Foreign investors find Indian realty sector attractive again after 5 years

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At least Rs 14,680 crore of funds have been raised in sector so far in current investment cycle.

Foreign investors’ interest in Indian real estate is on the rise after almost five years, India-specific fundraisings indicate.

The cycle started gaining momentum just before the 2014 general elections and at least $2.2 billion (Rs 14,680 crore) of funds have been raised so far in the current investment cycle, indicating an improvement in foreign investors’ confidence in Indian real estate, said consultancy firm JLL India. “During the pre-GFC (global financial crisis) phase, 82% of funds got raised in US dollar.

This reduced to 57% in post-GFC phase when micro-market understanding was required more than banking on the macro-economy,” said Shobit Agarwal, managing director of capital markets at JLL India. “Interestingly, the contribution, 2014-onwards, has increased considerably to 70% – hinting that the positivity is here to stay for some time.”

Recent easing of foreign direct investments rules is expected to bring in more capital into the property sector. PE funds are also looking to leverage on this rising interest among foreign investors.

“We believe this is an opportune time to invest in Indian real estate, with rigorous risk management and strong asset management.

Offshore funds are showing interest in Indian real estate and there is lot of interest from FDI funds back in Indian real estate,” said Rubi Arya, chief executive of Milestone Capital Advisors. “We are planning to leverage further on our structured debt and commercial platform to raise money from offshore funds.”

According to Arya, FDI funds are looking to invest in pre-leased commercial assets, create strategic-level partnerships with reputed developers mainly through equity deals and make structured debt investments in residential projects.

India-specific cumulative fundraising attained its peak in the pre-GFC period. During this period between 2005 and 2008, there were 50 such funds that raised $16 billion in total. However, post-GFC, only 29 funds got raised in five years, with cumulative fundraising of $3.9 billion, said the JLL India report.

Not only has the volume of investment increased, but there has also been an increase in the average investment size from $134 million to $184 million in the current cycle that started in 2014.

Source: http://economictimes.indiatimes.com/articleshow/50476154.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

BSE plans platform for listing startups, easy access to capital

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Leading stock exchange BSE has set up an advisory group to suggest ways to develop BSE Hi-Tech, a platform to help startups list and access capital from sophisticated investors in the securities market. The 13-panel group, which held its first meeting, includes experts from the start-up ecosystem, investors, merchant bankers and legal professionals who will advise BSE on the newly proposed framework on BSE Hi-Tech, which will be based on the new institutional trading platform norms announced by regulator SEBI in August 2015.

Nasscom’s Ravi Gururaj, Khaitan & Co partner Rajiv Khaitan, Tie executive director Naveen Raju and Accel Partners partner Shekhar Kirani, are among the members in the group. “In order to develop BSE Hi-Tech, a platform where young fast growing companies can list and access capital from sophisticated investors, the Exchange has decided to form an advisory group,” the BSE said in a statement.

The group is mandated to interact with various stakeholders including the government, Sebi and industry associations and support in framing policies for the creation of a robust platform. “Deliberations and suggestions will be forwarded to the regulator for their consideration,” the exchange added.

In recent years, the Indian startup ecosystem has witnessed tremendous growth and has come into its own driven by factors such as massive funding, consolidation activities, evolving technology and a burgeoning domestic market. These entrepreneurs need a platform to reach out to potential investors and raise funds to fuel growth.

Source: http://yourstory.com/2015/12/bse-startup-listing/

RBI sets up helpline for startups on fund-raising

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With startups raising funds from a variety of offshore sources, including individuals, private equity players and crowdsourcing, the RBI has set up a dedicated helpline for advice on cross-border remittances which are subject to guidelines issued under the foreign exchange management act.

 

Although businesses are supposed to know the law before they raise capital, many of the startups are being promoted by very young and inexperienced individuals. Moreover, the amount raised by some of them run into only a few lakhs, making it difficult for them to hire law firms.

 

The helpline is actually an email ID (helpstartup@rbi.org.in) through which RBI will respond to queries. The central bank said that it will offer guidance/assistance to them for undertaking cross-border transactions within the ambit of the regulatory framework.

 

“While seeking guidance, the enterprises should provide complete information to the RBI and mention the specific issues on which they need guidance in relation to the Foreign Exchange Management regulations. This would enable the personnel attending the helpline to offer timely and effective information.”

 

In his Independence Day speech, Prime Minister Narendra Modi had announced that government would take measures to promote startups in the country. Since then, the government has sought inputs from investors like SoftBank president Nikesh Arora and Snapdeal CEO Kunal Bahl and former Infosys director Mohandas Pai. The department of industrial policy and promotion had drawn up an action plan to address concerns of entrepreneurs. One of the issues raised was the cumbersome process in complying with the Foreign Exchange Management Act (FEMA) documentation.

 

Startups usually undertake a wide range of cross-border transactions including those related to investment. Cross-border transactions of resident Indians are subject to the regulatory regime provided by the Foreign Exchange Management Act, 1999.

 

Source: http://timesofindia.indiatimes.com/business/india-business/RBI-sets-up-helpline-for-startups-on-fund-raising/articleshow/50290682.cms

Global Financial Secrecy Index: Hong Kong, Singapore’s ranks rise

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Hong Kong and Singapore have increased their ranking for financial secrecy, with the Chinese territory rising to number two, behind only Switzerland in a 2015 index of the world’s offshore havens, compiled by the Tax Justice Network (TJN).

Both the Asian financial hubs have made insufficient reforms to their corporate secrecy regimes, according to the London-based TJN, which campaigns for greater transparency in finance. Singapore’s ranking moved to fourth from the fifth place it held in the organisation’s previous index in 2013, when Hong Kong placed third.

“Singapore, in fourth place, poses many of the same threats that Hong Kong does: a lack of serious reforms to its corporate secrecy regime; a lack of interest in creating country-by- country reporting or in creating public registries of beneficial ownership,” the TJN said.

The two cities each account for about 4 per cent of the global market for offshore financial services, the organisation said. The hubs are well exposed to offshore flows because of rising assets under management and their status as regional financial hubs, according to the TJN.

“We do not have laws protecting bank secrecy and so we have never attracted foreign capital by such means,” a spokesman for Hong Kong’s Financial Services and the Treasury Bureau said in an e-mailed response to the TJN survey. “Hong Kong has all along been highly supportive of international efforts to enhance tax transparency and combat tax evasion,” the spokesman added.

The US was ranked third for its refusal to take part in a global system for exchanging bank data created by the Organisation for Economic Cooperation and Development.

Source: http://www.business-standard.com/article/economy-policy/global-financial-secrecy-index-hong-kong-singapore-s-ranks-rise-115110301720_1.html