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Kerala NRIs Feeling Insecure About Infra FirmMonday, February 26, 2007
Infrastructure Kerala Limited (InKel) has raised high hopes for the Non Resident Indians (NRIs) from Kerala. However, they are feeling a little skeptical about the success of project. These NRIs have parked funds in at least two dozen state government promoted companies and Cochin International Airport Limited (CIAL) is the only group which has emerged as an exception and paying good dividends.The government is soon to establish a new company with an authorized capital of Rs 1bn to develop projects including hi tech corridor and north south high speed expressway, announces Industries Minister Elamaram Kareem. The state government will keep only 26% in the company and sell out the rest to individual investors especially Kerala NRIs and institutions. We do not have a nice experience with earlier investments in the state, says Sandeep Rajan, a New York based NRI, This is what make us skeptic now Keltron Component Complex Ltd. was the first company that attracted investments from NRI in 1976. The company paid its first and last dividend after 11 years. A majority of companies make an exit from the market after drying up the entire capital investment. Most investors belong to low and middle income group, who invest their money expecting high returns, says Barjeel-Geojit Securities LLC director who advises expatriates the best sources to park their money. Around 955 of them find it hard to manage a regular income when they return to their roots for good. If they do not get expected returns, they are just left with losses. The CIAL had to wait for another five years to make a turn as the ministers are insisted on the government to retain 51 % stake without paying up its taxes just to keep their hold on the company.As such, the InKel requires going on long term bonds on lines of Konkan Railways or Naiveli Lignite or Narmada Sarovar Nigam rather than taking equity participation into concern. Moreover, the return of these bonds must be higher than bank deposits, say investors.
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