Friday, November 30, 2012

Old News : Auto Deals

Honda Siel buys out Usha International Ltd from India JV

Japan's Honda Motor Co on Friday ended its 16-year-old joint venture in India by buying the entire stake of Usha International for 180 crore.
Shriram Group-promoted Usha International Ltd (UIL) said in a statement it had sold its 3.16% stake, or 1.8 crore shares, in Honda Siel Cars India to the Japanese automaker. The sale was sealed at 100 a share, inclusive of a non-compete fee, Usha said.

"Usha feels that it was inevitable that some day the parting would come, because automobiles are not really Usha's direct business," the company said, adding, "The proceeds from the stake sale would be applied to the normal development of Usha's business."
Following the sale, Usha International owner Siddharth Shriram will cease to be chairman and director of Honda Siel, which manufacturers the City, Brio, Jazz, Civic, Accord and CRV in India.
The sale, finalised two days ago, makes Honda the sole owner of the company. The automaker said the name of the firm would be changed soon.
In a separate statement, Honda Siel Cars said, "Based on mutual consent, UIL has sold its shares to partner Honda Motor." UIL had shown interest in divesting its stake, it added.

Honda Siel Cars, which has manufacturing facilities in Greater Noida in Uttar Pradesh and Tapukara in Rajasthan, is the sixth Indo-Japanese joint venture to have been dissolved.
Honda and Usha had been fighting over the valuation of Usha International's stake in the JV for several months. Ernst & Young, appointed by Honda Siel Cars, had reported a valuation of 63.60 a share, while KPMG had given a value of 182 a share.
Usha had said E&Y's valuation was low, despite the consultant taking into account an additional equity infusion of about 3,200 crore in Honda Siel.
The tussle started when the Indian partner declined to participate in an capital-raising programme proposed by Honda in October last year. Honda Siel has planned to raise 3,200 crore to introduce new small cars and diesel variants in the market.
Usha's relationship with the Japanese auto major goes back to 1985 when Honda Siel Power Products(formerly Shriram Honda Power Equipment Ltd) was started as a joint venture between the two.
Honda, which operates several companies in India, has pulled out of joint ventures in the past to form wholly owned units.
In December 2010, Honda terminated its 26-year-old Indian joint venture with the Hero Group to manufacture motorcycles on its own. The company now operates Honda Motorcycle and Scooter India, which holds about 20% marketshare.
In 1998, Honda had also pulled out of Kinetic Honda, a joint venture with the Pune-based Firodias family. The Japanese automaker had also bought out Shriram's stake in Shriram Honda Power Equipments for 80 crore.
Source : ET Bureau 

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Honda-Siel battle ends with buyout
Shrirams sell stake to Japanese auto giant for Rs 180 crore





The uneasy partnership between Honda Motor Corporation (HMC) and the Siddharth Shriram-promoted Shriram Industrial Enterprises Ltd (Siel) has come to an end, with the Japanese auto major on Friday saying it has bought out the latter’s stake in its Indian subsidiary for Rs 180 crore.
The announcement brings to an end the 17-year-old joint venture, Honda Siel Cars India (HSCI), in which Siel through Usha International Ltd (UIL) had 3.16 per cent stake. “Usha, Honda Siel Cars India Ltd and Honda Motor Company, Japan, after working together for 16 years to develop Honda Siel Cars India Ltd have agreed to end their joint venture,” UIL said in a statement. According to the agreement reached between the two companies, Honda Motor Co has “purchased all of the shares (18 million) that Usha held in Honda Siel Cars India Ltd”. The stake sale had been negotiated at a price of Rs 100 a share, inclusive of a non-compete fee, the statement added.


With the stake sale, Siddharth Shriram ceased to be a director and the chairman of HSCI, UIL said.

AUTO SPLITS
Instances of joint 
ventures splitting in the Indian auto sector
HONDA-SIEL (2012)
Honda buys out Siel’s 3.16% stake in the company
Rs 180 crore
FORCE MOTORS-MAN (2011)
MAN bought out Force Motors’ 50% stake
Rs 1,050 crore
MAHINDRA-RENAULT (2010)
Mahindra bought out Renault’s 49% stake
HERO HONDA (2010)
Hero buys out Honda’s 26% stake
Rs 3,841.83 crore
MARUTI SUZUKI (2007)
The govt sells its 18.28% stake in Maruti Udyog Ltd to Indian financial institutions in May 2007 after a battle with the Japanese partner
TVS SUZUKI (2001)
TVS buys out Suzuki’s 25.97% stake
Rs 9 crore
YAMAHA ESCORTS (2001)
Yamaha buys out Escorts’ 26% stake in the company
Rs 70 crore
KINETIC HONDA (1998)
Kinetic buys out Honda’s 51% stake
* Rs 35 crore
* Deal value                                                                                   Source: Industr

In a separate statement, HSCI said, “UIL, which held 3.16 per cent shares in HSCI, had shown an interest in divesting from the joint venture to be able to focus and strategically invest to expand their own core business. Therefore, based on mutual consent, UIL has sold its shares to the partner Honda Motor Co, Japan.” HSCI will now be a 100 per cent Honda subsidiary in India.
“The process of changing the company name and other formalities will be completed over the next few months,” the car maker said.
The decision comes after months of the two partners waging a bitter battle over the valuation of UIL’s stake. HSCI had appointed Ernst & Young to value it. The valuation it arrived at (Rs 63.60 a share) was nearly a third of the Rs 182 a share arrived at by KPMG, which had done the valuation for UIL. UIL had objected to the valuation done by Ernst & Young, saying it was lower despite the consultant having taken into consideration an additional equity infusion of an estimated Rs 3,200 crore in Honda Siel.
The controversy erupted after Siel declined to participate in an equity capital-raising programme as proposed by Honda in October last year.
“Usha feels that it was inevitable that some day the parting would come because automobiles are not really Usha’s direct business,” UIL said in its statement on Friday. Usha had a relationship with the Japanese auto major since 1985, when Honda Siel Power Products (formerly known as Shriram Honda Power Equipment Ltd) was started. The group became Honda’s partner in 1995.
Honda, which commenced sales operations in India with flagship sedan City in 1998, has seen market share dip over the decade due to increased competition from global players. The company’s lack of diesel engines has further added to its woes in the domestic market. In the last financial year, the company’s sales declined 8.47 per cent to 54,427 vehicles.

Source : http://business-standard.com

Thursday, November 29, 2012

Starbucks comes to India, opens first outlet in Mumbai

India's 1st Starbucks outlet

Forty-one years after making a modest beginning in Seattle's Pike Place Market, the Starbucks Coffee Company has finally come to India, in a 50:50 joint venture with Tata Global Beverages.



(Employees of the newly inaugurated…)




















"Why don't you visit the Starbucks outlet and review it? A quick mood piece... the bill is on me," says the boss.
There goes another Saturday, I think. "Should we wait a while? The outlet is at Horniman Circle, next to the Bombay Stock Exchange. The exchange is closed today and it's a half-day for the banks. I think the place might be deserted," I say, half-hoping that he would change his mind.
Twenty minutes later, I am on a Mumbai local, off to sample a cup of coffee, which awaits me 32 kilometres away. Contrary to my fears, I am not the only pilgrim headed to this temple of American coffee. A dozen-odd people are queuing up at the entrance, braving the afternoon heat of Mumbai: families with noisy kids, groups of excitable teenagers and a few middle-aged men, including yours truly, who pretend to be busy with their smartphones, trying hard to hide the embarrassment of having to wait in line for a cup of coffee.
Coffee Break
Inside the outlet, the teenagers pull out their tablets and smartphones — click, click, click. Updates and photos on Twitter follow. The Medusa-esque coffee goddess of Starbucks stares down at you from a wall.
"Papa, this is the biggest Starbucks I have been to," screams a bespectacled eight-year-old with spiked hair. "It's waaay bigger than the one in Hong Kong and Singapore." That's possible: this one is 4,500 sq ft — almost thrice the size of the average Starbucks store in the US. The interiors are swank, trademark wood-and-brown Starbucks finish.
"I am going to get my mama here in the evening. CCD is so dead, dude," says a teenager with braces. Her friend, a plump girl with an accent that is lost in transit between Louisiana and Ludhiana, agrees. Briefly, they panic at the sight of disappearing croissants and tweet about it. Fifty people wait ahead of us —most of them wide-eyed like belles at a village fair.
It reminds me of another day in 1996 — when I was a teenager, with hair on my head and the idea of pocket money was 10 bucks a day. Pizza Corner had opened its first outlet in Chennai and I queuing up with two weeks' pocket money in my wallet, ready to eat my first pizza.
Problem was I didn't know what a pizza looked like. When it arrived, I squeezed the slice with tight, nervous fingers till the onions and olives rained down on my lap. After a few embarrassing minutes, the waiter walked up and mumbled those magic words: "Unlimited soft drinks, saaar."
All was forgotten and my passionate affair with pizzas and large-sized jeans began right then. There are no such embarrassments at Starbucks. Once you get into the store, an American employee hands out little cups of cold vanilla frappuccino. Another employee hands out menus, guides folks through the ordering process. "I have seen nothing like this before," says the American employee, looking starry-eyed at the queues. "I have heard that people waited for hours when the first outlet opened in Brazil, but other than that..."
India Story
Many of those who stood in the queue had been to a Starbucks before. Not surprising because the first outlet is located in uptown Mumbai, where the rich live. Next week, though, Starbucks will open two more outlets, at the Taj Mahal Palace hotel and at a mall in the suburb of Goregaon.
The latter will be Starbucks' first real taste of urban, middle-class India. Goregaon is home to middle-class working professionals, Gujarati jewellers and, of course, hundreds of shopkeepers. Most of them will throng to Starbucks, initially, for two reasons. One, Indians are a curious lot. Two, Starbucks has aggressively priced its coffee (Rs 95 for a cappuccino caffe latte).
However, Starbucks has set up shop in India a decade and a half after market leader, Cafe Coffee Day (1,300-plus outlets on the last count), opened its first outlet in Bangalore. Some might say that's too late. It's a mistake Starbucks made in Australia and paid dearly for it (see Between the Lines).
At Starbucks Mumbai, the coffee is hot, the air conditioning freezing cold ("Sorry, we share it with the Croma outlet next door") and the wi-fi patchy. The American employees go about boisterously greeting customers: "How're you doing?" Most customers smile and nod, a little embarrassed by the attention. Starbucks coffee mugs (Made in Thailand) and coffee pouches are stacked neatly near the counters. Nobody is hard-selling them, not yet.
Bill, Please
Finally, after 40 minutes of standing, I arrive at the counter. I order a caramel frappe (grande size) and a walnut-apricot cake. The lady at the counter tries to print a bill. The paper roll gets stuck. Close to 100 people are waiting behind me now. She takes my order, says the bill and grub will be given to me in a while.
I move to another counter, collect my coffee. I sink into a sofa, polish off the frappe (which is excellent). No sign of the bill or the cake. I call a supervisor. The cake arrives along with an apology, no bill yet. I eat the cake and leave, a content man: minus the bill (and the reimbursement). But, then again, what are the chances that the only person at Starbucks who doesn't get the bill turns out to be a reporter? Pretty slim, right?
In Pictures :

Starbucks outlet
The first Starbucks outlet in India opened on October 19, at the Horniman Circle in South Mumbai.


The American coffee giant opened its first cafe near the Bombay Stock Exchange, at the Horniman Circle in Mumbai, on October 20.
As happens when any global chain opens its first outlet in the country, there were long queues on the first day. When I visited the place with a friend a couple of days later, nothing had changed; the queue now stretched well outside the outlet.
It took me 15 minutes to get in, and another half hour to get to the counter. Still, the experience was not altogether unpleasant. The staff was friendly, and serving free samples of Starbucks' trademark Vanilla Frappuccino blended coffee to those standing in line.

Starbucks outlet
Gunny sacks, old milk cans and a hand grinder on the shelves.

The menu has a variety of Italian coffees, tea and the usual assortment of snacks and dessert. I ordered a brewed coffee while my friend had a Java Chip Frappuccino. We ended up spending around Rs.250.
Starbucks outlet
The decor is very Indian.

The Mumbai outlet is huge. Foreigners who were inside claimed they had never seen one as big. The ambience was very Indian: old boxes, dummy books, a hand-grinding machine and large photographs.
It was a bit like being in a curio shop for foreign tourists in India. All in all, an interesting experience.

Starbucks outlet
The store's wall-sized images are eye-catching.

Source : TV Mahalingam, ET Bureau,http://indiatoday.intoday.in

De-listing scrips Buzzing

MNCs decides to reduce promoter shareholding to be in line with listing norms

(Indian subsidiaries of…)
Intimidated by the huge costs involved in delistingshares from local bourses, the Indian subsidiaries of foreign multinational firms have decided to reduce promotershareholding to stay in line with listing norms, rather than mop up shares of minority investors.
The move by the multinationals caught many investors by surprise on Wednesday after two more companies - Honeywell Automation and Blue Dart Express - decided to reduce shareholding through the offer for sale (OFS) route instead of delisting its Indian subsidiaries from the local stock bourses.
The proposed offer for sale by these companies triggered panic among the investors of other multinational companies who have bought these stocks in anticipation that the multinational firms will delist their shares to escape Sebi's minimum public shareholding norm by acquiring the stakes held by minority investors at a huge premium.
Shares of MNCs declined between 2% and 6% on Wednesday against the 1% gain by the main stock barometer the BSE Sensex.
Shareholders in Honeywell Automation, supplier of industrial automation and control solutions, hammered the company shares down soon after the announcement on Wednesday, with the shares shedding a fifth of their value, or 20%, to close at Rs 2,504, a share. Blue Dart shares closed up 2.2% to Rs 1,713.85 a share as the announcement of promoter's divestment through secondary sale came after market hours.
Investment bankers believe that more MNCs may go for the OFS window to shore up non-promoter holdings as delisting is not viable.
"Promoters prefer the OFS route to delisting because of cost implications as many stocks have run up in anticipation of delisting offers at high premiums. Further, the deadline for increasing the public holding to 25% is approaching, and the OFS route provides a higher degree of certainty of completion," said Ravi Sardana of ICICI Securities.
Honeywell Automation stock surged 16% to a record high of Rs 3,392 on last Friday on reports that promoters are considering delisting of its Indian unit from bourses. This was apparently denied by the company and subsequently the stock corrected 6% on Monday. Honeywell Automation has surged nearly 82% so far this year through Monday in anticipation of an open offer for delisting.
Honeywell Automation during market hours said its foreign promoter Honeywell Asia Pacific Inc, which holds an 81.24% stake, in due course intends to reduce its shareholding in listed Indian unit in one or more tranches through the the OFS mechanism through a separate window provided by the stock exchanges for this purpose.
The company spokesperson told ET, "In order to meet the compliance requirements established by India's ministry of finance, Honeywell has announced its intention to reduce its ownership in Honeywell Automation India (HAIL), in due course, to 75%, thereby increasing public shareholding to 25%, through an "offer for sale" process, which we will endeavour to complete by June 2013. Honeywell maintains an optimistic view of the future business opportunities in India." The company has an equity capital of Rs 8.84 crore with a face value of Rs 10. At CMP, the promoters could raise up to Rs 175 crore by selling their 6.24% stake.
On the other side, DHL Express (Singapore), promoter of Blue Dart Express, has proposed to sell 14.32 lakh shares, or 6.03% equity capital, on November 23 though OFS. Blue Dart is the third company after Fresenius Kabi Oncology and Disa India, which has proposed to increase the public holding to 25% to meet the Sebi norms.
Source : Rajesh Mascarenhas, ET Bureau

PVR to buy Cinemax, set to become India's largest multiplex operator

PVR to buy Cinemax, set to become India's largest multiplex operator

PVR is set to buy out the 141-screen multiplex chain Cinemax owned by the Kanakia Group, making PVR the country's largest mutiplex operator

Ajay Bijli-ledPVR Ltd, which pioneered themultiplex business in India 15 years ago, is set to buy out the 141-screen multiplex chain Cinemax owned by the Kanakia Group, making PVR the country's largestmutiplex operator.
The deal, expected to close next week, will be executed in two stages. PVR will buy out Cinemax's promoters, Rashesh Kanakia and his family, who currently own a little over 69%, followed by an open offer for another 26%, said two people familiar with the developments.

ICICIBSE -0.91 % Prudential, with a 6.70% holding, and Mavi Investment Fund, with 1.20%, are significant institutional stakeholders as on September 30. The bulk of the promoter holding is pledged with financial institutions, but the Kanakias have been revoking the pledged shares to free them.

FINAL TALKS OVER PRICE STILL ON

The final negotiations over pricing are still on, but PVR has offered Rs 170-180 per share to buy out the promoters. This is a premium of 6.25-12.5% to the current trading price of Cinemax, which closed on Thursday at Rs 160, up nearly 5% on both the BSE and NSE.

The stock has run up 150% in the past one month on the back of the impending deal.

PVR to buy Cinemax, set to become India's largest multiplex operator
The upswing has fuelled large deals in the counter recently, with Reliance Capital's Media and Entertainment Fund buying around 1.6 lakh shares for more than Rs 1 crore. Leena Investments Consultancy LLP picked up 1.65 lakh shares at an average price of Rs 122.51 per share, for a total of Rs 2 crore, according to recent market data.

PVR will have to shell out around Rs 500 crore to buy out the Cinemax promoters and is busy giving finishing touches to the financing for the transaction, said one of the persons mentioned above. In FY12, the company registered a profit of Rs 28 crore on revenues of Rs 470.9 crore. The PVR stock ended the day in the green, up 1.83% at Rs 250.

The Cinemax brass has been preparing the ground for the sale, said another official aware of the development. Around noon on Thursday, the senior management was called in by Hemanshu Kanakia, Rashesh Kanakia's younger brother, to inform them of a possible change in guard.

He, however, assured them there won't be any large-scale retrenchment. Messages and repeated calls to Ajay Bijli, the chairman & managing director of PVR LtdBSE -1.52 %, and Rashesh Kanakia, executive chairman of Cinemax IndiaBSE 7.96 %, went unanswered.

On Thursday, Cinemax issued a statement to the exchanges after market hours confirming "that the promoters have informed the company that they are evaluating options for the sale of their shares in the company. However, no definitive agreements have been finalised in this regard".

Source : Nandini Raghavendra & Arijit Barman, ET Bureau

According to sources, negotiations with Renuka Ramnath's private equity venture Multiples is believed to have reached an advanced stage.
According to sources, negotiations with Renuka Ramnath's private equity venture Multiples is believed to have reached an advanced stage.
Cinemax in Hyderabad.
Cinemax in Hyderabad.

The management of PVR, India's third largest multiplex operator, has initiated active discussions with a group of private equity investors and non-banking finance companies (NBFCs) to finance its plan to buy the promoters of CinemaxBSE 10.00 %, another multiplex operator, for Rs 550 crore.

According to two independent sources, negotiations with Renuka Ramnath's private equity venture Multiples is believed to have reached an advanced stage. Multiples may invest Rs 150 crore for a minority stake in PVR LtdBSE 7.83 % by way of a preferential allotment of shares.

Existing investor L Capital - the private equity arm of luxury house LVMH - is also expected to make an incremental investment of Rs 85 crore in PVR, added the sources.

PVR promoters - led by Ajay Bijli, chairman and managing director - will also bring in some of their own equity to conclude the transaction. The debt financing is being syndicated by NBFCs such as Indostar and L&T Finance.

PVR in talks with NBFCs, PE investors to lock Cinemax deal
In August this year, L Capital Asia picked up a 10 per cent stake in PVR for around Rs 108 crore.

The two had announced their intention of entering into joint ventures for investment in various in-mall entertainment, gaming, food and leisure formats.

One of the sources mentioned above said, both L Capital and Multiples might have equal shareholding in PVR after the transaction. But this could not be verified independently.

As of September 2012, the promoters own 40.2 per cent stake in PVR, while domestic and foreign institutional investors together control 22.5 per cent in the company and the remaining 37.2 per cent are with public shareholders.

"The discussions are yet to close but it's at an advanced stage. There should be two back-to-back transactions and PVR would need to put together the equity required to finance the deal. A final announcement is due soon. The allotment will be a premium to the current market price," said an official aware of the ongoing negotiations who spoke on condition of anonymity as the talks are still private.

Source : SNEHA SHAH & ARIJIT BARMAN, ET BUREAU 

Adlabs Films Limited (now known as Reliance Mediaworks Ltd) to build Rs 1.6k-crore theme park near Mumbai

Manmohan Shetty’s Adlabs to build Rs 1.6k-crore theme park near Mumbai
Called Adlabs Imagica, the project coming up on a 300-acre plot will redefine the theme park experience in the country, Shetty said. (BCCL photo)

Called Adlabs Imagica, the project coming up on a 300-acre plot will redefine the theme park experience in the country, Shetty said. (BCCL photo)
MUMBAI: Manmohan Shetty's Adlabs Entertainment is building Rs 1,600-crore theme park on the Mumbai-Pune Expressway and the entertainment entrepreneur has secured two-thirds of the total project cost in debt from a consortium of 14 banks led by Union Bank.

"It took nearly 18 months to get the 14 banks to see and believe in my vision, as they did not have any previous benchmark to go by," said Shetty who will cough up the rest of the project cost as equity.

Called Adlabs Imagica, the project coming up on a 300-acre plot will redefine the theme park experience in the country, he said. It will be rolled out in three phases, with the first phase scheduled to open to the public by March next year.

Spread over 110 acres, the first phase will have about 21 international standard rides including the country's largest roller coaster and 4D stimulation rides.

Phases two and three will include a water park and a three-star hotel, Shetty said. The travel time from both Mumbai and Pune will be around one hour.

"We have chosen Mumbai as the location, since it is the financial capital of India and has the most attractive catchment to support the entire eco-system of a project of this magnitude and scale," Shetty said.

While entry prices are not yet fixed, it is expected to be around Rs 1,400-1,500 per person.

Ticket prices would form 75 per cent of the revenue, with the rest coming from food and beverages as well as merchandise sale.

Shetty said he is also open to dilute the equity in an appropriate time with the right partners and valuation. He said the theme park can accommodate 20,000 visitors at any given time and that the water park will be added in the first year itself.

"We are looking at targeting above 3 million visitors in the first year of operations," he said.

A maverick entertainer, Shetty founded Adlabs Films Ltd as an advertising films processing company in 1976. Soon, the firm ventured into feature film processing by setting up a state-of- the- art laboratory in Film City, Mumbai and processed 80 per cent of all films made.

After going public at the turn of the century and expanding into the film exhibition business, Shetty sold his stake to Anil Dhirubai Ambani Group, and two years later set up his own Walkwater Media and began producing films.

Source : Nandini Raghavendra, ET Bureau

Top 10 emerging business hotspots

Top 10 emerging business hotspots

Ahmedabad.

Next

Image: Ahmedabad.
Photographs: Amit Dave/Reuters. 


At roughly Rs 71,270 crore (Rs 712.70 billion), Ahmedabad saw the highest volume of investment by various companies in last two years among top 10 emerging business destinations, said global real estate consultancy, Cushman & Wakefield (C&W).
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Vishakhapatnam.

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Image: Vishakhapatnam.
Photographs: Nballa/Wikimedia Commons. 
The latest report on 'Top 10 Emerging Business Destinations in India' by C&W has identified the cities of Ahmedabad, Bhubaneswar, Chandigarh, Coimbatore, Jaipur, Kochi, Indore, Nagpur, Vadodara and Vishakhapatnam as the next most promising business destinations offering a long term investment potential.
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Ahmedabad.

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Image: Ahmedabad.
Photographs: Wikimedia Commons. 
Ahmedabad formed 38.8 per cent of the total investment volume of Rs 183,700 crore in the top 10 emerging business destinations, followed by Vishakhapatnam at Rs 58,180 crore (32%) and Vadodara at Rs 24720 crore (13.5%).

In Ahmedabad, however, since 2010, majority of which was in the automobile and auto components sector, followed by telecom and real estate and infrastructure.
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Jaipur.

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Image: Jaipur.
Photographs: Wikimedia Commons. 
"The emergence of tier II and III cities, is significant for the growth of the country's economy as it ensures continuity and rationalisation of business over a period of time. Businesses on the other hand are looking at identifying other suitable locations to setup or expand as they provide the advantage of either lower production and operation costs and access to better resources or to avail better infrastructure and/or benefits of favourable government policies," said Sanjay Dutt, Executive Managing Director, Cushman & Wakefield India.
"These emerging locations represent the possible growth trajectory India's economy will follow in the next few years," he said.
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A worker at a factory.

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Image: A worker at a factory.
Photographs: Reuters. 
According to C&W, among the specific industries or sectors, the metals and metal products manufacturing companies have announced the highest volume of investments with a 39 per cent share, followed by power production companies at around 16 per cent and chemical and petrochemical companies with approximately 11 per cent share.

IT & ITES has seen a growth in investment of 3 per cent. While the investment in this sector is relatively lower than other sectors, it has a higher contribution to the GDP.
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Labourers work at the construction site of a flyover on the outskirts of Ahmedabad.

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Image: Labourers work at the construction site of a flyover on the outskirts of Ahmedabad.
Photographs: Amit Dave/Reuters.
 

"The growth in these cities will be led by primary sectors like metallurgy and power, though services and manufacturing will play a crucial role in creating a more holistic socio – economic environment in these cities. However the most noteworthy aspect is that most of these locations have already identified their niche in certain primary and secondary sector verticals and are strategically poised for expansion into the services sector," Dutt added.

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Top 10 emerging business hotspots

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The cities which will see growth for metals and metal products are Bhubaneswar, Indore, Nagpur and Visakhapatnam due to proximity to the mining belt and good transport infrastructure.

For IT/ITeS sector, the strongest emerging cities are Bhubaneswar, Chandigarh, Jaipur and Kochi, which are attracting sizeable occupier interest. 
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An employee works inside the newly inaugurated plant for the Tata Nano car at Sanand.

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Image: An employee works inside the newly inaugurated plant for the Tata Nano car at Sanand.
Photographs: Amit Dave/Reuters. 

These cities offer the best manpower pool and necessary support infrastructure.

Within the automobiles and auto component industries, the strongest emerging cities are Ahmedabad, Coimbatore, Indore and Vadodara as they offer relatively cheaper and sizeable land parcels and supportive investment environment created by the state governments.
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Vishakhapatnam port.

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Image: Vishakhapatnam port.
Further, Ahmedabad, Vadodara and Vishakhapatnam are the strongest emerging cities for chemicals and petro-chemical industries including refineries. 
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Cochin Shipyard.

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Image: Cochin Shipyard.
Photographs: Wikimedia Commons. 
For pharmaceuticals and biotechnology, Ahmedabad, Indore, Vadodara and Vishakhapatnam are the prominent emerging destinations.

Kochi and Vishakhapatnam, both historically prominent port cities, retain their importance for shipping, ship building, and marine products trading.
Source : ,www.rediff.com
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