18 May 2010

INDIA-MALAYSIA : INVESTMENT SCENARIO -- Malaysian Investment in India


(I)  Malaysian Investment in India

Malaysia is currently the 24th largest investor in India with FDI inflows from April 2000 to Nov 2009 standing at US $ 243.41 million. If investments made through Mauritius route are also included, cumulative Malaysian investments in India till date stand in excess of US$ 5 billion. Malaysia is emerging as a major potential investor in India, with investments in the pipeline in power, oil refineries, telecommunication and electrical equipment industries, besides highway and other infrastructure development projects.

Malaysian Foreign Direct Investment in India is primarily focused on roads and highways, telecommunications, oil & gas, power plants, tourism and human resources.  The highest investment proposals have been in the telecommunications, followed by Fuels (power and oil refinery) sector and Roads and Highways.

H E Mr. Kamal Nath, Hon'ble Minister for Road Transport and Highways, along with a 4 member delegation, visited Malaysia from 4-5 January 2010 at the invitation of Malaysia's Minister of Works Datuk Shaziman and held a bilateral meeting with the Malaysian Minister to discuss about further cooperation in India's national highway development program and also on possible investments from Malaysia in this sector. During the visit, official level talks were held on finalization of a MoU on Cooperation in Highway Development and Management between Ministry of Road Transport & Highways, Government of India and Ministry of Works, Government of Malaysia, which, inter alia, provides for Government to Government support in this sector.

Recently, there has been a surge in Malaysian private sector initiatives in the flow of project-related investments into India. Notable among these are the investments, include;

  • Malaysia's national oil & gas company PETRONAS' stake in Cairn India (Indian arm of UK based oil & gas major Cairn Energy Plc) went up to 14.94% after its recent acquisition of 2.3% share for US $ 240 million.
  • Astro All Asia Networks Plc has increased its stake in India-based South Asia FM Ltd. (SAFL) from 6.98% to 20% for RM 60.55 million, with an eye on radio-advertising growth in future.  
  • Ranhill Bhd.'s USD 900 million contract for construction and commission of a 2x350 MW thermal power plant in Chhatisgarh;
  • Mudajaya Group Berhad's USD 150 million E&P power project related contract in Chhatisgarh;
  • Asian Gateways Construction Sdn Bhd's USD 1.4 billion mega thermal power project (1600 MW) in Andhra Pradesh, Power Purchase Agreement (PPA) for which was signed with PTC India Ltd. in July 2007;
  • 9.95% stake acquired by Khazanah Nasional Berhad, the investment arm of the Malaysian Government, in Infrastructure Development Finance Company (IDFC) valued at approximately Rs. 8.2 billion (USD 180 million) over a six-month period between September 2006 and March 2007 making them the second largest share holder in IDFC after the Government of India, which holds a 23% stake;
  • Sunway Group, Malaysia and Hyderabad based Opus Developers & Builders are developing a 35-acre township, SunCity in Andhra Pradesh, with around 3,400 units of high quality condominiums & their another JV with MAK Projects Private Ltd to develop an RM 380 million (USD 113.43) condominium project in Hyderabad;
  • UMW Holdings Bhd's acquiring 14.9% stake in BSE-listed Oil Country Tubular Ltd (OCTL) for RM 41.96 million (USD 12.16 million) through its Indian arm UMW India Ltd.;
  • IJM Corp. Bhd and IDFC's joint venture to develop a southern road project at a cost of Rs. 6.75 billion;
  • India's largest mobile phone service provider Bharti Airtel Ltd. and Malaysia's Global Transit Limited are part of a six member consortium to build a high bandwidth undersea fibre-optic cable linking Asia and the USA at a total estimated cost of US$ 300 million.
  • UMW Corporation Sdn Bhd, a subsidiary of UMW Holdings Bhd has entered into two separate share sale agreements in 2008 for acquiring a 51% stake in MK Autocomponents Ltd for USD 22.52 million and 50% in MK Automotive Industries Ltd for USD 1 million approximately.
  • Malaysian construction firm, UEM Builders Bhd, have set up an equally owned joint venture company in partnership with India's Ansal Group, called UEM Builders-Ansal API Contracts Pvt. Ltd., with the objective of working jointly on several upcoming construction projects in India, particularly those related to real estates and township development.
  • Sime Darby Plantation Sdn Bhd, a wholly owned subsidiary (WOS) of the Sime Darby Berhad, signed a Memorandum of Understanding (MoU) with the State Trading Corporation (STC) of India on 26 August 2008 to cooperate in the field of edible oils. Under the agreement, both sides would explore the possibility of setting up a joint venture to set up an edible oil refining facility and market the end products in India.
  • IJM Steel Products Private Ltd, an Indian subsidiary of IJM Group has commissioned an RM 16 million (US $ 4.9 million) welded wire mesh(WWM) manufacturing facility at Isnapur, near Hyderabad.


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