A MOTLEY COLLECTION OF BUSINESS AND ECONOMIC NEWS

Nitesh Shetty, managing director, Nitesh Estates said: “CPI has partnered us to build the hotel, a 250-room luxury hotel set to come up on Residency Road in Bangalore. The project is an integrated one having high-end retail stores on the ground floor and a health spa on top of the building. We will finalise the management chain in 3-4 weeks.

The hotel is being designed by an architects firm based in California and is to be operational in 30 months.

“While FDI will account for $12 billion, retained earnings (earnings ploughed back into investments) will be to the tune of $3 billion,” said Commerce and Industry Minister Kamal Nath. He said the overall FDI was expected to go up by 120 per cent as compared with the previous fiscal.

Between April and November, the FDI inflow was $7.3 billion, which is 117 per cent higher than that for the corresponding period last fiscal ($3.5 billion). 

Morgan Stanley invests $152 million in Oberoi Constructions

“We want to establish a pan-India presence as there is immense growth opportunities in other cities. At some point we will consider an IPO, but at present we decided to take the private equity route,” Vikas Oberoi, MD, Oberoi Constructions said. The company has projects lined up for Pune, Hyderabad and Bangalore for which it will acquire land. Sources said the company is valued at $1 billion by Kotak Mahindra Investment Bank, which has brokered the deal. 

“We’ve spent three years evaluating the business and have reached a valuation on the basis of the company’s individual assets and net asset value and qualitative aspects like sourcing quality and design expertise. This is our largest investment in India’s real estate sector, which is a testament of our belief in the company,” said Anand Madduri, executive director, Morgan Stanley Dean Witter Asia.

On an average, the fund looks at a return of over 30 per cent annually. The fund recently invested $67.4 million in Mantri Developers. The company has interests in commercial and residential projects. It plans to diversify into shopping malls, hotels, hospitals. It has ongoing residential and commercial projects in Mumbai’s suburbs—the Oberoi Mall in Goregaon, Oberoi Chambers and Garden Estate in Andheri, among others. 

The real estate sector is growing at 35-40 per cent and has seen large private equity deals with nearly $350 million in investments flowing into the sector. Siachen Capital invested $100 million in Bangalore-based Nilesh Estates, HDFC Real Estate has invested $35 million in the Ansals IT City and Parks and another $31 million in Pune based developer Vascon Engineers.

Responding to the observations made by the foreign CEOs that India had arrived on the global stage, Nath said: “India is better today and it can only get better. There are many challenges that India traverses, which infact go unnoticed.”

Responding to query on availability of a sustained consumer market in India, Nath pointed out that technology leapfrogging was leading to a huge consumer base. He gave the example of “ no phone to cell phone” to elaborate this.

Congratulating CII Vice-President, Sunil Mittal on being conferred the prestigious Padma Bhushan, Nath mentioned that Indian bred entrepreneurs have played a key role in taking India forward. 

Ashwani Kumar, minister of state for industry said that India’s relevance in the global scenario is now recognised. “India is looking for global partnerships” was a key message from Davos, he said.

Montek Singh Ahluwalia, deputy chairman, Planning Commission, mentioned that the government was aware that infrastructure was a key challenge for India’s growth and was working towards putting down an appropriate policy and regulatory framework. 

Indian CEOs present confirmed that India is essentially a private sector country and that the government acknowledged this. Nath stated that one fact overlooked was that India was producing entrepreneurs in large numbers.