Business

These entertainment centres, comprising a multiplex, bowling alleys, ice skating rink and food courts, will be developed at malls and the partners will enter into revenue sharing agreements with real estate players.

The first centre will come up at Noida in partnership with real estate player Logix Group.
"The project is in the planning and design stage and will be open to the public within 30 months from now," PVR Group President Pramod Arora told PTI.

The company estimates investments to the tune of $10 million per centre, which will be made by PVR along with its partners, he added.

Source: Business-standard PVR to set up 6 entertainment centres, to invest Rs 280 cr

This summit would cover the  three main segments relating to Packaging - Form, Function & Appeal, Trend Forecast & Visual Merchandising and Retail Market Potential for Home & Textiles Vision 2015.

The symposium on Packaging - Form, Function & Appeal will discuss the issues of cost effective package, value addition through packaging and forms and norms for packing as packaging is a very important marketing strategy to glamorize the products in order to attract the consumer's attention.

A 'added value' concept, the right packaging can save your damage costs, enhance the theme of your merchandise, add to the brand value and attribute much more to the product shelf in today's changing times.

Source: smetimes.tradeindia.com Handicrafts Sourcing Summit kick starts in Greater Noida

According to data from the Registrar of Companies (RoC), around 44,000 new companies were founded in the national Capital region (NCR) in the first nine months of the financial year, which is four times that of Maharashtra. The gap could widen if the numbers for Noida, the third member of the NCR triad, are factored in.

As of March 31, 2009, Maharashtra housed 1.76 lakh firms compared to Delhi, which had 1.57 lakh firms, and Haryana with 8,645 companies. By January 2010, Delhi combined with Haryana had become home to a total of 2.09 lakh companies, far ahead of Maharashtra, which has 1.87 lakh companies.

"There is a general perception on changing infrastructure in Delhi NCR. Improved transportation facilities and growth opportunities have helped the area inch ahead of Maharashtra," says Ashok Haldia, former secretary of the Institute of Chartered Accountants of India. More companies would mean greater investment flow into NCR, helping industrial activity and creating employment, believe those like Haldia, now a director with PTC India Financial Services, a recently formed subsidiary of Delhi-based PTC, the country's largest power trading firm.

Separate data for pure startups as separate from those formed by larger established business groups were unavailable, but given the quantum of increase in the number of registrations in the region, it is likely that both would have grown.

Source: Economic Times By Souvik Sanyal & Vivek Sinha More Companies Set Shop In NCR Than Maharashtra

The Greater Noida Industrial Development Authority (GNIDA), the designated state level nodal agency of the state government, signed a memorandum of understanding with the Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) in this respect last week. With this, the work of identifying a project consultant who will, in turn advice the government on other infrastructure development projects, will also be commissioned.

The DMIC seeks to create integrated investment regions and industrial areas across six states through which the corridor will pass. According to a senior state government official, work on these projects would now be put on the fast track, with GNIDA facilitating decisions and approvals of the state government and acquisition of land on the one hand and DMICDC providing expertise and resources in undertaking project development activities under PPP.

"The four projects that have been identified as early bird projects were already on the state government's priority list. And with the DMICDC also agreeing on them, we are likely to immediately undertake feasibility studies for these projects along with the selection of consultants for the development plans. We are also likely to create special purpose vehicles (SPVs) to house initial project development activities and facilitate various approvals from central and state governments," said the official.

The establishment of a Dedicated Freight Corridor (DFC) between Delhi and Mumbai, which is the backbone of the ,1483-km DMIC project, has been envisioned by the GoI, with end terminals at Dadri in NCR and Jawaharlal Nehru Port in Mumbai. This corridor will offer high speed connectivity for high axle load wagons of double stacked container trains supported by high power locomotives.

The DMICDC, which is a joint venture company, consists of 51% equity participation from financial institutions and 49% equity from the GoI, which has in turn offered its 24% stake equally to the six states in the DMIC region, including Haryana, Madhya Pradesh, Maharashtra, Gujarat, Rajasthan and Uttar Pradesh.

It may be mentioned that India and Japan had last week signed two agreements for implementing the ambitious Rs 3,60,000 crore Delhi-Mumbai Industrial

Corridor project. The DMIC project development fund will be set up with equal contribution from India and Japan. India has already approved a grant of Rs 330 crore (approximately $75 million) as the country's contribution. The Japanese component of $75 million is being provided in the form of an untied loan from JBIC

At present, the prescribed solvency margin, which is the excess of assets held by the insurer in the interest of policy holders is 150%. The solvency margin requirement will be much lower than the prescribed norm during an economic downturn. But this would mean that insurers will have to reckon with a higher solvency requirement during a boom. Simply put, they will have to save for a rainy day to tide over tough times when their sales and growth in business dips.

Solvency margin requirements are the equivalent of capital adequacy norms for the banking industry. RBI is already following the practice of having prudential norms that are countercyclical. For instance, in the past, RBI has increased the margin requirement for loans against shares when equity indices touched a new high. The central bank has also varied capital requirements for banks by tinkering with risk weightage on loans. In real estate loans, the central bank had increased the risk weightage when property prices soared in 2008 only to reduce them again when prices crashed in 2009.

IRDA too had reduced capital requirements for life insurance companies in 2008, following the crash in equity markets worldwide. The regulator had reduced capital requirements by almost a fifth in January 2009. For products with a guaranteed return, the capital requirement had been eased by 7%, whereas for products where there is no guarantee, the reduction is 20%. Given the industry's product composition, the overall capital requirement towards solvency margin would be lesser by 18%.

Source: Economic Times Insurers will soon have an easier solvency mandate

Mall developers in India seem to have regained some of the bravura that was punctured by the economic slump that took its toll on the country's retail sector last year. Some developers are reviving projects as the economy gathers growth momentum and rentals start looking up with shoppers returning.

An industry estimate says 15 new malls have been opened in Mumbai, Delhi, Bangalore, Kolkata, Chennai, Hyderabad and Pune in the past three months, and at least 48 more will be opened next year.

Till the end of 2008, these seven cities had 163 malls with 338.6 million sq. ft of space.

The new malls are all projects that ground to a halt a year or so ago. Some 80-85% of some 640 malls in various stages of development were put on hold after the global meltdown hit the Indian economy in 2008. Retail and real estate were the worst hit, and mall rentals dropped drastically, forcing the developers to go slow on projects.

They also reviewed the revenue model and many opted to lease space to professional mall management consultants or work on revenue-sharing arrangements with the retailers, as opposed to merely renting out square feet.

"Mall developers are no longer looking at just a one-time profit," said Nipun Jain, senior manager, consultancy and valuation, at Colliers International (India) Pvt. Ltd, a service provider to property investors and retailers. "Earlier, they sold retail space in a mall in a piecemeal manner and were not concerned with mall management and the success of the retailers. Things are changing."

Source: Live Mint Shoppers drift back, spur mall developers to revive projects

While retailers are now looking to prepare themselves for the next wave of growth that is expected in the next couple of months, the mood is still cautious.

Even as foreign players have slowed expansion plans, domestic players are making haste slowly on the expansion front.

The total store area added by the retail sector in metros and major cities nearly halved over the last 12 months, falling to 3.6 million from 6.8 million sq ft in 2008.

Cash has been a big problem.

Banks have sharply slowed their lending to retail players, driven by fears of asset quality. The collapse of Subhiksha, which was operating 1,600 stores nationwide when it ran out of cash to keep its operations going, was a huge shock.

While the market is abuzz with talk of some more players looking to exit, market leaders in different formats like Shoppers Stop and Pantaloons are hoping to raise funds from the market to fund their expansion plans.

Source: Mail Today Retailers get cautious on growth plans

To begin with, the attendance at the meet would reflect, whether UP has been able to garner the confidence of India Inc in its ability to promise and deliver on the industrial firmament. However, the acid test of the success of the conclave titled ‘Invest UP’ would be the subsequent investment commitments made by the business houses and industrial groups being invited.

The official mandate of the event is to expedite industrial development in UP and attract private investment in various sectors. State Infrastructure and Industrial Development Commissioner (IIDC) Anoop Mishra said the interactive meet would focus on ‘detailed and direct dialogue’ with big industrial houses, in which investors would be apprised of the enormous pool of resources and avenues available for investment in the state.

“The entrepreneurs would be informed about various facilities and incentives being provided by UP to investors,” he said adding the government had been making concerted efforts to ‘improve and develop’ world-class infrastructure and congenial environment for industrial development in the state.

Source: Hindustan Times Uttar Pradesh betting big on investors' meet

Construction work on the Delhi-Mumbai Industrial Corridor (DMIC) may begin soon, as the Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) is expected to invite bids for a dozen “early bird” projects, to come up along the corridor.

The corporation has identified 24 such early bird projects across Gujarat, Madhya Pradesh, Haryana, Rajasthan and Maharashtra.

These projects include development of a mega industrial park at Dholera, and a regional metro rail system connecting Gandhinagar-Ahmedabad-Dholera in Gujarat; an economic corridor along the link road connecting Indore airport to Pithampur, and a knowledge city in Ujjain district in Madhya Pradesh; a multi-modal logistic hub at IMT Maneswar in Haryana; a logistic hub at Bhiwadi in Rajasthan; a trans-harbour road-railway link project, rail connectivity of Mumbai Port Trust to Dedicated Freight Corridor and Inland Container Depot at Talegaon in Maharashtra, among others. Some of these projects will be put up for bids shortly.

The projects for which bids will be invited are part of the six investment regions (IRs) and six industrial areas (IAs). The first phase of the project is likely to be completed by 2012, and an estimated $100 billion will be invested to develop infrastructure in the IRs and IAs. Japanese companies are expected to invest over $10 billion in the proposed corridor during the first phase. The finance option of the remaining $90 billion has not been announced so far.

The six investment regions selected for development in the first phase include Dadri-Noida-Ghaziabad in Uttar Pradesh for general manufacturing, Manesar-Bawal in Haryana for auto-components and automobiles, Khushkhera-Bhiwadi-Neemrana in Rajasthan for general manufacturing, automobile, and auto component, Bharuch-Dahej in Gujarat for petroleum, chemicals and petro-chemicals, and and Igatpuri-Nashik-Sinnar in Maharashtra for general manufacturing.

Source: Business-standard Work on DMIC may begin soon

Wockhardt is in good company. Many others, including DLF, Suzlon, UB, the Tata and the Aditya Birla Group are selling stake or assets to reduce debt and the strain on their balance sheets. That's because they have been hit either by slowing sales, or have a big exposure to markets in the West where demand has contracted sharply as a result of the economic downturn.

The range of businesses on the sale list is wide: from hotels (DLF) to animal healthcare (Wockhardt) to electric insulators (the Birla Group), most of which are being termed non-core by the sellers.

DLF's promoters sold 10 per cent in the company in May and are selling assets like hotels and insurance as the real estate major plans to raise Rs 10,000 crore in three years through asset sales to reduce its debt burden of Rs 14,000 crore.

Suzlon is trying to sell its gearbox making subsidiary, Hansen Transmission, to reduce its Rs13,000 crore debt, part of which it has to repay soon. In January, Suzlon had sold 10 per cent stake in Hansen to a UK fund for Rs 60 crore. Suzlon owner Tulsi Tanti has also been selling shares to meet fund requirements.

Source: Business-standard India Inc takes the sale route to beat crisis

"The Bandra Kurla Complex and Kalina districts of Mumbai, for example, saw overall vacancy levels rise to 29.4 per cent, while vacancy levels in Noida in the National Capital Region hovered at around 40 per cent," real estate consultancy CB Richard Ellis (CBRE) said in its Asia Market View Q2-2009.    

The report said the election of a new government and falling interest rates improved local business sentiment during the second quarter in India.    

However, despite small signs of improvement, cities like Mumbai, Delhi and Bangalore witnessed a slide in office rentals due to an exodus of occupants from the CBDs as corporates moved to alternative locations as a cost cutting measure.    

Source: Business-standard Asian office-space mkt suffers from high vacancy levels

During a high-level meeting held here yesterday to review schemes launched by the department to promote investment in the industrial sector, the CM directed the officials concerned to ensure effective implementation of 'Nivesh Mitra', a scheme launched by the government.    

The CM said that the scheme has been launched to ensure that industries get required approvals, sanctions and certificates within the stipulated time.

"Problems being faced by the industrialists should be sorted out on priority and better infrastructure facilities should be ensured to accelerate industrial development in the state," she said.    

In order to generate employment opportunities it is necessary that industrial units were set up within the time frame and start manufacturing, she added.    

The officials informed the CM that within a short time 211 investment proposals has been received.    

"While 183 investment proposals are related to micro industry, 24 are for small industries, two for medium and one for large industry," they said.    

The officials said that Greater Noida has been nominated as the nodal agency for Dadri-Noida-Ghaziabad investment area being developed as a part of the Delhi-Mumbai Industrial Corridor Project.

A five-storeyed structure spread across 11 acres of land at Kasna Road, the Grand Venezia mall has an intricate system of waterways with a Gondola in it with special rides. It will host cultural events, brand promotions, product launches and live shows making it a total entertainment zone. Lifestyle clubs, hi-tech virtual games and a bowling alley will ensure that adults have a plethora of leisure options. A special kids' zone will be surrounded by live cartoon characters, happy meals and fun shows.

 The mall will have lifestyle, home décor and lot more, planned in specific zones for an unmatched shopping experience. The architecture and mall design ensures that all five levels of the mall will have different types of escalators. "A special boat will be brought from Venice. A live shark will be placed in a huge aquarium which would be an added attraction in the mall which will be completed by December 2010," claimed Krishna Chandra Jha, who is associated with the project.

The mall will have a unique ensemble of some of the best retailers from India and across the world. The mall will host a range of brands from all segments, from high end luxury to high street trends, apparel,  lifestyle and lots more.

Aquarium: The huge aquarium will be a sight to behold. An example of modern engineering, it will be a home to a number of exotic sea creatures.

Multiplex: Grand Venezia offers a host of movie-watching options in the form of 1000-seater multiplex. A fun time is ensured with coffee shops, restaurants, food courts, banquet hall, etc.

Future Group, which operates retail chains like Pantaloons and Big Bazaar, said such a step will facilitate optimum utilisation of the huge railways infrastructure. "This is an announcement which might well prove to be a big boost for growth of modern retail. Besides, the huge real estate of the Railways and its logistics capabilities will help us use the infrastructure as a supply chain," said Kishore Biyani, CEO, Future Group.

Asked if the Future Group is likely to explore the Railway Ministry's proposal, Biyani said: "We have earlier explored the opportunity and we might again look at it."

While presenting the Railway Budget 2009-10, Railway Minister Mamata Banerjee announced the construction of multi-functional complexes at stations for providing facilities like shopping, food stalls and restaurants.

"It is proposed to take up development of these multi-functional complexes in different parts of the country at 50 railway stations, serving places of pilgrimage, industry and tourist interest this year," said Banerjee.

The system was developed by UP industry department interface, Udyog Bandhu, and medium, small and micro enterprises chamber -- Indian Industries Association -- in August 2006.

After being operational for about a year, it had remained dysfunctional till now. However, the system has been re-introduced by the state government, which is keen to boost the industrialisation process with the help of private investment.

"Now, the STS has been launched with renewed vigour and we hope it will stay," IIA executive director DS Verma said.

The system provides all information regarding setting up an industry in UP along with the online availability of application forms/no objection certificates/clearances, etc. Applications can be filled online, which are to be processed centrally by respective district industries centres.

"Between now and 2010, an additional 31,846,504-square feet of mall space will be created across India through just over 100 new shopping centres," findings from a report titled 'Mall Realities India 2010', said.

However, 54 per cent of expected mall supply in 2008 was deferred to 2009-10, the report compiled by real estate consultancy firms, Cushman & Wakefield and Jones Lang LaSalle Meghraj, said.

"As far as retail real estate in the top eight was concerned, as much as 11-million sq ft of expected mall supply in 2008 was deferred to 2009-10, which was a reduction of 54 per cent from the projections made at the beginning of 2008," it said.

Of the over 30-million sq ft of malls to be added by end-2010, India's north zone is leading with a total of 14,790,000 sq ft.

"That translates into 45 malls expected in the North Zone with 24 in the Delhi NCR (National Capital Region) itself," it said.

West Zone is the second-most prolific region in terms of additional projected mall supply of 7,438,504 sq ft through 47 malls, it said.

South and East Zones total up a projected mall space at 5,865,000 sq ft (through 29 malls) and 3,753,000 sq ft (by way of 13 malls), respectively, it said.

"Interestingly, while most projects in North, West and South Zones are in and around Tier II cities, in the East, the majority of developments are to open in or around West Bengal's capital Kolkata," the findings said.

The list of properties scheduled to open in this period are located across metros, mini-metros and Tier II towns, including in Delhi, NCR, Mumbai, Pune, Aurangabad, Raipur, Bangalore and Siliguri, among others.

Spencer's Retail was restructuring the supply chain network, planning increased flow-through and direct receipts at large stores, implementing automatic replenishment for FMCG and staples, as well as reworking the transportation routes to bring down freight cost, informed a spokesperson of Spencer's.

Wills Lifestyle, the retailing arm of ITC Ltd, is leveraging ITC group synergies with other in-house lifestyle brands, and its customer relationship marketing programme to increase frequency and size of transactions. According to Atul Chand, divisional chief executive of Wills Lifestyle, "We have initiated consumer and trade panels to ascertain feedback on product creation and development, leading to higher range acceptability and sell-through, and consequently lower inventory levels."

Wills is also using IT and data analytics for deployment and replenishment of stocks, aligning strongly with customer preferences and demand levels, thereby minimizing out-of-stock. Wills is also collaborating with vendors and logistics partners to optimize freight costs and reduce back-mileage.

According to Sanjay Chugh, National Head - Business Development, Retail, Jones Lang Lasalle Meghraj, "Retailers can reduce costs between 15-20 per cent by rationalizing real estate portfolios, pruning store sizes to enhance the productivity, and implementing effective supply chain management. It is different for value and premium retailers because they address entirely diverse segments. The value segment is a mass model based on the theory of driving large consumptions on lower margins. Whereas the premium segment of retailing targets niche segments based on the theory of comparitively lower volumes coupled with higher yields."

Source: Business-standard Retailers rework strategy to bring down costs

Neighbourhood discount chain Subhiksha could be going bust, though large format chain Vishal Retail has managed not to slip into a financial distress through a substantial reduction in lease rentals which form a good 30 per cent of operational costs.

Shoppers' Stop registered a sluggish 4 per cent same store sales in the nine months ended December 31, 2008. Pantaloon Retail India Ltd's February 2009 investor update pointed to a modest 5.32 per cent year on year growth for its value retailing business. Its lifestyle retailing grew at 4.44 per cent while the home retailing business fell by 10.17 per cent on a year-on-year basis. Vishal Retail for the moment has put its expansion plans on hold.

Organised retail players are trying every trick in the book, which include closing unviable stores, focusing more on private labels and expanding with great care.

At the same time, they are taking advantage of the softening rentals.The Aditya Birla group which runs the 'More' chain of food and grocery stores has also taken a number of steps since the downturn cast its dark spell.

Speaking to Hindustan Times, Thomas Varghese, chief executive of Aditya Birla Retail said, "We are closing unviable stores, focusing more on private labels and taking a slew of cost reduction measures." In an email response to Hindustan Times Ambeek Khemka, group president, Vishal Retail said, "We are taking advantage of the slump in property prices and have renegotiated rentals at more than 50 stores." Real estate accounts for a good 30 per cent of the operational expenditure for Vishal Retail. Vishal Retail has centralised its warehouse in Gurgaon as part of a cost-cutting exercise.

Footfalls for most of the retailers have come down, as per a recent KPMG report titled 'Indian Retail-time to change lanes'.The report also pointed out that many retailers have borrowed a lot. For instance, Vishal Retail's interest expenditure is Rs 7 crore per month.

A high-level steering committee in this regard has already been formed under the UP Industrial and Infrastructure Development (IID) commissioner with representation from the industry.

"The committee is holding regular meetings to prepare the blueprint of the policy," IID commissioner VK Sharma told Business Standard.

Under the steering committee, different sub working groups have been formed for various sectors such as automobile, medical, and labour.

However, any announcement on this would be made only after the Lok Sabha elections.

UP is seeking private investment in several spheres such as power, education, medical, tourism, agriculture, infrastructure and transport.

Source: Business-standard New industrial policy on anvil in UP

As sales slow, three of India's biggest listed retail chains, Vishal Retail Ltd, Pan taloon Retail (India) Ltd, and Shoppers Stop Ltd are struggling with rising debt and interest costs. Their problems are likely to mirror those of several other companies in the business.

Earlier this year, Subhiksha Trading Services Ltd, which ran India's largest chain of supermarkets, halted its operations saying it had run out of cash as it could not raise money either from the equity markets or from banks due to tough economic conditions.

Subhiksha has blamed a high level of debt for its downfall.

Analysts say retailers are having to borrow money from banks for short-term needs to sustain their operations, resulting in a higher level of debt--and higher interest payouts.

According to analysts, Vishal Retail, the New Delhi-based discount retailer with around 180 stores across the country, for instance, has seen its debt to equity ratio rise to 2.65:1, Pantaloon will see its interest payout, as a proportion of sales rising this year, and Shoppers Stop could find it difficult to meet all its debt obligations.

The total debt on Vishal's books is around Rs750 crore.

Vishal is also saddled with heavy inventory, and, according to Sehgal, will have unsold goods worth Rs740 crore in its books on 31 March 2009, as compared to goods worth Rs557 crore on 31 March 2008.

Source: Live Mint Retail chains grappling with rising debt, interest costs