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  • 8/7/2019 Deepak Kumar Sharma Bba


    Presentation OnPresentation OnFactoIndian EconomyFactoIndian Economy


  • 8/7/2019 Deepak Kumar Sharma Bba


    :India Fastest Growing Free Market Democracy

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    : -India Among the Top 15 Countries in terms of GDP atconstant prices

    .Th e Ind ian econ om y ha s w itne ssed an un prece de nted grow th B oo m ing Ind ian services andin d u stry se cto r a re p rov id in g th e re q u ire d im p e tu s to th e e co n o m ic g ro w th

    The soundperformance of each

    industry segment isleading to theoverall robust

    performance of the

    Indian economy

    Indian economy isthe 4thlargest in

    terms of PPP USD

    .4 1 trillion in 2006

    India s GDPwitnessed high

    growth and was thesecond fastestgrowing GDP after


    ( - ):Growth in sectors 2006 07: . %Industry 10 9: %Services 11

    : . %Agriculture 2 7


    Fastest GDP growth of 9 4- ,percent in 2006 07 since last

    18 years

    Contribution of -Services increased from 49 percent to 55 percent


    . %8 5 . %7 5. %8 4

    . %9 4

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    :India Robust Economic Platform

    India s enhancedeconomic

    performance has

    been the major

    contributor towardsincreased Forex


    Steadily increasingForex reservesoffer adequate

    security againstany possible

    currency crisis ormonetaryinstability

    Falling Dollar inflatesthe India s external


    Increasedconfidence of

    investors in Indiancompanies have led

    to a surge in crossborder borrowing by

    the corporatehouses

    Forex reserveswitnessed an

    increase of 200percent for the

    -period 1990 2007

    at present level of Forex,reserves the country hasadequate cover for 12 months of


    India s Forex reserves are in excess of exter

    t he decreasing external debtto GDP ratio indicates that

    India has a sound economicplatform

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    :India Surging Exports

    Petroleum products are the major

    contributors towards India s growingimports

    Quality and cost advantage are thetwo important parameters leveraged bythe Indian producers to increasingly

    market their products and services

    Services sector hasbeen a major

    contributor to

    increased exportsfrom India

    Imports of productsby India mainly

    includes petroleumproducts and


    Indian companieshave chalked out

    extensive plans toincrease theirpresence abroad

    Acceptance ofIndian productsalong with the cost

    advantage hasprovided an edge to

    Indian companies

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    :India Attractive Investment Destination

    India is rankedsecond in ATKearney FDI

    confidence index

    Telecom andElectronics topped

    the list of inwardFDI

    FDI inflow for the-period 2006 07

    witnessed a growthof 180 percent overthe same periodlast year

    Mauritius has beenthe largestcontributor towards

    ..FDI into India

    Return on the Investments in India (2006 Q1)

    Market PE Ratio P/B Ratio RoE (%)

    India 16.1 4.53 22

    China 10.62 2.06 17

    Indonesia 10.26 3.09 NA

    Korea 9.85 1.84 16

    Malaysia 13.21 1.82 16

    Taiwan 12.17 2 11

    Thailand 9.84 2.32 23

    EM Asia 11.19 2.12 15

    Latin America 9.35 2.46 18

    EM Europe 10.9 2.39 15

    ,With improved performance on PE ratio and ROE Indian markets have attractedlarge investments

    180 percentIncrease

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    :India Vibrant Capital Market

    India is among themajor destinations

    across the globefor inflow of US. .Dollar i e FIIs

    Sensex risen 15times in the period

    -1990 2007

    Sensex The Bombay stock exchange index has risen 15 times from 1990s to,reach 15 000 mark in July 2007

    FIIs augmented support by infusing large investments

    Exorbitant industry performanc

    Increased local investors confide

    Emergence ofindustry and

    confidence of localinvestors along

    with the FIIs has

    led to increasedmovement of sensex

    / /7 9 2007,Crossed 15 000 mark

    ,Crossed 14 000 mark

    ,Crossed 10 000 mark

    ,Crossed 5 000 mark/ /12 30 1999

    / /2 7 2006

    / /1 12 2007

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    : &India Vibrant Economy Driving M A Activities


    Automotive 518 Manufacturing 933

    Banking and Financial 1,375 Media 630

    Chemicals and Plastics 1,133 Oil & Gas 384

    Electrical and Electronics 896 Pharma & biotech 2,520

    Energy 1,484 Telecom 2,198

    FMCG, Food andBeverages

    1,327 Others 4,006

    IT and ITES 2,903 Total 20,305

    :Growth DriversqGlobalisationof


    q Concentration ofcompanies to

    achieve economiesof scale

    q Lower interestrates and vibrantglobal markets

    q Cash Reserves withCorporates

    Contribution ofprivate equity deals to

    total number of dealshave increased from

    nearly 9 percent in2004 to 28 percent in


    ,In 2006 there were a&total of 480 M A deals

    and 302 private equitydeals

    Average deal size closeto USD 36 million

    :Trendsq Ratio of the Size

    of acquisition tothe size of

    acquirer has grownfrom 10 percent in2004 to 25 percent

    .in 2006q -Cross border deals

    are growing fasterthan domestic


    q ( )Private Equity PEhouses have funded

    projects as wellas made a few

    acquisitions inIndia

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    & .Major M A Deals Undertaken Abroad by India Inc

    .USD 12 1 billionTata Steel buys Corus PlcTata Steel buys Corus Plc

    USD 6 billion.Hindalco acquired Novelis Inc.Hindalco acquired Novelis Inc

    .USD 1 58 billionEssar Steel acquired Algoma SteelEssar Steel acquired Algoma Steel

    USD 730 millionVideocon Industries acquired Daewoo Electronics Corporation LimitedVideocon Industries acquired Daewoo Electronics Corporation Limited

    .USD 1 6 billion.Suzlon Energy Ltd acquires REpower.Suzlon Energy Ltd acquires REpower

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    &Major M A and Investments Announcements in India

    USD 11 billionVodafone buys HutchVodafone buys Hutch

    .USD 0 98 billion. -ya Birla Group increased its stake in Idea Cellular by acquiring 48 14 percent stake. -ya Birla Group increased its stake in Idea Cellular by acquiring 48 14 percent stake

    USD 1 billion, ,Plans investment in private equity real estate and private wealth management, ,Plans investment in private equity real estate and private wealth management

    .USD 1 7 billionPlans to spend on its development operations in India over the next four yearsPlans to spend on its development operations in India over the next four years

    .USD 0 905 billion& .san and Mahindra Mahindra has initiated a Greenfield automobile plant project in Chennai& .san and Mahindra Mahindra has initiated a Greenfield automobile plant project in Chennai

    Mylan Laboratories acquired a majority stake in Matrix LaboratoriesMylan Laboratories acquired a majority stake in Matrix Laboratories. USD 0 74 billion

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    :India Pacing Ahead to Emerge as a Major Economy in theWorld

    ( )2007 Global Retail Development Index GRDI

    India has beenranked superior toother major

    countries by manyprominent surveys

    AT Kearney placedIndia among the topthree in its FDI

    confidence index

    the retailmarket along with

    the services sectorhas been attractingthe interest of

    major players

    India is expectedto outperform its

    ,rivals in the BRICin terms of GDP,growth rates from2015 onwards

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    :India Astounding Demographics
















    -2001 02 -2005 06 - ( )2009 10 E

    ( , )Rich Above 115 000

    ( , , )High Income 57 000 115 000

    ( , , )Consuming class 23 000 57 000

    ( , , )Working class 10 200 23 000

    ( , )Needy Below 10 200

    Annual Household Income

    ( )in USD

    *In PPP terms





    Increasing per capita incomecoupled with an emerging middle

    class has provided the

    necessary impetus toconsumerism in India

    Growth in thehigher income

    categories of

    India s populationhas created anaffluent section of,society which has

    significant levelof purchasing power

    Increasing percapita income andlarge populationmoving into middleclass has led to

    high level ofconsumerism in



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    . , ,a shortage of working population in the future India is expected to emerge as a clear winner and by 2050 it will have

    :India Increasing Working Population

    Stock Position 2005

    South East Asia 362

    Southern Asia 132

    India 691

    Africa 500


    Latin America 359



    Japan 85

    ,World 4 168


    Addition to Working Age Population by 2010

    ( - )Growth in Global Working Age Population 15 64

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    q GDP USD 590 billion

    q %GDP growth rate 9

    q %Services contribution 54

    q FDI limit not 100 percent inmajor industry sectors such as

    , ,Telecom Semiconductors, .Automobiles etc

    q (-) .Balance of Trade USD 46 2billion

    q Investment goal USD 250billion


    q GDP USD 750 billion

    q . %GDP growth rate 9 5

    q %Services contribution 60

    qFDI limit is expected to beclose to 100 percent in major

    industry sectors such as, ,Telecom Semiconductors

    , .Automobiles etc

    q Balance of Trade Shouldincrease with surging exports

    as compared with imports

    q Investment goal USD 305billion


    q GDP USD 900 billion

    q %GDP growth rate 9

    q - %Services contribution 60 65

    qFDI limit is expected to be 100

    percent in major industry,sectors such as Telecom, ,Semiconductors Automobiles


    q Balance of Trade Should bepositive with increased level

    of exports as compared withimports

    q Investment goal USD 370billion


    Growth Expected in India

    , .To sustain the GDP growth of more than 8 percent India requires an investment of USD 1 5trillion in the next five years

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    India has among the highest returns on fore

    - , .Dan Scheinman Cisco System Inc as,told to Business Week August 2005

    , .sts stayed for the quality and are now investing for innovation

    A T KearneyFDI Confidence Index 2005

    .three most attractive FDI destinations in the world

    Jack Welch

    General Electric

    .India is a developed country as far as intellectual capital is concerned

    US Department ofCommerce

    , .By 2032 India will be among the three largest economies in the world

    ,BRIC Report Goldman Sachs

    Why India? Quote Unquote

    ,Travyn RhallACNielsen

    -The Indian market has two core advantages an increasing presence of multinati

    Craig BarrettIntel


    .India has evolved into one of the world's leading technology centers

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