Wednesday, December 10, 2014
Premium realty player Lodha Group has registered bookings to the tune of over Rs 500 crore for an ultra-luxurious residential project in the metropolis, three years after it was reopened for booking on November 29.
The company's iconic 117-storey project, 'World One Tower' is located in south-central Mumbai.
"After three years, bookings have reopened for a limited window. Despite challenging environment, we have received record bookings of around Rs 500 crore from November 29 to date," Lodha Group managing director Abhisheck Lodha said today.
The bookings will close on December 14.
Nearly 75 per cent of the civil construction has been completed. The project is expected to be completed in 2016.
Lodha had announced the project in 2010. Initially, the Directorate General of Civil Aviation (DGCA) had opposed the project, citing security concerns.
"But now we have all the necessary approvals in place and expect this project, once completed, to generate revenues to the tune of over Rs 5,000 crore," he said.
The Mumbai-based realty major is developing 3 and 4 BHK apartments, which are likely to fetch in the upwards of Rs 70,000-80,000 per sq ft. Lodha is also developing two other towers - World View and World Crest - on the land parcel spread over 17.5 acres.
India's GDP growth is likely to recover in the next financial year 2015-16 and may surpass China's growth by 2016-17, Hemant Kanawala, head of equity at Kotak Life Insurance, told NDTV.
"The Indian GDP is likely to recover in FY16. We are expecting that growth will recover above 6 per cent next year and by CY16 (Calendar Year 2016) or FY17 India is likely to surpass GDP growth of even China. India is likely to emerge one of the fastest growing economies among the emerging markets," he said.
India's growth has been stuck at sub-5 per cent for the last two fiscals - its worst ever performance in 25 years. While China's economy grew by 7.7 per cent in the last fiscal, India grew at 4.7 per cent.
"The expectation is Chinese growth will come off...for FY17 or CY16, which investors globally see, Indian GDP is likely to be in the range of 7 per cent whereas China is likely to go below that as of now, this is what the current estimates suggest," he said.
The Reserve Bank of India or RBI sees India's GDP growth at 5.5 per cent in FY15. The World Bank pegs it at 5.6 per cent.
Investors expect FY16 GDP in the range of 6-6.5 per cent, Mr Kanawala said. "But the exact GDP in March 16 is likely to be between 6.5-7 per cent," he added.
The International Monetary Fund or IMF expects China's growth to slow down to 6.5 per cent sometime in 2016, while the World Bank sees China's growth slide to 7.1 per cent in 2016.
Kotak expects the Reserve Bank of India (RBI) to lower interest rates next year, which it believes will propel growth.
"If inflation remains lower, then there will be greater ability of RBI to lower interest rates, which is one of the first requirements for the economy to recover and grow faster," Mr Kanawala said.
Wholesale inflation in October cooled to a 5-year low of 1.77 per cent, helped by fall in food and fuel prices; while retail inflation eased for the third straight month to 5.52 per cent.
Faster clearance of projects which are stalled and reforms on land and labour will be the key to India's growth recovery, Kotak said.
Tuesday, December 2, 2014
The world’s second most populous country is aiming to eclipse China as the next industrial superpower
With its chronic blackouts, crumbling roads, and other -infrastructure woes, India should have no appeal for John Ginascol. A vice president at Abbott Laboratories, Ginascol is responsible for ensuring that the com-pany’s food-products factories run smoothly worldwide. He can’t afford surprises when it comes to electricity, water, and other essentials. “People like me,” he says, “dream of having existing, good, reliable infrastructure.”
“[India's] the only country that has the scale to take up where China is leaving off”
Yet Abbott has just opened its first plant in India, and Ginascol says there haven’t been any nightmares so far. In October, the company began production at a $75 million factory in an industrial park in the western state of Gujarat. The factory is producing Similac baby formula and nutritional supplement PediaSure, which Abbott plans to sell to the growing Indian middle class. The plant will employ about 400 workers by the time it’s fully up and running next year. As for India’s infrastructure, Ginascol has no complaints. The officials in charge of the park “were able to deliver very good, very reliable power, water, natural gas, and roads”, he says. “Fundamentally, the infrastructure was in place.”
Indian Prime Minister Narendra Modi is hoping other executives will be similarly impressed with the ease of manufacturing in his country. Before Modi took charge in New Delhi, he headed the state government in Gujarat, and during his 13 years in power there he made the state an industrial leader. Manufacturing accounts for 28 percent of Gujarat’s economy, compared with 13 percent for the country as a whole, and a touch less than the 30 percent figure for manufacturing titan China.
In an attempt to build India’s industrial base nationwide, Modi is pushing the Make in India campaign, designed to attract foreign investment by highlighting the ongoing changes. “We have to increase manufacturing and ensure that the benefits reach the youth of our nation,” Modi tweeted after the initiative’s 25 September introduction. By now he’s eased restrictions on foreign investment in property projects and begun an overhaul of the railroad system.
In the year ahead the prime minister’s campaign may gain momentum, thanks to the shifting fortunes of India and neighbouring China. The Indian economy, which slumped badly in 2012 and 2013, will likely grow 6.3 percent next year, in part because of investor confidence in Modi. By 2016, the country’s growth rate of 7.2 percent will surpass China’s 7.1 percent, says CLSA senior economist Rajeev Malik.
Well before the arrival of Modi, Indian leaders had talked about promoting manufacturing. The slowdown in China, however, could make a big difference this time. China became an export powerhouse because of its vast pool of low-wage workers, but it’s no longer so cheap to manufacture there. Pinched by -double-digit increases in China’s minimum wages, many companies are looking for low-cost alternatives. Southeast Asian countries such as Vietnam and Indonesia are attractive, but they lack the deep supply of workers available in India.
“It’s the only country that has the scale to take up where China is leaving off,” says Frederic Neumann, a senior economist with HSBC. Vietnam and Indonesia? “Neither one is big enough to take up the slack,” he says, leaving India with a “golden opportunity”.
The hourly labour cost in India for manufacturing averages 92¢, compared with $3.52 in China, according to Boston Consulting Group. But, says Anil Gupta, a professor at the University of Maryland’s Robert H. Smith School of Business, India hasn’t come close to matching China’s investments in the roads, ports, and power networks that companies want. “Lousy infrastructure essentially eats up any advantage the country may have on the labour front.”
Local leaders allied with Modi are trying to change that. In Madhya Pradesh, the state government is creating 27 industrial areas while promising to improve infrastructure and make labour laws and land acquisition regulations more investor-friendly. Passing new labour laws that make it easier to hire and fire is especially important.
On the diplomatic front, Modi has adroitly taken advantage of the rivalry between Japan and China: After recent meetings with Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping, he won commitments for almost $57 billion in investments in India. China pledged $20 billion, and Japan about 4 trillion yen ($35.5 billion). Much of the money will be used to build a giant industrial corridor between Delhi and Mumbai featuring high-speed trains and superhighways. The goal, University of Maryland’s Gupta says, is to turn the area into the equivalent of southern China’s Guangdong province, which built special economic zones to -transform China into an -exporting power. India’s leaders “have the political ducks lined up” to make that happen, he says.
Kudos to new prime minister Narendra Modi. Thanks to him and Reserve Bank of India chairman Raghuram Rajan, India is the global fund managers favorite emerging market.
Despite a temporary bump in its growth trajectory, London-based investment firm Schroders says India is the best of the big emerging markets for investors.
“The emerging markets are a concern and our earnings outlook for three of the four BRICs is negative, but India is the only bright spot in our view,” writes Alex Tedder, head of global equities for Schroders. He said India, “has an exciting investment story, with exceptional demographics and a vibrant private sector. Although the economy and the market have both done well in 2014, we think they have further to go.”
The Wisdom Tree India (EPI) exchange traded fund is up 33.2% this year while the MSCI Emerging Markets Index is down 0.7% year to date ending Nov. 30.
The Modi government’s policy initiatives have been encouraging, including a stream lining of government bureaucracies. Local infrastructure companies remain a favorite as Delhi continues to tout plans to build much-needed infrastructure in the poorest of the BRIC nations.
Tedder said the Indian consumer should also receive a welcome boost from lower energy prices and reduced inflationary pressure.
India’s growth hit a temporary snag in the second quarter, which runs from July to September for India. GDP grew 5.3% compared to the same period a year ago, beating the consensus forecast of 5.1%. However, this growth follows 5.7% yearly growth in the first quarter.
With this latest data, released to the market last week, India’s first half of fiscal year 2014-15 stands at 5.5% compared to 4.7% last year.
Barclays Capital said on Nov. 28 that India’s GDP should expand this year by 5.7%, ending in April. India’s growth is expected to hit 6% next fiscal year.
The second quarter growth slowed down was largely due to weaker industrial production.
The French and Indian defence ministers agreed to press ahead with negotiations on the sale of 126 Rafale fighter jets to India, both sides said on Tuesday, after slow progress cast doubt on the estimated $12 billion or about Rs. 74,400-crore deal.
Under the deal, the first 18 planes will be made in France and shipped to India, while the remaining 108 will be produced by state-run Hindustan Aeronautics Ltd.
France's Dassault Aviation has been trying to clinch the deal to sell India since New Delhi chose the company over other foreign plane manufacturers in 2012. But disagreements over cost and work-sharing have slowed talks, while India's weak economy has stretched government finances.
Defence Minister Manohar Parrikar met his French counterpart Jean-Yves Le Drian in the capital on Monday. Mr Parrikar allegedly said the deal "would be resolved in a fast-track manner."
"It was decided that whatever differences still existed would be resolved in a fast-track manner" an Indian defence ministry spokesman told news agency AFP.
French company Dassault Aviation won the right in 2012 to enter exclusive negotiations with India to supply 126 fighters after lodging a lower bid than rival firm Eurofighter.
India, the world's top weapons importer, is in the midst of a $100-billion defence upgrade programme and experts say it urgently needs the jet fighters to maintain a combat edge over nuclear rival Pakistan.