A Fresh Start with a Reflection of the Last Year

The Beginning of the New Year is an occasion for us to reflect upon the passage of time. It is an opportunity for us to sit, reflect and take some firm decisions. The Year 2014 was filled with variety of opportunities, challenges and achievements. It is neither a peekaboo nor a sneak peek but it’s time to reflect and honor the past. Here are some major events listed in chronological order that happened in 2014.

Major Indian Events in 2014

8 Jan 2014 - Asia Business Responsibility Summit 2014

28 February 2014 – Union Budget of India 2014

March 13-16, 2014 – World Living Heritage Festival in Rajasthan

29th April 2014 – Indian Golfer Anirban Lahiri ranked 67 in World Golf Ranking

31st May 2014 - 8 Indian Soldiers posthumously awarded with prestigious Dag Hammarskjold Medal of UN

30th June 2014 - PSLV C23, carrying five satellites, launched successfully from Sriharikota

30th July 2014 - NASA’s Mars Exploration Rover Opportunity set off-Earth roving distance record

29th August 2014 - National Sports Day 

29th September 2014 - PM Narendra Modi addressed 69th session of UNGA in Hindi

31st October 2014 - Foundation for World's tallest statue of Sardar Vallabhbhai Patel laid in Gujarat

29th November 2014 - Delhi government set up helpline for information on Ebola

24th December 2014 - Global Arms Trade Treaty came into force

Nobel Prizes

Peace – Kailash Satyarthi and Malala Yousafzai

Literature – Patrick Modiano

Physics – Shuji Nakamura, Hiroshi Amano and Isamu Akasaki

Physiology – Edvard Moser, May-Britt Moser, John O’Keefe

Chemistry – William E. Moerner, Eric Betzig and Stefan Hell

Economics – Jean Tirole

Major World Events in 2014

5th Jan - Record Cold Weather Roars Across US 

6th Jan - Sochi Winter Olympics 

18th Feb - Ukraine Crisis 

19th Feb - Facebook Buys WhatsApp for 19 Billion US Dollars

5th March - Malaysia Air Plane Missing with Over 200 Passengers Onboard

16th April - South Korea Ferry Sinks, Hundreds Missing

29th April - Nigerian School Girls Abduction

13th May - Turkey Mine Accident, Hundreds Dead

10th June - ISIS Seized Large Regions 

3rd July - Israel Conflicts with Hamas in Gaza

17th July - Airplane with 298 Onboard was Shot Down over Ukraine 

30th July - Ebola Virus Outbreak

12th Nov - European Spacecraft Rosetta Landed on Comet 

17th Nov - World Oil Price Plunges to Historical Low  

17th Dec - Russia Ruble Tumbles 

18th Dec - US Cuba Relations Breakthrough

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Real estate firms may raise funds via IPO route

After a long time, real estate companies could hit the fund-raising trail. The reason is improvement in investor sentiment.

According to Pankaj Jaju, group head, strategic corporate group, Axis Bank, some that wanted to float public issues in 2011-12 but did not proceed might look at tapping the equity markets in six to nine months. The Mumbai-based Lodha group, Delhi-based Emaar MGF, Neptune group and Hindustan Construction’s Lavasa Corp were among those planning to float Initial Public Offerings (IPOs) three to four years earlier but did not.

“Around Rs 20,000 crore of IPOs were planned in 2011-12. Some will want to tap the markets now,” Jaju said at a real estate conclave organised here on Friday by the Confederation of Indian Industry. “In six months, realty stocks have gone up 60 per cent.”

According to Bloomberg, Lavasa Corp plans to float an IPO this financial year. Axis Bank and Kotak Mahindra Capital are working on it, the agency said, adding the company planned to file a draft prospectus next month to the capital markets regulator Securities and Exchange Board of India. Lavasa had planned to raise Rs 2,000 crore in 2010, Bloomberg said.

Nayan Bheda, managing director, Neptune group, said: “Not now. We will look at an IPO in some time. The gestation period in real estate is taking longer and it could pose a challenge in declaring quarterly results.”

According to sources, listed companies DLF, Phoenix Mills and others such as the Embassy-Blackstone combine could come out with real estate investment trusts and list these if the government gives them tax concessions.

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India a favorite of US firms for investment: Citi

India remains a consensus favourite investment destination for companies in the United States, largely on the back of a 'Modi-Rajan-Commodities trinity', global financial major Citigroup said in a report on Monday.

While India is not totally insulated from the adverse global cues emanating from slumping crude oil prices and depreciation in the Russian currency, "it is relatively better-off", economists at Citi said.

In its report, the American financial services firm said, "Unsurprisingly, India remains a consensus favourite both as an absolute and relative play due to a trinity of factors - business-friendly Modi government; pro-active RBI Governor Raghuram Rajan and commodity tailwinds."

Listing out factors in favour of the country, Citi's economists said in the report that the country is a net importer of crude, its macro fundamentals are improving and rising foreign exchange (or forex) reserves are giving a further boost.

"Following a strong market performance in 2014, most investors were of the view that the on-going cyclical and structural upturn could result in India continuing to outperform in 2015, albeit at a modest pace," the report added.

However, the global banking firm said that despite high expectations, memories of the 2013 taper tantrums have resulted in investors remaining on guard and watching out for potential risks.

Among major concerns for investors are NPA issues in the banking sector, stand-offs in Parliament denting the reform momentum and limited space on the fiscal side.

"Many feel that the first full budget of the BJP government in February 2015 will provide useful insights on the path ahead," the report said.

While estimating that the domestic economy is likely to edge back to 7 per cent growth rate and lower inflation, Citigroup noted, "Unlike the 2013 taper tantrums, when India had a high current account deficit, elevated inflation and weak growth, India's fundamentals have improved".

"However, we re-iterate there is no room for complacency as generalised EM risk aversion could result in reversal in portfolio flows and external debt de-leveraging," Citi economists added.

Source: Business Today

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Cabinet defers approval to real estate bill

The Cabinet on Wednesday deferred the Real Estate (Regulation & Development) Bill, which seeks to ensure consumer protection, establishing regulatory bodies at Centre and states for ethical and transparent business practices in the real estate sector. Sources said the housing ministry has been asked to review the bill to explore how it can be made more consumer-friendly and to have better provisions for promotion of low-cost housing. 

Low-cost housing and roof to all have been identified as a focus area by the Narendra Modi government and it has promised shelter to all by 2022. TOI has learnt that there was also a suggestion during the Cabinet meeting that the provisions relating to Centre-state issues need to be made clearer in the bill. 

Government has included the bill as one of the legislations for passage during the current session of Parliament. The bill was introduced in the Rajya Sabha last August and referred to the parliamentary standing committee. Though the committee had made several recommendations particularly in favour of consumers and greater check on unscrupulous developers, the housing ministry has rejected most of them. 

These include checking the antecedents of project promoters before their registration is done, and ensuring that developers who have defaulted in two earlier cases be blacklisted. But the ministry rejected this arguing that such a provision will work as a deterrent for the sector. Similarly, the panel had suggested the promoters be made to enclose names of contractors, architects and structural engineers, which was also turned down. The panel had also recommended all real estate agents involved in sale of secondary market projects also need to be regulated. But this was not accepted. 

Nevertheless, there are also several provisions in the revised bill to protect the consumer's interest. This included the condition that prohibits a developer to change the plan in a project unless 2/3rd of the allottees have concurred for such change. This has reference to recent cases in Noida where a developer had changed plans and built towers to increase economic viability without taking buyers into confidence. 

Earlier the housing ministry's move to allow builders to divert up to 50% of buyers' investment for a specific project to other projects had come under criticism. The original bill had mandated the developer to put 70% of the buyers' investment to an escrow account to be used only for construction of that project. 

TOI on November 25 had reported how the real estate lobby was trying hard to push for this dilution.

Source: The Times of India

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Real Estate: Why India can build hope

The real estate sector may be hung over from a two-year downturn, but developers say that one thing never changes: The right product at the right ticket size always sells.

Real estate developers had hoped that the election of a stable government would boost their fortunes. It’s been six months since the Narendra Modi-led NDA has come to power, but there has been no noticeable change in demand. Unsold inventory continues to pile up across the country. High interest rates and a sluggish sub-5 percent GDP growth in FY14 have resulted in people holding on to their purse strings. The fallout is that real estate prices have barely budged over the last two years. But sentiment is picking up, and cities like Bangalore have developed a vibrant and healthy real estate market. 

As part of the fifth session of the ‘Forbes India CEO Dialogues: The Leadership Agenda’, industry leaders shared their views on the steps needed to revive the sector. Boman Irani, chairman and managing director of Rustomjee Group, Subodh Runwal, director, Runwal Group, Khushru Jijina, managing director of Piramal Fund Management, Ashish Puravankara, joint managing director of Puravankara Group and Sunil Kaushal, chief executive officer of India and South Asia at Standard Chartered, discussed a roadmap to get the sector growing again. 

Developers on the panel believed that there would be an uptick in prices within six months, once there is a correction of interest rates. Financiers, however, said that this is at least 12-18 months away. 

Excerpts from a discussion moderated by R Jagannathan, editor-in-chief, Forbes India.

R Jagannathan: We have certainly seen a turnaround in sentiment. Is that percolating down to the real estate sector?

Boman Irani: Yes. People have started noticing that there is a strong government, which has made all the right noises. The government started with something as simple as the ‘Swachh Bharat Abhiyan’ (Clean India Campaign) and then made a grand announcement promising homes for all by 2022. People feel good about these measures. Emotion is what drives purchase, and real estate is driven by a desire to improve one’s lifestyle. The fact that everyone is hoping that the GDP will improve and interest rates will come down is adding a lot of positivity on the ground.

The flipside is that our industry has a lot of pundits and they like to make tall statements, often crying foul about prices being too high. This brings down public sentiment. They have still not started making the right noises. For the end user, any time is the best time to buy, provided he finds what he is looking for in his budget. 

Jagannathan: Bangalore is driven more by fundamental demand and less by investors, unlike, say, Mumbai. Do you see any change in demand?

Ashish Puravankara: Bangalore has been quite stable for the last 2-3 years. One distinct change that we have noticed is that pre-sales have seen a very good response. Earlier, we would sell 10-15 percent when we launched a project. Now we are selling 40-50 percent in the first three months of a launch, and these are at good prices. The end-user demand is very strong. People who come to the city because of their jobs end up staying back. Hence, there is a lot of demand.

Jagannathan: Mumbai is a different market from Bangalore in that there are a lot of speculative investments. With that in mind, do you think Mumbai would take longer to revive than Bangalore or Chennai?

Subodh Runwal: If you look at Mumbai from a 30-year horizon, you’ll see that real estate has outperformed all asset classes. What we are witnessing now is a temporary blip, but if you look at a good developer, you will see that his projects are still selling out quickly. Recently we had people queuing up at 5.30 am for a project we launched.

Source: Forbes India

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