India Investment Property

Icelandic investment bank Kaupthing has joined the West Midlands push to woo India.
It has listed an Indian infrastructure fund on the London Stock Exchange’s AIM market and is hoping the move will boost UK investment in its former colony.
Kaupthing Singer and Friedlander managing director Trevor Foster said: “This is an opportunity for discerning West Midlands investors to enter one of the fastest growing economies in the world.
“We hope it will attract those in the region of Indian origin but also interest business people who can see there are excellent returns to be made by taking a global outlook.”
KS and F Midlands chairman Paul Bassi added: “The West Midlands is increasingly seeing great advantages in developing business links with India.
“With on-going business and political initiatives taking place, the timing is right for this infrastructure fund to take off.”
The Kaupthing fund has raised £40 million in equity and bought three assets: a hydroelectric power plant, a toll road and a rail freight siding.
Kaupthing hopes to take advantage of India’s expanding middle class and increased urbanization and industrialization, which has led to the rise in value of infrastructure assets in the emerging market.
The initiative comes as the West Midlands looks to make the most of growing contacts in India.
Birmingham City Council is preparing to send a delegation to India early in 2009.
It will be led by council leader Mike Whitby and follows the recent visit by a Confederation of Indian Industries team to Birmingham and the West Midlands.
This saw Warwick Manufacturing Group, headed by Lord Kumar Bhattacharyya, enhance its links with the CII in order to strengthen work on climate change, high-tech manufacturing and global healthcare.
And recently an action plan to forge new business and academic ties between the West Midlands and India was launched by West Midlands Minister Liam Byrne.
The aim is to establish an India Co-ordination Group later this autumn to unlock potential multi-million pound trade and investment opportunities.
India’s largest industrial group Tata recently paid £1.15 billion to take control of Jaguar and Land Rover. It is also expected to press ahead with a major new multi-million pounds research unit in Coventry.
The Kaupthing fund will be advised by Bridge Capital Realty, a Singapore-based advisory and asset company that specializes in logistics and property in India.
Infrastructure India is headquartered in the Isle of Man and, in particular, is focused on the energy and transport sectors. Its chairman is Rupert Cottrell while investment advisers are Bloomsbury Asset Management.
It is aiming at an internal rate of return of 15% a year, rising to 25%. The hydroelectric power plant project has seen the fund take a stake in Shree Maheshwar Hydel Power Corporation.
The aim is to develop a 400MW unit situated in Maheshwar, in the southwestern region of Madhya Pradesh. It is approaching the final stages of construction and is expected to begin operations next year.
The fund’s pipeline of potential opportunities includes renewable and conventional power stations, roads and airports.
Mr Cottrell added: “The growth prospects for India provide a compelling rationale for investment in the Indian infrastructure sector at this time. We are delighted in the interest that has been shown.”
India was in the top 10 % of countries for GDP growth in 2007, however, that has been constrained by its lack of infrastructure.
The Indian Government’s eleventh five year plan (2007-2012) has set GDP growth target for the period at nine per cent per annum.
That will require around £249 billion in infrastructure spending, which will only be possible if there is a substantial expansion in the private sector contribution.
Recent Indian investments in the West Midlands have included Suprajit Engineering acquiring Tamworth-based CPT Gills Cables safeguarding 140 jobs in the manufacture of automotive cables; Hindalco, a group company of Aditya Birla buying Bridgnorth-based Novelis safeguarding 420 jobs in aluminium foil production; IT company, Enzen Global from Bangalore set up an office in Solihull in 2006-2007; and El Forge owns Black Country-based Shakespeare.
Over the past two years, Indian investment into the West Midlands has more than doubled in terms of the numbers of companies setting up in the region. More than 1,500 jobs have been created since 2006 by sixteen companies, meaning there are now over 30 Indian owned businesses in the region, including the State Bank of India and ICICI Bank.
Home to one of the largest ethnic Indian population in the UK there are well established cultural, community and religious facilities in the region. Around sixty thousand of Birmingham’s one million population claim Indian origins.
Forecasts predict that India will overtake the UK and become the fifth largest economy in the world within the next decade, the third largest behind China and the US by 2025 and the second largest after China by 2050.