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Page 1: Emerging Market -Presentation

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Emerging Market Analysis - India

By T.Suthasun

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Contents

� About India

� PESTEL Analysis

� Foreign Direct investment analysis

� Export Import Partner and Pr oducts

� Future Emerging Markets in India� Successful companies

� Indian Companies Acquisitions

� Unsuccessful Companies

� Conclusion

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 About India

� 0-14 years: 29.7%(male 187,450, 635,female 165,415,758)

15-64 years: 64.9%(male 398,757,331,female 372,719,379)

65 years and over: 5.5%(male 30,831,190,female 33,998,613) (2011 est.)

� Median age� total: 26.2 years

male: 25.6 yearsfemale: 26.9 years (2011 est.)

� GDP - per capita (PPP): $3,400 (2010 est.)� country comparison to the world: 163

� GDP -composition by sector :

� agriculture: 16.1%� industry: 28.6%� services: 55.3% (2010 est.)

� [https://www.cia.gov/library/publications/the-world-factbook/geos/in.html

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� Net migration rate

� -0.05 migrant(s)/1,000 population (2011 est.)

� Urbanization

� urban population: 30% of total population (2010)

� rate of urbanization: 2.4% annual rate of change (2010-15 est.)

� Languages

� Hindi 41%, Bengali 8.1%, Telugu 7.2%, Marathi 7%, Tamil 5.9%, Urdu 5%,Gujarati 4.5%, Kannada 3.7%, Malayalam 3.2%, Oriya 3.2%, Punjabi 2.8%, Assamese 1.3%, Maithili 1.2%, other 5.9%

� note: English enjoys the status of subsidiary official language but is themost important language f or national, political, and commercialcommunication;

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Lifestyle Indicators

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Main Import Items� Wheat

� Petr  oleum, Crude & Pr oducts

� Electr  onic Goods

� Gold

� Organic Chemicals

� Coal.

Main Export Items

� Precious stones,

� Machinery

� Ir on and steel

� Chemicals� Vehicles

� Apparel

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� POLITICAL

� The largest Democratic country but PDI is 80 (United States 40)� Corruption is High (3.3)� 100% FDI is not allowed in all sectors

� Economical

� Labor cost advantage

� Gr owing Economy� Demand f  or diversified pr oducts� Tax treaties with 40 countries

� Social

� Higher percentage of young population� Able to Adapt f or western trends� English speaking country

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� Technical

� IT services

� Cost effective medical services� Independent technological development

� Environmental

� Envir  onmental pr otection is in law

� Legal

� Governing law, the f orum (arbitration/courts) and the jurisdiction are allowed butLitigation is an oner ous and time consuming pr ocess

� Unpredictable Tax policies f or FDI

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More about India

� - is the world's second largest small car market

� - is one of only three countries that makes its own supercomputers

� - is the f  ourth largest economy in the world (measured in terms of purchasing power parity)

� - is one of six countries that launches its own satellites

� - 100 of the Fortune 500 have R & D facilities in India

� - has the second largest gr oup of software developers after the U.S.

� - is the world's largest pr oducer of milk, and second largest pr oducer of f ood,including fruits and vegetables

� - Indian pharmaceutical industry is the world's second largest after China

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Break up of FDI by sectors

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Opportunities

� Service Sectors{Expected Gr owth is 10.3% per year ± Prime minister office}

� Tele Communication

� Consultancy Services

� Hotel & Tourism

� Calling centers

 Automobile Sectors in India� Opportunities of FDI in the Automobile Sector in India exist in

� Establishing Engineering Centers� Two Wheeler Segment

� Establishing Research and Development Centers

� Heavy truck Segment

� Passenger Car Segment

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Opportunities contd..

� Air Transport Industry

� Cargo or Passenger Service

� Airport construction

� Market f  or luxury items� Leather goods,

� Jewellery

� Foot ware

� Watches.

� Brewing Industry

� Tourism

� Social Entertainment

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Successful Companies

� The Reliance Gr oup

f ounded by Dhirubhai H. Ambani, is India's largest private sector enterprise, is a Fortune Global 500 company and is the largestprivate sector company in India. as "Growth is Life".

Tata Motors Limited (Tata Motors)

is an automobile company. The Company is engaged mainly in thebusiness of automobile pr oducts consisting of all types of commercial and passenger vehicles

� Indigo

Over the next five years, 70 more Airbus A320 planes have beenordered

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Indian Company's Acquisitions

� 1. Tata acquired Corus:Undoubtedly the father of all acquisition deals in India, Tata Steel took over the

 Anglo-Dutch firm Corus Gr oup in 2006 to create the fifth largest steelcompany of the world. The deal was worth $7.6 billion.

� 2. Hindalco acquired Novalis: Aditya Birla Gr oup¶s Hindalco IndustriesLimited, India¶s largest non-ferr ous metals company, acquired the Canadabased firm Novalis in an all-cash transaction f or $6 billion.

� 3. Tata acquired Jaguar and Land Rover : in 2008 Jaguar and LandRover, $2.3 billion deal with Ford, their American owners. The deal showed

India¶s gr owing global ambition in owning the best brands.

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 Acquisitions contd..

� 4. Essel Packaging acquired Propack:

Subhash Chandra¶s Essel Packaging Ltd (EPL) acquired the Swiss tubepackaging major Pr opack.

� Runbacks acquired 3 European drug-makers:

In 2006, 3 drug-makers in Eur ope, all within a week¶s time. Allen S.P.A, adivision of GlaxoSmithKline (GSK) in Italy,

Romania¶s largest independent generic drug pr oducer Terapia anddrug maker Ethimed NV in Belgium,� 6. Wockhardt acquired Negma Laboratories:

In 2007, Pharmaceutical and biotechnology major Wockhardt bought the f ourthlargest independent, integrated pharmaceutical gr oup in France, NegmaLaboratories.

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Unsuccessful Companies

� Fiat Uno joint-venture with Premier Automobiles Ltd

Poor Market research

Styling of the Car & the UNO Badge

� Foreign Bakery Pr oducts

Indian Competition was stiff fr om very much entrenched local players

like Britannia and Parle

Pricing done by these companies was on the on the premium sidehence didn't get mass market slice .

Recipes which were not palatable to Indian tastes .

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Conclusion

� India is a gr owing economy

� political and legal factors should be more liberal thannow

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� BACKUP

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� Indian law recognises the freedom of parties in aninternational contract to choose both the governing law,the f orum (arbitration/courts) and the jurisdiction f or settling disputes. However, the FIPB often requires as acondition of its appr oval that agreements involving FDIbe governed by Indian law. Litigation in India is anoner ous and time-consuming pr ocess. Arbitration istheref ore a popular dispute resolution option.

source:http://www.washingtonpost.com/world/india-frustrates-f oreign-investors-with-its-unpredictable-tax-policies/2011/03/17/AFVpacLC_ story.html]

Envir onmental

� Technical

� IT services

� Cost effective medical services� Independent technolgical development

� http://www.slideshare.net/sh

adha29/f oreign-investment-in-india-anal sis-of-factors-

� Environmental

� Able to Adapt f or western trends

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� Tax: A large number of investments fr om the US into India are r outed thr ough Mauritius or Cyprus to takeadvantage of benefits under the double tax treaties thatexist between India and those countries. There isconcern at the attempts by the Indian tax authorities to question the validity of those benefits. A point to watch.http://www.law.com/jsp/law/international/LawArticleIntl.jsp?id=1196279832466&slreturn=1&hbxlogin=1

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Forms of FDI

� FDI is permitted thr ough f ollowing f orms of investments:

� Financial collaborations.

� Joint ventures and technical collaborations.

� Capital markets via Eur o issues (Foreign CurrencyConvertible Bonds (FCCBs)/Equity Shares under theGlobal Depository Mechanism).

� Private placements or preferential allotments

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� Bharti Airtel acquired

� the African mobile phone networks4 of Kuwait¶s

� Zain f  or $10.7 billion.

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Indian Company's Acquisitions

� 1. Tata acquired Corus: Undoubtedly the father of all acquisition deals in India, Tata Steel took over the Anglo-Dutch firm Corus Gr oup in 2006 to create the fifth largest steel company of the world. The deal was worth $7.6billion (Rs. 36,650 cr ore) at that time, and is the biggest acquisition in the history of India.

� 2. Hindalco acquired Novalis: Aditya Birla Gr oup¶s Hindalco Industries Limited, India¶s largest non-ferr ousmetals company, acquired the Canada based firm Novalis in an all-cash transaction f or $6 billion. Following thetransaction Hindalco, along with Novelis, was the world¶s largest aluminium r olling company, one of the biggestpr oducers of primary aluminium in Asia, and India¶s leading copper pr oducer.

� 3. Tata acquired Jaguar and Land Rover : Tata shook the automobile market once again in 2008 when it

snapped Britain¶s most famous automobile manufacturers, Jaguar and Land Rover, in a $2.3 billion deal with Ford,their American owners. The deal showed India¶s gr owing global ambition in owning the best brands.� 4. Essel Packaging acquired Propack: Subhash Chandra¶s Essel Packaging Ltd (EPL) acquired the Swiss tube

packaging major Pr opack, and joined hands to become the world¶s largest in laminated tubes. This deal was madeway back in 2000 and an Indian MNC became the World No.1 because of it.

� 5. Ranbaxy acquired 3 European drug-makers: In 2006, Ranbaxy Laboratories Ltd. (RLL) created quite a stir when it announced the acquisition of 3 drug-makers in Eur ope, all within a week¶s time. Allen S.p.A, a division of GlaxoSmithKline (GSK) in Italy, Romania¶s largest independent generic drug pr oducer Terapia and drug maker Ethimed NV in Belgium, three of these firms were acquired by the Indian firm. This deal consolidated Ranbaxy¶sposition after losing to rival Dr. Reddy¶s Laboratories in a bid f or German drug maker Betapharm earlier.

� 6. Wockhardt acquired Negma Laboratories: In 2007, Pharmaceutical and biotechnology major Wockhardtbought the f ourth largest independent, integrated pharmaceutical gr oup in France, Negma Laboratories. At a dealof $265 million, Wockhardt became the largest Indian pharmaceutical company in Eur ope with more than 1500employees based in the continent.

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Indian Company's Acquisitions

� 1. Tata acquired Corus:Undoubtedly the father of all acquisition deals in India, Tata Steel took over the

 Anglo-Dutch firm Corus Gr oup in 2006 to create the fifth largest steelcompany of the world. The deal was worth $7.6 billion.

� 2. Hindalco acquired Novalis: Aditya Birla Gr oup¶s Hindalco IndustriesLimited, India¶s largest non-ferr ous metals company, acquired the Canadabased firm Novalis in an all-cash transaction f or $6 billion. Following thetransaction Hindalco, along with Novelis, was the world¶s largest aluminiumr olling company, one of the biggest pr oducers of primary aluminium in Asia,and India¶s leading copper pr oducer.

� 3. Tata acquired Jaguar and Land Rover : Tata shook the automobilemarket once again in 2008 when it snapped Britain¶s most famousautomobile manufacturers, Jaguar and Land Rover, in a $2.3 billion dealwith Ford, their American owners. The deal showed India¶s gr owing globalambition in owning the best brands.

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 Acquisitions contd..

� 4. Essel Packaging acquired Propack: Subhash Chandra¶s EsselPackaging Ltd (EPL) acquired the Swiss tube packaging major Pr opack,and joined hands to become the world¶s largest in laminated tubes. Thisdeal was made way back in 2000 and an Indian MNC became the WorldNo.1 because of it.

� 5. Ranbaxy acquired 3 European drug-makers: In 2006, Ranbaxy

Laboratories Ltd. (RLL) created quite a stir when it announced theacquisition of 3 drug-makers in Eur ope, all within a week¶s time. Allen S.p.A,a division of GlaxoSmithKline (GSK) in Italy, Romania¶s largest independentgeneric drug pr oducer Terapia and drug maker Ethimed NV in Belgium,three of these firms were acquired by the Indian firm. This deal consolidatedRanbaxy¶s position after losing to rival Dr. Reddy¶s Laboratories in a bid f or German drug maker Betapharm earlier.

� 6. Wockhardt acquired Negma Laboratories: In 2007, Pharmaceuticaland biotechnology major Wockhardt bought the f ourth largest independent,integrated pharmaceutical gr oup in France, Negma Laboratories. At a dealof $265 million, Wockhardt became the largest Indian pharmaceuticalcompany in Eur ope with more than 1500 employees based in the continent.