India received $20 billion in FDI during COVID-19 pandemic: Harsh Shringla

Source: The Economic Times, Sept 15, 2020

India has received over USD 20 billion in FDI amid the coronavirus pandemicForeign Secretary Harsh Vardhan Shringla said on Tuesday, showcasing the country as one of the most attractive destinations for investment globally. In a virtual address at a CII event in the UK, the foreign secretary highlighted various structural reforms undertaken by India in even previously restricted sectors such as space, defence and atomic energy for greater private participation.

“The government of Prime Minister Narendra Modi has launched several historic reforms to improve the ease of doing business in India in the last six years. Today, India is one of the most open economies in the world. We have put in place a transparent and predictable tax regime,” he said.

Shringla talked extensively about implementation of various ambitious initiatives like, rolling out of Goods and Services Tax, the Aadhaar biometric project, “groundbreaking reforms” in the agriculture sector and creation of infrastructure for railways, ports and airports.

“The success of the reforms launched by the Government is evident in the numbers. Even during the pandemic, we have received over USD 20 billion of FDI this year. While the global FDI declined by one per cent in 2019, FDI into India rose by 20 per cent in the same period,” he said.

The foreign secretary said several global technology majors have announced significant investments in India including USD 10 billion by Google, USD 5 billion by Facebook and USD 1.2 billion by Mubadala – the UAE Sovereign Wealth Fund. Talking about India-UK economic partnership, he said the bilateral trade has been on an upward trajectory and touched 24 billion pounds in 2019 and that the country is the sixth largest investor in India with investments totalling USD 28.21 billion.

“The COVID-19 pandemic has created severe economic challenges for both our countries. We can overcome these challenges by working together to create new opportunities for our business and industry,” said Shringla. He said under the ‘Aatmanirbhar Bharat Abhiyaan’ or self reliant India campaign, India has rolled out a stimulus package for the economy of about USD 270 billion. The foreign secretary said research and development for vaccines for COVID-19 is a crucial area where there is potential for collaboration between India and the UK.
Serum Institute of India is already working with the Oxford University-Astrazeneca on their vaccine project. I talked about the role played by India’s pharmaceutical sector in meeting the global demand for essential medicines during the pandemic,” he said. “We are certain that our companies will play a similar role in the development of an affordable vaccine for COVID-19,” he added.

India eyes investment from Japanese firms

Source: The Economic Times, Sept 13, 2020

New Delhi: India has reached out to Japanese companies, not yet present in the country, such as NintendoHitachi MetalsTaisho PharmaOno Pharma and Mizuno to set up operations here, and urged conglomerates already here to bring verticals currently missing.

The Japanese government is offering its companies incentives to shift manufacturing bases out of China either back home or to India or Bangladesh.

New Delhi is keen to wean some of them here and is reaching out to them to facilitate their entry, officials said. “We are in touch with Japanese investors,” a senior government official told ET. “Engagement with them is going on at various levels.”

The government has drawn up a list of all the Japanese companies and is reaching out to them. Three categories of companies have been identified as part of the exercise.

The first category consists of companies not present in India. The second list is of companies that have just one business vertical in the country while other verticals are in China. The third is of those companies that have manufacturing here but can expand capacity further.

Those in the first list include auto companies Mazda and Subaru, sports retail and ecommerce company Mizuno, textiles companies Descente and Unitika, and railcars maker Japan Transport Engineering Company.
Japan has allocated about $221 million subsidy to encourage companies to relocate their manufacturing from China for 2020. Japanese supply chains are currently heavily dependent on China.

India has formed a high-level group chaired by cabinet secretary to draw up a phased manufacturing plan and incentive schemes to attract foreign investments in manufacturing of mobile and electronics, medical devices, and pharmaceutical drugs.

The group, comprising secretaries of key ministries and departments including the Department for Promotion of Industry and Internal Trade (DPIIT), has also been mandated to identify potential investors and organisations across key sectors and geographies with the capacity to invest in India or enter into joint ventures with Indian companies.

A national repository of landbank has been set up to provide ready access to availability of land and resources in the country.

Japan is the fourth biggest investor in India. Its total cumulative equity foreign direct investment (FDI) into India is nearly $200 billion, 7% of the total flows and more than that from the US and UK.

Finance Minister Nirmala Sitharaman welcomes US companies investment in India

Source: The Economic Times, Sept 04, 2020

Finance Minister Nirmala Sitharaman welcomed US companies investment and partnership with India, especially in the manufacturing and infrastructure sectors, during a virtual discussion with US-India Strategic Partnership Forum’s (USISPF) Board of Directors on the sidelines of its 3rd Annual Leadership Summit. 

According to a statement issued by USISPF, the finance minister’s discussion with the Board members focused on ease of doing business in India; digitization & fintech; agriculture (including agricultural infrastructure) and private sector participation across all the sectors of the Indian economy. 

Skill development; healthcare; CoVID-19 mitigating measures undertaken by the government & possible future course of actions; role of government spending in the infrastructure sector in the coming years; and manufacturing in India (with a special emphasis on the logistics sector in India), we’re also discussed. 

India continues to be a leading investment destination for US companies, having attracted investments over $20 billion in 2020. 

The United States and India are key strategic partners in various fields including in the economic and financial sphere. The US-India economic and financial partnership is based on the key pillars of development for both the countries that includes robust capital flows, and economic cooperation on issues of global importance, the statement added. 

Attendees at the meeting included: USISPF Chairman John Chambers; Ajay Banga, CEO, Mastercard; Charles Kaye, CEO, Warburg Pincus; Anish Shah, Deputy Managing Director & Group CFO, Mahindra; Shantanu Narayen, Chairman, President & CEO, Adobe; Robert Moritz, Chairman, PwC; Punit Renjen, CEO, Deloitte Global; Jim Umplebey, Chairman & CEO, Caterpillar among other fortune 500 leaders. 
USISPF President & CEO, Dr. Mukesh Aghi said, “We believe investments from U.S. companies will create new jobs, facilitate financial inclusion, and broad-based economic development for the Indian economy. It is encouraging to hear the Honorable Finance Minister’s commitment to provide a red-carpet welcome for long-term US investments in the Indian market.” 

RBI revises norms for core investment cos

Source: LiveMint.com, Aug 14, 2020

MUMBAI: The Reserve Bank of India (RBI) on Thursday announced stricter guidelines for core investment companies (CICs), mandating more disclosures, better risk management and a simpler group structure.

The new guidelines were based on the recommendations of the Working Group to Review Regulatory and Supervisory Framework for CICs, headed by Tapan Ray, former secretary of the corporate affairs ministry. The report was published by RBI on 6 November 2019.

CICs are non-bank lenders holding not less than 90% of their net assets as investments in equity shares, preference shares, bonds, debentures, debt or loans in group companies. Experts have been seeking a review of CIC guidelines ever since defaults by Infrastructure Leasing and Financial Services Ltd, a large systemically important CIC.

RBI said the parent CIC in the group, or the CIC with the largest asset size, will have to form a group risk management committee (GRMC), which will report to the board of the CIC that constitutes it and must meet at least once in a quarter. It will comprise at least five members, with two independent directors.

According to the revised guidelines, the GRMC will have to analyze material risks to which the group, its businesses and subsidiaries are exposed. “It must discuss all risk strategies, both at the aggregated level and by type of risk, and make recommendations to the board in accordance with the group’s overall risk appetite,” RBI said.

Moreover, all CICs with assets of over ₹5,000 crore will have to appoint a chief risk officer with clearly specified roles and responsibilities.

To address the complexity in group structures, the central bank also decided to limit the number of layers of CICs within a group, including the parent, to two. If a CIC makes any direct or indirect equity investment in another CIC, it will be deemed as a layer for the investing company, it added.

While the regulation will be applicable from the date of the circular, existing entities have been given time till 31 March 2023 to reorganize their business structure.

RBI also directed CICs to maintain a functional website containing basic information about the entity and the group. The website should also have annual reports, corporate governance report, management discussion and analysis. Core investment firms are mandated to prepare a consolidated financial statement as per the provisions of the Companies Act, 2013, to provide a clear view of the financials of the group as a whole.

BP to invest USD 70 million in India’s Green Growth Equity Fund

Source: LiveMint.com, Jul 07, 2020

INDIA: The UK-based BP plc on Tuesday said it will invest USD 70 million in the Green Growth Equity Fund (GGEF) that supports the growing renewable energy sector in India.

The fund, established in 2018, is focused on identifying, investing and supporting growth in zero-carbon and low-carbon energy solutions in the country.

“With a commitment of USD 70 million, BP will, upon investment later this year, become a limited partner in GGEF and have representation on its advisory committee, as well as the rights to co-invest in projects alongside GGEF,” the company said in a statement.

GGEF already includes investments from the Government of India, through the National Investment and Infrastructure Fund (NIIF), and the UK government, through the Department for International Development (DFID).

It expects to reach about USD 700 million commitment at the final close and grow further through leveraged capital options.

Dev Sanyal, BP Group’s executive vice-president for gas and low-carbon energy, said: “India is committed to the energy transition and pursuing a range of low-carbon options for the future. BP is equally committed to re-imagining energy in India.”

He said BP’s investment in GGEF was aligned with the group’s strategy of investing in integrated low-carbon energy using innovative partnerships and business models.

“It provides a unique platform for BP to accelerate its ambition in India and to co-invest in a variety of zero- and low-carbon energy solutions in the country,” he said.

Earlier this year, BP announced its ambition to become a net-zero company by 2050 or sooner. As part of this, one of its 10 aims is to increase the proportion of investments into non-oil and gas businesses.

Sashi Mukundan, president of BP India and and senior vice-president of BP Group, said, “Our investment in GGEF will aim to rapidly scale up commercially viable low-carbon solutions.”

“The portfolio and scale of investments made by GGEF — be it in solar power, mobility solutions, or sustainable infrastructure management — is extraordinary. Each one of these will help India achieve its climate goals,” he said.

GGEF is managed by EverSource Capital, a joint venture between Lightsource BP and Everstone Capital, and has invested in businesses like Ayana Renewable Power, Radiance Renewables, GreenCell Mobility, and EverEnviro.

Dhanpal Jhaveri, chief executive officer of EverSource Capital and vice-chairman of Everstone Group, said, “Eversource is committed to investing in India’s rapidly scaling green sector and providing renewable energy solutions in the country.”

EverSource has a long-term objective of becoming a leader in green infrastructure and climate change investing in India.

BP employs around 7,500 people in India. In addition to its gas value chain, announced retail, aviation fuels, and mobility solutions alliance with Reliance Industries Ltd, the company’s activities include Castrol lubricants; oil and gas trading; clean energy projects through Lightsource BP; IT back-office activities and a new global business services centre. India Gas Solutions Pvt Ltd, a 50:50 joint venture to source and market gas in India, is also part of BP’s gas value chain alliance with RIL.

Odisha Govt approves investment proposals worth Rs 608.79 crore

Source: Business Standard, Jun 30, 2020

The Odisha government on Monday approved five investment proposals worth Rs 608.79 crore in sectors like Metal, Food Processing, and Logistics & Infrastructure, which may generate employment for 1,496 people in the state.

In a meeting chaired by Chief Secretary Asit Kumar Tripathy, the investment proposals were approved at a State Level Single Window Clearance Authority (SLSWCA).

As per the Industrial Promotion and Investment Corporation of Odisha (IPICOL), the approved projects includes Metal Downstream sector, Iron Ore plant, Pellet Plant, among others.

According to the press release, “In a big boost to the State’s metal downstream sector, Reliable Sponge Pvt. Limited is looking at setting up an Iron ore beneficiation plant of 2.5 million tonnes per annum (MTPA) and Pellet Plant of 2.0 MTPA, with an investment of Rs 250 crore and providing employment to about 250 people.”

“Whereas Growel Feeds Pvt. Limited will be setting up a Shrimp/Prawn feed and fish feed manufacturing facility, with an investment of Rs 65.82 crore of capacity providing employment opportunities for 700 people

In the logistics and infrastructure sector. Another investor, Sravan Shipping Services Pvt. Ltd. will be setting up a logistics park at Jadupur village of Kendrapada District, with a total investment of Rs 100 crore and employing around additional 250 people,” stated the release. The proposal of Chilika Distilleries Pvt. Limited to set up 110 KL per day grain-based distillery plant, with an investment of Rs 99.97 crore and will provide additional employment opportunities for 170 people. SOM Distilleries and Breweries Odisha Pvt. limited is looking at setting up 120 KLPD capacity distillery (Grain-based) unit, with an investment of Rs 93 crore and it will provide additional employment opportunities for 126 people, it added.

Maharashtra govt signs Rs 16,000-crore investment pacts with 12 firms

Source: Business Standard, Jun 16, 2020

Mumbai: The Maharashtra government on Monday announced the signing of memoranda of understanding (MoUs) with 12 domestic and foreign companies for Rs 16,000 crore investment in the oil, chemicals, auto, electric mobility, and logistics sectors.

The agreements, part of the Magnetic Maharashtra initiative, are expected to help spur economic activities in the state reeling from the Covid-19 pandemic. The crisis has led to a sharp drop in the state’s revenues and led to an exodus of migrant labourers.

To revive the state’s economy, the government has been planning several initiatives, including fast-tracking approvals to new investors. “We will offer all assistance to new investors,” said Chief Minister Uddhav Thackeray on the occasion.

In the agreement with the government, UPL promised to invest Rs 5,000 crore in five years to manufacture pesticide ingredients in the Raigad district. Great Wall Motors, which recently acquired General Motors’ plant in Pune, will invest Rs 3,770 crore.

PMI Electro Mobility Solutions and Foton Motors of China signed MOUs for Rs 1000 crore investment for manufacturing electric vehicles in Pune.

ExxonMobil has agreed to invest Rs 760 crore to manufacture lubricants, while Varun Beverages would put in Rs 820 crore, the government announced.

Land has been allotted to nine of the 12 companies, which had been in talks with the Maharashtra Industrial Development Corporation for the last six months.

“Three more investment projects in the steel, pulp and paper, and electronic system design sectors are in the pipeline. These would entail investments of another Rs 8000 crore. We hope to finalise them soon,” said B Venugopal Reddy, principal secretary, industries department of the state government. “We expect the investment to materialise, and manufacturing to commence in two years,” said Bhushan Gagrani, principal secretary, the Chief Minister’s Office.

Anand Mahindra invests $1 million in social network start-up Hapramp

Source: Business Standard, Jun 10, 2020

Bengaluru: Anand Mahindra, Chairman, Mahindra Group, has come on board as a key investor at start-up Hapramp. The firm is working on the biggest social media challenges such as user privacy, data security, and fair content monetization. It was founded in 2018 by five students in the final year of their computer science graduate degree.

Mahindra is investing $1 million in the Gurugram-based firm. He had, in 2018, announced via Twitter a funding opportunity for an Indian social media start-up that met certain criteria. Hapramp, which had just come into existence, grabbed the opportunity to apply. Mahindra tweeted that Team Hapramp had won the seed funding on Wednesday.

“Took 2 Years but I finally found the start-up I was looking for,” Mahindra said in his tweet.

He called out Hapramp’s flagship offering GoSocial, saying “Look out for their social networking platform”. GoSocial is a social media platform that rewards artists and creators as they post and engage with the community. About 50 thousand users have already downloaded the GoSocial app from the Google Play Store before it has been formally launched. The app will soon be available on Apple App Store, and the company has plans to expand marketing to South East Asia in the coming year.

Mahindra had asked digital transformation expert and ex-Mahindra executive, Jaspreet Bindra, to work with him to find a next-gen Indian social network start-up. The aim was to find a firm which would reward creators, protect personal data and be built on next-generation technologies like Blockchain.

“The Hapramp team is building a Web 3.0 social network. It is built on emerging digital technologies, has a solid business model which rewards content creators, protects personal data, and best of all, is built here locally in India,” said Bindra. He has signed on as an executive advisor and mentor to the Hapramp founding team.

Shubhendra Vikram, CEO and one of the co-founders of the start-up said the investment is a massive approval of the company’s mission to give creators the right to their content.

“The fact that this comes from Mr. Anand Mahindra, someone who we admire and who has always supported creators, gives us confidence,” said Vikram. “We have big plans, and we intend to stick to our belief of empowering creators and building an ecosystem where they can learn, compete, and win rewards.”

Hapramp has been incubated through its early days by Huddle, a leading sector-agnostic incubator, based in Gurugram. Huddle has also invested in Hapramp.

“Since inception, the Hapramp team has worked with speed, frugality and a larger vision of enhancing lives, through the simplicity of an app that holds a true value of rewards on the go, with a large notion of educating and entertaining their users,” said Sanil Sachar, founding partner, Huddle.

Hapramp sees itself as an idea lab working on the ideas that emerge from the confluence of the creative industry and information economy. At present, Hapramp is working on three ideas. These include GoSocial, a platform for budding creators to showcase their talent and build a community and 1Ramp.io, a rewarding social media platform powered by Steem Blockchain. It is also working on Asteria Protocol, a new standard for platforms to privately and securely treat public data.

No global tender for government procurement of up to Rs 200 crore

Source: The Financial Express, May 14, 2020

In a bid to promote domestic manufacturing in micro, small and medium enterprises, the Centre has decided that no global tender will be floated by the government or its agencies for procurement of goods and services if the value is less than Rs 200 crore. However, its impact on the SME sector will be assessed after detailed guidelines are released.

“Unless the finer details of the announcement are out, it is very difficult to analyse its impact. Because, there could be multiple items in one tender to increase the value above Rs 200 crore to fit the criteria for a global tender,” said Anil Bhardwaj, secretary general of Federation of Indian Micro and Small & Medium Enterprises. Currently there is no financial limit fixed to float a global tender.

Finance minister Nirmala Sitharaman on Wednesday announced: “Indian MSMEs and other companies have often faced unfair competition from foreign countries. Therefore global tenders will be disallowed in government procurement up to Rs 200 crore. The necessary amendments of General Financial Rules will also be done.”

This will be a step towards self-reliant India and will also support the ‘Make in India’ initiative, she said, but did not explain how it would benefit the MSMEs in particular. “Unless there is more than 25% reservation for SMEs in this process, it will not be helping the sector,” said Chandrakant Salunkhe, president of Mumbai-based SME Chamber of India. The government has reserved 25% for the MSME sector in all its purchases, including through the Government e-Marketplace portal.

Private equity firm Silver Lake to invest Rs 5,655.75 crore in Reliance Jio Platforms

Source: The Economic Times, May 04, 2020

NEW DELHI: US private equity firm Silver Lake will invest Rs 5,655.75 crore in Jio Platforms for a 1.15% stake at an equity value of Rs 4.90 lakh crore, a deal which came less than two weeks after Facebook announced a $5.7 billion investnment into the unit of Reliance Industries.

“Reliance Industries Limited and Jio Platforms Limited announced today that Silver Lake will invest Rs 5,655.75 crore into Jio Platforms. This investment values Jio Platforms at an equity value of Rs 4.90 lakh crore and an enterprise value of Rs 5.15 lakh crore and represents a 12.5% premium to the equity valuation of the Facebook investment announced on April 22, 2020,” RIL and Jio in a joint statement said Monday.

Jio Platforms is a wholly-owned subsidiary of Reliance Industries Limited focussed on next-generation technologies. Reliance Jio Infocomm, which provides connectivity platform to over 388 million subscribers, will continue to be a wholly-owned subsidiary of Jio Platforms.

In April, US social networking giant Facebook said it will acquire 9.9% stake in Jio Platforms for Rs 43,574 crore, which according to analysts, would help reduce debt at RIL.

“…Silver Lake is one of the most respected voices in technology and finance. We are excited to leverage insights from their global technology relationships for the Indian Digital Society’s transformation,” Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd, said in a statement.

“…They (Jio Platforms) have brought extraordinary engineering capabilities to bear on bringing the power of low-cost digital services to a mass consumer and small businesses population. The market potential they are addressing is enormous…,” said Egon Durban, Silver Lake Co-CEO and Managing Partner.
The transaction is subject to regulatory and other customary approvals.

Morgan Stanley acted as financial advisor to Reliance Industries and AZB & Partners and Davis Polk & Wardwell acted as legal counsels.

“In the wake of the severe economic disruptions caused by the COVID-19 pandemic, globally and especially within India, this partnership with one of the most renowned tech-investors globally, Silver Lake, has special significance. Comprehensive digitisation will be a vital component of the revitalisation of the Indian economy,” Jio Platforms said in the statement.

“The investment by Silver Lake is underlines further testament to the world-class digital platform that Jio has built, powered by leading technologies, such as Broadband connectivity, Smart Devices, Cloud and Edge Computing, Big Data Analytics, Artificial Intelligence, Internet of Things, Augmented and Mixed Reality and Blockchain,” it added.

Silver Lake has around $40 billion in combined assets under management and committed capital with a singular focus on the world’s great tech and tech-enabled opportunities. Its investments have included Airbnb, Alibaba, Ant Financial, Alphabet’s Verily and Waymo units, Dell Technologies, Twitter and numerous other global technology leaders.