Incredible India, Incredible Opportunities RRS NRI Services
Understanding India • Growing Consumer Spending • Growth of Services • Indian Manufacturing establishing itself on the global stage • Pervasive communications : Satellite and Cable TV, Basic and Mobile Telephony, Fibre/Broadband • Infrastructure growth: Highways, Ports, Urban Transport • Growth in literacy & higher education • Mature political economy with development as its core agenda • As the world's fastest growing free market democracy paces itself for even further growth, can you afford to be left behind ? “Quite simply, I was blown away by what I saw on my first trip to India” – Stephen Roach, Chief Global Economist, Morgan Stanley on his visit on 2004.
India and the Developed markets • 1 year returns – BSE Sensex, FTSE , Dow Jones “Best Country to be an investor in” – Newsweek, July 2004.
India v/s Brasil and China • 1 year returns – BSE Sensex, Shangai , Sao Paolo “India's unique approach to development is preparing it to overtake China in the economic growth race.” – Far Eastern Economic Review, 2004.
US Companies in India • India has been identified as one of Coke’s most profitable global markets. • According to a study conducted by BCG, the Indian arms of two American banks, Citibank and Bank of America are more profitable in India than their global average. • American multinationals are scaling up as if there’s no tomorrow. India is already Reebok’s fastest growing market in the Asia Pacific • Motorola’s third largest market. • Ford arrived in India at the turn of the millennium with 12 dealerships in 8 cities; today it has 90 dealers in 70 cities. The US auto major has just completed what it calls “its best ever year” in terms of sales. • In segments such as Information technology and software, an overwhelming 83% of American companies said they were very happy with their experience in India. “India produces 3 million graduates, 700,000 post-graduates and 1,500 Ph.Ds every year.”
FDI in India • India is likely to emerge as one of the largest consumer markets in the world. On an average, 30-40 million join the consuming class every year. Political empowerment and economic trickle-down have now fuelled ambitions and aspirations in more Indians than in any other period of history. • India is now the third most favoured destination for Foreign Direct Investment (FDI), behind China and the USA, according to an AT Kearney survey that tracked investor confidence among global executives to determine their order of preferences. • There has been a sharp rise in the number of FDIs approved in 2004. During the first seven months of 2004, between January and July, Rs 5,220 crore worth of FDI was approved. • Non-resident Indians (NRI) repatriated close to $1 billion parked in various NRI deposit schemes in May and June. • Almost a third of these FDI inflows went into shares acquisition by NRIs in various Indian firms. “FDI will continue to be encouraged and actively sought, particularly in the areas of infrastructure, high technology and exports.” – P. Chidambaram, Finance Minister, Government of India
2005 – The year of Equity Market 3500 firms operating out of 39 Software Parks export over US$8 billion worth of IT products and services
2005 – The year of Equity Market • Net FII investments of $10 billion (Rs 45,000 crore; up by $2 billion — Rs 9,000 crore — over 2004) have only reaffirmed the interest that India commands among the FII community • Mutual funds had raised a staggering Rs 25,000 crore through New Fund Offers • The year 2005 turned out to be another good one for public issues, with about 70 offerings hitting the market, quality offers that gave investors reason to cheer included those of Shoppers' Stop, IDFC Shree Renuka Sugars and Suzlon Energy while Gateway Distriparks was one that must have considerably swelled investors' coffers. • Stocks from Sugar, Textile Mills, Construction and Small and mid-cap where considerable gainers GE Capital saves up to US $ 340 million a year by performing 700 tasks in India
Foreign Institutional Investors (FII) • Number of FIIs has also increased, from zilch in 1992-93 to 528 in 2000-01 to 803 in 2005-06. • Many Japanese and European funds have started eyeing India. Registrations from non-traditional countries like Denmark, Italy, Belgium, Canada, Sweden and Ireland rise. CALPERS (California Public Employees Retirement System), the world's biggest pension fund with a base of US $165 billion has recently decided to invest US $100 million in India Global economic survey ranks India as the sixth-fastest growing country in terms of construction
Foreign Institutional Investors (FII) • The year 2005 has been a remarkable year for stock markets — the indices scaled new peaks, the foreign inflows crossed an eye-popping US$ 10.57 billion (crossing the US$ 10-billion mark for the first time in a calendar) • FIIs are the single largest shareholders with a 15.28 per cent (Rs 3,63,354 crore market capitalisation) holding in Indian companies now. • Net FII Buy Positions in 2005 stand at Rs. 47181.93 Cr. • Foreign shareholders own almost a third of corporate India. • In 164 companies, foreign holding is above 50% • In 180 companies, between 25% & 49.95% • In 334 companies, between 10% & 24.95% • In 240 companies, between 5% & 9.90% According to the Indian Minister for Commerce and Industry, of all the foreign investors in India, at least 77 per cent make profit and 8 per cent break even.
Beyond 2005 • Indices have scaled new peaks to the worry of many, but still no slowdown looks likely in the near future as the market awaits a further flush of funds to the tune of $3 billion raised by three India-specific funds in Japan • Valuations do look stretched. But FIIs seem to be looking for the long term and hence, the current valuations are not relevant for them. • Year 2006 is predicted to be a `dream year for capital market’ as FIIs inflows into it is expected to be touching US$ 50 billion from their cumulative investment level which touched US$ 40 billion in October 31, 2005, according to The Associated Chambers of Commerce and Industry of India (ASSOCHAM). • It is the sheer size of India’s consuming class that is causing the maximum excitement among US companies. According to Richard Celester, the former US ambassador to India, the country has grown by a Brazil in the last 10 years, and will grow by another Brazil in this decade. 3/4th of SEI CMM Level 5 companies in the world are Indian
India Inc. going Global "Toyota Motor has chosen to source from India due to its competitive cost of manufacture, availability of abundant engineering talent, and strong indigenous machine tool."
What are people talking about? • "India has a fantastic pool of software professionals. The world needs to benefit from this.“ Bill Gates, Microsoft Chairman • "This market (India) is critical to our plans for building a Ford Motor Co. for the 21st century.“ Bill Ford, Chairman and CEOFord Motor Company • "India on its way to becoming IT, manufacturing kingdom of the world.“ Mr Yasukuni Enoki, Japanese Ambassador to India • "The dynamism shown by India in the last 15 years is phenomenal.“ Paul Wolfowitz, President, World Bank • "The Indian banking system is now perhaps better than any other in Asia.“ Stephen Roach, Chief Global Economist & Managing Director Morgan Stanley "India is not just about IT or business process outsourcing. We see it as an incubator for giant global corporations driven by IT strategy.“ Prof Warren McFarlan, Senior Associate Dean, Harvard Business School
Not a re-run of 2004 or 2005 • After the stellar showing over the past three years, investor expectations have also been marked up considerably. • But to expect a re-run of what happened in 2005 or, for that matter, 2004, may be a case of suspending reality • There are ample opportunities still for the focused investor "We are very bullish on our growth prospects in India.“ Charles Prince, CEO, Citigroup
Key Sectors • If the Government and bureaucracy deliver on the promise, the Indian industry is strongly positioned to deliver. And this will be reflected in the stock markets • Rise of the Indian Consumer – More than half of India's population is over 25 years with an increasing willingness to consume and spend providing ample opportunities in the retailing sector • To watch out for FDI in Retailing and Insurance • Infrastructure impetus going to be strong • IT Still the flavour thanks the robust business model • Construction to benefit from the government’s focus on Infrastructure and rapid economic development • Consumer Products to benefit from the growing middle class and growing incomes • Mid-Cap pharma and auto-components yet to fulfil their potential "It makes sense for pharma companies to look to India...Indian scientists are well trained...India has more pharmaceutical facilities approved by the U.S. Food & Drug Administration (USFDA) than any foreign country.“ Business Week Magazine
How can you be a part of this market? • Equity investments and investments in Mutual Funds can now be done directly by NRIs and PIOs, with simplified procedures • In order to invest in Mutual Funds, all you need is a NRE Account. • For direct investment in equities, you need • A PIS a/c , in a designated Bank Branch • A NRE a/c, preferably in the same branch • A NRI Demat account • Documents Required • Copy of Passport ( 5 Copies ) • 3 Passport Size Photographs • Power of Attorney to operate the NRE Account • Bank Details ( 2 Copies of Cancelled Cheque of NRE Accounts) • Address Proof ( 2 Copies, Can be Driving License , Bank Statement) • Proof of Correspondence address in India ( Typically address proof of Power of Attorney holder) RRS can assist you through out the entire process, visit our NRI Section on our website and download all the required application forms.
Equities and Mutual Funds • Equities • Higher Returns, More Risk • Easy tracking • Easy entry and Exit • No hidden loads or expenses • Mutual Funds • Relatively less risky, with lesser returns • Not very transparent tracking • Complicated entry and exit • Does not require active management & tracking
Why RRS • Benefit from our experience • RRS provides its clients with range of services personalized investment services like equity investments, Derivatives and mutual funds. Our people have a 20 years experience in the capital market, giving RRS a unique advantage from which you can benefit. • Smile every time to work with us • Using modern technologies, RRS ensures that all transactions done are a pleasant and a hassle free experience for you. All end of the day reports are instantly available on our website and our friendly staff are always there with you. • Team RRS • RRS Team includes a talented and experienced staff of 12 dealers and 18 support staff, who constantly thrive to service our clients.
RRS Online – www.rrs.in • What can you view ? • Detail Summary of transactions • Your Ledger Account • Stock Ledger – Profit & Loss , Long term and Speculative • End of day/Historic Contracts • Main Benefits • Instant, anywhere access anytime, over the Internet thru www.rrs.in • Saves time, no more calling • Access historical records with ease ( upto 2 years)