Investment in Indian Infrastructure Sector

8/13/2019 Investment in Indian Infrastructure Sector

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INVESTMENT IN INDIANINFRASTRUCTURE SECTOR


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AGENDA

Introduction

Major Issues and Implications

PEST Analysis

Competitor Analysis

Investment Opportunities FDI and Regulatory Environment

Government Policies and Initiatives

Tax Environment

Challenges for Foreign Player

Business Strategy

Financial Strategy

Human Resource Strategy

Building long term in India

Conclusion


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INTRODUCTION

MMS Consulting Firm consults in environment scanning, analysis and

strategic guideline to invest in India

A Singapore Firm wants to invest in Indian Infrastructure market

Infrastructure Industry consist of Roadways and Highways

Power

Ports and Airports

Rail Electricity

Indian Economy is booming

Growing housing and commercial space requirement


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INTRODUCTION

Rising household income

Booming It and ITES sector

100% FDI in construction industry through automatic route

Retail sector facilitating real estate growth

Lucrative investment alternative


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MAJOR ISSUES AND IMPLICATIONS

Contract Procedures

Skilled Manpower Shortage

Title clearance

Procedural and legal vulnerability

Urban Land monopoly

Debatable Tax status under section 801 (A)

Infrastructure bottlenecks


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PEST ANALYSIS

POLITICAL FACTOR

SEZ Act to boost infrastructural development

Cement prices reduced for state infrastructure projects

FDI Liberalization to Augment Industry growth

Introduction of REITS

Legal Framework to be followed

Building Commencement Certificate:

Occupation Certificate: Brihan Mumbai Corporation [BMC] Developing Plans

CRZ(Coastal Recovery Zone Rule):

TDR (Transfer of Development Right):

National Building code


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PEST ANALYSIS

ECONOMICAL FACTORS

Growth in construction activity stimulating GDP growth

Rate Hikes Unlikely to slow down growth

SOCIAL FACTORS

Rising Urbanization to boost Industrial growth

Green buildings in India

TECHNOLOGICAL FACTORS

Low technology to Hinder growth Construction as per Indian Requirements

Ready Mix concrete Being Experimented with

Pre-Structured Concrete Blocks

Mixture of Cement and Sand


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COMPETITOR ANALYSIS

Larsen & Toubro

Jaiprakash Associates

Lanco Infratech

Reliance Infrastruture

GMR Group

Punj Lloyd

Hindustan Construction Company

Gammon India Simplex Infrastructure

GVK Power and Infrastructure

IRB Infrastrucutre

Shriram EPC


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INVESTMENT OPPORTUNITIES

Projected spending from FY07-FY12 in selected infrastructure segments:

Electricity: US$167 billion

Railways: US$65 billion

Road and highways: US$92 billion Ports: US$22 billion

Airports: US$8 billion

One of the worlds fastest growing economies and growth expected to

continue at 6-7% despite the global downturn

Few restrictions on foreign direct investment (FDI) for infrastructureprojects

Tax holidays for developers of most types of infrastructure projects, some

of which are of limited duration

Opening up of the infrastructure sector through PPPs


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FDI AND REGULATORY ENVIRONMENT

APPROVAL ROUTE Permission Required

Existing Airports beyond 74%

Atomic Minerals

In case of joint venture or technology collaboration agreement in thesame field


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FDI AND REGULATORY ENVIRONMENT

AUTOMATIC ROUTE Freely Permissible (100%)

Greenfield airports

Construction & maintenance of infrastructure like ports, harbors, roads

and highways Power generation, transmission and distribution and power trading

(atomic energy not permitted)

Mass rapid transport systems

Townships, housing, built-up infrastructure and construction-development

projects


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GOVERNMENT POLICIES AND INITIATIVES

New Tenders to attract project implementators

Many projects started in various infrastrucure sections

Constantly simplifying the approval route process by setting several

agencies to expedite FDI approval Liberalisation

Improvising Legal system

Standardisation for all infrastructure projects


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TAX ENVIRONMENT

Tax Holidays Exemptions

International Tax Considerations like

Entry and exit strategy

Cash and Profits repatriation

Holding the investmentss


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CHALLENGES FOR FOREIGN PLAYER

Non-availbility of own infrastructure to execute projects

Skilled Manpower

Plant and Equipments

Construction Material

Risk Sharing with Indian partner

Cost Cutting and Competitiveness

Government guidelines for PP developers

Concerns of Indian Company will tie-ups


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BUSINESS STRATEGY

Concentrate of Core competency

Mergers and Aquisition

Tie-up with various Indian Company in all Infrastructure Projects

Joint Venture with potential partner (like Reliance Infra, etc)

Competitive cost and cost cutting

Efficient Utilisation of Indian Resource and Indian Partner

Target major project in all part of the country

Implement new technology from Singapore Setup manufacturing units and research labs

Plan Organization Life Cycle

Good Organization Structure (mix of Indian and Singapore Workforce)


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FINANCIAL STRATEGY

Budget Forecasting

ROI

Invest in Top Indian Infrastructure Companies

Invest in manufacturing companies to reduce the cost and increase thequality

Setup manufacturing and research units

Influence other investor in Singapore to invest in your company

Invest in stable of years

Invest through FDI (No approval required)

Invest in all infrastructure sections

Follow rules and regulation


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HUMAN RESOURCE STRATEGY

Good Organization Structure (mix of Indian and Singapore Workforce)

Hiring , Training and Development

Depot Human Resource from Singapore in each firms

Depot Indian Human Resource to understand the working

Implement mixture of Indian-Singapore Culture

Good Compensation

Transparency in workflow


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BUILDING LONG TERM IN INDIA

Manage Uncertainty and challenges

Planned investment of funds

Sustain competition by

Appropriate pricing

Funding

Prioritisation frameworks

Have holistic approach

New infrastructure should support social and economic goals Invest in fast moving and growing sections


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CONCLUSION

Navigate through views and opinions expressed by various local stake

holders

No.of contractors from Europe, Australia, China, Malaysia etc have already

made their presence felt Good Opportunities to develop significant business

Carefullly slect local business partner

Long-term and sustainable perspective planning

Maximize from FDI and Tax benfits


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REFERENCE

http://www.indiacompanysetup.com

http://www.oifc.in/sectors/infrastructure

http://business.mapsofindia.com/finance/mergers-acquisitions/strategies.html

http://business.mapsofindia.com/india-budget/infrastructure/companies-in-

india.html

http://www.constructionweekonline.in/article-7581-

top_30_infrastructure_companies/

http://www.pwc.com

http://www.idfc.com

http://www.india-briefing.com/news/fdi-opportunities-indias-infrastructure-development-5508.html/

http://www.globaljurix.com/foreign-direct-investment-india-fdi.php

http://www.oifc.in/sectors/infrastructure

http://www.managementstudyguide.com/strategic-management.htm


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TH NKYOU

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Investment in Indian Infrastructure Sector