GROUND REALITY: Vibrant Gujarat; Glimpses of the Gujarat growth story - Motilal Oswal

Recently, we visited Gujarat for a ground reality on the state's growth story. We met with the senior management of its apex bodies – Gujarat Infrastructure Development Board, Gujarat Industrial Development Corporation and Gujarat Industrial Extension Bureau.

We also interacted with the teams at Sardar Sarovar Narmada Nigam and the ambitious GIFT City. And to top it all, we got several insights from the very occupant of Gujarat's Corner Office, Mr Narendra Modi.

The Corner Office: Mr Narendra Modi

- Gujarat has several records to its credit, including one of the highest agricultural GDP growth rates of 9% against a national average of 2%.

- The state is increasingly becoming a preferred choice for industry due to a stable policy regime and high quality infrastructure.

- Human development, including education, employment and health, is a key focus area.

- Gujarat is fast emerging as a role model of economic and social development.

Gujarat: At the forefront of industrial development

- We were amazed to note the pace of industrial and infrastructure development.

- The Blueprint for Investment in Gujarat 2020 (BIG 2020) envisages investment of Rs11,809b in 19 infrastructure sectors.

- The vision is to make Gujarat a globally preferred place to live in and to do business through accelerated, balanced, inclusive & sustainable growth.

Sardar Sarovar Narmada Nigam

- We met the top management for a reality check on the tangible benefits of the project. We came back impressed with how the project is proving to be a gamechanger for Gujarat and India.

- The dam across the Narmada River, the largest in the world, will, when complete, create irrigation potential of 1.8m hectares, ~25% of the target under Bharat Nirman.

- The progress of the project so far has helped Gujarat to sustain 9-10% agriculture GDP growth, create about a million jobs in rural areas, increase rural incomes and led to lower dropout rates from schools.

- The Rs700b project, expected to be ready in 2012, will have a 458km main canal, 75,000km of feeder canals and will generate 1,450MW of hydro power.

Gujarat International Finance Tec-City

- We met the team behind GIFT (Gujarat International Finance Tec-City) to know more about the project and its prospects.

- GIFT is positioned as an International Finance Center with a strategic location (Gujarat accounts for 30% of India's market cap) and world class infrastructure.

- The Master Plan for the 62msf project is complete. The initial phase of 4msf is targeted to be completed in 2012.

- The target segment is core financial services, IT/ITES for financial services and also capital market and trading.

- IL&FS has signed up as the anchor tenant. Initial rentals are at Rs50-55/sf per month.

Source : Equity Bulls

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