More malls to come up
Nirmal Lifestyle, a large shopping mall at Mulund (a Mumbai suburb); Inorbit, a shopping mall which caters to the suburban consumers of Mumbai & Navi Mumbai (Malad and Vashi) and Star Shopping Centres Pvt Ltd (who promote the StarCentres chain of malls) are in the process of building new malls by next year. Nirmal Lifestyle is in the process of launching Phase 2 of its mall in Mulund, says a top company official. The mall will be operational by December next year.
 
“We have invested Rs400 crore in Phase 2 of Nirmal Lifestyle and we are looking at independent projects in the next financial year in different places,” says Dharmesh Jain, chairman and managing director, Nirmal Lifestyle.
 
The global downturn has not stopped retailers from expanding, but the number of malls supposed to come up by 2010–2012 has come down drastically, said an industry expert. “In 2007 there were 400 malls which were coming up across the country till 2010-2012 but now we have only 100 malls coming up by 2012, out of which I think 15-20 malls only will be operationally successful malls,” says Anuj Puri, chairman and county head, Jones Lang Lasalle Meghraj, a global real estate services firm specialising in commercial property management, leasing, and investment management.
 
The retail industry in India is worth $410 billion currently out of which about $20 billion is modern retail, which includes malls and chain stores, says Puri.
 
Inorbit is coming up with three more malls within next year (at Hyderabad, Pune & Bengaluru) with an investment of over Rs1,000 crore in these new projects.
 
Inorbit is inaugurating a new mall at Hyderabad, which is one of the largest malls with 800,000 sqft of retail built-up area which will be operational by next month. Hypercity in Hyderabad—which occupies 100,000 sqft, has already been in operation since July 2009. “We are looking at a soft launch by early next month with two of our anchor stores—Shoppers Stop and Lifestyle and a few others,” says Kishore Bhatija, director, Inorbit.
 
The Hyderabad mall will have 150 stores and the second will come up in Pune at Nagar Road which will occupy around 500,000 sqft. The Pune mall will be operational by August next year. The third project in the pipeline is an Inorbit mall in Whitefield, Bengaluru (capacity of 400,000 sq ft) which will be operational by December next year.
 
“I feel the retail business has a lot of potential if you apply the right kind of strategy. We have seen a healthy growth in our business as we expanded from Malad to Navi Mumbai, Vashi,” says Mr Bhatija.
 
Star Shopping Centres Pvt Ltd, another mall owner, is planning new chains. The company is promoted by Shilpa Malik, president and chief executive officer and Pranay Sinha, managing director. Both were the brains behind the famous Select Citywalk in South Delhi, and formed their own company in 2008 after the success of this mall.
 
The company is coming up with its first project in Bengaluru by the end of the first quarter of the next fiscal and is planning to build 10-12 new mall chains across the country. “Our first shopping centre is modelled on the designs of High Street (the mall chain in Portadown, UK) which offers the benefits of an organised shopping mall and also the benefit of visibility that High Street gets,” says Ms Malik. Mumbai’s Phoenix Mills, which was converted into a mall, is built on the High Street model.
 
“We are trying to come up with different formats of malls like lifestyle centres, destination centres, etc. All our shopping centres will be (based on) a revenue plus rent-share platform,” says Ms Malik. For example, an apparel store will shell out   12% -18% of its revenue, while food outlets may have to part with 20% of their revenues.
 
Kishore Biyani’s VC firm, Future Venture, has a stake (the VC is not ready to reveal the percentage) in Star Shopping Centres. Future Venture is planning an IPO to raise funds for Star Shopping Centres.
 
Star Shopping Centres has also tied up with Deepak Fertilisers and Petrochemicals Corp Ltd who own the Ishaniya mall in Pune. They have also inked a deal with Bhasin Infotech & Infrastructure Pvt Ltd, a Delhi-based developer, which owns the Grand Venezia in Greater Noida. Star Shopping Centres will be delivering their expertise in conceptualisation, planning, strategising and marketing for the two malls. The Grand Venezia will mainly cater to tourists from across the globe.

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India's Green Infra buys BP unit for undisclosed sum

Indian power producer Green Infra Ltd said it has bought BP Plc's unit BP Energy India Pvt Ltd for an undisclosed sum.

According to some media reports, Green Infra has paid Rs6.5 billion (about $134 million) for buying BP's Indian unit, which has a 100MW portfolio of wind energy assets. This also marks BP's exit from the renewable energy market in India.

Green Infra is a subsidiary of infrastructure-focused private equity investment manager IDFC Private Equity. Post the deal Green Infra will have a total generating capacity of 124MW.

"We have a very positive investment outlook on the power sector, particularly in renewables, and have committed Rs3.6 billion (about $72 million) to support Green Infra in consolidating its leadership position," said Satish Mandhana, managing director, IDFC PE.

 Following the acquisition, Green Infra will own operating assets worth over Rs7.5 billion ($150 million), including 20MW of assets eligible for the generation-based incentive announced by the Indian government and a development pipeline of over 300MW. 

IDFC PE recently closed its third fund with a corpus of $700 million and also has provided Rs3.6 billion to Green Infra. -Yogesh Sapkale [email protected]

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IOL Netcom in dire straits, claim employees
All is not well at IOL Netcom Ltd, an IPTV and Internet services company based in Mumbai. An ex-employee of the company complained that his salary has remained unpaid since June 2009. He reveals further that a lot more employees have not been paid their dues since January 2009. Several have left the company due to non-receipt of salaries.
 
A detailed search at consumer complaints forum website www.consumercomplaints.in) threw up a whole list of similar complaints from disgruntled employees. They claim that the company has no funds to make the salary payments and that the figures mentioned in the company balance sheet are made up. The company balance sheet shows that the salaries are being paid. The company is also reporting profits for the June quarter, when employees are claiming that it is absolutely cash crunched. The company had reported losses for the past two years. In FY08 its net loss stood at Rs25.57 crore while in FY09 it suffered loss of Rs14.05 crore. The ex-employee also alleges that the company president, Siddhartha Srivastava, is turning a blind eye to the grievances of the employees.
 
When Moneylife contacted a senior official at IOL Netcom, he said the salaries had remained pending merely due to factors related to recession. He said, "There is nothing much to it. Given the recession, many companies were facing a tough time and we are also passing through that phase. On an overall basis, we are getting into a strategic investment mode where a few weeks from now a strategic investor is taking over. Nobody would have invested if they had no confidence in the company. Everything will work out pretty soon."
 
What is IOL Netcom and why are its problems newsworthy? It is the same controversial company that made news as owners of a 1% stake in Reliance Infocomm when it was part of Mukesh Ambani's empire. A certain Ashish Deora, a partner of the late Pramod Mahajan's relatives in the same company (then known as IOL Broadband), was under investigation in 2002 after being allotted one crore shares of Reliance Infocomm at a nominal one rupee per share. This was allegedly a quid pro quo for various permissions granted to the company to launch a Wireless in Local Loop (WLL) service, without paying the appropriate fees. However, the said shares were cancelled on the claim that he had not completed the work, but IOL walked away with the expensive fibre optic network that was laid in Mumbai and Delhi.
 
The company website is apparently in shambles and has been down for quite a while, showing signs of abandonment. The company's services too are fraught with issues. One particular complaint talks of low quality service with connectivity issues and server breakdowns. Notwithstanding the strategic investor claims, the company seems to be in a very bad shape.

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