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Indian Investments Abroad

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Indian Investment Abroad - Overseas Direct Investment by Indian Companies

February, 2013

Brief Overview

India Inc is getting experimental with every passing day and as a result, is increasingly looking to invest abroad to accomplish its motives of resource-hunt or market-hunt or technology-hunt. Investments from India are no longer chasing just stressed assets in the US and Europe or for that matter mining resources in Australia but are largely placing focus on green-field projects around a larger geography encompassing the middle east, Africa, and south east Asia. Similarly, it's not just the Tatas, Ambanis and the Ruias, who are scouting for opportunities in foreign lands, corporate groups of all sizes are also exploring options outside to get greater access to the global markets.

Mr Pranab Mukherjee, the Finance Minister, has reported that while Mauritius is a hot destination for Indian corporate investing abroad, the US and Singapore also hold strategic importance for the same. The United Arab Emirates (UAE) is an upcoming market for Indian outflows.

Key Statistics

  • Overseas direct investment by Indian companies increased by 179 per cent to US$ 3.30 billion in January 2013 (as against US$ 1.18 billion in January 2012). Some of the major overseas investments made by Indian companies in January 2013 include: Bharat Petroresources Ltd (US$ 439 million), Cox & Kings India (US$ 249 million), Essar Steel (US$ 155 million), Tata International (US$ 128 million), and Videocon Oil Ventures (US$ 127 million)
    Indian companies' overseas investment in the first 10 months of FY13 stood at US$ 23.32 billion
  • A recent study by Grant Thornton India has stated that the total value of private equity (PE) and mergers and acquisitions (M&A) deals in November 2012 increased five times to US$ 10.1 billion from US$ 1.9 billion in November 2011. The number of outbound deals in the reported month shot up to 15 deals from 10 and its total value rose to US$ 6.7 billion from US$ 1.9 billion in November 2011

Recent Developments & Investments

  • Usha Martin's subsidiary Usha Siam Steel Industries Public Company Ltd has formed an equal joint venture (JV) with Japan-based Tesac Wire Ropes Company Ltd to set up a green-field facility in Thailand to manufacture high-performance steel wire ropes. The JV Company - Tesac Usha Wirerope Company Ltd- will be operational in 2014 and aims to manufacture 1, 000 tonnes a day of steel rope in the next four-to-five years. Usha Siam will invest about US$ 16 million over 2013-18 in the JV company which plans to acknowledge the Asean market
  • Kolkata-based Infinity Group is planning to set-up a Rs 4,000 crore (US$ 738.77 million)-Education City in Bhutan, and has entered into a JV agreement with Infrastructure Leasing & Financial Services Limited (IL&FS) for the same. The Group is also in talks with the leading universities of the UK, US and Australia, who have shown interest to establish their campuses in the world's youngest democracy
  • India's largest software exporter Tata Consultancy Services (TCS) has set up a new delivery centre in Liverpool, strengthening its presence in the UK. The new facility, which would be completely operational by July 2013, is dedicated to delivering government services. It would facilitate a secure applications development and maintenance centre for business applications and operational delivery centre for outsourced business process and IT services
  • PE firms Sequoia Capital and General Atlantic - backed Mu Sigma, is to set up a development centre in the US and recruit another 1, 000 personnel by December 2013. The decision sciences and analytics solutions company would establish the centre either in Seattle, Austin or Chicago. The new facility would be an extension of the company's innovation centre in Bangalore