Real estate ruled in 2007. A look at the potential target sectors for 2008
After getting a brief idea about
‘what lies beneath’ and ‘what’s on surface’ the time has come to get a hang of ‘what lies ahead’. Amidst the rollicking PE investments that are sweeping various sectors of the Indian economy, one truth stands out for sure – the ‘sunrises’ of today might be the ‘twilights’ of tomorrow! And as we say this, we dare to add the natural truth that most definitely, some new sector(s) will lead the lap in the race to woo investors. Here’s a primer…
Statistics reveal that the year 2007 was ruled by sectors like real estate and telecom that counted first when it came to the PE favourites category. And this comes as a no surprise as it fell quite in line with the promises that these two sectors held. Therefore, investments in companies like GMR Infrastructure and Bharti Airtel were some of the noteworthy deals in these above mentioned sectors. In terms of percentage value share for the year 2007, sectors like real estate & infrastructure management led the pack, attracting 36% of the net investment share. It was followed by others like Telecom, Banking & Financial services, Media, Entertainment & Publishing and IT & ITeS, which garnered 18%, 17%, 5% and 4% of the total pie respectively. And now talking about what’s bound to happen in the future, let’s consider the following figures. According to a PE firm, SMC, “There are 366 firms claiming to be operating in India and another 69 that are raising capital with plans to be operating soon. Approximately, over 400 funds are active or about to be active in Indian markets. In total, they seem to be sitting on $48 billion to be invested between now and December 10, 2008.” What this clearly proves is that there is no dearth of money flowing into India through the PE route. However, which are the target sectors for these deeppocketed sharpshooters is still a critical and cloudy question to ponder over.
Sudhir Gupta of Planman Financial feels that, “Sectors like education, especially e-education, will rake in big PE money in the coming future. Then there are also other sectors like healthcare, which will also attract huge PE investments.” Well, believe it or not, from career counseling to preparatory tutorials to vocational training companies, education is one of the sectors, which is enticing PE firms big time. 2007 was a great year for healthcare and it seems it will of course remain in vogue. The year saw a whopping $400 million being poured into this sector, and this fad is still far from becoming history. Currently pegged at $34 billion, the healthcare sector is expected to grow to a whopping $40 billion by 2010. “We are certainly looking at buyout opportunities in the domestic pharmaceutical space this year,” opines Sanjiv Kaul, Managing Director, Chryscapital Infrastructure. Sure enough, a look at the figures would prove that the pharma industry has also been a roaring success amongst the money-laden PE firms.
After getting a brief idea about
‘what lies beneath’ and ‘what’s on surface’ the time has come to get a hang of ‘what lies ahead’. Amidst the rollicking PE investments that are sweeping various sectors of the Indian economy, one truth stands out for sure – the ‘sunrises’ of today might be the ‘twilights’ of tomorrow! And as we say this, we dare to add the natural truth that most definitely, some new sector(s) will lead the lap in the race to woo investors. Here’s a primer…Statistics reveal that the year 2007 was ruled by sectors like real estate and telecom that counted first when it came to the PE favourites category. And this comes as a no surprise as it fell quite in line with the promises that these two sectors held. Therefore, investments in companies like GMR Infrastructure and Bharti Airtel were some of the noteworthy deals in these above mentioned sectors. In terms of percentage value share for the year 2007, sectors like real estate & infrastructure management led the pack, attracting 36% of the net investment share. It was followed by others like Telecom, Banking & Financial services, Media, Entertainment & Publishing and IT & ITeS, which garnered 18%, 17%, 5% and 4% of the total pie respectively. And now talking about what’s bound to happen in the future, let’s consider the following figures. According to a PE firm, SMC, “There are 366 firms claiming to be operating in India and another 69 that are raising capital with plans to be operating soon. Approximately, over 400 funds are active or about to be active in Indian markets. In total, they seem to be sitting on $48 billion to be invested between now and December 10, 2008.” What this clearly proves is that there is no dearth of money flowing into India through the PE route. However, which are the target sectors for these deeppocketed sharpshooters is still a critical and cloudy question to ponder over.
Sudhir Gupta of Planman Financial feels that, “Sectors like education, especially e-education, will rake in big PE money in the coming future. Then there are also other sectors like healthcare, which will also attract huge PE investments.” Well, believe it or not, from career counseling to preparatory tutorials to vocational training companies, education is one of the sectors, which is enticing PE firms big time. 2007 was a great year for healthcare and it seems it will of course remain in vogue. The year saw a whopping $400 million being poured into this sector, and this fad is still far from becoming history. Currently pegged at $34 billion, the healthcare sector is expected to grow to a whopping $40 billion by 2010. “We are certainly looking at buyout opportunities in the domestic pharmaceutical space this year,” opines Sanjiv Kaul, Managing Director, Chryscapital Infrastructure. Sure enough, a look at the figures would prove that the pharma industry has also been a roaring success amongst the money-laden PE firms.
telecom infrastructure business. Our strategy to create a separate company for infrastructure businesses has resulted in tremendous unlocking of value for over two million RCOM shareholders. RTIL, as an independent telecom infrastructure provider, has significant growth potential and is on track to become the leading player in India. RTIL will be listed in the future and provide investors another attractive opportunity to participate in India’s incredible telecom growth.” RTIL has already filed the draft Red Herring prospectus with SEBI and would hit the capital market soon to raise an expected Rs.6,000 crores from the public.
stock movements. Don’t fret and put undue stress on your grey cells, for now you can know the stock movements while driving! Confused? We’ll explain. The Telecom Regulatory Authority of India (TRAI) has finally given the green signal for the FM channels to broadcast news on their respective stations. So now, not only the stock movement, but you can also tune in to the latest happenings in the political and business world, with just a flick of the radio channel.
only creates virals, but also performs traditional media planning functions and buys appropriate space for their clients. “A client from travel, finance or insurance industry would look at search engines like Google as a more preferred destination rather than display advertising. But an FMCG brand would want more of branding and would want media display advertising to be more prevalent. So our media plans are tailor-made to suit the respective needs of our clients.”
segment and its subsequent acquisitions of technology vendors doesn’t seem to be getting over. In 2004, it fought a hard battle to get its hands on PeopleSoft for $10 billion. It went ahead and acquired Siebel Systems for $5.8 billion in 2006. Even 2007 saw Oracle get Hyperion Solutions for $3.3 billion. And now on Jan 16, 2008 Oracle added yet another name to its impressive portfolio with the acquisition of BEA Inc. for a sum of $8.5 billion.
richest man in India. Estranged brother Anil follows close behind in the region of Rs.1.83 lakh crore... Besides, their respective clouts in the corridors of power – both business and political – make up the stuff for legends. While the former is bent on revolutionising the oil sector by building the world’s biggest oil refineries, the latter is not far behind scripting a remarkable success story, with his telecom, media and financial services arms. Not only this, since their split, the Ambani duo are exploring newer avenues to expand their respective empires. If Anil is ambitiously charting success strategies for the financial domain with Reliance Money, he’s also keen to dominate the power sector with his Reliance Power. On the other hand, Mukesh is changing the dynamics of India’s organised retail party, with his ambitious Reliance Retail project. The sibling rivalry, which took off with the market capitalisation war between the two at the time of their separation in 2005, is now a full-fledged warfare, where the winner will take it all. 
Reliance Fresh has hit a roadblock with the unorganised sector and political parties in the states of West Bengal, Tamil Nadu, Jharkhand and Uttar Pradesh rising tall against it. However, such protests have only given Reliance Fresh much publicity and when 4Ps B&M caught up with Raghu Pillai, President, Reliance Retail on his take on such ‘Protests’, this is what he had to boldly proclaim: “We are not doing anything illegal and neither are we manipulating any social norm. So nobody can stop us from doing anything along these lines and all the protest made against us is totally baseless. In spite of the baseless allegations against us, in a time span of just 13 months we are present in 13 states and in 11 formats. People say that our presence will force the unorganised players to close shops but can anybody actually prove that? There’s room for everyone to grow and when it comes to the protest from kirana stores, I couldn’t recall even a single local unorganised shop being shut because we were operating in that particular state. However, now we are also focusing on collaboration with other people involved in the supply chain like the farmers. But that’s not because of the protest, rather it’s a part of our growth strategy. As the country’s socio-economic state improves, there’s bound to be many changes in India. And what is good for consumerism will ultimately happen. Nobody can stop it, whether in the name of social awareness or in the name of protecting unorganised players. No protest will work against us or stop us from growing.”
w mascot! The seemingly know it all, funny yet globe trotting HCL employee is more then just arrogant. What he truly represents is the changing face of HCL, a company which not only operates in India but is working towards a better global future as well! With its 51,000 employees spread across 18 countries, HCL has become one of India’s true multinationals with interests in diverse genres such as financial services, retail, life sciences and healthcare, telecom, media, hi-tech and manufacturing. HCL Technologies focuses on what it calls ‘transformational outsourcing’ specialising in areas which will have an eventual impact on the future and business as a whole. According to Shiv Nadar, founder of HCL “Since its inception three decades ago, HCL has always dreamt fearlessly and is responsible for many firsts in the computing landscape. We could well be called a ‘pioneer in modern computing’.”
recall any ad campaign by Dish TV. That’s because they were pretty low on the advertising quotient as they were present majorly in cable dry or cable frustrated areas where there was hardly any competition. But as they started moving to bigger cities and the competition heated, the need to advertise was felt. And in 2007 Dish TV got overtly berserk with their advertising endeavours and roped in SRK as brand ambassador. 4Ps B&M caught up with Arun Kumar Kapoor, CEO, Dish TV, for chitchat on their recent branding and advertising strategies