National Manufacturing Policy / Zones

The NIMZ cities identified in the latest manufacturing policy area compendium of all identified microsites and

English: A new train, made in Germany by Bomba...
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large successes of India in manufacturing policy over the last decade. Japan funded Delhi Mumbai infra corridor, the industrial zone at Manesar or the village Dholera in Gujarat identified for investment can start in quick time. The Dedicated Freiht Corridor needs $7-8 bln, the DMIC even $40 bln or INR 2 Tln for itself, Japanese providing $10 bln and Private sector to be willing ot invest the rest

With a new Land acquisition bill, which nevertheless does not make it easy for someone to single handedly establish or grow a city in the wilderness( attract good talent for one, attract suppliers and ensure all resources in supply for another)  is still as difficult but where land acquisition and construction for manufacturing can begin like in Manesar, Haryana or Dholera , Gujarat can show the way to others if done right. Unfortunately winners do not include last decades export successes like Textiles and Auto ancilliaries and Services will be denied its place in the sun if it remains a National “manufacturing” Policy. The Buddh International Arena in UP near New Delhi with a NCR, Delhi address tag is a great success showcase for others.

Also, like Indian banks being told off in foreign lands, foreign banks in India like ICBC and CCB that have just opened should not be allowed to club their business with that of the parent country as it will stifle local opportunity esp where such large investments are expected by local satraps and a regular scam-o-rama is keeping the media busy from 2G to Mamta Banerjee Europe , in contrast has global companies and diaspora ( not remittances) that make such partnerships with banks global in thei rvery nature instead. Sadly some of them will leave or forfeit plans of growing in retail if they ever nodded to RBI

A couple of other ‘contradictions’ have to be managed in India, including letting farmers a share of real estate profit with the new bill in hand allowing prices without governemnt interference, delevraging required in the real estate satraps specialised for such acquisition incl DLF, JSW and maybe JP ( not delevraging but has hands fuull) or the new crop wlike India bulls and Adani which have to bear the blame for endless delays in the Power sector or the consumption successes like PVR and mall owners who are making profits only in the super luxury investments. Also India’s labor participation rates could soon be dropping below 65% ( nearly a low 60% in the mediterranean Euro crisis owners) and US that provided a great land of opportunity for educated talent from this country, also suffering a low participation rate of 64%

Interesingly India’s export growth, still keeps machinery in the largest categories, and should soon include

The Rashtrapati Bhawan which is the residence ...
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pharmaceuticals as well. Perhaps Farming can be mechanised, along with Textile cities and Auto ancilliary dreams. Loan mela, anyone?

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A tired nation awaits with open arms | India’s Energy story

india_FDI_November2010Here it is. After $20 billion in nine months till December, courtesy the crony capitalists much in disfavour elsewhere, India’s exports of management and corporations with outward M&A have finally been funded and FDI taken up a notch higher in one stroke. After suffering a lot of ignominy watching the world spinning from the sidelines, cheerleaders for the World’s third largest Economy got a reprieve par excellence when Mukesh Ambani’s Reliance that had almost been given up on in Exploration and Drilling got a 50:50 JV with none other than cash rich and ego bruised British Petroleum, now BP plc. BP paid $7.2 billion for pipeline building and marketing rights for 23 blocks of mostly GAS from the looks of it and in one stroke funded the entire Mukesh Ambani funding deficit, Next, Big brand Anil Ambani to save the world with a few movies and we will back be in the running for no. 2 as China struggles with inflation, hot money and hot headed banks not necessarily in the order the world lists the problems.

The BP deal is worth $9 billion including a $1.8 billion component for performance based on profits for the JV and promises some private investment in pipeline infrastructure for the nation as well. All in all a good deal with almost no downsides unlike the almost extinct Cairn Vedanta deal as her e the PSCs (Production Sharing Contracts) have been fairly evaluated and sold without shadow equity transactions usurping the valuation and a premium which ONGC already admits to be a honest premium on the said valuation of OIL well contracts. Reliance finally gets the world a big ticket story after a load of shale gas bumping up its trunk and we are all happier for it

OIL Exploration – follow up comparison | AK57.in

FROM Sh Arun Kejriwal’s Blog

Whenever one talks of OIL, ONGC comes to mind. Very clearly ONGC is the big brother of OIL and from the table below it can be seen that by and large ONGC is ten times the size of OIL. Broadly speaking on parameters of efficiency, earnings and performance the similarities are more than striking and one could say that they are identical. In terms of size there is a clear cut difference and ONGC is about ten times in size.
ONGC Group OIL India Limited
Production – approx. 448 MBOE Production – approx. 40 MBOE
Turnover – Rs 109000 crs or 1.09 trillion Turnover – Rs 7100 crs or Rs 71 billion
Profit After Tax Rs 19700 crs Profit after tax Rs 2200 crs
Equity – Rs 21.38 billion Equity – Rs 2.14 billion (pre-IPO)
Earnings per share (FY 09) Rs 92.35 Earnings per share (FY09) Rs 101
P2 Reserves – Oil – 5247 million barrels P2 Reserves – Oil – 577 million barrels
Gas – 628 bcm  = 3831 mn barrels Gas – 63 bcm  = 387 mn barrels
Oil + Gas = 9078 mboe Oil + Gas = 964 mboe
Return on net worth 25 % Return on net worth 23%
MBOE = million barrels of oil and oil equivalent 
BCM = Billion Cubic Metres
NHPC has just listed a few days back and very clearly the listing of the same was a disaster considering the overwhelming response the issue garnered. HNI’s had invested Rs 35000 crs in an issue where shares worth Rs 580 crs were to be offered to them. There cost of funds was in a range of Rs 6.75 – Rs 7.25 per share and each one of them has either booked a loss or is holding on to a huge loss, hoping that the price improves. In this scenario the question that comes to mind is should one invest in OIL by applying for the issue and if yes at what price?

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NMDC update (Divestment + Infrastructure = Mega IPO Tickets)

As per current Ministry of Steel meetings, the NMDC stake sale is likely to be of 15% in which case it could easily be over Rs 2000 crores ($400m) at CMP of 375 ( $7.50) As also the ones for Adani Power, Godrej, Indiabulls Power..i think it can happen given that each will have $40-50 million from retail investors, but it requires disciplined Institutional Investors who believe the India story..anyway, this kind of volume has not been done ever before in the same year, but then this is the era of Infrastructure.

Foreign portfolio investors have poured in $8.7 billion since April, while speculation is already rife for PSU divestment in Coal India and National Hydro Electric Corp in the Power sector, each easily worth a $1 b for 15-20% stake. Also SBI Infrastructure fund with Macquarie has raised its bucket size to 1.5 billion adding another $500m.

A dani Power is raising $600m. NHPC is going first planning to issue more than 70 crore shares of Rs 10 par value for offer including a existing 5% stake unlikely to be issued at par(despite reports) to net 2500 crores for 15% of the company capital NHPC also plans to invest Rs 28,000 crore by 2012 to position itself as over 10,000 MW utility. At present, its generation capacity stands at 5,200 MW. The proceeds from the IPO would partly be utilised to finance the expansions.

Indiabulls Power seems to have issued earlier capital at a premium and a current QIP at 25% of the Original at Par to raise a further 200 Cr ( $40m) Thus it is curently sitting on unutilised capital of 2200 crores ($440m). It has two Power plants planned in Maharashtra with the first in Nasik of 1335MW capacity (shld cost between (5500 cr to 7000 cr OR $1.1-1.4 billion) It is unlikely to try for any considerable premium if it comes first.

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India’s new boom – Infrastructure, Lifestyle and Entertainment

If you have been following the India story closely, India’s new developments are focussed on Infrastructure and Retail along with giant leaps in the Entertainment business. You can look closely at the India stories at http://advantages.us/inframils to get a flavor of what’s happening. 

ADA Reliance (BIG entertainment) has today announced details of its venture with Dreamworks (Steven Spielberg) planning a 40% stake in the final entity capitalised at approx $830 million ($1b at USD rate of Rs. 40) with Disney holding another 15%. The Company holds a target of producing 5-6 films a year. BIG already has agreements with Nicholas Cage’s Saturn, Jim Carrey’s JC23, George Clooney’s Smokehouse, Chris Columbus’s 1492 Pictures, Tom Hank’s Playtone and Brad Pitt’s Plan B among others

On the other hand Retail Lifestyle businesses are increasingly attracting investors with Rabobank’s India Agribusiness Fund picking up a 25% stake in Kishore Biyani’s Aadhaar Retail. Modern retailing businesses in India are predominantly located in cities with FDI restrictions except for Cash & Carry Businesses (100%) and Single Brand retail (51%) Rural Markets may grow at a faster pace at least on the Drawing board. One such project which extends Bangalore’s urban footprint to Bidadi is the Innovative Film City which also showcases the marriage of the rural and the urban as Bangalore expands to the West and the East and remains the fastest growing City in India. The problems on the ground remain. While the new real estate projects are trying to make a strong statement, the depression blues have not gone anywhere. In the showcased retail fund in ET today, for example, apart from Rabo Bank, the other investors are the usual suspects, IFC Washington a couple of /developed/semi developed state development bank(s) and institutions and select private investors. Where is Investor access? Why is it still on the government to make it happen? The FDI limits and the others are fairly rational policies..but where are the investors? Why are global investors so selective about projects? What does it take for them to find out ground realities and put it in the appropriate framework? At the end of the day India’s share in the Emerging Markets Indices is just 5% and emerging Markets worldwide probably get less than 20% of the global capital flows. One Federal Stimulus by Obama will be enough to keep US bankrupt for the next decade. I am not sure we are doing this right.
Nanos will roll into homes by July end and IPL teams are already applying for trademarks as it looks set to become the greatest sporting extravaganza in the world, already ranked at #2 behind the NFL season in the USA. The 3G challenge will tear at Telecom companies’ profits in the coming years ( MTNL has managed 1000 subscribers in its sneak rollout) while public divestment targets were also subdued in the budget but are firming up. The Global ID cards will be implemented pretty slowly, starting off as a Central database, depending of departmental initiative to share information from tax to passport and BPL ration cards, credit card data and other biometric features to enable security and duplicate allocations etc. 
Health and Education have just recently been provided a long lost policy focus. But these investments will also yield success only when the fully integrate into India’s new Lifestyle Economy. Today the same investments are required in the US and the developing world. We need roads, we need power supply, we need an educated performing population and we need affordable healthcare. 
There are other things to be done. To quote the Policy pages of The Economic Times ( pg. 11, Arvind Mayaram) – While investments in roads, ports, airports and urban amenities have a cascading effect on the virtuous cycle of stimulating demand..the impact is the quickest and most spread out through investment in tourism infrastructure. India received just 5.37 million foreign tourists as compared to 57.6 million in Spain. Tourism arrivals grew during the recession worldwide as well.  
Global collaboration and Private enterprise cannot function without the appropriate investment infrastructure either. Investment flows are still uneven and the tenets of this new dream unpostulated. The new web has however found an entry point in global business with increasing discussions on structuring the global memes that bring in change. The question is, as they say in Hindi – Kaise hoga? How will we make it happen!
India’s ICICI Bank is redesigning itself, taking more control of Investment Banking and Venture Capital business while private sector banking players are watching from the sidelines with Kotak Bank and Yes Bank not having the underwriting power or the global reach to finance and provide institutional support to those like the Innovative Film City in Bangalore or even others in and around New Delhi, Bombay, Bangalore and the growing cities of the country making this new boom more a story on paper yet than on the ground. It will be private enterprise that will win in the end with divestments from the government netting probably Rs 50,000 crores to the government to provide the support ( current target is firming up at Rs 15000 Crores or $ 3.15 billion)
This is our story and we have to make it happen. When it does happen it will be a sterling surprise for India’s citizens. One budget cannot make it happen. But all of us can. And we have already decided to make it happen. Onward we move after Outsourcing, to new avenues for progress and growth. Will the Banking sector step up to the requirement? Will new social media bring in more than awareness and readership? How will we move forward? This is not about enabling policy. This is about hard investments. Anyone who can make a successful investment in India’s Lifestyle story will be able to create a successful brand and a successful business empire. Anyone who supports Private Consumption will have the right project skills to win for Team India. 

Tags: Global Investing, BRIC, Emerging Markets, India, India Infrastructure, Retail Lifestyle, Infrastructure, urban infrastructure, rural infrastructure, Power, Roads, Entertainment, Advantage zyaada, zyaada, zyakaira, Lifestyle Economy, Amitonomics

Posted via email from The investment blog on Post

India's new boom – Infrastructure, Lifestyle and Entertainment

If you have been following the India story closely, India’s new developments are focussed on Infrastructure and Retail along with giant leaps in the Entertainment business. You can look closely at the India stories at http://advantages.us/inframils to get a flavor of what’s happening. 

ADA Reliance (BIG entertainment) has today announced details of its venture with Dreamworks (Steven Spielberg) planning a 40% stake in the final entity capitalised at approx $830 million ($1b at USD rate of Rs. 40) with Disney holding another 15%. The Company holds a target of producing 5-6 films a year. BIG already has agreements with Nicholas Cage’s Saturn, Jim Carrey’s JC23, George Clooney’s Smokehouse, Chris Columbus’s 1492 Pictures, Tom Hank’s Playtone and Brad Pitt’s Plan B among others

On the other hand Retail Lifestyle businesses are increasingly attracting investors with Rabobank’s India Agribusiness Fund picking up a 25% stake in Kishore Biyani’s Aadhaar Retail. Modern retailing businesses in India are predominantly located in cities with FDI restrictions except for Cash & Carry Businesses (100%) and Single Brand retail (51%) Rural Markets may grow at a faster pace at least on the Drawing board. One such project which extends Bangalore’s urban footprint to Bidadi is the Innovative Film City which also showcases the marriage of the rural and the urban as Bangalore expands to the West and the East and remains the fastest growing City in India. The problems on the ground remain. While the new real estate projects are trying to make a strong statement, the depression blues have not gone anywhere. In the showcased retail fund in ET today, for example, apart from Rabo Bank, the other investors are the usual suspects, IFC Washington a couple of /developed/semi developed state development bank(s) and institutions and select private investors. Where is Investor access? Why is it still on the government to make it happen? The FDI limits and the others are fairly rational policies..but where are the investors? Why are global investors so selective about projects? What does it take for them to find out ground realities and put it in the appropriate framework? At the end of the day India’s share in the Emerging Markets Indices is just 5% and emerging Markets worldwide probably get less than 20% of the global capital flows. One Federal Stimulus by Obama will be enough to keep US bankrupt for the next decade. I am not sure we are doing this right.
Nanos will roll into homes by July end and IPL teams are already applying for trademarks as it looks set to become the greatest sporting extravaganza in the world, already ranked at #2 behind the NFL season in the USA. The 3G challenge will tear at Telecom companies’ profits in the coming years ( MTNL has managed 1000 subscribers in its sneak rollout) while public divestment targets were also subdued in the budget but are firming up. The Global ID cards will be implemented pretty slowly, starting off as a Central database, depending of departmental initiative to share information from tax to passport and BPL ration cards, credit card data and other biometric features to enable security and duplicate allocations etc. 
Health and Education have just recently been provided a long lost policy focus. But these investments will also yield success only when the fully integrate into India’s new Lifestyle Economy. Today the same investments are required in the US and the developing world. We need roads, we need power supply, we need an educated performing population and we need affordable healthcare. 
There are other things to be done. To quote the Policy pages of The Economic Times ( pg. 11, Arvind Mayaram) – While investments in roads, ports, airports and urban amenities have a cascading effect on the virtuous cycle of stimulating demand..the impact is the quickest and most spread out through investment in tourism infrastructure. India received just 5.37 million foreign tourists as compared to 57.6 million in Spain. Tourism arrivals grew during the recession worldwide as well.  
Global collaboration and Private enterprise cannot function without the appropriate investment infrastructure either. Investment flows are still uneven and the tenets of this new dream unpostulated. The new web has however found an entry point in global business with increasing discussions on structuring the global memes that bring in change. The question is, as they say in Hindi – Kaise hoga? How will we make it happen!
India’s ICICI Bank is redesigning itself, taking more control of Investment Banking and Venture Capital business while private sector banking players are watching from the sidelines with Kotak Bank and Yes Bank not having the underwriting power or the global reach to finance and provide institutional support to those like the Innovative Film City in Bangalore or even others in and around New Delhi, Bombay, Bangalore and the growing cities of the country making this new boom more a story on paper yet than on the ground. It will be private enterprise that will win in the end with divestments from the government netting probably Rs 50,000 crores to the government to provide the support ( current target is firming up at Rs 15000 Crores or $ 3.15 billion)
This is our story and we have to make it happen. When it does happen it will be a sterling surprise for India’s citizens. One budget cannot make it happen. But all of us can. And we have already decided to make it happen. Onward we move after Outsourcing, to new avenues for progress and growth. Will the Banking sector step up to the requirement? Will new social media bring in more than awareness and readership? How will we move forward? This is not about enabling policy. This is about hard investments. Anyone who can make a successful investment in India’s Lifestyle story will be able to create a successful brand and a successful business empire. Anyone who supports Private Consumption will have the right project skills to win for Team India. 

Tags: Global Investing, BRIC, Emerging Markets, India, India Infrastructure, Retail Lifestyle, Infrastructure, urban infrastructure, rural infrastructure, Power, Roads, Entertainment, Advantage zyaada, zyaada, zyakaira, Lifestyle Economy, Amitonomics

Posted via email from The investment blog on Post

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