CDC and Abraaj Group invest $17.5 million in AP-based Rainbow Hospitals chain

New Delhi: Global development finance institution CDC Group and Dubai-based private equity investor Abraaj Group have jointly invested Rs. 107.3 crore ($17.5 million), for an undisclosed stake, in Rainbow Hospitals, the UK-based government-owned institution announced on Tuesday.

Proceeds from the investment will be used by the Hyderabad-based Rainbow Hospitals to expand its presence beyond Andhra Pradesh.

The 450-bed paediatric and maternity healthcare-focused hospital chain will set up hospitals in Chennai, Pune, Visakhapatnam and Kurnool, and increase its number of beds to 1,000 by 2017. The capital infusion is also expected to support the creation of as many as 3000 new jobs, up from its present employment figure of about 1,000.

"In parallel, we would also like to develop tertiary paediatric care in tier-2 like Vizag and Kurnool," said Ramesh Kancharla, chairman and managing director, Rainbow Hospitals.

Established in 1999, Rainbow Hospitals is India's largest specialized paediatric and maternity care company with four maternity, paediatric and neonatal intensive care units, and one outpatient clinic in Hyderabad. The business has expanded with four centres added in the last six years.

"With employment in the group currently at around 1,000 people, we expect this to grow as much as four times over the course of our investment, led by the rapid growth in the Indian healthcare market," pointed out Srini Nagarajan, regional director for CDC's South Asia operations.

He also added that with demand expected to grow at around 15% per annum over the next decade, it was clear that the gap in provision of healthcare in India will need to be plugged by the private sector.

The latest transaction is CDC's first direct equity investment in India since the launch of its new investment strategy in late 2012.

Under its new strategy, announced in September last year, CDC now provides direct debt and equity investment to businesses in South Asia and Africa, while continuing to act as a fund-of-funds investor.

From 2004 to 2010, it operated primarily as a fund-of-funds investor, investing in companies through intermediary fund managers.

The Rainbow Hospitals investment also builds upon Abraaj Group's long-standing partnerships with healthcare institutions in South Asia and represents its sixth healthcare investment in the region.

"The Abraaj Group has been an early and committed investor in the healthcare space and this transaction represents our 28th investment globally in this sector," said Balaji Srinivas, managing director at the Abraaj Group.

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Cabinet approves setting up of Tax Administration Commission

New Delhi: The Union Cabinet today approved the proposal for setting up of the Tax Administration Reform Commission (TARC).

Finance Minister P. Chidambaram in his Budget Speech 2013-14 had announced a proposal to set up the Commission.

The Commission will consist of a Chairman, two full-time members and four part-time members, of which at least will be from the private sector.

The Chairman will be an eminent person having wide experience of tax administration and policy making. The two full-time members will be with a background in revenue service pertaining to Income Tax and Central Excise and Customs respectively. The term of the Commission will be 18 months.

The Commission will review the application of tax policies and tax laws in India in the context of global best practices and recommend measures to strengthen the capacity of the tax system in India that would reflect best global practices.

The Commission will help in removing ambiguity in application of tax policy and tax laws, thereby establishing a stable tax regime and a non-adversarial tax administration. The Commission will facilitate an efficient tax administrative system that would enhance the tax base as well as tax payer base.

The Union Cabinet also approved a proposal for exemption of prior approval of Cabinet for disposal/auction of immovable properties acquired by the Union Government under the provisions of Chapter XX-C of the Income Tax Act 1961.

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VLCC acquires Singapore-based wellness firm GVig

New Delhi: Making its second overseas acquisition this year, the home-grown wellness and slimming firm VLCC has bought controlling stake in Singapore-based Global Vantage Innovative Group (GVig), which manufacturers and retails beauty and wellness products.

VLCC did not disclose the deal size, but industry insiders note that the deal is in the Rs 100-Rs 120 crore range. The company had earlier this year acquired Malaysian slimming and personal care firm Wyann International. It said the latest acquisition would help in expanding its presence in the South-East Asian region.

Mukesh Luthra, Chairman, VLCC Group, told Business Line, “We have acquired 80 per cent stake in GVig. The acquisition will give us a foothold in dermatological solutions. It will also help us gain access into GVig’s wellness products, research and development laboratory and manufacturing facilities.”

GVig provides wellness solutions through its subsidiaries BelleWave Cosmetics in the skin and haircare category, Celblos Dermal Research Centre, which offers dermatological solutions, and Enavose Life Science Research, offers a range of Swiss-made skincare and body wellness solutions.

Luthra said the acquisition has been funded through a mix of debt and internal accruals.

Asked on the products positioning in the India’s $5.7 billion beauty and wellness segment, Luthra said the products would be in the masstige (mass+ prestige) category.

He said VLCC had reported a turnover of Rs 1,000 crore in fiscal year ending March 2013. “We hope to touch a turnover of Rs 1,500 crore”.

PE investor Everstone Capital has been an investor in VLCC since 2007. It has 15 per cent stake and their funds were used for scaling up its India wellness services business and VLCC’s personal care business. CLSA had exited VLCC through a management buyout.

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India's exports show double-digit uptick for first time in 2 years

New Delhi: India exported goods worth $25.83 billion in July, a growth of 11.64 per cent — the best in nearly two years — propelled by higher demand for pharmaceuticals, textiles, chemicals and petrochemicals, and a falling rupee.

A sharp fall in gold and silver imports and a modest decline in the oil bill led to a 6.12 per cent decrease in overall imports, to $38.10 billion in July. Gold and silver imports declined sharply to $2.97 billion during July compared to $4.47 billion in the corresponding month last year following the increase in import duties and other curbs imposed recently by the Government.

The trade deficit narrowed, to $12.26 billion during the month, compared to $17.47 billion during July 2012, bringing some relief to policy makers grappling with a high current account deficit and a weakening rupee.

The Government said it was hopeful the export incentives announced recently, including an increase in the interest rate subsidy for select sectors, would help to keep exports on the growth track for the rest of the fiscal.

UP FROM NEGATIVE ZONE
The relatively high growth in exports , following two months of decline and several months of tepid increases, pulled the overall export figure for the fiscal out of the negative zone. Exports posted a 1.72 per cent growth in the April-July period, to $98.29 billion.

Commerce Secretary S. R. Rao said during a press briefing on Monday that export growth should keep pace in the coming months as recent incentives start showing results. While the rupee exchange rate was also helping exporters, Rao said a stable currency helps exporters in their long-term contracts.

“Very few exportis on spot-price basis. What is important is to have a stable currency. The new incentives announced by the Minister should play out in the next couple of months. We expect exports to be doing slightly better,” he said.

Rao added that the export growth target for the year was 10 per cent, and the country should be doing better over the next few months. The Commerce Department's continued focus on new markets such as Latin America, Africa and South East Asia, would also help exporters, he said.

Exporters said continued support from the Government was essential. Although the US market was showing definite signs of improvement, demand from the EU was still unstable, they said.

“The pre- and post-shipment credit rates are hovering around 10 per cent, which is very high when compared to interest rates available to our competitors. The Government should re-introduce separate rates of fixed 7.5 per cent for the labour intensive sectors of clothing and textiles,” Apparel Export Promotion Council chief A. Sakthivel said.

“The Government should continue with its reform process and address the issue of availability of credit and transaction cost related matters with the same zeal so that the momentum continues,” FIEO President Rafeeque Ahmed said.

OTHER IMPORTS TOO DOWN
Apart from gold and silver, other products that witnessed an import decline included project goods, vegetable oil, and precious and semi-precious stones.

Oil imports during July were 8 per cent lower at $13.816 billion, while non-oil imports, at $25.39 billion, were 5.26 per cent lower than the same month last year.

In the April-July period, imports posted a growth of 2.82 per cent to $160.73 billion while the trade deficit stood at $62.44 billion, compared to $59.69 billion last year.

Exports in 2012-13 fell 1.6 per cent, to $300.6 billion, as a slowdown in the global economy reduced demand, while imports increased by a marginal 0.44 per cent to $491.48 billion from $489.31 billion.

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India Inc’s Europe investments stood at $56 bn in 2003-12

Mumbai: Indian companies have invested €43 billion ($56 billion) across Europe between 2003-2012, of which €29 billion was mergers & acquisitions of 411 companies.

About €14 billion was invested across 511 projects during the decade, according to a report by the Europe India Chamber of Commerce (EICC), a body that promotes bilateral trade between the European Union and India.

The primary driver behind this investment is the rapid growth of Indian Multinational Corporations (MNC) which is seeking new markets for growth and diversifying risks, access to new technologies, R&D capabilities and leveraging their cash rich positions against low valuations in today’s financial market, it said in the report.

The report – ‘Indian Companies in the European Union: Reigniting Economic Growth’ – also said that Indian companies employ 1.34 lakh professionals in Europe, including 40,000 new jobs created by 511 greenfield investments.

The biggest pan-European employer is the Tata group, which counts about 80,000 employees across its 19 companies in Europe, including the IT giant Tata Consultancy Services.

“Indian Businesses have shown an extremely good track record in turning around troubled companies and that has made their investments even in existing European enterprises as both job protecting and job creating ones,” said Sunil Prasad, Secretary General of the EICC.

A dominant 47 per cent of the Indian greenfield investment and 63 per cent of the employment creation was accrued to the United Kingdom – with which India has strong historic, social and economic ties.

This was followed by Germany, the Netherlands, France, Belgium and Italy – which jointly accounted for 41 per cent of investment and 25 per cent of employment creation.

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Govt eases land requirement norms for SEZ to attract more investors

New Delhi: Government made the special economic zones attractive for the investors by notifying relaxations in the minimum area requirements and easing the exit clause for developers on Monday. In line with the announcement made by the commerce and industry minister in April, the amendment in SEZ rules will allow SEZ developers to add one product category on each additional 50 hectares of land.

There will be no minimum area required for IT SEZs, but only a minimum built up area of 1 lakh square meters for the top-7 cities, 50,000 square meters for the next 15 cities and 25,000 square meters for the rest of the cities. "The idea is to give incentives to push these IT SEZs out of the big cities and explore the less dense cities," said a commerce department official.

Multi-product SEZ's minimum land requirement has been cut to 500 hectares from 1,000 hectares. Single product SEZ's minimum land requirement has been cut to 50 hectares from 100 hectares. Multi-services SEZs will be treated on a par with single-product SEZs, with the minimum area being slashed to half from 100 hectare. This will allow multi-product SEZ developers with a minimum land requirement of 500 hectare to set up multi-services SEZ on an additional 50 hectare of land.

For SEZs to be set up exclusively for electronics hardware, agro-based food processing, biotechnology, handicrafts, the minimum area required will be 10 hectares.

Agro-based food processing SEZs are being introduced following demands by the agrarian states. SEZs allow duty-free imports or domestic procurement of goods and also provide 100% income tax exemption on export income for SEZ units for the first five years.

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Nation’s largest blast furnace goes on stream at SAIL plant

New Delhi: Steel Authority of India Ltd (SAIL) has operationalised the nation’s largest blast furnace at its Rourkela Steel Plant.

It will increase SAIL’s hot metal capacity by 2.5 million tonnes per annum (mtpa) to 4.5 mtpa, the company said in a statement.

Named ‘Durga’, the furnace is built at an approximate expenditure of Rs 1,600 crore. It has a useful volume of 4060 cubic metres.

SAIL chief C.S. Verma also inaugurated a new slab caster at Steel Melting Shop-II of the plant. The environment-friendly furnace ensures minimum emissions and recovers waste energy to the fullest. It also has a closed-loop cooling system resulting in almost zero water discharge.

The new slab caster, set up at an approximate expenditure of Rs 500 crore, incorporates the latest technologies and can cast slabs of width up to 2,500 mm with thickness of 220 mm, 250 mm and 300 mm. It will supply slabs to the new 4.3 metre wide plate mill being installed as a part of the Rourkela plant’s modernisation and expansion plan.

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