Deakin University again leads the way with India

When organisations ask how to engage with India, the answer can be found in how Deakin University has built the India relationship.

Deakin has demonstrated patience, long term commitment, adaptability and real community engagement with India.

Their latest announcement takes it to another level:

“Deakin University’s relationship with India has been a key part of who we are for more than 27 years. Our Indian students and staff are an integral part of the Deakin community and we have been shocked and saddened seeing the COVID-19 crisis unfold. 

“After careful consideration about what we can do to help make a difference to the Indian community, we’ve decided to join forces with our long-time partners, Tata Trusts, through their initiative ‘One Against COVID-19’ to lend financial support and encourage our community and partners to do the same.

“Funds will go to the areas most in need, specifically to aid with:

  • Repairing/upgrading facilities
  • Staff training, and
  • Expert project management to improve the efficacy and efficiency of the health response

“These funds would be in addition to the existing Student Emergency Assistance Fund which supports Deakin students experiencing financial distress and would go directly to the individuals and public services in need in India.”

To Vice Chancellor Iain Martin and Ravneet Pawha, Deputy Vice President Global – well done for shining a light in the relationship with India.

India could be world’s third largest economy as soon as 2030

Two facts demonstrate India’s amazing economic growth:

First, today India is the world’s 6th largest economy.

Second, as soon as 2030, it is likely to be the 3rd largest.

Mugunthan Siva, CEO of India Avenue Investment Management (Sydney and Mumbai) makes a compelling case for India focused, actively managed high conviction funds and the investment themes he likes include technology, manufacturing, construction, rural, real estate, B2B and market share leaders.

You can read more here:

https://www.livewiremarkets.com/wires/why-india-could-be-third-placed-by-2030

India Avenue website:

India’s millennials drive a shift to consumer demand

India’s millennials – what a shock – are borrowing for consumables.

This is a massive generational shift in India where previous generations believed in first saving and then buying – even if it took years or ultimately going without.

Consumer credit companies such as TVS Credit and Bajaj Finserv have been increasing the share of their offerings to these niche segments not covered by conventional lenders and NBFCs.

The loans are known as EMI’s (equated monthly instalments) and are used to buy various goods, including mobile phones, consumer durables and small-ticket items on easy, no-cost EMIs via loans or credit cards.

It is the segment of youthful, low-income but tech-savvy consumers that fintech lenders are targeting – half the small loans are of Rs5,000 or less.

The country’s largest AI-enabled consumer lending platform, ZestMoney, noted in a report that it had seen more than 125% growth in EMI funding.

E-commerce majors such as Amazon, Myntra, Flipkart, MakeMyTrip, Decathlon and Paytm, among others, have seen a substantial surge in online sales in the past year due to EMI financing schemes – and digital payments mean no cash.

The New India is not afraid of debt – signalling a major uplift in consumer demand for decades to come.

Indian startups – the real story

For decades Ashith Kampani has been in the Mumbai financial markets, giving him a front and centre seat to the Indian start-up environment. Here is his review – the real story.

Globally start-up names have become common in our lives – twenty years ago, today’s top names such as Apple, Google, Microsoft, Amazon, Facebook, Alibaba, WeChat, Baidu, Uber, Ola, Instagram, Slack, PayPal, Tesla, SpaceX, Flipkart etc. did not exist or barely made a mark in the mind of consumers. These brands have made it to the top of the valuation charts over the last two decades.

Each firm named above has been funded by the elite global VC and Private Equity firms. This trend continues.

India is still in the catch-upstage of having an organised and monitored ecosystem for its indigenous start-ups. In the Indian start-up ecosystem local ideas and local capital pools locally are mismatched.

Although Indian Angel and Seed investors have been on the rise, risk appetite has not increased.

What is needed to encourage investment? Local investors need a curator who will qualify founders, whet business models and create capacity building. This will allow deep tech to grow locally.

The areas that Indian needs to develop more efficiency in are BFSI (Banking, financial services and insurance), CPG(Consumer Packaged Goods), Smart Infrastructure, Health Care, Real Estate, Defence & Aerospace.

BFSI and Health Care have many start-up names where optimisation and efficiency levels have shown some improvement but many existing large players in Banking and Health Care are dependent on legacy systems which will require a large capex to upgrade.

In CPG & Smart Infrastructure there are fragmented players. Real Estate has many platforms, but they are part of a broken ecosystem as they are mainly matching and advertising platforms. Defence and Aerospace are a restricted sector due to government controls. However, India needs local start-ups to provide the “make & made in India” technology. This is urgently needed.

India based or born start-ups include PayTm, FlipKart, Ola, Oyo, Baiju, Swiggy, Zometo, Grofers, Nyakaa etc. They are all 10-12 years old. None of them have a dominant market share and are burning funds to acquire customers.

With a few exceptions, founders’ stakes are diluted below 15% ownership. I am OK with equity dilution as founders may have faced challenges initially to raise capital. However, if these early-stage capital pools were raised within India and in INR (Indian rupee) that would be preferable to an infusion of USD denominated funds.

Today hardly any start-ups are indigenously funded onshore in India. This is changing. Select names such as Lets Venture, angel groups which are city centric and micro-VC firms have started to commit between $100K to $1 Million in pre-seed or seed rounds.

India needs few hundred start-up names to work along with platforms like Lets Venture and a few more to provide risk capital.

Accelerators are scarce and should be encouraged to scale rapidly as well.

India also needs a centralised monitoring system on how start-ups are faring and what kind of ecosystem support is needed. These platforms can keep an eye on the progress of start-ups and create visibility and business opportunities for start­ups by bringing synergistic players on.

For example, start-ups can raise initial capital and receive visibility on the platform. They are then discovered by larger enterprises that need their services. Such platforms can be initially funded by enterprises (mid to Large) who shall have first access to the innovations of the nurtured start-ups.

Sector Analysis for India

CPG and Retail

There are four big players: Amazon, Flipkart, BigBasket, Reliance. The first three are attacking the market from an e-commerce angle with an internet front end paired with a warehouse back end. They negotiate hard with CPG players and offer attractive lower prices to consumers to as well as home delivery. The fourth, Reliance Retail has tied up with Kirana stores for last mile delivery and storage. However, Kirana may lose its business to Reliance Retail in the distant future.

Both the models pose challenges to existing small stores. Today 85% of FMCG & CPG sales are in single or small stores while Ecom and organised retail have a combined market share around 15% (other names like Delhivery, ShopX, Udaan, RingRing are still growing while some have given up).

BFSI

This is the most active and largest sector where digital offerings have taken the front row. Frontend players like Digital Lending / Neo Banks/ Payments/ Foreign Exchange offer services which compete with large banks and lenders. There are many players who digitise middle and back-ops for fintechs, lenders and banks.

Competition is fierce and it is a dog-eat-dog market where service levels and delivery are key as pricing is dictated via negotiated deals. Barriers to entry are also high. Large entrants such as Amazon Pay, Google Pay, Phone Pe Bharat Pe have been more visible than silent players like Razor Pay, Pine Labs, Pay U etc. New Neo Banks have been creating a buzz as well (Epify, Jupiter, Niyo, Ocare etc). I have not factored in Jio, but they have big plans in BFSI.

Smart Infrastructure

One of the biggest markets with select international players in this market as local start-ups do not have enough funding yet. Personally, I would watch this segment carefully as new Indian players enter.

Health Care

This is now a most vibrant sector thanks to the recent pandemic Covid19. Vaccine creation to efficient delivery is a large and needed segment. Connecting the health of each individual (with assessment) into a seamless hospital, insurance and finance model will make a positive impact on many lives. Today we have cashless health insurance, but it is a fragmented system. Start-ups are better positioned to offer a solution to repair such an awkward process.

Real Estate

Real Estate is also a broken system in India. Renting or purchasing needs to be repaired as the experience is not seamless. Only some parts are digitised, and none offers an end-to-end service. This is a totally broken experience and must be repaired end to end.

Conclusion

The Indian market of 1.4 Billion people needs many start-ups to create products and services which suits the needs of Indian people. The road ahead in India and South Asia is extremely optimistic as start-ups can simplify, digitise and link together transactions.

The market opportunity is vast but initial funding needs to be localised and customised to the India based entrepreneur. More platforms that can offer funding, visibility, sales and exit needs to be encouraged.

About the Author

Ashith Kampani has spent 38 years in capital market. Journey began with family stock broking firm on Dalal Street open outcry system to all digital online trading systems. During this journey he spent time with retail, wealth management, institutional equities, private equities, Investment Banking M&A and now in Venture Capital and early-stage Investment and advisory. Worked with JV partner Morgan Stanley and before stepping down he was MD at JM Financial. Currently Chairman at CosmicMandala15 Group & Member of Managing Committee Bombay Chamber.

Pat Cummins role model for how all of us can help India

Many of us in business relations with India are wondering what is the right thing to do in the midst of India suffering so much from the pandemic.

Pat Cummins has showed us what to do.

He is staying because IPL creates some joy for lockdown people – and he has made a big donation.

For business and trade the message is striking – keep in touch, build business relations and where you can, donate to support India.

Cummins has starred for the Kolkata Knight Riders so far this season.

The Australian superstar wrote on Twitter on Monday night to announce a donation in the fight against the virus, and to urge fellow cricketers to donate.

I am reproducing his entire Tweet because it is moving and inspirational:

“India is a country I’ve come to love dearly over the years and the people here are some of the warmest and kindest I’ve ever met.

“To know so many are suffering so much at this time saddens me greatly.

“There has been quite a bit of discussion over here as to whether it is appropriate for the IPL to continue while Covid-19 infection rates remain high. I’m advised that the Indian government is of the view that playing the IPL while the population is in lockdown provides a few hours of joy and respite each day at an otherwise difficult time for the country.

“As players, we are privileged to have a platform that allows us to reach millions of people that we can use for good. With that in mind, I have made a contribution to the “PM Cares Fund”, specifically to purchase oxygen supplies for India’s hospitals.

“I encourage my fellow IPL players – and anyone around else the world who has been touched by India’s passion and generosity – to contribute. I will kick it off with $50,000.

“At times like this it is easy to feel helpless. I’ve certainly felt that of late. But I hope by making this public appeal we can all channel our emotions into action that will bring light into people’s lives.

“I know my donation isn’t much in the grand scheme of things, but I hope it will make a difference to someone.”

India’s top ten business cities and what they are known for

Mumbai – beautiful, never sleeps, the financial and commercial capital of India

Mumbai

Mumbai is the ultimate commercial and financial city of India – a true 24/7 powerhouse that never sleeps. It houses the headquarters of a large number of major Indian companies like Tata Group, Reliance Industries, Aditya Birla Group, Larsen & Toubro, Godrej Group, and Hindustan Petroleum among others. The city is also the headquarters of the Reserve Bank of India, National Stock Exchange, Bombay Stock Exchange, and – yes – Bollywood.

GDP (PPP) – 310.0 billion

Delhi

Delhi is the National Capital of India – and on a global scale, it is one of the great capitals of the world. It is also the most populous city of the country. Being the political center, Delhi is home to all the prominent political personalities and officeholders including the President, the Prime Minister, and distinguished ministries. Delhi is a metropolitan city and attracts a large part of the population from all the states. With the ever-growing rates of urbanisation, the city accommodates everyone and has a diversified economy.

GDP (PPP) – 293.6 billion

Kolkata

Kolkata – oh yes, I know it has a reputation as relaxed or even sleepy – but it was the capital of British India and houses India’s oldest stock exchange. Most people are not aware that more than 83 percent of the city’s population is employed in the tertiary sector. Kolkata is the third richest city in South Asia after Mumbai and Delhi. Kolkata is a house of many Indian corporations like Coal India Limited, ITC Limited, Britannia Industries, Allahabad Bank, National Insurance Company, and United Bank of India among others.

GDP (PPP) – 150.1 billion

Chennai

Chennai is one of India’s great southern cities with all the manners, politeness and conservatism that goes with it. It is the capital city of Tamil Nadu and sits by the Bay of Bengal. Given its glorious history and its significance as Madras Presidency during the British rule, Chennai is historically and culturally rich and diverse, attracting tourism in turn. Besides being a pioneer in art, culture, and music.

GDP (PPP) – 110.0 billion

Bengaluru

Bengaluru used to be called the “garden city” but today is better known for massive traffic jams. It has a “young” feel and houses some of India’s most trendy eating and drinking establishments. It contributes more than 35 percent of India’s IT exports. The city also houses some major manufacturing industries like Bharat Heavy Electricals Limited, Bharat Electronics Limited, and Bharat Earth Movers Limited among others. Infosys and Wipro have their headquarters in Bengaluru. The city is home to 8 billionaires.

GDP (PPP) – 86.0 billion

Hyderabad

Hyderabad comes across first as located in a dry and rocky area – but the city is known for its rich history, food, and its multi-lingual culture, both geographically and culturally. The city has an estimated population of around 8 million, making it 4th largest city in India, while the population of the metropolitan area was estimated above 9 million. Religiously and culturally, the city is united with Hindus, Muslims, and Christians.

GDP (PPP) – 75.2 billion

Pune

Pune, a place for learning, thinking and doing. Pune is a city located in the western Indian state of Maharashtra and now closely linked with Mumbai. It is the 8th largest city in India and the second largest in Maharashtra. India’s first Prime Minister called Pune “The Oxford of the East” because Pune attracts students from all over the world. There are a large number of good schools in Pune affiliated either with the Maharashtra State SSC Board or the All-India Indian Certificate of Secondary Education (ICSE) and CBSE boards.

GDP (PPP) – 69.0 billion

Ahmedabad

Ahmedabad was the historic home of Gandhi’s famous ashram and is now a dynamic commercial hub – it is one of the fastest-growing cities and is one of the best cities to live in. Ahmedabad is an economic and industrial hub of India and is the largest city in Gujarat. There are several significant companies located in the city and the place is known for the textile industry. This city attracts a large number of tourists every year as there are several amazing monuments along with numerous modern buildings. Have fun – go there during the amazing kite festival.

GDP (PPP) – 68.0 billion

Surat

Surat is known by several names – the silk city, the diamond city and the clean city – it is one of the cleanest cities in India and is the best developing urban community. Surat has the largest stone cutting and cleaning centers and is especially known for diamonds. Surat has a large textile industry and there are more than 380 dyeing and printing mills with 41,000 power looms.

GDP (PPP) – 59.8 billion

Visakhapatnam

Thankfully known by the shorter name of Vizag, this city manages to combine a powerful steel industry, major port and lots of natural beaty. It is a great economic destination that is also known as the financial capital of Andhra Pradesh. This coastal city is also known for its medication, programming, and pharmaceutical industry.

GDP (PPP) – 43.5 billion

(Thanks to multiple sources including INDIA TODAY for the above)

India adopting digital payments as Covid spurs rapid move away from cash

I am a big fan of The Hindu Business Line and one of their recent reports shows a big shift in India to digital payments – the cash economy, so long a burden for India, is dying out as a result of Covid and long-term Modi Government efforts.

This has massive positive implications for GST income for government.

Business Line reported that ACI Worldwide released a new report that indicated more than 70.3 billion real-time payments transactions were processed globally in 2020, a surge of 41 per cent compared to the previous year.

This comes as the Covid-19 pandemic dramatically accelerated trends away from cash and cheques towards greater reliance on real-time and digital payments, according to the study.

According to the report, India retained the top spot with 25.5 billion real-time payments transactions, followed by China with 15.7 bn transactions.

In 2020, the transaction volume share in India stood at 15.6 per cent and 22.9 per cent for instant payments and other electronic payments respectively, while paper-based payments had a considerable share of 61.4 per cent.

The report speculated that by 2024 the share of real-time payments volume in overall electronic transactions will exceed 50 per cent. This will further touch 71.7 per cent by 2025.

“India’s journey of creating a digital financial infrastructure has been characterized by collaboration between the government, the regulator, banks, and fintech. This has helped to advance the country’s goal of enabling financial inclusion and also provided rapid payment digitization for citizens. The pandemic has further accelerated the adoption of digital payments with many first-time users adopting digital payments and significant uplift by merchants,” said Kaushik Roy, VP, and head of product management, Asia, ME, and Africa, ACI Worldwide.

Melbourne edtech firm TALi launches learning app in India

Pictured is Glenn Smith, MD, TALi Digital

I was pleased to hear from Michelle Wade, Commissioner South Asia at Global Victoria, that Victorian edtech and digital wellness company TALi Digital this week launched their Indian platform via the Times of India. The two apps — the TALi app and TALi TRAIN — are designed to improve children’s attention skills, which are so important for their ability to listen, learn and focus on tasks at home and at school. Targeting children aged 3-8.

As Michelle wrote on Linked In – “Very proud of our team, and particularly Annie SanthanaGopi Shankar and Stuart Bland for the many months’ work and continued support to Tali Digital.”

Well done!

India to become the 3rd largest economy and “sweet spot” for investors over next decade

Indranil Sen Gupta, BofA Securities

Indranil Sen Gupta, BofA Securities, recently expressed the view that India is likely to become the 3rd largest economy over this decade. This will be driven by:
– sweetspot for the demographic dividend
– significant FX reserves to protect the economy
– 9-10% nominal GDP growth over the decade
– Low interest rates will lead to the next capex cycle, earnings growth

He said: “We see the economy growing at 9% nominal, that is 6% growth, 5% inflation, and 2% depreciation for the next two years. There are three drivers. The demographic dividend which we have all been talking about for the last 15 to 20 years is actually going to kick in from 2020 and help savings and investments. Secondly, there is financial deepening. Compare it to GDP ratio, which is around 40 to 50 per cent of GDP, should jump almost 100%. And thirdly, there is the emergence of mass markets, which the US probably saw 100 years ago. For example, the price of an entry level car today is 2.5x down from 14x 20 years ago. We think that is close to 1x on export basis.”

Read more at:
https://economictimes.indiatimes.com/news/economy/indicators/india-to-be-the-third-largest-economy-in-10-years-bofa-securities/articleshow/81685020.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Why is the Indian American diaspora so successful and now influential in the US?

The power of India in the US. People hold placards of Kamala Harris, as she prepares to take her oath as vice-president of America, at her ancestoral village in Thulasendrapuram.

Migrants from India are the most successful migrant group in the USA and now they are becoming influential and leading in politics. Even President Joe Biden recently quipped that “Indian Americans are taking over the country”.

These Indian Americans have played a “stellar role” in education, technology and entrepreneurship. Now public administration and politics.

Companies in the US headed up by Indian American CEO’s right now include Google, Microsoft, Albertsons, Micron Technology, Mastercard and Adobe Inc.

Biden should feel close to the Indian migrants – his speech writer (Vinay Reddy), Vice President (Kamala Harris) and the leadership of NASA’s Mars Mission (Swati Mohan) all have Indian heritage. But this is just the tip of the iceberg.

Indians are a small migrant group – around 3.8 million migrated making up 1.2 per cent of the US population.

But this diaspora is the richest, most educated and among the most successful ethnic groups in the USA.

Why?

Indian entrepreneurial drive makes them unique among migrants

The National Academies of Science, Engineering and Medicine of the US in its report titled The Economic and Fiscal Consequences of Immigration had said in 2015-16 that “Indian immigrants are the most entrepreneurial of any group including natives, and immigrant businesses represent more than a quarter of businesses in the transportation, accommodation, and recreation and entertainment sectors.”

Indians have chased better education

According to Pew Research Center data from September 2017, about 32 per cent of Indian Americans have a bachelor’s degree and 40 per cent are post-graduates. The comparable figures for all Asian Americans are 30 per cent and 21 per cent, respectively. If all Americans are considered, Indians stand out even more as only 19 per cent of Americans have undergraduate degrees and 11 per cent have post-graduate education.

Indians make more money

The Indian community in the US earn a lot more than all other ethnic groups, white Americans included. A recent survey by Coalition for Asian Pacific American Community Development found that the average income of Indian American families is $120,000, compared to the overall US average of $88,000.

So, why are Indians the most successful?

A recent book titled The Other One Percent: Indians in America bySanjoy Chakravorty, Devesh Kapur and Nirvikar Singh found some answers.

Singh hypothesises that “There is no ‘secret sauce’. There are no peculiarly Indian cultural traits (that make Indian Americans more successful than others)…. They came very carefully selected. They were not coming from poverty. The simplest policy prescription may be this: Make sure everyone has access to education,” he told the media.

The immigration of Indian Americans really began in 1965 when the US lifted caps it had placed on immigrants from some countries. Since then, the visa process has favoured the entry of mostly upper class, educated Indians, their close relatives, students with very high scores and skilled workers.

Summarising why Indians succeed in America

They are a migrant group with access to educational resources and having a stable financial background. Without these two, migrants generally stay at lower levels of income and influence.

You have not seen the best yet!

80 per cent of second-generation Indian Americans are under the age of 25 years. This means their political influence and commercial success is likely to grow further in the years and decades to come. The Indian American population is expected to almost double to 2 per cent of the US population by 2030. They are mostly concentrated in New York, New Jersey, Washington DC, California and Texas.

Indians now standing out in public service

President Biden has appointed significant numbers of Indian Americans to his team – Uzra Zeya, Under Secretary of State for Civilian Security, Democracy, and Human Rights, State Department; Mala Adiga, Policy Director to Dr Jill Biden; Aisha Shah, Partnership Manager, White House Office of Digital Strategy; Sameera Fazili, Deputy Director, US National Economic Council (NEC); Sumona Guha: Senior Director for South Asia at the National Security Council, White House; and Sabrina Singh: Deputy Press Secretary, Vice President White House.

In addition, two Indian Americans, Nikki Haley and Bobby Jindal, have already ruled states such as Louisiana and South Carolina as governors.

The story of Indian Americans is amazing right now – and will continue to grow.