e-Uttar Pradesh 2013 - Growth of IT Infrastructure - Rajiv Vaishnav, Vice President, NASSCOM

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e-Uttar Pradesh 2013 - Growth of IT Infrastructure - Rajiv Vaishnav, Vice President, NASSCOM

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e-Uttar Pradesh 2013 - Growth of IT Infrastructure - Rajiv Vaishnav, Vice President, NASSCOM

  1. 1. PRESENTATION INFRASTRUCTURE PERSPECTIVE ON IT / ITES BUSINESS IN INDIA 29TH NOV 2013
  2. 2. Agenda • IT & ITeS Sector & SEZs in India • Office Space Absorption Trends – India • IT & ITeS Sector – Employment Generation • Location Evaluation Parameters • Chennai – Growth Drivers
  3. 3. IT & ITeS | Executive Summary Strong growth oppurtunities The IT-BPM sector in India is estimated to expand at a CAGR of 9.5 per cent to USD300 billion by 2020. The sector increased at a CAGR of 25 per cent over 2000–13, 3-4 times higher than global ITBPM spend Leading outsourcing destination India is the world’s largest sourcing destination, accounting for approximately 52 per cent of the USD124–130 billion market. The country’s cost competitiveness in providing IT services, which is approximately 3-4 times cheaper than the US continues to be its USP in the global sourcing market Largest pool of ready to hire talent Most lucrative sector for investments India’s highly qualified talent pool of technical graduates is one of the largest in the world, facilitating its emergence as a preferred destination for outsourcing The sector ranks fourth in India’s total FDI share and accounts for approximately 37 per cent of total Private Equity and Venture investments in the country Source: Nasscom, 2013 Note: BPM - Business Process Management, USP - Unique Selling Proposition 3
  4. 4. IT & ITeS | Advantage India 2013 E Industry value: USD108 billion Growing demand • IT firms in India have delivery centres across the world; as of 2012, IT firms had a total of 580 centres in 75 countries • India’s IT & ITes industry is well diversified across verticals such as BFSI, telecom, retail • Strong growth in demand for exports • Expanding economy to propel growth in local demand Advantage India Competitive advantage • India has cost savings of 60– 70 per cent over source countries • With 52 per cent market share, India continues to be a leader in the global sourcing industry 4 • Country has a huge talent pool 2020 F Global footprints Industry value: USD300 billion Policy support • Tax holidays extended to IT sector • SEZ scheme since 2005 to benefit IT companies with single window approval mechanism, tax benefits etc. Source: Nasscom, 2013 Note: E stands for Estimate, F stands for Forecast
  5. 5. Trends in Office Space Absorption 23.9 8% 10 4% 0 0% 2005 2006 2007 2008 2009 New Completions 2010 2011 Net Absorption 2012 2013F 2015F Vacancy • India is expected to have 32.05 Crore square feet of office space by the end of 2013 • 5 2014F The total absorption is expected to be around 25.68 Crore square feet of office space by the end of 2013 Source: Real Estate Intelligence Service (Jones Lang LaSalle), 1Q13 Vacancy (%) 12% 28.6 26.8 27.1 30.2 26.7 34.5 37.0 36.7 40.5 30.5 33.1 16% 19.6 20 22.8 22.3 28.8 28.8 30 32.9 32.0 42.5 40 44.2 20% 41.6 24% 50 Completions / Absorption (million sq ft) 60
  6. 6. Leasing of Office Space on the Basis of Countries of Origin • Firms Headquartered in USA and Europe contribute to the major share of office space take up across Indian cities 100% 90% 9% 11% 9% 80% 70% 7% 3% 19% 8% 17% 5% 16% 8% 3% 16% 14% Australia 27% 29% Others 35% 30% 60% 32% 30% 27% 29% Switzerland 50% European Union 40% 30% 56% India 60% 49% 20% 39% 43% 48% 48% 51% USA 10% 0% 2005 6 2006 2007 2008 2009 2010 2011 2012 Source: Real Estate Intelligence Service (Jones Land LaSalle)
  7. 7. Sector wise Leasing of Office Space • Top 7 sectors contribute to more than 70% of office space leasing 100% 10% 90% 6% 80% 3% 5% 2% 8% 8% 1% 5% 4% 11% 2% 11% 3% 4% 3% 7% 70% 1% 12% 7% 3% 4% 2% 3% 3% 9% 8% 7% 3% 4% Transportation & Warehousing Telecom Services Telecom Real Estate & Construction 9% 7% Professional Services Miscellaneous 60% 33% 48% 47% 49% 23% Media & Entertainment 46% 50% 34% 39% Manufacturing 3% IT_Services 9% Hospitality & Tourism 40% 6% 30% 2% 4% 1% 9% 20% 10% 14% 2% 10% 3% 11% 12% 2005 2006 5% 8% 9% 3% 7% 4% 4% 2% 10% 4% 8% 16% 11% Healthcare Energy & Utilities 9% Electronics 5% 23% 17% 6% 11% 8% 8% Consumer Goods & Services Banking, Financial Services & Insurance 0% 7 2007 2008 2009 2010 7 2011 2012 Source: Real Estate Intelligence Service (Jones Land LaSalle)
  8. 8. Location Evaluation Parameters REAL ESTATE HUMAN RESOURCE BUSINESS ENVIRONMENT PHYSICAL INFRASTRUCTURE SOCIAL ENVIRONMENT Real Estate Availability Labour Availability/Quality External Risk Telecom availability & cost Education, medical, recreational • Delivery timelines and procurement risks • Developer profile • Demographic profile • Talent availability • Labour quality • Security & safety Power availability & cost Culture & entertainment Business Competitiveness Transportation Availability of 4 star and plus categories Real Estate Costs Labour Risks • Relative competitiveness of policies • Business maturity & growth trends • Air connectivity • Local Employee Transport Availability and Costs • Operational costs • Capital costs • • • • Recruitment potential Legal considerations Impact of competition Attrition levels Cost of living Labour Cots • Salary across various levels Source: Jones Lang LaSalle Research 8
  9. 9. Tier II/III cities emerge Trends in tier II and III cities • 43 new tier II/III cities are emerging as IT delivery location; this could reduce pressure on leading locations • Cost in newer cities is expected to be 28 per cent lower than leading cities • Lower cost and attrition, affordable real estate and support from local government, such as tax breaks, STPI and SEZ schemes, are facilitating this shift of focus IT sector employment distribution in Tier I and Tier II/III cities 6000 5000 4000 3230 3000 • • Over 50 cities already have basic infrastructure and human resource to support the global sourcing and business services industry Some cities are expected to emerge as regional hubs supporting domestic companies 2000 175 1000 1821 1615 2008 2018E 0 • 9 Growth is assumed based on the fact that tax benefits etc for SEZs remain the same. Tier II/III Locations Tier I Locations Source: Nasscom, 2013
  10. 10. Uttar Pradesh – SCOT Analysis Strengths • Proximity to New Delhi and some centers (Noida) being part of the National Capital Region • Vast tracts of land available for development in the region • Noida already is an established IT & ITeS location in the National Capital Region with large number of IT companies Opportunities • Proposed Greater Noida International Airport could facilitate access of international tourists to this region • Proximity of NOIDA to Delhi and its modern infrastructure presents an opportunity to develop this location as the Gateway to Uttar Pradesh (Lucknow, Agra & Kanpur) • Established IT companies setting up their disaster recovery centers and plan for business continuity in Tier 2 and 3 locations of the State – Additional incentives can be provided. 10
  11. 11. IT & ITES SECTOR – EMPLOYMENT GENERATION 11
  12. 12. Employment – Sector Wise Break up • 50% of the Indian Work force is self employed. 32% are contract labourers & only 18% of the work force constitutes of full time salaried workers • The agricultural , forestry & fisheries sector employs 50% of the work force followed by the services sector & manufacturing. Source : Govt. Of India Labour statistics 12
  13. 13. Gross Domestic Product vs Employment 70 60 58.2 57.7 Percentage % 50 40 30 20 19.9 15.8 12.1 10.5 11.4 14.4 10 0 Services Other Industry % of GDP Manufacturing Agriculture % of Workforce • Although agriculture employs 50% of the labour work force in India its contribution to GDP is only 14.4%. This portrays the productivity challenges faced by the sector. • The services industry is the most productive and provides the highest return on investment for the GDP . 13 Source : IBEP Report - Role of manufacturing in employment generation in India
  14. 14. 2013 Employment Outlook West Region 32 South Region 27 East Region 17 North Region 38 0 5 10 15 20 25 30 35 40 Net Employment Outlook • Survey results of 5,370 employers in India . They were asked, “ How do you anticipate total employment at your location”? • Robust hiring in the Services sector . Source : Manpower – Employment Outlook Survey Q2 2013 14
  15. 15. Job Creation Sector Employment Till Dec 2011 Increase in employment Jan - Dec - 2012 Increase in percentage Jan - Dec - 2012 IT / ITeS 21,02,421 2,27,428 10.08% Manufacturing - Machinenary & Equipment 11,90,736 59,180 5.00% Manufacturing - Non - Machinenary 42,62,741 1,63,075 3.50% • The IT / ITeS industry continues to be a net employment generator - have added 230,000 jobs in FY 2012. • Providing direct employment to about 2.8 million, and indirectly employing 8.9 million people. 15 Source : Nasscom, 2013
  16. 16. IT GROWTH IN TAMILNADU 16
  17. 17. Growth Rate – IT / ITeS in Tamil Nadu • • 17 The growth of the IT industry in Tamil Nadu was at least 20 % every year during the boom time of 2003 - 2008 IT industry in Tamil Nadu registered double digit growth even during the recession period
  18. 18. Tamil Nadu Government Initiatives (Tier 2 & 3 Cities) COIMBATORE IT/ITES SEZ ELCOT established this IT SEZ in 62 acres of land in Vilankurichi Village in Coimbatore North Taluk  Wipro - 10 acres, TCS - 5 acres and TIDEL Park Coimbatore Limited - 10 acres  Wipro is establishing their processing centre in 3.5 lakhs sq.ft.  Tidel Park Coimbatore Ltd has started construction of 17 lakhs sq. ft. building  Employment to 25,000 candidates directly MADURAI IT /ITES SEZ ELCOT is establishing two SEZs in Madurai, one at Ilandhaikulam Village and another at Vadapalanji Village in 28.91 acres and 239.58 acres of land respectively.  HCL-60 acres, Satyam-50 acres and Sutherland-5 acres in Vadapalanji.  HCL-5 acres, Honeywell-5 acres and Tessolve-2.5 acres in Ilandhaikulam  Employment to 60,000 candidates directly in both parks combined TIRUNELVELI IT/ITES SEZ ELCOT has leased 500 acres of land from SIPCOT in Gangaikondan Village, Tirunelveli Taluk, Tirunelveli  Employment to 30,000 candidates directly TIRUCHIRAPALLI IT/ITES SEZ ELCOT has 147.61 acres of land in Navalpattu Village in Tiruchirappalli Taluk  10 acres of land has been allotted to Sutherland Global Services Pvt. Limited  Employment to 20,000 candidates directly SALEM IT/ITES SEZ ELCOT has 164.26 acres of land in Jagir Ammapalayam Village, Salem Taluk, Salem.  Employment to 15,000 candidates directly HOSUR IT/ITES SEZ ELCOT has 174.47 acres of land to in Viswanathapuram Village in Hosur Taluk,Krishnagiri District.  Employment to 40,000 candidates directly 18
  19. 19. CHENNAI – GROWTH DRIVERS 19
  20. 20. Chennai – Growth Drivers 8.24 Million (2011 census); Chennai Metropolitan Area: 1200 sq. km POPULATION EDUCATION • Over 693 Arts/science/commerce colleges; 269 Engineering colleges; 19 Universities. • Characterized by low attrition; • Primary employment centre for Coimbatore, Madurai, Trichy, Salem. RANK CITY INDEX - #1 by india today best city survey SAFEST CITY IN INDIA Nation Crime Records Bureau • Over 12 Major Hospitals comprising of 3356 beds RANKED 2ND BY GIREM SURVEY 2013 as most favourable business destination in india • Over 30 Major Hotels comprising of 5223 rooms 2nd LOWEST POPULATION DENSITY amongst the metropolitan cities in India HOSPITALS HOTELS HIGHEST LITERACY RATE amongst all the metropolitan cities in india BEST FEMALE TO MALE SEX RATIO amongst all the metropolitan cities in india STABLE POLITICAL ENVIRONMENT Chennai 20 *Current GDP of $67 bn to grow to $150 bn by 2025 – CII
  21. 21. City Business Districts 6 OFFICE SPACE RENTALS  1 CENTRAL BUSINESS DISTRICT 2 3 4 SECONDARY BUSINESS DISTRICTS PreToll – OLD MAHABALIPURAM ROAD (OMR) GUINDY MOUNT POONAMALLEE ROAD (MPR) 5 6 7 PERIPHERAL BUSINESS DISTRCITS Post Toll – OLD MAHABALIPURAM ROAD (OMR) AMBATTUR GRAND SOUTHERN TRUNK ROAD (NH 45) 1 4 * Indicative warm shell rental ranges R Central Business District 3 Ramanujan IT City R 2 7 Secondary Business District 5 Peripheral Business District 21
  22. 22. City Transport Network Chennai has a highly integrated public transport network. CMBT The bus & rail networks intersect at key locations making city travel easy for its commuters.. Chennai Bus Network The Metropolitan Transport Corporation runs a mixed fleet of 3,637 buses to distances of 50 km from the city .It services 5 million passengers everyday. The main bus terminus is in Koyembedu (CMBT - marked on the map.). Outstation & city buses to all destinations can be boarded from here . The metro stop which will be functional soon will connect this bus terminus to the Airport reducing travel time significantly. Bus frequencies vary depending upon the route. All localities connecting to : Airport – 20 minutes Ramanujan IT City – 20 minutes DLF IT Park – 30 minutes R Micro Transport 2 categories of Auto Rickshaws service city commuters • Share Autos – with a minimum fare of Rs. 5 these autos ply commuters between busy routes across the city . It’s a preferred mode of travel for office goers and students. • Fare Autos- With a minimum fare of Rs 25 these auto ply commuters across the city and are an important mode of transport.in Chennai R Ramanujan IT City 22 Major Bus Depot Metro station
  23. 23. City Transport Network CHENNAI CENTRAL Suburban rail • Connects the north & south of the city . • CHENNAI BEACH .All inter state trains arrive & depart from Chennai Central. • CMBT Trains to all destinations with in the city can be boarded from Chennai Beach Station. • The MRST train frequency • Peak Hours:10 minutes • Non peak Hours:20 – 30 minutes Chennai Metro • Designed to Integrate different modes of Transport - MRTS, Suburban Rail, Airport and Chennai Mofussil Bus Terminus (CMBT). • CMBT Station located inside the bus terminus to benefit interstate commuters. • Direct link from the Chennai airport to CMBT • Pavements and elevated walkways to ease commuter movement • Expected completion by FY 2014-15 R Existing Route - Suburban Rail Corridor 1 – Chennai Metro – Q3 2015 Corridor 2 – Chennai Metro - Q3 2014 Existing Route – MRTS Proposed MRST Route R Ramanujan IT City 23 Major Bus Depot Major Metro station
  24. 24. City Transport Network CHENNAI CENTRAL Airport • CHENNAI BEACH CMBT The Chennai Domestic & International airports are located on the Great Southern Trunk road ( GST). • The airport handles 13.5 million passengers annually and about 325 aircraft movements a day. • 8.6 million in the domestic and 4.5 million in the international terminals • There are here 52 scheduled airline operators, including 33 international and 19 domestic operators Airport Access • The Chennai airport is well connected and easily accessible by the city road & rail transport network . • The average frequency of buses to the airport is 20 minutes from different bus terminuses • The suburban rail network connects the city to the airport at Tirusalam Station • Chennai Airport Metro Station Post completion of the 2nd corridor of the Chennai metro in Q3 2014 the Metro R line will be the 3rd access path to the airport Tirusalam Station Existing Route - Suburban Rail Corridor 1 – Chennai Metro – Q3 2015 Corridor 2 – Chennai Metro - Q3 2014 Existing Route – MRTS Proposed MRST Route R Ramanujan IT City 24 Major Bus Depot Major Metro station
  25. 25. 25
  26. 26. Schools Key Schools Affiliation Key Schools Affiliation 1 PSBB, Nungambakkam CBSE 28 2 St. John’s CBSE 29 VELS Vidyashram CBSE 3 DAV, Gopalapuram CBSE 30 Sivasami Kalalaya CBSE 4 Vidya Mandir CBSE 5 Holy Angels State Board 1 American International School IB 6 Assumption HS School State Board 2 Sacred Heart School State Board 8 Good Shepherd Convent State Board 3 British International School 9 Asan Memorial School State Board IGCSE, GCE, AS/A Level 10 SIET State Board 4 Lords International School IGCSE 5 Vaels Billabong International School IGCSE, ICSE 6 MCTM Chidambaram International School 17 IB 7 Gateway American International School IB 11 Shrine Vailankanni CBSE Sankara Vidyalaya, Tambaram 23 State Board International Schools 19 24 13 8 8 Affiliation 12 Chettinad Vidyashram CBSE 13 Abacus Montessori ICSE 7 HLC International Sishya ICSE 8 CPS Global School The School KFI ICSE 9 European International School Hindu Sen Sec School CBSE 10 German International School IGCSE 17 SBOA CBSE 11 Crescent School IGCSE, AS/A Level 3 5 4 7 10 11 6 20 18 DAV, Velachery CBSE 19 Don Bosco CBSE 12 Akshar Arbol International School Sri Vidhya Academy International School IGCSE, GCE, CBSE APL Global School IGCSE, AS/A Level 20 Kendriya Vidyalaya CBSE 21 St Michaels Academy ICSE 22 Padma Seshadri CBSE 23 DAV, Mogappair CBSE 24 Chinmaya Vidyalaya CBSE 25 Natesan Vidyalaya CBSE 26 St Bede’s Academy CBSE 27 Santhome High School 26 14 15 16 4 1 29 28 25 18 13 CBSE 14 30 21 R 11 IB 13 27 26 12 IB 16 22 IB 15 12 IGCSE 14 9 1 6 IB - International Baccalaureate IGSCE - International General Certificate of Secondary Education GCE - General Certificate of Education ICSE - Indian Certificate of Secondary Education CBSE - Central Board of Secondary Education A Level - Advanced Level AS Level - Advanced Subsidiary Level R Ramanujan IT City 3 10 2 7 14 5 9 2
  27. 27. Hospitality Key Hotels Keys 1 Hyatt Regency 327 2 Park Sheraton 3 Courtyard By Marriot Key Hotels Keys 22 SRM Group Hotel * TBA 283 23 Lemon Tree 108 238 24 Radisson GRT 101 Trident 167 Ginger 85 4 Rain Tree, Anna Salai 230 25 5 Taj Coromandel 202 26 6 The Residency Towers 174 27 Reseda The Fern * GRT Grand 133 28 Fortune Select 105 The Gateway 200 30 Novotel Ibis * 3 11 10 6 7 129 29 14 TBA 7 12 5 1 9 TBA 8 Rain Tree, St Mary’s Road 9 My Fortune 90 10 Accord Metropolitan 162 11 The Residency 112 12 Radisson Blu 162 13 The Leela Palace Ibis, Mount Road * Ascott Somerset Savera ITC Grand Chola Park Hyatt The Hilton Le Meridian Westin 215 Vivanta 128 34 GRT Temple Bay 144 240 21 33 25 24 R 21 204 20 179 201 19 Asiana 17 20 600 18 15 13 22 23 18 230 17 19 129 32 8 187 16 2 TBA 15 Aloft 4 338 14 31 27 26 27 28 29 30 31 R Ramanujan IT City 32 33 34 * The hotel is under construction 16
  28. 28. Hospitals Key Hospitals Beds 1 Apollo, Greams Road 250 2 Miot 500 3 Fortis, Adyar 250 4 Apollo, Taramani * TBA 5 Apollo, Perungudi 180 6 Billroth 400 7 Sankara Nethralaya 256 8 ESI Hospital 330 9 Kauvery 100 10 Kamakshi Hospital 150 11 Ramachandra Medical College 690 12 Madras Medical Mission 250 13 Chettinad Health City 645 14 Apollo, Teynampet 120 15 Apollo, Ayanambakkam 260 16 Global Hospital 500 17 Fortis, Vadapalani * 1500 12 6 15 7 1 17 8 11 9 14 2 3 R 4 5 10 All major hospitals with more than 100 beds have been listed 16 R Ramanujan IT City 28 * The hospital is under construction / renovation 13
  29. 29. Colleges 13 Key Colleges Streams 1 Loyola College Arts, Science, Engineering & Management 2 Stella Maris Arts & Science 3 IIT Madras Vivekananda College Women’s Christian College Ethiraj College Arts & Science 7 Anna University Engineering 8 NIFT Fashion Technology 9 DB Jain College 10 Arts & Science 6 17 6 1 Arts & Science 5 14 5 Engineering 4 16 Arts & Science 10 IFMR Medicine 14 Madras Medical College Medicine 15 Sr Ramachandra Medical College Medicine 16 Govt Medical College – Kilpauk Medicine 17 Madras University All 18 Sathyabama University Engineering 19 Hindustan University Engineering 20 SRM University 7 Medicine 13 Stanley Medical College 11 Law 12 Madras Institute of Technology 4 15 Management 11 Dr. Ambedakar Law University 2 Arts, Science, Engineering & Medicine 3 R 8 12 20 18 19 R Ramanujan IT City 29 9
  30. 30. THANKS

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