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General |
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First half of 2007 scores record $50 billion M&A and PE deals
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25th July 2007 |
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- India Inc has reached a new milestone with mergers and acquisitions (M&As) and private equity (PE) deals worth $51 billion in first six months of 2007, compared with $28.2 billion in the full year of 2006.
- The acquisition by Tata Steel Ltd, part of India’s largest diversified conglomerate Tata Group of U.K.’s Corus Group Plc for $12.2 billion; U.K.’s Vodafone Group Plc’s acquisition of majority stake in Hutchison Essar Ltd, India’s second largest GSM mobile service provider for $10.8 billion and Hindalco Industries Ltd’s, part of the diversified Aditya Birla Group, acquisition of Canadian aluminium producer Novelis Inc for $6 billion were the top three deals during the first half of 2007, which accounted for 66% of total value of M&A deals during the period.
- There were 11 M&A deals having value greater than $500 million, including 7 deals worth more than $1 billion.
- There were 167 domestic M&A deals worth $1.61 billion in the first half of 2007, compared with 214 domestic deals worth $5 billion in the full year of 2006.
- There were 51 (overseas companies acquiring Indian companies) inbound cross border M&A deals worth $14.51 billion in the first half of 2007, compared with 76 inbound deals worth $5.40 billion in the full year of 2006.
- There were 121 (Indian companies acquiring companies overseas) outbound M&A deals worth $28 billion in the first half of 2007, against 190 outbound deals worth $15.31 billion in the full year of 2006.
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Sensex 2007 at a Glance
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- Sensex surged 42% to 19,795.87 from 13,942.2; peaking at above 20,000 levels twice mid-way.
- Trading on a price/earning ratio of about 25 times, up 40% in last two months.
- Indian corporate earnings growth at 20%-25% and the Sensex companies at 30%-40%.
- Nifty touched the highest level of 6,159 ever, a growth of 48%
- Foreign Institutional Investments inflow at $19 billion compared to $8 billion in 2006.
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Growth Outlook - 2008
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- Sensex expected to gain 14% to touch an all time high of 22,600 in 2008.
- Indian economy relatively immune to the U.S. sub prime crisis.
- U.S. Federal Reserve interest rate cut by quarter basis point to spur further foreign investment inflow.
- Sensex up by about 85 points to a new high of 20,375 points.
- Sensex 30 trades on a price/earning ratio of about 23.6 times, compared to UK's FTSE 100 that trades on a price/earnings ratio of 11.2 times; and S&P 500 index trading at 15.9 times.
- India's GDP growth for FY07-08 at 9.4% and 9.8% in the next fiscal, against 9.3% in fiscal ended March 2007: Citigroup
- India's growth pegged at 8.1%-8.6% in 2008, against 8.5%-9% in 2007: Standard & Poor's
- India's GDP growth forecast for 2009 at 8.4% and current financial year (2007-08) 8.6%: Organisation for Economic Cooperation and Development (OECD)
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India- Economic Indicators
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- Manufacturing is the main driver of growth. In the last three years the growth rate in manufacturing has accelerated from 8.7% to 9.1% and further to 11.3% .
- The services sector continues to maintain impressive growth and has recorded, in the last three years, a growth rate of 9.6%, 9.8% and 11.2% respectively.
- India ranks fourth highest in foreign currency reserves at $273 billion behind China at $1.4 billion, Japan at $954 million and Russia at $464 million; ahead of South Korea at $257 billion, Brazil at $177 billion, and Singapore at $158 billion.
- Twelfth largest and the second fastest growing economy in the world,
- India forecast to become the third largest economy .
- GDP of $1 trillion. Growth rate of 9.4% fiscal year ending March 2007,
- Population of 1.1 billion with 70% of people still under the age of 35 .
- 300 million-strong middle class.
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Power
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- India's demand for energy to double by 2012 to 200 Giga Watts from current installed capacity of 125 Giga Watts.
- Investment requirements in the next five years $73 billion .
- Total size of India's electric power system is currently 124 Giga Watts.
- Composition:
- Coal fuel comprises 55%,
- Hydroelectric 26%,
- Natural gas 10% and
- Renewable sources 5%.
- Nuclear energy 3% of total installed capacity.
- India all set to become a lucrative market for nuclear energy equipment makers as the U.S. Congress cleared the nuclear deal .
- General Electric Co., the world's second-largest company by market value,
- Russia's state-owned nuclear company Atomprom, and
- Toshiba Corp., which is buying Westinghouse's nuclear unit from British Nuclear Fuels, are vying to enter India's nuclear energy market.
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Merger & Acquisitions and Private Equity 2007
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- Total deal value $68 billion, a growth of 142% compared to $28 billion in 2006
- Mergers & Acquisitions - $51 billion through 661 deals, growth of 150%
- Cross border deals - $48 billion through 348 deals, growth of 220%
- Inbound deals - $15.6 billion through 108 deals
- Outbound deals - $32.73 billion through 240 deals
- Private Equity investments $17 billion, compared to $8 billion the previous year
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Indo-Europe Trade
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- Indo-Europe trade by 2010 to touch $100 billion from $20 billion currently.
- Indo-French trade to touch $10billion by 2010 from $3.5 billion currently.
- India among top 10 investors in U.K. in 2006-07
- No. of Indian companies in London : 500
- Listed companies : 30
- New Projects financed : 76
- New jobs created : 1,449
- Outbound acquisitions by India Inc in Europe - approximately 53% of deal value this year .
- U.K. accounted for about 40% of the outbound deal value at $12 billion.
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Indo-U.S. Trade
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- Trade volume of $30 billion in 2006-07.
- U.S. accounts for 16.8% of Indian exports and 6.3% of its imports.
- India-U.S. bilateral trade expected to double by 2009.
- U.S. accounted for 30% of the outbound acquisitions this year at $9 billion.
- Indo-U.S. Nuclear deal expected to open a lucrative market for nuclear energy equipment makers.
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Record foreign direct investment (FDI) inflow in 2006-07
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25th July 2007 |
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- India’s gross foreign direct investment (FDI) inflow increases by 153% to touch a record $19.53 billion (Rs.79,096.5 crore) in 2006-07.
- Private equity (PE) and venture capital (VC) funds’ investments in 2006-07 stood at $8.9 billion, out of which about 60%, or $5.3 billion, was inflow from abroad.
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Foreign Tourist Arrivals Rises 12%
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2nd July 2007 |
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- About 2 million foreign tourists visited India in the first five
months of 2007.
- Foreign tourist arrivals in January-May 2007 is 12% higher than
the same period last year.
- Foreign exchange earnings from tourism went up 17.4% at $3.07
billion during January-May 2007 from $2.6 billion in the same period
last year.
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Air Conditioners, Microwave Oven
Fastest Growing Segments Of White Goods Sector
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7th June 2007
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- Sales of air conditioners grew by 50% to Rs.1,998 crore ($487
million) in 2006-07.
- Unit sales of air conditioners grew by 51.6% to 1.05 million in
2006-07.
- Microwave oven sales went up by 39% in 2006-07 to Rs.472 crore
($115 million) in terms of value, and up by 49.6% to 690,000 units
in terms of volume.
- The market of washing machines expanded by 10.6% to Rs.1,468
crore ($358 million) in 2006-07. The total number of units sold
was 1.67 million, up 6.7% from the previous year.
- Total 3.75 million refrigerators worth Rs.3,782 crore ($922
million) were sold in 2006-07. The growth was 10.7% in terms of
value and 6.7% in terms of volume.
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India’s exports rises 21% in 2006-07
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18th May 2007 |
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- India’s exports for 2006-07 stood at $124.63 billion, up 21%
from $103.06 billion in the previous year.
- Imports have increased by 26% during 2006-07 to $181 billion
compared with $143 billion in 2005-06.
- Oil imports during 2006-07 stood at $57 billion, with a rise of
30.% compared with $44 billion in the previous year.
- India targets 28% export growth during 2007-08 to $160 billion.
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Foreign portfolio investments in India grew 129% in the last three
years
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1st May 2007 |
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- Total investment by foreign institutional investors (FIIs) grew
129% in the last three years to $119 billion.
- The cost price of the total investment by registered FIIs has
been estimated at $52 billion
- India has total 992 FIIs from 39 countries registered with the
market regulator Securities and Exchange Board of India (SEBI)
- Indian securities market is the fifth largest in Asia-pacific
with a market capitalisation of $850 billion
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Indian banking sector opening new avenues for global companies
and investors
5th April 2007
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- Reserve Bank of India (RBI), the central bank of the country,
has announced an increase of FDI limit to 74% under automatic
route in private banks.
- With the RBI fixing the deadline for implementation of Basel-II
norms by March 31, 2008, Indian banks will need additional capital
of up to $2.72 billion (Rs.12,000 crore) to meet the capital
charge requirement for operational risk under Basel-II.
- The banks will need to raise up to $4.5 billion (Rs.20,000
crore) in the short term to meet the Basel-II norms. Tapping the
capital markets is the most likely option that most of the banks
will exercise to meet this fund requirement.
- Indian Banking Sector is going to witness a change in the
ownership structure of the public sector unit (PSU) Banks, with
the Government of India considering to reduce its stake to 51% in
a number of such banks.
- To meet this large requirement, a number of banks are turning to
the capital markets
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Textile Industry in India 16th
February, 2007
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- Global Textile and Clothing industry is worth $4,395 billion with
clothing accounting for 60% of the market. Global trade in textile
and clothing is $356 billion and is expected to grow to $600 billion
by 2010.
- India is the largest exporter of yarn for the international market
and has 25% of world cotton exports and 12% of textile fibres and
yarn.
- In terms of spindleage the Indian textile industry is ranked
second, accounting for 23% of the world’s capacity. The country
has the highest loom capacity.
- Cotton textiles dominated the total fabric produced in 2005-06
with a share of 46%, man made fibres were close to 41%.
- Overall cloth production in the country has been growing at a
steady rate of 3.5% per annum.
- Yarn and Fabric production is growing annually at 2% and 3%
respectively.
- Significant investments are expected in this sector with a
cumulative investment of $6.67 billion by 2008 of which 2/3rd is
expected in the spinning and weaving section.
- The removal of restrictions by the government has helped set up
large integrated units which can effectively face challenges of
cheap mass production processes.
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India ranks 11th in service exports 16th January, 2007
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India’s share in global services exports in
2005: 2.3%.
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India ranked 11th in commercial service exports
in 2005, 5 places higher than previous year.
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India accounted for 0.9% of goods exports
during 2005, ranking 29th in the world
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India’s exports increase 57% in November 2006
26th December, 2006
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- India’s total exports in November 2006 at $9.68 billion, up
33.6% from $7.24 in November 2005.
- Imports in November 2006 at $15.87 billion, up 43% from the same
month last year.
- India’s trade deficit widened to $6.2 billion, compared with
$3.87 billion in November 2005.
- Exports in April-November 2006 at $79.59 billion, up 39% from
$64.17 billion in April-November 2005.
- Imports in April-November 2006 at $115.63 billion compared with
$93.23 billion in the first eight months of 2005-06; a growth of
22.3%.
- Trade deficit widened to $36.04 billion in April-November 2006,
compared with $64.17 billion in the same period year-ago
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Indian Industry Facts and Trends
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