Govt clears FDI proposals worth Rs 4,340 cr

The Foreign Investment Promotion Board (FIPB) headed by Finance Secretary Ashok Chawla, which met on December 31, however deferred decision on 16 FDI proposals, including Reliance Broadcast Network and Essar Capital Holding.



The government has cleared 19 foreign direct investment projects worth Rs 4,340 crore, including that of Tata Steel and Future Ventures.

The Board also rejected two proposals, including that of B4U Television Network for induction of foreign equity to carry out business of up-linking a non-news and current affairs TV channel. The FIPB cleared the Tata Steels Rs 1,100 crore proposal for issue of warrants as part of its fund mobilisation plan, a Finance Ministry statement said.

The board that offers a single window clearance for proposals on FDI, also approved Mumbai-based Future Ventures India Ltd request to allot shares worth Rs 300 crore to FIIs and NRIs under portfolio investment scheme. The government has also allowed Karur Vysya Bank to issue partly paid up shares worth Rs 107.5 crore.

Standard Chartered Bank (Mauritius) was also allowed to acquire equity shares worth Rs 4.5 crore of an Indian company which will undertake additional business of operating a stock exchange and specifically trade in currency and interest rate futures.

The board allowed Japan-based Yorozu Corporation to set up a joint-venture company to manufacture different automotive parts. The company will bring in Rs 140 crore worth investment. Chawla headed panel also gave go ahead to Wireless Broadband Business Services (Delhi) to induct foreign equity worth Rs 362.78 crore to carry out internet and broadband services.

EADS Deutschland GmbH and Larsen & Toubro were also allowed to induct foreign equity up to 26 per cent to carry out manufacturing, distribution and marketing of defence related products like electronic warefare and military avionics.

FIPB, however, deferred decision on Reliance Broadcast Network's proposal of induction of overseas investment by FIIs and NRIs by way of fresh allotment of shares by private placement up to the limit of 20 per cent of the total paid up capital of the company. The Anil Ambani-led firm is engaged in FM radio business.

Decision on ABG Shipyard's proposal to enter defence contract was also deferred. Essar Capital Holdings (India) had also sought FIPB's nod for acquisition of equity shares by way subscription to new equity shares and purchase of existing equity shares in an company engaged in telecom sector. The FIPB deferred decision on the proposal.

India’s airlines enter 2011 comforted by double-digit growth due India's strong economy

India’s airlines enter 2011 comforted by double-digit growth in passenger traffic that promises to stretch into a second year as the economy grows at a faster pace, helping support their ambitious expansion plans.Jet Airways (India) Ltd, Kingfisher Airlines Ltd, IndiGo run by InterGlobe Aviation Ltd, Air India Ltd and smaller airlines have carried a record 50 million passengers in 2010, an increase of 18% over the year-ago period.And, after posting a combined loss of $2 billion (`9,020 crore today) in each of the previous two years, airlines are set for a profit of $300 million in the fiscal year to March 2011, estimates the consultancy Centre for Asia Pacific Aviation (Capa).

India’s airlines have emerged from two years of turbulence during which they were beset by surging costs, excess capacity and intense competition as well as fallout from the global financial crisis that caused passenger traffic to slump.The Indian economy’s rapid turnaround—growth in the current fiscal is pegged at 8.75% by the government, compared with 7.4% in the previous year—has come to the rescue of the airline industry.Almost all factors that drive airline profitability—passenger demand, load factors, yields and oil prices—have largely been favourable in 2010.JPMorgan India has started tracking airline stocks that are back in favour with investors who shunned them in the past three years.Jet Airways shares have risen 29% since the start of 2010 to `715 at the close of trading on Wednesday and SpiceJet Ltd rose 35% to `76.90. But Kingfisher Airlines declined marginally by 1.58% to `62.05. The Bombay Stock Exchange benchmark Sensex rose 16.67% in the same period.

“Stock prices have recovered and that has provided opportunity for full service airlines to infuse equity and bring down gearing levels,” said JPMorgan’s Singh. “Full-service airlines have lined up plans to raise equity and are also looking at restructuring debt to bring down interest costs.”Air India, Kingfisher Airlines and Jet Airways have combined debt of $13.5 billion; the Reserve Bank of India has given their creditors the go-ahead to recast the debt, throwing a lifeline to the full-service carriers.“In the earlier decade, they may not have carried so many passengers (as in 2010), but the profits were higher,” says Boeing Co.’s India president Dinesh Keskar. “What has happened is that the debt has increased and therefore that needs to be paid off as well.” As a consequence of debt it now “takes you six months to dig the hole to see the sun”, is how Keskar puts it.The debt is a legacy of airlines’ expansion in the years of air travel boom that preceded the 2008-09 slowdown.

Russian government to make its $600 million investment in the MTS

Sistema Shyam Teleservices, the Indian arm of Russia's Sistema, which promotes the MTS brand, expects the Russian government to make its $600 million investment in the company by October, a top official said on Wednesday.The Russian government will get a 20 per cent stake in Sistema Shyam, which holds telecoms licences for the whole of India, as a result of the investment, Chief Executive Vsevolod Rozanov told reporters.

"Our immediate funding requirements will be taken care of with this investment," Rozanov said. Sistema owns 73.71 per cent of the Indian firm, while India's Shyam Group owns the remainder in Sistema Shyam Teleservices. After the issue of shares to the Russian government, Sistema's stake will be diluted to 54 per cent.Russian Prime Minister Vladimir Putin had in March this year pledged state financial aid for Sistema Shyam.Rozanov said Sistema Shyam would turn EBITDA positive in 2013, though mobile call tariffs were expected to fall further.The entry of new players has crowded India's telecoms space and made it fiercely competitive, leading to dramatic fall in mobile phone tariffs and hit mobile operators' profitability.Recently Sistema Shyam had said it would invest around $1 billion in its India operations over the next one year.

India’s economy is estimated to grow between 8.35 percent and 9.7 percent in the 2010-11

India’s economy is estimated to grow between 8.35 percent and 9.7 percent in the 2010-11 fiscal as experts and think tanks remain divided over the level and speed of the country’s recovery from the recent global financial crisis.While one study expects that moderation in private consumption is likely to pull down India’s economic expansion to 8.35 percent in the second half of this fiscal from 8.9 percent in April-September, another leading think-tank put the country’s real GDP growth in the current fiscal at 9.2 percent.According to a latest report by the global consultant Dun & Bradstreet (D&B), India’s inflation is likely to fall to five percent by March 2011 due to base effect. “But since it is a statistical decline, the common man will not get much relief.
The report, reiterating the concern raised by the Reserve Bank of India in its mid-quarterly review, also warned that rising global crude oil prices may impact inflation.

“The underlying growth momentum for the Indian economy is expected to remain strong with improving consumption and investment, though some moderation would be visible in the headline growth numbers from the current levels.

Large capital inflows leading to rupee appreciation can hit India's exports

Large capital inflows leading to rupee appreciation can hit India's exports which have seen a smart recovery in the first six months of the current fiscal, a Finance Ministry analysis said.

"The main implication of large investment into India has been buoyancy in stock markets and appreciation of the rupee vis-a-vis the US dollar...the appreciating rupee can have adverse impact on the earnings of exporters and makes exports less competitive," mid-year analysis of economy said.

The analysis which was placed in Parliament said the widening trade deficit has also been a matter of some concern.

India's exports during April-September aggregated to USD 103.65 billion registering a year-on-year growth of 28 per cent.

However, cumulative value of imports during the same period was USD 166.48 billion showing an annual expansion of 29.9 per cent.

The trade deficit for the first half of 2010-11 was USD 62.83 billion, up 33.2 per cent from the previous corresponding period.

Total capital inflows were of the order of USD 37.4 billion in the first half of the current fiscal. In the previous fiscal as a whole, these inflows were USD 53.6 billion.

"The surge in the investment in recent years raises the question whether the inflows are in access of domestic absorptive capacity, which could lead to overheating of the economy," the review said.

However, there is a positive side to the phenomenon. The appreciating rupee "is an anti-inflationary tool as it makes imports of oil, which form 30 per cent of India's total import basket, cheaper.

India can be the third highest economy for foreign direct investment in 2010-2012

India climbed four notches to be ranked the ninth most attractive investment destination in 2009 with a total foreign direct investment inflow of $34.61 billion, a UN report revealed on Thursday. India attracted sizeable overseas investment despite the overall drop in such inflows due to the
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global financial crisis, said the World Investment Report-2010, prepared by the United Nations Conference on Trade and Development.

"If the situation continues to improve, India is likely to be among the most promising investor home countries in 2010-2012, as well as the third highest economy for foreign direct investment in 2010-2012," said the report.

"In 2008, though India attracted higher foreign direct investment worth 40.42 billion, its ranking was lower at 13th. China nudged further up to second at $95 billion from a third place last year," said Rashmi Banga, senior economist with Unctad.

The US remained the top investment destination with inflows of $130 billion in 2009, followed by China, France, Hong Kong, Britain, Russia, Germany, Saudi Arabia, India and Belgium. Total inflows amounted to $1.11 trillion, against 1.77 trillion in 2008.

In 2009, Indian firms and funds also invested a lower amount of $14.89 billion overseas, compared to a $18.4 billion in 2008.

"But such outflows are expected to rebound in 2010 sustained by merger and acquisition opportunities associated with Indian and Chinese firms' persistent pursuit of natural resources and markets," the report said.

The report also said that five Indian companies figured in the list of top 100 non-financial trans-national corporations, ranked by their foreign assets overseas.

Among them Tata Steel was ranked 15th, the state-run Oil and Natural Gas Corp in the 20th position, Hindalco in 29th rank, Tata Motors in 40th position and Suzlon in 54th.

Marketing Strategies For Investment Properties in This Economy

One of the side effects of the current economy and number of foreclosures is an increase in the percentage of people relying on leased housing. As families lose their homes they have to live somewhere and rentals are often the only choice available to someone with a foreclosure on their credit history. Add on to the fact that some estimates show that in California alone twenty percent of foreclosed properties were rental properties all adds up to the fact that there are a flood of people looking to rent rather than own. This would seem to be great news for owners of income property, but with the new renters there are also the fact that many homes being sold by financiers are being purchased by investors who have every intent of turning that property into an incoming producing property. The market just got more crowded and owners are now faced with increased competition for tenants. Move in Specials, first month free, decreasing rents and no security deposit are all common techniques to try and make sure your property stands out amongst all the others, yet they are not always the best solutions. Instead of jumping to a decrease in income and security, other tactics should be looked at. Reducing your income, which is exactly what most these tactics do, make sure you have exhausted all other avenues first.

Housing is an emotional purchase and any marketer will tell you people make decisions based on emotion. First and foremost you need to make your property as inviting as possible. It goes without saying that you need to make the outside look as good as possible, but take a look inside. Any real estate expert will tell you that a staged home is easier to sell than an empty one, the reason is it is easier for the prospective buyer, or in the case of income property tenants, to see themselves in the home if it has some kind of furniture in it. Staging companies are great resources and might even offer their services for a percentage of the lease. Property Managers or owners of a number of units may find it more profitable to buy a room or two worth of furniture and then store it for when you need it. The cost of furniture and rental space is probably less than the income you would lose if your vacancy extends into more than a couple months.

You can have the home decorated the nicest and have the best sign out front but if people are not driving by they are useless. Open up a classified add and you will see an overwhelming number of ads all saying the same thing ''Charming space with so many beds and so many baths in such and such neighbourhood'', what does that tell you. If you own properties and do not have a website what are you waiting for. URL registration can easily be found for under twelve dollars a year, some sites even offer basic hosting with the URL or at the vary least hosting plans are very affordable. If you are not savvy in the ways of HTML there are companies that can build a website for you. Instead of just putting the standard verbiage you can now direct potential tenants to your website where they can view pictures, get community information and download application materials. This also gets the potential prospect imagining themselves in the home before they even view it. How cool is it if you show the place, getting an application right then and there.

Real Estate agents who are looking to sell a house often will hold an open house, a time for people to walk in and view the house. Yet this tactic is not as popular in the rental house, and is a missed opportunity to save time and to get your property rented. Set aside a Saturday or Sunday, advertise it in all of your normal outlets, making sure you set clear start and end times, and then see what happens. While sitting open houses for my wife I was surprised the number of time I was asked if the owner would consider renting the home. It is easier to get people to come to you one day as opposed to driving to the location every time someone wants to see it. Some marketing strategies save you money and some save time, open houses could save both. The day of put signs up directing people to your property, make sure you have all the necessary forms that potential tenants will need to apply for a lease.

Unfortunately not all advertising is free, and sometimes you need to pay to place an ad. Advertising is an investment and as such you need to make sure the money your spending is well spent. If you are not asking everyone who calls, to inquire about your properties, how they found out about the home; if you take only one tip and use it make this the one. Keep a tally of calls that come in, calls that lead to showings and calls that lead to signed leases. If you find that 95% of your signed leases are referred from one particular ad in a certain magazine, you can start to eliminate ads in magazines that do not get you the same exposure, this means you save money. Tracking referral sources also allows you to put the optimal message out there, or allows you to target which property you market in which publication. You may even find out that your best marketing tool is a good old lawn sign. Never waste money on an ad that does not work.

The bottom line is you do not necessarily need to spend money to make money. There are opportunities to take advantage of no cost to low cost advertising. If you do need to spend money, you need to make sure you are getting the most return on your investment.