NRIs planning to return home should build India portfolio

Ireo Skyon, Gurgaon

Ireo Skyon, Gurgaon

More choice requires more clarity in decision making and non-resident Indians (NRIs), especially those living in the developed world, have a variety of avenues for their investments. They may, for example, choose to invest in the country of their residence or park their savings in the Indian market.

Though the Indian economy has slowed down significantly and is not as attractive an investment destination as it was until a few years ago, it remains one of the fastest growing large economies in the world. The motivation for investing in India could range from just diversification of the portfolio to better understanding of the Indian conditions.

However, questions such as the amount of allocation and the choice of assets must be answered before NRIs begin to build their India portfolio.

The allocation arithmetic

To solve the puzzle of allocation, NRIs investing in India can be divided into two groups. First, those who have liabilities in India or those who want to come back and settle in India. Second, those who do not intend to come back in the foreseeable future.

Naturally, it would make more sense for NRIs who intend to return or have expenses in India to allocate more money towards an India-focused investment. Says Suresh Sadagopan, founder, Ladder7 Financial Advisories, a financial planning firm: “NRIs should look at Indian assets on merit.”

Read more: Mint

Investing in real estate is not that simple for NRIs

The rupee is down about 7% since a year ago and by around 39% since five years ago, which makes it cheaper for people earning in dollars and spending in rupees. India received the highest amount of remittance at $69 billion in 2012 among all countries, according to the World Bank.

Given the current scenario—a depreciating rupee coupled with stagnant property prices in India—non-resident Indians (NRIs) may want to buy property in India. “There was a huge run-up in property prices in 2011 and 2012. Now they are consolidating,” says Rohit Raj Modi, director, Ashiana Homes Pvt. Ltd, a New Delhi-based real estate firm.

Recently, there has been significant increase in enquiries from NRIs for property in India. “High net worth individuals (HNIs) and people from the middle income group are showing interest as they see this as an opportunity. They either plan to come back at some point in time or have relatives to use the facility,” says Rajesh Saluja, chief executive officer, ASK Wealth Advisors Pvt. Ltd.

However, there are a few things that should be kept in mind before buying a property in India.

Read more: Mint

Real Estate

PE firms ready to deploy $2 bn in Indian real estate sector: Cushman & Wakefield

Real estate consultancy Cushman & Wakefield’s latest report on the private equity (PE) in real estate investment states that around $2 billion (Rs 11,854 crore) is available with PE firms for deployment in the Indian real estate sector.

The interest comes despite the fact that PE investment flow in the first half of 2013 dropped by around 46%.

The PE investments in real estate was recorded at $276 million (around 1,638 crore) in first half of 2013 as compared to $514 million (around Rs 3,050 crore) in the same period last year. The decline in the quantum of PERE investment was essentially due to less number deals (13 in H1 2013) as the average ticket size of deals remained same.

The consultancy firm attributed the drop to the volatility in the market, including slower growth of the Indian economy, political stalemates and depreciation of the rupee. While, there is a strong investment sentiment for PERE transactions in India, they display a reflection of the market sentiments, where funds are looking at only embarking on projects with strong fundamentals.

Sanjay Dutt, executive managing director South Asia, Cushman & Wakefield commented that it is noteworthy that despite a slowdown in the construction market and reduced number of investment-worthy projects in India, real estate features as the fourth most invested sector by PE Funds.

Read more: Business Standard

Real estate sector to remain unaffected by inclusion in NCR: Experts

Three new inclusions to NCR viz Mahendragarh and Bhiwani in Haryana and Bharatpur in Rajasthan would not impact real estate sector negatively said the industry experts. This was in response to a query whether the step would bring down prices of the properties in Gurgaon. This brings the tally to 11 districts of Haryana in the NCR region out of twenty.

“People still have to throng past Manesar in Gurgaon. Residential market or even commercial real estate market response is very far sighted,” said Sunil Chutani, managing director Terra Realcon.

Chairman and managing director of Trehan Home Developers, Harsha Trehan echoed similar sentiments. “Lot of vacant land is still available in other parts of the NCR such as Noida, Greater Noida, Faridabad, Gurgaon, Manesar, Bhiwadi, Kundli, etc. The point is when end-user is not going to these far off places, why would he go to newer areas recently added to the NCR map.

Trehan further clarified, “As of now people still have to move into these places. A lot of investors have invested in various areas of these regions but actual buyers have not come in. For example some of the newer areas in Gurgaon have a lot of investors and because of high price end user are not coming.”

Read more: The Economic Times

Economy

PM Manmohan Singh vows to accelerate reforms, power-up Indian economy

Committing to accelerate the pace of reforms, PM Manmohan Singh today said the government will act boldly and decisively to revive the Indian economy and power growth to prove nay-sayers wrong.

“I do not underestimate the task before us. As the Twelfth Plan points out, our preferred scenario of strong inclusive growth at an average rate of 8 per cent per year will not come from business as usual policies. We have to act boldly and decisively” he said.

The Prime Minister was speaking here after releasing a book ‘An Agenda for India’s Growth: Essays in Honour of P Chidambaram’.

Observing that the last couple of years have been challenging, he said: “We must view this as a short term deceleration. Our government is determined to once again accelerate the pace of change. Once again, we will prove the naysayers and Cassandras of doom wrong.”

Over the past decade, Singh said, when the economy had absorbed the full benefit of the reforms that began in 1991, it had grown at close to 7.5 per cent.

He added: “Our growth rate has slowed down to 5 per cent in 2012-13. But this should not make us feel disheartened and imagine that we have slipped back to our old growth rate.”

He further said that the government has to deal with macro economic imbalances and major challenges in key sectors such as energy, water, and land.

Highlighting the achievements of the past five years, he said the growth has been much more inclusive.

Read more: Financial Express

Infrastructure

Delhi Metro’s interchange hubs to make travelling easier in NCR

Three years down the line, you will be able to travel to any part of Delhi and the national capital region by changing metros in your neighbourhood.

After completion of Phase 3 in 2016, almost all parts of urban Delhi will have their own dedicated interchange hubs from where commuters will be able to change trains without going to Rajiv Chowk.

The existing Kashmere Gate interchange metro station is situated in north Delhi and registers an average daily footfall of 2.92 lakh. In Phase 3, the Delhi Metro will construct four new interchange hubs in different parts of the city, which will cater to more than a lakh commuters each, said Delhi Metro Rail Corporation (DMRC) officials.

The stations that will be upgraded as interchange hubs during Phase 3 construction includes Hauz Khas and INA in South Delhi, Rajouri Garden in West Delhi and Mayur Vihar 1 in East Delhi.

“These four stations will give commuters the facility of changing trains in their own localities, without having to travel to either Rajiv Chowk or Kashmere Gate. This will also help in decongesting these stations,” said Anuj Dayal, chief spokesperson, DMRC.

Read more: Hindustan Times

Regional Rapid Transit System for NCR finally takes off

With the stakeholder states signing the Memorandum and Articles of Association of National Capital Region Transport Corporation (NCRTC) in New Delhi, the much awaited project of RRTC connecting the major cities of NCR region has finally taken off.

Besides Haryana, the main constituent States of NCR include Delhi, UP and Rajasthan, besides the Ministry of Railways, National Capital Region Planning Board and Ministry of Urban Development.

The NCRTC has been set up to take up Regional Rapid Transit System (RRTS) and Multi Modal Transport System in National Capital Region. Haryana will have to bear 7% of the total project which is totally a centrally sponsored project.

Initially NCRTC will take up the three priority corridors Delhi-Sonipat-Panipat (111 km), Delhi-Gurgaon-Alwar (180 km) and Delhi-Ghaziabad-Meerut (90 km). The work of the corridors is likely to start in about 6 months. First of all Delhi-Sonipat-Panipat corridor will be taken up, because its alignments have been finalized and the DPR has been approved by Haryana Government.

On behalf of Haryana Government, Chief Secretary P.K. Choudhery signed the Memorandum, whereas on behalf of Delhi, Rajasthan and Uttar Pradesh, the Memorandum was signed by their Chief Secretaries. T.C. Gupta, Principal Secretary, Town & Country Planning and Urban Development, Haryana, was also present on this occasion.
Read more: The Times of India

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