Govt disinvestment policy halts NTPC follow-on public offer

The Finance Ministry today said the NTPC follow-on public offer has been rejected as under the present disinvestment policy government stake in a navratna company cannot be sold.

Last week, Minister of State for Power Jairam Ramesh had said that there was a proposal by NTPC to approach capital market through an FPO but the Finance Ministry has rejected it.

Notably, the Power Ministry had approached the department of disinvestment in the Finance Ministry in August 2007 for approval of the FPO that could fetch the company nearly Rs 6,000 crore to part finance the expansion programme.

After the FPO, government shareholding in NTPC would have come down to 84.75 per cent from the present level of 89.5 per cent.NTPC, in 2004, had raised Rs 5,386 crore through an initial public offering by way of raising fresh capital and diluting government's stake.

Uco Bank plans Rs 250 cr issue

Public sector Uco Bank is planning a follow-on public offer (FPO) of shares to raise Rs 200-250 crore in the first half of the calendar year 2008 to fund asset expansion.
“The bank also has plans to raise Rs 200 crore in tier-II bonds by March-end 2008,” Uco Bank Chairman and Managing Director S K Goel said today.

Uco Bank has submitted a capital restructuring plan to the government. It has suggested for a conversion of Rs 300 crore worth equity shares into preference shares and the bank expects to get the government’s nod in 45 days. At the moment, the bank has a paid-up capital of Rs 800 crore.

The share sale would dilute the government’s holding to 55 per cent from the present 75 per cent.

Read more in The Business Standard article.

Govt plans to divest NTPC stake; may raise up to Rs 6,000 cr

The government plans to divest 4.75 per cent of its stake in NTPC Ltd, the country's biggest power generation utility, through a public offer that could fetch it nearly Rs 6,000 crore.

Power Ministry, acting on a request from the state-run firm, has approached the Department of Disinvestment in Ministry of Finance for approval of a Follow on Public Offer (FPO) of 4.75 per cent shares, official sources said.

NTPC had a few years back proposed an initial public offering (IPO) of 24 per cent. But in February 2004, the government allowed NTPC to go for an IPO of 10 per cent of its paid-up capital in one or more stages to augment resources.

The company chose to go for an IPO of 5.25 per cent, leaving balance 4.75 per cent of approved IPO for later date. The IPO of 5.25 per cent was tagged with government divesting an equal shareholding. Subsequent to the offer, government shareholding in NTPC fell to 89.5 per cent from 100 per cent.

Sources said NTPC has stated that as a result of low level of free float, turnover of the shares of the company was quite low. Besides, for listing the company in National Stock Exchange's NIFTY and MSCI, it was required to have a free float of at least 12 per cent and 15 per cent respectively.

Syndicate Bank to raise $125 million

Syndicate Bank is firming up plans to raise $125 million in the current fiscal through innovative perpetual bonds to boost its tier-I capital. The Manipal-headquartered bank is expected to get the board approval next month.

This issue, if the global markets cheer up, is expected to run parallel to the bank’s follow-on public issue which is also expected to hit the market by early next year. The bank, through this public offer, is expected to raise capital in the range of Rs 600-Rs 700 crore.

Syndicate Bank’s total assets is at Rs 91,000 crore which is expected to grow by 15 per cent by end of FY08. To maintain this growth momentum, it will have to raise more tier-I capital. Its capital adequacy ratio is currently at 12.62 per cent.

The decision to raise the $125 million comes just months after it recently raised $100 million from Wachovia Bank to fund its expansion plans in the European market. The bank is in the process of expanding its global presence by entering strategic global centres such as Singapore, China and Hong Kong.

At present, the government holds 66.3 per cent stake in Syndicate Bank, foreign institutional investors hold 13.3 per cent, 3.47 per cent is held by domestic institutional investors, while the rest by the general public. The bank is in the process of implementing Basel-II recommendations.

Bombay Rayon may raise Rs 500cr via FPO

Bombay Rayon Fashions is embarking on a three-pronged modernisation, expansion and vertical integration strategy for its garments manufacturing facilities.The company is expected to raise the required funds through a secondary offering in the next three months. Market sources said the company is eyeing Rs 450-500 crore as gross proceeds from a follow-on public offer (FPO).

While the quantum of shares to be floated is not clear, sources indicated that rupee term loans from banks and other financial institutions could not be ruled out as a buffer against the prevailing market conditions.

About 70% of the funds raised through the secondary issue and other sources would be used for augmenting capacities in Leela Scottish Lace, the erstwhile garments business of Leela Ventures, which was acquired by Bombay Rayon for Rs 155 crore in July.

BEML sets FPO price at Rs 1,075/share

Bharat Earth Movers Ltd has fixed the issue price of Rs 1,075 per share for its 49 lakh share follow-on issue. It is at a discount of Rs 149 or 12 per cent to the current market price of Rs 1,224.

BEML’s follow-on public issue, which opened for subscription on June 27 and closed Tuesday, was subscribed 30.65 times.The FPO received bids for 150,193,480 equity shares against the offer of 4,900,000 shares. The issue received bids for 6,072,645 shares at cut-off price.

Out of the issue, qualified institutional buyers’ portion received bids for 139,654,750 shares against the offer of 2,205,000 shares, resulting in a huge subscription of 63.3355 times.

The non-institutional investors’ portion received subscription of 8.47 times with bids for 5,604,055 equity shares against the offer of 661,500 shares. Retail individual investors’ portion received bids for 4,930,965 shares against the offer of 1,543,500 shares, resulting in subscription of 3.19 times.

Spice IPO sold 37 times, BEML offer on a roll

Investors’ interest in Spice Communications’ initial public offering (IPO) picked up on the final day backed by qualified institutional investors as the issue was subscribed 37.554 times. Suryachakra Power Corporation, which has two more days to close, is yet to impress investors.

The Noida-based cellular operator’s public issue of over 113 million equity shares, which opened for subscription on the Bombay Stock Exchange (BSE) on Monday, received over 4,247 million bids, according to the BSE website. The issue is priced in the band of Rs 41-46 a share.

The public issue of Suryachakra Power Corporation, which opened for subscription on Monday for selling 34 million equity shares, received bids for 79 per cent of the shares on offer. The company received a total of 26.802 million bids.

The qualified institutional buyers’ (QIB) portion was subscribed 1.5124 times, while the retail portion was subscribed 0.1142 times. The non-institutional investor portion has not got any investors so far. The price band for the issue has been fixed at Rs 17-20 a share.

Meanwhile, mining and construction equipment major Bharat Earth Movers’ (BEML) follow-on public offer (FPO) opened for subscription today. I-Sec is the lead banker to the issue. The issue has already been subscribed 1.02 times.

BEML fixes FPO price band at Rs1,020-1,090

Bharat Earth Movers Ltd (BEML) on 25 June announced a price band of Rs1,020-1,090 for its follow-on public issue to mop up upto Rs534 crore, to fund expansion and diversification plans.

The price band has been fixed at a discount to the scrip’s market price of Rs1,144 at 3pm on 25 June on the National Stock Exchange.BEML chairman and managing director V R S Natarajan said the price-band was “reasonably kept” keeping in mind the interests of retail investors.

BEML’s follow-on public offer of 4.9 million shares opens on 27 June and would constitute the company’s 11.77% of the fully diluted post-issue paid-up equity capital.The defence public sector undertaking posted 8.58% increase in net profit at Rs93.51 crore for the fourth quarter ended 31 March, against Rs86.12 crore for the same period last year.

Read more in The Livemint article.

ICICI Bank prices Follow-on issue at Rs 940 per share

ICICI Bank Ltd on Monday said it has priced its recently concluded follow-on issue at Rs 940 per equity share. The Rs 8,750-crore issue was made at an offer price of Rs 885-950 per share and was open from June 19-22.

At 10:51AM, ICICI Bank shares were down nearly 1 per cent at Rs 944.50 on the Bombay Stock Exchange in line with the general weakness in banking shares. So far, the stock has seen a high of Rs 960 and low of Rs 940 with volume traded at 42,306 against two-week average of 3,96,524 shares.

The issue price represents a premium of 3.6 per cent to the average closing price since the announcement of the issue on April 28.

The bank’s American depositary share offering of $ 2.14 billion has been priced at $ 49.25 per ADS, which amounts to Rs 1,002.5 per equity share. It represents a premium of 6.6 per cent over the domestic issue price.

The ADS offering, which represents two equity shares of the bank, has a green shoe option of $ 0.32 billion.

ICICI Bank FPO gets over 100 cr bids

India's largest private sector lender ICICI Bank on Friday received over 100 crore bids, exceeding the total issue size of over 9.88 crore shares by over 10 times.
The Follow-on-Public Offer (FPO) has been subscribed 10.53 times receiving bids for over 104.13 crore shares on the last day of the bidding process, latest data available with stock exchanges show.

The company could raise over Rs 9,000 crore from the issue, if it sells the shares at the higher end of the price band of Rs 885-950 a share.The FPO is a part of the company's plan to raise about five billion dollars from the issue of equity shares in domestic and international markets.

The issue, which opened on June 19, was fully subscribed soon after the bidding began and would close at the end of working hours today.Investment bankers had expected the last day to be marked with higher subscriptions from retail investors, taking a cue from strong demand by institutional investors.

ICICI Bank FPO subscribed 11.38 times

The follow-on public offer (FPO) of ICICI Bank has been subscribed 11.38 times, according to data on the website of the National Stock Exchange.

The offer of 9.88 crore shares in the price band of Rs 885-950 per share received bids for 112.48 crore shares.

The maximum bids (for over 67 crore shares) have been made at the top end of the offer - i.e at Rs 950 per share.

Temasek, Singapore GIC eye 40% of ICICI Bank public issue

Temasek and Government of Singapore Investment Corporation (GIC) are looking at cornering a little less than 40% of the fresh public issue of ICICI Bank. This would involve an investment of around Rs 8,000 crore. Temasek has already put in an application of Rs 8,300 crore — the maximum possible — on Tuesday when the issue opened for subscription.

Though retail investors are yet to step in, the issue was oversubscribed 2.7 times on the first day, thanks to demand from institutional investors.

The Singapore government arms may face some competition from government-owned institutions in the Middle East. State-owned entities from Dubai, Abu Dhabi, Kuwait and Qatar are also said to looking at subscribing to the issue.

The RBI has allowed the two Singapore government arms to pick up 10% stake each in the country’s largest private sector bank. Incidentally, four Middle East government-led institutions are also said to be looking at subscribing to a significant portion in the $5-billion issue, half of which would be raised from the local market.

Other overseas institutional investors who may subscribe include Capital International, T Rowe Price, Legatum Capital and Aberdeen. Temasek and GIC together hold 9.61% stake in ICICI Bank — Temasek through Allamanda Investments has a 7.37% stake while GIC owns 2.24% equity.

Read more in The Economic Times article.

ICICI Bank FPO off to a blistering start

The country's biggest ever follow-on public issue (FPO) for Rs 8,750 crore ($ 2.13 billion) by ICICI Bank was fully subscribed within the first 10 minutes of its opening today morning following big bids by institutional investors. At the end of the first day, the FPO was subscribed by 2.74 times.There are three more days for the issue to close.The bank received bids for 270.84 million shares for the 98.87 million shares on offer. Bids for 1,77,516 shares were at the cut-off price.

Data available with the National Stock Exchange shows that foreign institutional investors (FIIs) have placed bids for shares out of the shares reserved for qualified institutional buyers (QIBs)."Mutual Funds are sitting on good cash. This coupled with FII interest has led to oversubscription of the FPO," Kashyap Jhaveri, analyst at Emkay Share, said.The QIB portion was subscribed by 5.6 times, say sources.

"It's not surprising. The issue was expected to get good response from investors. The liquidity situation continues to be good in the Indian markets," said Jayesh Shroff, fund manager, SBI Mutual Fund.

Shares of the bank traded at Rs 944.40 on the 30-stock Sensex of the Bombay Stock Exchange(BSE), up by 2.89% from its previous close.

The Mumbai-headquartered bank is offering shares in a price band of Rs 885-950 per share. For retail investors (those applying for Rs 1 lakh or lower amount), the bank is offering a discount of Rs 50 a share.

The minimum bid size is six equity shares for retail bidders and existing retail shareholders.

Look at what lies beneath

The Market is in turmoil. Barring the support on Thursday, on account of a global bounce-back, the benchmark indices looked weak — whether you talk about technicals or look at plain index numbers. Consider the movement of the index since the past couple of weeks. The Nifty has been making new intra-day lows. This indicates weakness. The volumes have also declined considerably from the average. This confirms the downward trend. The DLF IPO, which just managed to scrape through the retail and the non- institutional category, sucked out some liquidity last week. ICICI Bank’s follow-on public offer (FPO) will suck out some more. So, the market faces tough times ahead.

This is the first FPO of the current year. ICICI Bank has raised money through FPOs twice in ’04 and ’05. The stock appreciated 230% and 75% over its FY04 and FY05 FPO prices respectively. So, long-term

investors who had applied for the FPO made good returns on their investment. The upcoming issue looks promising as the bank aims to unlock value by creating a holding company for its non-banking business.

Read more in The Economic Times article.

BEML's follow-on issue on June 27

Bharat Earth Movers Ltd’s follow-on public issue of 49 lakh equity shares of Rs 10 each will open on June 27 and close on July 3. The price band is yet to be announced.ICICI Securities is the book running lead manager to the issue.

The issue would constitute 11.77 pct of the fully diluted post issue paid-up capital.
BEML is the second largest manufacturer of earthmoving equipments in Asia, and commands 70 pct market share in domestic industry.

The ministry of defence is BEML’s largest customer. The company’s other customers are Indian Railways, Delhi Metro Rail Corporation and other metro rail transit agencies.