New Delhi: Undergraduate students from all parts of the country will soon be able to take a peek through a microscope that they can carry with them, following an initiative by the Department of Biotechnology to reach the Prakash Lab’s low cost paper folding-microscope, the Foldscope to students in our country.
The letter of intent to distribute Foldscope through DBT’s star college and other programmes was exchanged between the Department of Biotechnology (DBT) and the Prakash Lab in the presence of Prime Minister Shri Narendra Modi during his visit to Silicon Valley in USA recently.
It all started with a tweet from Secretary, Department of Biotechnology Professor K Vijay Raghavan to Dr Prakash on August 12 this year.
‘Hi, can we discuss using Foldscope widely in India? I am at the Deptt of Biotech, Govt of India’.
Dr Prakash responded immediately welcoming it, a skype call followed subsequently. Prime Minister’s office also responded enthusiastically to the call requesting for his support.
Rapid communication through the social media played a crucial role quickly paving the pathway for the letter of intent to spread the low technology widely through DBT’s network.
This was a unique demonstration of how the government is using the social media in novel ways to stimulate citizen science.
Dr Prakash is excited about engaging through DBT to extend further the Foldscope’s reach to all parts of India. He said, “Our vision is to bring a microscope into the hands of every single kid in the world”.
“Partnering with Prakash Lab’s Foldscope is an exciting new adventure for the Department of Biotechnology. It is Citizen Science at its best. The Foldscope is torchlight in the hands of human curiosity that allows each and every one of us to explore our planet at the microscopic level, just as the telescope allows us to explore the stars. The beauty we see and the science underneath it will create a new generation of young scientists in India. We look forward to taking this wonderful partnership ahead” said Professor Vijay Raghavan.
Prakash Lab, a research group at Stanford University working in the field of engineering and physical biology, will source Foldscope to DBT and its constituents.
The DBT will ensure that the Foldscope is provided to students of the Star College scheme in each identified college. This will be done progressively based on the availability of Foldscope.
Foldscope will be used as an educational and training tool to understand physics, chemistry, biology and instrumentation.
Foldscope is provided as a kit where the student starts by first building the actual unit from the kit; and explores curiosity driven questions surrounding the microscopic world in physics, chemistry and biology. The users build an online community and share insights, projects, questions and scientific discoveries with the community at Foldscope online platform.
Workshops and training programmes will be run by Prakash Lab in collaboration with Indian institutions. The nascent Local Foldscope community based in India will also be involved in training.
After this initial pilot program, the collaboration with Prakash Lab will be expanded to setting up of joint research for explorations of other low cost instrumentation in colleges as deemed mutually appropriate.
This was a case of matching of views that is focused to create a spark. The Prime Minister has been stressing on using Indian experts abroad to bring benefits to India.
Success in my Habit
Wednesday, October 7, 2015
Edelweiss setting up US$ 1 bn real estate fund
Bengaluru: Edelweiss Alternative Asset Advisors Ltd, part of diversified financial services firm Edelweiss Group, is raising up to $1 billion for its first residential real estate fund, a top executive said.
Edelweiss Real Estate Fund is a structured credit, offshore fund that is looking to invest $15-75 million in each transaction. It is planning to do a first close of about $350 million in a month’s time, making it one of the largest first closures in recent times.
Once a fund achieves the so-called first close, it starts making investments.
“We are looking to partner mid-sized developers in real estate projects that have already got the key approvals. The fund will not provide capital to buy land or invest in an early stage of a project,” said Venkat Ramaswamy, executive director and co-head of global asset management, Edelweiss Financial Services Ltd.
The fund will scout for investment opportunities in five property markets—National Capital Region (NCR), Mumbai, Pune, Bengaluru and Chennai.
Private equity (PE) firms plan to raise about $3 billion (excluding the Edelweiss fund) from overseas investors this fiscal year to invest in projects in the top property markets despite choppy markets and inadequate interest from limited partners (LPs) in the Indian real estate segment.
LPs include public and corporate pension funds, insurance companies, wealthy individuals and university and other endowments that are the source of money for PE firms, which then establish funds to invest.
Housing Development Finance Corp. Ltd (HDFC) has two new offshore funds, a $500 million fund through HDFC Property Fund that will be launched later this year and an $850 million fund through another entity which is already in fund-raising mode.
IDFC Alternatives is also targeting about $250 million from offshore investors for a new fund and has entered into an asset management and development partnership with property firm SARE Homes, which will manage and monitor the projects in which the fund will invest.
For six-to-seven years, Edelweiss has made investments in real estate projects mainly out of its own balance sheet. This time, as it gears up for a full-fledged fund, it is tapping investors in Asia, Europe and the US.
“Edelweiss is a meaningful investor in all our alternative credit funds, and our fund size is decided on the basis of what we can deploy. We have an extremely good team with strong real estate market connects in our five addressed cities, which is essential in terms of deploying and recovery of capital,” said Ramaswamy.
PE funds that invest in real estate projects typically opt for equity investments, which carry higher risks and returns; debt investments with lower but guaranteed returns; or structured transactions, which are a mix of both.
In the Edelweiss fund, structured credit means returns are structured keeping in mind the cash flow of the project. It keeps 1.5 to 2 times its investment amount as collateral and has control of the project cash flows.
For home-grown firms such as ASK group and Edelweiss that are raising their first offshore funds, it will be interesting to see how they tap the LP network in today’s challenging conditions, a property consultant said.
“Funds have taken longer to raise offshore capital in recent times as most LPs are not willing to write large cheques and commit upfront capital,” said Shashank Jain, partner, transaction services, PricewaterhouseCoopers India. “Most of them give out smaller amounts, and keep monitoring the fund’s performance and as and when good transactions take place, they commit more money. As a result of which, the final closing of a fund happens in a staggered manner.”
Edelweiss Real Estate Fund is a structured credit, offshore fund that is looking to invest $15-75 million in each transaction. It is planning to do a first close of about $350 million in a month’s time, making it one of the largest first closures in recent times.
Once a fund achieves the so-called first close, it starts making investments.
“We are looking to partner mid-sized developers in real estate projects that have already got the key approvals. The fund will not provide capital to buy land or invest in an early stage of a project,” said Venkat Ramaswamy, executive director and co-head of global asset management, Edelweiss Financial Services Ltd.
The fund will scout for investment opportunities in five property markets—National Capital Region (NCR), Mumbai, Pune, Bengaluru and Chennai.
Private equity (PE) firms plan to raise about $3 billion (excluding the Edelweiss fund) from overseas investors this fiscal year to invest in projects in the top property markets despite choppy markets and inadequate interest from limited partners (LPs) in the Indian real estate segment.
LPs include public and corporate pension funds, insurance companies, wealthy individuals and university and other endowments that are the source of money for PE firms, which then establish funds to invest.
Housing Development Finance Corp. Ltd (HDFC) has two new offshore funds, a $500 million fund through HDFC Property Fund that will be launched later this year and an $850 million fund through another entity which is already in fund-raising mode.
IDFC Alternatives is also targeting about $250 million from offshore investors for a new fund and has entered into an asset management and development partnership with property firm SARE Homes, which will manage and monitor the projects in which the fund will invest.
For six-to-seven years, Edelweiss has made investments in real estate projects mainly out of its own balance sheet. This time, as it gears up for a full-fledged fund, it is tapping investors in Asia, Europe and the US.
“Edelweiss is a meaningful investor in all our alternative credit funds, and our fund size is decided on the basis of what we can deploy. We have an extremely good team with strong real estate market connects in our five addressed cities, which is essential in terms of deploying and recovery of capital,” said Ramaswamy.
PE funds that invest in real estate projects typically opt for equity investments, which carry higher risks and returns; debt investments with lower but guaranteed returns; or structured transactions, which are a mix of both.
In the Edelweiss fund, structured credit means returns are structured keeping in mind the cash flow of the project. It keeps 1.5 to 2 times its investment amount as collateral and has control of the project cash flows.
For home-grown firms such as ASK group and Edelweiss that are raising their first offshore funds, it will be interesting to see how they tap the LP network in today’s challenging conditions, a property consultant said.
“Funds have taken longer to raise offshore capital in recent times as most LPs are not willing to write large cheques and commit upfront capital,” said Shashank Jain, partner, transaction services, PricewaterhouseCoopers India. “Most of them give out smaller amounts, and keep monitoring the fund’s performance and as and when good transactions take place, they commit more money. As a result of which, the final closing of a fund happens in a staggered manner.”
New IPR policy in 2 months: DIPP secy
New Delhi: India was going to unveil a comprehensive intellectual property right (IPR) policy to address the concerns of foreign industries operating here and those looking to invest in the country, Department of Industrial Policy and Promotion (DIPP) Secretary Amitabh Kant confirmed in New Delhi on Monday.
Addressing a joint Indo-German business round table, attended by chief executives of companies from both countries, Kant said the government was doing all it could to bring out the IPR policy; it would be made public in two months’ time.
His statement came after entrepreneurs from Germany’s pharmaceutical and defence industries conveyed the difficulties of working with sensitive technology under India’s existing IPR regime.
The defence trade between India and Germany, though at a favourable stage currently, needed to be streamlined through responses from the demand and supply sides of the economy, said a German industrialist.
Among other issues raised by the delegation were the unease of business, especially in the Customs clearance process, unavailability of technical workforce and need to remove existing red-tape in investment.
Significant concerns over delays in implementation of the goods & services tax (GST) were also mentioned.
The event, organised by industry bodies Federation of Indian Chambers of Commerce and Industries (Ficci), Confederation of Indian Industries (CII) and the Indo-German Chamber of Commerce, saw the participation by 20 CEOs of German and Indian companies.
Addressing a joint Indo-German business round table, attended by chief executives of companies from both countries, Kant said the government was doing all it could to bring out the IPR policy; it would be made public in two months’ time.
His statement came after entrepreneurs from Germany’s pharmaceutical and defence industries conveyed the difficulties of working with sensitive technology under India’s existing IPR regime.
The defence trade between India and Germany, though at a favourable stage currently, needed to be streamlined through responses from the demand and supply sides of the economy, said a German industrialist.
Among other issues raised by the delegation were the unease of business, especially in the Customs clearance process, unavailability of technical workforce and need to remove existing red-tape in investment.
Significant concerns over delays in implementation of the goods & services tax (GST) were also mentioned.
The event, organised by industry bodies Federation of Indian Chambers of Commerce and Industries (Ficci), Confederation of Indian Industries (CII) and the Indo-German Chamber of Commerce, saw the participation by 20 CEOs of German and Indian companies.
Centre to invest Rs 70,000 crore in ports in 5 years
New Delhi: The Centre is likely to invest around Rs 70,000 crore in 12 major ports in the next five years under 'Sagarmala', an initiative aimed at promoting 'port-led development' along India's 7,500-km coastline.
"In a recent meeting, industrialists said it's cheaper to travel from Mumbai to London than to Delhi. Our logistic cost is thrice that of China... If we want to compete in the global market, logistic costs need to be reduced. 'Sagarmala' will address all these issue by developing ports and waterways in the country," said Nitin Gadkari, minister for road transport, highways and shipping after chairing the first meeting of the National Sagarmala Apex Committee.
"We are planning to invest Rs 60,000-70,000 crore on development of 12 major ports in the next five years. We have received 104 suggestions from international consultants to increase efficiency, which will be implemented in the next few years," he added, Gadkari said the project would create huge employment and boost the country's GDP. "Very soon, the ports, shipping and highways sector will add two per cent to the country's GDP."
To transform India into an automobile hub, he said the government would build eight scrap recycle centres near ports such as Kandla to recycle used vehicles from the world over and boost automobile exports.
"In a recent meeting, industrialists said it's cheaper to travel from Mumbai to London than to Delhi. Our logistic cost is thrice that of China... If we want to compete in the global market, logistic costs need to be reduced. 'Sagarmala' will address all these issue by developing ports and waterways in the country," said Nitin Gadkari, minister for road transport, highways and shipping after chairing the first meeting of the National Sagarmala Apex Committee.
"We are planning to invest Rs 60,000-70,000 crore on development of 12 major ports in the next five years. We have received 104 suggestions from international consultants to increase efficiency, which will be implemented in the next few years," he added, Gadkari said the project would create huge employment and boost the country's GDP. "Very soon, the ports, shipping and highways sector will add two per cent to the country's GDP."
To transform India into an automobile hub, he said the government would build eight scrap recycle centres near ports such as Kandla to recycle used vehicles from the world over and boost automobile exports.
India and Germany Sign Agreements for Furthering Cooperation in the Field of Science & Technology
New Delhi: India and Germany have signed agreements for furthering cooperation in the field of Science & Technology. The Union Minister for Science & Technology and Earth Sciences Dr. Harsh Vardhan and the German Federal Minister for Education and Research Ms. Johanna Wanka signed the main agreement and witnessed signing of another agreement by the officials for the purpose after mutual discussions in New Delhi today. At the meeting held before the 3rd Indo-German Consultative meeting, both the Ministers expressed their satisfaction on the level of Indo-German Science & Technology cooperation which is now recognised as one of the strategic pillars in the overall bilateral relationship. It was reiterated by both sides that they would continue to support and strengthen the basic research component of collaboration which will underpin future technology developments. India is investing approximately 14 million euro for the construction of an additional beam line and access to the synchrotron facility at PETRA-III in DESY at Hamburg. Similarly, India is equity share holder with investment of 36 million euro in the construction of the international “Facility for Antiproton-Ion Research” (FAIR) at Darmstadt. Both these state of art facilities will further enable our scientists to conduct high impact and frontier research in material science, nuclear and high energy physics. On the same model, Dr. Harsh Vardhan offered Germany to participate in some of the future mega science projects, which India will be embarking upon. A major highlight of the meeting was the agreement on both sides to extend the bi-national Indo-German Science & Technology Center (IGSTC) beyond 2017 with increase in funding from 2 million euro to 4 million euro every year. This was a reflection of the common endeavour on both sides to support industrially relevant R&D projects that have potential to generate novel technologies and new intellectual property in sectors such as advance manufacturing, embedded systems & ICT for automobiles, renewable energy, food security, clean water and health care technologies- all of which are in tune with present national missions of the government of India. India is the only country with whom Germany has such a bilateral R&D Centre dedicated to promote applied and industrial R&D. The Centre is already supporting 15 joint projects and pro-types of some new technologies have been co-developed in solar-thermal energy, stress tolerant chic-pea variety, and high altitude cold resistance plants etc. Dr. Harsh Vardhan expressed confidence that the extended tenure of Indo-German Science & Technology Centre (IGSTC) until 2022 along with doubling its financial resources will enable us to co-develop affordable technologies that can contribute to the knowledge economy of both our countries. Both the Ministers reiterated the need for concerted effort to promote exchanges of young scientists and student researchers. To this end DST through a Letter of Intent agreed to continue the support for participation of 25 Indian science and medical students to the annual Nobel Laureate meet in Lindau. Both the Ministers echoed that the future cooperation should focus on programs to promote innovation and techno-entrepreneurship by linking the SME and Start-up enterprises of both the countries in order to make meaningful contribution to the knowledge economy and use the tools of science and technology to address socially relevant challenges. New areas such as anti-microbial resistance and regenerative medicine, earth science system including monsoon studies and marine sciences required to understand the climate change process was emphasised by the Indian side that needs to be addressed together.
Saturday, September 19, 2015
Sun buys InSite Vision for US$ 48 million
Sun Pharmaceutical has acquired InSite Vision, a US-based specialty ophthalmic product maker, in a $48 million (about Rs 320 crore) deal. The acquisition will enable Sun Pharma, India's largest drug maker by revenue, to grow its US business. The US sales make up for about half of its consolidated revenue.
Sun Pharma said it was developing branded ophthalmic business in the US and acquisition of InSite Vision and in-licencing of Xelpros eye drops were steps in that direction.
For the six-month period ended June 30, InSite Vision reported revenue of $3.8 million, Ebitda loss of $6.4 million and a net loss of $7.5 million. InSite Vision's core competence is research and product development, and has research facilities in California. However, the company has been facing fund shortages, sources said.
Kal Sundaram, chief executive of Sun Pharma's North American business, said, "This potential acquisition is a part of our overall objective of transitioning to a specialty company. Besides dermatology, we have identified ophthalmics as one of the key segments for establishing our branded presence in the US."
Jerry St Peter, vice-president and head of Sun Pharma's US ophthalmic business, said, "The potential addition of the InSite Vision portfolio serves as a significant step towards enhancing our branded specialty pipeline in the ophthalmic segment. InSite Vision will bring with it a pipeline of three late-stage clinical candidates, validated drug delivery technology and a track record of achieving US FDA approval for ophthalmic products." The company has two branded eye drops, which are marked by other companies.
The size of ophthalmic product business is about $7 billion and top five companies in the space control over 95 per cent market share.
Sun Pharma said it was developing branded ophthalmic business in the US and acquisition of InSite Vision and in-licencing of Xelpros eye drops were steps in that direction.
For the six-month period ended June 30, InSite Vision reported revenue of $3.8 million, Ebitda loss of $6.4 million and a net loss of $7.5 million. InSite Vision's core competence is research and product development, and has research facilities in California. However, the company has been facing fund shortages, sources said.
Kal Sundaram, chief executive of Sun Pharma's North American business, said, "This potential acquisition is a part of our overall objective of transitioning to a specialty company. Besides dermatology, we have identified ophthalmics as one of the key segments for establishing our branded presence in the US."
Jerry St Peter, vice-president and head of Sun Pharma's US ophthalmic business, said, "The potential addition of the InSite Vision portfolio serves as a significant step towards enhancing our branded specialty pipeline in the ophthalmic segment. InSite Vision will bring with it a pipeline of three late-stage clinical candidates, validated drug delivery technology and a track record of achieving US FDA approval for ophthalmic products." The company has two branded eye drops, which are marked by other companies.
The size of ophthalmic product business is about $7 billion and top five companies in the space control over 95 per cent market share.
Railways, Maharashtra government to set up Special Purpose Vehicle for railway infrastructure
In a bid to give boost to Railway infrastructure projects in the state, the Maharashtra government on Wednesday has decided to form the Maharashtra Railway Infrastructure Development Company. The decision was taken after Maharashtra Chief Minister Devendra Fadnavis held a review meeting with Railway officials of various development projects pending in the state.
The Maharashtra government has said that the Company which is a Special Purpose Vehicle (SPV) has been formed to ensure that the various development projects are completed in a time bound manner. Fadnavis would soon be meeting Railway Minister Suresh Prabhu in order to fix the modalities of how Railway officials would be members in this company and how many funds would be allocated by the Railways as well as by the state for the company.
Some of the projects that would be undertaken through this SPV would be the setting up of the Beed-Parli- Baijnath railway line. In Marathwada the state would also use the SPV to clear the decks for the land acquisition for the Wardha- Yavatmal- Nanded line.
Fadnavis also discussed with Railway officials to prepare a plan for building a Metro from the Mumbai Airport to Naina in Navi Mumbai in order to connect to the new Navi Mumbai airport and also asked Railway officials to simultaneously prepare a detailed plan for an elevated line from CST to Panvel.
The Maharashtra government has said that the Company which is a Special Purpose Vehicle (SPV) has been formed to ensure that the various development projects are completed in a time bound manner. Fadnavis would soon be meeting Railway Minister Suresh Prabhu in order to fix the modalities of how Railway officials would be members in this company and how many funds would be allocated by the Railways as well as by the state for the company.
Some of the projects that would be undertaken through this SPV would be the setting up of the Beed-Parli- Baijnath railway line. In Marathwada the state would also use the SPV to clear the decks for the land acquisition for the Wardha- Yavatmal- Nanded line.
Fadnavis also discussed with Railway officials to prepare a plan for building a Metro from the Mumbai Airport to Naina in Navi Mumbai in order to connect to the new Navi Mumbai airport and also asked Railway officials to simultaneously prepare a detailed plan for an elevated line from CST to Panvel.
NHAI global arm to build roads in Iran, Sri Lanka, Nepal and Bhutan
New Delhi: With offers to build roads and highways in Iran, Sri Lanka, Nepal and Bhutan coming its way, the National Highways Authority of India (NHAI) has decided to go global, and Roads, Highways and Transport Minister Nitin Gadkari will soon set up a separate body — NHAI International — to tap into road building possibilities outside India.
NHAI International will be a set-up outside the existing ambit of NHAI and will have its offices in several countries. It will work as a contractor mostly in neighbouring countries on the same model as railways PSUs -- IRCON, Railtel and RITES -- are undertaking construction and consultancy projects internationally.
"Recently, Iranian foreign Minister met the roads minister in Delhi and requested him to take up the roads and highways construction projects in Iran. We have an excellent opportunity to go international," a senior government official said on the condition of anonymity.
"The ministry has similar proposals from Nepal, Sri Lanka and Bhutan. We could get similar opportunities in Myanmar and several west Asian countries," the official said. The step would open up a revenue stream for the roads ministry that is planning to award contract worth Rs 5 lakh crore in India in the coming years.
The government has decided to increase India's national highways network to 1.5 lakh km within a year by adding 50,000 km more to the existing network. Roads ministry is already in the process to increase its road building capacity with the target of achieving 30 km of roads construction every day by March 2016. The government is also planning to set up a separate body to undertake its expressways project. The ministry has planned to build more than eight expressways at a cost of Rs 16,500 crore.
"There's a committee set up for the revamp of NHAI. So, we'll act as per its recommendations," the official added.
Other than building roads, the Nitin Gadkari-led ministry is also expanding its wing to build other mass transit projects connecting major cities with the suburbs. There's a proposal to build Rs 4,000 crore mass rapid transport system that connects Manesar to Dhaula Kuan. The work on the project is expected to start by the end of this year.
Under this project, small, fully automatic, driverless vehicles known as pods will travel suspended under an overhead network. The overhead network will be laid on the median of the highway stretch. The project will cost Rs 50 crore per km as against Rs 350 crore per km cost of building a metro network. The government is likely to set up a separate body on the lines of DMRC to build more such projects around the National Capital Region (NCR) and other big cities.
NHAI International will be a set-up outside the existing ambit of NHAI and will have its offices in several countries. It will work as a contractor mostly in neighbouring countries on the same model as railways PSUs -- IRCON, Railtel and RITES -- are undertaking construction and consultancy projects internationally.
"Recently, Iranian foreign Minister met the roads minister in Delhi and requested him to take up the roads and highways construction projects in Iran. We have an excellent opportunity to go international," a senior government official said on the condition of anonymity.
"The ministry has similar proposals from Nepal, Sri Lanka and Bhutan. We could get similar opportunities in Myanmar and several west Asian countries," the official said. The step would open up a revenue stream for the roads ministry that is planning to award contract worth Rs 5 lakh crore in India in the coming years.
The government has decided to increase India's national highways network to 1.5 lakh km within a year by adding 50,000 km more to the existing network. Roads ministry is already in the process to increase its road building capacity with the target of achieving 30 km of roads construction every day by March 2016. The government is also planning to set up a separate body to undertake its expressways project. The ministry has planned to build more than eight expressways at a cost of Rs 16,500 crore.
"There's a committee set up for the revamp of NHAI. So, we'll act as per its recommendations," the official added.
Other than building roads, the Nitin Gadkari-led ministry is also expanding its wing to build other mass transit projects connecting major cities with the suburbs. There's a proposal to build Rs 4,000 crore mass rapid transport system that connects Manesar to Dhaula Kuan. The work on the project is expected to start by the end of this year.
Under this project, small, fully automatic, driverless vehicles known as pods will travel suspended under an overhead network. The overhead network will be laid on the median of the highway stretch. The project will cost Rs 50 crore per km as against Rs 350 crore per km cost of building a metro network. The government is likely to set up a separate body on the lines of DMRC to build more such projects around the National Capital Region (NCR) and other big cities.
Govt makes Rs 3,000 cr from first batch of Phase 3 FM auctions
HT Media Ltd, the owner of the Fever FM radio station, outspent rivals to win 10 licences, including one for the sole available frequency in Delhi, in the electronic auctions for private FM radio. The company spent Rs.340 crore in the auctions that concluded on 8 September.
Entertainment Network India Ltd (ENIL), the radio broadcasting unit of Bennett, Coleman and Co. Ltd, won 17 licences for Rs.339 crore.
Other radio operators that won licences include Music Broadcast Pvt. Ltd, which is now a part of the Dainik Jagran Group, Reliance Broadcast Network Ltd (RBNL), DB Corp. and Rajasthan Patrika Pvt. Ltd. RBNL invested Rs.117 crore in the auctions.
The results of the first batch of the Phase 3 of FM radio auctions were declared by the ministry of information and broadcasting on Wednesday and posted on its website. However, the ministry withheld the results for three Sun group companies—Sun TV, South Asia FM and Kal Radio— in compliance with a Madras high court order.
After these auctions, Fever 104, the FM radio brand of HT Media, will expand its presence from four cities to 13 with 15 licences. The company, which picked up Delhi for Rs.169.2 crore, also won frequencies in Mumbai and Hyderabad and bought a number of stations in Uttar Pradesh.
“We are entering the UP market with seven new stations. Lucknow, Kanpur, Agra, Aligarh and Gorakhpur purchased at reserve price along with Bareilly and Allahabad,” said Harshad Jain, chief executive of Fever 104 FM. Fever FM hopes to leverage its synergy with Hindustan, the Hindi newspaper of HT Media, in expanding in Hindi-speaking markets. Jain added that with Hyderabad in its kitty, the company had completed its six-metro strategy.
ENIL’s Radio Mirchi will now own 49 stations all over the country, up from 32. Radio Mirchi’s 49 station network also includes the licences it bought for Amritsar, Patiala, Shimla and Jodhpur from Oye FM of the India Today Group. Among the new cities, the company has acquired frequencies in Chandigarh, Kochi, Kozhikode, Jammu, Srinagar, Guwahati, Shillong and second frequencies in Bengaluru, Hyderabad, Ahmedabad, Pune, Kanpur and Lucknow, among others.
Big FM, the FM brand of RBNL, has added 14 new stations to its existing 45. “We continue our leadership position in India…focusing on key cities such as Pune, Nagpur, Lucknow, Patna, Varanasi, Kolhapur among others. We now have an overall presence of 59 stations with newly acquired frequencies in key states of Maharashtra, Uttar Pradesh, Bihar and northeast India,” said chief executive Tarun Katial.
The Dainik Jagran group, too, won 11 frequencies and will now have a network of 39 stations, including the stations under the Radio Mantra and Radio City brands. Apurva Purohit, CEO, Radio City 91.1 FM, said that Music Broadcast Pvt. Ltd (owned by Jagran) had won frequencies in the markets that it was keen on. “This increases our footprint across important cities in each state as we become a 39 station network. Together Radio City and Radio Mantra will be dominant players in important state clusters and continue our successful phase 2 strategy of concentrating on advertiser relevant markets,” she said.
The electronic auctions that ran 125 rounds and lasted 32 days had on offer 135 channels in 69 cities. The total value of sold channels was Rs.1,187 crore. However, the government made more than Rs.3,000 crore from these auctions, including the migration fee from 245 stations that will move from Phase 2 to Phase 3.
Pleased with the company’s success at the auctions, Fever 104 FM’s Jain said that radio has a huge growth potential with its high listenership among youth, the biggest population segment in India. “Fever...is in a commanding leadership position in its existing markets of Delhi and Bengaluru and is the fastest growing station in Mumbai and Kolkata. With our investment in the FM Phase 3 e-auction…we are expecting impressive returns from our new stations as well.”
ENIL CEO Prashant Panday said that the company will roll out the Mirchi brand in all the new towns it has got, including the four cities acquired via Oye FM. Katial, too, is hoping to launch some of the new frequencies within this fiscal.
Fever 104, the radio station brand of HT Media that publishes the Hindustan Times and Mint, competes with different radio stations in several markets which participated in these auctions.
To be sure, some licences in the metros such as Delhi, Mumbai and Bengaluru were sold steeply even as 30% of the stations and 20 cities remained unsold. Delhi, for instance, was sold for Rs.169.2 crore, while the two frequencies in Mumbai were picked up for Rs.122.8 crore each. Bengaluru too went for a high Rs.109.2 crore.
According to Smita Jha, media practice head at consulting firm PriceWaterHouseCoopers, the auctions can be deemed successful on two counts—that it fetched the government 110% on its reserve price and that it was an absolutely transparent ascending e-auction. Agreed Jehil Thakkar, partner and head of media and entertainment at KPMG: “In terms of revenue to the government, the auctions were hugely successful.” However, he added that the scarcity of spectrum in the metros pushed the prices very high for radio operators in these cities.
According to Panday, there were too few frequencies in the metros. “After 9.5 years, the government offered one frequency in important cities like Delhi, Bengaluru, Chennai, Jaipur, and Ahmedabad...clearly, the prices reached in these cities is because of ‘scarcity premium’. These are not fair market prices, and the government must consider the auctions to be a failure, not a success.”
He does not think that some of these stations will make money in a hurry at these prices. “Not for at least five years. At these prices, the winners will have to do more revenues than even their first frequencies are doing. This is difficult, even if not impossible. And if there is one bad economic patch in the next five years, then the loss period will be extended further,” he said.
However, Fever’s Jain disagrees. He said that the metro markets are the largest advertising markets for FM radio channels. Besides, the second stations will come up at no significant additional infrastructure cost. Fever, which now has two frequencies each in Delhi and Mumbai, could tap the same sales team for advertising. “That’s not all. This time, the licence period is 15 years giving us a better leeway to make money,” he added.
Currently, the radio sector is seeing a compound annual growth rate of 18% and will touch revenue of Rs.3,950 crore in 2019 compared with Rs.1,960 crore in 2015, according to the 2015 media and entertainment industry report by the Federation of Indian Chambers of Commerce and Industry and KPMG.
Entertainment Network India Ltd (ENIL), the radio broadcasting unit of Bennett, Coleman and Co. Ltd, won 17 licences for Rs.339 crore.
Other radio operators that won licences include Music Broadcast Pvt. Ltd, which is now a part of the Dainik Jagran Group, Reliance Broadcast Network Ltd (RBNL), DB Corp. and Rajasthan Patrika Pvt. Ltd. RBNL invested Rs.117 crore in the auctions.
The results of the first batch of the Phase 3 of FM radio auctions were declared by the ministry of information and broadcasting on Wednesday and posted on its website. However, the ministry withheld the results for three Sun group companies—Sun TV, South Asia FM and Kal Radio— in compliance with a Madras high court order.
After these auctions, Fever 104, the FM radio brand of HT Media, will expand its presence from four cities to 13 with 15 licences. The company, which picked up Delhi for Rs.169.2 crore, also won frequencies in Mumbai and Hyderabad and bought a number of stations in Uttar Pradesh.
“We are entering the UP market with seven new stations. Lucknow, Kanpur, Agra, Aligarh and Gorakhpur purchased at reserve price along with Bareilly and Allahabad,” said Harshad Jain, chief executive of Fever 104 FM. Fever FM hopes to leverage its synergy with Hindustan, the Hindi newspaper of HT Media, in expanding in Hindi-speaking markets. Jain added that with Hyderabad in its kitty, the company had completed its six-metro strategy.
ENIL’s Radio Mirchi will now own 49 stations all over the country, up from 32. Radio Mirchi’s 49 station network also includes the licences it bought for Amritsar, Patiala, Shimla and Jodhpur from Oye FM of the India Today Group. Among the new cities, the company has acquired frequencies in Chandigarh, Kochi, Kozhikode, Jammu, Srinagar, Guwahati, Shillong and second frequencies in Bengaluru, Hyderabad, Ahmedabad, Pune, Kanpur and Lucknow, among others.
Big FM, the FM brand of RBNL, has added 14 new stations to its existing 45. “We continue our leadership position in India…focusing on key cities such as Pune, Nagpur, Lucknow, Patna, Varanasi, Kolhapur among others. We now have an overall presence of 59 stations with newly acquired frequencies in key states of Maharashtra, Uttar Pradesh, Bihar and northeast India,” said chief executive Tarun Katial.
The Dainik Jagran group, too, won 11 frequencies and will now have a network of 39 stations, including the stations under the Radio Mantra and Radio City brands. Apurva Purohit, CEO, Radio City 91.1 FM, said that Music Broadcast Pvt. Ltd (owned by Jagran) had won frequencies in the markets that it was keen on. “This increases our footprint across important cities in each state as we become a 39 station network. Together Radio City and Radio Mantra will be dominant players in important state clusters and continue our successful phase 2 strategy of concentrating on advertiser relevant markets,” she said.
The electronic auctions that ran 125 rounds and lasted 32 days had on offer 135 channels in 69 cities. The total value of sold channels was Rs.1,187 crore. However, the government made more than Rs.3,000 crore from these auctions, including the migration fee from 245 stations that will move from Phase 2 to Phase 3.
Pleased with the company’s success at the auctions, Fever 104 FM’s Jain said that radio has a huge growth potential with its high listenership among youth, the biggest population segment in India. “Fever...is in a commanding leadership position in its existing markets of Delhi and Bengaluru and is the fastest growing station in Mumbai and Kolkata. With our investment in the FM Phase 3 e-auction…we are expecting impressive returns from our new stations as well.”
ENIL CEO Prashant Panday said that the company will roll out the Mirchi brand in all the new towns it has got, including the four cities acquired via Oye FM. Katial, too, is hoping to launch some of the new frequencies within this fiscal.
Fever 104, the radio station brand of HT Media that publishes the Hindustan Times and Mint, competes with different radio stations in several markets which participated in these auctions.
To be sure, some licences in the metros such as Delhi, Mumbai and Bengaluru were sold steeply even as 30% of the stations and 20 cities remained unsold. Delhi, for instance, was sold for Rs.169.2 crore, while the two frequencies in Mumbai were picked up for Rs.122.8 crore each. Bengaluru too went for a high Rs.109.2 crore.
According to Smita Jha, media practice head at consulting firm PriceWaterHouseCoopers, the auctions can be deemed successful on two counts—that it fetched the government 110% on its reserve price and that it was an absolutely transparent ascending e-auction. Agreed Jehil Thakkar, partner and head of media and entertainment at KPMG: “In terms of revenue to the government, the auctions were hugely successful.” However, he added that the scarcity of spectrum in the metros pushed the prices very high for radio operators in these cities.
According to Panday, there were too few frequencies in the metros. “After 9.5 years, the government offered one frequency in important cities like Delhi, Bengaluru, Chennai, Jaipur, and Ahmedabad...clearly, the prices reached in these cities is because of ‘scarcity premium’. These are not fair market prices, and the government must consider the auctions to be a failure, not a success.”
He does not think that some of these stations will make money in a hurry at these prices. “Not for at least five years. At these prices, the winners will have to do more revenues than even their first frequencies are doing. This is difficult, even if not impossible. And if there is one bad economic patch in the next five years, then the loss period will be extended further,” he said.
However, Fever’s Jain disagrees. He said that the metro markets are the largest advertising markets for FM radio channels. Besides, the second stations will come up at no significant additional infrastructure cost. Fever, which now has two frequencies each in Delhi and Mumbai, could tap the same sales team for advertising. “That’s not all. This time, the licence period is 15 years giving us a better leeway to make money,” he added.
Currently, the radio sector is seeing a compound annual growth rate of 18% and will touch revenue of Rs.3,950 crore in 2019 compared with Rs.1,960 crore in 2015, according to the 2015 media and entertainment industry report by the Federation of Indian Chambers of Commerce and Industry and KPMG.
RBI issues 10 small bank licences
Mumbai: The Reserve Bank of India (RBI) on Wednesday granted 10 entities in-principle licences to open so-called small finance banks—another move towards expanding access to financial services in rural and semi-urban areas.
Ujjivan Financial Services Pvt. Ltd, Janalakshmi Financial Services Pvt. Ltd and Equitas Holdings Ltd are among the 10 entities. The others are Au Financiers (India) Ltd, Capital Local Area Bank Ltd, Disha Microfin Pvt. Ltd, ESAF Microfinance and Investments Pvt. Ltd, RGVN (North East) Microfinance Ltd, Suryoday Micro Finance Pvt. Ltd, and Utkarsh Micro Finance Pvt. Ltd.
Larger financial services firms such as Dewan Housing Finance Ltd, IIFL Holdings Ltd, SKS Microfinance Ltd and UAE Exchange and Financial Services Ltd did not qualify for the licences. No publicly traded entities have been included in the list.
Small finance banks will offer basic banking services, accepting deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries, and entities in the unorganized sector, RBI said when it released guidelines for such banks in November.
Eight out of the 10 entities granted the in-principle approval, which is valid for 18 months, are microfinance institutions. The exceptions are Capital Local Area Bank Ltd, which operates in five districts of Punjab, and Au Financiers. Local-area banks are institutions that lend in contiguous districts, mobilizing rural savings and making them available for local investments. Au Financiers is a non-banking financial company.
For microfinance firms that give tiny loans to low-income earners, the key incentive for converting into small finance banks will be the access they gain to deposits; they will also be able to offer a wider range of loan products to customers.
The licensing of small finance banks follows 11 payment bank licences given out by RBI last month to provide basic savings, and deposit, payment and remittance services to people without access to the formal banking system. Payments banks will not be in the business of lending.
Both initiatives are aimed at furthering financial inclusion, which the Bharatiya Janata Party-led National Democratic Alliance government has made one of its top priorities since it assumed office in May 2014.
It has launched the Pradhan Mantri Jan Dhan Yojana (PMJDY) to ensure a bank account for every household, offering accidental insurance cover of Rs.1 lakh, life insurance cover of Rs.30,000 and easy transfer of money across India as sweeteners. As of 12 August, 175.7 million bank accounts had been opened under the scheme, according to the PMJDY website.
In a statement released on Wednesday, RBI said it had selected the 10 candidates to start small finance banks after three different committees conducted a detailed case study of each applicant.
“Going forward, the Reserve Bank intends to use the learning from this licensing round to appropriately revise the guidelines and move to giving licences more regularly, that is, virtually ‘on tap.”’
After setting up a bank, it would take nearly two years to merely stabilize the operation, said Samit Ghosh, founder and managing director, Ujjivan Financial Services. Ujjivan’s loan book stands at about Rs.3,300 crore and it plans to continue its focus on smaller borrowers, he said.
“The next 18 months are going to be a lot of hard work. We have to figure out ways to bring down the 90% foreign shareholding in the company since RBI has strict guidelines for it. We will be looking at various options including private placements,” said Ghosh.
According to the current policy, the aggregate foreign investment in a private sector bank from all sources is capped at 74% of its paid-up capital.
Ahmedabad-based Disha Microfin said its focus will be to expand in the central and western Indian states where there is a huge base of unbanked customers.
“The initial challenge will be to restructure and transform into a bank from a non-banking financial institution and offer multiple banking products,” said Rajeev Yadav, director of Disha group, which runs the Ahmedabad-based microfinance company.
In total, 72 entities applied for a small finance bank licence. The applications were reviewed by a committee headed by former RBI deputy governor Usha Thorat.
“It is clear from the list (of licensees) that the RBI’s bias is towards people who have proved themselves in the priority lending space. Since larger banks have always felt it to be a drag on their books, these entities will be able to fill that gap and serve smaller customers,” said Abizer Diwanji, partner and national leader, financial services, EY.
According to Diwanji, the ability to maintain a full-fledged treasury department would be one of the advantages of turning into a small finance bank, apart from access to deposits and the opportunity to offer a wider range of loan products.
“But these will also be the biggest challenges, since these are players who have not had much experience in these services,” Diwanji said.
To be sure, the transformation will not be easy.
“For the initial few years, lives are going to be difficult for the licensees. Some extremely large challenges include the ability to form a sustainable business model and gaining trust from the depositors. However, this sector is capable of achieving these things,” said Alok Prasad, industry expert and former chief executive officer of Microfinance Institutions Network, an industry body for microlenders.
One challenge will be the prudential norms they have to adhere to.
Small finance banks will be subject to most of the prudential norms that scheduled commercial banks have to adhere to. For instance, they need to maintain a cash reserve ratio (CRR), or portion of deposits to be set aside with the central bank, and statutory liquidity ratio (SLR), or the portion of deposits to be invested in government securities, as stipulated for commercial banks.
Seventy-five percent of the credit advanced by small finance banks will need to go to sectors that are considered part of the so-called priority sector, which includes agriculture, small enterprises and low-income earners. Commercial banks have to mandatorily lend 40% of their net bank credit to such sectors.
Small finance banks will also have to ensure that 50% of their loan portfolio constitutes advances of up to Rs.25 lakh, said RBI.
Such banks can eventually apply to RBI to transit into universal banks once they have established a satisfactory track record. Such a transition would be subject to due diligence by the banking regulator.
The minimum paid-up equity capital for small finance banks was set at Rs.100 crore and the minimum initial contribution from promoters fixed at 40%.
Ujjivan Financial Services Pvt. Ltd, Janalakshmi Financial Services Pvt. Ltd and Equitas Holdings Ltd are among the 10 entities. The others are Au Financiers (India) Ltd, Capital Local Area Bank Ltd, Disha Microfin Pvt. Ltd, ESAF Microfinance and Investments Pvt. Ltd, RGVN (North East) Microfinance Ltd, Suryoday Micro Finance Pvt. Ltd, and Utkarsh Micro Finance Pvt. Ltd.
Larger financial services firms such as Dewan Housing Finance Ltd, IIFL Holdings Ltd, SKS Microfinance Ltd and UAE Exchange and Financial Services Ltd did not qualify for the licences. No publicly traded entities have been included in the list.
Small finance banks will offer basic banking services, accepting deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries, and entities in the unorganized sector, RBI said when it released guidelines for such banks in November.
Eight out of the 10 entities granted the in-principle approval, which is valid for 18 months, are microfinance institutions. The exceptions are Capital Local Area Bank Ltd, which operates in five districts of Punjab, and Au Financiers. Local-area banks are institutions that lend in contiguous districts, mobilizing rural savings and making them available for local investments. Au Financiers is a non-banking financial company.
For microfinance firms that give tiny loans to low-income earners, the key incentive for converting into small finance banks will be the access they gain to deposits; they will also be able to offer a wider range of loan products to customers.
The licensing of small finance banks follows 11 payment bank licences given out by RBI last month to provide basic savings, and deposit, payment and remittance services to people without access to the formal banking system. Payments banks will not be in the business of lending.
Both initiatives are aimed at furthering financial inclusion, which the Bharatiya Janata Party-led National Democratic Alliance government has made one of its top priorities since it assumed office in May 2014.
It has launched the Pradhan Mantri Jan Dhan Yojana (PMJDY) to ensure a bank account for every household, offering accidental insurance cover of Rs.1 lakh, life insurance cover of Rs.30,000 and easy transfer of money across India as sweeteners. As of 12 August, 175.7 million bank accounts had been opened under the scheme, according to the PMJDY website.
In a statement released on Wednesday, RBI said it had selected the 10 candidates to start small finance banks after three different committees conducted a detailed case study of each applicant.
“Going forward, the Reserve Bank intends to use the learning from this licensing round to appropriately revise the guidelines and move to giving licences more regularly, that is, virtually ‘on tap.”’
After setting up a bank, it would take nearly two years to merely stabilize the operation, said Samit Ghosh, founder and managing director, Ujjivan Financial Services. Ujjivan’s loan book stands at about Rs.3,300 crore and it plans to continue its focus on smaller borrowers, he said.
“The next 18 months are going to be a lot of hard work. We have to figure out ways to bring down the 90% foreign shareholding in the company since RBI has strict guidelines for it. We will be looking at various options including private placements,” said Ghosh.
According to the current policy, the aggregate foreign investment in a private sector bank from all sources is capped at 74% of its paid-up capital.
Ahmedabad-based Disha Microfin said its focus will be to expand in the central and western Indian states where there is a huge base of unbanked customers.
“The initial challenge will be to restructure and transform into a bank from a non-banking financial institution and offer multiple banking products,” said Rajeev Yadav, director of Disha group, which runs the Ahmedabad-based microfinance company.
In total, 72 entities applied for a small finance bank licence. The applications were reviewed by a committee headed by former RBI deputy governor Usha Thorat.
“It is clear from the list (of licensees) that the RBI’s bias is towards people who have proved themselves in the priority lending space. Since larger banks have always felt it to be a drag on their books, these entities will be able to fill that gap and serve smaller customers,” said Abizer Diwanji, partner and national leader, financial services, EY.
According to Diwanji, the ability to maintain a full-fledged treasury department would be one of the advantages of turning into a small finance bank, apart from access to deposits and the opportunity to offer a wider range of loan products.
“But these will also be the biggest challenges, since these are players who have not had much experience in these services,” Diwanji said.
To be sure, the transformation will not be easy.
“For the initial few years, lives are going to be difficult for the licensees. Some extremely large challenges include the ability to form a sustainable business model and gaining trust from the depositors. However, this sector is capable of achieving these things,” said Alok Prasad, industry expert and former chief executive officer of Microfinance Institutions Network, an industry body for microlenders.
One challenge will be the prudential norms they have to adhere to.
Small finance banks will be subject to most of the prudential norms that scheduled commercial banks have to adhere to. For instance, they need to maintain a cash reserve ratio (CRR), or portion of deposits to be set aside with the central bank, and statutory liquidity ratio (SLR), or the portion of deposits to be invested in government securities, as stipulated for commercial banks.
Seventy-five percent of the credit advanced by small finance banks will need to go to sectors that are considered part of the so-called priority sector, which includes agriculture, small enterprises and low-income earners. Commercial banks have to mandatorily lend 40% of their net bank credit to such sectors.
Small finance banks will also have to ensure that 50% of their loan portfolio constitutes advances of up to Rs.25 lakh, said RBI.
Such banks can eventually apply to RBI to transit into universal banks once they have established a satisfactory track record. Such a transition would be subject to due diligence by the banking regulator.
The minimum paid-up equity capital for small finance banks was set at Rs.100 crore and the minimum initial contribution from promoters fixed at 40%.
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