India Inc raises $9 bn via overseas bonds in 2013

Raises more than double the amount raised last calendar year
Kolkata: India Inc is making a scramble to raise money abroad. Indian private and state-run companies, other than financial institutions, have raised $9.23 billion by selling foreign currency bonds in foreign markets in 2013. This is more than double the money they raised through this route during the last calendar year. In 2012, domestic companies had raised $4.12 billion through foreign currency bonds.

There were 16 foreign bond issuances by private and public sector companies from India in 2013 compared to nine a year earlier. Standard Chartered Bank topped the league table helping corporates raise $1.3 billion this calendar year. It was followed by Deutsche Bank, JPMorgan, Royal Bank of Scotland (RBS) and Citi.

"The overseas issuances were largely driven by volume rather than pricing. Indian companies were able to raise large sums of money through foreign currency bonds. It would have been difficult for them to raise this money in India in the current environment," said a senior banker with a large foreign bank in India.

He added investors' confidence in Indian issuers had improved in recent months, which helped domestic companies in raising money abroad. Apart from the dollar, local companies have also raised funds in other foreign currencies like the Euro, Swiss franc and Singapore dollar.

"Many issuers were of the view that interest rates could go up in the future and, hence, we saw a lot of opportunistic fund-raising as well. Overseas bond markets presented a perfect opportunity to raise large amounts and longer tenor liabilities, compared to the bank loan market," Randhir Singh, head of financing at Deutsche Bank in India, said.

Deutsche Bank managed nine of the 16 deals this year and helped its clients raise $1.29 billion from foreign bond markets.

In most cases, companies decided to use the money abroad — either to expand their business or refinance some of their existing foreign currency liabilities.

Bankers remained confident that this trend of raising money through foreign currency bonds will continue in 2014, at least in the first couple of quarters. The deal pipeline for the first quarter of the 2014 calendar year is estimated to be around $2 billion. "The new year should start on a good note, as the first quarter deal pipeline is quite robust," said a senior banker with a mid-sized foreign bank in India.

India Inc raises $9 bn via overseas bonds in 2013

Raises more than double the amount raised last calendar year
Kolkata: India Inc is making a scramble to raise money abroad. Indian private and state-run companies, other than financial institutions, have raised $9.23 billion by selling foreign currency bonds in foreign markets in 2013. This is more than double the money they raised through this route during the last calendar year. In 2012, domestic companies had raised $4.12 billion through foreign currency bonds.

There were 16 foreign bond issuances by private and public sector companies from India in 2013 compared to nine a year earlier. Standard Chartered Bank topped the league table helping corporates raise $1.3 billion this calendar year. It was followed by Deutsche Bank, JPMorgan, Royal Bank of Scotland (RBS) and Citi.

"The overseas issuances were largely driven by volume rather than pricing. Indian companies were able to raise large sums of money through foreign currency bonds. It would have been difficult for them to raise this money in India in the current environment," said a senior banker with a large foreign bank in India.

He added investors' confidence in Indian issuers had improved in recent months, which helped domestic companies in raising money abroad. Apart from the dollar, local companies have also raised funds in other foreign currencies like the Euro, Swiss franc and Singapore dollar.

"Many issuers were of the view that interest rates could go up in the future and, hence, we saw a lot of opportunistic fund-raising as well. Overseas bond markets presented a perfect opportunity to raise large amounts and longer tenor liabilities, compared to the bank loan market," Randhir Singh, head of financing at Deutsche Bank in India, said.

Deutsche Bank managed nine of the 16 deals this year and helped its clients raise $1.29 billion from foreign bond markets.

In most cases, companies decided to use the money abroad — either to expand their business or refinance some of their existing foreign currency liabilities.

Bankers remained confident that this trend of raising money through foreign currency bonds will continue in 2014, at least in the first couple of quarters. The deal pipeline for the first quarter of the 2014 calendar year is estimated to be around $2 billion. "The new year should start on a good note, as the first quarter deal pipeline is quite robust," said a senior banker with a mid-sized foreign bank in India.

Jet Air in pact with Turkish Airlines

Mumbai: Jet Airways (India) Ltd has entered into a fresh aircraft leasing arrangement with Turkish Airlines for its Airbus 330-200 wide bodied jets.

The Indian company, which is 24 per cent owned by Etihad Airways, will lease out three of its idle A330s to the Turkish carrier for six years, according to sources.

A Jet spokesperson did not comment on the development, and the financial details could not be ascertained.

At the end of the second quarter, Jet said it had grounded five A330s and had initiated discussions with players for both an outright sale and long-term lease arrangements.

If the company is successful in an outright sale of these aircraft, its debt portfolio will shrink by $200 million, the airline's chief financial officer Ravishankar Gopalakrishnan had said then. Debt at the country’s second largest airline was at $1.9 billion as on September 30, 2013.

Indian companies are keen to lease out their idle aircraft to tide over mounting losses. For Q2, Jet Airways had reported a net loss of Rs 891 crore. Of this, Rs 123 crore in losses were related to aircraft on ground.

Earlier, Jet was close to leasing out all five aircraft to Kuwait Airlines, but the deal fell apart with the Kuwait government suspending the flag carrier’s chairman, Sami Al-Nesif.

Turkish Airlines and Jet Airways have a long history of commercial arrangements. News reports suggest that the two airlines have been leasing partners since 2008. In 2010, Turkish Airlines has inked an agreement with Jet to take three Boeing 777s on lease.

Recently, Air India invited bids from leasing companies to sell its Boeing 787 Dreamliner jets and is set to hire them back on monthly rentals as part of its strategy to raise cash.

Frugal innovations to keep India healthy

Mumbai: From a smart medicine pack that keeps a tab on a person taking tuberculosis medicines to technology that identifies the right blood vessel for an intra-venous procedure, innovations are now coming in small packages.

And research competitions are challenging these “Edisons of tomorrow” — students, scientists and entrepreneurs — by encouraging them to think-up novel solutions in healthcare.

Prototype development
Take the ‘Grand Challenges in Tuberculosis Control’ programme for instance. Winners get $30,000 as a grant for six months to develop a prototype. And those who scale this challenge get $100,000 each to integrate the innovation into India’s healthcare system.

The TB-control challenge, an initiative from IKP Knowledge Park, has the US Agency for International Development and the Bill and Melinda Gates Foundation, as partners.

Big innovations are required and will continue, but the idea here is to open opportunities for effective, high-volume and low-cost solutions, says Gopichand Katragadda, Chairman and Managing Director of GE India Technology Centre (GE-ITC). GE’s Edison Challenge gives the winner a Rs 10-lakh grant, and the runner-up, Rs 5 lakh.

Exposure to market
The challenge gives university research an exposure to market needs, as perceived by the industry, he says, adding that GE would be open to absorbing an innovation that “fits the bill.”

Globally, such initiatives are not unknown. In fact, the Breakthrough Prize in Life Sciences, collectively founded by Facebook founder Mark Zuckerberg and Google co-founder Sergey Brin, among others, also looks to russel up the excitement around science and research.

One of the 15 recipients of IKP’s first round of funding for TB-control solutions is Bill Thies, a researcher with Microsoft Research India. His team’s innovation helps ensure that a patient takes the TB medicine regularly and without the direct supervision mandated in the Government-run system.

The innovation involves giving numbers, hidden behind the pills in a strip of TB medicines. On taking the medicine, a four-digit code is revealed to the patient, who has to combine it with a six-digit number printed on the pack and give a missed phone call to that number. And this gets captured at the monitoring end.

TB control falters, since patients default on taking their medicines regularly. Thies’ team’s innovation seeks to plug this gap. The grant money goes to Innovators in Health, a non-profit organisation in Bihar that partners and co-evaluates the initiative, says Thies.

In the GE Edison challenge, this year’s winner was a mobile application to diagnose skin cancer and related abnormalities from IIT (Kharagpur). And last year’s runner-up, Vellore Institute of Technology’s VeinLoc (blood-vessel detector), has taken the innovation a step further, by applying for a patent.

The five-year Edison challenge encourages awardees to continue interacting with mentors at GE — a no mean exposure — since GE’s centre at Bangalore is its largest multidisciplinary research, development and engineering centre outside the US.

Intellectual property
Explaining the academia-industry misfit, Katragadda says universities are flush with funds, but are not tied to deliverables and market insight. Besides, there are trust issues between universities and the industry on matters such as intellectual property.

The Edison challenge looks to bridge the gap, by including interactions with technology resource persons and angel investors, to awaken researchers to market-place realities.

Centre approves IOC's LNG project

The capacity of the proposed facility, part of Indian Oil's Rs 56,000-cr investment plan during the 12th Plan, will be five mt a year
Chennai: The expert appraisal committee of the ministry of environment and forests has given its nod to Indian Oil Corporation (IOC)'s Rs 4,320-crore liquefied natural gas (LNG) terminal project at Ennore, about 25 km away from Chennai.

The capacity of the proposed facility will be five million tonnes a year. The terminal can be expanded to 10-15 million tonnes a year. This is part of IOC’s Rs 56,000-crore investment plan during the 12th Plan Period (2012-17).

IOC started marketing of re-gasified LNG (RLNG) in 2004. As one of the major off-takers of RLNG from Dahej LNG import terminal of Petronet LNG Limited (PLL- a Joint Venture Company of IOCL, BPCL, GAIL and ONGC). IOC also has a marketing share of 30 per cent of RLNG in the upcoming PLL’s Kochi LNG terminal.

According to the committee, the Ennore port is an all-weather facility. It has all infrastructure facilities in place. The port has already earmarked water front for LNG jetty and land for storage and regasification terminal in their master plan.

After the completion of the project, RLNG would cater to the southern states. RLNG will be supplied to customers such as power plants, fertiliser companies through an extensive pipeline network. LNG would also be supplied by road through cryogenic LNG road tankers.

CCI approves acquisition of cement plants of Jaypee in Gujarat located at Sewagram and Wanakbori by Ultratech

New Delhi: The Competition Commission of India (CCI) has approved the proposed acquisition of cement plants of Jaypee Cement Corporation Limited, comprising an integrated cement unit at Sewagram and grinding unit at Wanakbori in Gujarat by Ultratech Cement Limited (Ultratech). Jaypee Cement Corporation Limited is a wholly owned subsidiary of Jaiprakash Associates Limited (Jaypee).

Both Ultratech and Jaypee are engaged in the manufacture and marketing of different varieties of cement across India. The combined capacity of sewagram and wanakbori plants is 4.8 MTPA.

The Commission vide its order dated 20.12.2013 is of the opinion that the proposed combination is not likely to have an appreciable adverse effect on competition in India and therefore, approved the proposed combination under sub-section (1) of Section 31 of the Act.

2 more investment zones, chilli park for Karnataka

Bengaluru: Union Commerce Ministry has approved the Karnataka Government’s proposal to set up a chilli park at Haveri.

Addressing reporters after a meeting here to review the pending projects, Union Commerce Minister Anand Sharma said, “We have cleared the proposal. The land for setting up the chilli park will be finalised by the State government. Spices Board and the State government will take it forward.”

The Ministry also cleared the Karnataka Government proposal to include pepper under the National Horticultural Mission (NHM).

“Karnataka is the second largest pepper producer. The State will be brought under NHM. For setting up a pepper park, the State will co-ordinate with the Spices Board,” said Sharma.

Export facilitation
To facilitate export from Karnataka, Commerce Ministry has approved few more projects. Prominent among them are to take up construction of a convention centre. An assistance of Rs 20 crore is being given to Karnataka Trade Promotion Organisation (KTPO) to take up construction of the centre.

In order to increase agri-exports from Karnataka, Agricultural and Processed Food Products Export Development Authority (APEDA) will take up construction of cold storage and warehousing facilities at the new airport (BIAL).

“This will increase State’s share of agri-exports and create additional infrastructure facility at the airport,” said Sharma.

Of the seven mega leather clusters proposed in the country, Karnataka will get one.

The regional sub centre of the National Institute of Design (NID) in Bangalore is will be upgraded to a full-fledged campus.

The Indian Institute of Packaging’s proposal to set up a centre in Bangalore has been cleared.“A proposal was approved some time back but it will be taken up with the State government’s help,” Sharma said.

IMT Ghaziabad ties up with Arizona State University

New Delhi: The Institute of Management and Technology, Ghaziabad (IMTG) has joined hands with Arizona State University (ASU) of the US to strengthen bilateral collaborations in business management education.

Under the tie-up both the institutions will offer dual-degree programmes. In the 2+1 IMTG-ASU programme, students will spend two years at the IMTG and one year at the ASU.

In 1+1 IMTG-ASU programme, aspirants will spend one year at the IMTG followed by one year at the ASU. Both models will have internship engagements built into the programmes. Students at the IMTG will get direct access to some of the Masters programmes in business and decision analytics, sustainable systems, environmental management and resource management domains.

“Our multi-faceted network of international collaborations with some of the best foreign institutions of the world makes IMTG a unique institution for those aspirants who seek to pack in a lifetime of learning in a short span of time,” said Bibek Banerjee, Director of IMTG and Academic Mentor of the IMT Group in a press statement.

“The Arizona State University pursues research that contributes to the public good, and ASU assumes major responsibility for the economic, social and cultural vitality of the communities that surround it,” said Ajay Vinze, Earl and Gladys Davis Distinguished Professor of Business and the Associate Dean of International Programmes at W. P. Carey School of Business. Vinze is also the Vice-Provost of Arizona State University.

According to a survey, the ASU was ranked fifth on a list of the top universities favoured by employers by The Wall Street Journal. The W. P. Carey School of Business at ASU houses more than 1,500 graduate students and more than 8,300 undergraduates.

Vedic Realty to invest Rs 2,500 cr

Kolkata: Kolkata-based Vedic Realty Pvt Ltd plans to invest nearly Rs 2,500 crore for setting up an 18-hole golf course, with an integrated IT township. The investment will be through 25 per cent debt and 75 per cent equity.

To be spread across approximately 1,500 acres at Rajarhat New Town in the north eastern fringes of the city, the project, Greentech City, would be home to the third big golf course in the city. The two others include British-era Royal Calcutta Golf Club and Tollygunge Club.

“We will be investing nearly Rs 2,500 crore to develop the IT township, along with a golf course. The investment will be done over seven to eight years,” Raj K Modi, Chairman and Managing Director, Vedic Realty, told Business Line. Golf tourism is likely to come up as major draw in the coming days here, he said.

Greentech City has a bouquet of varied residential units starting from flats at Rs 17 lakh to a golf villa at Rs 4 crore. So far, nearly 800 units have been booked. Another major project by the company is Vedic Village spread over 150 acres at Rajarhat.

The company has so far invested nearly Rs 500 crore to develop the township and one-third of the required land has been acquired so far.

Post a “lull period” in 2009-10 following some trouble over land acquisition, the project is slowly picking up pace, Modi said.

Once the residential units and golf course come up, the company will focus on creating infrastructure for information technology companies.

Vedic Realty, through its joint venture with the West Bengal Electronics Industry Development Corporation Ltd, will provide land for IT firms to set up facilities at Greentech City.

World Bank keen to finance solar projects in India

Total fund requirement is worth Rs 80,000 cr to add 9,000 MW
Mumbai: The World Bank has launched consultations with the ministries of finance and new and renewable energy for financing solar projects under phase II of the National Solar Mission.

“The World Bank is really impressed with the performance of phase I of the National Solar Mission wherein, the installed capacity has risen to 2,000 Mw from 30 Mw. The World Bank was engaged with the ministry of new and renewable energy during phase I in working out the policy and putting in place necessary guidelines but had not provided funds. However, during phase II, the World bank is quite keen to finance solar projects,” Ashish Khanna, lead energy specialist told Business Standard. He however, declined to divulge further details in this regard. The total requirement of funds is of the order of Rs 80,000 crore ($13 billion) of which, as high as Rs 54,000 crore ($9 billion) will be debt based on a 70:30 debt equity ratio. The World Bank has expressed that it was keen to partially finance debt requirement.

Khanna said of the total debt requirement of Rs 54,000 crore, much needed to come from the scheduled commercial banks.

“During the first phase, commercial banks had lent $700 million and they need to scale up to the levels envisaged. In order to make investment in solar power more attractive for scheduled commercial banks, the government will need to strategically use scarce public resources to leverage commercial financing, address structural barriers that prevent commercial banks from participating and facilitate appropriate technology deployment,” Khanna added.

Khanna said the role of facilitating public funding in leveraging commercial lending on a sustained basis through risk reducing instruments as well as innovations in financing is significant and imperative for moving solar development to a largely non-recourse financing mode in India. The World Bank in its report titled, “Paving the way for a Transformational Future: Lessons from Jawaharlal Nehru National Solar Mission Phase I”, suggests that the government could offer multiple financial solutions involving viability gap fund, generation-based incentives, credit guarantees, credit lines to banks at a concession to cut interest rates and subordinate public finance to extend the tenor of loans. According to the World Bank, using public financing for extending the tenor of a loan and providing subordinated debt is least expensive among all other options, with the objective of reducing the solar tariff to Rs 5.50 per unit.