US institutions plan to sell off assets in India

Large institutions such as AIG, Morgan Stanley, Wachovia and others are planning to liquidate some of the Indian assets in which they had invested their proprietary capital.Investment banking sources and PE funds have confirmed that a number of such deals have been available in the market for the last few weeks.Some of these institutions are highly leveraged and their mortgage related assets in the US are getting marked down. There is a need to liquidate some of the assets they bought with their proprietary capital to get cash and strengthen their balance sheet.

Most of these large institutions have been investing in real estate in India through both managed and proprietary capital. Wachovia does not have a fund and has been investing from its proprietary books for the last two years, though at the moment they are looking at investing selectively from their proprietary books in India.Market sources though confirm that there are a few of Wachovia's real estate deals that are being looked at closely. Interestingly, Merrill Lynch had merged its proprietary book with its third-party fund early this year so they are safe on that front after the recent events. DSP Merrill Lynch has made proprietary investments of $500 million in the real estate segment.

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.

Ess Dee plans to buy Alcan arm

Ess Dee Aluminium, whose promoter Sudip Datta once depended on Alcan for the bulk of his income, has joined the race to acquire the packaging business of the Montreal-based giant which was recently taken over by Rio Tinto. The Mumbai-headquartered Ess Dee is the second domestic contender, the other being Essel Propack.

Bankers in the know of the development said there was a third contender as well — Australia’s Amcore. Rio Tinto, the new promoter of Alcan, has already begun talks with the three companies, they said, adding that the deal size is expected to be around $1 billion (Rs 4,000 crore), or 1.2 times the turnover of the target.

Rio Tinto, which recently acquired Alcan for $38 billion, decided to pull out of the packaging business as it does not fit into Alcan’s core area of operations and has been looking for a buyer for the past two months. Alcan makes packaging material for food and beverages, medical and pharmaceuticals as well as cosmetics and tobacco industries.

For Ess Dee, the successful acquisition of the packaging business of Alcan will give it presence in 13 countries —something which, otherwise, will take at least 10 years. Ess Dee posted net profit of Rs 37 crore and net sales of Rs 141 crore last year.It is learnt that DSP Merrill Lynch and Enam are advising Ess Dee on the acquisition.

Read more in The Business Standard article.

India Infoline to dilute 40% in retail finance firm

India Infoline, one of the leading retail brokerage houses, is venturing into the consumer finance business in a big way.The company is looking for private equity funding or a strategic partner for its new venture, India Infoline Finance Holding (IIFH). The newly formed holding company for retail financing business will be valued at Rs 800-1000 crore.

India Infoline will infuse around Rs 200 crore into IIFH directly, and around $100 million would be raised either through private equity or stake dilution to the extent of 30-40 per cent.

Sources close to the development said that negotiations are in an advanced stages with prospective investors. The company is banking on a huge network of 540 branches across the country and a ready retail clientele.

Indiainfoline has called off its partnership with DSP Merrill Lynch, which was holding equity in India Infoline. Senior employees of Citi Financial Group, who had joined DSP are now with India Infoline.

Read more in The Business Standard article.

Omaxe seeks Rs 600 crore in IPO

Real-estate developer Omaxe Ltd plans to raise as much as Rs 600 crore ($148 million) selling shares for the first time to finance land acquisition and repay loans.

The company will sell 17.8 million new shares of Rs 10 face value at Rs 265 to Rs 310 apiece, starting July 17. The price will be decided based on demand from investors after the sale ends on July 20, the New Delhi-based company said in a statement on Thursday.

Omaxe founder Guild Builder Pvt may offer an additional 1.75 million shares on demand, taking the total offer to 19.5 million shares, the company said. The company has reserved 296,520 shares for employees.

Omaxe hired DSP Merrill Lynch Ltd, Citigroup Global Markets India Pvt, UBS Securities India Pvt, JM Financial Consultants Pvt and ICICI Securities Ltd to arrange the sale.
If all 19.5 million shares are sold, they will account for 11.2 per cent of the company's fully diluted, post-issue capital, Omaxe said.

Read more in The Economic Times article.

Inst investors lap up DLF offering within an hour

Property developer DLF Ltd. said the institutional portion of its $2.4 billion initial public offering, the country's biggest, had been fully subscribed within an hour of its opening on Monday.

Banking sources told media the offer had received bids to cover about 40 per cent of the issue within 45 minutes of the offer opening.

The offering of 175 million shares at an indicated price band of 500-550 rupees ($12.20-$13.40) each has an institutional allotment of 104.4 million shares.The offer runs until Thursday.

DLF is selling 10.27 per cent of its enlarged capital. If the sale is priced at the upper end of an indicative range, the firm would be valued at around $23 billion, ahead of State Bank of India and ICICI Bank and rival Unitech Ltd., which is worth around $11 billion.

The IPO was shelved in May last year after the stock market dropped sharply and amid disputes with minority shareholders. At the time, New Delhi-based DLF hoped to raise over $3 billion.

The IPO is lead managed by Kotak Mahindra and DSP Merrill Lynch. Other managers are UBS, Citigroup, Lehman Brothers, Deutsche Bank, ICICI Securities, and SBI Capital Markets.

India Infoline scraps credit arm sale

India Infoline which signed an agreement last year with DSP Merill Lynch to sell its shareholding in subsidiary Moneyline Credit Pvt Ltd (formerly Khambhat Investment & Trading Company Private Limited), has called off the deal citing prolonged delays in completing the transaction.

According to a regulatory filings with Bombay Stock Exchange, India Infoline said "owing to prolonged delays in finalisation of the transaction and changed business plans, the MoU was mutually terminated with immediate effect".

Earlier this year, the New York-based Merill Lynch had hiked its stake in India Infoline to 14.10 per cent and had also initiated talks for acquiring a significant stake in India Infoline Distribution Company, the distribution arm of India Infoline for over Rs 150 crore.

Shares of India Infoline ended higher by 0.56 per cent at Rs 436.10 on BSE, compared to Friday's close of Rs 433.65.

Lintas to sell 51% stake to Interpublic

The shareholders of India have agreed to sell their 51% stake in the agency to their international partners the Interpublic Group.The shares were held by 12 Lintas Employees Welfare Trusts. Confirming the development, Prem Mehta, chairman and managing director, Lintas India said, " There is a proposal from IPG to acquire the shares held by the Indian shareholders in Lintas India Private Limited.

However, the deal is not yet complete. There is an application awaiting approval at FIPB." There were according to Mehta no brokers for the deal — Ambit Corporate Finance advised IPG while the Indian shareholders were advised by DSP Merrill Lynch.

While Mr Mehta declined to comment on the value of the deal, it is estimated by industry sources to be between $80-$100 million.