With an objective of bringing to the fore the success stories and potential of the leading Small and Medium Enterprises (SMEs) Dun & Bradstreet and The Karur Vysya Bank Ltd. joined hands to recognize and applaud the leading SMEs of India through SME Business Excellence Awards 2015 on November 23, 2015 in Delhi. TEMA India, one of the leading manufacturers of heat exchangers in the country, was recognized as the Best Global Business SME 2015.
SMEs are widely known as the backbone of industrial development. India is home for nearly 48 million SMEs which contribute more than 45% towards country’s industrial output, generating 40% of total exports and producing 1.3 million jobs every year. Though the Indian entrepreneurs have contributed immensely to the country’s economic and international evolution, yet the sector continues to struggle with the darkness of ignorance and lack of interest from masses.
Commenting on the development, Mr. Haresh Sippy, Managing Director, TEMA India, said “The small and medium scale enterprises play a crucial role in the socio-economic growth story of India. By facilitating employment and business avenues in rural and urban India, the sector provides equitable and inclusive growth across local economies. But in the changing times there is a heightened need to bring to light the success stories of the sector in an attempt to not only showcase the might of SMEs but also to attract, inspire and motivate entrepreneurs. I am deeply grateful towards Dun & Bradstreet for conceptualizing the SME Business Excellence Awards initiative which provides a platform for SMEs to show-case their performance and contributions to the growth of the nation”.
He further said, “This award highlights the high morale and the synergy that exists in team TEMA. I offer my deepest gratitude to all the employees of TEMA India who helped us to achieve this award.”
The ceremony also marked the release of sixth edition of Dun & Bradstreet’s premier publication ‘Leading SMEs of India 2015’ a leading compendium on the Indian SME industry, by chief guest Shri Jayant Sinha, Minister of State for Finance, Ministry of Finance, Government of India.
Most experts would agree that our economy is out of danger, if not on the road to recovery. From 2013-2014 we saw the broad market move upwards due to the easy money policies of the Federal Reserve. Now with the market recovering well, most believe that the Fed will start raising interest rates mid-2015 and the market has responded accordingly. We must recognize that investment in the stock market must be done much more strategically because this year—every sector will behave differently. The sector that has suffered the most severely in the past 12 months and consequently most poised for a rebound is the energy sector.
Understanding the Movement
The energy sector consists of all players in the various sectors of crude oil, solar, wind and water. As more than 60% of this sector is dominated by crude oil related companies, our analyses refer to energy and oil interchangeably. It won’t come as a surprise that gas prices are and have been going down for the past 12 months. This is because the price per barrel of oil has gone from around $95 per barrel in January 2014 to $60 per barrel in one year—a 37% drop! It is a common adage in investing circles to “buy low-sell high”—the art is in recognizing when the bottom is. To put things in perspective at the height of the last market peak in September 2007, Brent Crude (a major oil price index) was at $76 per barrel. Based on market and historical behavior, energy is poised for a revival—it’s just a matter of time.
The coal, power and renewable energy sectors could create new business worth Rs.1 trillion in the next six to eight months, which in turn will help kickstart growth for firms in these sectors and other related segments such as capital goods, said Piyush Goyal, Union minister of state for power, coal and new and renewable energy.
“I see just the power, coal and renewable energy sector investing or bringing out business worth Rs.1 lakh crore (Rs.1 trillion) in the next six to eight months,” said Goyal. The minister was talking at a Mint post-budget analysis conference, Budget 2015: Remaking India held in Mumbai on Friday.
A significant part of this business is likely to come from Coal India Ltd, Power Grid Corp. of India Ltd (PGCIL), NTPC Ltd and Energy Efficiency Services Ltd (EESL).
“Coal India would be placing orders for mining equipment worth Rs.3,000-5,000 crore and orders worth another Rs.15,000 crore is expected from Power Grid for their transmission business. Energy Efficiency Services Ltd will also be placing an order worth Rs.6,000 crore for LED (light emitting diode) lamps,” Goyal said on the sidelines of the event.
In addition, the country’s largest power producer NTPC Ltd is also expected to place orders worth Rs.30,000-35,000 crore for power plant equipment.
The pickup in orders from public utilities will help the capital goods sector in particular, which has been struggling due to a fall in fresh orders which were impacted by a slowdown in the investment cycle in the economy.
This has impacted the earnings of key capital goods firms including state-run Bharat Heavy Electricals Ltd, which reported a 69.4% year on year fall in its net profit for the December 2014 ended quarter to Rs.212.6 crore. BHEL’s net sales also dropped by 28.2% to Rs.6,078 crore during December quarter from Rs.8,462.4 crore in the year-ago period, impacted by both power and industry segments.
Gamesa installed the highest wind energy capacity in India for the second consecutive year in 2014, a report by Danish firm Make Consulting states.
Gamesa commissioned a fourth of the 2.3 GW wind energy capacity commissioned in India last year, with Suzlon Energy and Wind World India taking second and third spot respectively. Suzlon Energy was once the leading wind energy solutions provider in India and has commissioned 37% of the total wind energy capacity operational in India today, but the company has been reeling under tremendous debt. Gamesa has taken full advantage of this market opportunity as it plans to enhance its footprint in India.
Gamesa plans to significantly increase its capacity installation this year. In 2014 the company managed to add about 575 MW, but aims to commission 1 GW capacity this year. Last year, the company announced 1 GW cumulative installed capacity in India and announced that it would invest €100 million in the country over the next 5 years.
A majority of this investment is expected to go into enhancement of manufacturing capability. The company plans to introduce new wind turbines with bigger blades to be installed in areas with low wind energy potential. Additionally, the Indian government is planning to open the offshore wind energy sector as well. Both, Suzlon and Gamesa are planning to introduce offshore wind turbines in India.
The evolution of technology has not only made our lives easier but has also made us completely dependent on energy sources. In the 1970s, the main issues were the oil crisis and the threat to energy security. Presently, the environment and its conservation is the major issue. The excessive exploitation of natural resources has adversely affected our environment. The efficient use of environmental friendly energy sources has gained importance. This will not only save energy but is also financially viable.
The increased use of energy sources, especially fossil fuels, has also resulted in greater levels of pollution. Fossil fuels emit greenhouse gases that cause global warming. The impact of global warming has already proven disastrous for all living organisms.
For instance modes of transport like buses, trucks, trains, aeroplanes, ships and automobiles are powered using coal, gasoline, diesel and gas. In the agricultural sector, pumps for irrigation run on diesel (a fossil fuel) or electricity. Tractors, threshers and combined harvesters are all fuel-intensive.
Economically developed countries use more energy per unit of economic output and consume much more per capita compared to developing countries. There is an urgent need to resort to cost effective or cheaper and environment friendly energy sources. Energy intensity is an indicator of efficiency of energy usage in the economy. India’s energy intensity is much higher than the emerging economies of other Asian countries.
India’s renewable energy industry is likely to generate business opportunities worth $160 billion in the next five years, the Economic Survey said on Friday, the day before a budget that is set to boost clean energy funding.
Prime Minister Narendra Modi is banking on renewables to fight climate change rather than committing to emission cuts like China. He has set ambitious clean-energy targets including raising solar capacity fivefold to 100 gigawatts (GW) by 2022.
“It offers a very good opportunity for businesses to set and scale up industry, leapfrog technologies and create volumes,” the economic survey report said.
The report, authored by the government’s chief economic adviser, Arvind Subramanian, said “immediate plans” include scaling up total renewable capacity to 170 GW from 33.8 GW.
To take the possibilities forward, Chinese and Indian Solar Energy industry recently met under the aegis of FICCI for a business roundtable to explore partnerships between the companies of both the countries on the eve of the upcoming RE-INVEST. The Chinese delegation was led by the China Photovoltaic Industry Association (CPIA).
During the meeting, the Chinese delegation highlighted that the Chinese companies have immense experience in terms of research and development, product development, innovation and support from their top leadership. The mission of the China Photovoltaic Industry Association (CPIA) is to provide service to the solar business and support the Chinese government in terms of policy to support the solar manufacturing industry. The CPIA delegation has chosen India as the first country to visit.
Three months before his swearing-in as Prime Minister, Narendra Modi spoke at an election rally in Neemuch, Madhya Pradesh, where he articulated his strategy for India’s creaky energy sector. If elected to office, Modi said at the rally where this writer was present, he would usher in an “energy revolution” by harnessing sources of energy such as solar and wind power. India is no stranger to exaggerated poll promises made only to be forgotten once the polls are over. This time it was different. In a rare instance of policy action rapidly following an election promise, Modi’s National Democratic Alliance (NDA) government put renewable energy at the top of its agenda after taking office in May, seeking to reduce India’s overwhelming dependence on coal-fuelled electricity. The targets are ambitious. An earlier target of installing 20,000 megawatts (MW) of solar energy capacity by 2022 has been raised fivefold to 100,000MW. The government also wants to put in place 60,000MW of wind power capacity by then in a country that’s the world’s third largest emitter of greenhouse gases, behind only the US and China.
India’s honeymoon with low oil prices could be nearing its end. Prices have already climbed from a low of $45 to $60 per barrel—should the recovery continue, oil may surgeall the way back to over $100.
So far, soft oil prices have helped India tame inflation and drag CPI down to below 5%, other than narrowing its trade deficits despite the dwindling exports. But all that could change quickly if the spurt in oil prices continues. This is because 35% of India’s energy needs are met by oil and gas and these two fuels alone account for over 40% of its total import bill.
PTC India Financial Services is planning to focus on lending to the renewable energy sector and ensure that the sector accounts for 50% of its total exposure by March 2016, up from the current 38%.
The non-banking financial company is promoted by PTC India and key shareholders include Macquarie Bank. Till December 31, 2014, the company has sanctioned loans of Rs 12,449 crore, of which, Rs 4,996 crore has been granted to the renewable energy sector. In comparison, loans sanctioned for the thermal power sector stand at Rs 3,981 crore.