focus

Viridian Capital, as fund manager, has
identified the following sectors that present
opportunities

Real Estate

Rapid urbanization, easy availability of finance, increasing disposable income and consumerism, rapid growth in the services sectors (IT/ITeS, BFSI and Telecom) and the growing organized retail sector have fuelled growth of the real estate sector.

Each real estate sub-sector, such as commercial office space, retail, industrial, residential and hospitality, has different performance characteristics and risks. In combination with the unique characteristics and operating risks of individual projects and sub-markets, customized risk mitigation solutions for every investment are required, necessitating the ability to be proactive and flexible to adapt to continually evolving market and regulatory environments.

The primary qualifier for each opportunity we invest into is that its intrinsic value is enhanced by the active management of all asset life cycle stages. This allows us to take a long-term strategic view of asset allocation at the portfolio level, while focusing on the value creation that effective asset and development management creates at the project level.

Hospitality

The domestic tourism industry in India is witnessing robust growth buoyed by the increasingly global nature of Indian businesses which boosts business travel. The sector’s direct contribution to GDP is expected to grow 6.4 percent per annum during 2014–24 vis-à-vis the world average of 4.2 per cent. The travel and tourism sector in India accounts for 7.7 per cent of total employment, generating 35.44 million jobs. The number is expected to rise by 1.9 percent per annum to 43.8 million jobs in 2024. In addition, travel and tourism’s contribution to capital investment is projected to grow 6.5 percent per annum during 2014–24, above the global average of 5.1 percent.

Viridian Capital is strategically placed, with its Group’s expertise in real estate, hospitality and financial management, to facilitate the growth of investment in this sector.

Manufacturing

With investors gaining more confidence in India’s economy, the country’s manufacturing sector could grow by up to 14 percent, according to the government. Our areas of focus in this sector will be:

Defense:

India’s defense offset obligations include: compensatory, reciprocal trade agreements for industrial goods/services; and mandatory offset requirement of a minimum 30 percent for procurement of defense equipment in excess of US$ 49.2 million. India’s defense sector spending is expected to exceed US$ 100 billion over next few years, offering an offset opportunity to the tune of approximately US$ 25-30 billion. The country has also embarked on the long-term goal of strengthening its defense-industrial base.

This scenario presents an unpreceded opportunity to embark on one of the world’s largest and most sustained procurement cycles in the defense industry.

Building materials & components:

The construction industry, the second largest employer of the Indian workforce with a multiplier effect of 7.7 in job creation, has enormous potential to accelerate India’s economic development in the near future. Since housing is the major component in the construction field, there is an urgent need to reinvent and rethink ways to deliver housing solutions at a faster rate with greater efficiency and optimum cost as well as a deliver a greater sense of dignity and pride to the end users. The current shortage of 20 million urban housing units, projected to reach 30 million over the next 20 years, make mass housing a potential domain for huge growth in the future. Hence, not developing but manufacturing housing seems to be the ideal way forward.

Technology

India is the third largest technical manpower in the world with its162 universities awarding 4,000 doctorates and 35,000 postgraduate degrees. With government and private sector funding, academia is adapting to the changing requirements of industry. Policy is a key driver of technology; the Government promotes mechanisms for nurturing technology business incubators and science led entrepreneurship and also provides incentives for commercialization of innovations.installation/ logistic support to Indian as well as overseas companies.

In addition, the present Indian Government’s focus on Make in India and modernization of the Armed Forces presents a viable opportunity for forming joint ventures (with either Indian or foreign companies) to set up a business/manufacturing base in India to manufacture and supply technology-based products for the defense sector.These could include various types of weapon systems, security/surveillance equipment, communication systems, simulation devices, vehicles, tools and machinery for defense and/or civil use. Opportunities also exist to for support OEMs for project planning, consultancy, project implementation and installation/ logistic support to Indian as well as overseas companies.

SME & Entrepreneurship

In a developing nation like India, SMEs and entrepreneurs have a very important role to play. Companies that are in the development phase today will power employment and derive revenue tomorrow. However, they can only fulfill this role if they obtain the finance necessary to start and grow their business. Access to finance represents one of the most significant challenges for these firms.

The India Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the country’s economy over the last five decades. MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural and backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth. The MSME sector contributes 8 percent of the county’s GDP and creates 100 million jobs through the 46 million units from the rural and the urban areas across the country. It also contributes to 90 percent of the total industrial output and 45 percent of the manufacturing output of India with 6,000+ products across the spectrum. MSMEs are credited with contributing to 36 percent of the total value of exports from the country and the sector has recorded a constant year-on-year growth of over 10 percent, making it the backbone of country’s economy.

SME & Entrepreneurship

Viridian Capital and Financial Services Pvt. Ltd. (VC&FS) is a Non-Banking Finance Company (NBFC) registered with Reserve Bank of India vide registration number B-14.01655. The company offers a spectrum of financial products and services for trade and industry and maintains a quality asset book spread across multiple small and medium enterprise (SME) cluster locations.

The key business mantra driving VC&FS is to provide fast, flexible and easy access to funds for business enterprises, handholding them as partners in their growth journey. VC&FS realizes the immediate and diverse capital needs of SMEs and focuses on providing short to medium term loans for a period of one to 24 months. The company is predominantly engaged in providing loans for purchase of machinery and equipment, working capital and business or capacity expansion.

The company focuses on extending loans to the following industrial sectors and sub sectors.

  • Pharmaceuticals and Healthcare
  • Information Technology
  • Auto Ancillaries and Engineering

However, it looks forward to cater to the financing needs of other industrial sectors on a case-to-case basis depending on the market trends, performance and other parameters affecting each sector.