Strategy Management Consultancy. India. Regional Analysis k n o w l e d g e c e n t e r. Linesight Knowledge Center. linesight.

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1 Strategy Management Consultancy India Regional Analysis 2016 k n o w l e d g e c e n t e r Linesight Knowledge Center linesight.com

2 Contents India Market Review 3 GDP Growth Rate (US$ Billion) 4 Consumer Price Index 4 Trend in Indian Construction Output by Sector Average Construction Costs 5 Construction Cost Indices 6 Wholesale Price Index for Major Construction Materials 6 Top Construction Companies in India 7 US Dollar vs. Rupee 7 Contributors to the India section of Knowledge Centre 2016: Helen Pender, Aidan Walsh Linesight India

3 India Market Review India is well positioned to withstand near-term headwinds and volatility in global financial markets compared with other major emerging economies and predicts it will grow at 7.9% by Despite the economic uncertainty that presently shrouds the world markets, the World Bank forecast for India is for a bright spot, amid a gloomy outlook for developing countries in the next two years. It says that India is well positioned to withstand near-term headwinds and volatility in global financial markets compared with other major emerging economies and predicts it will grow at 7.9% by This would make India the fastest growing economy of the developing countries in the region, ahead of Bangladesh, at 6.8% and China at 6.5%. The Foreign Direct Investment (FDI) regulations in India were relaxed in late 2014, early 2015, making it easier for international companies to invest in India s construction industry. They can now invest in projects with a minimum built area of 20,000 sq.m, relatively small by Indian standards and significantly lower than the previous threshold of 50,000 sq.m. The minimum capital investment by foreign firms has been halved from $10m to $5m. As a result of these regulation changes, India overtook China and the USA as the top destination for FDI in In the first half of 2015, it attracted investment of $31bn compared to $28bn and $27bn in China and the USA respectively. The construction sector accounts for the second-highest influx of FDI into India, after services. The Indian government is poised to spend billions of dollars upgrading housing and infrastructure, which will support the growth of the construction sector by up to 8% every year for the foreseeable future (5 years). The buyer demand in the residential market continues to rise across all major cities in India, with developers unable to secure project finance to keep pace with demand. The construction market appears to be continuing its rise from the ashes of recession, with positive action by the Government to reinvigorate the industry. With over 35 million people employed in the construction industry, making it the second-largest employer in India, the Government recognises the efforts the industry has made and continues to make in a country with a population of 1.3bn citizens. 3 India

4 GDP Growth Rate (US$ Billion) Actual Forecast Source Labour Bureau Government of India Consumer Price Index Jan Feb Mar Apr May Jun Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec Jan 15 Feb Mar Apr May Jun Jul Aug Sep Oct 15 Nov Source Labour Bureau Government of India 4 India

5 Trend in Indian Construction Output by Sector % pa Average Growth Rates Residential Non-Residential Infrastructure Total Source Global Construction Perspectives and Oxford Economics Average Construction Costs From Cost Range INR To Unit Commercial Offices Residential Leisure Retail Healthcare Warehouses City Centre Air Conditioned Shell and Core (Low Medium Rise) Developer Standard Apartments (medium standard) Hotel Building (4 / 5 Star) Shopping Centre Hospital Without Offices 37,000 43,500 per sq.m 28,500 33,000 per sq.m 91, ,500 per sq.m 40,500 49,000 per sq.m 43,500 50,000 per sq.m 27,500 33,000 per sq.m Notes - All subject to site specifics, design and specification - All exclude Land Acquisition Costs, External Works Costs & Professional Fees - Regional variances occur across the country and from sector to sector Source Linesight 5 India

6 Construction Cost Indices 2007=100 Delhi Mumbai Chennai Kolkata Hyderabad Source Construction Industry Development Council, India Wholesale Price Index for Major Construction Materials 2005= Grey Cement White Cement Bricks & tiles Stone Reinforcement bars Source Office of the Economic Advisor, India 6 India

7 Top Construction Companies in India DLF Gammon India Hindustan Construction Company Ircon International Jaiprakash Associates Lanco Infratech Larson & Toubro Punj Lloyd Group Shapoorji Pallonji & Co Sobha Developers Tata Projects US Dollar vs. Rupee Jan 10 Apr 10 Jul 10 Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Source European Central Bank 7 India