Canadian fund commits Rs 1012 crore for renewable energy in India

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CDPQ, which deals primarily in public and para-public pension and insurance plans, also announced the establishment of its Indian office in New Delhi.

Canada’s institutional fund manager Caisse de depot et placement du Quebec (CDPQ) on Wednesday said it has committed an investment of $150 million (Rs 1012.05 crore) in the Indian renewable energy sector. CDPQ, which currently manages $248 billion (Rs 16.73 lakh crore) in net assets, invests globally in major financial markets, private equity, infrastructure and real estate.

“CDPQ plans to commit $150 million to renewable energy investments in India,” the company said in a statement.

Over the next 3-4 years, CDPQ will use its commitment to target hydro, solar, wind and geothermal power assets with investments likely to take the form of select partnerships with leading Indian renewable energy companies, it added.

“We believe that India stands out as an exceptional country to invest in, given the scope and quality of investment opportunities, the potential for strategic partnerships with leading Indian entrepreneurs and the current government’s intention to pursue essential economic reforms,” CDPQ President and CEO Michael Sabia said.

CDPQ, which deals primarily in public and para-public pension and insurance plans, also announced the establishment of its Indian office in New Delhi. It appointed Anita Marangoly George managing director of its South Asia operations.

George, who joins the company from the World Bank where she was working on the global practice on energy, had helped finance the first commercial solar project in the country, the statement said. She will be taking up the new assignment from April 1 this year, it added.

 

Source: http://www.dnaindia.com/money/report-canada-s-fund-manager-commits-rs-1012-crore-investment-in-indian-renewable-energy-2187291

Paragon Partners launches $200M India-focused mid-market PE fund

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Indian private equity investor Siddharth Parekh and entrepreneur Sumeet Nindrajog are launching a $200 million India focused fund. The duo announced today that they have raised $50 million in commitments, marking the first close of their $200 million private equity fund, Paragon Partners Growth Fund I (PPGF-I). Established in August 2015, PPGF is an Alternative Investment Fund(AIF)-Category II Private Equity fund looking to invest in high growth mid-market private companies in India.

 

The fund will focus on five core sectors, including consumer discretionary, financial services, infrastructure services (capex light), industrials and healthcare services. The fund claims to have an advanced pipeline of investment opportunities across these sectors and plan to invest in 10-15 mid-market companies in India, with an average deal size of $10-20 million.

 

In line with this, Paragon Partners plans to pursue an active investment approach, contributing to the advancement of its portfolio companies in three core areas: business development, organizational development, and operational efficiency.

 

Paragon Partners’ Advisory Board will also work hand-in-hand with its investment and operations professionals to drive value in its portfolio companies. The board includes Deepak Parekh (Chairman, HDFC Ltd.), Harsh Mariwala (Chairman, Marico Ltd. & Founder Member), Sunil Mehta, (Chairman, SPM Capital Advisors Pvt Ltd) and Jeff Serota (ex Sr. Partner at Ares Private Equity) amongst others. Siddharth, Co-Founder, Paragon Partners, commenting on the first close, said,

 

We believe the next decade in India will see a strong resurgence of growth in key sectors such as manufacturing, financial services and infrastructure.

 

With its first close, PPGF-I has invested $10 million as growth capital in Capacite Infraprojects Limited, a Mumbai based firm which is engaged in the construction of buildings (including super high rise structures) and factories, for large real estate developers, corporates and institutions  across the Mumbai, NCR and Bengaluru regions.

 

Established in August 2012, Capacite is promoted by Rahul Katyal, Rohit Katyal, and Subir Malhotra. It will look to grow and expand to more locations on a selective basis moving forward. Commenting on the investment, Rohit, Director at Capacite said,

 

Within a span of three years, Capacite has achieved significant scale with an expected top line of ~Rs 1,000 cr for the current financial year, backed by a gross order book of  Rs 5,400 cr. We are delighted to partner with Paragon Partners, as Capacite embarks on its next wave of growth.

 

PPGF-I claims to have seen interest from onshore and offshore institutions, family offices and HNI’s. Domestic investors include India Infoline, Edelweiss Group and Infina Finance Private Limited (an associate of Kotak Mahindra Bank Limited).  The fund also claims to have received a significant commitment from the Fairfax group based in Canada. With additional discussions in progress, the fund expects to close on further commitments in coming months.

 

The Indian startup ecosystem has seen an uprising in the past few years and there is now both internal and external interest in investing in early and mid-stage companies. In September 2015, Kalaari Capital had raised a $290 million India focused fund. In December 2015, Blume Ventures had raised $30 million for its Fund II to invest in 35-45 startups. In February 2016, early stage investor, Kae Capital too raised $30 million for its second fund, with an aim to allocate 10% of the fund to cater to non-tech start-ups.

 

Reports also suggest that Sequoia Capital had closed a $920 million India focussed fund in February 2016, though Sequoia is yet to confirm the same. Other marquee investors like SAIF Partners, Accel Partners, and Lightspeed India, have racked up fresh funds in the recent past.

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PE inflows from foreign funds in real estate up 33%

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Total private equity investments from foreign funds in Indian real estate increased 33%, from $1,676 million (around R11,306 crore) in 2014 to $2,220 million (around R14,974 crore) in 2015, according to latest findings of global real estate consultancy Cushman & Wakefield.

 

Owing to high property prices and high investment potential, Mumbai was accounted for about 35% of the total foreign investments in 2015, followed by Delhi NCR accounting for about 25% of the investments.

Sanjay Dutt, managing director, Cushman & Wakefield India said, “The three large cities; Mumbai, Bengaluru and Delhi-NCR continue to attract the highest investments in India and account for about 75% of these investments.

However, with government initiatives to de-stress these cities, relaxed FDI norms and focus to improve infrastructure across the country, other cities in India are likely to witness rise in PE investments going forward.”

The structured debt deals accounted for almost half (49% in value terms) of the total PE investments in 2015.

The structured deals strategy, though moderated due to increased competition, offers returns in the range of 15% – 17% to its investors.

Source: http://www.financialexpress.com/article/industry/companies/pe-inflows-from-foreign-funds-in-real-estate-up-33/221723/

Hong Kong eyes strengthening business ties with India

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Pushing for an investment promotion agreement, Hong Kong today called for strengthening business ties with India and boosting bilateral trade.

“India is Hong Kong’s seventh-largest trading partner globally, with bilateral trade of USD 23.7 billion last year. We are looking at strengthening business ties with India and increase trade manifold,” Hong Kong Trade Development Council (HKTDC) Executive Director Margaret Fong told reporters here.

Hong Kong and India enjoy strong ties formed over more than 150 years of business and cultural links, Fong said.

In 2015, India was Hong Kong’s fourth-largest export market with shipments expanding 8.1 per cent y-o-y to USD 13.1 billion.

On the other hand, India was Hong Kong’s ninth-largest source of imports in 2015, amounting to USD 10.6 billion, said Fong, who is leading a business delegation to India.

HKTDC, the global marketing arm for Hong Kong-based manufacturers, traders and service providers, has a proven track record in helping Indian businesses expand into new markets using the special administrative region’s platform, Fong added.

“With India’s tremendous economic potential, trade and investment between Hong Kong and India are expected to expand continuously in the coming years.

“The Investment Promotion and Protection Agreement (IPPA) will further strengthen the economic and investment ties between the two places, bringing mutual economic benefits,” Hong Kong Special Administration Region Chief Executive C Y Leung said in a statement.

“Hong Kong and India will launch negotiations on an IPPA,” Leung added.

Many Indian companies have established offices in Hong Kong. As of June 2015, there were 12 Indian companies with regional headquarters in Hong Kong, 15 with regional and 37 with local offices. The ranges of businesses include trading, banking, IT and logistics.

Leading Indian companies with operations in Hong Kong include Bank of India, UCO Bank, Jet Airways, Infosys and Tata Group.

Source:http://economictimes.indiatimes.com/articleshow/50856674.cms

Bank of Baroda scam: RBI tells banks to conduct internal audit

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All public sector and private banks have been asked by the Reserve Bank of India to conduct a “thorough internal audit” and put the report before their respective audit committees, as part of the central bank’s efforts to check fraudulent foreign exchange transactions. The move comes in the wake of irregularities that came to light last year in Rs 6,100-crore import remittances effected by Bank of Baroda’s Ashok Vihar branch in New Delhi.

A circular has been issued to all scheduled commercial banks, advising them to conduct a thorough internal audit and place the report before audit committee of the board of the respective banks and to forward the summary of findings to RBI, the central bank said in reply to an RTI query filed by PTI. The RBI was asked to provide details of action being taken by it to check fraudulent forex transactions by banks. “We are in the process of receiving the internal audit report from various banks,”it said.

The RBI has asked Bank of Baroda to conduct a bank-wide review of the outward remittances to rule out similar wrong doings at other domestic branches and submit a report thereof to it. The bank has since completed the internal audit and placed the report before its audit committee for directions. The Bank of Baroda has also selected a consultant to review its Know Your Customer (KYC), Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) policy and practices, to set up robust systems, the central bank said.

“They have also framed a policy for advance import remittance which covers system check points like cooling period of six months in respect of newly opened account, multiple transactions in a day for $100,000 and below, etc,” the RBI said.

Both the Central Bureau of Investigation and Enforcement Directorate (ED) are probing remittances of Rs 6,100 crore to Hong Kong from the Bank of Baroda’s Ashok Vihar branch.

The huge transaction is believed to be trade-based money laundering as the amount was transferred in the garb of payments for imports that never took place, investigators say.

Source: http://www.business-standard.com/article/pti-stories/bob-forex-scam-rbi-tells-all-banks-to-conduct-internal-audit-116013100149_1.html

Foreign firms rush to India’s online marketplace

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India’s booming online marketplace business has attracted a new wave of merchants and sellers from countries such as China, South Korea, Japan, Singapore and the US. In fact, thousands of sellers are getting into tie-ups with Indian e-commerce players to kick-start operations in the country.

 

According to industry insiders, around 50,000 sellers from China, South Korea and Singapore are planning to enter India through online marketplace players.

 

“In business-to-business (B2B) segment, there is no online organised player in the country right now. The market is being created for the online businesses,” said Sanjay Sethi, co-founder and CEO of Shopclues. The company has brought in DHgate, the second largest player in China after Alibaba, on to its platform. It’s also getting 25,000 South Korean merchants on board. Tie-ups are also in process with Singapore Traders Association to enable them to sell on Shopclues.

 

American retail major Walmart is also exploring ways to tie up with leading e-commerce companies in India, including Flipkart, Snapdeal, ShopClues, Grofers and Bigbasket. It is learnt that German wholesale giant Metro Cash and Carry is also in talks with e-commerce marketplace players to sell its products online.

 

Meanwhile, e-commerce giant Alibaba is looking to make a big bang entry into India’s marketplace via One97 Communications-owned Paytm.

 

Alibaba is expected to be the support behind Paytm’s China product portfolio. With that in place, Paytm will aim to become the biggest Indian player insofar as the number of sellers on the platform is concerned. With eight million sellers, Alibaba has the widest seller range as well as product portfolio.

 

This is not for the first time that Paytm is planning to sell Alibaba’s product range. During Diwali last year, Paytm had the whole product catalogue sourced from Alibaba and merchants from China were directly shipping products to customers in India, saving Paytm the hassle of finding warehouses.

 

As for the second top player in China, DHgate, online B2B would be a gateway into India and an opportunity to get connected to 350,000 sellers through the Shopclues portal.

 

DHgate plans to list its products across categories, including electronics, accessories, beauty products and sports. “From China we are getting around 10,000 SKUs (stock keeping units) listed. It is not a retail business and the target audience for this business are other businesses in India,” said Sethi.

 

The foreign investment rules vary across retail platforms and companies often resort to complex structuring to bypass policy. While foreign direct investment (FDI) is capped at 51 per cent in multi-brand retail with states having the last say on whether international players would be permitted to operate or not, there’s no limit of foreign investment in single-brand and business-to-business or cash and carry.

 

In e-commerce, however, FDI is not permitted. But, e-commerce players are mostly run with foreign money by operating marketplace platforms, where rules have not been framed yet.

Source: http://www.business-standard.com/article/companies/foreign-firms-rush-to-india-s-online-marketplace-116020100015_1.html

India less vulnerable to external shocks: S&P

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Indian economy is less vulnerable to external shocks as it is mainly driven by household consumption and government spending, and not dependent on hot money which can move out quickly, Standard & Poor’s Rating Services said today.

The US-based rating agency expects the current account deficit (CAD), which is the difference between inflow and outflow of foreign exchange, to remain at a modest level of 1.4 per cent at the end of current fiscal and would continue at similar level till 2018.

“We see India as having limited vulnerability to external economic or financial shocks. This is because growth in the economy is mainly driven by domestic factors, such as household consumption and government spending.

“At the same time this is a country that has low reliance on external savings to fund its growth. In other words, the banks are mainly deposit funded and don’t rely on wholesale funding to grow their loan books,” S&P Rating Services India Sovereign Analyst Kyran Curry told PTI.

He said India’s capital markets are diversified and deep enough for companies to raise funding.

“Another favourable aspect of India external settings is that it is generally not subject to hot money inflows that can turn into outflows with shifts in investor sentiment. As such we see the external risks for India to be relatively contained,” Curry said.

He said while export growth may be disappointing, the current account deficit likely to be a modest 1.4 per cent in 2015, with similar levels through 2018.

“Our forecasts are partly informed by our view of increased monetary credibility, which dampens the demand for monetary gold imports. In addition, we expect India to fund this deficit mostly with non-debt, creating inflows,” Curry added.

The CAD in the first half of current fiscal stood at 1.4 per cent of GDP, lower than 1.8 per cent in the same period last fiscal. For full 2014-15 fiscal, the CAD stood at 1.3 per cent of GDP.

Source: http://economictimes.indiatimes.com/articleshow/50727133.cms