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India’s entry into Europe clubto help SMEs expand footprint As reported in the CII newsletter, MSME Business
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ndia has become a member of the Enterprise Europe Network (EEN) - the 54th country to do so - in a bid to facilitate the flow of trade, investment and technology between SMEs in India and the European Union (EU), according to a recent issue of the CII newsletter, MSME Business. The EEN works through local business organisations to help SMEs make the most of the European marketplace. India’s entry into the EEN will give the country’s SMEs access to Europe’s large database of cutting-edge technologies, with companies from the 27-member bloc both offering and seeking research and commercial applications in 17 sectors, including agro-food, automotive, transportation
and logistics, biotech and health care. The EU has been a difficult market for Indian SMEs, given its complexities, stringent rules and protectionist tendencies, but India’s membership of the EEN is expected to make a difference. CII, along with the European Business and Technology Centre (EBTC) and the Federation of Indian Export Organisations are partners in this initiative, and contact points for Indian SMEs. The network serves as a one-stop shop for enterprises looking to go global with their innovative ideas. The EEN can provide insights on sources of venture capital and loans; the best way to sell a business plan to investors; getting aid from
regional, national or EU authorities; and accessing public funds and grants for research and development. The EEN’s business cooperation database of some 23,000 profiles and business support organisations from 54 countries enables SMEs to utilise it to search for international business partners and sourcing new technologies and advisory services on issues such as intellectual property, going international, or EU laws and standards. The network ensures that SMEs looking to expand their business to another country find competent and trustworthy partners, as well as assess how EU laws and regulations affect businesses.
Foreign investors increase stake in India Inc Foreign Investment in India
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ith foreign investors pumping a massive $10 billion in Indian markets in January-March , the second highest ever in a quarter, FII ownership in top-500 companies has hit an all-time high of 21.2% for the quarter ending March. It climbed 1.28% in the JanuaryMarch quarter alone and 2.87% in 201213 . Along with foreign promoters (7.6%), foreigners are now the most dominant shareholders in India Inc. FII inflows topped $25.8 billion during the one-year period ending March 2013, the second best ever. Though FII ownership of India Inc. has hit a peak, their exposure to Indian markets remains well below the highs achieved earlier. The value of FII portfolio stood at $236.2 billion, data compiled by Citi Research and the Centre for Monitoring Indian Economy showed. It hit an all-time high of $276.5 billion at the end of December 2010. Significantly, foreigners (FIIs and foreign promoters ), with a combined ownership of 28.8% in BSE-500 companies, are now ahead of Indian promoters, who on an average held 27.7% stake in these firms. The churn on the back of Unilever’s aggressive open offer to shareholders and promoter stake sales to meet the minimum public shareholding norms stipulated by market regulator SEBI has led to the decline .
FIIs own a quarter of the largest companies in the country. They own 25.32% in sensex companies compared to the average 23.37% owned by Indian promoters in these 30 blue-chip firms. “FII flows would continue as the interest rate cycle has turned favourable,” says Kishor P Ostwal, Managing Director , CNI Research, an equities research provider. “It is largely driven by global liquidity ,” says Vikram Dhawan , Director, Equentis Capital. Since stock valuations in developed markets are ruling higher, money has started to move into emerging markets such as India, he says.
declined 3% during January-March on the back of heavy selling from domestic institutional investors (DIIs ). The average stake held by DIIs dropped 0.24% in 2012-13 during which they pulled out about $12.7 billion from the equity markets. “Domestic investors have been facing redemption pressure. But they held rather tenaciously to their ownership levels,” market observers said.
FII ownership in financial services and consumer staples companies remained high.They have also increased their stakes in energy , telecom and healthcare firms. They have also started to reduce their exposure to IT companies. IT is now the biggest underweight for FIIs, data showed. FII ownership matters a lot for stock price movement . Stock prices of most companies in which FIIs increased their holdings went up in January-March . All the top companies where FIIs cut their exposure during the quarter witnessed a fall in stock prices. Stock prices plunged 12% to 30% in these companies during the period. The increase in FII stakes has however failed to move the markets. The markets
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