To introduce a range of premium kitchen products. Lighting products and appliances maker Bajaj Electricals is targeting the premium Indian home appliances market. The company has entered into a strategic alliance with Italy-based Nardi Elettrodomestici Spa to launch Bajaj Nardi brand of home appliances in India.
The association will enable Bajaj Electricals to widen its product basket to premium kitchen products, address the growing built-in appliances and modular kitchen market in India. With presence in 80 countries, Nardi has 40 per cent market share of the competitive Italian home appliances market.R Ramkrishnan, executive director, Bajaj Electricals, said, “Nardi’s technological expertise and insights of the international markets will help Bajaj in expanding the offering. The company will introduce customised products for the Indian market that will be manufactured in Italy in the first phase.”
Initially, Bajaj Nardi will launch the range of hobs, cooktops and chimneys followed by built-in ovens, dish washers amongst others. Marco Nardi, chairman, Nardi Elettrodomestici Spa said, “India has potential to become double than the European market. Our main objective will be the modular kitchen and product ranges like hobs and hoots.” Ramkrishnan said that Bajaj Nardi is eyeing 25 per cent market share of the premium gas hobs and chimney market. According to the company executives, the Indian home appliances market is pegged at Rs 4,000 crore with brown goods segment largely dominated by the unorganised players.
The company plans to distribute Bajaj Nardi brand through about 8,000 out of 25,000 of its existing distribution dealers and make its presence in the specialised retail stores. The Nardi partnership is estimated to boost the topline of the Bajaj’s appliances business. Last year, the company’s appliances operations registered a turnover of Rs 375 crore and is expected to touch Rs 501 crore in FY2009.
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Its sovereign wealth fund now has $90 billion to spend on assets abroad. China's $200 billion sovereign wealth fund now has as much as $90 billion to spend on assets abroad, an increase of more than 30 per cent on its original allocation, its president and chief investment officer told western bankers in Beijing on Wednesday.
The China Investment Corporation initially had about $66 billion for investment offshore but Gao Xiqing said it had changed that after the government decided less would be needed to restructure Agricultural Bank of China, China Development Bank and other struggling state-owned financial institutions. Gao said most of CIC’s enlarged offshore allocation would be given to external managers to invest in non-renminbi-denominated equities, fixed-income products and alternative investments including private equity funds, hedge funds and possibly commodities.
The fund has already chosen a number of global fund managers through an open bidding process to invest in offshore equities on its behalf but has not yet released their names as it is still negotiating contract terms. CIC emerged in May last year when it invested $3 billion in a pre-IPO stake in US private equity firm Blackstone — before the fund was even formally established. It has since invested a little over $5 billion for a 9.9 per cent stake in Morgan Stanley, $200 million in Visa’s IPO and $100 million in the Hong Kong IPO of China Railway Group.
In the case of Blackstone, the fund’s investment has lost more than a third of its value. Its Morgan Stanley stake has lost about 5 per cent. Both of CIC’s smaller investments have risen significantly.
When CIC was established, it was given $200 billion with a mandate to invest in roughly three equal parts — one-third to take over Central Huijin Investment, the entity that holds most of the government’s stakes in large state-owned banks and brokers; one-third for overseas investments; and a third to bail out the unreformed state banks.
At the end of last year, CIC recapitalised China Development Bank with $20 billion as part of the process of transforming it from a policy arm of the government into a commercially run bank. The reallocation of CIC funds suggests the government intends to restructure Agricultural Bank with a far smaller amount than earlier estimates, which went as high as $50 billion.
CIC has recently become more cautious in the face of intense domestic criticism over its investment record and a frosty reception from foreign governments because of a perceived lack of transparency and questions over political motivation. Fund officials have said the United Kingdom is the only major western power that has consistently welcomed CIC. Lou Jiwei, CIC’s chairman, has likened the fund to a Beijing taxi driver who wakes up each morning knowing he must make Rmb300 million that day to cover his expenses.
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Educomp Solutions Ltd's profit and revenue could likely double in 2008/09, as more schools adopt its teaching aids, its managing director told investors late on Wednesday.Rising household income and demand for quality education from India's fast-growing middle class have created a lucrative market for multimedia teaching-aids and computer-education programmes that Educomp offers to schools.
Smart Class is Educomp's interactive education-aid which contributes nearly half of the firm's revenue. Orders for computer-aided-education programmes from government-run schools add another third. Educomp's stand-alone net profit is seen rising to 1.35-1.4 billion rupees in the year to March 2009, up from 700.7 million rupees a year ago, Prakash said. Revenue will rise to 5.4-5.5 billion rupees from 2.62 billion rupees in 2007/08, he said.
With little competition and high entry barriers for its largest businesses, Educomp trades at nearly 98 times its 2007/08 earnings. Prakash said 1,700 schools would use Smart Class in 2008/09, up from 933 currently. The firm also expects 12,000-15,000 schools to order computer-aided-education programmes in the year, with the government hiking spending on elementary education.
The order value from the 933 schools stands at 5.92 billion rupees over 3-5 years, he said. Educomp's capital expenditure in the current year will be 3 billion rupees, up from 1.75 billion a year ago, Chief Financial Officer Sangeeta Gulati said on the call.
Educomp's board on Wednesday approved raising up to $500 million overseas, $150 million of which would be used to set up 150 schools over four years. Prakash said he expected to have 25 schools by the end of the financial year.Educomp has a tie-up with Ansal Properties & Infrastructure Ltd to lease out and manage schools in townships built by the real-estate developer. It is also in talks with other developers for similar agreements. The firm has no immediate plans for using the remaining $350 million, Prakash said. Educomp shares were up 1 percent at 4,031 rupees at 10:57 a.m. in a flat Mumbai market.
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