Airtel teams up with Singtel to expand data business in 325 cities globally

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Bharti Airtel and Singapore Telecommunications (Singtel) have combined resources to form an Internet Protocol Virtual Private Network (IP VPN) to deliver high-speed, secure data network coverage to enterprise customers in Asia-Pacific, the Middle East, Africa, Europe and the US.

The combined network will provide data connectivity to 325 cities across the world through 370 Points of Presence (PoP). Together, Singtel’s 200 PoPs in 160 cities around the world and Airtel’s 170 plus PoPs in 165 cities across India, Africa and Middle East will form a new network that offers a connectivity backbone to enterprises across Asia, Europe, Africa and North America.

“This association will strongly enhance our value proposition for enterprise customers by offering them a wider global reach and the largest reach within India under a single platform. In particular, this will benefit companies in the pharmaceutical, IT and IT-enabled services as well as financial services segments, which are branching out to international locations rapidly,” Manish Prakash, director for strategic ventures at Bharti Airtel, said in a joint statement issued on Tuesday.

Under this global network, multinational corporations can maintain line of sight of their operations across different regions by using high-bandwidth business applications such as cloud applications, unified communications, video conferencing and software-defined networking solutions.

“By tapping on one another’s infrastructure assets, we enhance each other’s capabilities,” said Lim Seng Kong, Managing Director of Global Enterprise Business at Singtel Group Enterprise.

Source :  http://economictimes.indiatimes.com/articleshow/52745963.cms

Indian real estate may attract $2 bn investment from Japan

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JapanJapanese developers and private equity investors are looking to enter Indian property market and could invest at least USD 2 billion over the next three years in residential as well as industrial projects, says JLL.

 

Realty consultant JLL India said in a report that the country is emerging as major investment destination for Chinese and Japanese developers.

 

China’s biggest developer Wanda has signed an MoU with Haryana government earlier this year and more developers from China and Japan are expected to enter the Indian realty market, it said.

 

Private equity investors from these two countries are also looking at entering India’s real estate sector, it added.

 

“Japanese developers are keen to explore strategic partnerships and enter into joint ventures with Indian builders, and are particularly interested in industrial projects. There is likely to be an inflow of at least USD 2 billion in investments from Japan into the Indian real estate market over the next three years,” JLL India Chairman and Country Head Anuj Puri said.

 

After 100 per cent foreign direct investment (FDI) was allowed into the real estate industry, it was only a matter of time before foreign developers made big investment announcements, he said.

 

“One of China’s most prominent developers, Dalian Wanda Group, signed a memorandum of understanding (MoU) earlier this year with the northern state of Haryana to develop Wanda Industrial New City’. The investment of USD 10 billion, phased out over the next decade, is a very significant outlay by any Chinese company in India,” Puri said.

 

Other Chinese developers are also interested in India and most likely to follow suit, he added.

The RICS-JLL survey this January had shown that 62 per cent of the respondents felt that institutions from Japan and China could come knocking to the Indian real estate market in 2016.

 

Source: http://timesofindia.indiatimes.com/city/delhi/Indian-real-estate-may-attract-2-bn-investment-from-Japan/articleshow/52763657.cms

US, Europe combined infra spending less than China’s

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Despite a crying need for better infrastructure, investment in it has actually fallen in 10 major economies since the financial crisis, including the US, according to a new study by the McKinsey Global Institute. Meanwhile, China is still going gangbusters on roads, bridges, sewers, and everything else that makes a country run.

“China spends more on economic infrastructure annually than North America and Western Europe combined,” according to the report published Wednesday.

Economists around the world have been arguing that now is a great time to invest in infrastructure because interest rates are super-low and the global economy could use the spending jolt. “Is anyone proud of Kennedy airport?” Harvard University economist Lawrence Summers likes to ask.

The MGI report cites 10 countries where infrastructure spending fell as a share of gross domestic product from 2008 to 2013: the US, UK, Italy, Australia, South Korea, Brazil, India, Russia, Mexico, and Saudi Arabia. The study counts 11 economies, but that’s because it lists the European Union as a separate entity.

In contrast to the widespread declines, the institute says, infrastructure spending grew as a share of GDP in Japan, Germany, France, Canada, Turkey, South Africa and China. The chart from the MGI report shows China’s strength in infrastructure spending. Its bar is the highest. There’s such a thing as too much infrastructure spending, of course. At current rates of investment, China, Japan, and Australia are likely to exceed their needs between now and 2030, the McKinsey & Co-affiliated think tank says. To fund more public infrastructure, the report favours raising user charges such as highway tolls, among other measures.

To encourage more private investment in infrastructure, MGI argues for increasing “regulatory certainty” and giving investors “the ability to charge prices that produce an acceptable risk-adjusted return.”

 

Source:  http://www.business-standard.com/article/international/us-europe-combined-infra-spending-less-than-china-s-116061600030_1.html

S&P: Renewable energy biz high-growth area in India

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Renewable energy business is a high-growth area in India, though falling asset prices and competitive bidding for new power purchase agreements may lead to volatility in returns on investments, S&P Global Ratings said today.

 

“We believe the renewable energy business is a high-growth area in India, given the governments focus on increasing capacities for renewable energy and priority dispatch,” it said in a statement.

 

However, falling asset prices and competitive bidding for new power purchase agreements (PPAs) can expose renewable energy assets to volatility of returns on investments, it said.

 

It added that such assets also face greater volatility of cash flows due to seasonality and inherent uncertainty of wind/hydro/solar patterns, resulting in resource risks.

 

The agency further said that Tata Powers business position is unlikely to materially change after the acquisition of Welspun Renewable Energy.

 

S&P Global Ratings further said that its corporate credit rating on Tata Power Ltd (B+/Stable) is not immediately affected by the company’s acquisition of Welspun Renewable Energy for an enterprise value of Rs 92.49 billion.

 

Tata Power indicated that it intends to maintain leverage at the current improved levels post-acquisition through strategic measures.

 

Source: http://www.hindustantimes.com/business-newspaper/s-p-renewable-energy-biz-high-growth-area-in-india/story-d7BXtbQVS7YW2RWnGDIjgN.html

India records 10-year low in public-private investments: World Bank

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India recorded a 10-year low in investments in public-private sector in the year 2015, adding to contraction that pulled down the global investment to below its five-year average of $124.1 billion, the World Bank has said.

In its latest annual report, the World Bank said global investment in 2015 decreased to $111.6 billion, below the five-year average of $124.1 billion from 2010 to 2014.

“This contraction resulted from lower investments in Brazil, China and India,” the World Bank said on Monday in its latest report on Private Participation in Infrastructure Database.

“India recorded a 10-year low in investments, as only six road projects — usually a rich source of PPI over the past 10 years – reached financial closure,” the World Bank said.

In South Asia, there were 43 deals for a combined total of $5.6 billion that closed in the region, representing 5 per cent of the total investment — a decline of 82 per cent from the five-year average of $30.5 billion.

“Consistent with historical trends, India generated a majority of the projects (36 out of 43); Pakistan had four; Nepal, two; and Bangladesh, one. Notably, 26 of the 36 projects in India, amounting to $2.0 billion, targeted renewable energy, while all of Pakistan’s projects, totalling $749.9 million, solely focussed on renewables,” the Bank said.

Solar energy investments climbed 72 per cent higher than the last five year average, while renewables attracted nearly two-thirds of investments with private participation, it said.

Global private infrastructure investment in 2015 mostly remained steady at $111.6 billion when compared to the previous year, it said.

Among the most notable, commitments in Brazil were only $4.5 billion in 2015 — a sharp decline from $47.2 billion the previous year, reversing a trend of growing investments, it said.

“Investment in China also fell significantly below its 5-, 10-, and 20-year averages, as the average transaction dropped to $63 million,” it said.

By number of projects, however, these three historical heavyweights took the lead, with 131 of the 300 global deals, or 44 per cent of all projects.

Still their combined investment of $11.6 billion only made up 10 per cent of the global total, compared to 54 per cent in 2014, which was also the annual average over the previous four years.

According to the World Bank, global private infrastructure investment in 2015, though on par with the previous year, was 10 per cent lower than the previous five-year average because of dwindling commitments in China, Brazil, and India.

“The data finds that investments in other emerging economies increased rapidly to $99.9 billion, representing a 92 per cent year-over-year increase,” said Clive Harris, Practice Manager, Public-Private Partnerships, World Bank Group.

Cash crunch: How customers came to owe banks more than what they were loaned

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More than a thousand borrowers have outstandings that are substantially larger than the amounts sanctioned to them by banks, data sourced from Reserve Bank of India (RBI) shows. The total outstandings of 1,131 borrowers, at Rs 1,09,909 crore, were 150% more than the amount sanctioned, as on March 2016, data accessed by FE reveal. At the end of December 2015, the outstandings were Rs 90,235 crore.

Bankers and ex-bankers that FE reached out to attributed the pile-up in outstandings to short-term requirements of borrowers that were met by banks to help them tide over a cash crunch. Overdue interest, they said, could be another cause for the high outstandings. One senior banker observed that there were occasions when the capacity of the borrower to repay the additional amount was not assessed properly. “At times, limits get exceeded without a proper assessment of the customer’s ability to service the loan,” he said.

A former executive director of a public sector bank said one reason for the actual outstanding exceeding the permitted limits was that lenders tended to sanction ad hoc non-funded letters of credit (LC) even before the limits were okayed by the consortium. “Sometimes ad hoc LCs are opened for amounts which are bigger than those agreed to by the consortium. Since consortiums take anywhere between six months and a year to sanction limits, the money is disbursed since business cannot wait,” he explained, adding that such loans serve as working capital.

A former chairman of a state-owned bank said if the customer was unable to service the loan, the interest piled up pushing up the outstanding amount. “If the interest hasn’t been paid for three or four years, the amounts can become large,” he pointed out.

An RBI document on the Central Repository of Information on Large Credits notes that if outstanding loans exceed 150% of the limit, a “warning message should be displayed to the user on generation of the instance document”.

Ashvin Parekh, managing partner, Ashvin Parekh Advisory Services, observed the main reason for the outstandings surpassing the sanctions was “temporary accommodation and loans against receivables”.

Parekh explained that at times borrowers approached banks for funds to be able to take delivery of imports. “The customer promises to pay back the amount from receivables so bankers do accommodate such requests,” he said.
Total non-performing assets (NPAs) of the banking system stood at Rs 5.8 lakh crore at the end of March 2016 and total provisions were Rs 1.43 lakh crore.

The central bank has been trying to help banks tackle bad loans by allowing them to convert debt into equity and more recently into convertible redeemable preference shares. However, banks have not been able to find buyers for any of the assets under strategic debt restructuring scheme.

FE had earlier reported that bank loans that aren’t NPAs just yet but could turn toxic amount to over Rs 6 lakh crore or close to 9% of total advances, citing RBI data. The total troubled loans of Rs 6,24,119 crore at the end of December 2015 were 9% higher than the Rs 5, 73,381 crore at the end of June 2015.

While Rs 3,06,180 crore worth of loans were classified in the SMA-1 category where repayments are overdue between 30 and 60 days, another Rs 3,17,939 crore was in the SMA-2 category where repayments are overdue between 60 and 90 days. These Special Mention Accounts follow a fiat from the RBI in 2014 asking banks to put in place a mechanism to red-flag troubled loan accounts early in the day so that these could be dealt with speedily. If the loan is not serviced after 90 days it must be classified as an NPA.

 

Source: http://www.financialexpress.com/article/industry/banking-finance/cash-crunch-how-customers-came-to-owe-banks-more-than-what-they-were-loaned/285239/

SEBI begins proceedings to recover Rs 55,000 crore from defaulters

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The Securities and Exchange Board of India (Sebi) has initiated recovery proceedings against defaulters to collect more than Rs 55,000 crore, largely on account of its clampdown on illicit money-pooling schemes.

Ever since it was given powers in October 2013 to recover penalties and investors’ money collected fraudulently, Sebi has initiated nearly 900 recovery proceedings, of which more than 200 have been fully completed.

The amount involved in these proceedings stands at Rs 55,015 crore, including Rs 52,959 crore in the last financial year. This include a total of Rs 52,912 crore in cases related to collective investment scheme (CIS) and deemed public issues and another Rs 47 crore to recover penalties.

More than 2,500 attachment notices have been issued during the period under review, including over 600 in 2015-16.

Interestingly, an amount of Rs 250 crore has been recovered in 207 cases. Promising high returns to the investors, several firms have raked in unauthorised funds through various mechanisms. The capital was raised through realty schemes and ‘buffalo purchase’, among others. Also, funds have been garnered by issuing securities to investors without complying with public issue norms.

To recover pending dues, Sebi has attached properties, bank and demat accounts of the defaulters. Besides, the regulator has sold shares attached in recovery proceedings in various defaulters in 744 trading sessions and realised an amount of over Rs 11 crore.

Through amendments in the Securities Laws Act, the government had enhanced powers of Sebi to take action against illegal money-pooling activities. It has been empowered to recover penalties imposed by the Adjudicating Officer, amount directed to be disgorged and money ordered to be refunded to the regulator.

The recovery powers include attachment of bank as well as demat accounts, sale of assets of the defaulters and arrest and detention of the defaulter.

The Act also provides for setting up of a special court to expedite the cases filed by Sebi. The government in consultation with the high courts have set up special courts in Mumbai, Kolkata and Chennai.

Besides, constitution of a special court in Delhi is in progress. However, a designated court is already dealing with Sebi cases.

 

Source: http://www.business-standard.com/article/markets/sebi-begins-proceedings-to-recover-rs-55-000-crore-from-defaulters-116061400476_1.html