ASSOCHAM

INVESTMENT

METER

RAJASTHAN
March 2009

Prepared by: Nusrat Ahmad

ASSOCHAM Research Bureau
Email: nusrat.ahmad@assocham.com
url: http://www.assocham.org/arb/
RAJASTHAN

In dark clouds of economic slowdown, silver lining emerged for Rajasthan as the
western desert state attracted highest investment plans during October-
December 2008-09 by corporate India, bringing a considerable shift in its ranking
order, among the 21 India states.

Rajasthan is turning to be one of the most favourable investment destinations,

carving top position in the third quarter of the financial year 2008-09 (October-
December), witnessing a major jump from 13th position in the same period of the
financial year 2007-08, according to a paper brought out by ASSOCHAM.

As India Inc expressed investment plans in Rajasthan, the state registered a

major jump by 245.84 per cent during October-December 2008-09 as compared
to the corresponding period of the last year (2007-08).

The Indian desert state, Rajasthan, have lured the investors to express their plans
for undertaking projects in the region in the third quarter of the current fiscal
with Rs.11, 102 crore as compared to Rs. 3,210 crore in the same period of the
previous fiscal registering a maximum growth of 245 per cent.

ASSOCHAM observed that the number of companies planning investments in

Rajasthan dipped by 133 per cent from 7 domestic corporate houses expressing to
investments during Oct-December 2007-08 to just 3 major Indian players in the
same months of the fiscal 2008-09.
Introduction

Data Source
The report prepared is based on the data tracked from various investments
announcements planned by the Indian companies, in the domestic market in
print and electronic media.

Time period
The data analyzed for the report include the time period January -December
2007-08 and 2008-09 respectively.

Methodology
The corporate houses that have expressed investment plans for a particular
region have indicated a spread of 3-5 years for their plans to fructify.

Ranks have been assigned, based on the descending order of the amount of
investment planned for the state. Comparative analysis has been drawn for the
same time period of two different years.

India Inc. investment announcements are planned (not realized), hence

industrialists express to invest a large sum of amount in particular sector across
2-3 states, but they do not disclose the ratio of the sum in each state. Thus, to
avoid the problem of double counting, ARB, divide the capex amount in equal
ratio among the number of states where investment is planned.
Corporate investments in Rajasthan (Oct-Dec 2008-09 over Oct-Dec 2007-08)

During the year 2007, the Indian economy boom as Indian industrialist expressed
to invest across various sectors and states with the purpose to modernize,
expand and set-up new plants. However, the preceding year (2008), started with
moderate downfall in terms of the capex planned by the business leaders.

Investment plans by the corporate sector is driven by expectations about the

future. Projects are undertaken in those regions where India Inc. foresees returns.
In light of this the year 2008 started with turbulence in the global financial
markets leading to credit crunch and shaking investors’ confidence, becoming a
cause of concern for the corporate India. However, states like Rajasthan tapped
the opportunity in attracting Indian corporate houses to invest in sectors such as
energy, hospitality and food processing.

During October-December 2008-09, India Inc. expressed to invest Rs. 11, 102
crore in Rajasthan, registering a sharp growth by 245 per cent as compared to the
corresponding period of the last year (2007-08), with investment announcements
worth Rs. 3,210 crore.

(Planned Capex in Rs crore) Growth

Oct-Dec 2007 Oct-Dec 2008 rate (in %)
3,210 11,102 245.84
Source: Assocham Investment Meter.
 Major sectors attracting investments announcements
(Oct-Dec2008 over Oct-Dec 2007)
The state with prospects and resources for mineral, textiles, agro processing,
chemicals, energy and cement sectors attracted Indian corporate leaders towards
the state to utilize it and expand their businesses.

During the third quarter of 2007-08 hospitality sector topped the charts with
maximum capex announced worth Rs. 1800 crore in the region. However, in the
same period of the financial year 2008-09, the energy sector notched the top
position in Rajasthan witnessing whooping amount worth Rs. 11,000 crore by
major domestic player.

In October-December 2007-08, the metals and mining sector witness second

highest investment announcements totaling Rs. 450 crore, followed by FMCG
sector attracting Rs. 310 crore in the desert region. However, in the same period
of FY 2008-09, food processing sector attracted 2nd highest amount of planned
capex worth Rs. 101.5 crore.

Top Sectors attracting investments for the Top Sectors attracting investments for the
period October-December 2007-08 period October-December 2008-09
Capex Capex
Sno. Sector (in Rs. crore) Sno. Sectors (in Rs. crore)

1 Hospitality 1800 1 Energy 11000

2 Metals & mining 450
3 FMCG 310 2 Food Processing 101.5
Source: Assocham Investment Meter.
Top Indian Corporate Houses expressing investment plan:
(Oct-Dec2008-09 over Oct-Dec 2007-08)

ASSOCHAM observed that the number of companies planning investments in

Rajasthan dipped by 133 per cent from 7 domestic corporate houses in Oct-
December 2007-08 to just 3 major Indian players in the same month of the fiscal
2008-09.

In Oct-Dec 2007-08….

Dawney Day Hotels planned the largest investment decision of Rs. 1600 crore for
setting up four star hotel in Jaipur.

JB group ranked second with Rs. 500 crore investment announcements in

diversified category including sectors such as mining, oil & gas, alternative
energy, diamond & jewellery, hospitality and real estate.

Hindustan Copper Ltd ranked third with investment plans amounting to Rs. 450
crore with the purpose of developing two green filed copper mines

Adarsh Derivaties had come up with an investment decision of Rs. 310 crore
occupying fourth rank, for setting up 3 plants for processing and storage of
organic products in the region.

In October-December 2008-09….

Cairn India Ltd made the largest capital expenditure announcement worth Rs.
11,000 crore for the development including a modern processing terminal at
Mangala along with a 600 km evacuation pipeline in the West Coast.
 Top Indian companies planning to invest Top Indian companies planning to invest
during the period Oct-December 2007 -08 during the period Oct-December 2008-09
Capex Capex

Sno. Company Name (Rs. crore) Sno. Company Name (Rs. crore)
1 Dawney Day Hotels 1,600 1 Cairn India Ltd 11,000
2 JB Group 500 2 Vikas WSP 100
3 Hindustan Copper Ltd 450
4 Adarsh Derivaties 310
5 Panaromic Universals 200 3 The Sommelier 1.50
Source: Assocham Investment Meter

In the food processing sector, two companies namely, Vikas WSP and The
Sommelier planned investments during the period worth Rs. 100 crore and Rs.
1.5 crore respectively.

Vikas WSP plans to utilize the amount to produce 8,000 tonnes of organic
guarseed, whereas, The Sommelier, a wine lounge company expressed to expand
the business.
 ANNEXURE I

Growth rate (q-0-q)

(Oct-Dec 2008-09 over Oct-Dec 2007-08)

State Growth Rate (in %)

Rajasthan 245.84
Bihar 100.00
Punjab 41.66
UP 26.85
MP -47.76
Karnataka -53.82
Delhi -59.65
Gujarat -64.13
Himachal Pradesh -84.00
Aandhra Pradesh -84.04
Haryana -86.87
Orissa -88.68
Maharashtra -91.92
Tamil Nadu -95.56
Assam -97.53
Jharkhand -98.76
West Bengal -98.97
Total -75.27
Source: Assocham Investment Meter, Oct-Dec 2007-08 & 2008-09.
Ranking in descending order of the amount of investment planned for the
state by corporate India

(Oct-Dec 2008-09 over Oct-Dec 2007-08)

Rank
Oct-Dec Oct-Dec
State 2008-09 2007-08
Rajasthan 1 13
Madhya Pradesh 2 6
Orissa 3 3
Maharashtra 4 1
Karnataka 5 8
Gujarat 6 10
Uttar Pradesh 7 14
Andhra Pradesh 8 7
Haryana 9 9
Tamil Nadu 10 4
Punjab 11 17
Delhi 12 15
West Bengal 13 2
Bihar 14 21
Jharkhand 15 5
Himachal Pradesh 16 16
Assam 17 11
Chattisgarh 18 20
J&K 19 19
Kerala 20 18
Uttaranchal 21 12
Source: Assocham Investment Meter, Oct-Dec 2007-08 & 2008-09
 ANNEXURE II

Investments in Rajasthan during the calendar year 2008 (January-December)

2008 was not an investor friendly year for Indian corporates, sectors and states,
as impact of slowdown was well reflected in the expansion, modernization and
up gradation plans of India Inc, with declining numbers in investment
announcements.

However, the year 2008 saw major shifts in investment destinations, as

Rajasthan, considered to be one time BIMARU state, have shed its image, getting
attention from corporate India for investment purpose to utilize the untapped
resources in the region. The desert state witnessed investments worth Rs.
93,354.78 crore during the period January-December 2008.

TOP 5 SECTORS WITH

INVESTMENTS PLANS DURING TOP 5 COMPANIES PLANNING INVESTMENTS
JAN-DEC 2008 (in Rajasthan) DURING JAN-DEC 2008 (in Rajasthan)
Amount Amount
Sectors (Rs. Crore) Company (Rs. Crore) Sector
Real Estate 43,550.00 Omaxe Ltd 40,000 Real Estate
Energy 19,960.00 Aviation,
Infrastructure 6,950.02 Parsvnath Infrastructure,
Developers 20,000 Retail
Ratail 6,700.00
Cairn India Ltd. 19,400 Energy
Aviation 6,666.67
Jindal Stainless Ltd 5,600 Steel
Steel 5,600.00
Sun City Projects 1,800 Real Estate
Source: Assocham Investment Meter
 ASSOCHAM Research Bureau

ASSOCHAM Research Bureau (ARB) is the research division of Associated

Chambers of Commerce and Industry of India. The Research Bureau undertakes
studies on various economic issues, policy matters, financial markets,
international trade, social development, sector wise performance and monitoring
global economy dynamics.

The main banners of the Bureau are:

ASSOCHAM Eco Pulse (AEP) studies are based on the data provided by
various institutions like Reserve Bank of India, World Bank, IMF, WTO, CSO,
Finance Ministry, Commerce Ministry, CMIE etc.

ASSOCHAM Business Barometer (ABB) are based on the surveys conducted by

the Research Team to take note of the opinion of leading CEOs, MDs, CFOs,
economists and experts in various fields.

ASSOCHAM Investment Meter (AIM) keeps the track of the investment

announcements by Indian industrialists in different sectors and across various
states and cities.

ASSOCHAM Placement Pattern (APP) is based on the sample data that is

tracked on a daily basis for the vacancies posted by companies via job portals
and advertisements in the national and regional dailies, journals and newspaper.
Data is tracked for 60 cities and 30 sectors that are offering job opportunities in
India.
 THE KNOWLEDGE CHAMBER

Evolution of Value Creator ASSOCHAM initiated its endeavour of value creation

for Indian industry in 1920. It has witnessed upswings as well as upheaval of
Indian Economy and contributed significantly by playing a catalytic role in
shaping up the Trade, Commerce and Industrial environment of the country.
ASSOCHAM derives its strength from the following Promoter Chambers:
Bombay Chamber of Commerce and Industry, Mumbai; Cochin Chamber of
Commerce and Industry, Cochin; Indian Merchant's Chamber, Mumbai; The
Madras Chamber of Commerce and Industry, Chennai; PHD Chamber of
Commerce and Industry, New Delhi.

VISION

Empower Indian enterprise by inculcating knowledge that will be the catalyst of

growth in the barrier less technology driven global market and help them
upscale, align and emerge as formidable player in respective business segment

MISSION

As representative organ of Corporate India, ASSOCHAM articulates the geniune,

legitimate needs and interests of its members. Its mission is to impact the
policy and legislative environment so as to foster balanced economic
industrial and social development. We believe education, health, agriculture
and environment to be the critical success factors.

GOALS

To ensure that the voice and concerns of ASSOCHAM are taken note of by policy
makers and legislators. To be proactive on policy initiatives that are in
consonance with our mission. To strengthen the network of relationships of
national and international levels/forums. To develop learning organization,
sensitive to the development needs and concerns of its members. To broad-base
membership. Knowledge sets the pace for growth by exceeding the expectation,
and blends the wisdom of the old with the needs of the present.