Indian Property News on 'August, 2008'

SEZs ready to take off

Special Economic Zones (SEZs) are ready to take off in a big way, despite the initial obstacles. India has so far approved 513 SEZs, of which 250 have been notified. Investments are expected to cross Rs 2 lakh crore by December 2009 and bring incremental employment to eight lakh people, said the commerce secretary, Mr G.K. Pillai. So far about Rs 81,000 crore have been invested in SEZs, generating employment for close to 3, 50,000 people, according to statistics from the government’s SEZ site. Last year SEZs generated about Rs 66, 600 crore in exports, a 92 per cent jump from the previous year. India’s total exports during the period rose 23 per cent to $155.5 billion.

In the last three months more than Rs 16,000 crore of investments in SEZs has been announced by various firms. Ansal Properties & Infrastructure Ltd is investing about Rs 3,600 crore for IT SEZs across three states. Infrastructure Leasing & Financial Services has tied up with Maharashtra Industrial Development Corp (MIDC), to invest up to Rs 8,000 crore in SEZs in the state. The state-run trading firm, MMTC Ltd, has invited bids to set up SEZs in various sectors. Tata Realty & Infrastructure, in a joint venture with the Tamil Nadu government, has committed to investing more than Rs 3,000 crore to build an IT SEZ. “The benefits and revenues far outweigh the issues involved,” said Mr Rajiv Jalota, chief executive officer, MIDC, which is developing 22 SEZs in Maharashtra. The body has faced opposition to land acquisition in the state and has now set up a dedicated cell to compensate and rehabilitate displaced landowners. Read More »

Robust growth in bank loans

Indian banks are witnessing a robust growth in loans According to the latest data released by RBI; bank loans touched Rs 24, 40,078 crore as on August 15. This means that loans disbursed by banks have vaulted Rs 78,214 crore since end March 2008 compared with a growth of only Rs 9,132 crore in the same period a year ago. The annual loan growth at the current levels work out to 26% compared with close to 23% a year ago.

The Banking sector attributes the loan demand to a combination of factors. With the slide in the stock markets, companies are now approaching banks again to fund projects. Besides, state-owned firms are trying to meet their working capital costs on account of high input costs, which is also fuelling the demand to an extent. According to Punjab National Bank chairman and managing director KC Chakravarty, not only is the demand being largely fuelled by state-owned companies, but there is good demand from the infrastructure sector as well. Banks, which have surplus bonds may even offload a portion of their stocks to fund loans, he said. Read More »

Microchip Technology to invest $ 65 million in India

Microchip Technology Inc. will invest heavily in India and it stated that it hopes to create 300 new jobs at its new India Development Centre in Bangalore. The Foreign Direct Investment is worth $65 million. The development centre, inaugurated today, works on integrated-circuit development and marketing, microcontroller development tools and corporate information systems.

“Today’s investment demonstrates Microchip’s long-term commitment to India, and builds on the foundation we have created over the last 12 years. Not only are we impressed by the quality of the workforce available in India, we also see opportunity in the emergence of many Indian companies as global powerhouses in the development of embedded systems,” Ganesh Moorthy, executive vice president of Microchip.

Singapore based firm to invest $200 mn in Indian real estate

Singapore-based private equity firm Millennium Spire Ltd on Thursday announced that it would be investing $200 mn in real estate projects in India next one year. “MSL envisages investing 200 million dollars in real estate projects in the national capital region and Coimbatore in mix use complexes, IT parks, residential and commercial areas in the next 12 months,” MSL Managing Director Ashish Bhalla said. The company also announced the launch of Spire Edge, an IT Park in Manesar near the national capital. The IT Park will be spread over 1.6 mn square feet of scalable eco-office complex with an energy saving capacity up to 30 per cent.

The company envisages investing up to one billion dollars in the next four years in the realty sector and would build university-based townships. “We have much larger plans. We are in talks with various state governments as we want to set up projects in public-private-partnership mode including setting up university based townships,” he said. The company also unveiled ‘Spire World’, its maiden platform to ‘drive development of mainstream green projects.

Peninsula Land to build projects outside Mumbai

City-based real estate developer Peninsula Land today said that it would develop projects in Pune, Nagpur, Nashik, Goa and Hyderabad. “We now have land in the cities of Pune, Goa, Nashik, Nagpur and Hyderabad wherein development work is expected to commence shortly and the projects will be completed over a span of 3 to 5 years,” Peninsula Land Group Managing Director Mahesh Gupta said at the company’s Annual General Meeting.

Kerala Govt. to retrieve public land

Proving that the LDF government in Kerala is committed to retrieving public land from encroachers and assigning them to landless people, Chief Minister V S Achutanandan on Wednesday said, “The LDF government will continue its initiative to retrieve land illegally occupied by plantation groups in the state.” He alleged that real estate businessmen were buying prime land all over Kerala using ‘hawala and unaccounted money’. The situation was such that an ordinary person could not buy a single cent of land at current prices, he said.

The government had so far succeeded in recovering 1200 acres in Munnar during its first phase of ‘Munnar eviction drive’ and 13,000 acres in different parts of the State. The government’s new legislation to protect paddy fields and water resources has received the nod from the President, he said, adding that this would give an impetus to the government resolution. He said the LDF government was only following the policies formulated by the late E M S Namboodiripad, A K Gopalan and other CPI-M leaders through the land-rights struggle in 1970.

Nature’s Essence forays into retail

Beauty and healthcare products maker Nature’s Essence is planning to foray into the organised retail business .It plans to open 100 stores, including 25 company owned and 75 franchisee outlets by middle of 2009. The first three stores would come up in Delhi by September and the rest would follow across the country,” Nature’s Essence Executive Director Saurabh Nanda said. He said the company would set up 6-7 stores each in the four metros, while the other stores would come up in various Tier I and II cities. The company would be investing Rs 10 crore in setting up the stores, while it is looking for another Rs 20 crore as franchisee investment.

The company is aiming to increase its sales by three times this year to Rs 100 crore, up from last fiscal’s Rs 35 crore, on the back of the retail foray and expansion into new export markets, besides doubling its distribution network within the country. It is also investing Rs 12 crore for setting up two new production facilities in Uttarakhand. The new plants, with a combined area of 70,000 square feet, would become operational by end of 2009.

Reliance capital to spin off home loan business

Reliance Capital Ltd recently announced the decision to spin off its home loans business into a new company. It has sought the mortgage market regulator’s approval, the Mint newspaper said on Wednesday. “We have decided to float a separate company for home finance,” the paper quoted the firm’s chief executive Sam Ghosh as saying.

Reliance Capital also runs India’s largest asset management firm, a stock brokerage and insurance businesses.

DLF plans to raise 100000 cr by next year

DLF Ltd is planning to raise Rs 10,000 crore over the next one year. The shareholders will pass an enabling resolution to this effect in the next annual general meeting which will be held on September 30. According to a DLF spokesperson, “This is a normal procedure to raise money. We need the shareholders approval to raise money. This process authorizes us to raise money upto Rs 10,000 crore.” The real estate company may not raise the absolute amount. It may raise funds for a smaller amount. The resolution is valid for one year, until the next AGM takes place.

With a size of Rs 84,909 crore DLF is the largest real estate company in India. In July this year DLF said it would buy back up to 2.2 crore shares at a maximum price of six hundred rupees per equity share. It has allocated one thousand one hundred crore rupees for the purpose, and would be financing the same through internal resources. The company is planning to buy the shares through open market purchases through the stock exchange route. Read More »

PBEL India to build 1200 cr township project in Hyderabad

Hyderabad-based real estate developer PBEL India plans to build a township in the city at a cost of Rs 1,200 crore. Christened PBEL City, the township will comprise of 13 residential and two commercial towers. PBEL City, a joint venture between PBC and Electra Real Estate, both from Israel, and Incor from India, will come up in Rajendranagar on the outskirts of Hyderabad. Addressing the media, project executive director Anand Reddy said that PBEL City was the company’s first offering in Hyderabad. It has spent about Rs 200 crore on the project for purchasing the land and creating infrastructure.

The company will raise the funds from internal sources and through banks. In the first phase, to be completed in 18 months, the project will have 500 units with a built-up area of 1,050-1,600 sft. While the second phase will be ready in 24 months, the third phase will be completed in 36 months. The units will be priced between Rs 40 lakh and Rs 55 lakh each, Reddy said. The company is planning mega projects across the city and in other parts of the country. Over the last couple of months, PBEL had bought about 110 acre worth Rs 500 crore across various cities. Currently, it is focusing on Hyderabad, Chennai and Mysore, and plans to spend about Rs 4,700 crore over the next three years.