Chennai: Apollo Tyres Limited is planning to invest about Rs 400 crore at its Kerala facility to expand its off-highway tyres manufacturing capacity.
According to Satish Sharma, president - APMENA Region, Apollo Tyres, growing demand, especially in the global market, has pushed the company to go for expansion.
At present, the company’s Kalamassery plant in Kerala manufactures 30 tonnes of off-highway tyres and its capacity would be raised to 110 tonnes in the next 18-24 months, he said.
These tyres are used in specialised vehicles like loaders, golf vehicles, agriculture equipments and others. The company exported 60 SKUs to the European operations, he said.
On the company’s Chennai plant in which the company invested around Rs 2,300 crore, Sharma said, “We thought the break-even will be reached in seven years, but in three years the plant reached break-even level.” The plant, located at Oragadam, on the outskirts of Chennai, was inaugurated three years ago.
“The real challenge now is manufacturing, not sales. To address this issue, we are now planning to expand the capacity of the plant by around 30-35 per cent,” said Sharma. The overseas market contributed to around nine per cent last year for Apollo Tyres and the company expects to increase this to 14 per cent in 2014-15, said Sharma.
The official said in the last few months, the company witnessed around 40 per cent growth in overseas business. The company said it was open to inorganic growth, which would give both market access and manufacturing capacities.
“One of our major focuses is the Asean region and this is the market where the company needs a manufacturing base,” said Sharma.
“It is not only to avail duty benefits, but it is important for the company to be close to the market and to avoid high freight rates,” he said.
The company is looking at manufacturing facility in Thailand, Indonesia and Philippians. “It will take another two years to decide on the destination. The focus now is to make the eastern Europe facility up and running by 2016.” The facility is a greenfield project and the company is investing around ^500 million in this facility, over four years.
Success in my Habit
Tuesday, June 17, 2014
Telenor to buy remaining 26% stake in Uninor for Rs 780 crore
New Delhi: Norway’s Telenor Group on Friday said it plans to invest an additional Rs. 780 crore to raise its ownership in Indian subsidiary Uninor to 100 per cent.
Telenor currently owns a 74 per cent stake in Uninor and the balance is held by Lakshdeep Investments, a company owned by Sun Pharmaceutical’s Executive Director Sudhir Valia.
“Continuing its long-term commitment to India, Telenor Group has filed to take complete ownership of its Indian business unit.
An application has been filed with the Foreign Investment Promotion Board of the Government of India, seeking approval for an additional investment of Rs. 780 crore to raise ownership in Uninor to 100 per cent,” said a company statement.
The money being paid by Telenor to acquire the 26 per cent stake does not reflect the valuation of Uninor as the transaction is based on the shareholders agreements signed with Valia. Other telecom companies, including AT&T, Vodafone and MTS India, have also sought to increase their holdings in their respective Indian ventures after the Government allowed 100 per cent FDI in telecom.
Expansion plans
Telenor’s Indian operations have had a rough ride with the Supreme Court cancelling its initial licences as part of the 2G spectrum scam order.
But the Norwegian company has since then participated in two auctions to acquire spectrum in the range of 5Mhz to 7.2 Mhz in seven circles that together represent more than half of India’s population.
This year, Uninor has announced an additional investment of Rs. 500 crore towards expansion of its network and distribution infrastructure by 30 per cent. Uninor has emerged as the fourth largest mobile operator by both customer and revenues share in some of its best circles.
The company now has over 30 million subscribers and is set to launch services in its newest circle of Assam this year.
Telenor currently owns a 74 per cent stake in Uninor and the balance is held by Lakshdeep Investments, a company owned by Sun Pharmaceutical’s Executive Director Sudhir Valia.
“Continuing its long-term commitment to India, Telenor Group has filed to take complete ownership of its Indian business unit.
An application has been filed with the Foreign Investment Promotion Board of the Government of India, seeking approval for an additional investment of Rs. 780 crore to raise ownership in Uninor to 100 per cent,” said a company statement.
The money being paid by Telenor to acquire the 26 per cent stake does not reflect the valuation of Uninor as the transaction is based on the shareholders agreements signed with Valia. Other telecom companies, including AT&T, Vodafone and MTS India, have also sought to increase their holdings in their respective Indian ventures after the Government allowed 100 per cent FDI in telecom.
Expansion plans
Telenor’s Indian operations have had a rough ride with the Supreme Court cancelling its initial licences as part of the 2G spectrum scam order.
But the Norwegian company has since then participated in two auctions to acquire spectrum in the range of 5Mhz to 7.2 Mhz in seven circles that together represent more than half of India’s population.
This year, Uninor has announced an additional investment of Rs. 500 crore towards expansion of its network and distribution infrastructure by 30 per cent. Uninor has emerged as the fourth largest mobile operator by both customer and revenues share in some of its best circles.
The company now has over 30 million subscribers and is set to launch services in its newest circle of Assam this year.
Indian Government to create ministry for entrepreneurship and skill development
Panaji: The Union Government will create a separate ministry for promoting entrepreneurship and skill development, as per Mr Narendra Modi, Prime Minister of India.
“A separate ministry, which will look after promoting entrepreneurship and skill development, would be created. Even developed countries have accorded priority to promoting skilled manpower,” said Mr Modi while addressing a gathering of 150 special invitees.
About 65 per cent of the Indian population is under the age of 35 and promotion of skill and development will give job opportunities to unemployed youth in India as well as abroad, as per Mr Modi.
The Prime Minister said his Government was firm on applying austerity measures in an effort to bring down expenditure and enhance economic growth.
Mr Modi favoured inviting large-scale foreign direct investment (FDI) to revive growth. “Foreign countries are now keen to invest in India,” he said, adding that the country’s focus should be to give basic amenities to all citizens.
He said India will complete 75 years of independence in 2022, and to accomplish the dream and vision of the country’s freedom fighters, the Government will provide houses to all by that year with facilities like water, electricity and toilets.
As part of the celebrations to commemorate the 150th birth anniversary of Mahatma Gandhi (in 2019), the Union Government will commence a nationwide cleanliness drive, said the Prime Minister.
“Our Government will fulfil the people’s aspirations and expectations. This is a nation of honest people,” he added.
“A separate ministry, which will look after promoting entrepreneurship and skill development, would be created. Even developed countries have accorded priority to promoting skilled manpower,” said Mr Modi while addressing a gathering of 150 special invitees.
About 65 per cent of the Indian population is under the age of 35 and promotion of skill and development will give job opportunities to unemployed youth in India as well as abroad, as per Mr Modi.
The Prime Minister said his Government was firm on applying austerity measures in an effort to bring down expenditure and enhance economic growth.
Mr Modi favoured inviting large-scale foreign direct investment (FDI) to revive growth. “Foreign countries are now keen to invest in India,” he said, adding that the country’s focus should be to give basic amenities to all citizens.
He said India will complete 75 years of independence in 2022, and to accomplish the dream and vision of the country’s freedom fighters, the Government will provide houses to all by that year with facilities like water, electricity and toilets.
As part of the celebrations to commemorate the 150th birth anniversary of Mahatma Gandhi (in 2019), the Union Government will commence a nationwide cleanliness drive, said the Prime Minister.
“Our Government will fulfil the people’s aspirations and expectations. This is a nation of honest people,” he added.
India becomes permanent member of Washington Accord
New Delhi: In what can be seen as a boost for techies, India on Friday became a permanent member of the Washington Accord (WA), an elite international agreement on engineering studies and mobility of engineers.
The country now joins a select group of 17 countries who are permanent signatories of the WA. “The signatory status will substantially increase global employment opportunities for technical and engineering graduates,” HRD Minister Smriti Irani said in a statement issued by the Ministry.
Washington Accord is an international agreement amongst prominent nations of the world, with the charter of promoting mobility and quality assurance of engineers across international boundaries.
The charter requires that nations set up suitable accreditation standards, which would ensure a minimum quality of attainment for their engineering graduates.
Irani said, “This will ensure highest quality assurance standards to be implemented in our technical and engineering programmes and provide global mobility to our engineering graduates.”
“Graduates having degrees, which have been so accredited, would have substantial international equivalence of their achievement levels across the signatory nations. This will substantially enhance their employment opportunities around the world,” she added.
Former HRD Minister Pallam Raju also tweeted: Congratulations to MHRD, after a seven-year effort by the Ministry, India has gained permanent membership of the Washington Accord!
The country now joins a select group of 17 countries who are permanent signatories of the WA. “The signatory status will substantially increase global employment opportunities for technical and engineering graduates,” HRD Minister Smriti Irani said in a statement issued by the Ministry.
Washington Accord is an international agreement amongst prominent nations of the world, with the charter of promoting mobility and quality assurance of engineers across international boundaries.
The charter requires that nations set up suitable accreditation standards, which would ensure a minimum quality of attainment for their engineering graduates.
Irani said, “This will ensure highest quality assurance standards to be implemented in our technical and engineering programmes and provide global mobility to our engineering graduates.”
“Graduates having degrees, which have been so accredited, would have substantial international equivalence of their achievement levels across the signatory nations. This will substantially enhance their employment opportunities around the world,” she added.
Former HRD Minister Pallam Raju also tweeted: Congratulations to MHRD, after a seven-year effort by the Ministry, India has gained permanent membership of the Washington Accord!
Sunday, June 15, 2014
AirAsia takes off, eyes non-trunk routes
Bangalore: As its brand new A320 took off from Kempegowda International Airport in Bangalore and headed to Goa, AirAsia India became the country’s latest domestic airline. With its maiden flight, AirAsia India became the country’s fourth low-cost carrier, after IndiGo, SpiceJet and GoAir.
CEO Mittu Chandilya told newspersons that Bangalore would be the airline’s operational hub while Chennai will remain the corporate and maintenance base.
Chandilya noted that the high tax rate of 29 per cent on aviation turbine fuel levied by the Karnataka Government is a deterrent and the airline has requested the State Government to reduce it.
AirAsia will operate its next flight on June 19, from Bangalore to Chennai. Two more new A320s will join the fleet in a month or two. The budget carrier plans to add an aircraft a month to its fleet over the next 10 months.
Focus on tier-2 cities
It will add nine new destinations in the next few months, mostly in the south, including Mangalore, Hubli and Jaipur, where A320s can land. During the next three years, the airline plans to expand the network to 30 cities.
“Our focus will be on tier-2 cities and we are not keen on ‘trunk’ routes (to Mumbai, Delhi or Kolkata),” Chandilya said.
He said the airline sold all 180 seats within minutes of opening bookings on May 30. As a promotional offer, the airline sold 40 per cent of the tickets at Rs. 990, 10 per cent at Rs. 5 per ticket and the balance for up to Rs. 1,900 a ticket.
The 300-staff airline has shifted its pilots, crew and office to Bangalore. “Over the years we will invest and develop our hub here. Bangalore’s airport is excellent. I am interested in being here. I have moved the entire team here and am putting in contracts that are very Bangalore-centric.”
The Indian venture of the Malaysian airline has an initial investment of Rs. 90-crore ($15-million) from Air Asia Berhad (49 per cent); Tata Sons (30 per cent); and Telstra Tradeplace (21 per cent); it will go up to $20 million (around Rs. 120 crore), the CEO said.
Eyeing quick break-even
On recovering the investment, he said: “We will break even in four months… Our fares will be 35 per cent lower than the market rat. At this rate, we believe we can sustain and be profitable.”
AirAsia’s Indian venture was approved in February 2013. The carrier got its first plane in March this year and its operating licence in May.
CEO Mittu Chandilya told newspersons that Bangalore would be the airline’s operational hub while Chennai will remain the corporate and maintenance base.
Chandilya noted that the high tax rate of 29 per cent on aviation turbine fuel levied by the Karnataka Government is a deterrent and the airline has requested the State Government to reduce it.
AirAsia will operate its next flight on June 19, from Bangalore to Chennai. Two more new A320s will join the fleet in a month or two. The budget carrier plans to add an aircraft a month to its fleet over the next 10 months.
Focus on tier-2 cities
It will add nine new destinations in the next few months, mostly in the south, including Mangalore, Hubli and Jaipur, where A320s can land. During the next three years, the airline plans to expand the network to 30 cities.
“Our focus will be on tier-2 cities and we are not keen on ‘trunk’ routes (to Mumbai, Delhi or Kolkata),” Chandilya said.
He said the airline sold all 180 seats within minutes of opening bookings on May 30. As a promotional offer, the airline sold 40 per cent of the tickets at Rs. 990, 10 per cent at Rs. 5 per ticket and the balance for up to Rs. 1,900 a ticket.
The 300-staff airline has shifted its pilots, crew and office to Bangalore. “Over the years we will invest and develop our hub here. Bangalore’s airport is excellent. I am interested in being here. I have moved the entire team here and am putting in contracts that are very Bangalore-centric.”
The Indian venture of the Malaysian airline has an initial investment of Rs. 90-crore ($15-million) from Air Asia Berhad (49 per cent); Tata Sons (30 per cent); and Telstra Tradeplace (21 per cent); it will go up to $20 million (around Rs. 120 crore), the CEO said.
Eyeing quick break-even
On recovering the investment, he said: “We will break even in four months… Our fares will be 35 per cent lower than the market rat. At this rate, we believe we can sustain and be profitable.”
AirAsia’s Indian venture was approved in February 2013. The carrier got its first plane in March this year and its operating licence in May.
India to be Ford’s centre piece for small cars
Chennai: With 60 per cent of the cars sold worldwide being compacts and sedans, “India is the centre piece for small cars” for Ford, according to Alan Mulally, President and CEO, Ford Motor Company.
More than half the cars sold globally are in the Ford Focus and Fiesta sized segment. So, the Indian customer and the company’s design team here are important.
Ford has decided its Indian operations will be the export hub. It now exports to over 50 countries and “we see that increasing over time,” he said in an interaction with media persons.
Mulally, who retires in July after eight years at the US-based automobile company, said for the first time, Ford used a single platform in the B-sized segment to offer the Figo and the EcoSport, a hatchback and a small SUV. This flexibility is an inherent part of Ford’s strategy worldwide.
Small cars are no longer about being ‘cheap and cheerful.’ Customers expect them to offer safety, quality and fuel efficiency as much as cars in any other segment, according to Mulally.
The company has nine basic platforms that can cater to over 85 per cent of the volume of vehicles sold globally covering compact cars to SUVs and wagons. It can bring to India any of its offerings including the largest of sedans in the market, if the customers want it.
Ford’s investments in India and China, the fastest growing markets, have been ‘tremendous’. “You are our future,” he said.
More than half the cars sold globally are in the Ford Focus and Fiesta sized segment. So, the Indian customer and the company’s design team here are important.
Ford has decided its Indian operations will be the export hub. It now exports to over 50 countries and “we see that increasing over time,” he said in an interaction with media persons.
Mulally, who retires in July after eight years at the US-based automobile company, said for the first time, Ford used a single platform in the B-sized segment to offer the Figo and the EcoSport, a hatchback and a small SUV. This flexibility is an inherent part of Ford’s strategy worldwide.
Small cars are no longer about being ‘cheap and cheerful.’ Customers expect them to offer safety, quality and fuel efficiency as much as cars in any other segment, according to Mulally.
The company has nine basic platforms that can cater to over 85 per cent of the volume of vehicles sold globally covering compact cars to SUVs and wagons. It can bring to India any of its offerings including the largest of sedans in the market, if the customers want it.
Ford’s investments in India and China, the fastest growing markets, have been ‘tremendous’. “You are our future,” he said.
Industry grows at fastest rate in 13 months
New Delhi: After falling for two months, industrial production grew at a 13-month-high rate of 3.4 per cent in April, driven mainly by electricity generation and manufacturing.
The numbers, if sustained, could push up economic growth, stuck below five per cent for two years now. However, economists are still not certain about the recovery in manufacturing, as it is driven by volatile capital goods.
The country’s industrial output, as measured by the Index of Industrial Production (IIP), had declined 0.5 per cent in March and 1.7 per cent in February, official data showed on Thursday.
Industrial output grew just 1.5 per cent in April last year and contracted 1.3 per cent in April the previous year. Economists said the slow IIP growth rate in April last year magnified the expansion in the month this year — in what is technically referred to as the base effect.
Electricity generation in April this year surged at a seven-month-high rate of 11.9 per cent, compared with 5.3 per cent the previous month. Mining grew 1.2 per cent, after contracting 0.3 per cent the previous month.
Manufacturing, which has the highest weight of 75.5 per cent on IIP, grew at 2.6 per cent, its fastest in nine months. Had it not been for a revision in the January data — from a 0.5 per cent contraction to a 0.2 per cent rise — manufacturing output would have declined for six months before April this year. Its production grew 1.8 per cent in April 2013 and shrank 1.8 per cent in April 2012.
However, economists remain concerned. “Manufacturing activity is still a concern, with no significant growth trend evolving within IIP,” said Debopam Chaudhuri, chief economist at Zyfin Research.
Economists want to watch the IIP data for a few months more before they can declare a revival, as the index is prone to volatility and is often revised. Volatility is particularly true of capital goods, which spurted 15.7 per cent in April after contracting in the previous four months. “The only caveat to the good news is that all of the upward surprise came from the notoriously lumpy and volatile capital goods sector,” said JPMorgan Economist Sajjid Chinoy.
Arun Singh, senior economist, Dun & Bradstreet, said he would look at IIP data for four months to confirm whether industry was recovering.
The capital goods segment, with a weight of 8.8 per cent on IIP, was responsible a 1.38 per cent rise in industrial production in April. Most of the push came from electrical machinery & equipment sector, which grew 66 per cent in the month.
With investment activity yet to display a broad-based pick-up, it was unclear whether the double-digit growth in the capital goods index would persist in the ongoing quarter, said ICRA Senior Economist Aditi Nayar.
Sustaining momentum in industrial production would depend on the government’s resolve to fast-track stalled projects, revive the investment pipeline and lift consumption demand by improving growth prospects, research firm CRISIL said in an analysis.
Fourteen of the 22 industry groups on the index posted growth in April, against 10 the previous month.
However, growth skipped consumer goods. Consumer durables have been declining for over a year now and in April non-durables also contracted. Consumer durables declined 7.6 per cent in April and consumer non-durables fell 3.3 per cent. Overall, consumer goods declined 5.1 per cent in April.
"Fast-moving consumer goods have also started bearing the brunt of a persistently high inflation rate,” Singh said. The fall in consumer non-durables may also be due to the base effect of 11.3 per cent growth in April 2013.
The numbers, if sustained, could push up economic growth, stuck below five per cent for two years now. However, economists are still not certain about the recovery in manufacturing, as it is driven by volatile capital goods.
The country’s industrial output, as measured by the Index of Industrial Production (IIP), had declined 0.5 per cent in March and 1.7 per cent in February, official data showed on Thursday.
Industrial output grew just 1.5 per cent in April last year and contracted 1.3 per cent in April the previous year. Economists said the slow IIP growth rate in April last year magnified the expansion in the month this year — in what is technically referred to as the base effect.
Electricity generation in April this year surged at a seven-month-high rate of 11.9 per cent, compared with 5.3 per cent the previous month. Mining grew 1.2 per cent, after contracting 0.3 per cent the previous month.
Manufacturing, which has the highest weight of 75.5 per cent on IIP, grew at 2.6 per cent, its fastest in nine months. Had it not been for a revision in the January data — from a 0.5 per cent contraction to a 0.2 per cent rise — manufacturing output would have declined for six months before April this year. Its production grew 1.8 per cent in April 2013 and shrank 1.8 per cent in April 2012.
However, economists remain concerned. “Manufacturing activity is still a concern, with no significant growth trend evolving within IIP,” said Debopam Chaudhuri, chief economist at Zyfin Research.
Economists want to watch the IIP data for a few months more before they can declare a revival, as the index is prone to volatility and is often revised. Volatility is particularly true of capital goods, which spurted 15.7 per cent in April after contracting in the previous four months. “The only caveat to the good news is that all of the upward surprise came from the notoriously lumpy and volatile capital goods sector,” said JPMorgan Economist Sajjid Chinoy.
Arun Singh, senior economist, Dun & Bradstreet, said he would look at IIP data for four months to confirm whether industry was recovering.
The capital goods segment, with a weight of 8.8 per cent on IIP, was responsible a 1.38 per cent rise in industrial production in April. Most of the push came from electrical machinery & equipment sector, which grew 66 per cent in the month.
With investment activity yet to display a broad-based pick-up, it was unclear whether the double-digit growth in the capital goods index would persist in the ongoing quarter, said ICRA Senior Economist Aditi Nayar.
Sustaining momentum in industrial production would depend on the government’s resolve to fast-track stalled projects, revive the investment pipeline and lift consumption demand by improving growth prospects, research firm CRISIL said in an analysis.
Fourteen of the 22 industry groups on the index posted growth in April, against 10 the previous month.
However, growth skipped consumer goods. Consumer durables have been declining for over a year now and in April non-durables also contracted. Consumer durables declined 7.6 per cent in April and consumer non-durables fell 3.3 per cent. Overall, consumer goods declined 5.1 per cent in April.
"Fast-moving consumer goods have also started bearing the brunt of a persistently high inflation rate,” Singh said. The fall in consumer non-durables may also be due to the base effect of 11.3 per cent growth in April 2013.
68% teens shop online in cities, 91% in mini-metros own mobiles
Mumbai: Almost seven out of 10 urban teenagers shop online and teenagers in mini-metros are ahead of their metro counterparts in adopting digital lifestyles, found a survey. The survey, which aimed to study the digital preferences of high school students, also found over 48% respondents had bought clothes and accessories online.
The TCS Gen-Y 2013-14 survey covered 18,196 students aged between 12-18 years across 14 cities in the country. Over 68% respondents said they shop online, compared to 37% last year. "While the number of teenagers who shop online has definitely increased, the difference in what they are shopping is stark. Last year, they were shopping for low value things like movie tickets and books, but this year clothes and accessories have taken the lead," the survey said.
While over 82% teenagers own a mobile phone in the metros, the numbers are higher in mini-metros at 91%. Similarly, teenagers from mini-metros also lead in the use of social media for school projects, with over 66% agreeing it helps them perform better in studies compared to 60% in metros. "Students have started using the internet for self learning and projects. Classrooms are taking that ahead and holding discussions," said Ajoy Mukherjee, the company's executive vice-president and global head of human resources.
Mobile phones and tablets were the most popular gadgets with teenagers, while Facebook continued to remain their most preferred social network. Over 85.8% of respondents were registered on it and more than 21% posted on the site everyday.
However, micro-blogging site twitter was not too popular with the teenagers. Over 31% respondents said they had a twitter account, only 2.7% said it was their most preferred social network. "The low popularity may be because the teenagers find it more complex," the survey said. Over 87% think social media has made them aware of current affairs.
The survey, which also looked at the career preferences of teens, found IT and engineering were their top two choices but observed a growing interest in media and entertainment compared to last year. Almost 10% respondents picked media or entertainment as their top three preferred choices.
The TCS Gen-Y 2013-14 survey covered 18,196 students aged between 12-18 years across 14 cities in the country. Over 68% respondents said they shop online, compared to 37% last year. "While the number of teenagers who shop online has definitely increased, the difference in what they are shopping is stark. Last year, they were shopping for low value things like movie tickets and books, but this year clothes and accessories have taken the lead," the survey said.
While over 82% teenagers own a mobile phone in the metros, the numbers are higher in mini-metros at 91%. Similarly, teenagers from mini-metros also lead in the use of social media for school projects, with over 66% agreeing it helps them perform better in studies compared to 60% in metros. "Students have started using the internet for self learning and projects. Classrooms are taking that ahead and holding discussions," said Ajoy Mukherjee, the company's executive vice-president and global head of human resources.
Mobile phones and tablets were the most popular gadgets with teenagers, while Facebook continued to remain their most preferred social network. Over 85.8% of respondents were registered on it and more than 21% posted on the site everyday.
However, micro-blogging site twitter was not too popular with the teenagers. Over 31% respondents said they had a twitter account, only 2.7% said it was their most preferred social network. "The low popularity may be because the teenagers find it more complex," the survey said. Over 87% think social media has made them aware of current affairs.
The survey, which also looked at the career preferences of teens, found IT and engineering were their top two choices but observed a growing interest in media and entertainment compared to last year. Almost 10% respondents picked media or entertainment as their top three preferred choices.
Overseas funds rushing to invest in India, over $5 billion invested in last 8 months
Mumbai: Several sovereign wealth funds (SWF) and overseas pension funds are rushing to invest in India, driven by hopes of economic recovery under a new stable government. At least three sovereign funds from West Asia have invested over $5 billion in the past eight months and one global pension fund has committed to invest $450 million.
Two other funds are scouting for investments in India's real estate and infrastructure developers.
"Risk of returns are out of the way and these funds can invest capital for longer tenure," said the head of a realty fund, which has received investments from two SWFs in West Asia.
"They have lesser redemption pressure unlike private equity funds, which have to give returns to their investors in few years."
Private equity (PE) experts say a trend is visible of both SWF and pension funds investing heavily in the past six months. They say they expect to see more such investments this year.
"SWF and pension funds will be the largest investors in the next one year, while the fund of funds and PE funds will stay away after being caught in the two cycles of economic slowdown," said a senior PE fund manager, whose fund runs a distressed asset fund jointly with an American bulge bracket fund.
Abu Dhabi Investment Authority (ADIA), which had invested roughly $500 million in the past decade, has also upped the ante. Abu Dhabi power company Taqa, owned by ADIA, purchased a 51% stake in Jaypee Group's thermal power projects for $1.5 billion jointly with a Canadian pension fund and local PE IDFC Alternatives Fund.
Last year, ADIA also appointed Suresh Sadasivan as head of its internal equities department for Asia excluding Japan, responsible for developing strategy, managing risk and overseeing management of portfolios.
Oman's State General Reserve Fund, Government of Singapore Investment Corp (GIC) and Temasek committed $200 million investment in a real estate fund run by India's biggest mortgage lender, Housing Development Finance Corporation.
In May last year, Qatar paid $1.26 billion for a 5% stake in India's largest mobile telephony by customers Bharti Airtel.
Canadian Pension Plan Investment Board, which manages $218.1 billion of assets, formed two joint ventures in November last year.
It formed a joint venture with real estate developer Shapoorji Pallonji Group to invest in commercial real estate in India, and formed an equal real estate finance company with billionaire Ajay Piramal group's Piramal Enterprises, which will specialise in debt and structured finance. The fund committed $200 million in the first and $250 million in the second venture. "We will be deploying more and more capital to India and that is fungible.
We are constantly moving our capital, so it can't be seen as what happens to one dollar invested in one project," Mark Wiseman, president and CEO at Canada Pension Plan Investment Board, said after announcing its real estate venture. The fund opened its second office in India outside Canada after Hong Kong.
Consultants say the fund flow to India will rise as Japan allowed its $1.26 trillion pension fund to invest in alternate assets overseas.
Two other funds are scouting for investments in India's real estate and infrastructure developers.
"Risk of returns are out of the way and these funds can invest capital for longer tenure," said the head of a realty fund, which has received investments from two SWFs in West Asia.
"They have lesser redemption pressure unlike private equity funds, which have to give returns to their investors in few years."
Private equity (PE) experts say a trend is visible of both SWF and pension funds investing heavily in the past six months. They say they expect to see more such investments this year.
"SWF and pension funds will be the largest investors in the next one year, while the fund of funds and PE funds will stay away after being caught in the two cycles of economic slowdown," said a senior PE fund manager, whose fund runs a distressed asset fund jointly with an American bulge bracket fund.
Abu Dhabi Investment Authority (ADIA), which had invested roughly $500 million in the past decade, has also upped the ante. Abu Dhabi power company Taqa, owned by ADIA, purchased a 51% stake in Jaypee Group's thermal power projects for $1.5 billion jointly with a Canadian pension fund and local PE IDFC Alternatives Fund.
Last year, ADIA also appointed Suresh Sadasivan as head of its internal equities department for Asia excluding Japan, responsible for developing strategy, managing risk and overseeing management of portfolios.
Oman's State General Reserve Fund, Government of Singapore Investment Corp (GIC) and Temasek committed $200 million investment in a real estate fund run by India's biggest mortgage lender, Housing Development Finance Corporation.
In May last year, Qatar paid $1.26 billion for a 5% stake in India's largest mobile telephony by customers Bharti Airtel.
Canadian Pension Plan Investment Board, which manages $218.1 billion of assets, formed two joint ventures in November last year.
It formed a joint venture with real estate developer Shapoorji Pallonji Group to invest in commercial real estate in India, and formed an equal real estate finance company with billionaire Ajay Piramal group's Piramal Enterprises, which will specialise in debt and structured finance. The fund committed $200 million in the first and $250 million in the second venture. "We will be deploying more and more capital to India and that is fungible.
We are constantly moving our capital, so it can't be seen as what happens to one dollar invested in one project," Mark Wiseman, president and CEO at Canada Pension Plan Investment Board, said after announcing its real estate venture. The fund opened its second office in India outside Canada after Hong Kong.
Consultants say the fund flow to India will rise as Japan allowed its $1.26 trillion pension fund to invest in alternate assets overseas.
Japan's Meiji Holdings acquires Medreich for Rs 1,720 Cr
Mumbai: Japanese pharmaceutical major Meiji Holdings has bought out Temasek-backed Medreich for $290 million (Rs 1,720 crore), the company informed Tokyo Stock Exchange on Wednesday, marking the first inbound investment in the Indian pharmaceutical sector by a Japanese company after Daiichi Sankyo's ill-fated acquisition of Ranbaxy in 2008.
Temasek, the private equity arm of the Singapore government, had invested Rs 109 crore in 2005 for a 25 per cent stake in Medreich which manufactures therapeutic generic and branded drugs. Temasek has made almost a four-fold return on its investment in the company by getting around Rs 430 crore from this transaction.
"Meiji, through its operating subsidiaries, Meiji Seika Pharma, has bought out 100 per cent stake in Medreich as it plans to enter the Indian market," said a person with direct knowledge of the deal. As part of the Japanese company's 2020 vision, it wants to expand to newer geographies, the person explained.
Medreich sells generic pharmaceuticals products to Europe, Asia, and Africa. Its main business partners include GSK, Adcock Ingram, Pfizer, Sanofi, Novartis and Mylan, among others. "The Meiji Group wants to enter the global generics field, particularly in Asia and emerging countries," the company's release in Japanese read.
The $5-billion Meiji Group's acquisition signals a return of longterm confidence in the Indian pharmaceutical sector. Last month, in an all-share transaction, Sun Pharmaceutical Industries bought generic drugmaker Ranbaxy Laboratories for $3.2 billion. Daiichi had paid $4.2 billion for a 69 per cent stake in Ranbaxy in 2008.
"If multinational companies have to make a mark in India, they cannot grow organically, and if they have to acquire companies, they will trigger the foreign direct investment issue," said Sujay Shetty, head of life sciences at consultancy PwC when the Ranbaxy-Sun Pharma deal was announced.
Investment bank JP Morgan was the advisor to Meiji Holdings and NM Rothschild advised the investors and promoters of Medreich. Medreich, founded in 1976 by Rajeev Mehta, Keith De Souza and CP Bothra, has the capability to produce over 500 products with an R& D team of over 75 scientists. The company has been profitable since its inception. The company's branding and name will not be changed post the acquisition, Meiji Holdings has said.
For Temasek, this marks a blockbuster exit from an Indian company. Temasek has made several large private equity investments in India, including in Bharti Airtel, Tata Teleservices in Maharashtra, GMR Energy, National Stock Exchange and Godrej Consumer Products.
Temasek, the private equity arm of the Singapore government, had invested Rs 109 crore in 2005 for a 25 per cent stake in Medreich which manufactures therapeutic generic and branded drugs. Temasek has made almost a four-fold return on its investment in the company by getting around Rs 430 crore from this transaction.
"Meiji, through its operating subsidiaries, Meiji Seika Pharma, has bought out 100 per cent stake in Medreich as it plans to enter the Indian market," said a person with direct knowledge of the deal. As part of the Japanese company's 2020 vision, it wants to expand to newer geographies, the person explained.
Medreich sells generic pharmaceuticals products to Europe, Asia, and Africa. Its main business partners include GSK, Adcock Ingram, Pfizer, Sanofi, Novartis and Mylan, among others. "The Meiji Group wants to enter the global generics field, particularly in Asia and emerging countries," the company's release in Japanese read.
The $5-billion Meiji Group's acquisition signals a return of longterm confidence in the Indian pharmaceutical sector. Last month, in an all-share transaction, Sun Pharmaceutical Industries bought generic drugmaker Ranbaxy Laboratories for $3.2 billion. Daiichi had paid $4.2 billion for a 69 per cent stake in Ranbaxy in 2008.
"If multinational companies have to make a mark in India, they cannot grow organically, and if they have to acquire companies, they will trigger the foreign direct investment issue," said Sujay Shetty, head of life sciences at consultancy PwC when the Ranbaxy-Sun Pharma deal was announced.
Investment bank JP Morgan was the advisor to Meiji Holdings and NM Rothschild advised the investors and promoters of Medreich. Medreich, founded in 1976 by Rajeev Mehta, Keith De Souza and CP Bothra, has the capability to produce over 500 products with an R& D team of over 75 scientists. The company has been profitable since its inception. The company's branding and name will not be changed post the acquisition, Meiji Holdings has said.
For Temasek, this marks a blockbuster exit from an Indian company. Temasek has made several large private equity investments in India, including in Bharti Airtel, Tata Teleservices in Maharashtra, GMR Energy, National Stock Exchange and Godrej Consumer Products.
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