Transcript INVESTMENT OPPORTUNITIES IN INDIA

INVESTMENT OPPORTUNITIES IN INDIA
Presented By,
SAN Corporate Advisors.
GOVERNMENT
• India is Parliamentary Form of government, governed under
the Constitution of India.
• Indian Democracy is the LARGEST AMONGST All.
• Democracy is governed by Two level Control i.e Central Level & 2. State
Level.
• Macro Level Financial and Foreign policies are governed by Central
Government.
• India consists of 28 states and seven Union Territories. Almost 80% states
speaks local languages. Hindi is National Language & English is Business
Language.
DEMOGRAPHY
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Total Population 1.17 bn (July 2009 est. CIA)
Rural Population72.2%,
Median age 25.1 years
60% population is between 15 to 60 years.
Population growth rate 1.548% (2009 est.)
Literacy rate71.7% (Age 7 & above)
Percent of the population under the poverty line 22% (2006 est.)
INDIAN ECONOMY
• The economy of India is the eleventh largest economy in the world by GDP and
the fifth largest by purchasing power parity (PPP).
• Following strong economic reforms from the socialist inspired economy of a postindependence Indian nation, the country began to develop a fast-paced economic
growth, as free market principles were initiated in 1990 for international
competition and foreign investment. Economists predict that by 2020, India will be
among the leading economies of the world.
• Fixed exchange ratesUSD = 45.6100 INR(September 21, 2010)
• Fiscal year Calendar year (1 April — 31 March)
GDP
• GDP $1.250 trillion (nominal: 11th; 2009)
• $3.526 trillion (PPP: 4th; 2009)GDP growth8.8% (2010, Q1)GDP per
capita$1,031 (nominal: 139th; 2009)
LIST OF COUNTRIES WITH GDP ON THE BASIS OF PUCHASING POWER PARITY
(BY IMF) (Fig in US$ Bn)
COUNTRY
2010
2011
2012
2013
2014
EU
15046.88
15543.84
3.3%
16175.82
4.06%
16854.03
4.2%
17554.03
4.2%
US
14799.56
15397.16
4.04%
16048.20
4.2%
16761.26
4.4%
17490.34
4.4%
CHINA
9711.71
10828.77
11.5%
12101.27
11.75
%
13521.45
11.75
%
15106.65
11.75
%
JAPAN
4267.50
4414.48
3.4%
4584.82
3.8%
4755.10
3.8%
4933.50
3.8%
INDIA
3862.00
4248.30
10%
4671.51
10%
5144.83
10.12
%
5667.58
10.16
%
GERMANY
2859.77
2951.96
3.2%
3064.77
3.8%
3180.25
3.8%
3292.25
3.8%
RUSSIA
2209.04
2314.75
4.7%
2443.29
5.5%
2591.27
6.05%
2758.22
6.5
INDUSTRIAL GROWTH IN % (BY WORLD FACE BOOK)
COUNTRY
CHINA
INDIA
US
EUROPE
GERMANY RUSSIA
JAPAN
2008
10.7
6.5
0.2
0.2
2.2
3.5
0.5
2010
12.5
9.0
1.5
0.75
3.5
2.5
2.5
REGULATORY AGENCIES
• RBI: (Reserve Bank of India)
i. Act as the Central Bank of all Banks of India
ii. Controls the monetary policy of the Rupee as well as US$287.37
billion (2009) of currency reserves.
iii. FDI is also regulated by RBI.
• SEBI
SEBI controls and regulates Capital Market operations
FDI FACT SHEET
From April 2000 to June 2010
AMOUNT
(In million $)
CUMULATIVE AMOUNT OF FDI INFLOWS IN INDIA
170,323
Sector-Wise Distribution of FDI Equity Inflow
NAME OF
INDUSTRY
POWER
GROWTH RATE%
AS ON DEC 2009
3
AUTOMOBILE
5.2
METALLURGICAL
8.6
PETROLEUM
6.2
CHEMICAL
12
FINANCIAL
8.5
SOFTWARE/HARD
WARE
33
TELECOM
14
REAL ESTATE
11
CONSTRUCTION
8.5
INVESTMENT OPPORTUNITIES TO NRI/ FOREIGN NATIONAL ENTITIES
SR
NO
EVALUATION
CRITERIA
MUTUAL
FUND
SHARES OF
LISTED
COMPANIES
BUSINESS
REAL
ESTATES
DEPOSITES
WITH
BANKS
1
RESTRICTION ON
INVESTMENT
FREELY
PERMITTED*
FREELY
PERMITTED
TO PVT
SECTOR *
UPTO 100% IN
NEARLY ALL
SECTORS*
FREELY
PERMITTED
FREELY
PERMITTED*
*Subject to FDI Rules
(Large Projects)
OTHER THAN
AGRICULTURE *
2
RETURN ON
INVESTMENT
EQUITY BASE
25-30%,DEBT
1015%,DIVIDEN
D EXEMP
FROM TAX
20-25%,
DIVIDEND
EXEMP FROM
TAX
DEPEND ON
BUSINESS
MODEL, AVG
15-20%
15-20%
6-9%
3
RISK OF LOSSES
EQUITY –
HIGH,DEBTLOW
HIGH
LOW
LOW
LOW
4
LIQUIDITY
HIGH
HIGH
DEPENDS ON
BIZ MODEL
MEDIUM
HIGH
5
PROCEDURAL
SIMPLICITY
YES
YES
YES
YES
YES
6
REPATRIATION OF
POST TAX INCOME
FREE
FREE
FREE
FREE
FREE
FOREIGN DIRECT INVESTMENT (FDI)
1. Reserve Bank of India, Apex Bank of India regulates FDI in India.
2. FDI is allowed under automatic route in almost all sectors except a few of national
interest.
3. FDI can be brought in via three routes:
i. Automatic Route (Without RBI Approval)
ii. Approval Route (RBI Approval)
iii. Government Approval Route
4 Indian companies can issue equity shares, fully, compulsorily and mandatorily
convertible
debentures and fully, compulsorily and mandatorily convertible preference shares.
External Commercial Borrowing(ECB)
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RBI regulates ECB in India
Almost all sectors are permitted ECB upto USD 500 Mn
ROI is LIBOR based and repayment tenure from 3 years to 10 years.
All multinational Banks have presence in India to raise ECB
At present RBI Approval is required for ECB. Proposed automatic route.
India’s Investment Opportunities
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Power - Short Supply of 100’000 MW
Engineering & Automobiles – Short of Technology
Information Technology
Banking & Financial Sector
Agricultural – Short of Investment in agro processing
Infrastructure – Mining, Steel, Oil & Gas, Public Transort, Roads
Jewelry & Diamond Processing
Aviation
Logistics & Transportation
Healthcare
Education
TO CONCLUDE…
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Indigenous demand and potential of exports makes it the best investment
destination.
India’s resources and sincere government efforts assures the success.
Economy has passed acid test of recession in last few years showing unparallel
success. During 2008-2009 global recession, India posted 7% rise in GDP.
Its industrial performance is the main selling point in last few years.
India is a country with stable government with deep rooted democracy
TAXATION IN INDIA
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India has corporate tax rate @ 30% at present and proposed rate @ 25% in new
Act.
Dividend Tax Rate @ 16.5%. Dividend Exempted in the hands of recipient.
India has DTAA with almost all major countries.
Direct Tax is now getting computerized.
Almost 90% tax departments are now computerised.
Presently Indirect Taxes are at multiple level and charged separately.
GST is proposed to consolidate major indirect tax under one roof.
WHO WE ARE?
SAN Corporate Advisors Provides comprehensive financial services,
corporate and investment advisory services primarily to mid-market
companies.
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Due Diligence
Tax Advisory
Legal Services
M &A
Accounting & Assurance Services
Investment Trustee Services
All other business support Services
SUCCESS STORIES
Major deals completed in the year 2009:
• Debt Syndication for a listed public company in the business of manufacturing auto spares –$ 20
Mn
• Equity and Debt Tie-up for a Healthcare Company – $13 Mn
• Advisory and funding arrangement on Acquisition of Italian Car Design Company – $ 5 Mn
• Debt arrangement for an Aluminum Extrusion Company – $ 5 Mn
• Financial Restructuring & Syndication of Finance for a Sugar, Power and Ethanol Greenfield
Project – $ 80 Mn
• Major deals in progress in the year 2010:
• Collaboration/Acquisition proposal between India based Company with a company in Germany .
Deal size approx. 15 million Euros.
• Acquisition proposal between Rio Tinto with Jindal Steel Works- $ 150 millions .
• Strategic alliance and Acquisition of forging units by Listed Company in India . Deal size $ 10
millions.
• Deals Already completed -• Fund raising for Hospitality project - $ 5 millions from USA based Company.
• Fund raising for Hospitality project - $ 5 millions from USA based Company.
CONTACT DETAILS
Address : 1, Shree Shailya Apartments,
Lane no. 14, Prabhat Road,
Pune-411004, Maharashtra, India.
Telefax
: + 20-25459205 / 0091 9822348498 , 0091 9822433132
Email
: [email protected] , [email protected].
Web
: www.sanadvisors.com
WELCOME TO INDIA