Archive for September, 2014

RIL to raise $800 million from K-Exim for Reliance Jio

September 26, 2014

In order to finance the purchase of telecommunications equipment from vendors such as Samsung in Korea, Reliance Industries Limited (RIL) will be raising $800 million from Korea EximBank (K-Exim). The much-awaited rollout of 4G services by Reliance Jio, RIL’s telecommunications arm, is scheduled for the first quarter of 2015.

It is believed that K-Exim will fund about 60% of the amount while standing guarantees for the remaining. The rest will be bankrolled by a number of global banks, three each from Korea and Japan, including ANZ and HSBC. The agreements expected to be signed within the next 2 days.

Other International Financiers

This will be the first international financing for the company after it borrowed $1.5 billion through external commercial borrowing (ECB) for its spectrum payments in 2010. RIL will soon be refinancing that funding at well. The new tenure for$500 million will be 6.5 years and for $1 billion will be 5.25 years. It will be at spreads that are lower than the previous loans.

Between 2012 and now, RIL has been responsible for approximately 14% of India’s exports. In addition to this, it has raised more than $11 billion from foreign countries through bonds besides funding from export-import banks and ECBs. A major part of this funding is essentially to finance RIL’s capital expenditures for large expansions of its petrochemical capacity.

RIL’s longstanding Relationship with Export Credit Agencies

In addition to being the country’s largest overseas borrower, RIL is also one of the most active Indian corporations in tapping Export Credit Agency (ECA) financing routes, which offer cheaper credit than commercial banks for long tenures. The latest financing with K-Exim for instance is believed to be for 12 years.

Taking into consideration RIL’s credit ratings and its strong balance sheet, ECAs from the United States, Korea, France and UK have frequently provided funding during 2013. As a result of this, the company has been able to lock in capital commitments for as much as 14 years at extremely low rates. On an average, a fixed-rate ECA offered by the US government comes with an interest rate of 3.5% for a 10-year dollar-denominated bond.

Reliance Jio’s Roll-Out Plans

In a note on September 16th, analysts from Credit Suisse, Sunil Tirumalai and Chunky Shah, wrote, “RJio has completed installation of 32,000 LTE (Long Term Evolution) base stations nationwide. The pace of rollout, importantly, has picked up sharply to 6,500-7,000 per month. It seems the company and the rollout partners are maturing in the rollout process.”

Reliance Jio has been working towards the 2015 launch of its 4G services and is expected to invest as much as INR70,000 crore in this regard. It is believed that RIL will be pumping in about 42% of that amount over the next two years. Spokespersons at RIL said that Jio will initially cater to 5,000 towns and cities, covering more than 90% of urban India. In addition to this, it will also launch its services in over 215,000 villages in India. Their overall target is to reach out to over 600,000 villages.

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Mukesh Ambani, Priyanka Chopra, J P Vaswani to Receive Priyadarshni Academy Global Awards

September 19, 2014

Leading personalities from diverse walks of life have been chosen to receive the Priyadarshni Academy’s Global Awards. On 19th September 2014, the likes of Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited(RIL); Priyanka Chopra, Bollywood Actress; and Dada J P Vaswani, a Religious Leader and Head of the Sadhu Vaswani Mission will be awarded accolades at The Trident, Nariman Point, Mumbai.

The event will be attended by Union Minister Piyush Goyal along with the Maharashtra Assembly Speaker Dilip Walse-Patil and former Union Minister Suresh Prabhu, among many other renowned guests. Nitin Gadkari, Minister for Shipping, Road Transport & Highway; Rural Development and Panchayati Raj for the Government of India will be the Chief Guest at the event.

About Priyadarshni Academy

Since its inception in 1984, this not-for-profit academy has been involved in a variety of socio-cultural activities. For instance, the academy intends to facilitate national integration through encouragement of dance and music. The academy is also actively involved in a number of environment protection initiatives, in the provision of nutrition and monetary aid to the underprivileged, international cultural exchange programs and promotion of sports and education. It hosted its first Global Awards in 1985. This year will mark the academy’s 30th anniversary for the award function.

Recognizing Global Achievers

The Chairman of this establishment, Niranjan Hiranandani, says that through the Global Awards, the academy intends to pay tribute to achievers from around the world that inspire leaders of both current and future generations.

Mukesh Ambani has been selected for the Harish Mahindra Memorial Award to recognize his role as a business leader. In 2012, it was awarded to Kumar Mangalam Birla, Chairman of Aditya Birla Group for his outstanding contributions to globalization of Indian industry.

The Smita Patil Memorial Award, previously won by Deepika Padukone and Vidya Balan, will go to Priyanka Chopra this year in recognition of her contribution as an actress. The Spiritual Leadership Award will be given to J P Vaswani.

Other Awardees

Other notable names on the list of award recipients include Rajshree Birla, Director of Aditya Birla Group, who will be given the Ramakrishna Bajaj Award for her contribution in the field of Corporate Social Responsibility.

CEO of the Miss World Organization, Julia Morley is named for the Save the Children Award while Sir Fazle Hasan Abed from Bangladesh will be recognized for his role in the alleviation of poverty and empowerment of the poor. The award for Outstanding Contribution to Sustainable Development will go to American economist Jeffrey Sachs. Other past international winners include names such as Dr. Jacques Rogozinski, General Manager at Inter-American Investment Corporation, for his contribution towards economic development leveraging on small and medium enterprises.

This event is considered highly prestigious and acknowledges outstanding achievements of various individuals in the field of literature, entrepreneurship, science, technology, environment protection, education, and for their work in fields such as fine arts and films.

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ISL Launches its Marketing Campaign with a Peppy TVC

September 12, 2014

The much-anticipated first season of the Indian Super League (ISL) is scheduled to start on October 12th. For this, the organizers have released a captivating TV commercial (TVC) that aptly captures the fervor behind the sport.

The ISL is arguably the most anxiously awaited football event in India this year. The official TV campaign that was launched on 7thSeptember kicked off with a 100-second panoramic film that appropriately showcased the hopes of 1.2 billion people in developing a thriving football culture in India.

The first television advertisement kick-starts the lead-up to a 36-day-long integrated marketing campaign for the opening game that is scheduled for next month.

Bringing about a Football Revolution

The league is a result of a joint venture between Reliance Industries Limited and International Management Group. The league is built on the vision of Nita Ambani, Chairperson of Reliance Foundation,to encourage the spirit of sports. The league intends to bring about a football revolution in India. She says, “ISL hopes to act as a foundation in creating an ecosystem to nurture talent and make our own national football heroes.”

This event ushers inhope of India qualifying for the FIFA World Cup in a few years’ time.

C’mon India, Let’s Football!

With this simple phrase, the television commercial conceptualized by Ogilvy & Mather urges Indians to be a part of their very own league. The peppy soundtrack for this commercial is composed by Amit Trivedi who has been able to aptly capture the spirit of millions of fans all over the country.

The commercial reaches out to everyone from fishermen in Kerala to pujaris on the banks of the Ganges;from monks in the north-eastern part of the country to dancers in Rajasthan. The joint effort, power and passion of Indian fans towards football eventually takesthe shape of a unique human stadium, acting as an overwhelming climax to the film.

Audience Reception

This artistic commercial was shot at over 20 locations across India by Manoj Pillai from ThinkPot Films. The campaign was launched in the T20 game between India and England on Sunday, followed with full-fledged promotional broadcasting across the Star Network.

Piyush Pandey, Executive Chairman and Creative Director, South Asia, Ogilvy & Mather adds, “India is a great nation, which will excel in everything possible and football is our next goal. I’m extremely excited about the League and the communication. The only thing I want to hear is 1.2 billion people saying,’C’mon India, let’s football!'”

Srinivasan Gopalkrishnan, AVP Marketing & Commercial – ISL says, “This film showcases India’s grand welcome to the beautiful game and, with it, the passion and dreams of all Indians out there. Come 12th October, the fans will be treated to a great sporting spectacle and we hope everyone joins us in saying: C’mon India,let’s football!”

The audience found the creative of the commercial to be loyal to the magnificent size of the project. It has been able to effectively bring alive a sense of inspiration that will eventually help India take its rightful place in the world of football. On social media as well, the sentiment towards this campaign is positive.

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Reliance and Other Retail Giants Explore Emerging Opportunities in Divided Andhra Pradesh

September 4, 2014

The recently truncated 29th state of India, Andhra Pradesh,is attracting attention from a number of large domestic as well as global retailers. Giants such as Wal-Mart, Reliance Retail, Future Group and Aditya Birla Group have already begun exploring opportunities here.

According to various property consultants and industry executives, international single-brand players such as Adidas and Nike are also scouting for available commercial real estate with an aim to expand their presence in Andhra Pradesh.

Current Concentrations of the Retail Sector

Andhra was recently condensed to 13 districts right after the creation of Telangana, a new state with 10 districts, including the city of Hyderabad. This motivates Andhra Pradesh to create a large new capital city along with a number of smart cities, consequently paving way for new retail opportunities.

Most large players, such as the retail wing of Reliance Industries Limited, have their outlets located in and around Hyderabad. This city is currently a part of Telangana even though it will remain the joint capital for both states for the next decade.

Positive Sentiments in the Retail Industry

Wal-Mart India, which operates its 20 cash-and-carry stores under the brand name Best Price Modern Wholesale, is optimistic about the emerging opportunities that are made available with the new capital and cities planned in Andhra Pradesh. Rajnees Kumar, Vice President of Corporate Affairs, said,”We plan to open 50 more cash-and-carry stores in India in the next four to five years.” However, he refused to disclose the exact number of stores planned for Andhra Pradesh. Wal-Mart currently has 1 store in Hyderabad and 3 in Andhra Pradesh.

On the other hand, a senior executive at Future Group cited political uncertainty and regional agitations in the then undivided state as reasons behind not expanding base there in spite of business potential. While Future Group has 21 stores in Karnataka, 17 in Tamil Nadu they only had 9 in undivided Andhra Pradesh.

The change in the state’s political scenario since June 2014 has encouraged Future Group to aggressively plan for 6 big-format stores. “Apart from signing agreement for stores at Guntur, we are on the verge of signing agreements for Rajahmundry and are looking for suitable property in Kurnool,” said a company executive.

Under the Chairmanship of Mukesh Ambani, Reliance RetailLimited already has about 50 stores in undivided Andhra Pradesh. Working under brands such as Reliance Fresh, Reliance Super, Reliance Mart, Reliance Trends, and many more, the Group’s future plans for Andhra Pradesh are still unclear.

Sandip Patnaik, Managing Director at Jones Lang La Salle India says, “Thanks to end of uncertainty over state bifurcation, now most of the large-format players are aggressively exploring business opportunities in truncated AP.” He adds, “Though the real-estate prices and rentals now in most cities of AP are no less than Hyderabad, retailers are attracted by over five lakh populated locations with presence of higher spending population.”

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