Think India Foundation

Builders feel investor heat, bite buyback bullet

Some are funding it from internal accruals, while many want to avoid the put option

Mumbai : Thursday was a big payday for Deutsche Bank (DB), which ended its tumultuous relationship with the Mumbai-based Lodha Group. For DB, the exit was a windfall — a neat 55 per cent profit in four years.

Such buybacks are rising. Indian real estate saw 14 such private equity (PE) exits, worth $457 million (around Rs 2,285 crore) in 2011. Of these, promoters bought out existing PEs or other financial sponsors in eight deals, according VCCEdge, the research platform of VCCircle. Read more

Source : business-standard.com

Bangalore Metro to float tax-free bonds

New Delhi, DHNS : Rs 2,000 crore to be raised for first phase of the project

The Bangalore Metro Corporation (BMRC) will issue a tax free Metro Bond 
to raise Rs 2,000 crore  for the first phase of the project. 

The bond, pending with the Union Finance Ministry at present for clearance, is expected to hit the market in  a few days, the Union Urban Development Secretary Sudhir Krishna said on Friday. Read more

Source : deccanherald.com

Boost financial instruments, discourage gold imports: Assocham

Mumbai : Encouraged by the government’s intention to categorise gold as a holding asset not to bring in circulation, the premier industry body Assocham has urged the government to encourage formal financial instruments to make the investment more productive. A senior government official had recently said that gold is a holding asset which increases massive strain on investible resources.

Terming the current gold import as huge burden on the balance of payments, Assocham’s secretary general D S Rawat said. Read more

Source : business-standard.com

Time ripe for financial institutions to invest in housing: Selja

New Delhi: Minister of Housing and Urban Poverty Alleviation Kumari Selja Monday said time was appropriate for the banking sector and other financial institutions to play a greater role, along with the government, to provide affordable housing to the poor.

Delivering the keynote address here at an international seminar on "Growth and stability in Affordable Housing Markets", Selja said there has been a steady growth in the housing finance companies in India who are serving as dedicated outlets for the housing credit delivery. Read more

Source : zeenews.india.com

Development should be all inclusive

It's not just policies that spur growth, but the implementation of such policies which is crucial to that growth. Stakeholders must be involved in that process 

There are certain key issues in the transaction of business in India which are not always factored in when enterprises draw up their strategy. This is often true when one looks at the environmental factors which determine the relationship among resource generation/ identification, resource accessibility and resource affordability.

What is required is a careful designing of the architecture of the delivery processes and the delivery institutions. These institutions which undertake the supply, by definition, could be embedded in the private sector ethos or the public sector ethos or be a part of the essentially governmental sector. Each of them would have its distinct defining characteristics. Read more

Source : dailypioneer.com

Depositors in urban India not aware of interest rate: Nielsen

MUMBAI: A huge section of depositors in urban India are not aware of the interest rate they earn on their saving rate deposits even as the banking regulator recently deregulated the rates resulting in several banks offering higher rate to attract customers. A research by Nielsen shows that nearly 46% did not know interest they are earning from their bank while 54% of the account holders were aware of the savings rate they were earning from their bank. Of this, 18% knew the correct savings rate. 

Saving account was in the news a month ago after the Reserve Bank of India freed deposit rate, which was capped at 4% earlier. As a result, banks likeYes Bank and Kotak Mahindra Bank began offering 6% on savings account deposits. However State Bank of India and HDFC Bank, which have almost 50% of their deposits in form of savings and current account, continue to offer 4% on saving account deposits. Read more

Source : economictimes.indiatimes.com

PE investments rise 41% to a 4-year high in 2011

Last year saw 427 deals worth $11.2 billion as sluggish capital market, costlier debt led firms to tap PE investors

Mumbai: Private equity (PE) and venture capital (VC) investments in India rose 41% in 2011 over the previous year—the highest since 2007—as a sluggish capital market and costlier debt led Indian companies to approach these investors for fresh funds.

Last year saw 427 PE/VC deals worth $11.2 billion (around Rs59,500 crore today), compared with 328 investments worth $7.96 billion in 2010, according to data from research and financial consulting firm Four-S Services Pvt. Ltd. Read more

Source : livemint.com

Infra - Fund Plan of Over 50k Crores Gets Approved by Govt.

Bangalore: A fund of $10-billion (over  50,000 Crore) has been fixed by the government for infrastructural development. An agreement with the Infrastructure Debt Fund (IDF) to provide financing on infra-projects has been confirmed. Foreign banks and a multilateral financial agency will contribute 50 percent of financial lending, whereas, the rest of the contribution will be made available by public sector institutions to promote investment.

A proposed plan has been made to set up an NBFC (a non-banking finance company) which will aid the fund. The major financial institutions who will participate for its establishment are India Infrastructure Finance Company (IIFCL), IDBI Bank, HSBC Life Insurance Corporation (LIC) and Asian Development Bank. Read more

Source : siliconindia.com

Toll collection to be electronic soon: NHAI

AHMEDABAD: The Electronic Toll Collection (ETC) system will replace the current cash tax payment system at toll booths on national highways across the country next year. A senior official of the National Highways Authority of India (NHAI) said on Tuesday, ahead of the launch of its first-ever tax-free bonds issue of Rs 10,000 crore.

NHAI member (finance) J N Singh said, "RDIF technology-based ETC in India shall create a credit card for making payments, like in any other developed country." Singh is in Ahmedabad for the bonds public issue which is opening tomorrow and effective until January 11, 2012. The issue under tranche-I aggregates to Rs 5,000 crore with an option to retain over-subscription of up to Rs 10,000 crore. Read more

Source : timesofindia.indiatimes.com

NHAI set to raise Rs 10,000 cr through tax-free bonds

Mumbai : The National Highways Authority of India (NHAI) plans to raise Rs 10,000 crore through tax-free bonds. The state-owned entity is set to issue the first tranche of bonds on December 28.

The issue size would be Rs 5,000 crore, with an option to allot additional shares worth Rs 5,000 crore in case of over-subscription. “The proceeds from the issue would be used to finance various highway projects across the country,” said J N Singh, member (finance), NHAI. Read more

Source : business-standard.com

Fewer PE exits, low valuations may prompt fresh investments

According to industry experts, the return expectation of LPs has dropped to as low as 15-18% from 22-25%

The new year will serve a mixed dish for private equity (PE) investors in India. While high inflation, steep interest rates, volatile markets and political uncertainty will make it difficult for them to exit with good returns, 2012 will also provide a good vintage for funds pumping in money afresh since investors are expecting a bigger correction in the valuation of firms.

A good vintage, which refers to a fund’s first year of investment, helps PE funds derive good returns at the time of exit since they can buy cheap but sell at higher prices when the markets improve. About 120 PE funds, seeking to raise approximately $34 billion in 2011, are currently on the road, according to a May report by consulting firm Bain and Co. and the Indian Capital Venture Association. Read more

Source : livemint.com

PM mulls Rs.1,000 crore corpus for housing poor

New Delhi: The government is considering creating a corpus fund of Rs.1,000 crore in the current fiscal that would encourage banks to give housing loans in "significant volumes" to the urban poor, Prime Minister Manmohan Singh said Tuesday.

Addressing a conference on the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) here, Manmohan Singh said the corpus of Rs.1,000 would be set aside to create a credit risk guarantee fund that could be used to cover any bank losses. Read more

Source : zeenews.india.com

State Govts told to release Rs 200 cr for recapitalisation of regional rural banks

Kolkata : The Union Finance Minister, Mr Pranab Mukherjee, has asked State governments in the eastern region to release about Rs 200 crore towards recapitalisation of regional rural banks.

Under the Union Government's scheme of supporting 40 weakest regional rural banks, 13 have been provided recapitalisation support to the tune of Rs 355 crore over the last two years, with 50 per cent of the contribution coming in from the Central Government. Read more

Source : thehindubusinessline.com

Tech can speed up financial inclusion

Reaching out to the unbanked, a process called financial inclusion, involves innovative models and the use of technology

Mumbai : Bankers agree that all Indians should have an account. Yet, many millions of people in rural areas still deal in cash, and many others in both urban and rural areas have not done more than extracting cash out of automated teller machines (ATMs). Reaching out to the unbanked, a process called financial inclusion, involves innovative models and the use of technology. But banks have to strike a fine balance between reaching out to areas where the returns are not immediate, and making reasonable gains. Is there a method to do this, and are banks the only route to financial inclusion? Read more

Source : livemint.com

Regional Rural Banks' count will reduce to 46 as government starts consolidation

KOLKATA: The government has kicked off a major consolidation exercise among regional rural banks, which play an intense role in the country's scheme of financial inclusion. It plans to amalgamate geographically contiguous RRBs within a state, to help optimise the use of resources, three persons familiar with the development said.

As many as 63 RRBs will come under the purview of amalgamation and 27 larger and stronger banking entities will be created to improve services to essentially poorer segment of the population residing in the country's interiors. Read more

Source : economictimes.indiatimes.com

Improve credit delivery in rural areas: RBI to pvt banks

Mumbai : At a time when the government and regulators are emphasizing inclusion and increase in credit delivery to those without access to formal sources of finance, private sector banks are found to have low credit-deposit ratios in rural areas as compared to public sector counterparts.

In a recent interaction at the state-level bankers committee (SLBC) meeting, in which Reserve Bank of India governor D Subbarao was present, bankers brought this to the regulator’s notice. According to bank executives present, RBI asked private sector banks to boost credit expansion in rural areas. Read more

Source : business-standard.com

HDFC Bank launches premium women’s credit cards

In fact, Solitaire Premium is the first premium women’s card in the country. With Solitaire, INFINIA and a pack of travel cards, HDFC Bank now has an unparalleled premium bouquet of plastics in India.

HDFC Bank, the biggest issuer of credit cards in the country, today launched the most premium bouquet of cards for Indian women. Named ‘Solitaire Premium’ and ‘Solitaire’, the two cards represent an important milestone for the Bank in its efforts to offer premium cards not only for women, but every member of the family. Read more

Source : indiainfoline.com

Cooperative banks in Nagpur city safe, now

NAGPUR: Depositors in urban cooperative banks (UCBs) in city may rest assured of the safety of their money - at least for now. After prolonged financial crisis resulted in three cooperative banks in city being shut down causing huge loss to depositors, Reserve Bank of India (RBI) has declared finally there is no cooperative in the city having a negative networth. This means no bank faces a fate similar to Nagpur Mahila, Samata Sahakari and Parmatma Ek Sevak, which have been de-licensed and facing RBI embargo on withdrawals for more than three years.

Moreover, this situation is not because the weak banks have been wiped out. It is because banks have over time shown consistent improvement in financial parameters, said a source in apex bank. Negative networth means the banks' losses are more than its owned funds that include share capital and profit reserves. Read more

Source : timesofindia.indiatimes.com

Andhra to launch interest-free loans in a blow to MFIs

Lines up outlay of Rs 1,400 cr from next financial year

In its latest attempt to virtually wipe out microfinance institutions from the state, the Andhra Pradesh government has decided to introduce interest-free loans for women in self help groups, with an outlay of Rs 1,400 crore from next financial year.

With this, it aims to encourage better repayment habit among the 1.36 crore women in the 12.5 lakh self help groups. This new scheme grants complete interest subvention, under bank linkages, for groups with a record of on-time repayments. Read more

 

Source : mydigitalfc.com

Kochi catches up with big four centres of capital trade market on NSE

KOCHI: Major metros like Mumbai, Delhi and Kolkota still dominate the capital market trade in the country. But the data on city-wise trade from National Stock Exchange (NSE) throw up some interesting results.

Kochi has emerged as one of the top centres of capital market trade in the country occupying fifth position among all the cities in the country. The first four positions are occupied by Mumbai, Delhi, Kolkata and Ahmedabad. Read more

Source : economictimes.indiatimes.com

ASSOCHAM calls for next generation reforms

New Delhi (IBNS) : As the UPA II completed its mid-term, industry body ASSOCHAM on Tuesday called for a determined push to implement second generation reforms in finance, banking, insurance, taxation, infrastructure funding and many other sectors in agriculture, industry and services.

The negative perception of decision-making paralysis within the government must be reversed now, or else the opportunity will slip by, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in an analysis of UPA 1 performance and agenda for the next term (available at www.assocham.org). Read more

Source : indiablooms.com

Rules on infrastructure debt funds to be eased

 New Delhi : RBI likely to allow banks access to `1 lakh crore more for project lending

The Reserve Bank of India will come up with norms next week for banks and non-banking finance companies (NBFCs) to set up infrastructure debt funds. This will lead to release about Rs 1 lakh crore bank loans for core sector projects. Read more

 

Source : mydigitalfc.com

IT, healthcare, BFSI rank high among investors

Even with earnings volatility shaking investor confidence worldwide, India was better when compared to developed markets and other emerging markets when it came to the risk to reward ratio.

Mumbai :  Consumption, IT, Healthcare, and BFSI (banking, financial services and insurance) are high-yield sectors for investors going forward, said a panel of experts at the World Economic Forum and the CII organised India Economic Summit. Read more

 

Source : thehindubusinessline.com

NSC, MIS maturity period set to be reduced to 5 years

NEW DELHI: The maturity for Monthly Income Scheme (MIS) and National Savings Certificate (NSC) would be reduced to five years from six years and a new NSC instrument with a maturity of 10 years would be introduced.

The expert panel, headed by former RBI deputy governor Shyamala Gopinath, in a report had said the continued popularity of both Kisan Vikas Patra (KVP) and NSC among the urban population who are not all small savers could be prompted by an incentive to avoid tax. "As compared to NSC, KVP is more popular as it is a bearer-like certificate due to its ease of transfer. It also has an in-built liquidity due to the regulated premature closure facility offered in the scheme. In view of the recent developments on Anti Money Laundering/CFT front, the committee recommends that KVP should be discontinued," the report had said. Read more

Source : timesofindia.indiatimes.com

Rise in savings deposit rate draws clients to private banks

 Mumbai : Only a little over a week ago, a handful of private banks had increased the interest rate on savings deposits. However, these lenders already claim the number of enquiries for opening an account with them has surged.

The enthusiasm was seen not only among retail depositors; even small and mid-sized companies have expressed interest to open salary accounts of their employees with these banks. Read more

Source : business-standard.com

Urban areas too see opportunity in fin inclusion

The aim of financial inclusion so far has been to reach out to unbanked rural areas of the country and offer banking facilities there. But financial inclusion also has huge scope in the urban segment too, informed a report by McKinsey & Company.

The study says that by the year 2015, there will be around 45 million urban families having annual income less than Rs 2 lakh thereby making financial inclusion a vital necessity then. Read more

Source : rupeetimes.com

Children's Education: Don’t save for it!

Before you realise, it’s the first day of school for your child. For a parent this is a big occasion, a child’s first steps down the long road of education. You have checked everything—uniform, pencils, crayons, books and schoolbag. Well, check again. Have you started a college savings plan for your child? 

If you feel there is still time, it may already be too late to start. Many financial planners would say that you are already late by five years. Following is a story that should set you thinking. Read more

Source : moneylife.in

Just 3.3% of urban Indian population gets home loans

With housing complexes and apartments cropping up at every nook and corner of most Indian cities, have you ever wondered how many Indians avail of housing loans? Your query would be much tougher to answer than you imagined. This is because, In India, there are no figures from the government agencies — Reserve Bank of India (RBI) included— about how many Indians get housing loans, especially in urban areas.

The regulator for the sector, National Housing Bank (NHB), too, has data only on the quantum of loans disbursed by housing finance companies (HFCs), divided by the loan ticket. And that data is seven years old. So, if one attempts to figure out, say, how many Indian households have taken loans from banks or HFCs, the answer would be pure guess work. According to RBI data, in 2010-11, the total housing loan disbursed by the banking sector was R 3,46,110 crore, of which priority housing accounted for R 2,30,686 crore. Of the latter, the Indira Awas Yojana — a government of India social welfare programme to provide housing for the rural poor — accounted for less than R 10,000 crore. Deducting the sum — as one can safely assume a ticket size of R 20 lakh even under the priority sector — the total number of beneficiaries stands at just around 11,00,000. Read more

Source : financialexpress.com

Madhya Pradesh to have 300 more bank branches

Bhopal: A total 300 more branches of banks would be opened in 2011-12 under financial inclusion scheme in Madhya Pradesh. Of them, 25% would be in rural and 10% in villages where there is no bank.

Nationalised banks alone have already opened 46 new branches in the first quarter of the current fiscal. Read more

Source : daily.bhaskar.com

Credit Guarantee Fund for urban poor on the anvil

Mumbai : Amid constraints over the availability of funds from banks and other financial institutions, the Centre plans to soon launch a scheme to trigger credit markets for the urban poor.

The Credit Guarantee Fund (CGF) will cover the risks of the bank’s lending to the urban poor, who would be covered in the Centre’s ambitious slum-free India scheme. Read more

Source : business-standard.com

Gujarat to have at least 40 new UCBs after changed norms

 Mumbai/ Ahmedabad : The Malegam Committee's report published by the Reserve Bank of India on Monday, seems to have opened doors for Gujarat's cooperative credit societies, which had been waiting for long to get a status of cooperative banks. Experts anticipate about 40-50 cooperative credit societies from Gujarat may opt for becoming an urban cooperative bank (UCB) after the newly issued norms recommended by the Committee.

The recommendations of the committee, appointed by the RBI on licensing of new UCBs under the chairmanship of Y H Malegam said, 'the existing well managed cooperative credit societies, which would meet financial criteria like profits, capital adequacy and NPAs' proportion should be given priority for granting licenses as UCBs mainly in the unbanked or inadequately banked districts of the country. Read more

Source : business-standard.com

Co-op banks to have Rs 50 lakh fixed capital

Mumbai : The Reserve Bank of India panel, on Monday, suggested the need for a greater presence of Urban Cooperative Banks (UCBs) in unbanked districts and in centers having population of less than 5 lakh.

An expert committee on Licensing of New Urban Co-operative Banks emphasised the need to encourage new entrants to open banks and branches in States and Districts which are unbanked or inadequately banked. Prescribing entry point capital for new UCBs, the Report said UCBs operating in only one state should have a minimum capital of Rs 50 lakh.  At the same time, UCBs which wishes to operate in more than one State after five years of successful operations must have a minimum capital of Rs 5 crore. Read more

Source : deccanherald.com

Now, Palike plans to float bonds to pool in resources

It ignored poor credit rating and presented inflated budget

Bangalore: The Bruhat Bangalore Mahanagara Palike (BBMP) is all set to float municipal bonds to raise Rs 150 crore to meet its various financial demands, despite a negative credit rating by a professional agency.

Investment Information and Credit Rating Agency of India (ICRA) has placed the credit rating of the Palike at a moderate risk to high risk of defaulting on their financial obligations. Read more Source : deccanherald.com

RBI sets Rs 500 cr as minimum capital for new banks

Mumbai: The Reserve Bank of India (RBI) on Monday unveiled the draft guidelines on new banking licences, pegging the minimum required capital to set up a bank by a corporate at Rs 500 crore while limiting the foreign shareholding at 49 per cent.

"The minimum capital requirement will be Rs 500 crore. Subject to this, the actual capital to be brought in will depend on the business plan of promoters," the Reserve Bank of India (RBI) said in its draft guidelines on new banking licences. Read more

Source : ibnlive.in.com

Mumbai, a land of opportunities

Mumbai (formerly known as Bombay) is not only the commercial capital of India but also one of world's top 10 centres of commerce in terms of global financial flow. For a while, if we keep aside the commercial aspect, Mumbai is also synonymous to - the 'city that never sleeps', the 'city of dreams' and the 'land of opportunities' to hundreds of people staying here. Besides, Mumbai is also home to Bollywood, the country's movie capital.

Located on the west coast of India, the coast line made trade easier for Mumbai. Mumbai houses about 17 million of population making it the second most populated city in the world. Read more

Source : articles.timesofindia.indiatimes.com

FinMin, regulators meet today on infra debt fund

New Delhi: The finance ministry will meet regulators tomorrow to decide the structure for the proposed Infrastructure Debt Fund to finance the core sector to sustain high economic growth.

The plan is to invest $1 trillion in ports, highways, power utilities and telecom infrastructure in the next five years. A comprehensive policy framework for a public-private partnership in building of physical infrastructure and social sectors such as health and education is also on the anvil. It will lay down guidelines for the entry of private players and implementation of infrastructure projects. Read more

Source: business-standard.com

One number to rule all transactions

The unique ID may be used for all securities transactions, helping to curb fraud and increase transparency

New Delhi: Capital market regulator Securities and Exchange Board of India (Sebi) and the Unique Identification Authority of India (UIDAI) are considering linking all securities transactions with the UID (unique identification) or Aadhaar number and will soon launch a pilot project to explore how this can be done.

A mutual fund company, HDFC Asset Management Co. Ltd, and IFMR Trust, which works in the area of financial inclusion, have been mandated for the pilot project, five people directly involved with the project said independently. None of the five wanted to be identified given the significance and sensitivity of the project. Read more

Source: livemint.com

Banks lending more money to students for higher education

Education loans through banks have grown by 20% in the past couple of years. That’s the fastest ever, and banks want to push that further to 30%-40% going ahead

The season of college admissions has begun and banks are gearing up to facilitate maximum education loans to students. Going by the comments of banking experts, the education loan portfolio has gained momentum and is set to grow multi-fold. Read More

Source: Moneylife.in

Gold demand in India to fall in 2011

Even though gold has been the best-performing asset class over the past several years, households seem to rank property ahead of gold as a long-term investment.

Morgan Stanley said that the findings of its latest research survey concluding that India’s gold demand is likely to fall by 16 per cent (base case) in 2011. The survey, the latest in the firm’s AlphaWise Evidence Series, is based on interviews with over 1,600 chief wage earners from middle and high-income households across urban India. Read more

Source: cpifinancial.net

 

Experts don't see realty stocks standing tall

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According to the BSE Realty indicates, real estate stocks are believed to have seen a return of investors appetite. However, real estate analysts Aatash Shah of Nomura India and Surajit Pal of Elara Capital, in an exclusive interview with CNBC-TV18’s Latha Venkatesh and Anuj Singhal says that do not see much building upon on the realty space.

Shah says “Until volumes come back into this market, the stocks are not really going to react in a sustainable manner upwards.” He observes that the volumes have gone down significantly in cities like Mumbai, Bangalore, Chennai. He believes that volumes alone are the key to stock performance because the other stigma on corporate governance is likely to remain poor. Read more

Source: moneycontrol.com

 

Malegam panel mulls recommending more licences for urban co-op banks

The cooperative banking sector is gearing up for a makeover, with greater participation of cooperative societies in banking operations.

A high-powered committee, under the chairmanship of Y H Malegam, a member of the board of directors of the Reserve Bank of India (RBI), is considering recommending licences to new cooperatives planning to become urban cooperative banks (UCBs), and convert the existing credit cooperative societies into a cooperative bank. Read More

Source: Business-Standard.com

India's Suzlon Energy to issue foreign currency convertible bonds

India's Suzlon Energy , the world's third-biggest wind turbine maker, said on Monday it would issue foreign currency convertible bonds, due in 2016.

The floor price for the conversion of the bonds will be 46.05 rupees, the company said in a statement. Read More

Source: Reuters.com

India Infrastructure ETF Destined to Shine

India is already one of the world's most populated nations and is expected to witness rapid population growth over the next two decades. This boosts the appeal of ETF INXX.

India’s economy is growing at the second largest pace amongst the world’s major nations and is likely to continue to do so as the nation is abundant with an intelligent and young labor force. Furthermore, this growth is shining a ray of light on the nation’s infrastructure sector and boosting the appeal of the EGShares India Infrastructure ETF (INXX).

According to a recent article in the Wall Street Journal, numerous private equity firms have recognized this appeal and have turned their attention to the emerging market sector. Read More

Source: Minyanville.com

Pop goes the bubble

Median house prices in the main cities are close to Rs1 crore, far beyond the reach of most urban families

Real estate prices are already above their 2008 highs in many cities, though the ratio of house prices to incomes may still be below that peak because of the smart recovery in the Indian economy since the global economic crisis. Yet, median house prices in the main cities are close to Rs1 crore, far beyond the reach of most urban families, especially since home loan costs have been inching up in step with the anti-inflation monetary tightening by the Reserve Bank of India.

The high prices of real estate are already weighing down on demand. Both sales volumes and registrations have been falling in recent months. Inventory of unsold homes is piling up even as developers continue to build new residential projects. This newspaper reported on 14 February that a survey of 2,400 housing projects in the nation’s commercial capital, conducted by Liases Foras, a property research firm, showed there were around 88,000 unsold homes in the Mumbai metropolitan region.

The chief executive of the firm had told Mint that up to 22 months may be needed to clear the inventory in cities such as Mumbai, New Delhi-National Capital Region, Chennai and Hyderabad. This inventory could increase if buyers stay away while builders continue to finish projects in the hope of generating sales.

A price correction thus seems overdue unless builders have the financial muscle to hold on to inventory despite rising interest rates. That seems unlikely. And with it could come more instances of defaults by real estate developers, something we saw in the middle of 2009 as well when they could not pay their dues to banks and bond investors. Read More

Source: Livemint.com

Indian Infra Turns A Huge Magnet For Global Institutional Investors

The amount of capital available for infrastructure investment is set to more than double in the next few years.

Indian infrastructure is where all the action appears to be for global institutional investors if findings of an industry research house are a pointer. According to Preqin, a London based research firm that tracks private equity fund raising globally, of all unlisted infrastructure funds targeting a single country within the emerging markets, the highest proportion is focused on India.
 
Going by such unprecedented interest in the Indian infrastructure space, it appears that this asset class can actually outshine the interest of institutional investors into private equity. There are currently 38 unlisted infrastructure funds with a preference for investment in India, 25 of which have already held a final close raising $9.5 billion while 25 have already held a final close raising an aggregate $9.5 billion, and a further 13 currently in the market seeking an additional $7.3 billion in institutional capital, the report adds. Further, there are also nine India-focused infrastructure funds expected to be launched by unlisted fund managers in 2011, so the amount of capital available for infrastructure investment in India over the next few years is anticipated to more than double.  Read More

Source: Vccircle.com

Comment: Gautam Adani

Levying MAT on SEZs has surprised investors

The budget is a pragmatic and forward looking balanced effort across the social spectrum. While the urban middle class gets some relief by way of an increase in income-tax exemption level, a slew of initiatives have also been announced to strengthen agri infrastructure and help people in rural areas.

The FM has nailed the crucial issue of infrastructure funding, which has plagued the country for several decades by announcing several measures to enhance capital inflow in Indian infrastructure. The decision to step up infrastructure funding via a vibrant debt market is a welcome step to resolve funding bottlenecks. A robust bond market will give much needed fillip to strengthen infrastructure funding. Read More

Source: Business-Standard.com

Smart Cities: Getting Greener, and Making Money Doing It

 

 

Another week, another smarter city conference. "It's the creation of a new industry!" Cisco's chief globalization officer, Wim Elfrink, exclaimed on stage last night at the opening of Global Green Cities of the 21st Century, this week's stop on what is rapidly becoming a conference circuit populated by mayors, architects, academics, consultants and financial types all struggling to understand just how we'e going to build (and make money building) smarter, greener cities on a scale that's practically unimaginable--according to a recent study from the Lincoln institute, humanity's urban footprint is set to double in just 19 years. (Full disclosure: Fast Company is the conference's media partner.)

The scope and scale of what's on the drawing board in places like India--which expects to grow at 9-10 percent for the forseeable future while urbanizing 350 million villagers--was hammered home during the opening session by Amitabh Kant, the CEO of the Delhi-Mumbai Industrial Corridor Corp., which is planning to build not one, not two, but twenty-four "smart, sustainable" cities of as many as 2 million residents each lining a freight rail corridor between India's largest cities. "Cities don't happen in ten years," he said blithely. "They happen in 25 or 35 years," or considerably longer. "But if you build them in phases, you can build the first phase in seven years…" So think of it this way: the world is currently in phase one of an urban transformation.

Once the speakers waded through the headline stats--humans are officially more urban than rural; consumption of just about everything is projected off the charts--these challenges were quickly reframed as huge opportunities. "It's all up for grabs," Elfink told me beforehand, outlining the broad areas on which he and the world's largest networking firm (whose ambitions I've written about at length) are focused on: thought leadership (hence this conference), smart regulation, and global standards. "Cities that pioneer these concepts will create a new industry," Elfrink told me.

Speaking to that point was California Lt. Governor Gavin Newsom, who proclaimed "this is the job creation issue of our time. There isn't a sector like the green-tech sector. It is the one outperformer out there in a state with 12 percent unemployment." A billion dollars invested in a coal plant created 890 jobs, he said, citing a recent study. A nuke creates 1,500. But retrofitting buildings for energy efficiency creates 7,000. "This is our ticket to broad-based economic growth," he said. In addition, it creates skills exportable worldwide. "When I go to Shanghai, it's like homecoming," Newson crowed. "All the architects are from San Francisco.

The other words on every speaker's lips was "public-private partnerships," i.e. private sector investment in infrastructure in exchange for a future cut of savings or revenue. India in particular hopes to raise $500 billion from private investors. Indian parliament member Rajeev Chandrasekhar briefly described plans to fund public services in Bangalore that way. (Cisco's most recent smarter city deal, this one with Barcelona, is also structured as a public-private partnership.) Read More

Source: Fastcompany.com

Postman to turn Banker in rural areas

The postal department and the country’s largest lender, State Bank of India (SBI), are gearing up to take basic banking services to the doorsteps of millions of people in rural areas who have no access to the country’s banking system. The tie-up will see postmen acting as banking correspondents for SBI in over 12,000 villages, collecting deposits and offering small credit and remittance facility to people in far-flung areas. Villagers in these areas currently have no option but to keep hard-earned money at home, losing out on interest and running the risk of theft. 

SBI, which has around 5,000 branches in rural or semi-urban areas, hopes to cover 12,492 villages by 2012. "To meet this intiative a tie-up with India Post will be a great advantage," a senior SBI official said. The business correspondent model, set up by the Reserve Bank of India, allows specific individuals and entities such as ‘kirana’ shop-owners , NGOs and post offices to conduct banking business as agents of banks at places other than the bank premises. 

India Post has a network of over 1.5 lakh branches. A finance ministry official said the government was keen on such initiatives because of the postal network’s reach. "We have encouraged banks to explore similar tie-ups to speed up the financial inclusion agenda," he said. Last week, the finance minister had alerted banks to the risks involved with not choosing the right kind of business correspondent. Read More 

Source: Economictimes.Indiatimes.com 

Infra bonds may not suit all

The number of infrastructure bonds that have hit the market recently to coincide with the tax-saving investment rush have not cut much ice with financial experts, who have an issue with the modest returns that these plans offer as well as the long lock-in period.

At least three such bonds are open in the market now. L&T Infrastructure Finance’s tax-saving bond offers interest rates of 8.2 per cent to 8.3 per cent. Rural Electrification Corporation’s (REC) infrastructure bonds offer 8 per cent to 8.1 per cent while India Infrastructure Finance Company’s (IIFCL) tax-saving infrastructure bonds offer 8.15 per cent to 8.30 per cent.

Power Finance Corporation, which issued infra bonds at 8.10 per cent interest rate a few months ago, is also expected to announce its second infrastructure bond issue in a few days. Read More

Source: Mydigitalfc.com

72,000 more villages to get banking services by 2012

The Reserve Bank of India (RBI) has asked all the commercial banks to take banking services, in any form, to 72,000 uncovered villages in India by 2012, a top bank official said here Sunday.

'Keeping with the RBI directives, the banks have been engaging retired bank officials, locals and societies as business correspondents (BC) and setting up branches to extend the banking services to unbanked rural and remote areas having population of 2,000,' United Bank of India (UBI) chairman-cum-managing director Bhaskar Sen told reporters.

According to Sen, introduction of core banking solutions (CBS), internet banking, mobile banking, online payment, transaction and business are some of the latest technologies being used in the Indian banking sectors.

UBI is the sponsored bank of Tripura Gramin Bank and the Manipur Gramin Bank, two of among India's 82 Regional Rural Banks. Read More

Source: Sify.com