The Reserve Bank of India (RBI) is hoping to limit investments by SEBI-registered foreign venture capital investors (FVCIs) to certain select sectors. Apparently, RBI has written to the ministry of finance recommending that investments by FVCIs be restricted to nine sectors to encourage development of entrepreneurial capabilities. RBI has been uncomfortable with FVCIs having low-capital base, circumventing takeover guidelines and round-tripping of investments, and has therefore also suggested that SEBI set up screening mechanism for all FVCI applications. In the interim, most of the applications have been kept on hold without any clarity on the time frame.
The intention behind introducing the FVCI regime in 2000 was to provide FVCIs a favorable environment with respect to their investments in India compared with foreign direct investment (FDI) and create a level-playing field between domestic and overseas venture funds. FVCIs are accordingly entitled to certain benefits, including exemption from entry and exit pricing norms, exemption from any lock-up restriction, post-IPO (subject to certain conditions), and exemption from applicability of the takeover code in the event of sale of shares back to Indian promoters (and not generally). RBI seems to have developed some concerns on the nature of the applications received and investments under the FVCI regulations. RBI is apparently uncomfortable with FVCI applicants having a low-capital base. The industry practice of venture capital (VC) and private equity (PE) funds has been that they typically solicit capital commitments from investors and make draw downs as and when there are investment opportunities. Further, the FVCI registration fee is $25,000 which would be paid only if substantial investments are likely to be made. If necessary, the FVCI regulations should stipulate the minimum capital base.
Indu Projects, a Hyderabad based infrastructure company has raised $113 million (about Rs 476 crore) from Credit Suisse, the Swiss investment bank. Indu Projects is a growing infrastructure company with interests in real estate, housing and market infrastructure. Indu will receive about $77 million (Rs 325 crore) in the first tranche of the funding and the balance would flow in the next 90 days. “The fund will be used for both our existing and future requirements. Credit Suisse has seen the potential in this market and the business plan we have,” Indu chairman and managing director I Syam Prasad Reddy told DNA Money on Thursday.
Founded in 2001 by Reddy, Indu recorded a turnover of over Rs 1,300 crore, with businesses in the areas of core infrastructure, theme ventures, end-to-end solutions and real estate. The company is currently building health cities and agri-parks across India. Indu currently has an equity base of Rs 15 crore, and the promoters hold 70% stake. Credit Suisse will get a 10% stake, while the rest 20% of it is shared by Citigroup Venture Capital, Maple Holdings, IDFC, Sun Apollo and Red Fort Capital. While this plan of theme parks is being finalised, the company is already in the housing market in the state.
Reliance Retail is now entering into a joint venture with leading European supply chain specialist Wincanton for giving a boost to its food and grocery and hypermarket businesses. The venture will do a lot for Indian retail. The synergy would enable Reliance to efficiently run its critical back-end operations, which essentially include warehousing of goods and transporting them to stores on time. The latest move by India’s largest corporate house, which jumped on the retail bandwagon two years ago by promising to do everything on its own, seems to suggest that it now needs a partner for almost every retail initiative.
Industry observers believe that the company has expanded very fast and has managed to set up over 600 stores across various retail formats in less than two years, but its supply chain is in a mess. “How to get the right merchandise to the stores on time has been its biggest problem. You’d often not find the goods you want in Reliance’s food and grocery outlets,” said a source.
News Published Under: Real Estate India, Retail Market in India.
The International Real Estate Advisory Board has launched the largest International Real Estate referral program in the world and has invited Real Estate Professionals from around the globe to become a registered IREAB Advisor and earn a significant supplemental income via International Real Estate Referrals.
IREAB’s Director of Development, Amber Montana, stated in a recent interview in Miami that “IREAB’s Referral Program is destined to become one of the most valuable resources for every Real Estate Professional and Real Estate Developer in the world. The launch of the IREAB Advisor Referral Program benefits Registered IREAB Advisors (Real Estate Professionals) with an extra source of income that actually generates significant income. On the reverse side of the coin, the Referral Program will also provide Real Estate Developers with a meticulously organized (world-wide) referral program.
It’s a Win-Win-Win for everyone, especially International Real Estate Investors and Residential Home Buyers of International Real Estate because the majority of Referral Contracts registered with IREAB is considered to be privileged information. IREAB International Real Estate Analysts will only work with select development projects which are deemed to have a high probability for Return on Investment. All referral contract listings have been analyzed and assessed by top IREAB Analysts with focus to the best interest of Investors, Developers, IREAB and registered IREAB Advisors. IREAB’s mission is to provide free advisory that accesses the largest organized international real estate advisory referral program in the world.”
A committee of IREAB Chairmen will review IREAB Advisor Applications which if approved will be provided with a video orientation that will begin to provide extended education regarding the topic of International Real Estate. Upon completing the orientation, one will become an IREAB Advisor and will be provided with marketing materials to provide to your contacts and clients. IREAB Advisors will be able to generate income almost immediately.
International Developers and International Real Estate Acquisitions firms should also contact the International Real Estate Advisory Board and request any information about Land Acquisitions for Sale, Commercial Property for sale including Offices, Residential Condo Towers, Marinas, Casinos, Hotels, Islands, and Resorts. The information will typically not be advertised via web sites and many times are not listed with real estate brokers. IREAB leverages Investors, Advisors and Referral Listing Opportunities in Fiji, Australia, Dubai, India, China, Europe, Canada, Latin America and South America
Banks are raising the charges of fee-based products, including the use of ATM & credit card facility, locker services, demand draft (DD), cheque issue and internet banking facilities, in a bid to keep the bottomline growing. High borrowing costs, coupled with fears of a slowdown, are now beginning to get bankers worried about profitability and growth.
The largest private sector lender ICICI Bank and public sector lender Bank of India (BoI) have already raised the rates for many of these products while others are expected to follow soon. Fees for some of these products have been increased by up to 50%, while many free services will no longer continue to be free any longer.
“We have to raise the charges to keep up with the quality of services we provide,” said an official in ICICI Bank. The rate hikes would be applicable for both — Indian and NRI customers. ICICI Bank has raised charges for issue of cheque books, demand draft and cheque collecting facilities while increasing the penalty for return of cheque due to financial or non-financial (technical) reasons. Also, consumers would now have to pay for irresponsible use of their debit card as ICICI Bank would slap a penalty if there is decline of transaction at any ATM.
The bank will fine Rs 100 from the consumer for de-hotlisting of cards (getting the card unblocked). For premature closure of an account, it will charge a fine of Rs 500 instead of the previous charge of Rs 250. Consumers will also be charged for issue of new user-ID and PIN for internet banking usage.
Bank of India has revised the locker charges also in addition to the charges for other services. “We have revised the service charges with effect from August 14 and the details will be available soon,” Bank of India CMD T Narayanswamy told ET. He, however, said the fees have been raised selectively and not “across the board.”
Commercial banks have been struggling to maintain their profits, owing to recent hikes in key policy rates by RBI. The high cost of borrowing has affected their net interest margins (NIM). Owing to this pressure, most banks reported a single-digit growth in net profit for the first quarter of the current fiscal. The high rate scenario is likely to persist as RBI is unlikely to relax the monetary measures in the near future.
The Nellore district of Andhra Pradesh is experiencing the development of a multi product SEZ (Special Economic Zone) about 55 km from Chennai. The sprawling 5000 acres private city on the National Highway-5, a part of the golden quadrilateral connecting the four major metros with well-demarcated industrial zones and an adjacent domestic tariff area in the bordering district of Andhra Pradesh, is set to have the strategic advantage of sharing a proximate corridor with Sriperumbadur autocomponent cluster - outer of Chennai and manufacturing cluster units near Gummidipoondi and other manufacturing industries - located north of Chennai. The city is also close to 3 sea ports and 2 airports with 2 sea ports having closer access to the Ennore (40 km) and Chennai ports (65 km) and with one international airport (75 km) also in Chennai - all opening a floodgate of opportunities for jobs and businesses between Sri City and Chennai. The new SEZ is envisaged to generate employment for 1.75 lakh people with an overall investment of Rs 17,500 crore, said Chief Minister of Andhra Pradesh, Y S Rajasekhara Reddy in his keynote address.
Explaining India’s rationale in jumping the SEZ bandwagon, L B Singhal, director general of export promotion council for EOUs and SEZ units, ministry of commerce, government of India, said the country’s venture is based on the success of 3,600 SEZs generating 420 lakh jobs around the globe. “SEZs in India have attracted investments to the tune of Rs 73,000 crore and contributed to the export kitty of around Rs 60,000 crore, providing employment to around 3.30 lakh people in the country,” he said. Lauding the government’s role in roping national and international SEZ developers, Bhaskar Subramanian, associate director, PWC (PricewaterhouseCoopers) said the government sops in both direct and indirect taxes in various state governments is encouraging various reputed players both national and international to set up shop in India. Ravindra Sannareddy, chairman, Sri City (P) Ltd said the setting up of 5000 acres SEZ and DTA (Domestic Tariff Area) encompassing a landmass in Nellore and Chitoor districts of Andhra Pradesh in a way is repaying the debt of gratitude he owes to his native region of the state
The huge project is being developed and executed in Chembur, Mumbai by GA Builders, an “RNA Corp Group” company that would provide “New Homes” to more than 1950 tenants, according to a media release. The Subhash Nagar Colony, built by MHADA, is about 55 years old and comprises 57 buildings that house 36 members each. On completion of the mass housing project, the tenants would be re-housed in flats with an area of 320 sq. ft. plus 65 square feet in the form of a flowerbed, niche or dry area with all necessary amenities. After obtaining all the requisite approvals for the redevelopment of the project and after setting up the transits for tenements, the company is all set to make its mark in Mumbai real estate sector.
“We have so far built 744 flats for the residents in five buildings, and have finalized plans to build eight more buildings for 546 families who have signed for redevelopment.” Mr. Manoj John, spokesman for RNA Corp said. He added that more than 1300 families out 1950 have accepted their plan to turn Subhash Nagar into mini-township. Mr. John further said “Considering the sheer scale of this project, we have undertaken extensive infrastructure enhancement drive that includes setting up of drainage and sewerage infrastructure, underground water lines, recreation grounds, playgrounds, internal roads. Underground and overhead tanks will ensure uninterrupted water supply with an added provision for piped gas connection
The eagerly awaited 3rd Construction World Architect & Builders Awards will be held on August 22 at the ITC Grand Central, Parel. Constituted by ASAPP Media, the awards recognize exceptional work done by Architects and Builders in various aspects of infrastructure and real estate industry over the years. The selection was based on a survey conducted amongst the professionals from the industry. The awards supported by the Builders Association of India (BAI) and Maharashtra Chamber of Housing Industry (MCHI) will be presented to a total of twenty recipients – ten architects and ten builders. His Excellency S.C. Jamir, Governor of Maharashtra, Dr. J.M.Pathak, Commissioner, Brihanmumbai Municipal Corporation and over three hundred senior professionals from the construction industry across India will be attending the event. Russell Gilchrist from Skidmore, Owings & Merril, Chicago, designers of Burj Dubai, the tallest building in the world will deliver the key note address. Russell, with a history of working on innovative and world-renowned projects, will provide valuable insights on unique trends in architecture and the growth of international high-rise construction in his keynote address.
“We have used the perception mapping process to select winners. An exhaustive survey was conducted among professionals within the industry. The highlight of CW Architect & Builder Awards 2008 is that it is recognition and admiration by peers. The awards are given by the industry to the industry. The value of the awards is highlighted by the fact that the whole industry is participating in the awards,” says Pratap Padode, Managing Director, ASAPP Media Information Group. Padode, who has been instrumental into getting the awards constituted adds, “Our consistent efforts in documenting success, recognizing talent, addressing pertinent issues, and creating the awakening for a transparent and well-governed industry are bearing fruit in the form of a community that is more forthright about sharing information.
Goa government has recently stated that no lands within the industrial estates owned by Goa Industrial Development Corporation (GIDC) should be allotted or leased for establishing special economic zones (SEZs). In a written reply tabled on the floor of the house, chief minister Digamber Kamat said that if any land has been leased, the lease should be immediately revoked or cancelled. The state-government run GIDC had earlier issued show cause notice to revoke lands to seven SEZ promoters, which were later revoked forcing the state developers to approach the High Court.
The GIDC has issued notices to meditab specialities (pharma), Peninsula Pharma Research Centre Private Limited (Bio-tech), K Raheja Corp Pvt Ltd (service), Paradigm Logistics and distribution pvt ltd (IT), Inox Mercantile co. pvt ltd (Bio-tech), Planetview Mercantile Co Pvt Ltd (Gem and Jewelry) and Maxgrow Finlease Pvt Ltd (IT). The chief minister stated that the six companies have already moved to the high court challenging the show cause notice. The court has granted status quo to the petitioners.
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