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India: Moving away from inbound to outbound investment Carl Nisser – Consultant SJ Berwin LLP – London 3130087. Overview of Presentation. Major issues in India’s internal market Competition – a base for stronger Indian companies Changing investment trends . 1.
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India: Moving away from inbound to outbound investmentCarl Nisser – ConsultantSJ Berwin LLP – London3130087
Overview of Presentation • Major issues in India’s internal market • Competition – a base for stronger Indian companies • Changing investment trends 1
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 2
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 3
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 4
Cross border deals by Indian firms Changing investment trends (cont’d) 5
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 6
Changing investment trends (cont’d) • Total M&A’s into India in 2006 $3.5 billion whilst private equity deals $7.5 billion 7
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: carl.nisser@sjberwin.com 8