NCR Realty sector woes: How buying a flat became a nightmare in NCR

India’s biggest property market by volume has numerous projects stuck for years. What has led to this dismal situation?

On a blazing hot Saturday afternoon in June, a group of people assembled in a small room in an under-construction building at Today Ridge Residency, Sector-135, Noida, a part of the National Capital Region (NCR) centred around Delhi.

The motley group, with people ranging from senior citizens to software engineers, had one thing in common. Each one of them has parted with a huge chunk of their savings to buy a home, which had not been delivered to them.

Most of them booked an apartment in the project owned by Today Homes and Infrastructure Pvt. Ltd in 2010.

The buyers were assured of delivery in about two-and-a-half years; it has been six years now and most are yet to get possession.

At some other projects by builders such as Unitech Ltd, Amrapali Group, The 3C Company, Gardenia Group and Jaypee Group, the wait for possession has lasted more than eight years.

Rajiv Kumar Goel, who works for a private firm, said he commutes every Saturday for five hours to and from Faridabad to join the group.

“I have to take leave every Saturday to come here and my company cuts that amount from my salary,” he said.

Today Homes, The 3C company, Gardenia Group, Amrapali Group and Jaypee Group did not respond to a Mintquestionnaire sent a day earlier.

The NCR, India’s biggest property market in terms of volume, has numerous projects such as Today Ridge Residency that have been stuck for years, with just concrete structures and minimal work on the ground.

A combination of lack of funds, rising debt, unsold inventory, a trust deficit among customers and incessant litigation have brought the sector to a standstill, with no takers for the flats under construction.

A Knight Frank India report released on 4 July said that new launches in the NCR have been in a decline since 2010 and have dropped by more than half over the last six years.

Property consultant Liases Foras said NCR has witnessed a rise in unsold inventory by almost 14% to hit a high of 267,000 units by the end of March 2016 and it will take around six years to sell them.

The rot began to set in during the early part of the decade. The residential property market touched a high in early 2010 with firms raising loans to enter real estate in pursuit of what looked like an unstoppable boom.

“In the last 4-5 years we saw everyone from every industry come to real estate. Shoemakers and milk packagers, Godrej, Tata and the who’s who of the world entered the business. But many of them are stuck now,” Omaxe Ltd chief executive Mohit Goel said in an interview.

The sector went from boom to bust in the face of a spate of farm protests and resulting litigation.

Puneet Parashar is a buyer in Amrapali Group’s Heartbeat City project in Sector 107, Noida, which has been stuck in litigation after farmers challenged the land acquisition by New Okhla Industrial Development Authority. The Supreme Court, in an August 2013 order, quashed the acquisition of about 547 acres of land, which included two other projects by the 3C Company and Great Value Projects India Ltd, encompassing a total of about 5,000 flats.

While the apex court passed its order in August 2013, the New Okhla Industrial Development Authority, builders and the lenders didn’t inform the buyers, who kept paying their dues for a whole year without knowing that projects had actually been declared illegal.

Great Value Projects India Ltd and New Okhla Industrial Development Authority didn’t respond to a questionnaire sent to them.

“With the project stuck and the weight of rent already weighing me down, I wasn’t able to shell out EMIs (equated monthly instalments) to my bank. Taking the situation into account, I asked my bank for a restructuring of my loan, but they instead sent me a notice. I had to finally sell my property to pay the loan amount,” said Parashar of the loan taken from Axis Bank.

Axis Bank didn’t respond to a questionnaire sent by Mint.

Low investor interest and lack of cash flow have resulted in ballooning debt at all the major real estate companies, with Jaiprakash Associates Ltd (Jaypee) having a consolidated debt of Rs.58,250 crore as of 31 March. DLF Ltd is saddled with a debt of Rs.22,202 crore and Unitech weighed down byRs.7,165.7 crore.

“The customer cell here clearly says that they don’t have money to finish the project,” said Ashish Srivastava, who booked a flat in Noida’s Jaypee Kassia project in May 2011 and is still waiting for possession.

Jaiprakash Associates did not respond to a Mintquestionnaire.

Many buyers have also accused banks of lack of monitoring while disbursing loans to the builders even when they didn’t have clearances and of looking other way when those funds were diverted.

“Unitech has taken Rs.180-200 crore from buyers. Later, they told us that they spent only Rs.20 crore on the project, which was shocking,” said a buyer who didn’t want to be identified.

The buyers filed a first information report (FIR) against Unitech for fraud and also named ICICI Bank Ltd in the FIR for lack of monitoring and colluding with the builder in cheating the buyers.

“As per the agreement for the housing loan between ICICI Bank and the customer, the bank has in no way any control over the delivery of the property by the developer. Consequently, the bank cannot be held responsible for any delays. However, the bank is engaging with the builder to explore options to resolve the current situation,” an ICICI Bank spokesperson told Mint.

Unitech did not respond to a Mint questionnaire sent on 5 July.

Reserve Bank of India guidelines stipulate that disbursal of housing loans sanctioned to individuals should be closely linked to the stages of construction of the housing project and upfront disbursal should not be made in cases of incomplete, under-construction or new housing projects.

The delay in executing the project has also resulted in large volume of litigation with buyers organizing themselves into associations and approaching the National Consumer Disputes Redressal Commission for better compensation or refund of their money.

“In the last three years, the filings at national commissions have risen three times. People are becoming aware of their rights, they are also exerting their rights,” said Sudhir Mahajan, a property lawyer.

The buyers have also staged protests against builders.

“We asked Jaypee to meet us on 11 June but they refused to address the group and insisted on meeting individuals only. When 1,000 buyers gathered together on the set day to demand action, they blocked us from the office and even welded the gates. We blocked the expressway for 40 minutes and finally they agreed to talk,” said Nrip Kumar Mehta, one of the organizers of the protest.

The gates of the Jaypee office in Sector 128 today resemble a military outpost, protected by barriers, large gates, barbed wires and a posse of guards to prevent protests on the premises.

“What these builders have been doing is a matter of fraud. They have been raising money on one project and then siphoning it off to another project. Everything is getting stacked up and now it has resulted in this domino effect,” said Vivek Chib, a lawyer who has filed several cases against Unitech on behalf of buyers.

While questions about the conduct of banks remain, they have already started the process of recovering their dues from the defaulters. ICICI Bank and Axis Bank have taken over several properties from Jaypee to recover their dues.

The Gardenia project in Sector 46, which is being operated by Gardenia Aims Developers Pvt. Ltd, is an example of the domino effect on the real estate industry.

According to documents seen by Mint, the developer took a loan of about Rs.134 crore from a consortium of three banks— Bank of India, Oriental Bank of Commerce and Corporation Bank—but couldn’t pay back as the project got stuck due to regulatory issues.

The developer still owes about Rs.86 crore to the bank consortium and about Rs.250 crore to the New Okhla Industrial Development Authority in land dues.

Gardenia did not respond to a Mint questionnaire.

With loan repayment elusive, Oriental Bank of Commerce, on behalf of the consortium, issued a public notice against the Gardenia project, declaring its intent to take over the asset to recover dues.

The consortium of banks didn’t respond to a Mintquestionnaire.

This has led to a plunge in the project’s value with the existing buyers panicking and attempting to cancel their bookings.

“Clearly the project appraisal mechanism could have been better,” said Rajeev Bairathi, head of capital markets, Knight Frank India, adding that around the time banks started to lend, the projects seemed to be doing well.

Some buyers, by staging protests and through constant persuasion, have been able to get the developers to give them possession of their flats, but they have only encountered new problems.

“Jaypee has used very low quality material and has done cost cutting wherever possible. We paid more than a lakh for the club, but nothing is ready and still they are charging us for common area utilization. They have not given us occupancy certificate as well,” said Sanjeev Kumar Aggarwal, a software engineer who finally got possession of his flat in Jaypee Klassic, Noida, after a three-year delay.

There are no signs of recovery in the near term. According to the 4 July report by Knight Frank India, residential unit prices in NCR fell 4% in the first half of 2016 and are expected to keep falling for the rest of the year.

This will further increase the financial strain on developers struggling with a cash crunch.

Some buyers, however, want to take matters into their own hands and finish projects by pooling money.

“Banks should let us build ourselves because Unitech doesn’t have either the willingness or the capability to complete the project. We are ready to help ourselves if administration allows us to do that,” said Vibha Bhatra, a buyer of a flat in Unitech E-space, Gurgaon, which has been under construction since 2011.

The future of our economy

A smaller labour force is required to meet extant demand, leading to a vicious cycle of lower demand and employment

The economy has not behaved the way economic textbooks prescribe ever since the global financial crisis broke over a decade ago. Economic policies are proving to be singularly ineffective in reviving the global economy. Governments have been running levels of fiscal deficits and public debt that most economists baulk at. Central banks have been experimenting with unorthodox policies such as quantitative easing, zero interest rate and now negative interest rate policy. But all the king’s men and horses have been unable to put Humpty Dumpty back together again.

Is this a temporary phenomenon or an indicator of structural transformation underway? If so, transforming into what exactly? What does our economic future look like? Where can we turn to get a glimpse of this?

Science fiction is perhaps our only source. Past experience indicates that human ingenuity is only limited by imagination. After all, several fanciful science fiction constructs have eventually come about, such as submarines, tanks, spaceships, robots and recently, 3D printers. Many more may do so in the future. We should never stop imagining this future.

Star Trek has long been acknowledged as one of the more thoughtful works of science fiction. Although originally set in the 21st century where the crew profile of USS Enterprisemirrored that of the ill-fated Columbia space shuttle, the subsequent Next Generation series is set in the 24th. In a new book, Trekonomics, Manu Saadia has gleaned the kind of economy expected far into the future.

There is no such thing as money, the universal store of value and exchange, as this is a society of plenty rather than of scarcity. There is, consequently, no need for trade and markets. All these have been around since the dawn of human civilization. This revolutionary development is made possible by the replicator, some kind of hardware that uses advanced computing power to materialize anything we can imagine in any quantity by rearranging atoms and molecules. The implication is that current economic theory, based on scarce resources, no longer holds. There would be no need to measure the rate of economic growth as a measure of well-being. The economic textbooks and Adam Smiths of the future remain part of the future for now.

Sounds utopian? But consider this: The global economy has for some time now been afflicted by demand rather than supply constraints. Consumer price inflation has been tamed, and central banks are currently finding it difficult to raise it to targeted levels. It was not long ago that they were struggling with just the obverse problem, of lowering inflation. How has this come about?

Part of the reason for subdued demand is technological advancement, leading productivity levels to reach a tipping point. A diminishing percentage of the labour force is required to meet extant demand. This has led to a vicious cycle of lower demand and lower employment. As competition increases, there is enhanced pressure to improve productivity, with information technology, automation, robots and artificial intelligence replacing human labour more and more.

At the current breathtaking pace of technological progress, an avalanche of resources is being made available. Consider energy. It was only a short while ago that oil prices had touched $150 per barrel. With renewables increasingly available, the prognosis for oil prices is not bright. What happens if and when humans tap directly into the sun’s energy, and atoms and molecules, the building blocks of all matter, are used directly in the production process? Surely the replicator cannot be more than a couple of centuries away?

With the replicator comes a new mentalité and new forms of social organization. To begin with, there is no need for humans to work to make a living. There would be no need to steal or to possess things. This does not, however, turn humans into sloths as they nevertheless desire to work as a form of self-actualization and to win the admiration of peers by endeavouring to improve the overall lot of humanity. With everybody attaining the higher echelons of Abraham Maslow’s needs hierarchy, the proportion of those in a position to contribute to advancing knowledge would rise dramatically, accelerating the rate of human progress. Global integration, a trend long underway, is assured—and with extraterrestrial contact, interplanetary cooperation is also eminently likely, on the lines of the united federation of planets in Star Trek. This is made possible by the invention of the warp drive (enabling intergalactic travel by beating the time barrier) and tele-transportation (that takes care of irritating last-mile connectivity).

Where Star Trek stands out from most other science fiction is in its vision of man as ultimately cooperative and altruistic rather than dystopian. This is in keeping with the spirit of the European Enlightenment that underscored the perfectibility of man. It is easy to lose sight of this with talk of Brexit, nationalist resurgences and violence unleashed by small, marginal groups leveraging advanced destructive technologies—all of it seemingly escalating all around us. But while history has a pattern and direction, discernible retrospectively, this direction is never linear. Despite the current doom and gloom, humans are materially better off than when they started, and their future looks even brighter.

All these may seem notions on the fringes of our imaginative abilities. But if the past is any guide, as it should be—and if current economic anomalies are indicative of structural transition to something else—looking so far ahead may be no idle fancy. Neither the author nor the reader will be around to see these ideas come to fruition. But come they will.

Amid crisis in banking, fresh risk for the RBI

The banks, especially nationalised ones, in India have been in a perpetual state of crisis.

In any economy, the banking system is the steel frame that holds it all together. Banks can go bust when depositors withdraw money in panic, or when the companies or people to whom they give loans are unable to return them. The system is in crisis when the bad loans equal or exceed the capital of the banks. It is saved only when governments bail out the banks by putting in more money to “recapitsalise” them. The banks, especially nationalised ones, in India have been in a perpetual state of crisis. The bankers on instructions (a phone call) from powerful politicians extend loans to dodgy promoters. The rot starts with top appointments that are made in deals in which both top managers and their political bosses share the cut. The practice has been going on for so long that, it became part of business lore, until RBI Guv Raghuram Rajan clamped down, The crucial factors are the percentage of loans that are “non-performing”, the infusion of public money needed to save the banks, the pressure that can be put on promoters to return the money, and the effect of all this on the economy. The June 2016 Financial Stability Report (FSR) brought out by the RBI quantifies the crisis.

This was because the gross non-performing advances (GNPAs) of banks “sharply increased to 7.6 per cent of gross advances from 5.1 per cent between September 2015 and March 2016.” Besides this, the banking sector’s GNPAs showed a sharp increase year-on-year of 80 per cent despite the low growth of credit. The growth of bad loans was not evenly distributed. It is the large borrowers who do not pay back. The ratio of bad loans of large borrowers increased sharply from 7.0 per cent to 10.6 per cent during September 2015 to March 2016. Moreover, “there was a sharp increase in the share of GNPAs of top 100 large borrowers from 3.4 per cent in September 2015 to 22.3 per cent in March 2016.” The crisis in the banking system is thus largely a result of the big borrowers’ inability or unwillingness to pay. One recalls the ever-flamboyant Vijay Mallya, who did not settle his dues to the banks and took refuge in the UK.

The debt owed by some of the biggest companies in the power, transport and steel sectors made for compelling reading in a report “The House of Debt” by merchant banker Credit Suisse. The report mentioned 10 top debtors. The total debt of these 10 groups was Rs 7.32 lakh crore (or trillion). The debt of these groups has risen seven times over the past eight years and some of these groups are carrying an interest burden that exceeds their earnings before interest and taxes. Not all these loans are bad, and many of these business groups are selling part of their assets to reduce their debt. Still, around Rs 4 trillion will be needed by the government if it is to recapitalise the banks. The pumping of money into banks comes from the government’s budget expenditure.

India Weekly Market Updates from 2nd July to 8th July 2016

India Market Weekly Economy: Government is expected to go ahead with the strategic divestment in public sector units (PSUs) within the next six months besides closing down sick firms that are beyond revival, NITI Aayog Vice Chairman Arvind Panagariya said. Britain will start trade talks with India for a bilateral deal as it redraws economic ties with the world after being forced by a referendum vote to leave the EU The total sown area as on 8th July, 2016 as per reports received from States, stands at 406.27 lakh hectare as compared to 431.82 lakh hectare at this time last year. (PIB) The water storage available in 91 major reservoirs of the country for the week ending on July 06, 2016 was 28.208 BCM, which is 18% of total storage capacity of these reservoirs.  This was 55% of the storage of corresponding period of last year and 74% of storage of average of last ten years. The Union Cabinet has approved the Interest Subvention Scheme for farmers for the year 2016-17. The Government has earmarked a sum of Rs. 18,276 Crore for this purpose. This will help farmers getting short term crop loan payable within one year up to Rs. 3 lakhs at only 4% per annum. The Union Cabinet has given its 'in-principle' approval for setting up a Major port at Enayam near Colachel in Tamil Nadu.  A SPV will be formed for development of this Port with initial equity investment from the three Major Ports in Tamil Nadu i.e. V.O.Chidambaranar Port Trust, Chennai Port Trust, and Kamarajar Port Limited. Exports of gems and jewellery grew 25.5 per cent to USD 5.78 billion during the first two months of the current fiscal, largely driven by demand in India''s major markets like the US. India witnessed the fastest domestic air passenger growth at 18.8 per cent in 2015, way ahead of neighbouring China and the United States, according to IATA. Delhi-NCR has recorded 39% increase in net office space absorption at 2.4 million sq ft in the first half of this year on the back of a few large-sized leasing transactions, according to property consultant Cushman & Wakefield. Gold imports fell by about 51 per cent to USD 2.7 billion in April-May this fiscal, which is expected to keep a lid on the current account deficit.  India's tea output declined by 15 per cent to 67.21 million kg in April this year, mainly due to fall in production in southern states.  MRP of DAP and MOP fertilizers to come down with immediate effect; Enough availability of all the required fertilizers in the country, said the Minister of Chemicals and Fertilizers Raising concerns over jobless economic growth, Bajaj Auto Chairman Rahul Bajaj has said that although India''s GDP can hit a steady-state of around 8.5 per cent for several years, employment "will not rise at anywhere close to that rate of growth". Terming India's GDP number as "overstated", Morgan Stanley's Chief Global Strategist Ruchir Sharma has called for more private investment for the economy to get back on track. RBI Monday said it has appointed Sudarshan Sen as an Executive Director in place of N S Vishwanathan, who has been elevated as Deputy Governor at the central bank.  A latest breakthrough treatment for the deadly Hepatitis C virus could soon be available in India as 11 Indian firms have been given licenses by its American manufacturer following an approval from US authorities. The Kandla Port has achieved the 6% growth in traffic during the first quarter of financial year 2016-17, as compared to the corresponding quarter of last year. Corporates:  The Cabinet Committee on Economic Affairs has approved increase in foreign investment from the current approved level of 62% to 74% of the total paid up share capital of the Axis Bank on a fully fungible basis. Punjab National Bank’s subsidiary PNB Housing Finance has approached Sebi for an initial public offer to raise Rs 2,500 crore. Adani Ports and SEZ Ltd (APSEZ) Tuesday said it has raised Rs 252 crore through issuance of NCDs on a private placement basis. L&T Tuesday said it has bagged export orders worth USD 71.3 million (nearly Rs 480 crore) from Mitsubishi Hitachi Power Systems Ltd through its two joint venture (JV) firms. The Union Cabinet has approved redevelopment of seven General Pool Residential Accommodation (GPRA) colonies i.e. Sarojini Nagar, Netaji Nagar, Nauroji Nagar through National Buildings Construction Corporation Limited (NBCC) Petronet LNG Ltd has plans to set up a Rs 5,000 crore LNG import terminal at Kutubdia islands in Bangladesh as it looks to build terminals to feed demand in neighbouring countries. Hero MotoCorp has inked a wage settlement pact with its permanent workers at Gurgaon plant, entailing an hike of Rs 12,500 spread over three years. Bharat Financial Inclusion Ltd, formerly known as SKS Microfinance, may raise Rs 10,000 crore during the current fiscal to meet the lending requirements, a top executive of the micro-lender said Wednesday Maruti Suzuki India today said its mid-sized sedan, Ciaz, has crossed the one lakh cumulative sales mark in the domestic market in June, nearly two years after its launch. Indian Oil Corporation (IOC) will invest Rs 40,000 crore to expand its refining capacity to over 100 million tonnes by 2022 After a four-year hiatus, Shipping Corporation of India (SCI) will resume sailing to Iran to ferry ''transport crude oil'' from the Persian Gulf nation for state refiners. Dhanlaxmi Bank today said it will raise Rs 200 crore through issuance of equity shares on preferential basis. C K Birla Group firm Orient Electric is eyeing 20-25 per cent growth in top line this fiscal on the back of increasing demand for its LED lightings and fans, a senior company executive said today. Global events: Hillary Clinton has a lead of nine points over her Republican rival Donald Trump with roughly four-in-ten voters saying it is difficult to choose between them because neither would make a good US president, according to a latest survey by a nonpartisan American think tank. IMF Chief has warned in an interview published on Thursday that anti-trade policies like those championed by Republican presidential candidate Donald Trump risked a protectionist movement that could severely damage global growth. Politics: France submits fresh plan for six nuclear plants in Jaitapur Reshuffling of cabinet took place during the week

NPA sales down to a trickle of just 2% of total bad loans

Notwithstanding rising bad loan problems in the system, sale of stressed assets to asset reconstruction companies (ARCs) in 2015-16 was only a trickle of the NPA mount at 2 per cent of the total of nearly Rs 5.8 trillion, which is down a whopping 20 per cent from previous year, says a report.

Notwithstanding rising bad loan problems in the system, sale of stressed assets to asset reconstruction companies (ARCs) in 2015-16 was only a trickle of the NPA mount at 2 per cent of the total of nearly Rs 5.8 trillion, which is down a whopping 20 per cent from previous year, says a report.

“The overall loans sold in FY2016 were lower by 20 per cent y-o-y and around 15 per cent of the overall loans in the banking system,” Kotak Institutional Equities said today in a report that is based on the analysis of 33 public and private banks.

The report did not offer any reasons for the massive dip in the sales, but it can be noted that banks are not happy with the cheap valuation that ARCs are offering while these companies are capital starved to make the higher upfront payments to the banks. The report also did not quantify the total amount of bad loans sold to ARCs.

As per RBI, total NPAS in the system jumped to 7.6 per cent in 2015-16, up from 4.6 per cent in the previous fiscal, which it warned could jump to a whopping 8.5 per cent by this fiscal end. The total stressed assets including NPAs stood at a staggering 13 per cent or over Rs 8 trillion in 2015-16.

State-run banks sold 75 per cent of their overall bad loans, lower than the 90 per cent of loans sold in 2014-15.

Axis Bank sold the largest quantity of loans but at a significant loss. The SBI Group, however, had the largest share of loans sold at 33 per cent of the overall loans compared to over 60 per cent in 2014-15.

Allahabad Bank and Central Bank were the two large public sector banks which sold a high share of their loans to ARCs last year.

Why central vigilance commission shouldn't be part of a NPA resolution forum

It is a time-honored tenet of the auditing world that an auditor should not partake directly or indirectly in designing a system. The reason is not far to seek. If he does, he would be compromising his position tremendously. For, in that case he would be put in an embarrassing and awkward position of having to audit the very system he has had role in designing.

It is for the same reason the code of conduct for auditors proscribes the statutory auditor of a company from doubling in as its internal auditor as well - as statutory auditor he has to comment upon the adequacy and effectiveness of the internal audit system put in place by the management. The role of internal auditor would conflict with his role as the statutory auditor though in actual practice, auditing firms get round this moral hazard and code of conduct by getting a proxy auditing firm appointed as internal auditor.

It is against this backdrop that the central government’s proposal to set up a NPA resolution forum comprising among others the RBI and the Central Vigilance Commission (CVC) has raised eyebrows and hackles. The implicit rationale underpinning CVC’s induction is its overweening presence would deter and nip in the bud quid-pro- quo deals (mutual backscratching deals to put in more bluntly) between the officialdom and the wily borrower. But what must be nipped in the bud is this hare-brained proposal.

First, any adjustment with an incipient and potential defaulter would involve a small or big sacrifice on the part of the bank. By being a party to such a compromise as a forum member, the CVC would find it difficult to proceed against the banker or any official later on because he would turn around and smugly point out that it was consummated with CVC’s blessings. Surely, CVC as indeed any investigative agency

should be spared the blushes.

It must also be remembered that a committee or forum is by definition perceived as antidote to deals on the sly by individuals. That is why it is said larger the committee the better unless of course all of them fall a prey to blandishments which is unlikely. The point is the forum itself can be counted upon to behave with rectitude without the hawkish presence of the CVC.

Second, banking is not CVC’s forte. It lacks domain knowledge and expertise which RBI has in abundant measure. On the contrary, it would smell rat in any compromise or restructuring. It may not be able to tell between defaults engendered by genuine economic reasons experienced by the borrower and wilful ones.

Thirdly and lastly, the move flies in the face of the recently crafted comprehensive bankruptcy code which sets store by the principle of early resolution of NPA problem without allowing it to fester or take roots. The National Company Law Tribunal (tribunal) that would resolve corporate bankruptcy quickly and comprehensively by addressing the concerns of other stakeholders as well like employees and government should not be snapped at its heels much less exposed to the threat of even being unwittingly marginalised or undermined by a parallel forum.

Parenthetically, it may be mentioned that financially advanced economies have found a way out of the niggling problem of NPAs by simply asking the corporates to seek funds from the bonds market which has its own disciplining mechanism - the threat of being awarded the junk bond status with its grim implications for cost of borrowing. The argument is banks should lend only to small and medium enterprises (SMEs) which cannot access the bond market and which give lesser shocks than a big ticket borrower. But that is another story for another time.

Are private equity investors going slow on India?

Between 2013 and 2015 they PEs increased their exposure little by little and in the first quarter of 2015 they ploughed in USD 4704 million. Right now, their total India exposure is down to USD 1054 million in the second quarter of 2016.

Private equity investors have had a love-hate relationship with India. Just in the last three years, they have yo-yoed a lot in their attentions to India. Between 2013 and 2015 they were upbeat on the Indian subcontinent. The period saw the PEs increasing their exposure little by little and in the first quarter of 2015 they peaked ploughing in USD 4704 million. The same quarter witnessed a total of 112 deals being inked. However, in the last nine months the PEs lost interest. Their total India exposure is down to USD 1054 million in the second quarter of 2016 which had only 52 transactions taking place.  The second infographic shows how internet/technology received the maximum investments of USD 1110 million till date beginning 2016. Business services and transportation clocked the least equity inflows with USD 17 million and USD 12 million, respectively, out of a combined USD 2139 million for the period.