Abu Dhabi’s ADIA invests $200 million in India real estate: sources

Ireo Skyon, Gurgaon

Ireo Skyon, Gurgaon

ADIA, which manages the surpluses the Gulf emirate earns from oil exports, has appointed Kotak Realty Fund, run by Kotak Mahindra Bank Ltd (KTKM.NS), to invest the money, one of the sources familiar with the matter said.

Earlier this month, Oman’s State General Reserve Fund and the Government of Singapore Investment Corp (GIC) GIC.UL and Temasek committed to invest $200 million in a real estate fund run by India’s biggest mortgage lender, Housing Development Finance Corporation (HDFC.NS).

In May, Qatar paid $1.26 billion for a 5 percent stake in Indian telecoms firm Bharti Airtel Ltd (BRTI.NS), the world’s fourth-biggest mobile phone company by customers.

India’s finance minister P. Chidambaram visited the Gulf region in May for the second time in two months seeking investment in Asia’s third-largest economy.

ADIA has investments of about $400-$500 million in India which includes an 11.22 percent stake in Infrastructure Leasing & Financial Services and a $50 million investment in Red Fort Capital, a real estate private equity fund.

Read more: Reuters

NCR’s new towns get ready for realty boom

A real estate boom seems to be building up on the north of India, decades after Gurgaon arrived on the scene. Part of the Delhi National Capital Region (NCR) for long, Gurgaon is seen as a real estate jewel in the region, and is often cited as an example to emulate.

Nondescript Bhiwani and Mahendragarh in Haryana, recently named part of the NCR, are likely to see developers queueing up soon and investors betting big on the new hubs. Rajasthan’s Bharatpur, known for its famous bird sanctuary and tourist resorts, might also be transformed into a hot realty destination, as this region was also brought under the NCR’s fold. Business Standard recently visited these places to check out the developments.

In these areas, there are projections of a 15 per cent rise in property prices within three years. That would mean a jump from the current rates of Rs 3,272-4,857 per sq ft in Bhiwani and Rs 2,000-3,000 per sq ft in Mahendragarh. The Bharatpur residential segment is pegged at a little over Rs 1,500 per sq ft, while industrial plots are priced at Rs 150 per sq ft. The government’s plans for rapid rail transit in the area would also help boost realty growth.

Bhiwani, some 125 km from Delhi, and Mahendragarh, about 70 km from there, already sport international retail brands and finance companies’ offices – a sign these are ready to consume more. At Bharatpur, some 200 km from Delhi, builders have already made inroads.

Read more: Business Standard

Economy

RBI takes new steps to prop up rupee

The central bank tightened liquidity further and made it even harder for lenders to access funds with measures including lowering the amount banks can borrow or lend under its daily liquidity window.

The latest moves come a week after its initial steps steadied the rupee somewhat, but left the currency still within sight of a record low of 61.21 hit on July 8.

However, bond yields – especially shorter-term rates – have surged, threatening to raise borrowing costs for banks and companies and sparking concerns about the impact on an economy growing at a decade low of 5 percent a year.

These worries, combined with a record high current account deficit and now uncertainty over the central bank’s monetary policy stance, have prompted foreign investors to sell $11.5 billion of Indian debt and equities since late May.

The RBI is intervening more frequently in spot markets, traders said, coming in late in the session or whenever the rupee threatens to break below 59.89, the level at which the currency traded before the RBI’s initial measures on July 15.

Read more: Reuters

Infrastructure

Rlys fast-tracks R16k-cr stretch Re16k-cr stretch of freight corridor

After much delays, the 540-km-long Sonnagar-Dankuni section of the eastern dedicated freight corridor, to come up on public-private partnership, is finally being put on the fast track.

After being taken up by the steering committee of the Prime Minister’s Office, whose mandate is to get an investment of R1 lakh crore in six months, the Dedicated Freight Corridor Corporation (DFCC), the SPV of the Indian Railways, is getting new traffic forecasts for the R16,000-crore freight corridor. This is a key requirement before the project is put before the investors.

The work of preparing the forecast report has been given to CRIS. To get the financial planning of the corridor, which has been broken into two slices — (Dankuni-Gomoh (276 km) and Gomoh-Sonnagar (264 km) — the DFCC has hired UK-based consultant Grant Thornton, which will prepare the report on the capital structure, revenue model and the financial viability of the project.

The project has been broken into two phases as the investment was too stiff for a single private player as the stretch would primarily be carrying coal and iron ore traffic in the Dhanbad, Raniganj and Jharia region.

Read more: Financial Express

Larsen & Toubro: Buy

The stock of conglomerate Larsen & Toubro presents a good route to buy into the infrastructure and engineering space. By dint of sheer size and proficiency across segments from buildings and factories to roads, power equipment and defence, L&T has been able to manage far better than peers. L&T is comfortably positioned on the funding side unlike most peers, with standalone debt-equity ratio at 0.3 times.

At Rs 975, the stock trades at 19 times trailing earnings, at a deserved premium to most other infrastructure players, but well within the PE band in the past five years. The stock trades at 13.9 times estimated earnings for FY15. Investors with a two-to-three-year perspective can accumulate the stock on dips linked to broad markets. L&T will announce its June results on Monday.

Good inflows

L&T’s new orders for the 2012-13 fiscal grew a strong 25 per cent over the inflows for the previous fiscal, in part due to a lower base in FY12. Even so, growth is significant in light of the adverse conditions in infrastructure and capital goods and the sluggish inflows for other infrastructure majors.

Over the past five years, order inflow has grown at a healthy eight per cent annually. The company has already clocked more than Rs 20,000 crore in new orders so far this fiscal.

Read more: Business Line

Retail

Panel backs regulator for multi-brand retail

A Parliamentary panel has recommended setting up of a regulatory authority for the multi-brand retail sector and said the government must ensure that micro small and enterprises (MSME) are not adversely affected with the entry of global players. “We have recommended a regulatory authority to look into the problem,” Tiruchi Siva, chairman of the Parliamentary Standing Committee on Industry and DMK leader, told a news conference. Parliamentary panel’s suggestions are recommendatory in nature.

He said proper regulation of the sector was needed to ensure that the MSMEs are not hurt by the entry of large multinational players. Siva also said that regulation would also ensure that farmers get the right price and customers are not harassed. The DMK leader said the recommendations of the panel were unanimous and sought clarity on the sourcing norms for the sector. He said the panel also found the condition of self-certification in respect of 30% sourcing norm, was not helpful to the MSME sector and urged the government that an auditor should specifically certify the declaration. “In absence of any previous survey on impact of FDI on the SSI sector in the country, the committee feels that the implementation of policy provision should be closely monitored through an institutional mechanism in the initial year and must not be left to self-certification.”

Read more: The Times of India

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