Besides building houses for people living in slums, SRS also focuses on supporting the communities, reports Dolly Mirchandani
Founded in 1972 by Adolf Tragler, an Austrian, Slum Rehabilitation Society (SRS) was the first NGO dedicated to slum rehabilitation in Mumbai. Over the years, it has built a considerable record of successfully converting slums into healthy communities.
SRS works with people who have lived in slums for over a decade because they cannot afford proper housing in the metropolis. It aims to provide slum-dwellers with a legal, self-contained home that has basic amenities like: a raised kitchen platform, a toilet and a bathroom. Having a home is only the beginning; so SRS involves itself with post-rehabilitation activities to ensure that slum-dwellers make a smooth transition to living in apartments. This involves help with understanding co-operative housing society rules, building maintenance and upkeep and taxes. Having done this, SRS also works at empowering women’s groups, building a network to provide pre-school education, income-generation projects, solid waste management, activities to beautify the environment and other services.
The Society initially focused on a section of Bandra (a Mumbai suburb), containing 30-odd slum pockets. Its first rehabilitation project at Mount Mary was completed in 1977. Until now, SRS has rehabilitated 7,000 families. Speaking about the new initiatives, Mr Tragler, the honorary secretary says, “The Society is currently engaged in two assignments—one for safe and legal supply of electricity to Shivaji Nagar slum in Deonar; the other is a socio-economic survey of nearly 10,000 families living in slums in Sion Koliwada. In terms of housing slum-dwellers, we are working on two projects, one in Khar and the other in Andheri, comprising 260 families. In Andheri and Bandra, we are working on several slum rehabilitation projects. Our greatest handicap is inadequate financial capacity.”
SRS promotes a ‘self-development’ approach to rehabilitation in which slum-dwellers play an active role. They are mobilised to develop their own land so that no outsider or individual walks away with the profit and no individual can indulge in profiteering. The benefits then accrue to the dwellers as well as the city. “However, because of the free housing scheme, people do not contribute financially,” says Mr Tragler. When asked about the challenges faced by the organisation, he says, “We are not in favour of the free housing scheme for slum-dwellers. This scheme has made people passive and demanding without any responsibility on their part. It also has pitted us against the powerful builder lobby who do not like to hear of self development and people having a say in their rehabilitation. Some builders try to intrude on our projects by offering money to the committee members, persuading them to join the builder and to bring the people also over to the builder.” He further adds, “A big problem is corruption in the committees of the slum-dwellers; and undue support from interested political parties or elected representatives adds to our problems.”
On funding and donations, Mr Tragler says, “We received Rs5.20 lakh from Alternaid, Germany, for medical services, while interest from fixed deposits is close to Rs2 lakh. We have received only Rs1.45 lakh this year from consultancy service. Our other amounts are overdue, particularly from Mumbai Metropolitan Region Development Authority. Miscellaneous expenses till date are about Rs2.25 lakh. The amount received through funding is very poor. We mostly struggle to create some additional income from our consultancy. Donations in our case are very few.”
The welfare activities of SRS include running balwadis (kindergarten), creating self-help groups, mahila mandals and holding health camps. SRS also conducts events such as Children’s Day, dental camps, medical programmes, teacher training, anti-malaria programme, etc. Donations made to SRS are exempt under Section 80G of the Income-Tax Act.
A revival in business after a two-year slump saw a more confident corporate India undertake more M&A deals this year than in 2007. Global biggies came shopping too, with action focused on energy and healthcare
The deal machine was in overdrive in 2010 as Indian corporates all over again showed a voracious appetite for cross-border mergers and acquisitions (M&As), after two lacklustre years. In fact, outbound deal values this year far outstripped those in 2007, when M&A activity was previously at its peak. The uptick in the domestic economy and the resulting business optimism was confirmed by India Inc’s hunger to acquire foreign assets.
Indian companies inked deals worth a total of $67.2 billion during the year (as of November 2010), up sharply from $21.3 billion last year, according to Thomson Reuters data. The average deal-size was also significantly higher. There were 1,047 deals with an average ticket-size of $51.4 million, compared to 1,235 deals with an average ticket-size of $16.5 million in 2009.
The maximum activity by value was in energy and power (around $23 billion), with the big one being the $4.8 billion purchase of Venezuela’s Carababo block by a consortium of state-run oil companies.
According to an energy sector analyst at a leading brokerage, “India is deficient in energy and existing companies can increase their production from domestic sources only to some extent. The only option is to acquire overseas assets to secure domestic energy needs. The government has given a mandate to state-run enterprises to acquire some assets. Private companies like Reliance Industries are also venturing abroad as domestic opportunities get saturated.” The analyst suggested this trend will continue next year.
Outbound transactions amounted to $25 billion—nearly twice the outbound deal value in 2007. The biggest cross-border deal this year was mobile operator Bharti Airtel’s $10.7 billion acquisition of the African telecom assets of Kuwaiti group Zain. Telecommunications was the next big deal activity sector ($15 billion) after energy. Some other prominent outbound deals were Shree Renuka Sugars’ acquisition of a 50% stake in Brazilian Equipav SA for $329 million (Rs1,151 crore), and Jindal Steel & Power’s acquisition of Oman-based Shadeed Iron & Steel Company for $464 million.
Zia Mody, senior partner at law firm AZB & Partners and a respected advisor on M&As, said significant strategic outbound acquisitions by India Inc were the characteristic feature of deal activity this year. “As far as inbound M&A activity was concerned, private equity showed increased significant interest, but off-shore financing remained a problem,” she said.
Foreign companies also showed a keen interest in acquiring assets in a promising Indian market. Inbound deals for the year more than doubled to $16.4 billion. The biggest was Abbott Laboratories’ $3.72 billion buy-out of the branded generics business of Piramal Healthcare.
Put together, energy, power, telecom and pharma accounted for almost 65% of the total deal value so far this year.
At home, GTL Infrastructure’s $1.8 billion purchase of Aircel’s tower business stood out. There were a couple of significant buys in the financial space, where ICICI picked up Bank of Rajasthan and Axis Bank acquired Enam Securities.
Freny Patel, associate editor, DealReporter (part of Mergermarket Group), Asia-Pacific, said, “Indian companies are ready to pay what they perceive to be the right valuation. They are not just hunting for bargain buys, but they would take advantage of the economic slowdown and the fact that many loss-making companies in developed markets are looking to sell out.”
However, several potential deals turned sour during the year. Reliance Industries’ (RIL) $14.5 billion bid for LyondellBasell could have been the biggest acquisition this year, but it fell through. Reliance Communications’ $10.8 billion merger of its towers division with GTL Infrastructure did not happen. Jindal Steel & Power’s estimated $600 million bid for a stake in Zimbabwe Iron & Steel was rejected. Another deal that did not see the light of day was Fortis Healthcare’s proposed acquisition of Singapore-based Parkway Holdings. Vedanta Resources' $9.6 billion proposed purchase of a majority stake in Cairn India is stuck in the government pipeline.
At the close of the year, JSW Steel, the country’s third largest steel maker, announced it was acquiring a controlling stake in cash-strapped Ispat Industries for $476 million (Rs2,157 crore) and Tata Chemicals bought British Salt, the UK-based chemicals company that makes pure white salt, for £93 million (Rs673 crore). Hyderabad-based infrastructure firm Lanco Infratech reportedly paid $795 million-$845 million for 100% ownership of Australian coal miner Griffin Coal.
Global consumer goods major Reckitt Benckiser acquired ointments and personal care manufacturer Paras Pharmaceuticals for $726 million (Rs3,260 crore). Religare Enterprises acquired a 55% stake in US-based Landmark Partners, a private equity and real estate fund-of-funds asset manager for $171.5 million. Opto Circuits (India) bought a 76% stake in Bothell, Washington-based Cardiac Science Corporation for $55 million. This was Opto Circuits’ third acquisition in the year, after it bought Unetixs Vascular Inc (Rhode Island in the US) for $9.7 million in July and a domestic company, NS Remedies, for $1.50 million in April.
It was quite a busy year with regard to M&As. Optimism is high and the appetite is not likely to go down. At the recently concluded VCCircle Dealmakers’ Conclave held in Mumbai, dealmakers and financiers were confident about an increase in both domestic and cross-border transactions in the months ahead. Rajiv Saxena, head of M&A, Essar Group, Rajesh Sawhney, president, Reliance Entertainment, Sanjay Bansal, managing director, Ambit Corporate Finance and Aditya Sanghi, managing director, Investment Banking, Yes Bank, who participated, also suggested that overseas assets in the US and Europe would be of particular interest to Indian companies.
India Inc is shopping hard and the trend is expected to get better. “India is seen as a strong emerging market to invest in. Unless the country takes a beating because of too many scams, the M&A deal flow should continue,” Ms Mody of AZB & Partners, said.
New Delhi: India Inc sated its thirst for funds like never before in 2010, with a record mop-up of over Rs2,00,000 crore from the equity and debt market during the calendar year, reports PTI.
The capital raised by Indian companies in the 2010 calendar year was over one-third more than the Rs1,50,000 crore mop-up in the previous year and was a beacon of hope in a global economy that has been witnessing turbulence on account of the poor health of Western economies.
Experts said Indian companies seem to have found a silver lining in the global financial crisis, as they managed to wrangle better terms for garnering the funds required for business expansion activities. They expect even more funds to be mopped up in the New Year.
Indian firms raised a total of Rs2,00,123 crore during 2010 through equity issues-in the form of initial public offers (IPO), follow-on public offers (FPO), qualified institutional placement (QIP), rights issues and foreign depository receipts like global depository receipts (GDRs) and American depository receipts (ADRs)-as well as debt instruments like External commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs).
However, fund-raising from the international market, through FCCBs, ADRs and GDRs, was somewhat subdued in comparison to the previous year. There was not a single ADR issue by Indian companies in 2010.
Analysts believe that the Indian economy-which is expanding at a pace of almost 9%-with its ability to generate better returns, will attract an even higher amount of capital next year.
"Indian investors will definitely mop-up more capital in 2011 from the level of 2010. They will prefer domestic routes for raising capital in 2011," SMC Global Securities' strategist and research head Jagannadham Thunuguntla said, adding that the ECB route will be the instrument of choice for raising funds next year as well.
A total of 547 companies raised about $18 billion (Rs81,400 crore) through ECBs in 2010, while they had garnered nearly Rs75,000 crore ($15 billion) last year. The biggest ECB issuances during 2010 were by companies such as Indian Oil Corporation, Exim Bank and Reliance Industries.
The year 2010 also featured 70 public issues, that is, 62 IPOs and 8 FPOs. The funds raised through public issues totalled about Rs71,114 crore. A major chunk of the amount raised through share sales-that is, Rs49,946 crore- came from the government divesting its stake in public sector companies.
In the public offer segment, 2010 saw a clear revival in the Indian primary market after a lacklustre 2009, when only 20 companies raised close to Rs20,000 crore. The largest public issue in 2010 was that of Coal India, with the issue size exceeding Rs15,000 crore.
Coal India's share sale offer also made history as the largest public issue of all time in the Indian capital market.
The grand success of Coal India's IPO was also seen in the Rs9,967 crore follow-on offer of NMDC, NTPC's FPO (Rs8,287 crore) and Power Grid Corporation of India Ltd's FPO (Rs7,442 crore).
Notably, the response from all classes of investors was robust, given that most of the public offers were over-subscribed multiple times.
Public issues were seen across sectors such as power, minerals, infrastructure, banking, healthcare and realty, among others, indicating that investors' overall confidence in the primary market is on a high.
Further, one more special highlight in the 2010 primary market were public issues from sunrise sectors such as microfinance, fitness centres, etc.
In particular, it was the ECB-push that took India Inc's fund-raising activities in 2010 to a new level despite capital-raising activities turning lukewarm on fronts like ADRs, GDRs and FCCBs.
About 53 companies raised about Rs28,339 crore during the year 2010 through the sale of shares to qualified institutional investors, including overseas private equity firms and local and foreign financial services firms like banks, insurers and fund houses. During the calendar year 2009, the funds raised through the QIP route amounted to about Rs32,631 crore.
Adani Enterprises was the first company to set the trend for QIPs during the year, raising a total of Rs4,000 crore.
Its example was followed by Tata Motors (Rs3,350 crore) and IDFC (Rs2,654 crore).
The quantum of funds raised through rights issues-where listed companies offer shares to existing shareholders-jumped 135% on a year-on-year basis to Rs9,203 crore in 2010. In comparison, Indian companies were able to raise just Rs3,626 crore in the previous year.
While there were no ADR issues, some action was seen in the area of fund-raising through GDRs. During 2010, there were 33 GDR issuances, which raised Rs3,968 crore ($879 million). This was almost 43% lower than the funds raised through GDR issues in 2009.
"In an era where fund-raising in the Indian domestic markets through instruments such as IPOs, FPOs and QIPs has been quite strong and healthy, foreign fund-raising through ADRs has almost become a thing of past," according to an analyst.
Another sour point in the fund-raising space was that of FCCBs. During the year, a total of about Rs6,100 crore ($1.35 billion) was mopped up through 12 FCCB issues. This was lower than the FCCB activity seen in the previous year, when 13 FCCB issues raised about $2.23 billion (Rs10,000 crore).