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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