2. AGENDA
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Introduction
Major Issues and Implications
PEST Analysis
Competitor Analysis
Investment Opportunities
FDI and Regulatory Environment
Government Policies and Initiatives
Tax Environment
Challenges for Foreign Player
Business Strategy
Financial Strategy
Human Resource Strategy
Building long term in India
Conclusion
3. INTRODUCTION
• MMS Consulting Firm consults in environment scanning, analysis and
strategic guideline to invest in India
• A Singapore Firm wants to invest in Indian Infrastructure market
• Infrastructure Industry consist of
– Roadways and Highways
– Power
– Ports and Airports
– Rail
– Electricity
• Indian Economy is booming
• Growing housing and commercial space requirement
5. MAJOR ISSUES AND IMPLICATIONS
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Contract Procedures
Skilled Manpower Shortage
Title clearance
Procedural and legal vulnerability
Urban Land monopoly
Debatable Tax status under section 801 (A)
Infrastructure bottlenecks
6. PEST ANALYSIS
POLITICAL FACTOR
• SEZ Act to boost infrastructural development
• Cement prices reduced for state infrastructure projects
• FDI Liberalization to Augment Industry growth
• Introduction of REITS
• Legal Framework to be followed
– Building Commencement Certificate:
– Occupation Certificate:
– Brihan Mumbai Corporation [BMC] Developing Plans
– CRZ(Coastal Recovery Zone Rule):
– TDR (Transfer of Development Right):
– National Building code
7. PEST ANALYSIS
ECONOMICAL FACTORS
• Growth in construction activity stimulating GDP growth
• Rate Hikes Unlikely to slow down growth
SOCIAL FACTORS
• Rising Urbanization to boost Industrial growth
• Green buildings in India
TECHNOLOGICAL FACTORS
• Low technology to Hinder growth
• Construction as per Indian Requirements
• Ready Mix concrete Being Experimented with
• Pre-Structured Concrete Blocks
• Mixture of Cement and Sand
8. COMPETITOR ANALYSIS
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Larsen & Toubro
Jaiprakash Associates
Lanco Infratech
Reliance Infrastruture
GMR Group
Punj Lloyd
Hindustan Construction Company
Gammon India
Simplex Infrastructure
GVK Power and Infrastructure
IRB Infrastrucutre
Shriram EPC
9. INVESTMENT OPPORTUNITIES
Projected spending from FY07-FY12 in selected infrastructure segments:
• Electricity: US$167 billion
• Railways: US$65 billion
• Road and highways: US$92 billion
• Ports: US$22 billion
• Airports: US$8 billion
• One of the world’s fastest growing economies – and growth expected to
continue at 6-7% despite the global downturn
• Few restrictions on foreign direct investment (FDI) for infrastructure
projects
• Tax holidays for developers of most types of infrastructure projects, some
of which are of limited duration
• Opening up of the infrastructure sector through PPPs
10. FDI AND REGULATORY ENVIRONMENT
APPROVAL ROUTE – Permission Required
• Existing Airports – beyond 74%
• Atomic Minerals
• In case of joint venture or technology collaboration agreement in the
same field
11. FDI AND REGULATORY ENVIRONMENT
AUTOMATIC ROUTE– Freely Permissible (100%)
• Greenfield airports
• Construction & maintenance of infrastructure like ports, harbors, roads
and highways
• Power generation, transmission and distribution and power trading
(atomic energy not permitted)
• Mass rapid transport systems
• Townships, housing, built-up infrastructure and construction-development
projects
12. GOVERNMENT POLICIES AND INITIATIVES
• New Tenders to attract project implementators
• Many projects started in various infrastrucure sections
• Constantly simplifying the approval route process by setting several
agencies to expedite FDI approval
• Liberalisation
• Improvising Legal system
• Standardisation for all infrastructure projects
13. TAX ENVIRONMENT
• Tax Holidays Exemptions
• International Tax Considerations like
– Entry and exit strategy
– Cash and Profits repatriation
– Holding the investmentss
14. CHALLENGES FOR FOREIGN PLAYER
• Non-availbility of own infrastructure to execute projects
– Skilled Manpower
– Plant and Equipments
– Construction Material
• Risk Sharing with Indian partner
• Cost Cutting and Competitiveness
• Government guidelines for PP developers
• Concerns of Indian Company will tie-ups
15. BUSINESS STRATEGY
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Concentrate of Core competency
Mergers and Aquisition
Tie-up with various Indian Company in all Infrastructure Projects
Joint Venture with potential partner (like Reliance Infra, etc)
Competitive cost and cost cutting
Efficient Utilisation of Indian Resource and Indian Partner
Target major project in all part of the country
Implement new technology from Singapore
Setup manufacturing units and research labs
Plan Organization Life Cycle
Good Organization Structure (mix of Indian and Singapore Workforce)
16. FINANCIAL STRATEGY
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Budget Forecasting
ROI
Invest in Top Indian Infrastructure Companies
Invest in manufacturing companies to reduce the cost and increase the
quality
Setup manufacturing and research units
Influence other investor in Singapore to invest in your company
Invest in stable of years
Invest through FDI (No approval required)
Invest in all infrastructure sections
Follow rules and regulation
17. HUMAN RESOURCE STRATEGY
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Good Organization Structure (mix of Indian and Singapore Workforce)
Hiring , Training and Development
Depot Human Resource from Singapore in each firms
Depot Indian Human Resource to understand the working
Implement mixture of Indian-Singapore Culture
Good Compensation
Transparency in workflow
18. BUILDING LONG TERM IN INDIA
• Manage Uncertainty and challenges
• Planned investment of funds
• Sustain competition by
– Appropriate pricing
– Funding
– Prioritisation frameworks
• Have holistic approach
• New infrastructure should support social and economic goals
• Invest in fast moving and growing sections
19. CONCLUSION
• Navigate through views and opinions expressed by various local stake
holders
• No.of contractors from Europe, Australia, China, Malaysia etc have already
made their presence felt
• Good Opportunities to develop significant business
• Carefullly slect local business partner
• Long-term and sustainable perspective planning
• Maximize from FDI and Tax benfits