If you're a corporate dealmaker pursuing growth strategies in China or India, there's a wealth of resources out there. But whether they're surveys or reports from consultants, presentations at conferences around the world or reports from news organizations, the trick is finding and making sense of them. That's the purpose of our emerging markets watch posts -- of which this is the latest example.
We start with a view from
from the private equity crowd, some of whom say the credit crunch is creating opportunities in
India and China. At the 2008 Texas Association for Capital Growth Capital Connection, Johann Tse of Allegiance Capital Corp. also discussed China's many regional differences and lack of transparency. "One large company that I looked at had four sets of books, and about 75% of its sales were not invoiced," he said. That hasn't stopped foreign investors from coming to China, though;
foreign investment in China rose 38.3% in February from a year ago to $6.9 billion, the Commerce Ministry reported
This
BusinessWeek Q&A
with Harvard Business School professor Tarun Khanna offers some insight
on the role of corporate governance in the two countries. Khanna says
Indian companies are much better governed and that India is sort of a
noisier version of the U.S. system. He does state the two are almost
equal when it comes to corruption, though at least China's is
"constructive." Here's
a survey on that matter.
Ian Gomes, chairman of KPMG's new and emerging markets practice for the U.K.,
says here that China has been the destination of choice for U.S. companies for some time. He points out that obvious deals have already been done and new rules concerning the use of special purpose vehicles have reduced their attractiveness as a route into China. He also delves into the strong surge of M&A coming from Indian strategics, firms that may be willing to partner up at home.
Grant Thornton's Dealtracker took a snapshot of the early M&A numbers in India for '08, citing acquisitions such as Walt Disney Co.'s acquisition of a 17.2% stake in UTV Software Communication to increase its stake to 32.10% in the company.
Also, if you're looking for any good books on the subject, check out "Riding the Indian Tiger: Understanding India -- the World's Fastest Growing Market." The author is William Nobrega, president and founder of the Conrad Group, a consulting firm specializing in emerging market strategic planning and M&A. He provided us with the following excerpt.
India is poised to overtake China in 2008 as the world's fastest growing economy and is becoming one of the largest economies globally. Direct foreign investment in India has increased dramatically over the past three years and the pace of activity continues to quicken as large private equity funds create new emerging market funds and corporations continue to look for new revenue growth. The middle is expected to grow from 90 million individuals today to 351 million individuals by 2010, and the retail market is expected to grow from $300 billion today to $637 billion by 2015. However, many companies have yet to take a close look at India, and the information they currently have is limited and/or outdated. Riding the Indian Tiger will provide individuals and groups that have an interest in this vast market with a detailed picture of the economic opportunities it may provide.
And now, some news:
AT&T Inc.
on Tuesday said it would invest $1 billion in the Asia-Pacific region, particularly in India and China. It said the Asia-Pacific region exceeded the company's revenue targets last year, and that retail revenue grew 22% over that of 2006.
Tata Motors is expected to
sign an agreement to buy Ford Motor Co.'s Jaguar and Land Rover brands in the next two weeks. Also, look out for action from Nippon Steel. President Akio Mimura, fearing a takeover,
states here "Friendly mergers and acquisitions are one of our options. ... We need to further expand into overseas markets if we are to seek growth."
CD recently informed you of the revised rules for
foreign direct investment
opening up opportunities
for the airline industry. Two of note: India is allowing up to 100% foreign
investment in the maintenance, repair and overhauling of aircraft; and
in the construction and civil aviation industries, foreign-Indian
ground-handling joint ventures, such as Singapore-based SATS' venture
with Air India, will now be free to increase their foreign stakes.
We also gave you an in-depth look at Finance Minister Palaniappam Chidambaram's budget presentation and a first-hand
exclusive analysis
from a panel discussion moderated by Ambassador Neelam. In addition to
utilizing our coverage on the information technology and venture
capital industry, you should
keep an eye on the U.S.-India Business Council; there are also several meetings in India you may want to attend. -
Baz HiralalEmerging Markets Watch coverage
From the Asian subcontinent:
And from LatAm:
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Juergen Lasowski
And the winners are...
Having been involved in numerous deals in India I have found a high degree of transparency and as importantly a silicon valley mindset amongst the majority of Indian management teams that I have dealt with. This makes getting the full range of deals from stategic alliances, joint-ventures to equity stakes and acquistions much easier to complete. A refreshing difference from other BRIC countries.