday.
As per the new agreement, dividend, interest and royalty will be taxed in the source country and the rate of taxation will not exceed 10 percent.
Capital gains on securities will be taxed in the source country.
Business income will be also taxed in the source country if the taxpayer has a permanent establishment there.
The DTAA also has a ‘limitation of benefit’ clause to prevent any misuse of treaty benefits.
Hitachi to invest Rs 4,700 cr in India by 2016
Rethinking power equipment plan with BGR but also looking at nuclear power, metro rail, monorail and DFCC as opportunities
New delhi: the Japan-based global engineering, construction and electronics giant, has said it would invest another Rs 4,700 crore in India by 2016.
The aim is to expand capacities across business verticals such as construction machinery, information technology (IT) services, transport and power equipment. The move is part of a bigger strategy to expand its global footprint, the Tokyo-headquartered company announced on Monday.
The expansion is aimed to triple the sales of Hitachi India Ltd to Rs 20,000 crore and raise local headcount by 5,600 over the period. “The expansion will comprise providing services in the construction machinery and IT segments, apart from engaging in supplying urban transport equipment for the metro trains or monorails here,” said Junzo Nakajima, executive vice-president for the Asia-Pacific.
India currently accounts for only one per cent – Rs 6,700 crore – of Hitachi’s global sales. The expansion will raise local sales to three per cent of the overall figure by 2016. “Our global revenues would rise from ¥9 trillion to over ¥10 trillion at the end of the period,” said Nakajima.
The company, however, said it was rethinking an earlier plan to set up a power equipment manufacturing facility in a joint venture (JV) with Hyderabad-based BGR Energy Systems. “The Indian power market is going through a slowdown,” noted,” Ichiro Iino, managing director, Hitachi India.
He also said the company was seriously looking at an opportunity to supply nuclear power plants in India, as part of another JV with US-based GE.
India is part of the company’s nuclear business interest outside of Japan, through GE-Hitachi Nuclear Energy. “We are also talking to Delhi Metro Rail Corporation and the Delhi government for supplying metro coaches and monorail systems,” said Iino.
It is also hoping to bid for supplying railway signalling systems, on the Dedicated Freight Corridor project which aims to connect Delhi with Mumbai and Kolkata through an only-cargo rail network.
“The project has been a little slow, though,” observed Iino.
Going forward, Hitachi plans to develop India as a base for exports to expand presence in Africa and West Asia/North Africa.
The company has so far invested Rs 2,300 crore in India, including a desalination plant at Dahej in Gujarat and a solar power generation project at Neemrana in Rajasthan.
“We expect Hitachi India’s revenue for financial year 2013 to grow in double digits,” said Nakajima.
Hitachi currently operates through 24 companies, with facilities across seven states, employing 7,508 people in India.
The overall employee number is set to rise to 13,000 by March 2016
New delhi: the Japan-based global engineering, construction and electronics giant, has said it would invest another Rs 4,700 crore in India by 2016.
The aim is to expand capacities across business verticals such as construction machinery, information technology (IT) services, transport and power equipment. The move is part of a bigger strategy to expand its global footprint, the Tokyo-headquartered company announced on Monday.
The expansion is aimed to triple the sales of Hitachi India Ltd to Rs 20,000 crore and raise local headcount by 5,600 over the period. “The expansion will comprise providing services in the construction machinery and IT segments, apart from engaging in supplying urban transport equipment for the metro trains or monorails here,” said Junzo Nakajima, executive vice-president for the Asia-Pacific.
India currently accounts for only one per cent – Rs 6,700 crore – of Hitachi’s global sales. The expansion will raise local sales to three per cent of the overall figure by 2016. “Our global revenues would rise from ¥9 trillion to over ¥10 trillion at the end of the period,” said Nakajima.
The company, however, said it was rethinking an earlier plan to set up a power equipment manufacturing facility in a joint venture (JV) with Hyderabad-based BGR Energy Systems. “The Indian power market is going through a slowdown,” noted,” Ichiro Iino, managing director, Hitachi India.
He also said the company was seriously looking at an opportunity to supply nuclear power plants in India, as part of another JV with US-based GE.
India is part of the company’s nuclear business interest outside of Japan, through GE-Hitachi Nuclear Energy. “We are also talking to Delhi Metro Rail Corporation and the Delhi government for supplying metro coaches and monorail systems,” said Iino.
It is also hoping to bid for supplying railway signalling systems, on the Dedicated Freight Corridor project which aims to connect Delhi with Mumbai and Kolkata through an only-cargo rail network.
“The project has been a little slow, though,” observed Iino.
Going forward, Hitachi plans to develop India as a base for exports to expand presence in Africa and West Asia/North Africa.
The company has so far invested Rs 2,300 crore in India, including a desalination plant at Dahej in Gujarat and a solar power generation project at Neemrana in Rajasthan.
“We expect Hitachi India’s revenue for financial year 2013 to grow in double digits,” said Nakajima.
Hitachi currently operates through 24 companies, with facilities across seven states, employing 7,508 people in India.
The overall employee number is set to rise to 13,000 by March 2016
Pharma major GSK to make Rs 6,400-cr open offer to hike stake in Indian arm
Mumbai: Bullish on the long-term opportunity that India holds, British drug-maker GlaxoSmithKline Plc is set to fork out up to Rs 6,400 crore to increase its stake in its publicly-listed pharmaceutical subsidiary.
In an announcement before market hours on Monday, GSK said it would increase its stake in GlaxoSmithKline Pharmaceuticals Ltd from 50.7 per cent to 75 per cent, at a price of Rs 3,100 a share.
Buoyed by the news, GSK Pharma shares shot up 18.6 per cent to Rs 2,927.40 on the BSE on Monday.
The move comes within a year of GSK upping its stake in its consumer healthcare arm from 43 per cent to 73 per cent, a Rs 4,800- crore transaction. About a month ago, GSK committed to investing Rs 864 crore in a new factory in India, creating 250 jobs.
On the stake-increase, David Redfern, GSK’s Chief Strategy Officer, said the transaction would increase its exposure to a strategically important market. For GSK Pharma shareholders, it would offer a good liquidity opportunity at an attractive premium, he added.
Long-term opportunity
Against the backdrop of price-control measures and patent litigation witnessed in the local market, Redfern told Business Line there were short-term challenges. But the parent company has been investing in India, as it was positive on the long-term opportunity because of an increase in wealth and demand for improved healthcare.
Responding to analyst observations that greater control in the Indian arm would give it greater flexibility in introducing products locally, he said, operations will not be impacted by the decision.
The parent has been continuously reviewing its pharma operations after increasing stake in its consumer healthcare business, he said, adding that there was no specific reason behind the timing of its decision.
In 2009, multinational drug companies Novartis and Pfizer too, had increased stakes in their respective India arms. But, the effort had not been smooth and both companies had to increase their offer price to match their then prevailing share prices.
FUNDING OFFER
GSK does not intend to de-list either consumer healthcare or pharmaceuticals from the local stock-exchanges, Redfern said, adding that it was important to keep both companies listed.
The open offer will be funded through GSK’s existing cash resources. It will be earnings neutral for the first year and accretive thereafter and will not impact expectations for the group’s long-term share buyback programme, the company said.
Offer details
GSK looks to acquire up to 2.06 crore shares, representing 24.3 per cent of the total outstanding shares in the Indian company.
The offer represents a premium of approximately 26 per cent to the company’s closing share price on the National Stock Exchange on December 13. This closing price represents an appreciation of 19 per cent over the last 12 months, GSK said. GSK’s offer is expected to begin in February, pending regulatory clearance.
In an announcement before market hours on Monday, GSK said it would increase its stake in GlaxoSmithKline Pharmaceuticals Ltd from 50.7 per cent to 75 per cent, at a price of Rs 3,100 a share.
Buoyed by the news, GSK Pharma shares shot up 18.6 per cent to Rs 2,927.40 on the BSE on Monday.
The move comes within a year of GSK upping its stake in its consumer healthcare arm from 43 per cent to 73 per cent, a Rs 4,800- crore transaction. About a month ago, GSK committed to investing Rs 864 crore in a new factory in India, creating 250 jobs.
On the stake-increase, David Redfern, GSK’s Chief Strategy Officer, said the transaction would increase its exposure to a strategically important market. For GSK Pharma shareholders, it would offer a good liquidity opportunity at an attractive premium, he added.
Long-term opportunity
Against the backdrop of price-control measures and patent litigation witnessed in the local market, Redfern told Business Line there were short-term challenges. But the parent company has been investing in India, as it was positive on the long-term opportunity because of an increase in wealth and demand for improved healthcare.
Responding to analyst observations that greater control in the Indian arm would give it greater flexibility in introducing products locally, he said, operations will not be impacted by the decision.
The parent has been continuously reviewing its pharma operations after increasing stake in its consumer healthcare business, he said, adding that there was no specific reason behind the timing of its decision.
In 2009, multinational drug companies Novartis and Pfizer too, had increased stakes in their respective India arms. But, the effort had not been smooth and both companies had to increase their offer price to match their then prevailing share prices.
FUNDING OFFER
GSK does not intend to de-list either consumer healthcare or pharmaceuticals from the local stock-exchanges, Redfern said, adding that it was important to keep both companies listed.
The open offer will be funded through GSK’s existing cash resources. It will be earnings neutral for the first year and accretive thereafter and will not impact expectations for the group’s long-term share buyback programme, the company said.
Offer details
GSK looks to acquire up to 2.06 crore shares, representing 24.3 per cent of the total outstanding shares in the Indian company.
The offer represents a premium of approximately 26 per cent to the company’s closing share price on the National Stock Exchange on December 13. This closing price represents an appreciation of 19 per cent over the last 12 months, GSK said. GSK’s offer is expected to begin in February, pending regulatory clearance.
SpiceJet and Tigerair to tap each other’s network with interline pact
Expects to wipe out accumulated losses by roping in potential investors; rebound to profits in a year
Hyderabad/ Mumbai: The Singapore-based Tigerair on Monday grabbed the first-mover advantage over its rival AirAsia in the lucrative India-Southeast Asia airline market by entering into an interline agreement with India’s second largest low-cost carrier SpiceJet.
Low-cost airline Tigerair, in which Singapore Airlines has 33 per cent stake, has been slugging it out with the Kuala Lumpur-based AirAsia, the largest player in this space in the Southeast Asian market. The move comes just a few months before AirAsia (which has a joint venture with the Tatas) is set to launch a low-cost domestic airline in India.
Under the new agreement with Singapore’s largest low-cost carrier, customers travelling on SpiceJet’s domestic network from 14 Indian cities can enjoy seamless connectivity through the Hyderabad airport onto Tigerair’s Singapore-bound flights from January 6, 2014. With this move, Tigerair would be able to carry passengers from India to Singapore through 20 cities, including six from which it flies directly to Singapore.
The other 14 cities would be Ahmedabad, Bhopal, Mumbai, Kolkata, Coimbatore, Delhi, Goa, Indore, Mangalore, Madurai, Pune, Rajahmundry, Tirupati and Visakhapatnam. Tigerair flies directly to Chennai, Trichy, Trivandrum, Bangalore, Kochi and Hyderabad.
The move will preempt AirAsia’s ambitious strategy to add more cities from where it can get passengers and connect them to Kuala Lumpur and Bangkok, among other destinations, through hubs like Chennai. Currently, AirAsia flies directly from Kuala Lumpur to Chennai, Kochi, Kolkata, Trichy and Bangalore while Thai AirAsia flies from Bangkok to Kolkata and Chennai. With AirAsia setting up a domestic airline, it will have access to passengers across the country.
Starting January 12, 2014, Tigerair customers from Singapore will also enjoy easy access to SpiceJet's domestic network. Both airlines will use their Navitare reservation systems, integrated to enable the issue of single tickets by each.
“Looking at interlining is a part of our strategy and Tigerair is our first partner. Other discussions will take place and we expect more such arrangements,” Sanjiv Kapoor, chief operating officer of SpiceJet, told the media. Stating that SpiceJet’s move would increase competition for AirAsia, which hopes to connect various cities in India to Kuala Lumpur from its Chennai base, sources said SpiceJet was expecting an additional 200 passengers daily to and from Hyderabad with its tie-up with Tigerair, besides expecting 6 per cent revenue growth in the first year of the alliance.
According to a JPMorgan research report, the two had 6 per cent share each of the India-Asean market in 2012. Their share of the South India-Asean market is bigger, with Tigerair having 13 per cent market share and AirAsia 11 per cent. On an all-India scale, they are still small players with a share of 4 per cent each of the India-Asia market.
Analysts say the relationship beginning on the Singapore route will likely be extended to others cities in Southeast Asia, including those in Indonesia and the Philippines, and Australia. AirAsia also has joint ventures in the Philippines, Indonesia and Thailand. On Monday, Tigerair had announced the signing of an agreement with China Airlines to set up a new low-cost carrier in Taiwan and the expansion of its partnership with Singapore Airline's low-cost carrier Scoot.
“The agreement will bring operational benefits rather than financial as of now as there is no equity infusion. The deal will enable network expansion and given the higher inbound and outbound travel as compared to domestic growth rates, it should improve the load factors. Given that the airlines can tap into each other’s network, it is a win-win for both,” said Deven Choksey, managing director of KR Choksey Shares and Securities.
“From SpiceJet’s point of view, our load factors are currently around 70 per cent, which could be raised further using the Tigerair relationship,” said Kapoor. Tigerair's load factors range between the mid 70s and low 80s in percentage terms.
Refuting reports that SpiceJet would shrink its fleet as well as the route plan, Kapoor said the company would rationalise its routes and planned to redeploy its fleet into a more profitable network design. Even as network revamp processes are underway, the airline officially confirmed that negotiations were on for equity sale.
"We are talking to people. We want the right partner from an equity perspective... Hopefully soon," Kapoor said, without disclosing more details. On the accumulated losses, currently around Rs 1,137 crore, he said there were ways to address such issues. “There are some possible solutions to come out of these. We are talking to potential investors,” he said, declining to comment further.
Hyderabad/ Mumbai: The Singapore-based Tigerair on Monday grabbed the first-mover advantage over its rival AirAsia in the lucrative India-Southeast Asia airline market by entering into an interline agreement with India’s second largest low-cost carrier SpiceJet.
Low-cost airline Tigerair, in which Singapore Airlines has 33 per cent stake, has been slugging it out with the Kuala Lumpur-based AirAsia, the largest player in this space in the Southeast Asian market. The move comes just a few months before AirAsia (which has a joint venture with the Tatas) is set to launch a low-cost domestic airline in India.
Under the new agreement with Singapore’s largest low-cost carrier, customers travelling on SpiceJet’s domestic network from 14 Indian cities can enjoy seamless connectivity through the Hyderabad airport onto Tigerair’s Singapore-bound flights from January 6, 2014. With this move, Tigerair would be able to carry passengers from India to Singapore through 20 cities, including six from which it flies directly to Singapore.
The other 14 cities would be Ahmedabad, Bhopal, Mumbai, Kolkata, Coimbatore, Delhi, Goa, Indore, Mangalore, Madurai, Pune, Rajahmundry, Tirupati and Visakhapatnam. Tigerair flies directly to Chennai, Trichy, Trivandrum, Bangalore, Kochi and Hyderabad.
The move will preempt AirAsia’s ambitious strategy to add more cities from where it can get passengers and connect them to Kuala Lumpur and Bangkok, among other destinations, through hubs like Chennai. Currently, AirAsia flies directly from Kuala Lumpur to Chennai, Kochi, Kolkata, Trichy and Bangalore while Thai AirAsia flies from Bangkok to Kolkata and Chennai. With AirAsia setting up a domestic airline, it will have access to passengers across the country.
Starting January 12, 2014, Tigerair customers from Singapore will also enjoy easy access to SpiceJet's domestic network. Both airlines will use their Navitare reservation systems, integrated to enable the issue of single tickets by each.
“Looking at interlining is a part of our strategy and Tigerair is our first partner. Other discussions will take place and we expect more such arrangements,” Sanjiv Kapoor, chief operating officer of SpiceJet, told the media. Stating that SpiceJet’s move would increase competition for AirAsia, which hopes to connect various cities in India to Kuala Lumpur from its Chennai base, sources said SpiceJet was expecting an additional 200 passengers daily to and from Hyderabad with its tie-up with Tigerair, besides expecting 6 per cent revenue growth in the first year of the alliance.
According to a JPMorgan research report, the two had 6 per cent share each of the India-Asean market in 2012. Their share of the South India-Asean market is bigger, with Tigerair having 13 per cent market share and AirAsia 11 per cent. On an all-India scale, they are still small players with a share of 4 per cent each of the India-Asia market.
Analysts say the relationship beginning on the Singapore route will likely be extended to others cities in Southeast Asia, including those in Indonesia and the Philippines, and Australia. AirAsia also has joint ventures in the Philippines, Indonesia and Thailand. On Monday, Tigerair had announced the signing of an agreement with China Airlines to set up a new low-cost carrier in Taiwan and the expansion of its partnership with Singapore Airline's low-cost carrier Scoot.
“The agreement will bring operational benefits rather than financial as of now as there is no equity infusion. The deal will enable network expansion and given the higher inbound and outbound travel as compared to domestic growth rates, it should improve the load factors. Given that the airlines can tap into each other’s network, it is a win-win for both,” said Deven Choksey, managing director of KR Choksey Shares and Securities.
“From SpiceJet’s point of view, our load factors are currently around 70 per cent, which could be raised further using the Tigerair relationship,” said Kapoor. Tigerair's load factors range between the mid 70s and low 80s in percentage terms.
Refuting reports that SpiceJet would shrink its fleet as well as the route plan, Kapoor said the company would rationalise its routes and planned to redeploy its fleet into a more profitable network design. Even as network revamp processes are underway, the airline officially confirmed that negotiations were on for equity sale.
"We are talking to people. We want the right partner from an equity perspective... Hopefully soon," Kapoor said, without disclosing more details. On the accumulated losses, currently around Rs 1,137 crore, he said there were ways to address such issues. “There are some possible solutions to come out of these. We are talking to potential investors,” he said, declining to comment further.
Rs 1-cr worth flowers exported to Qatar
Kochi: The Cochin International Airport Ltd on Monday exported a consignment of fresh flowers to Doha on the occasion of Qatar National Day, which falls on December 18.
The shipment of 10,000 packets totalling 53,000 kg of flowers from Kerala and Tamil Nadu has been despatched through a special Etihad freighter. The Rs 1-crore export order was executed by procuring flowers from different locations in the two States. They consisted of jasmine, lilies, polyanthus, tuberose etc.
The perishable centre at CIAL, which can handle highly perishable products, is the key selling point to attract this type of business to Kochi. The centre is capable of handling temperature sensitive products such as vegetables, fruits, flowers, marine and pharma items etc. Highly perishable goods are brought to the centre in reefer trucks in order to maintain the freshness and quality of the produce.
Established in 2009 with the financial assistance of Agricultural Processed Food Products Export Development Authority (APEDA), the centre has 25,000 sq ft area, with ambient temperature of 18 degrees centigrade.
It has computerised embedded weighing stations, separate cool rooms with a temperature range of 0 to -10 degree centigrade, 24x7 camera surveillance etc.
The shipment of 10,000 packets totalling 53,000 kg of flowers from Kerala and Tamil Nadu has been despatched through a special Etihad freighter. The Rs 1-crore export order was executed by procuring flowers from different locations in the two States. They consisted of jasmine, lilies, polyanthus, tuberose etc.
The perishable centre at CIAL, which can handle highly perishable products, is the key selling point to attract this type of business to Kochi. The centre is capable of handling temperature sensitive products such as vegetables, fruits, flowers, marine and pharma items etc. Highly perishable goods are brought to the centre in reefer trucks in order to maintain the freshness and quality of the produce.
Established in 2009 with the financial assistance of Agricultural Processed Food Products Export Development Authority (APEDA), the centre has 25,000 sq ft area, with ambient temperature of 18 degrees centigrade.
It has computerised embedded weighing stations, separate cool rooms with a temperature range of 0 to -10 degree centigrade, 24x7 camera surveillance etc.
India likely to become global production hub for compact superbikes
New Delhi: Having changed the dynamics of lowcost manufacturing and become a global hub for small cars, India is now poised to emerge a centre for producing compact superbikes as Indian customers graduate to the next level of biking.
Several global and Indian bike makers plan to utilise India's mass-production base of 16-million bikes and scooter to roll out sports bikes in the 250cc capacity.
British firm Triumph has finalised its strategy to roll out its next global platform of the 250cc version of the Daytona from its greenfield facility near Bangalore, and its American rival Harley-Davidson is expected to follow suit. Chennai-based TVS Motors is developing new platform for German luxury automaker BMW, while Hero MotoCorp would showcase its all-new 250cc bike, made in collaboration with its American subsidiary Erik Buell Racing, in the 2014 Auto Expo.
"India is poised to become one of the largest sports bikes market in the 250cc segment," Vimal Sumbly, managing director at Triumph India, said.
"It is the most promising segment as we expect a large number of customers moving up the value chain and we are already working in that direction to tap the potential market," he told ET.
Triumph plans to roll out its bikes from India in the next two years.
Specialist bike makers are trying to cash in on Indian customers' increasing preference for higher displacement and bigger engine bikes, backed increasing aspiration levels and growing incomes of the new generation of buyers.
Automotive research and advisory firm Emerging Markets Automotive Advisors expects sale of big bikes in India to jump 50 per cent this year to 167,000 units from nearly 112,000 big bikes in 2012.EMMAAA forecasts superbike sales to rise to 708,000 units in 2022.
"The introduction of big brands like Harley and Triumph in the last few years has created this thirst for top-rated motoring experience and motorcycle enthusiasts have finally found access to global spec, high-powered speed machines," Deepesh Rathore, director at EMMAAA, said. "Going forward global manufacturers like Triumph, BWM and Harley-Davidson are rushing to develop smaller capacity machines to grow the market and quench the thirst of Indian bikers," he added.
The average motorcycle engine displacement index (AMEDI) has increased by around 8 per cent in the past decade. EMMAAA expects this index to climb much faster going by the shift in customer's preference and higher disposable incomes.
Bajaj Auto has the largest portfolio of sports bikes in the country, thanks to its Austrian subsidiary KTM. In the past Royal Enfield ruled the Indian big bike market with its 350-500 cc Bullets.
In Asia, sales of superbikes — having engine displacement in excess of 1,000 cc and costing upwards of Rs 10 lakh — increased 20 per cent last year, second only to 26 per cent growth in Latin America.
But in India super bike sales have slowed this year due to rapid devaluation of the rupee that has made imports expensive. This has forced manufacturers to go for smaller engine sizes to improve affordability and have a wider larger customer base in the coming years.
Harley-Davidson recently unveiled its Street range, the smallest Harleys with engine sizes of 750cc and 500cc. Its entry-level Superlow bike range starts at Rs 5.7 lakh.
Global players are also assembling bikes here to benefit from lower taxes of around 30 per cent compared to 100 per cent import duty on fully built bikes and scooters. Local assembly helped Harley cut the price of its iconic Fat Boy by almost 30 per cent to around Rs 15 lakh. Triumph, too, assembles six of the 10 bikes it sells in India at its facility in Manesar. Harley-Davidson plans to convert its Haryana CKD facility into a full-fledged manufacturing base.
Several global and Indian bike makers plan to utilise India's mass-production base of 16-million bikes and scooter to roll out sports bikes in the 250cc capacity.
British firm Triumph has finalised its strategy to roll out its next global platform of the 250cc version of the Daytona from its greenfield facility near Bangalore, and its American rival Harley-Davidson is expected to follow suit. Chennai-based TVS Motors is developing new platform for German luxury automaker BMW, while Hero MotoCorp would showcase its all-new 250cc bike, made in collaboration with its American subsidiary Erik Buell Racing, in the 2014 Auto Expo.
"India is poised to become one of the largest sports bikes market in the 250cc segment," Vimal Sumbly, managing director at Triumph India, said.
"It is the most promising segment as we expect a large number of customers moving up the value chain and we are already working in that direction to tap the potential market," he told ET.
Triumph plans to roll out its bikes from India in the next two years.
Specialist bike makers are trying to cash in on Indian customers' increasing preference for higher displacement and bigger engine bikes, backed increasing aspiration levels and growing incomes of the new generation of buyers.
Automotive research and advisory firm Emerging Markets Automotive Advisors expects sale of big bikes in India to jump 50 per cent this year to 167,000 units from nearly 112,000 big bikes in 2012.EMMAAA forecasts superbike sales to rise to 708,000 units in 2022.
"The introduction of big brands like Harley and Triumph in the last few years has created this thirst for top-rated motoring experience and motorcycle enthusiasts have finally found access to global spec, high-powered speed machines," Deepesh Rathore, director at EMMAAA, said. "Going forward global manufacturers like Triumph, BWM and Harley-Davidson are rushing to develop smaller capacity machines to grow the market and quench the thirst of Indian bikers," he added.
The average motorcycle engine displacement index (AMEDI) has increased by around 8 per cent in the past decade. EMMAAA expects this index to climb much faster going by the shift in customer's preference and higher disposable incomes.
Bajaj Auto has the largest portfolio of sports bikes in the country, thanks to its Austrian subsidiary KTM. In the past Royal Enfield ruled the Indian big bike market with its 350-500 cc Bullets.
In Asia, sales of superbikes — having engine displacement in excess of 1,000 cc and costing upwards of Rs 10 lakh — increased 20 per cent last year, second only to 26 per cent growth in Latin America.
But in India super bike sales have slowed this year due to rapid devaluation of the rupee that has made imports expensive. This has forced manufacturers to go for smaller engine sizes to improve affordability and have a wider larger customer base in the coming years.
Harley-Davidson recently unveiled its Street range, the smallest Harleys with engine sizes of 750cc and 500cc. Its entry-level Superlow bike range starts at Rs 5.7 lakh.
Global players are also assembling bikes here to benefit from lower taxes of around 30 per cent compared to 100 per cent import duty on fully built bikes and scooters. Local assembly helped Harley cut the price of its iconic Fat Boy by almost 30 per cent to around Rs 15 lakh. Triumph, too, assembles six of the 10 bikes it sells in India at its facility in Manesar. Harley-Davidson plans to convert its Haryana CKD facility into a full-fledged manufacturing base.
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