Speaking at the CII National Conference and Annual Session 2010 on ‘Implementing Inclusive Growth and Development’, Finance Minister, Mr Pranab Mukherjee said that he expected India to better IMF’s projected GDP growth rate of 8.4 per cent in 2010-11.

As per Mukherjee, the governance and implementation remained the key determinants of ensuring inclusive growth and UIDAI is a step forward in that direction. Mr Venu Srinivasan, CII President and President-Designate Hari Bhartia assured the minister of working for inclusive growth and enhancing employability skills of the Indian youth through vocational training.

At another occasion, Mr Anand Sharma, Union Minister of Commerce and Industry expressed his confidence in India’s future export and investment opportunities and said that they will be found in new geographies in Asean countries, Latin America, and Africa, where a new middle-class similar to India’s own is rising. Furthermore, he recommended industry to grasp opportunities in these new markets as the government facilitated the process through FTAs and other economic diplomacy initiatives.

The new National Manufacturing and Investment Zone (NMIZ) policy which is under consideration would provide a package of incentives and policy reforms and herald the growth of India’s growing manufacturing sector.
Source: IBEF

Promoters keen to close deals quickly knock on syndicators’ doors.

A revival of private equity (PE) deals is giving syndicators such as mid- and small-sized investment banks and accountancy firms good business.

As demand for capital revives, promoters of companies are asking these syndicators to get them a quick deal from PE firms. This is likely to take the syndication business to the 2007 level, say experts.

“A significant turnaround has happened in PE syndication after a lull of about two years,” said CG Srividya, partner at Grant Thornton, an international accountancy and business advisory firm. Her firm helped Micromax Infomatics, a domestic mobile handset maker, raise $45 million from global PE firm T A Associates this year.

The first four months of 2010 saw 107 PE deals worth $3.7 billion. An estimated 60-70 per cent of these were through syndicators. In 2009, there were 221 PE deals worth $12 billion. But, transactions worth approximately $8.6 billion were through qualified institutional placements and syndicators did not get much business. Investment banks and accountancy firms charge 1-3 per cent of the transaction amount as fee.

“There is convergence in valuation expectations now and so promoters are keen to close deals quickly. Hence, they are approaching the syndicators,” she said.

“There is such a robust pipeline for PE syndication that we expect revenue from it to match the revenue from our M&A business,” said Jacob Mathew, managing director, Mape Advisory Group, an investment banking firm. His firm helped Chennai-based Star Health Insurance raise Rs120 crore from ICICI Venture this year.

Last week, Equirus Capital advised Dalmia Cement in raising Rs 750 crore from global PE firm KKR. Mukesh Jain, director of Equirus Capital, who executed the deal, said, “Promoters who planned to raise capital but could not do so in the last 18 months due to the economic crisis are back to the deal rooms. So, there is pent-up demand and if this year’s trend continues, we should be back to the 2007 level in the PE syndication business.”

Private equity investments are unique in that they come with a lot of governance issues. And, most of the times, promoters of unlisted companies who want to raise funds are apprehensive about the terms and conditions that may come with these investments. This prompts them to go to syndicators.

“Syndicators help promoters find the right fit in terms of cultural coherence and price discovery,” said Gaurav Deepak, managing director of Avendus Capital. “There are promoters who can approach PE firms directly but prefer to come through us as we understand the terms and conditions of the PE business better.” His firm advised pharmaceutical company Famy Care raise $50 million from PE investor AIF Capital.
Source: IBEF

India is finally set to give shape to its futuristic smart cities — world-class, self-sustainable habitats with minimal pollution levels, maximum recycling, optimised energy supplies and efficient public transportation.

The pilot projects to develop these ‘smart communities’ is underway and is expected to be completed over the next 18 months. Japanese corporations such as Hitachi, Mitsubishi, JGC Corp and Toshiba, among others, will design and build these eco-friendly towns along the Dedicated Freight Corridor (DFC).

The DFC between Delhi and Mumbai will pass through six states — Uttar Pradesh, Delhi, Haryana, Rajasthan, Gujarat and Maharashtra.

“This is the first time after Chandigarh that a serious effort is being made to build modern cities,” said Commerce and Industry Minister Anand Sharma.

The eco-friendly cities would provide world-class facilities with 24-hour power supply and drinking water, mass rapid urban transportation, with bicycle and walking tracks, complete waste and water recycling, systems for smart grids — digitally managed systems to control energy consumption — and smart metering.

The industrial hubs and eco-friendly cities along the Delhi Mumbai Industrial Corridor (DMIC) are expected to double employment opportunities, triple industrial production and increase exports by four folds over the next decade.

The pilots have been initiated in Haryana (Manesar Bawal region), Maharashtra (Shendra industrial region) and Gujarat (Changodar and Dahej).

“With industrial expansion pollution increases. The attempt here is to ensure that development takes place in harmony with the environment, not in conflict with it. Everything in these cities will get recycled,” said Sharma.

Amitabh Kant, chief executive and managing director of Delhi Mumbai Industrial Corridor Development Corp. Ltd (DMICDC) said Japan has been a frontrunner in introducing sustainability concepts.

“Japan’s Kitakyushu Eco-Town has received global acclaim for its environment friendly practices. The city has successfully integrated an environment conservation policy and an industry promotion policy. It is our aim to learn from them and do better while coming up with ecologically sustainable cities along the industrial corridor.”

Once the pilot programmes are successfully implemented the smart community concepts would be taken forward and executed in developing three mega cities in Gujarat and Maharashtra.

The first of these cities would come up in Dholera investment region in Gujarat, 110 km from Ahmedabad. The master-plan for the city is ready and talks are on with farmers for the acquisition of land.

“These cities are expected to draw young people because of their employment potential and would therefore come up not just as manufacturing hubs but also as integrated residential areas. No city in the world has succeeded only because of manufacturing pull,” said Kant. The cities will have several central business districts with residential areas.

The master plan for the new cities will soon be put up on the website of DMICDC to seek comments from experts. “We are starting late. So, we need to learn from others and do at least 2 per cent better.”

Admitting to the challenges ahead, Kant said, “It’s the toughest project anyone has done in India.” DMICDC is looking at creating 500 million world-class dwellings, and will be one of the biggest urban development projects globally. Suzhou, a new city in China, is one of the models that the DMICDC is looking at. Some of the other models are Shanghai, Iskandar Malaysia and Amsterdam-Rotterdam.

To make the region energy-sufficient, DMICDC is also working on building six power projects of 6000 MW along the corridor. For water availability, it has already tied up with sites where gas grids and water is available.
Source: Business Standard

Commerce Minister Anand Sharma and his Singaporean counterpart Lim Hng Kiang will review the comprehensive trade pact between the two countries in New Delhi tomorrow.

The Comprehensive Economic Cooperation Agreement (CECA), signed in 2005, facilitates trade and investment in goods, services and investment protection features.

Singapore’s Trade and Industry Minister Lim is arriving in New Delhi tomorrow to launch the second review of the pact.

Lim will also meet with key Indian business leaders in New Delhi, the Singapore’s Trade Ministry said today.

The ministers would also exchange letters on the special medicinal product registration scheme, an outcome from the first CECA review, it said.

While the first review, which was completed in 2007, had focused largely on implementation issues, the second review is intended to be more comprehensive with a view to improve the goods, services and investment chapters.

The trade between India and Singapore, since 2005, has increased at a rate of 20 per cent annually, peaking at 28.8 billion Singaporean dollar in 2008.

Although bilateral trade took a dip due to the economic crisis last year, it has quickly rebounded to 7 billion Singaporean dollar in the first quarter of 2010, up 38 per cent from the same period in 2009.

India is Singapore’s 11th largest trading partner in 2009 and seventh largest investor with foreign direct investment jumping eight-folds to 11 billion Singaporean dollars in 2008 compared to that in 2005.

Singapore ranked second in terms of FDI inflows into India with 2.9 billion Singaporean dollar in 2009.
Source: The Economic Times

The median forecast in a poll of 22 economists shows that industrial output is estimated to rise 15 percent in March 2010 from a year earlier, close to an annual rise of 15.1 per cent in February 2010. Forecasts ranged from a rise of 12 per cent to 16.3 per cent.

As per the estimates, manufacturing should lead overall output growth, driven by higher infrastructure spending by the government, buoyant domestic consumer demand, revival in exports and more private investment. Also, due to a statistical low base a year ago, the output will grow in double-digits for the sixth straight month.

The Reserve Bank of India has raised its policy rates by 50 basis points over two months, citing a strong pick-up in the economy.
Source: IBEF

The government will give a 5% discount to retail investors in the follow-on offer by Engineers India and stick to the conventional book-building process, having seen the strategy yield good results in the recently concluded stake sale offer in SJVNL.

The two-pronged strategy is aimed at making the offer more attractive to retail investors. “Our aim is to price the issue attractively. Following the share split, we expect the offer to be substantially lower than EIL’s prevailing share price,” a disinvestment department official said. Following the Cabinet decision to divest a 10% stake in EIL, the company’s board last month approved the subdivision of its shares of Rs 10 into two shares of Rs 5 as well as the issue of bonus shares. On Friday, EIL closed at Rs 497.05 per share on the Bombay Stock Exchange, gaining 7.9% over the previous day close. The 30-share sensitive BSE Sensex fell 1.29% to close at 16,769.11 points.

The disinvestment department has also decided to continue with the conventional book-building process for the EIL issue. “Based on our own experience and the feedback from investors, we feel that the French auction route needs to be further fine-tuned,” said another official. Market regulator Sebi is working on the French auction rules to improve it. One suggestion the regulator is considering is that institutional investors should be allowed to bid first.

The price for retail investors will then be fixed based on the cut-off price for institutional buyers, providing them with a better price discovery mechanism. The disinvestment department had earlier used the French auction method for the NTPC and REC issues, but only found partial success with retail investors. The 10% stake sale in EIL is part of the government’s ambitious disinvestment programme for 2010-11.

The issue is expected to hit the market in July and will fetch Rs 1,000 crore. At present, the government holds a 90.4% stake in the company.

The government has already begun the process of appointing lead bankers for managing the issue. It is expected to announce a list of shortlisted banks on Monday. EIL provides engineering and consultancy services largely to oil and gas firms. It has cash reserves of Rs 1,320 crore as on March 31,2009. The company has recently announced a 1000% special dividend to its stakeholders.
Source: The Economic Times

India copper futures may edge higher in early trade on Wednesday helped by overseas leads and a weaker rupee, analysts said.
The most-active June copper MCCM0 on the Multi Commodity Exchange (MCX) last closed at 316.75 rupees per kg, up 2.6 percent.

The contract may open at 318-319 rupees, said Aurobinda Prasad, head of research, Karvy Comtrade.

Three-month London copper MCU3=LX was trading 0.37 percent higher at $7,049 a tonne at 9:17 a.m.

A weaker rupee makes the dollar-quoted asset expensive. [INR/]

However, analysts said, the view still remains bearish in copper on wider euro zone debt crisis and monetary tightening by China, the largest consumer of industrial metals.

“There could be some recovery, but still we are holding on to bearish view, one can go short at 319, targeting 314, maintaining a stop loss of 321,” said Prasad.

GOLD:

India gold may edge lower on Wednesday weighed by a strong dollar overseas, which dims the yellow metal’s appeal as an alternative investment, analysts said

The most-active June gold contract on MCX MAUM0 closed flat at 17,188 rupees per 10 grams.

The contract may open at 17,150 rupees, said Kunal Shah of Nirmal Bang Commodities.

The dollar index, a gauge of the greenback’s performance against a basket of currencies, was 0.27 percent higher at 83.520.

“The bias will be on the lower side due to a strong dollar, gold may trade in the range 17,090-17,222, said Prasad.
Source: Reuters India

S Kumars Nationwide has formed a joint venture with Donna Karan International to design, produce and distribute the entire range of DKNY menswear apparel across the world except Japan for 10 years.

The Indian textile maker and retailer will hold 90% in the joint venture, SKNL (UK), with Donna Karan holding the rest, the companies announced in Mumbai and New York on Monday.

“Because DKNY is a specialist in womenswear, they were looking at licensing out the menswear business,” said Nitin S Kasliwal, vice-chairman and managing director of S Kumars.

Donna Karan, part of luxury major Moet Hennessy Louis Vuitton, designs and sells mainly women’s apparel, sportswear, accessories and shoes under the DKNY and Donna Karan brands.

The new venture will invest $25 million for expansion of Donna Karan’s menswear brand and targets to record sales of about $140 million in the next three years, said Mr Kasliwal.

Mark Weber, chairman and CEO of DKI, said the new venture will expand offerings for DKNY Men to include a full lifestyle collection.

The two partners have appointed Michael Morris, who was earlier the executive deputy chairman of UK fashion brand management Marchpole that was handling the DKNY menswear portfolio.

The new venture will take the brand to new markets and expand its presence in Europe, Mr Morris said.

The company plans to open 50 new exclusive outlets for the menswear brand, DKNY Black Label, on top of its existing network of 100. It may also appoint franchisees for the brand.

The venture followed S Kumars’ interim agreement with Donna Karan last year to produce the entire range of DKNY men’s line in 2009.

SKNL already has the license to produce DKNY’s sportswear, to be sold in the US, and other menwear categories for Europe, Africa, Middle East and Asia.

Mr Kasliwal said S Kumars was looking to raise $100 million by spinning off its brand Belmonte into a separate unit in the coming months. S Kumars sells apparels under a variety of brands at different price points, from Reid & Taylor, which caters to the premium and upper-middle segment of the suiting market, to Belmonte suits and shirts for the economy segment.

The firm is also looking to list its subsidiary Reid & Taylor and was planning to file with the market regulator in around two months’ time for an initial public offering, he said.

Kasliwal who was earlier looking at raising up to $150 million from the proposed IPO of Reid & Taylor is now planning to raise between $225-$250 million. In 2008, S Kumars Group was divided among the Kasliwals with Nitin Kasliwal getting charge of the Rs 1,500-crore SKNL.

SKNL last year extended its presence overseas to the European and North American markets expanding its brand portfolio of 45 brands including the US brand Hartmarx and Italy’s Leggiuno.

DKI, currently a public traded venture, was founded in 1985 in New York by fashion designer Donna Karan and her late husband Stephan Weiss. It was later purchased by LVMH Moet Hennessey Louis Vuitton.
Source: The Economic Times

CM Rosaiah inaugurates the park in AP Special Economic Zone

Andhra Pradesh chief minister K Rosaiah on Monday inaugurated the Brandix India Apparel City (BIAC) located in the Andhra Pradesh Special Economic Zone here.

The state government has allotted 1,000 acres of land for the project while the Centre has provided Rs 36 crore under the Union textile policy.

Speaking on the occasion, Rosaiah asked BIAC, promoted by Sri Lanka-based Brandix group, to fulfil its promise of providing employment to 60,000 people at the earliest.

He said the government was providing training to youth under Rajiv Udhyogsree to make skilled manpower available and had, so far, trained 1 million youth.

BIAC would have 20 apparel manufacturing plants, three fabric mills, eight accessories factories and one finishing plant. The apparel city would attract an investment of $1.2 billion (around Rs 5,400 crore), said Brandix group chief executive officer Ashroff Omar.

While two manufacturing units — Brandix Apparel India and Ocean India (US) — have already commenced exports, four others are at different stages of completion. These six companies, on completion, would cumulatively invest about $70 million (Rs 315 crore) for factory infrastructure development, he said.

Fabric companies like Fountain Set Holdings of Hong Kong, Pioneer Elastic India Quantum Clothing Indi (UK), DEB Fashion India and Seeds Intimate Apparel India have come forward to set up joint ventures in the BIAC.

Visakhapatnam would attract investments worth about Rs 68,000 crore over the next five years and see 71,000 new jobs being created. During the last three years, Vizag district attracted Rs 17,000 crore in different sectors, said K Lakshmi Narayana, major industries minister.

The Centre has sanctioned six integrated textile parks for Andhra Pradesh, including in Visakhapatnam, said Panabaaka Lakshmi, Union minister of state for textiles, adding this was the biggest textile park in Southeast Asia. “This year, the textile Budget is Rs 4,500 crore. The government has allotted Rs 397 crore to promote the integrated textile parks in the country,” she said.
Source: Business Standard