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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Delays in government decision making have stymied progress on
infrastructure projects leading to a slowdown in order inflow for most
construction contractors in India. While availability of funds is not a
constraint, loan approvals are falling due to a shortage of bankable
projects. Amid the gloom, highways, power transmission and distribution
and urban infrastructure stack up better in orders and execution, while
railways could see activity increase over the next few months.
Investment growth slowing
Investment momentum in Indian infrastructure appears to have been moderating,
leading to order inflows falling for most construction companies and developers.
While funding has never been a constraint, bank approvals for lending to the sector
appear to be falling sharply, in view of a shortage of bankable projects.
There are likely to be about 3,000 projects in the country that have been stalled at
this time for want of requisite approvals or due to political or local opposition.
Government will is key
India’s infrastructure is far from adequate and efficient; the government’s strategic
role in conceiving projects and streamlining execution is paramount.
Recent events in India appear to have frozen decision making across many levels,
though. This is impacting progress both in terms of orderflow and execution.
The lack of a National Highways Authority (NHAI) chairman, delays in resolving coal
linkages, slow ports and railways progress and land-acquisition issues are examples.
While a major improvement is unlikely in the near term, there could be some progress
on the Land Acquisition Bill and approvals for stalled projects in the next few quarters.
Certain sectors better poised than others
Road-highway project awards from the NHAI have picked up in the past few months.
Power transmission and distribution is also likely to attract investment, while urban
infrastructure is seeing strong activity, driven by metro projects in several cities.
Although still early days, railways could see some activity in the upcoming
quarters, after a complete hiatus over the past few years.
There has been little progress in ports and airports, while in power, pressing issues like
adequate coal linkages and controlling State Electricity Board losses remain unresolved.
Straight to the source with CLSA
When industry innovations change as quickly as they are created, your
ability to respond could mean the difference between success and failure. In
this volatile environment, why rely entirely on broker research when you can
tap into unfiltered, unbiased primary research?
CLSA U® is a value-added executive education programme created to
allow you to gain firsthand information and draw your own
conclusions and make better informed investment decisions.
CLSA U® offers tailored courses on a broad range of macro themes with a
special focus on technology and telecoms. The format ensures you learn as
we do and obtain firsthand information about prospects and trends in
industries and sectors that underline the companies in your portfolio.
You will interact and learn from the trailblazers at the centre of
today’s fastest moving industries - experts, engineers and scientists
who design, implement and shape the new technologies today,
which impact the market tomorrow.
CLSA U® is not a one-off event. It is an ongoing education programme
restricted to CLSA’s top clients. The syllabus will constantly evolve to meet
your needs and help you debunk the latest technologies, investment styles
and industry trends that affect the markets and sectors you invest in.
For more details, please email clsau@clsa.com or log on to www.clsau.com
Vinayak Chatterjee
Born in 1959, Vinayak Chatterjee graduated in Economics (Hons) from St.
Stephen's College, Delhi University and gained his MBA from the Indian
Institute of Management, Ahmedabad. He co-founded Feedback Infra in
1990, which is today India's leading provider of professional and technical
services in the infrastructure sector, and continues to serve as its chairman.
Chatterjee is often called upon to play a strategic advisory role to leading
Indian companies, the government of India, various ministries dealing with
infrastructure, as well as multilateral and bilateral institutions in the areas of
infrastructure planning and implementation. He interacts regularly with the
planning commission and various state governments on infrastructure
policy, projects and related enabling frameworks. He is one of the leading
proponents of the public-private partnership (PPP) model for developing
India’s infrastructure through his steering of the successful India
Infrastructure Initiative - an IDFC and Feedback Ventures partnership.
Currently, he is the chairman of the Confederation of Indian Industry’s (CII)
National Task Force on Regulatory Framework in Infrastructure. He has
chaired the CII’s National Council on Infrastructure (2003-06, 2007-09),
CII’s National Committee on Urban Infrastructure (2001-03) and was the
chairman of CII (Northern Region) for FY01.
He is a board member of SRF and Avantha Power and Infrastructure and is
on advisory boards of HDFC India Realty Fund, L&T Power and is a member
of the board of governors of the Indian Institute of Management, Lucknow.
Chaterjee is also a well-read columnist and writes a monthly column on
infrastructure for business standard called ‘INFRATALK’. He has authored a
book entitled Getting it Right - India’s Unfolding Infrastructure Agenda.
Foreword
India needs to invest heavily in infrastructure, given power shortages, the poor
quality of roads, constrained capacity and low efficiency at ports, an
overburdened railway network and inadequate urban infrastructure. The public,
companies and the government all recognise the need. While the past five years
saw investment growth outstripping overall economic expansion, the past few
quarters have witnessed a perceptible slowdown.
Our conversations with industry participants suggest that the key headwind
has been delays in government decision-making at various stages. This has
been manifested in various forms - new project tenders are taking longer to
finalise, existing projects have witnessed delayed execution as resource or
input linkages dependent on government approvals have taken time to come.
Not surprisingly, the orderflow momentum across most infrastructure and
construction vendors has slowed. Indeed, with most of them having expanded
capacities over the past few quarters in anticipation of investments picking up,
cashflows are under pressure, forcing them to bid aggressively and accept
thinner profit margins. This has predictably flowed through to the banking
system with slowing loan approvals on a shrinking pipeline of bankable projects.
Delays in execution have also hit the infrastructure developers. The power
sector is a case in point with inadequate or delayed resource linkages and
environment approvals having strained project economics. Further, new
project conceptualisation has taken a backseat indicating that the pipeline for
both developers and vendors may yet see further stress.
While drastic improvement is unlikely in the near term, there could be some
progress in areas like the Land Acquisition Bill and the gradual kick-starting of
stalled projects. We have seen some pragmatism in interpreting
environmental norms in the past few weeks, for example. In a recent meeting
of state power ministers, various steps to curtail losses at the State Electricity
Board (like the automatic pass-through of fuel costs and annual filing of tariff
petitions) were proposed.
Nonetheless, amid the gloom, road highways, power transmission and
distribution and urban infrastructure stand out as subsectors where there is
visible progress in terms of new orders and execution. Railways could also see
some activity, after a complete hiatus over the past few years.
Our guest speaker, Vinayak Chatterjee, Chairman of Feedback Infra, is one of
the most knowledgeable personalities in the Indian infrastructure space. He is
often called upon to play a strategic advisory role to leading Indian companies,
the government, as well as multilateral and bilateral institutions in the areas
of infrastructure planning and implementation. He co-founded Feedback Infra
in 1990, which today is India's leading provider of professional and technical
services in the infrastructure sector.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Delays in government decision making have stymied progress on
infrastructure projects leading to a slowdown in order inflow for most
construction contractors in India. While availability of funds is not a
constraint, loan approvals are falling due to a shortage of bankable
projects. Amid the gloom, highways, power transmission and distribution
and urban infrastructure stack up better in orders and execution, while
railways could see activity increase over the next few months.
Investment growth slowing
Investment momentum in Indian infrastructure appears to have been moderating,
leading to order inflows falling for most construction companies and developers.
While funding has never been a constraint, bank approvals for lending to the sector
appear to be falling sharply, in view of a shortage of bankable projects.
There are likely to be about 3,000 projects in the country that have been stalled at
this time for want of requisite approvals or due to political or local opposition.
Government will is key
India’s infrastructure is far from adequate and efficient; the government’s strategic
role in conceiving projects and streamlining execution is paramount.
Recent events in India appear to have frozen decision making across many levels,
though. This is impacting progress both in terms of orderflow and execution.
The lack of a National Highways Authority (NHAI) chairman, delays in resolving coal
linkages, slow ports and railways progress and land-acquisition issues are examples.
While a major improvement is unlikely in the near term, there could be some progress
on the Land Acquisition Bill and approvals for stalled projects in the next few quarters.
Certain sectors better poised than others
Road-highway project awards from the NHAI have picked up in the past few months.
Power transmission and distribution is also likely to attract investment, while urban
infrastructure is seeing strong activity, driven by metro projects in several cities.
Although still early days, railways could see some activity in the upcoming
quarters, after a complete hiatus over the past few years.
There has been little progress in ports and airports, while in power, pressing issues like
adequate coal linkages and controlling State Electricity Board losses remain unresolved.
Straight to the source with CLSA
When industry innovations change as quickly as they are created, your
ability to respond could mean the difference between success and failure. In
this volatile environment, why rely entirely on broker research when you can
tap into unfiltered, unbiased primary research?
CLSA U® is a value-added executive education programme created to
allow you to gain firsthand information and draw your own
conclusions and make better informed investment decisions.
CLSA U® offers tailored courses on a broad range of macro themes with a
special focus on technology and telecoms. The format ensures you learn as
we do and obtain firsthand information about prospects and trends in
industries and sectors that underline the companies in your portfolio.
You will interact and learn from the trailblazers at the centre of
today’s fastest moving industries - experts, engineers and scientists
who design, implement and shape the new technologies today,
which impact the market tomorrow.
CLSA U® is not a one-off event. It is an ongoing education programme
restricted to CLSA’s top clients. The syllabus will constantly evolve to meet
your needs and help you debunk the latest technologies, investment styles
and industry trends that affect the markets and sectors you invest in.
For more details, please email clsau@clsa.com or log on to www.clsau.com
Vinayak Chatterjee
Born in 1959, Vinayak Chatterjee graduated in Economics (Hons) from St.
Stephen's College, Delhi University and gained his MBA from the Indian
Institute of Management, Ahmedabad. He co-founded Feedback Infra in
1990, which is today India's leading provider of professional and technical
services in the infrastructure sector, and continues to serve as its chairman.
Chatterjee is often called upon to play a strategic advisory role to leading
Indian companies, the government of India, various ministries dealing with
infrastructure, as well as multilateral and bilateral institutions in the areas of
infrastructure planning and implementation. He interacts regularly with the
planning commission and various state governments on infrastructure
policy, projects and related enabling frameworks. He is one of the leading
proponents of the public-private partnership (PPP) model for developing
India’s infrastructure through his steering of the successful India
Infrastructure Initiative - an IDFC and Feedback Ventures partnership.
Currently, he is the chairman of the Confederation of Indian Industry’s (CII)
National Task Force on Regulatory Framework in Infrastructure. He has
chaired the CII’s National Council on Infrastructure (2003-06, 2007-09),
CII’s National Committee on Urban Infrastructure (2001-03) and was the
chairman of CII (Northern Region) for FY01.
He is a board member of SRF and Avantha Power and Infrastructure and is
on advisory boards of HDFC India Realty Fund, L&T Power and is a member
of the board of governors of the Indian Institute of Management, Lucknow.
Chaterjee is also a well-read columnist and writes a monthly column on
infrastructure for business standard called ‘INFRATALK’. He has authored a
book entitled Getting it Right - India’s Unfolding Infrastructure Agenda.
Foreword
India needs to invest heavily in infrastructure, given power shortages, the poor
quality of roads, constrained capacity and low efficiency at ports, an
overburdened railway network and inadequate urban infrastructure. The public,
companies and the government all recognise the need. While the past five years
saw investment growth outstripping overall economic expansion, the past few
quarters have witnessed a perceptible slowdown.
Our conversations with industry participants suggest that the key headwind
has been delays in government decision-making at various stages. This has
been manifested in various forms - new project tenders are taking longer to
finalise, existing projects have witnessed delayed execution as resource or
input linkages dependent on government approvals have taken time to come.
Not surprisingly, the orderflow momentum across most infrastructure and
construction vendors has slowed. Indeed, with most of them having expanded
capacities over the past few quarters in anticipation of investments picking up,
cashflows are under pressure, forcing them to bid aggressively and accept
thinner profit margins. This has predictably flowed through to the banking
system with slowing loan approvals on a shrinking pipeline of bankable projects.
Delays in execution have also hit the infrastructure developers. The power
sector is a case in point with inadequate or delayed resource linkages and
environment approvals having strained project economics. Further, new
project conceptualisation has taken a backseat indicating that the pipeline for
both developers and vendors may yet see further stress.
While drastic improvement is unlikely in the near term, there could be some
progress in areas like the Land Acquisition Bill and the gradual kick-starting of
stalled projects. We have seen some pragmatism in interpreting
environmental norms in the past few weeks, for example. In a recent meeting
of state power ministers, various steps to curtail losses at the State Electricity
Board (like the automatic pass-through of fuel costs and annual filing of tariff
petitions) were proposed.
Nonetheless, amid the gloom, road highways, power transmission and
distribution and urban infrastructure stand out as subsectors where there is
visible progress in terms of new orders and execution. Railways could also see
some activity, after a complete hiatus over the past few years.
Our guest speaker, Vinayak Chatterjee, Chairman of Feedback Infra, is one of
the most knowledgeable personalities in the Indian infrastructure space. He is
often called upon to play a strategic advisory role to leading Indian companies,
the government, as well as multilateral and bilateral institutions in the areas
of infrastructure planning and implementation. He co-founded Feedback Infra
in 1990, which today is India's leading provider of professional and technical
services in the infrastructure sector.
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