Post on 06-Apr-2018
8/3/2019 IBEF Presentation on Indian Economy Opportunities
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Indian Economy
Opportunities Unlimited
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India: Fastest Growing Free Market Democracy
GDP Growth Forex FII Flow 93 FDI Per Capita Inflation
1990 4.9 percent < USD 1 billion USD 1 million USD 97 million USD 390 9 percent
2007 9.4 percent USD 246 billion USD 15 billion USD 16 Billion USD 720 3.4 percent
Source: Times of India
http://epaper.timesofindia.com/Daily/skins/TOI/navigator.asp?Daily=CAP&login=defaulthttp://epaper.timesofindia.com/Daily/skins/TOI/navigator.asp?Daily=CAP&login=default8/3/2019 IBEF Presentation on Indian Economy Opportunities
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105 105 135 145
103 125204 231
191237
398453
0
100
200
300
400
500
600700
800
900
1999-00 2002-03 2005-06 2006-07
U S D B i l l i o n
Agriculture Industry Services
India: Among the Top-15 Countries in terms of GDP at constant prices
The Indian economy has witnessed unprecedented growth. Booming services and industry sectorsare providing the required impetus to economic growth
The soundperformance of eachindustry segment isleading to theoverall robustperformance of theIndian economy
Indian economy isexpected to be 3 rd largest in terms ofPPP USD 4.5trillion by the end of2007
Indias GDP haswitnessed high
growth, and was thesecond fastestgrowing GDP afterChina in 2006-07
Fastest GDP growth of 9.4percent in 2006-07, since last 18years (at constant prices)
Contribution ofServices -
increased from48 percent to
55 percent
India's GDP at Current Prices: 2002-07
469556 638
737 830
237
0100200300400500600700800900
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08(Q1)
U S D B i l l i o n
Growth in sectors at CurrentPrices (2006-07):Industry: 16.2%Services: 16.3%Agriculture: 10.2%
Source: MOSPI Statistics
Estimated growth rate in various GDPsectors for Q1 (2007-08) is: Industry 15.9percent, Agriculture 11.4 percent andServices 15.7 percent
http://mospi.nic.in/t1_31august07.htmhttp://mospi.nic.in/t1_31august07.htm8/3/2019 IBEF Presentation on Indian Economy Opportunities
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India: Robust Economic Platform
India's Forex Reserves: 2001-07 (Till 28 September 2007)
5475
112141 152
199
248
0
50
100
150
200
250
300
2 0 0 1 - 0
2
2 0 0 2 - 0
3
2 0 0 3 - 0
4
2 0 0 4 - 0
5
2 0 0 5 - 0
6
2 0 0 6 - 0
7
2 0 0 7 - 0
8
( T i l l 2 8
S e p
t e m
b e r )
U S D B i l l i o n
External Debt-to-GDP Ratio
21.120.4
17.817.3
15.816.4
10
13
16
19
22
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
R a t i o
Indias strongeconomicperformance hasbeen the majorcontributor towardsincreased Forexreserves
Steadily increasingForex reserves offeradequate securityagainst any possible
currency crisis ormonetary instability
Falling Dollar inflatesthe Indias external debt
Increasedconfidence ofinvestors in Indiancompanies has ledto a surge in crossborder borrowing bycorporate houses
Forex reserveswitnessed anincrease of 200percent for theperiod 1990-2007
at present level of Forexreserves, the country hasadequate cover for 12 months ofimports
Indias Forexreserves are in
excess ofexternal debt
t he decreasing external debt toGDP ratio indicates that India hasa sound economic platform
Source: RBI Statistics
http://www.rbi.org.in/scripts/Statistics.aspxhttp://www.rbi.org.in/scripts/Statistics.aspxhttp://www.rbi.org.in/scripts/Statistics.aspxhttp://www.rbi.org.in/scripts/Statistics.aspx8/3/2019 IBEF Presentation on Indian Economy Opportunities
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India: Surging Exports
India's Imports: 2002-08
61.5278.28
111.89
149.65
190.50
72.40
0
50
100
150
200
250
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08(April-July)*
U
S D B i l l i o n
India's Exports: 2002-0 8
52.8163.95
83.81103.42
126.33
46.80
020406080
100120140
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08(April-July)*
U S D B i l l i o n
Petroleum products are the majorcontributors towards Indias growingimports
Quality and cost advantage are the twoimportant parameters leveraged by theIndian producers to increasinglymarket products and services
Services sector hasbeen a major
contributor toincreased exportsfrom India
Product imports byIndia mainly includepetroleum productsand minerals
Indian companieshave chalked outextensive plans toincrease theirpresence abroad
Acceptance ofIndian productsalong with the costadvantage hasprovided an edge to
Indian companies * - 2007-08 provisional data for period of April to July only
* - 2007-08 provisional data for period of April to July only
Source: Ministry of Finance (August Report)
http://finmin.nic.in/stats_data/monthly_economic_report/index.htmlhttp://finmin.nic.in/stats_data/monthly_economic_report/index.htmlhttp://finmin.nic.in/stats_data/monthly_economic_report/index.htmlhttp://finmin.nic.in/stats_data/monthly_economic_report/index.html8/3/2019 IBEF Presentation on Indian Economy Opportunities
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India: Attractive Investment Destination
India is ranked
second in AT
Kearneys FDI
confidence index
FDI inflow for the
period 2006-07
witnessed a growth
of 180 percent over
the same period last
year
With improved performance on PE ratio and ROE, Indian markets have attractedlarge investments
FDI Inflow - India: 2001-07
4,2223,134 2,634
3,7555,546
15,730
4,909
02,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08(till June)
U S D M i l l i o n 180 percent
Increase
Net FII into India: 2001-07
1.800.60
10.00 10.20 9.40
6.71
16.60
02468
1012141618
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08(till 12
October)
U S D B i l l i o n
Source: DIPP (June Report) , SEBI
Electronic equipment,manufacturing and telecomhave witnessed significant
FDI inflow
Large FII activity in India hasled to an upsurge in theSensex
http://dipp.nic.in/fdi_statistics/india_fdi_index.htmhttp://www.sebi.gov.in/Index.jsp?contentDisp=FIITrendshttp://www.sebi.gov.in/Index.jsp?contentDisp=FIITrendshttp://dipp.nic.in/fdi_statistics/india_fdi_index.htm8/3/2019 IBEF Presentation on Indian Economy Opportunities
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7India: Vibrant Capital Market
India is among themajor destinationsacross the globe forinflow of US Dollari.e. FIIs
Sensex has risen18 times in theperiod 1990-2007
Sensex The Bombay Stock Exchange index has risen 18 times from 1990s toreach 18,000 mark in October 2007.
FIIs have infusedlarge investmentsinto the Indianstock market
Encouragingindustry
performance
Increased localinvestorsconfidence
Emergence ofindustry andconfidence of localinvestors along with
the FIIs has led toincreased movementof the Sensex
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
12-Oct-97 12-Oct-98 12-Oct-99 12-Oct-00 12-Oct-01 12-Oct-02 12-Oct-03 12-Oct-04 12-Oct-05 12-Oct-06 12-Oct-07
10/9/2007Crossed18,000mark
30 December 1999Crossed 5,000 mark
07 February 2006
Crossed 10,000 mark
09 July 2007Crossed 15,000 mark
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8India: Vibrant Economy Driving M&A Activities
SECTOR USD(Mn) SECTORUSD(Mn)
Automotive 518 Manufacturing 933
Banking and Financial 1,375 Media 630
Chemicals andPlastics
1,133 Oil & Gas 384
Electrical andElectronics
896 Pharma &Biotech
2,520
Energy 1,484 Telecom 2,198
FMCG, Food andBeverages
1,327 Others 4,006
IT and ITES 2,903 Total 20,305
Growth Drivers:Globalisation and
increasedcompetitionConcentration ofcompanies toachieveeconomies ofscaleLower interestrates and vibrantglobal markets
Cash Reserveswith corporates
Number of Deals and Value
12.3
18.3
28.2
306
467
782
0
5
10
15
20
25
30
2004 2005 2006
U S D B i l l i o n
0100200300400500600700800900
N u m
b e r o
f d e a
l s
Deal Value No. of Dea ls
Average private equityinvestment deal sizeincreased to USD 26.02million in 2006 from USD16.4 million in 2005
In 2006, there were atotal of 480 M&A dealsand 302 private equitydeals
Average deal size close to
USD 36 million
Trends:Ratio of the Size ofacquisition to thesize of acquirerhas grown from 10percent in 2004 to25 percent in 2006.Cross-borderdeals are growingfaster thandomestic dealsPrivate Equity (PE)houses havefunded projects aswell as made a fewacquisitions inIndia
Source: Dealtracker Grant Thornton , Economic Times
Indian companies have clocked M&Adeals approximately worth USD 31billion during the first eight months in2007
http://www.gt-india.com/html/http://www.gt-india.com/html/http://economictimes.indiatimes.com/News/Economy/Finance/Corporate_India_logs_over_48_bn_MA_deals_in_07/rssarticleshow/2406124.cmshttp://economictimes.indiatimes.com/News/Economy/Finance/Corporate_India_logs_over_48_bn_MA_deals_in_07/rssarticleshow/2406124.cmshttp://www.gt-india.com/html/8/3/2019 IBEF Presentation on Indian Economy Opportunities
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9Major M&A Deals Undertaken Abroad by India Inc.
USD 12.1 billionTata Steel buys Corus Plc
USD 6 billionHindalco acquired Novelis Inc.
USD 1.58 billionEssar Steel acquired Algoma Steel
USD 1.6 billionSuzlon Energy Ltd. acquires REpower
USD 1.1 billionUnited Spirits Ltd. acquired Whyte &Mackay
http://images.google.com/imgres?imgurl=http://www.avenuevine.com/movabletype/archives/UBGroupLOGO-w.jpg&imgrefurl=http://www.avenuevine.com/archives/001747.html&h=227&w=225&sz=10&hl=en&start=1&um=1&tbnid=ZdZLuVxxM79CoM:&tbnh=108&tbnw=107&prev=/images%3Fq%3Dunited%2Bspirits%2B%26svnum%3D10%26um%3D1%26hl%3Den%26rls%3DGGLJ,GGLJ:2006-34,GGLJ:en8/3/2019 IBEF Presentation on Indian Economy Opportunities
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10Major M&A and Investments Announcements in India
USD 11 billionVodafone buys Hutch
USD 0.98 billionAditya Birla Group increased its stake in IdeaCellular by acquiring 48.14-percent stake
USD 1 billionPlans investment in private equity, real estate,
and private wealth management
USD 1.7 billionPlans to spend on its development operationsin India over the next four years
USD 0.905 billionRenault, Nissan and Mahindra & Mahindrahave initiated a Greenfield automobile plantproject in Chennai.
Mylan Laboratories acquired a majority stakein Matrix Laboratories
USD 0.74 billion
http://www.mylan.com/http://en.wikipedia.org/wiki/Image:Nissan_logo.pnghttp://en.wikipedia.org/wiki/Image:Microsoft_logo.pnghttp://en.wikipedia.org/wiki/Image:VodafoneNewLogo.jpg8/3/2019 IBEF Presentation on Indian Economy Opportunities
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11India: Pacing Ahead to Emerge as a Major Economy in the World
Projected GDP Growth Rates for Select Upcoming Economies
0
2
4
6
8
2005-10 2010-15 2015-20 2020-25 2025 -30 2030-35 2035-40 2040-45 2045-50
G D P G r o w
t h R a
t e ( % )
Brazil China India Russia
0
20
40
60
80
100
India Russia VietnamUkraine China Chile Latvia
G R D I S c o r e
2007 Global Retail Development Index (GRDI) 2007 Global Services Location Index
3.3
2.6
3.2
2.8
2.9
3.2
1.5
1.8
1.2
1.3
2.3
2.3
1.1
1.5
1.6
2
1.4
1.4
Indonesia
Brazil
Thailand
Malaysia
China
India
Financial structure People and skill availabli tyBusiness environment
AT Kearney hasplaced India as themost preferabledestination forServices sector
the retail marketalong with the
services sector hasbeen attractinginterest of majorglobal players
India is expected tooutperform its rivalsin the BRIC, in termsof GDP growth rate,from 2015onwards
Source: AT Kearney , BRIC Report
India is the topdestination in the ATKearney GlobalRetail DevelopmentIndex (2007)
http://www.atkearney.com/main.taf?p=5,3http://www2.goldmansachs.com/insight/research/reports/report6.htmlhttp://www.atkearney.com/main.taf?p=5,3http://www2.goldmansachs.com/insight/research/reports/report6.htmlhttp://www2.goldmansachs.com/insight/research/reports/report6.htmlhttp://www.atkearney.com/main.taf?p=5,38/3/2019 IBEF Presentation on Indian Economy Opportunities
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12India: Astounding Demographics
Per Capita Income
393461
519583
651
0
100
200
300
400
500
600
700
2002-03 2003-04 2004-05 2005-06 2006-07
U S D
2
9
48
221
726
9
17
74
285
710
20
33
120
404
613
2001-02 2005-06 2009-10(E)
Rich (Above 115,000)
High Income (57,000 115,000)
Consuming class (23,000 57,000)
Working class (10,200 23,000)
Needy (Below 10,200)
Annual Household Income
(in USD)
* In PPP terms
P o p u
l a t i o n
( m i l l i o n
)
Increasing per capita incomecoupled with an emerging middle
class has provided the necessaryimpetus to consumerism in India
Growth in the higher
income categoriesof Indias populationis creating anaffluent section withhigh purchasingpower
Increasing per capitaincome and agrowing middleclass is driving ahigh level ofconsumerism inIndia
DEMOGRAPHIC TRANSFORMATION OF INDIA
Source: RBI Statistics
http://www.rbi.org.in/scripts/Statistics.aspxhttp://www.rbi.org.in/scripts/Statistics.aspx8/3/2019 IBEF Presentation on Indian Economy Opportunities
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Countries worldwide are anticipating a shortage of working population in the future. India is expected to emerge as aclear winner, and by 2050, it will have the largest working age population.
India: Increasing Working Population
-3
0
10
17
31
33
44
64
71
314
-5 45 95 145 195 245 295 345
Stock Position 2005
South East Asia 362
Southern Asia 132
India 691
Africa 500
China 934
Latin America 359
USA 200
Europe 497
Japan 85
World 4,168
In Million
Addition to Working Age Population by 2010
Growth in Global Working Age Population (15-64)
Source: Its Hendersons
http://www.itshenderson.com/content/itshenderson/restricted/documents/research/2007-05-02_newsletter.pdfhttp://www.itshenderson.com/content/itshenderson/restricted/documents/research/2007-05-02_newsletter.pdf8/3/2019 IBEF Presentation on Indian Economy Opportunities
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BRIC Report,Goldman Sachs
I have never seenIndia so dynamic,vibrant and full of
businessopportunities.
- Dan Scheinman, Cisco System Inc. as told to Business Week,August 2005
We came to India for thecosts, stayed for thequality and are now
investing for innovation.
John Redwood Economic Competitiveness Policy Group, UK
India is now truly aland of opportunity.
Jack Welch General Electric
India is adeveloped country
as far as intellectualcapital is
concerned.
Peter Loescher President and Chief Executive Siemens
By 2032, India will beamong the three
largest economies inthe world.
Why India? Quote Unquote
Travyn Rhall,ACNielsen
The Indian market has twocore advantages - an
increasing presence ofmultinationals and an upswing
in the IT exports.
Craig Barrett Intel Corporation
India has evolved intoone of the world's
leading technologycenters.
Mr Paul de Voijs
Managing Director Volvo Car India
India is a very excitingmarket and the luxury
car segment is growingexponentially here.
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