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India: Moving away from inbound to outbound investment
Carl Nisser – ConsultantSJ Berwin LLP – London3130087
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Overview of Presentation
• Major issues in India’s internal market
• Competition – a base for stronger Indian companies
• Changing investment trends
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Major issues in India’s internal market
• Democratic strength
• Growth rate of 9 percent overall and 15 percent in IT
• Increased education reflected in improving literacy rates – total adult population (15 +) 61.3 percent. Youth (15 - 24) 73.3 percent
• Entrepreneurial spirit
• Rule of Law and Competition Law
• Huge financial market
• Military R&D and production
• Sustainable energy production and nuclear power generation
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Competition – a base for stronger Indian companies
• India is one of the most competitive countries for production of steel, auto components, pharmaceuticals and chemicals offering low cost high value products
• Software and services such as call centres, accounting, graphic art, customs application developments, back offices for multinational entities
• Local versus foreign lawyers
• Governmental interference
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Changing investment trends
• From back office to main stage
• From agents and distributors to direct presence with a footprint in Europe through M&A’s for strategic reasons
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Changing investment trends (cont’d)
• Cross border deals by Indian firms
2007 $35 billion
2006 $15 billon ($21 billion?)
2005 $4.3 billion
2000 $1 billion
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Changing Investment trends (cont’d)
• Indian firms acquired 180 firms in EU and US in 2006 and 130 in 2005
• 210 M&A’s by Indian companies expected in 2007 and about 400 in 2010
• Mittal Arcelor; Tata Tetley; Tata Corus
• Bollywood now shoots in UK, diamond trade in Antwerp etc.
• Presence of Indian immigrants in the EU
• Private Equity from small to large
• 40 percent of acquisitions by Indian companies are in Korea, Hong Kong and Singapore and 60 percent in EU and US
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Changing investment trends (cont’d)
• Total M&A’s into India in 2006 $3.5 billion whilst private equity deals $7.5 billion
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Many thanks for listening.
Carl Nisser
Consultant – SJ Berwin LLP
10 Queen Street Place, London EC4R 1BE
Tel: +44(0)20 7111 2396
E-mail: [email protected]
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