Mumbai Has More ₹100 Crore Real Estate Deals Than Ever Before

• <00:55> Mumbai is seeing more Rs 100 crore house deals than ever before with Anuj Puri
• <05:52> Global consumer brands are leading the next round of manufacturing investments in India, as global supply chains shift and the Indian market grows. 
• <10:55> The Adani Effect plays out as SEBI finalises guidelines for more transparency amongst foreign investors with Ambareesh Baliga
• <16:15> The CEO's diet, what's a fibre diet and how should you be starting one? with Dr. Nandita Iyer

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TRANSCRIPT

NOTE: This transcript contains only the host's monologue and does not include any interviews or discussions that might be within the podcast. Please refer to the episode audio if you wish to quote the people interviewed. Email [email protected] for any queries.

Good morning, it's Friday, the 30th of June and I'm Govindraj Ethiraj in transit till the weekend and missing the pouring rains, utter chaos, deepening potholes and unfinished bridges in Mumbai, India's financial capital.

Our top stories

-Mumbai is seeing more Rs 100 crore house deals than ever before.

-Global consumer brands are leading the next round of manufacturing investments in India, as global supply chains shift and the Indian market grows.

-The Adani Effect plays out as Sebi finalises guidelines for more transparency amongst foreign investors.

-The CEO's diet, what's a fibre diet and how should you be starting one?

Real Estate Deals Get Bigger

There are more Rs 100 crore house deals than ever before. Millennials and younger people are back to buying houses or trying to and many large business houses have now entered real estate. While names like Mahindra, Tata and Godrej were the earlier entrants, now there are Hero, Birla, Jindal, TVS and Kirloskar who have also entered the real estate sector.

Expect more supply and more, if you are in a city, mess I would think.

But the industry is growing strong with prices rising almost everywhere except Mumbai and fresh construction in full swing.

And by the way, 50% of the total sale in terms of value among the top 6-8 cities in India happens in Mumbai city, I found when I spoke to Anuj Puri, Chairman of Anarock, a real estate research and consulting firm. He laid out the megatrends for me:

You can catch the full interview on Saturday on Core Report The Weekend Edition.

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New Round Of Manufacturing Investments

Two years ago, I was moderating a panel discussion on sustainable manufacturing in Mumbai. One of the panellists was a director of supply chain for South APAC for L'Oreal, the cosmetics major.

L'Oreal is a 38 billion Euro by sales brand you likely know but perhaps do not pay much attention to the making of it.

It employs some 1,600 people in India across two manufacturing facilities and two R&D facilities. The Indian R&I hub, as L'Oreal calls it, is one of 6 L'Oreal global hubs and caters to hair, skincare and make-up.

What emerged from the conversation was that companies like L'Oreal were actively looking at two things strategically, first, to step up the near-shore market presence as in manufacturing closer to or right in the market and second, to look at alternatives to China. The reason for the former was to do with sustainability and reducing the supply chain footprint. The reason for the second, or the China + 1 strategy as we call it, is known.
Sanand in Gujarat, an hour's drive from Ahmedabad, has several manufacturing plants, ranging from automotive to automotive ancillaries to chemicals and light engineering, including air conditioners.

It's now seeing an interesting mix of very high-tech and consumer brand investment announcements

Micron Technology said earlier this week it was setting up a Rs 22,500 crore semiconductor plant in Sanand.

The assembly, test, marking and packaging facility will come up on 93 acres of land in an industrial estate there.
The facility will transform wafers into what is known as ball grid array integrated circuit packages, memory modules and solid-state drives.

India is keen to set up semiconductor capacity because of its strategic nature and the fact that in a shifting geopolitical scenario, you don't want to be going around begging for chips which connect to almost everything in your home, car and of course mobile phone.

But it's not just strategic semiconductor plants that are going to Sanand.

Procter & Gamble has just committed to investing Rs 2,000 crore to set up a plant, which will make, among other things, digestives, or mostly its healthcare brands. The unit is expected to be more export-oriented, according to the company's announcement
P&G makes probiotics and laxatives though they are not sold in India as I could see.

The interesting thing is P&G had agreed to set up in Sanand and met with the Government in 2021 itself, going by a report in the TOI then.

The scope of the project and the products that are being manufactured seem to have expanded since then.

The TOI at the time also quoted officials saying P&G was moving production from Indonesia to Gujarat, which is an interesting move in itself and fits with what I broadly took away from my sustainable manufacturing discussion in 2021 June.

Incidentally, around 10 years ago in 2013, P&G announced a major plant near Hyderabad spread over 170 acres making a wide range of products.

Its other plants are in Baddi, Bhiwadi, Mandideep, Goa and Ahmedabad, the last of which appears to have scaled up since its initial recce visits and meetings.

The broader point is that while semiconductor projects will expectedly draw attention, there clearly is a steady flow of investments in areas where one would not have normally noticed, including consumer and healthcare products.

The reasons are several, one of them clearly being the domestic market and the Government's push towards local manufacturing and of course, the other shifts we spoke of earlier.

Most of these investments will likely create proportionately more direct jobs because of their labour-intensive nature if I were to go by the claims of the companies on different occasions.

Speaking of local manufacturing in unexpected areas, Japanese clothing and retail brand Uniqlo is looking to set up a significant presence in India through 20 production partners, The Economic Times has just reported.

Uniqlo already has production partners in India, as would any global clothing or garment brand but Uniqlo apparently wants to build production partners for the domestic markets as opposed to the earlier lot, which was export-oriented and focused.

Uniqlo started operations in October 2019 in Delhi, has 6 stores there and then added Lucknow and Chandigarh and is now going to come into Mumbai and Bangalore. It also launched its own online store in June 2021.

Uniqlo has factories all over Asia, with most being in China, followed by Vietnam, Bangladesh, India and Indonesia apart from Japan where it appears to have the least.

Detailed Disclosures For Foreign Investors Are Here, The Adani Effect.

A key charge in the Adani-Hindenburg imbroglio was that a handful of companies owned most Adani group stocks which were somehow linked to each other and were driving up the stock price in India.

India's market regulatory body the Securities & Exchange Board of India had in May released a consultation paper saying foreign portfolio investors (FPIs) who have a substantial portion of their investments concentrated in a single Indian company will have to make additional disclosures.

SEBI has now released guidelines on this matter essentially trying to force offshore entities to reveal their true owners.

The paper said that the objective of this exercise is to foster and enhance trust and transparency and greater investor protection in the Indian securities market.
Thus hinting that trust and transparency levels are either low or have been lost.

Going by data as of March 31, 2023, SEBI has estimated around $31 billion or Rs 2.6 lakh crore or 6% of total FPI equity assets under management and less than 1% of India's total equity market capitalisation could fit the high-risk FPI category.

SEBI's additional granular level disclosures now cover ownership, economic interest, and control for foreign portfolio investors meeting certain criteria, on a full look-through basis.

The enhanced disclosures are aimed at addressing possible circumvention of Minimum Public Shareholding and Takeover Regulations, SEBI said.
If disclosures are not made, then the FPI licences will be cancelled, Madhabi Puri Buch, chairperson, SEBI said.

Existing FPIs will have three months to bring down their positions and new FPIs will have three months to meet the disclosure requirements.

The board has now said that the higher disclosure requirement will apply to:

FPIs hold more than 50% of their Indian equity assets under management in a single Indian corporate group.

Individual FPIs or FPIs along with their investor group hold more than Rs 25,000 crore of equity AUM in the Indian markets.

However, certain entities have been exempt. These include government and government-related investors, pension and public retail funds, certain listed ETFs, corporate entities and verified pooled investment vehicles meeting certain conditions.

Market analyst Ambereesh Baliga who I spoke to then however felt that investors would circumvent this rule by pooling elsewhere or differently.

Faster IPOs To The Rescue

Meanwhile, Sebi has reduced the listing timeline after an Initial Public offer to 3 days after the closure of an issue from the current T+6 days, T being the day the issue closes for the subscription.

It will become mandatory for offers after December 1 this year and will be voluntary from September 1 this year.

In general, this would mean that companies have faster access to the capital raised and investors can dump and run more quickly than ever before, if they want to of course.

Before I go, did you know that dietary fibre is good for you? What indeed is dietary fibre and why is it relevant to you, as an active professional? I asked our health and lifestyle columnist Dr Nandita Iyer, a medical doctor and nutritionist to explain what it is.

Do read Dr Nandita Iyer's weekly columns on www.thecore.in and also find her every week on The Core Report where she will pick up a new theme relating to food and wellness.

That's it from me for now, have a great weekend and don't forget to tune in to The Core Report Weekend Edition with Anuj Puri for the megatrends that are shaping India's real estate industry right now.