Newsletter on Investor leads & investment Opportunities: India, September 2004.
1. IDEA Internal News: IDEA has been undertaking a capacity building exercise to create a business matchmaking & direct investment network in India. It has developed over 100 investment opportunities & leads cutting across horizontal geographies & vertical sectors. The same has been circulated with the help of FDIXchange, a World Bank Agency and iNDEXTb, a govt. of Gujarat agency to a data base of investors http://www.ideagujarat.com/news2.htm . IDEA has also taken initiative to enrich its content partners & with their help extend the geographical reach of the program throughout India. It has also recently initiatied a dialog with the Ministry of Finance & approached the Ministry of Industry for ongoing cooperation & support. This newsletter is an update of the investment leads & opportunities received by the initiative that can be converted into serious deals by follow up & action.***
2. Electrical & Electronics: A global leader in electronic, electrical & automobiles fuses is looking for an entry strategy in India & any opportunities maybe posed to the investor. Media reports indicated that :
a global leader in instrumentation automation systems, with a presence in India, announced its intention to scout for acquisition opportunities.
Two Japanese chip makers are seeking cooperation in software & hardware design with Indian firms.
Another leading solutions provider in uninterrupted power supply ( UPS) and precision air conditioning systems ( PAC) was looking for acquisitions in India.
- Banking & Insurance: A leading global insurance co., through its joint venture in India, is looking for strategic alliances to provide group insurance to cover bank lending portfolios or corporate gratuity & pension schemes. It is also promoting attractive Unit liked investment promotion schemes ( ULIP’s) that are an investment opportunity for Non resident Indian’s. As such the private sector has been growing this year at around 150% & some private majors have set a target as high as 250% growth for the current year.
A leading PSU bank in India is looking at a target to disburse around Rs. 600 cr ( US $ 150 million) in Western India for large manufacturing or infrastructure projects, and it is a very positive sign that the Indian banking sector is flushed with liquidity.
It is expected to see much consolidation in the banking industry but due to restrictions such as 10% voting cap on FDI much of it is likely to be domestic investment. E.g. Global Trust bank was picked up by Oriental Bank of Commerce within days. However there are no restrictions on the organic, 100% owned subsidiary model and groups such as CITIBANK would expand braches via this.
- Globalization efforts of SME’s: A Gujarat based SME is looking to globalize its laminate sheet business by acquiring distributors or outsourcing production. Another mid size company manufacturing food colors, with existing exports of around $ 10 million is keen to globalize its business. IDEA has been assisting these SME is in networking through web-based platforms like FDIXchange & physically by its content partners abroad. Apart from contact manufacturing, SME’s are willing to leverage their network for imports in exchange for any assistance provided for exports. Recently ICICI has published a magazine dedicated to the SME sector which sites examples of how Indian SME’s have been contract manufacturing for global pharmaceuticals & healthcare majors with a presence in India. In Tiripur, a major textile hub close to Rs. 2000 crs ( $ 400 million) worth of products are supplied to global majors. Other example include footwear, socks, retail packaging of spices, food products, coffee grinders etc.
- Oil & gas :
A foreign listed co. is looking to acquire to farm in a stake in E&P blocks in India. Recently, India’s largest co. IOC acquired farmed in a stake in a majority UNOCAL, owned E&P co. in India.
Participatory interests are available in a Coal Bed Methane Block is available in East India.
A reputed 25 yr old Canadian co. is looking go give its distribution rights to India , along with manufacturing rights for CNG kits with imported technology. Around 1 lac vehicles each have been converted to CNG in Delhi & Mumbai & cities such as Pune, Surat, Baroda & Ahmedabad are likely to witness strong growth in this sector.
Oil & gas co’s are looking to raise debt funding for major initiatives in India.
( see http://www.ideagujarat.com/news4.htm for Energy sector archives)
- Food & Agro:
A Canadian co. is offering a 100% buy back for mushrooms as a part of project know how transfer for mushrooms.
Available technology/ equipment for solar power green house’s used in water & land started area’s to produce hydro phonic fodder, sprouts etc.
Available a cornolo oil mill for sale in Canada for around US $ 20 million.
(see details in our Canada focused newsletter http://www.ideagujarat.com/news7.htm )
- PHARMA & LIFESCIENCES:
Ø In the pharma where there is a huge frenzy for acquisitions in developed countries where Indian co’s are trying to predominate generics business.
A UK based CRO ( clinical research organization) is looking for strategic alliances in India. Leading global majors such as Glaxo SmithKline & Novartis have announced that they would source their clinical research operation from their Indian subsidiaries.
A leading Indian pvt. sector co. has announced its foray into the CRO area.
Available for a sale an SME pharma unit in Gujarat meeting all standards required for compliance by SME pharma units. Around Rs. 1500-1600 crores are being invested. ( US $ 300- 320 million)
( see http://www.ideagujarat.com/news3.htm for the pharma sector archives & also http://www.ideagujarat.com/news6.htm for a few lifesciences opportunities in cooperation with Israel)
- Education: is emerging as an important sector of the economy with potential for SME’s. IDEA has dedicated a newsletter to this sector and the opportunities include strategic alliances such as outsourcing facilities in India for initial years, leveraging brand of leading Indian institutions for executive education centers & host of franchising opportunities.
( for details of Education sector visit http://www.ideagujarat.com/news9.htm )
- Chemicals:
Available a market study & imported technology & potential buyback for a 3- 6 lac tpd Methanol project in Western India.
India’s leading petrochemical unit is looking for technology for styrene butadiene rubber. Available an old 70,000 unit in UP for sale for SBR.
India’s leading exploration company has announced plans to invest US $5 to 7 billion in diversification in petrochemicals & Power business. It is seeking support to set up a C2 & C3 cracker for which investment announcement have taken place in Dahej, Gujarat. Some of the leading Japanese co’s have shown an interest in the same for providing technical know how & EPC assistance for such projects.
A paper mill sourcing equipment from Austria is looking to raise financing. Some M& A activity is also reported in this sector & some of the smaller mills of 10-15 tpd capacity are available for sale as the industry consolidates.
- Construction & Building Materials:
Cement: a foreign co. is interested to acquire a cement unit in India.
Available is a mine cement unit for sale in Eastern India & minority stakes in some of the larger cement units, as much consolidation has already taken place.
Greenfield opportunities are given attractive incentives in Kutch, Gujarat.
A Swiss group in bathroom products is looking to have a presence in India either trough acquisition or green field .
Available is technology for ready made construction i.e. foam embedded metallic panels idea for cold storages.
Indian co’s in plastic based construction items such as water tanks, prefabricated housing are looking for suitable diversification opportunities.
- Infrastructure:
Chinese construction co’s are looking to partner with India co’s in the 500-1000 cr turnover bracket. ( US $ 100- $ 200 million bracket)
A proposed container port in Gujarat has received a good response and in negotiation with around 6 global shipping lines & port management co’s.
SEZ’s in India are looking for co-investors. Recently some interest was reported in the Media that the successful Free Zones in the Middle East were looking outward towards development of SEZ’s in India.
- Environment & Economic Projects :
CDM projects: Available with adequate surplus, around 3 million tonnes of Carbon Equivalent credits with a unit in India, slated to be amongst the worlds first & largest CDM projects. Buyers may send their inquiries. Their has been a flurry of recent activity reported in area’s such as wind & hydro energy, bio diesel etc. where Carbon credits are being earned.
Economic Projects are identified in area of urban environment up gradation in Gujarat & biodiversity business development in Kerala. As such any well funded not for profit agency from abroad can find no dirth of activities & partnerships in a diverse country like India.
- Minerals & Mineral Based Industries:
A mid sized US based co. has entered into a j.v. talks with an Indian co. for alumina & specialty alumina chemicals & looking to bid for opportunities in Kutch.
An granite leases in Gujarat is willing to offer blocks to international markets in colors safari brown & diamond brown. Another investment opportunity has been identified for SME’s interested in development of marble leases in Gujarat, India.
An NRI is looking to invest around Rs. 1 cr ( US $ 200,000) in this sector in areas’ such as Met coke. Although the projects size is much larger most of the Indian steel co’s have been expanding their coke oven capacities and even investing in coal mines abroad to secure their supplies of met coke.
- Power:
Around five recent announcements in Gujarat 6100 MW in pipeline & a 3000 MW project in North India based on gas/ LNG. Support for EPC & financing from a leading Japanese co. for such power projects & from a leading PSU bank, subject to proper appraisal via its investment banking outfit.
The Indian Institute IIM along with Stanford university is presenting a workshop on September 23rd to 24th on power sector reform. Many of the projects are trying to secure long term & short term power trading arrangements for off take in power projects. Striking the right balance would be a key in these projects.
Small power projects based on gas , if not available furnace oil are identified by various industrial clusters to take advantage of the new electricity act in India which permits setting up of captive units as groups.
- Real Estate:
Available for sale or on lease a multiplex cum entertainment center near Ahmedabad.
A group residential housing complex in south Delhi has also received a good response from investors.
The National Textile Corporation has also announced an ambitious program to raise Rs. 1500 to 2000 cr ( US $ 300-400 million) from selling land locked in these old textile mills.
The Gujarat govt. is trying to develop a garment cluster in Surat where it has set up a garment park & entrepreneurs are invited to set up training centers, under support of the govt. for the project.
( Please visit http://www.ideagujarat.com/news5.htm for real estate sector archives)
- Trade:
A delegation from US consulate announcement a business sourcing center & is willing to provide assitance to locate product distribution representations, technology or joint venture projects. US TDA provides feasibility studies as grant in aid that often helps to give easy assess to US technology & equipment in high technology sectors.
A free zone in Sharjah is inviting Indian entrepreneurs to set up operations in Sharjah to cater to GCC region. Over 200 Indian co’s are already there.
A large trade offer received for seeds & new molasses/ alcohol spirit from Canada.
A US based Pharmacy is looking to outsource its requirements of syringes.
A list of trade leads is enclosed on the sites www.gujexim.com & www.buygujarat.com
- Other Outward Investment Opportunities:
A delegation of ambassadors of East African countries wishing to associate with Indian co’s for upgrading healthcare, education & manufacturing had visited the Gujarat Chamber of Commerce & Industry ( GCCI). Earlier the Botswana Export Development & Investment Agency ( BEDIA) had visited Gujarat. Political risk insurance can play an important role in such activities & idea has published a newsletter’s on Africa & sought approval and cooperation of MIGA to propagate the same. ( Please visit http://www.ideagujarat.com/news8.htm for details)
Indian co’s are also aggressive keen to invest in oil & gas blocks , coal or other minerals such as Copper.
Outward investment opportunities identified in new area’s such as textile retailing, auto ancilliaries, construction equipment, specialty chemicals, etc. A leading telecom co. in India has said that it would actively participate in aquisition opportunites abroad.
Opportunities identified abroad by our network partners include a food & agro uni, in CNG, , Diamond mines in Canada etc Others such as ERW oil casing & Aluminum project in China were selected from FDIXchange for potential matches.
- Other Inward investment opportunities:
IT: An inquiry had been received for acquisition of a software co in India with an investment size of upto US $ 500 million with 500 to 1500 employees. One of the high profile opportunities in the sector Hughes Software was taken over by Singapore based co. Hughes software.
IT enabled services: Some of the most recent FDI investments have been in this sector with IBM acquiring a BPO facility in India. Another BPO opportunity is available in India for data capturing for litigation services.
Logistics: A south African based aviation cargo handling co. is looking for j.v. tie ups in India.
***IDEA would be happy to profile interests of serious investors & undertake a business matchmaking or direct investment opportunity search. It works on the basis of a success based beneficiaries side or investor side mandate. The initiative works closely with govt. investment promotion agencies, investment bankers & a network of investment practitioners. It would be happy to work with other investment promotion agencies or investment bankers for inward-outward investment promotion efforts with India as a focus.
