Indian Economy An Opportunity Unlimited www ibef org
Indian Economy An Opportunity Unlimited www. ibef. org
India: Fastest Growing Free Market Democracy GDP Growth Forex FII Flow FDI Per Capita Inflation 1990 4. 9 percent < USD 1 billion USD 1 million (1993) USD 97 million USD 390 9 percent 2008* 8. 7 percent USD 309 billion as on Mar 28, 2008 USD 16. 1 billion in 2007 -08 USD 12. 7 billion in 2007 -08 till December (USD 16 billion in 2006 -07) USD 740 7. 4 percent as on March 29, 2008 2 * Annualized data used to show comparison with 1990 Source: Times of India, RBI, DIPP, Indian Budget, Rediff www. ibef. org
India: Among the Top-15 Countries in terms of GDP at constant prices The Indian economy has witnessed unprecedented growth…. Booming services and industry sectors are providing the required impetus to economic growth © Fastest GDP growth of 9. 4 percent in 2006 -07, since last 18 years (at constant prices) © India’s GDP has witnessed high growth, and was the second fastest growing GDP after China in 2006 -07 © The sound performance of each industry segment is leading to the overall robust performance of the Indian economy Contribution of Services increased from 48 percent to 55 percent AE - Advance Estimates Growth in sectors at Current Prices (2007 -08): Industry: 10. 7% Services: 8. 9% Agriculture: 2. 6% Source: MOSPI Statistics 3 www. ibef. org
India: Robust Economic Platform Steadily increasing Forex reserves offer adequate security against any possible currency crisis or monetary instability In 2007 -08 (till 28 March), Forex reserves witnessed a growth of approximately 55 percent over 2006 -07. Falling Dollar inflates the India’s external debt Increased confidence of investors in Indian companies has led to a surge in cross border borrowing by corporate houses India’s Forex reserves are in excess of external debt… …the decreasing external debt to GDP ratio indicates that India has a sound economic platform Source: RBI Statistics 4 www. ibef. org
India: Surging Exports Services sector has been a major contributor to increased exports from India Acceptance of Indian products along with the cost advantage has provided an edge to Indian companies Quality and cost advantage are the two important parameters leveraged by the Indian producers to increasingly market products and services * - 2007 -08 provisional data for period of April to December only Petroleum products are the major contributors towards India’s growing imports Product imports by India mainly include petroleum products and minerals * - 2007 -08 provisional data for period of April to December only Source: Ministry of Finance (November Report) 5 www. ibef. org
India: Attractive Investment Destination With improved performance on PE ratio and ROE, Indian markets have attracted large investments India is ranked second in AT Kearney’s FDI 185 percent Increase Electronic equipment, manufacturing and telecom have witnessed significant FDI inflow confidence index (2007) FDI inflow for the period 2006 -07 witnessed a growth of 185 percent over the same period last Large FII activity in India has led to an upsurge in the Sensex 149 percent Increase year * FII growth momentum was restricted because of Sub Prime Crisis in 2007 -08 Source: DIPP (October Report), SEBI 6 www. ibef. org
India: Vibrant Capital Market Sensex – The Bombay Stock Exchange index rise 20 times from 1990 s to reach 20, 000 mark in November 2007. India is among the major destinations across the globe for inflow of US Dollar Sensex has risen 20 times in the period 1990 -2007 Emergence of industry and confidence of local investors along with the FIIs has led to upsurge of the Sensex FIIs have infused large investments into the Indian stock market Encouraging industry performance Increased local investors’ confidence 7 www. ibef. org
India: Vibrant Economy Driving M&A Activities In 2007, there were a total of 676 M&A deals and 405 private equity deals… In 2007, the total value of M&A and PE deals was USD 70 billion… … Total M&A deal value was close to USD 51 billion… Growth Drivers: q Globalisation and increased competition q Concentration of companies to achieve economies of scale q Cash Reserves with corporate Private equity deals value increased to USD 19 billion Trends: q Cross-border deals are growing faster than domestic deals q Private Equity (PE) houses have funded projects as well as made a few acquisitions in India Source: Deal Tracker Grant Thornton, Economic Times 8 www. ibef. org
Major M&A Deals Undertaken Abroad by India Inc. Tata Steel buys Corus Plc USD 12. 1 billion Hindalco acquired Novelis Inc. USD 6 billion Tata buys Jaguar and Land Rover USD 2. 3 billion Essar Steel acquired Algoma Steel USD 1. 58 billion Suzlon Energy Ltd. acquires REpower USD 1. 6 billion 9 www. ibef. org
Major M&A and Investments Announcements in India (1/2) POSCO to invest in building steel manufacturing plants and facilities in India by 2016 USD 12 billion Vodafone buys Hutch USD 11 billion Plans to establish three manufacturing plants to produce photo-voltaic units USD 2 billion Plans to spend on its development operations in India over the next four years USD 1. 7 billion 10 www. ibef. org
Major M&A and Investments Announcements in India (2/2) Plans investment in private equity in Indian markets USD 1 billion Plans investment in private equity, real estate, and private wealth management USD 1 billion Aditya Birla Group increased its stake in Idea Cellular by acquiring 48. 14 -percent stake USD 0. 98 billion Mylan Laboratories acquired a majority stake in Matrix Laboratories USD 0. 74 billion 11 www. ibef. org
India: Pacing Ahead to Emerge as a Major Economy in the World 2007 Global Retail Development Index (GRDI) … India is the top destination in the AT Kearney Global Retail Development Index (2007) Services sector attracted interest of major global players and large investments are pumped in it AT Kearney has placed India as the most preferable destination for Services sector (2007)… India is expected to outperform its rivals in the BRIC, in terms of GDP growth rate, from 2015 onwards… Source: AT Kearney, BRIC Report 12 www. ibef. org
Why India? – Quote Unquote “India has evolved into one of the world's leading technology centers“. “India is now truly a land of opportunity”. John Redwood Economic Competitiveness Policy Group, UK By 2032, India will be among the three largest economies in the world. “We came to India for the costs, stayed for the quality and are now investing for innovation”. - Dan Scheinman, Cisco System Inc. as told to Business Week, August 2005 BRIC Report, Goldman Sachs “India is a developed country as far as intellectual capital is concerned”. Jack Welch General Electric “I have never seen India so dynamic, vibrant and full of business opportunities”. Craig Barrett Intel Corporation Peter Loescher President and Chief Executive Siemens “The Indian market has two core advantages - an increasing presence of multinationals and an upswing in the IT exports”. “India is a very exciting market and the luxury car segment is growing exponentially here”. Mr Paul de Voijs Managing Director Volvo Car India Travyn Rhall, ACNielsen 13 www. ibef. org
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