Ahmedabad Comm bourse up for sale

After India Bulls-MMTC's announcement of setting up commodity exchange, Kotak Mahindra Bank is all set to acquire controlling stake in the 50-year-old Ahmedabad Commodity Exchange (ACE).With capital infusion from the banking and financial services conglomerate, ACE will be the first regional exchange in India to be corporatised and de-mutualised national exchange. It would become a online screen-based exchange with technical upgradation.

Kotak Mahindra is picking up 51% equity stake in ACE at a price of Rs 321 per equity share. Though both Kotak and ACE remain tight-lipped about the development, a notice issued to the shareholders of the exchange says: “It is proposed to issue and allot to Kotak Mahindra Bank Ltd and/or its associates or subsidiaries upto 1,02,000 equity shares at a price of Rs 321 per equity share and upto 1,050,000 share warrants excersible to the extent of short falls in meeting the funding needs of the company through any issue/rights issue of equity shares within 36 months of from the date of allotment of the warrants at a price of Rs 321 per warrant exercised.”

Read more in The Times of India article.

DRS Group to raise Rs 100cr

The DRS Group, Hyderabad-based Rs 200 crore logistics company, is raising Rs 100 crore from private equity investors as part of its second round of funding plans.The company is in talks with a few private equity investors including an overseas investor from the US. It plans to use the money to fund expansion of its third-party logistics business.

The group is in advanced stages of completing the second round funding and will announce it within this month. The company is planning to divest 10-12 per cent equity to raise Rs 100 crore, Agarwal told Business Standard.In March this year, the DRS Group divested 20 per cent equity and raised Rs 100 crore from Kotak Mahindra Bank’s private equity arm.

The company provides 3PL logistics service to companies like Reliance Retail, Future Group, MRF Ltd, Hyundai Motors, Lifestyle and Aditya Birla Group among others.Agarwal said the DRS Group is also foraying into three new business areas — shipping, courier and railway cargo. It plans to acquire an existing company in each of these new areas to expand its business.

Read more in The Business Standard article.

Kotak Mahindra plans to raise $300 mn

Kotak Mahindra Bank is likely to hit the market with a fresh issue of over $300 million in the third quarter of the current financial year. The move will help the bank bring down the promoter shareholding. The group’s capital market exposure has exceeded the Reserve Bank of India’s mandated 40% of net worth because of the buoyant capital market.

Currently, the promoter shareholding in the bank is at 55.5%. The new issue will see a dilution of around 5% capital. The promoter shareholding, post-issue, would go down to around 52%.The bank could raise the money through a QIP or GDR route. Though the capital market exposure of the bank is only at around 25%, the group exposure is above 40%.

Read more in The Economic Times article.

IDFC to raise $500 mn via QIP route

The Infrastructure Development Finance Company (IDFC), the nation’s biggest infrastructure lender, has roped in Citigroup, UBS, Kotak Mahindra and JM Financial, to raise $500 million through share issuances to foreign and domestic institutions early next month.

This will be the biggest ever fund mobilisation through the Qualified Institutional Placement (QIP) route, after GVK Power & Infrastructure’s $300 million, handled by Kotak Mahindra, Citigroup and SSKI, and the $240 million issue by Max India, which was lead managed by CLSA.

IDFC’s roadshows for the QIP issue will start in the first week of July, said sources close to the development. The funds will be used to meet the growing demand from companies and the government to build ports, roads, power projects and other utilities.In the last eight months, 18 firms have raised more than Rs 4,500 crore ($1.09 billion) through the QIP route.

Read more in The Business Standard 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.