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  1. 1. Indian Economy An Opportunity Unlimited
  2. 2. India: Fastest Growing Free Market Democracy Source: Times of India * Annualized data used to show comparison with 1990 3.4 percent USD 797 USD 16 Billion (USD 9.2 billion in 2007-08 till October) USD 15 billion (USD 18 billion in 2007-08 till 14 th Jan) USD 246 billion (USD 276 billion in 2007-08 till December) 9.4 percent (8.9 percent for Q2 2007-08) 2007* 9 percent USD 390 USD 97 million USD 1 million (1993) < USD 1 billion 4.9 percent 1990 Inflation Per Capita FDI FII Flow Forex GDP Growth
  3. 3. India: Among the Top-15 Countries in terms of GDP at constant prices The Indian economy has witnessed unprecedented growth…. Booming services and industry sectors are providing the required impetus to economic growth The sound performance of each industry segment is leading to the overall robust performance of the Indian economy India’s GDP has witnessed high growth, and was the second fastest growing GDP after China in 2006-07 Fastest GDP growth of 9.4 percent in 2006-07, since last 18 years (at constant prices) Contribution of Services - increased from 48 percent to 55 percent Growth in sectors at Current Prices (2006-07): Industry: 16.2% Services: 16.3% Agriculture: 10.2% Source: MOSPI Statistics Estimated contribution to GDP by various sectors for H1 (2007-08) are: Industry – 138.5 billion, Agriculture – 73.8 billion and Services – 268.8 billion
  4. 4. India: Robust Economic Platform Steadily increasing Forex reserves offer adequate security against any possible currency crisis or monetary instability Falling Dollar inflates the India’s external debt Increased confidence of investors in Indian companies has led to a surge in cross border borrowing by corporate houses In 2007-08 (till 28 December), Forex reserves witnessed a growth of approximately 39 percent over 2006-07. India’s Forex reserves are in excess of external debt… … t he decreasing external debt to GDP ratio indicates that India has a sound economic platform Source: RBI Statistics
  5. 5. India: Surging Exports Petroleum products are the major contributors towards India’s growing imports Quality and cost advantage are the two important parameters leveraged by the Indian producers to increasingly market products and services Services sector has been a major contributor to increased exports from India Product imports by India mainly include petroleum products and minerals Acceptance of Indian products along with the cost advantage has provided an edge to Indian companies * - 2007-08 provisional data for period of April to October only * - 2007-08 provisional data for period of April to October only Source: Ministry of Finance (November Report)
  6. 6. 170 percent Increase India: Attractive Investment Destination India is ranked second in AT Kearney’s FDI confidence index (2007) FDI inflow for the period 2006-07 witnessed a growth of 185 percent over the same period last year With improved performance on PE ratio and ROE, Indian markets have attracted large investments Source: DIPP (October Report) , SEBI Electronic equipment, manufacturing and telecom have witnessed significant FDI inflow Large FII activity in India has led to an upsurge in the Sensex 185 percent Increase
  7. 7. India: Vibrant Capital Market India is among the major destinations across the globe for inflow of US Dollar Sensex has risen 20 times in the period 1990-2007 Sensex – The Bombay Stock Exchange index has risen 20 times from 1990s to reach 20,000 mark in November 2007. FIIs have infused large investments into the Indian stock market Encouraging industry performance Increased local investors’ confidence Emergence of industry and confidence of local investors along with the FIIs has led to upsurge of the Sensex 11/12/2007 Crossed 20,000 mark 30 December 1999 Crossed 5,000 mark 07 February 2006 Crossed 10,000 mark 09 July 2007 Crossed 15,000 mark
  8. 8. India: Vibrant Economy Driving M&A Activities <ul><li>Growth Drivers: </li></ul><ul><li>Globalisation and increased competition </li></ul><ul><li>Concentration of companies to achieve economies of scale </li></ul><ul><li>Cash Reserves with corporate </li></ul>Private equity deals value increased to USD 19 billion In 2007, there were a total of 676 M&A deals and 405 private equity deals… … Total M&A deal value was close to USD 51 billion… <ul><li>Trends: </li></ul><ul><li>Cross-border deals are growing faster than domestic deals </li></ul><ul><li>Private Equity (PE) houses have funded projects as well as made a few acquisitions in India </li></ul>Source: Deal Tracker Grant Thornton , Economic Times In 2007, the total value of M&A and PE deals was USD 70 billion…
  9. 9. Major M&A Deals Undertaken Abroad by India Inc. USD 12.1 billion Tata Steel buys Corus Plc USD 6 billion Hindalco acquired Novelis Inc. USD 1.58 billion Essar Steel acquired Algoma Steel USD 1.6 billion Suzlon Energy Ltd. acquires REpower USD 1.1 billion United Spirits Ltd. acquired Whyte & Mackay
  10. 10. Major M&A and Investments Announcements in India (1/2) USD 11 billion Vodafone buys Hutch USD 1.7 billion Plans to spend on its development operations in India over the next four years USD 2 billion Plans to establish three manufacturing plants to produce photo-voltaic units USD 12 billion POSCO to invest in building steel manufacturing plants and facilities in India by 2016
  11. 11. Major M&A and Investments Announcements in India (2/2) USD 0.98 billion Aditya Birla Group increased its stake in Idea Cellular by acquiring 48.14-percent stake USD 1 billion Plans investment in private equity, real estate, and private wealth management Mylan Laboratories acquired a majority stake in Matrix Laboratories USD 0.74 billion USD 1 billion Plans investment in private equity in Indian markets
  12. 12. India: Pacing Ahead to Emerge as a Major Economy in the World 2007 Global Retail Development Index (GRDI) AT Kearney has placed India as the most preferable destination for Services sector (2007)… Services sector attracted interest of major global players and large investments are pumped in it India is expected to outperform its rivals in the BRIC, in terms of GDP growth rate, from 2015 onwards… Source: AT Kearney , BRIC Report … India is the top destination in the AT Kearney Global Retail Development Index (2007)
  13. 13. BRIC Report, Goldman Sachs “ I have never seen India so dynamic, vibrant and full of business opportunities”. - Dan Scheinman, Cisco System Inc. as told to Business Week, August 2005 “ We came to India for the costs, stayed for the quality and are now investing for innovation”. John Redwood Economic Competitiveness Policy Group, UK “ India is now truly a land of opportunity”. Jack Welch General Electric “ India is a developed country as far as intellectual capital is concerned”. Peter Loescher President and Chief Executive Siemens By 2032, India will be among the three largest economies in the world. Why India? – Quote Unquote Travyn Rhall, ACNielsen “ The Indian market has two core advantages - an increasing presence of multinationals and an upswing in the IT exports”. Craig Barrett Intel Corporation “ India has evolved into one of the world's leading technology centers“. Mr Paul de Voijs Managing Director Volvo Car India “ India is a very exciting market and the luxury car segment is growing exponentially here”.
  14. 14. DISCLAIMER   This presentation has been prepared jointly by the India Brand Equity Foundation (“IBEF”) and Pvt. Ltd., EVALUESERVE (“Authors”).   All rights reserved. All copyright in this presentation and related works is owned by IBEF and the Authors. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF.   This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of the Author’s and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice.   The Author and IBEF neither recommend or endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed in this presentation.   Neither the Author nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.