The yet-unnamed joint venture of Mahindra and Mahindra Ltd, its subsidiary Mahindra-Renault Pvt. Ltd, and Nissan Motor Co. that will make four lakh vehicles a year from 2009, will be a contract manufacturer with the three companies equally sharing the capacity, said Pawan Goenka, president (automotive), Mahindra and Mahindra. He added the company was in talks with Nissan to market its cars in India similar to the venture it has with Renault for the Logan sedan.
The joint venture company would not develop or sell cars on its own, said Goenka. The three companies, which would market the products made by the venture, will pay a fee to it in proportion to the goods manufactured.
“Mahindra’s greatest advantage is to get access to the technology of Nissan and Renault through this plant in Chennai,” said Umesh Karne, senior research analyst with Emkay Share and Stock Brokers Ltd. “The joint venture company will be developing cost-advantageous products. So, royalty (fee for manufacturing) would not be an issue.”
Global players such as Fiat SpA and Nissan Motor Co. are entering into contract manufacturing alliances with Indian companies to gain from the low cost of manufacturing in the country and benefit from economies of scale.
Nissan Motor Co. has a tie-up with Maruti Udyog Ltd, which sells one of every two cars sold in the country, to make 50,000 units a year of a small car, which it will export to Europe. Fiat SpA and Tata Motors Ltd are spending Rs4,000 crore to build a factory in Pune which will roll out models designed by the two companies.
Mahindra and Mahindra will hold a 50% equity in the contract manufacturing unit; the chairman and CEO will also be its appointees. Nissan and Renault will work out how to split the other half between themselves.
Read more in The Livemint article
Thursday, May 31, 2007
Tata Tea to buy 11 pc in Mount Everest
Tata Tea Ltd will buy 11 per cent of an Indian mineral water maker, a television channel said on Thursday, almost a week after the company agreed to sell a 30 percent stake in a US vitamin water maker for $1.2 billion.
CNBC TV18 said the founders of Mount Everest Mineral Water Ltd., which makes Himalayan brand of bottled water, would make a preferential allotment to Tata Tea.
Tata Tea will also make an open offer for more shares in Mount Everest to take its holding to 42 per cent, the TV channel said, adding Tata Tea's board was expected to approve the deal at a board meeting on Friday.
Read more in The Economic Times article.
CNBC TV18 said the founders of Mount Everest Mineral Water Ltd., which makes Himalayan brand of bottled water, would make a preferential allotment to Tata Tea.
Tata Tea will also make an open offer for more shares in Mount Everest to take its holding to 42 per cent, the TV channel said, adding Tata Tea's board was expected to approve the deal at a board meeting on Friday.
Read more in The Economic Times article.
Amtek Auto close to $40 mn deal
Auto parts maker Amtek Auto Ltd is close to buying an aluminium foundry in the UK from J L French Automotive Castings for an enterprise value of about $40 million, two sources close to the deal said on Thursday.
The unit, which sells aluminium casts and machined parts to automakers including Ford and PSA Peugeot Citroen, has annual sales of about $80 million and a 20,000 tonne capacity, the sources said.
The deal could be valued at about 4 times core earnings, they said.
Amtek's spokesman declined comment.
The unit, which sells aluminium casts and machined parts to automakers including Ford and PSA Peugeot Citroen, has annual sales of about $80 million and a 20,000 tonne capacity, the sources said.
The deal could be valued at about 4 times core earnings, they said.
Amtek's spokesman declined comment.
Yes Bank floats $100 m agro fund
Yes Bank has launched a $100 million food and agribusiness India fund. The private equity fund plans to invest the entire amount in the next 1-2 years, with an investment between $5 million and $7.5 million per company. It is targeting average annualised returns between 20 per cent and 25 per cent.
The bank is in talks with 10 investors, including insurance companies, bilateral institutions and commercial banks who have expressed an interest in contributing to the corpus.
The fund will invest in companies operating in fruits and vegetables such as grain-based products, milk and milk-based products, poultry, spirits and beer, tea and coffee, confectionery, farm seeds, food services, food retail, food logistics and agri-infrastructure, including agri-market and cold storages sectors.
Read more in The Business Standard article.
The bank is in talks with 10 investors, including insurance companies, bilateral institutions and commercial banks who have expressed an interest in contributing to the corpus.
The fund will invest in companies operating in fruits and vegetables such as grain-based products, milk and milk-based products, poultry, spirits and beer, tea and coffee, confectionery, farm seeds, food services, food retail, food logistics and agri-infrastructure, including agri-market and cold storages sectors.
Read more in The Business Standard article.
FinMin clears FDI in BSE, UBS, others
The government today cleared UBS India's plans to acquire domestic NBFCs as part of approval granted to 23 Foreign Direct Investment (FDI) proposals involving investments of Rs 418.33 crore.
The proposals approved by Finance Minister P Chidambaram will allow UBS (India) to acquire shares of the existing non-banking finance companies (NBFCs) with an estimated investment of Rs 224 crore.
These proposals were recommended by FIPB for approval by the Finance Minister, an official statement said.
The minister also approved the proposal of four foreign investors to pick stake in the Bombay Stock Exchange at an investment of Rs 13 lakh. Consequent to this, FDI in BSE could go up to 16%.
Read more in The Business Standard article.
The proposals approved by Finance Minister P Chidambaram will allow UBS (India) to acquire shares of the existing non-banking finance companies (NBFCs) with an estimated investment of Rs 224 crore.
These proposals were recommended by FIPB for approval by the Finance Minister, an official statement said.
The minister also approved the proposal of four foreign investors to pick stake in the Bombay Stock Exchange at an investment of Rs 13 lakh. Consequent to this, FDI in BSE could go up to 16%.
Read more in The Business Standard article.
Tata Power to raise Rs 14000cr to fund Mundra proj
Tata Power Company (TPC), the country's biggest private power utility, will raise up to Rs 14,000 crore in loans to fund the Rs 18,000 crore ultra mega power project at Mundra in coastal Gujarat.
The company has appointed SBI Caps as head arranger for the funds, S Ramakrishnan, the company's executive director (finance), said.The remaining Rs 4,000 crore would be funded by the company through internal resources.
Besides, the company is also in talks with Asian Development Bank (ADB) and International Finance Corporation (IFC) for raising a part of the Rs 14,000 crore.
The Tata group company is also considering the option of having the project part-funded by export credit agencies.
The company has appointed SBI Caps as head arranger for the funds, S Ramakrishnan, the company's executive director (finance), said.The remaining Rs 4,000 crore would be funded by the company through internal resources.
Besides, the company is also in talks with Asian Development Bank (ADB) and International Finance Corporation (IFC) for raising a part of the Rs 14,000 crore.
The Tata group company is also considering the option of having the project part-funded by export credit agencies.
BNP Paribas buys 50% in SREI arm for Rs 775cr
BNP Paribas, France’s largest bank, will acquire 50% stake in the equipment financing business along with insurance broking (which is being spun off into a separate company) of Kolkata-based SREI Infrastructure Finance for Rs 775 crore.
The deal, the first of its kind in the country’s booming infrastructure sector, will help SREI to unlock shareholder value.SREI is into project financing in addition to equipment financing, the main money spinner. It has Rs 5,000 crore of assets under its management.
Both the companies today signed an agreement to this effect at a press conference in the city. Kotak Investment Banking advised SREI on the transaction while Ambit Corporate Finance was BNP Paribas’ advisor.
BNP Paribas Lease will be the investment vehicle for the foreign bank into the company in which SREI will also chip in Rs 25 crore. SREI will get Rs 375 crore for transferring the infrastructure equipment and insurance broking businesses into a separate company.
Read more in The Business Standard article.
The deal, the first of its kind in the country’s booming infrastructure sector, will help SREI to unlock shareholder value.SREI is into project financing in addition to equipment financing, the main money spinner. It has Rs 5,000 crore of assets under its management.
Both the companies today signed an agreement to this effect at a press conference in the city. Kotak Investment Banking advised SREI on the transaction while Ambit Corporate Finance was BNP Paribas’ advisor.
BNP Paribas Lease will be the investment vehicle for the foreign bank into the company in which SREI will also chip in Rs 25 crore. SREI will get Rs 375 crore for transferring the infrastructure equipment and insurance broking businesses into a separate company.
Read more in The Business Standard article.
Mallya nets 26% Air Deccan stake for Rs 550cr
Vijay Mallya today moved decisively towards controlling the largest share of the domestic aviation market. His UB Holdings, the parent company of Kingfisher Airlines, is acquiring 26 per cent of Bangalore-based Deccan Aviation’s equity for close to Rs 550 crore, pegging its valuation at Rs 2,200 crore.
The markets, anticipating this, boosted the stock of Deccan Aviation, which runs India’s first low-cost carrier Air Deccan, by 11% to Rs 146 at the close of trade on Bombay Stock Exchange. The offer of Rs 155 a share represents the 26-week average.
Deccan has 18% share of the market and Kingfisher close to 11%. Market leader Jet Airways as 25%.
Deccan Aviation is making a preferential allotment of a little over 35 million shares to UB, after which UB will be required under the law to make an open offer for another 20% at the same price. If the offer is fully subscribed, UB will have to pay another Rs 425 crore to take its total holding to 46%.
Read more in The Business Standard article.
The markets, anticipating this, boosted the stock of Deccan Aviation, which runs India’s first low-cost carrier Air Deccan, by 11% to Rs 146 at the close of trade on Bombay Stock Exchange. The offer of Rs 155 a share represents the 26-week average.
Deccan has 18% share of the market and Kingfisher close to 11%. Market leader Jet Airways as 25%.
Deccan Aviation is making a preferential allotment of a little over 35 million shares to UB, after which UB will be required under the law to make an open offer for another 20% at the same price. If the offer is fully subscribed, UB will have to pay another Rs 425 crore to take its total holding to 46%.
Read more in The Business Standard article.
MIC gains 123% on debut
Three new companies were listed on the bourses on Wednesday. MIC Electronics closed at Rs 335.65, a rise of 123.5 per cent compared with the issue price to record the fifth largest rise on the debut day.
The shares of the Hyderabad-based company listed at Rs 210.25, a premium of 40.16 per cent to the issue price of Rs 150 a share. The shares hit a high of Rs 367.80 during the day.
The company, which is a provider of video displays and telecommunication software, raised Rs 76.5 crore by selling 5.1 million shares through the initial public offering. Over 10 million shares changed hands on the BSE.
Insecticides India, the second listing, however, fared badly on debut, ending the day at Rs 110.70, a discount of 4.3 per cent to the issue price of Rs 115 a share.
The company’s shares had listed at Rs 105, a discount of 8.6 per cent to the issue price. The company raised Rs 37 crore by selling 3.21 million shares through the IPO. A total of 46,45,681 shares were traded on the BSE.
McDowell Holdings (MHL) was the third listing on Wednesday.
The shares listed at Rs 195.60, which is 20 per cent higher than the base price of Rs 163 set by the exchanges to calculate the daily circuit filter.
The listing of Mcdowell Holdings follows a restructuring scheme undertaken at United Spirits (USL), where the investment business of USL was transferred to MHL as a going concern. MHL had alloted equity shares to the shareholders in the ratio of one equity share for every 5 shares held in USL.
The gains made by MIC Electronics on the listing day placed the stock among the top five gainers on the listing day. The top four gainers on the listing day were Tantia Construction (340 per cent), Nissan Copper (230.26 per cent), Cambridge Tech (163.03 per cent) and ICRA (143 per cent). Global Broadcast News, whose shares listed at a premium of 104 per cent, now stands in the sixth position.
The shares of the Hyderabad-based company listed at Rs 210.25, a premium of 40.16 per cent to the issue price of Rs 150 a share. The shares hit a high of Rs 367.80 during the day.
The company, which is a provider of video displays and telecommunication software, raised Rs 76.5 crore by selling 5.1 million shares through the initial public offering. Over 10 million shares changed hands on the BSE.
Insecticides India, the second listing, however, fared badly on debut, ending the day at Rs 110.70, a discount of 4.3 per cent to the issue price of Rs 115 a share.
The company’s shares had listed at Rs 105, a discount of 8.6 per cent to the issue price. The company raised Rs 37 crore by selling 3.21 million shares through the IPO. A total of 46,45,681 shares were traded on the BSE.
McDowell Holdings (MHL) was the third listing on Wednesday.
The shares listed at Rs 195.60, which is 20 per cent higher than the base price of Rs 163 set by the exchanges to calculate the daily circuit filter.
The listing of Mcdowell Holdings follows a restructuring scheme undertaken at United Spirits (USL), where the investment business of USL was transferred to MHL as a going concern. MHL had alloted equity shares to the shareholders in the ratio of one equity share for every 5 shares held in USL.
The gains made by MIC Electronics on the listing day placed the stock among the top five gainers on the listing day. The top four gainers on the listing day were Tantia Construction (340 per cent), Nissan Copper (230.26 per cent), Cambridge Tech (163.03 per cent) and ICRA (143 per cent). Global Broadcast News, whose shares listed at a premium of 104 per cent, now stands in the sixth position.
Wednesday, May 30, 2007
JSW Steel to raise USD 325 million via FCCB
The FCCB issue is for USD 325 million with the conversion price of Rs 953.40 per share and the conversion price is at 50% premium over yesterday's close. This hasn’t come as a big surprise as it was mentioned in their result press conference that the company is looking to raise money via FCCB or ADR route.
Their 5-year, zero coupon convertibles are at annual YTM of 7.25%. The company is also looking to list on Singapore Stock Exchange and the closing date is on June 27 with ABN AMRO, Rothschild and Citigroup as joint book runners. The conversion price of Rs 953.40 per share would lead to an equity dilution of 7.8%.
The company is raising money for capex plan and is looking at increasing capacity from 3.8 mtpa to 10 mtpa by September 2010. The company has announced a capex of Rs 7,000 crore for expansion plans out of which Rs 2,000 crore is through internal accruals while Rs 5,000 crore will be financed via debt and quasi-debt instruments.
Their 5-year, zero coupon convertibles are at annual YTM of 7.25%. The company is also looking to list on Singapore Stock Exchange and the closing date is on June 27 with ABN AMRO, Rothschild and Citigroup as joint book runners. The conversion price of Rs 953.40 per share would lead to an equity dilution of 7.8%.
The company is raising money for capex plan and is looking at increasing capacity from 3.8 mtpa to 10 mtpa by September 2010. The company has announced a capex of Rs 7,000 crore for expansion plans out of which Rs 2,000 crore is through internal accruals while Rs 5,000 crore will be financed via debt and quasi-debt instruments.
Spice awaits IPO before deciding on merger with Idea
It is learnt that Spice Telecom may be in talks for a possible merger with Idea Cellular. Spice Telecom has revenues of Rs 1000 crore and has been valued between Rs 4500-5000 crore.
Spice Tele has 2.8 million shareholders and operates in two circles - Punjab and Karnataka.
At this point of time, it might make sense for Idea to make the move, as it is a nine-circle operator and might want to expand its India footprint. Also, getting new spectrum might take longer. So, the move makes perfect sense and is the fastest way for Idea to expand.
BK Modi, Chairman of Spice Tele said that at this point they were not in merger talks, but confirmed that there was a proposal for a merger with Idea. Currently, they were concentrating on their IPO, after which merger talks might resume. Meanwhile, Sanjeev Aga, Managing Director, Idea Cellular said that he had "no comment" to make.
Spice Tele's IPO was to float in June-July this year.
Spice Tele has 2.8 million shareholders and operates in two circles - Punjab and Karnataka.
At this point of time, it might make sense for Idea to make the move, as it is a nine-circle operator and might want to expand its India footprint. Also, getting new spectrum might take longer. So, the move makes perfect sense and is the fastest way for Idea to expand.
BK Modi, Chairman of Spice Tele said that at this point they were not in merger talks, but confirmed that there was a proposal for a merger with Idea. Currently, they were concentrating on their IPO, after which merger talks might resume. Meanwhile, Sanjeev Aga, Managing Director, Idea Cellular said that he had "no comment" to make.
Spice Tele's IPO was to float in June-July this year.
Tata, Vietnam Steel sign $3 bn venture
Tata Steel Ltd, the world’s sixth-largest steel maker, and Vietnam Steel Corp. plan to spend $3.5 billion (Rs14,000 crore) on a steel-and-iron ore venture in the Southeast Asian nation to supply construction and shipping companies.
Tata Steel will hold 65% of the 4.5 million tonnes (mt) plant and 30% of the iron ore mine, making one of the biggest foreign direct investments in Vietnam, said managing director B. Muthuraman in Hanoi on Tuesday after signing the accord.
Tata Steel joins rivals such as Arcelor Mittal and Posco in seeking to expand in Asia, where steel usage is growing faster than in Europe and the US. Vietnam, with limited steel making capacity, imports half its annual 7mt requirement to supply shipping and construction companies that are expanding at 12% a year, according to the Mumbai-based firm.
Read more in The Livemint article.
Tata Steel will hold 65% of the 4.5 million tonnes (mt) plant and 30% of the iron ore mine, making one of the biggest foreign direct investments in Vietnam, said managing director B. Muthuraman in Hanoi on Tuesday after signing the accord.
Tata Steel joins rivals such as Arcelor Mittal and Posco in seeking to expand in Asia, where steel usage is growing faster than in Europe and the US. Vietnam, with limited steel making capacity, imports half its annual 7mt requirement to supply shipping and construction companies that are expanding at 12% a year, according to the Mumbai-based firm.
Read more in The Livemint article.
Hindalco, Sterlite may join Alcan race
India's biggest aluminium maker, Hindalco, and Sterlite Industries, are in talks with global firms to separately bid for Canada's Alcan, said the media report on Wednesday. Citing unnamed sources, the report said Sterlite's parent Vedanta Resources Plc was in advanced talks with global miner Rio Tinto to form a special purpose vehicle to bid for the aluminium major.
London-based Vedanta will likely invest $3-$4 billion and Rio Tinto could put in $10-$12 billion in the joint venture, said the report.
Hindalco Industries Ltd, which earlier this year bought Canadian aluminium firm Novelis for $5.9 billion, was in talks with BHP Billiton for a joint bid but a deal was some distance away.
A Vedanta spokesman declined comment, while a spokeswoman for Hindalco said it was not the company's policy to comment on speculation.
Media reports earlier this week said Norwegian aluminium group Norsk Hydro and Rio Tinto might place separate bids to trump Alcoa's $28.5 billion hostile bid for Alcan, a takeover that would create the world's largest aluminium group.
London-based Vedanta will likely invest $3-$4 billion and Rio Tinto could put in $10-$12 billion in the joint venture, said the report.
Hindalco Industries Ltd, which earlier this year bought Canadian aluminium firm Novelis for $5.9 billion, was in talks with BHP Billiton for a joint bid but a deal was some distance away.
A Vedanta spokesman declined comment, while a spokeswoman for Hindalco said it was not the company's policy to comment on speculation.
Media reports earlier this week said Norwegian aluminium group Norsk Hydro and Rio Tinto might place separate bids to trump Alcoa's $28.5 billion hostile bid for Alcan, a takeover that would create the world's largest aluminium group.
Yes Bank launches PE fund for agri biz
Private sector lender Yes Bank has launched Rs 400 crore private equity fund under which it would raise money through institutional investors for putting in agribusiness.
The objective of the fund is to invest in food processing companies with high growth expectations and obtain a minority position in such companies, Yes Bank Senior Director Agribusiness Funds Management Sonal Shah told reporters here on Wednesday.
The fund would be raised through a mix of global and domestic investors, Shah said, adding that the bank is open to raise funds through high networth individuals (HNIs) also.
Yes Bank is targeting an annual return of about 20-25 per cent from the investment through the new fund.
The bank plans to invest the entire portfolio in the next 1-2 years in 10-15 companies, Shah said, adding the investment would be in the range of $5-7.5 million per company and the bank is already in the process of shortlisting the companies where it intends to invest.
The objective of the fund is to invest in food processing companies with high growth expectations and obtain a minority position in such companies, Yes Bank Senior Director Agribusiness Funds Management Sonal Shah told reporters here on Wednesday.
The fund would be raised through a mix of global and domestic investors, Shah said, adding that the bank is open to raise funds through high networth individuals (HNIs) also.
Yes Bank is targeting an annual return of about 20-25 per cent from the investment through the new fund.
The bank plans to invest the entire portfolio in the next 1-2 years in 10-15 companies, Shah said, adding the investment would be in the range of $5-7.5 million per company and the bank is already in the process of shortlisting the companies where it intends to invest.
Dubai exchange to trade rupee futures June 7
Dubai's new futures exchange said on Wednesday it would begin trading Indian rupee contracts on June 7 to tap India's growing share of international trade and investment. Each rupee-dollar contract will represent 2 million rupees ($46,710), the Dubai Gold and Commodities Exchange (DGCX) said in a statement.
Prices will be quoted in US cents per 100 Indian rupees, it added.
The DGCX launched the Middle East's first currency futures last year, trading euro-dollar, yen-dollar and sterling-dollar contracts.
Prices will be quoted in US cents per 100 Indian rupees, it added.
The DGCX launched the Middle East's first currency futures last year, trading euro-dollar, yen-dollar and sterling-dollar contracts.
Foreign investors to buy shares in IT co for Rs 162 cr
The Indian equity growth story continues to attract cash-rich foreign investors with Carrier International Mauritius Ltd and Global Investment Ltd looking to buy over 45 lakh shares in domestic IT services firm Infotech Entreprises, for nearly Rs 162 crore.
The Hyderabad-based company, which operates in 25 global locations, is seeking shareholders' nod to allot a total of 44.96 lakh shares to Mauritius-based Carrier International and Cyprus-based Global Investment, an Infotech communique to the Bombay Stock Exchange said.
The share allotment is proposed to be in two tranches -- 27.24 lakh compulsorily convertible preference shares and issue of 17.72 lakh equity shares, it added.
The company is also looking to issue of 38.11 lakh shares as underlying equity shares for the issue of ADRs to the foreign entities, subject to shareholders' approval.
Carrier International already holds over 14 per cent stake and other foreign investors in the firm include Merrill Lynch Capital Markets (1.32%), DB Fund Mauritius (1.41%) and BSMA Ltd (4.14%).
Read more in The Economic Times article.
The Hyderabad-based company, which operates in 25 global locations, is seeking shareholders' nod to allot a total of 44.96 lakh shares to Mauritius-based Carrier International and Cyprus-based Global Investment, an Infotech communique to the Bombay Stock Exchange said.
The share allotment is proposed to be in two tranches -- 27.24 lakh compulsorily convertible preference shares and issue of 17.72 lakh equity shares, it added.
The company is also looking to issue of 38.11 lakh shares as underlying equity shares for the issue of ADRs to the foreign entities, subject to shareholders' approval.
Carrier International already holds over 14 per cent stake and other foreign investors in the firm include Merrill Lynch Capital Markets (1.32%), DB Fund Mauritius (1.41%) and BSMA Ltd (4.14%).
Read more in The Economic Times article.
L&T may list 8 subsidiaries by 2015
In the next eight years, Larsen & Toubro hopes to list at least eight of its wholly owned units in a bid to unlock shareholder value.
Highly placed sources revealed that among the first lot of subsidiaries to head towards the stock bourses are its infrastructure subsidiary L&T Infotech, which is growing at a compounded annual growth rate of 60% per annum.
According to the official, the listing of its infotech subsidiary could be as early as October 2007. It has set a target year of 2015, to list the eight subsidiaries.
Confirming the strategy, Y M Deosthalee, CFO and member of the board at L&T, told DNA Money: “Apart from L&T Infotech, which is slated to list by the year—end, the company is considering three more subsidiaries to list over the next three years.” The list also includes its financial subsidiary, Deosthalee indicated.
Read more in The DNA Money article.
Highly placed sources revealed that among the first lot of subsidiaries to head towards the stock bourses are its infrastructure subsidiary L&T Infotech, which is growing at a compounded annual growth rate of 60% per annum.
According to the official, the listing of its infotech subsidiary could be as early as October 2007. It has set a target year of 2015, to list the eight subsidiaries.
Confirming the strategy, Y M Deosthalee, CFO and member of the board at L&T, told DNA Money: “Apart from L&T Infotech, which is slated to list by the year—end, the company is considering three more subsidiaries to list over the next three years.” The list also includes its financial subsidiary, Deosthalee indicated.
Read more in The DNA Money article.
Vodafone to drop Hutch name by end ’07
The Hutch logo will make way for the Vodafone symbol by the end of this year in India, according to Vodafone CEO Arun Sarin. Besides brand transition, the group also wants to introduce low-cost handsets in its newly-acquired Indian subsidiary, Sarin said after announcing Vodafone’s annual financial results on Tuesday. The handsets are being procured from Chinese equipment firm ZTE.
Vodafone plans to spend over £1 billion (over Rs 8,000 crore) towards capital expenditure in the financial year 2007-08 in the Indian market, and hopes to cover more than 50% of India’s population by then.
However, when it comes to offering the more evolved ‘total communication’ package, top Vodafone officials believe that the Indian market would be served differently as its needs are different. The main objective is to put a handset in every Indian hand.
Vodafone plans to spend over £1 billion (over Rs 8,000 crore) towards capital expenditure in the financial year 2007-08 in the Indian market, and hopes to cover more than 50% of India’s population by then.
However, when it comes to offering the more evolved ‘total communication’ package, top Vodafone officials believe that the Indian market would be served differently as its needs are different. The main objective is to put a handset in every Indian hand.
Tuesday, May 29, 2007
ICICI Holdings plans $500 mn stake sale
ICICI Holdings, ICICI Bank’s subsidiary which owns its insurance and asset management businesses, is selling 5 per cent stake to private equity investors and foreign reinsurers for $500 million.
The private equity investors likely to buy the stakes are General Atlantic, Government of Singapore Investment Corporation Private and Temasek.
Sources indicated that all investors would be allotted equal stakes in ICICI Holdings. The company has sought regulatory clearance and appointed JP Morgan as the financial advisor for selling the stake. The two Singapore-based private equity players, GIC and Temasek, have stakes in ICICI Bank.
ICICI Bank when contacted declined to comment. ICICI Bank was looking at valuing ICICI Holdings at $10 billion, the sources said.
ICICI Holdings’ 74 per cent stake in ICICI Prudential Life Insurance Company is valued at $6 billion and in ICICI Lombard General Insurance Company at $3 billion. The bank’s 51 per cent stake in ICICI Prudential Asset Management is valued at $1 billion.
The private placement is just the beginning. ICICI Holdings is planning to list its equity shares at an appropriate time to meet a part of its further capital requirements for ICICI Life and ICICI General.
Read more in The Business Standard article.
The private equity investors likely to buy the stakes are General Atlantic, Government of Singapore Investment Corporation Private and Temasek.
Sources indicated that all investors would be allotted equal stakes in ICICI Holdings. The company has sought regulatory clearance and appointed JP Morgan as the financial advisor for selling the stake. The two Singapore-based private equity players, GIC and Temasek, have stakes in ICICI Bank.
ICICI Bank when contacted declined to comment. ICICI Bank was looking at valuing ICICI Holdings at $10 billion, the sources said.
ICICI Holdings’ 74 per cent stake in ICICI Prudential Life Insurance Company is valued at $6 billion and in ICICI Lombard General Insurance Company at $3 billion. The bank’s 51 per cent stake in ICICI Prudential Asset Management is valued at $1 billion.
The private placement is just the beginning. ICICI Holdings is planning to list its equity shares at an appropriate time to meet a part of its further capital requirements for ICICI Life and ICICI General.
Read more in The Business Standard article.
Essar to monetise 33% Hutch stake
Essar group plans to monetise its 33 per cent stake in Hutchison-Essar, its joint venture with UK’s Vodafone, to raise around $4.5 billion (Rs 18,000 crore) for overseas acquisitions. This will be the largest fund-raising through share monetisation by an Indian company.
The group recently bought two steel plants in Canada and the US for $3.2 billion and committed $4 billion in Egypt to set up a refinery and steel plants. It is hunting for more global assets.
Sources close to the development said the group has appointed banks to advise it on assigning its one-third stake in India’s fourth-largest mobile service provider.
The attempt also reflects the buoyancy in the domestic telecom industry. “It shows that the Essar group is certain about the rising valuation of its holding in Hutchison-Essar before it exercises its put option,” the banker added.
On the basis of the acquisition cost paid by Vodafone, which recently acquired Hong Kong-based Hutchison’s 52 per cent stake, Essar’s holding in Hutchison-Essar is valued at $5.46 billion.
Read more in The Business Standard article.
The group recently bought two steel plants in Canada and the US for $3.2 billion and committed $4 billion in Egypt to set up a refinery and steel plants. It is hunting for more global assets.
Sources close to the development said the group has appointed banks to advise it on assigning its one-third stake in India’s fourth-largest mobile service provider.
The attempt also reflects the buoyancy in the domestic telecom industry. “It shows that the Essar group is certain about the rising valuation of its holding in Hutchison-Essar before it exercises its put option,” the banker added.
On the basis of the acquisition cost paid by Vodafone, which recently acquired Hong Kong-based Hutchison’s 52 per cent stake, Essar’s holding in Hutchison-Essar is valued at $5.46 billion.
Read more in The Business Standard article.
Vodafone to transfer Bharti stake by Nov '08
Vodafone, which acquired controlling stake in mobile firm Hutch-Essar, today said it will transfer its 5.6% stake in Bharti Airtel back to the Indian mobile leader by November next year.
Following acquisition of control in Hutch-Essar for $10.9 billion in cash, Vodafone had entered into a share sale agreement with Bharti regarding its 5.6% equity holding in the company.
"The shareholding will be transferred in two tranches, the first before March 31, 2008 and the second by November 2008," Vodafone said in a statement after announcing its annual results for the year ended March 31.Vodafone completed the purchase of the Hutch-Essar stake from Hong-Kong based Hutchison Telecom International (HTIL) on May 8.
Read more in The Business Standard article.
Following acquisition of control in Hutch-Essar for $10.9 billion in cash, Vodafone had entered into a share sale agreement with Bharti regarding its 5.6% equity holding in the company.
"The shareholding will be transferred in two tranches, the first before March 31, 2008 and the second by November 2008," Vodafone said in a statement after announcing its annual results for the year ended March 31.Vodafone completed the purchase of the Hutch-Essar stake from Hong-Kong based Hutchison Telecom International (HTIL) on May 8.
Read more in The Business Standard article.
ABF to buy UK's Indian cuisine brand Patak's
Associated British Foods (ABF), the UK-based food and retail group which owns brands like Twinings tea and Ovaltine beverages, today announced that it has reached an agreement to buy Indian cuisine brand Patak's from the founding Pathak family.
In a press statement, ABF said that the gross assets of the business being acquired were £40 million as of 2 October 2005. Unaudited revenue for the year to 30 September 2006 was £66million. The deal is expected to be completed by the end of August this year.
The business comprises the Patak’s brand and assets in all countries except India. Patak's, which manufactures and markets Indian cooking sauces, curry pastes, chutneys and other meal accompaniments was set up by the Pathak family in England in 1957.
Patak’s is a well established brand in Indian cuisine in England and also has a wide international presence. Tobacco to hotel company ITC too was said to be in the running for Patak's.
Read more in The Business Standar article.
In a press statement, ABF said that the gross assets of the business being acquired were £40 million as of 2 October 2005. Unaudited revenue for the year to 30 September 2006 was £66million. The deal is expected to be completed by the end of August this year.
The business comprises the Patak’s brand and assets in all countries except India. Patak's, which manufactures and markets Indian cooking sauces, curry pastes, chutneys and other meal accompaniments was set up by the Pathak family in England in 1957.
Patak’s is a well established brand in Indian cuisine in England and also has a wide international presence. Tobacco to hotel company ITC too was said to be in the running for Patak's.
Read more in The Business Standar article.
Nifty sets fresh record; Sensex ends up 110pts
The Sensex opened marginally higher at 14,419, up 21 points. Some weakness in early trades saw the index slip into red to a low of 14,372. However, steady buying in select heavyweights helped the index rebound into positive zone.
The buying gained momentum in the latter half of the trading day and the index rallied to a high of 14,530 - up 158 points from the day's low. The Sensex finally ended with a gain of 110 points at 14,508.
The NSE Nifty rallied to a new all-time intra-day high of 4299, before settling at a record 4293 - up 36 points.
The market breadth was positive - out of 2,672 stocks traded, 1,357 advanced, 1,213 declined and 102 were unchanged today.
BHEL, Cipla lead...
BHEL and Cipla soared nearly 5% each to Rs 2,856 and Rs 219, respectively. Larsen & Toubro surged 4% to Rs 1,857.
Ranbaxy and Reliance Communications rallied over 2% each to Rs 390 and Rs 521, respectively.
Reliance and HDFC Bank advanced 1.8% each to Rs 1,755 and Rs 1,145, respectively.
SBI, Grasim, HLL, Tata Motors and Reliance Energy were up around 1% each at Rs 1,322, Rs 2,509, Rs 203, Rs 741 and Rs 555, respectively.
HDFC shed 1.7% to Rs 1,813. Gujarat Ambuja and NTPC were down 1% each at Rs 115 and Rs 161, respectively.
MOST ACTIVE COUNTERS
Orbit Corp topped the value chart with a turnover of Rs 208.40 crore followed by Unitech (Rs 150 crore), Reliance (Rs 149 crore), Advanta (Rs 129 crore) and India Infoline (Rs 122 crore
The buying gained momentum in the latter half of the trading day and the index rallied to a high of 14,530 - up 158 points from the day's low. The Sensex finally ended with a gain of 110 points at 14,508.
The NSE Nifty rallied to a new all-time intra-day high of 4299, before settling at a record 4293 - up 36 points.
The market breadth was positive - out of 2,672 stocks traded, 1,357 advanced, 1,213 declined and 102 were unchanged today.
BHEL, Cipla lead...
BHEL and Cipla soared nearly 5% each to Rs 2,856 and Rs 219, respectively. Larsen & Toubro surged 4% to Rs 1,857.
Ranbaxy and Reliance Communications rallied over 2% each to Rs 390 and Rs 521, respectively.
Reliance and HDFC Bank advanced 1.8% each to Rs 1,755 and Rs 1,145, respectively.
SBI, Grasim, HLL, Tata Motors and Reliance Energy were up around 1% each at Rs 1,322, Rs 2,509, Rs 203, Rs 741 and Rs 555, respectively.
HDFC shed 1.7% to Rs 1,813. Gujarat Ambuja and NTPC were down 1% each at Rs 115 and Rs 161, respectively.
MOST ACTIVE COUNTERS
Orbit Corp topped the value chart with a turnover of Rs 208.40 crore followed by Unitech (Rs 150 crore), Reliance (Rs 149 crore), Advanta (Rs 129 crore) and India Infoline (Rs 122 crore
DLF to enter insurance in next one year
DLF Limited on Tuesday announced its plans to diversify into insurance sector in the next one year, for which it has tied up with US-based Prudential. "We have joined hands with Prudential of USA to enter into the insurance sector by the end of this year," DLF Chairman K P Singh told reporters here.
The company has plans to take up major projects in hospitality, SEZ and infrastructure sector. The company intends to participate in the construction of infrastructure projects, including roads, bridges, tunnels, pipelines, ports, runways and power projects through joint venture company, DLF Laing O'Rourke.
It also plans to expand its multiplex cinema business - DT Cinemas - through the development and operation of multiplex cinemas in its malls.DLF is coming up with an initial public offering to raise Rs 8,750 crore to Rs 9,625 crore. The IPO is opening on June 11 at a price band of Rs 500-550 per share. It will result in a dilution of 10.26 per cent of the post-issue capital of the company.
Read more in The Economic Times article.
The company has plans to take up major projects in hospitality, SEZ and infrastructure sector. The company intends to participate in the construction of infrastructure projects, including roads, bridges, tunnels, pipelines, ports, runways and power projects through joint venture company, DLF Laing O'Rourke.
It also plans to expand its multiplex cinema business - DT Cinemas - through the development and operation of multiplex cinemas in its malls.DLF is coming up with an initial public offering to raise Rs 8,750 crore to Rs 9,625 crore. The IPO is opening on June 11 at a price band of Rs 500-550 per share. It will result in a dilution of 10.26 per cent of the post-issue capital of the company.
Read more in The Economic Times article.
RBS-led group bids $95.7 bn for ABN AMRO
A consortium led by Royal Bank of Scotland unveiled a 71.1 billion euro ($95.7 billion) bid for ABN AMRO that included its disputed U.S. bank and a higher cash component than indicated.
The group of banks said on Tuesday their offer was worth 38.40 euros per ABN share -- 30.40 euros in cash plus 0.844 new shares in RBS.
The consortium of RBS, Fortis and Santanderhas so far been rebuffed by ABN management, which has agreed to an all-share takeover by Britain's Barclays currently valued at 63 billion euros.
The banks said a condition of their offer is that the deal include the purchase of ABN's U.S. arm, LaSalle Bank, which ABN agreed to sell to Bank of America for $21 billion at the same time that it agreed to be taken over by Barclays.
Read more in The Economic Times article.
The group of banks said on Tuesday their offer was worth 38.40 euros per ABN share -- 30.40 euros in cash plus 0.844 new shares in RBS.
The consortium of RBS, Fortis and Santanderhas so far been rebuffed by ABN management, which has agreed to an all-share takeover by Britain's Barclays currently valued at 63 billion euros.
The banks said a condition of their offer is that the deal include the purchase of ABN's U.S. arm, LaSalle Bank, which ABN agreed to sell to Bank of America for $21 billion at the same time that it agreed to be taken over by Barclays.
Read more in The Economic Times article.
Satyam, Oracle alliance for biz intelligence products
Satyam Computer and Oracle Asia Pacific have announced a strategic alliance that will help companies in Asia Pacific jump-start business intelligence implementations.The announcement saw Satyam Computer share rise 0.84 per cent to Rs 472.95.
iDecisions, the company's business intelligence accelerator, will become the first major application to be ported to Oracle's Business Intelligence Suite Enterprise Edition, a notice to the Bombay Stock Exchange said.
The combined solution will be available for multiple verticals, including banking, telecommunications, and insurance.
The company quoted industry reports, saying the Asia Pacific business intelligence platform market is growing at a compound annual growth rate of 15 per cent, based on software revenues from 2006 to 2011, and will reach $ 624 million by 2011.
iDecisions, the company's business intelligence accelerator, will become the first major application to be ported to Oracle's Business Intelligence Suite Enterprise Edition, a notice to the Bombay Stock Exchange said.
The combined solution will be available for multiple verticals, including banking, telecommunications, and insurance.
The company quoted industry reports, saying the Asia Pacific business intelligence platform market is growing at a compound annual growth rate of 15 per cent, based on software revenues from 2006 to 2011, and will reach $ 624 million by 2011.
Decolight Ceramics IPO fully subscribed
Vitrified ceramic tiles manufacturer Decolight Ceramics' Initial Public Offer on Tuesday got fully subscribed on last day of its offer.The IPO received 1.44 crore bids for 94.54 lakh offers, getting oversubscribed 1.53 times, latest data available on the stock exchanges shows.
The price band has been fixed between Rs 45 to 54. The company plans to raise Rs 43.45 crore through a 100 per cent book-building process.The IPO received decent response from retail investors with the portion reserved for them getting oversubscribed 3 times while the Qualified Institutional Buyers segment remained undersubscribed, latest data shows.
The proceeds of the issue would be used to raise capital to finance its expansion, which includes raising capacity of vitrified tiles from 6,000 square meters to 12,000 square meters per day.It has also proposed to set up two wind generators having a capacity of 1.25 MW and 2.1 MW each.
The price band has been fixed between Rs 45 to 54. The company plans to raise Rs 43.45 crore through a 100 per cent book-building process.The IPO received decent response from retail investors with the portion reserved for them getting oversubscribed 3 times while the Qualified Institutional Buyers segment remained undersubscribed, latest data shows.
The proceeds of the issue would be used to raise capital to finance its expansion, which includes raising capacity of vitrified tiles from 6,000 square meters to 12,000 square meters per day.It has also proposed to set up two wind generators having a capacity of 1.25 MW and 2.1 MW each.
Monday, May 28, 2007
DLF to rank among top 10 m-cap scrips
Post-listing, real estate major DLF will find a place among the top-10 companies in terms of market capitalisation.
The Delhi-based company’s total enterprise value stands at Rs 85,221 crore on the lower side of the price band of Rs 500 a share on the total equity capital of Rs 340.88 crore of Rs 2 paid-up equity share.
The company yesterday announced a price band of Rs 500-550 a share for its upcoming mega initial public offer (IPO) of Rs 9,625 crore.
On the higher side, DLF’s current enterprise value stands at Rs 93,743 crore. DLF will occupy the eighth position in terms of market capitalisation ranking, after Reliance Communications (Rs 1,03,110 crore) and before ICICI Bank (Rs 82,119 crore).
The company’s enterprise value of Rs 85,221 crore constitutes 50 per cent of the total market capitalisation of real estate stocks listed on the Bombay Stock Exchange (BSE). It is almost 100 per cent of the total market value of real estate stocks.
The real estate sector will cross the market capitalisation of Rs 1,70,000 crore after the DLF listing. The sector will be among the top-ten sectors after telecommunication, oil exploration and power and ahead of pharmaceuticals, steel and engineering sectors. Unitech with a market capitalisation of Rs 44,403 crore tops the list of the construction sector.
The Delhi-based company’s total enterprise value stands at Rs 85,221 crore on the lower side of the price band of Rs 500 a share on the total equity capital of Rs 340.88 crore of Rs 2 paid-up equity share.
The company yesterday announced a price band of Rs 500-550 a share for its upcoming mega initial public offer (IPO) of Rs 9,625 crore.
On the higher side, DLF’s current enterprise value stands at Rs 93,743 crore. DLF will occupy the eighth position in terms of market capitalisation ranking, after Reliance Communications (Rs 1,03,110 crore) and before ICICI Bank (Rs 82,119 crore).
The company’s enterprise value of Rs 85,221 crore constitutes 50 per cent of the total market capitalisation of real estate stocks listed on the Bombay Stock Exchange (BSE). It is almost 100 per cent of the total market value of real estate stocks.
The real estate sector will cross the market capitalisation of Rs 1,70,000 crore after the DLF listing. The sector will be among the top-ten sectors after telecommunication, oil exploration and power and ahead of pharmaceuticals, steel and engineering sectors. Unitech with a market capitalisation of Rs 44,403 crore tops the list of the construction sector.
Ranbaxy buys 13 US skin-care brands from BMS
Ranbaxy Laboratories Inc. (Ranbaxy), the wholly owned subsidiary of Ranbaxy Laboratories, has acquired the US rights to a group of 13 dermatology products from Bristol-Myers Squibb (BMS).
According to an official release issued by the company to the BSE today, these products have been present in the market for over 10 years and have been utilized in the treatment of Acne, Dermatitis, Psoriasis, fungal infections and Scabies.
The US dermatology market value is estimated at $10 billion and has been growning at 10% per annum. These brands will be sold in the US market under the Ranbaxy Laboratories Inc. label and offer significant potential for growth.
Commenting on the acquisition, Venkat Krishnan, VP & Regional Director, Ranbaxy (North America), said: "The acquisition strengthens and extends the Ranbaxy franchise in the dermatology arena. It enables Ranbaxy to establish an immediate presence in high value segments, in addition to Acne, where we already have a dominant brand, Sotret®...This business opportunity also creates a broader platform for the introduction of value added line extensions and additional brands as our involvement and commitment to dermatology expands. It underscores our strategy of pursuing inorganic growth opportunities to complement internal growth."
According to an official release issued by the company to the BSE today, these products have been present in the market for over 10 years and have been utilized in the treatment of Acne, Dermatitis, Psoriasis, fungal infections and Scabies.
The US dermatology market value is estimated at $10 billion and has been growning at 10% per annum. These brands will be sold in the US market under the Ranbaxy Laboratories Inc. label and offer significant potential for growth.
Commenting on the acquisition, Venkat Krishnan, VP & Regional Director, Ranbaxy (North America), said: "The acquisition strengthens and extends the Ranbaxy franchise in the dermatology arena. It enables Ranbaxy to establish an immediate presence in high value segments, in addition to Acne, where we already have a dominant brand, Sotret®...This business opportunity also creates a broader platform for the introduction of value added line extensions and additional brands as our involvement and commitment to dermatology expands. It underscores our strategy of pursuing inorganic growth opportunities to complement internal growth."
Spicy deal: Spice, Idea now talk merger
A major consolidation in the telecom sector could be on the cards. Discussions have just begun between Spice Telecom and Idea Cellular for a possible merger, whose outcome can go either way.
According to top sources, the option of both Spice buying out Idea Cellular as well as the Birlas-owned Idea Cellular buying out Spice are being considered. However, with talks being in the preliminary stages, a source said it would take anywhere between 8 and 12 months before anything could be finalised.
Adding a new dimension, sources told ET that Telekom Malaysia, which holds 49% in Spice Telecom (the BK Modi group holds 51%) is keen to expand its footprint in India and make some acquisitions to expand Spice’s operations. This is because Spice, at present, is limited to just two telecom circles, Punjab and Karnataka.
Last year, Telekom Malaysia had acquired 49% in Spice for $179 million (Rs 733 crore). In June 2005, Telekom Malaysia and Singapore Technologies Telemedia had opted out of the agreement for acquiring a 47.7% stake in Idea Cellular for about $390 million as the government did not clear the deal.
Read more in The Economic Times article.
According to top sources, the option of both Spice buying out Idea Cellular as well as the Birlas-owned Idea Cellular buying out Spice are being considered. However, with talks being in the preliminary stages, a source said it would take anywhere between 8 and 12 months before anything could be finalised.
Adding a new dimension, sources told ET that Telekom Malaysia, which holds 49% in Spice Telecom (the BK Modi group holds 51%) is keen to expand its footprint in India and make some acquisitions to expand Spice’s operations. This is because Spice, at present, is limited to just two telecom circles, Punjab and Karnataka.
Last year, Telekom Malaysia had acquired 49% in Spice for $179 million (Rs 733 crore). In June 2005, Telekom Malaysia and Singapore Technologies Telemedia had opted out of the agreement for acquiring a 47.7% stake in Idea Cellular for about $390 million as the government did not clear the deal.
Read more in The Economic Times article.
Coke to invest $250 mn in 3 years in India
Within days of acquiring vitamin water Glaceau, American giant Coca Cola today said it will invest 250 million dollars in India in next three years and said its bottling operations would turn profitable in 2008.
Most of the investment will stay within India as the required infrastructure like coolers and trucks are manufactured in India.Along with the 250 million dollars by Coke, franchises of the company's bottling operations in India are also likely to put in between 50-100 million dollars to ramp up infrastructure.
Of the 60 bottling plants in India, Coke owns 25 while 24 are owned by the franchises and the remaining are with the co-packers.The company is also open to divest in the bottling business and move towards more and more in the hands of franchises.
Most of the investment will stay within India as the required infrastructure like coolers and trucks are manufactured in India.Along with the 250 million dollars by Coke, franchises of the company's bottling operations in India are also likely to put in between 50-100 million dollars to ramp up infrastructure.
Of the 60 bottling plants in India, Coke owns 25 while 24 are owned by the franchises and the remaining are with the co-packers.The company is also open to divest in the bottling business and move towards more and more in the hands of franchises.
StanChart close to buying stake in UTI
Asia-focused bank Standard Chartered plc is in final talks to buy a 49 percent stake in Indian brokerage UTI Securities, the latest bank to buy into the country's brokerage sector.
The deal would help Standard Chartered expand its services for wealthy customers in India, a fast-growing private banking market, by offering stock brokerage.
"The UTI transaction is in final due diligence," Peter Flavel, Standard Chartered's global head of private banking, said in Singapore, confirming earlier press reports.
Standard Chartered is joining a clutch of foreign players, including Citigroup Paribas that have invested in India's fast-growing brokerage sector.
UTI, which is owned by the Securities Trading Corp. of India, has 170 branches across the country, according to press reports.
Read more in The Economic Times article.
The deal would help Standard Chartered expand its services for wealthy customers in India, a fast-growing private banking market, by offering stock brokerage.
"The UTI transaction is in final due diligence," Peter Flavel, Standard Chartered's global head of private banking, said in Singapore, confirming earlier press reports.
Standard Chartered is joining a clutch of foreign players, including Citigroup Paribas that have invested in India's fast-growing brokerage sector.
UTI, which is owned by the Securities Trading Corp. of India, has 170 branches across the country, according to press reports.
Read more in The Economic Times article.
Temasek arm to pick up 21.74% in GL Hotels
Dunearn Investments (Mauritius), a wholly-owned subsidiary of Asia investment firm Temasek Holdings, is acquiring a 21.74% stake in GL Hotels for Rs 125 crore. Mumbai-based GL Hotels, promoted by the Ghais of the Kwality and Gaylord restaurant fame, now operates the boutique Intercontinental (IHG) Marine Drive in south Mumbai.
It is foraying into boutique and lifestyle hotels and is understood to be talking to a number of global hospitality majors for the same.
The board of GL Hotels recently cleared its expansion plan for the next 3-5 years involving a first phase investment of around Rs 600 crore. To fund the first phase, GL Hotels approved the issue of warrants to Dunearn Investments to raise Rs 210 crore and an additional Rs 400 crore would be raised through debt and internal accruals.
After the recent amalgamation of its banqueting business( Mayfair) with GL Hotels, IHG’s stake has reduced to around 5% from 12% in GL Hotels.
Read more in The Economic Times article.
It is foraying into boutique and lifestyle hotels and is understood to be talking to a number of global hospitality majors for the same.
The board of GL Hotels recently cleared its expansion plan for the next 3-5 years involving a first phase investment of around Rs 600 crore. To fund the first phase, GL Hotels approved the issue of warrants to Dunearn Investments to raise Rs 210 crore and an additional Rs 400 crore would be raised through debt and internal accruals.
After the recent amalgamation of its banqueting business( Mayfair) with GL Hotels, IHG’s stake has reduced to around 5% from 12% in GL Hotels.
Read more in The Economic Times article.
Crompton to acquire Ireland's Microsol
Electrical equipment maker Crompton Greaves today said it will acquire Ireland-based Microsol Holdings Ltd for an enterprise value of around 10.50 million euro (over Rs 57 crore).
The company has concluded arrangements to acquire Microsol Holdings Ltd (MHL) together with other companies in the Microsol Group, Crompton Greaves informed the Bombay Stock Exchange (BSE).
"This acquisition will increase the company's strengths in the area of high-end engineering and sub-station automation capabilities," the company added.
MHL is a part of the Microsol Group and has operations in the UK, US and Ireland. It provides sub-station automation for MV and HV to new sub-stations and retro-fitting solutions for existing sub-stations.
The shares of Crompton were last trading at Rs 228.20, up 1.04 per cent, on the BSE.
The company has concluded arrangements to acquire Microsol Holdings Ltd (MHL) together with other companies in the Microsol Group, Crompton Greaves informed the Bombay Stock Exchange (BSE).
"This acquisition will increase the company's strengths in the area of high-end engineering and sub-station automation capabilities," the company added.
MHL is a part of the Microsol Group and has operations in the UK, US and Ireland. It provides sub-station automation for MV and HV to new sub-stations and retro-fitting solutions for existing sub-stations.
The shares of Crompton were last trading at Rs 228.20, up 1.04 per cent, on the BSE.
Saturday, May 26, 2007
HDFC to raise Rs 3,114cr from Citi, Carlyle
The board of directors of Housing Development Finance Corporation (HDFC), which met today, approved a proposal to raise up to Rs 3,114 crore by issuing 1.80 crore shares on preferential basis at Rs 1,730 per share to Citigroup Strategic Holdings Mauritius and CMP Asia (The Carlyle Group).
According to a release issued by HDFC to the BSE today, the holding of Citigroup will move up to 9.55% after the issue from the current level of 9.15%, and Claryle Group will hold 5.63%.
The meeting also approved a proposal to increase authorised share capital of the corporation from Rs 275 crore consisting of 27.5 crore equity shares of Rs 10 each to Rs 325 crore consisting of 32.5 crore equity shares of Rs 10 each.
The money would mostly be used to buy shares of its subsidiary, HDFC Bank, and invest in the life insurance subsidiary.
The preferential allotment to Citigroup is being made to ensure the US financial services group's stake in the mortgage lender remains at 12.3% after the allotment to Carlyle.
According to a release issued by HDFC to the BSE today, the holding of Citigroup will move up to 9.55% after the issue from the current level of 9.15%, and Claryle Group will hold 5.63%.
The meeting also approved a proposal to increase authorised share capital of the corporation from Rs 275 crore consisting of 27.5 crore equity shares of Rs 10 each to Rs 325 crore consisting of 32.5 crore equity shares of Rs 10 each.
The money would mostly be used to buy shares of its subsidiary, HDFC Bank, and invest in the life insurance subsidiary.
The preferential allotment to Citigroup is being made to ensure the US financial services group's stake in the mortgage lender remains at 12.3% after the allotment to Carlyle.
Friday, May 25, 2007
Indian firm to buy 50% of an Israeli company
Indian agriculture conglomerate Jain Irrigation Systems is buying 50% of Israel’s Na’an Dan Irrigation at a company valuation of about $35 million, a media report said on 25 May.
The two firms will be entering a memorandum of understanding on the transaction next week, daily Ha’aretz said. The Israeli firm chose the Indian company despite having a better offer from a local irrigation company, Netafim, the report said.
Jain irrigation is likely to transfer the production lines to India resulting in layoffs, it said. Sources told the daily that Na’an Dan rejected Netafim’s offer because it demanded a controlling share in the company, raising concerns that it would take steps to integrate the management activities of the two companies, sending the Na’an Dan’s management home.
Naan Dan recently announced a $2 million deal relating to sell of technology and equipment to a tea plantation in India. It is not known whether the deal is connected with the Jain takeover.
The two firms will be entering a memorandum of understanding on the transaction next week, daily Ha’aretz said. The Israeli firm chose the Indian company despite having a better offer from a local irrigation company, Netafim, the report said.
Jain irrigation is likely to transfer the production lines to India resulting in layoffs, it said. Sources told the daily that Na’an Dan rejected Netafim’s offer because it demanded a controlling share in the company, raising concerns that it would take steps to integrate the management activities of the two companies, sending the Na’an Dan’s management home.
Naan Dan recently announced a $2 million deal relating to sell of technology and equipment to a tea plantation in India. It is not known whether the deal is connected with the Jain takeover.
Bharti says no hitch in Wal-Mart JV
Wal-Mart Stores Inc. and Bharti are still discussing business plans for their cash-and-carry joint venture and a deal is just a matter of time, a top official at Bharti said on Friday.
"It's not just signing the agreement, there are a whole lot of other things -- discussions, business plans, other things simultaneously going on. So I don't have an exact date," Bharti group Managing Director Akhil Gupta said.
He rejected media reports about possible differences for the delay in striking a deal, which has been on the cards for many months.
"All I can say is it's on track and there is absolutely no hitch. It is just a matter of time," Gupta said.
India's highly fragmented $300 billion retail industry, which is dominated by small family-run stores, is forecast to more than double in size by 2015.
"It's not just signing the agreement, there are a whole lot of other things -- discussions, business plans, other things simultaneously going on. So I don't have an exact date," Bharti group Managing Director Akhil Gupta said.
He rejected media reports about possible differences for the delay in striking a deal, which has been on the cards for many months.
"All I can say is it's on track and there is absolutely no hitch. It is just a matter of time," Gupta said.
India's highly fragmented $300 billion retail industry, which is dominated by small family-run stores, is forecast to more than double in size by 2015.
Suzlon acquires wind turbine major REpowerAdd to Clippings
Wind power major Suzlon Energy today announced the acquisition of German wind turbine manufacturer REpower after the French nuclear energy group decided to withdraw from the bidding contest.
"We are delighted with the development. Given our arrangement with Areva we now, directly and through voting pool agreements, already control over 60 per cent of REpowers capital," Suzlon Chairman and Managing Director Tulsi Tanti said.
"In the next one week we will also know how many shareholders have finally tendered into our offer," he added.
"Suzlon Energy and Areva have signed a binding agreement governing a framework regarding both the firms shareholding in REpower. With this the bidding contest between Suzlon and Areva comes to an end," a statement quoting him said.
The bidding process for REpower started when Suzlon announced a competing public offer on February 9.
Read more in The Economic Times article.
"We are delighted with the development. Given our arrangement with Areva we now, directly and through voting pool agreements, already control over 60 per cent of REpowers capital," Suzlon Chairman and Managing Director Tulsi Tanti said.
"In the next one week we will also know how many shareholders have finally tendered into our offer," he added.
"Suzlon Energy and Areva have signed a binding agreement governing a framework regarding both the firms shareholding in REpower. With this the bidding contest between Suzlon and Areva comes to an end," a statement quoting him said.
The bidding process for REpower started when Suzlon announced a competing public offer on February 9.
Read more in The Economic Times article.
Cos like HAL, NALCO, PFC will get navratna status
Hindustan Aeronautics Ltd, National Aluminium Co and Power Finance Corp are among the seven public sector firms that would be given the navratna status soon, Minister for Heavy Industries Santosh Mohan Dev said on Friday.
An apex committee had recommended granting of navratna status to HAL, NALCO, PFC, Bharat Electronics Ltd, National Mineral Development Corporation, Power Grid Corporation of India and Rural Electrification Corporation Ltd, he said.
He said these would be granted the status as soon as they induct independent directors on their board.
With these, the number of navratna CPSUs under the Heavy Industry ministry would increase from nine to 16. Oil and Natural Gas Corp, NTPC Ltd, BHEL and Indian Oil are among the nine existing navratna companies.
Read more in The Economic Times article
An apex committee had recommended granting of navratna status to HAL, NALCO, PFC, Bharat Electronics Ltd, National Mineral Development Corporation, Power Grid Corporation of India and Rural Electrification Corporation Ltd, he said.
He said these would be granted the status as soon as they induct independent directors on their board.
With these, the number of navratna CPSUs under the Heavy Industry ministry would increase from nine to 16. Oil and Natural Gas Corp, NTPC Ltd, BHEL and Indian Oil are among the nine existing navratna companies.
Read more in The Economic Times article
Tatas map realty foray, to develop land of group cos
After big ticket acquisitions in the overseas market, the $22-billion Tata group now wants to expand its presence in one of the fastest growing business spaces in India—real estate. The salt-to-telecom conglomerate plans to develop excess land owned by various group companies through the recently-floated $1-billion real estate fund under the Tata Realty and Infrastructure. The group believes the exercise will help it “unlock intrinsic value” for the benefit of the shareholders of its various group firms.
Bombay House, the group’s headquarters, is learnt to be finalising a blueprint for the new business. The group has hired KPMG to outline the commercial development of land owned the group companies. In the first phase, the group would develop the excess land owned by group companies such as Tata Consultancy Services (TCS),Voltas and Rallis India, said sources close to the development.
TCS, the Tata group’s software company, has around 250 acres of excess land spread across Pune and Hyderabad, while consumer goods company Voltas owns 25 acres in Hyderabad. Rallis India, too, owns 100 acres in the southern city.
Read more in The Economic Times article.
Bombay House, the group’s headquarters, is learnt to be finalising a blueprint for the new business. The group has hired KPMG to outline the commercial development of land owned the group companies. In the first phase, the group would develop the excess land owned by group companies such as Tata Consultancy Services (TCS),Voltas and Rallis India, said sources close to the development.
TCS, the Tata group’s software company, has around 250 acres of excess land spread across Pune and Hyderabad, while consumer goods company Voltas owns 25 acres in Hyderabad. Rallis India, too, owns 100 acres in the southern city.
Read more in The Economic Times article.
DLF fixes IPO price band of Rs 500-550
Real estate major DLF has fixed a price band of Rs 500-550 per share for its IPO. The size of the total issue, at this price band, will be between
Rs 8,750 crore and Rs 9,625 crore. The issue opens on June 11 and closes on June 14. DLF is issuing 17.5 crore shares of Rs 2 each, through 100% book-building route. The issue will involve an equity dilution of 10.27%. We want to keep the price investor-friendly,” said a senior company executive.
While re-filling its draft prospectus in January this year the company decided not to exercise the greenshoe option. The company would raise Rs 9,625 crore at the top end of the price band and Rs 8,750 crore at the lower end. This is less than the Rs 13,500-crore float that had been proposed last year as well as the Rs 10,000 crore figure that was talked about when the company filed its revised draft prospectus earlier this year. However, despite being truncated it will be the largest issue to hit the Indian market.
Read more in The Economic Times article.
Rs 8,750 crore and Rs 9,625 crore. The issue opens on June 11 and closes on June 14. DLF is issuing 17.5 crore shares of Rs 2 each, through 100% book-building route. The issue will involve an equity dilution of 10.27%. We want to keep the price investor-friendly,” said a senior company executive.
While re-filling its draft prospectus in January this year the company decided not to exercise the greenshoe option. The company would raise Rs 9,625 crore at the top end of the price band and Rs 8,750 crore at the lower end. This is less than the Rs 13,500-crore float that had been proposed last year as well as the Rs 10,000 crore figure that was talked about when the company filed its revised draft prospectus earlier this year. However, despite being truncated it will be the largest issue to hit the Indian market.
Read more in The Economic Times article.
Another CRR hike looms
The Reserve Bank of India (RBI), which has already raised the cash reserve ratio (CRR) thrice since December last year, is contemplating another hike, though only on incremental deposits this time.
There is a buzz in the market that the decision can come tomorrow. Sources in the banking system, confirming that a hike was definitely an option, said the decision could come tomorrow or later.
CRR is the percentage of deposits that banks are required to keep with the RBI.
THE COST OF INFLATION CONTROL
Date
Action
March 30, 2007 CRR hiked by 50 bps to 6.5%; Repo rate
hiked by 25 bps to 7.75%
Feb 14, 2007 CRR hiked by 50 bps to 6%
Jan 31, 2007 Repo rate hiked by 25 bps to 7.5%
Jan 31, 2007 General provisioning on standard
commercial real estate loans, personal
loans & capital market loans doubled to 2%
Dec 11, 2006 CRR hiked by 50 bps to 5.5%
Oct 31, 2006 Repo rate raised by 25 bps to 7.25%
July 25, 2006 Reverse repo and repo rates hiked 25 bps
each to 6% and 7% respectively
June 8, 2006 RBI raises reverse repo and repo rates by
25 bps to 5.75% and 6.75%, respectively
According to the sources, banks may have to maintain an increased CRR on additional deposits garnered since April 1. Bank deposits have increased by Rs 11,218 crore to Rs 26,86,813 crore since April 1.
Deposits taken earlier will attract only the existing rate of 6.5 per cent.
Read more in The Business Standard article.
There is a buzz in the market that the decision can come tomorrow. Sources in the banking system, confirming that a hike was definitely an option, said the decision could come tomorrow or later.
CRR is the percentage of deposits that banks are required to keep with the RBI.
THE COST OF INFLATION CONTROL
Date
Action
March 30, 2007 CRR hiked by 50 bps to 6.5%; Repo rate
hiked by 25 bps to 7.75%
Feb 14, 2007 CRR hiked by 50 bps to 6%
Jan 31, 2007 Repo rate hiked by 25 bps to 7.5%
Jan 31, 2007 General provisioning on standard
commercial real estate loans, personal
loans & capital market loans doubled to 2%
Dec 11, 2006 CRR hiked by 50 bps to 5.5%
Oct 31, 2006 Repo rate raised by 25 bps to 7.25%
July 25, 2006 Reverse repo and repo rates hiked 25 bps
each to 6% and 7% respectively
June 8, 2006 RBI raises reverse repo and repo rates by
25 bps to 5.75% and 6.75%, respectively
According to the sources, banks may have to maintain an increased CRR on additional deposits garnered since April 1. Bank deposits have increased by Rs 11,218 crore to Rs 26,86,813 crore since April 1.
Deposits taken earlier will attract only the existing rate of 6.5 per cent.
Read more in The Business Standard article.
Citi to exit, captive BPO units no longer attractive
The captive outsourcing story is turning sour .. or so it appears with the latest market buzz that Citigroup is on its way to pull out of its local business process outsourcing (BPO) unit Citigroup Global Services (formerly eServe).
While Citigroup continues to maintain that "the bank's policy is not to respond to market speculation," industry sources say "it makes logical sense for Citigroup to exit the business since it's not core to its operations".
The BPO currently has close to 8,000 people spread over two centres in Mumbai and Chennai. Some of the names floating to acquire the business include IBM, Automatic Data Processing (ADS), Infosys, EDS, Genpact, Capgemini and private equity players like Blackstone and General Atlantic.
When contacted, Genpact denied comment saying that it is in silent period. While IBM and Capgemini, too, maintained the no-comment stance, a senior Capgemini official, on condition of anonymity, said: "We have studied Citi Global services, it seems to be a decent company and has a good set up." The official, however, was concerned about the valuation of the Citi's BPO arm, which market rumours pegged at $1-1.2 billion.
Read more in The Business Standard article.
While Citigroup continues to maintain that "the bank's policy is not to respond to market speculation," industry sources say "it makes logical sense for Citigroup to exit the business since it's not core to its operations".
The BPO currently has close to 8,000 people spread over two centres in Mumbai and Chennai. Some of the names floating to acquire the business include IBM, Automatic Data Processing (ADS), Infosys, EDS, Genpact, Capgemini and private equity players like Blackstone and General Atlantic.
When contacted, Genpact denied comment saying that it is in silent period. While IBM and Capgemini, too, maintained the no-comment stance, a senior Capgemini official, on condition of anonymity, said: "We have studied Citi Global services, it seems to be a decent company and has a good set up." The official, however, was concerned about the valuation of the Citi's BPO arm, which market rumours pegged at $1-1.2 billion.
Read more in The Business Standard article.
Tata Tea to sell 30% Glaceau stake for $1.2bn
Soft drink giant Coca-Cola today announced it will acquire US energy drink maker Glaceau, in which the Tata Group has a 30% stake, for $4.1 billion.
Tata Tea had acquired 30% stake in Glaceau last year for $677 million, and has decided to sell its stake for $1.2 billion. Tata Tea stock zoomed 4% today to Rs 914.
Tata Tea, in a release issued to the BSE today, said the company through its indirect UK subsidiary Tata Tea (GB) Investments had acquired 25% of the shareholding of Energy Brands Inc, USA ("EBI") and Tate Sons through its subsidiary Tata Ltd (UK) had acquired 5% of the shareholding of EBI. The aggregate consideration for the purchase of this 30% holding was $677 million based on an enterprise valuation of $2.2 billion for EBI.
Coca-Cola Company will acquire Energy Brands Inc, also known as Glacéau, and its full range of enhanced water brands including vitaminwater. The acquisition provides The Coca-Cola Company with a strong platform to grow its active lifestyle beverages.
Read more in The Business Standard article.
Tata Tea had acquired 30% stake in Glaceau last year for $677 million, and has decided to sell its stake for $1.2 billion. Tata Tea stock zoomed 4% today to Rs 914.
Tata Tea, in a release issued to the BSE today, said the company through its indirect UK subsidiary Tata Tea (GB) Investments had acquired 25% of the shareholding of Energy Brands Inc, USA ("EBI") and Tate Sons through its subsidiary Tata Ltd (UK) had acquired 5% of the shareholding of EBI. The aggregate consideration for the purchase of this 30% holding was $677 million based on an enterprise valuation of $2.2 billion for EBI.
Coca-Cola Company will acquire Energy Brands Inc, also known as Glacéau, and its full range of enhanced water brands including vitaminwater. The acquisition provides The Coca-Cola Company with a strong platform to grow its active lifestyle beverages.
Read more in The Business Standard article.
Thursday, May 24, 2007
IFC aims over $500mn investment in India
With India emerging as one of the most preferred investment destinations globally, World Bank's private equity arm, International Finance Corporation, aims to cross $500 million mark in new investments by June.
During the fiscal, IFC invested over Rs 91.71 crore in a subsidiary of Moser Baer, a manufacturer of optical storage device, and infused about Rs 82 crore for assisting Kanoria Chemicals in its expansion plan.
It has also picked up 11.48 per cent stake in Granules India for around Rs 26 crore and has committed a $50 million loan to Orissa-based cement manufacturer OCL India Ltd.
IFC would also invest over Rs 101.37 crore to help expansion of the production capacity of electronic bikes marker Electrotherm India in Gujarat.
Read more in The DNA Money article.
During the fiscal, IFC invested over Rs 91.71 crore in a subsidiary of Moser Baer, a manufacturer of optical storage device, and infused about Rs 82 crore for assisting Kanoria Chemicals in its expansion plan.
It has also picked up 11.48 per cent stake in Granules India for around Rs 26 crore and has committed a $50 million loan to Orissa-based cement manufacturer OCL India Ltd.
IFC would also invest over Rs 101.37 crore to help expansion of the production capacity of electronic bikes marker Electrotherm India in Gujarat.
Read more in The DNA Money article.
NSE ranks as third-fastest growing bourse in the world
India's National Stock Exchange has emerged as the world's third fastest-growing bourse in terms of increase in listed companies, outpacing global names such as NYSE, Nasdaq and London Stock Exchange.
While NSE recorded a 15 per cent jump in the number of listed firms to 1,244 during the one-year period ended April 2007, Bombay Stock Exchange has consolidated its position as home to the maximum number of listed companies in the world.
NSE's 15 per cent growth is next only to 23.3 per cent growth at Poland's Warsaw Stock Exchange and 15.4 per cent for Malta Stock Exchange, data compiled by the World Federation of Exchanges (WFE) show.
The Mumbai-based bourse has added 160 companies to its listed universe from a total of 1,082 at the end of April 2006. Out of these, more than 60 companies have joined the bourse this year itself.
Read more in The DNA Money article.
The bourse has seen a whopping ten-fold surge in number of listed companies in nearly 13 years from about 100 firms in 1994-95, after it was recognized as a stock exchange under the Securities Contracts (Regulation) Act in April 1993.
While NSE recorded a 15 per cent jump in the number of listed firms to 1,244 during the one-year period ended April 2007, Bombay Stock Exchange has consolidated its position as home to the maximum number of listed companies in the world.
NSE's 15 per cent growth is next only to 23.3 per cent growth at Poland's Warsaw Stock Exchange and 15.4 per cent for Malta Stock Exchange, data compiled by the World Federation of Exchanges (WFE) show.
The Mumbai-based bourse has added 160 companies to its listed universe from a total of 1,082 at the end of April 2006. Out of these, more than 60 companies have joined the bourse this year itself.
Read more in The DNA Money article.
The bourse has seen a whopping ten-fold surge in number of listed companies in nearly 13 years from about 100 firms in 1994-95, after it was recognized as a stock exchange under the Securities Contracts (Regulation) Act in April 1993.
Temasek, Singapore investment arm get nod to buy ICICI stake
The Reserve Bank of India (RBI) will allow Temasek and Government of Singapore Investment Corporation (GIC) to acquire 10% equity each in the country’s largest private sector lender ICICI Bank as a “one-off case”.
The regulator has taken a stand that this cannot be “quoted as a precedence” for the Singapore government’s investment arms and any other foreign investor to pick up stakes in other private sector banks, sources told ET. Even though the government has been in favour of allowing the Singapore entities to hold higher stakes in ICICI Bank, RBI had earlier said that Temasek and other investors associated with the Singapore government, like GIC and Monetary Authority of Singapore, were all ‘related entities’ and could together hold a maximum 10% stake.
The tussle between RBI and the Singapore government owes its origin to the Comprehensive Economic Co-operation Agreement between India and Singapore. The agreement says “...for investments into India’s capital markets, India shall regard GIC, Temasek and their investment vehicles as independent and unrelated legal entities, for the purpose of application of the Sebi legislation, including rules, regulations and guidelines governing investment limits on Foreign Institutional Investors...” Further, Annex 7 of the treaty says, “Each legal entity shall be allowed to purchase up to 10% or the prevailing threshold under these regulations, whichever is higher, of the issued capital of any company.” The Singapore investment arms were keen to participate in ICICI Bank’s issue in December ‘05. RBI had refused to make any exception for Temasek in the ownership guidelines for private banks, and had barred from further raising stake in the private bank.
Read more in The Economic Times article.
The regulator has taken a stand that this cannot be “quoted as a precedence” for the Singapore government’s investment arms and any other foreign investor to pick up stakes in other private sector banks, sources told ET. Even though the government has been in favour of allowing the Singapore entities to hold higher stakes in ICICI Bank, RBI had earlier said that Temasek and other investors associated with the Singapore government, like GIC and Monetary Authority of Singapore, were all ‘related entities’ and could together hold a maximum 10% stake.
The tussle between RBI and the Singapore government owes its origin to the Comprehensive Economic Co-operation Agreement between India and Singapore. The agreement says “...for investments into India’s capital markets, India shall regard GIC, Temasek and their investment vehicles as independent and unrelated legal entities, for the purpose of application of the Sebi legislation, including rules, regulations and guidelines governing investment limits on Foreign Institutional Investors...” Further, Annex 7 of the treaty says, “Each legal entity shall be allowed to purchase up to 10% or the prevailing threshold under these regulations, whichever is higher, of the issued capital of any company.” The Singapore investment arms were keen to participate in ICICI Bank’s issue in December ‘05. RBI had refused to make any exception for Temasek in the ownership guidelines for private banks, and had barred from further raising stake in the private bank.
Read more in The Economic Times article.
Alembic in talks for acquiring domestic ophthalmic company
Alembic Ltd, the maker of the cough preparation Glycodin which acquired part of Dabur’s pharmaceuticals business earlier this year is now eyeing a domestic maker of ophthalmic products as part of its inorganic growth strategy. “We plan to enter the ophthalmic segment through an acquisition in this space and we are in discussions to buy a company. The size of the deal could be about Rs100 crore,” said Chirayu R. Amin, chairman and managing director of Alembic. He declined to divulge further details.
Alembic ended 2006-07 with Rs700 crore in net sales.The company said its target would have expertise in manufacturing ophthalmic products. “We can build on these technologies to grow our presence in the ophthalmic segment, both in the domestic market as well as in the international markets,” said Pradeep Rane, president-formulations business, Alembic.
Ophthalmics is a niche segment and unlike other categories in the domestic pharmaceutical market which are crowded, few companies such as Allergan India Pvt. Ltd and Cipla Ltd have a significant presence in it.The domestic ophthalmology market is currently valued at around Rs400 crore and is growing at over 15%.
Read more in The Live Mint article.
Alembic ended 2006-07 with Rs700 crore in net sales.The company said its target would have expertise in manufacturing ophthalmic products. “We can build on these technologies to grow our presence in the ophthalmic segment, both in the domestic market as well as in the international markets,” said Pradeep Rane, president-formulations business, Alembic.
Ophthalmics is a niche segment and unlike other categories in the domestic pharmaceutical market which are crowded, few companies such as Allergan India Pvt. Ltd and Cipla Ltd have a significant presence in it.The domestic ophthalmology market is currently valued at around Rs400 crore and is growing at over 15%.
Read more in The Live Mint article.
Mutual fund Lotus India sees assets grow to $2 bn
Lotus India Asset Management, a Mumbai-based mutual fund group, expects funds under management to nearly treble to $2 billion (Rs8,112 crore) in the next 10 months as it targets Indian retail investors, an executive said on Thursday.
Lotus is a joint venture between Fullerton Fund Management, a unit of Singapore’s state investor Temasek Holdings, and London-based Sabre Capital Worldwide, which was founded by former Standard Chartered chief executive Rana Talwar.The group has launched seven mutual funds, raising $700 million, since November 2006 and plans to launch 10 to 12 more funds.
Indian mutual funds had total assets of Rs3.5 trillion ($86 billion) in April, up 36% from a year earlier, according to data from the Association of Mutual Funds in India.
Bagga, who previously worked at Citibank and GE Capital in India, said growth was likely to come from retail investors, thanks to higher savings, and from the pension industry as the government opens up the sector to fund managers.
Read more in The Live Mint article.
Lotus is a joint venture between Fullerton Fund Management, a unit of Singapore’s state investor Temasek Holdings, and London-based Sabre Capital Worldwide, which was founded by former Standard Chartered chief executive Rana Talwar.The group has launched seven mutual funds, raising $700 million, since November 2006 and plans to launch 10 to 12 more funds.
Indian mutual funds had total assets of Rs3.5 trillion ($86 billion) in April, up 36% from a year earlier, according to data from the Association of Mutual Funds in India.
Bagga, who previously worked at Citibank and GE Capital in India, said growth was likely to come from retail investors, thanks to higher savings, and from the pension industry as the government opens up the sector to fund managers.
Read more in The Live Mint article.
US investment banker eyes Indian m-caps
US-based investment banker RSM EquiCo, the third largest investment banker in the middle-sized mergers and acquisitions (M&As) space, is visiting India to scout for similar opportunities.
It struck its first deal in the Indian mergers and acquisitions space nearly two months back when the domestic machine tool company, Batliboi acquired Canadian Quickmill for Rs 22 crore.
“The middle-sized companies in India have an excellent opportunity to expand, by acquiring businesses outside. What I observe is, they have a great appetite for growth and we are offering them an opportunity to partner similar-sized global firms,” Hector J Ceullar, president, RSM EquiCo Capital Markets said.
The investment banker is bullish on the energy, healthcare and financial services sectors and is meeting nearly 15-20 companies with investment proposals.
Last year, M&A deals worth $20 billion took place in the country. Acquisitions worth $5 billion were purely domestic while the remaining $15 billion were cross-over deals, of which $10 billion was outbound.
Read more in The Business Standard article.
It struck its first deal in the Indian mergers and acquisitions space nearly two months back when the domestic machine tool company, Batliboi acquired Canadian Quickmill for Rs 22 crore.
“The middle-sized companies in India have an excellent opportunity to expand, by acquiring businesses outside. What I observe is, they have a great appetite for growth and we are offering them an opportunity to partner similar-sized global firms,” Hector J Ceullar, president, RSM EquiCo Capital Markets said.
The investment banker is bullish on the energy, healthcare and financial services sectors and is meeting nearly 15-20 companies with investment proposals.
Last year, M&A deals worth $20 billion took place in the country. Acquisitions worth $5 billion were purely domestic while the remaining $15 billion were cross-over deals, of which $10 billion was outbound.
Read more in The Business Standard article.
London firms keen on CSE revival
The financial services companies in the UK are keen on participating in the revival of the Calcutta Stock Exchange (CSE), the Lord Mayor of London A J Stuttard said.
The involvement of the companies can only be possible with regulatory permissions and a strong “political will” on the part of the local government. The revival of the exchange is essential to develop the region as a financial services centre, the Lord Mayor said.
London has proved itself as a financial services centre by setting up a separate Finance Services Authority, independent of government control, to develop the city in line with modern requirements.
The city houses the London Stock Exchange (LSE), London Metal Exchange (LME), the Euronext derivatives platform and Baltic Exchange apart from being a base for large financial services companies. According to established data, 3,500 trillion pounds are managed from UK.
Read more in The Business Standard article.
The involvement of the companies can only be possible with regulatory permissions and a strong “political will” on the part of the local government. The revival of the exchange is essential to develop the region as a financial services centre, the Lord Mayor said.
London has proved itself as a financial services centre by setting up a separate Finance Services Authority, independent of government control, to develop the city in line with modern requirements.
The city houses the London Stock Exchange (LSE), London Metal Exchange (LME), the Euronext derivatives platform and Baltic Exchange apart from being a base for large financial services companies. According to established data, 3,500 trillion pounds are managed from UK.
Read more in The Business Standard article.
GoM against listing of PSU non-life insurers
The group of ministers, deliberating on the draft amendments to insurance acts, are not in favour of allowing the four public sector non-life insurance firms to list on the bourses.
The draft amendments, prepared by the finance ministry, had proposed to amend the General Insurance Business Nationalisation Act to allow the four general insurers to raise equity capital from the market.
The finance ministry was considering to allow listing of the general insurance companies so that they have access to capital to meet solvency margins and also fund business expansion, including overseas.
However, Chaturvedi said for FY07, National Insurance, which was in the red, has shown improvement and the insurers have adequate reserves for expanding overseas operations.
The draft amendments, prepared by the finance ministry, had proposed to amend the General Insurance Business Nationalisation Act to allow the four general insurers to raise equity capital from the market.
The finance ministry was considering to allow listing of the general insurance companies so that they have access to capital to meet solvency margins and also fund business expansion, including overseas.
However, Chaturvedi said for FY07, National Insurance, which was in the red, has shown improvement and the insurers have adequate reserves for expanding overseas operations.
Raheja`s, Star to sell 15% in Hathway
The Raheja’s and Star TV are together selling 15 per cent in cable network operator Hathway Cable to private equity firm ChrysCapital. The sale consideration is estimated at around $60 million (around Rs 245 crore), thus valuing the closely-held company at $400 million (around Rs 1,640 crore).
ChrysCapital is buying around 11 per cent from the Raheja’s and another 4 per cent from Star TV, which holds a 26 per cent stake in the company. Star TV had invested $75 million for the stake.
Following ChrysCapital’s entry, Raheja’s stake will be reduced to about 63 per cent, while Star TV’s stake will come down to 22 per cent.Hathway Cable has operations in 13 cities. The other large players in the business are Hindujas’ Incable Net and the Essel group’s Wire and Wireless India Ltd.
Read more in The Business Standard article.
ChrysCapital is buying around 11 per cent from the Raheja’s and another 4 per cent from Star TV, which holds a 26 per cent stake in the company. Star TV had invested $75 million for the stake.
Following ChrysCapital’s entry, Raheja’s stake will be reduced to about 63 per cent, while Star TV’s stake will come down to 22 per cent.Hathway Cable has operations in 13 cities. The other large players in the business are Hindujas’ Incable Net and the Essel group’s Wire and Wireless India Ltd.
Read more in The Business Standard article.
Curbs likely on VC funds for realty
The government is reviewing norms for investments by foreign venture capital funds in real estate, after the Reserve Bank of India coming round to the view that such funding is helping create an asset bubble in the sector.
There is a view in the government that such funding in the sector should be stopped completely, sources close to the development said.
Venture capital funds do not invest directly in real estate projects. Instead, they put their money in private equity firms, which, in turn, invest in the sector. A total of 35 private equity funds are reported to have invested in the Indian real estate sector and another 10 are said to be poised to do so. Many of them have kitties swollen with money from VCs.
The government had recently clamped down on the use of external commercial borrowing by real estate companies in order to check capital inflow, which, it feels, is fuelling inflation in the country.
With stock market sentiments too turning against the sector, real estate developers were looking at private equity funds as their last hope. But that source too could suffer if the proposed clampdown on venture capital funds takes place.
Read more in The Business Standard article.
There is a view in the government that such funding in the sector should be stopped completely, sources close to the development said.
Venture capital funds do not invest directly in real estate projects. Instead, they put their money in private equity firms, which, in turn, invest in the sector. A total of 35 private equity funds are reported to have invested in the Indian real estate sector and another 10 are said to be poised to do so. Many of them have kitties swollen with money from VCs.
The government had recently clamped down on the use of external commercial borrowing by real estate companies in order to check capital inflow, which, it feels, is fuelling inflation in the country.
With stock market sentiments too turning against the sector, real estate developers were looking at private equity funds as their last hope. But that source too could suffer if the proposed clampdown on venture capital funds takes place.
Read more in The Business Standard article.
Capgemini sets up financial services unit in Pune
Capgemini, a technology and outsourcing services company, today announced the formation of its financial services strategic business unit (FS SBU) in Pune.Evolving from the recent acquisition of Kanbay International Inc, the unit is a significant contribution to Capgemini's expanding footprints in India.
Salil Parekh, executive chairman, Capgemini India, said the new unit will increase the company's global network of financial services professionals to 14,000 employees.
As part of the growth plan for the FS SBU, Capgemini will increase its investment in training and development of the professionals, a company release said here.
It has revamped its training and development centre in Pune. The centre has a 152,000 sq foot state-of-the-art training facility located within the FS SBU campus at Talwade near Pune.
Salil Parekh, executive chairman, Capgemini India, said the new unit will increase the company's global network of financial services professionals to 14,000 employees.
As part of the growth plan for the FS SBU, Capgemini will increase its investment in training and development of the professionals, a company release said here.
It has revamped its training and development centre in Pune. The centre has a 152,000 sq foot state-of-the-art training facility located within the FS SBU campus at Talwade near Pune.
PNs through FII sub-accounts under lens
Market manipulators are still at it, or so it seems. Despite the regulatory efforts to discourage participatory notes (PNs), there has been a sudden surge in PN issuance during the last couple of months by the 'proprietary sub-accounts' of foreign portfolio investors.
The trend has fuelled concerns over the possible use of the sub-account route by certain operators to escape the regulatory glare. The share of PNs as a percentage of total foreign portfolio flows rose from 32% late last year to 42% at the end of March 07, according to data maintained by the regulators.
The rise in issuance of PNs during this period has been attributed mainly to the issuance of such instruments by proprietary sub-accounts. Participatory notes are like a derivative instrument issued against an underlying security (in this case, shares).
These are issued by foreign portfolio investors (FIIs) registered here to overseas clients who may not be eligible to invest in the markets here. The holder of PNs will be able to gain from the capital appreciation of the underlying shares.
Read more in The Economic Times article.
The trend has fuelled concerns over the possible use of the sub-account route by certain operators to escape the regulatory glare. The share of PNs as a percentage of total foreign portfolio flows rose from 32% late last year to 42% at the end of March 07, according to data maintained by the regulators.
The rise in issuance of PNs during this period has been attributed mainly to the issuance of such instruments by proprietary sub-accounts. Participatory notes are like a derivative instrument issued against an underlying security (in this case, shares).
These are issued by foreign portfolio investors (FIIs) registered here to overseas clients who may not be eligible to invest in the markets here. The holder of PNs will be able to gain from the capital appreciation of the underlying shares.
Read more in The Economic Times article.
IBM, ADP, Genpact, Infy in race for Citi’s BPO biz
The first round of bids for Citi’s business process outsourcing operations — Citigroup Global Services (formerly known as e-Serve) — is likely to be completed this week. A host of global IT companies and also private equity firms are said to be in the initial race. However, Citi is likely to look at selling part of its operations only to a strategic partner, given the sensitivities involved in the deal.
According to sources, IBM, Automatic Data Processing (ADP), Genpact, Infosys and private equity firms such as Blackstone and General Atlantic are in the race for Citi’s BPO business.
Citi is likely to follow the Genpact model, where it is likely to sell off over 50% stake in the BPO firm. It is, however, likely to retain a part of the stake in the firm so that they can not only get the benefits in case of a future listing but would also handhold the firm. According to sources, one of the main reasons that the group is looking at bringing in a strategic partner is to bring down the overall costs and not monetising the stake.
Read more in The Economic Times article.
According to sources, IBM, Automatic Data Processing (ADP), Genpact, Infosys and private equity firms such as Blackstone and General Atlantic are in the race for Citi’s BPO business.
Citi is likely to follow the Genpact model, where it is likely to sell off over 50% stake in the BPO firm. It is, however, likely to retain a part of the stake in the firm so that they can not only get the benefits in case of a future listing but would also handhold the firm. According to sources, one of the main reasons that the group is looking at bringing in a strategic partner is to bring down the overall costs and not monetising the stake.
Read more in The Economic Times article.
Hilton Metal lists at Rs 75 on BSE
Hilton Metal Forging on Thursday got listed at Rs 75 on the Bombay Stock Exchange (BSE), a premium of 7.14 per cent over its issue price of Rs 70.Within minutes of listing, the scrip touched a high of Rs 80 and over 27 lakh shares were traded on the BSE. Hilton Metal was trading at Rs 73.95 at 10.12 am on BSE.
On the National Stock Exchange (NSE), the scrip of the company got listed at Rs 73.10, with a premium of 4.42 per cent over its issue price.The shares later gained further strength and touched a high of Rs 77.80 and over 21.69 lakh shares exchanged hands on the bourse. The scrip was trading at Rs 74 at 10.12 am on NSE.
The company entered the bourses with around 1.25 crore equity shares at an issue price of Rs 70 each.The proceeds of the issue would be used for expansion of its existing capacity by setting up new facility and to meet the working capital requirements.The company is a leading manufacturer and exporter of forged components for oil, petrochemical, pharmaceutical and automobile industries.
On the National Stock Exchange (NSE), the scrip of the company got listed at Rs 73.10, with a premium of 4.42 per cent over its issue price.The shares later gained further strength and touched a high of Rs 77.80 and over 21.69 lakh shares exchanged hands on the bourse. The scrip was trading at Rs 74 at 10.12 am on NSE.
The company entered the bourses with around 1.25 crore equity shares at an issue price of Rs 70 each.The proceeds of the issue would be used for expansion of its existing capacity by setting up new facility and to meet the working capital requirements.The company is a leading manufacturer and exporter of forged components for oil, petrochemical, pharmaceutical and automobile industries.
Accentia bags 2 mn dlr order from US
Accentia Technologies on Thursday said it has bagged a two-million-dollar (over Rs 80 crore) order for its health care BPO solutions from a leading hospital in the US.
The company, however, did not disclose details of the client.
"The improvement that the company did for their (the client's) existing Healthdox model, has started giving results and we are confident of getting more orders for the improvised new product from US-based hospitals," Accentia's Director and CEO Pradeep Suseela Viswambharan said.
The 'Real Time Health Care BPO Solutions', developed by the company, is an extension to its popular offshore methodology branded as Healthdox, Accentia informed the Bombay Stock Exchange (BSE).Accentia acquired Bangalore-based Asscent Infoserve Pvt Ltd in March this year with a view to have access to a 600-seater BPO facility located at Bangalore.The shares of the company were last trading 0.11 per cent down at Rs 87.75 on the BSE.
The company, however, did not disclose details of the client.
"The improvement that the company did for their (the client's) existing Healthdox model, has started giving results and we are confident of getting more orders for the improvised new product from US-based hospitals," Accentia's Director and CEO Pradeep Suseela Viswambharan said.
The 'Real Time Health Care BPO Solutions', developed by the company, is an extension to its popular offshore methodology branded as Healthdox, Accentia informed the Bombay Stock Exchange (BSE).Accentia acquired Bangalore-based Asscent Infoserve Pvt Ltd in March this year with a view to have access to a 600-seater BPO facility located at Bangalore.The shares of the company were last trading 0.11 per cent down at Rs 87.75 on the BSE.
Wednesday, May 23, 2007
Anil ‘tells’ market mavens RIL gas ‘huge’
Last week, the single-largest individual investor in Reliance Industries, Anil Ambani, met with the Who’s Who of Dalal Street, including bulge-bracket names such as Rakesh Jhunjhunwala, Nimish Shah, Ramesh Damani, Raamdeo Agarwal and Radhakrishan Damani.
The chairman of Reliance ADAG Group had parted ways with elder brother Mukesh on “ownership issues” that eventually saw the Reliance empire being split vertically.
So it came as a surprise to the 25-odd stockmarket stalwarts present that Anil had chosen to speak like a staunch votary of RIL - even discounting his stake in the company - because of the public way the brothers had shed bad blood before reaching Splitsville.
Anil is said to have told the Dalal St experts that RIL holds far more gas than what has been already certified of 80 million cubic meters per day.
Read more in DNA Money article.
The chairman of Reliance ADAG Group had parted ways with elder brother Mukesh on “ownership issues” that eventually saw the Reliance empire being split vertically.
So it came as a surprise to the 25-odd stockmarket stalwarts present that Anil had chosen to speak like a staunch votary of RIL - even discounting his stake in the company - because of the public way the brothers had shed bad blood before reaching Splitsville.
Anil is said to have told the Dalal St experts that RIL holds far more gas than what has been already certified of 80 million cubic meters per day.
Read more in DNA Money article.
MRTPC issues notices to ICICI, Citibank, HSBC
Monopolies and Restrictive Trade Practice Commission on Tuesday issued enquiry notices to leading private lenders ICICI Bank, Citibank and HSBC on complaints regarding violation of norms in their credit cards business.
An MRTPC Bench comprising Justice O P Dwivedi and M M K Sardana issued the Notice of Enquiry (NOE) and directed the banks to file their replies in four weeks.
The notices followed the report of the Director General of Investigations and Registrations (DGIR), the investigative arm of the Commission, which had recommended action against these banks for making false promised to customers and violating RBI guidelines.
However, when contacted, an HSBC spokesperson said: "We have not yet received any notice from MRTPC. If we do, we will certainly examine it and respond to their query."
The spokesperson said the bank was conscious of the need to maintain transparency in business dealings and endeavours to offer the highest levels of customer service possible.
Read more in DNA Money article.
An MRTPC Bench comprising Justice O P Dwivedi and M M K Sardana issued the Notice of Enquiry (NOE) and directed the banks to file their replies in four weeks.
The notices followed the report of the Director General of Investigations and Registrations (DGIR), the investigative arm of the Commission, which had recommended action against these banks for making false promised to customers and violating RBI guidelines.
However, when contacted, an HSBC spokesperson said: "We have not yet received any notice from MRTPC. If we do, we will certainly examine it and respond to their query."
The spokesperson said the bank was conscious of the need to maintain transparency in business dealings and endeavours to offer the highest levels of customer service possible.
Read more in DNA Money article.
Citi to invite bids for BPO arm stake
Citigroup has opened talks with prospective bidders, including IBM Corp. for selling a strategic stake in its Mumbai-based captive business process outsourcing (BPO) arm Citigroup Global Services Ltd, earlier e-Serve International.
While additional details of the stake sale plans weren’t available, based on current annual revenue estimates ranging from $300 million to $400 million (Rs1,230 crore to Rs1,640 crore), industry sources estimate the unit could be valued at over $1 billion.
Citigroup India chief executive officer Sanjay Nayar declined to comment on the development, saying the bank’s policy is not to respond to market speculation, but people familiar with the development and who didn't want their names used said, “Citi has started feeling the market for a strategic stake sale. The process has started and it may take a while before concluding the deal.”
In March 2004, IBM took over Bharti’s information technology operations in return for assured revenues of up to $750 million over a 10-year period. “There could be a similar arrangement whereby IBM would run Citi’s BPO operations for a fee. In addtion to that, it could pick up a strategic stake (in Citigroup Global Services),” this person said.
Read more in The Livemint article.
While additional details of the stake sale plans weren’t available, based on current annual revenue estimates ranging from $300 million to $400 million (Rs1,230 crore to Rs1,640 crore), industry sources estimate the unit could be valued at over $1 billion.
Citigroup India chief executive officer Sanjay Nayar declined to comment on the development, saying the bank’s policy is not to respond to market speculation, but people familiar with the development and who didn't want their names used said, “Citi has started feeling the market for a strategic stake sale. The process has started and it may take a while before concluding the deal.”
In March 2004, IBM took over Bharti’s information technology operations in return for assured revenues of up to $750 million over a 10-year period. “There could be a similar arrangement whereby IBM would run Citi’s BPO operations for a fee. In addtion to that, it could pick up a strategic stake (in Citigroup Global Services),” this person said.
Read more in The Livemint article.
Tata Power gives 10% as pref issues
Indian power utility Tata Power Company Ltd. plans to issue more than 20 million shares and warrants, amounting nearly 10 per cent of its equity, on a preferential basis to its largest shareholder, Tata Sons Ltd.
The issue price of the shares and warrants would be set later, the company said in a statement to the stock exchange late on Tuesday. Shareholders would have to approve the issue plan.Tata Sons, the holding firm of the Tata Group, holds 28.74 per cent in Tata Power as of March 31, stock exchange data showed.
Tata Power's shares closed at Rs 610.65 on Tuesday.
The issue price of the shares and warrants would be set later, the company said in a statement to the stock exchange late on Tuesday. Shareholders would have to approve the issue plan.Tata Sons, the holding firm of the Tata Group, holds 28.74 per cent in Tata Power as of March 31, stock exchange data showed.
Tata Power's shares closed at Rs 610.65 on Tuesday.
Dubai Ventures buys 5% in Bharat Hotels
Dubai Ventures, the private equity arm of Dubai Investment Group, has picked up 5% stake in Delhi-based Bharat Hotels for Rs 160 crore. The deal values the company at Rs 3,200 crore. Post-deal, the promoters’ stake— the Suri family and associates — will come down to 92%.
The hospitality chain plans to raise up to Rs 1,000 crore through internal accruals, debt and private equity placements to fund its expansion programme. The expansion involves six properties under construction, while talks are on for setting up luxury hotels in Hyderabad, Amritsar, Chennai, Pune and Gulmarg.
The group had recently announced its international foray through a JV with Dubai-based Nakheel Group. Its Dubai property, The Grand Fort Dubai, is set to open in 2009. The group’s Kolkata property, the 165-year-old The Grand Great Eastern, is currently under renovation.
Read more in The Economic Times article.
The hospitality chain plans to raise up to Rs 1,000 crore through internal accruals, debt and private equity placements to fund its expansion programme. The expansion involves six properties under construction, while talks are on for setting up luxury hotels in Hyderabad, Amritsar, Chennai, Pune and Gulmarg.
The group had recently announced its international foray through a JV with Dubai-based Nakheel Group. Its Dubai property, The Grand Fort Dubai, is set to open in 2009. The group’s Kolkata property, the 165-year-old The Grand Great Eastern, is currently under renovation.
Read more in The Economic Times article.
Central Bank plans to raise $197 mn IPO
State-run commercial lender Central Bank of India has filed papers with the regulator for an initial public offering to sell 20 percent, which bankers said could raise about Rs 80 crore ($197 million).
The bank said in its offer document it planned to sell 80 million shares, or a fifth of its post-issue capital.
"We are aiming for about 8 billion rupees," said a banker associated with the issue, adding it may open for subscription in July. Another banker also gave a similar figure.
The bank's net profit jumped 93 percent to Rs 49.8 crore in the fiscal year ended March, boosted by lower provisioning for bad loans, it said in the offer document.
ICICI Securities, Citigroup, Enam Financial, IDBI Capital and Kotak Mahindra are arrangers to the issue.
The bank said in its offer document it planned to sell 80 million shares, or a fifth of its post-issue capital.
"We are aiming for about 8 billion rupees," said a banker associated with the issue, adding it may open for subscription in July. Another banker also gave a similar figure.
The bank's net profit jumped 93 percent to Rs 49.8 crore in the fiscal year ended March, boosted by lower provisioning for bad loans, it said in the offer document.
ICICI Securities, Citigroup, Enam Financial, IDBI Capital and Kotak Mahindra are arrangers to the issue.
Reliance group m-cap crosses $74 bn
Total market capitalisation of the four Mukesh Ambani-controlled Reliance group companies - Reliance Industries, Reliance Petroleum, IPCL and Reliance Industrial Infrastructure — on Tuesday crossed $74 billion at $74.22 billion (Rs 3,01,341 crore) and is Rs 3,159.30 crore away from the $75 billion mark.
Two group companies, Reliance Industries (Rs 1,780) and IPCL (Rs 353.50), on Tuesday closed at their all-time highs on the Bombay Stock Exchange.
Reliance Industries, the group flagship, accounted for Rs 2,47,470 crore market capitalisation, Reliance Petroleum (Rs 42,570 crore), IPCL (Rs 10,582 crore) and Reliance Industrial Infrastructure (Rs 719 crore).
Since beginning of calendar 2007, the total market capitalisation of the group companies appreciated 40 per cent (Rs 86,459 crore) from Rs 2,14,882 crore on January 1, 2007.
Two group companies, Reliance Industries (Rs 1,780) and IPCL (Rs 353.50), on Tuesday closed at their all-time highs on the Bombay Stock Exchange.
Reliance Industries, the group flagship, accounted for Rs 2,47,470 crore market capitalisation, Reliance Petroleum (Rs 42,570 crore), IPCL (Rs 10,582 crore) and Reliance Industrial Infrastructure (Rs 719 crore).
Since beginning of calendar 2007, the total market capitalisation of the group companies appreciated 40 per cent (Rs 86,459 crore) from Rs 2,14,882 crore on January 1, 2007.
FDI status for FIIs in real estate pre-IPOs
The government proposes to treat the investments by foreign institutional investors in pre initial public offers (IPOs) of real estate companies at par with foreign direct investment (FDI).
The FII investments in the pre-IPO allotment of real estate companies will have a lock-in period of three years, in line with the FDI norms. This means the investments cannot be withdrawn before three years. The lock-in period of three years is currently applicable to FDI in real estate.The changes will be notified by the Securities Exchange Board of India through changes in its regulations for the foreign institutional investors.
The overseas funds were seen to be contributing to an asset bubble in the real estate space, by pushing the prices up. The government recently clamped down on the use of external commercial borrowings for the real estate sector for integrated townships.
The review of the pre-IPO allotments in real estate follows the concerns expressed by the Reserve Bank of India a year back on foreign inflows into the sector. The concerns were further heightened by fears of inflation being impacted by foreign inflows.
Read more in The Business Standard article.
The FII investments in the pre-IPO allotment of real estate companies will have a lock-in period of three years, in line with the FDI norms. This means the investments cannot be withdrawn before three years. The lock-in period of three years is currently applicable to FDI in real estate.The changes will be notified by the Securities Exchange Board of India through changes in its regulations for the foreign institutional investors.
The overseas funds were seen to be contributing to an asset bubble in the real estate space, by pushing the prices up. The government recently clamped down on the use of external commercial borrowings for the real estate sector for integrated townships.
The review of the pre-IPO allotments in real estate follows the concerns expressed by the Reserve Bank of India a year back on foreign inflows into the sector. The concerns were further heightened by fears of inflation being impacted by foreign inflows.
Read more in The Business Standard article.
IPOs to break all records in June
Come June, the domestic primary market may witness the highest ever capital mobilisation.
Although the exact size and date of the initial public offering (IPO) of DLF and the follow-on issue of ICICI Bank are yet to be announced, marketmen expect these offers will compete head to head for investors’ fund of over Rs 24,000 crore next month.
Real estate major DLF, which took four months to receive market regulator Sebi’s clearance for its public issue, is expected to hit the market by the end of June with an over Rs 13,000 crore issue.However, marketmen expect that the public issue could be of around Rs 11,000 crore, and the remaining part might be raised from private equity investors.
The country’s second largest bank, ICICI Bank, has sought approval from Sebi to sell Rs 17,500 crore of shares to local and overseas investors. The bank has set a target of launching the issue in June. The offer may be raised to Rs 20,100 crore depending on demand, the sale document said.
The two issues are expected to inject buoyancy into the primary market which saw the last big issue in December when Cairn raised Rs 5,261 crore.
Read more in The Business Standard article.
Although the exact size and date of the initial public offering (IPO) of DLF and the follow-on issue of ICICI Bank are yet to be announced, marketmen expect these offers will compete head to head for investors’ fund of over Rs 24,000 crore next month.
Real estate major DLF, which took four months to receive market regulator Sebi’s clearance for its public issue, is expected to hit the market by the end of June with an over Rs 13,000 crore issue.However, marketmen expect that the public issue could be of around Rs 11,000 crore, and the remaining part might be raised from private equity investors.
The country’s second largest bank, ICICI Bank, has sought approval from Sebi to sell Rs 17,500 crore of shares to local and overseas investors. The bank has set a target of launching the issue in June. The offer may be raised to Rs 20,100 crore depending on demand, the sale document said.
The two issues are expected to inject buoyancy into the primary market which saw the last big issue in December when Cairn raised Rs 5,261 crore.
Read more in The Business Standard article.
Air India-Indian combine may hit market next year
The government on Tuesday said the merged national carrier, Air India, would wear a new look and logo. The merged company would go in for an initial public offer in 2008.
Giving details on how the merged entity between Air India and Indian would look, civil aviation minister Praful Patel said the brand, Air India, has been retained for its global and national recognition. “It will use the Maharaja as its mascot and a combined logo of the two merged airlines,” he said. The logo of the new airline is a combination of the flying swan from Air India and the ‘Konark chakra’ from Indian’s logo.
The design components of the new logo and livery have been drawn after merging some of the current features of both Air India and Indian. Mr Patel said the merged entity would start combined operations from July. The new company, National Aviation Company, would have its registered office in Delhi, while its corporate office would be located in Mumbai.
The merged airline would have a fleet size of over 100 aircraft. The minister said the new entity would add 25 new aircraft over next year, starting July this year. The new planes would have in-flight services comparable to international airlines, with the latest entertainment systems on board.
Read more in The Economic Times article.
Giving details on how the merged entity between Air India and Indian would look, civil aviation minister Praful Patel said the brand, Air India, has been retained for its global and national recognition. “It will use the Maharaja as its mascot and a combined logo of the two merged airlines,” he said. The logo of the new airline is a combination of the flying swan from Air India and the ‘Konark chakra’ from Indian’s logo.
The design components of the new logo and livery have been drawn after merging some of the current features of both Air India and Indian. Mr Patel said the merged entity would start combined operations from July. The new company, National Aviation Company, would have its registered office in Delhi, while its corporate office would be located in Mumbai.
The merged airline would have a fleet size of over 100 aircraft. The minister said the new entity would add 25 new aircraft over next year, starting July this year. The new planes would have in-flight services comparable to international airlines, with the latest entertainment systems on board.
Read more in The Economic Times article.
Tuesday, May 22, 2007
Viacom, TV18 to roll-out Viacom-18 -Video
Viacom Inc, US and the TV18 Group today announced the creation of a new 50:50 joint venture operation christened Viacom-18.
According to an official release issued by TV18 Group firm Network 18 Fincap to the BSE today, the strategic alliance will include television, film and digital media content across brands to build a multi-platform entertainment company.
As part of the agreement, Viacom-18 will launch a new Hindi-language general entertainment cable and satellite channel in the country within the next year. It will include original, locally produced programming and acquisitions. MTV Networks (MTVN), a unit of Viacom, will contribute its local networks, MTV, Vh1 and Nickelodeon India, to the joint venture. Viacom-18 will also launch a further suite of targeted channels in the future from the MTV Networks portfolio, as well as new brands, Digital media content across all the television brands will be developed and distributed to Indian consumers. The joint venture will also syndicate MTVN programming and newly produced content.
Read more in The Business Standard article.
According to an official release issued by TV18 Group firm Network 18 Fincap to the BSE today, the strategic alliance will include television, film and digital media content across brands to build a multi-platform entertainment company.
As part of the agreement, Viacom-18 will launch a new Hindi-language general entertainment cable and satellite channel in the country within the next year. It will include original, locally produced programming and acquisitions. MTV Networks (MTVN), a unit of Viacom, will contribute its local networks, MTV, Vh1 and Nickelodeon India, to the joint venture. Viacom-18 will also launch a further suite of targeted channels in the future from the MTV Networks portfolio, as well as new brands, Digital media content across all the television brands will be developed and distributed to Indian consumers. The joint venture will also syndicate MTVN programming and newly produced content.
Read more in The Business Standard article.
Monday, May 21, 2007
Nifty hits new highs; more room for upside say experts
The market had an extremely good session inline with its global markets. Nifty created history by closing on anew high. All the Asian indices closed in green. Rally was seen on the back of broad based buying interest.
Except for IT and auto stocks all the BSE sector indices closed in green. Energy, metal, banking, media and FMCG stocks were among the major gainers. Broader markets also participated in the uptrend giving markets an extremely positive breadth and even the turnover was high.
On the results front, SAIL came out with numbers above street expectations pulling other steel stocks higher.
Energy stocks from Reliance stable, Reliance Energy and Reliance were among the top gainers.
The Metal & oil and gas indices have led to this new high and the BSE metal index is up 9% from the February 8 highs. It has; in fact, recovered 29% from the March 16 lows. The BSE oil and gas index is up by 10.5% from the February highs and it has recovered by 24% from the March lows. Moreover, the banking index has recovered by 22.5% from its March lows.
RIL, in the oil and gas sector, is up 17% from the February highs. RPL gas recovered 36% from the March lows. IPCL recovered by 26% from the low.
Though there have been some sectors like the auto, IT and cement stocks that have not performed, the Asian markets' positive sentiment seems to have encougared the Nifty as well.
Read more in
The Moneycontrol article.
Except for IT and auto stocks all the BSE sector indices closed in green. Energy, metal, banking, media and FMCG stocks were among the major gainers. Broader markets also participated in the uptrend giving markets an extremely positive breadth and even the turnover was high.
On the results front, SAIL came out with numbers above street expectations pulling other steel stocks higher.
Energy stocks from Reliance stable, Reliance Energy and Reliance were among the top gainers.
The Metal & oil and gas indices have led to this new high and the BSE metal index is up 9% from the February 8 highs. It has; in fact, recovered 29% from the March 16 lows. The BSE oil and gas index is up by 10.5% from the February highs and it has recovered by 24% from the March lows. Moreover, the banking index has recovered by 22.5% from its March lows.
RIL, in the oil and gas sector, is up 17% from the February highs. RPL gas recovered 36% from the March lows. IPCL recovered by 26% from the low.
Though there have been some sectors like the auto, IT and cement stocks that have not performed, the Asian markets' positive sentiment seems to have encougared the Nifty as well.
Read more in
The Moneycontrol article.
Reliance Cap offloads stake in Reliance Energy
Anil Ambani Group firm Reliance Capital on Monday sold its entire stake in another group company Reliance Energy to other promoters in a block deal on the bourses, booking profits of about Rs 350 crore.
Reliance Capital, the financial services arm of ADAG, sold over 1.3 crore shares, representing 5.79 per cent stake in Reliance Energy, market sources said.
REL shares were trading at Rs 549 in afternoon trade at the BSE, up 7.4 per cent from the previous close of Rs 511.30.
Shares of RCL were trading nearly four per cent higher at Rs 941, after hitting a life-time high of Rs 946.40 earlier in the day.At the current price, the deal size amounts to about Rs 725 crore. Sources close to RCL also confirmed the deal.
Besides Reliance Capital, the other promoters of Reliance Energy include AAA Project Ventures, Reliance Innoventures, Hansdhwani Trading Company and members of Ambani family.
The promoter holding in ADAG's power utility venture stands at about 35 per cent or 7.87 crore shares.
Reliance Capital, the financial services arm of ADAG, sold over 1.3 crore shares, representing 5.79 per cent stake in Reliance Energy, market sources said.
REL shares were trading at Rs 549 in afternoon trade at the BSE, up 7.4 per cent from the previous close of Rs 511.30.
Shares of RCL were trading nearly four per cent higher at Rs 941, after hitting a life-time high of Rs 946.40 earlier in the day.At the current price, the deal size amounts to about Rs 725 crore. Sources close to RCL also confirmed the deal.
Besides Reliance Capital, the other promoters of Reliance Energy include AAA Project Ventures, Reliance Innoventures, Hansdhwani Trading Company and members of Ambani family.
The promoter holding in ADAG's power utility venture stands at about 35 per cent or 7.87 crore shares.
Tatas in talks for stake in Visteon
Tata AutoComp Systems (Taco) and French auto parts maker Valeo are believed to be in preliminary stages of discussions to acquire a stake in NYSE-listed ailing automotive supplier Visteon Corporation.
Sources close to the development said the acquisition of a stake in Visteon, which was spun off from Ford Motor Company in 2000, would cost $1.5-2 billion.
For Taco, a 12-year-old company that is an original equipment supplier to major domestic and multinational car-makers, the acquisition has a strategic fit with its operations. The company has appointed a merchant banker and is awaiting clearance from Visteon to start due diligence.
Valeo is also exploring all options, including a leveraged buyout of Visteon.
Read more in The Business Standard article.
Sources close to the development said the acquisition of a stake in Visteon, which was spun off from Ford Motor Company in 2000, would cost $1.5-2 billion.
For Taco, a 12-year-old company that is an original equipment supplier to major domestic and multinational car-makers, the acquisition has a strategic fit with its operations. The company has appointed a merchant banker and is awaiting clearance from Visteon to start due diligence.
Valeo is also exploring all options, including a leveraged buyout of Visteon.
Read more in The Business Standard article.
Infosys to invest Rs 306 cr in T`puram facility
Infosys Technologies has firmed up plans to invest Rs 306 crore for setting up its first campus in Thiruvananthapuram.
Speaking on the occasion, K Dinesh, co-founder and member of the Infosys board, said the new campus would create 8,000 seats over the next couple of years.
The existing facility at the Technopark campus in Thiruvananthapuram has a capacity of 1,100 seats and has seen an investment of Rs 30 crore, as of March 31, 2007. Infosys has also leased 40,000 sft of space in the Thejaswini Block at Technopark for expansion.
According to Achuthanandan, Infosys Technologies' expansion in the state reaffirms the fact that Kerala is emerging as a key IT destination in the south.
N Radhakrishnan Nair, CEO, Technopark, said: "The initiative marks the take off of Technopark to the trajectory, considering the infrastructure problems and the social tensions in traditional tier-I infotech locations. We will see a number of big league IT and ITeS companies expanding to Technopark and Kerala to benefit from the manpower resources."
Speaking on the occasion, K Dinesh, co-founder and member of the Infosys board, said the new campus would create 8,000 seats over the next couple of years.
The existing facility at the Technopark campus in Thiruvananthapuram has a capacity of 1,100 seats and has seen an investment of Rs 30 crore, as of March 31, 2007. Infosys has also leased 40,000 sft of space in the Thejaswini Block at Technopark for expansion.
According to Achuthanandan, Infosys Technologies' expansion in the state reaffirms the fact that Kerala is emerging as a key IT destination in the south.
N Radhakrishnan Nair, CEO, Technopark, said: "The initiative marks the take off of Technopark to the trajectory, considering the infrastructure problems and the social tensions in traditional tier-I infotech locations. We will see a number of big league IT and ITeS companies expanding to Technopark and Kerala to benefit from the manpower resources."
Banks, FIs' overseas M&A funding jumps three-fold
Indian corporate houses have stepped up the tempo for overseas mergers and acquisitions (M&As) in 2006-07. Keeping pace with the momentum, Indian banks, with extensive global branch network, have raised the volume of funding to Indian entities for M&As.
In 2006-07, the overseas M&A funding by state-owned banks and financial institutions - State Bank of India, Bank of Baroda (BOB) , Bank of India (BOI) and Export and Import Bank of India (Exim) -- was close to $2 billion, almost a three-fold increase over the previous financial year. Private sector major ICICI Bank bags the top slot. However, bank officials refused to divulge the numbers. SBI's direct funding was close to $1 billion, BOI ($450 million), BOB ($370 million) and Exim Bank (over $400 million).
The size of funding by Indian banks is small compared with their their global counterparts due to the small balance sheet size.ICICI Bank's deputy managing director Chanda Kochhar said her bank assistance stands on three strands - advisory, structuring the finance for M&A deal and underwriting and syndication of funds.In a particular deal ICICI takes about 25 per cent funding exposure on its book and the balance 75 per cent is syndicated, she said.
Read more in The Business Standard article.
In 2006-07, the overseas M&A funding by state-owned banks and financial institutions - State Bank of India, Bank of Baroda (BOB) , Bank of India (BOI) and Export and Import Bank of India (Exim) -- was close to $2 billion, almost a three-fold increase over the previous financial year. Private sector major ICICI Bank bags the top slot. However, bank officials refused to divulge the numbers. SBI's direct funding was close to $1 billion, BOI ($450 million), BOB ($370 million) and Exim Bank (over $400 million).
The size of funding by Indian banks is small compared with their their global counterparts due to the small balance sheet size.ICICI Bank's deputy managing director Chanda Kochhar said her bank assistance stands on three strands - advisory, structuring the finance for M&A deal and underwriting and syndication of funds.In a particular deal ICICI takes about 25 per cent funding exposure on its book and the balance 75 per cent is syndicated, she said.
Read more in The Business Standard article.
Acerinox, Nisshin Steel plan India JV
Acerinox SA, the world’s second-biggest stainless steelmaker, is studying building a plant in India with Japan’s Nisshin Steel Co to tap rising demand from makers of automobiles and houses.
The company was considering stainless steel demand and energy issues as part of the study into establishing a joint venture in India, Acerinox Chairman and Chief Executive Victoriano Munoz Cava said in an interview yesterday in Kyoto.
Acerinox is looking into India, the world’s fastest-growing major economy after China, because overall steel demand is forecast by the government to double by 2012. Nisshin Steel, which offered technology to Acerinox when the European company was founded in 1970, holds an 11 per cent stake in the Madrid-based company.
Read more in The Business Standard article.
The company was considering stainless steel demand and energy issues as part of the study into establishing a joint venture in India, Acerinox Chairman and Chief Executive Victoriano Munoz Cava said in an interview yesterday in Kyoto.
Acerinox is looking into India, the world’s fastest-growing major economy after China, because overall steel demand is forecast by the government to double by 2012. Nisshin Steel, which offered technology to Acerinox when the European company was founded in 1970, holds an 11 per cent stake in the Madrid-based company.
Read more in The Business Standard article.
Sun Pharma to buy Taro Pharma for $454mn
Sun Pharmaceutical Industries, together with its subsidiaries, has signed definitive agreements to acquire multinational generic manufacturer Taro Pharmaceutical Industries (TAROF, Pink Sheets), in an all-cash deal worth $454 million.
According to an official release issued by the company to the BSE today, it intends to fund the acquisition with internal accruals and proceeds from its earlier $350 million FCCB. This deal values Taro's equity at $230 million, or $7.75 per share which is at a 27% premium to its May 18, 2007 closing price of $6.10.
Sun Pharma will also refinance $224 million in net debt of Taro. In addition, to provide immediate liquidity for Taro, the company will provide interim financing to the extent of $45 million, the release said.
Taro has established subsidiaries, manufacturing and products across USA, Israel, Canada. North America represents more than 90% of its sales. It has a strong franchise in dermatology and topical products, in addition to product baskets in cardiovascular, neuropsychiatric and anti-inflammatory therapeutic categories, the release added.
According to an official release issued by the company to the BSE today, it intends to fund the acquisition with internal accruals and proceeds from its earlier $350 million FCCB. This deal values Taro's equity at $230 million, or $7.75 per share which is at a 27% premium to its May 18, 2007 closing price of $6.10.
Sun Pharma will also refinance $224 million in net debt of Taro. In addition, to provide immediate liquidity for Taro, the company will provide interim financing to the extent of $45 million, the release said.
Taro has established subsidiaries, manufacturing and products across USA, Israel, Canada. North America represents more than 90% of its sales. It has a strong franchise in dermatology and topical products, in addition to product baskets in cardiovascular, neuropsychiatric and anti-inflammatory therapeutic categories, the release added.
TV18, Viacom set for JV
Media conglomerate TV18 group is likely to sign an agreement with US entertainment major Viacom to float a general entertainment joint venture.
The 50:50 venture is likely to be signed tomorrow during the visit of Viacom CEO and President Phillipe P Dauman, who is arriving in India late tonight, industry sources said.The JV is likely to invest about Rs 500 crore and Viacom's popular music channel MTV in India is understood to be transferred to the joint venture, the sources said.
The planned JV between Viacom, which has channels like VH1 and Nickledeon, and TV18, one of India's major electronic media groups running business news channels and a website, comes at a time when television entertainment sector in India is witnessing a churn.
Viacom also owns Country Music Television, Spike TV and more than 120 networks around the world. It is also one of the leading creators of programming and content having media platforms such as Paramount Pictures and Paramount Home Entertainment.
The 50:50 venture is likely to be signed tomorrow during the visit of Viacom CEO and President Phillipe P Dauman, who is arriving in India late tonight, industry sources said.The JV is likely to invest about Rs 500 crore and Viacom's popular music channel MTV in India is understood to be transferred to the joint venture, the sources said.
The planned JV between Viacom, which has channels like VH1 and Nickledeon, and TV18, one of India's major electronic media groups running business news channels and a website, comes at a time when television entertainment sector in India is witnessing a churn.
Viacom also owns Country Music Television, Spike TV and more than 120 networks around the world. It is also one of the leading creators of programming and content having media platforms such as Paramount Pictures and Paramount Home Entertainment.
NTPC to foray into wind power
After ONGC, HPCL and Tata Power, the country's biggest electricity generator NTPC Ltd now plans to foray into wind power with an investment of more than Rs 1,200 crore as it seeks to diversify into renewable energy.
The navratna PSU, which has an installed capacity of more than 26,000 MW entirely on coal or gas, has been looking to diversify into other energy sources and is already working on hydroelectric projects, besides a few small biomass plants.
NTPC's proposed venture comes at a time when a number of energy companies in India and abroad have already forayed into renewables, particularly wind and solar. India is the world's fourth largest wind energy producer with an installed capacity of more than 7,000 MW, only behind Germany, Spain and the US.
Read more in The Economic Times article.
The navratna PSU, which has an installed capacity of more than 26,000 MW entirely on coal or gas, has been looking to diversify into other energy sources and is already working on hydroelectric projects, besides a few small biomass plants.
NTPC's proposed venture comes at a time when a number of energy companies in India and abroad have already forayed into renewables, particularly wind and solar. India is the world's fourth largest wind energy producer with an installed capacity of more than 7,000 MW, only behind Germany, Spain and the US.
Read more in The Economic Times article.
Sunday, May 20, 2007
Petrobras, Petroplus in race for Cairn
Interest from Malaysia’s Petronas in Cairn India and Swiss Petroplus in Cairn India’s parent, Cairn Energy, saw the shares of both the companies gaining on the bourses.
Petronas, which already owns 10 per cent of Cairn India through a pre-IPO placement, was now looking to buy out Cairn Energy’s 69 per cent stake in Cairn India, sources said. The takeover talks pushed Cairn’s share price on the BSE to Rs 144.30 on Friday, up 2.3 per cent on Thursday’s close of Rs 139.85.
This was 4.85 per cent higher than the Wednesday’s close of Rs 134.05. At the current price of Rs 144.30 a share, Cairn Energy’s 69 per cent stake would be worth around Rs 17,700 crore.
Finacial Times report that Swiss refiner Petroplus is planning a bid for Cairn Energy, sent the Cairn Energy stock higher by 3.5 per cent to £17.93 a share on the London Stock Exchange on Friday.
Following the news, Citigroup changed its status on both Cairn Energy and Cairn India to “buy”. The research group revised the price target for the Cairn stock from Rs 145 to Rs 185.
Petronas, which already owns 10 per cent of Cairn India through a pre-IPO placement, was now looking to buy out Cairn Energy’s 69 per cent stake in Cairn India, sources said. The takeover talks pushed Cairn’s share price on the BSE to Rs 144.30 on Friday, up 2.3 per cent on Thursday’s close of Rs 139.85.
This was 4.85 per cent higher than the Wednesday’s close of Rs 134.05. At the current price of Rs 144.30 a share, Cairn Energy’s 69 per cent stake would be worth around Rs 17,700 crore.
Finacial Times report that Swiss refiner Petroplus is planning a bid for Cairn Energy, sent the Cairn Energy stock higher by 3.5 per cent to £17.93 a share on the London Stock Exchange on Friday.
Following the news, Citigroup changed its status on both Cairn Energy and Cairn India to “buy”. The research group revised the price target for the Cairn stock from Rs 145 to Rs 185.
Foreign retail brokerage majors eye stakes in Indian cos
Attracted by the tremendous potential and phenomenal growth achieved by Indian retail brokerage firms in recent times, a clutch of foreign majors are mulling an entry into the market.
Foreign majors such as the Citigroup, Societe Generale (SocGen), BNP Paribas, Standard & Chartered Bank and Australia-based Macquarie Bank are understood to be contemplating picking up equity stakes in Indian retail brokerages as an easy route to enter the market.
A buoyant stockmarket despite the odd hiccup combined with an increasing appetite for equities among investors, tech convenience of online trading and falling brokerage fees have proved to be the major growth drivers of the industry.
The potential of the Indian market was higlighted recently when nearly 19 suitors stepped forward to claim a stake in leading retail brokerage Sharekhan, amongst the top three such firms in the country.
Read more in The Economic Times article.
Foreign majors such as the Citigroup, Societe Generale (SocGen), BNP Paribas, Standard & Chartered Bank and Australia-based Macquarie Bank are understood to be contemplating picking up equity stakes in Indian retail brokerages as an easy route to enter the market.
A buoyant stockmarket despite the odd hiccup combined with an increasing appetite for equities among investors, tech convenience of online trading and falling brokerage fees have proved to be the major growth drivers of the industry.
The potential of the Indian market was higlighted recently when nearly 19 suitors stepped forward to claim a stake in leading retail brokerage Sharekhan, amongst the top three such firms in the country.
Read more in The Economic Times article.
Saturday, May 19, 2007
Patni scrip surges on IBM buyout buzz
The share price of Patni Computer Systems has surged over 8 per cent in the last two days on market buzz that IBM is in talks to acquire around 25 per cent in the company.
With Patni’s market cap at Rs 7,211 crore on close of trading today, the acquisition could cost IBM around Rs 2,000 crore.
Some investors are planning to offload their stake in the company. If IBM buys 25 per cent, it will have to make an open offer for an additional 20 per cent stake as per the Takeover Code of the Securities and Exchange Board of India.
After closing at Rs 476.55 on the Bombay Stock Exchange on Wednesday, the Patni stock rose to Rs 513.90 on Friday.
At present, the company’s Indian promoters — Ashok Kumar Patni and Gajendra Kumar Patni – hold 11.31 per cent in the company, while foreign promoters—Isolutions and Narendra Kumar Patni — hold another 14.77 per cent.Narendra Kumar Patni, who is also the chairman of the company, owns 1.53 per cent of the company, while Isolutions owns 13.24 per cent.
Read more in The Business Standard article.
With Patni’s market cap at Rs 7,211 crore on close of trading today, the acquisition could cost IBM around Rs 2,000 crore.
Some investors are planning to offload their stake in the company. If IBM buys 25 per cent, it will have to make an open offer for an additional 20 per cent stake as per the Takeover Code of the Securities and Exchange Board of India.
After closing at Rs 476.55 on the Bombay Stock Exchange on Wednesday, the Patni stock rose to Rs 513.90 on Friday.
At present, the company’s Indian promoters — Ashok Kumar Patni and Gajendra Kumar Patni – hold 11.31 per cent in the company, while foreign promoters—Isolutions and Narendra Kumar Patni — hold another 14.77 per cent.Narendra Kumar Patni, who is also the chairman of the company, owns 1.53 per cent of the company, while Isolutions owns 13.24 per cent.
Read more in The Business Standard article.
LIC, SBI in race to manage pension funds
Public sector entities Life Insurance Corporation, UTI AMC, State Bank of India and Punjab National Bank are among the front-runners to become pension fund managers under the new pension system.
The direct and indirect foreign investment in pension funds will not exceed 26 per cent. The Pension Fund Regulatory and Development Authority (PFRDA) recently invited expressions of interest for managers. The last date to apply is May 25, 2007.
The selected sponsors will have to incorporate the pension fund as a separate public sector company in which direct and indirect foreign investment will not exceed 26 per cent.PNB is likely to have US-based Principal Financial Group as the foreign partner.
According to official sources, there will be 2-3 fund managers from the public sector as the scheme at the moment is for central and state government employees. Private fund managers are likely to be allowed after the scheme is made available to other citizens of India in due course.
According to the criteria, a sponsor to be eligible for fund manager must have at least five years of experience of fund management and average assets under management of sponsors must not be less than Rs 10,000 crore.
Read more in The Busienss Standard article.
The direct and indirect foreign investment in pension funds will not exceed 26 per cent. The Pension Fund Regulatory and Development Authority (PFRDA) recently invited expressions of interest for managers. The last date to apply is May 25, 2007.
The selected sponsors will have to incorporate the pension fund as a separate public sector company in which direct and indirect foreign investment will not exceed 26 per cent.PNB is likely to have US-based Principal Financial Group as the foreign partner.
According to official sources, there will be 2-3 fund managers from the public sector as the scheme at the moment is for central and state government employees. Private fund managers are likely to be allowed after the scheme is made available to other citizens of India in due course.
According to the criteria, a sponsor to be eligible for fund manager must have at least five years of experience of fund management and average assets under management of sponsors must not be less than Rs 10,000 crore.
Read more in The Busienss Standard article.
ECBs banned for township projects
To contain inflation and manage foreign exchange inflows, the finance ministry today banned the use of external commercial borrowings (ECBs) for a section of the real estate sector.It also made borrowing for such projects less attractive by reducing the upper limits on interest.Although ECBs are not permitted for the real estate sector, such borrowing was allowed for integrated townships of 100 acres or more.
Citing an upgrade to the country’s sovereign credit ratings, the ministry also decided to reduce the all-in-cost ceilings for ECBs.The changes, applicable to ECBs under the automatic as well as approval route, will be effective from the date the RBI notifies the amendments to Foreign Exchange Management Act, 1999.
The implications of this ban are significant for the country’s booming real estate business.
Read more in The Business Standard article.
Citing an upgrade to the country’s sovereign credit ratings, the ministry also decided to reduce the all-in-cost ceilings for ECBs.The changes, applicable to ECBs under the automatic as well as approval route, will be effective from the date the RBI notifies the amendments to Foreign Exchange Management Act, 1999.
The implications of this ban are significant for the country’s booming real estate business.
Read more in The Business Standard article.
Wkly Mkt Review: Sensex gains over 500pts
A spate of positive factors saw the Sensex end the week ended May 18 at a 13-week high of 14,303.41, up a whopping 3.68%, and the Nifty registered its first-ever weekly close above the 4,200-mark.
Good corporate earnings, strong global cues, reports of early onset of monsoon, and the discovery of new gas reserve by Reliance boosted market sentiment, dealers said.
Banking stocks led the rally as SBI announced excellent growth of over 75% in net profit for the fourth quarter, and the Lok Sabha passed the State Bank of India (Subsidiary Bank Laws) Amendment Bill, 2006.
The Sensex moved between a high of 14,352.98 and low of 13,885.46 before ending the week at 14,303.41 - a steep rise of 507.25 points - over the last weekend close of 13,796.16.
The Nifty spurted 137.85 points (3.38%) to end the week at 4,214.50 from the preceding weekend close of 4,076.65.
Good corporate earnings, strong global cues, reports of early onset of monsoon, and the discovery of new gas reserve by Reliance boosted market sentiment, dealers said.
Banking stocks led the rally as SBI announced excellent growth of over 75% in net profit for the fourth quarter, and the Lok Sabha passed the State Bank of India (Subsidiary Bank Laws) Amendment Bill, 2006.
The Sensex moved between a high of 14,352.98 and low of 13,885.46 before ending the week at 14,303.41 - a steep rise of 507.25 points - over the last weekend close of 13,796.16.
The Nifty spurted 137.85 points (3.38%) to end the week at 4,214.50 from the preceding weekend close of 4,076.65.
YOU Telecom acquires IceNet
Citigroup owned broadband service provider YOU Telecom on Saturday said it has acquired Ahmedabad-based digital internet service provider IceNet.
"We are pleased about this development as it will help us consolidate our reach in Ahmedabad, Baroda and Rajkot. IceNet has got a strong presence in these cities, which merges well with YOU's business strategy," YOU Telecom E V S Chakravarthy said in a release.
The acquisition would further help YOU Telecom's ambition of providing next generation broadband applications, it said.
"I am confident that IceNet and YOU Telecom together will take this business to new heights," IceNet CEO and Managing Director Chirag Mehta said in the release.
"We are pleased about this development as it will help us consolidate our reach in Ahmedabad, Baroda and Rajkot. IceNet has got a strong presence in these cities, which merges well with YOU's business strategy," YOU Telecom E V S Chakravarthy said in a release.
The acquisition would further help YOU Telecom's ambition of providing next generation broadband applications, it said.
"I am confident that IceNet and YOU Telecom together will take this business to new heights," IceNet CEO and Managing Director Chirag Mehta said in the release.
Friday, May 18, 2007
BSE demutualised; LIC, SBI, AV Birla group pick up stakes
The Bombay Stock Exchange, Asia’s oldest, on 18 May completed a nearly two-year exercise of corporatising itself by offloading 51% of broker members’ stake to 19 investors including SBI, LIC and Aditya Birla group, besides Deutsche Borse and Singapore Exchange.
The corporatisation or demutualisation process was to have been completed by 19 May as mandated by the Securities and Exchange Board of India under the BSE (Corporatisation and Demutualisation) Scheme, 2005.Before demutualisation, 790 broker-members held 100% in the 131-year-old exchange.
The 19 investors have picked up 41% stake and the remaining 10% was sold to Deutsche Borse and Singapore Exchange (SGX), who picked up 5% each for Rs189 crore at Rs5,200 a share earlier this year.The market capitalisation of the BSE now stands at around $1 billion.
T V Raghunath, executive president, investment banking, Kotak Mahindra Capital Company, which was the exclusive financial advisor to the demutualisation process, said that a total of $500 million was collected through the stake sale.
Read more in The Live Mint article.
The corporatisation or demutualisation process was to have been completed by 19 May as mandated by the Securities and Exchange Board of India under the BSE (Corporatisation and Demutualisation) Scheme, 2005.Before demutualisation, 790 broker-members held 100% in the 131-year-old exchange.
The 19 investors have picked up 41% stake and the remaining 10% was sold to Deutsche Borse and Singapore Exchange (SGX), who picked up 5% each for Rs189 crore at Rs5,200 a share earlier this year.The market capitalisation of the BSE now stands at around $1 billion.
T V Raghunath, executive president, investment banking, Kotak Mahindra Capital Company, which was the exclusive financial advisor to the demutualisation process, said that a total of $500 million was collected through the stake sale.
Read more in The Live Mint article.
Usha Martin plans to buy European distribution co
Usha Martin Ltd, the world’s second-largest maker of wire rope, is close to acquiring a European distribution company which will give it a greater access to more lucrative wire rope market in the continent.
Rajeev Jhawar, managing director, Usha Martin, said the investment in the deal will be small, involving about $2-3 million (Rs8.2-12.3 crore). He declined to give further details.
However, he added that this investment would be an incentive to expand the manufacturing base. The company will be pitching in about $15 million over the next three years to raise the UK plant’s current capacity of 6,000 tonnes per annum (accounting for just 7% of Usha Martin global production) to 10,000 tonnes per annum.
The distribution arm that Usha Martin is looking to acquire, will push the company’s turnover in Europe past the $100 million mark, said P. Bhattacharya, joint managing director, Usha Martin. The various operations of the company in Europe generate a revenue of about $84 million, he added.
The company also plans to enter China, opening a liaison office at Shanghai or Guangzhou to sell its high-end speciality ropes in China. Company officials said they are open to the idea of setting up a production base in China if the market warrants it.
Read more in The Live Mint article.
Rajeev Jhawar, managing director, Usha Martin, said the investment in the deal will be small, involving about $2-3 million (Rs8.2-12.3 crore). He declined to give further details.
However, he added that this investment would be an incentive to expand the manufacturing base. The company will be pitching in about $15 million over the next three years to raise the UK plant’s current capacity of 6,000 tonnes per annum (accounting for just 7% of Usha Martin global production) to 10,000 tonnes per annum.
The distribution arm that Usha Martin is looking to acquire, will push the company’s turnover in Europe past the $100 million mark, said P. Bhattacharya, joint managing director, Usha Martin. The various operations of the company in Europe generate a revenue of about $84 million, he added.
The company also plans to enter China, opening a liaison office at Shanghai or Guangzhou to sell its high-end speciality ropes in China. Company officials said they are open to the idea of setting up a production base in China if the market warrants it.
Read more in The Live Mint article.
ICI India may up buyback proposal to Rs575 a share
The board of paints and chemicals maker ICI India Ltd will meet on 26 May to consider a revised share buyback proposal, as the earlier plan did not attract any shareholder interest.
The company said its board will consider buyback of shares at up to Rs575 a share, compared with its ongoing buyback at up to Rs350 a share. According to the earlier proposal, approved in July 2006, ICI India planned to utilize Rs125 crore of its cash surplus for the buyback, and another Rs20 crore for capacity augmentation and to support sales growth. Since then, the company’s cash reserves have swelled through the sale of its advanced refinish business to Asian PPG Industries for Rs52 crore, and that of its flavour and food ingredients business, Quest India, to the
Givaudan group for nearly Rs390 crore.
The company said its board will consider buyback of shares at up to Rs575 a share, compared with its ongoing buyback at up to Rs350 a share. According to the earlier proposal, approved in July 2006, ICI India planned to utilize Rs125 crore of its cash surplus for the buyback, and another Rs20 crore for capacity augmentation and to support sales growth. Since then, the company’s cash reserves have swelled through the sale of its advanced refinish business to Asian PPG Industries for Rs52 crore, and that of its flavour and food ingredients business, Quest India, to the
Givaudan group for nearly Rs390 crore.
Anil boarding Air Deccan?
On Thursday, the Street was abuzz with a strong rumour that the pioneer of low-cost aviation could be within striking distance of a deal with Reliance’s Anil Dhirubhai Ambani Group (ADAG). Industry sources in the know of Gopinath’s talks with various investors said a final word is still some time away.
Gopinath is in the process of raising $75-100 million for the expansion of his business. He has revealed he could dilute between 15 and 26% stake of his airline to a suitable professional (not strategic) investor.An analyst said the rumour was sparked by Capt Gopinath’s Mumbai visit, from moving on to London.
Meanwhile, analysts are putting one and one together and speculating that Capt Gopinath could well be opening talks with Kingfisher Airline chairman Vijay Mallya, who, on Wednesday, sealed an acquisition deal with Scottish whisky maker Whyte & Mackay.
Industry sources ruled it out saying “It is not in that connection.” Gopinath has publicly spurned Mallya’s interest in his carrier, saying Mallya should mind his own business.
Read more in DNA Money article.
Gopinath is in the process of raising $75-100 million for the expansion of his business. He has revealed he could dilute between 15 and 26% stake of his airline to a suitable professional (not strategic) investor.An analyst said the rumour was sparked by Capt Gopinath’s Mumbai visit, from moving on to London.
Meanwhile, analysts are putting one and one together and speculating that Capt Gopinath could well be opening talks with Kingfisher Airline chairman Vijay Mallya, who, on Wednesday, sealed an acquisition deal with Scottish whisky maker Whyte & Mackay.
Industry sources ruled it out saying “It is not in that connection.” Gopinath has publicly spurned Mallya’s interest in his carrier, saying Mallya should mind his own business.
Read more in DNA Money article.
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