‘$50 billion in assets, but Blackstone is still getting started in India’

Source: Economic Times, 01 March 2024

India remains a top conviction theme for the Blackstone Group globally, which plans to deploy capital from its $65 billion dry powder to further expand its assets portfolio beyond the current $50 billion, Kathleen McCarthy, global co-head of real estate at Blackstone Group, told ET.

“We are just getting started in India… Size of the opportunities in other markets is not even close to what India has to offer,” said McCarthy, who manages real estate assets worth $586 billion globally for the group.

Blackstone is the largest owner and operator of office properties in India with an office portfolio of 135 million sq ft across 48 assets in seven key cities. The global investment major will continue to invest in office properties here besides increasing investments in new segments such as hospitality, data centres and warehousing.

“When I review our (India) portfolio today, it’s clear that real estate and private equity stand out, boasting $50 billion in assets, with $20 billion assets in real estate alone. We believe we are just scratching the surface,” McCarthy said.

According to her, Blackstone has succeeded in building exceptional companies in India, particularly in sectors like office and retail, where the firm identified specific opportunities unique to the Indian market.

“Our global focus on logistics represents approximately 42% of our portfolio, with a current (India logistics) footprint of 40 million sq ft, achieved in just 2.5 to 3 years – a stark comparison to the 10 years it took to reach 100 million sq ft in the office sector. This rapid growth underscores the strength of our platform and our ability to capitalise on conviction themes,” she said, adding that data centres are another area of global conviction for the firm.

Blackstone is one of the early global investors to enter India. After establishing its presence in 2006, it has emerged as one of the top 10 business groups in the country.

“Looking beyond our current endeavours, hospitality investing remains largely untapped. While we do own some hotels, we anticipate substantial growth in both domestic and international tourism, drawing upon our 30 years of experience operating hotels and partnering with renowned brands,” McCarthy said. “We are eager to expand our portfolio of hospitality assets.”

Blackstone owns seven or eight hotels that are strategically linked to other investments but is keen to invest in larger-scale hospitality ventures. Globally, it has a track record in various formats, ranging from luxury and leisure-oriented properties to business travel accommodations and branded limited-service hotels, which are highly popular among both leisure and business travellers.

In India, she sees immense potential for growth in the hospitality sector, which is still in its nascent stages as various brands hold around 178,000 hotel keys and this underscores the vast opportunities that exist in this market.

According to her, Blackstone’s India portfolio performance has been “exceptionally successful” owing to its value creation strategy and approach in the market. She highlighted the performance of Embassy Office Parks REIT in the public markets that saw returns of 3 to 3.5 times higher than the market average since it took the maiden India REIT public until the recent exit.

“This aspect of our strategy has been particularly reassuring for investors, especially those who may have had challenges with investments in India’s real estate sector prior to the financial crisis. Demonstrating our capacity to deliver returns has addressed a key concern among investors and solidifies their interest in both our investments and the Indian market as a whole,” she added.

McCarthy is of the view that India’s economy, compared to other markets, has displayed a more stable picture, characterised by lower inflation rates, steady interest rates and sustained economic growth. This stability has been further bolstered by favourable demographic trends.

“The unique combination of strength and stability in India’s economic landscape, coupled with favourable real estate operating and supply fundamentals, sets it apart globally. This confluence of factors creates a highly attractive ecosystem for real estate investment, offering a robust foundation for sustained growth and stability in the sector,” she said.

McCarthy believes India is still in the early stages of capital investment from global institutional investors and there is significant potential evident in various asset classes such as hotels, warehouses and data centres. The influx of capital into the market is a positive development as it enhances liquidity and fosters growth opportunities.

Nestle investing Rs 6,000-6,500 cr to expand manufacturing ops in India, says top official

Source: Economic Times, 08 February 2024

New Delhi: FMCG major Nestle is expanding its manufacturing footprints and operations in India, for which it will end up investing Rs 6,000 to 6,500 crore between 2020-2025, to meet the growing demand, its India Chairman and Managing Director Suresh Narayanan said on Wednesday. From its inception here to 2020, Nestle India has invested Rs 7,000 crore but the investment in the last five years by the company is more than what it had done in the last 20-25 years, said Narayanan in a media round table here.

Earlier, Nestle India had announced to invest Rs 2,000 crore between the years 2000 to 2020 and again in 2022, it announced to invest Rs 5,000 crore on expansion, which was to be invested by 2025.

“So if you take out the common years in the middle of the investment, the net investment would have been about Rs 5,800 crores. We are well on that track. I think Rs 3,200 crore has already been invested between 2020 and 2023,” said Narayanan.

Nestle India, which owns popular brands such as Maggi, Nescafe, KitKat etc is setting up its tenth factory at Orissa and is increasing existing capacities in our manufacturing of prepared dishes, which is the mainly Maggi range, doubling its coffee business, increasing chocolate lines and augmenting investment in distribution chains.

“By 2025, we might be recording almost Rs 6,000 crore to Rs 6,500 crore investments that we would have put since 2020,” he said adding this indicates “underlying robustness of demand for our products” but also the “commitment to the making India” philosophy, he added.

In 2023, Nestle sales crossed Rs 19,000 crore market. Currently, India is among the top ten markets of Swiss multi-national Nestle SA.

“We have some strong hefts in some of the business. We are ranked very well globally. I think the outlook on India is very, very positive. And there is a lot of Equity goodwill support,” he said.

Though, Narayan did not share any future numbers but said he would be very happy to be on the path of growth which Nestle India has sustained.

“If you look at our 2016 to 2022 performance, it has been around 11 to 12 per cent Y-o-Y growth and slightly higher on profitability. If I am able to deliver that on a larger base, that will be a good objective,” he said.

Over the demand scenario, Narayanan said the urban market has opened up dramatically, having a strong sweet spot, while the smaller tier II, III, IV & V are also opening up and Nestle is supporting them with relevant portfolio intervention and distribution expansion.

“In fact, if you look at urban penetration now for the company, which five years ago was about 80 per cent today it is about 93 per cent and similarly, rural penetration also has gone up significantly to rate to about 30 odd per cent, which was in a mid to high single digits a couple of years ago,” he said.

This as a cumulative effect has led to good results. In the last 28 quarters or 22 quarters, Nestle India has reported double-digit quarters, he said.

The growth is also reflected in the capex of the company, which is now investing 8 per cent of its turnover on capex, which is much higher than what it ever was.

“In the last seven, eight years, it was in the region of about 2 to 3 per cent,” said Narayanan.

Nestle is also keeping its innovation tempo high and has launched 130 new products in the last seven years, which is helping to diversify its offerings.

On the sales front, Nestle is now using AI-enabled analytics for sales automation. Many of its brands like KitKat, Maggi and Nescaffe are highly digital now in terms of consumer outreach.

“Almost 40 per cent of our media expenses as a company if we look at aggregate is being spent on digital today,” he added. In the December quarter Nestle India contributed 7 per cent of domestic sales.

Foxconn buys Rs 300-cr land in Bengaluru

Source: Financial Express, 10 May 2023

Foxconn Hon Hai Technology India has bought 300 acres of land in Bangalore Rural District for Rs 300 crore, according to a filing by parent Hon Hai Precision Industry on the London Stock Exchange.

The transaction has been carried out by parent Hon Hai Precision on behalf of Foxconn. The iPhone manufacturer has bought the land in the Information Technology Investment Region (ITIR) in Devanahalli taluk of Bangalore Rural District.

The development is crucial as the company is looking to diversify its manufacturing base away from its largest market, China. Owing to benefits of the production-linked incentive scheme, iPhone manufacturers like Foxconn are finding India a lucrative destination to manufacture iPhones.

In the filing, the company said the land has been acquired for operation requirements.

Based on the incremental investments and sales, Foxconn in December became the first global company to have received approval for production-linked incentives worth Rs 357.17 crore for mobile manufacturing done in FY22. In fact, the company has also submitted incentive claims for FY23.

In March, the Karnataka government said that Foxconn would invest `8,000 crore to set up a mobile manufacturing unit in the state that will offer employment to 50,000 people. The announcement from the state government came after Foxconn chairman Young Liu met chief minister Basavaraj Bommai.

The company had also entered into an agreement with the Telangana government to set up an electronics manufacturing facility. While the amount of investment was not disclosed, the facility is expected to provide employment to 100,000 people.

According to reports, the company is likely to invest around $200 million for its manufacturing facility in Telangana and might use that facility to manufacture iPods.

Lately, Apple has also been looking at doubling and trebling its growth and investments in India. Apple registered a four-fold jump in exports of iPhones to over `40,000 crore in FY23. One of the company’s units in Chennai, operated by Vietnam’s Foxconn Hon Hai, has already emerged as the largest in the country in a single location in any sector, employing 35,000 people on the shop floor.

Of the total `90,000 crore worth smartphone exports in India in FY23, half was contributed by Apple, according to industry estimates.

In the last financial year ended March, Apple’s sales from India rose nearly 45% to $6 billion in FY23.

Essar Oil to invest Rs 2,000 cr more to raise CBM output

Source: Financial Express, 09 May 2023

Essar Oil and Gas Exploration and Production will invest another Rs 2,000 crore to ramp up production of coal bed methane (CBM) gas and increase the total number of wells to 500 in the next 2-3 years.The company, which has already drilled 348 wells, has invested more than Rs 5,000 crore for development of its Raniganj CBM block in West Bengal.

The investments, which would be made at its coal seam block in West Bengal, will help in increasing the production to contribute about 5% to India’s total gas production. A part of the investment would be earmarked for eCBM microbial technology and R&D initiatives such as hydro-fracking, radial drilling and microbial treatments among others.

The company will start drilling of the new wells in the next 18-24 months to take production to about 3 mscmd.“The investment in Microbial eCBM technology demonstrates our commitment to increase production and reserves base,” CEO Pankaj Kalra said.Essar Oil, which primarily focuses on unconventional hydrocarbons, has a resource base of 12 trillion cubic feet CBM and shale gas resources.

India may see $150 billion investment in hydrogen sector in 10 years, says RIL official

Source: Financial Express, 22 June 2022

India provides immense opportunities in the field of hydrogen and is likely to attract an investment of up to USD 150 billion, a RIL official said on Wednesday.

The industry has the potential to generate lakhs of job opportunities, Kapil Maheshwari, President, New Energy, Reliance Industries Limited, told PTI on the sidelines of the BNEF Summit.

When asked about the investment potential of the hydrogen sector, he said, “Opportunities exist. We (India) are already a market of 6-7 million tonnes that’s not small. In 10 years, 150-200 billion dollars could come (as an investment) and lakhs of jobs will be generated.” Earlier, industry players in a panel discussion on ‘India’s Hydrogen Opportunity’, stressed taking certain measures in the form of “penalty and taxes” by the government to create demand for hydrogen in India.

“The government should do something about the creation of demand for hydrogen by putting in obligations, carbon taxes, penalty taxes till the market adopts it,” Maheshwari said.

Besides, there is a need for policies which remain uniform in nature as it will build confidence among investors, he said.

“Make policies which are certain. No uncertainty in policies or changes so that an investor gets confidence that this is where I am investing and I will get my return on investments,” Maheshwari said.

Naresh Lalwani, Head of Strategy, Planning & Diligence, JSW Steel, said there is a need for public funding for the creation of the ecosystem of hydrogen.

He also said that there is a need to focus on production and the cost of hydrogen which is at USD 3-4 per kg at present. Technologies to produce hydrogen at a low cost must be developed and adopted.

Speaking on the use of hydrogen in the manufacturing of steel, he said, “If steel is produced using hydrogen at USD 3-4 per kg, the price of steel will go up by six times.”

Elest to set up India’s first display fab in Telangana

Source: The Hindu Businessline, 12 June 2022

To manufacture advanced AMOLED displays at an investment of ₹24,000 crore
Telangana’s dream to emerge India’s FAB Hub got a boost with Bengaluru-based Elest deciding to set up India’s first display fab for manufacturing advanced AMOLED displays at an investment of ₹24,000 crore in the State.

It will supply AMOLED displays to TV, smartphone and tablet makers globally.

Speaking at the occasion here on Sunday, Telangana Industries & IT Minister K T Rama Rao said: “Having a Display FAB in Telangana would put India on a global map at par with select few countries such as China, USA, and Japan. Since the announcement of India Semiconductor Mission, Government of Telangana has been working on a mission mode to have a Fab in the State and this investment will provide us further encouragement to continue our efforts.”

The State government is confident that having a Display Fab will be a major boost to the thriving Electronics and IT ecosystem in the State and its ancillaries, he said.

Elest has been incorporated by the promoters of Rajesh Exports, a Global Fortune 500 company, specifically for the purpose of manufacturing innovative technology products such as AMOLED displays, Lithium-ion cells, batteries, and EVs. Elest would be setting up the Display FAB in technological association and with technology inputs from some of the most advanced and finest research centres across the world.

With the announcement of this investment, Telangana emerges a front-runner in the semiconductor and Display Fab sector. It is one of the largest investments in the country’s electronics sector and the largest ever investment by size in the State.

Attracting global talents
The Display FAB would be set up under the India Semiconductor Mission programme of the Ministry of Electronics & Information Technology. Chairman of Rajesh Exports Rajesh Mehta said, “the Display FAB in Telangana would attract some of finest global talents in the next generation technology and would generate direct opportunity to more than 3000 people including scientists and advanced technology professionals. It would create a much larger ecosystem of partners, ancillaries, suppliers, generating thousands of jobs. Elest is confident that the setting up of the Gen6 AMOLED Display manufacturing facility will generate a global interest and would ensure future technology growth in our country.”

Elest would also be setting up a Research and Development centre for research in the next generation areas of advanced display technology.

Piyush Goyal meets global leaders, pitches India among best investment destinations

Source: Economic Times, 24 May 2022

Pitching India as one of the best investment destinations globally, Union Minister Piyush Goyal on Tuesday asked global business leaders at the World Economic Forum Annual Meeting to “come to India and grow with India”.

Goyal, who has been meeting a host of global leaders here since Saturday, reiterated India’s position as one of the world’s most preferred investment destinations and told them about the massive scope and range of opportunities it presents to investors globally.

The Commerce and Industry Minister, who addressed a breakfast session on Tuesday morning, said there was so much interest in India among those present here that he was finding it hard to adjust his calendar, but was trying to accommodate everyone as all of them are important and are keen to make large investments.

On Monday evening, he also met John Kerry and discussed future tracks for India-US Climate and Clean Energy Agenda 2030 Partnership.

In his meeting with Deutsche Bank chairman-elect Alexander R Wynaendts, he discussed how the financial institution can further complement the Indian government’s sustainable growth agenda.

The two leaders also explored how digitisation can aid businesses pursue environment, social and governance-linked goals.

He also addressed a global investors roundtable here.

His other meetings included those with Standard Chartered Bank Group CEO Bill Winters, Micron Technology CEO Sanjay Mehrotra and Brookfield Asset Management CEO Bruce Flatt.

Exide announces Rs 6000 Cr investment in lithium-ion cell unit in Bengaluru

Source: Economic Times, 31 March 2022

Exide Industries on Thursday announced that it will invest about Rs 6000 crore in a state-of-the-art lithium-ion cell manufacturing unit in Karnataka.

The battery manufacturer’s announcement followed a meeting between its managing director Subir Chakraborty and chief minister Basavaraj Bommai. The project is expected to add about 1400 jobs.

The battery maker has proposed one of India’s largest giga factories for advanced cell chemistry technology. The company has sought 80 acres of land at Haraluru industrial area near the Bengaluru international airport.

Industries Minister Murugesh R Nirani welcomed the investment and said the government will extend support to see early commissioning of the project. He also assured the investors that Karnataka provided them with the best investor friendly climate and cited the highest FDI inflows in the last three quarters as evidence to this.

Industrial Development Commissioner Gunjan Krishna said Exide’s proposed venture will help the state to build products for a global market. The government, she added, will do its best to encourage big ticket investments around Bengaluru.

India, France push blue economy & investment partnership

Source: Economic Times, 21 December 2021

François Delattre, Secretary-General, Ministry for Europe and Foreign Affairs of France, is on an official visit to India from December 20-22. The visit comes on the heels of the Annual Defence Dialogue held on December 17 in New Delhi between Rajnath Singh, Defence Minister and Florence Parly, French Minister for Armed Forces.

Foreign Secretary, Harsh Vardhan Shringla, had bilateral talks with the Secretary-General on December 21. Both sides took stock of the bilateral relationship and discussed the potential for cooperation in sectors such as defence and security, space, cybersecurity and the digital economy, blue economy, education and people-to-people contacts, energy, health and climate change. Ambassadors of India and France joined the talks.

India’s trade with France has witnessed a steady rise in the last decade reaching USD 10.75 billion in 2020. Despite the pandemic, it is estimated that bilateral trade between the two countries in 2021 has reached USD 8.85 billion. To tap the full potential of bilateral trade and economic relations, both sides reiterated their commitment to restarting negotiations on the India-EU Free Trade Agreement.

France has emerged as a major source of FDI for India with more than 1,000 French establishments already present in India. France is the 11th largest foreign investor in India with a cumulative investment of USD 9.86 billion from April 2000 to June 2021 which represents 1.80% of the total FDI inflows into India. Most big French groups have their subsidiaries in India such as BNP Paribas, Capgemini, Airbus, Dassault, Arkema, L’Oréal, Sanofi, Total, etc. There are around 200 subsidiaries of Indian businesses established in France, which employ more than 6,000 people. Among Indian investments in France, majority are in IT services, pharmaceuticals/biotechnologies and hospitality sectors.

Reaffirming their shared commitment to a multipolar world and faith in multilateralism, the Foreign Secretary and the Secretary-General also held discussions on a number of regional and global issues of mutual interest, including cooperation in the European Union in view of the forthcoming French Presidency, Indo-Pacific, UNSC, situation in Afghanistan, among others, according to officials.

Delattre will be visiting Mumbai on December 21-22, where he will meet other Indian officials.

UAE based retail giant, Lulu Group will invest Rs. 2,000 crore in Gujarat to set up a shopping mall

Source: Economic Times, 11 December 2021

This was announced during a meeting between Bhupendra Patel, Chief Minister of Gujarat and Yusuff Ali MA in Dubai. An MOU in this regard was signed by Rajiv Kumar Gupta, additional chief secretary signed on behalf of Gujarat Government and Yusuff Ali CMD of Lulu Group.

According to the MOU, Lulu will set up a shopping mall between Ahmedabad and Gandhinagar which will create employment to more than 5,000 people. The construction is expected to start by the first quarter of 2022 and be completed in 30 months.

Government of Gujarat will facilitate Lulu Group with all necessary assistance and clearances and also depute a senior IAS official to follow up the procedures.

Apart from this, Lulu Group will also set up food processing and logistics centers in Baroda and Surat for exports.

“The government will make every effort to ensure that land and any other assistance is provided to the group so that they can begin work,” said the Chief Minister.

“Gujarat holds a very special place in my heart, this is where I first learnt the basics of business as my father had family business in Ahmedabad. So I feel very excited to invest in Gujarat and hope we can expand further in this Vibrant state,” said Ali.

The group has also recently opened Lulu Hypermarket in Bangalore, spread across 2 lakh sq ft, while Funtura is set up across 60,000 sq ft – the largest indoor entertainment zone in India.

Lulu currently operates more than 220 hypermarkets and shopping malls in the Middle East, Egypt, Indonesia, Malaysia and India. Globally, Lulu Group employs more than 57, 000 people. Lulu hypermarkets and department stores have a 32 per cent share of the retail market in Gulf Cooperation Council countries.

The group also has invested in India’s retail market with malls in Kerala and Uttar Pradesh. Group’s latest mall is slated to be opened by next week at Kerala’s capital Thiruvananthapuram while Lucknow Lulu Mall is expected to be open for shopping by march 2022.