M&M arm buys assets of AGS Hotels

Mahindra Holidays and Resorts, part of the $4.5 billion Mahindra & Mahindra Group has expanded its footprints further, with the acquisition of assets of AGS Hotels in Tamil Nadu's most popular tourist destination - Ooty.

According to sources, Mahindras has signed the deal for around Rs 30 crore for the 100 room resort, in the heart of Udhagamandalam (popularly called Ooty), overlooking the race course. AGS Hotels, a subsidiary of erstwhile SSI Ltd, purchased this property from the Dasaprakash Group.In subsequent transactions, PVP Ventures, acquired SSI Ltd and consequently AGS Hotels came under its belt.

NTPC approaches govt to raise ECBs worth $25 bn

State-run power company NTPC has approached the government for free access to external capital markets for raising debt of around Rs 1.05 lakh crore (about 25 billion dollar) in order to become a 50,000 MW company by 2012.The ECB would include Rs 60,300 crore in foreign currency and Rs 45,200 crore in rupee term.


Countries largest power producer NTPC wants to raise money in foreign as well as domestic currency without any ceiling.In the present scenario, the companies can raise up to 500 million dollar per annum through ECBs under the automatic route for import of equipments. Apart from this an additional 250 million dollar can be raised for the said purpose with the approval of RBI.

NTPC is pursuing this matter with the power minister to achieve its ultimate objective of becoming a 50,000 MW company by 2012 and a 75,000 MW company by 2017.For achieving these targets, the company is required to invest around Rs 1.6 lakh crore during the XI plan period.The debt requirement is around Rs 1. 05 lakh crore with 70:30 debt equity ratio

Imperial Energy has choosen OVL over Sinopec

UK-listed Imperial Energy today said it has chosen ONGC Videsh Ltd over Chinese competitor Sinopec to discuss a possible sale to the Indian company and an announcement is likely shortly. OVL, through its wholly owned subsidiary Jarpeno Ltd, has made a 12.50 pounds per share takeover offer.

OVL, the overseas investment arm of state-run Oil and Natural Gas Corp (ONGC), had made a takeover offer last month and earlier this month China Petroleum and Chemical Corp (Sinopec) made a counter offer.Imperial, a relatively small British oil and gas company based in Leeds in UK, has oil producing blocks in Tomsk region of western Siberia in Russia and Kastanai in north-central Kazakhstan.It produced about 10,000 barrels of oil per day in December 2007 and is targeting to raise this amount to 80,000 barrels per day (4 million tons a year) by year-end 2011.

Read more in The Economic Times article.

PEs zeroing in on distressed firms

Private equity(PE) firms who have been largely focused on providing growth capital in India are now eyeing distressed firms, which has been a domain of the Asset Reconstruction Companies (ARCs). While some of the PE players such as Vision Global, Eight Capital and ClearWater have specialised funds, which are targeting distressed assets, other PE firms are also looking to invest in such companies during these troubled times.

Vision Global, which recently entered India, is looking to invest out of it $200-million Asian fund. Independent estimates peg the total value of the country’s distressed assets at around $60 billion.

While fund managers say there is still lot of opportunity to invest in growing companies besides distressed firms, the slowdown in the Indian economy coupled with stock market crash early this year has already affected PE deal activity in the country. There has been a decline of more than 50% in the value of PE deals in India with only 46 PE deals worth $1.8 billion so far this year as compared to $6.9 billion in the corresponding period last year.

Read more in The Economic Times article.

Shemaroo looking to raise Rs 100 cr through pvt equity route

Entertainment major, Shemaroo Entertainment, is in talks with private equity players to raise Rs 100 crore for fuelling its expansion programme, a top company official said.Shemaroo hopes to seal transactions within the next six months.The company is mulling over diluting a portion of its equity to raise funds from private equity players.

Shemaroo, an integrated film production, post-production, distribution and animation player, would utilise the funds raised to enhance and strengthen its existing verticals.Shemaroo also plans to expand its films acquisition and distribution rights business.

SEBI to fine 7 i-bankers

The regulator’s Market Intermediaries Regulation and Supervision Department (MIRSD) has uncovered serious shortcomings in the due diligence process for initial public and rights offerings, besides open offers, carried out by seven investment bankers — Kotak, Enam, DSP Merrill Lynch, SBI Caps, HSBC, Keynote and Aryaman Financial.

According to sources,the arbitration proceedings against Enam and Kotak pertain to YES Bank and IDFC IPOs dating back to 2006. A SEBI probe had revealed a scam involving manipulation of retail category in these IPOs. DSP Merrill Lynch was also rapped by SEBI for the YES Bank IPO as the regulator’s inspection showed that the details of the promoters as mentioned in the IPO document were different from the one filed with the Reserve Bank of India.


Read mor4e in
The Economic Times article.

SBI rejects rumours of JV with SG

State Bank of India (India) today rejectd rumours of its proposed joint venture with French financial services major Societe Generale. The bank said it has not received any official communication from the regulators.

SBI had entered into an agreement with Societe Generale Securities Services (SGSS), a division of Societe Generale Group in June this year to provide a range of security services like reporting, corporate actions, dividends collection and distribution, tax reclaim services amongst others.Following the signing of the pact, SBI is presently waiting for the Reserve Bank of India approval while Societe Generale's proposal is pending with the Foreign Investment promotion Board (FIPB).

Chaturvedi Panel for sharp increase in oil prices

The high-level Chaturvedi Committee has recommended raising petrol prices by Rs 2.50 a litre per month till March 2009 and diesel prices by Rs 0.75 per litre till 2010 to eliminate subsidies on the two fuels.The three-member panel, headed by Planning Commission member B K Chaturvedi also suggested levying a 'Metro Extra' tax of Rs 2 per litre on diesel, in four installments in large cities where the fuel was being used in expensive cars.

Besides suggesting freeing auto fuel pricing from government control, the commitee also recommended changes in distribution of domestic LPG by restricting only six refills per connection a year.The Committee also suggested slashing import duty on petrol and diesel to zero (from 2.5 per cent) as has been done in the case of crude oil, domestic kerosene and LPG.

Read more in The Economic Times article.

BSNL IPO hits roadblock!

The much awaited $10 billion BSNL IPO has hit a road block before even taking-off. Communications minister A Raja's offer to give all the 3 lakh employees 500 shares at Rs 10 each has been rejected by the Union. This would have fetched each employee a minimum of Rs 1.5-2 lakh at the time of BSNL’s listing on the bourses.

If the share were to list somewhere between Rs300-400, it would give BSNL valuation of $37-45 billion which is way lower than $100 billion what the company has been claiming since January.According to analysts, the $37-45 billion valuation is a fair one. BSNL has about 81 million subscribers, 10 million more than the country’s largest private operator, Bharti Airtel, which is valued just over $38 billion. However, a top BSNL official said that this was only the book value of the company and did not include its asset value.

Read more in The Economic Times article.

VCs may not get to invest in listed cos

The new guidelines, being drafted by the finance ministry and the capital market regulator SEBI, may not allow VCs to invest in listed companies and restrict them only to startups.The guidelines will also seek to remove the differences in the treatment of foreign and domestic VC funds. One of the aspects being reviewed is the minimum capital required for VCs to set up shop in India. Currently, domestic VCs need to have a minimum capital of Rs 5 crore to operate, while foreign VCs don’t have any such requirement.The new guidelines will attempt to provide a level playing field for domestic and foreign funds. The government is studying norms in other countries, where mere commitments to provide capital to a VC fund would be sufficient.

VCs, who are currently exempt from SEBI’s takeover code or lock-in period for shares held would be allowed to enjoy this exemption only if they invested in “genuine new ventures.” The government feels that VCs should provide capital to new ventures and not invest in established listed companies.

On another count, while domestic VCs can get a tax exemption only if they invest in high-risk areas like biotechnology or nanotechnology, foreign VCs escape taxes altogether as they normally operate from offices established abroad. Most foreign VCs do not have to pay any tax, as they have no permanent establishment in India. The differences in tax treatment between domestic and foreign VCs is also under review.

The government is also understood to be looking at redefining the investments that are more risky instead of categorising certain sectors such as biotechnology as risky. The government’s intention is to have a new classification of risky areas of funding irrespective of the sectors.

Govt approves Daiichi-Ranbaxy deal

India has approved Daiichi Sankyo's stake purchase in the country's top drug maker by sales, Ranbaxy Laboratories, the finance ministry said in a statement on Wednesday.

Japan's Daiichi has agreed to buy a 34.8 per cent stake in Ranbaxy and aims to take up to 20 per cent more from the open market in deals worth up to $4.6 billion. The Japanese drug maker will also make an open offer to buy up to 20 per cent of shares in another Indian firm, Zenotech Laboratories, which is 47-per cent owned by Ranbaxy.

Bharat Forge NTPC in a JV

Bharat Forge-NTPC JV called Bharat Forge NTPC Energy Systems which finally has been finalised, is now scouting for a location in Maharashtra, which it expects to finalise in the next couple of months.Bharat Forge and NTPC have a participation of 51:49 in the new venture.

Chairman and MD, Bharat Forge told shareholders at the company’s 47th annual general meeting that should the Indo-US nuclear deal go through, Bharat Forge will be “one of the prime suppliers” for nuclear power plants since forgings comprise 60-70% of a nuclear reactor.

Read more in The Economic Times article.

TPC in race for Singapore power co

Investment arm of Government of Singapore,Temasek Holdings has shortlisted Tata Power (TPC) to bid for the city state’s power generating company, Senoko Power.The successful bidder may need to fork out $3 billion to bag Senoko.Tata Power will have to compete with global giants like Japan’s Marubeni and Mitsubishi, France’s GDF Suez, Malaysia’s YTL Power and the OneEnergy-CLP Holdings combine

The sale of Senoko will involve a two-stage process with interested companies initially submitting a non-binding expression of interest. Later, the shortlisted companies will be allowed to conduct due diligence before making their binding offers.

In the last financial year, Senoko Power generated revenues of $2.5 billion and an operating profit of $245 million. Credit Suisse and Morgan Stanley are advising Temasek on the sale of all the three power generating companies.

Read more in The Economic Times artcile.

Dr. Reddys to increase its stake in the company

Domestic pharma major Dr Reddy's Labs has said that a promoter group firm Dr Reddy's Laboratories Holdings Pvt Ltd has increased its stake in the company to 22.82 per cent through open market purchase.Dr Reddy's Holdings Pvt Ltd acquired 1,95,348 equity shares representing 0.11 per cent stake in the company through open market transactions, Dr Reddy's Labs said in a disclosure to the Bombay Stock Exchange.

The market purchase of shares, for an amount of about Rs 11.36 crore, was conducted through DSP Merrill Lynch.However DSP Merrill Lynch has no stake in Dr Reddy's Holdings Pvt Ltd.

Pursuant to the acquisition, the holding company's stake in Dr Reddy's Labs has increased to 22.82 per cent.At the end of June, Dr Reddy's Holdings held 22.46 per cent stake in the company.

Swaps the way to go!!

Equity swaps seems to be the preffered route for those foreign investors, who prefer to stay away from the regulatory glare, tapping other routes for investment in the local market. In the past few months, these investors, including global hedge funds, have been increasingly using the equity swap — an unregulated over-the-counter (OTC) derivative contract — to take exposure to the Indian market.

Hedge funds have been using this route, especially to gain exposure to India’s futures and options market, where trading through participatory notes have been completely banned since last October.An equity swap is an arrangement where a series of future cash flows are made by two counterparties to each other. The pre-determined set of payments, which is based on a notional principal amount, may be determined by returns on stocks or indices or a fixed or floating rate.

Balaji in talks with investors to buy Star's stake:Report

Television content provider Balaji Telefilms Ltd is in talks with a consortium of investors to buy the 25.99 percent stake held by a unit of Rupert Murdoch's Star group, a newpaper reported on Tuesday.

The stake is owned by Dubai-based Asian Broadcasting FZ-LLC and was bought for 1.23 billion rupees in 2004, the paper said. Balaji will float another joint venture company with these investors to launch a bouquet of regional television channels, the paper said.

While Star was "very close" to ending its relationship with Balaji, the formalities were yet to be completed, the paper cited an unnamed official as saying. On Monday, News Corp chief Rupert Murdoch said the US media conglomerate plans to invest $100 million in six regional language channels in India, where it is a leading broadcaster.

Officials at Balaji Telefilms could not be immediately reached for comment. Murdoch on Monday declined to comment on speculation Star and Balaji were ending their venture.