Bangalore costliest Indian city to live in: Survey

Glitzy tech capital Bangalore just earned a new sobriquet - the costliest Indian city. An analysis of the Reserve Bank of India's Consumer Price Index (CPI) shows that Bangalore is a couple of notches higher than the all-India cost-of-living average, with financial capital Mumbai just a shade behind.




The CPI is a measure of a standard basket of items, including food, clothing and transport, across cities. In the price race, Delhi is comfortably placed very low in the table, deriving its cushion from the subsidies galore it receives from the Centre . Take, for instance, LPG cylinders, which is a must-have in middle-class families . According to Bharat Petroleum's latest figures, Bangalore currently pays Rs 415 for a 14.5-kg refill, Kolkata Rs 405, Mumbai Rs 402 (expected to go up after budget), Delhi Rs 399 and Chennai Rs 393.50. Bangalore's CPI peaks in the national chart at a whopping 200, followed closely by Mumbai at 199, Kolkata 184 and Delhi a distant 181. The national CPI average is 198. For homemakers like Koramangala resident Aditi Rao, life in Bangalore is becoming tougher with each passing day. "Frequent hikes in the prices of basic items put our home budget out of sync every month," said Rao, 34.

Budget analyst Ravi Duggal, who has lived in Mumbai and Delhi, observed that the high cost of living in Bangalore has come about as a result of the IT industry. He said there were different reasons for differential living costs among cities, including the aspiration of people. Talking of India's two leading cities, he said, "Where education is concerned, for instance , Delhi has more public education facilities than Mumbai."

What makes Mumbai equally expensive ? "There are many factors, the chief being high rentals. Over 40% of the salary of an average Mumbaikar goes into paying rent," pointed out economist Vibhuti Patel of SNDT University.

Brigade trying to raise 500 crore from PE players

Brigade Enterprises is trying to rope in PE players to offload 30% stake in its special purpose vehicle BCV Developers for Rs 250 crore.The Bangalore-based real estate company floated the SPV to develop a 120-acre integrated township project in Devanahalli.
BCV Developers is a 50:50 joint venture between Brigade and Classic Valmark.The Rs 2,000-crore residential project in Devanahalli will have houses for low income households,as also luxurious townhouses and villas.
M R Jaishankar,CMD of Brigade Group,said he was not in favour of structured PE deals,but would definitely consider pure-play PE investors.We have invested Rs 350 crore from internal accruals and the rest will come from institutional funding and advances from sale of units, he said.He declined to divulge the names of private equity players he is talking to.
Brigade also plans to divest up to 30% stake in its subsidiary Brigade Hospitality Services for Rs 250 crore in order to raise funds to expand its hospitality footprint."We are looking at PE players or institutional investors,"Jaishankar said.
The company is planning a Rs 700 crore outlay for four hospitality projects in South India.It is launching a 220 rooms business hotel in Chennai in partnership with Holiday Inn that is expected to be ready by 2013.It is planning two business hotels with over 300 rooms in Mysore and a resort in Kerala.The company already runs two hotels in Bangalore -- a 230-room Sheraton at Brigade Gateway in Malleswaram and Grand Mercure in Koramangala that is managed by the Accor Group.The company has a consolidated debt of Rs 800 crore.It is trying to reduce the debt equity ratio to 0.5,from the current 0.7.

State attracts Rs 4,846 cr investment at Aero Park

The Karnataka government, which is promoting Bangalore as a potential hub for aerospace industry in the country, has seen investment proposals from as many as 54 companies for a combined investment of Rs 4,846 crore. Of these, 46 proposals are in the small and medium enterprises segment and the rest are major projects with investment of over Rs 50 crore cleared by the state high level clearance committee (SHLCC). Once set up, these projects are expected to generate employment for about 30,000 people.

“We have identified the aerospace sector as a focus area for attracting investment into the state. The state has an ideal ecosystem for the sector and we want to cash in on this not only to sustain Karnataka’s position as the country’s aviation hub, but also to encourage and support the MSMEs in the sector,” M Maheshwar Rao, commissioner, department of commerce and industries, government of Karnataka told Business Standard.

The state has acquired 982 acres near the Bangalore international airport for the aerospace park, of which 250 acres have been set apart for the aerospace Special Economic Zone (SEZ). The government till now has allotted 218 acres to 25 companies at the SEZ. The major investors at the SEZ include Hindustan Aeronautics Limited (Rs 2,095 crore), Dynamatic Technologies (Rs 465.8 crore), Jupiter Aviation Logistics (Rs 630 crore), BEML Limited (Rs 316 crore), Mahindra Aerospace Pvt Ltd (Rs 284 crore), European Aeronautics Defence and Space Company (Rs 278.2 crore), Sobha Aviation and Engineering Services, Tyco Electronics Corporation India, AMADA (India) Pvt Ltd and Wipro Ltd (Rs 52.05 crore) among others.
These companies are setting up manufacturing plants for producing aircraft components, assemblies, MRO activities related to aerospace applications, aerospace actuators and parts, engine and engine components, welded structural assemblies, aviation training academy among others. Further, Rao said the government expects to attract more companies to the aerospace SEZ during the forthcoming global investors’ meet (GIM) in June 2012. At the recently concluded India Aviation 2012 held in Hyderabad, the government had fruitful discussions with several global and Indian players in the aviation sector, he said.

He also said the state government and Confederation of Indian Industry (CII) have formed a joint task force on aerospace with the overall intent of promoting and developing the state’s aerospace industry.

The government also proposes to establish a Technology Innovation Centre on aerospace at the Bangalore Aerospace Park to provide R&D support, particularly to SMEs. The government plans to approach organisations like ISRO, USIBC, NAL, EADS and Honeywell among others to become stake holders in the Technology Innovation centre. As recommended by the Joint Task Force, the government hopes to set up an aerospace university in the near future to cater to the human resources for the aviation sector, he added.

Adigas in talks to sell stake in biz

New Silk Route Partners May Acquire A Share

The heightened global investor appetite for local cuisine may see Adigas,a chain of south Indian vegetarian restaurants and fast-food joints,offload shares to a private equity investor to fuel its expansion plans.
The $1.4-billion New Silk Route Partners is holding talks to buy a big stake in the KN Vasudev Adiga-promoted Bangalore restaurant network,valuing it at about Rs 200 crore,said three sources directly briefed on the matter.

KN Vasudev Adiga denied fund-raising plans as market speculation.New Silk Route Partners declined to comment.

The Adigas,which gained high visibility in the past decade,made news when Infosys co-founder N R Narayana Murthy signed it up for the wedding functions of his daughter in Bangalore a couple of years ago.
A Mumbai-based boutique investment bank is advising the Adigas on the possible induction of a financial investor.The PE investor could emerge as the largest shareholder,but the promoter family would continue to manage the growing business,said a source.Secondgeneration entrepreneur K N Vasudev Adiga started the restaurant chain in the early 1990s as an offshoot of Brahmins Coffee Bar in Basavanagudi,started by his father,late K V Nageshwar Adiga,in 1965.The Adigas operates 12 multi-cuisine restaurant chains,fast-food joints and catering services,with annualized revenue estimated at a little over Rs 80 crore.

The food-and-beverage street has attracted significant private equity investment and consolidation.Cuisine Asia,jointly owned by Everstone Capital and marque Belgian family office Verlinvest SA,has propelled Blue Foods operators of Copper Chimney,Noodle Bar and Bombay Blue to buy stakes in a slew of standalone restaurants.

TASTY BITES OF SWEET DEALS

India Equity Partners bought Sagar Ratna,a Delhi-based south Indian restaurant business,in 2001 Everstone acquired big stake in north Indian food chain Pind Balluchi Norways Orkla bought MTR Foods UKs Actis acquired food-and-grocery retailer Nilgiris in 2006

PIE GETS BIGGER

Investors have pumped in $400 million in food and-beverage sector;family-owned localized restaurants catch PEs eye because of their low-cost,high-value proposition

TRIUMPH MOTORCYCLES TO SET UP ASSEMBLY OPERATIONS IN Narasapura Near Bangalore

 

British motorcycle brand Triumph Motorcycle will launch a range of high performance motorcycles in the Indian market mainly aimed at motorcycle enthusiasts later this year. The motorcycle showcased its motorcycle range at the 2012 Indian Auto Expo, where it pleasantly surprised many of the Indian enthusiast motorcycle riders when it announced prices of its CKD models, as the prices were very competitive. To assemble motorcycles in India, Triumph is said to have identified a 40 acre land parcel at Narsapura, situated on the Bangalore-Chennai highway.


Triumph Motorcycle Range

In the recent past, Karnataka has seen a big ticked investment in the motorcycle segment with Japanese motorcycle giant Honda setting up a plant close to the state’s capital of Bangalore. The country’s largest two wheeler maker, Hero MotoCorp, is also said to be finalizing plans to set up a plant close to Dharwad, Karnataka. With Triumph also planning to set up an assembly unit in Karnataka, this southern state will now play host to over four motorcycle makers including TVS, which has a manufacturing facility at Mysore.


Triumph Tiger 800XC

The location of Triumph’s plant at Narasapura, off Bangalore, is said to be strategic as the motorcycle maker is said to have chosen this location due to its accessibility to the Chennai port. Triumph India also plans to build affordable premium sports motorcycles with displacements of about 350cc in the coming yearsand these motorcycles could also be exported out of India. Therefore, the location to high quality port infrastructure is quite critical to the motorcycle maker, which will also assemble motorcycled through the completely knocked down(CKD) kit route, with the kits arriving from Great Britain.

Although the Triumph assembly unit will take nearly a year to become operational, the motorcycle maker is said to be all set to launch its motorcycles in the Indian market over the next few months. It is also said that Triumph plans to price four of its models very competitively, despite them being brought into India as CBUs initially. These models would later be assembled by Triumph once the assembly unit is up and running. That said, 3 motorcycle models in Triumph’s 7 bike portfolio for the Indian market would continue to remain completely built units(CBU) as they are low volume products.

State plans to develop auto hub in Narasapur near Bangalore

One year ago nobody knew about Narasapur, a village in Kolar district situated about 52 kms from Bangalore. But on today, the village is on course to become a major automobile hub in South India as several automotive giants are in the process of setting up shop there. Thanks to the efforts of the department of commerce and industry, government of Karnataka, which is preparing to organise the second edition of global investors’ meet (GIM) in June this year, the automobile companies are making a beeline to Karnataka.

Already, Honda Motorcycle and Scooters India Limited (HMSI), a subsidiary of Japanese auto major Honda Motor Corp, is setting up its fourth two-wheeler plant in Narasapur at an investment of Rs 1,350 crore.

The state government has allotted 100 acres to the company. The new plant would go on stream by the first half of 2013. According to the company, the assembly unit has the capacity to produce 1.2 million units a year in the first phase. Eventually, the production capacity would be ramped up to 1.8 million vehicles a year in the second phase. The company has created employment opportunity for 3,000 persons, a top state government official said.
“In addition to HMSI, the government has also allotted about 150 acres more to Honda’s Tier-I suppliers for developing an ancillary park. In all, 13 vendors would be setting up their manufacturing units in the park with a combined investment of over Rs 2,000 crore,” M Maheshwar Rao, commissioner for industrial development and director of industries and commerce, told Business Standard.

HMSI’s vendors include XCD Corporation India Pvt Ltd, Musashi, Advik, Badve, Jay Ushin, Nippon Compo India and T S Interseat among others.

Apart from HMSI and its vendors, Swedish truck and bus maker Scania is setting up its truck and bus body building facility in Narasapur Industrial Area. To add to this list is UK-based premium bike maker Triumph Motorcycles, which has zeroed in on Narasapur for a local assembly plant. The company has recently signed a memorandum of understanding with the State government, Rao said.

About 40 acres land has been identified for the company for its plant. Scania has chosen Narasapur to set up its truck assembly plant at an investment of Rs 150 crore. The facility will serve as a completely knocked down (CKD) assembly unit for truck and bus chassis during phase one of the operations. It will employ about 800 people in this facility over the next five years.

Scania plans to roll out 2,000 heavy trucks and 1,000 inter-city buses and coaches from this plant in the next five years. Besides this, it plans to sell about 1,500 engines within the same period. In the next phase, it will build trucks and buses from the same facility. During the first phase, it will initially assemble trucks and by 2014, it plans to roll out buses.

Other than automobile companies, the government has allotted land to Mahindra Aerospace Pvt Ltd to manufacture small aircraft at Narasapur. The company will invest Rs 285 crore in this facility.

Convention centre at Devanahalli to get Rs 250 cr

Devanahalli, which has earned a reputation with the landmark Bengaluru International Airport, is set for another image booster.

The State government has made a budgetary provision of at least Rs 250 crore for an International Convention Centre (ICC) at Devanahalli, near the BIA, which is expected to be completed in the next six months.

The proposal which was cleared in May last, was expected to boost the second edition of the Global Investors’ Meet, scheduled for June this year. However, chief minister D V Sadananda Gowda, has said that it will take another six months now.

The ICC to be built on 35 acre, will have a capacity to accommodate 6,000 people, and is aimed at promoting Bangalore as an attractive destination for prestigious international meets and exhibitions.

The government had targeted completion of core components of the project (the convention hall, meeting rooms, exhibition hall and food court) before June this year, but was unable to do so.

There will be 20 meeting rooms with seating capacities varying from 50 to 250 and an exhibition hall with a minimum area of 20,000 sq mt.

Critics have questioned the need for such a centre with the Bangalore International Exhibition Centre is already in place, but officials in charge of the implementation have been backing the project.

While the ICC is yet to come up, the BIA is going through a transition phase with the expansion of Terminal-1. The Bangalore International Airport Limited developed on a PPP model will complete the expansion by December 2012.

Being implemented at a cost of Rs 1,479 crore, the expansion will enable the airport to handle 17.5 million passengers per annum as opposed to the existing 11 million.